Exploring California's Stem Cell Future: A Start Today on the 16th Floor in Oakland

OAKLAND, Ca. -- "Phantom equity," the affordability of $1 million cures, maximizing returns to the state and conflicts of interest -- all that and more was on the table today at the $3 billion California stem cell agency.

The occasion was a discussion of "ideas for enhancement" by some of the directors of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

This was more than simply kicking around possibilities. The meeting was called because the agency expects to run out of money for new awards later this year.

Its hopes for financial survival rest largely on a possible $5 billion bond initiative on the November 2020 ballot. Writing an initiative also means an opportunity to improve agency operations. To pass an initiative, California voters would also need to be inspired by the work the agency has done and how it will do even better in the future. 

So the governing board put together today's session to hash over ideas, starting with a 10 page list of initial thoughts. No decisions were reached, however. The discussion will carry on next Thursday at a meeting of the full board, which will also be held in CIRM's 16th floor offices here. But internally the agency plans to begin to explore some of the areas in more depth.

The implications of changes could have a major impact not only on California researchers but biotech businesses looking for possible products that could generate profits, preferably large ones.

One area of concern by CIRM directors was maximizing the return to the state for its $6 billion investment, which includes the interest on the $3 billion borrowed for the CIRM program. One of several suggestions included the use of "phantom equity," a loose term that implies having an investment but not ownership in a company that is tied to the value of its shares.  (CIRM is barred from actually owning stock.)

At the same time, directors also said they did not want to raise financial obstacles that would stop biotech firms from turning CIRM research into cures.

CIRM Director Jeff Sheehy, who has served on the board since its inception in 2004, brought up affordability and access suggestions by the man who led the 2004 campaign, Robert Klein. 

In a recent interview with the California Stem Cell Report, Klein said he was interested in seeing more stringent requirements to assure that state-backed therapies are available to all.  Esimates of costs of some legitimate stem cell treatments have ranged up to $1 million or more. 

Another subject of some discussion was the matter of perceived conflicts of interest involving the current structure of the CIRM board. About 90 percent of the awards made by CIRM have gone to institutions with links to members of the board. While some board members acknowledged the importance of perceptions, they said no conflicts of interest have actually occurred. 

A proposed initiative will have to be filed late this year in order to qualify for the November 2020 ballot. In the interview with Klein, he said he was looking at filing around the middle of September.

California Stem Cell Crossroads: A Researcher Muses About the Golden State's Research Program

OAKLAND, Ca. -- A California stem cell researcher weighed in this morning on the future of the state's $3 billion stem cell agency, a topic that its leaders will delve into here today for two hours.

Paul Knoepfler, writing on his blog, said,

"We are at a crossroads for stem cell research in California as the original form of the California Stem Cell Agency (CIRM)winds down. Will CIRM get a new infusion of billions in state funding via a ballot initiative a la Proposition 71 from more than a decade ago? Will CIRM instead find a different source, probably much smaller, of research funding such as via philanthropy? Could CIRM cease to exist within a few years?"

Knoepfler is a longtime supporter of the agency. He wrote,

"CIRM has such strong clinical momentum right now, I hope it continues robustly for another 10 years."

The agency, however, expects to run out of cash for new awards late this year. It is pinning its hopes on a possible $5 billion ballot measure in November 2020. 

Knoepfler speculated about other sources of fund, including some from the legislature and possible private support. He wrote,

"While California has been very successful in getting NIH research funding for stem cell research by individual labs, the feds don’t fund state-wide efforts. The stem cell-related biotech industry in California is robust and should there be a few blockbuster successes from ongoing clinical trials here, which I expect will occur in the coming decade, this will likely draw in much more funding in that area."

Knoepfler also discussed the impact of "snake oil" stem cell clinics on the future of the agency. 

"In my view," Knoepfler said, "a newly funded CIRM is also going to have to deal directly with the unproven stem cell clinic problem in our state. With more than 100 such clinics here, Californians are at risk but so is stem cell research funding from these rogue efforts. The new bill on stem cell clinics could be the ticket, should it become law."

The California Stem Cell Report will be covering live this morning's hearing on the agency's and will file reports as warranted.

Stem Cell Treatments on the Installment Plan, Cash for Patient Families, State Grants for Stem Cell Training? Perhaps Part of a New, $5 Billion California Ballot Measure

In November 2017, Robert Klein appeared before directors of the California stem cell agency to discuss a new bond initiative for the agency. He had more to say last month. See story below.

 California Stem Cell Report photo. 

PALO ALTO, Ca. -- The man regarded as the father of the $3 billion California stem cell agency is thinking about changes in the program to help win voter approval of another $5 billion for the research program. 

They include a stronger requirement to make state-backed, stem cell therapies more affordable and accessible and to provide more cash for creating a greater stem cell work force in the Golden State.

Robert Klein, the real estate investment banker who led the formulation of the 10,000-word ballot initiative that created the stem cell agency, recently told the California Stem Cell Report,

"The original initiative stated really a commitment to the idea of access....

"It's my intention to actually put a directive in for funding the infrastructure to work on access, to work with insurance companies, to work with Covered California to work with Medicare, to make sure that there's access, to make certain that public hospitals and public clinics in California get discounted prices."

Klein discussed some of his thinking for another ballot initiative in 2020 during a 70-minute interview last month in the offices of Klein Financial Corp. 

