How to Conduct Market Diligence for Cell Therapy Safety Testing

Cell therapy is a rapidly growing market, with the FDA expecting 200 new INDs and 10-20 approvals of cell and gene therapy products by 2025 (see appendix). As the number of clinical trials and approvals grows, the long-term safety of these products will continue to be scrutinized, leading biopharma and biotech companies to require safety studies on all of their assets throughout clinical trials and conduct long-term safety studies upwards of 15 years after administration of a therapeutic.

Given the growth and nuance of the cell therapy safety testing market, it is critical to understand the dynamics that impact this market; this rigorous market diligence will provide a clear picture of safety testing now and in the future.

At Kineticos, we look at three critical areas when conducting market diligence that is all anchored by primary research and subject matter expert (SME)/key opinion leader (KOL) interviews: regulatory environment, market dynamics, and competitive landscape

Primary Research: SME and KOL Interviews

Arguably the most important piece to any diligence project is conducting primary research. Gaining insights from subject matter experts and key opinion leaders who are working within the industry, and running the day-to-day will provide refinement to each step in a diligence project.

When working with our clients, we help identify what these SMEs and KOLs look like. Key considerations when profiling these experts are:

• The types of companies/institutions are they are from: academic researchers, physicians, lab directors, executives at Pharma, Biotech, CDMOs, CROs, etc.
• Their potential relationship with the client: customers, competitors, etc.
• Their role: decision maker, recommender, lead investigator, etc.

Understanding what insights we need will help drive deciding who to speak with. Kineticos can then use its expert network and proprietary database to identify and recruit the right individuals.

Once you have the right individuals, you need to ask the right questions. Thinking about the goal of the project and the critical areas will help to create these discussion guides. It is also important not to treat this as a script, but as a true guide for the conversation. You have to be adaptable based on the flow and expertise of the SME/KOL in order to get the most out of each interview.

Then, we need to synthesize the insights gained from our discussions. The best way to do this by identifying key themes from all interviews and provide supportive quotes for those themes. Even if there are conflicting quotes, they will ultimately impact the theme of that portion of the discussion and give important variation, and guidance, for our clients. The primary research is a key pillar supporting all of the work done throughdiligence and specifically supporting the research done on the regulatory environment, market dynamics, and competitive landscape for the cell therapy safety testing market.

Regulatory Environment

A key consideration whenever conducting market diligence is the regulatory landscape. The FDA continuously updates its cell and gene therapy safety testing guidelines and recommendations as each new IND is filed, each trial is completed, and each NDA is approved; however, more considerations need to be put in place.

Understanding what has been historically required by the FDA and what potentially may change in the future is equally as integral as knowing what the current guidelines are. Are cell and gene therapy companies following these guidelines to the letter, or just using them as references while continuing to do what has been done historically? Understanding how companies follow the regulatory guidance is integral when considering what the market size and competition are for those service companies conducting the cell therapy safety testing.

The FDA recently released new guidelines in January 2020 for the various aspects of cell therapy safety testing. Post-administration long-term follow-up, CMC, and testing for various diseases are all addressed in these guidelines. How do you interpret this based on your company? Big pharma, biotech, CROs, and Safety Testing Labs all have to analyze these guidelines differently.

So, how do you navigate the regulatory landscape? Take secondary research with current and historical guidelines, and conduct primary research. Conducting primary research by engaging regulatory and FDA experts, CROs, Pharma, and Biotechs is integral to understanding exactly how each group is navigating the landscape. How do guidelines impact how the FDA approves INDs and NDAs? How are service providers and sponsors following those guidelines? How is it impacting the services that labs and CROs offer? How does it impact trial design and time to regulatory approval? All questions can only be answered through detailed primary research with each of the key players.

Market Dynamics

Once you understand the regulatory landscape then you can start thinking about what the market looks like for cell therapy safety testing.

