Novathera CEO, Gareth Roberts
Backgrounder: Regenerative medicine is the concept of repairing or restoring the body to alleviate or even eradicate the effects of disease and injury, for example, an arthritic joint would be restored to movement without pain, damaged heart muscle repaired to function properly.
NovaThera is developing a number of products based on its three technology platforms - TheraGlass, a novel bioactive material which interacts with the body's tissues to stimulate cell growth and provide vital anti-bacterial, structural or regenerative proteins; TheraMachine, a process that allows the rapid scale-up of stem-cell culture; and TheraLung, technology that allows stem cells to be grown into the cells that line the lungs.
01.Can you give an overview of the company's funding history?
NovaThera is a university spin out from Imperial College London. It was initially set up in 2003 with Challenge Fund seed money of £250K. We raised £2.75 million in July 2005 (from Imperial College and private investors,) enabling us to establish headquarters at the Babraham Campus.
We now have office, manufacturing and R&D facilities. The business is developing rapidly with several products in the clinic. To drive the expansion we are looking to raise a further £2-5 million in the next three months. The investment climate is good if you have a good story and real commercial prospects. We have had a lot of interest from the US, for example.
02.What is your commercialisation strategy?
Our proprietary biomaterial TheraGlass is ready for the clinic in applications for burns and anti-scarring (with our partner ABT Inc US). We have the second generation of materials (combined with large human proteins) ready for development with our partner Pharming (Netherlands). Our strategy is to drive the applications to market as quickly as we can. In parallel we are developing our cell expansion technology for commercialisation and looking at cell treatments for lung disease.
We have plenty of things to do and are now on a recruitment drive for commercial managers and project managers. Our first product will be a cream containing TheraGlass, designed to be a simple, effective and antibiotic treatment for burns. A formulation to prevent scarring should follow. These programmes should deliver products for launch before the end of 2007.
03.There is a body of opinion that believes that stem cell technology has been vastly over-hyped. What is your take on this?
I think this is absolutely correct in some cases. There is great promise in regenerative medicine but some way to go, hence our strategy of early revenue generation from biomaterials. But I believe things are beginning to move into the clinic (over 30 clinical trials on stem cells and heart repair) and so we will see an acceleration in real news and developments over the next few years.
Regenerative medicine approaches have a spectacularly successful past history, for example, the miracle of heart, kidney, lung, liver and bone marrow transplants. Given the proven medical success and the relative safety of the approach I feel that there will be significant advances quite quickly as companies bring products to market.
04.How soon will we see stem cell therapies being approved and what are the key barriers that need to be overcome?
The first stem cell therapy - bone marrow transplantation - is used across the world already! Additional applications (particularly heart repair and nerve and brain repair) are undergoing trials now. Expect approvals within five years. The barriers that need to be overcome are selecting the clinical end points to measure success and the problem of large scale manufacture of good quality cells.
05.What much potential does the joint venture you recently signed in China, SteMing Asia, hold?
China is a vast, exciting prospect. It has over one billion people (three times the size of Europe) with enormous manufacturing, technical and scientific resources. Biotechnology is underdeveloped and regenerative medicine is a key technology component of the Chinese government's plans for the future.
We are positioning SteMing Asia, our JV with Hong Kong University of Science and Technology, to be a leading provider of cells for regenerative medicine therapies. SteMing has already raised funds in China and is set for expansion.
Given their progress so far, the experienced management team and their connections, we believe SteMing should be a very valuable business within five years. I am also excited by the interest shown from the US and Europe from companies who would like to partner with SteMing to introduce their technologies into China in a relatively painless way.
06.There are very few biotech floats on the main list nowadays. Is NovaThera a candidate for one?
Flotation is attractive at the right price! Flotation will be one option in the future depending on NovaThera's progress and market conditions. Our business prospects are substantial - we manufacture, we have products in development and we are extending our partnerships. Our investors are in agreement that to realise the value of NovaThera we must build the business and the revenues so that we can create a real substantial and enduring enterprise for flotation.
07.The UK Government has worked hard to establish this country as the world capital for stem cell and regenerative medicine research. Has this strategy borne fruit in your opinion?
We do lead the world in aspects of the science. We do not lead the world in the application of the science. Where are the clinical trials of stem cells in the UK, for example? We are in the dangerous situation that the science foundation will be used by other countries to build businesses, develop products and create wealth. It is this concern that lies behind NovaThera's strategy of building a manufacturing and product base and pushing forward into clinical trials as fast as practicable. If we don't develop the products we will have no stem cell industry in the UK.
08.Do you have any plans for physical expansion in the near term?
We plan to expand our manufacturing capacity both in the UK and overseas. We will also need to expand our R&D capacity. Our expansion will be centred on Cambridge.
09.NovaThera chose to relocate to Cambridge. Why was this?
Personally I think Cambridge is one of the most attractive cities in the UK. It has the scale and vibrancy which attracts people from all over the world. Because of this and the 250 hi-tech firms in the area setting things up, securing good advice from specialists and recruitment is relatively easy.
Add the brand of Cambridge University and you have an attractive place that most people on the planet have heard of. I confess that NovaThera uses the Cambridge name and our Imperial College parentage shamelessly. We are proud of where we came from and of where we are. We will begin to approach the overall economic success of Boston and the Bay area when we make more products and take them to market.
10.You are doing an elevator pitch for investors: Why should they part with their cash and back NovaThera?
Healthcare is a trillion dollar business, the biggest in the world. Demand is increasing due to an ageing population and expanding economies that can fund the cost. Regenerative medicine is set to dramatically alter the delivery of healthcare. NovaThera is a regenerative medicine company with revenues, products in development and an expanding product pipeline.
We are driving fast and efficient product development straight to the market place. Regenerative healthcare is in its infancy with no major players established, markets open to product development and a global scale. NovaThera offers investors access to the long term promise and returns from building a regenerative medicine business with the risks offset by substantial short term revenues arising from a burgeoning biomaterials product pipeline.