Oct. 28 (Bloomberg) -- Sangamo Biosciences, a developer of gene therapies based in Richmond, California, and the City of Hope, a nonprofit treatment center in Los Angeles, were awarded a $14.6 million grant to develop a new type of AIDS treatment.

California’s stem cell agency also will give $20 million to the AIDS Institute of the University of California, Los Angeles, which is partnering with Calimmune Inc., a closely held company based in Tucson, Arizona, to develop a related approach to AIDS treatment.

The grants are among a package of awards totaling more than $200 million approved today by the California Institute for Regenerative Medicine. The aim of the money is to help prepare treatments for human testing of stem-cell therapies within four years.

“It’s very exciting, a completely new paradigm for treating AIDS,” Jeff Sheehy, an HIV patient representative on the agency’s board, said about the City of Hope-Sangamo project in a telephone interview yesterday. “If it works, it could take AIDS treatment in a whole new direction.”

Sangamo fell 27 cents, or 4.4 percent, to $5.88 in composite trading on the Nasdaq Stock Market.

The two projects will use different methods to deactivate a gene called CCR5 that allows the AIDS virus to enter cells and spread infection, a new treatment approach. Both attempt to confer immunity to AIDS by mimicking the successful treatment of an AIDS patient in Germany.

Resisting Disease

That patient was able to stop drugs he had taken for 10 years, and remain healthy, after getting a transplant of stem cells from a donor with a rare gene variant known to resist the disease. The transplant also cured his leukemia, according to a report that appeared in February in the New England Journal of Medicine.

The unidentified 40-year-old patient had leukemia as well as HIV, the virus that causes AIDS, and needed a stem cell transplant to treat his cancer. The stem-cell donor was chosen because he is among the 1 percent of Caucasians who lack CCR5. Without the gene variant, the AIDS virus can’t enter a cell.

By giving the donor’s stem cells to the patient, doctors also gave him a new immune system that lacked CCR5. The experiment worked and the man is considered cured.

Kill the Cancer

The aim of the City of Hope-Sangamo effort is to treat patients with HIV and lymphoma, a blood cancer, killing the cancer by wiping out the patient’s immune system with chemotherapy. They will then use a genetic technology developed by Sangamo to modify the patients’ stem cells, which will be used to rebuild their immune system so they lack the CCR5 receptor.

“Cells that grow up following this process no longer have a functional copy of the CCR5 gene and no longer make the CCR5 protein,” said Philip Gregory, Sangamo’s chief scientific officer, in a telephone interview today. “If you don’t make it, then HIV can’t enter the cell. It’s a complete block to entry.”

The UCLA project will use a different method, attempting to turn off, or “silence,” the CCR5 gene using a technique known as RNA interference.

To contact the reporter on this story: Rob Waters in San Francisco at rwaters5@bloomberg.net.

Last Updated: October 28, 2009 16:07 EDT