California Spending More than $19 Million on Search for Stem Cell Arthritis Therapy

Stem cell agency summary of Peter Schultz proposal

Highlights
First in class therapy
Avoids risks, costs
Uses drug-like kartogenin
The California stem cell agency tomorrow is set to boost its spending on arthritis to $19.5 million with a new grant to a San Diego researcher who is preparing a clinical trial for his possible therapy.

The agency’s governing board is all but certain to approve a $1.7 million award to Peter Schultz of the Scripps Research Institute in La Jolla on top of the $6 million he has already received.

Meeting behind closed doors, the agency’s blue-ribbon scientific reviewers earlier this summer approved the application on a 12-0 vote. The agency board almost never overturns a positive decision by its reviewers.

The review summary said the proposed therapy would be “first in class regenerative medicine” for osteoarthritis as well as cartilage injury. Currently no disease-modifying drugs are approved for clinical treatment of arthritis, which afflicts 27 million people in the United States. The award is to assist in preparation for a federally approved clinical trial. 

Peter Schultz -- Scripps photo

Schultz, who has close ties to Merck and who is also director of the California Institute for Biomedical Research, laid out some details of his approach in an earlier progress report to the stem cell agency.

He said,

“Because limited joints are affected in most (osteoarthritis) patients, intra-articular drug injection is an attractive treatment approach that allows high local drug concentration with limited systemic exposure. Targeting resident stem cells pharmacologically also avoids the risks and costs associated with cell-based approaches.”

 Schultz continued,

“Cartilage contains resident mesenchymal stem cells (MSCs) that can be differentiated in vitro to form chondrocytes. This observation suggests that intra-articular injection of a small molecule that promotes chondrogenesis in vivo will preserve and regenerate cartilage in OA-affected joints. Using an image-based screen, we identified a drug-like small molecule, kartogenin (KGN), that promotes efficient and selective chondrocyte differentiation from MSCs in vitro. Intra-articular injection of KGN also shows beneficial effects in surgery-induced acute and enzyme-induced chronic cartilage injury models in rodents, as well as positive effects in incapacitance pain models.”

The agency has already pumped in around $17 million for arthritis research, including funds given earlier to Schultz.

As usual, the award tomorrow involves an institution that has a representative on the agency board. About 88 percent of the money that the agency has handed out since 2005 -- $1.9 billion -- has gone to institutions that have ties to agency directors, according to calculations by the California Stem Cell Report.

The stem cell agency does not identify the winning applicants for awards until after the board acts. However, based on information on the agency's Web site, the California Stem Cell Report was able to verify that Schultz was the applicant up for approval tomorrow.

Tomorrow’s teleconference meeting is scheduled for only one hour beginning at 9 a.m.. The main session will be in San Francisco, which has another location there as well. Other locations where the public can participate include Irvine, San Diego, Napa, Redwood City, two in Sacramento, Los Gatos, San Francisco, Elk Grove, Beverly Hills, Fresno, Los Angeles, Cambridge, Ma., and Ballard, Ca., in Santa Barbara County. Specific addresses can be found on the agenda.

The public can also make comments  on any issue during the board session.

(Editor's note: The figures on CIRM's total spending for arthritis have been increased from an earlier version of this story. The previous figures were based on erroneous numbers on the agency's "arthritis fact sheet," which did not include a $2.3 million award to Schultz in March.)

California Ready to Approve $243 Million for New Stem Cell Research

CIRM President Randy Mills uses a railroad analogy for therapy development

The California stem cell agency Thursday is set to approve $243 million to finance everything from testing therapies on patients to exposing high school students to research.

The multi-faceted effort will come before the 29 directors of the agency at their meeting on Thursday at the Oakland Marriot City Center. The initiatives have already cleared the directors’ Scientific Subcommittee.

The effort is the second installment in the CIRM 2.0 program begun earlier this year by the agency’s president Randy Mills. He assumed his post in May 2014 at the California Institute of Regenerative Medicine or CIRM, as the $3 billion agency is formally known.

Mills has described his changes as radical. He says they are aimed at improving the quality of applications and speeding development of therapies. He also has called for deeper involvement by the agency in the direction and work of researchers.

Mills, who has made his entire career in the biotech business, says he wants to provide a relatively smooth track, a “continuous, predictable pathway” from basic research to clinical applications. He uses a railroad analogy to illustrate the desired progression of research(see graphic above).

The $243 million up for approval this week is about 30 percent of the agency's remaining $800 million. However, the money will be spent over the next several years -- not just this year. Under Mills' spending projections, the agency will not run out of cash until 2020. 

The largest program coming before CIRM directors this week is $100 million during 2015-16 for more advanced research related to clinical development. Directors earlier approved $50 million for the effort for the first six months of this year. However, they have awarded only $25 million as of the end of June.

Another $53 million is set for a variety of mostly basic research, which Mills calls “discovery.” Requests for applications are scheduled to begin late this summer or fall. Some of the rounds will have application openings twice a year.  Cash is scheduled to flow to researchers within about 10 months of application.

Mills is also asking the board for substantial delegation of authority to him during the reviews and is calling for an “optimized review process” because of a high anticipated volume of applications in discovery.

Under the $40 million translation research round, Mills would also be delegated authority in the grant review process to pluck out applications and advance them even if reviewers disagreed. Applications will be accepted in September and March. Cash will flow to researchers about nine months after applications are submitted.

Both the discovery and translation rounds are open to both businesses and nonprofit enterprises.

