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

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that need to be cleared before Novocell can enter clinical trials, but he was drawn to the company because he was looking for the “next big area in biology,” a place that was ripe for someone with his background in biotech product development.

Novocell lost its previous CEO in November, when Alan Lewis left to become CEO of the New York-based Juvenile Diabetes Research Foundation. The company has had a few good breaks since then, winning a $5.4 million grant from the California Institute for Regenerative Medicine, forming a research collaboration with Japanese stem cell researcher Shinya Yamanaka, and securing a partnership to help supply stem cells to Pfizer, the world’s largest drug maker, for use in research.

As I reported back in November, Novocell has been pushing forward for years in its diabetes stem cell research, much of which has been published in top scientific journals. It made a breakthrough in 2005, when it was able to coax human embryonic stem cells to become endoderm cells in their first two weeks of development. Building on that, the company used genetically engineered proteins to turn those cells into pancreatic progenitor cells. Now Novocell has shown it can go much further, by developing fully functioning pancreatic beta cells that secrete insulin. When it injects mice with these regenerative, insulin-producing cells, they can function as well as mice with normal insulin-producing cells for two to three months, Novocell chief scientist Ed Baetge told me.

Novocell certainly hopes that investors will be encouraged enough by this progress to put in more funding, West says. The company has 40 employees, and its products are at least two years from entering clinical trials, so it will take more than a trivial amount of cash to get to that point. If Novocell can catch a lucky break, it will ride the coattails of Geron, the Menlo Park, CA-based biotech that pioneered the first clinical trial to use a therapy derived from human embryonic stem cells.

Novocell is pursuing a different therapeutic use—diabetes as opposed to Geron’s spinal cord regeneration-which it hopes will have more commercial potential, West says. “We are the No. 1 players in the diabetes space with stem cell therapy,” West says. “Our expertise is in differentiating pancreatic cells for diabetes.”

When I tried to pin him down a couple weeks ago on the company’s commercial strategy, in particular how he hoped to exploit the first patent on the composition of matter of endoderm cells, he declined to be specific (in fairness, it was his first week on the job).

“We’re interested in taking this technology to market,” West says. “There are many more opportunities than diabetes out there, and we can’t do them all. We want to see good proposals to get the technology used.”

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