WARNING LETTER

American CryoStem Corporation MARCS-CMS 535041 — January 03, 2018

Recipient:: Recipient Name

John S. Arnone; American CryoStem Corporation; One Meridian Road, Suite 5
Eatontown, NJ 07724
United States

Issuing Office:: Florida District Office; United States

WARNING LETTER

OBPO – 1 18-02

VIA UNITED PARCEL SERVICE

SIGNATURE REQUIRED

January 3, 2018

John S. Arnone

Chairman/Chief Executive Officer

American CryoStem Corporation

One Meridian Road, Suite 5

Eatontown, NJ 07724

Dear Mr. Arnone,

During an inspection of your firm, American CryoStem Corporation (American CryoStem), located at 7 Deerpark Drive, Suite C-7 Monmouth Junction, NJ 08852, conducted from July 17 to July 26, 2017, the Food and Drug Administration (FDA) documented that your firm receives and processes adipose tissue, a structural tissue, for autologous use. Using (b)(4), your firm isolates cellular components from the adipose tissue, thereby processing the adipose tissue into Stromal Vascular Fraction (SVF). The SVF is then expanded through cell culture to produce your product ATCELL™. American CryoStem then ships the autologous product back to physicians to treat patients for a variety of diseases or conditions by various routes of administration, including intravenously, intrathecally (i.e., injection or infusion into the central nervous system) and by aerosol inhalation.

FDA investigators collected records during the inspection (b)(4).1 These records reveal that ATCELL™ is intended to treat a variety of diseases and conditions, including, but not limited to, anoxic brain injury, Parkinson’s disease, amyotrophic lateral sclerosis (ALS), stroke, and multiple sclerosis.

ATCELL™ is a human cell, tissue, or cellular or tissue-based product (HCT/P) as defined in 21 CFR 1271.3(d) and is subject to regulation under 21 CFR Part 1271, issued under authority of section 361 of the Public Health Service Act [42 U.S.C. 264]. However, this product fails to meet all the criteria in 21 CFR 1271.10(a) Therefore, ATCELL™ is not regulated solely under section 361 of the PHS Act [42 U.S.C. 264] and the regulations in 21 CFR Part 1271.

ATCELL™ does not meet the minimal manipulation criterion set forth in 21 CFR 1271.10(a)(1) as defined for structural tissue, such as adipose tissue, in 21 CFR 1271.3(f)(1). You process adipose tissue using (b)(4) to isolate cellular components of adipose tissue, commonly referred to as SVF. Such processing is more than minimal manipulation because it (b)(4) and (b)(4) and the (b)(4) that provide (b)(4), thereby altering the original relevant characteristics of the HCT/P relating to its utility for reconstruction, repair, or replacement. Then you process the SVF by expanding it in cell culture to manufacture ATCELL™. Such expansion also is more than minimal manipulation because it alters the original relevant characteristics of the tissue. Therefore, both manufacturing processes more than minimally manipulate the adipose tissue and cause ATCELL™ to fail to meet the minimal manipulation criterion (21 CFR 1271.10(a)(1)).

ATCELL™ also fails to meet 21 CFR 1271.10(a)(2)’s criterion that the HCT/P be “intended for homologous use only, as reflected by the labeling, advertising, or other indications of the manufacturer’s objective intent.” As noted above, ATCELL™ is intended to treat a variety of diseases and conditions. Such intended uses demonstrate that ATCELL™ is not intended to perform the same basic function or functions of adipose tissue (e.g., to provide cushioning and support). As a result, ATCELL™ cannot qualify for regulation solely under section 361 of the PHS Act and 21 CFR Part 1271.

Because ATCELL™ does not meet all the criteria in 21 CFR 1271.10(a), and it does not fall within any exception in 21 CFR 1271.15, ATCELL™ is regulated as a drug under section 201(g) of the FD&C Act [21 U.S.C. 321(g)] and a biological product as defined in section 351(i) of the Public Health Service Act (PHS Act) [42 U.S.C. 262(i)]. Indeed, American CryoStem’s Chief Operating Officer, Anthony Dudzinski recently acknowledged that American CryoStem’s “cellular expansion” therapies (like ATCELL™) are “breakthrough technologies which are about sending cells the same way you send any other drug to a doctor.” See Uptick Newswire Interview, available at https://audioboom.com/posts/6188886-coo-tony-dudzinski-of-american-cryostem-corp-otcpink-cryo.