Also housed in his building is the office of Americans for Cures, a nonprofit stem cell advocacy group. Klein, who founded the group and is its chairman, said he is consulting with its scientific advisory group to develop possible changes in CIRM. 

The co-chairs of the group are Irv Weissman, director of Stanford's Institute of Stem Cell Biology and Regenerative Medicine, and Larry Goldstein, director of the UC San Diego stem cell program.

Klein's thoughts on affordability and access were expansive. 

"We need to also address the issue of how do patients get treatment. They need transportation to get there right? They need housing for their family member who's going to take care of them."

As for possible costs of $1 million for a single treatment, Klein called for fresh thinking in terms of insurance coverage and financing. He notes that stem cell therapies can result in a total cure, eliminating the need for recurring, expensive treatments. He said,

"These curative therapies -- we need to work on a new business model for biotech where instead of paying $500,000 upfront or something where companies price it."

As for payments by insurance companies for treatments, Klein said,  

As long as you're in remission from cancer, they pay for it, but they pay for it over a period of five years or 10 years. Right? It’s pay for performance and medicine, which is important to access. Right?"

As for training medical professionals to handle what Klein hopes will be a burgeoning industry, he said,

"I'm looking at a directive section that deals with specifically broadening the doctors who are specifically educated. The only way you can do that is to buy a part of the residency time. Otherwise they don't have time to do anything other than deal with current patients and current methodologies, which are radically insufficient as compared to the new cellular therapies. 

"In terms of having the workforce that can implement these new therapies.... You need individuals that are trained in high speed cell sorters. You need individuals that understand the handling of cellular therapies, keeping frozen transportation, the procedures within the operating rooms on delivery, specific structures that have been created to be able to precisely insert them at the right place."

Klein, who was the first chairman of CIRM, has more ideas that may well be aired at a CIRM meeting Wednesday to discuss a possible $5 billion bond initiative to rescue the agency from financial death.

The bond funds that were authorized in 2004 are expected to run out for research awards as early as September.

Wednesday's meeting involves the science and governance committees of the agency's 29-member board. The session will be aired live over the Internet. The public can participate as well. Instructions are available on the agenda. 

The meeting will be based in Oakland with teleconference locations for CIRM board members, which the public can share, in Riverside, South San Francisco, San Diego, Napa, San Francisco, Irvine, La Jolla and Rancho Cordova. Specific addresses can be found also on the meeting agenda. 

Stem Cell Scrutiny in the Golden State: California's Research Program Looks to Avoid Extinction

In just nine days, the California stem cell agency will take a close look at its future, examining its budget for the coming fiscal year as well as the possibilities for a ballot initiative in 2020 that could stave off its financial demise.

The $3 billion enterprise, known formally as the California Institute for Regenerative Medicine (CIRM), expects to run out cash for new research awards this year, perhaps as early as September.

It has sufficient funds to administer its remaining 211 ongoing awards and keep the lights on. But it has only $114 million left before its research coffers are empty. 

CIRM is attempting, however, to raise privately $220 million to bridge the gap in research funding between this year and late 2020. The success of that effort is still unknown.

CIRM was created in 2004 by Proposition 71, a ballot initiative that also financed the agency with California state bonds (borrowed money). Since then it has awarded $2.6 billion for stem cell research, including involvement in 53 clinical trials, which are the last stage prior to federal approval of a treatment for widespread use. 

Despite the rosy expectations of 2004 campaign, CIRM has not yet backed research that has led to a stem cell therapy that is widely available for public use.

CIRM has scheduled two significant meetings for Wednesday May 15. One involves the agency's budget for the fiscal year that begins July 1. The other involves "discussion of ideas for (a) new initiative."

For readers unfamiliar with the initiative process in California, it is a method for placing before voters proposals for new state laws and funding and basically bypasses the legislature. To qualify a measure for the ballot in the fall of 2020, stem cell research supporters will need to gather hundreds of thousands of valid signatures of registered voters. Usually that is done by hiring firms that specialize in that sort of collection.

Current estimates of the cost of each signature run around $6.00. Estimates of the total cost of a ballot campaign for a new stem cell initiative run in the neighborhood of $50 million, which would have to be raised privately by supporters of the research -- not the agency.

CIRM is stepping cautiously into the ballot initiative process because of legal constraints. Scott Tocher, CIRM's general counsel, said in a statement to the California Stem Cell Report, 

"While a public agency is not permitted to advocate for or against a ballot measure because it is barred from using public funds in an effort to convince the voters with respect to a particular policy position, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters. 

"For instance, the (California) attorney general has concluded that public agencies may engage in outreach to obtain input and assess the feasibility of a measure.  In our case, of course, we don’t even have a ballot measure on the ballot yet. The purpose of the meeting is to discuss elements that a future measure might contain, not to campaign for a measure’s passage."

The agency has not yet disclosed its proposed operational budget for the fiscal year that begins July 1. But CIRM is limited by the ballot initiative that created the agency to spending no more than 6 percent of the total it has awarded. This year's operational budget approached $17 million. The spending plan for the next fiscal year is expected to be less. 

In the next few days, the California Stem Cell Report will carry more on the upcoming CIRM meetings, including the perspective from Robert Klein, who headed the 2004 ballotcampaign. Klein was also the first chairman of the agency and is eager to see it funded anew with as much as $5 billion. 

