$28 Million California Search for HIV/AIDS Stem Cell Cure Advancing to Clinical Trial

The California stem cell agency today announced that one of its multimillion dollar efforts to come up with a cure for HIV/AIDS is moving into the first stage of clinical trials involving human beings.

The effort includes the City of Hope in Duarte, Ca., the University of Southern California and Sangamo BioSciences, Inc., of Richmond, Ca.

John Zaia
City of Hope photo 

The $3 billion agency is pumping $5.6 million into the clinical trial. Overall, the agency has awarded the lead scientist in the project, John Zaia of the City of Hope, $28.2 million for work involving HIV/AIDS. 

The agency, formally known as the California Institute for Regenerative Medicine (CIRM), said the FDA had approved the initial trial to determine the safety of the treatment.

CIRM’s press release said that the plan is to “take blood stem cells from HIV infected individuals, then treat them with zinc finger nucleases (ZFNs), a kind of molecular scissors, to disrupt the CCR5 gene in those cells. The hope is that this will make those stem cells, and their progeny, resistant to HIV. The modified cells will then be reintroduced into the patient with the hope that they will create a new, AIDS-resistant immune system.”

The effort is intended to replicate what occurred with the “Berlin Patient,” a man who has apparently been cured of AIDS as the result of a mutation.

Jeff Sheehy, a longtime CIRM board member and HIV/AIDS advocate, said in the press release,

“This trial is enrolling HIV patients whose immune cells have not returned to normal levels even after success in suppressing the virus with antiretroviral therapy, and even if it doesn’t lead to a cure it could still result in a therapy that offers clinical benefit to patients at risk for opportunistic infections.”

(Here is a link to how Sangamo describes its ZFN pipeline.)

Zaia said,

‘While we have a number of drugs that are effective in holding HIV at bay, we have nothing that cures it. In addition, for many patients, these medications come with significant long-term problems so there is a real need for a therapy that can help eradicate the virus from a patient completely. That is where our work is focused.”  

The agency is also funding a clinical trial involving an alternative approach to HIV/AIDS. That effort includes UCLA and an Arizona company, Calimmune, Inc., co-founded by a former member of the CIRM governing board, David Baltimore. Calimmune also has an address near UCLA in Los Angeles.

CIRM said,

“Calimmune, an HIV gene medicines company focused on developing cell-based therapies for HIV, began its human clinical trial in July 2013 and has already shown that the first group of patients treated did well enough for the company to start treating a second group more intensively.” 

Jonathan Thomas, chairman of the CIRM board, said,

“This kind of work is too important to just try one method at a time and sit back and wait to see if it is effective.”

Sparse News Coverage This Morning of California Stem Cell Agency Action

LA JOLLA, Ca. -- Media coverage of the resurrection of the Geron's landmark human embryonic stem cell trial was light today in the wake of a $14.3 million award by the California stem cell agency to support its continuation.

The San Diego U-T and the San Francisco Business Times both carried stories but none others appeared this morning in a Google search.

Bradley Fikes of the San Diego newspaper attended yesterday's CIRM board meeting here. He wrote,

"A potentially groundbreaking trial to treat spinal cord injuries with tissue grown from human embryonic stem cells will resume, after being funded by the California's stem cell agency."

Both he and Ron Leuty of the San Francisco Business Times also noted the award to Sangamo BioSciences of Richmond, Ca. Leuty wrote,

"Sangamo BioSciences Inc. (NASDAQ: SGMO) of Richmond will split a $5.6 million California Institute for Regenerative Medicine award with Dr. John Zaia of the Beckman Research Institute at the City of Hope near Los Angeles to take blood stem cells from HIV patients and cut and replace a gene that is key to the spread of the AIDS virus."

Asteris issued a press release this morning that said,

“We are preparing to initiate the dose escalation Phase 1/2a clinical trial of AST-OPC1 in patients with cervical injuries in 6-9 months subject to FDA clearance,” stated Edward Wirth III M.D., Ph.D., Asterias’ Chief Translational Officer. “Achievements in this CIRM-supported program could also help accelerate further development of AST-OPC1 in other neurodegenerative diseases such as stroke and multiple sclerosis. We are currently evaluating the function of AST-OPC1 in nonclinical models of these diseases.”

