The Preferred Biotech Resource in Asia-Pacific
Vol 19, No 07, July 2015
Biotech in China
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Eye on China


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The Marketing of Unapproved Stem Cell Products: An Industry-wide Challenge
Tamra Lysaght
National University of Singapore, Singapore

Stem cells are an emergent biotechnology with the potential to generate enormous benefits in the treatment of significant human diseases and conditions. They are currently used routinely in the treatment of certain types of blood and immune disorders and new approaches are currently being investigated in Phase I/II clinical trials. These approaches include the use of bone marrow-derived stem cells for myocardial infarcts,1 spinal cord injury,2 multiple sclerosis,3 and Parkinson’s disease.4 In addition, four separate trials using products derived from human embryonic stem cells (ESC),5,6 somatic ‘adult’ stem cells (ASC),7 and induced-pluripotent stem cells8 for the treatment of dry age-related macular degeneration are either underway or are expected to commence in near future.

However, these exciting developments are being overshadowed by an alarming number of clinics claiming to offer treatments with stem cells without having either been approved for use by regulatory authorities or demonstrated to be safe or effective.9 These clinics typically market stem cells directly to the consumer via the Internet for an unlikely range of conditions and illnesses.10,11 The interventions often come with hefty price tags and can be particularly expensive where overseas travel is required. Many are provided in countries with weak regulatory infrastructures, such as Mexico, China and Russia, although reports have also emerged of physicians offering them in the United States, the European Union and parts of South East Asia.

In this article, I report on some of the regulatory challenges being raised in an ongoing law suit between the Food and Drug Administration (FDA) and a Colorado-based company that is marketing an unapproved autologous ASC product in the US. I then show what the Governor of Texas and the Texas Medical Board have in common with a Korean stem cell company implicated in the deaths of two patients. I will then comment on why these events should be considered a major concern for the biotech industry as whole and what should be done about it. First, however, I will briefly describe the regulatory context of stem cell-based products.

The Regulatory Context

From a regulatory perspective, stem cells are human cells and tissue-based products (HCT/Ps). In most developed countries, HCT/Ps are regulated by authorities that oversee interstate commerce in drugs, biologics and devices. In the US, this task is delegated to the FDA. As elsewhere, unless an HCT/P qualifies for an exemption, FDA approval is required before it can be sold commercially across interstate borders. Exemptions are generally permitted only if the HCT/P is minimally manipulated, intended for homologous use, is not combined with another article (except for water, sterilizing, preservation or storage agents), and either has no systemic or metabolic effect, or is for autologous use, allogeneic use in first-second degree blood relative or reproductive use.

HCT/Ps that do not meet all of these criteria, and have not yet been approved for marketing, may be only administered under an Investigational New Drug (IND) application. INDs must be accompanied with preclinical data, including animal pharmacology and toxicology studies, and detailed protocols for proposed clinical studies that have been approved by an Institutional Review Board (IRB). Only after the safety and efficacy of a product is demonstrated, which is typically done through formal clinical trials, will a manufacturer of an IND be issued with a valid biologics license to market the product. Manufacturers must then register with the regulator and conform to current Good Manufacturing Practices (cGMP).

The Legal Dispute

The legal dispute between the FDA and the Colorado-based company named Regenerative Sciences, Inc. began in 2008, when the regulator issued an ‘untitled letter’ to its medical director, Christopher Centino. In this letter, the FDA claimed that the autologous mesenchymal stem cells (MSCs) being marketed on the company’s website for musculoskeletal and spinal injuries were HCT/Ps that required a valid biologics licence.12 As neither a valid licence nor IND was in effect, the company was asked to cease being in violation of the federal regulations. Regenerative Sciences responded by denying that their MSCs are drugs or biological products and, therefore, should not fall under the regulatory authority of the FDA.

In the legal proceedings that have followed, which are described in more detail elsewhere,13 the FDA has claimed that the MSCs used in Regenerative Science’s procedure are an adulterated biological drug product that should be licenced, branded and manufactured according to cGMP. The company has denied this claim and instead argues that their procedure constitutes the practice of medicine, over which the FDA has no authority. Medical procedures are instead regulated by professional practice standards, state licensing boards, professional accreditation bodies, third party payers, and medical malpractice laws.14 Thus, if the FDA injunction does not hold, it could potentially pave the way for virtually anyone with a medical licence to culture autologous ASCs and inject them back into patients, with little to no regulatory oversight.

