Vital Therapies, Inc. (VTI) is developing the first human liver cell-based Extracorporeal Liver Assist Devic (ELAD.).  ELAD provides metabolic support for patients with severe liver failure by processing toxins and synthesizing proteins that are key products of normal human liver function.  The WHO identified the worldwide market for acute-on-chronic liver failure at approximately 12 million patients. In China alone there are over 400,000 deaths each year from liver disease.  VTI has completed a successful pivotal trial and filed for market approval in China in September 2007, commercialization will follow approval. Trials in the U.S. will continue in 2008.
 
 
Product   ELAD is comprised of four hollow fiber cartridges containing 440 grams of cells and 32,000 fibers mounted on a standard blood pumping unit. Immortalized human liver cells are grown outside, and the patient’s plasma flows inside of hollow fibers to allow appropriate two-way transfer of toxins and nutrients.  During ELAD therapy the cells function like a human liver, metabolizing toxins and synthesizing proteins and other liver specific products essential for life. The ELAD cell cartridges are grown to exacting specifications at VTI’s San Diego GMP-compliant facility.
 
 
Technology The key to the performance of ELAD is the proprietary human hepatocyte cell line, C3A, licensed from the Wistar Institute in Philadelphia and further developed by Baylor College of Medicine. This is an immortal cell line that can be grown in unlimited quantities, stored and shipped worldwide.  A four-cartridge set is incorporated into a blood pumping unit at the patient’s bedside, enabling continuous treatment for ten days or more without the cells losing their ability to perform the metabolic and synthesizing functions of normal liver cells. 
 
Clinical Development   Five human clinical trials have been conducted in the U.S., UK and China with 96 patients receiving ELAD treatment.  Phase 1 and 2 controlled trials were run under an FDA IND and demonstrated safety and efficacy. In the China registration trial there was a statistically significant improvement in transplant free survival compared to the control group.
 
U.S. Market   Transplantation is the sole therapy shown to improve survival in severe liver failure. Over 17,000 patients are on the transplant waiting list. One-third of these patients have cirrhosis from conditions other than alcohol with a mortality rate of almost 50%. In a market study done for VTI by Easton Associates, a U.S. market potential for ELAD of $1.08 Billion /year was defined.  Most are chronic liver failure patients who have had an acute liver failure episode. The largest growth is predicted to be in patients infected with hepatitis C as well as those suffering from NASH and alcoholic liver disease.  Chronic liver disease affects between 5 to 10% of Americans and is responsible for approximately 2% of the deaths in the U.S.  A significant opportunity exists in the U.S. to improve both the cost of care and the quality of life in chronic patients who experience acute liver failure.
 
China Opportunity   Liver disease is pandemic in China. A market study done for VTI by IMS China concluded that 12% of the population is infected with hepatitis B and C and there are more than 400,000 deaths from liver disease annually. With 20% of the world population, China has 34% and 24% of the worldwide cases of hepatitis B and C, respectively. IMS identified in the major cities alone over 1 million patients who would be clinical candidates for ELAD. After evaluating the China market opportunity, VTI decided to focus on approval in China first because of its serious liver disease problem and the prospect of early market approval at reasonable cost. With the cooperation of eminent physicians who approached VTI through a long time VTI Chinese employee, a 100% owned subsidiary was formed in China to conduct the clinical trial and launch ELAD in China.  The trial was completed in July and the China market application was filed in September.
 
Marketing and Distribution Care for acute liver failure patients typically occurs in focused centers of major hospitals in both the U.S. and China.  VTI intends to launch ELAD in China and the U.S. through specialized liver “Centers of Excellence”.  All of the logistics of growing, storing, shipping and connecting the cartridges to the bedside unit have been proven during the U.S. and China clinical trials.  The U.S. manufacturing facility will be able to supply both the China launch and the U.S. clinical trial.  A second manufacturing facility will be built in China.
 
Competition There are currently no other living cell-based liver treatment devices in controlled clinical trials anywhere in the world.  All such products are pre-clinical.  First mover advantage for VTI will include Orphan Drug and Fast Track in the U.S. creating a large technical and regulatory hurdle to overcome – including growing large quantities of cells consistently.  Existing toxin removal systems include albumin dialysis, charcoal or resin filtration and plasma exchange; none of these have been shown to improve survival, and have not become standard of care.
 
Financing  VTI is well financed with a syndicate of venture capital funds led by Versant Ventures and includes MedVenture Associates, Delphi Ventures, Valley Ventures, Toucan Capital, HBM BioMed China, DFJ DragonFund China and Heights Capital.