“This award provides significant non-dilutive funding to accelerate the development of AST-OPC1 for patients with spinal cord injury. Given the lack of any approved therapies for spinal cord injury and the high level of disability, substantial costs of care, and shorter life expectancy of injured individuals, AST-OPC1 has the potential to address a substantial unmet medical need in this condition,” stated Katharine Spink, Ph.D., Asterias’ Chief Operating Officer."

BioTime's stock price was up 22 cents this morning at the time of this writing to $2.95. It has risen from $2.42 on May 22 when the California Stem Cell Report first carriednews of the California stem cell agency award.

Sangamo has not yet issued a press release, but its stock price was at $13.68 this morning, up 16 cents.

Sangamo and the California Stem Cell Agency: Good News for Both

Sangamo Biosciences is one of the California stem cell agency award recipients that is again surfacing in the news in a way that could ultimately burnish the reputation of the $3 billion research enterprise.

Sangamo, a publicly traded company based in Richmond, Ca., popped up in a story in the New York Times dealing with the search for a cure for AIDS involving researchers at the University of Pennsylvania.

Sangamo is also involved in another AIDS research project financed by the stem cell agency at the City of Hope and USC.  The company produces a gene-editing tool and its stock price is soaring. 

The Times story by Denise Grady reported on the phase one clinical trial at the University of Pennsylvania. She wrote,

“The idea of genetically altering people’s cells to make them resist the virus that causes AIDS may seem like a pipe dream, but a new report suggests it can be done.

“The research involves the first use in humans of 'gene editing,' a treatment that zeros in on a particular gene and disables it.”

We asked the stem cell agency how the trial fits with the work financed by CIRM. Kevin McCormack, senior director for communications, replied,

“On first glance it looks as if this works with the CD4 t-cells while the work we are financing focuses on a similar approach but perhaps the best explanation of the difference comes from this section of the original application from John Zaia's team at City of Hope that is partnering with Sangamo. 

“'Recently, ZFNs have been shown to inactivate CCR5 in primary human CD4 T cells, allowing them to preferentially survive and expand in the presence of HIV. A human clinical trial evaluating this approach is on-going, in which patient T cells are re-infused after ZFN-treatment to block CCR5 expression and possibly provide an HIV-resistant reservoir of CD4 T cells (THIS IS THE PIECE IN THE NY TIMES ARTICLE). The CIRM Disease Team proposes an approach to modify a patient’s own HSC to circumvent the need to find matched donors that carry the Δ32 CCR5 mutation and yet provide a renewable and long-lasting source of HIV-resistant cells.'”

Sangamo's stock has climbed dramatically this year. On Jan. 9,  based on news of an investment in the company by Biogen Idec, Sangamo opened at $15.70, rose to $19.12 and closed at $18.88. The volume of shares traded was 10.4 million. The average volume of trading over has been well less than 1 million for most of the last 12 months.

Today the stock closed at $22.96, up from $18.92 at the Tuesday close, the day before the clinical trial news surfaced. Volume hit 11 million shares. Sangamo's 52-week low is $6.86.  

Big Sangamo Deal for California Stem Cell Agency with an Asterisk

It was a $20 million deal -- possibly as much as $300 million --for Sangamo BioSciences, and its president told the California stem cell agency,

“We wouldn't be where we are today without you.”

The $3 billion agency has pumped $5.4 million into the publicly traded Richmond, Ca., firm for HIV/AIDS research and another $6.4 million last May for a phase one clinical trial dealing with beta-thalassemia, a genetic blood disease.

Last week Sangamo announced that Biogen Idec of Cambridge, Mass., would buy into its research related to beta-thalassemia as well as sickle cell anemia. The announcement said Biogen Idec will also reimburse Sangamo for “its internal and external research and development program-related costs.” Payments of up to another $300 million could come Sangamo's way if it meets certain goals.

Kevin McCormack, CIRM's senior director of public communications,wrote on the agency's blog that it has been “a very good start” in 2014 for CIRM. He noted that the Sangamo announcement followed similar good news from Capricor, another CIRM grant recipient that has announced funding from Big Pharma.

He quoted Ellen Feigal, senior vice president at the agency, as showing how “important the funding we provide is in helping companies like Sangamo get their research to a point where big pharmaceutical companies stand up and take notice, and invest.” 

McCormack wrote that Edward Lanphier, president of Sangamo, sent an email to CIRM in connection with the announcement that said,

"Thank you for ALL of your support over the past several years. We wouldn't be where we are today without you."

