Tuesday, May 31, 2016

StemCells, Inc., 'Winding Down' Its Business; Shareholders Could Be Left in Cold

StemCells, Inc., a publicly traded firm that once held close ties to the $3 billion California stem cell agency, this morning said that it was going to close its doors and that its shareholders may not receive a dime in the liquidation.

The announcement was buried deep in a press release focusing largely on the termination of the firm's spinal cord injury trial, which the California company said was not showing sufficient benefit to patients to continue. The news release continued,
"The company also announced that, in light of the decision to terminate the Pathway Study, the company’s available strategic alternatives and its current cash position, the board of directors approved a plan to wind down the company.  As part of this process, the company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.
"As of May 31, 2016, the company had cash and cash equivalents of approximately $5.5 million. The company cannot determine with certainty the amount of any liquidating distribution to its stockholders and it is possible that there will be no liquidating distribution to stockholders. The amount of any cash distributed to its stockholders will depend upon, among other things, the company’s current liquid assets offset by its known and unknown liabilities as well as operating expenses associated with the wind down."
StemCells, Inc., was co-founded by Irv Weissman, a Stanford stem cell researcher. It was the only company to be awarded $40 million in a single round by the California stem cell agency. The awards followed vigorous lobbying by the former chairman of the agency, Bob Klein,

StemCells, Inc., also appointed Alan Trounson to its board just days after he left his post as president of the agency, triggering a controversy about conflicts of interest. 

The California Stem Cell Report will have more on the closure of StemCells, Inc., later. 

Monday, May 30, 2016

California Stem Cell Firm Battles Congress in Fallout From Planned Parenthood Flap

"Terrorized" is how the largest circulation newspaper in California, the Los Angeles Times, put it last year. That's the description of the plight of StemExpress, a small stem cell company in the Sierra Nevada foothills in California.

Now comes the Washington Post with a lengthy piece this weekend about the Placerville firm, which was caught up in the Planned Parenthood abortion/stem cell videos that are still rattling around the Internet. The headline on the story by Danielle Paquette said,
"‘We lose money doing this’: Tiny company caught in abortion debate takes on Congress"
The Post story picks up where the Times and also a piece on the California Stem Cell Report left off last year.
Paquette reports that the company has had to supply Republican congressional investigators with more than 2,000 pages of documents including five years of banking records. Employees have received death threats, and now the House committee wants the names of workers, a demand StemExpress is resisting. 

One particular target is Cate Dyer, president and founder of the firm. In December, a Washington
Cate Dyer, CEO of StemExpress
Photo by Max Whittaker for Washington Post
state man was arrested, according to the FBI, after he wrote on the Internet, 
“She will have to face the souls of the babies she’s bought and sold when she arrives on the other side. I’m sending her there early.”
Dyer was interviewed at some length for the article, describing the impact on her company. But it goes beyond what is happening to StemExpress. Paquette wrote, 
"The consequences of this supercharged debate transcend one firm. Scientists and doctors across the country say the political turmoil on Capitol Hill has stalled lifesaving work and imperiled progress toward, among other treatments, a Zika virus vaccine."
Paquette said,
"Those kinds of threats and the growing political pressure have chilled stem cell research at laboratories across the country."
The Post cited a case at Stanford, as well as one in New York state, involving a slow down in research.  Researcher Steven Sloan of Stanford said he was discouraged,
“The backlash makes you think twice about proceeding with this kind of work.”
Paquette concluded her article with this from Melanie Rose, a lab technician at StemExpress,
“This tissue would be thrown away if we didn’t send it to researchers who are truly trying to save lives. I want them to see what I’m doing. That something good can come of it.”

Sunday, May 29, 2016

The Unique Six Percent Cinch on California's $3 Billion Stem Cell Research Effort

A look at CIRM's calculations on the life left in its operational budget.
Six percent budget cap
Restrictions courtesy of Prop. 71
Hearing on June 7

California's $3 billion stem cell agency may be the only state department that has a rigid legal cap on the total it can spend on operational expenses -- such things as employee salaries, office space, computers, meetings and much more.

