ViaCyte: Stem Cell Diabetes Therapy 'Not Possible' Without California Taxpayer Cash

The California stem cell agency hit a couple of firsts this week when it pumped up its investment this week in the “teabag” diabetes therapy being developed by ViaCyte, Inc., of San Diego.

The effort, backed by $55 million from the agency, is the first clinical trial in the United States for a diabetes treatment involving human embryonic cells (hESC).

It is also likely the first time that the state of California has directly invested so much money in a single business.

However, the cash and the research work did not happen overnight. The research began many years ago when ViaCyte was known as Novocell. The stem cell agency entered the game six years ago. Wednesday’s $16.6 million cash infusion came on top of $38.5 million already handed out by the state, which is likely to be a financial player for at least several more years, assuming the ViaCyte clinical trials go well.  

Paul Laikind
ViaCyte photo

Paul Laikind, CEO of the firm, was there as agency directors Wednesday approved ViaCyte’s latest application (AP1-08039).  Following the 8-0-1 vote, he said, 

“I can say without doubt that the progress we have made developing our therapeutic candidate would not have been possible but for the tremendous support we have received from CIRM(the stem cell agency).  Importantly, CIRM’s support has been multiplied, as it has helped us to secure other funding sources that we need to drive this project forward.” 

About 40 patients are being recruited for the clinical trial. UC San Diego this week announced that interested persons can contact them at 858-657-7039. Laikind said other sites are expected to open around the country.

Here is the full text of Laikind’s remarks.   

“Good afternoon, I am Dr. Paul Laikind, president and CEO of ViaCyte.
 “I would like to take this opportunity to thank the members of the ICOC, the Grants Review Working Group, the CIRM staff and especially the citizens of California whom you all represent, for the continued support of the work we are doing at ViaCyte to develop what we all hope will be an important, innovative treatment for diabetes.
 “CIRM has been a partner with us in this endeavor since the early days and your confidence and support has allowed us to make tremendous progress.  Last month we were cleared by the Food and Drug Administration to begin clinical trials evaluating our stem cell-derived islet replacement therapy candidate in patients with type 1 diabetes.  Following up on that exciting news, it was proudly announced just yesterday that the first center to enroll patients in this trial will be the University of California, San Diego School of Medicine.
 “To our knowledge this will be the first time an embryonic stem cell derived cell replacement therapy for diabetes will be tested in the clinic.  This exciting development illustrates the importance of CIRM’s mission for medicine and for California.  CIRM is all about breaking new ground, nurturing promising medical advances and stimulating our great state’s economy.
 “I can say without doubt that the progress we have made developing our therapeutic candidate would not have been possible but for the tremendous support we have received from CIRM.  Importantly, CIRM’s support has been multiplied, as it has helped us to secure other funding sources that we need to drive this project forward.
 “Some will point out that that we are still at an early stage with this project and there is no denying that, there is much left to do and discover.  However, together we have made tremendous progress and increased the odds of success with each milestone achieved.  Whatever the outcome, CIRM has pushed the boundaries of medicine and is step by step bringing us closer to realizing the tremendous promise of regenerative medicine.
 “Thank you again for the very important work you are doing.”

California Stem Cell Meeting Concludes; Links to Stories

BERKELEY, Ca. -- Directors of the California stem cell agency today concluded their meeting at 1:53 p.m. PDT. Look for more coverage of matters discussed at the meeting in the next week or so.

Here are links and excerpts from stories from today's session.

California Bets $55 Million on 'Teabag' Diabetes Treatment

BERKELEY, Ca. -- California today beefed up its investment in a “teabag” therapy for diabetes, bringing the total to $55 million in an effort to develop a “virtual cure” for an affliction that affects 347 million people worldwide.

It is believed to be the largest direct investment that the state has ever made in a company. The therapy also involves the most controversial of stem cell treatments, ones derived from human embryonic stem cells(hESC). 

Revolving Door Policy Tightened at California Stem Cell Agency

BERKELEY, Ca. -- Directors of the California stem cell agency today approved a measure aimed at easing conflicts of interest involving employees who may seek employment with recipients of the agency’s largess.

Revolving Door Policy Tightened at California Stem Cell Agency

BERKELEY, Ca. -- Directors of the California stem cell agency today approved a measure aimed at easing conflicts of interest involving employees who may seek employment with recipients of the agency’s largess.

