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May 1, 2017 Issue

CEOCFO MAGAZINE

 

Developing Autologous Cell Therapies for the Hair Loss, Skin Rejuvenation and Tendon Repair and an Injection Device to Deliver them, RepliCel is Positioned to Revolutionize these Areas of Unmet Needs

 

 

R. Lee Buckler

President and CEO

 

RepliCel

www.replicel.com

 

Interview conducted by:

Bud Wayne, Editorial Executive, CEOCFO Magazine, Published – May 1, 2017

 

CEOCFO: Mr. Buckler, would you tell us about regenerative medicine, what it is and the focus of RepliCel?

Mr. Buckler: Regenerative medicine is a broad concept for a next wave of biotechnology that is in development, some of which is are already on the market and others that are in clinical development, where the idea is to use some kind of therapeutic agent to accomplish a true regeneration or replacement of cells, tissues or organs in the body. There is a number of ways we can accomplish this. We can do it by scaffolds, we can do it by matrices and we can do it by drugs. There are examples of regenerative medicine approaches using those kinds of technologies. The biggest bulk of regenerative medicine is comprised of the use of cells so we call it cell therapy. It can be stem cells, it can be immune system cells or numerous kinds of cells. There is about a billion dollars’ worth of cell therapy products approved by regulatory agencies in the world today, many of which have been approved by FDA. For the treatment of skin repair, wound repair, cartilage repair and these kinds of things and even more recently certain kinds of cancers. There is a very  big pipeline of products in development in clinical testing for almost every imaginable kind of human disease or condition and RepliCel falls in that category. When you think of cell therapy there are two different camps of cell therapy. One is the using of the patient’s own cells; we call that autologous cell therapy. The other is allogeneic cell therapy which uses donor cells. RepliCel is exclusively focused on using and manufacturing products developed from the patients’ themselves so all of our products are derived from a tissue biopsy taken from the patient and we go from there to manufacture a product that eventually gets injected back into that patient.

 

CEOCFO: Would you explain your technology?

Mr. Buckler: RepliCel is focused largely in two clinical areas and one is aesthetics. There we have a product in development for hair loss and another for skin rejuvenation. The second category is orthopedics or sports injury. We have a product that we are very excited about for tendon repair. The technology while exciting and cutting-edge, it is really quite simple. We take a punch biopsy taken from the back of the patient’s scalp. This is closed by a single stitch so it is a relatively small tissue biopsy. That tissue biopsy gets packaged and sent to the manufacturing facility. In the manufacturing facility we isolate one of two target cell populations; one cell formulation is a formulation that we have invested a lot of time and resources and developed a lot of exciting patents around, which is a cell population that is responsible for growing hair in the dormant follicles of men and women with pattern hair loss caused from androgenic alopecia. The cells are taken from the back of the scalp where these cells, responsible for supporting all the cells involved in hair growth, are immune to condition. We isolate this cell population from this tissue biopsy, grow millions more of these cells in bioreactors in a five-week process, harvest the cells and, if the product meets the release specifications designed for the product, the product gets frozen in a cryovial and is shipped back to the clinic for eventual reinjection into the area of thinning hair.

 

Basically that same technology is used for the other cell population that we are targeting. This is a cell population that we remove from that tissue biopsy which has nothing to do with hair growth and everything to do with the maintenance and generation of tissue. This they do by expressing proteins. One of the proteins that they are particularly expressive of is Type l collagen, which is extremely critical to the health and vitality and youthful appearance of skin. There is a layer under your skin that is largely comprised of Type l collagen. It also turns out to be a very important component for healthy functioning tendons. Tendon is the tissue that joins the muscle to the bone and it is largely comprised of these layers of Type l collagen. We all know people who have chronic pain and loss of function in their ankle or knee or tennis elbow or golfers elbow or shoulder pain. This is as a result of their tendons having been degenerated to the point where the cells are not capable of getting it back to normal because the cells are not able to express enough proteins to rebuild the tendon after overuse - wear and tear. What we have found in early testing is that after a single injection of these cells into degenerated tendon tissue, the cells will express sufficient proteins particularly Type I collagen to regenerate those tendons and get the patient back pain-free and functioning again with the ultrasound showing a nice and compelling regeneration of the tendon tissue. In a recently completed first-in-human trial looking at the potential for these cells to rejuvenate skin, we saw very significant changes in biomarkers highly correlated with skin aging and sun-damage. Our clinical advisors believe these biomarker changes are highly predictive of the product’s potential to reverse the aesthetic look for aged or sun-damaged skin.

