Embryonic Stem-Cell Approvals Rise

Research using human embryonic stem- cell lines approved under President Barack Obama is accelerating, boosting a scientific field that’s been dogged by legal and political threats.

The U.S. allowed 37 embryonic stem-cell lines for taxpayer- funded research in June, the most of any month this year, according to the National Institutes of Health. The total number of U.S.-endorsed lines now stands at 128, a decade after a curb by former President George W. Bush limited work to about 20 lines derived before Aug. 9, 2001. President Barack Obama repealed the restriction by executive order on March 11, 2009.

At issue is the use of taxpayer funds to support the work, spending that’s grown more than 16-fold since 2002. The newly approved cell lines enable scientists to study the mechanisms of more diseases and bolster a field that may someday rival the $300 billion prescription-drug market, said Mark Monane, a Needham & Co. analyst.

There is “a real opportunity to see if embryonic stem cells are going to work,” Monane said in a telephone interview from New York. Investors are still wary of the industry because of “sociopolitical risk, which is compounded upon the general risk of biotech,” he said.

A researcher applies supplement to stem cells at the Gladstone Institute of Cardiovascular Disease in San Francisco, California. There are 128 cell lines available for federally supported scientists. Photo: Noah Berger/Bloomberg Close

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A researcher applies supplement to stem cells at the Gladstone Institute of Cardiovascular Disease in San Francisco, California. There are 128 cell lines available for federally supported scientists. Photo: Noah Berger/Bloomberg

Stem cells derived from embryos develop into different tissues and may lead to cures for conditions such as juvenile diabetes, Parkinson’s disease and some cancers. Geron Corp. (GERN) and Advanced Cell Technology Inc. (ACTC) are conducting three trials on therapies derived from embryonic stem cells to treat spinal-cord injuries and causes of blindness, the first clinical applications for cell-based treatments.

Doctors’ Lawsuit

The cells come from human embryos donated by patients of fertility clinics. The work is controversial because abortion opponents say destroying embryos is the equivalent of murder.

Obama’s repeal of the Bush restriction acknowledged the sensitivity surrounding the research, requiring cell-line creators to document that embryos were donated and the parents gave informed consent.

Two doctors, James Sherley of Watertown, Massachusetts, and Theresa Deisher of Seattle, sued the National Institutes of Health and its parent agency, the Department of Health and Human Services, claiming they were unfairly disadvantaged in competing for U.S. funds with researchers using embryonic stem cells. The doctors said the U.S. is violating a 1996 law called the Dickey- Wicker Amendment by funding embryonic research.

Source: NIH

Research using embryonic stem cells, first derived in 1999, is controversial because the cells come from human embryos donated by patients of fertility clinics. Close

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Source: NIH

Research using embryonic stem cells, first derived in 1999, is controversial because the cells come from human embryos donated by patients of fertility clinics.

U.S. District Judge Royce Lamberth granted the doctors an injunction last year, forcing the government to temporarily halt funding for embryonic projects. A panel of the U.S. Appeals Court in Washington lifted the injunction in April, restoring funding, while Lamberth considers the merits of the case. The Justice Department has asked him to dismiss the claims.

‘Cloud of Uncertainty’

The court action has left “a cloud of uncertainty over the field,” said Francis Collins, the National Institutes of Health director, in a phone interview. “Certainly anybody who’s watching that would say we’re not sure where this is going and it’s not necessarily over.”

Bush vetoed legislation in 2006 that would have locked federal support for the research into law. Democrats didn’t try to pass similar legislation when they controlled both chambers of Congress in the first two years of Obama’s presidency. An Obama defeat for re-election in 2012 would mean his Republican successor could cut off funding.

“I had one pharma executive tell me, ‘we couldn’t be more excited about the technology but we’re afraid we’ll go to jail,’” said Mike West, chief executive officer of Alameda, California-based BioTime Inc. (BTX), declining to name the individual.

Embryonic Funding Bill

Two embryonic stem-cell lines that BioTime created were among those approved for federally funded research in June. BioTime said they are the first lines designed to meet U.S. Food and Drug Administration guidelines for therapeutic use. The company submitted four more cell lines for approval last month.

Representative Diana DeGette, a Colorado Democrat, introduced legislation on June 24 that would turn Obama’s policy into federal law.

“Just because the House is controlled by Republicans doesn’t mean we couldn’t pass” the bill, DeGette said in a telephone interview.

