Friday, June 28, 2013

Cost of a Stem Cell Therapy? An Estimated $512,000

(Editor's note: Updated figures on costs can be found in this 2017 item.)

The likely costs of potential stem cell therapies and cures receive almost no attention in the media as well as publicly from scientists and the biotech firms.

Usually any public discussion is obliquely framed in the context of “reimbursement,” as if industry is owed something instead of making a business decision about what will make a profit. Euphemisms and jargon cloak unpleasant realities such as astronomical patient costs. But what reimbursement really involves are, in fact, pricing decisions and profit margins along with lobbying campaigns for inclusion of therapies in normal coverage of health insurance and Medicare

And today a singular figure – $512,000 for one stem cell treatment – appeared in the Wall Street Journal . The story by Kosaku Narioka and Phred Dvorak dealt with what would be the first-ever human study of a treatment that uses reprogrammed adult stem cells.

They reported that the study received preliminary approval on Wednesday from a key panel of the Japan Health Ministry. The treatment involves a form of age-related macular degeneration, which has also been targeted by the California stem cell agency with different approaches.

Buried deep in the Wall Street Journal article, with little other discussion, was this sentence:
“One eventual obstacle, even if tests go well, could be cost: (Masayuki) Yamato (of Tokyo Women's Medical University) says initial estimates for the treatment run around ¥50 million ($512,000) per person."
The subject of costs for potential stem cell treatments has rattled around in the background for years without much deep public discussion. One reason is that high costs of treatments are controversial and can trigger emotional debate. Another reason is that it is very early in the therapy development process and estimates are not likely to be entirely reliable.

A few years ago, however, the California stem cell agency commissioned a study involving costs of stem cell therapies. The UC Berkeley report said,
“The cost impact of the therapy is likely to be high, because of a therapy’s high cost per patient, and the potentially large number of individuals who might benefit from the therapy. This expense would put additional stress on the Medicare and Medicaid budgets, cause private insurance health premiums to increase, and create an incentive for private plans to avoid covering individuals eligible for a therapy.”
The findings did not seem to be exactly welcomed. The agency sat on the 2009 study for seven months until it was uncovered by the California Stem Cell Report in April 2010. Then the agency was careful to say that the study did not reflect the view of CIRM management or board leadership.

Their wariness of being out in front on the issue could be well-advised. The pharmaceutical industry received some unpleasant attention this spring when more than 100 influential cancer specialists from more than 15 countries publicly denounced the cost of cancer drugs that exceed more than $100,000 a year.

Nonetheless pricing is critical to both patient accessibility and therapy development. If companies cannot make a profit on a possible therapy, it is virtually certain not to appear in the marketplace.

While the subject remains in the background, it does not mean there is a lack of interest. The copy of the Berkeley stem cell cost study that was posted online by the California Stem Cell Report has been read 11,701 times since it was made available in April 2010 on

(For a 2015 look at costs for non-government approved procedures, see this item.)

A copy of the Berkeley study can be found below.

Wednesday, June 26, 2013

Bluebird and Banking: Media Pluses for California Stem Cell Agency

The California stem cell agency scored a couple of favorable publicity points last week as the result of a successful stock offering by an award recipient and another piece about creation of a stem cell bank in Northern California.

The IPO by bluebird bio (the company's preferred spelling) of Massachusetts was a big winner for the company, raising millions of dollars more than anticipated.

The Boston Globe wrote,
“Shares of the Cambridge life sciences company bluebird bio Inc. soared almost 60 percent on their first day of trading (last) Wednesday, an impressive debut for a business that endured years of stagnation and another encouraging sign for the biotechnology industry.
“The local gene therapy company raised $101 million in an initial public offering priced at $17 per share, higher than the $14 to $16 estimated by investment bankers. Bluebird shares closed at $26.91 per share on Wednesday.”
The stock continues to trade around $25 a share at the time of this writing, which is good news generally for the biotech industry.

The company received a $9.4 million award last fall from the $3 billion stem cell agency. The company has yet to receive any actual cash from the agency as both parties work out final details of an agreement, a spokesman for the agency said last week.

