Known as Proposition 71 and voted into California state law in 2004, the $3 billion stem cell initiative which created the California Institute for Regenerative Medicine is now being reexamined.

After encountering setbacks from a variety of sources which have included legal, economic and scientific challenges, a number of scientists are taking a second look at the embryonic stem cell initiative which was supposed to have accomplished so much but which instead has accomplished so little. As the result of a growing lack of investor confidence in embryonic stem cells, not only as a consequence of the ongoing ethical debate that surrounds embryos but also due to caution regarding the inherent medical risks that are unique to embryonic stem cells, only a small handful of companies in California are actually experimenting with embryonic stem cells. Despite predictions that Proposition 71 would create a job boom in the stem cell field which in turn would stimulate greater economic prosperity throughout the state, as well as medical cures for disease and injury, in fact the exact opposite has proven to be true, and currently the California Institute for Regenerative Medicine has even put a freeze on the distribution of its scheduled funding. Additionally, the promise of a clinical therapy ever actually being developed from embryonic stem cells seems to be an unrealistic dream that is retreating further and further away with each passing day.

According to Alan Trounson, president of the California Institute for Regenerative Medicine, “I would have expected there to be more interest.”

In 2004, proponents of Proposition 71 predicted that the new law would generate more than 2,000 jobs per year during the first 5 years, but in fact there is no demand for such jobs due to a scarcity of companies that are willing to work with embryonic stem cells. Although Geron of Menlo Park has been predominantly in the news lately, with their FDA approval for the first clinical trial ever to be conducted with human embryonic stem cells, in actuality Geron is not as large an organization as people might think, with only 140 employees according to its latest annual report. Furthermore, Geron invested more than $150 million over 13 years in preliminary research in order to win FDA approval just to begin clinical trials with embryonic stem cells, and many more years of expensive clinical trials will be required before the FDA can even consider approving the marketing of an actual therapy. Since most of Geron’s preclinical research was conducted prior to Proposition 71 and therefore prior to the creation of the California Institute for Regenerative Medicine, most of Geron’s funding came from alternate sources that were unrelated to the Institute. Even if Geron is successful in bringing a new stem cell product to market, years from now, companies such as Geron and Advanced Cell Technology hold the patents for their proprietary technology, which is a disincentive to other biotech entrepreneurs who would be at a competitive disadvantage if they were to try to enter the field. In fact, most of the $635 million distributed thus far by the California Institute for Regenerative Medicine has been awarded to university laboratories or to other nonprofit organizations for basic research on embryonic stem cells, and not to biotech companies, which have received less than $6 million from the Institute. There have also been lawsuits challenging the constitutionality of the Institute, which resulted in a further restriction on the distribution of grant money until the Supreme Court dismissed the lawsuits in May of 2007. Additionally, there remain a number of safety concerns about embryonic stem cells, especially in regard to teratomas, which are a specific type of tumor that embryonic stem cells must, by definition, form, and such concerns have cast serious doubt on the safety and efficacy of embryonic stem cells as a clinical therapy. For those few businesses which are willing to delve into embryonic stem cell research, they have found even fewer investors who are actually willing to back them, due to the unknown timeline at which a profit might ever be attainable.

According to Robert Lanza, chief scientific officer of the Los Angeles-based stem cell company Advanced Cell Technology, “Raising money has been almost impossible.” In 2006, Advanced Cell Technology relocated its headquarters from Worcester, Massachusetts to Los Angeles in order to take advantage of the state funding for embryonic stem cell research that was enacted into state law with the passing of Proposition 71. Since then, Advanced Cell Technology had been working toward the development of an embryonic stem cell therapy for diseases of the eye, but was forced to halt its research when the company encountered financial problems and adequate funding was not forthcoming.

Meanwhile, in sharp contrast to embryonic stem cells, adult stem cells are already being used as real therapies in real clinics around the world, treating real human patients with real diseases and injuries – while also paying a hefty dividend to investors. Consequently, an increasing number of scientists, investors and patients alike are turning their attention to adult stem cell therapies, since embryonic stem cells have yet to prove any therapeutic viability. Even if restrictions on federal funds are lifted by the new administration, the ethical controversies and the medical dangers, especially that of tumor formation, which are inherently problematic in embryonic stem cells, are enough to dissuade many biotech entrepreneurs from having anything to do with embryonic stem cells.

Ethics and politics aside, embryonic stem cell research is a lengthy and risky process, which thus far has been frought with dangers, scientifically as well as financially.

The Glasgow-based stem cell company ReNeuron has been granted approval to begin clinical trials with its ReN001 product in the treatment of human corneal blindness. Approximately 20 patients will participate in the study, in which they will be treated with ReN001, which contains fetal stem cells harvested from aborted fetal tissue.

The trial will be conducted by Dr. Bal Dhillon and colleagues at the Princess Alexandra Eye Pavilion in Edinburgh, in collaboration with the Gartnavel General Hospital in Glasgow. According to Dr. Dhillon, “This study is the first of its kind anywhere in the world and it is exciting to be involved in such groundbreaking work. I probably see two or three new cases of corneal disease every month. On a larger scale, it’s a significant problem.”

Although preclinical animal studies were successful in testing the product, there are still a number of concerns among scientists, doctors and patients alike over the safety of fetal stem cells, not the least of which is a concern over the risk of teratoma (tumor) formation, in addition to immune rejection, biological contamination and genetic mutation, among other problems. It is precisely because of medical risks such as these that requests to begin similar human clinical trials in the U.S. were denied by the FDA.

