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The anticipated lift of restrictions on federal embryonic stem cell research funding could mean millions of dollars for local laboratories and startups — with the potential to accelerate the maturity of the science and attract more private investors.
President Barack Obama has stated that he intends to lift that funding ban, although exactly when is an open question. Already, however, the U.S. Food and Drug Administration last month approved the request of Geron Corp., a California-based biotech, to proceed with the first human test using an embryonic stem cell-based treatment. New England stem cell advocates believe such developments could change the market completely — and even enable the creation of new technologies.
“If I were to make a prediction, I would say there’s a 95 percent certainty you’ll see more startups and see a significant investment by established pharmaceutical companies and venture capitalists,” said Gary Stein, interim director of the University of Massachusetts program in stem cell biology and regenerative medicine. “It will mean tremendous development in this area for Massachusetts, being a major center for biomedical research.”
In grants alone, local researchers “unquestionably” are set to receive millions of dollars, said Stein — the only question is how many millions.
Stem cells are a potential source of widespread therapies, and their two major sources are from adults or embryos. While adult cells tend to have restricted developmental potential, embryonic stem cells can divide almost indefinitely and can be used to recreate every cell type in the body. But because they require the destruction of a blastocyst-stage embryo, President George W. Bush in 2001 restricted federal funding to only those embryonic stem cells derived before Aug. 9, 2001.
Stem cell research advocates say the ban severely set the industry back, as private or state dollars haven’t been adequate to fund research. In turn, this has allowed competitors such as China and Europe to gain on the United States’ lead in the field, they say.
One Connecticut-based startup stands ready, once the ban is lifted, to apply for federal Small Business Innovation Research grants for embryonic stem cell research.
“We’ve been waiting for an opportunity like this,” said John Hambor, CEO of New Haven-based CellDesign Inc., a stem cell research material provider that uses both embryonic and adult stem cells.
CellDesign was founded in 2008 using venture capital money, said Hambor. However, he noted, “government grants as well as venture capital funding are critical to a biological technology startup.” The company has applied for a Connecticut stem cell funding grant in the past year.
But investors said politics have played less a role in their reluctance than has the science’s slow development. “The ban itself has not been what’s holding back investment, it’s the relative immaturity of the technology that is holding venture capital investment back,” said Doug Fambrough, general partner at Waltham-based venture capital firm Oxford Bioscience Partners LP.
With federal money supporting research, however, this could bring the embryonic stem cell field to a point where private investors are ready to put money in, Fambrough said. Oxford is now considering the market, although nothing is “imminent,” he said. If Oxford does create a financing package for an embryonic stem cell startup, it would probably have a federally funded research component to it, he said.
There is one other major benefit of the reversal that isn’t tied to money, noted Stein. “If it’s allowed, there’s a seal of approval, and it provides public confidence so that people will put up venture capital. People will be in a position where they are supportive of the therapy rather than feeling it’s something immoral.”
Stem cell fund ban: Impact felt in the lab
The anticipated lifting of the current federal restrictions on funding for research on embryonic stem cell lines is good news to patients seeking new therapies, as well as researchers that have been hampered by extra cost and effort to comply with the rules, say local scientists.
The federal ban prevented any lab research equipment and supplies bought with federal dollars from being used on any project involving unapproved embryonic stem cells. “It required a great deal of will to put in place the necessary accounting processes and safeguards so there weren’t any violations of the restrictions around using federal money,” noted David Scadden, co-director of the Harvard Stem Cell Institute, headquartered in Cambridge.
This, in some cases, required buying redundant equipment — some (marked with a green sticker) that is used for the unapproved embryonic stem cells and some for research using approved stem cell lines that enabled them to use federal dollars, said Scadden. The research equipment can run into the hundreds of thousands of dollars.
Additionally, those people whose salaries were depending on federal dollars couldn’t work on the unapproved embryonic stem cell projects. “You had to have certain people designated to work with the embryonic stem cells and those who couldn’t,” he explained. The accounting processes were lengthy and slow, as well. “You had to figure where a piece of equipment had come from.”
Given these obstacles, it was discouraging for new researchers to even want to perform this type of research, said Scadden. “There was a brain drain from the field,” he said. “That’s an expense that’s hard to measure. We’re hoping to now enable (new scientists) to get into this field and drive it quickly.”
The ban has also limited the options for patients who wanted to try new therapies for conditions that were otherwise incurable, said Scadden. He regularly received e-mails from patients who wanted an opportunity to try new embryonic stem cell-based therapies. “There are reasons to think (stem cells) could actually be very effective for them.”
— Marc Songini, msongini@masshightech.com
Brewing stem cell activity
The regional activity around stem cells:
Connecticut: Last month, scientists at the University of Connecticut made two new lines of human embryonic stem cells available for research.
Massachusetts: The University of Massachusetts Medical School houses the Massachusetts Human Embryonic Stem Cell (hESC) Bank and an international Massachusetts hESC Registry.
Maine: In October, the Maine Medical Center Research Institute received a $10 million grant from the National Institutes of Health to study how stem cells develop.
Vermont: Researchers in the Vermont Lung Center at the University of Vermont College of Medicine are running an initial clinical trial with adult stem cells.
Rhode Island: Brown University is pursuing blood stem cell research.
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