Matthew L. Wotiz, M.S. and Hakan Gadler, M.D., Ph.
4/1/2005
Like
financial and investment markets, and like fashion trends, disciplines of
biotechnology have the tendency to become “hot”. For approximately five years, since the isolation of the first embryonicstem
cell at the University of Wisconsin, the elements
of “trend architecture” have been aligning to make the next ten to fifteen
years the “age of the stem cell”.
The stem cell issue poses a unique metaphysical
paradox. On the one hand, a vivid scientific imagination can appreciate a
scenario whereby full comprehension of embryonic stem cells and the sequential stages of ontogeny generate a solution toa
multitude of medical problems and an unparalleled amount of learning. On the other hand, a vivid human imagination can appreciate the sublime
challenges inherent in abuse of the technology. Regardless of one’s stance on
the issue, successful development of
technological applications of stem cellswill not occur without political alignment. This article
seeks to address the potential for development of stem cell focused research
initiatives in New York, in light of the political context generated by success
stories occurring elsewhere.
The
stem cell paradox is a challenging political quagmire, with any firm stance
sure to stoke the flames of constituents on one side of the issue. Hence, upon
taking office in 2000, President George Bush made his best effort at striking a compromise, making limited federal funds
availablefor
research on existing embryonic cell lines. While
proponents of stem cell research reject Bush’s stance as a failure of proactive
thinking, Bush haseffectively left
the door open for individual states to chart their own course. A watershed
moment in the development of state-sponsored stem cell research initiatives
occurred in November 2004, when voters in California approved a ballot
initiative entitled Proposition 71.
Through this voter referendum, the
state of California issued $3 billion in bonds to finance $300 million
in stem cell research annually, through grants that will be awarded by a
governing body of thought leaders and industry representatives. At the time of
its passing, the ballot initiative was controversial not only because of the
subject matter, but also because of the size of California’s existing debt.
However, Proposition 71 drew the support
of politicians (including the recently-installed
Republican Governor Arnold Schwarzenegger), luminaries, and high profile
business executives (many of whom had contributed vast sums of money to market the proposition before Election Day).
Upon its passing, Proposition 71
created a guiding light for states to surpass the national restrictions on
funding stem cell research, embryonic and otherwise. As importantly,
particularly for those of us in New York, Proposition 71 created an opportunity
for high profile researchers and
fledgling companies to securefunds
for new research initiatives that were previously
impossible. Many of New York’s finest researchers,
including Gordon Keller (Mount Sinai), Mark Mehler (Albert Einstein), Malcolm Moore (Memorial Sloan-Kettering), and Ron Crystal
(Weill-Cornell) have suggested to the press that recruiters are calling, and
agree that Proposition 71 is a fantastic opportunity.
Fortunately,
most of New York’s researchers are
staying put…for now.
A
number of states
have followed California’s lead in attempting to obtain voter referendum
to make funds available for stem cell research. The Governors of Connecticut
and Massachusetts have made verbal
commitments for funding,although
with significant restrictions in the
case of the latter. Wisconsin and Illinois, with a host of
others, are presently working through a number of different financing
mechanisms (including a special tax on elective cosmetic surgery) for stem cell
research set-asides. Interestingly, the second most well-developed effort is in
New Jersey, where acting Governor Richard Codey has committed a minimum $150
million investment in stem cell research (the $150 million will come from unspent bond money; as much as$230 million more will be raised for directed
research grants). Plans are already
formulated for the Stem Cell
Institute of New Jersey, a facility
to be led by Dr. Wise Young and
headquartered in New Brunswick with a research staff of 150. As is the case in
California, the presence of readily available funds for
directed research creates the need to
deploy the capital to human hands, and Codey and others have already begun
recruiting some of New York’s talent,
including Albany Medical Center neuroscientist
Sally Temple.
Historically,
the state of New York has proactively dictated policy to the rest of the
country on issues ranging from labor
law to public entitlement programs. However, in the case of financingresearch
in the potentially groundbreaking
field of stem cells, NewYork
is presently facing the risk of
falling into a second tier of states
slow to react to the opportunity
created by the Bush WhiteHouse
policy. New York’s lack ofproactivity
on a state-wide basis on the issue is
surprising, given the powerhouse academic research facilities in New York City
and New York State, the concentration of existing healthcare enterprise, and effortspresently
underway by the Bloomberg and Pataki
administrations to enhance the visibility of New York’s life sciences business endeavors. It’s not that nothing is happening in New York; rather, stem cell ballot initiatives presently have support from powerful proponents within
both parties via proactive policy that
has been proposed in both the Senate and the Assembly. However, policy
proposals and results are entirely
different, and standing in the way
are a SenateMajorityleaderstaunchly
opposed to any sort of embryonic stem
cell research, a budget shortfall
for the state, and a governor who is
seemingly unsure of his position
on the is sue, perhaps because of larger
future political aspirations.
Specific
efforts for the development of a New
York stemcell
ballot initiative actually have a
significant amount of momentum.
