Stem Cells: Scientific and Commercial Challenges

1. Stem Cells:Scientific and Commercial Challenges Scott Stern Northwestern University and NBER Chicagoland Stem Cell Symposium February 2008

2. The Challenge of Stem Cell Research • Stem cell research is likely to be among the most important areas of scientific research over the next 50 years – we just don’t know exactly how • Stem cell research takes place in Pasteur’s Quadrant – where research is simultaneously of scientific and commercial interest • Stem cell research is global – local (or even national) efforts at regulation have had little impact on whether research is actually conducted but has had a significant impact on where the research is conducted and whether the research takes place in an effective institutional environment

3. While the isolation of stem cells was originally developed in relatively narrow applications, the potential applications are enormous. Despite a decade of work, however, the research is still a highly exploratory phase Bone Skin Kidney osteoblasts Nervous System Blood blood cells neurons astrocytes oligodendrocytes Vessels Liver endothelial cells liver cells Pancreas Heart Muscle insulin producing cells cardiomyocytes based on Martin F. Pera (2005)

4. Similar to many other cutting-edge areas of life sciences research, stem cell research is conducted in Pasteur’s Quadrant, where research is simultaneously of scientific and commercial interest The traditional distinction between science and technology fails when knowledge has both basic and applied value, with implications for discovery, development and commercialization.

5. Over the past several years, despite policy debates over Federal funding of basic research for publication purposes, an explosion in patent applications over various stem cell technologies Bergman and Graff, NBiotech, 2007

6. In Pasteur’s Quadrant, we will see fundamental scientific research in both the public and private sector, and both universities and firms will aggressively protect intellectual property through patents (or even secrecy!). More than 40% of all stem cell patent applications are by university researchers Bergman and Graff, NBiotech, 2007

7. The Geography of Stem Cell Research:While some countries support embryonic stem cell research, others – including the United States – have imposed complex restrictions on their use (or ability to get funding) NT =nuclear transfer Based on Martin F. Pera (2005)

8. Perhaps in part because of these policy differences human embryonic stem cell research publications has become increasingly globalized Owen-Smith and McCormick, NBiotech, 2006

9. Indeed, the emerging international stem cell research “network” seems to reflect strategies by researchers to avoid locations or research materials hindered by IP restrictions or onerous regulations

10. Some Implications • Stem cells are a “general purpose” research tool of fundamental scientific, commercial and therapeutic interest • We are unlikely to be able to forecast the precise ways in which these exciting new discoveries will impact clinical practice or the human experience • A proactive debate about the ethics of certain practices (and providing effective global institutions and policies) ensures that the ethical issues are debated in advance of having to make hard choices about alternative research directions • So far, most policy has been national and narrow – providing narrowly tailored exceptions for Federal funding that simultaneously undermine the effectiveness of the scientific research process while having little impact on the actual direction and conduct of research • The United States has begun to cede its early lead in stem cell research to other countries • A great deal of research is now funded by a patchwork of private or non-profit funders who may actually impose fewer ethical obligations or requirements on researchers