In what they’re calling a breakthrough, Duke University Medical Center and Artecel Sciences Inc. researchers transformed adult stem cells from fat into cells that appear to be nerve cells.

Artecel President and Chief Executive Officer Carolyn Underwood says the latest findings boost the image of the company as it seeks a $15 million to $20 million second round of venture capital. “Anytime you show ground-breaking research, it helps the company,” she says.

This is the first time scientists have managed to make fat cells resemble cells of a completely different type, says Henry Rice, M.D., senior author of the paper describing the research. The report was published in the May 31 issue of “Biochemical and Biophysical Research Communications,” which reports fast-breaking news in experimental biology.

“These experiments are proof of principle that is possible to change one lineage of adult stem cells into another using fat,” says Rice.

Previously adult stem cells from fat had been transformed into those that resemble cartilage and muscle cells.

The promise of cellular therapies

Underwood notes that “Those are from the same lineage as fat.” That means fat, muscle and cartilage all develop from the same parent cell type, which never naturally develops into nerve cells.

“No one has shown that nerve cells could be grown from fat before,” Underwood says.

Fat cells, like bone marrow cells, have a natural adult stem cell precursor state that makes them ideal for the research, Rice says. Adult stem cells from bone marrow are difficult to harvest, however.

Artecel’s Chief Scientific Officer Jeffrey Gimble, M.D., co-author of the research, says, “This is a promising first step in the use of an abundant source of adult stem cells in central nervous system repair. We are trying to think about human disease in a new way.”

Everyone is used to the idea of surgical, medical and drug treatments, but, “We’re looking at one of the next steps in biotechnology, using cellular therapies,” says Gimble.

Cellular therapies offer hope of treatments where none were possible before. It may eventually help repair brain or central nervous system damage from strokes, spinal cord injuries, and degenerative diseases.

Will transformed cells work?

The abundance of fat and the ease of harvesting adult stem cells from it mean that someday doctors may use a patient’s own fat to provide a source of nerve, cartilage, or other cells, avoiding tissue rejection problems. “Our approach with fat offers a limitless supply of readily obtainable adult stem cells,” Gimble says.

Rice, a pediatric surgeon, says it is still unclear whether the new cells from fat will function like nerve cells.

Biologists have questioned whether adult stem cells are really transforming into functional cells of other types. “You have to be careful with your words,” cautions Rice. “This is a first step. But from a biological and clinical point of view, it’s a big first step.”

Rice says the latest findings “violate what has been immovable scientific dogma until recently, that one type of tissue cannot differentiate into others.”

Rice agrees that questions about whether the transformed cells will perform as nerve cells are important. Rice adds, “We’re a long way from showing they’ll function as nerve cells. But they express a wide range of proteins that nervous system cells do.”

That is of crucial importance because the proteins a cell makes are essential to defining its function.

The research team conducted parallel experiments with mice and human fat cells. They treat the fat stem cells with chemicals and growth factors that transform them into the nerve-like cells within hours.

Second round dance underway

The findings bolster Artecel’s position as it hunts for a big second round of financing it hopes to close by mid-July.

Underwood says the company is negotiating with an investor outside the area to lead a $15 million to $20 million deal. “No one in the area has that kind of cash,” Underwood says.

She says the company will hire eight to 10 more people when it closes the round.

The work transforming adult stem cells from fat into nerve cells is the latest of Artecel’s five development programs.

The 17-employee company expects to file its first investigative new drug application with the U.S. Food and Drug Administration by the end of this year for its lead product, a wrinkle plumping treatment.

Following that in the pipeline is Artecel’s plan to infuse its cells with blood stem cells to help patients who need blood or bone marrow transplants.

“We think we can get those two through the FDA most quickly,” Underwood says. The company has progressed to animal model data on all but the nerve cell research, she adds.

Research on those efforts and on using the stem cells from fat for cartilage repair is ongoing at Duke. Artecel also is working with a University of North Carolina at Chapel Hill researcher on using fat stem cells to promote bone repair.

Artecel was spun-out from Zen-Bio in November 2000 following a $3 million first round led by Eno River Capital in Durham.

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Previously published on LocalTechWire:

Finding Value in Fat: Zen-Bio Plumps Up Bottom Line with Fat Cell Line: