By Mary Welch

Cynthia Fisher started Viacord Inc., a private umbilical cord-blood banking business, seven years ago and when she met Morey Kraus, who six years ago started t. Breeders Inc., a development stage biotech company, they realized they shared a similar vision.

"We started talking about our companies and realized that we both had the same vision - the utility of umbilical cord blood in stem cells," Fisher recalled. "We realized that we could develop a vision for the future in this field if our companies came together and brought our different approaches into one company. It was in our first meeting that we shared the spark of this greater vision and could finish each other's sentences."

So Boston-based Viacord and Worcester, Mass.-based t. Breeders in April merged to form ViaCell Inc., a company that will specialize in the development of stem cell therapies. Simultaneous with the merger, three venture capital companies invested $11 million to help form ViaCell. The investors were MPM Asset Management, of Cambridge, Mass.; Javelin Capital, of Birmingham, Ala.; and Zero Stage Capital, of Cambridge.

"This funding will be used to initiate Phase I trials for stem cell expansion protocol and to ramp up Viacord's business," Fisher said.

ViaCell will leverage its high-quality cord blood banking service infrastructure and patented stem cell expansion technology to build a cellular pharmaceutical company that provides products and services for the treatment of diseases using stem cells.

"The research and development arm of t. Breeders combined with the commercialized service of Viacord will catalyze the development and delivery of new cellular medicines in the marketplace," Kraus said.

Although controversial, stem cell research ranks as one of the most promising biomedical fields and cord blood, which is harvested from the umbilical cords of newborns, has emerged as a leading source of the stem cells. Cord blood is a rich supply of these stem cells.

Stem cells, which appear early in an embryo's development, can grow to become anything in the body, including nerves, bone marrow cells or internal organs. Stem cells are being used as an alternative to bone marrow transplants for patients with cancer and genetic disorders such as sickle cell anemia.

ViaCell essentially will carry out the work of both companies. ViaCell will continue to offer cord-blood banking services under the Viacord name. Cord-blood banking means that families pay to have blood extracted from a newborn's umbilical cord right after birth. Viacord harvests, tests, processes, freezes and stores the cells for an annual fee of about $1,500. The family can then count on having the cells available when needed.

To date, Viacord has banked more than 4,500 cord blood units. Five of the cord blood units have been used in stem cell transplants. Each transplant involved siblings and each was successfully engrafted.

While one part of ViaCell is storing cord cells, the other aspect of the company - the t. Breeders part - is busy developing a manufacturing platform for the production of pharmaceutical-grade cells for use as cellular medicines.

The company's patented method of expanding cells, Selective Clonogenic Amplification (SCA), produces highly pure populations of targeted primary cell types. The company demonstrated the feasibility of the process by amplifying one of the most sought after cell types in the human body - the hematopoietic stem cell. Using SCA, it has grown hematopoietic stem cells in a continuous and controllable fashion that have demonstrated functional integrity and engraftment capability.

The technology theoretically would enable a patient to receive genetically competent HSCs from a donor to treat a genetic disease, receive an organ from a genetically unrelated donor or receive donor lymphocyte infusions to induce graft vs. tumor effects.

The SCA enables the simultaneous selection and amplification of stem cells from bone marrow, mobilized peripheral blood, or cord blood and creates culture conditions that foster the outgrowth of stem cells. Strictly speaking, it is a process for "breeding" cells.

ViaCell expects to file an investigational new drug application later this year to start Phase I/II trials to test the safety and efficacy of stem cells amplified using its proprietary system.

"The merger allows ViaCell to leverage the commercial infrastructure of Viacord with the patented stem cell expansion technology," Fisher said. "We believe it's a winning combination to create a pharmaceutical company providing stem cell products for the treatment of certain otherwise life-threatening diseases."

ViaCell, now with 40 employees, will split its corporate headquarters between Boston and Worchester.