By Jeff Buchanan, Xconomy Wisconsin

In the years since researchers at the University of Wisconsin-Madison derived the first human embryonic stem cell line, in 1998, numerous stem cell-focused businesses have popped up in the area. Each one has its own unique concentration, but the overarching goal of these companies is to develop and sell lines of stem cells, as well as to create therapeutics and ancillary products to help researchers study the cells.

Stem Pharm is one of the newest Madison-based startups to join the field. The company, which was formed in 2015 and builds on research conducted in the laboratory of UW-Madison biomedical engineering professor Bill Murphy, is developing biomaterials capable of supporting stem cells as they grow. Stem cells are of interest to scientists in part due to their versatility; they can be turned into specific cell types and programmed to perform functions like regrowing tissue, for instance. That can help drug makers evaluate new therapies they’re developing or be used by groups in the regenerative medicine field to manufacture human tissues, among other applications, says Murphy, co-founder of Stem Pharm.

“The University of Wisconsin-Madison is ground zero for the regenerative medicine field,” says Murphy, who is also co-director of the university’s Stem Cell and Regenerative Medicine Center. “[Stem Pharm’s] efforts extend from a lot of the initial discoveries that were made in my lab and throughout campus.”

The new industry focus on stem cell manufacturing stems from an early discovery made by James Thomson, a biology professor at UW-Madison. He was one of the researchers behind the embryonic stem cell discovery nearly two decades ago and contributed to another landmark achievement in 2007, when Thomson and colleagues became the first researchers to derive human induced pluripotent stem cells (iPSCs). These are stem cells that can be differentiated into any type of cell found in the human body. Thomson is the co-founder of Cellular Dynamics International, which seeks to further research and development of iPSCs. CDI, which was acquired by Fujifilm for $307 million in 2015 and operates as a subsidiary of the Japanese company, is probably the most widely known stem cell company based in Madison.

Murphy says that the technologies Stem Pharm is developing can be used to expand iPSCs and iPSC-derived cells, and to enhance differentiation of iPSCs—turning them into the types of cells needed in the development of particular therapeutics and aiding in the delivery of these cells.

Stem Pharm currently has two full-time employees—Connie Lebakken, the startup’s chief operating officer and scientist Jeff Nelson. (Murphy is not considered an employee of Stem Pharm.) Lebakken previously spent nearly a decade working at Life Technologies, a business unit of Waltham, MA-based Thermo Fisher Scientific (NYSE: TMO). Stem Pharm also has some part-time employees, and has brought on consultants to assist in areas like sales, marketing, and accounting, Murphy says.

The startup is already shipping products to customers, such as materials that promote the self-assembly of cells into human tissues, Murphy says. In addition to the revenue that’s coming in from those sales, Stem Pharm is supported by funding from grants and individual investors, including a $291,000 award from the National Institutes of Health earlier this year, and separate grants from the Center for Technology Commercialization and the Wisconsin Technology Innovation Initiative. Lebakken declined to reveal the total amount of money that Stem Pharm has raised since launching.

Murphy says that prior to officially incorporating Stem Pharm, he participated in the Discovery to Product (D2P) program, which helps students, faculty, and staff at UW-Madison turn ideas into companies.

“As part of the D2P process, we did a lot of research and interviewing of folks in the industry to discover where the needs were,” he says. “The university’s resources and our efforts there helped to clarify the focus of the company.”

In the coming months, Stem Pharm will focus on expanding its product line and forming strategic partnerships, Murphy says.

“Launching a couple of new products that relate to this idea of tissue self-assembly for drug screening applications is critical,” he says. “In addition to that, forging partnerships with companies that can use Stem Pharm technologies to deliver cell therapies more effectively will be an important milestone.”

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