iPSC-derived cells and the future of NAMs after FDA Modernization Act 2.0

In a recent article we described how a 1938 mass poisoning gave rise to the modern drug development landscape. In the wake of this tragedy, regulators took action to ensure that all new drugs are proven safe before they’re given to patients. Animal testing emerged as the best available safeguard, and for nearly 80 years animals served as the gold standard in preclinical drug development.

However, the drug development landscape is once again changing. Mounting evidence suggests that animal models are poor representations of the human body, with too many toxic compounds appearing safe until they reach clinical settings^1-4. At the same time, technological advances are enabling the development of New Approach Methodologies (NAMs), a set of human-relevant tools and techniques, from advanced cell culture to computational modelling, that align with the 3Rs principles to replace, refine or reduce the use of animals in experimentation^{5, 6}. By leveraging human cells (often derived from induced pluripotent stem cells (iPSCs)) to build more human-relevant model systems, NAMs provide an increasingly attractive alternative to animal models. 

Motivated by these trends, regulatory bodies around the world have recently moved to embrace NAMs in the drug development process, most notably with the passage of the FDA Modernization Act 2.0 (FDAMA2.0)^{7, 8}. Where researchers were once required to use animal models in preclinical testing, the FDAMA2.0 removes this outdated mandate, enabling researchers to use the most scientifically appropriate model available, whether that be an animal or a NAM. In effect, it opens the door to safer and more productive drug development. 

Turning this possibility into a reality, however, requires researchers to step through that door into a space where “you’ve got unfamiliar methods, unfamiliar outputs, and unfamiliar costs,” explained Ross Dobie, Head of Science at the Center of Human Specific Research (You can hear his full talk here). NAMs are not necessarily new, but positioning them as pivotal decision making tools in the drug development process is. That shift demands clear standards for validation, guidance on use, and—above all—model consistency.

It will be some time before these demands are met, but that doesn’t mean progress isn’t being made. “Induced pluripotent stem cells (iPSCs) have been a bit of a game changer,” emphasised Dobie. “It’s amazing to think of what’s possible when working with human cells.”

For NAMs, consistency is critical

A core promise of NAMs is that they increase the predictive validity of preclinical studies by giving you a more human-relevant alternative to animal models. Sometimes a NAM can be an advanced in silico model, but more often they’re in vitro models that allow human cell types to be cultured in physiologically relevant conditions. Until recently, building these types of NAMs was no trivial feat, in large part because researchers struggled to find a source of human cells that could meet the consistency requirements that NAMs demand.

To be a reliable tool in drug development, the baseline performance of NAMs must be consistent across time and laboratories. This is a difficult goal to achieve, however, because it is rare to find such a robust source of human cells. Human primary cells, for example, are scarce and their behaviour can vary significantly between donors⁹. Patient-derived iPSCs are powerful, but often inconsistent and experimentally fragile. And immortalised cell lines, while convenient, frequently fail to capture relevant human biology and are prone to genetic drift. In other words, if NAMs are to be a viable tool in drug development, researchers need a better source of consistent, reliable human cell types. 

Such a source may come in the form of iPSC-derived human cells. Technologies such as bit.bio’s opti-ox deterministic cell programming allow researchers to access defined human cell types, neurons, hepatocytes, myocytes, and others that are highly consistent across batches. Researchers can now build NAMs on a human cellular foundation that is both physiologically relevant and experimentally dependable. Doing so can not only improve predictive validity but may open important doors for new drug development paradigms. 

Enabling a new rare disease drug development paradigm

“My goodness, this [FDAMA2.0] has really opened the door for rare disease researchers,” said Rodney A. Bowling Jr., Chief Scientific Officer of the AlphaRose RareLab.

Bowling Jr’s work is focused on developing therapeutics for patients with ultra-rare diseases—conditions so uncommon that drug development pipelines often collapse under the demands of traditional approaches. “We need a faster model than traditional pipelines use,” he explained, “because in our case, time is life.”

That urgency has forced AlphaRose RareLab to rethink nearly every step of the preclinical process. When patient populations consist of only one or two individuals, the cost and timelines associated with conventional animal-based workflows can be prohibitive. As a result, many rare diseases remain unexplored despite being biologically tractable.

Bowling Jr and his team are working to change that by pursuing patient-specific therapeutics and “N of 1” studies. Doing so requires preclinical models that are both human-relevant and fast to deploy—models that can inform decisions without adding years to the clock. Under previous regulatory constraints, that goal was difficult to reach. “An animal model—such as a humanised mouse—can take 19 months, if not two years, to prepare,” Bowling Jr noted.

With the passage of the FDAMA2.0, that calculus begins to shift. “Perhaps we could shorten this whole thing down to six months by using human organoid models,” he said.

Already, Bowling Jr’s team has found success using human iPSC-derived neurons in 2D culture. bit.bio’s ioGABAergic Neurons enabled the team to perform therapeutic screening on a set of antisense oligonucleotides that show promise for a rare neurodevelopmental condition. Two of these candidates are now fast approaching the clinical phase. Encouraged by this success, the team is now exploring the potential of using iPSC-derived neurons in organoid models. Read more about the race to treat rare diseases here.

Human iPSC-derived cells provide a foundation for physiological relevance

“In terms of developing models for disease, I think [physiological relevance] is where we need to go to make sure that we can ask the right kind of questions,” explained Eric Hill in a recent interview with bit.bio. A Reader in Cellular and Molecular Neurobiology at Loughborough University, Hill focuses on stem cell neurobiology, tissue engineering, and disease modelling. Over his career, he has been motivated to study and solve some of the field’s most intractable problems.

