Japan is Breathing Life into the Stem Cell Space, Astellas Pharma (ALPMF) & Pluristem Therapeutics Inc. (PSTI) Are Benefiting

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Japan is the stem cell capital of the world. From the Nobel winning efforts of Shinya Yamanaka in the field of mature to pluripotent stem cell reprogramming, to the STAP scandal and its suicide tarnished fallout, if there’s something to talk about in the sector, chances are it happened first in Japan.

Japan’s development of the stem cell space is being encouraged by government policy in the country targeting the promotion of stem cell research and development activity. The Japanese government put into effect a raft of new laws in November 2014, designed to incentivize the industry.

The Japanese Pharmaceuticals, Medical Devices, and Other Therapeutic Products Act (PMDAct) allows conditional and time-limited approval for regenerative medical products based on the ensured safety and estimated efficacy in small-scale clinical trials. In other words, it’s far quicker and easier to take a stem cell treatment to market in Japan than it is anywhere else in the world due to relaxed government regulation. For the companies operating in the Japanese stem cell sphere, this is clearly a huge advantage. It’s also an advantage to those looking to pick up an exposure to the space, with a number of US listed companies establishing operational locations in Japan to take advantage of the legal environment and framework.

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Here are two potential exposures to the stem cell space, each of which benefits from a Japanese operational presence.

Astellas Pharma (OTCMKTS:ALPMF)

Let’s kick things off with Astellas. In May 2016, and following its acquisition of then development stage stem cell biotech Ocata, Astellas formed what it now calls the Astellas Institute for Regenerative Medicine (AIRM). The AIRM is actually headquartered in Massachusetts, but its primary research team is in Tsukuba, Japan. Just as Japan is a hot spot for stem cell research globally, Tsukuba is a sort of unofficial hot spot for the sector in Japan.

What’s Astellas working on? Since its operations are rooted in its acquisition of Ocata, the AIRM’s primary focus is the continuation of the Ocata programs – specifically, regenerative treatments in ophthalmology. The two lead indications, and the only two that Astellas lists as ongoing in its latest pipeline report, are Stargardt’s disease (SD) and dry age-related macular degeneration (AMD). These are essentially the same condition, with slight variations based on the age of the patient.

The company’s treatment is rooted in what’s called the retinal pigment epithelial cell, or RPE. In our eyes, we have photoreceptor cells, which can be further broken down into rods and cones. Rods deal with low light images and have no color recognition, but they allow us to see in the dark because they only require low light to operate. Cones are responsible for photopic, or high light, vision, and can recognize color. Rods and cones require a blood supply, and this is the role of the RPE cells. If the RPE deteriorates, the photoreceptors don’t get the blood they need, and vision deteriorates. Both Stargardt’s and dry AMD are the deterioration of the RPE layer at the back of a patient’s eye, with the former being associated with younger and the latter with older patient populations.

Astellas Pharma (OTCMKTS:ALPMF)’s program is working on the regeneration the RPE layer in both SD and AMD sufferers. How? By introducing stem cells to the layer, and allowing these cells to mature into RPE cells.

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