A revised training program called “Bridges 2.0” for college level students is budgeted for $46 million over a five-year period. A training program for high school students, changed and rebranded as “Spark,” will receive $4 million over five years. Applications for that program are due Oct. 1. It is open to colleges, universities and non-profit academic institutions. 

Applications for the Bridges program are also due Oct. 1. They will be limited to “California public universities or colleges or private, nonprofit academic institutions, which did not receive a CIRM-funded Major Facility or Shared Research Laboratory Award (and, hence, do not have a major stem cell research program or a critical mass of stem cell researchers).”

In addition to the Oakland location of the directors' meeting, the public can participate at teleconference locations in San Diego, South San Francisco, Stanford and two in La Jolla. Addresses can be found on the agenda, which includes directions for listening to the Internet audiocast of the meeting.

Email comments for the CIRM directors on items on the agenda may be sent to mbonneville@cirm.ca.gov.

Cedars-Sinai Researcher Snags $5 Million for Stem Cell Eye Research

Another winner in last week's California stem cell awards was scientist Shaomei Wang of Cedars-Sinai, who will receive nearly $5 million for her work to find a treatment for retinitis pigmentosa. 

Shaomei Wang, Cedars photo

The board last Thursday ratified the decision of 15 reviewers who unanimously approved the Wang application. It was one of two awards approved in the first round of CIRM 2.0, the new effort by the agency to speed cash to researchers. It was the first agency award to Wang.

(The other award last week was for nearly $18 million to NeoStem, Inc., of  New York.)

CIRM, as the agency is known, said in a press release that the funds will go for "the late-stage research needed to apply to the Food and Drug Administration for approval for a clinical trial in people. The therapy will involve injecting neural progenitor cells under the retina at the back of the eye. The hope is that this will slow or even halt the progress of the disease."

The press release oddly, however, did not identify Wang as the recipient, only mentioning that the award went to Cedars. In the past, the agency has identified researchers by name in award press releases and has provided information that has included links to summary information about the research.  

Cedars has been awarded $43 million by the agency, not including the latest $5 million. It has had a representative on the CIRM governing board since its inception as do nearly all of the recipients of funds from the $3 billion state program.

Here is a link to a summary of the review of Wang's proposal. Here is Cedars' press release on the award. 

NeoStem Sees Whopping Jump in Stock Price on $18 Million Backing from California

A graphic depiction of trading on NeoStem stock last week.
Google chart

The stock price of NeoStem, Inc., shot up 28 percent in one day last week after the California stem cell agency approved a nearly $18 million grant to the firm for a potential therapy that “teaches the immune system which cells to attack and kill.”

The governing board of the state research effort awarded the funds on Thursday May 21. The grant is to assist in a third stage clinical trial involving a treatment for metastatic melanoma, the most deadly form of skin cancer. Following the approval, NeoStem’s stock soared from $2.30 to close at $2.95.

The California Stem Cell Report first disclosed the agency’s virtually certain action on Tuesday May 19.

It was an obvious boon for the New York-based company whose CEO, David Mazzo, told the board that the award would help to raise more cash to finance the trial which is expected to cost $45 million to $51 million, according to analyst Yi Chen of H.C. Wainwright.

For the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known, it will be the first time that it has plunged into a stage three trial and the closest it has come to actually bringing a therapy to market.

Jonathan Thomas, chairman of the $3 billion agency, told the board on Thursday that the NeoStem project has “the greatest chance of success for the people of California that we have funded.”

The agency was created in 2004 when voters approved a ballot initiative whose backers raised expectations of quick development of stem cell therapies. The agency has committed more than $1.9 billion for research. Its money for new awards is expected to run out in 2020.

NeoStem, which has operations in Mountain View and Irvine in California, issued a press release hailing the award. The company called the action a “significant endorsement” of its approach which it said has potential application in other types of cancer.

  

The release quoted Randy Mills, president of the agency and former head of Osiris Therapeutics of Maryland, as saying cash would start flowing to NeoStem in 45 days. He continued,

“But that's just the start. We are not just providing financial support; we are also partnering with these groups to provide expertise, guidance and other kinds of support that these teams need to help them be successful.”

Under a new scoring system introduced by Mills, the agency’s blue-ribbon reviewers voted 6-3-5 to fund the program with the three saying the application needed improvement. That action occurred behind closed doors weeks before last Thursday’s meeting when the board ratified the reviewers’ decision on an 11-0 vote. One CIRM board member, Leon Fine of Cedars Sinai, said that one perspective on the reviewers’ voting could be that eight persons thought the application needed more work or should be rejected.

Board member Steven Juelsgaard, former executive vice president of Genentech, raised questions about what might happen if the board rejected the NeoStem application, given that it has only $19 million on hand at last report. Juelsgaard said that was not sufficient to complete the trial.

Mills declined to speculate on what the company might do.

Juelsgaard returned to the subject a few minutes later when Mazzo addressed the board and asked Mazzo about the company’s “Plan B.” Mazzo said the company could go to the “capital markets.” He also said the company had recently negotiated a $30 million equity line of credit.

Mazzo said that the firm is constantly looking for funds and that the CIRM grant would go “a long ways to advancing the trial.”

The vagaries of the marketplace do, however, play a role in the investment community’s view of the company. After the stock jumped 28 percent on Thursday, it dropped 2 percent on Friday.

The 52-week low for the stock is $2.15 and the high is $7.23.

The trial is currently seeking enrollees worldwide, including at seven sites in California. 

Fast Cash in California for Stem Cell Research; $50 Million Up for Grabs

The stem cell agency's new logo to promote CIRM 2.0

California’s $3 billion stem cell agency this month is kicking off the first round of radical changes in how it finances research, including funding of the clinical trials that it hopes will push nascent therapies into widespread use.

