California Stem Cell Report Going Dark for a Few Weeks

The California Stem Cell Report will be offline for the most part until about the middle of July. Its editor and publisher, David Jensen, is sailing off to the Perlas Islands south of Panama.

Parsing Geron's Stem Cell Foray: A Nature Journal Commentary

Why did Geron "fail" in its much ballyhooed pursuit of the first-ever human embryonic stem cell therapy?

Christopher Scott, senior research scholar at Stanford, and Brady Huggett, business editor of the journal Nature, took a crack at answering that question in a commentary in the June edition of Nature.

Following the sudden abandonment last fall by Geron of its hESC business and the first-ever clinical trial of an hESC therapy, Scott and Huggett scrutinized the history of the company. The financial numbers were impressive. They wrote,

"How did Geron’s R&D program meet such a demise? After all, the company raised more than $583 million through 23 financings, including two venture rounds, and plowed more than half a billion dollars into R&D (about half of that into hESC work) through 2010. 

"There are problems with being at the forefront of unknown territory. Of Geron’s development efforts, the hESC trial was the most prominent, and fraught. Therapies based on hESCs were new territory for the US Food and Drug Administration (FDA), and it eyed Geron warily. The investigational new drug application (IND), filed in 2008, was twice put on clinical hold while more animal data were collected among fears that nonmalignant tumors would result from stray hESCs that escaped the purification process. Geron says it spent $45 million on the application, and at 22,000 pages, it was reportedly the largest the agency had ever received."

The California stem cell agency also bet $25 million on the company just a few months before it pulled the plug. Geron repaid all the CIRM money that it had used up to that point.

Geron suffered from a lack of revenue despite its vaunted stem cell patent portfolio. Scott and Huggett reported that Geron received only $69 million from 1992 to 2010 from collaborations, license and royalties. At the same time losses were huge – $111 million in 2010.

The Nature article noted all of that was occurring while other biotech companies – such as Isis and Alnylam – found ample financial support, revenue and success.

Scott's and Huggett's directed their final comment to Advanced Cell Technology, now the only company in the United States with a clinical trial involving a human embryonic stem cell therapy.

"Your technology may be revolutionary, your team may be dedicated and you may believe. But it does not matter if no one else will stand at your side."

Our take: The California stem cell agency obviously has learned something from its dealings with Geron. The company's hESC announcement was an unpleasant surprise, to put it mildly, coming only about three months after CIRM signed the Geron loan agreement. Today, however, the agency has embarked on more, equally risky ventures with other biotech enterprises. Indeed, CIRM is forging into areas that conventional investment shuns. It is all part of mission approved by California voters in 2004.

The dream of cures from human embryonic stem cells or even adult stem cells is alluring. And CIRM is feeling much justifiable pressure to engage industry more closely. All the more reason for CIRM's executives and directors to maintain a steely determination to terminate research programs that are spinning their wheels and instead pursue efforts that are making significant progress in commercializing research and attracting other investors.  

The California Stem Cell Agency and an HIV Cure: Pushing for a Clinical Trial in 2014

The California stem cell agency's leading efforts to find a cure for HIV – one tied to the famous "Berlin Patient" – received a plug today in a piece in the state capital's largest circulation newspaper, The Sacramento Bee.

The article by David Lesher focused on a $14 million CIRM grant to the City of Hope in Los Angeles that also involves Sangamo BioSciences of Richmond, Ca. The team hopes to launch a clinical trial by the end of next year.

The Berlin Patient is Timothy Brown, now of San Francisco, who is the only person in the world known to have been cured of HIV/AIDs. It came about as a side effect of a blood transfusion carrying a rare mutation of a gene found almost entirely among northern Europeans. Lesher, director of governmental affairs for the Public Policy Institute in Sacramento, wrote,

"The possibility of curing a global pandemic like AIDS with funding from the California bond is exactly the kind of exciting potential that inspired voters to approve Proposition 71 by a wide margin. But the HIV research is also a good example of the challenge facing the state's stem cell agency as it tries to show voters that they made a good investment. 

“None of the research under way will reach patients until long after the 10 years of funding by the ballot measure runs out. With the HIV project, researchers hope to be in human trials by 2014, but it is likely to be at least 10 years before they can show it might work in humans. And in the case of a stem cell cure for AIDS, it would be many years after that before a treatment is widely available.”

Jeff Sheehy, a prominent AIDS activist and a board member at the stem cell agency, described the effort as "the global home run. That's not in 10 years. … But this could be the beginning of something really amazing."

