StemCyte, a stem-cell therapeutic firm with offices in California, Taiwan, and India, has established a permanent East-coast branch in Ewing Township, NJ, to facilitate a collaboration with nearby Rutgers University that aims to commercialize a spinal cord injury therapy based on stem cells harvested from umbilical cord blood.
The company’s expansion, which follows on the heels of a sponsored research and licensing agreement it struck with Rutgers earlier this year, was also spurred by a $589,000, 10-year Business Employment Incentive Program grant from the New Jersey Economic Development Authority.
The move is somewhat atypical in that it involves a biotech company moving its operations to be closer to an academic partner, as opposed to a university licensing a technology to a local firm or creating a startup around the technology.
StemCyte’s move to the Garden State was announced by Gov. John Corzine during a news conference held on May 1 at Rutgers’ WH Keck Center for Collaborative Neuroscience. The Keck Center houses the laboratory of Wise Young, Keck’s founding director and chair of Rutgers’ neuroscience department, and the principal academic investigator in the StemCyte research agreement.
Young and colleagues have developed a potential treatment for nerve regeneration, and specifically, spinal cord injury, that combines StemCyte’s umbilical cord blood stem cells with lithium salts to stimulate neurotrophic factors in vivo.
According to David Carmel, vice president of business development for StemCyte, Young has demonstrated at least partial reversal of paralysis in rat models that have been dosed with a combination of lithium salts administered orally and mononuclear cells from cord blood injected directly into their spinal cords.
StemCyte and Young have collaborated on this research project for the better part of five years, Carmel said. Prior to that, StemCyte had primarily used its umbilical cord blood stem-cell technology to treat disorders such as hematological malignancies, thalessemia, sickle-cell disease, and immune deficiency.
“Worldwide, there have been more than 10,000 transplants done, mostly for blood disorders,” Carmel said. “StemCyte itself has treated more than 600 patients in 32 countries, and we’re basically shipping out 50 percent or more of cord blood stem cells each year.”
Now, StemCyte will attempt to branch out by turning Young’s discovery into a treatment for spinal cord injury in humans with an eye toward starting clinical trials later this year.
Carmel said that Young and Rutgers have applied for a patent on the treatment method. In February, at the Third Annual Stem Cell Summit in New York, StemCyte announced the research and licensing agreement with Rutgers.
“When we were looking where to establish our East coast operations, we looked first at where it would be most convenient for our employees on the East coast; [second], what the business climate was like, which is where the business employment grant comes in; and [third], our proximity to Wise Young.”
Terms of the deal call for StemCyte to provide an undisclosed amount of financial support for Young’s work. In exchange, StemCyte will receive exclusive rights to commercialize the therapy. If the product or other assets resulting from the collaboration are successfully commercialized, Rutgers will receive undisclosed royalty payments.
Carmel said that StemCyte has not disclosed additional terms of the agreement.
The therapy is now undergoing a double-blind randomized trial in Beijing to study the effects of the lithium method versus placebo in 40 patients with spinal cord injury.
Carmel told BTW that StemCyte and Rutgers decided to carry out initial clinical trials in China primarily because it is cheaper and because there are more spinal cord injury patients available in the country. He also said that the clinical trials are being carried out under US Food and Drug Administration guidelines.
“We hope to finish the Chinese process two years from now” and are “hoping to bring these same clinical trials to New Jersey, and the main obstacle right now is money,” Young told BTW sister publication BioRegion News last week. “We need to get some funding for this.”
Wise said that the group would need about $5 million to study the therapy in about 50 patients.
Should clinical trials occur in New Jersey, they would take place through the University of Medicine and Dentistry of New Jersey, according to BioRegion News. UMDNJ’s Robert Wood Johnson Medical School and Rutgers have established the Stem Cell Institute of New Jersey to carry out research, training, and clinical studies toward applying stem cells to human health.
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StemCyte setting up shop near Rutgers is an unusual twist on university-industry partnerships. Universities frequently establish sponsored research agreements or licensing agreements with companies that already have a local presence; or they may choose to seek grants and venture capital to establish a spinout based on technology developed at the academic institution.
According to annual licensing activity data from the Association of University Technology Managers, Rutgers received $264 million in research funding in 2006, and translated that research into 35 licensing or option agreements and $5.1 million in licensing revenues. Those numbers held relatively steady from 2005, when the school spent $269 million on research, executed 26 licenses or options, and took in about $5.7 million in licensing revenues.
However, the school did not spin out a startup company in 2006 or 2005, and has seen a dearth of spinouts over the past several years.
StemCyte could help fill that void with its new offices, especially since the firm is obligated to hire at least 12 employees in the coming years – some of which could be alumni from Rutgers and other area universities.
As part of its move to New Jersey, StemCyte received a $589,000, 10-year Business Employment Incentive Program grant from the New Jersey Economic Development Authority as part of recent initiatives by the state to fund stem-cell research.
“When we were looking where to establish our East Coast operations, we looked first at where it would be most convenient for our employees on the East Coast; [second], what the business climate was like, which is where the business employment grant comes in; and [third], our proximity to Wise Young,” Carmel told BTW.
Carmel also said that StemCyte had considered establishing its East Coast operations at an incubator affiliated with the University of Pennsylvania, in part because the company has some employees living in that state.
“We were weighing the options between that and this facility in Ewing, and we decided to go to New Jersey in large part because of this incentive program, which essentially gives you a rebate on your payroll taxes from the state,” he said. “So if you create a certain number of jobs in the state, they give you tax rebates. This is a significant incentive for companies like StemCyte.”
Under the NJEDA’s grant, StemCyte is committed to employing at least 12 new staffers at its new facility, BRN reported. To date, StemCyte has five professionals based in Ewing Township, including the company’s chief financial officer, chief science officer, and Carmel.
Kenneth Giacin, chairman, CEO, and president of StemCyte, told BRN that the company plans to hire “at least two or three people” before the end of this year — “likely one in finance, one and maybe two in the technical area.” Asked how soon the company would ramp up to 12 New Jersey staffers, he said “it really depends on how quickly we grow some of these programs.”