Monday, February 24, 2020

California's $250 Million Stem Cell 'Claw Back:' Recycling Research Cash

CIRM's recovery of cash is not common practice in government research
iStock image
California's stem cell agency, which critics have sometimes labelled a boondoggle, has managed to "claw back" $250 million during its 15-year life, an achievement that it attributes to diligent financial stewardship.

The cash includes $30.3 million last year with a high of $41.9 million in 2017.

The funds were recovered through a number of means including the cancellation of research awards when they failed to meet milestones. The terminations have left some scientists less than happy.

Termination of awards is not common in the world of government-funded science. In contrast to California, the National Institutes of the Health (NIH) do not generally engage in the practice, according to The Scientist magazine.   

The size of the two organizations, however, is much different. The NIH makes about 50,000 awards a year. The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has made only 1,031 awards during its lifetime. Its awards now total $2.7 billion for research into everything from cancer to incontinence. 

CIRM compiled its cash recovery figures in response to a request by the California Stem Cell Report. The request for the figures was prompted by CIRM board action this month to recycle $1.8 million in recovered funds into more research. The recovery practice is akin to what is known in Wall Street parlance as a "claw back."

Kevin McCormack, senior director of communications, said in a statement,
"The total amount of recovered funds collected since 2005 is $250 million which averages to an estimated $16.6 million per year. Although we cannot break this number down by year, recovered funds were significantly smaller in the early days of CIRM as we began launching awards and then increased over time as the portfolio grew.  Since implementation of operational milestones in 2016, recovered funds have totaled to the following:
  • "2016 - $30 million
  • "2017 - $41.9 million
  • "2018 - $25.85 million
  • "2019 - $30.3 million
"The number of awards cancelled is 32 and the total amount for that category is $122.3 million."
The financial stewardship of the California stem cell agency is a matter that has come under intermittent scrutiny during CIRM's short life. Its performance, however, will draw considerably more attention from its foes during the next eight months as CIRM backers seek to win voter approval of a ballot initiative for $5.5 billion more.

One of the agency's opponents is Republican state Sen. John Moorlach of Costa Mesa, Ca., who produced a video in 2017 denouncing CIRM as a boondoggle, ineffective and unaccountable. 

Termination of awards by CIRM began in 2009 and was first reported by the California Stem Cell Report. At the time, the cancellations led to some ill will in segments of the scientific community more comfortable with the easy ways of the NIH.

But one of the researchers who lost an award said at the time:
“I think that it is very important for CIRM to closely monitor its grantees. As a California taxpayer, I want to know that state revenues supporting the CIRM effort are well utilized. Furthermore, CIRM (and its grantees) need to make good on the promise of translating the science of stem cell biology into novel therapies.”
It was a statement that agreed with the agency's position. McCormack said, 
"Right from the very beginning CIRM has always tried to be good stewards of taxpayer’s dollars so we have always had processes and policies in place that ensured we were closely managing our awards which has resulted in recovered funds."  
Not all of the "claw back" came from failure to meet milestones. McCormack said, 
"Cancelled awards are a portion of the funds returned, but recovered funds also include unspent funds at the end of an award; reductions during contracting due to rebudgeting, unallowable costs, or inaccurate facilities rates; or a failure to meet a particular a condition of the milestones such as target patient enrollment which results in an award reduction.
"Awards can be canceled for not meeting milestones, changing the scope approved by the GWG, or other non-compliance issues."
(The full text of McCormack's comments can be found here.)

The agency is now down to its last $27 million for awards. Come the morning of Wednesday Nov. 4 the day after the election, CIRM will either start to shutter its operations at its Oakland headquarters or gear up for even more extensive forays into biomedicine.
Sphere: Related Content

Wednesday, February 19, 2020

California, Stem Cells and the Future of Human Suffering

Has California's $3 billion stem cell research agency "change(d) the future of medicine and human suffering?" 

It's a question and contention indirectly raised very briefly in a news article earlier this week published in the Long Beach Business Journal. 

