'A Good Deal?' -- California Stem Cell Research, Rosy Expectations and Billions of Dollars

Highlights
$6 billion from the Golden State
$1.1 billion in royalties?
40 new clinical trials projected

"Are taxpayers getting a good deal?" That's the question that was raised nationally this week by the New York Times in connection with federally funded research dealing with life-saving treatments.

The same question can be raised concerning the roughly $6 billion, including interest, that California is spending -- unsuccessfully so far -- to generate a stem cell therapy that can be widely used.

In the case of the Times, the article by Matt Richtel and Andrew Pollack dealt with cancer immunotherapies and the soaring business and medical enthusiasm for the treatments. The two writers started their lengthy piece with the example of Kite Pharma, which they said "has struck gold." The company's stock has soared from $17 a share two years ago to about $50.

The Times wrote that excitement over the treatment speaks "volumes about the value of Kite's main scientific partner: the United States government."

California too is partnering with researchers and companies to develop blockbuster treatments, including immunotherapies. It has awarded more than $2 billion for research into possible treatments ranging from arthritis to extremely rare diseases that affect only a few thousand people.

The state is financing its research via the California Institute for Regenerative Medicine (CIRM), which is more informally known as the state stem cell agency. The agency has only $692 million left before its money for new awards runs out in 2020.

CIRM is funded by $3 billion that state borrows (bonds). The interest on the bonds roughly doubles the cost of the research compared to pay-as-you-go financing, which the federal government basically relies on. Like the federal government, CIRM depends on the private sector to actually bring potential therapies into widespread use.

The stem cell agency was created by voters in 2004 when they approved a ballot initiative. The campaign raised rosy expectations that cures were right around corner for afflictions that reached into nearly 50 percent of California families. And supporters also said that the state could expect as much as $1.1 billion in royalties. But royalties and commercial therapies have yet to appear.

The Times piece laid out arguments concerning federal research that apply equally to California's research effort, which is unprecedented in state history and which operates outside of the control of the governor and the legislature.  The Times piece said,

"Defenders say that the (public/private) partnership will likely bring a lifesaving treatment to patients, something the government cannot really do by itself, and that that is what matters most.

"Critics say that taxpayers will end up paying twice for the same drug — once to support its development and a second time to buy it — while the company reaps the financial benefit."

The Times article continued,

“If this was not a government-funded cancer treatment — if it was for a new solar technology, for example — it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention,” said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines."

California's stem cell agency has yet to find a financial source to continue its work beyond 2020. Some talk has surfaced about another bond measure in 2018, but political observers give such an effort slight chance of success unless the agency can produce a therapy that will resonate with voters. If the Trump Administration, however, imposes restrictions on stem cell research, similar to those of the Bush Administration in 2004, that could create an impetus for passage of another measure.

Bob Klein, the first chairman of the stem cell agency, used to like to trot out the hundreds of scientific journal articles that were published by CIRM-funded researchers as a sign of success. "So what?" was the private comment to the California Stem Cell Report by one former CIRM staffer, alluding to the lack of impact of the journal articles. 

The agency's record, however, is picking up. Last week it cited 70 new projects, 10 new clinical trials plus a $30 million stem cell "pitching machine."  At at an emotional meeting, the agency's governing board also heard a mother thank the agency for saving the life of one of her children. Randy Mills, the president of the agency, is pushing hard and is looking for 40 additional clinical trials in the next several years. 

But the fundamental question remains: Will California taxpayers get their money's worth -- "a good deal" -- for the billions they are spending on stem cell research.   

$10 Million 'Eat Me' Award: California Stem Cell Agency to Firm Called Forty Seven

The California stem cell agency is set this week to award $10 million to a Menlo Park firm to help finance a clinical trial for a therapy for colon cancer, which is the second leading cause of cancer death in this country.

The cash will go to Forty Seven, Inc., an enterprise using an immune system, "eat me" technology developed at Stanford University by stem cell scientist Irv Weissman. The firm is adding $6.8 million of its own cash to the project. Weissman has received $30 million over the years from the state agency.

The application to help with an early stage clinical trial was unanimously approved by the agency's scientific reviewers during a closed-door meeting last month. The full board will ratify the action at its telephonic meeting this Thursday. 

The agency, formally known as the California Institute for Regenerative Medicine(CIRM), has almost never overturned a positive decision by its reviewers.

The $3 billion agency does not release the names of successful applicants prior to board action. Forty Seven was identified through the use of public records.

