Tuesday, July 31, 2012

$20 Million in Stem Cell Irony

A bit of irony popped up this week in the wake of approval of $151 million in awards by the California stem cell agency.

One of the awards was $20 million to StemCells, Inc., of Newark, Ca., which is also fighting hard for another $20 million from the state research enterprise.

However, back in 2008, Kenneth Stratton, general counsel for the firm, put some distance between his company and the agency, which is handing out $3 billion in toto.

Stratton said,
"We will take CIRM money last. We don't want to be in a position where, years from now, we are actually forced to sell [our products] in California at a loss."
But last week, Martin McGlynn, CEO of StemCells, said in a press release,
“We are extremely grateful to CIRM for its support.”
Times have changed for both the company and CIRM, which is in the process of altering the intellectual property rules that offended Stratton in 2008. The changes were due to be approved last Thursday, but action was put off by the CIRM board. It was overwhelmed as it dealt with the record pace of appeals by researchers who were scrambling to overturn negative decisions by grant reviewers.

StemCells' application for another $20 million is one of those being appealed. The board will take it up again in either September or late October, after it undergoes additional scrutiny by the agency.

CIRM is touting its IP changes as being more friendly to business. They also can be made retroactive to cover awards to business made in the past. CIRM directors expect to meet by telephone, probably in August, to approve the new IP rules.

Friday, July 27, 2012

News Coverage of CIRM Awards: Substantial but Not Extensive

The California stem cell agency today enjoyed substantial, if sparse, news coverage of the
$151 million in research funding approved by its board yesterday.

Both the San Francisco Chronicle and The Sacramento Bee carried solid stories on the grant awards. In the case of the Chronicle, the story included compelling photos of patients who spoke during emotional, tear-filled presentations.

The stories represent a modest change from the past, when media outlets all but ignored the agency's awards.

The Bee's Richard Chang wrote,
“For Melissa Biliardi of Santa Maria, the (CIRM board) vote symbolizes hope. Her son, James Birdsall, 32, was diagnosed four years ago with Huntington's disease. The degenerative brain disorder could prove fatal over the next 10 to 15 years. There is currently no cure or treatment, but with the grant, UC Davis researchers hope to deliver an effective therapy in four years.
"'This is the most hope we've ever had for a cure or treatment,' Biliardi said.”
The Chronicle's Erin Allday wrote,
“California's stem cell funding agency on Thursday approved nearly $100 million in grants for research into heart disease, cancer and spinal cord injuries, and to the cheers of dozens of patients and their supporters, it also awarded money to rare but devastating diseases with no cure.”
The articles demonstrated the effectiveness of patients and patient advocates in telling the CIRM story. Reporters are always looking for a warm human dimension – especially to enhance a dry, bare-bones science and government story.

Responding to a question from the California Stem Cell Report, Kevin McCormack, spokesman for CIRM, also mentioned radio news coverage in the San Francisco Bay Area. He said the awards were covered in “two different stories on KCBS-AM radio, one that ran several times yesterday and another that ran several times today. KGO-AM radio also ran a story several tim, and, of course, the best of all, today's KQED-FM Forum.”

The KQED show, which was also carried nationally on Sirius radio, consisted of an hour-long look at CIRM, with some calls from listeners. Guests on the show were CIRM President, Alan Trounson, UC Davis stem cell researcher Jan Nolta and yours truly, David Jensen.

Other stories appeared in the SanFrancisco Business Times and Genetic Engineering News. The Bee's story appeared in the Modesto Bee as well.

Thursday, July 26, 2012

Coverage of Directors Meeting Concludes

Coverage of today's meeting of the governing board of the California stem cell agency is now concluded. Late in the afternoon, the board lost its quorum, a supermajority dictated by Prop. 71, and adjourned, leaving a number of items to be dealt with either by a telephonic meeting or the regular session scheduled for early September.

Two More Disease Team Applications Sent Back for More Review

Directors of the California stem cell agency today referred two additional research applications for $37 million in disease team funding back to reviewers for further consideration.

Both were the subjects of appeals by researchers whose proposals were rejected by grant reviewers.

One was from Timothy Hoey of OncoMed Pharmaceuticals in Redwood City, who sought $20 million.  The other was from Henry Klassen of UC Irvine, who sought $17 million. (See here and here for their appeals.)

The  board began the day by directing staff to come back to the board in early September. But with the large number of grants to be reassessed, it was acknowledged some might not be acted on until the board's meeting in late October.

Disease Team Round Hits $151 Million with Final Action

Directors of the California stem cell agency approved an additional $20 million disease team grant today before adjourning their meeting. The grant brought the disease team round to a total of $151 million.

The award went to Judith  Shizuru  of Stanford. Scientist Irv Weissman and Robert Klein, former chairman of the stem cell agency, both spoke on behalf of her appeal of a negative decision by grant reviewers. 

At the suggestion of the current board chairman, J.T. Thomas, the board placed conditions on the grant would stipulate Stanford pick up certain unknown, additional costs if necessary. 

Here is a link to the CIRM press release on today's action.

