Science, 25. Feb 2000, Vol 287, No. 5457, page 1419
The Business of Stem Cells
Human stem cells have become one of the hottest areas in biotech
as several companies have jumped in to try to exploit them commercially.
Eliot Marshall
When biologist James Thomson announced 15 months ago that he had grown human embryonic
stem cells in a petri dish, scientists were excited about their potential uses in
medicine. These cells, which are capable of developing into almost any other type of cell
in the body, may one day provide an unlimited source of replacement tissues for treating
human diseases. Some elected officials were less enthused, however; they were more
concerned about the cells' source-human embryos. For now, at least, US. government rules
that protect the embryo have put the cells off limits to most publicly funded researchers.
But they aren't off limits for private companies. As a result, commercial enterprises now
have the field almost exclusively to themselves.
One company, Geron Corp. of Menlo Park, California, has secured a commanding position.
Geron not only bankrolled Thomson's work - gaining first rights to exploit the cells
commercially - but it also funded the isolation of a second type of very early or
"primordial" cell from human fetal tissue by John Gearhart of The Johns Hopkins
University. Now, the company is gearing up an intensive research program aimed at turning
both of these discoveries into therapeutic products. "We certainly have invested
heavily" in the field, says Geron CEO and president Thomas Okarma, noting that
exclusivity is the reward for "being smart and lucky."
While Geron has nabbed the early lead in exploiting embryonic and primordial fetal stem
cells, almost a dozen other biotech firms are elbowing their way into a crowded field to
develop therapies using so-called "adult" stem cells. Once thought to be less
versatile than primordial stem cells because they have already made a commitment to become
particular cell types, these cells are now turning out to have greater than expected
capabilities (see previous story). What's more, they pose fewer ethical problems because
they can be obtained from sources other than embryos or aborted fetuses. And the companies
using them argue that it may require less work to transform them into specialized cells
for transplantation.
The whole field has a gold-rush aura, with biotech companies betting heavily on their own
technologies and stock prices swinging on the latest announcements. Some companies are
already moving into clinical trials for products that, they are quick to point out, might
serve a vast pool of patients: the estimated 2 million people with severe osteoarthritis
or Parkinson's disease. "The great enthusiasm for stem cells," says Ronald McKay
of the National Institutes of Health (NIH), "is based on the idea that they can be
manipulated and have highly reproducible properties. I think it's a very important step in
biomedical research ... to be able to use them directly in therapy."
Embryonic potential
Much of this heady anticipation was sparked by Thomson's and Gearhart's success in
growing primordial stem cells. But academic researchers have been on the outside looking
in, wondering when - and under what conditions - they may get to work with the new cell
lines. For Gearhart's line, the answer is entirely up to Geron and its subsidiary, Roslin
Bio-Med of Midlothian, Scotland: Geron controls all uses of the cell line through an
exclusive license from Hopkins.
The company has less control over Thomson's cells, however. His institution, the
University of Wisconsin, Madison (UW), insisted on retaining the right to distribute the
cells to academics. On 1 February, UW established a new nonprofit subsidiary - WiCell
Research Institute Inc., directed by Thomson - that will provide stem cells to approved
applicants. The university has already received more than 100 requests, including 12 from
private companies, according to Carl Gulbrandsen, director of the Wisconsin Alumni
Research Foundation (WARF), which handles UW's patents.
Gulbrandsen says that anyone who wishes to use Thomson's cells will have to promise not to
share them with others, not to "mingle" them with human embryonic cells to make
a human clone, and not to attempt to grow them into embryos. WiCell will review each
applicant's research agenda annually, Gulbrandsen says, but WARF insists that "our
intention is to make these cells widely available and at a low cost for academic
researchers." Distribution hasn't begun yet, and federally funded researchers will
have to wait until government rules for working with embryonic cells are finalized
(Science, 10 December 1999, p. 2050).
Okarma also says his company won't try to go it alone in developing embryonic stem cells.
Geron intends to recruit outsiders to work with its scientific staff to "drive"
the stem cells into specific applications. In. December, Geron held a meeting with 45
researchers at the Asilomar conference center in Monterey, California, to begin building a
collaborative network. The conference brought together experts in cell regulation, gene
insertion, and nuclear transfer (cloning), Okarma says. But the agenda and guest list are
confidential.
Geron is also still very much involved in basic research. In the past year, Okarma says,
company scientists have produced cardiac muscle cells and three types of nerve cells from
the stem cells. They have also had "some success" in introducing new genes into
stem cells to control their differentiation into specialized cells. Indeed, Okarma
predicts, the first commercial payoff will come from identifying genes that either
initiate, or help maintain, the development of specific cell types. The information will
be useful, he hopes, in designing new therapies and screening candidate drugs.