A Peek Inside the California Stem Cell Research Machine: $25 Million, Babies, Bonds and Dwindling Cash

California's stem cell agency this week dished up rare public details of an advanced effort to create "transformative" therapies that would help cure afflictions ranging from diabetes to always fatal immune disorders.

The disclosure involves Stanford University researcher Judith Shizuru, severely ill babies, toxic chemical treatments, delays in clinical trials and stem cell agency board members who are acutely aware of the $3 billion agency's rapidly dwindling resources.

Judith Shizuru
Photo by Flynn Larsen, Ludwig Institute

All this plus more is on the table Thursday at a meeting of the directors of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

The agenda nominally contains one item, an application by Shizuru for $6 million from CIRM. But the issues reach back to 2013 and provide insight into difficult research pathways and how the agency manages its programs. 

At the top of the matter is the fact that the state agency expects to run out of cash for new awards by the end of this year. It is pinning its hopes on a proposed $5 billion bond measure on the November 2020 ballot.  Meanwhile, directors are trying to raise privately $200 million to tide it over until then. 

Avoiding Toxic Chemotherapy

That was the backdrop Wednesday Jan. 30 when directors convened to consider application number CLIN2-11431 by Shizuru for $6 million. She is seeking a way to avoid chemotherapy treatments and their toxic side effects in the case of a rare genetic affliction often referred to as the bubble baby syndrome. 

In December, CIRM's grant reviewers, meeting behind closed doors, approved Shizuru's application, an action that nearly invariably is rubber-stamped by directors. But last month was different, and a bit of CIRM history was brought up.

Shizuru received  a $19 million CIRM award in 2012 which has led to a phase one clinical trial with positive results for her therapy. Cost per each of the six patients so far averages $917,000, according to a CIRM document. 

However, additional patients are needed, along with more funding, before the potential product can reach the marketplace. The average cost of per patient will run about $333,333 during the final portion of the phase one trial.  Her latest application is aimed providing assistance with those costs. 

Questions about Delays and Co-Funding

Last month, questions arose among directors about months of delays in the clinical trial and a current shortfall in co-funding, among other things.

Steve Juelsgaard

Steve Juelsgaard, a former Genentech executive and chair of the directors' Finance Committee, said, 

"It's not clear to me that they're being frugal with the money that they have been given."

Juelsgaard also said,

"Delay doesn't necessarily add up to more money. They obviously spent the money on something that they didn't anticipate or under-budgeted or something. There's something more to it."

Another director, Jeff Sheehy, chair of the board's Science Committee, said,

"Financially, it seems very muddy to me."

Other directors weighed in as well, ultimately leading to a motion to delay action on the application to provide more time to find answers to questions.

At that point, Shizuru, who was in the audience, rose to respond.

"I understand CIRM's concerns, and I can see you're very thoughtful about how this money is being spent," she said, according to the transcript.

 The Sheehy-Shizuru Exchange

The Stanford researcher said that without additional funding the trial would have to suspend enrollment of additional patients, prompting this exchange between her and Sheehy.

"Shiruzu: Budgetarily we're better off using it (the remaining funding) to continue to follow the patients that we've already transplanted. From that budgetary standpoint, we should delay the trial. We should delay treating any more patients on the trial.

"Sheehy: So Stanford won't front you 1.6 million to (treat) patients if we don't give you the money today?

"Shiziru: I hesitate to say what they would do.

"Sheehy: To Stanford...they would actually put patients at risk?

"Shiziru: I'm not at liberty to say what Stanford would do."

Stanford is the No. 1 recipient of CIRM awards, chalking up $379 million over the past 14 years. It also has always had a member on the CIRM board of directors, who is not allowed to speak or vote on awards to Stanford.

Following Shizuru's comments, CIRM directors approved the motion to delay action until this week's meeting. Since the January session, Shizuru has provided the agency with more than five, single-spaced pages of explanation about her research, plus other material that has been kept under wraps for what CIRM has indicated are proprietary and legal reasons.

The information from Shizuru, as well as additional documents from CIRM, provided an unusual, public look into the agency's grant-making process as well as the hurdles encountered in advanced clinical research. In the past, reviews of applications approved by reviewers have received little or no discussion.

Shizuru's Perspective

In her material, which is available on the agenda for this week's meeting, Shiruzu said one, eight-month delay was caused by CIRM itself because of internal concerns. Another nine-month delay was caused by age-restrictions on patients.

"Significant delay" was also caused because of what might be called a supply and demand issue. The bubble baby syndrome is rare. Only one in out of 50,000 to 100,000 births results in a baby with the affliction: severe combined immunodeficiency.

Three other clinical trials are also competing for those rare patients. 

Nine letters of support were received by CIRM supporting the research, with some describing the potential result as "transformative." The letters also said Shizuru's approach could find use in a wide range of other afflictions, an expectation also agreed upon by CIRM. 

Shizuru said she is working on securing the needed co-funding for her first award, which is not yet concluded. As for commercialization, she said she and her colleagues have formed a company, whose name was not disclosed. She said she has a letter of support from one investor regarding "an intention to co-fund pending completion of due diligence."

In a final comment during the vote last month to delay consideration, one CIRM board member, a San Diego patient advocate for Parkinson's disease, praised the board's close examination of the application. David Higgins said, 

"I want to acknowledge fellow board members (for) their continued concern about spending taxpayer's money wisely because I think this is a great example of that."

(The public can listen to and participate in the Thursday meeting via the Internet. Instructions are on the meeting agenda.) 

