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A Site Selection Web Exclusive, August 2010
WEB Exclusive story

Stops and Starts

Francis S. Collins, M.D., Ph.D., Director, National Institutes of Health

What’s the economic development impact of a
judge’s injunction against federal funding for
human embryonic stem cell research?


hen it comes to a territory's regulatory, taxation and permitting schemes, business likes certainty, because that begets properly responsible short- and long-range planning.

That's a familiar trope in corporate strategy circles. But it's a concept unfamiliar to researchers, institutions and companies working in biotech research involving human embryonic stem cells (HESCs). Only a couple years ago, because of federal funding restrictions, institutions had to literally cordon off separate facility footprints so that certain types of HESC research that weren't eligible for federal funding would not get caught accidentally using facilities and equipment that had garnered federal support.

Most of those researchers and organizations let out a big sigh of relief last year when the Obama administration lifted the restrictions, literally breaking down the walls between research efforts that might find benefit from cross-pollination of ideas and collaboration.

But last week more than $100 million in federal funding was once again hung on a question mark, when Judge Royce Lamberth of the U.S. District Court for the District of Columbia issued a temporary injunction blocking the federal government from implementing the current National Institutes of Health (NIH) guidelines governing HESC research. Reaction was fast from the scientific community.

"Human embryonic stem cell research holds great promise for the development of treatments for people threatened by potentially curable diseases," said Francis S. Collins, M.D., Ph.D., director, National Institutes of Health, in a prepared statement. "The recent court ruling that halted the federal funding of human embryonic stem cell research could cause irreparable damage and delay potential breakthroughs to improve care for people living with serious diseases and conditions such as spinal cord injury, diabetes, or Parkinson's disease. The injunction threatens to stop progress in one of the most encouraging areas of biomedical research, just as scientists are gaining momentum — and squander the investment we have already made. The possibility of using these cells to replace those that have been damaged by disease or injury is one of the most breathtaking advances we can envision."

The ruling came after a legal appeal by adult stem cell researchers and other plaintiffs, stating that the funding violates the 1996 Dickey-Wicker Amendment, which prohibits the use of federal money for research in which an embryo is destroyed. The government is appealing the ruling.

The 67 FY 2009 NIH grant recipients for HESC research included 14 in Massachusetts, 11 in California, seven in Washington, six in Texas, five in Pennsylvania, and four each in Maryland, New York and Wisconsin.

California Here We Come

As various subsets of grantees try to figure out whether or not their projects can continue, they also are figuring out where to look for private sources of funding. Some are also looking to states like California.

That's where the California Insitute for Regenerative Medicine (CIRM) was established five years ago in San Francisco, subsequent to the approval of Proposition 71 in Nov. 2004.

Just a few days before Lamberth's ruling, CIRM's governing board approved the concept for up to a $243-million round of funding to move stem cell-based therapies to clinical trial. The CIRM Disease

Team Awards II will be the second in a recurring round of funding intended to support multidisciplinary teams of researchers working toward filing a request to begin clinical trials to the FDA or completing an early stage trial within four years. This round will support up to twelve awards worth up to $20 million each. The request for applications will be posted in November.

To date, the CIRM governing board has approved 364 research, training and facility grants totaling more than $1 billion, making CIRM the largest source of funding for human embryonic stem cell research in the world. Estimates suggest that these grants already awarded will generate tens of thousands of job-years of employment in the state.

"With federal funding uncertain, CIRM will continue providing a stable source of funding for those researchers who have committed their labs to pursuing new therapies based on work with human embryonic stem cells," CIRM said in an August 23 statement. "Through this ongoing funding, CIRM expects to be able to continue to leverage California's investment through its Collaborative Funding Partners, grant-making agencies in seven countries and Maryland and New York."

Work on four "Disease Teams" CIRM funded last fall using HESC lines will not be interrupted by the court order. Each of those teams is working within a time commitment to file for permission to begin a clinical trial within four years, working in the areas of stroke, type1 diabetes, age-related macular degeneration (blindness), and amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease).

