Geron says embryonic stem cells produce insulin

WASHINGTON (Reuters) - Human embryonic stem cells can be transformed into the pancreatic cells that produce insulin, offering the potential to treat diabetes, Geron Corp. said on Thursday.

The company worked with Canadian researchers who have specialized in a transplant technique called the Edmonton Protocol, which as been shown to restore insulin-producing cells in patients with type-1 diabetes.

The finding, published in the journal Stem Cells, might provide evidence of one of the most sought-after functions of embryonic stem cells -- treating diabetes.

Geron shares rose 64 cents, or 7.8 percent, to $8.88 in morning trade on the Nasdaq.

Geron's Anish Majumdar, who worked on the study, said the company, based in Menlo Park, California, would now work on purifying and perfecting these cells and testing them in animals.

The researchers said they produced islet-like clusters, which resemble the cells in the pancreas that produce insulin.

In lab dishes, these cells produced insulin, glucagon and somatostatin, three of the major hormones produced by islet cells.

The cells secreted insulin when they were treated with elevated glucose levels -- something they are supposed to do in the body.

"These studies show that the islet-like clusters contain the major cellular components of islets and are sensitive to glucose, the key sugar to which they must respond to be therapeutically beneficial," Majumdar said.

Type-1 diabetes is caused when the body mistakenly destroys insulin-producing pancreatic cells. When the body does not produce insulin in response to glucose, glucose levels rise in the blood, damaging blood vessels and organs.

The team at the University of Alberta developed the Edmonton Protocol to transplant these insulin-producing cells from cadavers. But there are not enough donors to treat very many diabetics.

Researchers have hoped that stem cells, a type of master cell for the body, might be coaxed into becoming the desired pancreatic cells. Stem cells from human embryos are considered the most flexible, and companies such as Geron, as well as academic researchers, have been working with them.

"The Edmonton Protocol provides significant evidence that transplantation of primary islets can be used to successfully reduce the need for insulin in patients with Type 1 diabetes," Geron President and Chief Executive Officer Dr. Thomas Okarma said in a statement.

"It is the work published today that demonstrates the potential of human embryonic stem cells to enable the ready availability of uniform, functional islet cells for therapeutic administration."

The use of human embryonic stem cells is controversial because some people oppose the use of human embryos to get the cells. President George W. Bush has vetoed legislation in Congress that would broaden federal funding of such research.