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October 16, 2012 VIA EMAIL (without attachments) VIA OVERNIGHT MAIL (with attachments) Robert A. Sausville Director, Office of Case Management Room 1025 HFM-610 Rockville MD 20852 Re: Response to September 24, 2012 Letter Dear Mr. Sausville: Celltex Therapeutics Corporation (Celltex) hereby responds to FDAs September 24, 2012 letter (September 24th Letter). Celltex respects the agencys authority, granted by the federal Food, Drug, and Cosmetic Act (FDCA) and the Public Health Services (PHS) Act. While Celltex respectfully disagrees with the positions outlined in the September 24th Letter, Celltex believes that this technologys therapeutic potential can be brought to fruition as a biological drug as the agency states. Although the regulatory requirements for a biological drug are ex- cessive for an autologous mesenchymal stem cell therapy such as Celltexs, Celltex will follow the agencys request to treat the Mesenchymal Stem Cell (MSC) product as a biological drug and develop Investigational New Drug (IND) submissions for clinical trials. As you know, the September 24th Letter is an advisory opinion, not final agency action on the issues it raises, inviting Celltex to explain why its product is not in violation of the FDCA and the PHS Act. Celltex would like the opportunity to explain its position, both with this letter and with its request for a meeting with FDA, as described below. 1 Celltex asks that FDA fully and carefully evaluate all of the submissions it has made to the agency since the inspection, the information in this letter and the attachments, and the information presented at the requested meeting, as it considers this matter. Upon the completion of a fair, thorough examination of

When FDA inspectors visited Celltex in April, and in Celltexs communications with the agency in the five months that followed, Celltex repeatedly stated its desire to maintain a cooperative relationship and an open line of com- munication with the agency. It was surprising to have the first indication of the agencys position come in the Sep- th tember 24 Letterletter rather than any earlier communication or conversation.

that information, Celltex believes FDA will determine that Celltexs stem cell technology can operate in compliance as an HCT/P 2-only product (21 CFR 1271.10). Summary Celltex respectfully requests a meeting with FDA for an in-depth discussion of critical points raised for the first time in the September 24th Letter. The purpose of the meeting is to give FDA and Celltex a better understanding of both Celltexs and the agencys interpretation of several factors, as explained in the meeting request section below. The science and regulations at issue here are complex, and Celltexs operational model presents a unique structure for FDA to consider under its regulatory precedent. It would well serve both FDA and Celltex to have a dialog face-to-face to achieve better understanding. Celltex has stopped enrollment and is closing out treatments in its trials for autologous stem cell therapy as described below. Celltex will contact the agency to discuss the details of that process. Celltex will also work with FDA for development of a 21 CFR 1271.10 compliant MSC HCT/P-only product in parallel with developing the product under its biological drug re- quirements and provide therapeutic MSCs in the US under IND applications. With this letter Celltex provides additional information from RNL and Human Biostar (collectively RNL, the contract manufacturers operating the FDA-registered Texas laboratory) concerning the April inspection results and the operations points repeated in the September 24th Letter. That material is described below under Inspection Observations and in attach- ments with this submission. To address an inaccurate statement on page 8 of the September 24 Letter, all of the SOPs provided in the July 31, 2012 submission and in this submission are spe- cific for RNLs Texas laboratory operations and are under continuous review and modification as required. In addition, RNL has also informed us that it is making additional changes to ensure laboratory operations are in full compliance with all applicable requirements. We include the details from RNL in this submission. RNL plans to have those changes completed by November 15th and we will provide details within five business days of receipt of RNLs report expected on that date. Confidentiality Celltexs operations are confidential. Its procedures, supplies, and processes are all in- tellectual property licensed from RNL (and RNL operates the Texas laboratory as the contract manufacturer). Celltex would experience significant and irreparable injury, including financial injury, if any of its operational and process details were made public, enabling competitors and third parties to achieve a significant market advantage over Celltex. Thus all of the information
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Human cell, tissue, cellular or tissue-based product (HCT/P) under 21 CFR Part 1271. 21 CFR 1271.10 defines an HCT/P-only category where agency pre-approval is not required for therapeutic use of a cell product when cer- tain criteria are satisfied.

