Online Extra: Thomas Okarma: Don't Ban Stem-Cell Research

Geron's CEO on the disaster of the federal funding cutoff for new embryonic stem-cell lines and the confusion over cloning

Dr. Thomas B. Okarma has one of the toughest jobs in biotech: Trying to convince Congress to preserve stem-cell research, and getting the lawmakers to understand cloning from a different perspective. Okarma is the CEO of Geron Corp. (GERN ), a Menlo Park (Calif.) biotech that's developing drugs to treat AIDS and cancer, and is best known for its work in embryonic stem cells.

Geron is studying the controversial cells for potential therapeutic use in organ and tissue regeneration, as well as to help identify the genes that control growth and development. And in 1999, Geron bought the unit of the Roslin Institute that cloned Dolly the sheep (now deceased). Geron is continuing the groundbreaking research into cloning in the hopes of deriving new lines of stem cells.

Okarma is a frequent face on Capitol Hill in his bid to keep stem-cell research from being banned. He recently spoke with BusinessWeek Correspondent Arlene Weintraub about the controversy surrounding cloning and stem cells, and how it affects the outlook for companies like his. Edited excerpts of their conversation follow:

Q: On Apr. 1, Geron announced research showing that functional liver cells can be derived from human embryonic stem cells. What's the potential impact of this research?


It could be a great enabler for drug development. Human liver cells can't be cloned, and they don't live very long. This method might provide unlimited liver cells for drug testing. Researchers could test how humans might react to an experimental drug much earlier in the study process.

Q: With the federal funding ban on researching new lines of embryonic stem cells and continuing controversy in Washington, why not give up on them and just study adult stem cells?


I'm not opposed to adult stem cells. I think there's some value in studying them. You want to study tumor stem cells, because they're the ones you need to identify and kill. And elegant techniques to isolate them are being developed. But when it comes to scalability -- the ability to derive unlimited cells from the source -- embryonic stem cells win hands down.

Q: When the religious group known as the Raelians claimed to have cloned a baby, how did that affect your lobbying efforts on Capitol Hill?


It did a lot of damage. These legislators are more moved by the notion of cloning people than by the legitimacy of the science.

Q: What happens when you try to explain to them that the type of cloning that's done to harvest stem cells isn't meant to create viable fetuses?


They look me in the eye and say they can't explain that to their constituents. It's easier for them to just say "no."

Q: How has all this controversy affected the funding environment for companies involved in stem-cell research?


It's a disaster. The Bush decree cut off federal funding for research into new embryonic stem-cell lines. Investors fear the next shoe that might drop. Is Congress going to pass a law making [all cloning] illegal? How crazy is the regulatory environment going to get? In an attempt to fill the federal-funding void, a bunch of companies are trying to get funding to study adult stem cells. But investors can't discriminate, so they're sitting on the sidelines until all this controversy is sorted out.

Q: What's the ultimate cost?


A lot of good ideas won't get funded. Innovation will take a hit. This will happen at the same time that Big Pharma gets into deep yogurt because it can't translate genomics into drugs. But guess who suffers the most? Patients with chronic diseases.

    Before it's here, it's on the Bloomberg Terminal.