Novocell, a stem cell engineering company based in San Diego, has raised $25 million in a Series C round. Led by Johnson & Johnson Development Corporation -- with participation from existing investors Sanderling Ventures, Asset Management Company and Pacific Horizon Venture -- the financing will support the company's three platform technologies, all of which are targeted at treating chronic cellular diseases. Through human embryonic stem cell (hESC) engineering, Novocell seeks to generate an essentially unlimited supply of therapeutic cell types. The company has developed a process to efficiently convert hESC into insulin-producing pancreatic endocrine cells, a potentially effective treatment for diabetes. Novocell's cell encapsulation technology provides a means by which such cells -- by providing a protective, biocompatible coating that shields them from the immune system -- could be delivered to patients without the need for chronic immunosuppression. Phase I/II trials are currently underway, looking at the safety and efficacy of subcutaneous implants of encapsulated human primary islet allografts in patients with type 1 diabetes. These encapsulated islets release human insulin via natural mechanisms in response to the recipient's blood glucose concentration. Novocell also is using its technology to explore treatments for cancer. The company's drug discovery efforts are focused on examining the key similarities between cancer stem cells and hESCs. Novocell's Series B financing was for $7 million and took place back in October 2001.