You don’t clone me…

by Michaela Drapes, August 25th, 2006, 7:00 am

It’s the kind of story that seems too good to be true, really. A team of scientists published a study in the scientific journal Nature, claiming they have developed a process to ethically extract stem cells from human embryos without destroying them. 

Concern about destroying embryos is what led the Bush administration, under pressure from pro-life activists, to withdraw government funding from stem cell research in 2001. At the time, critics claimed that US scientists would lag behind researchers abroad or in privately funded businesses. As it turns out, the scientists who wrote the article work for Advanced Cell Technology, a struggling company trading on the OTC market. 

When the story hit this week, I recalled that the company in 2001 and 2003 (before its reverse merger) developed procedures to clone embryos and thus harvest stem cells ethically. However, neither produced viable stem cells for biomedical research — thus the need to merge with a publicly traded shell company that formerly manufactured Hopi katchina dolls. The move enabled Advanced Cell Technology to raise equity in the public markets. 

Of course, if Advance Cell Technology’s stem cell extraction techniques are successful, it will be a tremendous breakthrough for science and the company. Before the stem cell announcement, which coincided with its most recent debt offering, the company appeared in need of some good news. Its stock was trading at its lowest point, and its most recent 10Q filing showed a decline in revenues and assets. (In 2005 the firm had $10 million in losses and $400,000 in revenues.) CFO James G. Stewart resigned August 17; the next day the company released a proxy soliciting a stock split. An 8K announced that stock option grants had been made to the company’s remaining top executives, including Dr. Robert Lanza, head of research and lead author of Nature article. 

 After the Nature press release August 23, the company’s stock price jumped 358%. More than 400 articles appeared on the Internet that afternoon alone, immediately re-igniting the controversy of government funding of stem cell research. By the next morning, the political and ethical issues raised by the study were front-page news around the world. 

My take is there’s likely another story about the company behind the headlines.