The Valley of Death and the California Stem Cell Agency: Luring Deep Pocket Investors

The California stem cell agency this week is tooting a $150 million horn and heralding its efforts to assist stem cell businesses with development of therapies that could ease the travails of everything from cancer to blindness.

It is all about a financial "valley of death" that can imperil biotech firms as they seek to turn research into an actual product that can be used by patients. The latest poster child for the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, is a San Diego firm called ViaCyte. 

The enterprise has received more cash -- $72 million -- from CIRM than any other business. CIRM is facing its own valley of death next year, when its taxpayer cash will run out.

Writing yesterday on the CIRM blog, the agency's communications director, Kevin McCormack, said,

"CIRM was created, in part, to help...great ideas get through the valley (of death). That’s why it is so gratifying to hear the news today from ViaCyte – that is developing a promising approach to treating type 1 diabetes – that they have secured $80 million in additional financing.

"The money comes from Bain Capital Life Sciences, TPG and RA Capital Management and several other investors. It’s important because it is a kind of vote of confidence in ViaCyte, suggesting these deep-pocket investors believe the company’s approach has real potential."

McCormack continued,

"CIRM has been a big supporter of ViaCyte for several years, investing more than $70 million to help them develop a cell therapy that can be implanted under the skin that is capable of delivering insulin to people with type 1 diabetes when needed. The fact that these investors are now stepping up to help it progress suggests we are not alone in thinking this project has tremendous promise.

"But ViaCyte is far from the only company that has benefitted from CIRM’s early and consistent support. This year alone CIRM-funded companies have raised more than $1.0 billion in funding from outside investors; a clear sign of validation not just for the companies and their therapies, but also for CIRM and its judgment.

"This includes:

• Humacyte raising $225 million for its program to help people battling kidney failure
• Forty Seven Inc. raising $113 million from an Initial Public Offering for its programs targeting different forms of cancer
• Nohla Therapeutics raising $56 million for its program treating acute myeloid leukemia"

One could argue that these companies could have found backing from other sources than the stem cell agency. One could argue that state government should not be in a business that is too risky for even the vaunted world of venture capitalists.

Nonetheless it is an important part of the CIRM story, one that will be tested perhaps in November 2020. That's when the $3 billion agency hopes to see a measure on the ballot that will give it another $5 billion. So far the agency, created in 2004 by a ballot initiative, has not fulfilled voter expectations that it would produce a stem cell therapy that is widely available. And it will need a good yarn to inspire voters once again in 2020. 

The Genetically Altered Babies Story: More Information Surfaces on Researcher's California Links

More details are emerging this week concerning the California connections of the man behind what are being described as the world's first gene-edited babies. 

The scientist is He Jiankui, who spent two years in a lab at Stanford University, according to the lab's web site.

Lisa Krieger of the San Jose Mercury News has produced a roundup of the information about the researcher's activities in the Golden State. They include the connections with Stephen Quake of Stanford, who heads the lab where He Jiankui worked from 2010 to 2012.

She reported that Quake is declining any comment on He Jiankui.

Also mentioned in Krieger's piece are Mark Dewitt of UC Berkeley, William Hurlburt of Stanford and Jennifer Doudna, also of Berkeley.

Another useful piece exploring He Jiankui's training was produced by Sharon Begley, Andrew Joseph and Rebecca Robbins at STAT. The article takes a broad look at the researcher's training and background.

One cautionary note: The "facts" in this ongoing tale sometimes seem in conflict and sometimes murky. UC Davis' Paul Knoepfler raised the matter on his blog yesterday in an item headlined, 

"Trying to connect the dots on CRISPR baby story paints a dark, cloudy picture."

Even determining the number of years He Jiankui worked at Stanford is in question. Quake's lab clearly reports two years. STAT reports that it was "about a year" without identifying a source. A relatively minor point, but if that can't be nailed down, what else is missing? As Knoepfler wrote, much murkiness exists in the morass of stories and commentary that has emerged this week.

The caveat for those who follow this matter? As the old adage goes,

"Even if your mother says it's true, check it out."

The California Stem Cell Agency Speaks Out on Raelians and New Types of Human Beings

The California stem cell agency this morning is asking us all whether we remember the Raelians?

The agency, however, is not offering a $64,000 prize for the answer. No quiz show contest at the Oakland headquarters of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

Instead the Raelian recollection is the lead-in to a cautionary note about the reports out of China that a researcher, who once worked at Stanford, has genetically altered two babies in embryo. The news has triggered an international flap about the ethics involved along with warnings about gene editing that results in "new kinds of human beings."

