February 22, 2024

Why no one is making money with stem cells

An article in Nature Biotechnology by an venture capitalist paints a gloomy picture of commercial prospects for stem cell therapies. Lutz B. Giebel, of SV Life Sciences, says that companies developing cell therapies have disappointed investors in the past — and stem cell therapies, especially those using embryonic stem cells, are even riskier, apart from difficult intellectual property issues.

Amongst the hurdles to be faced are: developing a “well thought- through licensing and cross-licensing strategy”; developing off-the- shelf products, not just one-person-only transplants; and finding ways to ensure that patients will not reject the product. Giebel lists the range of risks involved: the technology risk of differentiating stem cells into fully functioning cells; the manufacturing risk of being able to create an affordable product; the risk of failure in clinical trials; the regulatory risk of facing a potentially hostile US Food and Drug Administration; the timeline risk of selling other products while the therapy is being developed; and finally the exit risk of selling out with a profit.

Giebel concludes that stem cell therapy is currently an unattractive investment. It needs “to be incubated in academia much longer before it is ready to graduate into a business that can commercialise the technology and deliver real products.” However, he foresees that the US$3 billion to be spent by Californian taxpayers over the next 10 years will produce real products which can be commercialised by investors.