December 1, 2020

The Niche

Knoepfler lab stem cell blog

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.


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