“Toward the end of the Clinton Administration, the National Institutes of Health (NIH) issued new guidelines for embryonic stem cell research. Our guys set about developing stem cell lines in accordance with the new regulations, and by April, we were ready. We were the only organization that was ready when the regulations came into effect,” says Hadasit managing director Dr. Raphael Hofstein.
Hadasit Medical Research Services and Development promotes and markets the intellectual property generated by the Hadassah Medical Organization. Israeli start-up Embryonic Stem Cell International (ESI) was founded under the aegis of this incubator in July 2001, just before the official US policy directive on stem cell research. The rapid adoption of the US regulations enabled ESI to assert it had overtaken the creation of stem cell lines by the industry leader, Geron (Nasdaq:GERN).
In August 2001, President George W. Bush announced “very limited research” as the guideline for federal funding for embryonic stem cell research. Bush's decision meant no further cloning of additional embryonic stem cell lines, research could continue using the existing lines. The decision gave ESI an advantage.
ESI developed out of research by Dr. Benjamin Reubinoff of Hadassah Medical Organization and three colleagues from Australia, the Netherlands and Singapore. The research was on in-vitro fertilization, but the researchers developed a technique to develop embryonic stem cells from surplus embryos, “in order not to waste them”. The scientific and popular press had already weighed in on the significance of these discoveries, debating whether science would be able to systematically create stem cells and control them, whether they should be implanted in people, and the risks of immune rejection, which is the major hurdle to transplants today.
ESI’s discovery earned it a $10 million investment, at a $20 million company value, from Life Science Investments of Singapore and ES Cell Australia Pty Ltd. ESI’s first market is a treatment for Parkinson’s disease, and the company is trying to develop stem cells for the pancreas and heart. Last year, ESI signed a development agreement with Quark Biotech (QBI) to use QBI’s proprietary technology platform to discover new genes such as growth and cell differentiation factors derived from embryonic stem cells.
Stem cells become exploitable asset
Bush’s decision was the beginning of an era in which embryonic stem cell lines and the patents for them became an asset. The NIH issued a list of 64 stem cell lines that met Bush’s criteria for research. Nearly half of them came from two sources: Goteborg University of Sweden (19 lines) and CyThera, a private San Francisco-based company (9 lines).
Wisconsin Alumni Research Foundation of the University of Wisconsin (WARF) and Geron held 15 additional lines. The original research had been financed by Geron, and both groups have long been arguing over proprietary rights to the stem cell lines. BresaGen of Australia has four lines, and the remainder were developed in India and Sweden. The first country to officially permit embryonic stem cell research was the UK, in December 2000. However, the US is the whole world for practical purposes.
What was once contingent on technology experiments has now become a good transferred by licensing agreements with the owners of the stem cell lines. Geron, a pioneer in the field, already has almost 500 licensing agreements for its stem cell technologies. US companies using existing stem cell lines include BioTransplant, Aastrom Biosciences (Nasdaq:ASTM), StemCells Inc. (Nasdaq:STEM), OrganoGenesis (AMEX:ORG) and Nexell Therapeutics (Nasdaq:NEXL).
Rambam - provider of stem cell lines to the world
This corporate free-for-all has played into the hands of Haifa’s Rambam Medical Center. Dr. Joseph Itskovitz-Eldor and University of Wisconsin biologist Dr. James Thompson were the first to successfully grow embryonic stem cells in a culture. Rambam is now a major source for stem cell lines worldwide. The experiment, funded by Geron, was conducted on November 6, 1998. The researchers proved it was possible to grow embryonic stem cells in the laboratory over an unlimited period, making hundreds of generations of identical cells.
However, the moment stem cell lines were created, it was necessary to properly nourish the cultures, so the cells would grow and acculturate continuously and without limit. The original stem cell lines developed by Itskovitz-Eldor were used for later research in Israel at the Bruce Rappaport Institute of Medical Sciences at the Technion Faculty of Medicine, research which was published in July 2001. The researchers, headed by Rappaport Institute director Prof. Karl Skorecki succeeded in differentiating insulin secreting cells from stem cells.