The Sangamo deal, however, has an asterisk. In May 2012, a “special advisor” to the stem cell agency, Saira Ramasastry, was nominated to the seven-member Sangamo board of directors. Following an item in the California StemCell Report, the agency announced that her contract was not being renewed. CIRM said she was not involved in a decision-making role and was not required to file a statement of economic interests with the agency. Ramasastry subsequently was elected to the Sangamo board where she still holds a seat.

Sangamo's stock closed at $19.84 today, up 46 cents. Its 52 week high is $20.33 and its low $6.86.

Our take: The investment in Sangamo is a healthy sign of expanding interest from larger firms in stem cell therapies. However, it is darkened by the "revolving door" situation involving Ramasastry. CIRM does not require public disclosures of the financial interests of its consultants. Nor does it restrict revolving door arrangements with them that permit later employment at CIRM-connected firms. At the same time, the agency is moving aggressively to engage industry ever more closely and to generate results that will resonate with the public. The agency would do well to heed the conflict-of-interest study from the prestigious Institute of Medicine in 2009. Bernie Lo of UCSF was one of the editors of the study. He wrote that medical research and the private sector have sharply divergent priorities and sometimes irreconcilable differences. The stem cell agency should act to ensure that both the appearance and reality of cronyism, insider dealings and conflicts-of-interest do not blemish its scientific track record.

Advisor to CIRM Nominated to Board of CIRM Grant Recipient Expecting $5 Million from Agency

A "special advisor" to the $3 billion California stem cell agency has been nominated to the board of directors of Sangamo BioSciences, Inc., a firm that is sharing in a $14.5 million grant from the state research enterprise.

She is Saira Ramasastry, managing partner of Life Sciences Advisory, LLC, of Emerald Lake Hills, Ca., and who also has worked as a consultant to Sangamo. Ramasastry's ties to CIRM go back to at least May of 2010, when she served as a consultant for the panel that CIRM hired to review its operations. The panel strongly recommended that CIRM engage industry more warmly. Since then Ramasastry's contracts with CIRM have totalled $65,000. Her current $25,000 contract describes her work for CIRM as "industry analysis and consultation."

Ramasastry's website says she serves as "a special advisor to CIRM in industry engagement initiatives and strategic projects." Her firm also offers expertise to life sciences firms in "strategic alternatives advisory, strategic options analysis, tailored business development solutions and innovative financing strategies."

In a news release April 30 announcing her nomination, Sangamo said Ramasastry has worked as a consultant to the Richmond, Ca., company. William Ringo, chairman of Sangamo's board of directors, said,

 "Saira's extensive experience in global healthcare investment banking and strategic advisory consulting will bring valuable financial, commercial assessment and business development skills to our board."

Compensation for Sangamo directors in 2011 ranged from $75,000 to $35,000 for those who served a full year plus stock options. 

Sangamo is sharing in a $14.5 million, four-year grant from CIRM with the City of Hope in Los Angeles dealing with an AIDS- related lymphoma therapy. The grant was approved in 2009. Sangamo expects to receive $5.2 million from the grant if it runs for the full four years. As of the end of 2011, the firm has received $2.4 million, according to its financial documents. In March, Ellen Feigal, CIRM senior vice president for research and development, said the effort is due for an evaluation late this year.  Earlier this year, CIRM terminated one $19 million grant in the same round after it failed to meet milestones.

Sangamo's board is scheduled to vote on Ramasastry's nomination on June 21. 

The California Stem Cell Report has asked Ramasastry if she has any comment for publication. We are also querying CIRM and Sangamo. Their comments will be carried verbatim when we receive them.

Our take? Ramasastry's consulting work with both CIRM and Sangamo demonstrates again the tiny size of the world of stem cell science. It also raises questions about conflicts of interest involving CIRM and industry. Can a consultant in such a position serve two masters and serve them both equally well? CIRM's interests are not necessarily the same as Sangamo's, which is a publicly traded firm working diligently to generate profit and financial returns for its shareholders. To do that, it needs capital from its financial "backers," including CIRM. The stem cell agency, however, is in the business of getting the results that it wants from Sangamo. If not, the grant can be cancelled. Working for both the stem cell agency, whose paramount obligation is to the people of California, and a recipient of the agency's millions is incompatible.