This article focuses upon issues that public policy makers need to address, when trying to stimulate world-leading research into new areas, which are potentially also valuable to solving societal challenges. Our analysis helps contribute to the theoretical discussions about governance of new knowledge. We focus upon the sequence of events surrounding the main actors of a recent crisis of regenerative medicine in Sweden. We define governance theoretically, and use a conceptual model in order to structure the empirical analysis. Regenerative medicine is an interesting setting to explore these topics, not least because both public and private actors are often involved, and because governments struggle with how to promote ‘translational research’, e.g. diffusing scientific research into clinical practice. Our case study helps understand the process that led up to a crisis in regenerative medicine and identifies and discusses four issues that need to be addressed by policy makers. © The Author(s) 2018. Published by Oxford University Press.