West Coast Editor
California's Proposition 71, which proposes $3 billion worth of stem cell research over the next decade - an average of $295 million a year - is likely to pass muster with voters, said Denis Rodgerson, CEO of NeoStem Inc., but that doesn't mean the program will be funded.
"I suspect it will hit problems," Rodgerson said.
The amount is almost triple what Democratic presidential candidate John Kerry has proposed spending on the research nationwide, and almost 12 times what the Bush administration spent last year.
"Three billion dollars is a lot of money and a lot of bonds, and California is not exactly strong at the moment," Rodgerson noted. The fight over funding comes later. For now, "both the quantitative and qualitative evidence suggest it's going to pass," he said. "The figures I see are 60-40 [in favor]."
If the measure is funded, NeoStem probably wouldn't see any of the money, Rodgerson said, since the bulk of it would go to academic institutions and a "small amount to selected commercial entities with a track record in the field."
Start-up NeoStem, of Agoura Hills, Calif., was founded in late 2002 and has 11 employees.
"We're certainly not sitting around waiting for Prop. 71 funds," he told BioWorld Today. The proposal is bringing attention to the research, though, and that's valuable. "Churning and agony related to the moral and ethical aspects" have put investors off.
"At the moment they're a little uncertain about where to go, and I sympathize with that," Rodgerson said. "To venture capitalists and ordinary investors, perception is everything," and if they understand the issues better, maybe the financing picture will change.
The measure provides the majority of its $3 billion for embryonic stem cell research, with a secondary focus on cord blood and adult stem cell work. A survey from NeoStem and market researcher Synovate found widespread confusion among Americans on stem cells, particularly the difference between adult and embryonic stem cells and the importance of the former in fighting diseases today.
Conducted among 1,182 Americans, the survey found 40 percent of respondents claiming to be "very" or "somewhat" familiar with the topic of adult stem cells. But of that sample, 68 percent wrongly believed adult stem cells are harvested from embryos and 65 percent incorrectly said adult stem cells do not have the potential to cure diseases as embryonic stem cells do.
"My sense is that the confusion doesn't impact tremendously and immediately on [the November vote]," Rodgerson said. "People are confused, but they're not aware of their confusion. It's only when you get down to the second, third or fourth level of the issue" that the misperceptions become clear.
In April, NeoStem opened its first commercial adult stem cell bank in Los Angeles to collect stem cells from individuals looking to store cells on a pre-disease basis.
The company first wanted to "establish a southern California footprint" and get its business model working, Rodgerson said.
"We've pretty much succeeded in doing that," he said. "Our next endeavor is related to scaling the model and pushing into other areas." NeoStem, which subcontracts the collections, aims to "get into the major markets on the East Coast," Rodgerson said. The company also will be pursuing autologous stem cell applications and therapies.
"We're in business, we're open, we have a revenue stream," he said. "We're certainly looking for more investment," which might come with more awareness such as that inspired by Proposition 71, he added.
"Stem cells are going to be huge in the next 10 years, and regenerative medicine is going to be huge," Rodgerson said. "We're at the very early stages of this."