From Texas to South Korea (and back)

This outcome, it appears, would be welcomed by some. In 2011, the Governor of Texas and then-presidential candidate for the Republican Party, Rick Perry, was reported to have been injected with his own cultivated stem cells for a back complaint.15 The procedure was reportedly carried out at an undisclosed location in Texas by Houston orthopedic surgeon, and Perry’s personal friend, Dr Stanley Jones.16 Jones had apparently never performed the procedure but had received a similar treatment in Japan for his arthritis. The autologous MSCs used in both procedures were isolated and grown by a South Korean company called RNL Bio.

A month prior to Perry’s procedure, it was reported that Texas lawmakers had passed a health care bill that authorized the creation of a state ASC bank and that the Governor’s office had been in discussions with the Texas Medical Board (TMB) about regulating the procedure.17 The TMB responded by announcing that it would look to provide oversight of stem cell transplants as a medical procedure with new rules to guide physicians in their use of investigative agents such as stem cells.18 According to the draft guidelines, physicians may use unapproved stem cell products providing they first gain approval from an accredited IRB and follow state and federal laws concerning the use of therapeutic agents, which include the FDA regulations on HTC/Ps.

Key industry players have been accused of lobbying the TMB heavily not to introduce onerous regulations on physicians. One of those is a company called Celltex Therapeutics Corp, which was co-founded by Stanley Jones and a financial supporter of Rick Perry. Last year, prior to the enactment of the Texas legislation, Celltex signed a reported $30 million licensing agreement with RNL Bio for the exclusive rights to market their stem cell technology in North America.19 RNL Bio, which is based in Seoul, and is better known for its commercial dog cloning services, came under investigation in 2010 following the deaths of two Korean patients who had received injections of the company’s stem cells in Thailand and Japan.

While the formal investigation of RNL Bio continues, the International Cellular Medicine Society (ICMS) conducted one of its own in 2010. The ICMS is a US-based organisation that was co-founded by the medical director of Regenerative Sciences, the company currently in court with the FDA. Assisting with their evaluation of RNL Bio’s ethical and clinical practices was Glenn McGee, Editor-in-Chief of the American Journal of Bioethics (AJOB) at the time. The ICMS investigation found that one of the deaths were likely caused by the stem cell procedure.21 RNL Bio has since been expelled from the ICMS membership for failing to comply with the recommendations made in its investigation.22 In a final twist, McGee resigned from his post at AJOB in late 2011 to take up a senior position at Celltex, but reportedly quit the job in February 2012 amidst much controversy over the potential for conflicts of interest at the journal.


As these events continue to unfold, there are some serious concerns that should alarm the biotech industry more widely. The first relates to the lack of published data demonstrating that stem cells are safe or efficacious to use outside of their existing applications in certain blood and immune disorders. Enthusiasm to be first to market can sometimes override good judgment when novel treatments are pushed into the clinic prematurely and before for their safety and effectiveness can be properly assessed. Few examples remind us of this more starkly than when bone marrow transplant was used with high dose chemotherapy for the treatment of breast cancer.24 This so-called therapy was eventually shown to be no more effective than the standard treatment, but not before substantial amounts of public resources and private investment were wasted commercializing an intervention that simply did not work.

A second concern is the potential for the loss of credibility and loss of public trust that the industry may face if, in the near future, these unapproved interventions fail to live up to the hype and expectations being encouraged by their proponents. For an industry that struggles against authorities in some jurisdictions, such as the EU which has previously imposed trade restrictions on genetically engineered products25 and banned patents on ESCs,26 it may be timely to discuss the options for self-regulation. For, it is conceivable that if the industry does not implement guidelines and sanctions of its own, then the regulatory authorities, especially those in the major markets of the US and EU, most certainly will and it is unlikely that they will be aimed at protecting commercial interests as a first priority.

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