Cloning Profits Not Easy for Biotech Firms

N E W  Y O R K, Jan. 6 -- On Dec. 27, a company called Clonaid said that it had created the first human clone, a 7-month-old baby called Eve. The company was founded by the Raelians, a religious sect that believes aliens created human life. The announcement was met with a heavy dose of scientific skepticism, not to mention widespread disgust.

There are many reasons to doubt that the purported clone exists, and reputable scientists think that such a baby would likely suffer serious and unpredictable health problems.

But if Clonaid really has fulfilled its mission, the result is deeply ironic because many legitimate companies that wished to use cloning technology are floundering. Could it be that cloning a baby in the face of popular scorn is easier than developing medicines or other products?

Probably. The Raelians first made their way into the popular press last summer. Human cloning became a hot topic because some scientists thought they could use it to create embryonic stem cells that could replace damaged organs without the risk of immune rejection. The leader in the embryonic stem-cell field is Menlo Park, Calif.-based Geron, which also controls important patents related to cloning. Geron shares now trade at $3.50 — 1/70th of their all-time high.

BioTransplant, another company that hoped to use cloning in embryonic stem-cell technology, has fared far worse. It trades at 43 cents per share, down 95 percent year to date. Earlier this year, Chief Executive Elliot Liebowitz stepped aside; he remains as chairman. In November, BioTransplant warned all its employees that they may be laid off.

Poor Track Record

Right now, cloning technology is very unreliable — with only a handful of successes for every attempt in animals. Alan Trounson at Melbourne, Australia-based Monash University, a leader in the field, says that even if a cloned baby's genome was checked gene by gene with DNA microarrays such as those made by Affymetrix, there could be no assurance that the baby would be healthy. Cloned animals appear to have problems translating genes into proteins, meaning that a correct gene can be "misread."