WRAPUP 2-Stocks jump as Obama raises stem cell limits

Mon Mar 9, 2009 4:09pm EDT

* Move reverses Bush restrictions

* Obama promises strict guidelines for stem cell research

* Shares of stem cell companies surge

* Congress to move next (Adds quotes on future Congressional action)

By David Alexander

WASHINGTON, March 9 (Reuters) - Shares in stem cell companies soared, scientists gushed and activists cheered on Monday as President Barack Obama signed an order lifting eight years of restrictions on federal funding of human embryonic stem cell research.

Obama's executive order reversed and repudiated restrictions placed on the research by his predecessor George W. Bush, freeing labs across the country to start working with the valued cells, which give birth to all cells and tissues in the body. [ID:nN08329064]

"By doing this, we will ensure America's continued global leadership in scientific discoveries and technological breakthroughs," Obama told a packed White House ceremony.

Shares of stem cell leader Geron Inc.(GERN.O), which won government permission in January to test embryonic stem cells in human patients, were up 16 percent at $4.50 a share soon after the signing. [ID:nN09446661].

Researchers said companies that have been afraid to test the waters will likely leap in now that federal dollars can be used to do the most risky and experimental basic research.

"It is a relief from the bureaucratic and accounting nightmares that have slowed our work, discouraged young scientists, and delayed progress for nearly eight years," said Dr. Douglas Melton of the Harvard Stem Cell Institute, who uses stem cells to try to cure juvenile diabetes and other illnesses.

Diana DeGette and Mike Castle, two members of Congress who pushed legislation to bypass the Bush restrictions, said they would press to turn Obama's decision into legislation.

"Mike and I both feel that our immediate and top priority is to codify the executive order and pass the legislation that we have passed twice before and that was vetoed by President Bush twice," DeGette, a Colorado Democrat, told reporters. "Our legislation is already prepared and introduced."

But DeGette and Castle, a Delaware Republican, said they would not take on the Dickey-Wicker amendment, which prevents the use of federal funds to actually extract the stem cells from human embryos.

"I think the Dickey-Wicker decision perhaps could be done later," Castle said.

DESTROYING LIFE

Not everyone was happy. "Obama opens door to human embryo farms", the National Right to Life Committee said in a statement.

"If an embryo is a life, and I believe strongly that it is life, then no government has the right to sanction their destruction for research purposes," said Kansas Senator Sam Brownback.

Obama said he respected such sentiments but rejected them. "As a person of faith, I believe we are called to care for each other and work to ease human suffering. I believe we have been given the capacity and will to pursue this research -- and the humanity and conscience to do so responsibly," he said.

Michael Werner of the Coalition for the Advancement of Medical Research, an advocacy group, said states such as California and New York that had established their own stem cell research groups stood to gain from the change.

"The states that stepped out in front will have an advantage," Werner said in a telephone interview.

"It's never a waste to invest in medical research, I would argue. But from sort of a crass economic perspective, I think those states and those institutions and those researchers are going to be the ones who are going to be really rewarded now."

Aides said Obama would not dictate details about how stem cell research should be overseen but would give the National Institutes of Health 120 days to come up with guidelines.

Obama also signed a presidential memorandum directing the head of the White House Office of Science and Technology Policy to develop a strategy for "restoring scientific integrity to government decision making."

For years critics accused Bush of subverting scientific findings to appease his conservative political and religious base, not only on stem cells but on climate change policy, energy and reproductive and end of life issues. (Reporting by David Alexander, Will Dunham and Maggie Fox in Washington and Toni Clarke in Boston; Editing by Chris Wilson)

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