The hope is to eventually transplant the insulin secreting cells into diabetics, especially type 1 diabetes patients. So far as is known, this is the first time that human embryonic stem cells were differentiated into insulin secreting cells. Earlier experiments had succeeded only with lab mice. As mentioned above, the Rappaport Institute cells were derived from Itskovitz-Eldor’s stem cells. Itskovitz-Eldor and Dr. Lior Gepstein meanwhile succeed in differentiating embryonic stem cells into heart cells.
Tissue rejection treatments using stem cell therapies are competing against other treatments, such as the transplant of whole organs grown in other animals and gene therapies. Both these methods face immunological problems. Stem cells should improve survivability rates, but rejection is still the main hurdle to overcome.
This is why even the most optimistic sources say clinical trials of stem cell therapies on humans are at least four years away, and extensive use is 20-30 years in the future. Until then, Israel will be an active player in the field.
An umbilical cord blood stem cell bank
It is not every day one catches a glimpse of the future of the kind provided by Cryo-Cell Israel, a subsidiary of Cyro-Cell International (Nasdaq:CCEL). The company’s website appeals to parents of newborns: “Following are several important reasons why choosing CRYO-CELL for your baby's cord blood stem cell preservation is like providing a security blanket for your entire family… Your baby's cord blood stem cells are a perfect match for the newborn throughout his or her lifetime and are also a 1-in-4 chance of matching a sibling… enroll in the CRYO-CELL U-Cord™ preservation program. If you need your U-Cord collection kit in less than 24 hours, please speak directly with our Client Services department 24/7…”
What is going on? Cryo-Cell operates an umbilical cord blood stem cell bank, and is appealing to the private sector – parents interested in preserving the stem cells of their newborns in the event of any future health problem. The fee is $549 to cover collection of the stem cells, work on blood samples and their cryogenic preparation, plus $75 a year in storage fees. Current know-how allows for 20 years cryogenic preservation.
Cryo-Cell calms potential customers: “We have been operating in the field for over 11 years… Financial statements are published on our website for your perusal. We are financially solid, with excellent liquidity. We have millions of dollars in the bank, with no short or long-term liabilities.” The promotion seems rather over the top, considering there is only one private sector competitor in Israel.
That competitor is Gamida-Cell, which develops stem cell cloning technology. Last year, Gamida-Cell announced its intention to establish an umbilical cord blood stem cell bank, financed by Elscint Biomedical, and in cooperation with the Schneider Hospital in Petah Tikva. The idea is to preserve patients’ cells in order to shorten lines for bone marrow transplants.
Gamida-Cell’s first product is umbilical cord blood stem cells, intended for bone marrow transplants. Market launch is planned for late 2005. The company is developing technology to develop ex vivo stem cell cultures, designed to reduce tissue rejection in transplants, since stem cells are not perceived by the body as invaders. The main market for the product is cancer patients undergoing radiation therapy.
Gamida-Cell raised $9.75 million at $20 million company value, before money, in September 2001.
The public sector is also entering the field. The Israel Cancer Association and the Magen David Adom blood bank opened an umbilical cord blood bank. The aim is to utilize blood stem cells for bone marrow transplants. These transplants are used to treat certain cancers and blood diseases. However, bone marrow transplants carry risk of rejection, side effects and the inability to find a suitable donor. Stem cells from the patient at birth should be suitable. Bone marrow transplants using umbilical cord blood stem cells tend to be successful, the body rejects the transplants less, while viral infections are reduced. The procedure has been tested for leukemia, lymphoma, anemia and other diseases.
These umbilical cord blood stem cell banks offer an
interesting situation in which the parents of a newborn deposit a quantity
of umbilical cord blood in the bank. In the event that a transplant is some day
needed by the child, sibling or parent, the cryogenically preserved blood will
be available for use.
Published by Israel's Business Arena on 20 March 2002