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provided during the inspection, the documents that were given to the investigators, and all cor- respondence with FDA since the inspection, including this unredacted letter (with all attach- ments), are confidential business records exempt from public disclosure under 5 USC 552(b)(4). Please limit access to those confidential business records to only those FDA personnel who must have access to this body of information to perform their duties. Consistent with 5 USC 552(b)(4), FDA must contact Celltex prior to any public disclosure of the confidential busi- ness records, informing it of the details of the proposed disclosure. Celltex is providing a redacted version of this letter (Exhibit A). It requests that FDA post the redacted version of this letter without any attachments as Celltexs response to the Sep- tember 24 Letter on FDAs website. Request for a Meeting Celltex respectfully requests a meeting pursuant to 21 CFR 10.65(c) to discuss the fol- lowing issues identified in and questions arising from the September 24th Letter: FDA has identified the adipose tissue from autologous donors as the human cell, tissue, cellular or tissue-based product (HCT/P) at issue, not the constituent mesenchymal stem cells (MSCs); o Why is the adipose tissue being treated differently by FDA than other re- covered tissue from which HCT/Ps are isolated in compliance with 1271.10, such as umbilical cord blood or semen? o If MSCs were removed from other sources such as bone marrow or pe- ripheral blood, how would that affect the application of 1271.10? Would those MSCs become the HCT/P against which 1271.10 is applied?3 Celltexs April 27th Letter (resubmitted here as Exhibit B) showed the original, relevant fundamental characteristics of the MSCs are not altered (under 21 CFR 1271.3(f)(2)) in any of the steps used by RNL; o Does FDA agree that the relevant characteristics of MSCs are identified in Celltexs April 27th Letter (morphology, immune-phenotype, differentia- tion capability, and genetic stability)? If not, what other characteristics necessary to define MSCs are relevant? o Does FDA agree that the techniques described in the April 27th Letter for testing those characteristics are the appropriate tests for those charac- teristics (see page 6-7 of April 27 Letter)? If FDA prefers other tests,
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As explained below, Celltex could change the recovered tissue from which MSCs are isolated. Adipose tissue is used because it is a relatively convenient procedure for the individual and offers a plentiful supply of MSCs relative to the volume of tissue removed compared to other sources of MSCs.

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please identify the specific tests and the criteria applied by FDA for se- lecting tests. o Does FDA agree that the evidence presented in the April 27th Letter shows that the relevant biological characteristics of MSCs do not change through the application of this technology? If the evidence is insufficient please provide guidance on what evidence would be sufficient. Celltexs April 27th Letter showed its expansion and passaging do not alter the relevant biological characteristics of the MSCs. o If MSCs are the HCT/P against which the regulations are applied, not adi- pose tissue, would Celltexs process of tissue culture, expansion and pas- saging meet the definition of not more than minimal manipulation for non-structural cells in 21 CFR 1271.3(f)(2)? The normal hallmark characteristics and functions of MSCs are: (1) multi-potency including angiogenesis; (2) anti-inflammatory; and (3) immune-modulatory. o Does FDA agree that those are the normal activities of MSCs? o Would FDA consider intended use consistent with those characteristics to be homologous use? We have provided the agency with extensive documentation on laboratory op- erations to address the concerns stated in the 483 but the September 24th Letter simply states that the response was not sufficiently detailed to fully assess the adequacy of the corrective actions. o Are the operational changes identified by RNL in all of Celltexs submis- sions, including in this letter, sufficient to address all of the agencys con- cerns with laboratory operations? o Celltex is willing to comply with necessary changes but without specific detailed feedback on where steps taken by RNL are sufficient and where steps taken are not sufficient, we would simply be guessing regarding perceived inadequacies attendant to the information submitted in such voluminous submissions. o Celltex will be proceeding with operations necessary for biological drug development under GMP conditions for the clinical trials under INDs as suggested in the September 24 Letter. Thus, Celltex requests specifica- tion on the laboratory operations concerns so that it can ensure future operations are in compliance. Determination of Biological Drug Product Status Celltex respectfully disagrees with FDAs categorization of Celltexs operations, causing MSCs for autologous therapeutic use to be deemed biological drug products. Celltex has not
