California Politics, Stem Cells and Campaign Endorsements

A relatively obscure stem cell scientist last week one-upped -- sort of -- one of the more powerful lawmakers in the United States Senate.

It was not a direct, head-to-head contest -- just sort of a rough comparison involving Democratic politics in California.

The two individuals involved are Hans Keirstead, who is touting his involvement in the creation of the $3 billion California stem cell agency,  and Sen. Dianne Feinstein, who has served in the Senate for 26 years.

Despite her long track record, last week she did not receive the endorsement of the California state
Democratic Party for re-election, apparently because she was not right type of liberal for the activists who dominate the party. The party, indeed, did not endorse any Democrat in Feinstein's re-election contest.

At its convention this past weekend, however, the party did endorse Keirstead in a Southern California congressional race.  He is running to replace Republican Rep. Dana Rohrabacher, who was once described oddly by a fellow Republican as "Putin's favorite congressman." 

Keirstead campaigning earlier this month.
Photo by Andrea Adelson, LB Indy

In political terms, Keirstead is indeed obscure, having never run for office before. However, he has achieved some recognition within the stem cell world, but most of that population does not vote in his district.

Keirstead, who did much of his research at UC Irvine, is trumpeting his stem cell work as part of his campaign. Here is a sample from a campaign web page:

"Hans served as a lead scientific advisor for the California Stem Cell Initiative which established a $3 billion stem cell research fund to support medical innovation in California."

The two candidates who receive the most votes in the June primary election will face off in November, whether they are Democrats or Republican. Keirstead has seven likely Democratic candidates facing him, according to one report. However, the filing deadline to run is March 9.

Rohrabacher is widely regarded as vulnerable and Democrats nationally are hoping to remove him from office in November.

Feinstein is way ahead in the polls in her separate race and vastly better financed than her opposition. The Democratic Party's lack of endorsement gained considerable attention in the mainstream media, but her backers said it provided little tangible benefit for her Democratic opponents.

California's Stem Cell Agency Hits 45 Clinical Trials

Directors of the $3 billion California stem cell agency yesterday added another clinical trial to its portfolio, bringing to 45 the number of its forays into the late stage research that is the most likely to produce a therapy sooner rather than later.

The decision on the $5.7 million award carries more weight in terms of the viability of the agency than might ordinarily be assumed. The agency's cash is running out. It is facing its demise in less than two years unless prodigious funding raising efforts are successful.

One of those efforts involves asking California voters in the fall of 2020 for $5 billion more in bond funding. The California Institute for Regenerative Medicine or CIRM, as the agency is formally known, would dearly love to point to a therapy or cure that would resonate with voters.

Thursday's award went to Joseph Rosenthal, director of pediatric hematology and oncology at the City of Hope and lead investigator on the trial. He told the agency,

"CIRM funding will allow us to conduct a Phase 1 trial in six adult patients with severe SCD (sickle cell disease). We believe this treatment will improve the quality of life of patients while also reducing the risk of graft-versus-host disease and transplant-related complications. Our hope is that this treatment can be eventually offered to SCD patients as a curative therapy.”

CIRM directors also approved a $4 million award to Fate Therapeutics, Inc., of San Diego, a publicly traded firm that is developing a "natural killer" cell cancer immunotherapy derived from induced pluripotent stem cells.

CIRM said that the goal is to treat many patients in an "off-the-shelf manner." The firm hopes to launch a clinical trial in 2019. Fate's stock closed at $10.58 today, down one cent. Its 52-week low is $2.52 and its 52-week high $11.70.

Here is a link to CIRM's press release on the awards. Here is a link to the CIRM blog item on the matter. Here is a link to the Fate Therapeutics press release which the company posted this morning.

'Less Than a Drop in the Bucket' -- Dueling Perspectives on California's First Stem Cell Royalty Check

California is counting its first royalties from a 13-year-old effort to develop stem cell cures and has declared that it hopes that the check will be the first in a flood of payments.

Others, however, warn of the dangers of over-excitement about the $190,345.87 payment from the City of Hope, saying that it is "less than a drop in the bucket" compared to the cost of the $3 billion California Institute for Regenerative Medicine or CIRM, as the state stem cell agency is formally known.

Here is a longer look at the two perspectives in the wake of Monday's royalty report.