The money is scheduled to start flowing to scientists in the Golden State as soon as June in a new, fast-track program that is called CIRM 2.0. But only if the researchers file their applications within the next 19 days. Slow-moving researchers, however, will have a chance to file again at the end of next month and each following month.

The effort has all the earmarks of a venture capital program with heavy involvement by the financing party (CIRM), involving both the budget and the science.  The agency, known as CIRM after its formal name of the California Institute for Regenerative Medicine, last Friday repeated its pledge to be an “active investor,” which may or may not be welcomed by some researchers.

Nonetheless, Los Angeles Times columnist Michael Hiltzik recently wrote that scientists would find a “lot to like” in the new direction at the agency. Here is how CIRM put it in a news release Dec. 31 that contained links to the detailed program announcements, 

“CIRM 2.0 is a radical overhaul of the way the agency does business, implementing efficient new systems and programs that place added emphasis on speed, partnerships, and patients.

“CIRM 2.0 makes it easier for both companies and academic researchers with promising projects to partner with CIRM to get the support they need when they need it, reducing the time from application to funding from around two years to just 120 days.”

The release laid out some of the aspects of the new grant review and funding process, which the agency expects to extend to all its remaining $1 billion in award programs, 

“Speed:  In addition in to reducing the time to funding to 120 days, new clinical stage projects may be submitted to CIRM year round instead of only once or twice a year as in the past. Applications simply have to be filed by 5pm PT on the last business day of the month to be eligible for consideration in that round of review. If you miss the deadline one month, you only have to wait 30 days for the next one.

“Partnerships:  Under CIRM 2.0, the agency will not act as a passive funding source, but instead will be an active investor, devoting significant internal resources and leveraging its vast external team of world-class subject matter experts to advance the projects it selects. This will result in a true partnership that both accelerates programs and gives them the greatest opportunity for success.

“Patients: Each project will be partnered with a project-specific Clinical Advisory Panel  (CAP) to help advise and guide it forward.  Importantly, every panel will include at least one patient advisor with first-hand experience of the specific condition, who will provide input, recommendations and the appropriate sense of urgency that can only come from the unique perspective of someone living with the disease.” 

The agency has allotted $50 million to be handed out between now and July for programs involving clinical trials or preparation for clinical trials.  Applicants can ask for as much cash as they desire. But their proposed budgets will be scrutinized by an outside panel and subject to possibly substantial revision. If CIRM does not fancy the researcher’s figures, the application will not be presented to reviewers.  

The budget review is a significant change from past procedures.  It is just one of many changes, small and large, that scientists need to understand about the new process. Others involve restrictions on appeals, solvency requirements for businesses and, in some cases, hefty co-funding requirements that must be documented in advance. In-kind support, for example, will no longer be acceptable as  matching cash or for co-funding.

If scientists want to be competitive, they would be wise to carefully review the program announcements posted at the first of the month. In some cases in years past, applicants have lost out simply because they failed to understand in a timely fashion all the nuances of the process.

Other changes include the following:

• Businesses are limited to 10 percent indirect costs compared to 20 percent nonprofits, a requirement backed by CIRM board members representing nonprofits.  The agency said no legal conflict of interest existed for board members from nonprofits who voted for the bigger indirect allotment for their enterprises.
• Budgets must contain contingency plans for financing should expenses exceed initial estimates.
• Applicants must be ready to work within 45 days of CIRM board approval of their applications.
• The agency – not grant reviewers -- will determine whether applications meet eligibility requirements. If they do not, they will not be reviewed. An appeal by an applicant may be made behind closed doors to the grant review group.
• No public appeals are formally allowed. However, state law permits all members of the public, including researchers, to speak directly to the board on any issue. That avenue for seeking funding, however, has not been very successful in recent months. 

The grant review group is likely to continue to make -- behind closed doors -- virtually all the de facto decisions on application approvals. Their actions will come in three "recommendations" to the board: fund the application, do not fund but allow re-submission or do not fund and do not allow resubmission.  The CIRM board will then ratify in public the group’s decision, as it has almost invariably in the past. The board has the legal authority to do anything it wants with applications, but it has rarely overturned positive decisions by the board. Infrequently, it would approve some lower ranked applications. The new procedures would seem to make any public appeals to the board by researchers even less likely to be successful.

Randy Mills, CIRM photo

CIRM 2.0 is the brainchild of Randy Mills, who took over the presidency of the agency last May. He has launched a major effort to spread the word about the move. It includes a Jan. 21 “webinar” conducted by Mills to discuss CIRM 2.0. Advance registration is required.

On Jan. 20, the CIRM directors Science Subcommittee is scheduled to vote on new grant administration rules involving CIRM 2.0. That is another matter that researchers who wish to be successful in securing funds should be following and making recommendations on.  Sites where they can participate are in San Francisco, Oakland, Irvine, Duarte, La Jolla and Sacramento. See the agenda for specific addresses.

Gil Sambrano continues to head the review process, albeit with a new title: director of portfolio development and review. His phone number and email can be found on the program announcements posted at the first of the month (see here, here and here). 

For additional news stories on CIRM 2.0, see here and here.

Eleven Percent Stock Price Drop for StemCells, Inc., on Bad News From California Stem Cell Agency

Six month performance StemCells, Inc., stock price
Yahoo chart

The stock price of StemCells, Inc., of Newark, Ca., plummeted nearly 11 percent today following a federal filing that it had lost its $19 million award from the California stem cell agency.