The Assembly has proposedpolicy
for multiple years running, and
Assembly leader Sheldon Silver recently introduced thepossibility
of creating the New York State Institute for Stem Cell Research and
Regenerative Medicine, a non-profit
entity thatwould
regulate stem cell research and award
loans and grants to organizations and companies. The Institute would be funded through the Health Care ReformAct,
which would have availablestate
funds already earmarked for health
care initiatives. Similar policy concepts have been put forward by the Senate;
in fact, Silver’s ideas seem to be inspiredin large part by a ballot initiativeintroduced
in January by SenateDemocratic
leader David Paterson, which called for the
state to provide $1B to support stem
cell research. However, New York Democrats in the Senate and the
Assembly have nearly always been in sync with respect to the
need to fund stem cell research— initiatives
have previously been halted by Senate Republicans.Despite
previous setbacks, recent developments from GOP Republicans do provide cause for cautious optimism. In early March, Senator
Nicholas Spano introduced a proposal
that would provide $100 million in stem cell research grants annually
for 10 years. The grants would be
awarded by a state-sponsorednon-profit
organization similar tothe
Stem Cell ResearchInstitute
created through Proposition 71 in
California. In fact, Spano’s proposal
is identical
to Proposition 71 in every way except for the amount of capital being raised.
Although the proposal has the support of five other Senate Republicans (James
Seward, John Bonacic,
Vincent Leibell, Stephen
Saland, and George Winner), which has drawn praise from supportive Democrats
including Paterson, the 35 total chamber Republicans can
still block the measure from passage.
Furthermore, Senate Majority Leader
James Bruno is unlikely to allow any
legislation with the possibility of the exploitation of
embryonic stem cells (as opposed to
non-embryonic progenitorcells) to
reach Pataki’s desk. Regardless,
some Senate commentators believe
that Spano’s proposal and the support it has already received will result in placing the stem cell issue on the legislative calendar in some form or fashion.
To be
sure, statewide ballot initiatives
are not the only way to make funds
available for stem cell research. For
example, in an interesting twist,
the Starr Foundation(one of the
largest philanthropic organizations
in the US with approximately $3.5 billion in assets) announced on 23 May
that it would provide $50
million to three medical institutions
based in New York City (Weill Medical College at Cornell University,
Rockefeller University, and Memorial-Sloan
Kettering Cancer Center). The funds will be made available over the course of three years to finance research
Chart 1. Selected companies active in stem-cell research and commercializing
products.
projects involving stem cells
that cross the boundaries of all
three institutions. Although specific focus areas for the grants to be given have not been
clearly stated (i.e. embryonic vs. non-embryonic stem cell research), it has
been pointed out that Weill Medical Colleage has one of the world’s
largestfertility
clinics, with a ready supply of frozen embryos.
Nonetheless,
it can be argued that a statewide initiative is necessary to not only to give
New York visibility in a rapidly developing field, but also to ensure the
sustenance of available funds, as recurring foundation grants are not likely. As mentioned, New York has prevented
itself from hopping on the stem cell research “funding bandwagon”
thus far because of a divided chamber;
at the end of the day the Senate, Assembly, and Governor must agree on a plan
that will be put forward to voters. Proponents of stem cell
research have been growing in number, both within
the state government and outside, to advocacy
groups such as New Yorkers for the Advancement
of Medical Research (this group includes representatives from multiple academic
research centers including Albert Einstein and Columbia, and has called for
$100M for stem cell research annually,
to be funded by a tax on cigarette sales) and the general public. Opponents of stem cell research point to the fact that no existing
human therapeutics involve embryonic stem cells or derivatives thereof, nor do
any therapeutic candidates currently in human clinical trials, and they also
frequently remind their audience of the many failure points between
university/academic research and a profitable, successful company. Regardless
of one’s stance, there is no doubt that the answers to the scientific questions
posed by stem cells hold a vast amount of understanding for
the advancement of human healthcare, and the only way to address the
questions is through research.The remainder of this article will investigate
companies presently operating in the
field of stem cells, in hopes of providing
optimistic guidance for the potential economic benefit of state sponsored stem cell research to New
York.
The
possibility of developing cures for diseasesand
conditions which are untreatable today is an
extremely attractive prospect to not only most laypeople but also to the
biotechnology andpharmaceutical
industries. Many companies havebeen
formed tocommercializebasic
discoveries and many existing
companies are joining in. Chart 1 lists
selected companies actively researching anddeveloping stem-cell based treatments. It is
evidentthat
many different approaches to stem-cell based
therapy are being researched; not only are
companies working with cells of embryonic or ofadult
origin but the use small molecules to activate regulatory pathways is also being tried. Most of the companies in the chart are working
with adult-derived stem cells thereby
avoiding many of the moral issues.
