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TITLE:  Stem cell companies struggle to survive
SOURCE: Associated Press/The San Diego Union - Tribune, by Paul Elias
DATE:   Nov 15, 2002

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Stem cell companies struggle to survive

In the latest blow to the already staggering field of stem cell research, a 
pioneering scientist is quitting Advanced Cell Technology and abandoning 
his work trying to clone human embryos. SAN FRANCISCO  In the latest blow 
to the already staggering field of stem cell research, a pioneering 
scientist is quitting Advanced Cell Technology and abandoning his work 
trying to clone human embryos.

Jose Cibelli is joining the faculty of Michigan State University, where he 
will set up a $1 million animal biotechnology lab.

For Cibelli, 39, it means giving up the experiments to which he's devoted 
the last five years of his life, since it's illegal in Michigan to create 
and destroy human embryos for research purposes.

Money, along with brains, is draining from the field, despite President 
Bush's vow 15 months ago to commit federal funds to research human 
embryonic stem cells, which hold the promise of healing a wide range of 
diseases and spurring regenerative medicine.

Private funding is nearly nonexistent  federal monies can only support 
research on existing stem cell lines  and obtaining the cells themselves 
remains exceedingly difficult even for top researchers because of political 
and intellectual property disputes or the poor quality of the cells 

Of the 78 stem cell colonies worldwide the Bush administration has said are 
eligible for federally funded research, only about a dozen are in good 
enough shape to experiment on. Even fewer  perhaps four lines  are being 
shared and sent to other researchers interested in breaking into a field 
already clouded with political, ethical and scientific questions.

The seven National Institutes of Health-approved lines in India, for 
instance, can't be shipped because of that country's laws. Geron Inc., 
which has seven lines at its Menlo Park, Calif. headquarters, won't ship 
any of its lines unless researchers agree to sign over any discoveries to 
the company.

(When properly nurtured, stem cells can theoretically replicate forever, 
creating a colony of cells known as a line. Scientists can then harvest 
cells from the line to supply researchers).

For now, researchers generally have but two suppliers to call on, the 
University of California, San Francisco or the University of Wisconsin. 
Both are overwhelmed by demand, slowing distribution.

All of this has investors shunning stem cell companies like the plague.

"It's going to take some time before this very important area of research 
makes it through the political obstacle course," said Steven Burrill, a 
biotech venture capitalist.

Advanced Cell, based in Worcester, Mass., temporarily suspended Cibelli's 
human cloning efforts for lack of money, and also sold its cattle-cloning 
subsidiary, Cyagra LLC, to raise cash.

Geron, the Menlo Park, Calif.-based industry leader, laid off a third of 
its work force and cut research spending to bolster its lagging stock price.

Edinburgh, Scotland-based PPL Therapeutics, which helped clone Dolly the 
sheep, recently announced its stem cell program had "no value" and 
shuttered it after finding no buyers.

To conserve cash, tiny CyThera Inc., which holds nine of the 78 government-
approved stem cell lines, shares a fax machine with a neighbor and leases 
excess space in its San Diego labs to other companies.

CyThera's cells, which have been stored in a company freezer, could be 
scientifically worthless, having never been sufficiently examined. An 
ownership fight over the cells, which were first isolated by researcher 
Jeanne Loring of Arcos Bioscience, was finally resolved in August.

"No research has been done on them," said chief scientific officer E. 
Edward Baetge of CyThera, which purchased Arcos. "It's still not clear that 
any viable stem cell lines are going to come out of it."

Still, the ambiguity surrounding CyThera's stem cells didn't stop the 
National Institutes of Health from adding them to the official list of 
lines eligible for federal funding.

Stem cell research, which involves the destruction of human embryos, has 
suffered politically from critics including the Roman Catholic Church and 
women's rights groups. The controversy has kept would-be investors on the 
sidelines, and made some companies reluctant to discuss their work publicly.

Organizers closed an influential stem cell conference in San Diego to the 
media last month for fear of bad publicity.

At Advanced Cell, which is still determined to clone human embryos to 
harvest stem cells, chief executive Michael West said he lost at least one 
potential investor in the political fallout over human cloning.

Still, West said he is close to announcing a new investment in Advanced 
Cell, and others in the field insist the work will ultimately pay off in 
treatments and cures. They hope that by controlling how stem cells create 
all of the other cells that give rise to the human body, they can grow 
replacement tissues and organs for the ailing.

"This will happen in time," Cibelli said. "It's a bad climate for 
biotechnology in general, but this will pass."


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