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February 10, 2006 - BioWorld Today
Diversified Risk Important To Investors In
Stem Cells
By Randall Osborne
West Coast Editor
"Externalities, which have to do with society" -
as Anula Jayasuriya, a venture capitalist from
India, called the still-raging controversy over
stem cell research - became a topic of much talk
at this week's International Symposium on Stem
Cell Collaboration.
But there was more. Attendees wanting to hear
about the practical aspects of working in a
climate in which the mainstream media and those
opposed can whip the already-suspicious public
into a near frenzy got what they came for, too.
"People are investing in stem cell companies,"
said Jayasuriya, founding partner of Draper
Fisher Jurvetson Life Sciences India, which
backs U.S. firms that leverage "core strategic
functions" in that country.
"That being said, there are many restraints,"
she added, pointing to parallels with gene
therapy, though in a more acute form.
"There is a perception that venture capitalists
are risk takers, but they're not," Jayasuriya
said, and put academia in that role instead.
"Venture capitalists are actually quite
conservative" - which makes the funding picture
for stem cells even trickier, she said.
"The big issue is time and cost to development,"
Jayasuriya said. "We think that for stem cells
in general, it's a 10-year time frame. I don't
have a crystal ball, but I'm throwing out that
number. That's my working figure."
Venture investors, though, want liquidity in a
five-year to seven-year time frame, she said, so
stem cell efforts might be explored in areas
other than therapeutics, such as tools - that
is, artificial tissues made for the purpose of
testing drugs.
"That is an area where the returns are not as
high as having a therapy," Jayasuriya allowed,
but the risks are reduced, as in research
related to chemicals or proteins that turn on
and turn off stem cells.
"It's not that we say. 'Stem cells, no,'" she
said. "We try to see where in the picture can it
fit."
Jayasuriya cited ViaCell Inc., of Cambridge,
Mass., as a stem cell firm that has diversified
risk into research and a stem cell bank that
represents another part of the business,
generating "most of their revenue. It's
important to break it down into different
areas."
ViaCell made news in December when the FDA
lifted its clinical hold on the company's Phase
I study evaluating CB001, a cord blood stem cell
product for hematopoietic stem cell
transplantation in cancer patients.
The company said it would submit information to
the investigational review boards at each study
site to request immediate resumption of Phase I
enrollment. Last fall, with two cases of Grade
IV graft-vs.-host-disease in cancer patients,
ViaCell suspended enrollment in the trial. (See
BioWorld Today, Sept. 20, 2005.)
First established in 1994 under the name t.
Breeders Inc., ViaCell changed its name in April
2000 after acquiring Viacord Inc., the private
umbilical cord blood-banking business, and went
public early last year, raising $52.5 million in
January by selling 7.5 million shares at $7
apiece. (See BioWorld Today, Jan. 24, 2005.)
"What investors like is clarity - a path," along
which results are achievable. Jayasuriya said.
"If you do this, you get this. It's very scary
to invest in something and the world changes,
all the rules change, and you're stuck. That is
something we can't afford to do."
The stem cell conference, held on the University
of California at San Francisco campus and
organized by the Women's Technology Cluster,
started and ended Tuesday.
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