CIRM will also continue to fund research with other types of stem cells.

"The decision is a deplorable brake on all stem cell research," said CIRM President Alan Trounson. "Many discoveries with other cell types, notably the so-called reprogrammed iPS cells, would not happen without ongoing research in human embryonic stem cells. This decision leaves CIRM as the most significant source of funding for human embryonic stem cells in the U.S."

Even so, a CIRM survey of grantees conducted last week found that a third of the first 100 respondents said a freeze on NIH funding would have a significant impact on their research capacity, including suspension or cutbacks of programs.

Reached last Friday, CIRM spokesman Don Gibbons said he'd had two phones glued to his ears for the preceding 48 hours. He says among CIRM's programs is a recruitment grant whereby a university can seek $6 million for a recruitment package. It was used successfully recently to lure a prominent researcher from Duke University.

"Bringing this caliber of scientist to California also creates high paying positions to staff the labs, providing new jobs and tax revenue to the state," said Robert Klein, chair of the CIRM Governing Board, at the time of the award earlier this month to Robert Wechsler-Reya, Ph.D., who accepted a position as professor and director of the Tumor Development Program at Sanford-Burnham Medical Research Institute.

"Another one is under consideration as we speak," says Gibbons, "and my guess is there will be more coming in over the next few months. I'd suspect it would be easy to recruit people after this decision."

Sanford-Burnham Institute spokesman Josh Baxt says the organization is diversified, and its Florida site doesn't conduct stem cell research at this time. As for economic development reverberations, he says "I don't think we're particularly concerned on that level at this point. We're more concerned about the science. If you restrict funding, it's going to slow down the science."

Among the successful businesses in the state associated with stem cell research is Geron, a 175-employee biotech company developing first-in-class biopharmaceuticals for the treatment of cancer and chronic degenerative diseases, including spinal cord injury, heart failure and diabetes. In addition to its home base in Menlo Park, Calif., it has subsidiaries in Hong Kong and Edinburgh, Scotland. On July 30, Geron announced it had received notice from the U.S. Food and Drug Administration that it could proceed with the first human clinical trial of an embryonic stem cell-based therapy, initially for acute spinal cord injury, but also having possible applications (now under exploration) for in other degenerative central nervous system disorders such as Alzheimer's, multiple sclerosis and Canavan disease.

Cells on Campus

Gibbon says CIRM funding is not impacted by the judge's decision, but "about 25 percent of our grantees who work with embryonic stem cells also have federal grants, so they'll lose that synergy in their labs."

In the meantime, CIRM's institutional facility development support continues unabated, says Gibbons.

"We have given out 29 facilities grants, 17 of those shared labs," he says, describing the latter as small spaces, with up to a dozen hoods, that allow for the specialized environment that cell cultures require. They also have segregated space so they wouldn't run afoul of the previously existing federal restrictions. Now, says Gibbons, despite last year's apparent lifting of those previous restrictions, they may be glad they have that segregated space in order to deal with the new set of restrictions that may come into force.

The other 12 facilities grantees are either whole buildings (nine in all) or entire floors of buildings (the other three). Gibbons says three of the whole-building projects are now open, and another eight will open within the next year.

"These are whole buildings dedicated to stem cell research," he says. Universities had to contribute matching funds, but because the CIRM money is bond money, "we're not affected by the California budget mess either. We're actually improving the general fund. We can verify that the tax dollars coming in from these construction projects far exceed the interest payments on our bonds. We are actually growing the state's general fund, not making it smaller. We're actually growing the pool of money that education [funding] comes out of."

Story in Pictures

When stem cells like these human embryonic stem cells divide, each new cell has the potential to remain a stem cell or become a cell with a more specialized function, such as a muscle cell or a red blood cell. At right, scientists use fluorescence microscopy to study stem cells.
Photo courtesy of NIH
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