 

CEOCFO: Where are you in the development process?

Mr. Buckler: We are in early-stage clinical trials with all three of these biologic products. We did a Phase I study of our hair product. We published some early interim analysis data in 2012 on that product. In late February, we published the final analysis data on that product. In late March, we announced successful completion of our first-in-human tendon regeneration trial and in early April we released data from our dermatology trial showing very promising signals of the products potential for skin rejuvenation.

 

CEOCFO: Where are you in the development of the injection delivery device?

Mr. Buckler: As we were developing these therapeutic products, these injectable biologics, we became convinced that we needed a kind of injection device that simply did not exist on the market. We wanted something that was not subject to the human skill or lack thereof of the person driving the injector. We wanted something that brought unprecedented precision and control to the injection process. We found that there was not an injection device out there on the market that met the specification we believed necessary to ensure optimal delivery of our products. It sounds trite to say but if you do not have control over the injection process, you simply do not have control of the outcome. To the extent that the injection of your product is subject to human variability, you should expect the results to be varied as well and we wanted to minimize that variability of outcome. We engaged with a number of leading dermatologists and dermatology clinical sites and have come up with a design for a device that brought that kind of precision and control through the electronic design of the technology. We have also having incorporated into the device an element which reduces or eliminates the need for local anesthetic. Most of these injections today into people’s faces [and there are about $2 billion worth of products injected for aesthetic purposes annually] are preceded by injection of local anesthetic. This involves multiple needles, injections, and the pain associated with those injections that we simply have eliminated by including, in the injection device, an element that touches the skin and upon contact numbs the skin before the needles penetrate. We are very excited about bringing that technology to the injection market and making a significantly more pleasurable experience for the patient, doctors and clinics themselves as well as bringing a lot more consistency to the outcomes of their procedures. Your question was where we are in development. This year we are manufacturing and testing the commercial grade prototypes of that device and anticipate that next year it will be CE marked for a market launch in Europe and then put in the hands of a licensing partner that will manage the commercial sale, marketing and distribution of the device and associated consumables as our commercial partner.

 

CEOCFO: In your efforts to engage, educate and get to word out about the value of your efforts, are you attending conferences, using social media and the internet?

Mr. Buckler: Absolutely! I am a big fan of the power of social media. I have built previous companies and engaged in a lot of thought leadership of using social media. We have a great following on a number of different social media platforms. There is nothing like that face-to-face interaction so we attend a fair number of industries conferences and investment conferences as well throughout the year to tell our story, to industry colleagues as well as potential investors.

 

CEOCFO: Do you have the funding necessary to continue the development process or will you be reaching out to investors or partners?

Mr. Buckler: We are a pre-revenue company but we anticipate that this may be our last pre-revenue year as we move to commercializing the device with a commercial partner next year. We expect 2018 is about executing that partnership and putting us in a position to build revenue models around royalties earned from the commercial distribution of that device and associated consumables. However, this is not likely to make us profitable as we continue to plough revenue back into the development of our other products. We have a comfortable cash position now but we certainly anticipate requiring further investment to fund the ongoing development of our products to the point where we can capture optimal value from them with licensing deals. We will pursue a number of different avenues for that; certainly the issue of further equity is one option we have always at our disposal, also we are pursuing non-dilutive grants, and have a number of warrants outstanding which when exercised bring in capital. Additionally, with the execution of these licensing deals there is typically non-dilutive upfront licensing fees and milestone payments. The whole company is structured to be one of creating value in the early to mid-stage of product development and then putting these products in the hands of well-established commercial partners.

 

CEOCFO: Quarterback Payton Manning reportedly had regenerative medicine therapy that enabled him to get back on the football field a few years ago and have one of his best seasons ever. How important was that for your industry?

