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Sunday, July 29, 2001 Capital funding for cell research spotty By ANDREW POLLACK New York Times News Service A pioneering biotechnology company claims its cells can cure diabetes and Parkinson’s disease. But opponents of abortion object and President Bush considers extending a ban on federally financed research on the cells. These cells, however, are not embryonic stem cells. The scene was from the late 1980s, when the current president’s father was in the White House and a California company called Hana Biologics began implanting cells from the pancreases of aborted fetuses into diabetics, in hopes the cells would produce insulin. But Hana had an even bigger problem than the ethical debate: The cells did not work. The company abandoned its effort and faded into oblivion. More than a decade later, no therapy using fetal cells to treat any disease has reached the market. Hana’s difficulties have implications for today’s controversy. Embryonic stem cells are just the latest candidates to come along in a field known as cell therapy that has been extremely difficult to turn into a viable business. "I don’t think a great business model with high profits has come out yet," said Irving Weissman, a professor at Stanford Medical School, who has started two stem cell companies. Embryonic stem cells can be turned into any type of cell in the body, potentially providing new heart, liver or pancreatic tissues to people whose own organs are damaged. One hope, for instance, is new nerve cells to allow people in wheelchairs to walk again. But Ron Cohen, chief executive of Acorda Therapeutics, which is developing treatments for spinal cord injuries, said that other approaches, like drugs, were likely to be ready before stem cells. "Stem cells is one piece of the puzzle," he said. "I certainly would not elevate it above the others." Cohen said that Acorda, based in Hawthorne, N.Y., was doing research on commercial uses for stem cells, but that after consulting academic experts, the company had come away stunned at how little was known about how to grow and use such cells. "It was depressing," he said. Opponents of embryonic stem cell research could argue that such difficulties show that there is no urgency for federal financing of such research. The opponents say that embryos are nascent human life and that such research is immoral because it requires their destruction. But many people in the biotechnology industry argue the opposite: that federal financing is needed precisely because the technology is still too early in its development to attract much corporate interest. "I would say there’s not a huge amount of venture capital interest in that," said Alan Walton, a general partner of Oxford Bioscience Partners, a venture capital fund. "The news on transplants has not been very good." Geron Corp. of Menlo Park, Calif., the company clearly in the lead, does provide financial support to a handful of academic collaborators, but it is a small company with limited resources. "That’s not sufficient to really drive significant progress in the field," said Steven Goldman, a professor of neurology at Cornell Medical School, who is one of those collaborators. What makes cell therapy a tough business is that since cells are living things, they are not easy to manufacture to a consistent standard like drugs and may do unpredictable things in the body. Moreover, as with blood transfusions or organ transplants, cells can carry infections or be rejected by the patient’s immune system. One way to avoid rejection and infection is to take a patient’s own cells, treat them or multiply them, and put them back in. But this personalized therapy is anathema to many drug companies that believe it will ultimately be easier and more profitable to sell standard products in great quantities. "That doesn’t play to our core strength," Robert Kramer, a vice president for drug discovery at Bristol-Myers Squibb, said of stem cell therapy. Novartis, the Swiss drug company, acquired Systemix, a company developing blood stem cell treatments, but then shut it down. "Novartis decided they are not part of a service industry," said Weissman of Stanford, who founded Systemix and is now starting a new company to take back the technology. Only one mass-produced product containing living cells has received approval from the Food and Drug Administration — an artificial skin developed by Organogenesis of Canton, Mass., for treatment of various ulcers. The cells come from foreskins from circumcisions. But sales of the artificial skin, while now growing rapidly, are expected to reach only about $20 million this year. Organogenesis’ stock, which traded as high as $35 in 1998, is now around $8. Organogenesis and rival companies focusing on wound care have, on average, only seven months’ cash left, making them the poorest group among 17 categories of biotechnology companies tracked by Recombinant Capital, a research firm in Walnut Creek, Calif. Still, there is little doubt that cell therapies have the potential to be very important. Blood transfusions, bone