John McCain, Washington Times photo

 The royalties were generated from a $5.2 million award in 2012 to the City of Hope for research involving a potential therapy for glioblastoma, one of the deadliest forms of brain cancer and the type afflicting U.S. Sen. John McCain. 

"A little piece of history" is how Kevin McCormack, senior director for communications for the  stem cell agency, described the royalty in an email. He also wrote on the agency's blog,

"It’s the first of what we hope will be many such checks, helping repay, not just the investment the state made in the field, but also the trust the voters of California showed when they created CIRM."

McCormack continued,

"Maria Millan, CIRM’s President & CEO, says the amount of the payment is not the most significant part of this milestone – after all CIRM has invested more than $2.5 billion in stem cell research since 2004. She says the fact that we are starting to see a return on the investment is important and reflects some of the many benefits CIRM brings to the state."

Asked for comment on the payment, John M. Simpson of Consumer Watchdog in Santa Monica, Ca., who was deeply involved in the development of the agency's initial intellectual property rules, said,

“Once again it’s clear that Proposition 71 (the ballot initiative that created the agency) was oversold by its sponsors. Despite campaign hype, it’s only now that we are seeing the first royalty payment and a rather modest one at that."

Bernard Munos

Bernard Munos, a senior fellow at FasterCures. a think tank aimed at speeding medical research, elaborated at more length in his response to a query by the California Stem Cell Report. He said,

"The $200,000 check from City of Hope should be acknowledged, but it only represents 0.02% of the $1.1 billion in royalties that were promised to California taxpayers -- and does not even cover the annual salary of CIRM’s part-time vice chairman.

"It is also unclear how the licensing (by the City of Hope) of a discovery to a New York-based company, Mustang Bio, Inc., will generate jobs and investment in California, as proponents of CIRM originally promised voters. 

"The world has changed since 2003 when George W. Bush severely restricted government-funded research on embryonic stem cells. The Obama administration lifted those restrictions, and regenerative medicine has diversified into many lines of research that have taken the field well beyond the embryonic vs. adult stem cell debate of the early days, which gave CIRM its initial impetus. Looking ahead, it is unclear whether CIRM still has a role to play. 

"Regenerative medicine offers enormous promises, and Californians may indeed want to leverage that opportunity by supplementing federal funding with their own. We have proposed a way to do this, as an alternative to developing plans to extend CIRM with another $5 billion in California bonds, to be paid out of the state’s general fund. 

"Whenever a multi-billion dollar fund is created, it tends to attract all kinds of people who want a piece of it. Unless strong governance is in place with clear rules on how the money must be disbursed, some of it is likely to fund projects that don't get the scrutiny they should, or even lie outside the organization's remit. Inadequate governance has been a problem at CIRM, as documented by reports from the Institute of Medicine -- now the National Academy of Medicine -- and others. Before consenting to an extension of CIRM's mandate, Californians should look at the returns they have gotten, and are likely to get (or not) from CIRM's past investments, and should demand an independent assessment of whether these investments are consistent with what they were promised and with CIRM's mission."

Marcy Darnovsky, FIXED photo

Marcy Darnovsky, executive director of the Center for Genetics and Society, in Berkeley, Ca., said in her email,

"Many Californians voted to establish CIRM because they believed the promises that its backers were making: that we'd soon see revolutionary medical breakthroughs, that our state would get back a billion dollars or more in royalties, that the agency would be run by an 'independent' board. Almost a decade and a half later, none of that has come to pass. 

"The rules and regulations about royalty returns to California are confusing and unclear, and need to be made far more transparent. But it's hard not to ask whether this first royalty payment is anything other than theater, meant to assuage and allure voters now that CIRM is talking about another ballot measure for $5 billion more from the public purse.

"The royalty check from City of Hope is less than a drop in the bucket. It's almost as if you loaned someone $3000 (at your own expense) because they promised to do some good work and pay you back $1000. Years later, they haven’t finished the work but they are offering you twenty cents instead of $1000, and asking for thousands more."

The debate over what Millan has called the "value proposition" of the agency's work is likely to intensify over the next two years. CIRM expects to run out of cash within that period and is pinning its hopes for survival on a proposed $5 billion ballot initiative on the November 2020 ballot -- a campaign that should excite some considerable interest if it is not heavily overshadowed by the presidential election that year.

