Cloning Around: Medical Pipe Dream or Real Science?
What if I told you the technology exists for a company to grow immortal human cells with the potential to cure any disease, grow new organs for transplantation, or repair any damaged tissue in the body?
Would you believe it if I told you it may be possible to grow genetically pure organs in pigs, immune from rejection, and harvest them for human transplantation?
Would you believe me if I told you that it is now possible to keep human cells dividing indefinitely, keeping them alive forever and potentially preventing the aging process and the diseases associated with aging?
The cloning of Dolly the sheep in 1996 was nothing compared to what some companies are working on to treat disease in the next century. Dolly is old wool; today there are companies perfecting incredible cloning technology with unlimited medical and financial potential. Below, I will discuss the several key components to the emerging cloning field and what their implications are for the companies involved–and what you can look out for as a trader.
The cloning process
By now, I would expect everyone has heard of the famous sheep Dolly and how she was cloned from a single cell of her “mother.” Dolly shocked the world because no one had ever before perfected the technology to clone a complete genetic organism from a single cell.
| If scientists can prevent cells from aging with telomerase, then entire organs may never age or succumb to the diseases of aging |
Cloning involves what is called nuclear transfer technology, a process crucial to cell replication. By perfecting this technology in Dolly, scientists are now able to clone cells at will and keep them alive and are well on their way to forming complete organisms.
The medical implications of cloning are exciting and range from cloning genetically pure organs for human transplantation to using cloned animals to produce pharmaceutical agents. Cloned animals can be genetically reared to produce naturally occurring human proteins in their milk that may be absent in diseased states like hemophilia, a blood clotting disorder.
Just recently, Genzyme Transgenics Corp [GZTC>GZTC] genetically cloned goats to produce antithrombin III, a human protein vital to the regulation of blood clotting. The company is also working on creating animals to produce other substances ranging from antibodies to human growth hormones. Cloning may be a more cost effective way to produce drugs than the current manufacturing technology. Besides the medical benefits of this technology, the financial market for its application is unlimited because any disease is fair game.
Telomerase: The fountain of youth enzyme
Telomerase is a human protein recently shown by Geron Corp [GERN>GERN] to promote indefinite cell division, thereby halting cellular aging. This protein essentially gives a cell “immortality.” Normal human cells have a finite number of divisions in their lifetime, the so-called Hayflick limit, as they age and die.
Telomeres are small structures on the ends of human chromosomes that slowly whittle down as cells divide. When they disappear, the cells die. Geron Corp, a company on the forefront of this technology, has been able to use the protein telomerase to prevent these telomeres from shrinking, thus keeping cells alive forever.
The implications of this cellular fountain of youth toward the aging process and treatment of disease is enormous. If scientists can prevent cells from aging with telomerase, then entire organs may never age or succumb to the diseases of aging such as cancer, osteoporosis, Alzheimer’s disease, and stroke. Telomerase is also found in cancer cells, which are cells that divide uncontrollably. If a drug can be developed to block its action in cancer cells, then potentially all types of cancer cells can be arrested and treated. Telomerase technology is now being incorporated into the cloning process in order to create cells necessary to replace damaged cells in disease states.
Stem cells: The future of cloning technology
With cloning techniques and telomerase, the stage has been set to create an entirely new approach to the treatment of disease. The final piece of the puzzle involves an entity called embryonic human stem cells.
Stem cells develop early on in human life and have the inherent capacity, when stimulated, to develop into any cell type in the body. Embryonic stem cells have the ability to form human heart cells, kidney cells, lung cells, nerve cells, or bone cells. What would be the consequences of growing these embryonic cells in the lab and then directing them to become any type of cell we choose?
The medical implications are mind boggling. For instance, if a patient had a heart attack resulting in damaged heart muscle, then genetically identical stem cells could be cloned from that patient and directed to form new heart muscle to replace the damaged tissue.
| The companies involved will reap a windfall in patent fees and product revenue when this comes to fruition |
A different way of using stem cell potential is the thinking that all organs in our body already have their own stem cells lying in waiting among the normal organ cells. It may be much more feasible to activate these organ specific dormant stem cells with developing drugs to replace damaged tissue.