On a unanimous voice voice, the governing board  of the California Institute for Regenerative Medicine (CIRM) set a new revolving door policy that says,

“To prevent even the appearance of a conflict of interest, CIRM employees should contact CIRM’s general counsel or deputy general counsel if the employee has begun discussions with a prospective employer that has received or is currently applying for CIRM funding. CIRM’s attorneys will maintain the confidence of this information and advise the employee of his or her obligations under state law, and the employee will be precluded from participating in any decisions relating to the prospective employer.­­"

The new policy is a slight extension of the state law and was offered in the wake of the appointment of former CIRM President Alan Trounson to the board of directors of StemCells, Inc., of Newak, Ca., which holds $18.4 million in awards from the agency. 

Trounson was named to the board seven days after he left the agency and did not inform the agency he was considering a position with the firm. The news triggered a wave of unfavorable publicity for the agency.

CIRM Press Release on Viacyte Award on Diabetes

BERKELEY, Ca. -- The California stem cell has posted a press release on today's award to Viacyte, Inc., of San Diego, Ca., to speed up development of a human embryonic stem cell treatment for diabetes. Here is a link to the press release. 

California Bets $55 Million on 'Teabag' Diabetes Treatment

BERKELEY, Ca. -- California today beefed up its investment in a “teabag” therapy for diabetes, bringing the total to $55 million in an effort to develop a “virtual cure” for an affliction that affects 347 million people worldwide.

It is believed to be the largest direct investment that the state has ever made in a company. The therapy also involves the most controversial of stem cell treatments, ones derived from human embryonic stem cells(hESC). 

The impact of the potential therapy could be far-reaching.  About 70,000 persons die each year in this country from diabetes. It is the 7th leading cause of death in the United States.

Forty-three-year-old Maria Torres, who lives in the Sacramento area, is hoping for a positive outcome on the therapy.

Maria Torres
CIRM photo

 “I have three kids, and I know they could have the same thing I have. If they find a cure, for me, that’s peace of mind.”

Torres was featured in a blog post yesterday by the California Institute of Regenerative Medicine(CIRM), the state’s nearly 10-year-old, $3 billion stem cell research program, which is providing the taxpayer funding.

Meeting here today, directors of the agency approved, on an 8-0-1 vote, $16.6 million in awards to Viacycte, Inc., of San Diego, Ca., to advance its work on the therapy.  Over the last six years, the agency has pumped $38.5 million into the company, which has received by far the greatest amount of cash from the agency of any business. A subsidiary of Johnson&Johnson as well recently invested $20 million in Viacyte.

The firm’s treatment is scheduled to begin clinical trials this year. UC San Diego has begun enrolling patients, Viacyte CEO Paul Laikind told CIRM directors this morning.

The therapy involves several, porous, teabag-like packages that are inserted beneath the skin. An individual device is about the length of a credit card but half the width. The firm plans to work on a larger device for single insertion. 

In the CIRM blog post yesterday, Anne Holden, Web content and social media manager for the agency, said the device contains cells that “sense blood sugar levels and produce insulin to reduce them.”  That “allows transfer of blood sugar, insulin, oxygen, and other molecules but keeps (other) cells out, thus avoiding the possible attack and rejection by the patient’s own immune system.”

Regular use of the treatment is years away because of the series of clinical trials that must be run. Additionally, only about one out 10 traditional drugs entering clinical trials reach the marketplace. No therapies involving human embryonic stem cells (hESC) have successfully run the clinical trial gauntlet in the U.S. and secured approval for widespread use.  

Viacyte’s therapy is derived from those controversial cells and is the first hESC trial backed by CIRM.   Some religious groups and others believe the use of the cells is tantamount to murder. Opposition to hESC research has subsided in recent years because of the focus on the possible use of reprogrammed adult stem cells. However, it flared up again in recent weeks because of a flap over the so-called Ice Bucket Challenge, which raised funds for ALS research, some of which involves hESC.

The California stem cell agency, ironically, owes its existence to the opposition to hESC research. Former President George Bush restricted federal funding for hESC research because of the religious concerns. The ballot campaign in 2004 to create the agency relied heavily on Bush’s action to demonstrate the need for continuing research into the promising field. 

