Federal Stem Cell Regulation Setback in California; Case Involves Treatments with Fat Cells

Dubious stem cell clinics in California were in the news again this week with a piece in the Los Angeles Times declaring that a federal judge had dealt a blow to regulators trying to crack down on the much-criticized enterprises. 

The column by Michael Hiltzik said,

"A Los Angeles federal judge has rejected a government motion that could have shut down a network of clinics offering customers allegedly unauthorized stem cell treatments.

"The ruling by Judge Jesus G. Bernal potentially deals a setback for the Food and Drug Administration’s campaign against treatments using stem cell preparations that the FDA has not approved. 

"In the ruling published late Monday, Bernal denied the government’s motion for summary judgment in its lawsuit against the Rancho Mirage-based California Stem Cell Treatment Center, the Cell Surgical Network, and the latter’s founders, Mark Berman and Elliott Lander. Bernal ruled that the case was suitable for trial."

UC Davis stem cell researcher Paul Knoepfler also wrote about the case on his blog.

"The reasons why Bernal said he rejected the summary judgment request are concerning and don’t fit with my view of the medical science here as a stem cell biologist. 

"Unfortunately, this all leaves the door potentially still open for hundreds of clinics to sell the unproven fat stem cell product at the heart of this case called 'stromal vascular fraction' or (SVF)."

This lawsuit was first filed in May 2018 and is likely to continue for some time, possibly involving lengthy appeals. 

The controversy over unregulated clinics is of concern to those who support refinancing California's stem cell agency with $5.5 billion via a hoped-for voter approval of a ballot measure in November. The fear is that the flap could create voter confusion and besmirch the entire field. 

The agency was created in 2004 by voters who provided it with $3 billion. It is now down to its last $27 million for research grants. That figure is likely to increase next week as agency directors hear a report on the amount of cash recovered from awards that did not meet benchmarks.

Calfornia's Stem Cell Pie for 2020: State Agency to Slice Up Nearly Final Millions Next Week

It ain't over yet -- at least that's the word from what could be deemed the financial center of stem cell research in California.

The governing board of the California stem cell agency is scheduled to meet Feb. 6 to allocate unspecified additional millions for stem cell research and peer down the road that awaits it beginning Nov. 4 of this year.

That is the day after California voters are expected to deliver their judgment on whether the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, should continue and receive an additional $5.5 billion.

The agency is running out of money. Its initial $3 billion is now down to $27 million for awards. A ballot initiative to give the agency the additional billions is expected to be on the ballot this fall, Nov. 3 to be precise.

But in just 10 days, the CIRM board will reveal the amount of cash that has been recovered from research awards that failed to meet milestones during 2019. The board is scheduled to make decisions on how that money, which is likely to run into tens of millions, is to be allocated during the remainder of this year.

Also on the agenda is a three-word topic: "strategic plan themes."  This is likely to involve possible directions of the agency should it receive additional funding from the ballot initiative. That proposed measure substantially expands the scope of the agency and specifies it move into in certain new areas, including attempting to assure the affordability of agency-financed therapies whose costs could run upwards of $2 million.

The agenda includes an update on most major programs involving CIRM, information that will come widely into play as the next fall's election receives more attention.

The meeting will be based at CIRM's headquarters in Oakland. But it will also be available electronically at a number of other public locations throughout California and via the Internet. Members of the public will be able to comment and ask questions through the Internet. Details are available on the agenda. 

Tiny Poll Heartens Backers of California's Financially Beleaguered Stem Cell Agency

The first public opinion poll of 2020 is out concerning the financial fate of California's $3 billion stem cell agency, and the result is "upbeat." 

However, there is one caveat that is as consequential as the failure of a phase 1 clinical trial. That is the go, no-go stage at which the safety of a stem cell therapy is tested in humans. 

The poll covers only 83 people out of the roughly 20 million California voters. 

The testing of public sentiment was conducted in the past week or so by UC Davis stem cell scientist Paul Knoepfler, who well knows the weakness of the non-scientific sample. But he still thinks it is something of a promising sign. 

Writing on his blog, The Niche, Knoepler reported that 48 percent of his self-selected respondents, who filled in the poll on the blog, believe that the agency will be refinanced with $5.5 billion from California voters come November. 

Sixty-three percent of those polled also said it should be.  

The agency is now down to its last $27 million, which is only a relative drop in the stem cell research bucket. 

Knoepfler described the poll results as "upbeat." He said that he thought that the 63 percent figure was an especially good sign for the agency, known formally as the California Institute for Regenerative Medicine (CIRM). Knoepfler wrote, 

"I actually thought this one might swing the other way since we have many readers here on The Niche who run stem cell clinics or are fans of the clinics, and seem to have a dislike or skepticism for organizations such as CIRM, ISSCR (an international group of stem cell researchers), etc."

Backers of the agency are currently in the process of gathering more than 600,000 voter signatures to qualify the $5.5 billion ballot measure for the fall ballot. 

The results of that signature drive, which is being handled by professional signature-gathering firms, may not be known until June. 