Lesher also wrote,

"Nobody thought stem cells might be used to cure HIV when the bond (funding for the stem cell agency) passed. Far from the embryonic stem cell treatments that inspired the ballot measure, the HIV research involves a new and growing integration of stem cell and genetic science."

Indeed, the ballot initiative that created the $3 billion California stem cell agency trumpeted its devotion to human embryonic stem cell research, which had been throttled by the Bush Administration. The agency has veered away from hESC research, which now amounts to less than $450 million out of the $1.4 billion in grants approved since 2004. 

$30 Million Round Attracts Strong Industry Interest; More Cash Coming?

The California stem cell agency is considering adding more cash to its upcoming $30 million award round aimed at aiding projects that can complete – within the next four years – a clinical trial for a therapy.

CIRM Chairman J.T. Thomas, a Los Angeles bond financier, last month told agency directors that there is "some real quality in the mix" among the firms that have expressed initial interest. Depending on the judgment of CIRM award reviewers later this year, Thomas said the board could well be asked to increase the funding.

The "strategic partnership" round has already exceeded expectations in terms of volume. CIRM told the California Stem Cell Report that the agency has received letters of intent from 37 enterprises, including 29 biotech companies.

The round is an outgrowth of recommendations two years ago from an "external review" panel that said that CIRM needed to do a better job of engaging the biotech industry. The RFA for the round said the agency's intent is to "enhance the likelihood that CIRM-funded projects will obtain funding for phase III clinical trials" and attract additional financing.

Elona Baum, the agency's general counsel and vice president for business development,, said in a news release earlier this spring,

“The Strategic Partnership Funding Program represents a new era for CIRM, one that is increasingly focused on moving therapies from the lab to the clinic, while still recognizing the importance of maintaining investments in early stage science,”

As the RFA is currently configured, CIRM will provide grants or loans of up to $10 million to three recipients. Applicants will have to match the size of the award. For the first time, CIRM will also require applicants to demonstrate the financial ability to carry the project forward.

In response to a query, CIRM spokesman Kevin McCormack said,

"We received 37 letters of intent (LOIs), including 8 from non-profits and 29 from biotech companies.  Based on the information in the LOIs, and on discussions with applicants, we were able to determine that some of the proposals were for projects that were outside the scientific scope of the RFA and that some of the applicants did not meet the minimum specified criteria in the RFA for 'Commercial Validation.' We currently expect to receive 10-15 applications for projects that appear to be eligible."

A "commercial validation" review is scheduled for this fall by the directors' Intellectual Property and Industry Subcommittee, which is co-chaired by Stephen Juelsgaard, former executive vice president of Genentech, and Duane Roth, CEO of CONNECT, a San Diego nonprofit that supports technology and life sciences business development. The others on the six-member panel are Chairman Thomas, Michael Goldberg, a general partner at the MDV venture capital firm, and two academics, Os Steward, chair and director of the Reeve-Irvine Research Center for Spinal Cord Injury at UC Irvine, and Susan Bryant, former vice chancellor for research, also at UC Irvine.

CIRM's short version of commercial validation says that applications must have "the financial capacity to move the project through development or of being able to attract the capital to do so. This may be evidenced by, for example, (i) significant investment by venture capital firms, large biotechnology or pharmaceutical companies and/or disease foundations; (ii) a licensing and development agreement with a large biotechnology or pharmaceutical company, or a commitment to enter into such an agreement executed prior to the disbursement of CIRM funding; and/or (iii) financial statements evidencing significant liquid assets."

Applications are due June 26 with reviews in September. The directors' Industry Subcommittee will meet following the reviews. CIRM said funding would come no earlier than January of next year.

Stem Cell Agency and its $2.4 Million Legal Costs: Proposal to Add Staff Lawyer Slips Away

The California stem cell agency has dropped a plan to add an additional lawyer to its staff on top of its $2.4 million yearly legal budget.

The proposal was eliminated from the agency's spending plan for the fiscal year beginning in July after it ran afoul of complaints in April from Art Torres, co-vice chairman of the agency, that legal spending was "awfully bloated."

At the time, CIRM's President Alan Trounson and general counsel Elona Baum argued, however, that the position was needed to protect CIRM's intellectual property. They said that grantee institutions were failing to take necessary steps to protect the IP and were putting CIRM "at risk."

The discussion occurred during a public meeting, but was settled behind the scenes before last month's approval of the budget by the CIRM board of directors. Instead of containing $221,000 for salary and benefits for another lawyer, the budget contained $203,000 for an external contract for the IP legal work.

The issue of hiring additional staff has implications beyond the most obvious. CIRM is laboring under a legal budget cap that hampers its operational flexibility. Plus the agency will move into a shutdown mode in about five years unless it derives a new source of financing.

