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.

CIRM Funding Priorities Presentation

Here is the CIRM presentation today on the agency's funding priorities. The document was provided courtesy of CIRM and its communications chief, Don Gibbons. The document is available via Scribd.
Priorities(at Rev IV) 2009PC

Publish at Scribd or explore others: Presentations Academic Work

A Look Inside the Financial Woes at the California Stem Cell Agency

California's $40 billion budget crisis landed hard last week on its five-year-old stem cell agency, which is now engaged in the initial stages of an unusual effort to sell state bonds privately.

If CIRM is successful, it is believed that it may be the first time that the state has placed bonds privately and perhaps the first time for any state in the nation.

The scope of CIRM's fiscal difficulties were laid out last week during a board of directors meeting that heard words like dire, daunting and pain. CIRM director Carmen Puliafito, dean of the USC School of Medicine, said,

"We have a financial crisis looming."

He was not alone among the directors with that perspective. But at the same time, CIRM Chairman Robert Klein and others (presumably including Puliafito ) worried about the message being delivered concerning what is now the world's largest source of funding for human embryonic stem cell research. Klein and others stressed that while "challenges" exist, the private bond sale plan provides hope.

Bonds are the key to CIRM's financial survival. They are virtually its only source of funding, although it does have some cash that has been donated. The agency does not tap the usual sources of state revenue, such taxes and fees.

Currently California is not selling bonds because of its budget crunch and turmoil in the bond markets. If and when the state does begin sales, other state needs will take priority, leaving CIRM with the necessity to find cash to continue operations perhaps for as long as the next two years, according to a briefing at the CIRM board meeting Thursday evening.

Klein repeatedly stated, however, that current grants will be funded and that the state has a legal, contractual obligation to do so.

John Robson, CIRM's vice president for operations, walked through through the numbers for board members. Here is a summary of what his Power Point presentation contained. The entire presentation can be found at the end of this item.

CIRM had $158 million on hand as of Jan. 1. It has awarded $637 million as of last Thursday. It projects expenses of $139 million by July 1, when it will have $39 million on hand.

If no additional bonds are sold, by the end of 2010, CIRM will be $134 million short of being able to fund on-going commitments. If it tries to fund both on-going commitments and projects whose concepts have been approved by the board, it will need $320 million by the end of 2010. The shortfall would be $377 million if new projected new programs are added.

Robson presented several recommendations "to achieve scientific mission critical goals during (the) cash-flow shortfall." They included switching from annual to quarterly payments for grants, which could save $21 million to $109 million depending on which of the three scenarios are chosen. Another recommendation was possibly delaying requests for grant applications. Robson, however, identified as "mission critical" both the Bridges to Stem Cell Research grant round and early translational and disease team grants.

The $18 million Bridges program was approved on Friday but actual funding was delayed until the agency has a better understanding of the outlook for the plan to sell bonds privately.

Other recommendations/administrative actions included no additional "upfront funding" for its much-touted lab construction effort, which would save $55 million to $60 million. Another option was to reduce budgets for all grants by a fixed percentage.

The board itself took no action on the recommendations other than declaring that it would decide later on the actual funding of the two training grant programs approved on Friday. It indicated generally that the staff should make a change to quarterly funding. CIRM is also going ahead with requests for applications this month for its $210 million disease team round, which Klein said was critical. The board expects to hear updates on CIRM's financial condition at its meetings in March and April.

On Friday, we asked CIRM if it had additional comments on its financial situation for this piece and said the remarks would be published verbatim. We will carry the agency's remarks if and when we receive them. In the past, we have personally told both Klein and CIRM President Alan Trounson we are more than glad to carry comments from them verbatim on any CIRM-related subject of their choosing.

Klein on Friday indicated that at some point, the agency would make a general statement on its website about its fiscal difficulties.

