Redefining the Stem Cell Opportunity
Small companies are now trying to leverage the value of both embryonic stem cells and adult stem cells, as genomics tools and for toxicology screening. At the same time, stem cells are gradually making their way into human testing, leading to an even more urgent need to understand the role that cytokines and growth factors play in signaling cells to differentiate. In fact, there's a growing recognition that the ultimate pharma opportunity may lie in selling drug cocktails that control cell differentiation, not in making and selling cells. Because dormant adult stem cells reside in tissues and in circulation, researchers are even beginning to envision applications where transplanted replacement cells are not needed at all.
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Despite the millions of dollars from public initiatives, particularly in California, to fund stem-cell research, VCs will still probably stay away until Big Pharma and Big Biotech show more of their own R&D interest in the area.
When UK cell therapy company CellFactors failed to raise money last year, one of its shareholders stepped in as COO, bringing commercial experience and a customer focus to a group that lacked both. CellFactors is still a risky bet, but its recent progress suggests that European biotechs have much to gain from managers with a track record in other sectors.
A rudimentary orthobiologic rationale forms the basis of Macropore Biosurgery's acquisition of StemSource. Macropore wants to develop the devices needed to collect adipose stem cells (StemSource's technology) in the operating room for surgeons to administer them to help rebuild damaged organs and tissue. While financially modest, the deal is one of the first forays to bring the medical device and cell therapy worlds closer.