While the Long Beach weekly does not have the reach of such other Southern California outlets as the Los Angeles Times, the question may well be at the heart of campaign to convince voters to approve an additional $5.5 billion for the California Institute for Regenerative Medicine (CIRM), as the agency is formally  known.  


Robert Klein
CIRM, created in 2004 by voters, is down to its last $27 million. It will begin to  shut down next fall if voters fail to approve the $5.5 billion measure in November. The proposed initiative will labor under a burden created by the ballot initiative campaign 15 years ago that raised expectations that stem cell cures were just around the corner. CIRM, however, has yet to finance a stem cell therapy that is approved by the federal government for widespread use. 

The Long Beach article by Alena Maschke provided a brief overview of the agency and its programs. Right at the top was a quote from Robert Klein, the Palo Alto real estate developer who is leading this year's ballot initiative campaign. He also led the effort in 2004 and was the first chairman of the agency.

Klein was also quoted as saying,

“The scientists and patient advocates in California have proven through the California stem cell initiative funding that they can change the future of medicine and human suffering. California funding has filled the gap of the federal government’s failure to fund this revolution in medicine.”
Mascke's article said Klein's efforts for stem cell research were initially triggered years ago by his concern for his son, Jordan, who had Type 1 diabetes.  The piece said, 


"In 2016, 26-year-old Jordan Klein died of complications related to the disease, two years after scientists first made significant progress on finding a treatment developed with the help of human embryonic stem cells. 

"Klein blames the federal government’s resistance to embracing stem cell research for the lack of adequate treatment options that lead to his son’s death. 'My youngest son died. If they hadn’t held it up in D.C., he would be alive,' he said. 'How many children, how many adults are going to die before they create enough stability to advance therapies that mitigate or cure these chronic diseases?'"

The Long Beach paper also tapped Aaron Levine, an associate professor at the
Aaron Levine, Georgia Tech photo
School of Public Policy at Georgia Tech. Levine was a member of the blue ribbon group that conducted a $700,000 study of the agency's work, an effort that was paid for by CIRM. 

"'CIRM stepped in to fill a gap when the National Institutes of Health was restricting its funding in this space,' Levine said. 'The research that CIRM has supported, as well as the training programs, has had quite a big impact on the field.'"

The article continued, 

"Levine also noted that the program has yet to resolve one crucial question: Who will pay for patients’ treatment with costly stem cell therapies once they’re ready to hit the market? Per-patient costs for stem cell therapies can easily reach several hundred thousand dollars and as research advances, more patients are expected to qualify.
 "'Suddenly, that’s just such a substantial sum of money that it becomes a fundamental challenge to how we pay for healthcare, how we pay for medicine in the United States,' Levine said. Subsidies for California residents, whose taxes helped pay for the research necessary to bring these cures and therapies to market, would be one option, Levine noted.

"Despite these concerns, Levine said he supports the measure to extend the program. 'Even though this is not the perfect measure, I think there’s a lot of value in CIRM and it makes sense to continue it,' he said. In the end, it will be up to California voters to decide. 

"'It largely will rise and fall on whether there’s a motivated campaign for and against it and what people who’ve never really thought about stem cell research as a state ballot issue are going to think about this particular initiative when it comes in the fall,' Levine said."

As for whether CIRM has changed the future of medicine and human suffering, some might argue that it alone has not, that other stem cell researchers around the world have been as instrumental. Others would argue that if revolutionary change has occurred, CIRM has fulfilled its mission and the people of California no longer need to fund it. 

As Levine points out, the voters of California will make the judgment in November. Their decision will come during an election that will focus intensely on presidential politics and much, much less so on the performance of the stem cell agency.   Sphere: Related Content

Monday, February 17, 2020

The California Stem Cell Campaign for $5.5 Billion More Mounts a Web Site, Hires PR firm

The ballot campaign to pump an additional $5.5 billion into California's stem cell stem cell agency is now moving briskly and has a web site plus a well-known public relations firm that has handled more than 20 other ballot measures in the Golden State. 

