By Bradley J. Fikes U-T 12:01 a.m.Dec. 24, 2013

Medistem, a San Diego-based developer of stem cell treatments, has been purchased for about $26 million by biotech Intrexon Corp. of Germantown, Md.

Intrexon will use its genetic engineering technology to increase the potency of Medistems stem cells, said Alan Lewis, Medistems chief executive. The sale, announced Friday, is expected to be completed by the first quarter.

Medistem says its stem cells can form new blood vessels, reduce inflammation and could treat diseases such as diabetes and cardiovascular disease.

These adult stem cells are unusually versatile and can be used in unrelated patients, making them a universal donor kind of stem cell, Lewis said. Derived from the uterine lining, they are called endometrial regenerative cells.

Medistem is a small company, with just a handful of employees. Lewis said he and some others from the company will be taken on by Intrexon, although exact details have yet to be specified.

In January 2012, Medistem began a clinical trial of its cells in Russia in patients with congestive heart failure. The company has done preclinical studies in the United States for a diabetes treatment. Intrexon is developing synthetic biology technology for use in health, food and environmental applications, similar to the goals of genomics pioneer Craig Venter, Lewis said.

Medistems cells will extend Intrexons reach in health care, giving Intrexon the ability to make clinical-grade stem cells, said Samuel Broder, senior vice president of Intrexons health division, in a statement. The division is located in San Diego.

Medistem developed its stem cells as a source of transplantable tissues. Broder said Intrexons technology could also be used to engineer the stem cells to produce protein and RNA-based drugs.

In another announcement last week, Intrexon said it had hired Gregory Frost, CEO of San Diego-based Halozyme, to head its health sector.

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