Biotechnology: The Stem Cell Revolution ; Stem Cell Research Promises New Treatments for a Host of Diseases - and Vast Profits for Investors. Scientists Are Thrilled, but Not Everyone Is Cheering

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The imminent launch of the world's first stem cell bank in Britain will signal the latest stage in a modern-day medical gold rush boasting all the ruthless rivalry of the Wild West.

Scientists say stem cells are the future of medicine, offering a way to cure a host of diseases and degenerative conditions. Pro- life groups are appalled by the Medical Research Council's plan, revealed last week, to create a bank containing cells harvested from hundreds of thousands of healthy human embryos, which will thus be destroyed. Politicians are delighted that this will make Britain the world leader in a pioneering branch of medical research, as it is the only country that allows so much access to embryonic stem cells for those seeking to cure diseases ranging from Alzheimer's to Parkinson's.

"Stem cell researchers are going to hit lots of barren bits of rock until eventually they find the big mother lode of gold they're looking for," explains Erling Russem, a biotechnology specialist at the City investment house Nomura.

"The money may not start rolling in for a decade, but eventually someone is going to strike very lucky when they finally break through the next medical frontier. So, yes, people are still fired up about stem cells."

This promise of jam tomorrow has kept a number of the City's more long- term investors interested in stem cell research, despite the conspicuous lack of returns to date. But pressure on the scientists to deliver something - anything - of commercial value is immense and growing by the day. The race is truly on.

The three major players - Geron of California, and the British companies ReNeuron and PPL - have all seen their market values plummet as the more short-termist, mainstream investors tire of the waiting.

But specialist backers, such as the biotech venture capitalist house Merlin, have kept the faith. And, controversially, some of Britain's most successful fertility clinics - which provide the "spare" embryos to the research labs - are also now joining in the rush.

Only last week the Human Fertilisation and Embryology Authority held a secret meeting of leading fertility doctors and stem cell experts to discuss "matters of common interest". The first item on the agenda was how the clinics could provide more high-quality embryos (unhealthy ones are not appropriate for research uses), and the second item was the growing number of partnerships between IVF clinics and research groups. …