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The gold rush for induced pluripotent stem cells

http://www.nature.com/nbt/journal/v27/n11/full/nbt1109-977.html

Abstract
As the first commercial ventures are formed around induced pluripotent stem (iPS) cell research, who will have the freedom to operate commercially remains a big unknown. Sarah Webb reports.

Introduction
Induced pluripotent stem cells. Technology for producing iPS cells is developing quickly. (Image courtesy of James Thomson, University of Wisconsin Stem Cell and Regenerative Medicine Center)
Research on induced pluripotent stem (iPS) cells continues at a breathtaking pace. Not only is rapid progress being made in understanding the basic mechanisms of reprogramming, but also the first applications of this work are beginning to appear. In the past 18 months, iPS cells have been used to generate disease-specific cells for several disorders (mostly neurodegenerative, and a September issue of Nature describes the use of iPS cells derived from patients with familial dysautonomia to generate neurons to evaluate drug candidates4. That opportunity—to create cellular models of disease and then use them to screen for drug candidates—highlights the promise of this technology.

iPS cells offer a pathway to pluripotency unhindered by the ethical and practical obstacles associated with research using human embryos and human eggs. "Many of the pharmaceutical companies were really concerned about using ES [embryonic stem] cells," says Mahendra Rao, vice president of research in stem cells and regenerative medicine at Invitrogen, part of Life Technologies, in Carlsbad, California. "Now that they have an alternate to getting pluripotent cells it becomes an easier choice for them to begin work with iPS [cells]."

But many fundamental research questions about the reprogramming process (by which differentiated somatic cells are returned to an ES cell–like state) remain unanswered. And with no patents issued as yet, but a raft of reprogramming patents filed (75 and counting), intellectual property (IP) and future freedom to operate remain uncertain. Undeterred, companies in this space are crafting strategies to move forward, by targeting unmet scientific needs, filing patent applications and purchasing licenses to other IP, and building their knowledge base through in-house talent and strategic partnerships. At the same time, commercialization efforts are zeroing in on near-term goals—reprogramming kits, cell lines for toxicology screening and disease models (Table 1)—leaving therapies for later.

The new and the unknown
The initial technologies for producing iPS cells reported by Shinya Yamanaka of Kyoto University in Japan and the Gladstone Institute at the University of California, San Francisco, and James Thomson of the University of Wisconsin-Madison delivered four reprogramming genes with viral vectors. The presence of integrated vector sequences, however, is problematic, particularly for clinical application. For one thing, the potential for insertional oncogenesis exists. In addition, "vectors always have a basal expression level, you can't turn them off really," says Rudolf Jaenisch of the Whitehead Institute for Biomedical Research at Massachusetts Institute of Technology in Cambridge. That has spurred a search for chemicals that can moonlight for the reprogramming factors.

Already, researchers have been able to replace one or more of the reprogramming genes with small molecules or proteins. And as they look toward clinical applications of iPS cells, they're focusing on factors that can be added extracellularly to reprogram cells. In May, an international group of researchers reported reprogramming human fibroblasts with the four recombinant proteins alone5. And in October, Sheng Ding of Scripps Research Institute in La Jolla, California reported reprogramming human fibroblasts to iPS cells using three small molecules6. Combinations of small molecules with proteins are likely to be most efficient for reprogramming, Ding predicts.

However, the more challenging issue, according to Jaenisch, is the ability to differentiate iPS cells efficiently and predictably into the cell types wanted. Background vector expression could be preventing iPS cells from differentiating as efficiently as ES cells. Jaenisch's group has done experiments showing that iPS cells with only 1% background vector expression showed significantly different gene expression patterns compared with iPS daughter cells in which the vectors had been excised.

Epigenetic modifications, accumulated over a lifetime in donor somatic cells, are likely to play a role in the efficiency of reprogramming and subsequent differentiation. Differentiation is challenging even with ES cells, says Ed Baetge, CSO at Novocell in San Diego, because each line is genetically distinct, and culture conditions and other selective pressures can alter the state of chromatin or DNA methylation as the cells differentiate. "The problem with iPS cells is that they're more epigenetically variant depending on what source you make them from and how you reprogram them," he says. "You already have issues with [differentiating] ES cells, and you magnify them with iPS cells."

Another important issue, particularly for clinical applications, will be a better understanding of the molecular mechanisms of reprogramming. Why those four genes reprogram cells and another four genes don't is not fully understood, says Ian Ratcliffe, president and CEO of Stemgent in Cambridge, Massachusetts, and San Diego. Even if you're using proteins, or eventually small molecules, to reprogram cells, he says, "the FDA is likely to want to know what is the mechanism of action of these molecules if you want to put [these cells] into humans."

The murky waters of intellectual property
With advances in the field announced nearly weekly, numerous patent applications have been filed, but no patents have been issued in either the US or Europe. As a result, companies have freedom to operate within this space until the patent offices make those decisions. "You have the tension that this just looks like a really attractive technology to commercialize. Then you have the challenge that we're not clear on what we can patent or what we can't patent," says Ken Taymor, executive director of the Berkeley Center for Law, Business and the Economy in California.

