Lancet reported that the company had created human embryonic stem cells without using cell "feeders", about the same time rival Geron published similar research. The breakthrough is important because exposing stem cells to mouse or human cell feeders contaminates them, rendering them potentially unusable for medical therapies.

Despite the controversy and excitement surrounding its science, ACT has always operated on a shoestring. Its executives have publicly lamented their tight budgets, saying they have often had trouble paying their small staff.

With a new name and management structure and fresh plans to expand to California, the group is hoping for renewed corporate life. In February the company went public in a "reverse merger" into the shell of a publicly traded group, Two Moons Kachinas. The Utah firm was founded in 2000 to sell Native American ceremonial dolls originally used to promote fertility. The collectible dolls have been forgotten, but the deal allowed ACT to avoid the high cost of an initial public offering.

The group has a new CEO: William Caldwell IV. Former CEO Michael West--who in 1998 left Geron, which he founded, to head ACT--has become chairman and president. At the time of the merger, the company received a much needed infusion of cash, $8m from venture capitalists and private investors. The company hopes its new standing will help it raise even more money. ACT Holdings trades over-the-counter.

While ACT says it will stay in Massachusetts, the company plans to set up a satellite research facility in California to take advantage of the just approved $3bn programme to finance stem cell research.

ACT was founded in 1994 for the purpose of cloning livestock and transgenic animals used to make human medicines in their milk. Although the company still works with animal cloning, the focus shifted under West's leadership to human embryonic stem cell research. The company says it will not pursue cloning for the purpose of reproduction and is only interested in using the technique for regenerative medicine.