FOOL PLATE SPECIAL: An Investment Opinion
Human embryo stem cell research promises a revolution for organ transplants, cancer and other disease treatments, and drug candidate testing, but political opposition led Congress in 1996 and 1998 to ban federal funding for stem cell research. Today the U.S. National Institutes of Health approved funding guidelines it believes are legal. The controversy won't end, but the NIH action addresses a key uncertainty for the biotech sector.
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Benefits and burdens
Stem cells in embryos are undifferentiated, but they grow into every other kind of cell in the body. Think of your blood, muscle and nerve cells as "stemming" from stem cells. Plus, they are immortal until differentiated (or you wouldn't be aging right now), and researchers have replicated this fountain of youth quality in the lab. The NIH believes stem cell research can lead to:
But controversy has dogged such government plans before. Patients-rights groups have urged funding, citing possible production of human insulin-producing cells for diabetics and nerve cells for Alzheimer's and Parkinson's sufferers. Other groups objected to the destruction of human embryos, notwithstanding the current limited use of embryos for in vitro fertilization (IVF).
In response, Congress in 1996 and 1998 banned federal funding for research on human embryos. This act and the continuing debate have shadowed private research efforts at biotech companies such as Geron Corp. (Nasdaq: GERN), prompting speculation over whether Congress would restrict the private sector as well.
The NIH guidelines
NIH will reportedly stay within the law by specifying that researchers can only use cells from frozen embryos that would otherwise be discarded. Also, the guidelines will prevent federal funding for destruction of embryos to get the cells. This means that privately funded researchers would do it and pass the useful cells to federally supported scientists. Both sides debate whether this separation of responsibility for the embryo's destruction solves any moral dilemma.
U.S. and U.K. struggle with issue
The NIH issued its proposal in December 1999, seeking public comment. Congress has not yet responded.
Not long before the NIH acted, U.K. officials rejected experts' advice to allow cloning of human embryo tissue for research. But last week, British experts strongly recommended that scientists be allowed to use stem cells from unwanted human embryos for research into new treatments for disease. In the U.K., human embryos up to 14 days old are already used for fertility research, under tight supervision. Reproductive cloning of humans will be banned. U.K. Prime Minister Tony Blair's government promises Parliament a vote on the final decision.
A federal spur to the biotech sector?
Responding to public concern, the U.S. and U.K. governments have created uncertainty for biotech companies and investors. For example, President Clinton and Prime Minister Blair's March statements on gene patenting guillotined biotechnology stock prices, many of which have only recently recovered. So any government steps to advance human stem cell research will be positive for biotech. If the federally funded Human Genome Project is any indicator, federal support for stem cell research will encourage more private investment, leading to private sector successes and opportunities for biotech investors.
Your Turn:
Is stem cell research promising or a pipe dream? Which, if any, biotech companies will benefit from a government green light? Let's debate on the biotechnology discussion board.
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