Writing on the agency's blog, Kevin McCormack, senior director for CIRM communications, said,

"Remember the Raelians? Probably not. But way back in 2002 the group, some described them as a cult, claimed it had created the world’s first cloned baby. The news made headlines all around the world raising fears we were stepping into uncharted scientific territory. Several weeks later the scientist brought in by the Raelians to verify their claims called it an 'elaborate hoax.'"

McCormack cautioned that ultimately the news out of China could amount to the same sort of thing. 

He noted the use of the CRISPR gene editing technique which has made it much easier to dip into the genetic process. McCormack wrote,

"CRISPR has been making headlines all of its own in the last few years as a fast, cheap and efficient way of editing genes. CIRM supports research using CRISPR for problems such as sickle cell disease. The difference being that our research works with adults so any changes in their genes are just for them. Those changes are not passed on to future generations.

"The work making headlines around the world used CRISPR on embryos, meaning a child born from one of those embryos would pass those changes on to future generations. In effect, creating a new kind of human being."

McCormack picked up a sample of reaction around the world, including a comment from Stanford bioethicist Hank Greely on CNBC. Greeley said that that if the report is accurate, the research is "criminally reckless, and I unequivocally condemn the experiment.”

McCormack concluded,

"Our best hope right now is that this is just a repeat of the Raelians. Our worst fear, is that it’s not."

Genetically Altered Babies: A Bit of a California Connection

This You Tube video produced by He Jiankui had drawn 19,723 views at the time of this posting along with nearly 300 comments, pro and con.  The number of views jumped about 5,000 during one hour this morning.

The startling news about what is being described as the world's first gene-edited baby has a something of a California tie.

The scientist behind the work, He Jiankui, worked from 2010 to 2012 in the lab of Stephen Quake at Stanford University, who is participating in a $40 million genomics program backed by California's $3 billion stem cell agency.  

Like many other scientists, He Jiankui was trained in the United States, receiving his Ph.D. from Rice University. 

A statement on the web site of Direct Genomics, a company He Jiankui founded, said,

"He was working on genome sequencing research during his postdoc training in the lab of Stephen Quake at Department of Bioengineering, Stanford University. Dr. He has multidisciplinary research background, such as in physical theory of network evolution, influenza virus, immune repertoire sequencing, single cell genomics and bioinformatics."

Quake's lab is currently dealing with ultra high throughput DNA sequencing. On the lab's web site, a mission statement by Quake said,

"My work in single molecule biophysics led to the first demonstration of single molecule sequencing, and my research in this field has led me to become deeply involved in human genetics, immunology, and the development of new clinical diagnostics."

Quake has not yet responded to a query concerning He Jiankui's work at Stanford.

In the stem cell agency's genomics project, Quake is the lead on a project dealing with cell differentiation.

California's Center for Genetics and Society in Berkeley released a statement on the news about the gene editing. Executive Director Marcy Darnovsky, said, 

“If true, this amounts to unethical and reckless experimentation on human beings, and a grave abuse of human rights. We wish the best for the health of these babies, but strongly condemn the stunt that threatens their safety, and puts the rest of us at risk. Throwing open the door to a society of genetic haves and have-nots undermines our chances for a fair and just future.”

California Kicks Off Major, New Foray into Gene Therapy: First by Any State in the Country

California today became the first state in the nation to launch itself into the sizzling field of gene therapy, backed by tens of millions of dollars and with the hope of creating treatments that could permanently cure afflictions ranging from hemophilia to cancer.

The move came today as the board of the $3 billion California stem cell agency opened its doors to funding gene therapy research that has reached the most advanced stage, clinical trials. The agency said that gene therapy -- minus stem cells -- is "valuable and worthy of pursuit."

"This is where the science is going," said Jeff Sheehy, chairman of the CIRM board's Science Subcommittee, at hearing earlier this month,

The state stem cell program has allocated $143 million for research programs next year that could include gene therapy.

A document prepared by the leadership of the agency, formally known as the California Insitute for Regenerative Medicine (CIRM), said, 

"For CIRM and the patients it aims to serve, it is vital to support technologies which prove to be highly complementary and augmenting to stem cells, such as gene therapy."

Gene therapy treatments are expected to be quite expensive, with some forecasts running in the $1 million to $2 million range. Supporters of gene therapy argue that the cost is justified because gene therapy can be a total cure that would eliminate the need for also very expensive lifelong treatments of chronic diseases. 

In its action today, the stem cell agency did not announce any specific research awards. Rather it created a procedure for declaring that a gene therapy project with a regenerative element is a "vital research opportunity."  That would allow CIRM to fund such a project under the terms of the ballot initiative that created the agency in 2004. Today's action is the first time that the agency has acted to use the "vital opportunity" provision. 

