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For what appears to be the first time, a major drug company has plunked down a significant equity investment in embryonic stem cells.

Earlier today, VentureWire reported (sub required) that Novocell, an early-stage San Diego biotech that aims to treat diabetes with the embryonic cells, is hoping to raise $35 million in a third round of funding. The interesting thing, however, isn't so much the money as the identity of the lead investor: Johnson & Johnson Development Corp., the venture arm of pharmaceutical giant J&J.

The news grabbed my attention because to date, Big Pharma has shown relatively little interest in the smaller biotechs working on embryonic stem-cell therapeutics, with the standard explanation that the field is too young and in need of some solid clinical success before the big guys can get involved. Political controversy over the destruction of embryos - necessary to derive the stem cells - probably also inclines the naturally cautious pharmas to move even more carefully. (Novacell intends to make new insulin-producing islet cells from embryonic cells, then transplant them into diabetics.)

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