Counting the Stem Cell Beans: Inside California's First Stem Cell Royalty Check

Readers who really want to dig into the numbers involving the first royalty check generated by  research funded by the $3 billion California stem cell agency have a special treat.

Below is a look at how the royalty payment by the City of Hope was calculated. The royalties grew out of an arrangement with Mustang Bio, Inc. of New York City.

 First Royalty Payment Generated by California  State Stem Cell Agency by DavidJensen on Scribd

After 13 years, California Receives Its First Stem Cell Royalty Check

California's $3 billion stem cell agency this morning reported the first royalty check resulting from its 13-year-old research program -- a payment of nearly $200,000 from the City of Hope.

The money, however, did not go to the agency, which is scheduled to run out of cash by 2020. It went to the state's general fund and can be used for anything from smog prevention to patching up the state's freeways. 

The royalties resulted from a $5.2 million grant in 2012 to Stephen Forman at the City of Hope in the Los Angeles area. The research, now overseen by Christine Brown, involved the use of genetically modified CAR-T cells to improve cure rates of patients with "high-grade" malignant glioma, an aggressive type of brain cancer.

In an email today, Kevin McCormack, senior director of communications for the agency, described the $190,345.87 royalty check as a "little bit of history."

It was a "bit of history" that goes back to the ballot initiative campaign of 2004 that created the California Institute of Regenerative Medicine or CIRM as the agency is formally known.  Backers of the measure created what some say were unrealistic expectations that the agency would generate $1.1 billion in royalties. 

The royalty payment resulted from an agreement by the City of Hope to license the technology to Mustang, Bio, Inc., of New York City. It is a subsidiary of Fortress Biotech, Inc. Both are publicly traded firms.

The San Francisco Chronicle first reported the size of the payment, although the fact that a royalty check was coming was disclosed last summer. Joaquin Palomino wrote in the Chronicle this morning, 

"'This is an initial payment for the recognition of the potential of this therapy,' Brown said. 'If it’s ultimately approved by the FDA as a commercial product, this could be a continued revenue source' for California."

The Chronicle article also said, 

"'In order to prove that it was a good investment for California taxpayers, we are going to need to see returns in the tens or hundreds of millions of dollars, not in the hundreds of thousands,' said Bernard Munos, a senior fellow at the medical think tank FasterCures and a close observer of CIRM. 'It’s too early to claim victory, or to claim this was a great deal for the taxpayers of California."

Here is a link to CIRM's blog item on the payment. Below is a letter from the City of Hope to CIRM about how the royalty payment was calculated.

   First Royalty Payment Generated by California  State Stem Cell Agency by DavidJensen on Scribd

California Stem Cell CEO Millan on What's Missing in CIRM News Coverage

California's $3 billion stem cell research program suffers from the same sort of problem that arises at other state departments, ranging from Fish and Wildlife to Pesticide Regulation.

They are all struggling to gain the public's attention, tell their story and create support for their activities. The big difference is that Fish and Game and Pesticide Regulation are not likely to go out of business in two years. The stem cell agency, however, could well be on its way to closing its doors by then because it is running out of cash.

The California Stem Cell Report recently talked with Maria Millan, CEO and president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. One of the topics was news coverage and how the agency is perceived, especially considering that voters may be asked to give the agency another $5 billion.

Millan was asked: What is the most "uncovered" story about CIRM, what is the "least written about?" Here is how she responded,

"I don't think people really have an understanding for what the value proposition of CIRM is as an agency. They know we're a funding agency, and I think it's best recognized for money."

Millan said that a lot of news coverage involves such things as "are you spending that money well, do you have enough oversight, do you have enough things in place to make sure that that's being done responsibly? There's a lot of focus on that."

"I think we've solved a lot of those issues and have things in place to catch issues and deal with them as they come up.... Part of it is that some of these assets didn't exist before and now we have them, and part of it is that the field has matured, and we've been positioned well to drive it."

Millan said that CIRM is "the model" for stem cell research and its funding. She said, 

"It's well-recognized that we do this very, very well. The NIH (National Institutes of Health) recognizes that we've been able in the space of stem cell regenerative medicine to do this extremely well. We have a portfolio in terms of development and our way of doing things that's unparalleled. 