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introduced a drug or biological drug product into interstate commerce. Celltex accepts FDAs invitation in the September 24th Letter, to present reasoning and supporting information as to why Celltexs products are not in violation of the FDCA and PHS Act. 4 As stated above, Celltex has stopped enrollment and is closing out treatments in its tri- als for autologous stem cell therapy. 5 Celltex will contact the agency to discuss the details of that process. Celltex will also work with FDA for development of a 21 CFR 1271.10 compliant MSC HCT/P-only product in parallel with developing the product under its biological drug re- quirements and provide therapeutic MSCs in the US under IND applications. As discussed be- low, Celltex can work with FDA to find a regulatory pathway for this technology that is compli- ant with the requirements of 21 CFR 1271.10. However, Celltex needs additional detailed guid- ance from FDA on the reasoning behind the September 24th Letter. The September 24th Letter states three grounds for its determination that Celltexs pro- cessing results in biological drug products: (1) the process alters the original relevant charac- teristics of the adipose tissue; (2) tissue culture, expansion and passaging fails to meet the defi- nition of minimal manipulation for structural tissue (emphasis added); and (3) the clinical uses of the MSCs in the clinical trial protocols do not meet the homologous use definition in 21 CFR Part 1271. Celltex responds to each below. Recovered Adipose Tissue or Recovered MSCs? The first two stated grounds for determining that the Celltex process results in biologi- cal drug products: arise from FDAs proposition that the tissue (or cells) at issue, against which the regulatory requirements of 21 CFR Part 1271 are applied, is the adipose tissue removed from the individual. Celltex respectfully but firmly disagrees with that position. The adipose tissue is simply the tissue that is recovered from the individual. The MSCs replete within the tissue are the cellular product that is isolated from the adipose tissue. There is precedent for this within HCT/P regulation. Below we present two examples (that are not intended to be an exhaustive list of all regulatory precedent) illustrating the Celltex position. Just this summer FDA posted on its website an article for consumers on how the agency regulates umbilical cord blood. http://www.fda.gov/BiologicsBloodVaccines/ResourcesforYou/Consumers/ucm236044.htm
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Celltex has requested a meeting, as stated above, is presenting information and documentation with this submis- sion, and including by reference all of its prior submissions (April 27, May 18, May 31, June 29, July 31, and August 31, 2012).) for FDAs consideration in this matter. th 5 The September 24 Letter asks for details on how Celltex plans to deal with the biological drugs that have al- ready been manufactured in violation of the FDCA and PHS Act. These products do not have a shelf-life. There are no products that are available for recall or other action as suggested by FDAs language in its letter. When prepared for therapeutic use under the clinical trials, the cells are [REDACTED] and available for infusion for up to [REDACTED]. If not used within that window they are disposed of in the lab following GTP destruction processes. Thus, FDAs request for this type of information is not applicable to Celltexs circumstances. If FDA has any ques- tions about this please let us know.

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(last visited 10/15/2012). As that article states, when umbilical cord blood is recovered it is not banked or used therapeutically as is. Instead, the cord blood is processed and the hemato- poietic stem cell containing cell fraction is separated from the starting umbilical cord blood. Then, the hematopoietic stem cell containing fraction of the cord blood is banked or used ther- apeutically, as stated in the article. The article further states that when those cells are provided to the patient or first or second generation family members, they are not biological drugs. They are HCT/Ps. Thus, for autologous use, the hematopoietic stem cell fraction of cord blood is ap- plied therapeutically even though the original mixture that made up the cord blood has been, in a sense, destroyed because the stem cell containing fraction was isolated from the starting cord blood for use. Another precedent example is semen recovered for use in IVF, other reproductive ther- apies, and in sperm banking. Broadly stated, semen is recovered then the laboratory performs processing on it to separate out the sperm cells. The sperm cells may be used immediately or stored but they are not kept in the original state, as donated semen. In that process, thus, the sperm cells are the HCT/P product used for therapies rather than the original semen. In a 2001 Federal Register (66 Fed. Reg. 5447 and 5457 (Jan 19 2001)) FDA identified multiple techniques as minimal manipulation: Density gradient separation; selective removal of B-cells, T-cells, malignant cells, red blood cells or platelets; centrifugation; cutting, grinding, or shaping; soaking in antibiotic solution; sterilization by ethylene oxide treatment or irradiation; cell separation; lyophi- lization; cryopreservation; or freezing. Id. at 5457. Those include cell separation techniques. Celltexs separation of MSCs from adi- pose tissue using [REDACTED] is consistent with those techniques. It safely separates the MSCs from the other cells. In fact, many of the techniques in the 2001 list have some risk of damag- ing cells intended for HCT/P use, unlike using [REDACTED] for MSC separation from adipose tis- sue. 6 Thus, consistent with prior regulatory precedent, in the Celltex case, adipose tissue should not be defined as the HCT/P to which the regulatory requirements are applied. The adi- pose tissue is simply an easily accessible tissue source of MSCs in which MSCs are plentiful and easily separated. As stated in the meeting request above, Celltex wishes to discuss this regula- tory precedent and the position FDA has taken as stated in the September 24th Letter. Celltex can recover MSCs from other sources such as bone marrow and peripheral blood. It is well documented that MSCs are found throughout the body. See http://www.hindawi.com/journals/sci/2012/342968/ (last visited 10/15/2012). As stated in the
The 2001 Federal Register states the proposition that culturing is more than minimally manipulated. Celltex discusses that in the next section.
