San Diego’s Cytori Gains Cash; Loses a Patent

7/29/09

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suctioned from a patient’s midsection, processed, and injected into the breast, where it grafts to existing fat tissue, the company says. A second clinical study underway in Europe looks at the use of fat-derived cells in 27 heart patients with chronic myocardial ischemia, or angina. Cytori believes the fat-derived cells may promote the growth of new vessels to increase blood flow in the heart. Results of the six-month safety and feasibility study are due during the first half of 2010.

The company traces its roots to UCLA, where its founder and president, Marc Hedrick, was a plastic surgeon. Working with a team from the University of Pittsburgh, Hedrick and colleagues reported in the journal Tissue Engineering in 2001 that they had converted fat from liposuction patients into bone, cartilage and muscle. Cytori exclusively licensed that discovery and others from the University of California, which claimed a stake in the invention because of Hedrick’s work.

Cytori says its products are covered by other patents and do not use the discovery, which turns out to be a good thing. Last week, a federal appeals court ruled that the University of Pittsburgh—and not UCLA—owned the discovery because idea of isolating fat stem cells that can be differentiated into other cell types first occurred to researchers at Pitt. In so ruling, the court removed Hedrick’s name from the patent and effectively terminated Cytori’s right to use the invention, known as the ‘231 patent. The names of other UCLA researchers were also stricken.

Cytori spent more than $5.2 million since 2006 to defend the patent, a substantial sum given the company’s financial position. Although it was not a defendant, Cytori was obligated to support the litigation under the terms of its licensing deal with the University of California, company spokesman Tom Baker said. Hedrick, however, was a defendant; he stood to receive seven percent of the royalty payments made to the University of California by licensors—in this case, Cytori. (The company says Hedrick’s royalty agreement predates his employment there.)

The decision has no effect on products or clinical applications under development, Cytori says. However, the litigation did force the company to discontinue production of fat stem cells it sold through a partner for research purposes. All rights under the ‘23l patent now belong to Cytori rival Artecel of Sunnyvale, CA., which holds an exclusive license from Pitt.

Denise Gellene is a former Los Angeles Times science writer and regular contributor to Xconomy. You can reach her at dgellene@xconomy.com Follow @

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