CIRM Directors Continue Discussion on Disease Team Grants

The CIRM directors are continuing to purse action on the remaining disease team applications. Two more have been sent back for more review. Another is up for approval.

Stem Cell Directors Approve $151 Million to Commercialize Stem Cell Research

Directors of the California stem cell agency today approved $151 million in research awards aimed at commercializing stem cell research and pushing therapies into clinical treatment.

Patients and researchers cheered when the action was announced. 

The awards of up to $20 million each were ratified by CIRM's governing board, which added two to the six applications approved by reviewers. The original six totalled $113 million. Directors budgeted $243 million for today's round.

Five of the applications involving appeals were sent back by the board for more review. (See here, here and here.) They will be considered again in early September or October.

The awards are the second largest research round in CIRM's history, surpassed only by an another, earlier $211 million “disease team” round. The latest effort is aimed at bringing proposed clinical trials to the FDA for approval or possibly starting trials within four years. That deadline coincides roughly with the date when CIRM is scheduled to run out of cash unless new funding sources are developed.

CIRM is currently exploring seeking private financing. It could also ask voters to approve another state bond issue. (Bonds currently provide the only real source of cash for CIRM.)  In either case, the agency needs strong, positive results from its grantees to support a bid for continued funding.

Today's action came after nine out of the 15  applicants who were rejected by reviewers appealed the  negative decisions. Two of the appeals were successful at today's meeting. It is a good bet that at least some of those referred for more review will be ratified by the board in September. 

The appeals were based on a variety of issues, ranging from technical science questions to inconsistencies in CIRM's research approaches and mistakes by reviewers. The outpouring of appeals was the largest in CIRM history in terms of the percentage of applicants seeking to overturn reviewer decisions.

The round also marked another first in terms of the total initially approved by reviewers. On occasion in the past, reviewers have not approved enough awards to consume all the funds budgeted by the CIRM board. But never before has the amount fallen so far short.

Most of the awards went to enterprises connected to persons on 29-member CIRM governing board, continuing a trend that has existed throughout CIRM's history. Board members with conflicts, however, are not allowed to vote or participate in the

The full list of the winners and the CIRM press release can be found here.

(Editor's note: This item was updated from an earlier version and the figures increased as the CIRM board added another grant and took additional action.)

CIRM Board in Executive Session

The governing board of the $3 billion California stem cell agency has gone into executive session to consider confidential information on applications for $20 million disease team awards.

Harvard's McMahon on His Way to USC

Andy McMahon
Harvard photo
The governing board of the California stem cell agency this afternoon approved a $5.7 million grant to lure a Harvard researcher to the University of Southern California in Los Angeles.

The scientist is Andrew McMahon, who serves on the executive committee of the Harvard Stem Cell Institute. CIRM officials said McMahon is ready to begin his work immediately at USC.

McMahon won stellar reviews from CIRM's grant reviewers who said he was an “exceptional scientist and one of the leading young developmental biologists.” Reviewers gave his proposal a score of 90 and, in summary, said,
“Major strengths include the candidate's exceptional productivity and contributions to the fields of mammalian embryology and kidney development, the significance and potential of the research program, the PI's proven leadership capabilities, and the outstanding institutional commitment.”

$18 Million Cedars Sinai ALS Proposal Headed for Approval

The California stem cell agency today cleared the way for approval of an $18 million grant to develop a new cell-based therapy for treatment of ALS.

The agency's governing board moved the application into a category that is expected to approved later today.

The action came on an appeal by researcher Clive Svendsen of Cedars Sinai. Also supporting the application were a number of persons with ALS.

StemCells, Inc., and Capricor Stave Off Rejection from Stem Cell Agency

Two California stem cell firms today won a reprieve from rejection in their bids for $40 million in funding from the California stem cell agency.

They are StemCells, Inc., of Newark and Capricor, Inc. of Beverly Hills. StemCells was founded by Stanford researcher Irv Weissman. Capricor was formed to commercialize research at Cedars of Sinai that had been previously financed in part by the state's $3 billion enterprise. Frank Litvack, who unsuccessfully vied for the chairmanship of the stem cell agency in June 2011, is the recently appointed executive chairman of Capricor.

The CIRM board sent the firms' bids back for more scientific review based on their appeals of reviewers' negative decisions as well as testimony at the board meeting today. The board will take up the applications, which seek $20 million each, again in early September.

Robert Klein, who was the first chairman of the stem cell agency, appeared before his old board as a member of the public on behalf of the StemCells appeal. He said new evidence will be published soon in a scientific journal that supports the StemCells approach. Klein also said that he was personally involved in three CIRM grant reviews in which scientists affirmed the company's approach. (Here are links to the appeal and to grant reviewer comments.)

The other application also involved new information. Litvack, former CEO of Conor Medsystem, told the board the firm has made considerable progress since CIRM's closed-door review of applications last April, both in terms of management and science. The firm's appeal said Litvack's appointment is part of the management improvements at the firm.

Sherry Lansing, a member of the CIRM board and former CEO of a Hollywood film studio, enthusiastically recalled a presentation last year before the board about the results of the initial research. She the firm has solved the problems cited by reviewers. She said,
“We have a fiduciary responsibility to select the best science.”

