Stem cell strength in numbers

Embryonic stem cells are a tricky business, as evidenced by Advanced Cell Technology's linkurl:recently announced;http://www.the-scientist.com/blog/display/54884/ financial woes. The technology is too nascent for guaranteed returns, but potential payoffs could be huge. Increasingly, biotechs are looking to navigate the uncertain funding waters by forging partnerships with pharmaceutical companies. Some biotechs working on embryonic stem cells have been able to get start up money from the state

By | July 30, 2008

Embryonic stem cells are a tricky business, as evidenced by Advanced Cell Technology's linkurl:recently announced;http://www.the-scientist.com/blog/display/54884/ financial woes. The technology is too nascent for guaranteed returns, but potential payoffs could be huge. Increasingly, biotechs are looking to navigate the uncertain funding waters by forging partnerships with pharmaceutical companies. Some biotechs working on embryonic stem cells have been able to get start up money from the state or angel investors for short-term operations. But, "The more serious problem is going to lie in long term funding," Elizabeth Donley, CEO of Stemina Biomarker Discovery, a privately owned embryonic stem cell biotech in Wisconsin, told The Scientist. In addition to approaching venture capital firms, Donley is looking to partner with biotech and pharmaceutical companies, she said. "We've been talking to a number of potential partners] about collaborative research projects. They are becoming more positive about using human embryonic stem cell research." Such partnerships may help tide companies over during a time when venture funding is tight. "Anything which is early stage in the biotech industry is having a tough time raising money," Alan Lewis, CEO of Novocell, a biotech in California developing human embryonic stem cell technology, told The Scientist. "Investors by and large are looking for quicker exits, supporting companies which are later stage, clinical stage." While Novocell has benefited from state funding thanks to California's proposition 71, they're getting creative for the long term. 'In the last four to five months we've been talking to big pharma and that has been quite a positive experience. We've discovered that a number of companies are willing to consider embryonic stem cell research, especially for their drug discovery programs." Also, Lewis added, a number of the pharma companies he's talked with are setting up their own regenerative medicine divisions. "Investors love it when big pharmas are stepping up, then the exit looks different; someone else is paying for research and there is the potential for mergers and acquisitions." GlaxoSmithKline demonstrated its strong interest in stem cell research last week, by linkurl:announcing;http://www.gsk.com/media/pressreleases/2008/2008_pressrelease_10089.htm a 5-year, $25 million research collaboration with Harvard. And a venture capital firm in California is planning on investing $225 million in 10-15 stem cell companies by the end of the year, the San Francisco Business Times linkurl:reported;http://www.biospace.com/news_story.aspx?NewsEntityId=104707 yesterday. But, as I linkurl:wrote last week,;http://www.the-scientist.com/blog/display/54884/ investors may feel more comfortable backing adult stem cell research for now, both because adult stem cells are less controversial and because their translation into therapeutics will likely be quicker.
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