Mr. Buckler: What we have seen is some exciting anecdotal incidences like this where we have some stunning examples of the power of cells to heal people, regenerate tissue and restore function. I have talked to people who have received cell therapies or tissue engineered products using their own cells and doing remarkable. We have had some very exciting incidences of this kind of thing that gives us a tremendous amount of hope and promise on the ability to capture the power of cells to be therapeutic. One of the challenges that we face is translating these occasional anecdotal incidences in the clinical into robust products. There are two sides of that coin. It’s worth noting that even a widely successful drug works in 30% maybe 40% of the people, so we do not expect cell therapies to have 100% cure rates just like we do not expect that of any other kinds of products. Having said that, we need to move beyond what is capable very occasionally in some doctor’s office, to products that have a much more robust manufacturing and scientific profile behind them that we can both be assured of the safety around but also have some assurance of their rate of efficacy. Payton and others have traveled to countries and seen doctors who are doing in-clinic procedures, some of which occasionally work phenomenally well. It would appear this kind of treatment is responsible for Payton’s great recovery but there is little-to-no robust evidence behind the product or treatment he received. Our goal as an industry is to translate those occasional incidences into regulated products that have very rigorous scientific and clinical behind them and really be able to extrapolate that kind of potential across a wider population of patients.


CEOCFO: Do you ever see the day when regenerative medicine will be affordable for the average person and/or something that will be included in an insurance plan?

Mr. Buckler: Absolutely! I take considerable comfort in the fact some of the largest companies in the world are investing in cell therapies and other kinds of regenerative medicine and even autologous cell therapies where we are taking the patients tissue and manufacturing a product for them. The comfort I take from that is that all of these companies have a significant vested interest in lowering the cost of production related to these products such that we can bring them to the widest possible up market. I absolutely do envision a day when the cost of good for these is such that almost anybody can avail themselves of these kinds of technologies whether they are the kinds of therapeutics which would be reimbursed or the kinds of injections that you would pay for out of pocket.

 

CEOCFO: In closing, address of our readers, many of which are in the investment and healthcare communities. Why is RepliCel an important company to watch?

Mr. Buckler: I think regenerative medicine is a very exciting sector to watch. It represents what almost everybody universally believes is a next wave of technology and healthcare that promises to do things for us, particularly as we age, that drugs, traditional biologics and surgical interventions simply are not capable of doing. I urge all investors to find something in the regenerative medicines sector that excites them. We are excited about what we are doing because we are a micro-cap company in this exciting field of regenerative medicine developing next-generation products which affect more than one in three Americans. RepliCel is uniquely positioned in aesthetic and orthopedic applications highly correlated with an aging demographic. These are big market applications: pattern baldness, more youthful skin, and chronic tendon regeneration. This is a company with exciting technology, strong promising clinical data, and big market applications with plenty of blue sky opportunity but also executing on a plan to generate near-term revenue. Every time I leave the office I am talking to someone who wants more hair, someone that wants to look younger or someone that has a tendon that just bothers them and would like to make it go away. We are very excited about where we are at with RepliCell. We think we have something very exciting, near term catalysts and have a great future ahead of us in terms of building value in these R&D products and then partnering with large-scale companies to put these in the hands of patients.


 

“We are excited about what we are doing because we are a micro-cap company in this exciting field of regenerative medicine developing next-generation products which affect more than one in three Americans. RepliCel is uniquely positioned in aesthetic and orthopedic applications highly correlated with an aging demographic. These are big market applications: pattern baldness, more youthful skin, and chronic tendon regeneration. This is a company with exciting technology, strong promising clinical data, and big market applications with plenty of blue sky opportunity but also executing on a plan to generate near-term revenue.”- R. Lee Buckler


 

RepliCel

www.replicel.com

 

Contact:

Lee Buckler

778.996.2355

lee@replicel.com




 

 



 

 


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RepliCel, CEOCFO Magazine Interview, CEO Interviews 2017, R. Lee Buckler, Developing Autologous Cell Therapies for the Hair Loss, Skin Rejuvenation and Tendon Repair and an Injection Device to Deliver them, RepliCel is Positioned to Revolutionize these Areas of Unmet Needs

 

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