Stem Cell Directors Order More Consideration on $20 Million UCLA Research Application

Directors of the California stem cell agency today deferred action on a $20 million proposal that was rejected by its grant reviewers and sent it back for more consideration. 

The move involved an application by Stanley Nelson and M. Carrie Miceli of UCLA dealing with Duchenne muscular dystrophy. They are parents of a child with the affliction, which is usually fatal by age 25. The CIRM review summary said it is “a devastating and incurable muscle-wasting disease caused by genetic mutations in the gene that codes for dystrophin, a protein that plays a key role in muscle cell health.”

Nelson had filed an appeal seeking to overturn reviewers' action. Five  mothers and two fathers with children suffering from the disease made emotional appeals to CIRM directors on behalf of the application. Following their presentation, Art Torres, co vice chairman of the CIRM board, responded equally emotionally that the board is dedicated to finding therapies for such afflictions as Duchenne muscular dystrophy

The board approved more review for the application after it was disclosed that a company issued a press release two days ago that showed that  a drug involved in the proposal was more effective than reviewers believed. Philip Pizzo, a member of the board and dean of the Stanford medical school, expressed caution about the press release, given its timing and source. His comments came prior to the appearance of the parents.

The application is scheduled to be brought back to the full board in September for further action.

Rejected Grants May Be Sent Back for More Review

California stem cell agency chairman J.T. Thomas has raised the possibility of sending some of the disease team applications back for additional review if the board feels that is necessary to consider new information and resolve scientific disputes. 

Thomas discussed such a move at the beginning of the discussion of the $243 million disease team round. Nine out of 15 rejected applicants have appealed to the full board.  Some have presented new information. Others have disputed the scientific work of reviewers. 

The board used such a referral process for one application in the past. That grant was ultimately approved.

Discussion Beginning on Disease Team Grants

The governing board of the $3 billion California stem cell agency has begun discussion of applications in the $243 million disease team round. A large number of speakers are in the audience and will be limited to three minutes each.

Short-term Borrowing to Continue to Provide California Stem Cell Cash

The California stem cell agency will continue to be funded with short-term borrowing -- commercial paper -- provided through the state treasurer's office, J.T. Thomas, chairman of the agency's governing board, said today. 

Until late last year, the $3 billion agency was funded through state bond funds, but California Gov. Jerry Brown is trying to reduce the state's long-term debt load, which has skyrocketed in the last decade. 

Thomas told directors this morning that short-term funding comes at "the lowest possible interest rate." He said the arrangement leaves the agency in "very good shape."

The state will provide the funding to CIRM on a month-to-month basis in addition to providing a two month cushion, Thomas said. 

At some point, the short-term debt is likely to covered by state bonds.  As of June 30, CIRM
had $50.9 million on hand, down $42 million from April 30. During the fiscal year ending June 30, the agency paid out $232.7 million compared to $201.4 million in the previous fiscal year. 

California Stem Cell Directors Open Meeting

Today's session of the governing board of the $3 billion California stem cell agency has begun. The major item on the agenda is a $243 million grant round that has triggered a record pace for appeals by rejected applicants. At the request of the California Stem Cell Report, the agency has provided the conflict of interest list used by the agency to determine which directors will not be allowed today to vote or participate in the discussion of specific applications.  The list can be found below. Conflict of Interest List  -- CIRM Directors Meeting 7-26-12ound below.  

Live Coverage of Today's CIRM Board Meeting

The California Stem Cell Report will provide gavel-to-gavel coverage of today's meeting of the governing board of the $3 billion California stem cell agency. Among other things, the board is scheduled to give away anywhere from $113 million to $243 million to help push research into the clinic. Stories will be filed as warranted, based on the Internet audiocast.  Instructions for listening directly to the audiocast can be found on the agenda. The meeting is scheduled to begin at 9 a.m. PDT in Burlingame, Ca., with remote teleconference locations in Los Angeles, La Jolla and Pleasanton. The public can participate and comment from those locations. Addresses can be found on the agenda.

Wednesday, July 25, 2012

The Harsh Message at the California Stem Cell Agency

Grant reviewers have delivered a harsh message in the latest $243 million research round at the California stem cell agency – at least that is one way to look at it.

In effect, they told the governing board of the $3 billion enterprise that the overwhelming majority of applicants in its signature disease team round do not measure up, despite the fact that CIRM had early on partially vetted their efforts. Indeed, the reviewers said that the researchers deserve only $113 million instead of the full $243 million that was budgeted.

Obviously the results of the review can be interpreted in other ways as well. But the review outcome should raise some flags within the stem cell agency and its 29-member board, which meets tomorrow in Burlingame. It may not auger well for future rounds that also involve CIRM's newly energized drive to push research into the clinic.   