Please be advised that to lawfully market a drug that is a biological product, a valid biologics license must be in effect [21 U.S.C. 355(a); 42 U.S.C. 262(a)]. Such licenses are issued only after a showing that the product is safe, pure, and potent. While in the development stage, such products may be distributed for clinical use in humans only if the sponsor has an investigational new drug application (IND) in effect as specified by FDA regulations [21 U.S.C. 355(i); 42 U.S.C. 262(a)(3); 21 CFR Part 312]. ATCELL™ is not the subject of an approved biologics license application (BLA) nor is there an IND in effect. Based on this information, we have determined that your actions have violated the FD&C Act and the PHS Act.^{^[2]}

During the inspection, FDA investigators also documented evidence of significant deviations from current good manufacturing practice (CGMP), including deviations from section 501(a)(2)(B) of the FD&C Act and 21 CFR Parts 210 and 211. The deviations in procedures observed as well as those noted in documents collected during the inspection indicate that the use of ATCELL™ raises potential significant safety concerns. For example, American CryoStem’s unvalidated processes, inadequately controlled environment, lack of control of components used in production and lack of sufficient and validated product testing, as described below, pose a significant risk that ATCELL™ may be contaminated with microorganisms or have other serious product quality defects, such as (b)(4). Furthermore, ATCELL™ is intended to treat a variety of serious or life-threatening diseases or conditions, all of which are non-homologous uses. Such uses raise potential significant safety concerns because there is less basis on which to predict the product’s behavior in the recipient, and use of these unapproved products may cause users to delay or discontinue medical treatments that have been found safe and effective through the New Drug Application or BLA approval processes. Because the product is administered to humans by various higher risk routes of administration, including intravenously, intrathecally and by aerosol inhalation, if contaminated, its use could cause a range of adverse events, from infections to death.

At the close of the inspection, FDA investigators issued Mr. Anthony Dudzinski a Form FDA 483, list of inspectional observations, which described a number of significant objectionable conditions relating to your facility’s compliance with CGMP. FDA has found some additional significant deviations upon further review of the documents collected during the July 2017 inspection, as discussed below. The deficiencies include, but are not limited to, the following:

1. Failure to establish and follow appropriate written procedures designed to prevent microbiological contamination of drug products purporting to be sterile, including procedures for validation of all aseptic and sterilization processes [21 CFR 211.113(b)]. Specifically, you manufactured and distributed (b)(4) batches of ATCELL™ without validating the aseptic manufacturing process.

2. Failure to establish and follow written production and process control procedures designed to assure that the drug products have the identity, strength, quality, and purity they purport or are represented to possess [21 CFR 211.100(a)]. Specifically, you failed to validate the manufacturing process for ATCELL™ with respect to identity, strength, quality, and purity.

3. Failure to assure a system for monitoring environmental conditions is in place to prevent contamination during aseptic processing [21 CFR 211.42(c)(10)(iv)]. Specifically, you did not monitor the environment or personnel during production of (b)(4) batches of ATCELL™ that were distributed.

4. Failure to perform operations in areas with control systems necessary to prevent contamination or mix-ups during aseptic processing [21 CFR 211.42(c)(10)(v)]. Specifically, the cleaning and disinfection processes in aseptic processing areas have not been validated to show that cleaning and disinfection processes consistently perform as expected.

5. Failure to maintain laboratory controls that include the establishment of scientifically sound and appropriate specifications, standards, sampling plans, and test procedures designed to assure that components, drug product containers, closures, in-process materials, labeling, and drug products conform to appropriate standards of identity, strength, quality, and purity [21 CFR 211.160(b)]. Specifically, you do not test each batch of ATCELL™ for identity, strength, quality and purity prior to release. Rather, you have periodically performed in-process testing for certain parameters and routinely test only for (b)(4) and (b)(4).

6. Failure to establish and follow written procedures describing in sufficient detail the receipt, identification, storage, handling, sampling, testing, and approval or rejection of components, and drug product containers and closures [21 CFR 211.80(a)]. Specifically, you failed to establish written procedures for sampling and testing components and drug product containers and closures used in manufacturing ATCELL™ such as (b)(4) and (b)(4) vials that contain the final product.

7. Failure to ensure that each lot of components, drug product containers, and closures are withheld from use until the lot had been sampled, tested, or examined, as appropriate, and released for use by the quality control unit [21 CFR 211.84(a)]. Specifically, you failed to appropriately test or examine before release for use (b)(4) and (b)(4) vials that contain the final product.

