The Australian company Mesoblast has received institutional ethics approval to begin clinical trials with its adult stem cell product, RepliCart, in the treatment of osteoarthritis of the knee.

Headquartered in Melbourne, Mesoblast is now approved to begin randomized, placebo-controlled, double-blind Phase II clinical trials for its off-the-shelf allogeneic stem cell product, “RepliCart”, in the treatment of osteoarthritis of the knee in patients who have undergone reconstruction of a ruptured anterior cruciate ligament (ACL) within 6 months of a traumatic knee injury. The clinical trials will enroll 24 patients between the ages of 18 and 40 who will either be administered RepliCart in combination with hyaluronan, or just hyaluronan alone. The primary endpoint of the study will measure safety at 12 months, and a secondary endpoint will measure the prevention of cartilage loss and of knee osteoarthritis over time. Preclinical trials were successful in demonstrating the ability of a single injection of the allogeneic stem cells contained in RepliCart to regenerate joint cartilage and prevent osteoarthritis in animal models.

According to orthopedic surgeon Andrew Shimmin, from the Melbourne Orthopedic Research Foundation and the lead investigator of the clinical trials, “ACL injury is very common in our young active sporting population and unfortunately the injury is associated with the early development of arthritis despite modern reconstructive procedures. Little has changed in the prevention and treatment of arthritis over the past 50 years, so the application of Mesoblast’s stem cell technology for reducing the progression of this degenerative process in the knee offers a new and exciting direction for the management of arthritis.”

As Mesoblast’s executive director, Dr. Silviu Itescu, explains, “Commencing this clinical trial in post-traumatic knee osteoarthritis is an important step towards accessing the huge commercial opportunity that exists today for Mesoblast in the osteoarthritis market.”

It has been estimated that more than 15 million people in the U.S. alone suffer from osteoarthritis, which is a degenerative disease characterized by loss of cartilage. Osteoarthritis constitutes the most common form of musculoskeletal disorders among the elderly, in whom it is the primary cause of disability and joint pain. In the past, joint replacement has been the only option for such patients, but now stem cell therapy offers the first type of treatment that may actually reverse damage and regenerate joint tissue.

For people who suffer a ruptured anterior cruciate ligament (ACL) of the knee, which is more commonly and simply known as ruptured knee, 70% of the patients will develop osteoarthritis 15 to 20 years earlier than the general population, regardless of whether or not they have undergone reconstructive knee surgery. In the U.S. alone there are approximately 300,000 new cases per year of osteoarthritis having developed after an acute traumatic incident, not only in the elderly but in people of varying ages.

Mesoblast Limited is focused on the treatment of orthopedic conditions via the rapid commercialization of proprietary adult stem cell products that are designed for the regeneration and repair of bone and cartilage. As such, Mesoblast has the worldwide exclusive rights for a series of patented technologies that were developed over a period of more than 10 years and which are built upon the utilization of adult mesenchymal precursor cells (MPCs). As described on their website, Mesoblast has acquired 39% equity in Angioblast Systems Inc., which is a private New York-based biotechnology company that is developing the platform MPC technology for the treatment of cardiac, vascular and eye diseases including the repair and regeneration of blood vessels and heart muscle. Together, Mesoblast and Angioblast are jointly funding and advancing the core technologies behind such therapies.

The biotech companies Osiris Therapeutics and Genzyme announced their signing of a collaboration for the commercialization of two adult stem cell products. According to the agreement, Osiris will commercialize the proprietary products Prochymal and Chondrogen in the U.S. and Canada, while Genzyme will commercialize the products throughout the rest of the world. Genzyme will make an upfront payment of $130 million to Osiris in additon to milestone and royalty payments that are estimated to be worth approximately $1.3 billion. Prochymal and Chondrogen are therapies that use allogeneic (in which the donor and recipient are different people) adult mesenchymal stem cells derived from bone marrow. Both of the products are late-stage treatments for a wide variety of diseases.

Although Osiris developed the therapies, Genzyme will provide the financial support for further marketing and commercialization of the products. This strategic alliance will leverage the leadership position that Osiris enjoys in the development of novel adult stem cell therapies, as well as Genzyme’s regulatory and marketing infrastructure outside of the U.S. and its expertise in the commercialization of cell therapies.