One interpretation of the review results could well be that CIRM's goals are unrealistic, that the agency is trying to move too fast for the normally glacial pace of research and development. Another interpretation is that the science is not good enough in California to accomplish what the agency is seeking to do, a view expressed by some in the early days of the nearly 9-year-old program. Another is that the reviewers themselves don't know enough or have failed to do their homework, which some of the rejected applicants have argued in their appeals. Yet another is that the CIRM review process is inadequate to the task of meeting CIRM's goals. And still another interpretation is that the normal peer review process on which CIRM's procedures are based is mightily flawed, a general contention argued by some(See here, here and here.)

Or quite possibly the result of the disease team reviews could reflect a combination of all of the above, to one degree or another.

Little is known about the substance of what goes on during the grant review process, aside from the staff-written review summaries. Even CIRM board members, who see only the summaries, have complained from time to time about not having enough information to make a good judgment on an application. Reviews are conducted behind closed doors. Information about the economic and professional interests of reviewers is withheld from the public by the stem cell agency.  

Here is a look, however, at what we do know. Initially the universe of applicants in this round totalled 36. That was the number that applied for planning grants for this round. Without a planning grant, they could not apply for a full $20 million award, with some exceptions. The exception process was controlled by CIRM President Alan Trounson, not reviewers. CIRM used the planning grants and the exception process not only to assist applicants but to winnow out weak applications.

Nineteen researchers won planning awards. With exceptions included and minus dropouts, 22 applied later for the big money. Out of the 22, only six were recommended for funding by reviewers, who are known more or less formally as the Grants Working Group. (See the four items at the end of this piece for a list of reviewers involved.)

In the past, reviewers have sometimes not approved sufficient applications to consume the entire amount budgeted for a round. But they have never produced a shortfall as great as in this case. It is all the more dramatic since this round carries a lot of weight for CIRM, which is pushing hard to commercialize research and fulfill at least part of the promises that were made to California voters in 2004 to win approval of creation of the stem cell agency.

One reflection of the unusual nature of the round is the record pace of researchers' appeals of negative decisions by reviewers. At least nine of the 15 rejected scientists are willing to say publicly that something is is not quite right in the review process, ranging from missing facts to inconsistencies in CIRM's endorsement of particular paths of research.

It is safe to say that CIRM directors tomorrow will pluck some applications out of the reject bin and increase the total awarded. But they should also examine the process to determine what generated this particular outcome. The Institute of Medicine, which is currently engaged in a $700,000 examination of CIRM, also might scrutinize this round with some care, given its size and importance to the California stem cell research effort.

Riding the Stem Cell Financial Wave in Newark

The stock price of StemCells, Inc., of Newark, Ca., has more than doubled this month following the publication of several “good news” stories about the company, including the virtual certainty that it will receive a $20 million loan tomorrow from the state of California.

The company also could well receive $20 million more if its appeal on another award from the California stem cell agency is successful.

StemCells, Inc., founded by Stanford researcher Irv Weissman, has seen its stock plummet as low as 59 cents during the last 12 months. On July 16, its price stood at 88 cents. On July 17, it jumped to $1.80. Today it is running about $2.28 at the time of this writing. (The latest stock price can be found here.)

All of which is to the benefit of Weissman, who acquired 15,433 shares of StemCells, Inc., on July 2 at no cost. According to SEC filings, the stock was given by the company to Weissman as a quarterly retainer for his services on the firm's scientific advisory board. Weissman also serves on the board of directors and currently holds 88,612 shares of the company.

Most of the good news about the company focused on its research into an Alzheimer's therapy. The California Stem Cell Report also reported on July 18 that the company was in line for a $20 million award from CIRM for its spinal cord injury therapy. CIRM's grant reviewers rejected the company's bid for $20 million for an Alzheimer's treatment but the firm is appealing that decision to the full board. (See here and here.)

Here are links to recent stories on StemCells, Inc.

Seeking Alpha by Chris Katje – July 17

California Stem Cell Report by David Jensen – July 18
First public report that StemCells, Inc. was in line for a $20 million loan from CIRM development of human neural stem cells to treat chronic cervical spinal cord injury

Technology Review by Susan Young – July 24

Tech24 – July 24

StreetInsider.com -- July 24

Live Coverage for Tomorrow's Board Meeting of the California Stem Cell Agency

The California Stem Cell Report will provide gavel-to-gavel coverage of tomorrow's meeting of the governing board of the $3 billion California stem cell agency. Among other things, the board is scheduled to give away anywhere from $113 million to $243 million to help push research into the clinic. Stories will be filed as warranted, based on the Internet audiocast.  Instructions for listening directly to the audiocast can be found on the agenda. The meeting is scheduled to begin at 9 a.m. PDT in Burlingame, Ca., with remote teleconference locations in Los Angeles, La Jolla and Pleasanton. The public can participate and comment from those locations. Addresses can be found on the agenda.

Tuesday, July 24, 2012

Record Appeals by Researchers in Huge California Stem Cell Agency Round

The California stem cell agency's latest grant round – which is budgeted for $243 million – has drawn an extraordinary and record outpouring of appeals from more than half of the scientists rejected by the grant reviewers.

Nine of the 15 applicants who were turned down have filed appeals to the governing board for its meeting Thursday in Burlingame. No other CIRM grant round has drawn as high a percentage of appeals, formally known as extraordinary petitions. (See here for a story on the previous record for percentage of appeals.)