marrow transplants and organ transplants are all cell therapies. But the cells and organs are usually not provided by companies. And many new medical technologies can take two decades to develop, so early problems with cell therapies do not mean there is no future. Indeed, a scientist in Canada last year did what Hana Biologics could not — effectively treat diabetes by transplanting pancreatic cells, in this case from cadavers rather than fetuses. Moreover, the business potential for stem cells goes beyond making tissues for transplants. Since these cells can turn into all other types of cells, scientists can study which genes are turned on and off as these transformations occur. That knowledge could help in developing drugs, including ones that may activate the body’s own stem cells to regenerate tissue. Stem cells could also be turned into liver, heart or other cells that could be used to test drugs in a test tube. Geron is working with Celera Genomics to study genes in stem cells. VistaGen, in Burlingame, Calif., is trying to build a business on the use of stem cells for drug discovery. Opponents of embryonic stem cell work say that scientists should use stem cells taken from adults. Several types of stem cells have been isolated from adults, including blood stem cells and nerve stem cells. A disadvantage is that such cells are hard to isolate and cannot be grown as easily in test tubes as embryonic cells. Moreover, they tend to be more tissue-specific, unable to turn into all sorts of cells. But less versatility can also be an advantage. The embryonic cells are so versatile that scientists have still not figured out how to make them turn into just one particular type — and to do so completely. If any raw stem cells are implanted in the body, they could give rise to tumors or into something else undesirable — like bones sprouting in the brain. Yet other stem cells are derived from fetuses. While this is controversial in its own right, companies using such cells say they are not destroying potential human life, since the fetuses have already been aborted for other reasons. So far, the adult stem cells are ahead of embryonic stem cells in moving toward commercial use. Osiris Therapeutics of Baltimore is in early clinical trials using stem cells extracted from bone marrow that can turn into cartilage, bone or fat. In one trial it is trying to repair jaw bones and in another to improve the outcome of bone marrow transplants. Various types of cells are being tried to treat neurological diseases. Layton BioScience, a private company in Sunnyvale, Calif., has nerve cells derived from a testicular tumor that are being tested in stroke victims. Diacrin Inc. of Charlestown, Mass., is testing neural cells from pig fetuses. The treatment failed in a recent clinical trial for Parkinson’s disease. By contrast, tissues made from embryonic stem cells are probably several years from being tried in people and there are only a few companies pursuing those cells right now. Geron, which financed the research at the University of Wisconsin that led to the initial isolation of human embryonic stem cells in 1998, has the rights to commercialize six cell types made from those cells. It’s unclear whether its patent rights represent a big barrier to others. An institute set up by the University of Wisconsin has given out about 30 licenses for doing research using the cells, but only one has gone to a company besides Geron, according to Andrew Cohn, a spokesman for the Wisconsin Alumni Research Foundation. Another business pursuing embryonic stem cells is Advanced Cell Technology, a privately held company in Worcester, Mass., headed by Michael West, who founded Geron. Advanced Cell has said it plans to clone patients’ cells to make embryos from which to obtain stem cells. Tissues grown from such stem cells would match those of the patient and not be rejected. Other companies that say they have human embryonic stem cells are BresaGen Ltd., of Australia, and ES Cell International in Singapore. Some executives and analysts say the controversy has kept companies and investors from the field. But others say the attention focused on the potential of stem cells has spurred investment, particularly in companies using nonembryonic cells. "It’s really brought a lot of investors into this space that wouldn’t be here," said Martin McGlynn, president and chief executive of StemCells Inc. of Palo Alto, Calif., which has neural stem cells derived from fetuses. Its stock price has quadrupled from its low this year. But even companies working on adult stem cells say a ban on federal funding of embryonic cell research could hurt them. "It could hinder the competition," said Stephen W. Webster, president of Neuronyx, in Malvern, Pa. "But the more people working on it, the better off the whole field is." SOURCE: Fosters / The New York Times http://www.fosters.com/news2001c/july/29/bu0729d.htm * * * ---------------------------------------------------------------------- To sign-off Parkinsn send a message to: mailto:[log in to unmask] In the body of the message put: signoff parkinsn