According to a federal Web site,

"This trial will evaluate Hu5F9-G4 in combination with cetuximab. Hu5F9-G4 is a monoclonal antibody which is designed to block a protein called CD47, which is widely expressed on human cancer cells. Blocking CD47 with Hu5F9-G4 may enable the body's immune system to find and destroy the cancer cells. Cetuximab is a monoclonal antibody drug that is used for treatment of certain types of colorectal cancer as well as head and neck cancer."

The idea is to override a tumor's "don't-eat-me" signal and instead trigger the body's "eat-me" response.

California's scientific reviewers expressed high praise for the project. However, they also said,

"The design of the trial itself is fine, but the decision-making process is sub-optimal. It is critical to include clear go/no go criteria for the second phase of the trial and for the data to be evaluated by an independent, objective third party for a decision as it is unclear what toxicities are expected given the proposed new mechanism of action and use of a combination therapy." 

Forty Seven announced last February that it is backed by $75 million from a variety of partners including Google. Others in the venture capital group are Lightspeed Venture Partners, Sutter Hill Ventures (the two leaders on the financing) and Clarus Ventures.

In August, Karen Tkach wrote in BioCentury:

"With companies lining up to block CD47 for cancer, the cell surface protein is emerging as one of the top new targets in oncology. But the list of suitors could be about to get a lot longer as the target could have uses in a much broader range of indications, according to two studies from Stanford University that extend its prospects to cardiovascular disease and transplant biology, and hint at roles in several more diseases."

According to the clinical trial information on a federal Web site, Forty Seven will have clinical trial locations in Grand Rapids, Mich.; San Antonio, Texas, and Nashville, Tenn.  The California stem cell agency is limited to spending its award for work done in California. 

The federal information has conflicting indications on whether patients are currently being recruited for enrollment in the trial.

(In response to a query following publication of this item, Mark Chao, a co-founder and medical

Mark Chao, Stanford photo

director of Forty Seven and co-PI on the trial, said,

"We have been excited about the positive reviews by the CIRM committee and hope to hear good news on Thursday. Thank you for sending this article. With regards to initiating California clinical sites on the trial, this is a very big point of emphasis for us, in particular with CIRM’s mission and are currently working to activate two sites in California (Stanford University and UCLA) for the trial. One of our goals are to bring this therapy to patients within California and have designed our trials with this in mind. Please let us know if there are any further questions we can address. We look forward to a long relationship with CIRM.")

The chair of the study is Chris Takimoto of Forty Seven. The CIRM application number is CLIN2 -09577.

NYTimes: Fresh and Major Attention to Immunotheraphy and Cancer

The New York Times personalized its look at immunotherapy -- Times graphic

The New York Times this weekend unveiled a dramatic, special report on immunotherapy to treat cancer, a field in which California's stem cell agency has invested tens of millions of dollars.

The Times' work will undoubtedly focus greater public attention on the use of immunotherapies and generate a fresh surge of interest on the part of patients who are unfamiliar with the expensive treatment, which is very much in its infancy. The Times wrote,

"Harnessing the immune system to fight cancer, a medical dream for more than a century, is becoming a reality. Terminally ill patients who had slim chances of surviving have gone into remission and patients with inoperable tumors are gaining months or years. But so far, the new treatments work for only a minority patients, and doctors are not sure why. The treatments are prohibitively expensive, and not all patients have access to them."

The Times did not deal with any of the work specifically backed by California. But as recently as March, the $3 billion California Institute for Regenerative Medicine(CIRM), as the stem cell agency is formally known, made another investment in the field with more than $10 million to two researchers, William Murphy of UC Davis and Lili Yang of UCLA. (See Tran1-08533 and Tran1-08635 here.)

In February, Alex Lash of xconomy reported that a new immunotherapy firm has sprung from handsome support by the stem cell agency. He wrote,

"Forty Seven(the firm's name), emerged Wednesday with a program already in clinical trials, a rarity for an academic spinout. Stanford researchers led by Irving Weissman, the director of the school’s Institute of Stem Cell Biology and Regenerative Medicine were able to begin testing the drug in humans thanks to $30 million in funding from California’s stem cell agency, known as CIRM."

Lash said that Forty Seven is named for the CD47 protein on tumor cells that its experimental cancer drugs target.

The agency also sponsored a webinar last year on immunotherapies with participation by the Food and Drug Administration and Kite Pharma of Santa Monica, Ca., and which covered such topics as safety and regulatory issues. The webinar is available here. Slides offered by Margo Roberts of Kite can be found here.

Here are links to the various Times stories.
Harnessing the immune system to fight cancer
What is immunotherapy
Immunotherapy offers hope to a cancer patient but no certainty