CIRM has budgeted $143 million for next year in two areas where the new gene therapy initiative could come into play, clinical trials along with translational research that is intended to advance basic research into clinical stages. 

The agency's new foray comes as its cash is running out. By the end of next year, it expects to have no more funding for new research. The agency is pinning its hopes of survival on a $200 million plus private fundraising effort this year and voter approval of a yet-to-be-written ballot initiative on the November 2020 ballot. 

The gene therapy field is moving swiftly and could generate a result that would resonate with voters and help to win approval of an additional $5 billion for CIRM.

CIRM board members have acknowledged that its new gene therapy effort will mean more competition for the state's research dollars, including possibly less for stem cell research, which is the agency's fundamental reason for being.

The agency, however, has already awarded millions of dollars for gene therapy research that has a stem cell link, including a program at UCLA that has led to a successful treatment for what is known as the "bubble boy syndrome." However, that research has not yet moved into the marketplace.

The target of the UCLA treatment is an immune deficiency that is fatal and for which there is no successful treatment outside of the experimental trials that are still underway. 

Bloomberg News has reported that Scott Gottlieb, head of the federal Food and Drug Administration(FDA), has described the field as "somewhat breathtaking." More than 500 experimental treatments are in the pipeline. 

Gottlieb has said that he expects the FDA to approve 40 gene therapies by 2022 and possibly a cure for sickle cell anemia within 10 years. CIRM is deeply involved in a major national push on sickle cell supported by the National Institutes of Health.

Combating Stem Cell Snake Oil: A Primer From a California Researcher

Hundreds of dubious, unregulated stem cell clinics exist throughout the country with the most in California. Desperate people seeking help have been maltreated and fleeced. What to do?

UC Davis stem cell research Paul Knoepfler has produced a useful guide to reporting dubious
activities along with a list of state and federal agencies that could have a role.

In an item on his blog last week, Knoepfler wrote,

"I would emphasize concrete reasons for concern such as the use of an unapproved stem cell drug product by the clinic, a physician practicing outside their area of expertise so putting their patients at risk, false marketing, and potential or documented (if they’ve already happened) patient harms.

"For some clinics that aren’t led by physicians, I would also emphasize the risks of non-physicians such as chiropractors or Ph.D.s doing procedures for which they aren’t trained or licensed. I think patients (or people communicating on their behalf) making complaints about clinics and their personnel will have the greatest impact."

Knoepfler continued,

"We can make a difference by pushing back on the worst clinics. Of course, not every action by those of us in the stem cell arena who are concerned about predatory clinics will hit a bullseye to make real change, but sometimes it has happened in the past and will happen again in the future too."

I would add that the activities and stories that emerge from these dubious enterprises damage the reputation of the field as a whole. Indeed, when I talk to folks in the general public, the clinics' offerings are the most often mentioned reference they have.

As California's stem cell agency moves closer to seeking more billions from voters in 2020, fraudulent stem cell activity could create much confusion about the legitimacy of the entire field. Supporters might want to keep that in mind. But critics should as well. Fleecing the public with unproven therapies is unhealthy for those who are swindled but also for society in general.

California's Stem Cell Agency Opening Door to Pumping More Millions into the Sizzling Gene Therapy Market

Gene therapy graphic from FDA

The California stem cell agency today crossed a key threshold into the "somewhat breathtaking" and potentially multibillion-dollar world of gene therapy, a field that it has skirted previously. 

The action came when a key panel of the agency's governing board this morning approved its first-ever procedure for awarding millions of dollars for research not connected to stem cells. 

"This is where the (regenerative) science is going," said Jeff Sheehy, chair of the Science Subcommittee of the board of the California Institute for Regenerative Medicine (CIRM), as the Oakland-based agency is formally known. 

Under Prop. 71, the ballot initiative that created the $3 billion agency in 2004, CIRM is limited to financing research involving stem cells in some fashion. However, a provision of the measure also allows the support of a "vital research oppportunity" under certain conditions. Today's action formalizes the process for making that finding. 

CIRM said in in a document that it is "vital" that the agency expand its horizons.

"CIRM has supported projects that combine stem cell and gene therapy technologies, such as the gene-corrected stem cell transplants at UCLA that essentially cured 5-year old Evangelina Padilla Vaccaro and several CAR-T cell approaches using stem memory T cells that aim to tackle various cancers. 

"The support of stem cell research that contributes to these treatments is and will continue to be the core of CIRM funding. However, treatment opportunities in regenerative medicine that utilize gene therapy technologies but not necessarily stem cells are also valuable and worthy of pursuit."