The first step to understanding market dynamics is having a detailed conception of what vectors are being used for cell therapy products. While lentivirus is the prominent vector within cell therapy safety testing, products using adeno-associated virus (AAV), retrovirus, and other viral vectors are still being discovered and leveraged during clinical trials. The second step is to determine the amount of ongoing clinical trials.

Once you understand how many active clinical programs are within cell therapy, and which vectors are being used in those programs, you can build a bottom-up model. Splitting the market size up by vector type is important as each vector type will have a different number of patients in each trial, a different number of samples pulled from each patient, and different assays are run that have different costs depending on which vector type is being used.

When building a bottom-up model, the inputs are critical. For safety testing, you need to consider the clinical trials and research that is being done where the safety testing will occur. You then need to identify the number of patients on average in each trial and how many samples they are testing per patient. That will give you the total number of tests that will be performed. From there, you can calculate the market size by taking the number of tests and the cost of each test, which will give the market size from that year. Growth rates can be calculated by looking at historical data and analogs, using that information to project forward what the growth rates will be for the next five years.

Similar to the regulatory landscape though, it’s critical to not rely on publicly available databases such as clinicaltrials.gov or other proprietary databases, to give you the full breadth and depth of information needed for a bottom-up model.

You need to talk to those who are discovering and researching these assets, as well as those who are running the actual clinical trials to get a full understanding of which assets are based on what vectors and are conducting which tests.

Only then will you be able to create a comprehensive bottom-up model for determining the market size for cell therapy safety testing.

Competitive Landscape

The final factor to consider when doing any market diligence is what the competitive landscape looks like. While understanding the regulatory guidelines and knowing the market size and growth are crucial pieces, if there is no room for new market entrants, then it may be ill-fated to go into that market. Conducting a competitive analysis for cell and gene therapy companies is a crucial step.

The competitive landscape can be straightforward for certain markets when there are clear dominant participants, but when looking at niche markets like cell therapy safety testing, it may not be as obvious who the key players are, and what the key technologies may be.

While some competitors may be obvious on paper, once you dig deeper you start to find that CROs and Labs often outsource certain tests or services to niche providers. Thus, primary research becomes a key factor again when gaining the appropriate nuance into who the true competitors are. Unfortunately, pharma and biotech may only engage with the CRO or lab with whom they are partnered but may not always know if it gets outsourced or not.

Having key connections into CROs, Labs, and niche providers is key to getting to the roots of who does each type of testing and understanding what the true cell and gene therapy competitive landscape looks like.

Conclusion

Market diligence is critical when making strategic decisions on where to invest your time and resources. For a niche market such as the cell therapy safety testing market, it is critical to gain a clear understanding of the regulatory landscape, market dynamics, and competitive landscape.

While secondary research can provide a snapshot of each of these pieces to the puzzle, primary research needs to be the centerpiece for every market diligence. With primary research, the diversity of KOLs is key – by function and by company. Talking to one or two people, or simply individuals with the same background will narrow the view. An equal balance of key opinion leaders, subject matter experts, and industry leaders allows you to gain a full, deep understanding of the nuances within the cell therapy safety testing market.

Appendix

• Interpreting Sameness of Gene Therapy Products Under the Orphan Drug Regulations (September 2021)
• Chemistry, Manufacturing, and Control (CMC) Information for Human Gene Therapy Investigational New Drug Applications (INDs) (January 2020)
• Long Term Follow-up After Administration of Human Gene Therapy Products; Guidance for Industry (January 2020)
• Testing of Retroviral Vector-Based Human Gene Therapy Products for Replication Competent Retrovirus During Product Manufacture and Patient Follow-up (January 2020)
• Human Gene Therapy for Hemophilia (January 2020)
• Human Gene Therapy for Rare Diseases (January 2020)
• Human Gene Therapy for Retinal Disorders (January 2020)

Kineticos is a life sciences consulting firm that represents centers of excellence in cell & gene therapy and oncology, combined with a vast depth of expertise in driving strategy and growth for companies in these areas.

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