After California, more states eye stem cell research

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Roland Jones

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These states are moving forward at a time when federal embryonic stem cell research has been tightly restricted. In one of his first official acts in 2001, President Bush limited federal financing for embryonic stem cell studies to a handful of existing stem cell lines — an act that many scientists say dramatically hinders advancement of the field.

Embryonic stem cell research is highly controversial with many Americans opposed to it on religious or ethical grounds, while others are skeptical about its scientific benefits. Lawmakers in a few states, like Arkansas and Virginia, are working to ban or limit stem cell research.

Investor interest stoked
In California, though, Proposition 71 has caused a stir of enthusiasm in the biotechnology community and has stoked investor interest in the science.

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One company piquing investor interest is Geron, a 53-employee biopharmaceutical firm based in Menlo Park, Calif. Geron recently said it is in plans to begin clinical trials by mid-2006 of a possible treatment for spinal-cord injury that uses cells derived from human embryonic stem cells.

Over the last eight years, Geron has invested $96 million in the field of human embryonic stem cell research, notes David Greenwood, the company’s chief financial officer. And with its leadership position in the industry and its projected royalties from 240 stem cell patents, he expects Geron to be one of the big players in the emerging stem cell business.

However, the projected gold mine from stem cell therapies might still be some way off. The primary beneficiaries of California’s stem cell funds will likely be research centers and universities, with money going to institutions like Stanford University and the University of California at San Francisco, says G. Steven Burrill, CEO of Burrill & Company, a merchant bank based in San Francisco that invests in companies involved in biotechnology.

A few years down the line, technologies developed at these institutions may translate into new medical sciences and into companies, which in turn will attract seed capital from private investors, adds Burrill.

“We are still in the early stages of stem cell research and development, and so most of this will develop initially in academic institutions,” Burrill says. “It takes time for a new technology to come to the marketplace.”

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