The campaign has also spent $1 million, which is a tiny amount given that the campaign could cost upwards of $50 million, give or take some millions. The latest campaign disclosure statement shows that it had a zero balance as of Dec. 31 last year. 

The state stem cell agency is running out of the $3 billion originally approved by voters via a 2004 ballot measure. If the new ballot initiative is not approved in November, the agency is expected to whither and die. Its only significant source of cash has been the $3 billion in state bonds. 

The campaign web site is called "Californians for Stem Cell Research, Treatments and Cures." It carries a list of 43 organizations that it says support the ballot initiative, which has not yet qualified for the ballot. 

The groups range from the Alliance for Regenerative Medicine, an industry lobbying group in Washington, D.C., and the Loving Mind Institute, which deals with mental and addiction issues,  to the Arthritis Foundation and the International Society for Stem Cell Research, the largest organization of stem cell researchers in the world. 

Also listed as supporters are patient advocates, scientists and private parties. They include luminaries such as Nobel Prize winner David Baltimore. He served on the board of the stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM) from 2004 until June 6, 2007. 

Baltimore was also a co-founder and chairman of the board of a firm backed with millions by the stem cell agency. The firm, Calimmunewas incorporated March 23, 2006, in Delaware.  The firm has received $8.3 million from CIRM. Calimmune's initial award came as part of a $20 million award on Oct. 28, 2009.   Calimmune was sold to CSL Behring in 2017 for $91 million. 

(See herehere and here for more on Calimmune.)

A number of current board members of the stem cell agency are also listed by the campaign as supporters. The board has not yet taken a formal position on the initiative, but there is little doubt that it will support the proposal. Other supporters include a number of researchers who have received CIRM funding. 

The campaign web site features "success stories" in CIRM program, all of which have been carried earlier on the official CIRM web site. The campaign site asks for donations as low as $5 via credit cards. It contains a list of five stories and columns that are favorable to the agency, covering the period from 2016 to last month.

The campaign has also hired a well-known California public relations firm, Fiona Hutton and Associates, which has offices in Los Angeles and Sacramento. Hutton was involved in the 2004 stem cell campaign as well. 

Hutton's main web page promises "communications that shake up things and move mountains."

The American Association of Political Consultants says that Hutton is "one of only two women-owned businesses ranked in the Top 10 of national public affairs agencies and the Top 10 Los Angeles-based firms by leading PR trade publication O’Dwyer’s." Sphere: Related Content

Wednesday, February 12, 2020

Former CEO of California Stem Cell Agency Leaves Top Post at Minnesota Non-profit

Randy Mills, the former head of the California stem cell agency who left it in 2017, has resigned as president of a large bone marrow non-profit known as "Be The Match" in Minneapolis.

A brief news release from the organization said he was leaving for "personal reasons."   Local news coverage of Mills' departure in Minnesota was scanty. Be The Match reported income of about $418 million in 2018.

Maria Millan, then vice president for therapeutics at California's stem cell agency, succeeded him as CEO and president of the agency and still holds that position. Mills was highly regarded at the agency and has been credited with helping to sharpen its focus and direction. Sphere: Related Content

New California Stem Cell Ballot Initiative Hits $1 Million Campaign Spending Mark; Tens of Millions More Needed

The effort to persuade California voters to pony up an additional $5.5 billion to finance stem cell research has so far spent nearly $1 million on its campaign, and the proposal is not yet on the November ballot.

The spending was reported by the Californians for Stem Cell Research, Treatments and Cures, the campaign committee led by Robert Klein, a Palo Alto real estate developer who also directed the campaign that created the state stem cell agency in 2004 via a ballot initiative. 

The $942,005 in spending covers all of 2019 but not 2020. The report to the California Secretary of State shows that the committee received only  $712,254 in non-monetary contributions and had a zero balance as of the end of last year. All of the contributions came Klein Financial Corp. in Palo Alto, Ca., or from Klein, who is president of the real estate investment firm. 