Hype and Fraud and Their Impact on the California Stem Cell Program

Cartoon by Johan Thyberg from "For Better Science"

The New York Times this week published a piece about how the lust for success could be corrupting science in a greater way. 

The questions it raises have particular relevance in the stem cell field, which is still very much in a formative stage. 

Aaron Carroll, a professor of pediatrics at the University of Indiana, produced the opinion piece for the Times. He wrote, 

"How might grant funding and career advancement — even the potential for fame — be biasing researchers? How might the desire to protect reputations affect the willingness to accept new information that reverses prior findings?"

He also said, 

"Moves toward open science, and for a change in the academic environment that currently incentivizes secrecy and the hoarding of data, are perhaps our best chance to improve research reproducibility Recent studies have found that an alarmingly high share of experiments that have been rerun have not produced results in line with the original research."

Questions arise with some regularity about hype and fraud in stem cell research. Back in 2014, bioethicist Art Caplan asked, “Why so Much Fake, Unduplicable Stem Cell Research?”

Just this past fall, a multimillion-dollar stem cell research scandal involving Harvard surfaced once again in the news.

Credibility, of course, is everything in science. For the California stem cell agency, it is a matter of survival. It will be out of cash for new awards in less than 12 months and is hoping voters will then give it an additional $5 billion.  More news about stem cell hanky panky, wherever it occurs, will not serve the agency well when it makes its pitch once again to the people of the Golden State.  

Possible Federal Restrictions on Stem Cell Research and the Multi-Billion Dollar California Angle

The recent federal crackdown on the use of fetal tissue in scientific research could well be a harbinger of an effort to revive restrictions on the use of human embryonic stem cells, placing a roadblock in the way of creation of therapies to treat often deadly afflictions that affect millions of Americans.

And it could have an impact on the fate of California's $3 billion stem cell program, which expects to run out of money for new awards by the end of next year.

A leader of the pro-life movement signalled today that anti-abortion groups' next target is likely to be the National Institutes of Health(NIH), which provide billions of dollars in research funding, including use of embryonic stem cells (hESC).

Writing on The Hill web site, Tom McClusky, president of March for Life Action, denounced current federal research practices. His opinion piece was headlined.

"Trump's move on unethical fetal tissue experimentation isn't enough"

McClusky wrote,

"The head of NIH, Frances Collins, has been a long-time supporter of unethical research and has a reputation of disinterest for the countless lives lost as long as it produces results.
"His track record not only includes support for fetal tissue research but also human-embryonic stem cell experimentation, human-animal chimeras and even human cloning. Of the many great nominations made by President Trump, Frances Collins sticks out as a counter to his stated pro-life agenda."

This is a bit of deja vu for the California stem cell agency, whose $3 billion program was approved by voters in 2004. The impetus for creation of the agency, known formally as the California Institute for Regenerative Medicine (CIRM), was generated by then President Bush's restrictions on federal funding for hESC research. State cash, however, was not similarly restricted.

Trump has not yet revived Bush's restrictions, but the issue seems to be increasing in importance for Trump's evangelical political base and at least 102 congressmen. The opposition is based on the belief that using human embryonic stem cells for research is tantamount to murder.

The stem cell agency is hoping that California voters will extend its life in November 2020 by approving $5 billion more for the research. However, the agency has not delivered on 2004 expectations that stem therapies were right around the corner. The agency has yet to finance a therapy that is widely available.

Overcoming voter disenchantment could be difficult. But a Trump crackdown could energize stem cell supporters much as Bush's did in 2004. Scientists, patient advocate groups, venture capitalists and others banded together to win approval of the ballot initiative that created the state stem cell program, using Bush as a handy villain in the argument for more stem cell research.

Ironically, the article by the pro-life group came almost exactly one year after the then president of the International Society for Stem Cell Research,  Hans Clever, wrote on the Stat website that fetal tissue is absolutely necessary to produce cures and therapies. He said,

"The development of vaccines against polio, rubella, measles, chickenpox, adenovirus, rabies, and treatments for debilitating diseases such as rheumatoid arthritis, cystic fibrosis, and hemophilia all involved fetal tissue."

"Fetal tissue has been essential in research used to develop therapies that have saved millions of lives, and it continues to be necessary for the future of medicine."

California Stem Cell Agency and First-of-Kind Fetal Transplant for Fatal Affliction

Nichelle Obar and her daughter, Elianna, at three weeks. NYT photo by Bryan Meltz

A uniquely California medical treatment -- the first of its kind in the world -- won national attention today with reports that it could open the door to similar operations before birth for such diseases as sickle cell and hemophilia.

The therapy was developed by a UC San Francisco researcher who treated "the first patient enrolled in the world’s first clinical trial using stem cells transplanted prior to birth," according to a UCSF news release.

Fetal surgery was also invented in California. And the transplant was backed by $11 million from the state's stem cell agency, a $3 billion enterprise that is unique among states in its size and scope.

Missing from the news, however, was any mention of the agency's multimillion-dollar contribution -- a not insignificant matter since the agency is facing its own financial demise in less than two years. The agency hopes voters will keep it alive and approve $5 billion more for stem cell research in 2020. The agency, however, is laboring under a lack of public awareness for its "value proposition." (See here and here.)