The stem cell agency touted the successful IPO in a blog item by  that said,
“Bluebird Bio, one of the oldest companies in the struggling gene therapy field, is having an outstanding first day in the stock market today, and largely by marrying its gene therapy technology with stem cell science. The company’s financial milestone brings hope and excitement to both fields.”
However, the news stories about the IPO failed to mention the stem cell agency's involvement, which would have been nice for the agency but was to be expected given the way news is covered.

The story about the stem cell bank appeared on Xconomy, an Internet news service dealing with technology. Written by Bernadette Tansey, a former San Francisco Chronicle reporter, the piece dealt with the both business and science of stem cell banking. She wrote,
“One of the main goals of California’s $3 billion stem cell research agency is to draw companies into the state so they can vie for a share of the funding.
"With a recently funded $32 million initiative, the California Institute for Regenerative Medicine(CIRM) has attracted two of the biggest US players in stem cell banking to Novato, CA, to form one of the largest biobanks of induced pluripotent stem cells (iPS cells) in the world.”
The stem cell bank effort has become a minor staple in recent news coverage of CIRM, surfacing in a number of articles since the awards were approved. One of the reasons for that is that the project has a relatively straight-forward story line compared to many research efforts and the concept of "banking" is familiar to editors, writers and readers. 

Thursday, June 20, 2013

Pay-For-Eggs Legislation Draws More Media Attention

California legislation to allow women to be paid for their eggs for scientific research generated several news articles this week as the measure neared final legislative approval.

The coverage included both pro and con but did not amount to major attention from the mainstream media. And, with one exception, the articles failed to report that the legislation did not apply to research funded by the $3 billion California stem cell agency, which bans compensation for egg providers.

The proposal (AB926) is now on the state Senate floor with a vote possibly coming as early as next Thursday. A spokesman for the American Society for Reproductive Medicine in Birmingham, Ala., an industry group sponsoring the bill, said unequivocally that the Gov. Jerry Brown is expected to sign the measure. (See the Senate floor bill analysis here and a press release on the bill here.)
Assemblywoman Susan Bonilla
Photo Source -- Bonilla's office

The articles about the legislation by Assemblywoman Susan Bonilla, D-Concord, have appeared in the journal Nature, the San Francisco Chronicle and the Huffington Post over the past few days.

Alice Crisci, a California patient advocate writing on the Huffington Post, yesterday remarked that women egg providers should be treated the same as men involved in scientific experiments.
“After all, aren't we past the days when we treat women like they are less capable than men of making sound decisions for their own well-being? It's my body and my choice if I want to donate a dozen of my eggs to science. Who knows -- maybe it's my egg that will be used to find a cure for cancer.”
Debra Saunders, writing a column in the Chronicle on Sunday, said,
“That sperm-egg parity argument is so bogus. When men donate sperm, they risk second thoughts about unknown, random offspring, but they do not risk serious medical side effects. Egg donation, on the other hand, can be hazardous to your health. The New York Times reports, "Egg donors can suffer serious side effects from the powerful hormones needed to generate multiple eggs." And: "The most significant risk is ovarian hyper-stimulation syndrome, which can cause bloating, abdominal pain and, rarely, blood clots, kidney failure and other life-threatening ailments."
Charlotte Schubert, writing in Nature on Tuesday, said,
“In practical terms, the bill would bump up payments from hundreds to thousands of dollars. In Oregon — which, like most states, does not have regulations governing egg donation — women recently received $3,000–7,000 each for eggs used in a study that created stem-cell lines from cloned human embryos.”
Prices for eggs can run substantially higher depending on the characteristics of the supplier.

Bonilla's office said the bill did not come up for a vote during today's Senate floor session but could come up next Thursday.

Thursday, June 13, 2013

Compensation for Human Eggs Approved by Key California Senate Committee, But Not For CIRM Researchers

Legislation that would permit women in California to be paid for their eggs for scientific research yesterday cleared a key state Senate committee and is likely headed for the governor's desk.

The measure by Assemblywoman Susan Bonilla, D-Concord, was approved on a 6-1 vote by the Senate Health Committee and now goes to the Senate floor. Earlier, it passed the Assembly on a 54-20 vote.

