West Coast Editor

"Externalities, which have to do with society" - as Anula Jayasuriya, a venture capitalist from India, called the still-raging controversy over stem cell research - became a topic of much talk at this week’s International Symposium on Stem Cell Collaboration.

But there was more. Attendees wanting to hear about the practical aspects of working in a climate in which the mainstream media and those opposed can whip the already-suspicious public into a near frenzy got what they came for, too.

"People are investing in stem cell companies," said Jayasuriya, founding partner of Draper Fisher Jurvetson Life Sciences India, which backs U.S. firms that leverage "core strategic functions" in that country.

"That being said, there are many restraints," she added, pointing to parallels with gene therapy, though in a more acute form.

"There is a perception that venture capitalists are risk takers, but they’re not," Jayasuriya said, and put academia in that role instead.

"Venture capitalists are actually quite conservative" - which makes the funding picture for stem cells even trickier, she said.

"The big issue is time and cost to development," Jayasuriya said. "We think that for stem cells in general, it’s a 10-year time frame. I don’t have a crystal ball, but I’m throwing out that number. That’s my working figure."

Venture investors, though, want liquidity in a five-year to seven-year time frame, she said, so stem cell efforts might be explored in areas other than therapeutics, such as tools - that is, artificial tissues made for the purpose of testing drugs.

"That is an area where the returns are not as high as having a therapy," Jayasuriya allowed, but the risks are reduced, as in research related to chemicals or proteins that turn on and turn off stem cells.

"It’s not that we say. ‘Stem cells, no,’" she said. "We try to see where in the picture can it fit."

Jayasuriya cited ViaCell Inc., of Cambridge, Mass., as a stem cell firm that has diversified risk into research and a stem cell bank that represents another part of the business, generating "most of their revenue. It’s important to break it down into different areas."

ViaCell made news in December when the FDA lifted its clinical hold on the company’s Phase I study evaluating CB001, a cord blood stem cell product for hematopoietic stem cell transplantation in cancer patients.

The company said it would submit information to the investigational review boards at each study site to request immediate resumption of Phase I enrollment. Last fall, with two cases of Grade IV graft-vs.-host-disease in cancer patients, ViaCell suspended enrollment in the trial. (See BioWorld Today, Sept. 20, 2005.)

First established in 1994 under the name t. Breeders Inc., ViaCell changed its name in April 2000 after acquiring Viacord Inc., the private umbilical cord blood-banking business, and went public early last year, raising $52.5 million in January by selling 7.5 million shares at $7 apiece. (See BioWorld Today, Jan. 24, 2005.)

"What investors like is clarity - a path," along which results are achievable. Jayasuriya said. "If you do this, you get this. It’s very scary to invest in something and the world changes, all the rules change, and you’re stuck. That is something we can’t afford to do."

The stem cell conference, held on the University of California at San Francisco campus and organized by the Women’s Technology Cluster, started and ended Tuesday.

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