Stem cell rights granted

St Paul Pioneer Press ^ | 12/12/02 | JIM MCCARTNEY

[Valin]

Catherine Verfaillie and fellow researchers at the University of Minnesota surprised the medical world last summer when they published a groundbreaking study showing that adult stem cells could be transformed into virtually any type of cell. On Wednesday, the university said it granted Athersys Inc., a Cleveland biopharmaceutical firm, exclusive rights to develop commercial applications of the breakthrough technology. The discovery by Verfaillie's team, which has yet to be confirmed in published reports by other scientists, is a critical development in the use of stem cells for treating diseases and injuries because it involves adult — not fetal — stem cells.

The use of fetal stem cells in research has been criticized because, in order to harvest the cells, an embryo must be destroyed. President Bush cited these ethical concerns in limiting federal research grants to stem cell lines that already existed.

The university chose Athersys as its commercial partner because the firm has a complementary technology that helps scientists identify genes and proteins and is well financed, said Michael Moore, who is in charge of licensing health technology patents at the University of Minnesota. "The main thing was to make sure it got in the hands of people who are committed to developing the technology," Moore said. "They won't develop every application — we expect further deals to get those applications developed.''

Financial terms of the agreement were not released, but Athersys is paying the university an upfront fee and providing other research financing. The university also gets a stake in the company and possible future payments and royalties.

Verfaillie and other researchers at the university's Stem Cell Institute have shown that a certain type of stem cell isolated from adult bone marrow, called multipotent adult progenitor cells that can be transformed into virtually any cell type, including liver, lung, muscle, brain and kidney cells. Use of these cells, which can be obtained from the patient's own marrow, offers potential for treating diseases such as diabetes, Parkinson's, muscular dystrophy and inherited disorders, according to a paper they published in the journal Nature in July.

Athersys' technology will likely play an "integral role" in discovering the biological mechanism by which the adult stem cells transform, Verfaillie said in a prepared release. Verfaillie, who is director of the university's Stem Cell Institute, was out of town and unavailable for comment Wednesday. "In the near term we will focus on accelerating the clinical development of cell therapy treatments," said Gil Van Bokkelen, chief executive officer of Athersys. "Our long-term goal, however, is to unlock the mechanisms responsible for the differentiation of stem cells."

Athersys has reportedly raised more than $85 million to pursue these developments, an eye-catching amount at a time when financial resources are scarce for biotech firms. The Athersys deal specifies that the University's stem cells will also be made available to other academic researchers, but that Athersys will license other companies that pursue commercial applications. Eventually, Moore expects some Minnesota companies to apply to use the cells. Earlier this fall, Fridley-based Medtronic Inc. formed a partnership with the Stem Cell Institute to find cell-based therapies to help ailing hearts heal themselves.

The first clinical trial using the adult stem cells is expected to begin in two years. Given the years of research and regulatory trials required for such discoveries, it will likely be years before there are any commercial applications coming out of the agreement with Athersys, Moore said. For that reason, it's hard to quantify how big a deal this may turn out to be for the University of Minnesota. "It's too early to rate this deal — we are a stage of development that is just too early to tell,'' he said.

Associated Press reports were used in this story. Jim McCartney can be reached at jmccartney@pioneerpress.com or (651) 228-5436.