When that money -- $180 million -- runs out, that's it, as far as the state goes. That is, unless the agency can wheedle more from lawmakers and the governor, which is an unlikely prospect at this time, given competing priorities for state spending.

The agency -- formally known as the California Institute for Regenerative Medicine or CIRM, -- has run through $105 million for administrative/operational expenses over its 11-year life. CIRM has about $75 million left and currently is burning up $15 million to $16 million annually.

The cap -- 6 percent of its $3 billion in bond funding -- was imposed by Proposition 71, the ballot initiative that created the agency in November 2004. From the very beginning, some members of the governing board questioned the cap, saying it was too chintzy for a research effort with such high aspirations.

Nonetheless, the cap is politically impossible to change at this point. It would require a super, super majority vote by the legislature or another vote of the people of California. Such an effort might result in efforts to bring the agency under legislative control. Currently, the governor and legislature have no legal say on how CIRM spends its money or how its awards are made, another feature of Prop. 71.

So parsimony has been a watch word at the agency, which, on June 7, will take up its budget for the fiscal year that begins in July. The CIRM board's Finance Subcommittee has scheduled a 90-minute session at its Oakland headquarters to consider the proposal. Following approval or any modifications, it is expected to be routinely ratified at a full board meeting in June.

The proposed budget is yet to be posted on the CIRM Web site and probably will not be available until later this week. The California Stem Cell Report will carry details on the plan when it becomes available.

The meeting has a teleconference location in Irvine where the public can participate in the discussion. Listen-only access is available via the Internet or through an 800 number. Details can or will be found on the agenda.

Friday, May 27, 2016

California's Stem Cell Agency Says FDA 'Chilling' Development of Stem Cell Therapies

CIRM graphic
The president of the $3 billion California stem cell agency hit the campaign trail this month but not to head off Donald Trump or Hillary Clinton or even Bernie Sanders.

Randy Mills targeted the Food and Drug Administration (FDA), the agency that has life-or-death power over the introduction of stem cell therapies. "Give us our cures" was Mills' message for federal regulators.

The most recent forum for Mills was Fox News. The headline on an opinion piece that he co-authored with former Republican U.S. Sen. Bill Frist,  said,
"Cell therapy reversed blindness for 47,000 patients in 2015. So why is it against the law?"
And in a presentation earlier this month to the Bipartisan Policy Center in Washington, D.C., Mills said that the current FDA "paradigm" for new stem cell therapies has been inconsistent, selective and chilling.
"By having a system that approves nothing after 15 years, we are neither protecting nor helping those in need."
Mills said that FDA regulations should "be scaled to more accurately reflect the risks, be balanced against the very real consequences of doing nothing and be fairly and consistently applied."

The campaign by the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known, grew out of work last year on its strategic plan. A survey of stakeholders showed that 70 percent of them identified the FDA as an impediment to development of commercial therapies.

Kevin McCormack, senior director of communications for CIRM, wrote about Mills' piece on Fox on the agency's blog, The Stem Cellar. McCormack said,
"A lot of people are frustrated with the US Food and Drug Administration (FDA) and its woefully slow process for approving stem cell therapies. That’s one of the reasons why we started the CIRM Stem Cell Champions campaign, to gather as many like-minded supporters of stem cell research as possible and help to change the way the FDA works, to create a more efficient approval process."
In his presentation in Washington, Mills was careful to point out that CIRM is not opposed to the FDA or its regulation. He said CIRM just wants better regulation that will help bring therapies to patients by speeding their approval and balancing risk.

In response to a question about how Fox News happened to carry the Mills' piece, McCormack, replied,
"It was something Randy and Senator Frist had been talking about doing for a while, and why not Fox News, it has a big audience."
Other big audiences for CIRM's message will be in the San Francisco Bay area next month: BIO, the annual biotech industry convention, which is expected to draw more than 15,000 from June 6 to June 9, and the annual meeting June 22-25 of the International Society for Stem Cell Research, which expects to see more than 4,000 attendees. CIRM is expected to have a strong presence, relatively speaking, at both events.
The stem cell agency says FDA practices lead to selective
enforcement of its regulations.                     CIRM graphic

Friday, May 20, 2016

$4 Million in Big Ideas Approved by California Stem Cell Agency

The $3 billion California stem cell agency this week welcomed the first members of its "Great Ideas" club and gave them a total of  nearly $4 million to pursue the scientific gleams in their eyes.