The agency's statement continued,

"The field of regenerative medicine brings together technologies that include stem cells, gene therapy, and tissue engineering that in many cases combine to produce a therapeutic product. In some cases, one technology leads the way. For CIRM and the patients it aims to serve, it is vital to support technologies which prove to be highly complementary and augmenting to stem cells, such as gene therapy."

Several directors noted during today's meeting that the change could lead to less cash for purely stem cell projects. 

The field of gene therapy has attracted widespread interest within the regenerative medicine industry and among federal medical regulators. Scott Gottlieb, commissioner of the Food and Drug Administration, earlier this year announced steps to speed development of the therapies. 

Bloomberg News reported:

"'The pace of progress in gene therapy has been somewhat breathtaking,' he (Gottlieb) said, with more than 500 experimental drugs now in development. 'The promise is becoming very much a reality.'"

In April, Novartis AG ponied up $8.7 billion to buy AveXis Inc., of Illinois to strength its efforts to produce a marketable gene therapy.

Gottlieb has said that he expects the FDA to approve 40 gene therapies by 2022 and possibly a cure for sickle cell anemia within 10 years. 

CIRM's new gene therapy policy will go before the full CIRM board one week from today where it is expected to be approved. Additional information on the policy can be found on the Science Subcommittee agenda. 

An FDA High Sign for a California Stem Cell Agency Bet: San Diego Biotech Business Earns FDA Speed-Up Approval

A San Diego firm backed by nearly $24 million from the California stem cell agency scored this week with a special designation from the federal government that could help speed approval of its therapy for a type of blood cancer. 

The firm is Poseida Therapeutics, Inc., which is testing the safety of a therapy for a type of blood cancer in a phase one clinical trial. 

The firm announced yesterday that the Food and Drug Administration (FDA) had granted Regenerative Medicine Advanced Therapy (RMAT) status for the adult stem cell-connected treatment. The designation is intended to expedite development of the multiple myeloma therapy. 

Eric Ostertag, CEO of the firm, said in a news release, that Poseida's potential treatment, P-BCMA-101, "is the first anti-BCMA CAR-T therapy to receive RMAT designation from the FDA and underscores the urgent need for new treatment options for multiple myeloma." 

He continued, 

“Initial Phase 1 data presented at the CAR-TCR Summit earlier this year included encouraging response rates and safety data, including meaningful responses in a heavily pretreated population...."

Ostertag said the firm expects to have more data by the end of the year. 

The stem cell agency, known formally as the California Institute for Regenerative Medicine (CIRM), has invested in 49 clinical trials. Five have garnered RMAT designation, which can significantly speed development of a commercial product. As of September, the FDA had granted only 24 RMAT designations nationally. 

Last Sepetember, Geoff Lomax, CIRM senior officer for medical affairs and strategic centers, wrote in cell&gene that the two-year-old, RMAT program streamlines therapy development by enabling possible priority FDA review and accelerated federal approval. 

Longitude Capital of Menlo Park, Ca., is a major investor in the firm, pumping in tens of millions of dollars.  

California Stem Cell Agency Moving to Expand its Reach into Big Market for Gene Therapy

The definition of gene therapy under proposed changes for
 research funding by the California stem cell agency. CIRM chart

California's $3 billion stem cell research program is set to add gene therapy -- minus stem cells -- as research that it will be able to legally finance. 

The change comes as the stem cell agency is looking to generate results that are likely to resonate with voters in November 2020 who may be asked to provide an additional $5 billion in funding for the program. The agency expects to run out of cash by the end of next year. 

Gene therapy has received considerable attention in the last few years. Yesterday, Orchard 
Therapeutics, a British gene therapy firm that has links to CIRM (also see here) and research by Donald Kohn of UCLA, raised $200 million in an initial stock offering. The company said in its prospectus that the total market potential "in the diseases areas underlying our five lead programs could be greater than $2 billion annually."

Donald Kohn, UCLA photo

Kohn has received nearly $31 million in backing from the stem cell agency, which is formally known as the California Institute for Regenerative Medicine (CIRM).

The Science Subcommittee of the agency is expected to approve extension of its gene therapy efforts next Wednesday in a teleconference meeting that will be available globally through the Internet. 

Under the provisions of the ballot measure that created the agency in 2004, the agency is limited in scope. But exceptions are possible if a finding is made that a "vital research opportunity" exists. 

Next week's meeting is expected to formalize the process of making that determination in regards to gene therapy that does not involve stem cells. It will require a 2/3 vote of CIRM's grant review group, among other things. 

Members of the public can participate in the hearing remotely via the Internet or at locations in Oakland, San Francisco, La Jolla, Riverside and Napa. Directions can be found on the agenda.