Can a New Jersey initiative that aims to tap Wall Street money reinvigorate the state's once-ambitious plans for stem cell research?

The stem cell research community once had high hopes that New Jersey would become the next California or New York. But in November of last year, the state voted against a referendum that would have boosted stem cell research funding by $450 million. New legislation, introduced last month by State Assemblyman Neil Cohen, would establish a pool of research money from Wall Street investment firms that the state could allocate to research institutions in the form of loans. Investors would receive equivalent tax credits for any loans not repaid by the research institutions.

Despite this new funding initiative, "New Jersey may miss the opportunity to be one of the pioneers in state stem cell initiatives," Ihor Lemischka, now director of the Black Family Stem Cell Institute at Mt Sinai School of Medicine in New York, told The Scientist. Lemischka and his wife, Kateri Moore, were both prominent stem cell researchers at Princeton University until last year when better research opportunities prompted them to leave the state and move to New York.

Without funds, plans for a new state stem cell institute were recently canned and an empty lot now sits where the research hub might have been. New Jersey Governor Jon Corzine told the New Jersey Business Journal last month the project was just "brick and mortar without adequate dollars for research." He continued, "Are we going to build a building and sit there and look at each other?"

Cohen believes the climate in New Jersey is still right for stem cell research to blossom. He has been in negotiations with two investment firms and told The Scientist one is ready to commit $500 million to fund stem cell research in New Jersey. For now, Cohen said, that money would be restricted to adult stem cell research, in order to move the bill swiftly through the legislative process.

Without large-scale funding, prospects for research are dim, said Lemischka. In 2005 the state established a $10 million stem cell research grant program. "Yes, it was nice to get small to medium sized grants but this is not the kind of initiative that will sustain already-existing [stem cell] research, and certainly not the kind of effort that will encourage people to relocate to the state," said Lemischka, adding that New Jersey has never had the right system in place to promote stem cell research. The state never approached researchers and asked them for advice on allocating funds or how to go about funding stem cell research, he said.

But Cohen said he believes the new funds can indeed lure out-of-state research talent. He hopes to announce the name of the firm that plans to invest in the scheme in a matter of weeks, and have the legislation passed by the end of summer. But it may be too little too late, said Lemischka. Even had the November referendum been passed, he added, the money wouldn't have been enough to bolster the dearth of stem cell research in the state.