The research is being conducted by Tippi MacKenzie, a pediatric and fetal surgeon who has received a total of nearly $15 million from the agency. Her employer, UC San Francisco, has received $169 million in 81 awards.  Various deans of its medical school have also served on the agency's governing board since the inception of the agency, known formally as the California Institute for Regenerative Medicine (CIRM).  

A spokeswoman for UCSF said omission of the CIRM funding in its news release was not intentional. 

The agency was not mentioned also in a lengthy article on MacKenzie's research in the New York Times this morning. The piece was displayed on the front page of the weekly Science section of the Times, a prestigious position available only 52 times a year.

MacKenzie's work involved a family from Hawaii and their child, who was treated in utero for a nearly always fatal affliction. 

In the article by Denise Grady, the Times reported, 

"Elianna, born Feb. 1 with a robust cry and a cap of gleaming black hair, has a genetic disease that usually kills a fetus before birth. The condition, alpha thalassemia major, leaves red blood cells unable to carry oxygen around the body, causing severe anemia, heart failure and brain damage.

"The transfusions in the womb kept her alive, but only treated her illness. The bone-marrow transplant has the potential to cure it. Whether it will succeed is still too soon to tell.

"Elianna and her mother, Nichelle Obar, were the first patients in an experiment that pushes the limits of fetal therapy, a field already known for its daring."

The Times continued, 

"If the treatment works, it could open the door to using bone-marrow transplants before birth to cure not just Elianna’s blood disease but also sickle cell anemia, hemophilia and other hereditary disorders, some so severe that the prenatal diagnosis may lead parents to end the pregnancy.

"Bone marrow is considered a potential cure because it teems with stem cells, which can create replacements for cells that are missing or defective as a result of genetic flaws."

Asked for comment by the California Stem Cell Report, Maria Millan, president of CIRM and a pediatric surgeon, said in an email, 

“The New York Times picture of Nichelle Obar with her 3 week old daughter Elianna shows us something that’s hard to capture in a billion words.(See photo above.)  Elianna is afflicted with alpha thalassemia major, a fatal condition that usually ends up in death before birth.

"It is extremely gratifying to know that CIRM has been instrumental in supporting Dr. McKenzie’s research to develop a treatment for this severe unmet medical need. Dr. McKenzie’s approach combines surgical advances that allow her to treat the baby while still in the mother’s womb; transplantation with the mother’s blood stem cells provides healthy blood cells that the baby needs to survive. 

"We have supported Dr. McKenzie’s research from the early years when she was a new faculty working out the basic science and immunology in the laboratory and we helped her to develop her clinical plan. Most recently, we have partnered with Dr. McKenzie to bring this research to clinical trials. To see Ms. Obar take their child home from the hospital is encouraging. We know that this is just the beginning. This is what the people of California voted for when they approved Proposition 71. They depend on us to boldly partner with Dr. McKenzie to translate the promise of stem cell treatments to patients with unmet medical needs."

The phase one clinical trial, which is aimed primarily at safety, is scheduled to release its preliminary results by February 2022 and hopes to treat another nine patients. The treatment would then face another two phases of clinical trials for efficacy. 

As for the baby, her mother told the Times, 

“Elianna’s doing great. I’m not disappointed at all. If it works, great. If it didn’t, we’re O.K. with it. We’ll celebrate all the little accomplishments. I’m glad we did it."

Here is a UCSF video on the trial.

Golden State's Stem Cell 'Value:' Bubble Boy Disease and Bringing a Therapy to Market

California's $3 billion stem cell agency today performed a double, PR whammy in an effort to create a greater public understanding of the "key role" it can play in the most expensive and critical steps in creating a therapy that is widely available to the public.

The agency's pitch comes as it faces its potential demise in two years unless it is successful in raising more funds for its operations.

Donald Kohn, UCLA photo

The agency's starting point today involved research for cures for an affliction that has received highly visible, albeit intermittent, coverage over the past several decades. The fatal affliction is often referred to as the "bubble boy" syndrome or, more accurately, SCID,  Severe Combined Immune Deficiency.

In this case, it involves UCLA scientist Donald Kohn, a British firm, Orchard Therapeutics, Inc., opening new facilities in California (Menlo Park and Foster City) and a $20 million award. The cash, however, is only a relatively small piece of the state's immune deficiency investment. 

$141 million for immuno deficiencies

Over the years, Kohn's research has been backed by at least $52 million from the taxpayer-financed California Institute for Regenerative Medicine (CIRM), as the agency is formally known. Overall, it has pumped more than $141 million into immune deficiency disorders, not all of which is directly related to SCID. 

Responding to a query, Kevin McCormack, senior director for CIRM communications, said,

"We’re a lot more than just a pretty face you know. We feel we’re helping change the face of medicine."

Or as Maria Millan, president of CIRM, said both in a news release and in an article on the agency's blog, The Stem Cellar: 

"We invest when others are not ready to take a chance on a promising but early stage project. That early support not only helps the scientists get the data they need to show their work has potential, but it also takes some of the risk out of investments by venture capitalists or larger pharmaceutical companies."

She continued, 

"Our funding and partnership has enabled the smooth transfer of Dr. Kohn’s technology from the academic to the industry setting while conducting this important pivotal clinical trial. With our help, Orchard was able to attract more outside investment and now it is able to grow its pipeline utilizing this platform gene therapy approach.”

De-risking stem cell therapies

In biotech, all this is referred often as "de-risking" and helping research advance beyond the "valley of death," the stage at which conventional financing for research becomes exceedingly difficult to secure. Both have been goals of the agency for some time and are part of what Millan refers to as the agency's "value proposition." 

