Wisconsin and California locked in stem-cell struggle

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Wisconsin State Journal

A showdown over stem cells is taking shape between Wisconsin and California, and the weapons the players are wielding are patents, lawsuits and billions of dollars.

The impact of the outcome isn’t limited to the two states, parties involved say. The confrontation could greatly influence the global development of stem-cell therapies, which might someday benefit millions of patients.

On one side is the Wisconsin Alumni Research Foundation, which holds two wide-ranging patents on embryonic stem cells that could bring in millions of dollars. In 1998, UW- Madison researcher James Thomson was the first person to successfully grow the cells in a laboratory.

On the other side is the California Institute for Regenerative Medicine, a state entity, which plans to distribute $3 billion in stem-cell research grants in California in coming years. Voters approved the state funds two years ago in response to federal funding restrictions.

In February, CIRM said universities and nonprofit institutions that receive the grants must give back to the state 25 percent of royalties on discoveries that yield more than $500,000.

But WARF doesn’t want the private companies working with the institute to profit without WARF receiving a fair share.

In March, at a biotech meeting in San Francisco, WARF attorney Elizabeth Donley said the CIRM demand amounted to a commercialization of the research. She said WARF may assert its patents and seek license fees and payments from the commercial partners of grantees — such as a company that a university researcher in California might pair with to develop a discovery.

Ed Penhoet, vice chairman of CIRM‘s oversight committee, charged that WARF‘s actions could bring California’s program to a halt.

“Theoretically, could they close down research activity in California? Yes,” he told the Los Angeles Times.

‘A blockade’ WARF‘s patents cover most of the human embryonic stem cells in use in United States labs. The patents are written in a way that they cover not only the human embryonic stem cells themselves but also the method Thomson used to derive and grow the cells.

In essence, the patents cover most of the human embryonic stem cells in use in United States labs.

And just about anybody who wants to use such cells in the lab has to go through WARF.

The Foundation for Taxpayer and Consumer Rights, a nonprofit watchdog group in California, called on CIRM to challenge WARF‘s patents in court.

“It would truly be a shame if a research organization in Wisconsin threw up a blockade to vital, publicly funded research in California,” John Simpson, stem-cell project director for the group, wrote in a letter to WARF.

Mary Maxon, Penhoet’s deputy at CIRM, said last week that “there are currently no intentions of suing WARF.” But, she added, “We are concerned.”

Carl Gulbrandsen, managing director of WARF, said in a recent interview that the foundation is discussing the issue with CIRM, though he wouldn’t provide details.

“We don’t want to impede research. We want to be a partner,” Gulbrandsen said. “We also want to make sure work that is done in Wisconsin is respected.”

Meanwhile, representatives from biotech businesses say the WARF patents, in effect only in the United States, will enable companies in other countries to develop stem-cell therapies quicker and more cheaply than companies here.

“It’s definitely hurting this country in terms of how much investment we make here versus abroad,” said Joydeep Goswami, vice president for stem cells and regenerative medicine at California-based Invitrogen.

Gulbrandsen said companies in other countries would want to sell stem-cell therapies in the United States and would eventually have to abide by the patents.

Called ‘too broad’ The WARF patents have been controversial since they were issued in 1998 and 2001. The first one covers embryonic stem cells from primates, the second one specifically from humans.

Embryonic stem cells are believed capable of turning into all 220 types of cells in the body, from bone to kidney to brain. Scientists hope to use them to replace or repair tissue that is damaged or diseased, in conditions such as Parkinson’s disease, diabetes, stroke and spinal cord injury.

Gulbrandsen said he respects the intellectual argument against patenting human life that some have raised. “I would be willing to say, maybe you shouldn’t,” he said.

But he said WARF had to file the patents based on Thomson’s work. The five stem-cell lines Thomson developed are among the 22 available for federal funding under Bush’s policy — but are used in research more than many of the others.

A federal law prohibited government funding for Thomson’s research in the 1990s, so Thomson accepted funding from the company Geron, Gulbrandsen said. If WARF hadn’t filed the patents, Geron would have, and that would have made it even more difficult for other researchers to access the cells today, he said.

“We really didn’t have a choice,” he said.

Has shared cells WARF has lived up to its promise to share the cells with other researchers, said spokesman Andy Cohn.

The foundation has shipped cells to more than 300 research groups in 21 countries and trained more than 360 researchers on how to grow the cells, Cohn said. It charged $5,000 to each group until last fall, when a National Institutes of Health subsidy helped lower the price to $500, he said.

The price for private labs is steeper — up to $125,000, plus an annual maintenance fee.

On top of those distribution arrangements, WARF has licensing agreements with a dozen research companies covering commercial uses of stem cells.

And if CIRM were to commercialize their research by taking a cut of the profits then the companies that partner with researchers funded by the institute could be subject to these higher WARF licensing fees.

WARF must act on its patents in California to protect the licenses, Gulbrandsen said. “If we don’t, (the licensees are) going to say, why are we paying money to WARF?” he said.

WARF won’t disclose how much money the licenses bring in, but Cohn said the funds have been put back into research and facilities on the UW-Madison campus. The patents could eventually yield millions of dollars, but they expire within a dozen years and it’s not clear if stem-cell therapies will be available by then, Cohn said.

Simpson, of the Foundation for Taxpayer and Consumer Rights in California, said his calls for CIRM or other entities in California to sue WARF over the patents have not led to any action. “There’s nothing definite right now,” he said.

Money is blocked CIRM, meanwhile, has been stymied by other lawsuits. Opponents of embryonic stem-cell research, who claim it destroys human life, have blocked distribution of the $3 billion in state funds.

To get around those lawsuits, CIRM issued special bond notes in April after receiving pledges for funds from foundations and trusts. That allowed CIRM to make its first awards that month: $12.1 million in training grants to 16 universities and other institutions.

But CIRM has not yet awarded any research grants.

Gulbrandsen said WARF‘s talks with CIRM continue – and since little money has been awarded, there is time to negotiate a truce.

One possibility, said CIRM‘s Maxon, is that the institute might pursue an omnibus license with WARF that would apply to all of its grantees and commercial partners.

“We have talked about ways to structure a collaboration,” Gulbrandsen said.
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