Nineteen researchers received awards at a meeting yesterday of the governing board of the agency. They were the first such grants approved by the nearly 12-year-old enterprise.

Writing on the agency's Stem Cellar blog, Kevin McCormack, senior director of communications, said,
"The goal...is to provide seed funding for great, early-stage ideas that may impact the field of human stem cell research but need a little support to test if they work. If they do work out, the money will also enable the researchers to gather the data they’ll need to apply for larger funding opportunities, from CIRM and other institutions, in the future."
Basically, all the applicants had to do was demonstrate was a "strong scientific rationale." The awards were small, only a maximum of $150,000 each, with overhead costs at recipients' institutions adding as much as $87,000 more, depending on the institution. Agency employees have used terms like "big ideas" and "great ideas" to describe the grant round.

All but one of the recipients came from institutions with ties to members of the agency's governing board. About 90 percent of the $1.9 billion the agency has awarded has gone to institutions with links to board members, who, however, are not permitted to vote on grants to their institutions.

Randy Mills, president of the California Institute for Regenerative Medicine (CIRM), as the Oakland-based agency is formally known, said in a news release,
“This is a program supporting early stage ideas that have the potential to be ground breaking. We asked scientists to pitch us their best new ideas, things they want to test but that are hard to get funding for. We know not all of these will pan out, but those that do succeed have the potential to advance our understanding of stem cells and hopefully lead to treatments in the future.”
Here are three examples of the type of work involved. Alysson Muotri at UC San Diego plans to examine treatments for inflammation of the brain, which is an important component of such afflictions as Alzheimer’s, autism, Parkinson’s, lupus and multiple sclerosis. Stanley Carmichael at UCLA wants to see if reprogrammed adult stem cells can help repair damage caused by strokes. Holger Willenbring at UC San Francisco is looking at creation of mini livers with stem cells to help patients waiting for liver transplants.

Wednesday, May 18, 2016

A "Chicken in Every Pot" -- Stem Cells and the Latest Warnings About Hype

Let's face it, folks, without some hype, California's $3 billion stem cell research effort would not exist.

That's because it is a creature of a popular vote in 2004, and the Golden State's voters needed to be persuaded to pony up their billions for something that they were told would pay off and pay off relatively quickly.

Old news, right? But not entirely. Last week the world's foremost stem cell research organization, the International Society for Stem Cell Research (ISSCR), issued stern warnings about "communications" involving stem cell research. "Circumspect and restrained" were the watchwords from the more than 4,000-member group. Seek "timely corrections" of misleading information in the media, the world's stem cell researchers were told, among other things.

All of which is interesting coming from the ISSCR, which loaned its considerable clout in 2004 to the $36 million effort to convince Californians to create the state's stem cell agency with billions borrowed by the state. The effort was also endorsed by a host of individual, top researchers. The campaign is widely regarded as over-promising results on an unrealistic timetable. (See here and here.)

That said, electoral campaigns are not science. Think about promises of a "chicken in every pot," and you will have a good idea of what needs to be said to win an election. And there's the rub.

To generate cash from citizens, it is necessary to create some excitement. Otherwise, it is ho-hum time. One Canadian writer, Kelly Crowe, put it this way in a piece on the public relations guidelines from the ISSCR,
"Would you read a story if this was the headline: 'New study raises questions about an experimental treatment that might not work and won't be ready for a long time.'"
Beyond public perceptions, there is the small matter of stimulating business interest in turning stem cell research into cures, the mission of the California stem cell agency. Businesses are often portrayed as daring innovators bringing fresh, exciting stuff to all of our homes. The reality is that businesses are more often timid, unwilling to take risks that might affect their financial well-being.