Only six applicants were approved for funding in the second of the agency's signature disease team rounds. Their applications totaled $113 million, although $243 million was allotted by the board, which would make it the largest in the agency's history. The round is aimed at bringing proposed clinical trials to the FDA for approval or possibly starting trials within four years.

The rejected applicants come from both biotech firms and nonprofit institutions, including at least two that are ready to begin clinical trials next year, a much-sought goal of the stem cell agency.

The appeals, posted late yesterday on the CIRM web site, deal mainly with the details of the research although they also say, in some cases, that reviewers did not grasp the facts or were dealing with information that is now outdated. Here are some samples of what the applicants had to say in their petitions.

Linda Marban, CEO of Capricor, Inc., said her firm's heart disease therapy proposal, which was rejected by reviewers, is set for a clinical trial beginning next year. She said that since the time of the review last April the firm has “made major advances in both our clinical development program and our management and operational team.”

Marban noted that Frank Litvack, former CEO of Conor Medsystems Inc. of Menlo Park, Ca., is now executive chairman of the Capricor and will provide “experienced operational leadership.” In June 2011, Litvack was nominated to chair the CIRM board. However, directors chose J.T. Thomas, a Los Angeles bond financier who has filled that post since then.

In another appeal, researcher Stuart Lipton of Sanford-Burnham said,
 “Some reviewers were concerned about the PI's (principal investigator's) lack of experience in developing a cell therapy for clinical transplantation. Reply: Since there is currently no FDA-approved stem cell product for transplantation therapy for (the) brain, no PI could possibly have the experience requested here.”
Alexandra Capela of StemCells, Inc. said reviewer comments on her application “were inconsistent with previous guidance provided by CIRM.” She said reviewers “objected to a clinical approach that was already supported by the CIRM in a successful early translational research grant and the planning grant(for her application).” Capela said this “contradicts previous acceptance of this strategy by CIRM and constitutes a central reason for our appeal to the (CIRM board).”

Henry Klassen of UC Irvine said reviewers “overlooked facts” in his application and “had no real way of gauging the extraordinary rate of our progress.” He said trials are already scheduled for next year, far earlier than time frames set up in the RFA for this round.

In addition to the written appeals, scientists can appear before the full board at its meeting and often have. Sometimes they bring patients, who make emotional presentations. The board does not have to discuss any of the appeals. Unless a board member makes a motion on an appeal, it does not even come up for a vote.  Directors are generally reluctant to approve an appeal. Here is a link to a CIRM description of the petition process.

Here is a list of researchers appealing their rejections along with links to their appeals. The list is in the order in which CIRM posted them on the board agenda. The review summaries for all the grants can be found here.

For more on the CIRM grant appeal process, see here.

Monday, July 23, 2012

California Stem Cell Agency Shy This Week on Openness

In the past year, since J.T. Thomas has served as chairman of the California stem cell agency, the $3 billion enterprise has done well in providing the public with important information about matters that come before its governing board – a welcome change from the grievously deficient past performance.

However, that new, high standard for openness and transparency is coming up short this month.

With less than three days remaining before Thursday's meeting of the governing board, important information remains missing on significant matters scheduled to be discussed later this week in Burlingame.

At the top of the list is the response by CIRM President Alan Trounson to the first-ever performance audit of the nearly eight-year-old agency. The $234,944 study said the agency is laboring under a host of problems, ranging from protection of its intellectual property and management of its nearly 500 grants to an inadequate ability to track its own performance. Trounson's response could have come much earlier than this week, even last May when the results were unveiled publicly, although the agency had been briefed privately on them still earlier.

Also missing from the agenda is an important update on what Thomas has called a “communications war” – shorthand for the efforts by CIRM to generate more and favorable news coverage of the agency along with solidifying support among its constituent groups. The agency's weak PR effort, which is now improving, has troubled many directors for some time. The CIRM story is critical to the agency's financial future as it looks to private funding to continue its life beyond 2017 when its money runs out.

Also not be found is an explanation of an item before the directors' Science Subcommittee on Wednesday evening that appears to have interesting implications, given CIRM efforts to embrace the biotech industry more warmly. The proposal calls for  establishing “responsible budgeting as a criterion for evaluating applications for funding.” No further information is available. But one wonders whether the proposal could reflect CIRM's unfortunate experience with Geron, which signed a $25 million loan agreement with CIRM last summer only to dump its hESC program a little more than three months later. Geron cited financial reasons. One also wonders whether the need to focus on “responsible budgeting” reflects problems with some researchers or whether it is intended to help businesses pick up a larger share of awards.

Posting details on issues to be decided by directors -- in a timely fashion -- should be a routine matter for the agency. It is also key to engaging the public, industry and researchers – not to mention that it is good policy, good management and good government. Without adequate notice, it is impossible for interested parties to comment on proposals or make well-considered suggestions. Given the agency's improved performance during the past year, this month's slippage may only be an aberration. We hope so.

