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Neonatal hypoxic-ischemic injury (HII) (annually ~1700/California & 13,000/US) remains a devastating cause of brain injury resulting in long-term disability (cerebral palsy, mental retardation, epilepsy). Approximately 80% of newborns surviving severe HII are severely impaired and 20% are moderately impaired. It is estimated that the lifetime national costs for persons with mental retardation approaches $51.2 billion and for those affected with cerebral palsy it is $11.5 billion. In many individuals, the etiology is traceable to neonatal HII. The costs of care for a family with these disabilities are prohibitively expensive: it is estimated that the average lifetime additional expenses for an individual with cerebral palsy is ~$921,000. As a result, many newborns with moderate & severe HII have life-long needs for chronic medical and rehabilitative care that in California. is funded by the Dept. of Health Care Services and agencies such as Cal. Children’s Services, Cal. Med. Assistance Program., and the Child Health & Disability Prevention Program. Although hypothermia (HT) has become the standard-of-care treatment for newborns with HII, it must be initiated within hours after birth (making it unfeasible for many newborns), and is only modestly effective in moderate HII & totally ineffective in severe HII. There is a dire need for developing better (& later) treatments that more elegantly target injury processes and pathways that together result in brain damage. Although many agents have been tried, there remain no effective treatments for global or focal ischemic injury in adults or children. Neural stem cells (NSCs) have proven effective in rodent models of HII based on multiple mechanisms leading to several clinical trials in adult stroke. We believe the combination of HT and NSCs may act together because of overlap in their respective reparative mechanisms. This clinical trial will be done at 8 California newborn intensive care units over a 4 year period. We will evaluate term newborns who have suffered HII and undergone therapeutic HT. In half of eligible newborns, NSCs will be implanted by a neurosurgeon into the ventricles of the brain using special endoscopic equipment. These infants will undergo frequent pediatric, neurological and neuropsychological examinations as well as studies using magnetic resonance imaging until study completion at 18 months of life. Our objective is to show that implantation of stem cells into newborns with HII who undergo HT will have better long-term neurological outcomes than newborns who did not receive stem cells. If successful, we can then pursue larger clinical trials nationwide. This hopefully will provide a treatment that could dramatically reduce the morbidity associated with neonatal HII. The potential social and economic benefits to affected children, their families and society would be enormous.