8. Failure to establish and follow a written testing program designed to assess the stability characteristics of drug products and to use results of such stability testing to determine appropriate storage conditions and expiration dates [21 CFR 211.166(a)]. Specifically, a testing program has not been developed to determine appropriate post-processing storage conditions and expiration dates for ATCELL™.

9. Failure to use appropriate air filtration systems for production areas [21 CFR 211.46(c)]. For example, the biological safety cabinets (BSC) used to fill ATCELL™ are in production areas that are uncontrolled, e.g. have no clean area classification. This presents a significant risk for product contamination from materials and components that enter the BSC from the uncontrolled production area.

10. Failure to adequately design the facility with adequate separation or defined areas or such other control systems necessary to prevent contamination or mix-ups [21 CFR 211.42(b)]. Specifically, the BSCs used for research and development are located directly adjacent to BSCs used for production of ATCELL™.

In addition, significant deviations in the manufacture of ATCELL™ intermediates were observed during the inspection. Specific areas of concern include, but are not limited to:

BUILDINGS AND FACILITIES

Production of the SVF component and its expansion in culture are conducted in production areas that are uncontrolled (e.g. have no clean area classification). This presents a significant risk for product contamination from materials and components that enter the BSC from the uncontrolled production area.

EQUIPMENT

Cleaning and disinfecting of the processing area, and equipment within it, has not been validated to show cleaning and disinfection practices can be consistently performed as expected.

CONTROL OF COMPONENTS

1. You do not have any written procedures addressing the sampling and testing upon receipt of components used to manufacture ATCELL™ intermediates. Specifically, you failed to establish written procedures for sampling and testing components used in manufacturing ATCELL™ intermediate, such as (b)(4).

2. You receive and accept components used in the manufacture of ATCELL™ intermediates such as (b)(4) with certificates of analyses from the supplier. You have not established the reliability of the supplier’s analyses through appropriate validation of the supplier’s test results at appropriate intervals, nor do you perform at least one specific identity test on each component.

3. You use components that are not intended for human use. For example, the “Usage Statement” for the (b)(4) used during your expansion of SVF in culture indicates the following: “Unless otherwise stated in our catalog or other company documentation accompanying the product(s), our products are intended for research use only and are not to be used for any other purpose, which includes but is not limited to, unauthorized commercial uses, in vitro diagnostic uses, ex vivo or in vivo therapeutic uses or any type of consumption or application to human and animals. (emphasis added).

MICROBIOLOGICAL CONTROL

1. You have not validated the aseptic process for ATCELL™ intermediates.

2. You did not perform environmental or personnel monitoring during the manufacture of ATCELL™ intermediates used to produce (b)(4) batches of ATCELL™.

PRODUCTION AND PROCESS CONTROLS

You have not validated the manufacturing process for your ATCELL™ intermediates, for example, the expansion of SVF in cell culture with respect to identity, strength, quality, and purity, to demonstrate consistency of production.

LABORATORY CONTROLS

Storage of your SVF component has not been validated for viability and length of storage before being used to manufacture ATCELL™ intermediates.

We also note that you use the (b)(4) system for (b)(4) testing of ATCELL™ intermediates at various stages during manufacturing, and for final drug product. Please provide the validation studies supporting the use of this system for testing of ATCELL™ intermediates and final drug product, including (b)(4) testing given that (b)(4) is used throughout your manufacturing process.

REVIEW OF INSPECTIONAL RESPONSES

We received your firm’s written response, dated August 16, 2017, to the Form FDA 483, including your “Corrective Action Plan” and accompanying standard operating procedures (SOPs) and have reviewed its contents. Although you commit to certain corrective actions, including “SOP review, update, and implementation,” many of your proposed corrections are inadequate, incomplete or lack sufficient detail to be fully evaluated.

Furthermore, you contend that you manufacture ATCELL™ for research use only, and a “For research use only” disclaimer is prominently placed on ATCELL™ shipping records. Your response also explains that ATCELL™ “is being . . . investigated in an [Institutional Review Board (IRB)]-approved Safety Study sponsored by third party groups to generate data (b)(4).” (emphasis added). Similarly, your response states that the “ATCell™ distributions in question are (b)(4). We wish to make this distinction to avoid the perception that ATCell™ is a commercially-distributed product.”