The patent uncertainty centers around two critical questions, notes Rao. Will the patents be based on the process or the source? In one scenario, it's possible that early discoveries such as those by Yamanaka and Thomson could receive broad patents and all companies would need a license to use iPS cells. However, a broad patent seems unlikely, according to David Resnick, a patent attorney with Nixon Peabody in Boston, in part because of changes in the patent office since the broad ES cell patents of the 1990s. "There's concern in the patent office that they don't want to have such a broad patent that it would stop people from being able to make and use iPS cells," he says.

Because the original technology using viral vectors has already been supplanted, "we know that technology in itself is not commercializable," says Taymor. The more significant question, Taymor adds, "is where the line gets drawn subsequent to Yamanaka, what's patentable based on his disclosure." Taymor is currently analyzing 75 patent applications relating to reprogramming technology to assess that question. Claims related to methods are easier to show and are therefore more likely, notes Resnick. However, based on the recent history, "the latest and greatest method [for producing an iPS cell] seems to have a half-life of several months," he adds. With decisions likely a few years off, he says, it wouldn't be surprising if some technologies are obsolete before the patents are prosecuted.

"The IP landscape around induced pluripotent cells is just as complicated as the IP landscape around the rest of the field of regenerative medicine," according to Greg Bonfiglio of Proteus Venture Partners in Palo Alto, California. However, he suspects that the current uncertain and complex IP situation might not matter in the long run. "I think that this technology is advancing very, very rapidly, and with each advancement the technology moves forward and could be less dependent on earlier technology."

The second question is how the patent office might distinguish iPS cells from other pluripotent cells, Rao adds. This question becomes important when thinking about methods for differentiating pluripotent cell lines into specific cell types. The method for differentiating an iPS cell might be identical to that used with an ES cell. If so, patents already issued based on ES cell research might predominate. In addition, because of their age, some patents for that ES cell work may soon revert to the public domain.

Companies currently operating in this space are protecting themselves by licensing broadly. Reagents and tools company Stemgent is talking with researchers with relevant technologies and licensing technology in the research products area, says Ratcliffe. He estimates that his company has purchased more than 50 such licenses. In many cases those licenses are for patent claims, rather than issued patents.

"I think that this [IP] space is complicated enough that there will be many roads to roam," says Chris Kendrick-Parker, chief commercialization officer of Cellular Dynamics International (CDI) in Madison, Wisconsin. "We believe that there's going to be very little space for blocking." Although he believes his company has a strong IP position, he thinks their execution as a business will be more important in the long run than their IP.

The money trail
Current commercialization strategies are focused around producing research tools for making iPS cells and using iPS cells in drug discovery. In April, ArunA Biomedical, a privately held company in Athens, Georgia, specializing in stem cells, launched a kit for producing iPS cells using lentivirus vectors, which was co-developed with Open Biosystems, in Huntsville, Alabama (and a part of ThermoFisher, the instrument and reagent supplier). Stemgent provides a variety of reagents, media and tools for cellular reprogramming, growth and differentiation.

Companies with experience with human ES cells are looking at iPS cells alongside their work with ES cells. In December, Novocell announced a partnership with Shinya Yamanaka to explore the development of iPS cells to produce pancreatic islet cells as a complement to the company's existing work in this area with ES cells. Invitrogen is working to provide tools and reagents for both cell types, Rao says. "If we have the best tools for ES cells, those tools should be good for iPS as well."

Collaboration as a catalyst
But for companies focused primarily on iPS cells, moving forward from reagents and kits toward cell lines and disease models in the commercial space has involved bringing together scientific know-how, funding sources and partners from academia or industry. "[Research is] just in its nascent period. In the current economic climate it's hard to get money to do big research projects in this space. People want products," Ratcliffe says.

One such undertaking is a consortium announced in May between Stemgent and Boston-based Fate Therapeutics, a private drug discovery company founded by Jaenisch, among other luminaries in stem cell field. The consortium, named Catalyst, brings together Stemgent's growing catalog of reagents with Fate Therapeutics' research into stem cell–based therapeutics and provides access to both products and knowledge base to a select group of clients.

"We believe there are a lot of precompetitive technologies," says Ratcliffe of Stemgent. "The pharmaceutical and biotech companies want the same sorts of tools and would like to see them validated in a number of different ways." Such tools could include iPS cell–generated disease models or alternatively normal iPS cells differentiated into different lines for toxicology screening. With an initial investment of a few million dollars, partners would provide the funding to support the research, says Paul Grayson, president and CEO of Fate Therapeutics. In return, they receive a license to the existing IP portfolio and the technology that results from Catalyst. No pharmaceutical companies have signed on yet.

All of the Catalyst funds will go directly into research, Grayson adds. Pharmaceutical partners will maintain rights to drug discoveries that they make using the common technology platform, but any improvements to the platform will be shared among Catalyst members, says Scott Wolchko, Fate's CFO. "So we are a developer of the technology but also an end-user of the technology," he says. Nonprofits and academic researchers would be able to license the Catalyst technology for free. "I believe that we as a company have a lot more to gain by pushing our technology into the academic market than by keeping those [inventions] internally," says Grayson.

