California Stem Cell Agency Plumps Its Program as It Eyes Need for More Funding

California's 12-year-old stem cell agency today launched a "statewide outreach tour" that is aimed "partly" at building support for pumping $5 billion more into the program which is nearing the end of its financial life.

The agency has billed the one-hour, public program in San Diego as a "patient advocate event." Reporter Bradley Fikes of the San Diego Union-Tribune discussed the event in an article this morning that was headlined:

"Should Californians give more money for stem cell research?"

In addition to being sponsored by the California Institute for Regenerative Medicine (CIRM),  as the agency is formally known, the event is backed by UC San Diego, which has received $177 million from the agency.

Fikes said the event is the first in a series that is "is partly meant as a way to persuade voters to further support the institute with more funding."

He continued,

"Jonathan Thomas, CIRM’s chairman, said the San Diego event and others like it in other parts of the state are meant to update patients and all Californians about how their money has been spent, and to hear from the public."

Robert Klein, the multimillionaire real estate investment banker who led the 2004 ballot campaign that created the $3 billion agency, said last month that he expects that a public opinion poll this fall will show strong support for adding $5 billion to the effort. It is scheduled to run out of cash for new awards in June 2020 and perhaps sooner.

The 2004 campaign cost $34 million. Klein has not publicly discussed his plans to raise money for the ballot effort.

The agency has yet to finance a commercially available stem cell therapy.

From Royalties to Real Products: The Journal Science Looks at the Prospects for the California Stem Cell Agency

The headlines last week in the journal Science spoke of California’s stem cell “end game,” its “a race to the clinic” and its “prospects for new money.”

The article by Kelly Servick provided a quick status report on the Golden State’s $3 billion stem cell agency. The research effort last month approved a plan for spending its last $800 million in an attempt to fulfill the promises of the 2004 ballot campaign that created the research effort.

Servick wrote that the new plan could be critical to survival of the agency. She said,

“(W)hether there will be enough believers in CIRM to keep the agency afloat may depend on how well it can build—and publicize—a track record for moving stem cell discoveries to the clinic.”

The agency has been largely ignored for the last several years by the mainstream media, but its fresh, five-year plan has attracted some modest attention, including  Servick’s piece in Science Jan. 1.

The article largely sprang out of the December meeting at which the board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, approved its strategy for the next five years.

Servick also quoted Robert Klein, the former chairman of the agency, as saying he hopes to spearhead a new ballot initiative in 2018 to fund the agency beyond 2020, when its cash is expected to run out. At the December meeting, the board specifically avoided approval of a ballot effort and referred the question of future funding to a board subcommittee. No public meetings of that panel have been announced.

Servick began her story like this:

“Born out of discontent with the federal restrictions on research with cells from human embryos, California’s stem cell agency is at a key juncture: Over the past decade, it’s spent a large portion of its $3 billion budget nurturing fledgling disease therapies, but that state money may run out before most ments are ready for the clinic.”

She continued,

“Even if all goes according to plan, however, most CIRM-funded projects will not finish phase II trials in the next 5 years, and may not be ready for an industry partner, (Chairman Jonathan) Thomas told the board. ‘If [CIRM doesn’t] have additional funding at that point, we will have only partially met our obligation to develop therapies and cures.’”

She noted that one funding possibility is “large royalty payments” from CIRM-related research, something that was promised by backers of the stem cell ballot initiative in 2004. However, if any royalties do surface, they will go to the state general fund -- not to the stem cell agency. Lawmakers would have to approve an appropriation for the agency -- one that would also have to be approved by the governor. Currently, the agency is financed by money that the state borrows and which flows directly to the agency without the need for legislative or gubernatorial approval.

At the December meeting, Art Torres, vice chairman of the board and a former, longtime state lawmaker, expressed reservations about dealing with the Legislature.

Servick wrote,

“There are ‘people that don’t believe in what we do, who are members of the legislature,’ Torres warned, and they ‘could invariably impact any [CIRM funding] proposal.’”

The Science article is behind a paywall. If you would like a copy, please email me at djensen@californiastemcellreport.com.

Changes Made in Tobacco Tax/Stem Cell Proposed Ballot Measure

The proposed tobacco tax initiative that could provide roughly $200 million a year to the California stem cell agency has been revised by its backers, although the changes initially appear not to affect the potential cash for the research effort.

Backers of the effort reported the changes today after the original version of the proposal dropped off the state attorney general's Web site this week, its first stop on the way to qualifying for the ballot.

In response to a query from the California Stem Cell Report, attorney Phil Kohn of the Rutan & Tucker law firm of Costa Mesa said the measure had been altered and was being resubmitted. We asked him to indicate the nature of the changes and their location in the document. He replied,

"There is a language change in Section 3(a) of the 'Purpose and intent' portion.  In addition, the following sections of the Act were modified (in minor part):  130161, subdivisions (e)(1), (e)(2) and (e)(3); 130163, subdivision (d)(2); 130164, subdivisions (c)(2) and new (c)(4); and 130165, subdivisions (b)(2) and new (b)(4)."

He also said that the Frank Barbaro of Santa Ana, the man responsible for the initiative, is a litigation lawyer and is currently deeply involved in a trial matter. He said Barbaro, who is also the former chairman of the Orange County Democratic Party, will elaborate on the initiative once he is free of his pressing professional obligations.

Here is the initial version of the ballot measure.

  Tobacco Tax Stem Cell Initiative Version 1 -- 2014

Here is the latest version of the ballot measure as provided by Kohn.

  Tobacco Tax Stem Cell Initiative Version 2  --2014

Merksamer Makes Only Bid For Stem Cell Agency Lobbying Contract

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

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

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

Nielsen Merksamer's proposal also noted a couple of other interesting aspects of the continuing arrangement. CIRM will run out of money for new grants in 2017, and Nielsen Merkasamer said,

“Furthermore, as a premier legislative advocacy and (Nielsen's italics) ballot measure law firm, Nielsen Merksamer can actively and effectively assist CIRM as it contemplates returning to the voters for additional funding.”

The proposal also suggested that it can conceal information that normally would be public record. The firm said,

“Another unique advantage offered by Nielsen Merksamer is that, unlike the vast majority of lobbying firms, since we are a full-service law firm, our relationships with our clients are subject to the attorney-client privilege.”

CIRM used such a technique in 2012 and 2008 in matters involving its budget and PR advice.

Nielsen Merksamer also said,

“(N)o one understands CIRM’s 'total picture' better than Nielsen Merksamer. Not only has Nielsen Merksamer been representing CIRM before the Legislature for the past decade, but Nielsen Merksamer was also one of the principal drafters of the aforementioned Proposition 71—which brought CIRM to life. The depth of Nielsen Merksamer’s familiarity with, and understanding of, CIRM’s mission and structure, the challenges it faces, and the promise it holds simply cannot be matched by any other legislative advocate.”

The firm said it would not need the $65,000 offered by CIRM but would charge only $49,200 annually, about the same as it has been paid for several years. Steve Merksamer and Gene Erbin, who drafted portions of Proposition 71, would handle most of CIRM's affairs. John Moffatt and Missy Johnson would also be available.

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

Merskamer 2013 Lobbying Proposal by DavidJensen