Odd Couple

What is a scientific company doing taking $1 million from the Catholic Church?

The unusual alliance is aimed at promoting research and education about adult stem cells, building block cells that scientists believe can be used to regenerate human tissue.

NeoStem Inc. CEO Robin Smith says she sees the partnership as a way to secure scarce dollars for research while promoting the use of adult stem cells for experimental treatments. The more the public and the scientific community hears about the research, the more grant money from multiple sources becomes available, she predicts.

Of course, NeoStem steers clears of the controversial practice that has religious groups like the Catholic Church up in arms. It is in the business of storing and studying stem cells from bone marrow rather than embryos.

While Smith says she understands that the alliance of a major religious organization and a publicly traded company seems odd to outsiders, she says NeoStem and the Vatican have shared goals. The church doesn't want embryonic research to continue.

"Our science is not in conflict with their religious beliefs," says Smith, who has a medical degree from Yale and an MBA from Wharton.

She won't disclose her own views on embryonic research. "I wouldn't want to put my personal beliefs forward" as a representative of the company, she says.

Instead she takes a more practical stand: There's not enough money to help fledgling stem cell companies advance their science.

"The funding supports only so much research," she says.

Smith says it's important for more people to understand the difference between the types of stem cell research. There's still a misperception that all stem cell research is tainted with controversy, she says. New York-based NeoStem has most of its operations in China, where it is doing research and holds a majority stake in a Chinese pharmaceutical company. The company lost $3.3 million on sales of $15.8 million in the quarter ending March 31.

The agreement with the church is a five-year deal with an option to renew. The initial commitment is for $1 million through the church's Vatican's Pontifical Council for Culture. The money will be funneled to a non-profit arm of NeoStem, which is a company with a stock market value of just under $130 million.

"Many people think that there is an antagonism between science and faith," Vatican representative the Reverend Tomasz Trafny told a news conference yesterday. "Some historical events, and one of them was surely Galileo’s affair, created that impression. Today only few people remember how many scientific inspirations and achievements came from the people of church."

Tomasz was referring to the fact the Catholic Church condemned and tried Galieleo for his research, calling it heresy.

One of the first big public events for NeoStem following this alliance with the church will be a three-day conference at the Vatican on stem cell research.

"It is a unique partnership," Smith says. "We'll have to see how it unfolds."

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Brett Chase covers health care for Portfolio.com and writes the blog Heavy Doses.