Focusing on disease models
Another collaboration led to the creation of iPierian, formed in July through the merger of S. San Francisco–based iZumi Bio, an iPS-cell drug discovery company, and Pierian. The new company is focused on using iPS cells to develop small molecules and biologics against neurodegenerative diseases. Pierian's founders, Harvard University professors George Daley, Douglas Melton and Lee Rubin, are all on the scientific advisory board of the new company. In addition, the company has hired young scientists such as John Dimos, a former postdoc in Kevin Eggan's group at the Harvard Stem Cell Institute and lead author on their Science paper that demonstrated the differentiation of iPS cell–based motor neurons from patients with ALS2. The company is also collaborating with Shinya Yamanaka on other methods for generating iPS cells.

iPierian CEO John Walker emphasizes that the company will not be marketing research tools. Rather, the company will be focused on drug discovery applications. By developing cellular models from patients, they plan to use those cells to both better understand the disease and investigate novel pathways and novel targets to intervene in the disease, says chief technology officer Berta Strulovici.

Although iPierian is not currently looking toward the therapeutic applications of iPS cell–derived cells, the company hasn't ruled it out.

The proof is in the cardiomyocytes
CDI was formed to industrialize both the process of reprogramming somatic cells to form iPS cells and the differentiation of those cells into useful cell types for toxicology screens and drug discovery. The company produces billions of iPS cells each day using the plasmid-based method developed by founder Jamie Thomson with recent hire Junying Yu7, and according to Kendrick-Parker, is producing cardiomyocytes for pharmaceutical companies, including Roche's Palo Alto, California, research facility. In the past few months, CDI has also announced exclusive licensing agreements with both Mount Sinai School of Medicine in New York and Indiana University–Purdue University Indianapolis for technology related to differentiation of cardiomyocyte progenitor cells and methods for producing highly purified cardiomyocytes.

"There really is an unmet need for models to understand cardiotoxicity," says Kendrick-Parker. Several drugs have made it to the market that have cardiotoxic profiles and that's unacceptable." These cells have the added bonus of a physiological function that researchers can monitor—a 'heartbeat'—in addition to other biochemical cues. In September CDI and VivoMedica, a Sittingbourne, UK, pharmaceutical technology company, launched CARDIOTOX, a consortium that will use CDI's cardiomyocytes in VivoMedica's microelectrode arrays and data analysis techniques. The consortium will include a group of pharmaceutical partners, who will validate the system as a screening tool to predict the cardiac proarrhythmic potential in new drug candidates. This type of feedback from pharmaceutical companies is valuable, Kendrick-Parker says, because rather than looking at standard cell biology markers, CDI gets information on how the cardiomyocytes perform compared with existing model systems. "A lot of people can make cardiomyocytes, but the key thing is, do those cells respond to therapeutics or drugs in a way that's expected?" he says. Consistency in that response is what will give pharmaceutical companies confidence that a tool will fit their needs, he says. In December CDI will launch iCell cardiomyocytes, a commercially available kit that will include cryopreserved cells, media and other tools.

Although Kendrick-Parker is excited about the opportunity that iPS cells provide to produce cell types with varying genetic profiles for drug development, CDI isn't looking toward future commercial cell therapies. Instead, he says, "we believe that we look like a great partner, for either pharmaceutical companies as they start to evolve toward these types of applications from a therapeutics perspective, as well as any other entity who has ideas about differentiation and cell therapy potential."

iPS cells and pharma
Large pharmaceutical companies are also beginning to explore the iPS cell space. London-based GlaxoSmithKline and the Harvard Stem Cell Institute announced a 5-year, $25 million collaboration in July 2008 that would provide tools from stem cells including human ES cells and iPS cells for drug discovery. Four months later, New York–based Pfizer launched its Regenerative Medicine group. Although the safety group at Pfizer is also looking at iPS–derived cell lines for toxicology studies, the regenerative medicine group is specifically focused on drug discovery using cell lines derived from iPS and hES cells. One particular area of interest is in neurodegenerative diseases, such as ALS and Huntingdon's disease, says CSO Ruth McKernan.

The unit already has a publicized collaboration with Novocell focused on using Pfizer's library of small molecules toward the differentiation of human ES cells into pancreatic beta cells.

But as with other companies entering this area, Pfizer sees itself as focusing on collaborative opportunities. "When we entered this space, we did so with the expectation that we would do a lot by collaboration because there are so many good academic and biotech groups out there," McKernan says. "We want to partner so that we can get right at the very front of science as quickly as possible."

The speed with which the science is progressing characterizes all aspects of iPS cell research. Whereas most fields develop over years or even decades, the explosion in iPS technology has developed "right before our eyes," says Resnick. "It's intriguing from a scientific and from a legal point of view."

That pace of development seems unlikely to slow any time soon. The promise of the field, for drug discovery or even personalized medicine, without the barriers associated with research with embryos or human eggs, has attracted talented people, Bonfiglio says. "You can't underestimate the power of that intellectual capital, and it's helped move the field along."

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