The Atlanta Journal and Constitution
October 24, 2001 Wednesday, Home Edition
SECTION: Business; Pg. 5E
HEADLINE: Atlanta Tech: Stem cell lab wrestles with questions;
OK for federal funding no guarantee of success for Athens-based BresaGen
BYLINE: KATHY BRISTER
" Athens --- The phone is silent in BresaGen's small office. It's a
relief to
John Smeaton, chief executive of the biotechnology firm.
For weeks after President Bush's Aug. 9 announcement that BresaGen's
four
embryonic stem cell lines were among 64 approved for federally funded
research,
Smeaton found it tough to get any work done.
Reporters kept calling to ask how BresaGen harvested its stem cells
---
starter cells that develop into cells with specific functions --- from
human
embryos. They wanted to know what the company would do with the
potentially
disease-fighting cells. They quizzed him on how BresaGen planned to build
a
business from its research.
After Sept. 11, they moved on to other stories.
Sitting in the cluttered, white-walled calm of BresaGen's laboratory
on the
University of Georgia campus, Smeaton still has questions of his own.
Just how
many of the 64 designated stem cell lines are viable for research? Will
politics
play an ongoing role in BresaGen's business? Will the company's start-up
cash
last two years, as planned?
"The biggest concern is the time frame --- whether we can afford to
finance
[stem cell research] as this area develops," said Smeaton. "We're hoping
the
financial markets will project that this is the area where the next big
success
will come."
It's a valid concern, said Frank DiLorenzo, a biotechnology analyst
with
Standard & Poor's. Even companies on the president's list will have to
look for
more money than they'll get from federally funded research, he said.
Building a viable business based on stem cells is a "long way off."
Even on a
biotechnology timetable --- which generally expects investors to wait a
decade
or more for a return on investment --- using stem cells to treat patients
is far
down the road, DiLorenzo said. "Public funding will help, but it's not
going to
be enough."
BresaGen got off the ground late last year with a $12.5 million cash
infusion
from its Australian parent, BresaGen Limited. That money is supposed to
last
until early 2003. Then the Athens operation may have to ask BresaGen
Limited for
more, or it may explore going it alone through an initial public
offering,
Smeaton said.
The latter may be difficult, even if the slouching stock market rights
itself, DiLorenzo said. Biotech is risky. Investors see embryonic stem
cell
therapies --- in very early stages and facing long-term regulatory and
political
hurdles --- as riskier still.
Nonetheless, stem cell work seemed promising enough for BresaGen
Limited to
establish a U.S. operation to isolate embryonic stem cells. The work
couldn't be
done in Australia. While it is legal to do research on embryonic stem
cells
there, it is illegal to experiment on human embryos, and, therefore,
illegal to
harvest stem cells.
After shopping for U.S. sites, BresaGen chose Athens late last year
because
it is home to renowned cloning and stem cell researcher Steven Stice and
because
it is affordable. The company's laboratory --- being moved in stages from
UGA's
Animal and Dairy Science building to the university's new bio-business
incubator
--- costs about a third of what similar space would go for in California,
said
BresaGen Chief Scientific Officer Allan Robins.
In addition, the state of Georgia wooed BresaGen with a $1 million
equipment
grant awarded by the Georgia Research Alliance, a public-private
technology
economic development group. Smeaton expects BresaGen's $12.5 million to
last
longer in Georgia than it would have in biotech hot spots like San Diego
or
Boston.
BresaGen isn't rushing to create revenue. BresaGen Limited doesn't
expect the
Athens operation to contribute directly to its bottom line, Smeaton said.
Rather, it wants BresaGen's stem cells for its own research. Smeaton
often
carries stem cells back to the the parent company's headquarters in
Adelaide,
Australia, in his pocket. His body temperature creates an ideal incubator
during
the 32-hour flight.
BresaGen Limited also wants to use the stem cells the Athens operation
isolates to gain access to research being done by other scientists. These
researchers may use BresaGen's stem cells at very little cost, but they
must
agree to give BresaGen Limited first dibs on buying or licensing
intellectual
property gained through their work. BresaGen's inclusion on the list for
federal
research dollars is key to this business plan.
