Four Firms Competing for $50 Million from California for Stem Cell Trials; Application Review Tomorrow

Reviewers at the $3 billion California stem cell agency tomorrow morning meet behind closed doors to consider applications from four biotech businesses seeking as much as $25 million each in the agency's first-ever clinical trial round.

Geron Corp. of Menlo Park, Ca., and Advanced Cell Technology of Santa Monica, Ca., are likely to be among the applicants, whose names have not been disclosed by CIRM. The agency generally clamps a lid of secrecy on applications until after they are officially approved by its full board, saying that rejected applicants might be embarrassed.

Another possible applicant, iPierian Inc., of South San Francisco, told the California Stem Cell Report that it had not applied for funds in the $50 million round. CIRM says it hopes to award up to $25 million to one or two applicants, although the CIRM board may well change that. The funds are scheduled to come in the form of loans, whose terms were recently changed by CIRM and can be found here and here.

The number of applicants is small (CIRM said only four) because the round is limited to those who "have filed an Investigational New Drug application for the human pluripotent stem cell-derived therapy," according to the RFA. CIRM will accept trials involving both human embryonic stem cells and induced pluripotent stem cells. Both Geron and Advanced Cell Technology have filed the required applications.

Ipierian's former president at one point indicated that the company might apply. However, in response to query last week, a spokesman said the firm had not applied. Geron and Advanced Cell Technology did not respond to questions.

The round is part of a high stakes effort by CIRM to push stem cell therapies into the clinic. More clinical trial rounds are expected in the next year or so. The ballot measure that created CIRM in 2004 appeared to promise speedy development of cures. CIRM is trying to fulfill that promise plus generate voter support in financially troubled California for another $3 billion to $5 billion bond measure. An external review of the agency last fall also called for closer ties to industry to bring therapies to market.

CIRM's clinicial trial round was originally scheduled to begin accepting applications in the spring of last year. The RFA was not posted until August. The agency has never responded to multiple requests for an explanation of the delay. The round has not been without controversy. CIRM hired a former Geron executive, Laurence Elias, as a $50,000 consultant on the round. The agency said no conflict interest was involved.

Geron's clinical trial involving an hESC therapy for spinal injuries is well underway. Stanford and the Santa Clara Valley Medical Center joined the effort last month.

Advanced Cell Technology is working on therapies for macular degeneration and is the only company with two hESC trials. In December, its longtime CEO, William Caldwell, died unexpectedly. Gary Rabin, a member of the firm's board of directors, has stepped in on a temporary basis.

Tomorrow's meeting will be the first review session for CIRM's new vice president of research and development, Ellen Feigal, formerly of Amgen, who started work on Jan. 31. Feigal is expected to be the agency's lead on commercializing stem cell research.

At least one analyst has remarked on both the scientific and financial stakes involved in hESC clinical trials, particularly Geron's. On Jan. 28, the Seeking Alpha web site carried an interview with Catoosa hedge fund manager Robert Lawton in which he described the Geron trial as "a binary event for the science." Lawton said,

"They will likely succeed or fail in a very big way, and advance or set back the science of HESCs forever."

Both Geron and Advanced Cell Technology have generated considerable interest among small investors who follow and discuss them via Yahoo investment groups.

Geron's closing price on Friday was $4.91, down from its 52-week high of $6.44. Advanced Cell, which moved its headquarters to California seeking CIRM funds, closed at nearly 18 cents, down from its 52-week high of about 27 cents.

Applications for CIRM's clinical trial round could be officially approved as early as the May 3 meeting of the CIRM board in Los Angeles with checks going out this summer. No announcements are expected tomorrow following the review session.

The CIRM review group will meet in Millbrae near the San Francisco airport and has scheduled a 30-minute public session beginning at 8:30 a.m. at which any member of the public, including applicants, may appear. The closed session begins at 9 a.m. The specific address for the meeting can be found on the agenda.