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Startups Amass University IP to Develop Stem Cell ‘Reprogramming’ Tools for Rx Use

One week after two separate academic research teams made headlines by announcing they had genetically “reprogrammed” human skin cells to act like human embryonic stem cells, a pair of startup companies based on university stem cell research is trumpeting the superior commercial potential of their technologies.
The companies, Cascade LifeSciences and Fate Therapeutics, have been busy assembling intellectual property from multiple universities related to methods of generating pluripotent stem cells from normal human cells, and plan to continue developing their technologies through academic research collaborations.
The methods being developed by the firms may also ultimately be safer for human therapeutic use than the recently announced breakthroughs because they do not use retroviral vectors or oncogenes, company representatives said.
Cascade LifeSciences, based in San Diego, said last week that it has taken an exclusive, worldwide license to technology developed by Oregon Health and Science University related to research conducted by OHSU researcher Shoukhrat Mitalipov.
Financial terms of the licensing agreement were not disclosed.
Mitalipov and colleagues have developed a method of creating monkey embryonic stem cells using a technique known as somatic cell nuclear transfer, in which the nuclear genetic material is removed from oocytes, or unfertilized eggs, of a species and inserted into normal cells from the same species to create pluripotent embryonic stem cells.
According to Ken Woolcott, chief business officer of Cascade, the company completed the license for the technology a few months ago, but disclosed the agreement last week to take advantage of the fact that Mitalipov’s work was published in the Nov. 22 issue of Nature.
“We have some other stem cell technology in our IP portfolio that we’ve gotten from other institutions, and we’re working with others now,” Woolcott told BTW. “This isn’t a one-trick pony. We think this is a second generation of stem cell technology that could be commercially applicable.
“We are in active discussions with a number of leaders in the field to bring technology to Cascade and to expand our portfolio,” he added. “More shots on goal, more chances to score.”
Woolcott said that the SCNT technique has been previously demonstrated in mice and other organisms, but that Mitalipov’s achievement of translating it to primates was extremely difficult. “No one fully understood the nuances of that until his work,” Woolcott said. “Now we’ve got our arms around that. The jump to being able to reprogram cells in humans should not be as difficult as moving from a mouse to a primate.”
Cascade has also licensed technology from OHSU related to parthenogenesis, and is in discussions with several other academic institutions for IP related to its core technology platform. The company also has ongoing research agreements in place with OHSU to further develop both the SCNT and parthenogenesis technology.
Meanwhile, Seattle-based Fate Therapeutics announced its formation last week. Based on scientific research conducted at Harvard University, Stanford University, the University of Washington, Scripps Research Institute, and Massachusetts General Hospital, Fate is developing methods of using small-molecule drugs to modulate cells in a patient’s body and to reprogram mature adult cells into stem cells.
Details of Fate’s formation are sketchy, as executives from the company did not return calls in time for this publication. However, Sheng Ding, associate professor of chemistry and cell biology at the Scripps Research Institute and one of Fate’s founding scientists, told BTW that Fate differs from other stem cell companies that “are using cells, and are primarily focused on cell-based therapies.”
Fate Therapeutics, he said, “is really about a collection of small molecules [and] protein therapeutics for modulating stem cell fate in vivo. That’s a totally different approach.”
Fate is backed by venture capital firms ARCH Venture Partners, Polaris Venture Partners, Venrock, and OVP, a syndicate group that Fate said has a combined $7 billion under management. The amount of money those VCs have invested in Fate so far is unknown.
Beyond the iPSC Breakthrough
The news from Cascade and Fate seems to ride the coattails of the stem cell scientific breakthrough announced two weeks ago, when separate groups of researchers led by James Thomson of the University of Wisconsin and Shinya Yamanaka of Kyoto University and the Gladstone Institute of Cardiovascular Disease in San Francisco published scientific papers in Science and Cell, respectively, describing their methods for creating “induced” pluripotent stem cells, or iPSCs.
Immediately hailed throughout the scientific community as a huge step for stem cell research, both methods involve inserting specific genes into normal human skin cells, essentially “reprogramming” the cells to act like pluripotent hESCs.