Still, the business of biotechnology is a gamble. Paying high-powered
scientists and providing them with cutting-edge equipment is expensive.
There's
no guarantee the research will lead to breakthroughs in patient
treatments.
Even if the science works in a laboratory, the Federal Drug
Administration
may deem biotechnology-based drugs or therapies too risky for broad
medical use.
BresaGen executives have more to worry about. Research on embryonic
stem
cells is controversial and politically charged. Medical researchers say
embryonic stem cells could unlock treatments for cancer, Alzheimer's and
other
diseases. But many anti-abortion groups oppose the research because stem
cells
often are obtained from aborted fetuses.
A compromise between these forces led Bush to designate embryonic stem
cell
lines isolated before Aug. 9 as the only ones that would qualify for
federal
research dollars.
BresaGen hasn't borne the brunt of any anti-abortion protests, Smeaton
said,
but he won't reveal the location of the clinic from which BresaGen gets
the
embryos. UGA officials --- worried about jeopardizing projects funded
with other
federal research dollars --- wouldn't let BresaGen bring embryonic stem
cells
into its campus laboratory until Bush's list was released.
The release of the federal-funding list was a relief, but Smeaton
still has
questions.
He and others in the field aren't sure 64 stem cell lines --- some of
which
may not have been fully isolated before Aug. 9 --- will be enough.
Smeaton also
wonders whether later-stage research using heart, pancreatic or liver
cells
produced from embryonic stem cell lines not on Bush's list will be
eligible for
federal funding.
"If the answer is no, there may be a lot more political pressure for
things
to change to get to the goal of curing disease," he said. Smeaton may
have to
employ the patience of a biotechnologist in his wait for answers. Since
Sept.
11, a Senate hearing on these issues has been postponed twice.
GRAPHIC: Graphic:
STEM CELL TECHNOLOGY
Embryonic stem cells are basic, blank cells that can change into any one
of the
more than 200 specific tissue and organ types that make up the human
body. These
cells also can proliferate indefinitely, giving doctors potentially
unlimited
options in treating various ailments, including diabetes, Parkinson's
disease,
kidney disease, chronic heart disease, liver failure and cancer. Here is
how
embryonic stem cell technology works:
Where are stem cells?
Once the egg is fertilized it develops into an embryo or blastocyst.
Within the
embryo, stem cells are formed and eventually will create the various
parts of a
human being.*
A pre-implantation embryo of 30 to 150 cells.
Stem cell removal
After several days scientists take the stem cells from the embryo. The
cells are
then cultivated in great quantities in a lab.
Treatment
Two ways stem cells can aid patients:
Stem cells can be changed by a scientist into a particular type of cell,
for
example a skin cell, then transplanted into the patient.
Stem cells can be transplanted into diseased bone, organ or tissue and
then
change into that specific cell to aid healing.
Scientists also can grow stem cells into tissue in a laboratory petri
dish, then
apply it to the patient.
Stem cell types
Embryonic -- Stem cells found only within the embryo. These cells are
less
specialized than adult stem cells.
PAGE 4
The Atlanta Journal and Constitution October 24, 2001 Wednesday,
Adult -- These specialized stem cells are found in various parts of a
mature
human. Adult stem cells are needed to replenish the supply of cells in
our body
that normally wear out. They are often present in only minute quantities,
are
difficult to isolate and purify, and their numbers may decrease with age.
Embryonic stem cells can be harvested three ways
1. Frozen embryos -- Spare embryos from fertility clinics.
2. Fresh embryos -- Embryos created specifically for research.
3. Cloned embryos -- Skin cells from an adult are injected into a donated
egg
cell stripped of its DNA. Stem cells are extracted from the resulting
embryo
clone, which does not keep growing.
* Stem cells can be found in all humans at any point in the life cycle.
Sources: National Institutes of Health, Associated Press
/ MICHAEL DABROWA / Staff
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