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meeting request above, Celltex would like to discuss with FDA the potential to alter its process so the MSCs are recovered from another source such as peripheral blood or bone marrow. If recovery from those alternative sources would position the MSCs to have the same regulatory treatment as a hematopoietic stem cell containing fraction isolated from umbilical cord blood, or sperm isolated from semen, Celltex could process MSCs recovered from those sources in lieu of adipose tissue. Establishing These MSCs Are Not More Than Minimally Manipulated In our April 27th Letter, attached as Exhibit B, we presented, in detail, the recognized relevant biological characteristics of MSCs and showed that the processing in our technology produces cells with the same biological characteristics. These are intact mesenchymal stem cells. The relevant biological characteristics of the cells have not changed through the applica- tion of this technology meeting the 21 CFR 1271.10 requirement and 1271.3(f)(2) definition. FDAs September 24 Letter does not address Celltexs April 27th Letter at all. We have included in our meeting request above, a request for guidance whether the agency agrees those charac- teristics, identified in the April 27th Letter, are the relevant characteristics for MSCs; whether the tests used for those characteristics are the correct tests; and whether FDA agrees with the results of those tests presented by Celltex in the April 27th Letter. The minimal manipulation definition should be applied to the MSCs. In the September 24th Letter, FDA has applied the definition of minimal manipulation to the structural tissue, the adipose tissue. As discussed above, that definition and use of the term minimally manipulated is not consistent with regulatory precedent. The adipose tissue is simply a convenient and plen- tiful source of MSCs. In fact, Celltex can separate out MSCs from other sources such as bone marrow and peripheral blood, if FDA would consider the MSCs recovered in those procedures to be the HCT/Ps. Celltex is requesting guidance on that issue. FDA must evaluate Celltexs actual process when applying its regulations, specifically what happens to the MSCs during that process. FDA cannot create a regulatory prohibition against culturing per se without following administrative procedural requirements. Technology has advanced, providing accurate tests that enable us to measure the recognized biological characteristics of cells. Here, those tests have been applied and the evidence shows that in this specific case of culturing MSCs, Celltex meets the definition of minimal manipulation. As stated in Celltexs April 27th letter, the testing shows that Celltexs technology does not alter the bio- logical characteristics of the MSCs. Celltexs culturing is not more than minimally manipulated. Establishing the Homologous Use of MSCs MSCs are present systemically in the vasculature of the human body. They are present wherever there is blood flow. Ra et al Stem Cells and Development 2011 (see Celltexs April 27th Letter for additional discussion). Literature has well-documented the normal characteris- tics of MSCs throughout the human body: (1) multi-potency including angiogenesis; (2) anti- inflammatory; and (3) immuno-modulatory. Celltexs April 27th Letter cites to authorities for
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those actions but additional peer-reviewed literature further documents this activity if FDA does not consider the previous authorities sufficient evidence. Celltex can to supply additional literature to support its position if FDA rejects the authorities in the April 27th Letter. Celltex has included in its meeting request clarification from the agency on whether it agrees with the literature that those characteristics are the normal, basic functions of MSCs. 21 CFR 1271.3(c) states homologous use is where the HCT/P performs the same basic function or functions in the recipient as in the donor. Thus, for MSCs those normal, basic func- tions are multi-potency, angiogenesis, anti-inflammatory and immune-modulatory. In the 2001 Federal Register referenced above, FDA stated that homologous use should be broadly con- strued. It gave an example where a bone is used to repair, reconstruct or rebuild any part of the skeletal system as an HCT/P-only product. It does not have to be used to repair only the specific bone from which it was recovered. 