Some stem cell researchers and other scientists have chafed under state restrictions that bar compensation for eggs while that the same time fertility clinics are paying an average of $9,000 a session for eggs, with some prices going as high as $50,000.

However, the legislation will not affect researchers using grants from the $3 billion California stem cell agency. The agency's regulations bar compensation for eggs in the research that it funds. That means that at least a two-tiered research system would exist in California not to mention another tier created by federal regulations that differ from both those of the stem cell agency and those set by the legislation.

CIRM's restrictions are required by Proposition 71, which created the agency in 2004, and cannot be changed without a 70 percent vote of the legislature. Bonilla's bill requires only a majority vote.

Bonilla's legislation is sponsored by American Society for Reproductive Medicine, the chief industry group for the largely unregulated fertility industry.

The analysis prepared for yesterday's committee session summarized Bonilla's arguments for the measure in this fashion:
“This bill seeks to create equity in the field of medical research compensation by removing the prohibition on compensation for women participating in oocyte (egg) donation for medical research. All other research subjects are compensated for their time, trouble, and inconvenience involved in participating in research. AB 926 ensures that women are treated equally to all other research subjects - allowing them to actively evaluate their participation in research studies. Unfortunately, the ban on compensation has had serious unintended consequences. It has led to a de facto prohibition on women’s reproductive research in California, adversely impacting the same women that the ban intended to protect. With few oocytes donated, fertility research and fertility preservation research has been at a standstill. This greatly affects women suffering from fertility issues and women facing cancer who would like to preserve their oocytes.”
A number of organizations are opposed to the bill including the Center for Genetics and Society in Berkeley and the Catholic Church. The bill analysis summarized some of the opposition arguments in this fashion:
“Egg harvesting exposes healthy young women to multiple synthetic hormones in order to produce many times the normal number of eggs per cycle. One of the potential harms is OHSS, which has resulted in hospitalizations and at least a few documented deaths. These groups state that many experts remain concerned about the long-term risks of these drugs, especially their potential impact on infertility and various cancers. Follow-up research on egg providers, which could establish the frequency and severity of these adverse outcomes, is widely recognized to be grossly inadequate.”
In addition to risk and religious objections, opponents also argue that poor and minority women are likely to be exploited by enterprises seeking their eggs to resell at a profit.

No major stem cell research organizations, including the California stem cell agency, have taken a position on the bill. The legislation has received little public attention, although The Sacramento Bee carried an article last March. Ruha Benjamin, author of "People's Science" and assistant professor at Boston University, also wrote about the measure in April on the Huffington Post. Benjamin said,

UC Berkeley professor Charis Thompson compares egg donation to 'other kinds of physically demanding service work,' arguing for a 'salary negotiation between the state agency (or relevant employer) and the donor.' This, she contends, is a 'sensible and dignified recognition of [the donor's] work, time, and effort.' And instead of refusing compensation to women, Thompson suggests that we 'direct our efforts to understanding and minimizing' the risks.

“Indeed. Now more than ever, we must redouble our efforts, because the market in eggs appears to be expanding from private reproduction to public research, and increasingly overseas, if the surrogacy industry is any indication of how 'cheaper' women become a reserve army of bio-labor in less regulated regions.” 

Wednesday, June 12, 2013

Merksamer Makes Only Bid For Stem Cell Agency Lobbying Contract

Only one of California's lobbying firms is interested in working for the California stem cell agency – at least interested enough to put in a bid.

However, that is likely more of a function of the small size of the contract – $65,000 – and the entrenched nature of CIRM's existing lobbyist – Nielsen, Merksamer, Parrinello, Gross & Leoni LLP – one of the state Capitol's larger lobbying firms with $5 million in billings last year.

The firm touted its longstanding connection to the $3 billion agency in its 21-page proposal in response to a CIRM RFA this spring. The firm has been with CIRM since 2005.