Termination of the Alzheimer’s research award to the publicly traded company was announced last Thursday by the $3 billion state agency. The publicly traded firm filed a report with the Security and Exchanges Commission on Friday, but it was not seen widely until today.

The price of the company’s stock fell 10.78 percent in heavy trading, 2.2 million shares compared to an average volume of about 676,000. It closed at 91 cents, still above its 89 cent low for the last 12 months. The stock continued to sink in after-hours trading. The 52-week high is $2.43. 

The award has been controversial since it was approved in 2012 on a thin, 7-5 vote by the 29-member governing board of the agency, formally known as the California Institute for Regenerative Medicine (CIRM). It was the first CIRM award approved that had been rejected twice by CIRM’s blue-ribbon grant reviewers. It was the first involving heavy, public lobbying by the first chairman of the agency, Robert Klein. And it was the first award involving a company that later appointed a top CIRM executive, former President Alan Trounson, to its board of directors. (See here and here.)

The company’s brief, SEC filing said the forgivable loan was cancelled because of a failure to meet a milestone it had negotiated with the stem cell agency. The filing echoed comments by CIRM.

Last Thursday morning the California Stem Cell Report requested a comment on the CIRM announcement from Martin McGlynn, president of StemCells, Inc., which was co-founded by eminent Stanford researcher Irv Weissman and serves on its board of directors.  McGlynn responded this afternoon.

He said that the company had reported on its research Nov. 20 at an investor event in New York. He said that “we did not see the research showed an improvement in the predetermined measures of memory enhancement.”

The firm has collected $9.6 million from the state. In response to a question about whether the agency would be repaid any of the loan, Kevin McCormack, senior director of communications for CIRM, replied,

“We are in the process of winding down that loan so as we do that we'll get a better idea of the final financial picture.”

StemCells, Inc.,’s stock price has been falling since July 3, when it hit its 12-month high at $2.43.  On July 7, the company announced the appointment of Trounson to its board, only seven days after he left the stem cell agency. The move surprised the agency. Its subsequent limited investigation said that it could find no evidence of illegal actions. The California Stem Cell Report suspects that most investment analysts would not link Trounson's appointment to the price drop. 

Here is the text of McGlynn’s response.

"Thank you for your email, and your request for comment, which I have provided below:

"As you know, Alzheimer’s Disease is significant unmet medical need. The funding for our Alzheimer’s program was in the form of a forgivable loan. Thus, the loan would be forgiven in the event that certain predetermined preclinical milestones were not accomplished. Those milestones included a “go/no go” goal of replicating certain behavioral changes observed in mouse models of relevance for Alzheimer’s, obtained in a small pilot study that had been conducted by our collaborator, Dr. Frank LaFerla, Chancellor's Professor and Chair, Neurobiology and Behavior School of Biological Sciences, University of California Irvine, and described in detail in the original application for funding under the CIRM Disease Team RFA. It has become clear to both the CIRM and StemCells that this goal has not been achieved, so the parties have begun the process of winding down the program.

"We presented this data during our recent Analyst & Investor Event in New York on November 20th. The conference was webcast live and a replay of that event is available at http://www.media-server.com/m/p/m8h3mw5w. During the conference, the Company presented data showing that the Company’s proprietary human neural stem cells, HuCNS-SC® cells robustly engrafted into the hippocampus for up to 3 months post transplantation (the longest time point tested). The Company also presented compelling data derived during the preclinical testing, showing that HuCNS-SC transplantation significantly increased the number of pre- and post-synaptic hippocampal spines in the AD mice, suggesting an increase in synaptic density in this important brain region.

"Unfortunately, despite this compelling histological data, we did not see an improvement in the predetermined measures of memory enhancement and the Company stated that in the absence of consistent behavior modification in the animal models tested, pre-determined success criteria were not met, and that it would be working with the CIRM on an orderly wind down of the program.

"Importantly, we do not view this as a “loss”, rather, we believe we have made a significant contribution to the field. We are of course disappointed that we didn’t see the preclinical efficacy that we had hoped for, but we are grateful to have had the opportunity to collaborate with Dr. LaFerla and CIRM to pursue this worthwhile cause. It is possible that in the future, more reliable and validated animal models of memory enhancement will emerge, at which time StemCells, Inc. will be well positioned to reenter the arena.

"Thank you
"Martin McGlynn"

Stanford Pulls Its $10.9 Million Alpha Stem Cell Clinic Application

Stanford University has withdrawn its $10.9 million request to the California stem cell agency to create an Alpha stem cell clinic on its campus, along with a complaint that an illegal conflict of interest was involved in reviewing the proposal.

No further details about the alleged conflict were disclosed by the stem cell agency, which cloaks such matters in secrecy.

The Stanford application last October came before the board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. It was pulled from the agenda without a vote shortly before it was to be considered because of the late allegation of a conflict.

The application was to have come again before the CIRM board yesterday but again was removed. Kevin McCormack, senior director for communications, said that both the proposal and the complaint had been withdrawn by the applicant.

McCormack did not disclose the identities of the reviewers in the Alpha round nor the identity of the applicant, which the agency keeps secret. But the California Stem Cell Report has learned that it was Stanford.

The proposal received a low score, 64 or below, from the agency’s blue-ribbon reviewers, all of whom come from out-of-state, and was not recommended for funding. It was a rare loss for the Palo Alto institution, which has been the most successful in the state in winning money from CIRM. It has collected $298.3 million in 90 grants. The figure far surpasses the No. 2 institution, UCLA, which chalked up $215.3 million in 75 grants.