Genzyme and Osiris are already strategic allies and this is not their first collaboration. In 2007, the two companies forged an alliance to develop Prochymal for acute radiation syndrome, which resulted in both companies being awarded a $224.7 million contract in January of 2008 by the U.S. Department of Defense to develop Prochymal for the treatment of radiation-induced medical conditions related to warfare and terrorism. Once Prochymal is approved by the FDA for such indications, the Pentagon will buy 20,000 doses at $10,000 each.

According to Dr. Henri A. Termeer, Genzyme’s chairman and CEO, “This partnership further strengthens Genzyme’s late-stage pipeline of products with the potential to support our growth beyond 2011. Osiris is the clear leader in stem cell technology, which holds the promise to transform standards of care in a number of therapeutic areas in which Genzyme already has a strong presence.”

Similarly, Dr. C. Randal Mills, president and CEO of Osiris, adds, “Today Genzyme and Osiris have forged a powerful partnership in the emerging field of stem cell therapy. This relationship greatly enhances our ability to effectively introduce this groundbreaking technology on a global basis.”

As stated by Edward Tenthoff, an analyst at Piper Jaffray & Co., the deal is the largest ever in the field of stem cell therapy. The stem cells under consideration are exclusively adult stem cells, which are derived from mature tissues instead of embryos. According to Tenthoff, “This is a huge validation. This is a major win for everyone involved.”

Osiris is an adult stem cell company which was founded in 1992 and went public in 2006. Yesterday the company’s stock gained 43 cents, or 2.8%, settling at $15.93 a share after the company announced a third-quarter profit of $5.3 million. Its products focus on the treatment of inflammatory, orthopedic and cardiovascular condtions. The company’s adult stem cell product Prochymal is the only stem cell therapeutic product currently designated by the FDA as both an Orphan Drug and as a Fast Track product. Prochymal is currently being evaluated in three separate phase III clinical trials, two of which are for graft vs. host disease (GvHD) and the third of which is for Chron’s disease, both of which are potentially fatal conditions. Prochymal is also in phase II clinical trials for the regeneration of pancreatic beta islet cells in patients with type I diabetes and for the repair and regeneration of damaged lung tissue in patients with chronic obstructive pulmonary disease. Data from all clinical trials are expected in 2009. Prochymal has also been approved to begin phase II clinical trials as a treatment for the regeneration of cardiac tissue following myocardial infarction. Additionallly, Chondrogen has also been approved to begin phase II and III clinical trials for osteoarthritis of the knee. Osiris currently has 47 U.S. patents, each with one or more foreign counterparts.

Genzyme, the world’s largest maker of drugs for rare genetic disorders, is well known for commercializing first-in-class biotechnologies. Founded in 1981, today Genzyme has a staff of more than 10,000 employees around the globe, with revenues of $3.8 billion. In 2007 Genzyme was awarded the National Medal of Technology, which is the highest honor awarded by the President of the United States for technological innovation. In addition to its large orthopedic franchise, Genzyme’s products are focused on rare genetic disorders, kidney disease, cancer, transplant and immune disease, diagnostic testing, cardiovascular disease, neurodegenrative diseases, endocrinology and other medical specializations in which patient needs are not adequately met. Most recently, Genzyme has also begun developing Mozobil, a novel proprietary product which stimulates the mobilization of the body’s own endogenous stem cells. Genzyme’s latest agreement with Osiris marks a major expansion by Genzyme into the field of cell transplant therapies.

As novel proprietary late-stage adult stem cell treatments which have already been shown to control inflammation, to prevent scarring and to promote tissue regeneration, both Prochymal and Chondrogen have the potential to treat a vast range of diseases. The mutual collaborative development and commercialization of these two adult stem cell therapies, by two of the most prominent biotech industry leaders, signifies an important milestone not only in the histories of these two leading companies, but also in the maturation of the adult stem cell industry. As David Meeker, executive vice president for Genzyme, explains, “The technology has evolved to a point where we have a level of confidence where we’re willing to make the deal. We’ll be working on the clinical development going forward and preparing for commercial launch.”

The partnership involves stem cell therapies which consist exclusively of adult stem cells, not embryonic stem cells, since embryonic stem cells have proven to be highly problematic in the laboratory and have therefore never advanced to the clinical stage.

Dr. Cheryl Adams, a pioneer in veterinary stem cell therapy, is one of only two vets in the state of Illinois who are certified to treat animals with stem cells. So far, among the 30 dogs whom she’s treated, she has achieved significant improvement without exception. In all cases, the stem cells used for the treatment were taken from the adult dog’s own body.

