Reinventing the European Advanced Therapies Sector: An Interview with Eduardo Bravo

02 Jun 2017

In 2009 TiGenix was the first company in Europe to gain the newly created advanced therapy medicinal product (ATMP) authorisation for its ChrondroCelect®, a somatic cell treatment product which replaces knee cartilage through an autologous[1] transplantation. Eight years on, TiGenix has reinvented itself with an orphan gastro-intestinal treatment called Cx601, which is currently in Phase III trials and has already been licensed to Japan’s Takeda. In the meantime, the groundbreaking ChrondroCelect® has been withdrawn from the European market due to lack of sales.

Duane Schulthess: Eduardo, thank you for your time. TiGenix made headlines in 2009 as a somatic cell cartilage replacement company, but has now completely changed focus and moved into orphan treatments for Crohn’s disease. Can you explain why you made such a radical change in strategy?

Eduardo Bravo: The current TiGenix is a merger of two companies. The original or ‘old’ TiGenix had a portfolio in cartilage repair products.  In 2011, TiGenix merged with Cellerix, which was a privately held cell therapy company based in Madrid that had a clinical stage allogeneic stem cell platform. As a result, we had a company that had ChrondroCelect®, the world’s first approved ATMP, and a robust pipeline of allogeneic products.

The merger has shifted our portfolio from a direct, interventional care of one therapy on one specific patient in ChrondroCelect®, to the new concept of using the immunomodulatory capacity of stem cells to suppress an immune response in Crohn’s disease. Unfortunately, due to the lack of reimbursement, we had to withdraw ChrondroCelect® from the market in November of last year, and we’ve decided to focus on bringing our new treatment, Cx601, to market. This would be the first allogeneic therapy approved in Europe, giving TiGenix the credit of creating two groundbreaking products.

You’ve mentioned the unfortunate withdrawal of ChrondroCelect® from the market in late 2016. The clinical data on the product was excellent. Why do you think it didn’t gain more traction in Europe?

Well, to start with, the pricing and reimbursement discussions with the EU member states took too long. Being an autologous product, it was expensive to manufacture, so the cost of goods was very high, and that necessitated a high price to be negotiated with payers. Having said that, we achieved reimbursement in Belgium and the Netherlands, and in those two markets the product was quite successful. If we’d had the same market penetration across the EU 28 as we had there, the product would have made in the range of $60m to $100m in annual sales, which is what we anticipated it would deliver. That would have been a nice revenue stream upon which a small biotech could have built for the future. The problem was that several large countries, such as France, did not grant reimbursement, and in Germany we were granted only partial reimbursement.

In addition, in the cases of Germany and Spain, our licence was granted with the co-existence of hospital-exempted products. Given that those products are able to produce without the same stringent criteria as a licensed product such as ChrondroCelect®, the competing hospital-exempted products could be sold at a significant discount to our price. The hospital exemption allows, at the European level, products to compete without clinical data, little manufacturing oversight, and less quality control. This situation made competition completely impossible in Germany and Spain, which were by far the most developed markets in Europe, so ultimately we were forced to withdraw the product from sale.

Had FDA approved ChrondroCelect® in 2009 under the joint ATMP assessment with EMA, instead of requiring a Phase IV study which TiGenix was unable to fund, would that have made the product viable?

It would have been easier at the beginning, for sure. However, if you look at the other similar products that were approved for cartilage replacement, such as Genzyme’s Carticel®, the product never really took off. It was a small market, and requires a complex surgical procedure and patients willing to accept the short-term pain for the long-term gain of having a fully regenerated cartilage. Most patients would opt for microfracture through arthroscopic surgery. ChrondroCelect® would have been a $100m to $200m product with US and EU approval, which would have helped the company finance our global Phase III trial of Cx601. As it stands now, we’re able to fund a Phase III trial in Europe only, which will lead to several years of delay for us in entering the US market. Having the global sales of ChrondroCelect® would have allowed us to be more aggressive and run Phase III in the US and Europe simultaneously and explore more indications. But I don’t think ChrondroCelect® would have allowed us to fund the growth of the company on its own.

Thus your shift to allogeneic therapies?

Yes. Definitely.

The US has always been a larger player than Europe in financing biotech, but over the last 24 months in particular, US dominance has turned into a one-sided rout. What is driving this exodus of biotech IP from Europe?

When you start with new IP, your cash needs are quite limited. I wouldn’t say it’s easy, but it is certainly doable to develop new IP in Europe at an early stage as you can source enough liquidity. As the company starts growing, and you move into Phase II or III, the ability of EU-based companies to find the investors to help fully develop these assets is challenged. US companies are starting to understand the unequal access to capital, and are taking advantage of the EU SMEs that have unique products but are having difficulty getting financing. They are able to acquire IP and new products to help their pipelines.