"They recognize that. We're working with them to generalize this and it'll just be a two-way street in terms of benefiting for both sides of relationships."

Millan also talked about the value that her agency brings to the state, enhancing its position globally in biomedical research. She said,

"My goal is to make sure that we're responsibly sharing the knowledge, bringing things forward, because it's going to benefit California. I know that we want to make sure that we're responsible for optimizing our funds that they really support California directly, but there are a lot of things that can happen outside that will feed into us if we enable them."

Significant coverage in the mainstream media of the activities of the agency, created by voters in 2004, is rare nowadays. However, CIRM recently received some widespread attention within the state and nationally as the result of a lengthy assessment of its efforts on NPR and KQED's web sites.

The November 2020 ballot, which will include a presidential election, is the target date for the proposed $5 billion bond measure to keep CIRM alive.  Look for more intense coverage of the agency as that date nears.

(Look for more on the California Stem Cell Report on our conversation with Millan in the coming weeks.)

California: Stem Cell Capital of the World? The Perspective from Oakland

The California Stem Cell Report recently spent an hour chatting with Maria Millan, the president and chief executive officer of the $3 billion California Institute for Regenerative Medicine (CIRM), as the 13-year-old, state stem cell agency is formally known. 

Maria Millan, CIRM photo

The session at CIRM headquarters in Oakland, Ca., covered a wide range of topics as the agency was releasing its annual report. One question raised by this publication was whether the Golden State has reached the sort of critical mass that would make it "the stem cell capital of the world."

Here are some lightly edited excerpts of Millan's response to that question.

"I don't know if we've reached the critical mass, but I think we are probably the furthest to (it). I remember joining (the agency)....and actually some of our programs were geared toward how can we bring in more business into California. What I'm seeing right now is a lot of players who don't actually need to come to California.  They're fine. They've got funding. They've got trials. They already have a plan to bring their products to market in the U.S., but they're coming to California, so that's telling."

"California is expensive, so we have to think about that piece of it. These cell therapies are manufacturing intensive. One of the things we are setting up is the translating center (a $15 million project at Quintiles -- now IQVIA -- in San Diego) to address that need because the process and the manufacturing have to occur close to the site of delivery, and the scientists are here, the developers are here.

"It would be great if there was a way that we could continue to help the field to address this need because that is what's going to be required in terms of getting these therapies really to patients and (meeting) the manufacturing challenges. 

"We're doing what we can with the expertise and what we currently have in place. We need to do that in partnership with other entities, so there's a lot of interest in that. The NIH and the FDA at a regenerative medicine forum identified this as a clear need -- standardization in manufacturing...."

"Another thing that is important in terms of recognition, the space of stem cell regenerative medicine does not follow the classical pharma model of drug development at all. Even the CAR-T therapies and the SPARC, those were all developed in academia, they were spun out to smaller, nimble organizations. These projects are highly risky. The de-risking role that CIRM has is critical, (reflecting) a recognition that there's now probably a new dance that occurs to getting these types of treatments developed and out there and commercialized....

"We have played a critical role in being kind of not just a funder, not just a match-maker, but an active participant in connecting the dots and bringing this conversation forward."

(Look for more on the California Stem Cell Report from Millan's additional comments throughout the month.)

Advancing Science, Avoiding Harm: New Fed Rules to Raise Curtain on Clinical Trial Results

The Wall Street Journal today carried a piece about sweeping, new federal research disclosure rules aimed at beefing up the public accessibility of findings of clinical trials backed by billions in public dollars.

The regulations are targeting what Francis Collins, head of the National Institutes of Health (NIH), has called a "disappointing" record of publishing clinical trial results.  He said that "both real and potential harm can result from failure to fully disclose the results of clinical trials."

The regulations are scheduled to roll out somewhat slowly but have been more than 20 years in the works. The Journal reporters, Daniela Hernandez and Amy Dockser Marcus, wrote online today,

"The new rules are part of a push for greater transparency and accountability for the NIH's huge investment in biomedical research. In the past, many organizations have failed to properly register studies and report their findings, actions that NIH officials say result in misspent funds, potential human harm and a lack of public trust in science. The NIH spends roughly $3 billion annually on clinical trials."

