The Sydney Morning Herald
Saturday, August 18, 2001
Hard cell
Brave new world ...
A neurosphere, which can grow into living tissue,
started as a single stem cell.
A cure for degenerative diseases will be worth billions,
and private companies want their share, writes Gay Alcorn.

News special: The next frontier
Frogs, chicken and mice were all very well, but researcher
Ali  Hemmati-Brivanlou was ready to move on to studying
human embryonic stem  cells, so promising a field that
normally cautious scientists were excitedly  predicting
revolutionary improvements in the quality of human life.

Professor Brivanlou confronted unexpected obstacles.
His employer,  Rockefeller University in New York, opened
negotiations earlier this year  with Geron Corporation,
the biotechnology company that claims worldwide,
exclusive rights to just about everything to do with
stem cells.

Brivanlou was astonished at the conditions Geron wanted
to put on his  research into how these unique cells grow
into different parts of the body  such as the pancreas,
the blood, or the brain.

Private companies demanding a return for investing in
high-risk medical  research are hardly new. But normally,
says Brivanlou, a deal known  as a "material transfer
agreement" would apply.

This would give a company  claiming intellectual property
a period of about a month, after the work was completed,
to scrutinise the results and take up options for further
research or  commercialisation before the researcher could
publish results. Californian-based Geron wanted much more.

"Not only did they have this confidentiality agreement,
I wasn't supposed  to talk about the work, I could never talk
without permission of Geron,  couldn't talk with my colleagues,
we could not publish our results," says Brivanlou.

"And it  went beyond stem cells. I couldn't talk about cancer,
anything that Geron  might some day be involved with.
Everything belonged to them. We are talking  about the
health of human beings, and Geron is just punitive."

Rockefeller University declined the conditions, and Brivanlou
was left a  frustrated, and furious, researcher, still
experimenting on frogs. Geron declined to comment.

Now that President George  Bush has allowed government
funding for the 60  stem cell colonies, or "lines" already
extracted from embryos - but  no money for work on new
stem cells - there is intense anxiety among  scientists about
what happens next.

Are there 60 stem cell lines and if so,  are they of good quality?
Is Bush's political compromise an invaluable boost  to the
nascent research or entirely inadequate to move beyond
animal  experimentation to clinical trials and one day,
cures for Alzheimer's,  Parkinson's, diabetes, paraplegia
and a host of other conditions?

However many cells are available, how are scientists going
to get at them?  When the buzz subsides about the "magic"
cells that can grow into any  type of tissue in the body,
who actually owns them and who's going to  profit?
"Commercial interests," Doug Melton, a Harvard University
researcher, said this week, "may not coincide with the public
interest."

Scientists are deeply sceptical that there are 60 stem cell
lines, a figure  identified by America's National Institutes
of Health, the leading public  backer of medical research
in the world, after telephone calls to  international groups
known to be working in the field.

Robert Klupacs, the chief executive officer of
ES Cell International, the company linked with renowned
scientists Alan Trounson and Martin Pera of  the  Monash
Institute of Reproduction and Development in Victoria,
thought there were about  20. American scientists are
dismissive. " I'm sitting here in California  without the foggiest
idea of what 60 stem cell lines he's referring to,"
Stanford University cancer researcher Paul Berg told
The Wall Street  Journal.

The Bush Administration insists the cell lines are "diverse,
robust and  viable". About half are believed to be in the US.
Fully 10  were harvested by Australian researchers, six by
the Monash group, and four  by BresaGen Ltd,
an Adelaide-company that last year also set up in America.
Israel and Singapore are key players, and Sweden and India
are also believed  to have stem cell lines, although details are
sketchy in what is a highly  secretive business.

Bush drew a line - no public funding for embryonic stem cells
harvested after his announcement on August 9 - a nod to anti-
abortionists  who say extracting stem cells, which destroys the
embryo, is abortion (even  though embryos left over at IVF
clinics are routinely discarded anyway).  That does not prevent
private funding of stem cells, nor does it prevent the  work
continuing internationally, which it undoubtedly will. There
is even  fretting in the US about a most unusual phenomenon,
a brain  drain from the US to the UK, Israel and Australia.

No-one doubts the importance of American public funding.
The NIH's budget is  $US20 billion ($37.6 billion) and last year
it spent $US226 million on adult stem cell  research, a related
field. Scientists are hoping for at least as much for embryonic
stem cell work, which they say has far greater potential.
BresaGen  set up in America as an acknowledgment of
commercial reality.

