I had the honor of interviewing Mr. Yaky Yanay, President and Co-CEO of Pluristem Therapeutics (PSTI), a clinical-stage cell therapy company based in Haifa, Israel. In this interview, we discuss the history of Pluristem Therapeutics, its clinical-stage products, intellectual property (IP) portfolio, marketing strategy and future directions. Enjoy these insights into Pluristem Therapeutics, a world-class leader in cell therapy manufacturing and placental-derived products.
Cade Hildreth: What is your background, and how did you become involved with Pluristem?
Mr. Yaky Yanay: I was appointed as Pluristem’s President and Chief Operating Officer (COO) in February 2014 and prior to that served as Pluristem’s Chief Financial Officer and Secretary since November 2006, and Executive Vice President since March 2013. Since my background is in business and finance, I specialize in assessing global trends, including macro-trends of aging and longevity.
I am also active in the life science industry within Israel. For over a year, I have co-chaired the largest innovation organization in Israel, which is called the Israeli Advanced Technology Industries (IATI). It is an organization that represents over 700 companies across all the innovation centers of Israel, the entire innovative ecosystem, from high-tech to life science to agro technologies and more. It represents companies from across the life science spectrum in Israel.
Ten years ago when I began looking at Pluristem, it was a very young company with 10 employees and a basic technology. I realized that I had found the technology and the company that I would like to take from a small company into large international company. I was very excited by the trends and technologies that I was observing and how Pluristem could impact the marketplace.
Cade Hildreth: When was Pluristem founded and around what technology?
Mr. Yaky Yanay: Pluristem’s original technology was invented at the Technion and the Weizmann Institute, which are both famous throughout the world. The basic technology was to create an environment, or ecosystem, that would allow cells to proliferate in a highly efficient and natural way.
The first bioreactors that were invented were to support expansion of hematopoietic cells. In 2006, we converted the technology so that it could support the expansion of MSCs derived from the placenta donated after full-term delivery. Since that time, we have been developing the technology and have changed it dramatically. Today, our propriety bioreactor technology provides full-scale cell manufacturing capabilities that allows us to expand trillions of cells and create a commercial-grade product.
The technology behind a closed system relies on the understanding that in cell therapy, and especially in MSC therapy, the “process is the product.” The way that you are going to process the cell is the final product that you are going to get. Controlling the process is essential to get batch-to-batch consistency and make sure that you are able to scale up, go into advanced clinical studies, and eventually go to market using your cells.
Pluristem has an advanced biotechnology that can provide very large quantities of cells with full control over the process, allowing us to have batch-to-batch consistency. We use cells derived from a full-term placenta to create an allogeneic cell product that is ready-to-use. We have already treated hundreds of people across the globe for different indications.
Cade Hildreth: Excellent. What are Pluristem’s PLX cells?
Mr. Yaky Yanay: We like to call our PLX cells adherent stromal cells or mesenchymal-like cells. They are collected directly from placentas collected after delivery of a full-term healthy babies. We collect the placentas from consented donors, and after the initial extraction and collection of the target cell population, we expand the cells using our bioreactors to produce a large number of doses. Today, we can get about 20,000 doses – 20,000 treatments – from a single placenta.
In all of our clinical studies, we make sure to use several placentas, in order to demonstrate in Phase I and Phase II studies that regardless of the placenta or identity of the donor, that we get the same cell potency and therapeutic effect with our PLX cells.
Cade Hildreth: What are the therapeutic effects of PLX cells?
Mr. Yaky Yanay: Currently, Pluristem is undertaking several advanced clinical studies. We are in the process of launching three pivotal studies. The first one will be of PLX-PAD in critical limb ischemia (CLI). The second one will be for the same product in muscle damage after hip fracture repair surgery, with the goal of triggering the regeneration of muscle, improving recovery and rehabilitation after the procedure, and improving the long-term outcome. The third indication is acute radiation syndrome, which we are expecting to undertake in collaboration with the United States government.
From our very early stages, we made the strategic decision to control our manufacturing, since using our three-dimensional (3D) bioreactor technology provides a strong competitive advantage. That was the first decision, to control our manufacturing. The second decision was to have more than one cell-based product. Today we have two products in clinical stages, PLX-PAD and PLX-R18.
