Julie Lamb, Senior Editor

About the Author Julie Lamb, Senior Editor

Julie joined Smarter Analyst across the world- all the way from Louisville, Kentucky- where she graduated with a Bachelor of Arts in English with a focus on creative writing from the University of Louisville.

Exclusive Interview with RepliCel Life Sciences President and CEO Lee Buckler

RepliCel Life Sciences Inc. (REPCF) (RP.V) is a biotech company looking not to just treat symptoms, but find cures. Why should patients who have a tendon injury suddenly be stalled in their life pursuits? What if you could retain your skin’s youthful appearance and function in a natural way that uses your own cells? RepliCel may have the key, not just to rejuvenated skin and functioning tendons, but also a safe way to stop – and perhaps even reverse – hair loss.

This week, I held an interview with President & CEO, Lee Buckler, who spoke with great passion of RepliCel’s multi-course trajectory. The company’s goal is to use cutting-edge regenerative cell therapies to treat various conditions from pattern baldness to skin rejuvenation to chronic tendon injury. Aging might not have to lead to less activity or skin that spills all your secrets.

Additionally, the company has a new dermal injector device that could target a great deal of attention, designed to make procedures less uncomfortable for patients, deliver better outcomes, enable new ways to tackle fine wrinkles, and deliver greater profit to aesthetic clinics worldwide. Both doctors and patients alike will soon have their eyes on this injector, and investors could see some long-term wins here.

When it comes to investigating the science behind the breakthrough for sports injury, it turns out that collagen and tendons have a lot more in common than the public might realize. RepliCel is maximizing on its cellular insights to bring better daily functioning to those in pain by attacking the root of the cause – and attempting to repair, breathing new life to aching tendons.

This is a biotech company that believes in safety first and is intent on expanding the options available, as RepliCel’s innovation stems from a desire to not provide immortality- but more quality of life through effective clinical discovery. Let’s take a closer look at the irons in this budding biotech company’s pipeline fire:

Julie Lamb: So far, RepliCel has one key global partnership established with Japanese cosmetics and hair company Shiseido for the pattern baldness drug RCH-01. That’s a solid foot in the door to reaching out to the Asian market.

Lee Buckler: Correct. We have two biologics in development for three markets. We have one that is uniquely targeting androgenic alopecia and that product is partnered with Shiseido, which has the rights to co-develop, commercialize and market the product in Asia. We’ve done a Phase 1 of this product and Shiseido is currently funding a clinical study of that product in Japan.

The second cell therapy product is a fibroblast product expressing collagen. We recently completed two clinical studies of this product. One was a clinical trial that we did in Dusseldorf, Germany for dermatology. The other clinical trial was done for tendinopathy in Vancouver, Canada.  We own the global rights on this product and are actively seeking partners in both Asia and abroad.

Lamb: Do you have other global alliances in the works?

Buckler: At the moment, we are in discussions with several interested parties regarding potential partnerships for all four of our products. The product that we’re the most bullish on in terms of our next partnership is the dermal injector, RCI-02. We have a number of relatively mature conversations ongoing and because of the near-term commercial stage of this asset, we are fairly confident that our next deal will be around the dermal injector, which will be market ready next year.

Lamb: By 2018. That is the device attracting some global attention. How do you think these collaborations will make the clinical stage pipeline more valuable?

Buckler: For early stage biotech companies like us, any time we can acquire a partnership with a major company it certainly provides a fair amount of credibility to the story. Early stage investors gain a lot of confidence when a company like ours establishes a partnership with a much larger, reputable company. I think that creates value in and of itself.

If, for instance, a deal is structured similar to the Shiseido partnership- then there’s the promise of the asset being well funded during the commercialization and launch process. For example, Shiseido has committed to financing the development of the product in Asia and, once, commercialized, Shiseido committed to paying us milestone payments and sales royalties. Investors put value on the fact that there’s an ongoing financial commitment and anticipated injections of capital into the company.

Lamb: Talking a bit more about the pipeline- you’ve got a few things you’re tackling: skin rejuvenation, pattern baldness, and chronic tendon injury through cell therapy regenerative medicine. We rely on healthy cells for healing and daily function, so there is exciting, untapped clinical potential in the sphere of cell therapy. I would love to hear more about your goals for RepliCel’s cell therapies to become the new go-to treatments for patients and the compelling possibilities available in this field.

Buckler: This is an incredibly exciting time for RepliCel. With first-in-human-clinical data now in place establishing a strong safety profile and exciting indications of efficacy, we are focused on the developing commercial products in all four of our target market applications. Now we have an opportunity to mature the products through mid-stage and late stage clinical studies and really focus on creating value.