As explained above, an IND must be in effect to lawfully distribute ATCELL™ for clinical use in humans while this product is being developed and studied. Please also be advised that, although IND applications require IRB review and approval, IRB-reviewed and approved studies do not equate to having an IND in effect.

Observation 1

Your response is inadequate. For more information on validation of an entirely aseptic process, please see FDA’s “Guidance for Industry: Sterile Drug Product Produced by Aseptic Processing: Current Good Manufacturing Practice,” September 2004.

Observation 2

Your response is inadequate. Rather than conducting validation of your manufacturing process, you are proposing to have every (b)(4) batch of product tested using (b)(4). Each batch of drug product you manufacture must be tested to assure proper identify, strength, quality and purity prior to release and distribution.

Observation 3

While we acknowledge that you are in the process of installing a proper Heating, Ventilation and Air Conditioning (HVAC) system and developing an environmental monitoring program, you had manufactured and distributed (b)(4) batches of ATCELL™ at the time of the inspection with neither in place.

Observations 4/5

We acknowledge your commitment to establish an identity test for your components; however, identity testing of components is only part of a comprehensive system required to control components and drug product containers and closures. Proper component and drug product container and closure control includes all steps in the receipt, identification, storage, handling, sampling, testing, and approval or rejection of these materials. We expect you to include all these elements in your control of components and drug product containers and closures.

Observation 6

Your response is inadequate. Although you state that ATCELL™ is “explicitly designed for immediate use upon arrival at a physician’s clinic,” the shipping conditions used to transport the product must be validated to ensure no loss of identity, strength, quality or purity. Additionally, we noted during the inspection that you have not validated the storage conditions (time, temperature, etc.) for your SVF product used to manufacture ATCELL™. Validation of the SVF storage conditions is critical to ensure that SVF retains its identity, strength, quality and purity during storage.

Observation 7

Your response does not address the issue noted on the Form FDA 483, which is the lack of validation of your facility and equipment cleaning processes.

Observation 8

Your response does not address the need to have a clean room classification for the manufacturing room(s) that contain the BSCs. Not only does the critical area within the BSC need to be controlled and classified, but the room(s) housing the units also must be controlled and classified to ensure that the product is not contaminated.

Neither this letter nor the observations listed on the Form FDA 483, which were discussed with you at the conclusion of the inspection, are intended to be an all-inclusive list of deficiencies that may exist at your facility. It is your responsibility to ensure full compliance with the FD&C Act and the PHS Act, and their implementing regulations.

You should take prompt action to correct these deviations. Failure to do so may result in regulatory action without further notice. Such actions include seizure and/or injunction.

For further information about IND requirements for biological products, contact the Division of Regulatory Project Management, Office of Tissues and Advanced Therapies, at (240) 402-8190, or OTATRPMS@fda.hhs.gov (mailto:OTATRPMS@fda.hhs.gov). Please include a copy of this letter with your initial submission to CBER.

Please notify this office in writing, within 15 working days of receipt of this letter, of any additional steps you have taken or will take to correct the noted violations and to prevent their recurrence. Include any documentation necessary to show that correction has been achieved. Corrective actions addressed in your prior response may be referenced in your subsequent response. If you do not believe your product is in violation of the FD&C Act and PHS Act, include your reasoning and any supporting information for our consideration. If corrective actions cannot be completed within 15 working days, state the reason for the delay and the time within which all corrections will be completed.

Your response should be sent to the following address: US Food and Drug Administration, Randall L. Morris, 555 Winderley Place, Suite 200, Maitland, FL 32751 or emailed to Randall.Morris@fda.hhs.gov. If you have any questions, please contact Randall L. Morris, Compliance Officer at (407) 475-4741 or via e-mail.

Sincerely,

/S/

Elizabeth A. Waltrip

Acting Program Division Director

Office of Biological Products Operations – Division 1

[1] (b)(4)., an entity your firm contracts with to supply ATCELL™ to physicians.

[2] Please further be advised that the SVF you manufacture does not meet all the criteria in 21 CFR 1271.10(a) and does not fall within any exception in 21 CFR 1271.15. Therefore, it would also be regulated as a drug under the FD&C Act and a biological product under the PHS Act. As with ATCELL™, to lawfully market SVF, a valid biologics license must be in effect, or you must have an IND in effect to distribute SVF for clinical use in humans while you are developing and studying it.