Animals often share many of the same physical maladies as humans do, especially bone and joint problems that come with advanced age. Animals who suffer from such ailments are now offering strong clinical evidence for the efficacy of adult stem cell therapy. One case in point is an 8-year-old German Shepherd who had developed osteoarthritis and hip dysplasia. After removing some fat from the dog’s abdomen, Dr. Adams shipped the cells to the San Diego company, Vet Stem, where the stem cells were isolated from the fat and returned to Dr. Adams who injected the stem cells into the dog’s joints. According to the owner of the dog, Chicago Police Lieutenant Jim Gantz, “This science actually gives a chance to rejuvenate tissue, tendon, ligament and bone. So the dog can actually get better.” The procedure costs approximately $3,000, which is less than conventional therapies which may have to be repeated numerous times and are rarely completely effective. Adult stem cell therapy, by contrast, may only need to be administered once, after which results are often “spectacular and almost immediate”, according to Dr. Adams. In reference to the 8-year-old German Shepherd, Dr. Adams describes that, “His energy level went through the roof, and we increased his range of motion by 20 degrees on his right hip.” Similarly, a 12-year-old golden retriever also exhibited remarkable improvement after receiving a similar type of stem cell treatment. Previously unable to walk up or down stairs, the dog was treated with her own adult stem cells two years ago, after which time she regained her ability to climb and descend stairs. Now, two years later, she is still able to do so.

Vet Stem is currently also testing adult animal stem cells in the treatment of damaged kidney, liver and heart tissue in cats and dogs.

At the annual meeting of the American Academy of Orthopedic Surgeons held in San Francisco this week, researchers and physicians alike have agreed that regenerative medicine will be their most powerful tool throughout the future. Rather than surgically replacing joints, as has been the standard medical approach in the past, therapies of the future will focus on the use of stem cells and gene therapy in the new scientific field of tissue re-engineering.

Dr. Thomas Einhorn, chairman of the Department of Orthopedic Surgery and professor of orthopedic surgery, biochemistry and biomedical engineering at Boston University, performed his first hip “replacement” last year with a new technique that utilizes the patient’s own stem cells. As he stated, “It’s the future of our specialty.”

A handfull of companies, such as Stryker and Medtronic, already sell bone morphogenic proteins (BMPs) which are comprised of certain cytokines and growth factors that induce the formation of bone and cartilage. According to Dr. Scott Rodeo, who is co-chief of Sports Medicine and Shoulder Service at the Hospital for Special Surgery in New York and an associate team physician for the Super Bowl champion team, the New York Giants, BMPs in combination with stem cells have already been used in the successful repair of torn rotator cuffs in animal models, thereby offering a promising new type of therapy, which does not involve surgery, for one of the most common shoulder injuries to occur in sports and which normally has only been treatable in the past with surgery.

Previously, the tools of an orthopedic surgeon have typically resembled those of a car mechanic. The heavy metal and even the newer synthetic and composite materials from which artificial hip and knee joints are still fashioned may soon be replaced by BMPs in combination with adult stem cells that are easily and safely derivable from such sources as bone marrow, fat, and umbilical cord blood.

Athletes with sports injuries, and non-athletes with more ordinary conditions such as osteoarthritis and other degenerative diseases of the bones and joints, are expected to benefit greatly by these new techniques in which adult stem cell therapy is already making surgical joint replacement obsolete.

A team of scientists at the University of Edinburgh in Scotland have developed a “bioactive scaffolding” comprised of materials designed to interact with adult stem cells in such a way that even the most serious types of skeletal injuries may now be able to heal completely. Some types of injuries to bone and cartilage are too traumatic to heal without medical intervention, although the conventional types of orthopedic surgery have not always been successful in repairing such injuries. Now Dr. Brendon Noble and his colleagues at the MRC (Medical Research Council) Centre for Regenerative Medicine in Edinburgh have developed a composite “scaffold” which consists of a rigid mesh structure that has been impregnated with chemicals that facilitate the natural action of stem cells derived from bone marrow. Such a device would be useful not only for treating people who have suffered acute injury, but also for treating chronic conditions such as osteoarthritis and cancer of the bone. People of all ages who may suffer skeletomuscular trauma, especially the elderly, would benefit greatly from such a therapy.

Dr. Noble and his colleagues are working in collaboration with the Scottish National Blood Transfusion Service in the harvesting and culturing of blood-derived stem cells that are known to differentiate into bone, and which are incorporated into this new therapy.