Global Growth in 2020 for Regenerative Medicine While California's Stem Cell Program Faces Extinction

ARM graphic

SAN FRANCISCO -- Leaders of the stem cell and regenerative medicine industry gathered yesterday at a sumptuous hotel here, and the talk was of billions of dollars in business, not to mention medical treatments that can cost millions. 

Just 11 miles away across the famed San Francisco Bay, however, was another sort of stem cell scene. It could be found in the not-so-posh, Oakland headquarters of the state stem cell program, known officially as the California Institute for Regenerative Medicine (CIRM) . 

CIRM is going broke. Its original $3 billion has shrunk to $27 million over the last 15 years. 

On the other hand, global financing for therapies and treatments in the regenerative medicine field totaled nearly $10 billion in 2019, marking the second highest year ever, the leading U.S. industry group reported at the session at the Parc 55 hotel.

Janet Lambert, CEO of ARM -- ARM photo

"2019 (was) a year of significant growth in the regenerative medicine sector," said Janet Lambert, CEO of the Alliance for Regenerative Medicine (ARM), told a standing-room-only crowd of more than 500 gathered for its annual briefing. "We enter 2020 poised for continued expansion."

Lambert said,

"The pipeline is robust, with several next-gen technologies entering the clinic and an increase in clinical trials for indications with large patient populations."

Her comments came as CIRM faces a financing shortfall that could mean its virtual extinction. 

The agency, created in 2004 by state voters, is down to its last $27 million of uncommitted cash. CIRM has often spent close to $300 million a year. The agency is hoping voters next November will provide it with $5.5 billion more under the terms of a ballot initiative yet to qualify for the ballot. CIRM's only significant source of funding is bonds issued by the state. 

Lambert's organization has more than 350 members, including CIRM. The largest percentage of ARM's membership comes from cell and gene therapy companies. The global financing it reports is almost entirely private. 

ARM's 2019 survey tracked nearly 1,000 companies globally, including 534 in the United States. The second largest number, 237, includes Europe and Israel. Lambert said the fastest growing area is Asia, which has 180.

ARM counted 94 phase three clinical trials globally, the last stage before a therapy is approved for widespread use by the federal government. 

CIRM is helping to finance 60 clinical trials, including three that are still active in phase three. It has yet to back research that has led to a widely available product.

Here are links to CIRM's phase three trials: BrainStorm Cell Therapeutics,  $16 million, ALS, PI Ralph Kern; Humacyte, Inc., $10 million, kidney failure, PI Jeffrey Lawson; Medeor Therapeutics, $11 million, kidney failure, PI Karen Smith. 

Here is a link to Lambert's slides. In the near future, ARM expects to mount online a video of her presentation including two additional panel sessions that examine the current and future outlook for regenerative medicine.   

Gold-Plated Stem Cell Treatments, Multi-billion Dollar Benefits and Potential Industry Profits

One of the nation's leading regenerative medicine industry groups is touting multi-billion dollar savings that may be achieved with the type of stem cell and gene therapies that are being developed with cash from California's financially beleaguered stem cell program.

The industry group is the Washington, D.C.,-based Alliance for Regenerative Medicine (ARM). It is tackling one of the major issues facing development of commercial stem cell therapies -- sticker shock at their expected prices, running upwards of a $1 million or more.

Without a willingness from health care insurers to cover the costs and provide a pathway to profit, it is unlikely that the biotech industry will embrace production of the therapies.

In a study released last Friday, the group said,

"Advances in molecular biology and genetics are leading to new treatments for rare diseases that require new ways of assessing value. CGTs (cell and gene therapies) are directed at the underlying cause of a condition and offer durable, potentially curative, or near-curative benefits. These transformative therapies create challenges for current reimbursement frameworks as they (the therapies) require significant upfront costs but are expected to provide a lifetime of benefits. The recurring treatment costs of chronically-managed patients can be greatly reduced and even eliminated with a one-time administration or short course of these novel therapies. 

"As CGTs arrive on the market, payers need new models for assessing their value. These treatments could potentially end the patient’s burden of illness, resulting in cost offsets (eliminating or reducing the need for long-term treatment, hospitalizations, and other care) and productivity gains that span a lifetime. Manufacturers incur a high per-patient development cost for these therapies and payers who bear the cost of treatment may not realize the long-term financial benefits due to health plan switching."

The ARM study predicted cost savings of as much as $33.6 billion over about a decade in connection with three afflictions: sickle cell disease (SCD), multiple myeloma (MM) and hemophilia A (Hem A). 

California's stem cell agency was not mentioned in the study, but it has funded research in all three areas. The agency is a member of ARM.

The study, backed by ARM and performed by the Marwood Group, said,

"Access to CGTs for even a modest number of patients with MM, SCD, and Hem A each year can reduce overall disease costs by nearly 23% over a 10-year period. The savings from lowering healthcare costs and raising productivity are considerable, approaching $34 billion by 2029. Of the savings, $31 billion are from a reduction in healthcare costs and $3 billion are from productivity gains."

