Umbilical cords, often ending up in biological waste bins in hospitals, are a source of blood-derived multi-potent stem cells created by ViaCell Inc. and the subject of a new collaboration focused on treatments for cardiac disease.

Cambridge, Mass.-based ViaCell signed an agreement with the Stem Cell Internal Venture (SCIV) of Centocor Research and Development Inc., a division of New Brunswick, N.J.-based Johnson & Johnson, to evaluate the stem cells in preclinical testing. The work also will be supported by another J&J company, the Biologics Delivery Systems Group of Cordis Corp., which will use its NOGA system to deliver the cells.

"It's a very unique catheter that is actually GPS-guided," said Marc Beer, ViaCell's president and CEO. "It has tremendous visualization capability of the heart."

While specific terms of the deal were not disclosed, ViaCell will receive initial up-front money, and the companies will share research costs. SCIV retains the first right to negotiate a clinical development and commercialization collaboration with ViaCell of a cardiac product, which if agreed upon, would push north the dollar potential of the deal.

"The intent is to go forward with J&J because I think they are the best possible partner in this area," Beer told BioWorld Today, adding that a clinical deal would have "new economics around it."

If the preclinical data support clinical development, ViaCell expects to file an investigational new drug application sometime in 2007. So far, ViaCell has shown in multiple preclinical models that its cell improves cardiac function when injected directly into the heart. The company believes the combination of technologies from Cordis and ViaCell "gives us the highest probability," Beer said, "that we can get the same functional improvement through a catheter-delivered cell."

More than 4 million Americans are affected by cardiac disease, and there is a large medical need for a treatment that can regenerate the heart.

"We've taken cardiac clinical improvements forward on the drug and device side about as far as we can," Beer said, "and cell therapy offers one of the greatest potentials going forward."

ViaCell was incorporated in 1994 under the name t. Breeders Inc., and changed its name in 2000 after acquiring the private umbilical cord blood-banking business, Viacord Inc. It went public in early 2005, raising $52.5 million.

The company markets its Viacord umbilical cord blood preservation product, which is being used mostly for pediatric bone marrow transplants, and it is developing ViaCyte, a product used to preserve and store human eggs in order to extend a woman's fertility.

Revenues in the first quarter, ended March 31, were $11.9 million for ViaCord, a 20 percent increase over the previous year's first quarter. The company reported about $58 million in cash, cash equivalents and investments.

ViaCell intends to start a two-year pivotal trial for ViaCyte by the end of this year. The product could reach the market in three years, Beer said.

The company has one other product in the clinic, CB001, which is being developed for hematopoietic stem cell transplantation in cancer patients. ViaCell suspended enrollment in a 10-patient Phase I trial last September when two patients in the study experienced Grade IV graft-vs.-host-disease.

While the news sent ViaCell's stock downward 21.6 percent, the FDA lifted the clinical hold in December, and the trial has since resumed. (See BioWorld Today, Sept. 20, 2005.)

"We feel comfortable the GVHD was due more to the procedure than to our cell," Beer said, adding that clinical data should be available by the end of this year.

CB001 is being co-developed with Amgen Inc., of Thousand Oaks, Calif.

ViaCell's stock (NASDAQ:VIAC) lost 7 cents Tuesday to close at $4.50.