The Life Sciences Report: Bob, there's a lot on your plate these days. How do you split your time?
Robert Hariri: I am truly fortunate that my full-time job currently is with Celgene Cellular Therapeutics (a subsidiary of Celgene Corp. [CELG:NASDAQ]), but I am a multitasker and spend a significant amount of time on other pursuits. I've been accused of being a bit of a workaholic. I follow the Elon Musk (CEO of SpaceX and Tesla Motors) theory of management, which says you can play a meaningful role leading multiple organizations as long as you are passionate and committed to their focuses and missions.
TLSR: You are a neurosurgeon, scientist and entrepreneur with active business interests, but you were originally trained as an engineer. Did you enter medicine because you saw disease processes as engineering problems?
RH: I have often thought about what skill sets served me best when I arrived at medical school. Yes, the tactical problem-solving approaches that I was exposed to as an engineering student made me comfortable with a new, complicated, challenging intellectual venture like becoming a surgeon. As my career developed, I found my comfort level in identifying, quantifying and distilling problems into their component parts, and then developing a strategy to form a solution, which is probably why I became so interested in surgery. My engineering background is also the reason I look at everything as an opportunity to build a better mousetrap. I still approach everything I do by fully identifying and characterizing the problem, and then looking for a near-term and long-term solution.
TLSR: Engineers are trained to solve problems without the prejudice of old thinking. Is that the way you approach innovation today?
RH: I think so. As an example, one of my favorite things to show people is an application on my iPhone. Using the integrated camera and light source, by placing your finger across the lens you can literally detect what's called a photoplethysmogram, which is the reflected spectral pattern that enables the detection of oxygenated hemoglobin volume coming into your tissue with each heartbeat. I worked on developing this technology 30 years ago to measure blood flow to the brain, and now it's an application that allows you to measure your heartbeat and oxygen saturation using your smartphone. That's what an engineering approach allows you to do—create a true innovation to raise the state of the art and the standard of care.
TLSR: Basic research costs lots of money, and oftentimes does not look like it is directed to a specific application. Why do you think it is so difficult to get lawmakers to understand the value of basic research?
RH: Generally speaking, lawmakers are faced with making judgments about issues they may have very limited backgrounds in. It may be difficult for them to fully appreciate the value of discrete elements of discovery, which enable applied scientific methods and engineering to reduce those discoveries to practical applications. When lawmakers look at the life of the scientist, and they see that exploration and discovery often yields information that doesn't have a clear use and path to commercialization, they immediately discount that discovery process as frivolous. In fact, the researchers just haven't been given the opportunity to connect the ideas between where discovery creates a point and a dot, and how those points and dots might be linked to other discoveries that will yield tangible and quantifiable results. To me, the most obvious failure has been that the scientific community and the legislative community have not created a purposeful dialogue, which I believe would highlight the tremendous intrinsic value of basic and applied research—not simply because such research leads to new technologies, but also because the technologies improve the human condition and fuel the economy.
When I look at anyone who believes that a solution to economic problems in American society today is to reduce investment in intellectual efforts like basic research, I know that person is missing the big picture. Investments in research translate into the only legitimate path forward in solving both our economic and health-related problems.
"The scientific community and the legislative community have not created a purposeful dialogue, which I believe would highlight the tremendous intrinsic value of basic and applied research."
To provide a good illustration, look at the effect of a revolutionary, groundbreaking treatment for a lethal disease, and what it has done for the economics of our society. Look at HIV. It was a uniformly lethal disease that we now have effective antiretroviral medications for. These medications have kept a lot of people alive; about 90% of people diagnosed with HIV can be managed with that as a chronic illness. The net effect of those 3 million life-years saved is somewhere in the neighborhood of $1.3 trillion contributed to gross domestic product. I see biomedical innovation as being the best path toward controlling the high cost of healthcare, fueling new job creation and reversing the trends that plague the global economy.
TLSR: Let's talk about some of the companies you have been part of. You founded a business called Anthrogenesis Corp. to leverage the potential of the placenta. That company was acquired by Celgene Corp. in 2003, and is now called Celgene Cellular Therapeutics (CCT). What are your positions at CCT?
RH: I was the CEO. I've stepped down from that role, and I've assumed the founder and chairman position.
TLSR: CCT has placenta-derived adherent cells currently in Phase 1 development for diabetic foot ulcers in patients with peripheral artery disease. These same cells also are in Phase 1 development for Crohn's disease, and I believe you've also done some clinical trials with these cells in rheumatoid arthritis and acute ischemic stroke. Why placenta-derived cells? As long as you are going the allogeneic route (using cells harvested from same species, but not the patient specifically), why not use cells from marrow, or nucleated cells from peripheral blood or adipose (fat) tissue?