Here is a link to the CIRM press release on the awards. 

California Stem Meeting Begins in Berkeley

BERKELEY, Ca. -- Directors of the $3 billion California stem cell agency opened their meeting this morning at 10:04 a.m. PDT with a "teabag" cure for  diabetes on their minds.

Also on tap is consideration of a proposal to ease problems with conflict-of-interest, revolving-door problems at the agency.

Coverage of California Stem Cell Meeting, Plus an Ohio Participation Possibility

The California Stem Cell Report will bring you on-the-scene, live, gavel-to-gavel coverage tomorrow of the meeting of the directors of the Golden State’s $3 billion stem cell research program.

Directors are expected to approve $16.6 million for a “teabag” treatment for diabetes that is being developed by Viacycte, Inc., of San Diego.  Also on the agenda is a move to ease revolving-door problems at the agency that may recur as some of its employees seek jobs elsewhere.

The meeting begins at 10 a.m. PDT and will be audiocast on the Internet for those who want to listen. To see the PowerPoint slides being used during the meeting, you can also log on to a WebEx presentation. The agenda has instructions on how to take advantage of these opportunities.

Stem cell fanciers in Ohio will be able to actually take part from a location at the Downtown Hilton at 401 N. High St. in Columbus. The room number was not specified on the meeting agenda, so interested parties should query the agency in advance at info@cirm.ca.gov.  

Remote participation locations in California outside of Berkeley include two in Los Angeles one each in La Jolla, Duarte  and Mountain View.  Remote locations are provided when some directors are unable to attend meetings.

San Diego's Viacyte Scoring Again with State Funding; Total Now Hits $55 Million

California’s stem cell research agency appears ready to pump another $16.6 million into a diabetes therapy effort that has already received $38.5 million from the Golden State.

At a total of more than $55 million, it is likely the single largest direct investment that the state of California has ever made in a business. The cash is expected to be approved by directors of the $3 billion stem cell agency at their meeting Wednesday in Berkeley.

The agency has a policy of secrecy concerning the names of those seeking public money and did not identify the firm.  However, it was apparent from documents on the Web site of the California Institute for Regenerative Medicine (CIRM), as the agency is known, that the recipient is Viacyte, Inc., of San Diego, Ca. The firm is the most heavily backed business by the stem cell agency. Second is Capricor, Inc., of Beverly Hills, Ca., at $19.8 million.

Viacyte is working on a diabetes treatment that it has described as a “virtual cure” for type 1 diabetes. The company describes the device as akin to a “flat tea bag” that would be implanted beneath the skin.

Last month, the firm announced it had received $20 million (see here and here) from Janssen Pharmaceuticals, a subsidiary of Johnson and Johnson. Viacyte also last month announced it has received a federal go-ahead to begin a clinical trial for its human embryonic stem cell treatment.

Only about one out 10 traditional drugs emerge into the marketplace from clinical trials. No therapies involving human embryonic stem cells (hESC) have successfully run the clinical trial gauntlet in the U.S. and secured approval for widespread use.

This week’s funding for Viacyte involves two awards in application AP1-08039 in the agency’s new, $200 million “accelerated development pathway,” which is designed to speed research into the clinic and marketplace. The agency’s blue-ribbon reviewers examined the application behind closed doors last spring but said in a summary posted publicly last week that the therapy had the potential to “transform” diabetes treatments.

More than two million persons suffer from diabetes in the California and roughly 370 million worldwide.

Only four other applicants were considered in the “pathway” round. Viacyte was the only business. The other applications came from Henry Klassen at UC Irvine, Thomas Kipps of UC San Diego, Donald Kohn of UCLA and Clive Svendsen of Cedars of Sinai. All the institutions have representatives on the CIRM board of directors, but were rejected by reviewers.  As mentioned above, none was identified by the agency but all could be recognized by other means.

All of the agency’s comments and summary of reviewer comments can be found on this document. Klassen’s application is DR2A-05379. Kipps’ application is AP1-08043.  Svendsen’s application is AP1-08047. Kohn’s application is AP1-08048.

  

Rejected applicants will have an opportunity to apply again in later offerings in the $200 million acceleration pathway program, which is aimed at producing major scientific results by 2017.