The winners in the $34 million round were the City of Hope in Duarte, UC San Diego and UCLA-UC Irvine. All of the institutions involved have representatives on the CIRM governing board. They are not allowed to vote on applications from their institutions.

In addition to Stanford, the other losing applicants in the round were UC Davis and UC San Francisco. 

See below for a CIRM list of the conflicts of interest in the round involving various directors.

   Conflict List -- Alpha Stem Cell Clinics -- Directors of California Stem Cell Agency

CIRM 2.0 -- California's New Urgency for Stem Cell Therapies

This is a big week for Randy Mills, the man who took control of the $3 billion California stem cell agency just seven months ago.

His proposals for radical changes at the agency are expected to be approved by its governing board on Thursday along with a restructuring aimed at improving speed, efficiency and innovation.

It all comes under the rubric of “CIRM 2.0,” a phrase coined by UC Davis stem cell researcher Paul Knoepfler and adopted by Mills after he became president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.  

 How important are the changes? Important enough for the agency to tout their mere outline in a press release out of last October’s board meeting instead of focusing on the hard news of the approval of its much-ballyhooed Alpha stem cell clinic program.

Randy Mills
CIRM photo -- Todd Dubnicoff

Mills has made his career in business, serving as 10 years as the CEO of Osiris Therapeutics of Maryland. He managed to make Prochymal the world's first government-approved stem cell drug approved for use on an off-the-shelf basis. Mills likes to move fast, which is largely the point of CIRM 2.0, and says that he wants to make the agency “radically more effective and efficient.”

The agency’s news release in October quoted Mills as saying,

“Right now it can take almost two years for a promising idea to go from the application to the final funding stage. That’s just unacceptable. We are going to shorten that to just 120 days.”

He also told directors at their October meeting,

 “We are in the business of trying to save people’s lives….We have to behave with the appropriate sense of urgency.” 

Mills knows that stem cell companies can’t sit around waiting two years for cash. Most operate on a short financial leash and are perpetually having to raise money. Mills also knows that researchers with non-profit institutions cannot wait for whenever it is convenient for the agency to bless them with greenbacks. Those researchers want to be first with their findings. And they need cash to meet payrolls and to satisfy their sponsoring institutions.

So Mills says,

“We’re not just making it faster, we’re also making it easier for companies or institutions with a therapy that is ready to go into clinical trials to be able to get funding for their project when they need it. Under this new system they will be able to apply anytime, and not have to try and shoehorn their needs into our application process.” 

At the end of January, the agency will begin accepting grant applications related to clinical trials on a monthly basis. The promise is for quick decisions and quick cash. Rejected researchers will – if their thinking has CIRM potential – be coached and guided into preparing a fundable project. Accepted researchers will find themselves working more closely than ever with CIRM staffers to develop something that will emerge as a marketable product. 

Mills is convinced that CIRM 2.0 will also improve applications, generating more proposals that will be scored at 95 out of 100 by scientific reviewers instead of the many applications scored at 75 that have been regularly approved.  

All of the details of the plan are still not clear. But $50 million will be set aside for the first six months of next year. Applicants can ask for whatever amount they want, but budgets will be scrutinized before they even get to the scientific reviewers. Appeals will not be allowed.  Milestones must be met or the cash dries up.  

The whole process sounds a bit like a venture capital operation minus face-to-face pitch meetings.

 

New rules dealing with conflicts-of-interest on the part of reviewers will be in place. They will allow applicants to seek to disqualify up to three reviewers for almost any reason. However, applicants will not be told who is reviewing their applications behind closed doors. They will have to guess by ferreting out reviewer names from CIRM’s list of more than 100.

Little public criticism of the plan has been heard at the two initial briefings that Mills has given board members. It is clear that there will be hiccups or worse, like any new process. One question involves transparency. Will the public or other scientists know which applications have been rejected along with the subject of their research, as they do currently. Another question involves board involvement. Currently seven members of governing board sit on the review committee. How will they participate on a monthly basis?

Coaching rejected applicants can lead to better or more targeted proposals. But is that something that researchers will readily accept? Does the whole process move the board farther away from the grant-making process. Already the directors have turned over what once were public appeals by rejected applicants to agency staff to be handled behind closed doors. However, applicants can still speak directly to the board on their own on any subject under a state law that CIRM cannot change.  But none has been successful recently in winning grant approval through that route.

Mills says his reorganization plan for CIRM staff – he prefers the word “team” – will create “organizational clarity and operational efficiency.”  It will certainly help to break up ossified structures that may have grown up during the tenure of former President Alan Trounson, who was not known for his managerial or organizational skills.

The plan also would seem to have some impact on the controversial dual executive arrangement involving the president and the chairman of the agency, Jonathan Thomas, who is also salaried. On the surface, the reorganization would seem to remove some responsibilities from the chairman and cost him some of his staff. However, the agency has not responded to questions concerning that area.

Kevin McCormack, senior director of communications for CIRM and who is also one of the top executives at the agency, will no longer be reporting, for example, to both the chairman and the president. That shared reporting was insisted on by former Chairman Robert Klein when the position that McCormack came to occupy was created. 

The dual executive arrangement, which is enshrined in state law, has been criticized for minimizing accountability at the agency. It has also led to tussles between Klein and other executives, although no serious disputes have surfaced in public for several years.

