Washington Editor

Embryonic stem cell research should advance a bit more freely because of policy changes announced this week by a major patent holder in this area, the Wisconsin Alumni Research Foundation (WARF). The move could clearly benefit biotech companies and possibly negate for now some criticism that the organization has endured.

"It creates a little more comfort in academic research institutions," explained Tom Quinlan, an attorney in the San Francisco office of Reed Smith LLP. He added that the new guidelines would provide "an increased opportunity to get research going or continue." It also would delay questions on "whether the WARF patents are going to continue to be challenged or should have been issued in the first place," he added.

Those thoughts were echoed by John Wetherell, a lawyer in the San Diego office of Pillsbury Winthrop Shaw Pittman LLP. He told BioWorld Today that the new policies would enhance stem cell research and also "should eliminate conflict" between WARF and its critics.

WARF, the technology transfer arm of the University of Wisconsin in Madison, has made three specific licensing changes "to move the science forward," said Andy Cohn, its director of government relations and public relations, by increasing opportunities for private funding and collaboration. "We certainly have heard from universities that this change would be helpful," he told BioWorld Today. "They are our customers, and we're listening to our customers."

First, WARF will no longer charge license fees for industry-sponsored research at academic or nonprofit institutions, regardless of location and intellectual property rights passing from the research institution to the company. That removes a high-cost hurdle to companies, some of which WARF had been charging up-front and annual maintenance payments that totaled well into six figures for funding academic lab research.

Up to now, the industry has been slow to bend to such tripartite agreements, considering the high cost of doing business with WARF on what essentially amounts to basic research, several years before commercialization efforts come into play. So there has been little industry-sponsored research on embryonic stem cells in the U.S., due in part to those fees but more so the result of President Bush's limits on federal funding for the research. So instead, those activities have moved overseas, where the patents hold no clout and more government backing is available.

Of course, returning stateside with therapies developed overseas but based on discoveries underlying the WARF patents would bring some sort of license back into play, Quinlan told BioWorld Today. The patents expire in 2015.

Some industry sources told BioWorld Today that the new policy doesn't go far enough - WARF said companies still will need a license when they want to conduct internal research, which potentially is debatable given recent Supreme Court rulings on patent law, or develop a product for the market. But those same critics nonetheless feel that the overall bent of the change in attitude represents a positive step.

Cohn said 15 companies have licenses to its patents, along with more than 365 academic groups. He said commercial license costs are variable, while independent researchers pay nothing more than $500 for processing and delivering cells.

Another new WARF policy should allow California's state-funded embryonic stem cell organization, the California Institute for Regenerative Medicine, to move forward without worrying about WARF challenges. Previously, WARF planned to charge the California agency for using its patents because the state expected to generate royalties from groups to which it grants money: 25 percent from universities and nonprofit institutions on commercial applications, and a lower but not yet determined figure for companies' commercial products. That prompted a good deal of opposition and has led the U.S. Patent and Trademark Office to re-examine the WARF patents.

Now WARF has acquiesced, indicating that it will not press the California institute to remit any payments received from its grantees. Lastly, WARF is changing the cell transfer provisions in its academic and commercial licensing to allow easier and simpler cost-free cell transfers among researchers.

The intellectual property held by WARF includes three broad patents related to a method to isolate and define human embryonic stem cells discovered by a researcher at the school, James Thomson. Should the ongoing re-examination process uphold the patents - a decision that Quinlan said could come later this year - it's possible that a court challenge could then arise, another tack to question their validity. Wetherell speculated that the less-restraining policies "will make it less likely" that such litigation would arise.

Many detractors believe that WARF has long been too restrictive in all those research areas, and essentially greedy, hampering progress on embryonic stem cells. The more cynical among them believe WARF is opening its doors a bit to foster the science before it misses potential commercial opportunities.

But outside of feelings about WARF, many with interests in advancing embryonic stem cells believe there remains the aforementioned White House obstacle. Sean Tipton, president of an organization called the Coalition for the Advancement of Medical Research, called WARF's new policies "a positive development" for broadening research opportunities and noted that such scientists "are doing their best" working within the confines of "a fundamentally flawed system."

Senate passage of a bill to circumvent the president's restrictions is expected next month, following on the House of Representatives' vote in favor of such legislation two weeks ago.