//     July 6, 2022

It’s the COGs*, stupid! (by Marcos Valadares)


Ref: Image modified from: https://workful.com/blog/cost-goods-sold/

Let me explain the title, first! Apparently, the first time this has shown up in the academic literature was in 2003 (ref), when Anderson et al, 2003 was investigating the reason why US health expenditure was much higher than Europe and the conclusion was written in a provoking title saying: It’s the price, stupid (by the way, in 2019 they published yet another paper claiming the same thing (here).

In 2016, Anthony Davies, founder and CEO of Dark Horse Consulting, adapted this phrase to “It’s the CMC*, stupid” (ref), making reference to the fact that in the prestigious JPM meeting of 2016, companies were aware that manufacturing challenges were likely the most relevant problem to be solved in order to bring cell and gene therapies to market and enable curative treatments to reach patients.

Recently, at a panel discussion the last ASGCT 2022 meeting in Washington, DC the table coordinator improved on that even more and said: “It’s the COGs*, stupid!”, which I unceremoniously stole as my running title.

If you attend one of these cell and gene therapies meeting you will quickly realize that manufacturing is the big elephant in the room to be addressed and the question becomes: how to develop therapies that can be used for potentially hundreds of thousands of patients, if efficacious?

There is no consensus on what we need to do to have a trully scalable cell therapy, but we can borrow from another industry to understand what the main problems are related to scaling cell manufacturing: cultivated meat. In the cultivated meat space, it is known that culture media, the nutritious liquid used to cultivate cells outside of the body (equivalent to blood in the body) represents up to 80% of all costs (ref) and this is a main point in the end of the day. We can say that allogeneic therapies (those in which one product will be used for many patients) will face similar challenges to cultivated meat and therefore we can anticipate that the only reagent scaling linearly in the process is media. That is just another way to say that media will increase in volume as scales increases in size (seems obvious but needs to be said). As it turns out, cell culture media is prohibitively expensive costing north of $500/L (lowest estimates) and up to $2000L in some cases.

If we truly want to tackle this challenge of scalable cell therapies, we need to critically face this problem of current media cost. Therefore, the first step forward is to be able to rethink the entire media composition from the ground up. At LizarBio we have developed negligible-cost cultivation iPSC media that is 100x less expensive than current alternatives (here) costing less than $5/L. Now, for the first time in history, we can fully commit to large scale suspension-based cultivation systems without incurring in huge media costs.

We understand that cultivation of iPSCs is just half of what we need to do. After cultivating these cells, we need to differentiate them into specific cell types, that will themselves be used as therapies. We are also working on this. As an example, we are quickly approaching a milestone in which we produce 1 billion fresh heart cells for as low as $50. Since we don’t have a media bottleneck regarding suspension culture systems anymore, we can now fully commit to suspension-based scalable therapies. We believe, this has the potential to change the landscape of cell therapies worldwide, potentially making curative cell therapies mainstream.

We know that each cell type will require its own set of process and nutrients to be cultivated. Therefore, the path to build a platform to produce any cell type in the body encompass more than what we have laid out here do far. Stay tuned for more information that will be shared about this.

As always, we keep pushing!

*if you are new to the field COGs stands for Cost of Goods and CMC stands for Chemistry, Manufacturing and Controls (part of a new pharmaceutical product application to the US Food and Drug Administration),


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