During the April discussion, Baum cited a "very in-depth memo" justifying the addition of an attorney but did not present it at the time. The California Stem Cell Report subsequently asked the agency for a copy. The first version that CIRM supplied consisted of a single page and was mostly a list of tasks. It was also heavily expurgated by CIRM, although the agency did not initially disclose that information had been removed. The actual document turned out to be two pages long but still was something less than in-depth.

CIRM said the information was removed under attorney-client privilege. CIRM spokesman Kevin McCormack said it contained "reflections and advice about particular legal issues" from Baum to Trounson.

Our take: It is poor management to place privileged information in what should be a routine budget justification for adding staff. The result is a breakdown in openness on the part of the California stem cell agency. It is not the first time that CIRM has hidden information under attorney-client privilege. In 2008, the agency concealed public relations advice from a New York firm using that rationale. The matter involved an Australian researcher "under investigation for improprieties who worked in the stem cell laboratory run by CIRM's incoming President Dr. Alan Trounson," CIRM said at the time.

A final note on budget matters at the May board meeting: With little discussion, the board approved an overall budget of $17.9 million for coming fiscal year, an 8.5 percent increase over the estimated $16.5 million spending for the current fiscal year. The budget calls for a handful of new hires, raising the size of the staff of the $3 billion agency to the equivalent of 59.

CIRM Chairman J.T. Thomas also told the board the agency is assured of cash for its operations and research funding through the end of this year. CIRM relies on money borrowed by the state – general obligation bonds. However, under an arrangementarrived at last year, the funding is being provided through short-term borrowing – commercial paper. The state expects to offer another round of bonds this fall, but it is not clear whether CIRM bonds will be included. Gov. Jerry Brown is adamant about reducing the cost of state borrowing, which has skyrocketed in recent years.

Here is a copy of Baum's memo.

CIRM IP attorney job description

Finding on 'Evil' Stem Cells Boosts Stem Cell Agency PR

The California stem cell agency, which is struggling to spread the word about its good deeds, made a bit of progress last week when it was praised – not once but three times – on a widely followed national media outlet.

Jill Helms, Stanford photo

The PR bonus occurred on Science Friday, the NPR program that is a favorite on PBS radio stations around the country. It has 1.4 million listeners and 600,000 podcast downloads each week.

Jill Helms, a surgery professor at Stanford and a specialist in regenerative medicine, was the guest last Friday. She talked about what Science Friday host Ira Flatow called a "paradigm-shifting" finding that cholestrol and fat are not the likely villains in clogging arteries. Instead the villain is a stem cell – an evil one.

While evil stem cells are not a matter that is pushed by the California stem cell agency, Helms said her collaboration began as a result of a CIRM-sponsored meeting in Japan. Although she and lead researcher Song Li, an associate professor of bioengineering at UC Berkeley, work nearly within shouting distance, they had never met. She said,

Zhenyu Tang (at microscope) examines vascular stem
cells in culture along with Aijun Wang (left) and Song Li.
UC Berkeley/Zoey Huang photo

"Even though he works just across the (San Francisco) Bay from me - I met him at a meeting in Japan that was sponsored by the California Institute for Regenerative Medicine, or CIRM, and they fund a lot of stem cell research in California."

Later she said,

"I will tell you that cancer is certainly a disease that looks very much like a stem cell gone out of control. And so if we understand what normally regulates a stem cell's behavior, then we gain some crucial insights into what regulates maybe a cancer cell's behavior. It's that kind of approach that I think that CIRM is largely funding initiatives to try to target human diseases, the big ones, and the ones that make us all sort of quake in our shoes, and attempt to come up with new therapies."

And then still later, she said,

"Most basic scientists that work in stem cells and in the area of stem cell are trying as hard as possible to move this into translational therapies, things that can be used in humans. And, of course, CIRM, our funding institution, is very adamant about this being the trajectory. So, you know, I'll be taking a stab at it about five to seven years. I think that the ability to rapidly screen existing drugs for their ability to target this cell population is why we think that it might have a shorter course to getting into humans."

We should note that Helms has not received a grant from the stem cell agency nor is she even one of the featured players in CIRM's many videos. Song Li does have a $1.3million grant from the agency.

The three-pronged push by Helms is just what the agency needs if it is to sell its efforts, which are almost totally ignored by the mainstream media. However, the Science Friday audience consists almost entirely of "true believers" in the virtues of science and research. If CIRM is to accomplish its PR-communications-marketing goals it also has to reach the unwashed heathens, who are, however, unlikely converts. But most importantly, CIRM needs to persuade fence-sitters. All of which will require a long, hard and sometimes frustrating campaign.

