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many speeches about the hurdles that Advanced Tissue Sciences was unable to overcome—and what she would have done differently. “After talking about what I would do differently a number of times,” Naughton says, “I decided to go out and actually do it.”
A key element in Naughton’s new strategy was the creation of Histogen Aesthetics, a subsidiary that would develop skin and hair restoration products based on the expertise Naughton and her team had acquired in developing conditioned cell media at ATS. Histogen Aesthetics would generate immediate revenue to support the long-term development of living tissue skin grafts and other regenerative medicine products.
So how is the technology underlying Histogen Aesthetics’ fundamentally different from the technology that was developed at ATS, and conveyed to SkinMedica?
[Corrected to show that SkinMedica cultures cells in three dimensions] Lawyers for Histogen successfully argued that the two key patents SkinMedica had acquired in the ATS bankruptcy were limited in nature. They said the SkinMedica patents only covered the technology needed to grow skin cells in three dimensions, which excluded the growth of cells on beads in a single layer. The appellate court agreed, saying the way that Naughton and her colleagues described the technology in the ATS patent filings “plainly and repeatedly distinguished” the use of beads to culture skin cells in a single layer from methods that could be used to culture skin cells in three-dimensions.
Naughton’s team at Histogen grows its cells as a single, two-dimensional layer, on beads in suspension cultures under low oxygen conditions. The appellate court ruling upheld the trial court’s interpretation that SkinMedica’s approach to culturing three-dimensional skin cells was fundamentally distinct from the two-dimensional approach taken by Histogen. (In a dissent from the majority opinion, Chief Judge Randall Ray Rader wrote that he would reverse the district court’s grant of summary judgment, which would have returned the dispute to San Diego for trial.)
SkinMedica’s skin care business is now part of Irvine, CA-based Allergan, which paid $375 million to acquire the business last year. The company has declined to comment on its plans, but it could try another appeal.