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FDA wins groundbreaking case against for-profit stem cell company

A picture of a patient’s eye one week after receiving stem cell injections from U.S. Stem Cell in 2015 shows widespread retinal hemorrhages. (Thomas Albini)

In a decision expected to send a chill through the booming stem cell industry, a federal judge ruled in favor of the Food and Drug Administration on Monday in a lawsuit against a Florida-based stem cell company whose treatments have blinded at least four patients.

Judge Ursula Ungaro agreed that the FDA has the authority to regulate a procedure that has become widespread in the burgeoning industry — using patients’ fat to create a stem cell treatment.

The judge ruled that the FDA is entitled to an injunction ordering U.S. Stem Cell to halt the procedure.

The judgment represents a major victory for the government, which has increasingly tried to constrain the industry even as it has rapidly expanded in recent years.

“This case is an important victory in the FDA’s work to protect the public health,” the agency said in a statement. “We’ve been taking action, like this case, against clinics that abuse the trust of patients and endanger their health. We will continue to promote the sound and scientific development of regenerative medicine products, but we will not tolerate those in this field who try to skirt the law and put patients in harm’s way.”

Scientists, medical associations and health officials have criticized stem cell clinics for selling treatments unproven by science and unapproved by the government for a wide spectrum of unrelated ailments, such as Parkinson’s disease, multiple sclerosis, joint pain and erectile dysfunction.

“This decision says the FDA has the authority to define a certain kind of stem cell product as a drug product” that requires FDA approval and compliance with other agency rules, said Paul Knoepfler, a stem cell biologist at the University of California at Davis. “There are potentially hundreds of clinics using the same model, and this ruling basically says the FDA can — assuming this is not overturned on appeal — say you are using an unapproved drug, and that’s a big deal.”

Beginning in 2015, at least four patients were blinded after U.S. Stem Cell and clinics associated with the company injected stem cell treatments into their eyes.

The FDA’s slow initial response to patient injuries permitted U.S. Stem Cell to continue operating four years after those first reports of blindness. Although the company stopped injecting its fat-derived treatments into eyes after the patients sued, it continues to sell the therapy to people with spinal injuries, Parkinson’s disease, multiple sclerosis and other serious chronic conditions.

Last year, just three weeks after the government filed suit, an additional patient had a catastrophic reaction after visiting a clinic in South Miami, Fla., that is affiliated with U.S. Stem Cell. A 59-year-old woman felt faint and started vomiting two hours after receiving injections for arthritis pain.

Her case was described in an “adverse event” report filed with the FDA and obtained by The Washington Post through the Freedom of Information Act.

In her judgment Monday, Ungaro said that unless the company is ordered to stop, “there is a reasonable likelihood that Defendants will continue to violate” regulations by offering the unapproved treatments.

In a written statement, U.S. Stem Cell said, “While we believe there is substantial evidence to prove the efficacy of this protocol, we must immediately comply with the court as we review the decision.” A spokeswoman said the company plans to continue offering stem cell treatments derived from bone marrow and other tissue.

Making $6.7 million in revenue last year, U.S. Stem Cell operates three clinics and has trained doctors at 150 others, making it one of the most influential stem cell companies in the nation. Over the past year, it has hired a top law firm to defend against the lawsuit and cultivated formidable allies with close ties to President Trump, including GOP operative Roger Stone and Newsmax chief executive Christopher Ruddy.

In the lawsuit, the government accused the company of “openly violating the law and endangering patients by manufacturing an unapproved, experimental drug.” Responding in court, the company called the FDA’s new rules “a power grab” and argued its treatment is a medical procedure that can’t be regulated as a drug.

Ungaro noted in her summary judgment that the clinic makes “numerous claims” about the benefits provided by the treatment derived from fat cells for an array of illnesses, including Parkinson’s disease, lung disease and diabetes. She added that the clinic has boasted its therapy is superior to conventional medicine in treating these serious diseases. She also said the FDA inspected the clinic seven times between October 2015 and May 2017.

The ruling does not automatically prevent other companies from offering the same treatment, said Sam Halabi, a law professor at the University of Missouri. “But it sends a very strong signal to the market, and other judges will look at this decision quite seriously and use it as a crucial road map for similar lawsuits that appear before them,” he said.

Leigh Turner, a bioethicist at the University of Minnesota and a longtime critic of the stem cell clinics, welcomed the decision but questioned whether it would prompt other companies to get out of the business. “Are some of them just going to say there are so many businesses out there that the FDA won’t knock on our door so we will just keep going?” he asked.

Turner said some clinics will “play the odds” and continue performing the fat-based procedures, while others may simply shift into questionable types of stem cell treatment not addressed in the ruling — such as birth-related stem cell products. “I don’t expect to see the disappearance of the direct-to-consumer industry,” he said. “These businesses are too dug in, and there’s too much money to be made.”

Former FDA commissioner Scott Gottlieb called the decision a “pivotal ruling” indicating that the FDA “is on strong footing” in challenging the practices of the clinics offering unapproved stem cell therapies. “This was a must-win case for the FDA,” he said. “It’s highly significant in that it establishes the agency’s ability to regulate in this space, and it paves the way for the agency to bring more enforcement actions.”

Gottlieb, who stepped up FDA action against the clinics offering unproven treatments, said the decision sends a strong message to the industry and will bolster agency efforts to take immediate action “against firms putting patients at immediate risk.”