Recently, Osiris Therapeutics Inc., a small privately held Baltimore biotechnology firm, identified a stem cell in bone marrow lending credence to this line of thinking. Another company, Cytotherapeutics [CTII>CTII], is also in the business of searching for stem cells in organs with the hope of stimulating them to repair damaged tissue. Biogen [BGEN>BGEN] and Novartis AG, two other companies working in this area, are investigating ways to awaken sleeping adult stem cells in bone, blood, and the brain. The potential application of stem cell technology, embryonic and adult, is widespread and the companies involved will reap a windfall in patent fees and product revenue when this comes to fruition.
Who will profit from this emerging biotechnology?
Geron Corp. [GERN>GERN]
650-473-7700
www.geron.com
Geron Corporation, a Menlo Park, Calif. Company, was founded in 1990 by Dr. Michael West, and focuses on developing products used to investigate the aging process of cells.
Specifically, Geron is currently in the eye of the evolving storm of stem cell research, telomerase technology, and cloning with the hope of developing a unique approach to the treatment of diseases of aging. During this year alone, Geron Corp. has been able to create “immortal” cells in the lab with the protein telomerase and grow human embryonic stem cells in collaboration with researchers at the University of Wisconsin and Johns Hopkins University.
Geron has also recently acquired Roslin Bio-Med, the company founded by the Roslin Institute and responsible for the birth of Dolly in 1996, for 2.1 million shares of stock valued at $27 million. By acquiring Roslin’s cloning technology, Geron Corp. has now positioned itself to perfect the cloning of human stem cells and potentially grow tissue necessary to treat a wide range of diseases.
Geron Corp. currently has a collaboration with Pharmacia and Upjohn to develop drugs aimed at blocking the action of telomerase in cancer cells. It has been trading in the $11-$13 range with a 52-week high of 24 1/2. The company currently is not profitable, has no products in the pipeline, and has no long-term growth forecast. Its current market capitalization is $160 million.
Despite its obvious investor risks, I believe Geron Corp. has nicely positioned itself to eventually perfect the techniques necessary to make stem cell cloning a reality in the twenty-first century. If anyone can do it, they can. If this technology works, it will truly be a brave new world. The company is far from producing any revenue-generating products, but this may be one stock to place in the children’s portfolio.
Genzyme Transgenics [GZTC>GZTC]
508-872-8400
www.genzyme.com
Genzyme Transgenics is a Framingham, Mass.-based company involved in cloning animals for the purpose of producing human proteins and drugs to treat disease. They recently made the news by cloning three identical goats, genetically engineered to produce antithrombin III in their milk.
Antithrombin III is a human protein intimately involved in the blood-clotting process and is absent in certain disease states. The company is currently in the late stages of clinical trials with antithrombin III and has plans to produce other drugs by transgenic cloning methods. This approach may be able to cut the costs of producing pharmaceuticals and make it easier to produce them by speeding up the process. Genzyme Transgenics currently has relationships with Advanced Cell Technology Inc. ( which last year cloned transgenic calves), Bristol-Meyers Squibb Company, BASF AG, and Genetics Institute.
The company’s stock has been trading in the $4-$5 range, with a 52-week high of $11, and has a current market cap of $73 million. It lost $19 million last year on $62 million in sales, but it does project a 30% annual growth forecast over the next five years.
PPL Therapeutics (London stock exchange)
44/131-440-4777
www.ppl-therapeutics.com
PPL Therapeutics is a Scotland-based biotechnology company that helped bring Dolly the sheep to the world’s attention. It is in the business of cloning genetically reared animals for the purpose of developing novel drugs to treat human diseases. The company also intends to use these animals to grow genetically compatible organs for human transplantation. It currently has several protein products in various stages of development with the goal of having the first out by 2001. The company has relationships with ProBio America and is currently trades on the London Stock Exchange.
Like many of the companies working in this field, PPL Therapeutics does not expect to be profitable for several years. It has no projected revenue growth forecast, but it does have products in clinical trials and feels they will enhance their revenue growth over the next five years.
Food for thought
As I researched this article and read about the developing technology and the companies involved, I found it both extremely exciting and frightening from an investor viewpoint. The concept of cloning cells, organs, and developing immortal stem cells to treat disease is fascinating since it opens up a portal science has not entered. But is also frightening in the sense that investing in these companies carries great risk.
The companies involved in perfecting this technology are at the very beginning of their journey. There are some who think cloning and stem cell breeding will never live up to their medical or financial potential. Like the Internet of the mid-1980’s, cloning technology today is only known to a select few and has no current impact on life. However, today the financial markets are now well aware of the influence of the Internet. Cloning and stem cell technology could be from the same seed.