The valley of death: stem cells, biotechs, and money

For those of us conducting stem cell research, especially human stem cell research, I don’t have to tell you how expensive it is.

Even just doing pre-clinical or basic science research costs a fortune.

When you start talking about the kind of pre-clinical research specifically designed to get in the near future to a Phase I trial, the costs skyrocket.

At a recent meeting, a top executive at a stem cell biotech referred to the period between basic research and a Phase I clinical trial as the “Valley of Death”.

It is during this period that biotechs struggle to have enough funding to bridge that gap. It is during this time that many products die without us ever really knowing their potential. Earlier on when everyone is excited about a novel idea, there is some funding, and later when Phase I looks promising and things are moving, more money comes in for the work. But in between money is scarce.

While CIRM does a lot of really good things in terms of funding, one could argue that their  funding of translational research (such as their Disease Teams RFA) in this valley of death is particularly important for moving the field forward toward the bedside. Perhaps early Phase I is still in the valley of death, and as such the recent CIRM funding for Geron is quite important and will have a huge impact.

How do other biotechs such as ACT navigate this valley?  Has ACT’s phase I/II trials generated enough excitement to raise the needed cash to continue on for years to come? I certainly hope so and from what I hear, ACT is likely to apply for CIRM funding as well in the future.

I also hope that ViaCyte, which remains a private company, can make it through this valley to their first trial perhaps in 18-24 months. Viacyte got some good publicity recently from an article in the LA Times that you can read here and in an article on KPBS (the San Diego Public TV station) has received more than $25 million from CIRM, which is likely to be instrumental in their progress. At what point does a company such as ViacCte go public to raise more funds? ViaCyte is a very cool company doing pre-clinical work on a stem cell-based treatment for Type I Diabetes.


1 thought on “The valley of death: stem cells, biotechs, and money”

  1. Hi Paul,

    Advanced Cell Technology (OTC:ACTC) Has enough cash to complete Phase I/II multicenter clinical trial using retinal cells derived from human embryonic Stem Cells (hESC) for both Stargardt’s Macular Dystrophy (SMD) and Dry Age-Related Macular Degeneration (AMD) the most common form of macular degeneration in the world affecting an estimated 150 million people. The trials will take place at UCLA’s Jules Stein Eye Institute in California & Casey Eye Institute at Oregon Health & Science University in Portland, Oregon. No approved treatment is currently available for AMD, so an approved treatment is valued in the tens of billions of dollars. Placing a value on being able to see again is up in the air. But it is safe to say that 1,000,000 patients would pay $20,000.00 each per year. Big Pharma is looking for such Companies, they do not mind pay when the risk is over and the “Valley of Death” has been replaced with Lush Europa with Unicorns and candy cane forests! ACT has $15,000.00 in the Bank, an additional $21,000.000.00 in a line of credit and Bond holders hold warrants for an additional $17,000.000. ACT is betting IMO that the Casey Eye Clinic (RCS) trials translate into humans, if they do ACT will have something that Geron Corp can not ever have. 100% proof that its RPE cells derived from (hESC) are responsible for vision improvment. The old saying ” a picture is worth a thousand words”. Before and After pictures of the Bruchs membrane will show the proof needed to finally give regenerative medicine its rightfuly place in healthcare. The work that you and your colleagues are doing is paramount to advancing the human race. Keep up the good work. Please have some of your Post Doc’s come to and mingle. Investors are responsible for bringing regenerative medicine from the lab to benchside. Please reach out to them by blogging and posting on The naysayers have controlled the conversation on stem cell technology long enough with the half-truths and misinformation. Educating the general public is how can bring change to the medical feild.


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