RH: When I first decided stem cells represented a platform technology that could revolutionize medicine, I was challenged to come up with a product that could be easily deployed, readily adoptable like a medicine, and could integrate into the existing healthcare system, where practitioners are most comfortable with traditional pharmaceuticals. Any technology that employs a living cellular product must meet very high standards of quality, consistency, "dosability" and all the metrics physicians are comfortable with in practice. The placenta, at the time, seemed the best source of high-quality, reliable, quality-controllable materials. Placental cells could be produced in sufficient quantities, and with such consistency, that physicians would be able to use them no differently than they use small molecules or biologic agents.
The unique thing about the placenta, aside from the fact that it's the richest source of stem and progenitor cells that we know of, is that the raw material can be procured under tight quality-control systems and with a high level of predictability. It fits well into the manufacturing scheme that's necessary for economics of scale and quality control. Both are necessary for cell therapy to be a realistic clinical tool.
TLSR: Are these placenta-derived cells immune privileged?
RH: You have hit upon an important point. The placenta is nature's natural and perfect allograft. It's designed to be accepted across immunologic barriers. When you think about it, the placenta is tissue produced by a developing fetus that a mother will carry for nine months without initiating any kind of immune response. There is no better example of that tolerability than in surrogate pregnancy, where a female carries a fetus and placenta that aren't even related to her, yet she doesn't reject that placenta.
TLSR: In fact, the surrogate doesn't even have a haploid complement of chromosomes and their genes. The fetus and placenta have a totally different genotype than the surrogate maternal host.
RH: That's right—and the surrogate still accepts the allogeneic fetus and placenta as if it's her own tissue. That can't be done with other solid organs, such as the liver, kidney or heart. The placenta is unique in that it can modify the host immune system and evade any host immune detection, making it the perfect source material for deriving cells that can be used across immunologic barriers. That was the premise behind our searching the placenta for these cells, and it served as the basis for our product development and, ultimately, clinical development, which has shown that allogeneic transplant is accepted without problems.
TLSR: What about another administration of placenta-derived cells to the same patient at a later time, say after 8 or 12 weeks? If we're going to use the cells in a medical model, like a drug, can we give them again without creating anaphylactic shock?
RH: One would assume that if there were even a small amount of immunogenicity associated with the cells with the initial administration, a repeat administration would result in an amplified immunologic response. We've shown this is not the case. The placental cell can be administered serially without an individual host mounting any type of an immune response against it, which validates the concept that the placenta is the perfect source of allogeneic material for transplant.
TLSR: CCT's PDA001 (cenplacel-L) cells are administered via intravenous infusion. The PDA002 cells are injected into muscle in the diabetic foot ulcer indication. How long does it take for the cells to clear the system of the recipient?
RH: Our genetic studies thus far suggest that the cells take up temporary residence and are biologically active for weeks to a few months in the recipient. After a number of months, they're generally not detectable. This sets it up nicely for serial or repeat dosing of the product.
TLSR: Weeks to months in the system implies a sustained therapeutic effect. Being a neurosurgeon and in the stem cell space, you are obviously familiar with some of the experiments and clinical trials being done with adult stem cells derived from fetal tissue to treat lysosomal storage diseases. One company involved in this area is StemCells Inc. (STEM:NASDAQ), which has proved durable engraftment of neurons in the brain. This was determined by genetic testing of samples taken at autopsy of some of the children treated. I wonder if a durable engraftment model is possible with placenta-derived cells?
RH: I think that, depending upon the situation, longer-term survival of the cells is possible. But I think that survival is dependent upon the physical environment into which the cells are introduced, and whether conditions exist where the cells can take up temporary or permanent residence and become synthetically active. I believe cellular therapy exerts its clinical effect in many ways; a very important way is to become a source of factors that behave in an endocrine manner to alter the physiology of the recipient. In some cases these effects are modulatory, as in the case of controlling the immune system in autoimmune disease, or trophic, when factors help stimulate endogenous repair and regeneration.
"Investments in research translate into the only legitimate path forward in solving both our economic and health-related problems."
One thing we learned from the bone marrow transplant world is that when you administer mononuclear cells from bone marrow or peripheral blood into the recipient in a bone marrow transplant, some of those cells actually remodel other organ systems. Years ago, Diane Krause and Neil Theise at Yale showed that recipients of bone marrow cell transplants actually had a large percentage of their livers repopulated and remodeled by donor cells, even though those cells were administered specifically to remodel the bone marrow. What that suggests is that when there is a venue for those cells to take up residence, they can do so in a durable way.
