Venture capitalists take note: Massachusetts wants to open the door to stem-cell research initiatives

Following the November 2 voter approval in California of a $3 billion measure to fund stemcell research, Massachusetts, generally regarded as US's second largest biotech hub, is considering granting incentives of its own for small companies involved in embryonic stem-cell research and development.

Though a potential stem-cell funding package in Massachusetts is not expected to match California's, state legislators are eager to reintroduce the topic in the government's new session in January, looking to grant small biotech companies certain tax credits and other incentives. Venture capitalists are also keen on additional capital being deployed in the sector so as to partly offset their own capital risks in the frontier technology. (According to a survey done by The Sacramento Bee newspaper, California's venture capitalists donated nearly $4 out of every $10 raised for the pre-election campaign to pass the California initiative.)

Massachusetts' new Speaker of the House Salvatore DiMasi has already issued a statement affirming his support in the matter. Previous House speaker Tom Finneran has been blamed for failing to get stem-cell legislation off the ground, despit reportedly saying on multiple occasions that the issue deserved further study before any action was taken. Ironically, Finneran now presides as the new president of the Massachusetts Biotechnology Council, a trade organisation encompassing both large and small biotech companies.

The state's Senate President Robert Travaglini is also reportedly planning to reintroduce legislation supporting stem-cell research that would attract companies and science organisations to the state.

“Researchers need to know that they are welcome in Massachusetts,” says Kevin O'Sullivan, president of the Massachusetts Biomedical Initiative, a non-profit group that helps startups. “Stem-cell research is open for business here. I am certain that it will happen quickly on the legislative side.”

Embryonic stem cells can be used to create any type of human tissue which offers great promise for fighting incurable diseases such as Parkinson's and Alzheimer's. The late actor Christopher Reeves had been actively involved in lobbying for the California stem-cell measure in hopes of finding a treatment for his spinal cord injury that left him paralysed from the neck down.

Stem cells are extracted in the initial stages of development when a human egg is fertilised. Massachusetts companies such as Cambridge-based Viacell and Worcester-based Advanced Cell Technology are examples of small biotech players focused on cell regeneration treatments using stem cells to replace malfunctioning ones.

However, anti-abortion groups view the use of stem cells as destroying a human embryo. The socially conservative Bush White House limited federal research funds to the area three years ago, spurring states on to come up with policies of their own.

“There needs to be a clear message: We reject the federal government's intrusion in this space,” O'Sullivan says. “You can't legislate science. We focus on debilitating diseases and conditions. [The stemcell research debate] should not be part of the religious or political arenas.”

O'Sullivan adds that investors in the biotech companies, such as venture capitalists, need to be reassured that the progress made “will not be stymied. The first step is to make sure that Massachusetts, like California, is wide open for stem cell research.”