CIRM 2.0 holds great promise. It also depends mightily on Mills' leadership and managerial skills in a considerably different environment than he has previously experienced. Will CIRM 2.0 make a favorable impression in the scientific community and with the public? That depends, of course, on the outcome of the research it generates. So far, CIRM 2.0 is barely visible in the stem cell community -- at least according to an item on the blog of UC Davis researcher Knoepfler. His readers were recently asked to vote on the top stem cell story of 2014. CIRM 2.0 came in last with 0.44 percent of the vote.

That sort of response does not discourage Mills.  He said, in an item on Knoepfer’s blog prior to the 0.44 percent showing:

 “We think the more the word gets out about this and all of the other great features of CIRM 2.0, the more high quality interest we will see from industry and academia alike.”

The details of the plan were approved yesterday by the Governance Subcommittee of the CIRM governing board. The plan will come before the full board at its meeting Thursday in Berkeley, with teleconference locations in Los Angeles, San Francisco and Sacramento and is virtually certain to be approved.

 (Here are links to the CIRM blog item on the 2.0 plan and to Mills’ slides that he presented to CIRM directors nearly two months ago. The transcript of that meeting has not yet been posted by the agency. Perhaps Mills can add posting of transcripts to his fast-track efforts.)

Earthquakes and Scientific Research: California's Exposure to Damage

The 6.1 earthquake today in Northern California once again demonstrated the vulnerability of scientific research in the Golden State to disruption by tremor.

As of Sunday morning, no research institutions – stem cell or otherwise -- reported damage from the quake. However, it was still early in the process of assessing the full impact of the temblor.

The closest stem cell research facility to the quake epicenter is the Buck Institute, located in Novato, which is roughly 15 miles from the epicenter.  A spokeswoman for Buck, which holds $34 million in awards from the California stem cell agency, said she had received no immediate reports of damage..

In response to a question from the California Stem Cell Report, Kris Rebillot said,

“I have not heard anything from our facilities staff about damage. The Buck is on pretty stable bedrock. I live in Petaluma which is closer to quake. No damage there.”

Later she reported that a walkthrough showed "no discernible damage."

The likelihood of severe shaking from an earthquake
is shown on this state map. The greatest potential is
marked by lavender with red and orange as less
 intense. The epicenter of the Napa quake was near
the north end of San Francisco Bay. 

 California is riddled with earthquake faults, many of which lie beneath or close by major research institutions, including Stanford, UC Berkeley and UC San Francisco. Institutions in the south are in the same situation as well.

Problems that arose in the aftermath of today’s quake included lack of power, lack of water and natural gas leaks from pipelines. 

The situation recalled a lesser event that left one Southern California stem cell research institution without its normal power.  The institution, which will remain unnamed, had a backup generator that also failed. Fortunately the situation was caught before irreparable harm occurred.

The focus during events like today’s quake in Napa is on major damage and injury. But research institutions can suffer significant harm from what appears to be relatively minor damage – laptops smashing to floors, servers toppling, delicate instruments flying off tables, animal cages falling over and breaking and so forth.

Today’s event served notice that researchers should double-check their safety measures and physical security of important equipment and ensure that all data is backed up well offsite where it would not be destroyed by a quake.  That would include data at the California stem cell agency, which is headquartered in San Francisco.

California Lawsuit Charges StemCells, Inc., with Putting Patients at Risk

A former senior manager at StemCells, Inc., which holds a $19.4 million award from the California stem cell agency, has filed a lawsuit alleging that “deficiencies in the company's cell lines put patients at risk of infection or death during clinical trials.”

The charges were contained in a suit by Rob Williams in Alameda County court, according to an article on Courthouse News Service written by Elizabeth Warmerdam. Williams is suing for wrongful termination, retaliation and violation of the California False Claims Act.

According to the article, the complaint said that StemCells, Inc., of Newark, Ca., says its stem cells are safe for human transplantation.  Warmerdam continued,

“Williams says he was hired as the company's senior manager of manufacturing in December 2013 to oversee its manufacturing facility, where stem cell cultures are cultivated for use in clinical trials.

“'Shortly after beginning his employment, plaintiff noted poor sterile technique, failure to adhere to current Good Manufacturing Practices in the company's manufacturing process, and substantial deficiencies in the company's Manual Aseptic Processing of HuCNS-SC (Human Central Nervous System Stem Cells) cell lines - failure and deficiencies that put patients at risk of infection or death during ongoing clinical trials,’ Williams says.

“Williams claims he also saw manufacturing deviations during cryopreservation of Working Cell Bank lots, leading to numerous stem cell lots with dangerously high numbers of damaged cells.

“'Knowing that these cells were to be injected into human patients, and that the high level of damaged cells and the possibility of contaminating microorganisms could cause serious harm to patients, plaintiff immediately took his concerns to upper management. He also noted that the use of adulterated stem cells lots could skew patient test results, effectively jeopardizing data behind years of clinical trials and research,’ the complaint states."

It was not immediately clear whether Williams’ allegations directly involve the work being funded by the California stem cell agency(see here, here and here), which has been asked for comment on the lawsuit.  The California Stem Cell Report has also asked the publicly traded company for a comment, although the article said the firm did not respond to a query by Courthouse News Service.

 (Late yesterday, the firm said the allegations have no merit. See full text here.)

The lawsuit said that Williams was told to conceal his finding from unspecified reports and that he was suspended shortly thereafter. It said that he sent emails to upper level management about his concerns and that he was fired a few weeks later.

Williams’ Linked In profile said that he has 15 years industry experience, including nearly six years as a senior manager at Alvine Pharmaceuticals and three at Johnson&Johnson.

Williams is seeking unspecified punitive damages from StemCells, Inc.

