Hurdles in tissue engineering/regenerative medicine product commercialization: a pilot survey of governmental funding agencies and the financial industry.

The Tissue Engineering and Regenerative Medicine International Society of the Americas (TERMIS-AM) Industry Committee conducted a semiquantitative opinion survey in 2010 to delineate potential hurdles to commercialization perceived by the TERMIS constituency groups that participate in the stream of technology commercialization (academia, start-up companies, development-stage companies, and established companies). A significant hurdle identified consistently by each group was access to capital for advancing potential technologies into development pathways leading to commercialization. A follow-on survey was developed by the TERMIS-AM Industry Committee to evaluate the financial industry's perspectives on investing in regenerative medical technologies. The survey, composed of 15 questions, was developed and provided to 37 investment organizations in one of three sectors (governmental, private, and public investors). The survey was anonymous and confidential with sector designation the only identifying feature of each respondent's organization. Approximately 80% of the survey was composed of respondents from the public (n=14) and private (n=15) sectors. Each respondent represents one investment organization with the potential of multiple participants participating to form the organization's response. The remaining organizations represented governmental agencies (n=8). Results from this survey indicate that a high percentage (<60%) of respondents (governmental, private, and public) were willing to invest >$2MM into regenerative medical companies at the different stages of a company's life cycle. Investors recognized major hurdles to this emerging industry, including regulatory pathway, clinical translation, and reimbursement of these new products. Investments in regenerative technologies have been cyclical over the past 10-15 years, but investors recognized a 1-5-year investment period before the exit via Merger and Acquisition (M&A). Investors considered musculoskeletal products and their top technology choice with companies in the clinical stage of development being the most preferred investment targets. All sectors indicated a limited interest in early-stage start-up companies potentially explaining why start-up companies have struggled to access to capital and investors based their investment on the stage of a company's life cycle, reflecting each sector's risk tolerance, exit strategy, time of holding an investment, and investment strategy priorities. Investors highlighted the limited number of regenerative medical companies that have achieved commercial status as a basis for why public investors have been approached by so few companies. Based on respondents to this survey, regenerative medical sponsors seeking capital from the financial industry must keep the explanation of their technology simple, since all sectors considered regenerative medical technology as difficult to evaluate. This survey's results indicate that under the current financial environment, many regenerative medical companies must consider codevelopment or even M&A as nondilutive means of raising capital. The overall summary for this survey highlights the highly varied goals and motivations for the various sectors of the government and financial industries.