Boosting public recognition of the value created by CIRM is likely to be a key element in winning approval of a proposed $5 billion bond initiative in 2020, seeking more cash for the agency. The agency estimates that it will run out of money for new awards at the end of next year. 

The agency noted the significance of the deal that GlaxoSmithKline(GSK) made last month with Orchard.  Although the agency tends to focus strongly on medical and scientific achievements, today's PR hit had a stronger emphasis on business matters. Without a successful business model, it is unlikely that any CIRM research will reach the general population.

California's key role

CIRM said,

"Under the deal, GSK not only transfers its rare disease gene therapy portfolio to Orchard, it also becomes a shareholder in the company with a 19.9 percent equity stake. GSK is also eligible to receive royalties and commercial milestone payments. This agreement is both a recognition of Orchard’s expertise in this area, and the financial potential of developing treatments for rare conditions."

Mark Rothera, Orchard photo 

The agency quoted the CEO of Orchard, Mark Rothera, as saying,

"The funding and advice from CIRM allowed Orchard to accelerate the development of OTL-101 and to build a manufacturing platform to support our development pipeline which includes 5 clinical and additional preclinical programs for potentially transformative gene therapies."

The GSK-Orchard deal, CIRM said, was "good news for both companies and for the patients who are hoping this research could lead to new treatments, even cures, for some rare diseases. It was also good news for CIRM, which played a key role in helping Orchard grow to the point where this deal was possible."

California Hits More Than Half-Billion Dollars in Stem Cell Clinical Trials

The stem call agency has an interactive dashboard on its web site, part of which is seen above.

The California stem cell agency this week boosted the number of its clinical trials to 48 -- representing an investment of $553 million -- with the hope of producing its first widely available stem cell therapy and staving off its own demise.

In a 14-minute, telephonic meeting Thursday, directors of the agency ratified three new awards totalling $32 million and increasing its trials from 45. The applications had been approved earlier behind closed doors by the agency's out-of-state reviewers.

The action left the agency, known formally as the California Institute for Regenerative Medicine (CIRM), with $224 million in uncommitted funds, CIRM said in response to a query. The agency was provided with $3 billion when it was created in 2004 by California voters. The $224 million figure could rise $278 million with "recovery" from cancelled grants.

Nonetheless, CIRM expects to run out of cash for new awards by the end of 2019. It is attempting to raise $220 million privately to tide it over until November 2020, the date when voters may be asked to approved an additional $5 billion in bond funding.

Thursday's brief meeting generated no fresh discussion about the financial future of the agency, which is unique in California history and operates with no oversight by the governor or the legislature. Nor was there any discussion of the applications for research funds. 

CIRM said in a news release this morning that while the agency has backed 48 trials, only 42 are active. It has also funded early stage research in 11 additional projects that moved later into the "clinical trial stage" without additional CIRM support. 

The directors made their award decisions Thursday based on a brief CIRM staff presentation and summaries of the reviews of the applications. 

Links to the summaries, the winners and their awards are below. Go to the summaries by clicking on the application number. Updates on the status of CIRM research can also be found as it progresses by searching on the application number.

Sangamo Therapeutics, Inc., of Richmond, Ca., was awarded $8 million to "test a new therapy (phase one/two) for beta-thalassemia, a severe form of anemia (lack of healthy red blood cells) caused by mutations in the beta hemoglobin gene."

The agency said,

Edward Conner
Sangamo photo

"Patients with this genetic disorder require frequent blood transfusions for survival and have a life expectancy of only 30-50 years."

The company, which announced a secondary stock offering of more than $200 million this week, is providing $15 million in co-financing. Its stock closed at $16.75 on Friday. Its 52-week high is $27.50 and its low $4.25. 

The principal investigator is Edward Conner, chief medical officer of the firm, and the application number is CLIN2-11031. 
The company said in a news release that the work also involved Bioverativ.

Stanford University researchers received $12.3 million and provided $2.3 million in matching funds for a a phase one trial for a CAR-T therapy for "patients with B cell leukemias who have relapsed or are not responding after standard treatments, such as chemotherapy."

Maria Millan, president of CIRM, said in the news release,

Crystal Mackall
Stanford photo

“When a patient is told that their cancer has returned it can be devastating news. CAR-T cell therapy is an exciting and promising new approach that offers us a way to help patients fight back against a relapse, using their own cells to target and destroy the cancer.”

The principal investigator is Crystal Mackall and the application number is CLIN2-10846. 

(Here is the link from Stanford on the award. The link was added on April 30 to this item after its initial publication.)

Morton Cowan
UCSF photo

UC San Francisco researchers received $12 million (with no co-funding) for a phase one trial to test a treatment "to restore the defective immune system of children born with severe combined immunodeficiency (SCID), a genetic blood disorder in which even a mild infection can be fatal" and which is often known as "the bubble baby disease."

CIRM said it has"funded two other clinical trials targeting different approaches to different forms of SCID. In one, carried out by UCLA and Orchard Therapeutics, 50 children have been treated and all 50 are considered functionally cured."

The principal researcher is Morton Cowan and the application number is CLIN2-10830.

Weighing California's Stem Cell Trials: An Update from the Golden State's Stem Cell Agency

A sample from the latest information from CIRM on its clinical trial investments. 