66 Fed. Reg. at 5458. Similarly FDA stated nonho- mologous use should be narrowly construed. Id. FDA gave examples (the use of dermis as a replacement for dura mater, the use of amniotic membrane in the eye, and the use of cartilage in the bladder) of nonhomologous uses. Applying those examples to Celltexs intended use of MSCs, the result is clearly homologous use. The re-infusion of a persons own stem cells into their body systemically for those cells to perform the same basic functions they performed when they were recovered is quintessential homologous use. The September 24th Letter criticizes the two clinical trials that have operated during 2012, stating that the uses for the MSCs indicated in the trials would not be considered homol- ogous uses. Celltex is happy to design clinical trial or other therapeutic protocols with appro- priate experts to advise usage for clinicians on the specifics necessary for the normal activity of MSCs. That was its intent in the 2012 trials. Celltex has included, in its meeting request, clarifi- cation from the agency on whether FDA would object to protocols that were limited to such indications (multi-potency, angiogenesis, anti-inflammatory, and immune-modulatory). Inspection Observations Page 8 of the September 24th Letter states that our prior submissions on April 27, May 18, May 31, July 31, and August 31 did not provide sufficient detail to fully assess the adequacy of the corrective actions at the laboratory. Additional material is being provided with this re- sponse from RNL, and RNL will provide even more material on November 15th, with us supply- ing it to FDA within five business days thereafter. We have requested in the meeting section above, feedback, specifics and a dialog with the agency about where the submissions have been adequate in detail or need additional material so we can provide information to satisfy the agency as well as guide future laboratory operations in GMP/GTP compliance for clinical trials under INDs. RNL has provided all of [REDACTED] documentation that we are sending by FedEx with this letter and [REDACTED] specifically the [REDACTED]. Those materials are contained in indi- vidual three-ring notebooks. An index of the notebooks is Exhibit C to this letter. Because of the number of notebooks, they have not been given separate exhibit designations. RNL is com-
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pleting other aspects of the [REDACTED] and expects to supply those with its November 15th production. To address FDAs statement in the September 24th Letter that the prior responses did not have sufficient detail, RNL has provided Celltex with additional responsive material that we have included as Exhibit D:
A spreadsheet titled Observation 483 that identifies step by step each observation and each action RNL has taken to address those observations. A spreadsheet titled Warning Letter that identifies each critique in the September 24th Letter and each action RNL has taken to address those critiques. Please note that column two has a heading in Korean that is Improvements and heading in column three that is Remarks. SOP [REDACTED] and accompanying forms, [REDACTED]; SOP [REDACTED] SOP [REDACTED] [REDACTED] training records on [REDACTED]. A photo that RNL has explained depicts [REDACTED]. The email order and price quote for [REDACTED]

As stated above, we will supply FDA with additional documentation and information on RNLs laboratory compliance operations as it is provided, within five business days of receipt. Conclusion FDAs product development process for approval of biological drugs was not designed for autologous, identical, MSCs used to supplement a persons own stem cell population. FDAs current stated position will present challenges for this type of product and we hope that FDA will work cooperatively with us as we go through this process as we are willing and able to un- dertake the necessary steps for approval. Celltex is dedicated to bringing this technology to fru- ition because of its significant potential benefits. Celltex has ceased patient enrollment and is closing out its 2012 clinical trials. It will work with the agency to create future clinical trials un- der INDs. Celltex has also requested a meeting with the agency for the purposes of seeking addi- tional information and guidance so that Celltex can work with the agency to develop a HCT/P- only MSC product in compliance with the regulations. Finally, RNL has provided additional in- formation with this submission to address each of FDAs concerns regarding laboratory opera- tions. RNL will provide additional material to Celltex on or before November 15th and we will provide the additional information to the FDA within five business days of receipt.

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 Celltex will continue to work cooperatively with the agency. It is Celltexs intent with this response to address every substantive aspect raised in the September 24th Letter and to clearly state the actions it is currently undertaking. Any failure to do so was inadvertent and additional information can and will be supplied upon request if an absence of information is perceived. Please notify us if this is the case. Finally, if FDA has any questions about any aspect of this letter, please do not hesitate to contact us. Best regards, David G. Eller Cc: Reynaldo Rodriquez Joel Martinez Linda Hoover

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