Viacyte had applied for $25 million, the upper limit in this week’s awards. However, the reviewers rejected two “modules” in the application worth $8.4 million, suggesting that they were not timely and could be reworked incorporating reviewer suggestions.

Tightening the Revolving Door at the California Stem Cell Agency

Directors of the California stem cell agency next week will consider a proposal aimed at partially addressing revolving-door and conflict-of-interest problems at the $3 billion research enterprise.

The proposal comes in the wake of a wave of unfavorable publicity this summer that embarrassed the agency when its former president, Alan Trounson, was named to the board of a stem cell company only seven days after he left the state research effort.

The Newark, Ca., firm, StemCells, Inc.,  is the recipient of $18.4 million in awards from the California Institute of Regenerative Medicine (CIRM), as the agency is formally known.  The news surprised the agency and prompted its new president, Randy Mills, to sign an agreement that he would not accept employment from a CIRM grant or loan recipient for at least a year after he left the agency.

Michael Friedman
CIRM photo

In a memo to CIRM board members yesterday, Mills said he was offering a new proposal on revolving door matters after CIRM Director Michael Friedman, president of the City of Hope, made such a suggestion in July.

Mills wrote,

“Under the proposed policy, CIRM team members (employees) would remain free to pursue other employment opportunities, including with CIRM-funded institutions. To prevent inadvertent violations of California’s conflict of interest laws and to ensure the integrity of CIRM’s decision-making process, however, the policy would request that CIRM employees notify CIRM legal counsel when the employee begins employment discussions with a CIRM grantee or current applicant. CIRM’s legal counsel will maintain the confidentiality of this information and advise the employee of the steps he or she needs to take to remain in compliance with the law. Thus, the policy balances the privacy interests of CIRM employees with the need to protect the integrity of  CIRM’s decisions.”

Mills said,

“As Dr. Friedman recognized, CIRM has a highly talented team. It is therefore understandable that California institutions, including those that receive CIRM funds, would be interested in recruiting them. Currently, there is no prohibition on CIRM team members accepting employment from CIRM funded institutions, however I believe additional clarity regarding this topic would help avoid potential conflict of interest occurrences.”

The board will act on the proposal at its meeting in Berkeley next Wednesday.

 Our comment: The proposal will not eliminate revolving door problems at the nearly 10-year-old agency as it winds down its funding and employees may want to seek other employment.  The proposal contains ambiguities that make it difficult to adhere to, such as the question of when employment discussions begin. It also does not contain any indication of the consequences for violation of the policy. However, coupled with the Mills’ personal declaration on future employment and the deplorable situation involving Trounson, the new policy helps make it clear that actions such as Trounson’s do not measure up to what is now expected at CIRM.  Mills has also produced a fresh perspective on CIRM’s future finances that would stretch them out to 2020 instead of 2017, another action that removes an incentive for employees to consider seeking employment elsewhere.  

California's New $200 Million Stem Cell Spark

Directors of the $3 billion California stem cell agency this month will attempt to supercharge some of their major research programs and push stem cell therapies more rapidly into the marketplace and the clinic.

Sir John Bell
Academy of Medical Sciences photo

The move is part of a $200 million effort approved only last December and was recommended by the agency’s blue-ribbon scientific advisory board, chaired by Sir John Bell of the University of Oxford in the United Kingdom. 

Awards in the first phase of the program – dubbed an “Accelerated Development Pathway” -- will range up to $25 million each. The effort will also involve more assistance and streamlined procedures from the California Institute of Regenerative Medicine (CIRM), as the agency is formally known.

The awards are scheduled to be approved publicly on Sept. 10 at the directors’ meeting at the Claremont Hotel in Berkeley, Ca. Winners will be culled from a select group of researchers already funded by the agency.

The number of applicants was not immediately available from CIRM, but they were limited to individuals and institutions that have already received the agency’s signature disease team or strategic partnership awards. Also unknown was whether any businesses were among the applicants. Applicants rejected in next week’s round will have a chance to apply in upcoming, new “pathway” rounds.

According to the request for applications (RFA) on the CIRM Web site, the agency is seeking “high potential” research that can achieve “clinical demonstration of an acceptable safety profile and proof of concept during or before 2017.”

