With use of embryonic stem cells problematic because of ethical and technical issues, the competitive landscape in cell therapy is being shaped by the adult stem cell opportunity. The firms profiled in this issue are taking a variety of approaches. NeuroNova has shown that neural stem cells transplanted into mouse blastocysts could differentiate into heart, liver, and intestinal cells, and is using its stem cells as a drug discovery tool to identify a broader range of factors affecting cell differentiation in the brain it can potentially turn into drugs. Stem Cell Pharmaceuticals wants to build a franchise around TGF-alpha, which causes adult stem cells to proliferate, induces migration of new cells, and allows their subsequent differentiation into fully functional tissue. StemCo Biomedical has developed a way to measure intracellular activity of aldehyde dehydrogenase, an enzyme highly expressed in stem cells, as a marker for isolating the cells and separating them out. StemSource Inc. has created a stem cell bank for individuals to store their own stem cells, which the company isolates from adipose (fat) tissue, for future use.

Small companies are now trying to leverage the value of both embryonic stem cells and adult stem cells, as genomics tools and for toxicology screening. At the same time, stem cells are gradually making their way into human testing, leading to an even more urgent need to understand the role that cytokines and growth factors play in signaling cells to differentiate. In fact, there's a growing recognition that the ultimate pharma opportunity may lie in selling drug cocktails that control cell differentiation, not in making and selling cells. Because dormant adult stem cells reside in tissues and in circulation, researchers are even beginning to envision applications where transplanted replacement cells are not needed at all.

Thousands die each year of end-stage organ failure. Transplantation is the preferred therapy, but there is a chronic shortage of human organs and organ rejection remains a problem. Bringing xenotransplantation to market has become a big company affair, but BioTransplant is a biotech still looking to win a piece of the market through an unusual partnership and unique technology.