The immuno-oncology products are a great example, as are the monoclonal antibodies. Both had their genesis in Europe but were commercialised in the US. So, ultimately, the jobs are created and the money is made in the US, which creates additional funds for them to invest in and create other companies outside of Europe. We do the most difficult part in the EU, funding the very basic research and de-risking these new technologies, and once we need to move them into the productive economy, we do not have the means to do so in Europe. We do not have a system that ensures that the public money we spend in Europe discovering these new technologies is translated into real economic growth.

Do you feel this process is accelerating? The data would say it is.

It is accelerating! If you look at the number of specialised funds, banks and analysts in the biotech sector, Europe is in a downward spiral. You have fewer banks and fewer dedicated funds, so the companies have less cash and they need to go somewhere else. The result is less of a universe in the EU. The companies are then forced to follow the money.

They may, like TiGenix, do an IPO in Europe to get some level of funding, but when they need large investments of capital for a Phase II or III, they are forced to go to the US. For example, GW Pharmaceuticals was a UK company started by two well-known British entrepreneurs. When it came time to commercialise their lead therapeutic, they moved to the US and launched an IPO. GW is now completely delisted from Europe, and is a successful California-based biotech. Increasingly, companies like uniQure have sidestepped EU fundraising completely and gone directly to the US. They were never quoted on a European exchange. Unfortunately, unless there are some very profound changes in Europe, this situation will continue to accelerate.

This was the exact motivation for our EBE position paper called “Europe’s Flawed and Underfunded Biotech Ecosystem”. We really need to pay attention to this problem, or we will lose Europe’s biotech ecosystem in the future.

TiGenix recently signed a joint marketing and commercialisation agreement with the Japanese firm of Takeda for your new Crohn’s product. Do you see this as an example of how EU-based companies can reach out to get products to patients and the market?

In an ideal world, you don’t want to license the asset at a late stage. You’d rather commercialise the product yourself as that is where a lot of the value is created. Generally, biotech investors take the risk but then expect the return. I think that we were very lucky with our agreement with Takeda, because we kept the access to the US market and we keep any new IP generated in new indications. For us, this was a way to finance the company and de-risk our portfolio in the eyes of investors, who are sometimes scared by the lack of success of previous cell therapy companies. But for the future, our desire is to finance the company to the point where we can create our own structure in the US, and eventually commercialise the rest of our pipeline.

So ultimately, you see the Takeda deal as a bridge to help you establish a firm toehold in the US?


Eduardo, you’re President of EBE, but also a member of the executive committee of the US-based Association of Regenerative Medicine (ARM). How do you see the focus of the two organisations on either side of the Atlantic? Are the demands on them different?

EBE is a trade organisation made of small, medium and large European biotechnology firms, and ARM is a global organisation with a section focused in Europe. I see a lot of synergies, with the understanding that ARM has as members many research centres and patient groups. This does mean that occasionally the interests of the two groups have small differences, such as the ARM position on hospital exemption being less stringent than EBE desires. However, my being the EBE President helps us ensure that our messages around ATMPs are aligned, and our needs are disseminated broadly and effectively.

If you could change one thing tomorrow in Europe, what would it be?

I think the most important change we need to make is to amend the hospital exemption. We need to ensure, for once, that there is Europe-wide regulation.

The fact is, many of the new and emerging products in immuno-oncology are autologous and their cost of production is phenomenally expensive. We are going to have hospitals – that do not bear the same costs as licensed biotech companies – developing these emerging products under the hospital exemption. They will not have the same regulatory burdens or production challenges or investment overheads as the originators, and this must be dealt with at the EU level.

Also, given that these new therapies are highly effective, we’re going to need innovative reimbursement methods for emerging ATMPs. We’re developing curative products with only one dose, or a very limited number of doses. As we’ve seen with Sovaldi, this is a very difficult problem for politicians and payers, and in the case of an autologous advanced therapy product under the current European reimbursement system, you’d need to agree on a price where all the value is captured in one dose. This is increasingly unworkable.

There is uncertainty around the lifetime value of these therapies, and serious questions around other potential mechanisms to capture that value. Could it be through annuities, with smaller lifetime payments while cured? Perhaps some type of insurance? Work is being done around innovative reimbursement methods for curative biotech therapies, and there are many questions about how we can make them affordable from the payer’s perspective.

The current reimbursement system will not be able to cope with new therapies where all the value of the drug or treatment is recovered in one go, with a cure that potentially lasts for years and with uncertainly around the outcome. We must work together to find a better way to fund these highly effective emerging cures.

Eduardo Bravo, EBE’s President, will be speaking at the EFPIA annual conference called “Unlocking Tomorrow’s Cures” on 14 June 2017, at the Radisson Blu Royal Hotel in Brussels. The conference will examine the environment needed to foster and support research and development in Europe.

[1] Autologous cell treatments are those involving one individual as both donor and recipient. They are made from an individual’s own genetic material. In contrast to this, allogeneic therapies are the transplantation of cells, tissues, or organs to a recipient from a genetically non-identical donor of the same species, which theoretically should make their production easier and their cost of treatment lower.

2017-08-31T11:58:42+00:00June 2, 2017|