Her first co-sponsor is Representative Charlie Dent, a Pennsylvania Republican, and DeGette said she had spoken “very briefly” about advancing the legislation with Fred Upton, a Michigan Republican who is chairman of the House Energy and Commerce Committee. Upton supported the bill that Bush vetoed.

Avoiding Embryos

A spokeswoman for Upton didn’t respond to e-mail asking his position on the DeGette-Dent bill.

Even under Obama’s policy, 59 embryonic stem-cell lines have been denied federal funding, and spending for research using stem cells from less controversial sources such as adult stem cells and fully developed skin cells remains greater than spending on embryonic cells.

The NIH, in Bethesda, Maryland, spent $164 million on human embryonic stem-cell research in 2010, and $414 million on research using non-embryonic human stem cells, up from $10 million on embryonic research and $171 million for non-embryonic research in 2002.

“People are taking full advantage of all the different opportunities for stem-cell research,” said Story Landis, the director of the National Institute of Neurological Disorders and Stroke, who chairs a National Institutes of Health committee that advises Collins on stem-cell policy.

Political concerns have led the NIH to adopt a rigorous process to approve embryonic stem-cell lines, said Mina Alikani, a research scientist at Tyho-Galileo Research Laboratories in Livingston, New Jersey, and a consultant to Reprogenetics Inc., a related company.

Politics in Process

Reprogenetics had two embryonic stem-cell lines it created approved for federal funding in June. Another line was denied because the consent form signed by the embryo donor didn’t meet federal standards.

“Because the entire issue of human embryonic stem cells has become politicized, you can imagine that the politics seep into this approval process as well,” Alikani said by phone.

“There’s already a lawsuit,” Alikani said. “Down the line, they may have to deal with some kind of a congressional committee coming down to check to see what they did, what the approval process entailed and how well they screened everybody, and how well they stuck to the guidelines.”

Public and congressional support for the science may be bolstered with progress creating therapies from the cells, said Matthew Vincent, director of business development at Advanced Cell Technology in Marlborough, Massachusetts. The company was to inject eye cells developed from embryonic stem cells into the first two patients in its clinical trials this week, he said.

Existing Treatments

“As patients/voters begin to see that these therapies may be useful to them, and may be useful to their families or loved ones or friends, I think it becomes harder to envision a country where embryonic stem-cell products don’t have a place,” he said.

Landis said that “the argument used to be made that there was no evidence human embryonic stem cells were being used to treat people. That’s simply no longer true.”

Early human experiments with the cells may fail, said Collins of the National Institutes of Health, adding that past breakthroughs such as organ transplants were preceded by failures, including the patients’ deaths. Failures in the first embryonic stem-cell clinical trials “should not discourage” further research, he said.

“We can never fully anticipate what happens when we make that leap into a human patient,” he said. “People need to be prepared for the fact that in this area, it’s not going to be successful from day one.”

Eye Disease

Advanced Cell has been working for about a decade on its treatments for macular degeneration, a cause of blindness, Vincent said. He called the period that included the years of federal restriction “a valley of death” that “most companies wouldn’t have survived.” Advanced Cell issued about 1.5 billion shares to raise money for research, he said.

The company plans to publish preliminary results from clinical trials this year, he said. Signs of progress may attract investment from larger pharmaceutical companies to help Advanced Cell proceed with additional trials, he said.

Geron is on firm financial footing, thanks to a portfolio of cancer drugs that are more attractive to investors than its stem-cell work, said Jane Lebkowski, the company’s chief scientific officer.

Geron Funding

Geron, based in Menlo Park, California, also won about $25 million from the California Institute of Regenerative Medicine, a $3 billion agency the state’s voters created in 2006 in part as a response to federal restrictions on the research. BioTime has received $4.7 million from the state.

Geron has spent $145 million and almost 10 years so far developing its spinal injury therapy, Lebkowski said. The expense and long development timeline for the projects, combined with political uncertainty, dissuade investors, she said.

“The number of investors who are going into stem-cell research at all are relatively small,” she said. “Other companies, whether it’s embryonic stem cells or stem cells from adults or fetal tissue, they’re all struggling.”

To contact the reporter on this story: Alex Wayne in Washington, DC on awayne3@bloomberg.net.

To contact the editor responsible for this story: Adriel Bettelheim in Washington, DC on abettelheim@bloomberg.net.

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