PROFESSOR MIODRAG STOJKOVIC/SCIENCE PHOTO LIBRARY

Advanced Cell Technology is running the only US trials of embryonic-stem-cell therapies.

Advanced Cell Technology (ACT), a biotechnology company based in Marlborough, Massachusetts, has long flirted with fame and bankruptcy.

The company is running the only US Food and Drug Administration (FDA)-approved clinical trials of embryonic stem (ES)-cell therapies. Later this month, ACT plans to report preliminary results from three trials to test the safety of its treatment for two different forms of vision loss. If all goes well, it could be the first clinical demonstration of the safety and perhaps also the therapeutic potential of ES cells.

Yet a series of financial missteps could cost ACT the opportunity to see that potential become reality. On 22 January, the firm announced that its chief executive, Gary Rabin, was stepping down. The news came a month after ACT which had US$5.5 million in cash on-hand as of 30 September 2013 announced that it would pay $4 million to settle a Securities and Exchange Commission (SEC) charge alleging that the company had illegally sold billions of shares of stock.

Thats a big hit for any biotechnology company, says Gregory Bonfiglio, a venture capitalist with Proteus Venture Partners in Portola Valley, California. This is a very painful time for them.

ACT is accustomed to the pain: it has been running on fumes for years and has repeatedly skirted bankruptcy. The company announced this week that it aims to begin the next round of its clinical trials in the second half of 2014. But its last quarterly statement, which covered the period ending 30 September, revealed that the company had only enough funds to last into the second half of 2014. ACT spokesman David Schull says that the firm is exploring all financing options and plans to expand its clinical operations to accommodate the upcoming trials.

That financing may have to carry ACT through additional legal charges. The settlement with the Securities and Exchange Commission was just one of a string of cases ACT has handled over the past few years as it dealt with the legacy left by the fundraising schemes of its previous chief executive, William Caldwell. One such case is still pending, and the SEC has launched a separate investigation of Rabin for distributing stock without reporting it to the SEC in a timely fashion.

More recently, on 2 January, the Wisconsin Alumni Research Foundation (WARF) sued ACT for breach of contract. WARF, which handles patents and licensing for the University of Wisconsin, holds a number of key ES-cell patents, and ACT struck a licensing deal with the foundation in 2007. The case has been sealed, and lawyers representing WARF did not respond immediately to requests for comment.

ACT may soon have company in the clinic. The London Project to Cure Blindness has been developing an ES cellderived therapy to treat age-related macular degeneration, a leading form of vision loss in people aged 50 and older.

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Stem-cell company in crisis