We are focused on two clinical markets: one in aesthetics and the other in orthopedics- sports injuries.

On the aesthetic side of things, our most mature product is the dermal injector. This is an injector that promises to improve the way things are injected into the skin- and that certainly includes Botox in some instances, dermal fillers, and other aesthetic and clinical applications. The injector will be the first product to go to market and then we’ve got our two cell therapies treating androgenic alopecia, aging or sun damage skin, and tendinopathy.

Androgenic alopecia, which is the target of our earliest and initial cell therapy product, is the primary cause for pattern baldness in men and women. This cell therapy is manufactured from cells taken from a single-stitch tissue biopsy removed from the back of the patient’s head.

From this tissue biopsy, we discovered that there are a number of cell populations. Some of these cells have everything to do with growing hair fibers; others have everything to do with growing and maintaining the tissue of the hair follicle, in which the hair fiber grows.

We isolate one cell population that’s a tissue-related cell and one cell population that’s related to growing hair. The cells, taken from the back of the head, are immune to the reasons for hair loss – this is why bald people still have hair at the back of the head.

Instead of relocating thousands of hair follicles from the back of the head to the top (as they do in hair transplant surgery) we simply isolate the cell population that is immune to the condition, grow millions more of them in a manufacturing facility, and ship them back in a vial for injection into the scalp. They are then injected into the affected area and repopulate the existing hair follicles with a cell population that is immune to the condition. In essence, we’ve observed the regrowth of hair and the halting of hair loss progression.

We’ve now got first-in-human clinical data on our androgenic alopecia study which provided overwhelming evidence of safety. We followed up with the patients for up to five years and have seen no serious adverse events.

While we were working with the cells of the hair follicle, we discovered another cell population that is highly expressive of tissue building proteins, especially collagen. Once we understood how to isolate these cells, characterize these cells, manufacture these cells, and keep their collagen-conductive capacity, we then launched two clinical studies of this product: one delving into the potential for skin rejuvenation, where collagen is really important, and the other into tendon repair.

Most people don’t understand the correlation between collagen and tendons. It turns out that 80% to 90% of the dry weight of your tendons is comprised of layers of rope-like strands of collagen, whether that’s in your ankle, knee, elbow, or shoulder. The tendon connects your muscles to your bones and has a particular composition and consistency that’s largely comprised of collagen to keeps it strong and functioning as it should be.

As we age, tendons become weak and susceptible to damage and micro tears start to form, causing long-term impairment. Surgery and physical therapy may help, but eventually, in some people, they degenerate. Ultra-sound images of these tendons show black holes where there’s not enough collagen in your tendon to be sufficiently strong. Symptomatically, your tendon hurts and eventually it hurts enough that you stop doing the things that you love. You start to lose function.

What we have seen is that the injection of our cells into tendons of people who have had long-standing pain and loss of function can improve function, reduce pain, and according to the ultra-sound imaging, result in measurable tendon regeneration. This is the very exciting field of regenerative medicine using cells as the therapeutic modality. We’re actually looking to cure people as opposed to just addressing their symptoms.

Today, there are over a billion dollars-worth of regulatory approved cell therapy products being administered to patients on an annual basis. There is a pipeline of cell therapies in development for almost every imaginable human disease or condition. We’re right there in that pipeline of products with a whole bunch of other companies pursuing everything from cancer and eye disease to hair loss and skin aging.

Lamb: That brings me to a few questions. First, I know you discussed the problem or chronic tendon pain preventing people from doing what they love. The goal would be to eliminate pain, restore function and stimulate tendon regeneration. How do you think that fibroblast therapy could help you make waves specifically in the sports medicine market?

Buckler: We are very honored to have a couple of leading, world-renowned orthopedic surgeons involved in helping us with these trials and identify the therapeutic needs. One of these is a doctor who for the past 16 years has worked with professional sports team sand has done a lot of work with high-performing athletes. For anyone wanting to remain active, when you have chronic tendon degeneration where the cells in the tendon simply aren’t repairing themselves as they used to do when you were younger, there are really no good options available in the current market today.

So, we are excited to be developing a product used in a non-invasive treatment protocol to reverse the kind of degeneration that is seen not only in professional athletes, but even in those who are aging, people carrying a little too much weight, or just people who have genetic weakness for this kind of degeneration. Basically, this is the disruptive promise of cell therapies to reverse degeneration by regeneration- and that’s as true of tendons as it is of skin.

