Biotech company CavoGene LifeSciences has licensed a novel investigational gene therapy from the University of California San Diego and brought the technology across the country to Cleveland, where the six-month-old firm will be headquartered.

The move — facilitated by Cleveland's health care and bioscience business accelerator, BioEnterprise — comes as the regenerative medicine industry is seeing a surge in investment, promising clinical trials and strong partnering opportunities.

In 2018, financing for regenerative medicine — which includes cell therapies, gene therapies and tissue-engineering products — reached $13.3 billion, topping the amount raised in 2015, an industry spike that had been seen as the year to beat, according to officials with the Alliance for Regenerative Medicine (ARM), a D.C.-based alliance of stakeholders interested in advancing the therapies around the world.

In 2015, the industry attracted a dramatic $9.4 billion in investment. After a couple of years that fell off from that peak, 2018's numbers surpassed it.

"A lot of investment is being made in the sector," said Janet Lynch Lambert, CEO of ARM. "And that in turn is driving company growth and more clinical trials and more work in this space. So the overall story for the sector in 2018 was a very good-news story. A lot of advancement in the science and in the commercialization of these technologies in the U.S. and abroad."

In 2018, gene and gene-modified cell therapy attracted $9.7 billion in investment; cell therapy attracted $7.6 billion; and tissue engineering attracted $936.9 million.

"I think the second spike means that the outlook is very, very bright for this sector," Lambert said. "And when you look at the chart that shows the indications that are covered, it's really a significant number of indications. So there's obviously a lot of work in oncology, in cancer, and a lot of work in cardiovascular, but there's also a great deal of exciting work in rare disease, in neuromuscular, in ophthalmological — you know, one of the first products on the market relates to an inherited vision disorder."

These therapies have been in development for decades, but are just now reaching the first wave of commercialization for cell and gene therapy, Lambert said. The first three products were approved in the U.S. in 2017, she said, noting that tissue-engineering products have been in the market quite a bit longer than that.

In Cleveland, CavoGene is looking to raise about $10 million this year to fund manufacturing and studies with nonhuman primates, said Scott Fisher, CEO of CavoGene and an executive-in-residence at BioEnterprise.

Fisher credits BioEnterprise for its ability to bring to Cleveland the technology, which is a novel and neuron-specific gene therapy licensed from the University of California San Diego and the laboratory of Brian P. Head.

BioEnterprise is "kind of a differentiated incubator," he said. "So it's really an amazing ecosystem for entrepreneurs. You kind of have everything in one place. We have all the key talent across the specturm of biotech."

Years ago, Fisher was involved in Juventas Therapeutics, a Cleveland-based, clinical-stage biotech company developing novel nonviral gene therapies. Late last year, Juventas entered into an agreement with Japanese pharmaceutical company Astellas. The agreement grants Astellas a license to conduct research and to develop Juventas' lead product candidate, JVS-100, through Phase 2a clinical trials with an option to acquire it from Juventas for further development and commercialization, according to a news release.

Athersys Inc., headed by chairman and CEO Gil Van Bokkelen, recently announced positive summary results from its exploratory clinical study that looked at the use of its cell therapy MultiStem to treat patients suffering from acute respiratory distress syndrome. In addition to this study, Athersys is conducting ongoing studies in ischemic stroke (MASTERS-2 Phase 3 study) and acute myocardial infarction, according to a release. The company is also planning a study to treat severe trauma patients and is supporting studies in Japan being conducted by Healios.

"There's a lot of momentum in the area right now because, more and more, we're seeing evidence of promising therapies that are being developed; there's more and more investment that's going into the sector; there's more and more partnering activity going into the sector," Van Bokkelen said. "The point is that there's a lot of indicators that are pointing in the right direction. I think that's pretty exciting. I think it provides tangible evidence and further testament to the fact that the field is progressing in a way that is quite exciting."

Milo Biotechnology, a spinout of Nationwide Children's Hospital, is also working on regenerative medicine therapies here in Cleveland, with a gene therapy that improves muscle strength or prevents muscle loss and muscle wasting. Al Hawkins, CEO and co-founder of Milo, said the regenerative medicine space in Cleveland is a small group but with a strong core. Companies like Juventas and Athersys brought in or cultivated strong expertise that has gone on to lead other companies in the area, he added.

Hawkins himself was co-founder and initial chairman at Abeona Therapeutics, a local company focused on developing novel gene- and cell-therapy approaches for the potential treatment of certain rare diseases.

"There have been some great successes in the field and people are starting to realize that these approaches are safe, and that they're scalable for larger patient trials and then ultimately commercialization," Hawkins said.

Right now, the regenerative medicine industry has more than 1,000 ongoing trials globally, 92 of which are in Phase 3, according to ARM. In 2018, the industry saw more than $20 billion in upfront payments for mergers and acquisitions, up from $13 billion the year prior.

"I think what the infusion of investment in this sector means is that the outlook is bright, that we'll be able to touch more patients across more indications and more geographies than we might have imagined just a few years ago," Lambert said.