SYDNEY, Australia ¿ Australian companies holding stem cell lines reported a sharp increase in interest about using the lines for research, following U.S. President Bush¿s declaration on funding for stem cell research.

Both the listed Bresagen Ltd. in Adelaide and the private group ES Cell Pty. Ltd., which is based in Singapore but has operations in Melbourne, said that they have noticed a sharp increase in the number of inquiries concerning the stem cells held by them, since the declaration by Bush that only research into existing stem cells lines would be eligible for U.S. federal government research funding.

Australian research in this area is governed by a patchwork of state laws that mostly prohibit taking material from embryos left over from in vitro fertilization procedures (IVF) ¿ the main procedure for acquiring new stem cells ¿ but both companies have obtained cell lines by one means or another.

ES Cell is closely associated with the work of researchers led by one of the world leaders in IVF research, Alan Trounson, at Monash University in Melbourne, but ES Cell operations manager Trina King said that the company¿s six lines had been isolated by its researchers in Singapore.

She said ES Cell frequently agreed to provide research groups with stem cell lines on a ¿material transfer¿ basis. That is, if the research group using the material made a commercial discovery, then ES Cell has the right of first refusal to acquire the rights to the discovery.

¿We have agreements with 15 groups, with another 30 to 40 agreements in the pipeline,¿ she said.

King also said she had noticed an increase in the number of inquiries received by the company since Bush¿s announcement. But she also pointed out that there was nothing to stop private groups undertaking research on new cell lines. The announcement applied only to groups looking for U.S. government funding.

Bresagen Vice President Merra Verma said her company had received ¿lots and lots¿ of inquiries over its four cell lines and was ¿in discussions with a number of groups¿ over use of the lines.

All four of Bresagen¿s lines were acquired along with the company CytoGenesis in Athens, Ga., which Bresagen bought in September last year for A$11.4 million (US$6.5 million) in stock and options.

An Australian parliamentary committee is now considering recommendations for a federal law governing the harvesting of stem cells. There have been media reports that the committee will recommend that Australia regulates as does the UK, where the harvesting and cloning of stem cells is permitted for therapeutic uses. But the final report is not expected for several weeks. The government is not obliged to act on the committee¿s recommendation and any resulting federal law may not override the various state laws on the issue.