Medical Device Daily Washington Writer

WASHINGTON — While the ban now has been lifted on federal funding for human embryonic stem cell (hESC) research, several questions remain, including what constitutes responsible and scientifically worthy stem cell research, which has been left to the National Institutes of Health (NIH) to decide.

The executive order, signed by President Barack Obama early last week, revokes an order signed by George W. Bush on June 20, 2007, and his presidential statement of Aug. 9, 2001, that limited federal funding of research involving hESCs.

The Bush administration allowed the NIH to fund hESC research on cell lines created before Aug. 9, 2001, but prohibited research on those created after that date. Obama's new order instructed the NIH to develop guidelines for "responsible, scientifically worthy human stem cell research, including human embryonic stem cell research, to the extent permitted by law."

The NIH was given 120 days to develop the guidelines and was told that in so doing, it must review the agency's existing guidance and "other widely recognized guidelines" on hESC research, including "provisions establishing appropriate safeguards," the executive order commanded.

NIH officials said the 120 days includes the posting of draft guidelines for public comment and finalizing the rules.

"NIH will do its part to implement the policy and to develop guidelines as expeditiously as possible to ensure both that the best science is funded and that the research is conducted in a responsible manner," said Lawrence Tabak, NIH's acting deputy director.

During a conference call with reporters last week, Tabak said the agency anticipated that funds from the $10 billion the NIH is getting as part of the $787 billion stimulus package "will be able to be used under the context of the new guidelines."

However, officials were unable to say how quickly any grant money would be available.

Officials also were unable to comment whether any of the funds could be used for hESC product clinical trials, such as the one being conducted by Geron (Menlo Park, California) the only company so far that has received FDA clearance for human testing of an hESC product.

"NIH is working very hard to establish a process and set of policies that would enable us to make sure that grants can be funded as quickly as possible," said Story Landis, director of the National Institute of Neurological Disorders and Stroke at the NIH. "But to be perfectly honest, given the fact that the executive order just came out and we have 120 days, it's really much too early to speculate," she told reporters.

The NIH's grant process, Tabak added, "can take varying lengths of time," depending on the nature of an application.

Tabak noted that the $10 billion stimulus funds must be used by September 2010.

"NIH is anxious to take advantage of the opportunity to expand research in human stem cells including human embryonic stem cells, and we will do whatever we can to expedite the development of the guidelines and the provision of grant funding," Landis said.

Tabak noted that the president's order "takes no position on specific scientific matters." In setting its guidelines, he said, the NIH "will undertake a very careful and deliberative look, and we also will have the benefit of public comment."

Tabak would not comment about whether he was surprised that the president's order was so open ended, only replying that the NIH was "very appreciative of the president's decision.

Landis acknowledge that the NIH had spent money and awarded grants under Bush's policy, which allowed tax dollars to be used for studies on 21 stem cell lines already extracted from embryos, as long as federal employees were not involved in extracting the cells.

"It was a start," she said, adding, "I think we were very clear that from a scientific point of view, more lines were needed and President Obama has now allowed us to expand this research."

Tabak noted that Obama's order does not address the 1996 Dickey-Wicker amendment, which placed a ban on federal funding for the creation of human embryos or research in which embryos are destroyed.

Jim Greenwood, CEO of the Biotechnology Industry Organization (BIO; Washington), said he expected Congress to take up legislation to overturn the Dickey-Wicker amendment. "The Dickey-Wicker amendment is bad policy," he said.

He noted that BIO plans to host a forum on March 24 for members of Congress and their staff on the science of hESC research and the policies that need to be in place on patent reform, follow-on biologics and reimbursement.

The lifting of the ban will have little, if any, immediate effects on the biotechnology industry or investment strategies for venture capitalists or biotech companies, said David Collier, managing director of venture capital firm CMEA Capital (San Francisco).

Stem cell research in general, he said, is an area that has not attracted a lot of venture funding, primarily because it is very early-stage research and venture capital investment is looking for returns on investments on a three-to-seven year time horizon.

VCs, Collier said, are looking for products that can gain approval or be on the market and generating sales or the generate sale of a company within that timeframe.

"Most stem cell approaches are realistically probably 10 to 15 years out before they are going to produce any real significant treatments," he said. "So that's why you haven't seen a lot of venture capital investment there."

If VCs wanted to invest over the past decade in companies engaged in hESC research "they certainly could have done it," Collier said.

"Bush was preventing federal money from going into that field, but companies could certainly have been funded with private money and could have gotten around any U.S. restrictions by operating abroad," he said. "So if people thought that there was realistically money to be made in the relatively short term, there certainly could have been a lot more investment in the area than there has been."

While Obama's order overall is a very positive development for hESC research by freeing up federal money for doing basic research, which could lead to companies and programs being "fundable" by venture capitalists in the next decade, "it doesn't change the fact that the whole area is really so early and so far out there that most VCs are not going to jump in," Collier asserted.

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