Courthouse News Service is a Pasadena-based national news service for lawyers and the news media.

California Stem Cell Agency to Alter $70 Million Alpha Clinic Proposal

The California stem cell agency is moving to revise a significant component of its $70 million plan to create one-stop Alpha clinics aimed at establishing the Golden State as the leading location worldwide for stem cell therapies.

Details of the changes that will be considered at the July 24 meeting of the agency’s board are not yet available. However, they deal with creation of a $15 million data and information management center that would be involved in clinical trial support, outreach and education and “development of healthcare economic resources.” The last area would involve efforts to convince insurance companies and the government to pay for what are likely to be very expensive treatments. 

The Alpha clinic applications were scheduled to be reviewed last month behind closed doors by the agency’s out-of-state reviewers. However, the June review was postponed shortly after Randy Mills became the new president of the agency. The agency said it was having difficulty getting qualified reviewers.  The review is now set for mid-September.

The Alpha clinic proposal has been championed for several years by the agency’s former president, Alan Trounson, who is now involved in a conflict-of-interest flap. Last week, he was appointed to the board of StemCells, Inc., of Newark, Ca., which is the recipient of a $19.4 million award from CIRM. The agency has launched a review of all activities involving the publicly traded firm and banned CIRM employees from speaking to Trounson about StemCells, Inc., matters.  

Mills began his presidential duties May 15 at which time Trounson was designated as a senior scientific advisor. Early in May, Kevin McCormack, CIRM spokesman, said that Trounson would remain with the agency until June 30. McCormack said that Trounson would  “help shepherd through a number of projects and commitments he has made,” which some assumed included the review of the Alpha applications in June.

McCormack did not response to a question on June 6 about whether Trounson would be participating in the review.

Eight, unidentified major institutions are competing for the Alpha clinic awards. Five are specifically shooting for the information management center.  StemCells, Inc., is not expected to be involved because of the terms of the RFA, but Stanford University is quite likely to be among the applicants.

Stanford scientist Irv Weissman, founder of StemCells, Inc., and currently a member of its board and chairman of its scientific advisory board, is head of the Palo Alto school’s Institute of Stem Cell Biology and Regenerative Medicine.

The CIRM board meeting will be held in Millbrae but two teleconference locations, where the public can participate, will be available in Los Angeles  and one in La Jolla. Specific locations can be found on the agenda.

More California Stem Cell Cash Likely for UC Irvine and UCLA

Two researchers at different University of California campuses look to be slated next week for additional cash for their research into Huntington’s Disease and corneal problems.

Applications for more cash are scheduled to be acted on July 24 at the CIRM board meeting in Millbrae in the San Francisco Bay area.

Leslie Thompson (left) and patient advocate Frances Saldana
Gene Veritas photo

Leslie Thompson of UC Irvine is up for additional “bridge” funding for her efforts to develop an hESC therapy for Huntington’s Disease. She received $3.5 million in 2010.  Amount of the bridge funding was not specified in the material posted online today.

Her latest progress report said,

“We have now selected a GMP grade hNSC line that will be carried forward for further testing in both rapidly progressing and slower progressing HD mice, as well as in mouse preclinical dosing studies. Taken as a whole, progress supports the feasibility of the CIRM-funded studies to transplant differentiated hESCs into HD mice for preclinical development with the ultimate goal on initiating IND-enabling activities for HD clinical trials.”

Sophie Deng
UCLA photo

Patient advocates for Huntington’s Disease have been particularly active at CIRM board meetings and at UC Davis, which has developed a major research effort dealing with the affliction.

Sophie Deng of UCLA is up for additional funding to take her research involving corneal disease to another stage. She received $1.5 million in 2010 for her translational research. Amount of the additional funding also was not specified today by the agency. The amounts for both researchers is likely to surface later this week.

Biopolitical Times: Trounson-Weissman-StemCells, Inc., Affair is 'Shameful'

The headline on the Biopolitical Times story said it all: “Shameful Conflicts of Interest Involving California’s Stem Cell Agency.”

The piece by Pete Shanks of the Center for Genetics and Society in Berkeley, Ca., dealt with the former president of the agency, Alan Trounson, and StemCells, Inc., which holds a $19.4 million award from the agency, along with Irv Weissman, the Stanford researcher who founded the firm and who now sits on its board.

Trounson was named to the StemCells, Inc., board on Monday, seven days after he left the agency. Yesterday the agency, formally known as the California Institute for Regenerative Medicine(CIRM), launched a “full review” of all activities involving StemCells, Inc. The agency also banned its staff and board fromcommunicating with Trounson about matters involving the publicly traded firm.  

Shanks wrote,

“Let's be blunt: This looks like a pay-off. Technically, what Trounson and Weissman and StemCells, Inc., just did may not be illegal. But it's shameless.”

Shanks pointed out that the problems with conflicts of interest at the agency are nothing new. As far back as 2004, they were noted prior to passage of the measure that created the state research effort. Their importance was noted by major supporters of the measure, including Weissman.

Weissman was quoted in Nature in September 2004 as saying,

“We want to avoid even the appearance of a conflict.”

Shanks concluded,

“CIRM should take a long look at its practices and procedures, which have never served the agency well — and especially should consider its obligations to the public, who fund it. There can be practical difficulties in balancing expertise and objectivity; the best scientists in any field do tend to know each other well. All the more reason to be especially careful. This kind of obviously problematic conflict of interest can and should easily be avoided.”

California Stem Cell Agency Bans Some Communications with its Former President; Conflict of Interest Feared

The California stem cell agency today banned its employees and governing board from communicating with its former president, Alan Trounson, about matters involving StemCells, Inc., which holds a $19.4 million award from the state program.

