IntroductionResearch fellow Dr Michael Morrison considers the ruling by the European Court of Justice on stem cell patents.
On 14 November California–based biotech company Geron announced the ending of its human embryonic stem cell (hESC) research programme, including the company’s pioneering ‘first-in-man’ trial of hESC-derived cells for spinal injury. In the accompanying press release Geron cited financial reasons for the decision. The apparent withdrawal from the field of stem cell research by a company often perceived as one of the major players has already drawn extensive comment from industry-watchers, patient groups, and scientists alike. However, I want to take the opportunity to reflect on what Geron’s decision reveals about another important event in the recent history of stem cell research (writes Dr Morrison).
On 18 October 2011 the European Court of Justice (ECJ) ruled in the Brüstle case that stem cell lines whose derivation required the destruction of human embryos were not patentable under European law. According to a report in Nature, the decision provoked strong criticism from a number of prominent figures within the stem cell field, including Professor Oliver Brüstle (University of Bonn), whose 1999 patent application for a method of converting hES cells into neurons was at the heart of the dispute, and Professor Ian Wilmut of the MRC Centre for Regenerative Medicine in Edinburgh . Much of the criticism of the decision revolved around the prediction that the lack of patentability would deter investment in European firms developing stem cell products and inhibit the development of cures for chronic diseases that stem cell research promises.
There are many reasons to dispute this gloomy interpretation of the ECJ ruling; not least that Europe has a significant cell therapy sector with more than 50 active firms.1 The legal intent to refuse patents on material derived from human embryos has been evident since the 1998 European Directive on the Legal Protection of Biotechnological Inventions and has been reinforced by subsequent decisions from the European Patent Office (EPO), so October’s ruling can hardly have come as a surprise to any interested parties. This has not prevented European firms developing technology platforms based on non-embryonic human stem cells nor has it precipitated a ‘brain-drain’ of European stem cell expertise to the US or Asia. It therefore seems unlikely that the ECJ ruling will make any significant impact in this respect.
The ECJ ruling does not apply to the granting of intellectual property rights in adult or induced pluripotent stem cells (which are being developed by European firms), nor does it prohibit any form of stem cell research. What the judgment does do, is limit the viability of certain business models for embryonic stem cell therapy development, which take proprietary patent rights on an invention as the primary assets around which to build a biotechnology start-up as a vehicle to commercialise that invention. Until 14 November, Geron was often cited as an exemplar of how this approach could work in the hESC field.
Through its financial support of James Thomson’s work on embryonic stem cells at the University of Wisconsin, Geron gained highly preferential access to the intellectual property estate arising from the isolation of hESCs in 1998. This patent portfolio, said to be one of the strongest intellectual property holdings in the whole stem cell field, formed the basis of Geron’s competitive advantage in the hESC field and played an important role in Geron becoming the first US company to receive regulatory approval to begin clinical trials of hESC-derived cells in human patients.2
Geron’s decision to abandon this line of work, after more than ten years of development and one of the most complex regulatory submissions ever presented to the US Food and Drug Administration, illustrates the scale of the challenge of bringing embryonic stem cell research from basic research through to clinical application. Similar difficulties have befallen other companies attempting to tread this path; Singapore’s once-lauded ES Cell International met a similar fate in 2000. (ES Cell International was acquired by US-based Biotime Inc. Biotime is active in the hESC field but mainly develops and markets cell lines, reagents and platform technologies, not therapeutics.) Geron’s decision leaves Massachusetts-based Advanced Cell Technologies as almost the only firm actively trying to bring hESC therapeutics to clinical application.
This indicates that the task of developing human embryonic stem cell technology for major diseases does not fit well with the standard biotechnology industry model, where intellectual property rights are positioned as the major drivers of innovation. The sheer scale of research needed and the timescale that this requires is not suited to investment-backed private enterprise, which depends on regular successes in order to sustain the promise of biotech firms and retain the interest of investors. This is especially pertinent in the present financial climate where the supply of venture capital for high-risk investments is increasingly limited.
There are exceptions – a number of firms worldwide produce and sell human embryonic stem cell lines and the accompanying technology platforms to manipulate and manufacture these lines. Europe is not excluded from this sector, having important companies such as Roslin Cells (UK) and Cellartis AB (Sweden) which have flourished and remain competitive despite the patent restrictions. (According to one report, Cellartis is currently the subject of a 50 million Euro takeover bid by French genome engineering firm Cellectis.) Additionally, the development of specific hESC applications for orphan diseases, if successful, ought to give the developing firm(s) a commercially viable monopoly over the market for a number of years.
However, in Europe embryonic stem cell research may be better served in the near term by publicly funded research carried out by academic, non-profit and public-private consortia at this stage of its development. This is not to suggest that hESC therapy cannot be a successful commercial enterprise, but the private experience so far suggests that open, collaborative research in the immediate term is necessary to allow the field to develop sufficiently to form the technological basis from which any future hESC industry may arise. This approach also retains the advantages of traditional academic routes of knowledge dissemination, avoiding the potential financial premiums on utilising new knowledge associated with the patenting of basic research in still-developing scientific fields. Ultimately then, the case of Geron suggests the ECJ ruling may turn out to be a blessing in disguise for European embryonic stem cell research.
1 Data from the final report of the Regenerative Medicine in Europe (REMEDiE) EC FP-7 project.
2 Loring, J.F. and Campbell, C. (2006) Intellectual property and human embryonic stem cell research. Science; 311:1716–1717.