Money woes plague stem cell researchers
Companies at the cutting edge of cellular research to cure diseases and repair damaged body parts are growing increasingly frustrated by a lack of funding support.
The political debate over stem cell research has eased somewhat over the last year. But it may pick up again during congressional elections later this year and the lead-up to the 2008 presidential election campaigns, which may well include Gov. Mitt Romney, who opposed the Bay State’s stem cell bill passed last year.Both the federal government and a number of states have already passed bills to allow some types of stem cell research and establish public funding in limited areas. The federal government allows stem cell research with federal funds only on those stem cell lines created prior to Aug. 9, 2001.
Any other stem cell work must use non-federal funding, a gray area that has created a vacuum that set in motion an inter-state race to establish burgeoning stem cell industry research and development. California led the way with its Proposition 71, a 2004 law that established $3 billion in public funding over 10 years for stem cell work.
Other states, including MA in 2005, also passed bills to set guidelines for stem cell research. But public funding in the Bay State for that work has not followed. House Speaker Salvatore F. DiMasi has said the house should wait and see how private entities funded the research before establishing a bond or other type of funding similar to CA.
Aside from a few high-profile investments — including a multimillion-dollar gift to Harvard for stem cell work — that money has not come.
No American investors
With no funding mechanism in place and worries about how the federal government will handle the legality of stem cell research in the future, investors are skittish about the risks on their returns.
And that baffles Jan-Eric W. Ahlfors, founder of Total ReCord in Worcester. The 28-year-old WPI graduate with his three-year-old startup has found a way to re-grow spinal columns in rats with its signature product, a therapeutic called Regeneration Matrix.
Although the product does not use stem cells, Ahlfors discovered it while working with adult stem cells, including his own. Made from "substances" accompanying adult stem cells released in the blood, the therapeutic creates an environment in damaged areas of the body that promotes regeneration.
The treatment has had early success. In laboratory tests, injections of RM repaired surgically removed pieces of rats’ spines. In 12 weeks, the formerly paralyzed animals were standing upright. Within a year, Ahlfors hopes to start manufacturing and testing in humans.
But news of that success has not brought American investors to his door, he says. Status quo for the three years he has been around, he has failed to raise a single dollar from any American investor.
Europe is a different story. All of the funding he has received to date has come chiefly from across the Atlantic. And last month, Total ReCord completed another round of financing that netted $7 million, all from Europe, although Ahlfors declined to say from whom exactly.
Other investors are also helping to pay for a manufacturing plant being built in Finland, which will produce Regeneration Matrix for European clinical trials. And at this point, it seems that overseas money will be essential in moving Total ReCord from a research group to a full-fledged manufacturer.
So what’s keeping him here? Loyalty, Ahlfors says. "I feel comfortable here and I know the place. But when I don’t get any support, it almost feels likes I’m being told ‘get out of here, we don’t want you.’"
But soon there may be more. Total ReCord is in discussions now with MassDevelopment over that agency’s helping fund a manufacturing plant somewhere in the area that could serve as a new home base for Total ReCord, which now occupies a lab in Worcester’s Biotech Park. A strong commitment like that from an in-state group would help him stay here, Ahlfors says.
Love of California
Others firms are leaving for warmer coasts and pro-stem-cell funding. Advanced Cell Technology, Total ReCord’s downstairs neighbor, in February moved its headquarters from Worcester to Alameda, CA, although the company will still maintain its presence in Worcester with research activities headed by ACT Vice President Robert Lanza.
ACT says its relocation allows the company to draw funding from the California Institute of Regenerative Medicine, a disbursement arm created by Proposition 71.
The company declined to make any of its officers available for an interview. But in a press release announcing the move, CEO William M. Caldwell said, "With California taking the lead in support of stem cell research... this move will allow us to gain significant momentum."
ACT may have been considering the move for some time. In a Nov. issue of the journal Nature, Lanza blamed a lack of federal funding for what he says is the loss of U.S. preeminence in stem cell research to competitors in Europe and Asia.
Lanza also blamed restrictive policies upheld by the Bush administration for hurting ACT’s efforts to harvest stem cells from human embryos through a process called Somatic Nuclear Transfer, which involves inserting a person’s DNA into the nucleus of an unfertilized egg.
Small startups face hurdles
Startups looking for funding face difficult hurdles as they get off the ground, says Tanja Dominko of CellThera, which she founded in her Southbridge basement.
Investors are apprehensive because they lack the assurance that the federal government will not criminalize the creation of new embryonic stem cell lines and endanger their investments.
Dominko, who is currently negotiating with WPI on a possible collaborative research project, says public funding would help CellThera establish itself as a research business.
Kevin O’Sullivan, head of Massachusetts Biomedical Initiatives, agrees. To retain and encourage new companies, the state should create a similar funding mechanism as the one in CA, he says.
"The possibilities of regenerative medicine are endless," he says. "What we’re talking about is advancing medicine. That’s where the key to stem cells lies."
Yet not everyone sees the necessity of public funding.
The Massachusetts Biotechnology Collaborative, a non-profit advocacy group, has declined to promote state funding for stem cell research out of concern that other areas of biotech would be overshadowed.
Pat Larkin, head of the John Adams Innovation Institute, says that it’s still too early to gauge the gravity of Proposition 71 in pulling Bay State companies away.
"We cannot compete with the California initiative, but we have a very strong starting point in life sciences, an excellent pool of researchers and very talented entrepreneurs," Larkin says. "We should be able to respond to this threat with a relatively small investment and smart collaborative work of research institutions and industry here."
Kenneth J. St. Onge can be reached at kstonge@wbjournal.com
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