Sunday, July 22, 2012

From Patient Advocates to Presidents: Decision-making Roles on Billions in Research

Directors of the California stem cell agency are moving to spell out the roles of the players who make the de facto decisions on its $3 billion in research funding.

This Wednesday evening in Burlingame, Ca., the directors' Science Subcommittee is scheduled to consider delineating the functions of members of the grant review group, also known as the Grants Working Group, along with CIRM staff in connection with grant reviews. Although the full CIRM board has legal authority to approve or reject grants, it almost never overturns a positive decision by the Grants Working Group on an application.

The agenda for Wednesay's meeting contains the full text of the addition to the working group's bylaws, but it does not say why changes are needed in the reviewers' closed-door procedures. However, from time to time, CIRM directors have commented during their public meetings that it is not always clear to the scientific reviewers what the full process entails.

Among other things, the bylaws addition spells out the role of the CIRM president, Alan Trounson, and other CIRM staff. It says the president can participate in discussions but cannot assign scores or vote. The president, however, has the top decision authority on grant pre-applications, which are a separate process. 

The new language makes it clear that the high-powered scientific reviewers can be expected, from time to time, to be asked by staff to explain themselves, or as the new bylaw phrases it, to “clarify their views or address specific issues in order to present a complete and useful” public review summary report to the CIRM governing board.

Also added to thebylaws would be this language,
“Prior to governing board consideration of GWG recommendations, the president and scientific staff should consider whether there are applications which they believe warrant particularly close review by the board, or whether specific modifications may be needed to successfully execute a particular proposal.”
The bylaw change also deals the roles of the eight patient advocates on the grant review group -- all of whom are also members of the CIRM governing board. They play a key role during “programmatic review,” an extremely broad-ranging process.

The bylaws addition states:
“Programmatic review is led by one of the GWG (Grants Working Group) vice chairs, who is a patient advocate, or a patient advocate member designated by the vice chairs. During programmatic review, patient advocate members of the GWG join the scientist members to make and vote on programmatic motions and funding recommendations to the gtoverning board. Programmatic review is intended to allow consideration of issues beyond scientific merit, such as disease representation and societal impact. In making funding recommendations to the governing board, GWG members consider the scientific merit of each application, as reflected in the scientific score, as well as any programmatic issues raised.”
The chairman of the CIRM Scientific Subcommittee is a patient advocate, Jeff Sheehy, who is also vice chair of the review group and plays the leading patient advocate role in the CIRM working group. Additionally, Sheehy, a communications manager at UCSF and nationally known HIV/AIDs advocate, almost invariably leads the full board discussion prior to action on grant applications.

In addition to the meeting location, the public can participate in the session at a teleconference site at UC Irvine. The address can be found on the agenda.

$70 Million Translational Round Proposed by California Stem Cell Agency

The latest California stem cell research round is expected to commit $70 million to advance “promising stem cell discoveries toward clinical development.”

The concept proposal, expected to be approved at Thursday's CIRM board meeting, would fund as many as 20 grants and loans. Grants would go to nonprofit entities. Businesses would have a choice of a loan or grant, which carry different rules regarding intellectual property.

The translational grant proposal said two categories would be funded:
“Research that results in a stem cell-derived development candidate (DC) to treat an unmet medical need where all necessary activities to move into IND-enabling preclinical development have been completed.
“Research conducted to identify and/or establish the feasibility of a potential stem cell-derived development candidate. The goal of these development candidate feasibility (DCF) awards is to achieve preclinical (in vitro/in vivo) proof of concept. CIRM is particularly interested in proposals for DCF awards that address unique new opportunities for regenerative medicine that are potentially transformative therapeutic approaches to unmet medical needs (e.g. direct reprogramming).”
The RFA is expected to be posted in September with funding in the summer of next year.

Researcher Alert: Grant Rule Changes at Stem Cell Agency

The $3 billion California stem cell agency is changing the rules for how it handles its grants, ranging from research milestones and budgets to training programs and unspent funds.

A CIRM staff memo, prepared for this Thursday's CIRM board meeting, said,
“Some of the proposed amendments are clarifying amendments and others are more substantive.”
The memo said that the changes are intended to improve the 45-page grant administration policy and remove provisions that are hard for the staff or grantees to “understand and follow.” The memo said the changes were developed after input from grantees and others.

Grant recipients and others seeking CIRM cash would be well-advised to examine the proposed changes, which are scheduled to be approved on Thursday at the board meeting in Burlingame.

The modifications will then go into the state's administrative law process and are scheduled to go into effect in October.

Friday, July 20, 2012

Royalty Rules at the California Stem Cell Agency: Business Friendly Changes Proposed

If you are looking to follow the money trail at the $3 billion California stem cell agency, next Thursday's meeting of its 29-member board of directors is a good place to start.

On the agenda are revisions in its intellectual property rules, which are all about who gets paid and how much and when – should an agency-financed product generate significant cash.
The key question about the proposed changes is whether they will generate an appropriate return for the state, given its $6 billion investment, including interest on the bonds that finance CIRM. The impact of the changes is not crystal clear. And the staff memo does not mention two important definition changes that appear to be quite business friendly.