The model used by ARM assumed CGT prices as high as $2 million. The study said,

 "The model has tested more than 180 different prices across the three potential CGTs that ranged from a minimum test price of $150,000 and up to a maximum price test of $2,000,000. The prices entered into the model created 60 different cost savings curves for all three of drugs in this model. Prices were distributed with more than 50% of test prices in the $100,000-$600,000 price per administration range."

The discussion of the costs of stem cell therapies has special resonance in the Golden State where voters are likely to be asked next fall to give $5.5 billion more to its stem cell agency, known formally as the California Institute for Regenerative Medicine (CIRM).

The agency, funded with $3 billion in 2004, is down to its last $27 million. A new, proposed ballot initiative is focusing hard on affordability of stem cell treatments. The initiative has no specific solutions but stipulates that a new version of CIRM  -- if the ballot measure is approved -- should devise some ways to come up with answers for insurers who are not likely to warm easily to $1 million therapies.

The 2020 Outlook for Regenerative Medicine: Major Industry Briefing Available Monday on Internet

One of more significant conferences of the year involving stem cells and regenerative medicine begins Monday in San Francisco with an overview of the industry and state of research. 

And there is an opportunity for those not on the scene to sample the presentations Monday morning via the Internet, including emerging therapies for cancer and next generation cell and gene therapies. 

The event is a state-of-the-industry presentation by the Alliance for Regenerative Medicine (ARM) in conjunction with the annual J.P. Morgan Health Care Conference.  

Something like 500 persons are expected to attend the ARM event. Below is the agenda for the Monday morning program. All times are PST. A live webcast will be available here, according to ARM.  Also available at the same Internet page location is a video from last year's presentation. 

Look for coverage also of the event next week right here on the California Stem Cell Report. 

8:00 – 8:20am | Introduction & Industry Update
Janet Lambert, CEO, Alliance for Regenerative Medicine

8:20am – 9:05am | Emerging Cell Therapies for Cancer
Claudia Mitchell, Senior VP, Production & Portfolio Strategy, Astellas (moderator)
Pascal Touchon, CEO, Atara Biotherapeutics
Matthew Kane, Co-Founder and CEO, Precision BioSciences
Samarth Kulkarni, CEO, CRISPR Therapeutics

9:05am – 9:50am | Next Generation Gene and Cell Technologies
Timothy Miller, Co-Founder, President, & Chief Scientific Officer, Abeona Therapeutics
Shelia Mikhail, CEO, AskBio
Laurence Cooper, CEO, Ziopharm
Emile Nuwaysir, President & CEO, BlueRock Therapeutics
Tim Lu, Co-Founder and CEO, Senti Bio

Doubters and Hard Choices: Challenges for California's Stem Cell Program

California's 15-year-old, $3 billion stem cell program received a modest smattering of attention during the holidays, first in an article in the Los Angeles Times and another in Bloomberg Law.

The Times, the state's largest circulation newspaper with 2 million readers on Sunday, called it one of eight, global science stories to watch in the coming year. Specifically, the brief item by Karen Kaplan referred to the proposed bond measure to refinance the agency, known formally as the California Institute for Regenerative Medicine (CIRM). She wrote about the impact of the cash handed out by the agency and said, ,

"A CIRM-funded treatment developed at UCLA has led to a cure for dozens of children who were born without a functioning immune system.

"All of this was made possible by CIRM’s initial allocation of $3 billion. Now that money has been spent, and voters will be asked to renew their commitment to stem cell science by approving a $5.5-billion ballot initiative in November 2020."

At Bloomberg Law online, Joyce Cutler wrote that supporters of the agency are refining their pitch and this month will begin seeking more than 600,000 verified signatures of registered voters to place the proposed initiative on the  ballot.  She wrote,

"They will face doubters and lots of competition for voters’ attention and tax dollars. 

"'I think that a funding decision by popular vote that locks in a substantial income stream over a decade over a particular use is not good social policy. It’s not to say that the money isn’t being used for a good purpose,' said Ken Taymor, deputy director of the Forum for Collaborative Research at the University of California Berkeley School of Public Health. 

"The question, said Taymor, is 'can we afford to spend it on what CIRM is doing as opposed to other public health needs?'"

Cutler covers more ground than does the piece in the Times. She has comments from Jeff Sheehy, a CIRM board member since 2004; Arnold Kriegstein, a CIRM grant recipient and director of UC San Francisco’s Developmental and Stem Cell Biology Program, and Zev Yaroslavsky, a specialist in state politics and government and director of the Los Angeles Initiative at UCLA’s Luskin School of Public Affairs, and Jeanne Loring, a CIRM grant recipient and chief scientific officer of Aspen Neuroscience.

Two samples:

Sheehy said he would give the agency an A plus for advancing science. He continued,

"We supported the field, we’ve grown biomedical research and biotech in California tremendously. I think if you look at returns to the state, you might say B minus. And that speaks to one of my frustrations as we try to move forward, as we talk about moving forward, that we really haven’t grappled with the mechanics of ensuring that the state gets a real return on its investment."

Yaroslavsky said,

"They’re (voters) are going to have to make a decision whether roads are more important than stem cell research, is education more important than water infrastructure."