CHAPTER 6: COMMERCIAL INTERESTS IN STEM
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
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.
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
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 Chinaand in other ways Singaporeprovide
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 firmsor lawyershave
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.
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 basedas it has been in the United
Kingdomon 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
Focus on Fundamentals; The Biotechnology Report, 2001. Back
The current level of funding was given in paragraph 2.7. Back
Stem cell therapy: the ethical issues, Nuffield Council
on Bioethics, London 2000, p 12. Back