During the 2004 ballot campaign that created the stem cell agency, California voters were told that the state would share as much as $1 billion or more in royalties. Eight years later, no royalties have materialized since CIRM research has not yet resulted in a commercial therapy. 

At next week's meeting in Burlingame, directors will be asked to modify CIRM rules for royalties that CIRM staff said "could be a disincentive" for business. A staff memo said the proposals would alter provisions that create "administrative challenges and uncertainty." The memo asserted the proposed changes would ensure "a comparable economic return to California" equal to the existing provisions. However, the memo provided no explanation or evidence for how that result would come about. The proposed changes could also be applied retroactively with the agreement of CIRM and the grantee.

Currently CIRM grantees and collaborators must share as much as 25 percent of their licensing revenue in excess of $500,000, depending on the proportion of agency funding for the product. The IP rules also contain a provision for payments in the event of development of a "blockbuster" therapy. The staff memo described how that would work.
“It provides that grantees and collaborators must share revenues resulting from CIRM funded research as follows: after revenues exceed $500,000, three times the grant award, paid at a rate of 3% per year, plus upon earning $250M(million) in a single calendar year, a onetime payment of three times the award, plus upon earning revenues of $500M in a single calendar year, an additional onetime payment of three times the award and, finally, in the instance where a patented CIRM funded invention or CIRM funded technology contributed to the creation of net commercial revenue greater than $500M in a single calendar year, and where CIRM awarded $5 million or more, an additional 1% royalty on revenues in excess of $500 million annually over the life of the patents.”
The proposed changes would exempt "pre-commercial revenues" from the state's revenue sharing, the memo said, in order to maximize the amount businesses can "re-invest in product development." The proportionality payment provision would be changed to require only 15 percent of licensing revenues if CIRM's investment is less than 50 percent and 25 percent if it is more than 50 percent. Revenue sharing would be extended to "commercializing entities." No definition of "commercializing entities" was provided in the board agenda material, but a June version of the changes defined them as "A For-Profit Grantee and its Collaborator or Licensee that sells, offers for sale or transfers a Drug, product(s) or services resulting in whole or in part from CIRM-Funded Research."

Not mentioned in the CIRM staff memo were two new provisions in the rules involving the definition of licensing revenue and the sale of a therapy. Both could be construed as quite favorable to businesses. According to the June version of the changes, licensing revenues are defined as a figure minus "a proportion of expenses reasonably incurred in prosecuting, defending and enforcing related patent rights equal to CIRM’s percentage of support for development."  The sale provision says that royalties on "net commercial revenue" are not due until received from sales in the United States or Europe. That provision would appear to exclude California from receiving royalties on product sales in most of the world, where it is easier to receive regulatory approval for sale of new therapies and drugs. (See here -- page 2 -- for royalty provision and here for definition of "first commercial sale"-- page 3.)

The existing IP regulations are enshrined in a 2011 state law. However, the law also provided that they can be altered by the agency, the CIRM memo said, “if it determined that it was necessary to do so either to ensure that research and therapy development are not unreasonably hindered as a result of CIRM’s regulations or to ensure that the State of California has an opportunity to share in the revenues derived from such research and therapy development.”

The memo continued,
"The proposed amendments re-strike the balance both to ensure that industry will partner with CIRM and to ensure that the State has the opportunity to benefit from successful therapy development."
Board action next week will give the go-ahead for posting the proposals as part of the official state administrative rules process. They are subject to additional changes in that process. 

The agenda originally contained the full text of the changes. However, that material has been dropped from the board agenda. An earlier version can be found here and here. We have queried the agency about the reason for dropping the text in the board agenda.

(Editor's note: The agency has now reposted the version of the text of the changes that was on the agenda earlier, saying that it was having problems with its web site. For the definitions of terms, however, it is still necessary to refer to the June documents.)

Thursday, July 19, 2012


The stem cell lure item today incorrectly said the total of the two grants was $13.4 million. The correct figure is $12.4 million.

California's $12.4 Million Stem Cell Recruitment Lure

Directors of the California stem cell agency next Thursday are likely to approve spending $12.4 million to lure a couple of stem cell stars to the Golden State.

It is part of a $44 million recruitment program that has brought three highly regarded scientists to three California research institutions, all of which have representatives on the CIRM board. (See here, here and here.)

As usual, the $3 billion stem cell agency does not identify the potential recipients in advance of the meeting or the institutions that are recruiting them. However, if you have a modicum of knowledge about the specific fields involved, it is likely that you can identify them based on the information in CIRM's review summaries and some Internet searching.

