What's So Hard to Understand?—No Profits Means No Medicines

Yesterday, the biotech company Geron announced that it was halting its stem cell research and stopping its Phase 1 trial in which stem cells were used to treat broken spinal cords. It was a business decision based on the company's evaluation of the commercial prospects of the treatment. One comment particularly struck me in the Washington Post's reporting on the company's announcement:

"I'm disgusted. It makes me sick," said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. "To get people's hopes up and then do this for financial reasons is despicable. They're treating us like lab rats."

WTF! First, Geron's announcement is a disappointment to be sure, but just how does Mr. Heumann expect a company to continue to operate if it runs out of money? Does he think a bankrupt company will be able to provide treatments? And, of course, the participants in the Phase 1 treatment trial are treated like lab rats because that's what they are. In Phase 1 trials:

Researchers test a new drug or treatment in a small group of people for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.

There's nothing about benefit to the patient in a Phase 1 trial. If a patient happens to benefit, then that's just great. Whatever one might say about government funding of biomedical research, the plain fact is that the National Institutes of Health has never brought a treatment to market. Profit-making companies do that. 

Disclosure: I am a long time small investor in Geron stocks and I certainly will not be retiring soon (if ever) off any capital gains from it.