The third decision was that we are not going to perform a 5,000 patient study, but instead we are going to pursue opportunities that exist worldwide that allow for a relatively small study size. This is because we are focused on shortening our time-to-market. I would like our PLX products to enter the market as early as possible. We are committed to this strategy, so in the last few years, we have had intense discussions with the different regulators.
We have identified the European Adaptive Pathway project as a very interesting pathway for approval. We have also identified the Japanese track for accelerated market approval as an interesting pathway. We are fortunate that the European authorities accepted our CLI program to be included under their Adaptive Pathway. We are actually the only company in the world that has had both European and Japanese regulators accept it for fast-track approvals.
Furthermore, it was with great pleasure and surprise that we witnessed the U.S. government pass the 21st Century Cures Act. With this legislation, the U.S. government decided that American patients also deserve to get early access to regenerative medicine technologies. It was huge step for the Senate to approve this bill and a major game-changer in our industry. In my opinion, it is the most important event for the cell therapy industry that has occurred in the past year and maybe longer. I am very pleased that the bill passed.
Cade Hildreth: I am pleased as well.
Mr. Yaky Yanay: I believe the 21st Century Cures Act resulted from trends relating to aging and longevity in the world. I am a CPA by training and have a financial education. I always like to look at the numbers and graphs to understand how the macro-trends are impacting our day-to-day activity. When you are looking at global trends with major changes in lifespan, it is amazing. I keep telling my team and everybody that I can speak with that we are very fortunate to live in a generation that has doubled our life-expectancy over the past 150 years or so. Over the past 150 years, the average human lifespan has doubled, and I expect that we are going to see continued increases in our life-expectancy over the coming 20 to 30 years.
I look carefully at numbers that identify macro-trends. In China, they expect to have about half a billion people over age 60 by 2050. In Japan, they expect to have 50% of the population over 65 within two decades. I also believe the same phenomenon will affect Europe and the U.S. Regulators are finally shifting their perspective to understand that we cannot continue to treat the patients the way that we treat them today. We either need to develop new technologies, or we will be forced to make moral decisions about how to limit medical expenses for elderly patients, which is of course, not an easy decision. I am a supporter of the developing new technologies to address these global issues, with cell therapies representing one of the most promising regenerative medicine technologies in the marketplace.
Patients cannot stay chronically ill and injured. They cannot be hospitalized forever. Currently, about 30% of the U.S. healthcare cost is for hospitalization. The drug component contributes 15% or 16%, so it is not the leading factor. It is about what the drug is doing for the patient. We need to identify whether current treatments can reverse disease in patients or if these drug treatments keep patients in a chronic state. This is the reason that we need regenerative medicine. It is the reason that we have seen the Japanese approve accelerated pathways, as well as the European Union, U.S. and China.
Global governments need to change their approach to healthcare, and I believe that cell therapy is one of the most promising technologies that we can use to address these issues of aging and longevity.
Cade Hildreth: I fully agree with your assessment, and you explain it well. What is your estimated timeline for bringing Pluristem’s PLX cell products to market?
Mr. Yaky Yanay: For our Phase II B study, we expect to get our clinical readout by early 2018. We are launching now a Phase III CLI study with 250 patients that will enroll participants within the U.S. and Europe. We had to undertake a lot of discussions with regulators to allow this CLI study to be for 250 patients, instead of for 2,000 patients or 1,000 patients. Thankfully, the regulators have been supportive. In Europe, there will be an interim analysis of the data once half of the patients have completed follow up. If the data is good, we could apply for approval for marketing in Europe at that time, although we would complete the full study.
We are also going to launch the second indication, a Phase III study for muscle recovery after hip fracture, which will recruit roughly 200 patients. Again, we are investing a lot of time and effort with the regulators to define our study design, the end points, and the size of the study. Currently, we have about 170 employees, so for a company our size, we must pursue study sizes that make sense. With the strategy, we are not going to undertake any study above a couple of hundred patients, because it takes too long and involves too much risk.
The third indication is acute radiation syndrome, a study that is fully funded by the U.S. government. We have been able to show unbelievable results after injecting our cells post exposure to radiation. We can keep close to 100% of the population alive in preclinical studies (small animals), in comparison to about 30% survival with the placebo. The U.S. government through the National Institutes of Health (NIH) got involved to join the radiation project. Now, we have moved into large animal studies, with a mutual target to launch a pivotal study in 2017.