One of the proposed research grants–a $5.7 million award--would go a scientist who won raves from CIRM's reviewers. The researcher was described as an “exceptional scientist and one of the leading young developmental biologists.” Reviewers gave his proposal a score of 90 and, in summary, said,
“Major strengths include the candidate's exceptional productivity and contributions to the fields of mammalian embryology and kidney development, the significance and potential of the research program, the PI's proven leadership capabilities, and the outstanding institutional commitment.”
 The other grant was larger–$6.7 million–but reviewers raised a number of questions about the candidate although they recommended it for funding. The review summary ranked the application at 57 and said,
“In summary, this is an application from an established leader in NSC biology to pursue research focused on disease mechanisms in PD. Strengths of the proposal include the quality of the PI, the focus of the project on an interesting hypothesis, and the leadership in basic science that the candidate would bring to the applicant institution. Weaknesses included deficiencies in the research plan, the limited track-record of the PI in PD research and an institutional environment lacking adequate support for basic science investigations.“
Last January, in a rare move, CIRM directors rejected a $6.3 million recruitment grant with a score of 76 sought by the Buck Institute, which is not represented on the board.

The proposals are scheduled to be acted on at a public CIRM board meeting in Burlingame, Ca.

(Editor's note: an earlier version of this item incorrectly said the total of both grants was $13.4 million.)

Wednesday, July 18, 2012

UC Davis Researchers Score Big in $113 Million Stem Cell Award Round

Scientists at the University of California at Davis are set to win nearly half of $113 million expected to be awarded next week by the California stem cell agency as it pushes aggressively to turn research into marketplace cures.

Directors of the $3 billion agency are virtually certain to approve awards to three researchers at UC Davis, which operates its medical school and other research facilities in nearby Sacramento. The other three expected winners are from UCLA, Stanford and StemCells, Inc., of Newark, Ca., a publicly traded firm.

The $113 million round is the second largest research round in CIRM's history, surpassed only by an another, earlier $211 million “disease team” round. The latest effort is aimed at bringing proposed clinical trials to the FDA for approval or possibly starting trials within four years. That deadline is close to the time when CIRM is scheduled to run out of cash unless new funding sources are developed.

CIRM is currently exploring seeking private financing. It could also ask voters to approve another state bond issue. (Bonds currently provide the only real source of cash for CIRM.)  In either case, the agency needs strong, positive results from its grantees to support a bid for continued funding.

The CIRM board is scheduled to approve the latest awards one week from tomorrow at a public meeting in Burlingame in the San Francisco area. The agency's policy is to withhold the identities of applicants and winners until after formal board action. The California Stem Cell Report, however, has pieced together their identities from public records.

Here are the winners and links to the grant review summaries, listed in order of the CIRM scientific scores:
  • Vicki Wheelock, UC Davis, $19 million, for development of a genetically modified cell therapy for Huntington's disease, an inherited neurodegenerative disorder. Scientific score 87.
  • Antoni Ribas, UCLA, $20 million, for genetic reprogramming of cells to fight cancer. Scientific score 84.
  • Nancy Lane, UC Davis, $20 million, for development of a small molecule to promote bone growth for the treatment of osteoporosis. Scientific score 80.
  • John Laird, UC Davis, $14.2 million, for development of mesenchymal stem cells genetically modified for treatment of critical limb ischemia, which restricts blood flow in the lower leg and can lead to amputation. Scientific score 79.
  • StemCells, Inc., (principal investigator not yet known), $20 million, for development of human neural stem cells to treat chronic cervical spinal cord injury. The company, founded by Stanford scientist Irv Weissman, who serves on its board, said earlier this year that it had filed two applications in this round, one of which dealt with cervical cord spinal injury. No other applicants filed a proposal for such research. Scientific score 79.
  • Robert Robbins, Stanford, $20 million, development of a human embryonic stem cell treatment for end-stage heart failure. Scientific score 68.
In the case of businesses, the awards come in the form of loans. Grants go to nonprofits. One of the reasons behind the varying mechanisms is the difference in CIRM's intellectual property rules for businesses and nonprofits.

CIRM's Grant Working Group earlier this year approved the applications during closed door sessions. The full CIRM board has ultimate authority on the applications, but it has almost never rejected a positive action by the grant reviewers.

The board originally allotted $243 million for this round. Directors could reach into the 15 applications rejected by reviewers and approve any of them, which the board has done in other rounds. In this round, three rejected applications scored within seven points of the lowest rated application approved by reviewers, which could lead some directors to argue that the scores are not significantly different. One of the three came from Alexandra Capela of StemCells, Inc., and was scored at 61. The other two and their scores are Clive Svendsen of Cedars-Sinai, score 64, for ALS research, and Roberta Brinton of USC, score 63, for an Alzheimer's project.

Rejected applicants also can appeal reviewer decisions to the full CIRM board in writing and in public appearances before directors.

Twenty-three researchers were eligible to apply for funding, CIRM told the California Stem Cell Report. Applicants qualified by either winning a related planning grant from CIRM last year or by being granted an exception to that requirement by CIRM staff. Of the 22 researchers who ultimately applied(one nonprofit dropped out), six came from biotech businesses. Three of those qualified through exceptions. Three other businesses won planning grants last year out of the eight businesses that applied.

CIRM has come under fire for its negligible funding of stem cell firms and is moving to embrace industry more warmly.

Only one of the grants approved by reviewers involves research with human embryonic stem cells, which was the critical key to creation of the California stem cell agency. California voters established the agency in 2004 on the basis that it was needed because the Bush Administration had restricted federal funding of human embryonic stem cell research.  

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