The BioBay Stem Cell Outlook: Congress to IP

The president of the leading biotech industry organization in the San Francisco Bay Area has a good-news, bad-news position on stem cell research.

The bad news is that the "potential" is more than a decade distant. The good news is that some companies have technology that may bear fruit sooner than the efforts of the California stem cell agency.

Matt Gardner, head of BioBay, discussed the biotech outlook with David Morrill, business writer for the Oakland Tribune, in a question-and-answer interview.

Here is what Gardner had to say on stem cell research:

"Q: One of the industry's hotbeds is stem cell research. Given the ethical and political hurdles, will the potential of this area ever be realized?

"A: Yes, but I think we are still a decade or more away from seeing what that potential looks like. Here again, I think California is in such a leadership position, being able to hopefully realize the promise of the stem cell institute (the California Institute for Regenerative Medicine) and that a tremendous amount of work needs to be done at the basic end of the research. And yet, even with that said, there are companies operating today in stem cell sciences that have technologies that may come to fruition much sooner. There are some early signs from a small number of companies that there is strong potential here. So we can only expect to see that grow as the science around stem cells is understood."

Gardner on intellectual property, a major issue facing the California stem cell agency:

"That's a huge issue for this industry. And the biggest thing to focus on there is that the U.S. Congress is going to visit this issue in 2007. What needs to be kept in mind here is that this industry is built on certainty in intellectual property. Anything that any of our public sector partners do to try and draw that into question will be harmful to this industry, no matter what it looks like.

"Most of these companies, when they are initially funded, are done so on a very clear picture of their intellectual property. Because it may be 15 years before you have product revenue based on the amount of time it takes to develop a product, run clinical trials and get the product approved, everything until then is a value based on intangible assets. Until you have your first product approved in this business, you are valued in the potential of the things you are developing. And the potential value of those intangible assets is all wrapped up in whether you own your intellectual property and how clearly you own it."

Gardner on Congress:

"In the next couple of years I think some issues will be brought up to a new level of discussion. One of the great opportunities is that Nancy Pelosi has a tremendous familiarity with the industry. And so in a new way, the industry has a profile with this speaker that it did not have before. To deal with someone in a leadership position that is committed to these solutions is a huge opportunity for us."