One final note: The UC Berkley press release on the research said it was supported by cash from CIRM, the NIH and the United States Army.  According to CIRM's research blog post on Li's work, his team included two researchers who were part of Berkeley’s CIRM-funded training program.

Business-friendly Changes Proposed for Revenue Sharing by Stem Cell Agency

The $3 billion California stem cell agency, which hopes to generate income for the state through the sale of stem cell therapies, is moving to make its profit-sharing rules more friendly to business.

The proposed changes will come up Monday morning before the Intellectual Property and Industry Subcommittee of the CIRM governing board.

No stem cell research funded by CIRM has yet been commercialized. Its intellectual property regulations, which determine payback criteria, were developed shortly after CIRM was created in 2004. Ed Penhoet, one of the founders of Chiron and now a venture capitalist, chaired the panel that worked out the rules. He has since left the CIRM board.

A CIRM staff memo described the payment rules in the case of a "blockbuster" therapy as "uneven" and "lumpy." The memo said they "could be a disincentive for the engagement of industry." Other rules were described as creating "administrative challenges and uncertainty." The proposed changes, the memo said, would address those issues and ensure a "comparable economic return to California."

Here are links to the specific changes -- see here and here.

Public sites where interested parties can take part in the discussion are located in San Francisco, La Jolla, Los Angeles and Irvine. Specific addresses can be found on themeeting agenda.

The proposed changes must go before the full governing board and then into the state's administrative law process before taking full effect.  

Business Success Rate at Stem Cell Agency: Zero in Latest Round After 14 Fail

California biotech companies chalked up a zero in the latest funding round by the state's $3 billion stem cell agency, although 14 tried to run a gauntlet that industry has complained about for years.

All $69 million in last month's translational research round went to 21 academic and nonprofit insitutions. No business received an award. One firm, Eclipse Therapeutics of San Diego, appealed to the agency's governing board but was not successful despite having a higher scientific score than at least two winners.

The miniscule amount of funding for commercial enterprises – less than 4 percent of $1.4 billion handed out so far – has been a matter of concern for some time for both industry and some members of the CIRM governing board. Most recently, industry executives complained at an April hearing of the Institute of Medicine panel looking into CIRM's operations. Even a 2010 review commissioned by CIRM said the agency needed to do better by business.

The question of funding goes beyond a simple matter of fairness or "good science," as CIRM describes its funding goal. Without efforts by industry to turn research into cures, CIRM will not be able to fulfill promises to voters in 2004 when they approved creation of the stem cell agency. CIRM last month approved a set of five-year goals that push more aggressively for development of commercial products, but the goals lacked such things as a financing round devoted solely to business applicants.

In last month's translational round, applicants went through a three-step process, which is conducted primarily behind closed doors. First came what CIRM calls pre-applications. Those were reviewed by CIRM staff with the help of outside advisors if necessary. Applicants who cleared that hurdle were allowed to apply for the full, peer-reviewed round. During that process, the CIRM Grants Working Group reviews applications, makes decisions and sends them to the full CIRM board for ratification and possible changes. The board almost never has rejected a grant approved by reviewers. But the board has ultimate authority and sometimes funds applications that reviewers have rejected. The applicants' names are withheld from the board and the public during the process, although some of the board discussion and the final vote is conducted in public. CIRM does not release the names of rejected applicants unless they appeal.

In the translational round, a total of 42 pre-applications out of 167 were approved by staff, according to CIRM. Thirty-eight came from nonprofits and academics out of the 153 such institutions that applied. Four out of 14 business pre-applications advanced to full applications but none made the final cut. All of the winning applications were linked to institutions that have representatives on the CIRM governing board. Those representatives are not allowed to vote on or take part in discussion involving applications to their institutions.

The primary decision tool used by the grant review group is a scientific score. In last month's round, scores of approved grants ranged from 88 to 53. However, eight grants that were ranked above 53 were rejected by the board. One of those higher-ranking applications came from San Diego's Eclipse Therapeutics, which scored 58. The low-ranking grants were approved for what CIRM describes as "programmatic" reasons.

More than three weeks ago, the California Stem Cell Report asked CIRM for figures on the numbers of applications in the translational round, including those for business. CIRM said the figures had not been compiled and would not be available until after the awards were made on May 24. The numbers were finally supplied yesterday.

Our take: The number of applicants, and their breakdown, is basic information that should be part of board's decision-making process. The statistics should be routinely available well in advance of the board's meeting. Indeed, the agency in its earlier days used to routinely publish the figures. It may be now that generating them is more time-consuming than necessary. The recent performance evaluation of the agency said CIRM needs to make major improvements in how it handles critical information needed for its top management and board.