Lamb: How do you think your company’s intent to address these cell deficits through these cell therapies separates RepliCel from the rest of its competitors?

Buckler: Well the fact of the matter is if one were to look at tendons, for instance, there are very few competitors. Once a tendon gets to this point, there’s no good surgical options that can be used. There are various one-on-one clinics that sometimes inject what is called PRP. That works sometimes, but a lot of the time, it is just a clinic-based treatment. It’s not a product that has robust clinical evidence behind it. If physiotherapy doesn’t work and the patient goes through clinic-based injections and the treatment does not work, you’re really left with no options other than stopping activity. So, we think we have a very unique position in the tendinosis field.

In the dermatology field, there are currently two billion dollars-worth of dermal fillers used annually to make people look younger. Add Botox and other general treatments in there, and you’ve got a three billion-dollar market to make people look temporarily younger, their skin look more robust, and less wrinkly.

The fact of the matter is that none of these products can claim to really regenerate that layer under the skin that’s keeping you looking younger. Our cell therapy is not only something that promises the potential for regeneration- that nothing else promises- but is also very natural. You’re not pumping something synthetic into you. We’re using your own cells to help you regenerate that layer under the skin that helps you keep that appearance.

We know there’s a segment of the market that is not using products currently available that would be attracted to use something that’s much more natural like our cell therapy products.

For hair loss, the competition is a drug called Propecia which has side effects, you can spread Rogaine on your head, like Rogaine that sometimes work and a lot of times doesn’t, or you can take a very aggressive surgical approach and have hair transplant surgery. Not a lot of people want to do it, because it’s expensive, invasive, and lacks consistent results. Now, if you could use your own cells and even stop the hair loss, let alone re-growing or increasing your hair, then that’s a very attractive opportunity.

Lamb: You mentioned specifically regarding your aging and sun-damaged treatment that it had a promising safety profile. It sounds like it is because you are using the person’s own cells to not just treat the symptom, but you’re trying to rejuvenate the skin itself. What do you think regarding the UV-damaged skin market and the aging market – can you talk a little bit about the value you think that will bring to the company? I know you mentioned there is a two billion-dollar market. In general, what are your hopes for RCS-01?

Buckler: In dermatology, we talked about the existing products that are out there on the market. We’re targeting fine wrinkles initially with RCS-01 and its companion dermal injector – the kind of shallow wrinkles you see in people over-exposed to the sun or environmental damage or just genetically predisposed to them. These fine wrinkles are most troubling in highly exposed areas such as across the expanse of cheeks or in the upper chest, or top of hands. There’s not currently a way to satisfactory address those types of wrinkles.

Our dermal injector is being designed initially to enable dermal filler products already on the market to be successfully distributed in a way that gives you a much more effective approach to treating these wrinkles. As a secondary attack on these wrinkles we are developing our RCS-01 cell therapy which is being designed to not just temporarily fill but to really regenerate by increasing the collagen production and protecting them from the deterioration of collagen in a much more natural way – addressing skin rejuvenation and reversing the impact of aging.

Lamb: Do you think this natural way of addressing aesthetics and tendon degeneration is something that would be appealing to potential patients?

Buckler: Based on the feedback we’ve had from dermatologists and from the patients themselves we think there are a couple of very important things that we’re addressing here. One is that there is a significant unmet need.

If we can rejuvenate skin, regrow hair, and reverse the impact of chronic tendon degeneration, then we’ve got something that nothing else accomplishes – particularly without side effects or invasive procedures and utilizing something much more natural than existing alternatives.

Lamb: I’d also love to talk a little bit more- you’ve mentioned about your dermal injector. It sounds like it’s going to be a real game-changer. What do you think makes that skin injection technology crucial not just to RepliCel, but you seem to talk about the way it could change the way injections are administered in the future? How do you think that your dermal injector could impact your near-term as well as your long-term prospects for the company?

Buckler: We are an early-stage biotech company with lots of blue sky market opportunity looking forward. For a lot of investors, that’s a fairly long-term investment proposition. We’re excited, because in conjunction with the biologics that have large, long-term opportunity, we have here in the dermal injector something that promises a short-term path to partnership and revenue.

Obviously, we understand that this is not going to be a valuable asset for RepliCel unless it’s a valuable asset for the clinicians and the companies that already have products in the market so, our design has been driven by those users and our injector addresses their needs. In the wrinkle market, for example, none of the current injectors really allow for controlled, precise, even dispersion of product into the shallow regions of the skin.

Lamb: In a way that has yet to be done. You’re saying that this is one of the things that makes RepliCel so unique.