New cells, familiar sources
Primordial cells like Thomson's and Gearhart's have captured most of the attention,
but adult stem cells have so far attracted far more investment. Many companies have
focused on 'the hematopoietic stem cells of bone marrow, which give rise to all types of
blood cells. Typical of this group are Nexell Therapeutics Inc. of Irvine, California, and
Aastrom Biosciences of Ann Arbor, Michigan, both of which are developing systems to
isolate such cells and grow them in large quantities, chiefly to aid in restoring cancer
patients' immune systems after intense radiation or chemotherapy.
Osiris Therapeutics Inc. of Baltimore, Maryland, has identified a different type of cell
in the supportive tissue that surrounds bone marrow, or stroma, called mesenchymal stem
cells. It has patented systems for isolating and producing these cells and launched two
clinical trials. Initially, Osiris is using the cells to help restore bone marrow in
cancer patients, as. the other companies are doing.
Meanwhile, because mesenchymal cells can differentiate into cartilage, muscle cells, and
possibly even some neuronlike cells, according to Osiris, the company is investigating
whether they can be used to replace cartilage in arthritis patients, fix damaged tendons,
and repair brain tissue. To help in these endeavors, Osiris's chief scientific officer,
Daniel Marshak, says, "we are making the cells available" to all nonprofit labs
through a private distributor, "so that everybody in the research community can move
the field forward."
Neural stem cells came on the scene later than the hematopoietic and mesenchymal cells,
but in the past year they have become hot items because of their potential for treating
patients whose brains have been damaged by disease or trauma. Indeed, investors are so
keen on this idea that each new neural stem cell discovery seems to attract immediate
investment. And the field is highly competitive.,
Layton BioScience, a small private company in Atherton, California, has already begun
clinical trials. It developed a line of cells derived from a germ line tumor that behave
like neural stem cells, according to CEO Gary Suable. In 1998, University of Pittsburgh
neurosurgeon Douglas Kondziolka transplanted the cells into the brains of 12 stroke
patients and later reported that brain scans revealed increased glucose uptake in the
affected area in several patients, an indication that the cells were alive and
metabolically active.
In late 1999, Layton licensed a different cell line derived from human fetal tissue and
patented by neuroscientist Evan Snyder of Children's Hospital and Harvard Medical School
in Boston. Snyder's team has shown that the cells will engraft in the brains of
experimental animals and is now testing them in models that mimic human diseases and
spinal cord injury in preparation for a potential clinical trial next year. Snyder
worries, however, that the field is becoming so hot that its credibility could be damaged
by hype, and he says he aims to help deflate exaggerated claims.
Another small private company, NeuralSTEM Biopharmaceuticals of Bethesda, Maryland, plans
to exploit human neural stem cells derived from embryos. Karl Johe, a former researcher in
McKay's lab at NIH and now at NeuraISTEM, discovered a method of isolating and growing
these cells in animals. NIH released the patent on the cells to NeuralSTEM, which was
founded by McKay, attorney Richard Garr, and another investor. Garr, the CEO, says the
company's first goals are to produce cells that can be transplanted into Parkinson's
disease patients and develop vectors that can deliver therapeutic proteins to the brain.
A similar project is taking shape on the West Coast, under the direction of Nobuko Uchida,
who previously worked in immunologist Irving Weissman's lab at Stanford University. Uchida
is now chief of neurology research at StemCells Inc., which Weissman helped found.
StemCells is a subsidiary of a public company known as CytoTherapeutics Inc., in
Sunnyvale, California, which announced last year that. it was shedding all other
investments to focus entirely on stem cells. It aims to commercialize Uchida's pending
patent on a method that uses surface markers to isolate adult neural stem cells from brain
tissue. Once the cells are in hand, the goal is to use them to treat patients with
neurodegenerative diseases.
Another company that aims to attack the same medical problems is Neuronyx Inc., which just
set up shop this month in Malvern, Pennsylvania, with backing from Hubert Schoemaker, the
former CEO of Centocor. Johnson & Johnson recently bought Centocor for $4.9 billion
(€4,75 Mio.), and Schoemaker is using some of the proceeds to create his new company,
which hopes to exploit embryonic stem cells for an agenda to be developed by research
chief Tony Ho, a neuroscientist recently hired from Johns Hopkins.
Although most of this new business activity is taking place in the United States, several
companies have sprung up elsewhere. ReNeuron, a small British company with a staff of
about 17, is trying to commercialize stem cell work by three faculty members at the
Institute of Psychiatry in London. With backing from the large biotech fund called Merlin
Ventures, ReNeuron has established a line of neuroepithelial stem cells derived from fetal
tissue. According to CEO Martin Edwards, the company hopes to begin transplanting these
cells into stroke patients in a clinical trial "around the end of 2000." Stem
Cell Sciences, based in Melbourne, Australia, which has ties to embryologist Austin Smith
of the University of Edin-
burgh in Scotland, is raising money for unspecified therapies using stem cells.
It is of course far too early to judge the likelihood of success for any of these
investments. But one thing is certain: We will be hearing a lot more about the promise of
stem cells in the next few years.