TLSR: Bob, you are also founder of a company called MYOS Corp. (MYOS:OTCBB). Can you tell me about the company and its mission?
RH: Sure. Several years ago I became very interested, in part because of my experience with stem cells, in the fact that the quality and health of skeletal muscle as an organ system was vitally important to a patient's ability to tolerate treatment for chronic diseases. Yet no one had devoted much effort to building a pharmaceutical, biotherapeutic or bionutritional approach in that space. I guess I was the inspiration for a small group to create a company that focused on muscle as an opportunity. The founding team explored what was available to individuals looking to maximize the health and performance of their muscle tissue, and realized there was room to develop a range of products in this emerging space.
All of us have close relationships with family and friends who are challenged with serious diseases like cancer or chronic neurologic disease. It is very clear to me that the final common denominator in the physical decline associated with those illnesses is best characterized by the condition of frailty. Frailty is both a systemic decline in physical performance as well as loss of metabolic integrity, and is characterized most evidently in the loss of lean muscle mass. Anything that could prevent or reverse that loss would be highly beneficial medically.
MYOS is a unique company that functions as a bionutrition and biotherapeutics business. The company has a marketed, naturally derived bionutrition product that significantly reduces the loss of healthy muscle tissue associated with aging. The product will also augment the muscle gains of athletes, such as those involved in resistance training.
TLSR: The product is for use in patients with muscle-wasting diseases, as well as muscle loss due to natural aging, and for muscle enhancement for athletes. Is that right?
RH: Exactly. What's interesting is that the objectives of these diverse populations are obviously different. The athlete is looking to build muscle mass above and beyond the normal muscle distribution, whereas the patient combating cancer or in the middle of rehabilitation from a neurologic illness is looking to maintain, as well as increase, the mass and quality of his or her muscle tissue. But at the end of the day, the mechanism behind augmenting that mass is similar.
TLSR: My understanding of the technology platform at MYOS Corp. is that the company is developing myostatin inhibitors. Myostatin is also known as growth differentiation factor 8 (GDF-8). If you inhibit myostatin, you can gain muscle mass. Is that it?
RH: Yes. Myostatin is a natural, regulatory peptide that interferes with the signals that drive recruitment and proliferation of stem cells in muscle. The function of myostatin is to balance muscle mass and skeletal integrity, which was important in evolution to prevent muscle mass from becoming so unwieldy that it could exceed the structural integrity of bone. The constant building of muscle tissue leads to contractile forces that can literally fracture bones, and that sort of adverse consequence would be selected against by evolution. This regulatory system is designed to keep those two anatomic systems—bone and muscle—in balance.
TLSR: I found it interesting that some gene knockout mice have been created to not express myostatin, and these animals develop double muscle mass. There is a name for these mice, isn't there?
RH: They are called mighty mice. Also, there are naturally myostatin-deficient species, like the Belgian Blue bull, which develops tremendous muscle mass. It appears the low myostatin state is associated with high lean body mass, which confers certain physiologic advantages.
TLSR: Was the Belgian Blue bull developed via unnatural selection, or was that a natural evolutionary process?
RH: No one knows exactly how it arose. However, it's assumed that a mutation expressed itself in a heavily muscled animal, and the line has since been intentionally bred to retain that trait. Obviously, domesticated cattle are prized for their total lean muscle mass, so the Belgian Blue bull might have been unnaturally selected for its commercial value. In other words, the appearance of these mutants led to active selection.
TLSR: Bob, I'm going to ask you an off-the-wall question. I certainly understand that myostatin appears mainly in striated—that which is voluntary—muscle, and it does not appear in high concentrations in smooth or cardiac muscle. However, I understand that cardiomyocytes do contain low levels of myostatin. I'm wondering if a myostatin inhibitor could be developed to assist patients who have heart failure.
RH: That is a very interesting concept, and is something a number of laboratories are looking at. It's very possible that an isoform of myostatin specific to cardiac muscle could be targeted for that purpose. There is also the potential to use myostatin itself to prevent hypertrophic cardiomyopathy.
"I see biomedical innovation as being the best path toward controlling healthcare costs, fueling new job creation and reversing trends that plague the global economy."
These are not off-the-wall concepts. I think they're good to think about. The science around the family of growth differentiation factors that control the process of muscle development is just now emerging, and over the next several years, I think great attention will be focused on this space. I believe being able to control the developmental processes that lead to healthy tissue regeneration and renovation is going to be an important clinical tool in the future.
TLSR: Allow me go one step further with regard to heart failure. I'm wondering about patients who may have had ischemic damage to the myocardium prior to a revascularization procedure. While the thoracic surgeon is operating on the heart and grafting new vessels to it, could he or she possibly infiltrate a myostatin-type inhibitor into the myocardium around the newly grafted vessels, which might revitalize the muscle with new growth and potentially new blood vessels? Have you thought about that?