California's $3 billion stem cell agency has posted a fresh overview of the 45 clinical trials that it has invested in, ranging from spinal injuries to kidney transplants.

The update is part of the agency's push to better inform the public as well its governing board of the scope and status of its 13-year-old efforts. The clinical trials carry special weight as the agency faces its demise unless it is successful in raising $220 million privately and winning voter approval of a proposed $5 billion bond issue in November 2020.

The Oakland-based agency, formally known as the California Institute for Regenerative Medicine (CIRM), expects to run out of cash for new awards by the end of 2019. Its only funding has been the $3 billion in bonds approved by voters in 2004. The ballot initiative provided no additional source of financing to carry it into the future.

Clinical trials are critical for the agency as it approaches the date when it must ask for more billions. They are the last stage before a therapy is approved for widespread use by the federal government. But even then, a trial can take years. And nine out of 10 proposed, "normal" -- non stem cell -- therapies fail during the clinical trial process, according to studies.  Stem cell trials are so new that their failure rates has not been fully examined.

CIRM is hoping for results in the next year or so that will resonate with voters and lead them to approve additional funding.

The five-page, clinical trial overview sorts the trial information by disease, dollar amount, benefit and date among other things. (See sample of the layout above.) The agency also has additional useful information on its trials on what it calls its clinical trials dashboard, an interactive web page that allows readers to slice and dice the information.

The fresh document on the trials was released as part of the agenda for tomorrow's CIRM meeting during which its governing board is expected to approve $32 million for three additional trials. 

Fleshing Out the Details: Inside the California Stem Cell Agency's Fledgling Industry Partnership Program

 California's $3 billion stem cell agency has released details on just what is involved in its new collaboration with industry, giving select companies "direct access" to the hundreds of millions of dollars in research that the state has financed. 

The effort involves creation of "robust data rooms," nondisclosure agreements and licensing templates, among other things, and owes a debt to the agency's moribund, $150 million public-private partnership proposal (ATP3).  The new program is aimed at speeding development of stem cell therapies as the agency faces its possible demise in the next couple of years. 

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has dubbed the collaboration as the Industry Alliance Program (IAP). It  already has two partners from the private sector, BlueRock Therapeutics of Cambridge, Mass., and Vivo Capital of Palo Alto, and the agency is looking for more. 

Q & A: Data Rooms and More

Neil Littman, CIRM photo

CIRM disclosed more information about the program in response to questions from the California Stem Cell Report (CSCR). Here is the agency's reply from Neil Littman, CIRM's business development officer. It includes a response to a comment filed last week on the original article by an anonymous reader concerning access to research.

CSCR: "What does 'direct access' to CIRM’s growing stem cell portfolio' mean? Will grantees be asked to share their results with these companies....or will CIRM just give out grantees' proprietary information to these companies?"

Littman:  "CIRM will never share proprietary information without the consent of the awardee and the awardee’s institution. In addition, in order to access non-public information, IAP partners (just like everyone else) will need to execute a confidentiality agreement with the awardee’s institution. 'Direct access' implies CIRM’s role in helping IAP partners navigate CIRM’s large and growing portfolio and facilitating introductions when it is mutually agreed upon by the awardee and IAP partner."

CSCR: "It would be useful to discuss with more specificity this language from the IAP agreements: "...diligence process through template legal agreements, such as non-disclosure agreements and licensing templates, and robust data rooms."

Littman: "What does CIRM mean by diligence process? The term due diligence refers to the process of how a company evaluates technology before making an investment. This is often a lengthy review process where the company evaluates items such as preclinical clinical and clinical data, CMC information, and regulatory correspondence. CIRM will help streamline this process by working with the awardee and awardee’s institution to gather all the information in one place for the collaborator to review (this is commonly referred to as a 'data room').

"Why are template agreements useful to collaborators? The template legal agreements provide standardized language which help save time for both the collaborator and the awardee institution. Many features of the agreements will still need to be negotiated, such as the economics of a specific deal, but the templates serve as a starting point."

Son of ATP3

CSCR: These arrangements appear to be descended from CIRM's ATP3 proposal. How did the partnership program emerge? How did those two companies come to be the first to be involved? 

Littman: "Yes, the IAP is descended from ATP3 and is meant to achieve the same goal: increasing the pull from industry in order to increase the number of partnerships. BlueRock and Vivo Capital were selected for a variety of reasons, including: 1) Demonstrated commitment to advancing stem cell treatments to patients (i.e. they have already made investments in the space) 2) Continued commitment to investing in stem cell programs in the future, 3) They are well capitalized with the ability to invest in CIRM-funded programs."

Text of IAP Agreement

Here is the text of the signed agreement with BlueRock, which was requested by the California Stem Cell Report. The agreement with Vivo is identical.

   California stem cell agency agreement with BlueRock Therapeutics by DavidJensen on Scribd

California's $3 Billion Stem Cell Program Partners with BlueRock and Vivo Capital, Looks for More Industry Collaborators

California's drive to produce a stem cell therapy is ratcheting up a notch with announcement of  two new, global industry partners along with a plan to engage more companies and give them "direct access" to hundreds of millions of dollars in state-funded research.

The California Institute for Regenerative Medicine (CIRM), as the $3 billion state stem cell agency is formally known, said the program represents an opportunity "to bring the most promising stem cell, gene therapy and regenerative medicine programs to market where they can help people with unmet medical needs."