Violation of the rules carries the possibility of fines running up to thousands of dollars a day plus endangerment of future funding from the NIH.

Already at one California university, the requirements have increased the workload. The WSJ reported,

"Stanford University School of Medicine is 'adding five or six full-time employees to our overall infrastructure for human research,' said Mark Cullen, senior associate dean for research.

"Dr. Cullen said many of his researchers are still worried and confused about how the new policies will affect their work; the new hires are meant to add to an existing support system made up of roughly 100 staffers."

The NIH is particularly interested in reporting research that has negative results. The WSJ wrote,

"Under the old rules that required publication in journals, negative results often remained undisclosed because journals prefer to publish positive findings.

"'The release of negative results not only prevents duplication and potential unnecessary risk to human volunteers, it also advances our understanding of the science,' said NIH’s Dr. (Carrie) Wolinetz (NIH's associate director for science policy).

In 2015, Collins and Kathy Hudson, then NIH's deputy director for science, outreach and policy and now executive director of the People-Centered Research Foundation, wrote in JAMA,

"If the clinical research community fails to share what is learned, allowing data to remain unpublished or unreported, researchers are reneging on the promise to clinical trial participants, are wasting time and resources, and are jeopardizing public trust.

"The scientific community has a disappointing track record for dissemination of clinical trial results.

Millions, Billions and Babies: The 2017 Stem Cell Story from California

Cover of CIRM annual report

California's 13-year-old stem cell research program has lured in nearly $390 million in private investment this past year, an accomplishment touted in its just released annual report for 2017.

The 23-page document is chock-a-block with facts and figures about the agency along with upbeat stories about its impact on a handful of patients, young and old.

All told, one could consider the report a key marketing tool for the agency's efforts to stave off its own financial demise, now slated for just two years down the road unless a rescue effort is successful.

The $3 billion stem cell agency, formally known as the California Institute for Regenerative(CIRM), expects to run out of cash for new awards in 2019. Its survival depends on a $200 million-plus, private fund-raising effort now underway and voter approval of a yet-to-be-written, $5 billion bond measure in 2020. The agency has been funded nearly entirely by state bonds, an unusual approach for state agencies, which generally survive on year-to-year appropriations.

The 2017 annual report, which cost $34,000, lays out the case for the agency's work, from clinical trials to patient advocacy. Included is less well-known information about the private investment that

has been drawn in to match awards and to support spin-off companies.

Private investment is critical to translating basic research into therapies and cures. So far, the agency has not delivered on expectations of voters in 2004 that it would produce a treatment that can be used by the general public. But it now has invested in 44 clinical trials and hopes that a therapy will emerge that will resonate with voters.

The agency cited its impact in the private sector with a comment from Deepak Srivastava, president of the Gladstone Institutes in San Francisco.

"CIRM has funded the full pipeline of our work on cardiac regeneration—from basic discoveries, all the way to preclinical studies. As a result of their support, we established Tenaya Therapeutics, a local start-up company that launched with $50 million in Series A investment and aims to tackle heart failure."

Maria Millan, CEO of CIRM since July, said,

"If not for CIRM, many programs currently in clinical trials to address debilitating and fatal medical conditions might have stalled or have been discontinued due to lack of funding. As a result, we are seeing more partnerships and follow-on industry investment—almost $390 million this year—to  advance CIRM-funded programs.

"By investing when others are not yet ready to do so, CIRM’s partnership enables researchers to develop a value proposition that attracts follow-on investors and industry partnerships."

The annual report will undoubtedly be a key document for CIRM Chairman Jonathan Thomas this year as he seeks to raise more than $200 million in private donations to tide the agency over until a bond election in November of 2020.

But the agency has a significant, additional challenge in reaching the general public, a point noted by Robert Klein,  the real estate investment banker who led the 2004 campaign that created the agency.  He cited the "lack of communication" in the mainstream media about CIRM.

Klein told CIRM directors last fall that 90 percent of the science reporters in the media have vanished in the last 20 years. He said that science writers were once the key to telling the story of scientific research as well as illuminating the progress of the quest for stem cell cures. Today is different, he said, and a more intense effort will be needed to win support for more billions.

"We've lost our communication link," Klein said.

(CIRM's summary of its impact graphically displayed below.)