Scientists have found a way to successfully create red blood cells from stem cells in the lab.

About five million Americans need blood transfusions every year, and hospitals are typically prepared. But during a natural disaster, a terrorist attack, or another emergency that sends a glut of patients into surgery, regular supplies of donated blood are often not enough.

And in the developing world, especially in war zones, blood shortages are frequent. “There are many preventable deaths—for example, the thousands of deaths each year due to postpartum hemorrhage—which a blood substitute could help alleviate,” said Emma Palmer Foster of the Cell Therapy Catapult innovation center in the UK.

These shortages have created a demand for artificial blood. “Artificial blood refers to substitute pharmaceutical products that can carry out similar functions of biologic, natural blood cells,” explained Leslie E. Silberstein, director of the Joint Program in Transfusion Medicine at the Center for Human Cell Therapy at Harvard Medical School and an official spokesperson on blood supply for the American Society of Hematology.

An ideal blood substitute would have a long shelf life, unlike donated blood, which can be stored for only about a month and a half. It would safely perform all the functions of natural blood, including replacing lost fluid volume, carrying oxygen throughout the body, fighting infections, and clotting to seal wounds. It must be easily manufactured in a lab, free of blood-borne diseases, and compatible with all blood types.

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Until recently, researchers trying to manufacture a blood substitute have taken one of two approaches.

Some companies are looking into compounds called perfluorocarbons (PFCs). Oxygen dissolves easily into PFCs. They’re completely free of disease and can be used for people with any blood type. And they have the bonus of being a viable option for people whose religions forbid blood transfusions. They’re also shelf-stable, so hospitals could keep large supplies of PFC-based blood substitutes on hand no matter where they are in the world.

However, PFCs don’t transport oxygen nearly as efficiently as natural blood does. They also don’t dissolve in blood, meaning they’d have to be combined with other chemicals before they could be mixed with the blood in a patient’s body. Many companies have developed PFC-based blood substitutes, but all have failed thus far to get approval from the U.S. Food and Drug Administration (FDA). Some, for example, cause blood vessels to contract, which can cause tissues to become oxygen-starved. In the FDA’s opinion, the risks outweigh the benefits.

The other option has been to create artificial blood from hemoglobin, the molecule in natural blood that transports oxygen. Taking hemoglobin out of red blood cells eliminates the risk of infectious diseases, as well as the problem of blood type matching. It also makes for a more concentrated product. But raw hemoglobin isn’t stable in the bloodstream; it breaks down into smaller chemicals that can damage the kidneys. The hemoglobin must be mixed with other chemicals to keep it usable. Although several hemoglobin-based products are in clinical trials, none are FDA-approved.

“Pharmaceutical manufacture of artificial blood [that] meets the necessary safeguards and federal regulation has proven to be very challenging,” said Silberstein.

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New developments in stem cell technology have made a third option available: growing blood cells from scratch. To this end, the Wellcome Trust has given £5 million (about $8.4 million) to the Blood Pharma Consortium, a group led by Professor Marc Turner at the Scottish National Blood Transfusion Service.

Cell Therapy Catapult is one of the project collaborators. “Initial work showed that it was possible to generate red blood cells from bone marrow stem cells, but there were drawbacks associated with their use—mainly the limited number of times the stem cells could replicate,” said Foster. Cells have a self-destruct sequence built in to prevent them from becoming cancerous after too many replications.

Now the team is using induced pluripotent stem cells (iPSCs), which can replicate indefinitely, to grow red blood cells. The iPSCs, like bone marrow, could also be used to grow other important blood cells—such as white blood cells, to fight infections, and blood platelets, to seal injuries. Because they’re grown in a lab, these red blood cells don’t carry a risk of diseases like HIV and hepatitis C. And although they have a blood type, the researchers can choose to grow type O blood, which can be given to anyone. The artificial blood’s shelf life wouldn’t be any longer than that of donated blood, but more could be grown at any time.

Best of all, these red blood cells appear to be perfectly healthy replacements for the blood cells your own body produces. “We’re actually making red blood cells that are equivalent to ones you get in your body,” said Jo Mountford of Glasgow University and Head of Cell Therapy R&D for the Scottish National Blood Transfusion Service. “They’re designed by evolution to do the job that we want them to do.”

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The consortium, however, still has to demonstrate that their product is safe to use before the FDA and other regulatory agencies approve it. They’re planning to begin their first human safety trial in 2016. Meanwhile, organizations like Cell Therapy Catapult are finding ways to scale their production methods so that blood might be grown on an industrial scale.

“Scale-up of cell therapies is not a simple task,” said Foster. “If all clinical trials are successful and regulatory approval obtained, then expertise developed so far will be applied to industrial level scale-up. It’s unclear as yet how long this would take.”

If they succeed, they’ll launch an entire new industry. A paper from 2008 estimates that artificial blood could have sales of $7.6 billion in the United States alone. And the true potential is international. “This technology, if we can get the cost sufficiently low, has the potential to provide cells across the globe where they don’t have access at the moment,” Mountford said.

But, she added, “to get to having widespread usage will still take twenty years, and people shouldn’t stop giving blood in the meantime.”