Obama campaign pledge buoys stem cell interests
President-elect indicates he will lift ban on funding for embryonic research
by Stephen Berberich | Special to The Gazette


A sea change in stem cell industry investment is coming, says Richard Garr.

The CEO of Neuralstem happened to be in New York last month, pitching his company to prospective investors, when a member of President-elect Barack Obama's transition team said one of Obama's first priorities as president will be to lift the federal ban on funding embryonic stem cell research imposed by President Bush nearly eight years ago.

When he returned to his Gaithersburg biotech last week, Garr said, he had found that "the general feeling in the investment community is that this is going to be a stem cell-friendly administration and a stem cell-friendly Congress." Even in today's difficult investment climate, the stem cell industry is going to see definite benefits, he said.

Human stem cells can be grown into healthy sources of new cells, tissues and organs to help scientists find treatments for diseases such as Alzheimer's, Parkinson's, diabetes and cancer. Some oppose embryonic stem cell research because they believe extracting cells from a viable embryo destroys a human life.

Investors mostly look for signs of progress, politics aside. Garr said he felt "warm interest by investors" at the Acumen BioFin Rodman & Renshaw ninth annual Healthcare Conference in New York because Neuralstem is ready to file an investigative new drug application for the first time and will enter clinical trials with a stem cell drug for amyotrophic lateral sclerosis, or Lou Gehrig's disease, this winter.

"The timing [of the Obama statement] is very good for us," he said.

A change in the federal policy won't directly affect Neuralstem, he said, because his company doesn't receive federal or state money.

But, he said, "It will be a good thing if [Obama] lifts [the funding ban] because it will change the public perception of stem cell companies. … It will remove the uncertainty of whether or not this is going to be a legal industry. That is huge."

Douglas Doerfler, president and CEO of MaxCyte in Gaithersburg, who testified at a U.S. Senate hearing on the issue in 2005, agreed.

"I believe it will be a huge boon for companies who have been involved in stem cells [and] several are located in Maryland," Doerfler said. "This is a phenomenal area of science, and watching this field closely adds a sense of marvel at the progress being made, especially in regenerative medicine."

Doerfler cautioned, however, that lifting the ban comes late for the U.S. to get "back in the game," as other nations have invested heavily in the promise of stem cells and took competitive advantage while the U.S. was not playing a major role.

Linda Powers, managing director and co-founder of Toucan Capital in Bethesda, Maryland's most active stem cell investment firm, said lifting the ban would be "just the first step" in making the industry more fluid. She hopes, for example, that treatments for heart disease, multiple sclerosis and other serious conditions now being developed in other countries using patients' own bone marrow cells would be developed here without the current requirements of years of clinical trials.

Other restrictions, she said, include regulatory "artificial efficacy" rules on stem cells.

"They are held to much more difficult standards than other medical products," said Powers, a member of the Maryland Stem Cell Research Commission.

Even if the stem cells used are a patient's own, eight to 10 years of clinical trials and hundreds of millions of dollars of expenses are required. "If a patient's own stem cells are used in a therapy, they are regulated as a drug just as stem cells that are not from the patient's own body," Powers said. "That is just plain crazy."

Commercial stem cell research operates in "a very restrictive patient environment as well," which could loosen if federal policies are changed, said Jonathan Auerbach, CEO of GlobalStem, Inc. of Rockville.

Funded partly by Toucan, GlobalStem sells bio-tools for stem cell researchers, such as growth media to feeder cells, characterization tests and assays. Lifting restrictions, Auerbach said, would help because some of the limited embryonic cell lines that are available, called the Bush lines, are old and are "not the best cell lines."

This report originally appeared in The Business Gazette.

Bowen P. Weisheit Jr., a member of the state stem cell commission and of the state chapter of the Cystic Fibrosis Foundation, said that if Obama lifts the ban, he thinks the effect on current proposals would expand.


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