Stem-Cell Industry, Research Evolving

Nov. 23, 2004 — -- Much has been made of President Bush's 2001 executive order limiting the use of federal funds for human embryonic stem-cell research. With Bush now slated for another four years in office, researchers and stem-cell supporters are seeking private investment to drive the science and the industry forward.

Some scientists believe embryonic stem cells, which can grow and assimilate into any type of body tissue, could eventually provide a unique way to repair damaged or diseased tissue and treat or cure ailments including Parkinson's disease, Alzheimer's, diabetes and even spinal cord injuries. Supporters say the laboratory creation and study of these lines, which could number in the hundreds, is crucial to the advancement of the research.

But anti-abortion rights activists have balked because the process of extracting stem cells from early human embryos, often leftovers from fertility clinics after in-vitro fertilization procedures, kills the embryos. The Bush policy provides federal funding only for stem-cell lines created before August 2001. No federal money can be used to create new lines.

Research advocates believe this is too restrictive, and investors have been wary about sinking money into the science without the backing of federal dollars.

"We're still in the early stages of research, and I don't think it's clear how to make a lot of money off of stem cells yet," said Charles Jennings, executive director of the Harvard Stem Cell Institute.

Private donations have spurred discovery of new stem-cell lines at Harvard, which subsequently created the Stem Cell Institute, and the University of Wisconsin, the University of California and Johns Hopkins have all made advancements in stem-cell research.

But both scientists and investors say business investment is needed to push the research forward, bridging the gap between the research phase and the presentation of a marketable product or procedure. That transition is often extremely expensive and can take years.

"We're probably 10 years out before there will be a product on the market and profits can be realized. For investors, that's still a long way away from the horizon," said David Williams, principal and co-founder of MedPharma Partners LLC. Williams works with companies to transform medical technologies into profitable businesses.

"Research is most often funded by the federal government at this early stage, so stem-cell research is going to be different in a lot of ways," he said.

One California company may be considerably closer to clinical trials than the conventional wisdom suggests. Geron Corp., a biopharmaceutical company based in Menlo Park, Calif., currently owns 20 U.S. stem cell patents and is considered by most to be the U.S. leader in stem cell research. The company plans to begin clinical trials on a spinal cord injury treatment as early as 2006, according to chief executive officer Tom Okarma.

"There's just so much misinformation about this issue. It is really frustrating, and it shows what happens when you politicize this," he said.

But most research remains admittedly a long way from the human clinical trials that tend to draw investors into the picture. What's more, despite Geron's progress on spinal injury treatments, most investors are unsure of exactly how stem cells will prove a marketable commodity.

The belief is that the science could produce a variety of customized treatments or stem cell-implanting procedures to be tailored to individual patients. It's revolutionary science, but the unique prognosis presents a variety of market challenges in the near term.