Nielsen Merksamer's proposal also noted a couple of other interesting aspects of the continuing arrangement. CIRM will run out of money for new grants in 2017, and Nielsen Merkasamer said,
“Furthermore, as a premier legislative advocacy and (Nielsen's italics) ballot measure law firm, Nielsen Merksamer can actively and effectively assist CIRM as it contemplates returning to the voters for additional funding.”
The proposal also suggested that it can conceal information that normally would be public record. The firm said,
“Another unique advantage offered by Nielsen Merksamer is that, unlike the vast majority of lobbying firms, since we are a full-service law firm, our relationships with our clients are subject to the attorney-client privilege.”
CIRM used such a technique in 2012 and 2008 in matters involving its budget and PR advice.

Nielsen Merksamer also said,
“(N)o one understands CIRM’s 'total picture' better than Nielsen Merksamer. Not only has Nielsen Merksamer been representing CIRM before the Legislature for the past decade, but Nielsen Merksamer was also one of the principal drafters of the aforementioned Proposition 71—which brought CIRM to life. The depth of Nielsen Merksamer’s familiarity with, and understanding of, CIRM’s mission and structure, the challenges it faces, and the promise it holds simply cannot be matched by any other legislative advocate.”
The firm said it would not need the $65,000 offered by CIRM but would charge only $49,200 annually, about the same as it has been paid for several years. Steve Merksamer and Gene Erbin, who drafted portions of Proposition 71, would handle most of CIRM's affairs. John Moffatt and Missy Johnson would also be available.

The firm's proposal outlined several instances where it successfully killed legislation opposed by CIRM. You can read about them in their proposal below.

Tuesday, June 04, 2013

Light Coverage of Cellular Dynamics IPO But One Exec Says It's Good for Stem Cell Biz

A handful of media outlets today carried stories about the public stock offering announced yesterday by Cellular Dynamics International, Inc., a Wisconsin firm that will benefit to the tune of $16 million-plus from the California stem cell agency.

Kathleen Gallagher of the Milwaukee Journal Sentinel described the company, founded by stem cell pioneer Jamie Thomson, as in the business of making “fully functioning human cells in industrial quantities.”

Judy Newman of the Wisconsin State Journal in Madison, where the company is based, quoted Beth Donley, chief executive of Stemina Biomarker Discovery, as saying,
“It can’t help but increase the value of other stem cell companies.”
Thomson is a professor both at the University of Wisconsin in Madison and at UC Santa Barbara, and we queried Dennis Clegg, co-director of the Center for Stem Cell Biology and Engineering at UC Santa Barbara, about the school's ties to Cellular Dynamics, which hopes to take in $57 million in its public offering.

He replied in an email that Santa Barbara has a collaboration with Cellular Dynamics and the University of Wisconsin to develop a vision-restoring, stem-cell-based therapy for people with advanced retinal diseases. That $900,000 effort is financed by the Foundation Fighting Blindness.

The California stem cell agency grant to Cellular Dynamics is for work at the stem cell bank being created at the Buck Institute in Novato, north of San Francisco.

The Milwaukee Business Journal and Genomeweb also carried stories on the IPO.

Monday, June 03, 2013

Cellular Dynamics: California Stem Cell Agency Recipient Plans $57 Million IPO

A Wisconsin firm that is the beneficiary of more than $16 million from the California stem cell agency today announced that it intends to go public to raise $57.3 million for its iPS cell ventures.

Jamie Thomson
UCSB photo
The firm is Cellular Dynamics International, Inc., and was co-founded by internationally known stem cell scientist Jamie Thomson of the University of Wisconsin, who is currently the company's chief scientific officer. Thomson is also a professor at UC Santa Barbara, where he is co-director of the Center for Stem Cell Biology and Engineering.

In March, the California stem cell agency awarded a $16 million grant to Cellular Dynamics to derive three iPS cell lines from 3,000 individuals as part of the agency's stem cell banking initiative. (Here is a link to the grant review summary.)

The company said in its SEC filings that it also will be the prime subcontractor on a $10 million grant that the Coriell Institute for Medical Research of Camden, N.J., received in the agency's stem cell banking round. Cellular Dynamics said some of the funds from the IPO will be used to complete its California laboratory in leased space at the Buck Institute in Novato, north of San Francisco.

Cellular Dynamics was founded in 2004 and sold its first commercial product in 2010. It reported revenues of $6.6 million in 2012 and losses of $22.3 million. It has 115 full-time and part-time employees worldwide.

