A new business model for cell-based therapeutics

Cell-based therapeutics have attracted large amounts of investment as they may offer effective treatments for a wide variety of health problems. In spite of extensive research relatively few examples of successful businesses exist. The products have several features that are challenging to manage when manufacturing at full scale. This feature is an obstacle to commercialisation that is often overlooked during research. For some cell-based therapeutics this may not be a problem. Traditional, centralised business models can be used with confidence for low volume production to treat high value indications, such as life-threatening disorders: the margins justify the expense. By contrast, when the products are required in large numbers and applied at high cell doses for less dramatic conditions the traditional model of business will be difficult to manage and to fund at full scale. An example is the cell-based repair of osteoarthritic damage to joints such as the knee. Overall business value for this target is high because the market is large and is growing. Effective therapy requires large cell doses and commands a modest value per dose. When using a traditional business model (requiring centralised manufacture and a long-distance, low temperature supply chain) very large sums of money must be put at risk during development in order to build adequate capacity. New ways of manufacturing and supplying such products are needed. A new model of business is developed in this thesis. The model requires lower initial capital investment and the business can be grown incrementally in line with demand rather than putting all the investment at risk at once. Data from published work and from laboratory experiments are used to derive the direct costs of manufacture. Structured Analysis and Design Technique and Activity Based Cost analysis are used to build a quantitative model of a centralised business. The model is compared with suitable alternatives based upon the extended enterprise model. The points of sensitivity in the cost model for the extended enterprise are identified and the model is refined to provide a less capital-intensive route for business development. The results and methods are of general applicability to similar products