Cytori Therapeutics Inc.'s stem cell device for purifying adult stem cells in fat drew a joint venture with Olympus Corp. worth up to $55 million for a license and further work to develop the Celution System, taking aim at cardiac disease.

"Our first heart trial will begin in Europe next year," said Christopher Calhoun, CEO of San Diego-based Cytori. "We've identified the centers, and we have been working on a similar, device-based strategy in the U.S. The devices will be approved over here, either in parallel or ahead of when we begin trials."

Cytori's stock - which raised 65 million (US$76.8 million) on the Neuer Markt in the summer of 2000, but now trades on the Frankfurt Stock Exchange - closed Friday at 6.30, up 0.68, or 12.1 percent.

Under the terms of the joint-venture deal, Cytori and Olympus, of Tokyo, each will own half of Olympus-Cytori Inc., developer and maker of the future generations of devices based on Celution, designed to isolate and concentrate a patient's own stem and regenerative cells in about an hour.

"Really it's a device model delivering a therapeutic," noted Mark Saad, chief financial officer of Cytori - something a little different for biotechnology, and Cytori wanted to "entrust it with a world-class company" such as Olympus.

The arrangement has an equity part and the joint-venture part. In June, Olympus bought 1.1 million shares of Cytori at $10 per share, with an option (expiring next year) to buy 2.2 million more shares at the same price. The joint venture brings $11 million for Cytori up front, and another $11 million when the first-generation Celution System wins approval in Europe, which is expected to happen in the next six months to eight months.

The joint venture will develop, manufacture and supply the devices for all therapeutic applications solely to Cytori at a formula-based transfer price and Cytori will keep the marketing rights for applications in adipose stem and regenerative cells.

Because it offers such an abundant supply of such cells, fat tissue is uniquely suited for real-time cell therapy that uses a patient's own cells, as first reported in April 2001 by a research team from the University of California at Los Angeles, led by Marc Hedrick, who now is president of Cytori. UCLA gained the first composition of matter patent related to adipose stem cells, to which Cytori is the exclusive licensee, in August 2004.

More recently, scientists from Cytori in collaboration with researchers from Tulane University offered preclinical heart data at the Transcatheter Cardiovascular Therapeutics annual meeting in Washington. Experiments suggested the cells have promise for repairing the cardiac wall after a heart attack.

In the study detailed during the mid-October meeting, pigs were given a heart attack by blocking one of their arteries. Scientists isolated stem cells from the pigs and then injected the cells into the damaged artery. Eight weeks later, stem cell-injected pigs had both less of a perfusion defect (caused by lack of oxygen in a heart attack) and a higher ejection fraction (which measures the heart's pumping efficiency) than control animals.

The research was set up to mimic as closely as possible a procedure that could be used in clinical practice for cell harvesting.

"This was done exactly as you would do it in people," Hedrick told BioWorld Today. Taking stem cells from a patient who's just had a heart attack is not an effort Cytori takes lightly, he said, "but it looks like you can get them under local anesthesia" because fat is not heavily innervated. "It's a lot easier to get than bone marrow - it's not too much different than drawing blood," he added.

The work by Cytori and Tulane is the first to show the feasibility of using autologous, uncultured cells to treat heart attacks. Previous studies have rigorously demonstrated the existence of true stem cells, where a single cell can give rise to multiple cell types. But in the pig study - although some cell types are filtered out prior to injection - a mixture of cell types is used, and the blend is likely to act by way of several mechanisms, including the secretion of growth factors along with differentiation of the true stem cells.

Specifically, the mix contains endothelial cells and endothelial progenitor cells, so another mechanism might be the formation of new blood vessels - an application that, as Hedrick pointed out, "cuts across a lot of diseases."

Cytori also has programs in spinal disc repair, breast reconstruction and wound healing, but Hedrick said the cardiovascular program is "most advanced in the sense that we're closest to doing broad human studies." Other firms testing adult stem cells from other sources against heart disease already have about 14 trials under way, mostly in Europe.

Founded in 1997, Cytori built its name from "cyto" for "cell" and "ori" for "originate." Though it trades overseas, the firm is "a U.S. company in all respects," Saad told BioWorld Today, adding that an application has been filed for trading on the Nasdaq market and "a lot of things are lining up nicely to have a homecoming," probably by the end of the year.

With about $15 million in cash at the end of second quarter, more coming from Olympus, and a burn rate of about $1.5 million per month, Cytori does not foresee having to raise funds in the near future.

"We do have these clinical trials [to conduct], and we've never told anybody there's a shortcut or that it's going to be cheap," Saad said. "But we're trying to take risk off the table wherever we can."