Monday, October 23, 2006

Do venture capitalists require previous government funding?

Further to discussion of the plans of ACT, David Morrill talked to the ACT CEO:

Q (by Morrill): Earlier this year, Advanced Cell Technology became the first company that focuses in stem cell technology to relocate its headquarters from out of state after California voters passed Proposition 71 in 2004. What were some of the reasons behind the move?

A: One of the magic issues that has driven the U.S. economy is that the government funds basic research, and then the venture capitalists and others begin to incubate some of the nuggets that can be commercialized. Well, that process evolved into some tremendous technology platforms. But in the case of stem cell research, the government decided not to, so the funding for this has been somewhat limited. When California voters decided to fill that void by passing Prop. 71, it was very apparent that if you were going to become a player in this industry, you had to be in an area where this capital would be deployed. We feel we bring some unique advantages to California because we have all this body of stem cell research. We know not only what certain processes need to be done, but we know what we shouldn't do. And we can take that and share it with the institutions here in the state of California.

IPBiz notes that the Wright Brothers, the inventors of the transistor, and the inventors of the integrated circuit did not rely on government funding.

Q: How will the fate of the funds from Proposition 71 impact ACT?

A: In part, these funds are really focused on nonprofit institutions, but we have collaborated with some of them and supported their efforts, and in that regard we will be kind of contributing to research efforts of their application. I'm under the impression that there will be a second wave of grants coming out near the end of the year that will address for-profit companies and specifically focus on this issue of translation.


Q: How has your report on generating human embryonic stem cells without harming embryos, the media attention and subsequent backlash affected your company? Where do you go from here?

A: There are several impacts that it has had. First, it has raised the profile of our company, which has created more liquidity in our stock. Second, just by the nature of that, it has allowed existing shareholders to reinvest in the company, which they did. And third, the strategy that was employed behind the research was to try and meet the standards by which President Bush had set the bar, if you will, for funding by the government. And we firmly believe that has been met, and we have seen responsible scientists and responsible publications affirm the fact that this appears to be something that needs to be considered. We believe we've met that standard.

Q: Some felt misled because embryos used in your research were ultimately destroyed. How would you respond?

A: Very simply. The experiment was not about whether embryos were destroyed or not destroyed. The experiment was designed to specifically determine whether if you extracted a cell realizing a well-known technique, can you create not only the test it was designed for, but also a new line which was an embryonic stem cell line. Everything else is already the state of the art. It was amazing when you read the national press about the subject when it came out. All of them got it right.


A piece by Terri Somers in the Union-Tribune suggested that John Reed was the most cited, of all scientists, for two years. This statement might be reconsidered.


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