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Will We Lose in the Stem Cell Race?

Can we repeat that success in new areas of science, such as stem cell research? Many Americans assume that once the current restrictions on federal funding of embryonic stem cell research have been lifted, America will surge to the forefront. A quick glance at the field seems to bear that out. The fundamental patents underlying embryonic stem cell research were developed in the United States and are held by the Wisconsin Alumni Research Foundation (WARF). Many leading scientists are based in this country. With private philanthropy supporting institutions such as the Harvard Stem Cell Institute, and public money in states including California, New Jersey, Connecticut and Maryland supporting research, history seems poised to repeat itself.

But closer examination suggests that such confidence might be misplaced. If one analyzes the state of the industry along some of the same critical dimensions that contributed to our come-from-behind win in biotechnology, unnerving patterns emerge.

· While Stanford granted 73 nonexclusive licenses in less than a year, WARF has awarded just 13 licenses in eight years under economic terms that many believe have slowed the sector's growth.

· The ongoing political debate over the appropriate use of embryonic stem cells and the low level of government support have denied stem cell research the catalyst provided to biotechnology -- even as other countries are investing aggressively.

· The entry of individual states into the breach left by the federal government has helped drive research activity. But it has also created a patchwork of regulations and funding levels that constrains research collaboration.

· Expensive and restrictive enabling patents, political controversy and the absence of federal research money, coupled with a long time to market, have made venture capitalists reluctant to invest. In 2005, just over $100 million in venture capital went to stem cell ventures, compared with $500 million in biotech ventures at an equivalent stage.

· Constraining federal research support to a selected area -- such as certain cell types and lines -- is not a sensible research policy. Advances with stem cells from amniotic fluid and the pulp of baby teeth have been in the news recently, but as the authors of those studies point out, such cells, while promising, cannot take the place of embryonic cells. These restrictions divert valuable time and effort in a way that is not occurring in Britain or Singapore.

In short, the stem cell sector is at risk of experiencing a failure to launch at the national level. Yes, some progress is being made: WARF has just revised some of its licensing policies; venture capital activity has picked up recently; and academic research and clinical centers, disease foundations and patient-advocacy groups are adopting a more aggressive stance in breaking down existing barriers. But will this be enough? Or will foreign governments, using America's biotech success as a model, systematically encourage the development of stem cell research and, not satisfied with emulating our competitive performance, succeed in outstripping us?

Joseph Fuller is a founder of the Monitor Group. Brock Reeve is executive director of the Harvard Stem Cell Institute.

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