"To get  all the research and development done and get
products to market is going to  require more capital then
we have now," said Dr Allan Robins, the senior vice-president
and chief scientific officer of  BresaGen, which is
concentrating its efforts on Parkinson's disease.

"When you do have  products, about half the patients will
be here in the US."

Australian scientists say that Bush's decision was perfect
for Australian interests, because of the numbers of local
stem cell lines and  the quality of local scientists. Klupacs
says that in the past few days, 40  to 50 American researchers
have contacted him about using Monash's lines.  "The trickle
has turned into a bit of a flood."

However, worn down by decades of underfunding and
indifference to science in  Australia, researchers worry
that the advantages could be squandered without
government funding and a national policy co-ordinating
what is a fragmented  industry.

There have been other chances, says Klupacs, but "we soon
got  run over because we couldn't compete".

"We've got to make sure that doesn't  happen again.
This is an area, because it's so young, where we could lead
the world."

There is palpable excitement surrounding stem cell research,
which sometimes  obscures the reality that moving beyond
the Petri dish is years, even  decades, away. There are no
human trials as yet, but animal trials are  encouraging and
there are soaring hopes that one day healthy cells could be
injected into the body, ushering in a new era of regenerative
medicine.

Then there is the Geron Corporation, the "800-pound gorilla",
says  Klupacs.

Geron is an unlikely gorilla. It has just 112 employees and,
last year, lost  $US46 million. But years ago, before there
was any prospect of government  money for research,
Geron backed Dr James Thomson of the University
of Wisconsin, and now believes it invested well.

In 1998, Thomson extracted the first human embryonic
stem cells (just  pipping the Monash scientists for the
honour) and promptly patented them. It  was a broad patent,
and the university now claims it has the rights to
all  the 60 stem cells, no matter where they are.
Wisconsin's for-profit  foundation charges fees for
researchers to use their stem cells, but refuses  them
the right to exploit any findings commercially.

That right belongs to Geron, which has an exclusive deal
with Wisconsin over  transforming cell lines into six vital
types - bone, blood, muscles, nerve,  pancreas and liver.
Geron was unavailable for comment, but its CEO,
Thomas Okarma, has said the the licence gives his
company "worldwide exclusive commercial rights"
to stem cells. "People who want to follow through
on commercial applications of these cells will need
to visit with  Geron", said the company's chief financial
officer, David Greenwood.

Those statements make American researchers furious,
and Australian  scientists nervous. BresaGen used some
of Wisconsin's stem cell lines 18  months ago, but they
failed to grow, and the company extracted its own
earlier this year. There are doubts about
what rights it has  to them, and  what rights Geron
will have over its research if it ever bears fruit.

Robert Klupacs from ES Cell International says "it's going
to get  tricky" and has lawyers scouring the implications
of the American deal. "Were not quite sure the claim they
have in their patents would cover  our lines."

This week, Wisconsin University fell out with Geron and,
in American style,  has sued the company that funded its
research. Geron, already the dominant player in the field,
wants not only commercial rights to cell types  it already
has, but also to 12 more. Wisconsin says the company's
dominance has  gone far enough.

Both Klupacs and BresaGen's Allan Robins believe deals
will be done and  that the field is big enough for more
than one player.

Klupacs concedes that  the Monash team would have
"absolutely" applied for a worldwide  patent if it has
been the first to extract a human embryonic stem cell line,
although the university has been far more generous in
distributing its work. It sends its lines to scientists at no
cost, with the condition that it has  a 12-month chance to
negotiate any licences for new technology that results
from the research.

There is one hitch that makes the Australian scientists
more sanguine than  their American colleagues.
Wisconsin's commercial foundation failed to get a  patent
in Australia or in Israel, potentially a costly mistake.
Geron has  two pending patent applications in Australia,
but over narrower issues of how to make the stem cell lines
last longer, rather than broad patents  covering stem cell
research generally. Patent lawyer Arti Rai, from the
University of  Pennsylvania, says that "Israel and Australia
may end up  being really the key to all of this. It's going to
be a truly international  legal fight."

Geron's claims to anything commercial arising from
stem cell work are  unusual, says Rai, particularly when
the research is still so new.  Scientists in America fear
one company's dominance and resent the control  Geron
seeks over their work. Geron says it has no intention
of constraining  research, but is unapologetic over its
apparent monopoly.

"We guessed  right," Thomas Okarma told
The Boston Globe just before Bush's  decision.
"Patents are what patents are. We funded the work;
we have the  rights."

SOURCE: The Sydney Morning Herald
http://www.smh.com.au/news/0108/18/review/review7.html

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