Whatever the reason, given CIRM's poor track record with business, the agency's directors should diligently track industry's success rate on applications. If proposals ranked as low as 53 are approved while higher ranking applications from business are bypassed, it warrants more than cursory examination.

'Ugly' Stem Cell Headlines and a Stem Cell Essay Contest

California stem cell researcher Paul Knoepfler has been busy recently pumping out a plethora of items on his blog, including his own stem cell essay contest and a summary of "ugly" stem cell headlines.

He also rails, albeit briefly, against the Los Angeles Times "hate fest" against the California stem cell agency and offers some advice on developments involving prostate cancer, an affliction that he suffered from a few years ago.

Knoepfler, a UC Davis scientist, puts some cash on the line in his essay contest, with a prize of a $50 iTunes card plus publication of the winning piece. He is looking for a "convincing, non-fiction essay on stem cells thinking entirely outside the box." No more than 500 words. He has two categories, one for persons under 18 and one for persons over that age. June 30 is the deadline for submissions.

Knoepfler also wrote about Twitter and how it can be used by scientists in a useful item called "The scientist's top 10 guide to Twitter." We recommend it.

Two California Stem Cell Agency Directors Plump for Proposition 29

Two directors of the $3 billion California stem cell agency have popped up in the battle over the anti-tobacco initiative on tomorrow's ballot in the Golden State.

They are Sherry Lansing and Kristiina Vuori, who were the subjects of a column by Michael Hiltzik of the Los Angeles Times dealing with Proposition 29, the "Son of CIRM" measure that would raise $800 million for research by increasing the price of cigarettes by $1 a pack. In addition to serving on the CIRM board, Lansing heads her own anti-cancer foundation and is chair of the board of the UC regents. Vuori is head of the Sanford-Burnham Institute in La Jolla.

Proposition 29 is patterned after the measure that created the stem cell agency. The organization established by Proposition 29 would also be governed by a board that is run by representatives of organizations almost certain to receive the bulk of the funding, as is the case with CIRM.

In an op-ed piece on Friday, Lansing and Vuori said the Times and Hiltzik had fallen for "a smokescreen" put up by tobacco companies which are spending something in the neighborhood of $40 million to defeat the initiative. Lansing and Vuori said the measure is needed to stop smoking by young people as well as providing cash for research for tobacco-related diseases. Young people are more sensitive to price increases of cigarettes than adults, according to research.

Lansing and Vuori referred to a column in which Hiltzik opposed the measure because it would divert money from more immediate state needs, including health and welfare programs for children, education and the poor. (See here for thecolumn and here, here and here for related items.)

In his most recent column, Hiltzik said,

"The...problem with Proposition 29 is its pigeonholing of the money for cancer research rather than for immediate needs here in California that are absolutely dire. It’s all well and good to say that cancer research benefits everyone, but the real question is whether it should be the absolute top priority for a state that can’t afford to keep its children fed or offer them medical care in the here and now. 

"Lansing and Vuori say the fact that Prop. 29 'fails to provide funding for schools, roads or affordable housing' is irrelevant, because it was 'was never intended to solve these problems.'

"In the context of the state’s needs, this is a rather callous approach to take. Let’s spell out why, so Lansing and Vuori won’t be so inclined to dismiss these necessities of life so casually."

Hiltzik cited a list of state government cuts that have meant the loss of health coverage for 400,000 California children, eliminated welfare benefits for 578,000 poor California families and would mean an end to state college student aid for 72,000 young people from less affluent families.

Hiltzik continued,

"That’s just the beginning of what might be cut because the state needs money—and won’t be able to lay its hands on the hundreds of millions of dollars that Lansing, Vuori, and their research colleagues are angling for. They don’t want voters to be reminded that there are competing demands for the tobacco money, and they do so by failing to mention that they exist, and also by presenting the spending on cancer research as the voters’ only choice. 

"It’s the only choice because the promoters of Proposition 29 designed it that way. Advocates of programs like this love to pass them in via voter initiatives because they leave no room to measure them against alternative needs."

 A final note: The New York Times carried a piece yesterday on Proposition 29 that drew 481 comments. The article said, 

"Organizers argued that the tax would have less chance of passing if voters thought it would go into the state coffers, and said that their only goal here was cutting down on smoking."

 Also yesterday, Willie Brown, the former mayor of San Francisco and a keen observer of California politics, predicted voter approval of the measure along with an increase in cigarette smuggling from adjacent states and the sale of discount smokes at the 58 Indian casino sites in the state.