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When his son Sam was diagnosed with type 1 diabetes at six months of age, Doug Melton was incredulous. “I remember at night, my wife and I pricking his heel, and saying ‘No, this can’t be, this can’t be,’” he says. “It felt like we had lost the lottery.”

Later, his daughter would receive the same diagnosis. By then, Melton had already dropped what he was doing—studying frog eggs at Harvard—and launched an effort to grow pancreatic cells from scratch in his lab. The beta cells of the pancreas are the ones killed off in type 1 diabetes, and Melton reasoned he could replace them using new tissue manufactured from embryonic stem cells.

Melton’s effort, involving a 30-person lab at Harvard and a startup company, Semma Therapeutics, which he named after his children, Sam and Emma, is one of the most costly and sustained efforts to turn stem cells into transplantable tissue, an attempt that Melton admits has been full of false starts and dead ends. “The public definitely doesn’t appreciate that much of science is failure,” he...