Klein was the first chairman of the stem cell agency, known officially as the California Institute for Regenerative Medicine (CIRM). The agency is running out of money and needs the additional billions to continue its work. It was funded with $3 billion in state borrowing 15 years ago. 


Robert Klein addressing CIRM board
 about the ballot measure in 2017
The campaign finance report showed that Klein personally contributed the largest amount, $534,340.  The contributions were all described as non-monetary. The term includes such things as employee services and "enforceable promises," involving such matters as a loan. 

Klein told the California Stem Cell Report in 2017 that he expected that the current stem cell ballot initiative campaign, including signature gathering, campaign advertising, etc., would run this year about $50 million. 

In a telephone interview last week, he demurred when asked about campaign finances and fundraising. 

Klein has reported to state election officials that the campaign has collected 25 percent of the more than 600,000 signatures needed to qualify for the fall ballot. That benchmark sets the stage for legislative hearings on the proposed initiative.

The legislature cannot modify the initiative but it could offer its own alternative approach. No date has been set for hearings, which must occur 131 days before the Nov. 3 election.     Sphere: Related Content

Monday, February 10, 2020

California's Alpha Stem Cell Clinics: A Look at the $50 Million Effort in May

If you want to know what is happening with one of the signature efforts of the $3 billion California stem cell agency, mark Friday May 1 on your calendar. 

That's the date of a free, day-long conference in Sacramento dealing with the stem cell agency's statewide Alpha Clinic program, which has its northern most location at UC Davis

This is the 5th annual review of the Alpha Clinic effort, which was seeded with $50 million by the stem cell agency, formally known as the California Institute for Regnerative Medicine(CIRM). The Alpha clinics specialize in delivering stem cell clinical trials to patients. 

(See here for a UC San Diego video involving the Alpha Clinic program. You can skip the ad at the beginning by clicking on the "skip ad" box in the right hand corner of the video screen.)

The Alpha conference represents an opportunity for state policy makers and legislators to get a first-hand perspective on the state's 15-year-old stem cell agency, which is hoping that next November voters will approve an additional $5.5 billion for the program. 

The agency expects to phase out its work if the ballot initiative fails. 

In addition to UC Davis, other Alpha locations are at City of Hope, UC Irvine/UC Los Angeles, UC San Diego and UC San Francisco

The agenda for the May meeting is still being developed. But topics currently scheduled include unmet medical needs, cures for rare diseases, cancer clinical trials and the all-important topic of access and affordability.

In addition to researchers, the session includes a number of patients and patient advocates.

Reservations can be made by going to this page on the Internet. Sphere: Related Content

Thursday, February 06, 2020

California Stem Cell Agency Okays Major, Publicly Financed Conference During Ballot Campaign for $5.5 Billion More

OAKLAND, Ca. -- California's financially strapped stem cell agency this morning approved a $250,000, two-day public conference on the state of stem cell research that would be held in the midst of a ballot campaign to provide the agency with an additional $5.5 billion from taxpayers.

The proposal was approved on a unanimous vote after a brief discussion. 

The conference is expected to be held prior to the Nov. 3 election involving the proposed, $5.5 billion measure. Details and location are yet to be worked out.

Known formally as the California Institute for Regenerative Medicine (CIRM), the agency was created by voters in 2004 who provided it with $3 billion in bond funding. It is now down to its last $27 million for awards. The agency has additional cash to continue its administrative operations this year and wind down later if the proposed ballot initiative fails to win approval.

CIRM has held a number of large, public events over its 15-year life to bring together scientists and the public as part of its public information efforts to report on its activities and encourage collaboration among researchers. The conference approved today falls in that category, the agency says. 

The meeting, however, is likely to be targeted, sooner or later, by opponents of the agency as an improper use of public funds. The state has legal restrictions on use of public funds during ballot campaigns that involve many gray areas. But normal public information efforts are permitted. 

No member of the public spoke today against the conference, which was available live online and at a number of public teleconference locations throughout the state.  