RH: It's something we have to look at more carefully, but is a very good point. It could be a fruitful development focus for companies with expertise in myostatins.
TLSR: What is the name of MYOS Corp.'s marketed product?
RH: The ingredient is called fortetropin, and it's marketed under a couple of brand names. MYO-X is one of them; Cenegenics Muscle Formula is another.
TLSR: Since Feb. 11, right after MYOS Corp.'s 1:50 reverse stock split, the stock is up 46%.
RH: And we think there's a lot of value there. The company is moving toward getting traded on an exchange. It's an unusual business model. Unlike the traditional therapeutics business, which starts out with a scientific concept and then invests a considerable amount of money and time navigating toward commercialization and revenue, MYOS has bifurcated its business. Its over-the-counter dietary supplement product has been a revenue generator from the day that doors opened. Growing that line of business helps fuel and validate the business model around the company's therapeutics. MYOS is going to leverage what it learns through deploying its dietary supplement product as a safe modulator of myostatin, and use that know-how to identify other approaches, some of which will be traditional small molecules and biologics that can act on the important pathway. I see MYOS as having a unique, derisked approach to building its substantial therapeutics business while growing a very healthy and potentially blockbuster bionutrition franchise.
TLSR: Just one more question about MYOS. In the athletic setting, have there been any attempts to ban myostatin inhibitors as performance-enhancing products for athletes?
RH: In the world of competitive sports, no doubt there will be interest in any strategy that manipulates a regulatory protein. The fact is that myostatin is a highly conserved (by evolution) natural regulator, and has a number of naturally occurring protein inhibitors. It may be very difficult to ban natural products that work in this space, because you'd literally be regulating what athletes can eat as food in some cases. Where do you draw the line on what is nutritional versus what is therapeutic?
TLSR: Bob, did you want to talk about a private company you're involved with called Human Longevity Inc. (private)?
RH: Human Longevity is an exciting and interesting business. Craig Venter, as you know, is the pioneering scientist who was the first to sequence the human genome. Craig and I have been close friends and partners, and we decided, along with Peter Diamandis, the founder of the XPRIZE Foundation and an incredibly accomplished leader in his own right, to create a platform through which a broad scientific approach could be launched toward identifying factors associated with long lifespan using a very comprehensive set of genomic, proteomic and metabolomic interrogation programs.
TLSR: This sounds like a systems biology approach.
RH: That's a great way of describing it. The fact is that by using sophisticated genomic and proteomic tools, we will identify actionable areas of the genome related to aging, and come up with strategies to help arrest or delay the whole process.
TLSR: Thank you, Bob. This has been very intriguing.
RH: I enjoyed it too. I thank you for your time.
Dr. Robert J. Hariri is considered a visionary serial entrepreneur in biomedicine. The chairman and former CEO of Celgene Cellular Therapeutics, one of the world's largest human cellular therapeutics companies, Hariri has pioneered the use of stem cells and biomaterials to treat a range of life-threatening diseases. Dr. Hariri has more than 100 issued and pending patents, and has authored more than 100 published chapters, articles and abstracts. He is recognized for his discovery of pluripotent stem cells from the placenta, and is a member of the team that discovered tumor necrosis factor. Dr. Hariri was recipient of the Thomas Alva Edison Award in 2007 and 2011. He serves on numerous boards of directors, including MYOS Corp. and Provista Diagnostics Inc. He is a member of the board of visitors of the Columbia University School of Engineering and Applied Sciences and the Science and Technology Council of the College of Physicians and Surgeons, as well as a member of the scientific advisory board for the Archon XPRIZE for Genomics. Dr. Hariri is also a trustee of the J. Craig Venter Institute and the Liberty Science Center, and has been appointed commissioner of cancer research by New Jersey Governor Chris Christie. Dr. Hariri received his undergraduate training at Columbia College and Columbia University School of Engineering and Applied Sciences, and was awarded his M.D. and Ph.D. degrees from Cornell University Medical College. Dr. Hariri received his surgical training at the New York Hospital-Cornell Medical Center, and directed the Aitken Neurosurgery Laboratory and the Center for Trauma Research.
Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) George S. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: StemCells Inc., MYOS Corp. Streetwise Reports does not accept stock in exchange for its services.
3) Robert Hariri: I own, or my family owns, shares of the following companies mentioned in this interview: Celgene Corp., MYOS Corp., Human Longevity Inc., Provista Diagnostics Inc. I personally am, or my family is, paid by the following companies mentioned in this interview: Celgene Corp., MYOS Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.