Among
the more novel approaches is that of
MacroPore Bio surgery—to harvest autologous stemcells
from adipose tissue. The company is seekingto
harvest adult stem cells, cells producing growth factors, and endothelial stem cells to be used to treat cardiovascular diseases, bone
regeneration, wound healing, and
soft tissue augmentation. Sincethe cells are harvested from the individual
patient,MacroPore
is focusing on developing technologies
and products which will facilitate harvesting and reimplanting the cells in the
same patient.
Several
of the companies are using hematopoietic stem cells which can be used for bone-marrow transplantation.
ViaCell, a company which effected an
IPO early 2005, is pursuing a dual-pronged business strategy: offering a
service storing stem cells but also developing proprietary products. Among the former is a service preserving and
storing umbilical cord blood for possible use later in life
and the development of a program to store oocytes
for use in reproductive medicine. The company’s lead product—currently in Phase
I—is the use of stem cells from umbilical cord to repopulate the bone marrow
with neutrophils at time of bone-marrow transplantation and another program, to
use cardiac-derived stem cells to assist in the
recovery after a myocarardial infarction, is currentlyin
the preclinical phase. Aastrom Biosciences and
Osiris Therapeutics are both working with bone-marrow
derived cells. Aastrom is developing their
use for bonegrafting
and vascularindications
while Osiris
is focusing on their use for repairing
the meniscus in knee surgery. Both companies’ programs are in the early clinical
phase.
Athersys,
NeuroNova, and StemCells are seekingto
commercialize products and treatments based onstem
cells from other organs. Athersys is developing small-molecule and monoclonal antibody-based therapeutics
in addition to their preclinical program
in regenerative medicine which is targeting neurological diseases,
osteoporosis, and liver regeneration.
NeuroNova, one of the two Europeancompanies
in our chart, is working with stem cells derived the adult neural stem targeting treatment of several neurological diseases. Similar
to NeuroNova, StemCells has
identified a populationof
stem cells in adult neural tissue, stem cells which
can be used to treat a variety of neurological conditions. Both companies’
programs are at the preclinical stage.
Several
of the companies are working on stem cells of embryonic origin. Advanced Cell Technology is fusing
embryonic stem cells with somatic cells to reprogram the latter to use them to
treat a variety of diseases. Geron may be best known for its work on telomerase
inhibitors as anticancer agents but also has a program utilizing
embryonic stem cells in a variety of clinical
conditions, including neurodegenerative diseases,
spinal cord injury, diabetes, osteoporosis and osteoarthritis. The second
European company, ReNeuron, is developing cell lines consisting of stem cells
which can be transplanted into patients with Huntingdon’s disease, stroke, and
other conditions.
Celgene,
similarly to ViaCell, has a stem cell
banking program but also isolates stem cells fromplacental
tissue which are commercially availableas
wound dressing material. The company is also
pursuing the potential
use of various immunomodulatory agents, e.g., lenalidomide, to reprogram
cellular differentiation. Curis has focused its efforts on modulators of
the hedgehog and bone
morphogenetic pathways for differentiation of cells and stimulation of
regenerative pathways. The core program of our last company, AnorMED, is the
development of a stem cell mobilizer which
facilitates the movement of stem cells into
the blood for harvesting and use in transplantation in
patients who do not fulfill the usual
criteria for transplantation.
The
financial markets have not been too kind tothe companies with one exception—Celgene, the
reason being, of course, that the company is an
established specialty-pharmaceutical company withseveral
products in the market. The stem cell R&D
is therefore only a very small part of the market capitalization of the company
which currently stands at over $6B.
The other publicly listed stemcell
companies have seen their valuations declineduring the early part of this year, similarly to
manyother
biotech companies, as investors’ appetite for
risk has diminished.
Given
the relative lack of return on investment seen to date combined with the low
number of stem-cell based
therapeutics in clinical trials and/oron
the market, it can be stated that the commercialapplications
of stem cells, from both embryonic and
autologous sources, are yet to be proven beyond
doubt. However, there is no possibility of argumentagainst
the knowledge that stem cell research has
generated to date, and the scientific and medical
communities recognize that we are barely at the tipof
a revolutionary and potentially lucrative iceberg. The metaphysical challenge posed by embryonic stem
cell research has resulted in restrictive federalpolicy on the subject, which has a spillover effect
into even non-embryonic stem cell research.
However, the progress made to date on state-wideinitiatives
is encouraging in general, but New York
State has been slow to act. It is important for political leaders in New York to truly understand the
issues at stake. The availability of funds certainly creates the possibility of
financing groundbreaking research at New York academic and medical institutions
that have always been regarded as forward
thinking. It is also possible that the fruits of that research will createcompanies
that contribute to the state’s well being. Furthermore, the possibility for individual and state-wide collaborative efforts with
leading domestic and foreign
institutes working with stemcells
will be impossible without the availability ofresearch funds (keeping in mind the proximity ofNew
York to Europe in comparison to California).In
the event a ballot initiative does not succeed inreaching
the next legislative calendar, the risk of
falling behind will become even more tangible.
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