The agency told the California Stem Cell Report earlier this week, 
"CIRM has conducted four grantee meetings since the agency’s inception.  These meetings are opportunities for grantees to share information about their progress, discuss bottlenecks in the field, and identify potential partnership opportunities.  This grantee meeting will be no different.  The meeting will comply with state laws governing the use of public funds in connection with ballot measure campaigns and will not include any advocacy for or against the ballot measure."
The CIRM conference proposal said that the public, CIRM grantees, interested funding organizations, patient advocates and stakeholders would be invited to the two-day session. An estimated 300-400 participants are expected. CIRM said the goals of the meeting are to:
  • "Provide a public forum to learn about the most recent advances in stem cell research in California.
  • "Encourage the sharing of information and data among CIRM grantees to foster collaboration and learning. 
  • "Timely presentations to address and overcome key bottlenecks and challenges in the field to help advance existing projects. 
  • "Showcase promising stem cell-based projects for partnership opportunities with investors, funders, or companies."
James Harrison, former general counsel to the agency and a well-known expert on campaign law, briefed the CIRM board last fall on the complex restrictions that surface during campaigns. He said, 
"Communications about a ballot measure should be delivered through CIRM’s ordinary communication methods, like its website, blog, newsletter, emails to interested persons, and public meetings, in the style CIRM normally uses to communicate other information. CIRM should avoid passionate or inflammatory language and modes of communication that it does not regularly employ, and should not encourage voters to vote in a particular manner." 
Harrison drafted portions of the 2004 initiative that created the agency. He was also heavily involved in drafting the current proposed initiative. 
Sphere: Related Content

California Stem Cell Agency Approves $1.8 million to Speed Promising Research

OAKLAND, Ca. -- The California stem cell agency today approved the use of $1.8 million in newly recovered  funds to help researchers move promising basic research into products that would be available to the general public.


The money for the awards comes from $2.8 million that has been recovered from other CIRM-funded research that has not met its milestones. 

The agency expects to report on the status of any additional recovered funds in May. 
Sphere: Related Content

Wednesday, February 05, 2020

$5.5 Billion California Stem Cell Initiative Moving Quickly to Qualify for November Ballot

The effort to place a $5.5 billion stem cell research initiative on the November ballot hit a key milestone this week, chalking up at least 25 percent of the signatures needed. 

In an interview yesterday with the California Stem Cell Report, Robert Klein, chairman and founder of Americans for Cures, said that he expects to have about one million signatures in hand by the end of April. 

To be be placed before voters, the initiative must have valid signatures from 623,212 voters.  To achieve that number, many more signatures are gathered because a number of them are disqualified by elections officials. The deadline for signatures for the measure is June 15.

Klein sounded optimistic about the pace of the signature-gathering effort. He said it was running slightly ahead of 2004 when he led the effort for the ballot measure that created the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. 

"We're gaining momentum actually," Klein said in a phone interview. 

CIRM needs a major cash infusion this year because it is running out of money. The agency was provided with $3 billion in bond funding by voters 15 years ago. It is now down to $27 million for research awards. 

Klein sent a letter Feb. 1 to the California secretary of state, the state's top election official, declaring that the effort had acquired at least 25 percent of the signatures needed. The milestone triggers legislative hearings on the initiative. 

The hearing or hearings must be held no later than 131 days before the Nov. 3 election. The legislature cannot alter the proposal, but it can offer its own version. Supporters of a proposed measure can also withdraw it. 

"This means the legislature can offer alternative legislation as a compromise in an effort to convince petitioners to withdraw certified initiatives," according to Ballotpedia. 

Klein declined to discuss specific costs of the signature gathering effort. However, it is largely done in California through firms that are paid by a measure's supporters. In 2018, the average cost of a signature was about $6.00 and ran as high as about $9.00, according to Ballotpedia.  The average total cost in 2018 was $2.6 million for qualifying an initiative. 

Klein is a real estate developer based in Palo Alto. He directed the writing of both the original initiative and the latest one and was the agency's first chairman. Americans for Cures is the stem cell advocacy group that he founded. 

(The information on costs of signature gathering was not contained in an earlier version of this item.) Sphere: Related Content