Banking on stem cells; Biotechnology's potential includes economic benefits for area

DATELINE: WORCESTER

Some of the biggest hopes for economic development in Massachusetts lie in some very small cells.

Yet as Gov. Deval L. Patrick pushes for a 10-year, $1 billion investment in life science research and development, including money for a stem cell bank in Worcester, some university and business officials say they are still trying to project the economic impact of such an investment.

There could be intellectual property benefits and the formation of new companies, said Dr. Michael F. Collins, interim chancellor of the University of Massachusetts Medical School. But as for numbers, he said, he's still working on that.

"What I'm attempting to assess is really the impact on the statewide economy, because we view the medical school as a statewide resource," Dr. Collins said.

Coming up with a projection could be no easy task. When California voters approved a 10-year plan to issue $3 billion in bonds to fund stem cell research, competing projections came up with different outlooks. One group suggested the state would reap income tax and sales tax revenues of at least $240 million from spending on research and facilities, additional tax revenues of $2.2 billion to $4.4 billion if the initiative brought additional private investment into California and up to $1.1 billion in royalty revenues from products developed through the initiative.

Separately, an economics professor at the University of California at Berkeley calculated that royalty revenues would total less than 1 percent of research and development spending. Or, to put it another way, wrote Professor Richard Gilbert, California "would be better off investing in its own municipal bonds."

In Madison, Wis., where the WiCell Research Institute and the National Stem Cell Bank have sprung up to build upon the groundbreaking 1998 stem cell discoveries of University of Wisconsin Professor James A. Thompson, four new businesses related to stem cells have emerged.

WiCell Operations Director Susan M. Carlson said the potential exists for economic benefits from intellectual property, license revenues and royalties.

"But that's a way down the road," Miss Carlson said. "This is a young technology."

Stem cells excite attention - and controversy - because of their origin and researchers' suggestions about their potential.

Stem cells are the body's master cells, capable of differentiating into cells for different parts of the body. Embryonic stem cells, the earliest stem cells, come from embryos that are just a few days old and as small as the period at the end of this sentence. Adult stem cells come from tissues or blood in the body, including the umbilical cord blood of newborns.

Doctors have been using adult stem cells from the body's blood system for years to rebuild the blood systems of patients who have undergone intensive chemotherapy. Some researchers think adult and embryonic stem cells could be wielded in the future to treat additional diseases, perhaps by building new nerve cells for spinal cord injuries or repairing damaged hearts and eyes.

Yet destroying early-stage embryos to retrieve embryonic stem cells is opposed by those who consider the work murder. In 2001, President Bush restricted federal funding on embryonic stem cell research so that scientists could obtain National Institutes of Health money for projects only if they work with 21 approved stem cell lines.

The decision set off a flurry of state-funded stem cell initiatives. Last week, New Jersey marked the start of construction of a research tower in New Brunswick as part of a $720 million stem cell initiative. Rutgers University experts calculated that New Jersey could reap total economic benefits of $2.2 billion from the initiative, gain jobs and generate more than $115 million in state revenues.

In Massachusetts, Gov. Patrick's proposed $1 billion initiative would include money for grants and tax incentives and $500 million for capital investments. Last week, the state took an early step toward those plans by approving $7.6 million from a supplemental budget for a stem cell bank at the UMass Medical School and $570,000 for a related stem cell registry.

Dr. Collins and others suggest that Gov. Patrick's life sciences initiative could spur construction spending and construction employment, new jobs for researchers and stem cell bank workers, additional national grants to the UMass Medical School and new business creation.

"First and foremost, the construction of it will be by local tradesmen, which has a direct impact on our economy in Central Massachusetts," said State Rep. Vincent A. Pedone, D-Worcester. "I believe it will bring new business to the area. We have seen spinoff from UMass, business spinoff from UMass in the research they're doing now."

The stem cell registry, which would amass and distribute information on the world's stem cell lines, might employ about four people, according to Dr. Collins. The separate stem cell bank, which would initially be located on UMass property in Shrewsbury, would hold, develop and distribute stem cells to researchers and might employ about 20 people, Dr. Collins said.

Yet an even bigger impact might be felt from the development of a UMass institute launched by the state and focusing on regenerative medicine, gene therapy and genetic technology known as RNA interference, according to Dr. Collins. One model, he said, is the $100 million Aaron Lazare Medical Research Building at the UMass campus in Worcester, which opened in 2001 with 360,000 square feet of space for researchers, laboratories, offices and meeting space.

"It's hard for me to believe there wasn't an impact on the greater Worcester community by having that building there," Dr. Collins said.

Those impacts could include the number of construction jobs created, the additional research grants snared and the ideas translated into products because of the building, said Michael D. Goodman, director of economic and policy research for the University of Massachusetts Donohue Institute.

Big research initiatives, which typically create long-term jobs for highly educated and skilled people, are not economic solutions for entire communities, Mr. Goodman said.

But "it's certainly a positive sign for the city (Worcester)," he said. "I think there's no question the city can trade on its growing medical prowess."

Worcester already possesses a small but vibrant bioscience community. The Massachusetts Biomedical Initiatives, a Worcester-based economic development organization and operator of business incubator space, estimated in 2004 that the life science industry in Central Massachusetts contained 111 businesses and employed 7,500 people.

MBI President and Chief Executive Kevin O'Sullivan said he expects a UMass stem cell initiative to generate interest among businesses to locate here and to spin off business to existing small companies that already perform contract research for larger entities. That outlook is more modest than the expectation expressed in the 1980s by some Worcester business officials that the city could spawn drug manufacturing plants employing thousands of people.

"I don't think we're going to do what we did when we built the biotech park and said we were going to create 10,000 jobs," Mr. O'Sullivan said.

Yet having a stem cell bank at UMass, amid the concentration of biomedical researchers of Central and Eastern Massachusetts, sets the stage for the kinds of advances that researchers make when they can communicate readily with each other, according to Gary S. Stein, chairman of the UMass department of cell biology and deputy director of the UMass cancer center.

"The most important agent to facilitate interactions is a cup of coffee," he said.

The investment could also stave off a brain drain, said Dr. Stein.

"In the absence of having this type of capability, I am concerned that some of our most knowledgeable folks would leave Massachusetts," he said. As for companies, "certainly biotech and pharmaceutical companies are going to go wherever they think they have the highest opportunity in the areas they are going to pursue."