Embryonic Stem Cell Researchers Lack Funding

With no government, and little private support, embryonic stem cell outfits are barely hanging on. The next President may determine their fate
Peter Horvath; blastocyst image by Hybrid Medical Animation/Photo Researchers

One company is working on a treatment for blindness. Another hopes to conquer paralysis in patients with spinal cord injuries. And both are counting on the next U.S. President to bail them out of serious financial difficulties. These two publicly held companies—Advanced Cell Technology (ACT) (ACTC.PK) and Geron (GERN)—are studying stem cells derived from donated human embryos, and federal funding for research in this area has all but dried up as a result of restrictions imposed by the Bush Administration.

The lack of government support has cast a pall over the field of embryonic stem cell research, prompting other investors to stay away. That's making it difficult for the companies to continue their research. "I don't know how much longer we can hang in there," says Dr. Robert Lanza, ACT's chief scientific officer. ACT has shown that embryonic stem cells can restore some sight in rats with degenerative retinal disease, but it has put the project on hold for lack of money. On Sept. 9, ACT closed two offices and began looking for financing partners.

Geron has made a product from embryonic stem cells that allows rats with spinal cord injuries to regain some movement. But in May, the Food & Drug Administration said it was not yet ready to green-light human trials. "We don't have a shred of evidence it's political," says CEO Thomas B. Okarma. He says the main issue is a general dearth of data on embryonic stem cells. Geron's stock has fallen from 70 to 4 since 2000. ACT's shares are languishing at 6 cents.

Embryonic stem cells possess the power to become any tissue or organ in the body. This could give them therapeutic power for a range of diseases. But the controversy that has erupted over their source—human embryos—has made the cells a terrible business proposition. Over the past five years the National Institutes of Health has awarded $186 million in grants for embryonic stem cell research, vs. $1 billion it has given to scientists studying "adult" stem cells from sources such as skin and blood.


Whether a new President will improve the funding prospects for embryonic stem cells is an open question, because the two candidates have been noncommittal on the issue. But both appear to agree that at least some of the funding restrictions should be lifted. In 2007, Senators Obama and McCain voted in favor of the Stem Cell Research Enhancement Act, which would expand beyond the 21 varieties of embryonic stem cells that can be studied with federal money. President George W. Bush vetoed the bill.

Some scientists worry that advances in adult stem cells could leave the impression that the embryonic variety is unnecessary. Several research groups have recently created stem cells from grown patients, then reprogrammed them to be "pluripotent," meaning they could grow into any type of body tissue. While such cells will enable scientists to study how diseases develop, their therapeutic potential is unclear. Says Stanford University professor Irving L. Weissman, "This is one of the hottest areas of science. But to say 'Now we don't need to do embryonic stem cell research' would be wrong."

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