No, Really, Save That Placenta
A biotech star with a fresh $100 million is betting stem cells can treat Crohn’s and MS and perhaps even slow aging

Airplanes used to crash a lot, but last year saw the fewest air accidents since 1923 and the fewest deaths since 1929. One reason is that everyone is a lot smarter about maintenance. Although breakdowns still occur, airlines, equipment suppliers, and regulators have spent decades collecting and analyzing data to predict when various parts will fail. They’ve adopted more refined inspection schedules based on each craft’s use and age. “We should be doing that to our bodies as well,” says Hariri. Hariri is a jet-certified pilot who also happens to be a pioneer of therapies drawn from stem cells, the body’s building blocks that can sometimes help patients by replacing other, ailing cells. He’s a co-founder, with leading geneticist Craig Venter, of Human Longevity Inc. (HLI). And he’s just stepped down as chief scientific officer of biotech giant Celgene Corp.’s cell therapy subsidiary to become chief executive officer of Celularity Inc., a Celgene spinoff that announced $250 million in backing from its former parent and others on Feb. 15. Within four years, Celularity aims to treat life-threatening immune disorders, such as Crohn’s disease and multiple sclerosis, by leveraging stem cells harvested from placentas, the organs pregnant women grow during their first trimester that provide nutrients to a developing fetus. Placental stem cells can “augment the regenerative engine that keeps us healthy and young,” Hariri says.

Beyond the startup capital, Celularity says it can count on revenue from Biovance and Interfyl, tissue repair strips and drips Hariri developed years ago, which the company just spent $29 million to buy back from another biotech company.

Celularity says the two products will bring in at least $25 million this year, and it expects an additional $15 million or more from its stem cell collection arm, which it describes as “the world’s only repository of private and publicly donated placenta cells and biomaterials.” Hariri started trying to use placental stem cells at a time most colleagues focused on the cells found in blood from umbilical cords. As far back as the mid-1990s, obstetricians were telling some expectant parents that their children should expect to treat all kinds of diseases with stem cells grown from samples of their frozen cord blood. So far, cord blood’s applications remain limited to certain types of leukemia; Krabbe disease, which affects the nervous system; and a few other rare conditions.

Hariri says he can do better, creating products “that can be deployed to the general population.” His theory is that placental stem cells can reprogram the immune system to treat the kinds of life-threatening diseases that affect millions of Americans. As long as parents provide informed consent, the placenta cells themselves are free, because federal law prohibits the sale of body parts.

Celularity has early votes of confidence from board members Bill Maris, the first CEO of Google’s venture arm; John Sculley, the former PepsiCo Inc. and Apple Inc. CEO; and Peter Diamandis, one of Hariri’s HLI co-founders and creator of the XPrize Foundation, the nonprofit that organizes competitions to develop spacecraft and other innovations. Diamandis says he’s focused on Celularity’s longer-term possibilities: “How do you extend your healthy life span 20 to 30 years?” Celularity and investor United Therapeutics Corp. have already teamed up to grow spare organs from donors’ cells. And if placental stem cells can treat immune diseases, why not cancer, or even aging itself? Replace the adult stem cells declining and losing function as you age, and you might be able to slow the effects.

This field already includes a handful of well-financed entrants, most notably HLI; Calico, a subsidiary of Google parent Alphabet Inc.; Unity Biotechnology, backed by CEO Jeff Bezos; and Breakout Labs, owned by venture capitalist Peter Thiel, who’s also invested in a startup that collects blood from the young. None has yet produced anything of value, and Celularity is likely to face similar challenges in the coming years and decades, according to other placental stem cell researchers.

“The field is in its infancy, and much remains to be learned,” says Dario Fauza, who specializes in fetal tissue engineering at Harvard. “Claims that placental stem cells are akin to a panacea seem premature to me.”