01 Dec 2004
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The Future of Stem Cells

by Garry Emmons

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Stem cells have been much in the news recently. But the hot-button ethical and political questions currently surrounding this area of research may ultimately prove moot, if the past is any guide. Business history shows that if the desire for a product or service is sufficiently widespread and intense, markets tend to form, with supply responding to demand, in spite of controversy. Thus, with the potentially huge, lucrative, and beneficial industry that could emerge from embryonic stem-cell research, the question seemingly becomes when, not if.

“Prohibitions and opposition to embryonic stem-cell R&D will almost certainly fade,” explains HBS professor Debora Spar, “because determined would-be buyers and sellers will eventually constitute a market of their own, either by circumventing the law or by pushing the state to relax its restrictions. The future of stem-cell research is likely to be driven as much by markets as by science.” Experts say that, in the United States alone, those markets could offer therapies for tens of millions of people who are suffering from conditions such as diabetes, Parkinson’s disease, leukemia, spinal cord injuries, Alzheimer’s disease, and cardiovascular disease. In addition, apart from any possible therapeutic benefits, embryonic stem-cell research could play a central role in helping to understand the nature and development of disease generally.

Spar, the Spangler Family Professor at HBS, and others at the School have joined colleagues from six other Harvard schools and seven Harvard-affiliated teaching hospitals in contributing to the work of the new Harvard Stem Cell Institute (HSCI). Launched in April, the HSCI has a goal of moving from the laboratory to the clinic the University’s cutting-edge research on embryonic stem cells, which, unlike cord-blood or adult stem cells, are unique for their ability to develop into any cell in the body. (While the HSCI does not as yet have a permanent physical home, it may one day become HBS’s Allston neighbor as part of the University’s planned new campus on the south side of the Charles River.)

In August 2001, President George W. Bush (MBA ’75) announced a ban on federal funding for research on any human embryonic stem-cell lines created after that date. The decision reflected opposition to the use and destruction of embryos that have been created in vitro for the purpose of enabling infertile women to conceive. Excess fertilized eggs are routinely discarded by clinics at the conclusion of the in vitro process. Opponents say such practices are immoral because they destroy human life; advocates assert it is immoral to discard the embryos when they could help contribute to important medical advances. The effect of the ban, experts say, has been to slow research and drive it into areas where it is supported in patchwork fashion by academic institutions, individual states, private firms, and foundations.

Stem cells have been much in the news recently. But the hot-button ethical and political questions currently surrounding this area of research may ultimately prove moot, if the past is any guide. Business history shows that if the desire for a product or service is sufficiently widespread and intense, markets tend to form, with supply responding to demand, in spite of controversy. Thus, with the potentially huge, lucrative, and beneficial industry that could emerge from embryonic stem-cell research, the question seemingly becomes when, not if.

Peter Van Etten (MBA ’73) is president and CEO of the Juvenile Diabetes Research Foundation (JDRF), which has donated many millions to stem-cell research and strongly advocated that federal funds be used for embryonic stem-cell research. While Van Etten believes that the ethics debate is important, progress in research, he says, is paramount. “I’m frustrated and getting more frustrated by the day,” Van Etten declared at the JDRF’s annual conference in June. “As breathtaking as many of the scientific advances have been, the simple fact is that the pace of the research has been far slower than it should be.”

Van Etten is committed to improving the process on the business and management side. He is promoting the concept of “team science” and trying to increase the sharing of data and resources among institutions and researchers, where information traditionally has been closely held during the lengthy peer review and publishing process. He is also encouraging more collaboration among individual funding sectors to avoid funding duplication and to ensure that resources are focused on solving problems. “We also need a more goal-driven approach to research management, to pay more attention to achieving results rather than expanding knowledge for its own sake,” Van Etten says. “In part, we’re encouraging academics to team up with industry in the hopes that the private sector’s focus on measurable goals and actionable results rubs off.”

At present, the business of stem cells remains a fledgling enterprise. Spar says that figures for 2003 reveal that only ten U.S. private-sector firms were actively involved in embryonic stem-cell research, spending just $70 million. For its part, the U.S. government has budgeted less than $25 million this year for research on existing lines, even as other countries are investing many times that amount. Says Cynthia Fisher (MBA ’90), president and CEO of BioMed 20/20 Technologies, a biotech and medical information products firm, “The federal government’s lack of support and its insufficient funding of research create a domino effect that has an impact on all stem-cell inquiry, beyond embryonic work. Young scientists fear inadequate funding and uncertain career paths.

Private investors and entrepreneurs, for their part, steer clear because they don’t like added risk. They’re wary of government’s intentions, including the potential for chilling or punitive legislation.”

Fisher is the founder of Viacord and ViaCell, two Massachusetts companies that, respectively, are involved in the storing of individuals’ umbilical-cord blood and the development of pharmaceutical-grade products from placental and cord-blood stem cells for the treatment of some cancers, genetic disorders, and certain immune deficiencies. (Cord blood contains stem cells; individuals can bank their own until they, or close blood relatives, tap it for their own possible therapeutic use, such as treatment of leukemia or sickle cell anemia.) A board member and former chair of the Massachusetts Biotechnology Council, Fisher says states are stepping up to fund stem-cell work, partly in response to their constituents who want the jobs and businesses — as well as the medical advances — that stem-cell programs can provide.

Current business models seem no friendlier to stem-cell R&D than the existing political climate. But that could be on the verge of change, says Bruce Cohen (MBA ’82), president and CEO of Cellerant Therapeutics. His Palo Alto firm develops and commercializes the use of hematopoietic (blood-forming) stem cell–based products and therapies for the treatment of autoimmune and blood disorders, infectious diseases, and cancer.

“The economics of our industry are still driven by the ability to make pills for pennies that can be sold to tens of millions of people,” Cohen observes. “But if I can give you a one-time treatment that’s going to make your lupus go away for life, then I don’t have to be governed by the economics of pill manufacturing — especially when long-term medications may prove harmful over time, as recent headlines remind us. At some point, government, the public, and health-care payers will ask, ‘What are the economics of managing someone with lupus, MS, or diabetes for thirty years, versus curing them?’ That’s the point when you’ll see a change in approach, especially as advances in science and research suggest that cures have come within reach.”

Often lost in the emotional debate, Cohen notes, is the fact that “through the use of research into embryonic stem-cell lines, we could make great strides in our ability to understand the biology and etiology of disease. Important research into how disease happens is being hampered by restrictions on the use of stem-cell lines.”

Fundamentally, stem-cell research will be driven by an all-powerful force — the human instinct for survival. The deeply emotional desire to rid one’s self or one’s children of crippling or deadly disease is so powerful, and the perceived potential for stem cells to do just that so alluring, it is difficult to see the public allowing stem-cell research to be stymied. Helping in that push will be scientific discoveries and advances that will whet the appetite of the hopeful, render previously controversial procedures less necessary, and underscore how stem-cell research contributes valuable knowledge to other medical areas as well. As for public policy and business, the desire to reduce medical and health-care costs and the rewards to be reaped from the development of blockbuster therapies will further drive markets forward.

“Pharmaceutical companies will focus on treatments for major illnesses, positioning themselves in the mainstream,” predicts Debora Spar. “Venture capitalists will fund research into stem-cell science that runs in accordance with the wishes of society. Firms will cluster where the rules are transparent and where states are essentially accepting.” And ultimately, as has happened so often before when science and morality have clashed, life will go on — with remarkable new possibilities.

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