Scientists cheer Obama's stem cell reversal

Scientists are cheering President Barack Obama's lifting of federal funding restrictions on embryonic stem cell research, hopeful the move will open the financial floodgates to speed new treatments.

"It's wonderful. We are elated," said Jan Nolta, who directs the stem cell research program at the University of California at Davis. "Now that we can use the federal funds, it will just go so much more quickly."

Directors of university programs in stem cell research said that money would mean more jobs at labs, especially for students just starting their careers. Researchers and biotech entrepreneurs also expect more work.

In 2001, President George W. Bush limited federal money for human embryonic stem cell research to 21 pre-existing stem cell lines, or families of cells derived from individual embryos.

Under those rules, scientists had to ensure that federal funds were not used to buy even the plastic pens used to write down observations from experiments on unapproved cells, Nolta said.

Obama's executive order now allows federally funded researchers to use hundreds of new embryonic stem cell lines. The reversal means some of the $10 billion for health care research in the president's stimulus package likely would go to stem cells.

Researchers at UC Davis planned to acquire four new stem cell lines as soon as the National Institutes of Health finalizes its updated guidelines, Nolta said. They plan to use the stem cells to seek treatments for Parkinson's disease, Huntington's disease and liver damage.

Though most federal grants go to academic researchers, biotech industry backers said the rule changes also could mean a windfall for private companies.

Michael West, chief executive of BioTime Inc., said he expected to see increased demand for the hundreds of stem cell lines sold by his Alameda-based company.

More important to the industry, West said, private investors will be less afraid of putting their money into stem cell startups. Venture capitalists and big pharmaceutical companies in the past have been skittish about investing in stem cell companies out of fear that federal regulations could tighten even further, he said.

"It's a green light that will go a long way in my experience to people committing capital," West said. "Not knowing the future was really a major risk factor."

To bypass the Bush-era restrictions, several states had created their own initiatives to fund stem cell research.

Massachusetts state pledged $1 billion to fund life sciences research, including stem cells. New York lawmakers approved $600 million for stem cells in 2007, and Gov. David Paterson on Monday announced the awarding of more than $100 million in new stem cell research grants.

California has led the country in stem cell research funding since voters pledged $3 billion in response to the Bush administration limits. The agency created by state ballot initiative in 2004 has given out more than $600 million in grants and is funding the construction of 12 stem cell research centers across the state.

States are hoping the investments they've already made will put them in a better position to attract federal money. State leaders are looking to the increased infusions of cash to yield not just new discoveries but new businesses selling blockbuster stem cell drugs.

"I think over the next five to 10 years, the revolution will have happened in stem cell therapeutics," Alan Trounson, president of California's stem cell agency.

While the dollar amounts may seem high, earlier biotechnology innovations show the returns can be even higher. Take the example the gene-splicing technique known as recombinant DNA.

Controversy swirled around the technique when it was developed in the 1970s. Senators grilled scientists in heated hearings, and critics warned that arrogant researchers "playing God" would release out-of-control genetically modified organisms into the environment.

Today, recombinant DNA is one of the basic tools used to create biotech drugs.

"People will probably forget these debates ever happened," West said.

(This version CORRECTS that BioTime is based in Alameda sted Emeryville.)