High blood pressure, diabetes, heart disease, and other numerous health problems can be the result if there is too much fat in a person’s body. But few would guess that the same fat that that contributes to a long and depressing list of health problems also has life saving potential.

The potential healing power stored within fat is being discussed at a conference in Indianapolis this week. About 150 medical researchers will be in attendance. Investors are dreaming about huge returns as well.

Using stem cells taken from a person’s own body fat, researchers hope to someday develop treatments for poor circulation in legs, heart attacks, and even obesity.

Using stem cells to treat the joints of horses and dogs, other research has focused on animal applications.

“It’s easy to get fat, even from thin people,” said Dr. Keith March, a professor of medicine at Indiana University known for his research on adult stem cells harvested from fat. “It’s a very readily available source. You can work with the cells from a person’s own body.”

During the annual conference of the medical society International Federation of Adipose Therapeutics and Science at the Hyatt Regency, researchers coming from more than a dozen countries, will present their findings today through Saturday.

However, more than just medical professors are being drawn to the IFATS conference in Indy. Conference sponsors include, Cook Medical, device makers Biomet, and drug giant Eli Lilly. All three are among Indiana’s leading health-care companies. Also attending and sponsoring the event are medical start-ups and a number of venture capitalists.

The adult stem cell industry is still small and mostly unprofitable despite having so many therapies in the research stage.

Working on treating heart disease and other conditions using fat derived stem cells is IFATS sponsor Cytori Therapeutics. But the California based company lost $12.7 million on product revenue of just $792,000 in the first half of 2007.

Blockbuster treatments and big payoffs for investors could eventually be the result of the millions being invested by private sources and the government according to experts.

“There’s really no cure for many of the diseases that we are working on,” said Phillip Singerman, managing director of Toucan Capital, a Maryland venture capital firm that sponsors IFATS conferences. “That’s really the promise of stem cells.”

With the potential to develop into specific cell types found in the body such as the heart, nerve tissue, blood, muscle, and other tissues, stem cells are immature cells with great capacity to differentiate. When taking cells from a living patient, the cells are referred to as adult stem cells. This is the type of non-controversial cell that IFATS is focused on.

On the opposite end of the spectrum, stem cells derived from human embryos are referred to as embryonic stem cells. Since a human embryo must be destroyed to harvest the cells, their use is considered controversial.

Fat is a non-controversial and plentiful source of stem cells says March, who is also president of IFATS.

Liposuction is used to extract fat from a patient’s abdomen, buttocks or thigh. About a million support cells can be extracted from only one gram of fat. Many of these support cells are stem cells.

The turn around time for patient treatment is quick with this type of cell according to March.

“They don’t have to be cultured extensively,” he said.

According to the National Institutes for Health, blood cancers, tumors and other conditions have been treated for decades using bone marrow derived adult blood-forming stem cells. But many more potentially life saving treatments could be developed according to experts and investors.

“We have seen opportunities, both in Indiana and nationally, that are making progress and beginning to show a more definite link between their research and eventual therapies,” said Greg Maurer, managing director of Heron Capital, an Indianapolis venture capital firm.

But years can stand in the way for treatments to be fully tested in humans before receiving final approval from the Food and Drug Administration. The road from animal models to humans is a tricky path.

But humans are already involved as subjects for some of the research that is being presented at the IFATS conference.

A treatment for heart attack victims who are injected with stem cells shortly after an attack is being tested by a research team from Erasmus University Medical Center in the Netherlands.

In the Dutch study, stem cells are extracted from fat that has been removed via liposuction. The cells are then injected into the heart muscle within 24 hours of the heart attack.

March said that since the cells secrete proteins and nutrients that preserve the existing heart muscle cells, the adult stem cells may be able to limit the damage to the patient’s heart muscle. New heart muscle cells could also be created by the stem cells added March.

Treating dogs for osteoarthritis is another research project that is being presented at IFATS. The California-based Vet-Stem, a company backed by Toucan Capital also uses stem cells to treat orthopedic injuries in horses.

In order to keep up with the latest research, it is important for Toucan to attend conferences such as IFATS said Singerman of Toucan Capital. 14 stem-cell-related companies have already been funded by Toucan which is a $120 million venture capital fund.

“The science is really at the cutting edge,” he said. “Every day there are new discoveries and new technologies.”