A cell-based therapy for pattern baldness has passed its first phase 1 safety test. Now, developer Replicel Life Sciences says it is preparing trials to see if it will become a game changer for the multibillion-dollar hair restoration industry.

For men and women who develop this type of baldness, treatment options are slim. Hair transplants are one option, but can cost thousands of dollars, while the available drug therapies—finasteride and minoxidil—don't work for everyone and generally have to be paid for out-of-pocket. The drugs are also fairly expensive, have to be used for months before any benefit is seen, and stopping treatment inevitably causes balding to resume.

Nevertheless, a recent market research report from IBISWorld values the US hair loss market at a sizeable $3.6 billion, although revenues have been declining in recent years due to an influx of generic competitors to big brands such as Johnson & Johnson's minoxidil product Rogaine.

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Enter Canada's Replicel, which has been working on its alternative therapy for pattern baldness, also known as androgenetic alopecia, for several years. In a nutshell, its procedure involves harvesting dermal sheath cup cells (DSCC) from the back of the scalp, and growing them up in cell culture to create a high-dose product it calls RCH-01.

High doses of the DSCCs are then injected into the areas of the scalp where hair is being lost. As DSCCs have stem cell-like properties, the hope is that the injections will regenerate hair follicles and lead to regrowth.

For now, Replicel has shown that its treatment can be delivered safely, a key consideration for a cosmetic treatment. Its phase 1 trial involved 19 volunteers—10 men and nine women—who went through the procedure and were followed up for at least two years, with the majority monitored for five years. There was some local irritation at injection sites reported but no systemic reactions that could be linked to the treatment.

Critically, biopsies taken after two years revealed no evidence that the injected cells were forming tumors or other growths, a perennial concern with regenerative medicines. Biopsies from the five-year group are still being assessed with data due in the next few weeks, but as it stands the firm's chief medical officer Rolf Hoffmann describes the safety profile of RCH-01 as "unquestionable."

The phase 1 trial wasn't statistically powered to show efficacy, but Replicel says the top seven responders achieved an 8% increase in average hair density in the treated areas of scalp. Three patients did a little better—with a 10% or more gain—and one showing density up 21% after two years.

There was considerable variation between patients, but the overall picture was of stabilization of hair loss, according to Replicel. Hoffmann said the results "validate the R&D strategy we have had in place since we saw the six-month post-injection data in 2012."

The Vancouver-based biotech says it is still refining its technique, including the way it harvests and cultures cells and the injection device and process. Future studies will use smaller doses of DSCCs given more frequently to increase the cumulative dose delivered, and this should "positively impact the product's efficacy and the uniformity of response," according to Replicel's chief executive Lee Buckler.

The company has already attracted one licensee for its technology, with Japan's Shiseido running a clinical trial in Japan due to report next year, and Buckler thinks that data could help it bring other partners to the table.

"We are very pleased with the results of this first-in-human study and are excited to move this product forward into the next phases of development," he said.