Cloning People Easier Than Profits
Matthew Herper, 12.30.02, 2:50 PM ET

On Dec. 27, a company called Clonaid said that it had created the first human clone, a 7-month-old baby named Eve. The company was founded by the Raelians, a religious sect that believes aliens created human life on earth. The announcement was met with a heavy dose of scientific skepticism, not to mention widespread disgust.

There are many reasons to doubt that the purported clone exists, and reputable scientists think that such a baby would likely suffer serious and unpredictable health problems. But if Clonaid really has fulfilled its mission, the result is deeply ironic because many legitimate companies that wished to use cloning technology are floundering. Could it be that cloning a baby in the face of popular scorn is easier than developing medicines or other products?

Probably. The Raelians first made their way into the popular press last summer. Human cloning became a hot topic because some scientists thought they could use it to create embryonic stem cells that could replace damaged organs without the risk of immune rejection. The leader in the embryonic stem-cell field is Menlo Park, Calif.-based Geron (nasdaq: GERN - news - people ), which also controls important patents related to cloning. Geron shares now trade at $3.50--one-seventieth of their all-time high.

BioTransplant (nasdaq: BTRN - news - people ), another company that hoped to use cloning in embryonic stem-cell technology, has fared far worse. It trades at 43 cents per share, down 95% year to date. Earlier this year, Chief Executive Elliot Liebowitz stepped aside; he remains as chairman. In November, BioTransplant warned all its employees that they may be laid off.

Right now, cloning technology is very unreliable--with only a handful of successes for every attempt in animals. Alan Trounson at Melbourne, Australia-based Monash University, a leader in the field, says that even if a cloned baby's genome was checked gene by gene with DNA microarrays such as those made by Affymetrix (nasdaq: AFFX - news - people ), there could be no assurance that the baby would be healthy. Cloned animals appear to have problems translating genes into proteins, meaning that a correct gene can be "misread."

"Such a child is very likely to have health problems and these will be unpredictable," Trounson says.

Animal-cloning firms, such as DeForest, Wis.-based Infigen and Athens, Ga.-based Prolinia, tend to be privately held, so it's not known how well they are doing. It is also unclear whether animal clones can be sold for use as food. The biggest success story in the field appears to be Toronto's Nexia Biotechnologies, which hopes to use cloned goats to mass-produce spider silk; the company says the silk could make an incredibly strong material for fishing line and perhaps body armor. The U.S. Army has shown interest.

In the stem-cell arena, things are even worse. Worcester, Mass.-based Advanced Cell Technology, which claimed that it had cloned the first human embryos a year ago, has seen some of its top scientific talent, including animal-cloning leader Jose Cibelli and mouse cloners Teru Wakayama and Anthony Perry, move to academia.

The malaise has extended to companies working with less ethically questionable adult stem cells, which, unlike embryonic stem cells, don't require the destruction of embryos. Stem Cells Inc. (nasdaq: STEM - news - people )--founded by Stanford University stem-cell guru Irving Weissman--and Curis (nasdaq: CRIS - news - people ) trade at $1 per share. One pioneering firm, Advanced Tissue Sciences, is now bankrupt.

Monash University's Trounson puts the Raelians' chances of actually having a human clone at less than the chance that a person will be struck by lightning. There is certainly a chance that this is a hoax, or that Clonaid thinks it has a baby clone but doesn't. The whole affair seems slightly off, from Clonaid director Brigitte Boisselier's bleached-blond hair to the fact that she held her press conference in Hollywood, Fla. (See: "Attacking The Cloners")

Four more cloned babies should be born in the next year, according to Thomas Kaenzig, a vice president at Clonaid. Twenty more pregnancies are planned thereafter. "Our goal is to offer this service on a worldwide basis," Kaenzig says. "If we can make a profit as well, that's great."

"Everything is legal in the country we operate from," Kaenzig adds. He declined to name which country that was--or where Clonaid's corporate operations are based.

Being struck by lightning is very rare. Cloning a human being is even rarer. But actually making money off this kind of Star Trek technology may be the rarest feat of all.

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