Will last week's $3-billion California stem cell initiative one day grow new business?
The massive bond measure known as Proposition 71 is designed to allocate nearly $300 million a year to scientific work with stem cells, particularly those derived from human embryos. The money is intended to transform California into an incubator for stem cell research, offering support to academic institutions and companies toiling in an area shunned by private investors.
For The Record
Los Angeles Times Wednesday November 10, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 54 words Type of Material: Correction
Stem cell funds -- A photo caption with an article in Sunday's Business section about passage of Proposition 71, California's $3-billion stem cell bond measure, said StemCells Inc. already had applied for bond funds. The company has not yet applied for the funds. Also, the article misstated the company's name as Stem Cells Inc.
A few biotech companies already have said they plan to apply for funds. One of them, Stem Cells Inc. of Palo Alto, is working on treatments for nervous system disorders and other ailments. Another, Advanced Cell Technology Inc., a Massachusetts company that made a splash two years ago when it cloned a human embryo, said it would open a laboratory in California to qualify for funding.
Stem cell research is controversial because it requires the destruction of human embryos, which some people regard as the earliest form of human life.
At the same time, embryonic stem cells are highly valued by scientists because they can turn into any type of cell in the body. Many people believe that the cells will one day provide cures for such illnesses as diabetes and Parkinson's disease.
Some leaders of California's biotech industry are optimistic that Proposition 71 funds eventually will produce commercially successful stem cell companies as academics spin off their discoveries. After all, the business got started in California more than 25 years ago, when scientists turned their inventions into enterprises such as Genentech Inc. of South San Francisco.
That's why Asset Management Co., a venture capital firm in Palo Alto, has placed its bets on stem cells: It has an investment in tiny Novocell Inc. of Irvine. And Asset Management's founder, Franklin Johnson, sank $1 million into the Proposition 71 campaign, said Graham Crook, a partner in the firm.
"There is going to be a big upswing in the number of tech- nologies using stem cell approaches," Crook said. "That will further venture investment" in the field.
But others worry that stem cells could be just another over-hyped technology.
Venture capitalist Kurt von Emster, a partner with MPM Capital in San Francisco, said stem cell companies remained a risky investment, despite the massive funding source coming into the field from California taxpayers.
