In November 2014, Japan passed a new regenerative medicine law, the upshot of which is that it enables therapeutic development sponsors to receive conditional marketing approval and generate revenue from regenerative products while trials are being conducted. This new law has made international cell therapy development, and subsequently, manufacturing, more appealing to the industry; cell therapy developers are now increasingly looking to pursue development in Japan and the growing and projected demand for cell therapy manufacturing in the region has been noted by companies working in the life sciences. The chart below illustrates this accelerated regulatory approval process:
This morning, PCT announced a collaboration that leverages this international shift and enables us to take the next step in making our vision of becoming a global, commercial manufacturing partner a reality. PCT has entered into a global collaboration and license agreement with Hitachi Chemical Co, Ltd., a global conglomerate headquartered in Japan with a growing franchise in life sciences, including regenerative medicine. As part of the collaboration, Hitachi Chemical has purchased a 19.9% equity interest in PCT for $19.4 million. Our parent company, Caladrius Biosciences, will retain the remaining 80.1% ownership of PCT. In addition, PCT has licensed its cell therapy technology and know-how to Hitachi Chemical for cell therapy manufacturing in certain Asian territories, including Japan. PCT and Hitachi Chemical have also agreed to explore the establishment of a joint venture in Europe.
This news comes on the heels of Caladrius’ recently announced decision to shift greater focus and resources to PCT and the confirmation of our facility expansion plans. 2015 saw the addition of multiple long-term capacity client agreements with PCT, including IRX Therapeutics, Kite Pharma and ImmunoCellular Therapeutics. PCT has current and anticipated requests for capacity that require expansion and we are looking at ways to add capacity judiciously going forward. We also continue to have ongoing dialogues with potential new clients as clinical trials in immuno-oncology, immune modulation and other cell therapies continue to advance and approach commercial launch. In order to accommodate this anticipated growth, we are currently in the midst of an expansion of our infrastructure, increasing our Allendale, NJ clean room capacity by 60% while developing and implementing cell therapy specific pharmaceutical-grade quality systems to support commercial manufacturing for the United States and Europe. We expect to complete the build-out in 2016. We intend our next moves to include further expansion to large-scale commercial facilities in the United States and in Europe, and our collaboration with Hitachi Chemical brings us closer to thei reality.
This partnership with Hitachi Chemical underscores the value of PCT’s expertise in cell therapy manufacturing and process development and will allow for the acceleration of our vision to create a global commercial enterprise with deep engineering expertise. Moreover, Hitachi Chemical’s investment in PCT shows its confidence in the growth of the cell therapy field as it continues to shift towards Phase 2 and Phase 3 trials and into commercial distribution as regulatory approvals are obtained. By leveraging this expanded footprint, our clients will gain global access to the cell and cell-based gene therapy markets of tomorrow, where we expect engineering solutions to process optimization and automation will play a seminal role. Our collaboration with Hitachi Chemical marks another exciting milestone not just on PCT’s journey, but on the journey and evolution of the cell therapy industry as a whole.
Caladrius management will host a conference call to discuss the Company’s 2015 fourth quarter and year-end financial results, at which time management will also discuss this announcement. Call details are below:
- Tuesday, March 15, 2016 at 5:00 pm EST
- 877-562-4460 (U.S.) or 513-438-4106 (international), conference ID 95709216
- Live webcast with archived after the call: http:/www.caladrius.com/events