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Prion diseases are neurodegenerative disorders that are progressive, incurable, and deadly. The prion consists of PrP^Sc, the misfolded pathogenic isoform of the cellular prion protein (PrP^C). PrP^C is involved in a variety of physiological functions, including cellular proliferation, adhesion, differentiation, and neural development. Prion protein is expressed on the membrane surface of a variety of stem cells (SCs), where it plays an important role in the pluripotency and self-renewal matrix, as well as in SC differentiation. SCs have been found to multiply the pathogenic form of the prion protein, implying their potential as an in vitro model for prion diseases. Furthermore, due to their capability to self-renew, differentiate, immunomodulate, and regenerate tissue, SCs are prospective cell treatments in many neurodegenerative conditions, including prion diseases. Regenerative medicine has become a new revolution in disease treatment in recent years, particularly with the introduction of SC therapy. Here, we review the data demonstrating prion diseases’ biology and molecular mechanism. SC biology, therapeutic potential, and its role in understanding prion disease mechanisms are highlighted. Moreover, we summarize preclinical studies that use SCs in prion diseases.