Because efficacy trials are not permitted in humans for this indication, studies in large animal models are needed to evaluate dosing for Pluristem’s PLX-R18 as a medical countermeasure in the treatment of the hematologic aspects of ARS. These trials will be conducted by the National Institute of Allergy and Infectious Diseases (NIAID), a part of the NIH. Once the optimal dose is determined in large animals, a pivotal trial could be conducted to support submission of a Biologics License Application (BLA) for PLX-R18 for this indication under the Animal Rule regulatory pathway.
This pivotal study is intended also to launch in 2017. We are preparing the company towards filing a BLA, hopefully at the end of 2017 or the beginning of 2018 for this product. Also, we are actively preparing the company to market this product, which is very interesting.
Cade Hildreth: Excellent. What are Pluristem’s marketing strategies?
Mr. Yaky Yanay: Great question. We have spent a lot of time to shape our marketing strategies. Our marketing strategy is a three-legged approach.
The first leg pertains to indications that involve large patient populations, such as critical limb ischemia (CLI) and orthopedic indications, like muscle recovery post-surgery. Millions of patients across the globe are affected by these indications. Because we are a small company, we do not have the capabilities to market our products to so many patients. For these two indications, we are targeting them for licensing agreements with potential partners. Since we are talking about relatively small studies, we have the capabilities to complete the study, file the BLA, and get to the marketing strategy. It is very good to have a licensing deal, but since the early days when we had only 10 employees, part of our strategy has been to make sure that we do not become only a licensing company that receives royalties. We also want to derive our own revenues and execute marketing capabilities.
The second leg of our marketing plan is to rely on direct sales of our products to government agencies, as we intend to do with acute radiation syndrome (ARS). We anticipate that we will be able to market this product to the U.S. government and potentially other governments. We may also have other indications that are applicable for direct selling to government. The advantage here is that since we control manufacturing, the government can provide us with logistics assistance.
The third leg of our marketing strategy involves indications for very small patient populations. We define very small indications as those for which the number of patients are 5,000 per year or fewer. First, we are talking about a very small number of patients, and second, we are talking about premium indications. By premium indications, I mean that payors are likely be willing to pay more for these indications, because our cell therapy products can introduce major saving into the healthcare system. For these indications, we will start and build our own marketing chain, starting at a very small scale, and eventually targeting patient populations for larger indications.
Cade Hildreth: What types of intellectual property (IP) has Pluristem secured?
Mr. Yaky Yanay: Over the last 12 years, we have collected about 85 granted patents and about 120 patents that are pending or in process. We are having an IP strategy that has several different layers. The first layer involves three-dimensional (3D) expansion of our cellular products. We have been able to secure a good number of patents that protect our method for expanding cells in our three-dimensional bio-reactor environment.
The second layer is about the composition of matter patents. We have been able to demonstrate that any cells that are expanded on 3D matrix have a different composition of matter from cells that are expanded with traditional 2D expansion. We have numerous patents that pertain to the compositional matter for 3D expansion. The third layer of our patent strategy pertains to indications and methods of cellular injection. Meaning, how do we inject cells for specific indications. Usually we inject our products directly into the muscle.
We have invested a lot of effort into these areas over the past few years to develop controls to allow us to manufacture not only the best in-class cells, but to have full control on over the shipment and delivery logistics of our cellular products. We have highly defined processes, so that our products involve the same exact cells and process each time. We want to have minimal, preferably zero, manipulation once we near the patient’s bedside.
Cade Hildreth: Excellent. When Pluristem was founded, its cell expansion technology was licensed from the Technion. Are you still licensing the technology today?
Mr. Yaky Yanay: Yes. In 2007 we converted our licensing to full acquisition. We acquired the technology and now are the sole owner of the technology.
Cade Hildreth: What are your 3-5 year goals for Pluristem?
Mr. Yaky Yanay: In 2017, we expect to launch three pivotal studies and have the data readout this year as well. We also expect to have major business milestones occur during 2017. We are moving very nicely along our clinical pathway. If I look five years down the road, I expect to submit a series of BLA submissions, as I mentioned, as early as end of 2017 or the beginning of 2018. In 2018, 2019, and 2020, we are going to submit a series of BLA’s at the rate of at least one per year. We also expect to start to producing marketing revenues from our products in the coming two years.