“We’ve known about conditions like Alzheimer’s disease for over 100 years and we’ve seen what it looks like on a molecular level in its later stages,” he continued. “And yet we don’t have a treatment for it because we haven’t been able to access [and study] human brain tissue properly. [NAMs] allow us to do that in a more meaningful way.”

Hill has been using iPSC-derived cells to develop complex 2D and 3D co-culture models that emulate portions of the human brain, in some cases demonstrating plasticity as well as signs of early disease development. His hope is that, by developing in vitro models using human neuronal cell types, he can replicate physiological processes that are absent in traditional disease models. 

Hill’s work underscores a broader point: iPSC-derived cells don’t define a single NAM—they enable a spectrum, from simple 2D assays to multicellular 3D models. 

Simple NAMs are important drug development tools 

The Director of the Drug Discovery Core at the Miami Project to Cure Paralysis, Dr. Hassan Al Ali, works across this spectrum. He has spent considerable time searching for ways to model spinal cord injuries for both basic research and drug development. “I don't think we need to go to the most complex model in every step of the testing funnel,” he explained. “If you're trying to go to the most complex thing from the very beginning, you're going to run out of money quickly.”

Rather than focus on complexity for complexity’s sake, Ali emphasises that “you need to make sure your model has good predictive validity, meaning that it has reliable forecasting of human responses.” 

Like both Bowling Jr and Hill, Ali’s team has found that one way to improve predictive validity is through the use of human iPSC-derived neurons. Previous studies in Ali’s lab uncovered a candidate therapeutic that encourages axonal regrowth following injury. However, their prior studies used rodent neurons. The team needed a robust method to validate whether promising derivatives would be effective in human neurons as well. 

“We needed something scalable, reproducible, and physiologically relevant to humans,” Ali explained. “Everything I looked at would give us one or two of those features, but never all three, until I discovered bit.bio’s ioGlutamatergic Neurons” bit.bio’s ability to produce differentiated neurons with high lot-to-lot consistency enabled the team to create a simple 2D assay to measure axonal regrowth in human neurons. This helped validate the compound, establish a screening assay, and secure critical grant funding.

Whether it's through simple 2D assays or complex organoid and microphysiological systems, NAMs promise greater physiological relevance by enabling researchers to reduce, refine, and replace animal models with models built using human cells. According to Ali, “iPSCs are going to be the cornerstone for a lot of NAMs, because it's the only way you can create all the diversity of the different human cell types you need.”

The nuanced future for NAMs in drug development

The growing importance of NAMs is not being driven by regulation alone. It is also a response to the changing nature of modern drug pipelines.

Biologics now account for a substantial and growing proportion of therapeutic candidates. Many of these molecules—antibodies, engineered proteins, and cell-based therapies—are designed to engage human-specific targets, epitopes, or signalling pathways. In such cases, cross-species differences can severely limit the validity of animal data.

As drug candidates become more tailored to human biology, the need for human-relevant preclinical models becomes harder to ignore.  “Most toxicities associated with monoclonal antibodies are immune-mediated, so you really need immune-competent models,” explained Dobie.

iPSC-derived cells provide a practical way to introduce human specificity earlier in development, helping teams assess efficacy, toxicity, and mechanism in a context that more closely resembles the patient.

“We’re really spoiled for choice when it comes to the different human-focused approaches that are being developed,” said Dobie. “In some cases, it won’t be a single NAM that brings all the answers,” he explained, “but it will be a number of cellular and computational methods working together that offer a suitable alternative to animal models.”

Ali agrees, adding that “a hybrid approach—where you use both animal models and NAMs—is likely to remain the standard for the foreseeable future.“ This approach allows teams to balance strengths while benchmarking new methods against established ones.

Having access to a reliable supply of human iPSC-derived cells has removed a longstanding bottleneck in the field. It has allowed researchers to begin engaging with NAMs not as experimental novelties, but as practical decision-making tools that can be deployed across the drug development funnel.

FDAMA2.0 did not prescribe a single alternative to animal testing. Instead, it introduces an opportunity for better science: if a model is more scientifically appropriate, it should be considered. The work now falls to researchers to define what “appropriate” looks like—through benchmarking, validation, and thoughtful integration of multiple approaches.

If the experiences of Bowling Jr, Hill, and Ali are any indication, iPSC-derived cells will play a central role in that effort—not as a single solution, but as a foundation upon which a more predictive, human-relevant preclinical ecosystem can be built.

References

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6. Beilmann, Mario, et al. “Application of New Approach Methodologies for Nonclinical Safety Assessment of Drug Candidates.” Nature Reviews Drug Discovery, 2 May 2025, www.nature.com/articles/s41573-025-01182-9.pdf, https://doi.org/10.1038/s41573-025-01182-9.
7.  “S.5002 - 117th Congress (2021-2022): FDA Modernization Act 2.0.” Congress.gov, 2021, www.congress.gov/bill/117th-congress/senate-bill/5002. Accessed March 25, 2026.
8. Han, Jason J. “FDA Modernization Act 2.0 Allows for Alternatives to Animal Testing.” Artificial Organs, vol. 47, no. 3, 1 Mar. 2023, pp. 449–450, pubmed.ncbi.nlm.nih.gov/36762462/, https://doi.org/10.1111/aor.14503.
9. Nicholson, Martin W., et al. “Utility of IPSC-Derived Cells for Disease Modeling, Drug Development, and Cell Therapy.” Cells, vol. 11, no. 11, 6 June 2022, p. 1853, https://doi.org/10.3390/cells11111853.