CIRM has not yet posted a link to the Power Point presentations that Robson made to directors Thursday on its financial situation. However, CIRM communications chief Don Gibbons kindly sent a copy of the presentations to the California Stem Cell Report. Since CIRM perhaps has other, more important business than posting presentations, we have published them below. Robson's presentation begins on slide 4.

Modest Coverage of CIRM Cash Problems

News coverage of the money woes of the California stem cell agency was skimpy today with only one mainstream media outlet discussing them at any length.

Our Internet searches turned up only three stories. They were in the San Diego Union-Tribune, the San Francisco Chronicle and the San Francisco Business Times.

Reporter Terri Somers of the San Diego paper produced the only story looking more deeply at the financial issues. The other two focused on approval of $58 million in training grants.

Somers wrote:

"The problem: Should the state stem cell institute keep approving research grants, even though it will run out of money about the end of September because of the state budget impasse?

"The answer: a resounding yes."

She wrote that CIRM is hoping to raise $138 million through the private placement of state bonds just to fund the programs through the end of 2010. Somers also quoted researcher Jeanne Loring of the Scripps Institute about the significance of CIRM's financial uncertainty.

"'You don't want to be hiring people for a couple months and then laying them off, especially since these are highly trained people we've already invested millions of dollars in,' said Loring, who has been promised about $7 million in three state grants.

"'I think the trouble is short-term, but I have to worry about the short and long term,' she said."

A shorter story by David Perlman of the Chronicle began,

"The governing board of the California stem cell agency tentatively approved $58 million in new grants Friday, but with the nation in recession and the bond market stagnant, board members decided to hold up the money and reassess the situation in March."

Ron Luety of the Business Times wrote,

"CIRM is considering a plan to sell bonds on the private market. Those sales are targeted at philanthropists who helped the state agency when lawsuits by taxpayer advocates and opponents to embryonic stem cell research delayed its startup.

"No timeline was set as to when the grants will be funded, but the CIRM board will study funding against at its March 12 meeting."

Overall, the coverage should be satisfying to CIRM, some of whose directors were deeply concerned about the negative message that its financial troubles would deliver to the public and the stem cell community.

CIRM Contracts with Fleishman PR Firm

The Fleishman-Hillard public relations firm has won a $115,000 contract from the California stem cell agency, according to odwyerpr.com.

The website said Fleishman bested five other firms: Burson-Marsteller, Weber Shandwick, Feinstein Kean, GCI Group and Wundermarx.

Odwyer reported that Ruby Barcklay, a senior vice president in Fleishman's San Francisco office, will be in charge of the account.

The contract includes "media monitoring, leadership media training, opinion leader research in the biotech and business communities, and high-level targeted media placement around the organization's leadership position in the field of stem-cell research funding," according to the report.

The odwyer site specializes in "inside PR news" and is partly free and partly paid.

Klein's Possible Salary: Comments From CIRM

The question of a salary, possibly exceeding more than $500,000, for the chairman of the California stem cell agency is a "non-issue" and a "non-reality," according to the agency's chief communications officer.

In an interview with the Marc Strassman of the Etopia News Channel, Don Gibbons explained that Robert Klein has not yet decided whether to ask CIRM board of directors whether they want to pay him for his work at the state agency. Klein, a multimillionaire real estate investment banker, refused to take a salary when he was elected to his post by directors in 2004.

More recently, however, Klein has more than once indicated that the question of a salary for both him and the vice chairman, Ed Penhoet, is something that the board is likely to have to deal with.

Last month, we asked Penhoet, who is a California venture capitalist and one of the co-founders of Chiron, about his position on taking a salary. He replied:

"I don't think it's appropriate for me to comment on personnel matters ( including my own)."

In the Etopia interview, Gibbons additionally discussed CIRM's opposition to legislation designed to ensure affordable access to CIRM-financed therapies. He also noted that 56 research papers have been published so far by CIRM grantees.

You can hear the 10-minute Gibbons interview here.