Wall Street Journal - June 2, 2004
Rhonda L. Rundle, rhonda.rundle@wsj.com

Capitalizing on the emergence of stem-cell therapy as standard treatment for many kinds of leukemia and lymphoma, a company called NeoStem Inc. wants healthy consumers to pay $5,000 to bank their own stem cells for the future, to be used in the event of disease. Last month, NeoStem opened its first collection center in Los Angeles and plans 60 or more in the U.S. over the next three years.

Stem cells are unspecialized cells, found in embryos and the blood and bone marrow of adults, that are capable of generating various kinds of human tissue. In a treatment for lymphoma, stem cells are collected from the patient's bloodstream or bone marrow, the patient receives chemotherapy and the stem cells are returned to the body to stimulate growth of healthy new blood cells. Leukemia patients typically receive transplanted stem cells from a matched donor.

Some research suggests stem-cell therapy may one day be useful in treating everything from heart disease to spinal-cord injury to radiation sickness. Indeed, stem-cell research "has the potential to revolutionize the practice of medicine and improve the quality and length of life," according to the National Institutes of

NeoStem is betting that well-to-do consumers will pay to maintain their own healthy blood stem cells in the event they become ill or injured. The company's founders, a retired professor and two physicians, think cell banks can become a multibillion-dollar business. "One group that excites us is people who have had an infarction and are at risk for another heart attack," said Denis Rodgerson, chief executive of NeoStem, a closely held venture based in Agoura Hills, Calif. Researchers are studying whether stem cells can promote growth of healthy heart tissue.

From a scientific point of view, stem-cell banking isn't particularly controversial. Transplants using a patient's own cells are less costly than those involving matched donors. And blood stem-cell banking doesn't involve embryonic stem cells, which are at the center of a world-wide ethical debate over their use in drug development and other human experiments.

Still, some researchers warn that people who rush out to have their stem cells stored could be throwing their money away. "This is the kind of thing that gets kicked around almost jokingly by people working in this field," said David Scadden, co-director of the Harvard Stem Cell Institute, a newly formed research organization in Cambridge, Mass. It will be at least a year or two before authoritative studies are available to show whether stem cells can be used to repair cardiac tissue, he adds.

Stephen J. Forman, chief of the blood-cell and bone-marrow transplantation program at City of Hope National Medical Center in Duarte, Calif., says it is "premature" for people to store stem cells while they are healthy, because the science of regenerative medicine hasn't advanced far enough yet. "It smacks of a real disparity between the haves and the have-nots, since clearly no insurance company will pay for this," he adds.

There's plenty of time to prove the skeptics wrong, says NeoStem's Dr. Rodgerson, a retired professor of pathology and laboratory-medicine at the University of California, Los Angeles. NeoStem has raised some $500,000. It has eight employees, including two who worked at Amgen Inc.

Clients willing to spend $4,700, plus a $300 annual storage fee, undergo a procedure similar to giving blood, but slower: It takes about three hours. Blood cells are drawn by needle out of one arm and sent through a plastic tube and into a machine that separates out the stem cells. Most of the blood returns immediately to the other arm, with only a tiny number of stem cells retained for banking.

So far, some 20 people have undergone the procedure, including Dr. Rodgerson and some of the firm's investors. Another customer was Kenji Mizuguchi, who heard about NeoStem at a venture-capital meeting last year. Mr. Mizuguchi, a general manager of Sojitz Corp. of America, a Japanese company that invests in technology, had personal and professional interest in stem-cell banking.

Last year, a few weeks after finishing the New York City Marathon, the 45-year-old runner was diagnosed with mild atrial fibrillation, which disturbs the heart's normal pumping function. He did some research into stem-cell transplantation as a future therapy for heart disease. His employer opted not to invest, but Mr. Mizuguchi decided personally to sink $20,000 into NeoStem. He also decided to bank his own stem cells.

Earlier this month, Mr. Mizuguchi arrived at NeoStem's ninth-floor collection site in a Los Angeles medical building. He complained of a "small ache" in his back and side -- a side effect of a drug he took for the two preceding days to boost production of white blood cells, including stem cells. Mr. Mizuguchi settled onto a reclining chair while two nurses inserted needles in his arms and hooked him up to a device resembling a dialysis machine.

"There's no discomfort," he declared after the needle in his left arm had to be removed and reinserted into a larger vein. He watched an office copy of "Shanghai Knights," a wacky Jackie Chan comedy, as it played on a flat screen suspended directly over his head. After a half-hour, Mr. Mizuguchi's head rolled to one side and he breathed deeply. He was asleep.

The stem cells collected in each procedure are combined with a preservative, packed into bags and plastic tubes, frozen in liquid nitrogen and stored in a laboratory at the Cedars-Sinai Medical Center.

Several years ago, NeoStem's founders helped start one of the first infant cord-blood banks, which preserve stem cells from the umbilical cords of newborns for possible future use. That venture is struggling financially. The entrepreneurs believe adult stem-cell banking has more commercial potential.

NeoStem is pitching the adult stem-cell banking service to corporations as a proposed executive perk, alongside laser eye surgery, full-body imaging scans and other high-end health benefits. The company is aiming for 1,500 collections in its first year, but it's a tough sell.

"I have no question that adult stem cells will revolutionize medicine, but how do you convince people it's worth spending a meaningful amount of money and undergoing a mildly unpleasant procedure?" wonders John L. Schwartz, a businessman and physician who left medicine 20 years ago and who was approached to invest in NeoStem. Dr. Schwartz says he hasn't made a decision yet -- but he does plan to bank his stem cells.

040602
WJ040302

Copyright © 2004 - The Wall Street Journal. Reproduction of this article (other than one copy for personal reference) must be cleared through the WSJ Permissions Desk.

Always watch for outdated information. This article first appeared in 2004. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 2004. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .