Select Committee on Stem Cell Research Report


CHAPTER 6: COMMERCIAL INTERESTS IN STEM CELL RESEARCH

6.1 This report concentrates largely on scientific and ethical issues arising from stem cell research. The Committee has, however, been aware throughout that commercial interests could, and to some extent already do, play an important part in the development of such research. Since we have received only a limited amount of evidence on this aspect of the subject and were unable to probe further within our time constraint, we simply identify the issues which have come to our attention. They are, however, of considerable significance for the legal and regulatory control of stem cell research, in which companies involved in stem cell research have an obvious interest.

6.2 Biotechnology is a growth industry. In their last annual European Life Sciences Report[43] the consultants Ernst & Young reported that by the end of 2000 the total value of Europe's publicly quoted biotechnology companies stood at 75 billion Euros, compared with 36 billion Euros a year earlier. According to a separate report, in the United States which has the largest number of companies in this field, market capitalisation of publicly quoted biotechnology companies fell over the same period (from $353.8 billion to $330.8 billion) but the number of public companies increased by 12.6 per cent, and in the two years to June 2001 biotechnology stocks outperformed internet stocks and the Nasdaq index.[44] Within Europe the United Kingdom has by far the most public biotechnology companies, although there are more private companies in Germany. Investor interest is considerable and evidently based on the assumption that future profits may be significant.

6.3 Only a small number of biotechnology companies engage in stem cell research. Most current work is being undertaken in academic research institutes, supported in the United Kingdom by government funding through the Research Councils and by the Wellcome Trust.[45] However, some work is done by the large pharmaceutical firms, even though it is not entirely clear at this stage what form the commercial applications may take, given that stem cell therapy will be a form of treatment rather than a drug-based therapy. Sir Richard Sykes, the Chairman of GlaxoSmithKline, in his evidence stressed the interest of these companies in fundamental research, even if applications are still uncertain. He identified three main areas where he saw the biopharmaceutical industry benefiting commercially from stem cell research: in producing new therapeutic and diagnostic agents; in developing standard stem cell lines; and in testing biopharmaceuticals (Q 409).

6.4 Of companies active in stem cell research, the Geron Corporation in the United States is widely regarded as a world leader. In the United Kingdom, the Celltech Group, which features in the FTSE 100 Index, conducts research in this area. The best known company in the United Kingdom in this field is probably PPL Therapeutics, the commercial arm of the Roslin Institute, which created Dolly the sheep. PPL Therapeutics is associated with the Geron Corporation. More recently, in November 2001, the American biotechnology firm Advanced Cell Technology (ACT) made headlines with the claim to have created a human embryo by CNR. (Similar claims were made by researchers in Seoul, South Korea in 1998.) Some regard such claims as public relations stunts in the competition for investors.

6.5 China—and in other ways Singapore—provide examples which deserve special mention. In China the government has encouraged a number of universities to invest heavily in stem cell research. In doing so universities have attracted not only public funds but investment by private companies like the Beijing Stemcell Medengineering Company. Leading Chinese researchers are often US-trained and have links with American laboratories. In Singapore, the Economic Development Board has provided initial finance for the Singapore Genomics Programme; it is said that by 2005 some $7 billion dollars will have been invested in relevant research. In both China and Singapore there is concern with ethical issues but also an interest to maintain the competitive advantage gained by light regulation.

6.6 It is not easy to gather solid data on trade in stem cells or stem cell lines. So far as research under present regulations in the United Kingdom is concerned, it appears that exchange of cell material takes place on a non-commercial basis between individual scientists or research units. However, there may be a less visible trade. It is unlikely that official figures of available stem cell lines give the whole picture.

6.7 Particular issues of both commercial and scientific significance arise from the patenting of research findings and stem cell lines. Not surprisingly, American firms—or lawyers—have been particularly effective in securing patents which make it costly for others to pursue certain lines of research. The Geron Corporation is said to be the leading owner of patents based on stem cell research.

6.8 The Nuffield Council on Bioethics has warned against the granting of over generous patents in the United Kingdom.[46] In his evidence to us Sir Richard Sykes took a more relaxed view. Pointing out that the broader the patent the more susceptible it would be to attack, he told us that he was satisfied that the present system maintained a reasonable balance between protecting the intellectual property rights of inventors and not stifling research (Q 412). We see the force in this argument. But patent litigation is expensive and only a major player is likely to have the resources to attack a patent held by a major biotechnology company. For a smaller player the economically rational decision may be simply to pay the licence fee. We share the concern expressed by the Nuffield Council that the technologies to produce and make use of stem cells should not be restricted by overly broad patents. We are not in a position to make a firm recommendation on this issue but it is clearly a matter that needs to be kept under review to ensure that there is a fair balance between the needs of research and the rights of patent-holders.

6.9 The Committee has drawn only tentative conclusions from this admittedly sketchy picture. Biotechnology is a growth area of business, and stem cell research plays a part in its development. Although considerable sums are available for investment in it, commercial returns on such investment are for the moment at best modest. Even the Geron Corporation appears to have made a loss in the field of stem cell research in 2001. This reflects the fact that most of this work is still at the basic research stage. Thus commercial interests are trying to position themselves for major profits in the future, but still face uncertain research prospects let alone uncertain therapeutic possibilities.

6.10 The regulatory regime for research on early human embryos needs to be based—as it has been in the United Kingdom—on careful assessment of the ethical, social and scientific considerations without regard to future commercial benefits. But, subject to that regulatory regime, commercial interests will have a key role to play in developing therapies and in bringing effective treatments to patients as quickly as possible, and they should be encouraged. In the United Kingdom there has been a fruitful collaboration between industry and research institutes and we strongly endorse the need for this to continue.


43   Integration, Ernst and Young's Eighth Annual Life Sciences Report, 2001. Back

44   Focus on Fundamentals; The Biotechnology Report, 2001. Back

45   The current level of funding was given in paragraph 2.7. Back

46   Stem cell therapy: the ethical issues, Nuffield Council on Bioethics, London 2000, p 12. Back


 
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