By Rebecca J. Kaufman

The promise of stem cell technology has generated more than a few headlines. So too have the politics of stem cells, namely human embryonic stem cells (hESC). As recently as last week, President Bush vetoed a bill that would have authorized expanded federal support for hESC research, citing moral issues. In the absence of new legislation, federal funding is limited to research on hESC lines derived before August 9, 2001; which many researchers have argued are inadequate.

A number of states, including California, Connecticut, Illinois and Maryland have stepped into the funding gap. California’s $3 billion program, created by popular vote in 2004, is now the largest source of funding for hESC research in the world. Private funding, including charitable foundations and venture capital, have also become major funding sources. Some researchers have turned to less controversial stem cell sources, utilizing adult human stem cells in preference to embryonic.

To date, no Southeastern state has committed resources to stem cell research that can even approach the California initiative. Yet, the Southeast is home to a thriving stem cell community. A number of companies are developing stem cell technologies, including both hESC and adult stem cells, for a variety of uses with support from divergent funding sources.

Aldagen Inc. (formerly StemCo Biomedical, Inc., Durham, North Carolina) is a clinical stage regenerative medicine company with three stem cell products in development for the treatment of pediatric metabolic disorders and malignancies, chronic heart failure and critical limb ischemia. Aldagen’s therapies utilize adult stem cells, typically from the patient’s own bone marrow. Aldagen has also commercialized an in vitro diagnostic tool. The company recently closed a Series C debt and equity financing totaling $17.3 million co-led by Harbert Venture Partners, LLC and Intersouth Partners.

Revivicor Inc. (Blacksburg, VA) is focused on the development of products for xenotransplantation, including cells and whole organs from transgenic animals, as well as stem cell technologies. Revivicor’s stem cell program involves the de-differentiation of skin fibroblast cells, preventing the need to create and/or destroy human embryos or fetal tissues.

The company was originally formed as a spin-out of PPL Therapeutics and the Roslin Institute; which is best known for bringing us Dolly the Sheep. Like Aldagen, Revivicor has significant private investment, with funding from University of Pittsburgh Medical Center (UPMC) Health System, Highmark Health Ventures Investment Fund, L.P., and Fujisawa Investments for Entrepreneurship, LP.

Georgia is home to Dr. Steve Stice, a world-renowned expert in the field of stem cell research and animal cloning. Recruited by the Georgia Research Alliance to the University of Georgia as an Eminent Scholar in 1998, Stice has since founded two companies; ProLinia, Inc. (Athens, GA) acquired by Viagen in 2003, and more recently, Aruna Biomedical, Inc. (Athens, GA).

With initial funding from Georgia Venture Partners, Aruna is commercializing research tools providing human neural cells, derived from human embryonic stem cells. Aruna’s research products will enable the discovery of novel treatments for such unmet clinical needs as Alzheimer’s disease and spinal cord injury.

The work of another high profile scientist, Dr. Anthony Atala, serves as the basis for Plureon, Inc. (Winston-Salem, NC). Plureon is a research stage company developing therapeutic applications for stem cells derived from amniotic fluid or placental tissue otherwise discarded as medical waste. The company is presently supported by funding from corporate partners, including Becton Dickinson, as well as grants from the government and private foundations, including the Juvenile Diabetes Research Foundation.

“Stem cell therapies have a bright future,” said Garheng Kong, a partner with venture capital firm Intersouth Partners, which invests in early-stage life science companies. “The field appears to be on the forefront of numerous therapeutic possibilities.

“We have invested in areas of adult stem cells with a focus on a therapeutic end product because, at the moment, there is less controversy around the source of cells and because ultimately, companies primarily get rewarded for actual products as opposed to enabling others. Development of those products is capital intensive.

“Organizations dedicated to the life sciences industry, such as Southeast BIO (SEBIO), help to raise the profile of emerging companies in the venture community and certainly Aldagen is one example of a stem cell company that has received exposure and benefits with SEBIO.”

Rebecca J. Kaufman is Chairman, Southeast BIO and Counsel, King and Spalding LLP. For more information on SEBIO visit www.sebio.org.

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