The company said,
“During 2011 and 2012, we had three large biopharmaceutical customers that individually accounted for greater than 10% of our total revenue in one or both years. Eli Lilly and Company (Lilly) accounted for 10% of total revenue in 2011 and 18% of total revenue in 2012. Hoffmann-La Roche Inc. (Roche) accounted for 13% of total revenue in 2011 and GlaxoSmithKline plc (GSK) accounted for 11% of our total revenue in 2012.”
Cellular Dynamics also said in its filings,
“Our total revenue grew from $2.6 million in 2011 to $6.6 million in 2012, an increase of 154%. This growth was driven by a 247% increase in sales of our iCell products which grew from $1.5 million in 2011 to $5.2 million in 2012. At December 31, 2011, our backlog of revenue expected to be recognized in 2012 was $1.1 million. At December 31, 2012, our backlog of revenue expected to be recognized in 2013 had grown to $4.1 million.
“For the three months ended March 31, 2013 our total revenue was $2.4 million, an increase of 109% over the corresponding period in 2012. This growth was driven primarily by an increase in iCell product sales, which grew from $0.6 million for the three months ended March 31, 2012 to $1.8 million for the three months ended March 31, 2013, an increase of 173%.”
Paul Knoepfler of UC Davis, writing on his blog, touched on some of the aspects of the IP issues involving Cellular Dynamics and  Japanese researcher Shinya Yamanaka, who won the Nobel Prize last year for discovering how to reprogram adult stem cells into pluripotent cells (the iPS process).

 Knoepfler wrote,
"A recent question is the issue of who has the intellectual property (IP) rights to iPS cell technology. People have told me in the past that they wondered if Cellular Dynamics has unambiguous rights to develop all of these iPS cell-based products."
Knoepfler also wrote,
 “This (the IPO) looks to be very interesting and could transform the field as it develops.”
News coverage today of the IPO filing was light, but is more expected to surface tomorrow. Here is a link to the only story that had surfaced as of this writing. 

No price or date has yet been set for the offering.

Pomeroy on Doing the Right Thing and Foster Care

Claire Pomeroy
CIRM photo
On Claire Pomeroy's last day as a member of the governing board of the $3 billion California stem cell agency, she also published an essay on the Huffington Post in which she discussed fleeing from an abusive home at age 14.

Pomeroy, former vice chancellor and dean of the medical school at UC Davis and now president of the Lasker Foundation in New York,  wrote last month,
“For some children, the uncertainty of life on the street is better than certainty of violence at home. It was for me. At age 14, I escaped from an abusive home with no money, nowhere to go and only the clothes I was wearing. I remember staring into the night, standing somewhere between fear and freedom. I became one of the millions of homeless teens, yet I was lucky because foster care ultimately saved me.”

“However, after an emergency placement and three foster homes, the challenges were not over. At 17 I aged out of the foster care system early when my foster parents moved out of state. On my own again, I had to find a job, a place to live and finish high school. Then I climbed the next mountain to graduate from college and medical school.”
Pomeroy said she only recently began publicly talking about her foster care experience. She said she is doing so because “many  people lack an understanding of the harsh statistics and their impact on the country's future. The nation faces a crisis that demands a call to action to start truly caring about foster youth before it is too late.”

She said that she was “lucky” in the foster care system but said that many children, particularly minorities among others such as the disabled, were not as fortunate and “were failed by the system and society.” Pomeroy called them “throwaway children” who were “robbed of their ideals, gave up hope and struggled to find a reason to live.”

Less than half of the foster children who “age out” of the system graduate from high school, she wrote. Only 3 percent to 11 percent earn a bachelor's degree. More than 400,000 children were in foster care in 2011 and have a one in 11 chance of being homeless.

Pomeroy called for expansion and improvement of foster care across the country. “It is time to stop forcing children to be the heroes of their own survival,” she wrote. “Now is the time to do the right the right thing.”
On a personal note, we have four grandchildren, one of whom was adopted out of foster care as a toddler. The other was adopted at birth. Some of the siblings of those two African-American children remain in foster care today.

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