Jan. 29, the day before the company was to close a $2.4 million funding round, investors pulled out, Naughton said. As a result, Histogen was forced to lay off all of its 36 employees until it could secure new investors, she said.
Earlier that day, Histogen had been served with a patent-infringement suit filed by SkinMedica, a San Diego company that has regenerative skin care products on the market.
The suit alleges that Histogen's ReGenica product, made from growth factors and other cells that promote the activation and growth of stem cells, violates patented scientific techniques that SkinMedica bought in 2003.
The science in question was created at the now-defunct Advanced Tissue Sciences, a company that was run by Naughton, who is also dean of the College of Business Administration at San Diego State University.
When Advanced Tissue Sciences broke up, its assets, including its science, were sold.
The SkinMedica lawsuit also claims that to manufacture the ingredients for Histogen's products, employees are using trade secrets covered by patents that SkinMedica owns. In addition to the hair regrowth treatment, HistoGen has regenerative skin creams for use after microdermabrasion and laser skin therapy.
Naughton said the lawsuit was filed to stop the planned March 6 launch of the cosmetic products.
It won't stop the launch, she said. But it did prompt investors to pull out of the funding round because they did not want their money used to defend a lawsuit, she said.
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