Successful preclinical studies in animals are not always an accurate indication of a succesful therapy for humans, a prime example of which was the tragedy in the 1950s of thalidomide, the teratogenic effects of which were not evident in animal studies, although in humans approximately 10,000 children with severe malformities were born throughout the world to mothers who had taken thalidomide as an antiemetic to combat morning sickness during pregnancy. Precisely because of egregious preclinical failures such as the thalidomide disaster, from which victims suffered throughout their entire lives with extreme and untreatable deformities, the U.S. FDA remains justifiably cautious in its insistence upon proof of safety as well as efficacy before new therapies are allowed to advance to the human clinical trial stage.

Meanwhile, in the United Kingdom, ReNeuron has received permission from the U.K. Medicines and Healthcare Products Regulatory Agency to begin human testing of its proprietary fetal stem cell product, the cells of which have been expanded from the brains of aborted human fetuses and will now be injected directly into the affected areas of the brains of stroke victims, in the hopes of regenerating neural tissue. The clinical trials will consist of 12 patients divided into 4 groups of 3, who will be administered the fetal stem cells between 6 and 24 months after having suffered a stroke. The first injection will contain approximately 2 million fetal stem cells, with subsequent treatments being increased to 20 million fetal stem cells per injection. Follow-up will include monitoring for a year.

According to Dr. Keith Muir, who will lead the clinical trial, “If it works, as it has done in animal model systems, it may allow new nerve cells to grow, or regeneration of existing cells and actual recovery of function in patients who would not otherwise be able to regain function.”

The procedure remains highly controversial not only because of the scientific and medical concerns already cited above, but for ethical reasons as well. Nevertheless, from a purely scientific perspective, the U.S. FDA is not the only organization in which individuals have expressed their doubts and concerns about the safety of embryonic and fetal stem cells, since many scientists who work in private industry do not wish to waste money on the development of a therapy that might never yield a profit, and similarly many physicians do not wish to risk being sued for malpractice by treating their patients with a “therapy” that is known to cause tumors. Additionally, an increasingly savvy and informed patient base is also aware of the fact that adult stem cell therapy already exists and does not pose any of the risks that are inherent in embryonic and fetal stem cells, neither of which have even been tested yet as a clinical therapy for humans. Even if the fetal stem cells are proven to be capable of regenerating damaged neurological tissue in humans in the upcoming clinical trials, that alone is not enough to win approval as a therapy, since safety must also be proven. Neither safety nor efficacy by itself is a sufficient condition for therapeutic viability, though both together constitute a necessary condition. There is not much point, however, in pursuing a therapy in which the risks outweigh the benefits – especially when an alternative option, namely, adult stem cell therapy, already exists and is already in clinical use and has already been proven not to carry any risk of teratoma formation nor any of the other risks that are inherent in embryonic and fetal stem cells.

ReNeuron was originally spun-off from the Institute of Psychiatry at King’s College London in 1997. At the news of its approval to begin human clinical trials with fetal stem cells, ReNeuron’s stock jumped 174%, from £2.75 to £7.88, after having fallen precipitously from its 52 week high of nearly £20 per share in March of 2008.

Scientists in Brazil have used adult stem cells harvested from umbilical cord blood to treat muscular dystrophy.

Rather than referring to one disease, the term “muscular dystrophy” actually refers to a group of hereditary disorders of genetic origin and varying severity, depending upon the degree to which the dystrophin gene is defective or absent. Located at Xp21, the dystrophin gene codifies dystrophin, an essential component in the protein complex that is responsible for the membrane stability of muscle cells. A complete absence of the gene causes more severe forms of the disease such as the Duchenne form (DMD), whereas the presence of a defective gene causes milder forms of the disease such as the Becker form (BMD).

In this study, which was condcuted by Dr. Tatiana Jazedje and colleagues at the Human Genome Research Center in Sao Paulo, Brazil, the scientists took CD34+ adult stem cells derived from umbilical cord blood and established co-cultures which combined the stem cells with myoblasts from a patient who had been diagnosed with DMD. The CD34+ stem cells were already known to differentiate into muscle cells and to express dystrophin in vivo, but Dr. Jazedje and her colleagues were the first to show that this particular progenitor cell is also capable of regenerating muscle dystrophin in vitro, as the stem cells were found to have differentiated into mature myotubes after 15 days, while dystrophin-positive regions were also detected through immunofluorescence analysis.

As the authors concluded in their article, “Our findings showed that umbilical cord blood CD34+ stem cells have the potential to interact with dystrophic muscle cells restoring the dystrophin expression of DMD cells in vitro. Although utilized within the context of DMD, the results presented here may be valid to other muscle-related therapy applications.”

Stanford University scientists have announced the discovery of adult stem cells that are located in human testes and which exhibit a capacity for differentiation that appears to be similar to that of embryonic stem cells.

The discovery is the result of studies that were conducted on 19 men who were treated for infertility by Dr. Paul Turek of San Francisco. Testicular tissue samples that were obtained from the men yielded abundant quantities of stem cells which were later found to exhibit multipotency in their differentiation capability when injected into mice.

The discovery is similar to previous reports that were published in the journal Nature by a team of scientists at the University of Tubingen in Germany, who had reported similar results from stem cells isolated from the testes of mice and which were found to differentiate into a variety of mouse tissue types. This latest study, however, is among the first to be conducted in humans.

According to Dr. Renee A. Reijo-Pera, who led the team of scientists, “We have a battery of tools now and we’re moving rapidly down the long road toward their use in human medicine. I’m really amazed at the progress the science is making, and I’m certain we’ll be ready for clinical trials of some stem cell therapies within the next 5 to 10 years.”

According to Alan Trounson, president of the California Institute for Regenerative Medicine, the primary focus of which is funding for embryonic stem cell research, “This is extremely interesting and important work.”

Whether or not men will be eager to donate testicular tissue for the harvesting of stem cells, however, is yet to be seen.