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.