Citing the need to protects its integrity and prevent conflicts of interest, the agency also ordered a full review of all agency activities linked to the publicly traded,  Newark, Ca., firm.

Today’s action followed Monday’s appointment of Trounson to StemCells, Inc.’s, board of directors. The announcement came only seven days after Trounson’s departure from the agency.  Members of the StemCells board received as much as $99,800 in total compensation in 2013.

Trounson’s relationship with StemCells, Inc., and its founder, Stanford researcher Irv Weissman, has come under sharp criticism. John Simpson of Consumer Watchdog of Santa Monica, Ca., a longtime observer of California stem cell affairs, said this week that Trounson’s appointment “calls into question not only his ethics, but unfortunately casts a shadow over CIRM and its award process as well.” 

Simpson said,

“Whether it’s true or not, this has every appearance of being a payback for the money CIRM paid out to Irv Weissman and Stanford University. StemCells Inc. and Stanford have received more than $300 million from CIRM — more than any other researchers.”

Weissman has received $34.7 million in grants from the stem cell agency, which is formally known as the California Institute of Regenerative Medicine (CIRM). Stanford has received $281 million.

In its announcement today, Randy Mills, the agency's new president, said,

“CIRM was created by the people of California to help accelerate stem cell treatments to patients with unmet medical needs.  Our responsibility is to them. So it is essential that we conduct these efforts with fairness and integrity. We take even the appearance of conflicts of interest very seriously.”

The agency also said that it was sending a letter to Trounson and StemCells, Inc.,  “reminding them of the legal limitations that apply to Dr. Trounson under state law.

“Although it is permissible for Dr. Trounson to accept employment with a CIRM-funded company, state law prohibits him from:

“1.  Communicating with Board members and CIRM employees on behalf of Stem Cells, Inc. for the purposes of influencing any administrative action, including the award or revocation of a grant or loan, involving Stem Cells, Inc. for one year following the termination of his employment with CIRM; and
“2. Assisting Stem Cells, Inc. in responding to a Request for Applications in which Dr. Trounson was involved as a CIRM employee or assisting Stem Cells Inc. with its existing loan.”

The agency said that it did not know that Trounson was going to be appointed to the StemCells board and only learned about it through the press release Monday morning.

The $19.4 million award to StemCells, Inc., occurred under unusual circumstances.  Robert Klein, the first chairman of CIRM, lobbied on behalf of the award, which was rejected twice by the agency’s respected reviewers.  Despite reviewer actions, the board approved the award on a 7-5 vote. (See here, here and here.)

Trounson’s relationship Weissman came under question also in the $40 million stem cell genomics award earlier this year. The No. 2 person in Weissman’s Stanford stem cell institute was involved in that award. However, the agency has not yet signed a final agreement involving that proposal.

The agency did not mention any awards beyond those involving StemCells, Inc., in its review.

The San Francisco Chronicle carried a story this afternoon on the agency's ban regarding Trounson.

Stephanie Lee wrote in the Chron,

“'It’s a pity that Trounson and StemCells Inc. simply don’t get it,' Simpson said. 'A full review of CIRM activities relating to StemCells Inc.,  as Mills pledged, is absolutely essential and the results must be made public as soon as available.'”

Bradley Fikes of the San Diego U-T quoted CIRM Chairman Jonathan Thomas as telling his board members,

"The announcement (by StemCells, Inc.)raises serious and obvious concerns on a number of fronts." 

Watchdog Says Trounson-StemCells, Inc., Connection Casts 'Shadow' Over California Stem Cell Agency

The San Francisco Chronicle today carried a story on the appointment of Alan Trounson, former president of the $3 billion California stem cell agency, to the board of  StemCells, Inc., which has received $19.4 million from the research program.

Trounson’s appointment came only seven days after he left state employment. Last year, members of the firm's board received as much as $99,800 in cash and company stock, as reported by the California Stem Cell Report yesterday.

Chronicle reporter Stephanie Lee today wrote that the agency's funding was "pivotal" for StemCells, Inc. On Saturday, in an overview of the stem cell agency, she quoted Martin McGlynn, CEO of the publicly traded company, as saying,

 “We would not have been able undertake another program, and certainly one as challenging and as risky as Alzheimer’s, were it not for the fact that (the agency) was willing to provide funding for us.”

Lee also quoted John Simpson of Consumer Watchdog of Santa Monica, Ca., a longtime observer of the agency, on the matter. Simpson said that Trounson’s joining of the board “calls into question not only his ethics, but unfortunately casts a shadow over CIRM and its award process as well.”

Simpson continued,

“Whether it’s true or not, this has every appearance of being a payback for the money CIRM paid out to Irv Weissman (an eminent Stanford researcher and founder of StemCells, Inc.) and Stanford University. StemCells Inc. and Stanford have received more than $300 million from CIRM — more than any other researchers.”

Simpson said that Trounson should have waited two years before joining a company that had received funds from the stem cell agency.

Lee said that StemCells, Inc., filed a document with the federal Security and Exchange Commission that said said,

 “There was no arrangement or understanding between the Company and Dr. Trounson pursuant to which he was selected as a director of the Company.”

Lee said the Newark, Ca., company declined to comment. The California Stem Cell Report yesterday asked StemCells, Inc., Weissman and Trounson for comment as well as the stem cell agency.  Their remarks will be carried verbatim when they are received.

Ron Leuty of the San Francisco Business Times also wrote a piece on the matter yesterday.