“This isn’t a one-trick pony. We think this is a second generation of stem cell technology that could be commercially applicable.”

The research has garnered an especially large amount of attention because it appears to enable a way to conduct hESC research and develop hESC-based therapies without using human embryos, thereby sidestepping the ethical debate that has impeded hESC research.
The commercial potential of the discoveries by Thomson, Yamanaka, and colleagues is unclear, and it may in fact be too early to determine, as the IP situation surrounding the discoveries still needs to be clarified. A representative for the Gladstone Institute’s tech-transfer office told BTW that the research group there has plans for commercializing the iPSC discovery, but declined to provide details until a later date.
Meantime, a spokesperson for Wisconsin Alumni Research Foundation, UW’s tech-transfer organization, declined to discuss the commercial potential of Thomson’s discovery, noting that the IP situation has yet to be fleshed out.
But even scientists from the two groups have said publicly that it would take several years before the full therapeutic implications of their discoveries can be worked out, mainly because of the fact that the methods used retroviral vectors to deliver their genetic payload, which would likely induce tumors in humans. In the case of the Yamanaka group, one of the inserted genes was actually an oncogene.
Both Cascade LifeScience and Fate Therapeutics believe they can avert these problems while still dodging the ethical concerns raised by using embryos to harvest hESCs by leveraging existing techniques for creating pluripotent cells from normal human skin cells.
Woolcott called the discoveries at UW, Kyoto, and Gladstone “very good science,” and said that the researchers indeed have generated pluripotent human cells, but said that it is still up for debate whether the cells are actually identical to hESCs.
Even if they act like hESCs, he said, “the challenge is that from a commercial standpoint, it would be hard to imagine regulatory authorities allowing you to treat patients with cells into which oncogenes have been inserted and [need to be] suppress[ed]. You’ve got to deal with that issue in some way, and it’s a complicating factor for using it outside of the Petri dish.”
Woolcott added that the iPSC research was “a very interesting scientific advance, [and] it will be interesting to see what their next steps are.”
Woolcott also said that Cascade believes that its technology, once refined, will be more powerful than the iPSC technology “because you’re talking about truly human or primate ESCs that are histocompatible to the host. This is a pure substitution of DNA so the resulting ESC is, for all immunological purposes, identical to the donor DNA.”
Woolcott also said that the “Holy Grail” for Cascade would be to develop human therapeutic applications based on the SCNT technology, which would essentially involve using an oocyte from a woman to transform skin cells from a patient into ESCs and differentiate them depending on patients’ needs.
“Don’t think this is going to happen next week, but we’re working on that, and that’s the long-term vision,” Woolcott said. “We believe this technology will be fundamentally important to that.”
In the near term, he added, the company will focus on developing research reagents and drug-discovery models and systems using primate and human stem cells generated with the SCNT technique. “The near-term revenue driver for us is to partner with people that are in the traditional pharma or biotech industry,” Woolcott said.
Fate Therapeutics’ Ding agreed that the iPSC method is “still too early for any therapeutic use” because it uses genetic manipulation.
“It’s basically these reprogrammed cells that will be used in therapeutic applications. If you want to do that, you also have to do the safety requirements,” Ding said. “The first thing is to really resolve those genetic manipulations before people can design those types of cells for therapeutic use.
“This technique, for the first time, gives people for the first time a defined factor for doing this,” Ding added. “But again, genetic manipulation has tremendous risk. What Fate is going to do is to use small molecules to do this.”
In a statement, Fate said that it expects to use its technology platform to focus on regenerative and reprogramming medicine; to treat neurological diseases such as Down syndrome, Alzheimer’s, and Parkinson’s; heal damaged heart tissue following heart attacks; increase bone and muscle strength in the severely frail; and protect organs after infection or transplantation.

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