Drug buoys Cleveland company's stem-cell aspiration

Juventas Therapeutics is a drug company competing against stem cell companies. That distinction could give the young Cleveland company a leg up on other businesses trying to hit it big in the regenerative medicine business, according to Juventas CEO Rahul Aras and a few people who follow the industry. Juventas has developed a drug designed to trick the body into sending more stem cells to the site of an injury than it otherwise would, thereby speeding up the healing process. By making a drug, Juventas should be able to sidestep a few big challenges faced by companies developing therapies that use adult stem cells.

Drugs are easier to make than stem cells, and they tend to be easier to store, according to Dr. Aras and others interviewed for this story. Plus, investors and regulators are more familiar with drugs, which should make it easier for Juventas to raise cash and get its product to market, they said.

“You get the benefits of regenerative medicine without the complexity of cell therapy,” Dr. Aras said.

Dr. Aras cites those advantages when speaking with investors. It seems to be working: Juventas in mid-July closed a $22 million Series B financing round led by Triathlon Medical Ventures of Cincinnati and New Science Ventures of New York. The company has raised a total of $35 million since it was spun out from the Cleveland Clinic in 2007.

As part of the Series B round, the company received an investment from Japan's biggest drugmaker, Takeda Pharmaceutical Co. Dr. Aras described Takeda as a strategic investor that one day could help Juventas take its products to market, possibly via an acquisition or some other partnership. However, the investment didn't give Takeda any exclusive rights to Juventas' products.

Dr. Aras described the relationship as “a nice way for the two groups to get to know each other better.”

Of course, Juventas will need to prove that its product, JVS-100, is effective if it is to succeed. It's working on that: The company a few weeks ago started enrolling patients in a Phase II clinical trial designed to test the drug's ability to treat patients with late-stage heart failure. A few months before, it began a similar trial for patients with critical limb ischemia, which is caused when blocked arteries prevent blood from properly flowing to the extremities, often the legs and feet.

In both cases, JVS-100 is delivered to the site of the injury. The drug contains DNA, which is absorbed into cells in the body. The cells then for two weeks make a protein that acts as a beacon, attracting stem cells to the injured area.

If Juventas can ace those trials, it will have a big advantage over its competition, according to Jason Napodano, managing director and senior biotechnology analyst for Zacks Investment Research.

Though he wasn't familiar with Juventas, Mr. Napodano follows several stem cell companies. Some are struggling to obtain FDA approval. Others have had trouble setting up a system to mass produce stem cells or raising enough cash to get their products to market.

As others in the business noted, both the FDA and investors are more comfortable with drugs than with stem cell products, Mr. Napodano said. Plus, producing a drug “certainly would be a lot cheaper” than making stem cells, he said.

Some stem cell therapies involve taking bone marrow from a patient, collecting stem cells from the marrow and injecting them back into the patient's body. Other methods involve collecting stem cells from a single donor and then replicating them for use in other patients.

Dr. Aras said the first method is the most expensive because it involves collecting and purifying stem cells from every patient. While the second method would benefit from greater economies of scale, it is a “much more complicated system” than the one proposed by Juventas, according to Glen Gaughan, a CEO-in-Residence at BioEnterprise Corp., a Cleveland nonprofit that works with health care companies.

In addition to the challenge of getting stem cells to replicate, it's also hard to store them and to make sure they morph into the right type of cell, said Dr. Gaughan, who before joining BioEnterprise spent about 20 years as a drug discovery scientist for the company that became Bristol-Myers Squibb.

“It's hard to make these stem cells,” he said. “It's hard to make sure they are what you think they are. It's hard to keep them alive.”

Drs. Aras and Gaughan expect Juventas' clinical trials to produce data proving that JVS-100 is an effective drug. They cited previous animal studies and Phase I trial data. In that trial, 17 heart failure patients took the drug. Fifteen were still alive after a year, nearly half improved to class II from class III, and some improved to class I. None experienced serious problems deemed related to the drug.

Though the early data is “quite promising,” B.J. Lehmann doubts the drug will be as effective as therapies that use stem cells. Mr. Lehmann is president and chief operating officer of Athersys Inc., a Cleveland company that aims to commercialize a stem cell therapy that would involve taking stem cells from relatively few donors and mass producing them.

If the two products turn out to have the same impact on a patient's health, Juventas would have an advantage, Mr. Lehmann said, but he added that the effectiveness of JVS-100 might be restricted by the supply of stem cells in the body. By contrast, companies such as Athersys choose how many stem cells to use, Mr. Lehmann said, adding that Athersys can double one donor's cells in less than 24 hours.

“You can produce whatever dose level you want to produce,” he said.

Although Dr. Aras believes Juventas has an edge over its competition, he said he also sees room in the market for several types of regenerative medicine companies.

Juventas in May moved into 6,200 square feet at Tyler Village in Midtown Cleveland. The new headquarters is many times bigger than the few offices it previously occupied in the Global Cardiovascular Innovation Center, which is across the street from the Cleveland Clinic's main campus.

Although the company has hired six people since April, it still has just 10 employees, who fill about half of the new space. Juventas is planning to keep hiring, but its biggest expense is the clinical trials, which are run by other organizations.

The Global Cardiovascular Innovation Center is one of several organizations that have provided key resources and assistance to Juventas over the years, Dr. Aras said. Others include JumpStart Inc. of Cleveland and the Center for Stem Cell & Regenerative Medicine, which is comprised of researchers from Case Western Reserve University, University Hospitals Case Medical Center, the Cleveland Clinic, Athersys and Ohio State University.

All three of those organizations have received money from the state's Third Frontier economic development program, which is designed to create jobs by financing technology companies and research projects.

Dr. Aras said he expects those investments will lead to more jobs at Juventas, even if the company eventually is acquired.

He cited a few situations in which big pharmaceutical companies bought regenerative medicine businesses and decided to keep those companies' employees on board. That's because the small companies not only have technology, but they also have expertise in regenerative medicine, Dr. Aras said.



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