Federal Aid Boosts Stem Cell Job Market

Scientists with experience cultivating stem cell lines may profit from an expansion of private and public investment sparked by President George W. Bush's decision to provide limited federal funding for human embryonic stem cell (ESC) research. Tommy Thompson, secretary of Health and Human Services (HHS) last month suggested that a "ballpark" of $100 million in federal funding for human ESC research would be available for research starting in early 2002. This money will top the $250 million in federal funds for animal stem cell research and nonembryonic human adult stem cell research. "Now that the president has made the decision that the federal government is going to allow for grants, there's going to be a lot more research in this field with a lot more researchers coming in," Thompson said during an Aug. 10 news conference.1 Some observers caution against too much hype about new jobs and opportunities, noting the long lead time required for drug production. Nevertheless, analysts and government officials anticipate a major upsurge in research once the new funding kicks in. Lana Skirboll, associate director for science policy at the National Institutes of Health, says she expects the number of funding requests involving human ESCs to increase "asymptotically" with the availability of federal funds. "We're hoping we will get a lot of applications," Skirboll notes. NIH has been accepting research grant applications since Oct. 1. "The skill sets of how to increase stem cell numbers [are] going to be needed if this area is to grow good commercial products," explains Wei-Wu He, general partner and cofounder of Emerging Technology Partners LLC, a biotech venture capital firm in Rockville, Md. "Those skills will be quite in demand." The volume of job openings, he says, will depend on the demand for particular cell types and the difficulty involved in developing them. "I'm a believer that these types of stem cells will be commercialized," he acknowledges. "The industry probably won't be developed [for] 10 to 20 years, but that's quick, actually." Federal dollars will boost research privately as well, says Linda Sonntag, general partner of Axiom Ventures, a San Francisco-based venture capital firm. "If there's an increase in [federal] funding, then you will see significant activity" in stem cell research across the board, she adds. But she describes the government's $100 million funding as "trivial," suggesting instead a minimum of $250 million a year would be needed to boost therapeutic breakthroughs. "A hundred million dollars doesn't go very far," maintains Sonntag. Reports about the cost of this research remain sketchy because many researchers and companies have deliberately kept quiet about their work to avoid controversy. The work of CyThera Inc. attracted no headlines, for example, until after NIH revealed that scientists at the private, San Diego-based company had derived nine human ESC lines, more than had researchers at the University of Wisconsin, which is renowned for its pioneering stem cell discoveries. More than 200 private companies, universities, and nonprofit research institutions work in stem cell research, according to a directory compiled by Stem Cell Research News, a trade publication in Leesburg, Va. With only a few exceptions (such as Geron Corp, in Menlo Park, Calif., which has 100-plus employees), these recently founded private companies employ only handfuls of workers. Many others, such as StemCells Inc. in Sunnyvale, Calif., evolved from earlier gene therapy efforts. Though federal funding for human ESCs is expected to spur additional private research activities, many businesses and investors remain cautious. Alan Walton, senior general partner and chairman of the science advisory board of Oxford Bioscience Partners, a Boston-based biotech venture firm, recalls that companies that had invested in early-stage research in monoclonal antibodies or Interferon years ago ended up losing millions of dollars because of the lag time between discovery and marketability. Patents and licensing also worry some executives. NIH has signed licensing agreements for its intramural researchers (these are expected to also apply to NIH-funded extramural researchers), but commercial licensing agreements are far more complex and worrisome.2 "There will be problems all over the place," Edwards predicts. Thus far, any federally funded human ESC research will require the use of 64 cell lines owned by just 10 institutions. Controversy over patent and intellectual property issues "really limits what anybody will be able to do in terms of creating value independently of those other companies. Unless there are waivers by these companies for use of these lines, there is no upside for anybody else," Sonntag says. "We've been trying to get a hold of stem cells [for commercial research] for three years without success," Walton complains. "The people that have them don't want to sell them and, if they do, the prices are so astronomical that nobody will pay that amount of money. Their commercial demands are so outrageous you can't get ahead." Some venture capitalists say they will continue to keep an eye on stem cell companies, but they don't expect to invest heavily because big pharmaceutical companies show little interest in the field. The stem cell model "is a service model of individualized medicine, where you create cells for an individual and treat that individual," Sonntag explains. "This is completely counter to how big pharma functions." Instead, she expects the government to continue funding human ESC research. Before the president approved limited stem cell funding, many major universities, including Stanford, Harvard, and Johns Hopkins, were already expanding biomedical research capabilities, making it easy to increase or shift emphasis to human ESC research. Investigators at Harvard's cell and molecular biology department are collaborating with Boston IVF, a network of fertility clinics, to obtain surplus human embryos to provide human ESCs to scientists without cost or restrictions. The Howard Hughes Medical Institute will underwrite the initiative, which will not qualify for federal funding. Ted Agres (tagres@usa.net) is a freelance writer in Washington, D.C. References 1. T. Agres, "Stepping up for stem cells," The Scientist 15[17]:1, Sept. 3, 2001. 2. T. Agres, "Stem cells: Steady momentum toward funding," The Scientist 15[18]:8, Sept. 17, 2001.

Federal Aid Boosts Stem Cell Job Market

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