The first two participants are BlueRock Therapeutics of  Cambridge, Ma., with offices in Toronto and New York City, and  Vivo Capital of  Palo Alto, Ca., which has offices in Bejing, Shanghai and Tapei. BlueRock was founded in 2016 with $225 million in backing from Versant Ventures and Bayer AG. Vivo has more than $1.7 billion under management, according to the firm's web site.

In addition to venture capital firms, the agency said its Industry Alliance Program (IAP) is looking for pharmaceutical and biotech partners to give them "direct access to CIRM’s growing stem cell portfolio."

Maria Millan, CEO and president of CIRM, said in a news release,

Maria Millan

"The goal of the IAP is to secure industry partnerships and funding for CIRM’s translational and clinical-stage projects. Our agency provides researchers the initial funding to advance promising projects towards the clinic. Now, we’re going a step further by offering a program that facilitates connections between industry partners and our grantees. These companies can offer the support or additional funding needed to give these promising projects the best chance for success and the best chance of helping patients.”

The stem cell agency is nearing its final days and is looking to fulfill promises to California voters who created it 13 years ago through a ballot initiative. The measure provided $3 billion in state bond funding, but no more. The campaign also generated expectations that stem cell cures were just around the corner. The agency has yet to back a therapy that is widely available.

The agency expects to run out of cash for new awards by the end of next year. A $220 million private fundraising effort is being waged to help the agency along until November 2020. That's when CIRM backers hope that the agency's efforts will excite California voters enough for them to approve $5 billion more in funding via another citizen-based initiative.

Deeper involvement with industry is one way to produce quicker results. Venture capital firms are willing to move fast and bet big on research that they deem likely to produce handsome profits.

BlueRock focuses on cell therapies that target severe brain and heart conditions.  According to Biospace, the company expects its most advanced lead therapeutic, a compound for Parkinson’s disease, to begin clinical trials this year.

Vivo focuses on high quality companies in the United States and China but includes building companies from scratch. 

California also brings something to the game.  Karen Ring, the agency's Internet majordomo, noted last week on the agency's blog,

"CIRM is the world’s largest stem cell research funding institution dedicated to helping patients by accelerating the development of quality stem cell treatments. We’re currently funding 244 active stem cell research programs including 39 ongoing clinical trials."

Neil Litman, the agency's director of business development, said CIRM has a "unique vantage point" because of its broad scope. He said the new program is "essentially a built-in concierge service for the stem cell space."

Media Coverage of Stem Cell Therapy for Blindness Loses Sight of California's $36 Million in Support

Dennis Clegg of UC Santa Barbara, one of the leaders in developing a new stem cell treatment for AMD, speaks broadly about the approach in this 2016 video.

The news this week was good for the $3 billion California stem cell agency, which is facing its possible demise in less than two years.

The stories demonstrated what the CEO of the agency, Maria Millan, calls the "value proposition" of the agency's work for the people of California. But only if the agency is mentioned in the news coverage.

Public perceptions are no small matter for supporters of the research agency, formally known as the California Institute for Regenerative Medicine (CIRM).  They wonder as does Millan: How does the agency get real and robust credit for its work, a likely life-or-death question given the agency's hopes to win voter approval of $5 billion more in funding in 2020?

CIRM says it is on track to run out of cash for new awards by the end of 2019 unless its ambitious fundraising plans are successful. And those are only a partial solution until billions more are provided by California citizens.

This week's "good news" stories generated national attention, albeit relatively modest, about CIRM-funded research that has led to to the first-in-human clinical trial for dry, age-related macular degeneration. The treatment uses technology that was described as "very exciting" by one researcher not connected with trial.

The headline on the New Scientist story on Wednesday said,

"Eye implant improves vision in people with age-related blindness"

Reporter Andy Coghlan wrote, 

"A patch implanted at the back of the eye has improved or stabilised sight in four people with severe age-related macular degeneration. The treatment enabled one 69-year-old woman to read 24 letters on a standard eye chart, when she could previously manage only seven.
"The patch is made of eye cells made from human embryonic stem cells, and it has been designed for treating the 'dry' form of macular degeneration, which accounts for 90 per cent of all cases, and affects 1.7 million people in the US."

Nowhere in the New Scientist story was it mentioned, however, that the state of California, through its stem cell agency, has pumped $36 million into the work. 

Likewise for the Los Angeles Times, whose story also did not mention the agency.  And likewise for articles on MIT Review, MedicalXpress, HealthDay, WebMD, US News and World Report, Futurism and FierceBiotech. The list could go on, but you get the idea.

Even the press release from Regenerative Patch Technologies LLC of Portola Valley, Ca., which holds the exclusive license for the implant, buried the Golden State's contribution in the next-to-last paragraph of a nine-paragraph press release.   Plus the company failed to note that the funding was a not insignificant $36 million.

FierceBiotech did mention some private money that was involved in other AMD research, but ignored California's cash.

Readers not familiar with the traditions surrounding news stories about medical research might wonder why the California support received almost no attention. Generally speaking, the amount of cash and the funding source are all but ignored in such stories with some notable exceptions. How that has come about is not clear, but money talks in most circles. The scientist who has lost his or her appointment by failing to bring in sufficient grants can speak to that.

For the California stem cell agency, it is also likely to be a matter of survival. If it fails to receive the widespread public credit for what it believes is a strong and important body of work, it is likely to wither away in very short order.