Novocell Snaps Up Second Stem Cell Patent, New CEO Pursues “Next Big Field” of Biotech

6/3/09Follow @xconomy

San Diego-based Novocell has nailed down a second important patent on a valuable type of cell derived from human embryonic stem cells, which could end up forcing a lot of researchers to license technology from the company on Torrey Pines Mesa.

The company is announcing today it has secured a U.S. patent that protects its invention for a method of using endoderm cells for research when derived from human embryonic stem cells. A couple of months earlier, Novocell nailed down protection for a composition of matter patent on endoderm cells, a type of cell with wide-ranging potential. Endoderm cells can become pancreatic cells for use in diabetes therapies, or be turned into other tissues that make up the lungs, intestines, liver, thymus, and thyroid.

“This meets a long-standing need of major pharmaceuticals for human cells,” said Novocell CEO John West, in a statement.

Patents are a sensitive subject in the field of stem cell research—just ask the Wisconsin Alumni Research Foundation, which has taken heat for what some scientists consider onerous licensing terms for the right to use human embryonic stem cells developed at the University of Wisconsin. Yet exactly how Novocell’s patents might translate into revenue for the company, which is still at the earliest stages of research and development of new therapies, is hard to tell. It stands to reason that collecting licensing fees on patents like these would be part of its revenue model, since Novocell is still at least a couple years away from the valuation-building stages of bringing its first stem cell therapy for diabetes into human clinical trials.

West, who joined as CEO just a month ago, told me in an interview shortly after he started that the strength of the company’s intellectual property is one of the things that attracted him to Novocell. He definitely gave it a close look, especially since he’s someone who could probably have his pick of a lot of jobs, after he sold his last company, Solexa, a maker of gene sequencing machines, to San Diego-based Illumina for more than $600 million in 2007.

“It’s similar to Solexa, in that it has very promising scientific breadth, and now the question is how you take it commercial,” West says. There are still big hurdles … Next Page »

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