Mr. Gunnar L. Engstrom

Gunnar EngstromMr. Engstrom is a Director and co-founder of ATP Capital.He serves as one of ATP's representatives on the Board of Directors and is Chairman of the Finance Committee of Advanced Cell Technology Group , a leading biotechnology company in cloning and cell therapy.Prior to entering private equity , Mr. Engstrom spent seven years as a management consultant with McKinsey & Company and A.T. Kearney.

Gunnar L. Engstrom, MBA

Chief Financial Officer - prior to joining Advanced Cell Technology, Mr. Engstrom was a Director of ATP Capital LP, a life sciences focused private equity fund.He also served as a Director of the Board and was the Chairman of the Finance Committee of A.C.T. Group, a holding company with a large equity stake in Advanced Cell Technology.Prior to ATP Capital, Mr. Engstrom spent seven years as a management consultant with McKinsey & Co, Inc. and A.T. Kearney, Inc., specializing in corporate turn-arounds, growth strategy and performance improvements.He holds a B.S. degree in Business Administration and Finance from Drexel University and an MBA from Harvard Business School.

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Not so, says Gunnar L. Engstrom, chief financial officer of Advanced Cell Technology. ''We did not create this media frenzy, and I'm not sure it works in our favor for fund-raising.I don't think any sophisticated investor would invest based on the level of hype in the media.A sophisticated investor will invest based on the strength of the science, the projected rate of progress and the promise of the market.''

Still, Engstrom says, he wouldn't mind hearing from a few sophisticated investors.

''Like all biotechnology companies, we are always monitoring the financial markets,'' he said. ''We intend to periodically tap into those markets and get funded.''

It appears a little more urgent than that.The company was founded in 1994 by Avian Farms, a poultry breeding operation owned by a Thai conglomerate.
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''We're well-funded well into next year,'' said Engstrom.This year, he said, the firm's ''burn rate,'' or money expended on salaries, rent, and other necessities, will be ''in the ballpark'' of $5 million, including a subsidiary that clones animals for agricultural purposes.

Advanced Cell Technology, which is privately held, won't divulge financial details.But Engstrom said the agricultural subsidiary generates profits, and the company has earned fees by licensing technology to other companies.It also has a grant from the National Institute of Standards and Technology, part of the US Department of Commerce which has a program to fund advanced technology.But it hasn't yet used the funds in the unspecified grant, which isn't related to the company's cloning technology.

Engstrom won't divulge how much the company earns from its technology licenses, but said: ''All revenue is meaningful for an early-stage company, but it's not sufficient to sustain the company.''

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Engstrom said as his company's technology develops, it will license ''non-core'' areas to other firms.Even some stem cell techniques might be licensed, he said, with the company choosing to keep only certain cures in-house.Eventually, it will enter into distribution agreements to market its products, he said.

Gunnar Engstrom, Chief Financial Officer at ACT, did not want to quantify the impact of his company's scientific advancement."The therapies we intend to develop would provide a potential cure for several diseases and save millions of lives.I believe the impact and the value of that would be significant," he said.

The stem cells produced for the company could -in the future- grow into virtually any type of cell and be used as a treatment for terminal diseases.

''We did not create this media frenzy, and I'm not sure it works in our favor for fund-raising,'' said Gunnar L. Engstrom, chief financial officer of Advanced Cell. ''I don't think any sophisticated investor would invest based on the level of hype in the media.A sophisticated investor will invest based on the strength of the science, the projected rate of progress, and the promise of the market.''

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Still, Engstrom admits, funding is a major concern for the company. ''Like all biotechnology companies, we are always monitoring the financial markets,'' he said. ''We intend to periodically tap into those markets and get funded.''

Advanced Cell was founded in 1994 by Avian Farms, a poultry breeding operation owned by a Thai conglomerate.
...
''We're well-funded well into next year,'' said Engstrom.This year, he said, the firm's ''burn rate,'' or money expended on salaries, rent, and other necessities, will be ''in the ballpark'' of $5 million, including a subsidiary that clones animals for agricultural purposes.

Advanced Cell Technology, which is privately held, won't divulge financial details.But Engstrom said the agricultural subsidiary generates profits, and the company has earned fees by licensing technology to other companies.It also has a grant from the National Institute of Standards and Technology, part of the US Department of Commerce, which has a program to fund advanced technology.But it hasn't yet used the funds in the unspecified grant, which isn't related to the company's cloning technology.

Engstrom won't reveal how much the company earns from its technology licenses, but said: ''All revenue is meaningful for an early-stage company, but it's not sufficient to sustain the company.''

Advanced Cell Technology is one of a number of companies that seek to use stem cells to create treatments for life-threatening diseases such as diabetes, and diseases resulting from the breakdown of brain and nerve tissue, such as Alzheimer's.Stem cells are tiny undifferentiated cells that have shown the ability to develop into different types of tissue, such as muscle or nerve.

But the source of stem cells has provoked fierce ethical debate.Some stem cells are found in adult tissue.Blood taken from the umbilical cords of newborns is also rich in stem cells.

"If [the National Institutes of Health] wants us to repay the money, then I assume we will comply with that," said Gunnar Engstrom, Advanced Cell's chief financial officer."But we have not received a request for anything."

Though such requests are not uncommon in the complex world of federal research funding, in this case they involve a company at the center of a heated national debate.The US Senate is preparing to debate the criminalization of all human cloning research, which would effectively end Advanced Cell's high-profile attempts to derive medical cures from week-old human embryos.

The probe into the company was ordered by 32 anticloning Washington lawmakers after Advanced Cell revealed in November its scientists were attempting to clone the first human embryos.
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Engstrom yesterday called the effort a "smear campaign."

"I think we have here an attempt to get ACT linked to human cloning.But we oppose human reproductive cloning," he said.The firm has said it has no plans to produce cloned babies, although it is openly attempting to create medical treatments through therapeutic cloning, which involves harvesting stem cells from week-old cloned embryos.

The nine-page April 26 report recommended that Advanced Cell return $149,917 it has spent from its government grants.The report charged that the company improperly billed the government for $35,000 in salary costs on one grant.Engstrom said the grant in question was old and the company lacked the documentation to exonerate itself.

In addition, the report charged that the company spent about $114,000 on equipment it was not authorized to buy.Engstrom said the expenditure was approved by the NIH, and if there was an error, it was committed by NIH.

Finally, investigators leveled a broader charge at Advanced Cell: "We have continuing reservations regarding ACT's ability to continue as a going concern," they wrote, citing a independent audit of the company from 2000 that found numerous weaknesses in the company's financial books.Engstrom said the company was currently on solid footing.

"Why did they put in a comment that dates back over a year?"he said."I can only assume they had a desire to hurt the company."