One big advantage that people usually don’t understand about cell therapy is that cells can exert many different effects. For our PLX cells, they release many factors once they receive signals from the patient’s body. We know that they release anti-inflammatory factors, immunomodulatory factors, hematopoietic recovery factors, muscle recovery factors, and many others.
I am expecting to see a series of phase IV studies, or post-approval studies from different physicians across the globe that will try to use our approved products for different indications, as well as products from other cell therapy companies. As this occurs, I expect to see a major expansion of cell therapy technologies within the market after the first products get approved. I get daily calls from different physicians that want to use our PLX cells for different indications. We will see post-approval studies for many different indications, some of which will be conducted by us and some of which will be conducted by the different clinical centers.
Cade Hildreth: Great points. Why did Pluristem decide to focus on placental cells?
Mr. Yaky Yanay: The placenta is one of the most fascinating organs in the world. First, the placenta is a combination of two human beings. It contains the cells of the mother and the baby. What’s also important is that the placenta is extremely available. You do not have to harvest anything to get the cells, because you collect the cells after a full-term pregnancy, a healthy delivery. You can collect 800 grams of young, healthy tissue that would otherwise usually be thrown out.
Additionally, the placenta is an ideal source for allogeneic cell therapy, because of one special reason. The placenta comes from pregnancy, which is the only place in nature where you see two organs living together, without any immune response of the mother against the baby or the baby against the mother. The placenta is the gateway between the mother and the baby, which have of course, different immune systems. If you think about it, a mother can even be a surrogate and carry a child which is not her own, one that is not genetically related to her. However, her body does not reject the baby.
Today, we know that the mother goes through a major immune modulation during pregnancy. We are collecting the cells from the placenta, which is the gateway between the mother and the baby and the organ that is responsible for allowing two different immune systems to live together. We take these young, fresh placenta cells, which are very potent and have a unique immunological profile. That allow us to do injection of the cells in an allogeneic way, even if we are injecting repeated doses from the same placenta. It is an amazing organ. We cannot ask more than that.
Cade Hildreth: It is very interesting that you are leveraging a natural biological state.
Mr. Yaky Yanay: Yes. Because our cells are MSCs and from the placenta, they are immune privileged. Today, we know that placenta cells are more immune-privileged than any other cells.
Cade Hildreth: Fascinating. Pluristem is currently a leader in producing large quantities of placenta-based cells. What do you see as the future of placental cell therapies?
Mr. Yaky Yanay: Celgene is also developing placenta based products for their Celgene Cell Therapy Division (CTD). That is good news, to see a company like Celgene getting involved in this type of cell therapy.
The future of cell therapy? I think the industry will need to figure out the way to scale-up production. I believe the way to scale-up is by using a three-dimensional bioreactor process. It provides the capacity to scale-up significantly, to inject millions of patients using the cells, which is not the case with other technologies. However, we know today that changing the scale-up technology also changes and alters the cells. Eventually, the companies that will become the dominant players within this industry are the ones that can manufacture cells in a very efficient way, with both operational and financial efficiency.
I truly believe that cell therapy has the potential to not only provide cures for many significant ailments and disorders, but also to significantly reduce healthcare costs by allowing a reversal and repair of disease. It depends on us, the companies and the executives operating within this industry, to produce clear, strong clinical data. I think that we are seeing a strong desire from regulators across the global to have these technologies come to market. I hope and believe that we will be able to provide this data.
Cade Hildreth: Currently, Israel is a global leader for cell therapy innovation, led by Pluristem Therapeutics, Gamida Cell, Stem Cell Medicine Ltd., and many others. What is supporting this innovation with Israel?
Mr. Yaky Yanay: That is a good question. Within Israel, science and technology play a major part of our life. People appreciate education, scientific development and progress. Additionally, the goal of Israel is to provide prosperity, technology and well-being to the world. People speak of innovation here, people appreciate innovation, and people want to contribute technologies that will do many good things for humanity.
As I mentioned earlier, life science is one of the most important evolutions to happen over the past 200 years. We need to contribute, especially in this field. Also, the number of large science companies in Israel has tripled over the past decade. It is continuously increasing. Most of these companies are young companies, but some of them are starting to mature. When I speak with my friends and colleagues here that head life science companies, we share an enthusiasm and desire to make sure that Israel will be a leading provider of life science technologies. We want to contribute our knowledge to help as many people as we can across the globe. I also believe that life science will be the leading industry in Israel over the coming years, even more important to our country than the high-tech industry.