So they too must be shown the stem cell light by the agency and its backers so that industry will cough up the considerable cash necessary to bring a stem cell therapy to market and fulfill the promises made to voters 12 years ago.

Just how far should stem cell advocates go in promoting their cause? The ISSCR has its new guidelines. Others may disagree. One person's hype is another person's honest belief. It is unlikely that the ISSCR guidelines will settle the questions.

Little doubt exists that stem cell hype is rampant, some of it from the scientific community and some from enterprises offering untested procedures and treatments. The hype has a natural audience. The public tends to want to believe in scientific and medical miracles, and stem cells smack of miracles.

Randy Mills, the president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, regularly brings the facts of "risk" to his dealings at the agency. It is one of his finer innovations.

Last year, his plan for the agency's next five years contained three pages of "risks," including inadequate health benefits, foot-dragging by the federal regulators and safety issues.

Mills exudes excitement for stem cell research and its potential, but at the same time he has a keen eye for the obstacles. It could be called realism. Unless you see the obstacles, you cannot hurdle them. Nor can the public be expected to be patient if it is oversold and under-delivered. 

(A final note: Kelly Crowe's piece is a dandy and involves much more than stem cell research. The headline: "It's not just stem cell research that's overhyped— medical science spin is a widespread problem.")

Sunday, May 15, 2016

Big Pharma's $100 Million Spending Plan for the Golden State

Big Pharma is going to be spending $100 million in California this year for a special effort, but none of the cash will be going for stem cells or, for that matter, any research purpose whatsoever.

The target of the spending is a ballot measure, the same sort of initiative that created the California stem cell agency. In this case, however, the proposal on the November ballot would limit prices that state agencies can spend for prescription drugs.

Writing in the Los Angeles Times this weekend, columnist Michael Hiltzik explored a bit of the ins and outs of the measure, He said,
"The so-called California Drug Price Relief Act would cap the price any state agency or healthcare program could spend on prescription drugs at the level paid by the U.S. Dept. of Veterans Affairs, which customarily receives the largest discounts of any government agency. Turning the VA’s prices into a benchmark for California could cost Big Pharma billions of dollars a year in profits, especially if the discounts were later demanded by other states or even private insurers."
Hiltzik reported that as of April 29, the opposition to the measure has amassed $68 million -- six months before the election. He said that experts estimate that at least $100 million will be spent to defeat the proposal. That could make the campaign among the most expensive in California history.

Fueling the debate are the skyrocketing prices of some drugs. The issue has surfaced in the presidential campaigns with both Donald Trump and Hillary Clinton taking on the drug industry. Trump even talked about squeezing "$300 billion" out of Big Pharma. All of which means that the California battle is likely to attract considerable national attention.

Meanwhile the hooha has helped to dampen the outlook for the industry this year, which does not necessarily bode well for some of California's ambitious plans to push stem cell therapies into the marketplace. Expectations of lower revenues may well suppress industry's enthusiasm for such things as the stem cell agency's proposal to create a $150-million, public-private stem cell "powerhouse."

Thursday, May 12, 2016

California's Latest, $4 Million Effort to Transform Human Stem Cell Research

The California stem cell agency's "great ideas" program is set to give away $4 million next week to 18 researchers to help them pursue fledgling pathways to a new therapy or cures for stroke, bladder injury, eye problems, Parkinson's disease and more.

In its solicitation for applications, the agency said the seed funding was aimed at supporting "exploration of transformational ideas that hold the potential to greatly impact the field of human
stem cell research." The expectation is that these awards will provide more information that will help generate more funding to carry the efforts forward.

"Great ideas" is how Gil Sambrano, the agency's director of portfolio and review, described the round in a slide prepared for the meeting of the governing board of the agency next Thursday. Board approval of the positive recommendations by the reviewers is routine. At that point, the agency will identify the winners but not the unsuccessful applicants.

The field of applicants began at 101 earlier this year and was winnowed down to 60 before the final 18 were selected.

Approval of the applications was performed behind closed doors by the agency's blue-ribbon, out-of-state reviewers. The identities of reviewers in a specific round are not disclosed nor are their professional and economic interests.