Buckler: This is one of the things that makes our injector unique in- that it allows for controlled, precise, even dispersion in the shallow region of the skin. That’s number one.

Number two is the very controlled precision of the device itself. One of the things that dermatologists have told us is that a lot of these procedures right now, because of the nature and the sensitivity of the injections have to be reserved for the person who has a lot of training and a lot of experience – the clinician in the office. A lot of the procedures you can’t delegate to people with less training or people with less experience without sacrificing quality outcomes.

This device has mechanical and electronic controls over the precise action of the needle and the dose delivery. So now for routine procedures, you can delegate this to less experienced technicians and not sacrifice any of the expected quality of outcome.

Number three: if you look at the dermal filler market, this injector has a numbing element that stands between the needle and the patient’s skin which is designed to numb the skin before the injection. This element has the potential to take away the need for use of local anesthetic prior to the injection of the product, which makes for a significantly more pleasant experience to the patient. Plus, there’s the reduction of the use of local anesthetic, and the time associated with the injection.

This device promises to increase a clinic’s profitability in a couple of ways. One, to eliminate the need for local anesthetic in a way that reduces the time associated with the procedures and the cost associated with the anesthetic.

Finally, the dermatologists that we’ve approached with this design have said that they’re very excited not only with the fact that this promises to improve the consistency of outcomes with the procedures, improve the profitability of these procedures, but perhaps most importantly actually allows them to do more kinds of injections – offer a procedure to address patients’ fine wrinkles they can’t do in a non-invasive way today.

Lamb: It sounds like it’s a huge win/win. Patients will have less pain, a better procedure and on the other end, more profitability.

Buckler: We tried to make sure that there’s a win for the company selling the products that are being injected, for the clinics themselves, for the users, and for the patients.

Lamb: This is definitely something that will be instrumental to your timeline. But looking back, you mentioned what started it all- we’re going to zero in for a moment- you mentioned the leading cause of pattern baldness was androgenic alopecia. I know that the company first sprang onto the scene back in 2006 under the name TrichoScience Innovation. It became RepliCel four years later. It changed once the firm reverse-merged and you earned an uplisting to OTC. This dermal injector is going to be potentially huge for your company. What does the rest of your timeline look like for the next five years?

Buckler: The first phase of our company, through 2006 to 2010 was really about discovery. Dr. Hoffman and Dr. McElwee did some early discoveries around the cell with hair follicles, specifically androgenic alopecia.

2010 through 2016 was about diversifying to our other cell therapy products, doing all the in vitro and pre-clinical science to get the products into clinic trials, and then launching the initial developments of the device. This phase was about leading the device into the final stages of commercialization and putting both our biologics into first-in-human clinical data.

Now we’re into the third phase of the company, which is about maturing the pipeline, getting the device market-ready, generating revenues, and leading our cell therapies into the next phase of clinical evidence.  This phase is really about establishing robust clinical evidence that gets us the kind of deals investors are looking for as we march these products forward toward market launch.

Lamb: And speaking to the diversity that you’ve discussed about your pipeline, what are RepliCel’s other sustainability objectives to maximize shareholder value and will you be expanding the pipeline even further?

Buckler: Our primary focus is on maturing the products we have in place already and without a doubt, we have to get this device across the finish line and generating revenue.

Second of all, we’re preparing for a launch of next phase clinical trials on one or more cell therapies in applications for which we’ve already got clinical evidence. We will make sure to balance equity financing with non-dilutive financing as much as possible.

We expect a deal around the injector to bring in upfront and milestone licensing fees that are non-dilutive. We are also working in conjunction with a company with a great track record in securing non-dilutive funding.

Lamb: Do you have any closing thoughts for our readers? Something you would like them to know about what your company represents and where it’s headed.

Buckler: RepliCel is a unique company in a very exciting space of regenerative medicine. We are pursuing products for which we don’t have to successfully negotiate reimbursement – these are large and consumer-driven market applications.

We also have this near-term revenue generation opportunity with the device which positions us uniquely as an investment opportunity among early-stage biotech peers. We know there is a fast-growing segment of the market that’s really focused on all things related to combating the effects of aging – that’s where we fit.  Our products are being developed to treat conditions correlated with aging in a way that people are looking to find more creative and natural ways to address.

Lamb: They always say youth is wasted on the young, so it looks like you’re offering a new chance of extending that fountain of youth opportunity, which I’m sure everyone will appreciate.

Buckler: Absolutely!

 

Disclosure:

RepliCel Life Sciences is a sponsor of Smarter Analyst. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 

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