Staff Writer

Deborah Eppstein, president and CEO of Q Therapeutics Inc., acknowledges that developing stem cell therapies to replace damaged organs is a daunting task.

That's why her company uses glial progenitor cells to repair rather than replace neurons, an approach she anticipates may be applicable in treating a host of neurodegenerative diseases.

The company's Q-Cells are "technically not stem cells," Eppstein explained. They are lineage-restricted glial progenitor cells that differentiate into oligodendrocytes, which produce the myelin sheaths that insulate neurons, and astrocytes, which make growth factors and support the health of neurons.

The name Q-Cells refers to the cells' ability to follow endogenous cues. "We don't have to direct them," Eppstein said, adding that the cells are harvested from donor tissue; isolated, purified and frozen; and then injected into the brain or spinal cord near the point of injury. From there, the cells migrate to the lesion and start their repair work, which includes remyelination as well as supporting neuronal health.

The Q-Cells were identified by Q Therapeutics' co-founder Mahendra Rao through research conducted at the University of Utah and the National Institutes of Health, where he headed stem cell work for the National Institute of Aging. Rao started the company in 2004 with help from Dennis Farrar, a founder of Myriad Genetics Inc. and other biotechs.

Q Therapeutics raised about $5 million in a Series A financing in May 2004. Earlier this year, the Salt Lake City-based company got another $8 million in the first close of its Series B round. Its investors include vSpring Capital, Invitrogen Corp., Epic Ventures, Toucan Capital, University of Utah Research Foundation, Salt Lake Life Science Angels and Q management.

Eppstein said Q Therapeutics hopes to raise between $7 million and $12 million in the second tranche of its Series B round, set to close in the first quarter of 2009. That money will allow the company to get its first clinical data, which Eppstein noted will include both safety and initial efficacy findings.

Q Therapeutics plans to conduct a dose-ranging Phase I/IIa trial at Johns Hopkins University to evaluate a single dose of Q-Cells in patients with transverse myelitis, a severe form of multiple sclerosis in which patients are wheelchair-bound. Preclinical studies are under way, and data published in the June 2008 issue of Cell Stem Cell showed that Q-Cells remylinated neurons in mice and improved survival in what otherwise would be a lethal murine model.

No abnormal affects have been observed in preclinical studies to date. The company expects to file its investigational new drug application in 2009 and start the trial shortly after.

Eppstein said the company has talked with several pharmaceutical companies that are "very interested in working with us" if the Q-Cells can create myelin in humans the way they have in mice.

In addition to demyelinating diseases such as multiple sclerosis, Q-Cells may be applicable in cerebral palsy, spinal cord injuries, white matter stroke, amyotrophic lateral sclerosis (ALS), Parkinson's disease and Alzheimer's disease. The company has grants supporting early research in ALS and spinal cord injury, and Eppstein said the team plans to seek additional grants to complement its venture capital investment.

Q Therapeutics also has a collaboration with the Buck Institute for Age Research to study Q-Cells in Parkinson's disease.

Because many of its intended indications are orphan diseases, Eppstein said Q Therapeutics may be able to conduct truncated clinical programs consisting of Phase I/IIa and Phase IIb/III studies. She doesn't anticipate needing to enroll large numbers of patients but said the company has a Q-Cell source sufficient to address multibillion-dollar markets.

In the interim, Q Therapeutics is developing drug discovery research tools based on its cells. Eppstein projected the tools could be on the market and starting to generate revenue within a year.

Q Therapeutics has 10 full-time employees.