None of the awards exceeds $238,000. Researchers will receive only a maximum of $150,000 for "direct costs." The excess goes to the institution or business involved for a variety of overhead costs. Duration of the awards varies.

Here is a link to summaries of the scientific reviews of the applications, including comments scores on both winning and losing applicants.

Monday, May 09, 2016

Rise and Fall of California's Onetime Biotech Guru Steve Burrill

Two years ago, the investment empire of California biotech maven Steve Burrill was crumbling amidst allegations of fraud and mismanagement.

Steve Burrill
Today Burrill has all but vanished from the San Francisco scene that he once dominated. He has agreed to repay nearly $5 million and pay a $1 million penalty. He has been barred by the Securities and Exchange Commission from the securities industry.

All that and more was covered by Thomas Lee of the San Francisco Chronicle in a piece Sunday about Burrill, named in 2002 as one of the world's top visionaries by Scientific American. Lee's article  ran on the front page of the California newspaper's business section.

According to the SEC, Burrill misused company funds for such things as charitable contributions, gifts for his wife and girlfriend, trips to Europe, jewelry and private jets.

Andrew Ceresney, director of the SEC’s Enforcement Division. said in a March 30 press release,
“Burrill spent his fund’s capital on whatever he pleased, and elevated his own interests above those of investors.”
Burrill was once a sought-after speaker at such events as the national BIO conference, which draws upwards of 16,000 attendees. In 2006, wearing his trademark pink ties, he presided over an international stem cell conference in San Francisco that was a bit of a celebration of California's new stem cell agency.

Lee brought to his story a fresh perspective from Minnesota, where Burrill promoted a $1 billion biotech park in a rural elk farm that involved a Woodland, Ca., real estate firm, Tower Investments.

Lee, who wrote about the proposal as a reporter in Minnesota, said that Burrill "personified the idea that (Minnesotans), too, could create an economic miracle out of nothing." Lee continued,
"Burrill did not respond to a request for comment left through his attorney or messages sent to him through LinkedIn. Public records do not list a current address or phone number. The office in the Presidio of San Francisco listed on his website is vacant, with his name off the building directory and the space up for lease. No one seems to know his current whereabouts."

Monday, May 02, 2016

'Paying for Miracles:' the Vatican and California's Stem Cell Research Program

California's $3 billion stem cell program owes its life to human embryonic stem cells. The state's research effort was created in 2004 to finance scientific inquiries involving such cells, long a matter a major controversy and banned at the time from federal funding by then President Bush.

Last week, Randy Mills, the president of the California agency, took part in a conference at the Vatican, which is adamantly opposed to hESC research as "gravely immoral" because it involves the destruction of embryos.

UC Davis stem cell researcher Paul Knoepfler wrote about the appearance on his Niche blog. He quoted Mills as saying,
“We are committed to accomplishing our mission of accelerating stem cell treatments to patients with unmet medical needs. We are encouraged that the Vatican is taking a leadership role by bringing together an outstanding collection of voices from the stem cell community to try to find common solutions to some very real problems. We are honored to participate.”
The California stem cell agency's position on adult stem cells has evolved over the years. In 2008, the agency fought an effort (see here and here) in the California legislature to make it easier for the agency to support adult stem cell research. The agency opposed the measure with Bob Klein, then chairman of the agency, indicating the move was attempt to sabotage the research program.

In 2010, an academic study showed that through 2009 only 18 percent of California's dollars went for grants that were "clearly" not eligible for federal funding under the Bush restrictions. In 2013, the agency's web site showed that that about 240 of the 595 awards that it had handed out went for hESC research. At the time, such funding amounted to $458 million out of the $1.8 billion it had awarded.

Updates to the 2013 figures could not be found on the agency's web site as of this writing. We are querying the agency for fresh figures.

The Vatican conference last week involved theology as well as science. The topic of Mills' panel, however, was "a look at who is paying for miracles."

Mills also often says he is "agnostic" about the sorts of cells to be used to develop therapies. But "agnostic" is probably not a word that he used last week at the Vatican.

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