The RFA continued,

“For example, a team could propose additions to an ongoing CIRM-funded clinical trial that would accelerate development decisions such as including the testing of a biomarker they identified in correlated research work or adding a patient group based on data from an unblinded safety study. Other examples of accelerating activities could include changes in manufacturing processes or delivery devices, based on novel ideas that emerged from the activities of the initial award or related research that could require comparability studies to facilitate development of the candidate therapeutic. In addition, the Accelerated Development Pathway would also consider the possibility of funding a future clinical trial to demonstrate clinical proof of concept in the approved therapeutic indication, ‘subject to satisfaction of milestones and conditions.’”

The “pathway” program was approved by CIRM directors after its new Scientific Advisory Board recommended its creation. The advisors said the agency should move “at speed” to turn research into treatments.

Creation of the panel of advisors was recommended by the Institute of Medicine (IOM) in a $700,000 study funded by CIRM. The IOM report said the panel would be invaluable in helping the agency to “make fundamental decisions about dealing with challenges that cut across particular diseases, decide which discoveries should progress toward the clinic and determine how best to engage industry partners in developing new therapies.”

(See here for the names of the members of the advisory panel. The full text of their report can be found at the end of this link.)

The panel has held only one meeting, and that was behind closed doors.

Asterias Stock Price Jumps Nearly 13 Percent Today Following hESC Therapy News

The California stem cell agency and Asterias Biotherapeutics today picked up a modicum of news coverage in connection with an advance on a spinal injury therapy that was once hailed as historic.

The news about the Menlo Park, Ca., firm’s clinical trial received major attention in the San Francisco Chronicle and more modest coverage in the San Francisco Business Times and on the ipscell.com blog.  

The news also helped to push the Asterias stock price up nearly 13 percent since yesterday to close at $3.08 today. The stock closed at $2.43 Tuesday, the day before the company released the clinical trial news, according to Google Finance.

Stephanie Lee’s piece in the Chronicle contained some history about the potential therapy, dating back to when it was developed by Geron and then abandoned. Geron was the first firm to win approval of a clinical trial for a human embryonic stem cell (hESC) treatment.

Lee also had a couple of interesting tidbits, including the fact that the stem cell agency’s $14.3 million award to support the trial will cover half its costs. Lee also reported,

“Geron treated severe injuries in the thoracic region of the spinal cord, which runs along the back. Asterias is targeting injuries that originate in the neck, citing an outside study that suggests injuries in this area are easier to treat.”

Enal Razvi
Select Biosciences photo

Lee additionally quoted Enal Razvi, managing director of Select Biosciences U.S., an international life sciences consulting firm with its U.S. headquarters in Fremont, Ca.,  as saying,

"This is just the start of a trial, not the approval of a drug, which are two very, very different things in this space…(but) this helps things go to the next level." 

The Chronicle story was the No. 1 story late afternoon today in Google news search results using the term "stem cell," ranking ahead of the STAP news out of Japan.

Paul Knoepfler, a UC Davis scientists who writes the ipscell blog, carried a Q&A with Jane Lebkowski, president of research and development at Asterias, who discussed another hESC product. She said,

“A second Asterias product is AST-VAC2, which are human embryonic stem cell derived dendritic cells. These cells are modified to express telomerase, a protein typically expressed in cancer cells. The aim is to use these telomerase expressing dendritic cells to stimulate immune responses against cancer cells. We are now preparing for clinical trials with this product.” 

That effort could well find its way to additional funding from the California stem cell agency if it meets the four-point criteria of the new president, Randy Mills, of the $3 billion research program.

In the San Francisco Business Times piece, Ron Leuty noted that the initial five-patient safety trial showed that “spinal cord injuries in four the patients had shrunk.” Leuty wrote,

“Whether that means Geron’s treatment is working in those patients is an open question. Geron’s study looked only at acute, or new, spinal cord injuries, so some of the results could be connected to normal healing over time.”

California's Stem Cell Trial for Spinal Cord Injury Moves Forward

A California firm, backed by $14.3 million in state cash, today announced that it has received a federal go-ahead to advance its clinical trial involving a human embryonic (hESC) therapy for cervical spinal cord injury.

Asterias Biotherapeutics, Inc., of Menlo Park, said in a press release that it is currently selecting clinical trial sites and expects to enroll patients beginning early next year. The trial is the continuation of an effort that Geron abandoned in 2011 for financial reasons.

Pedro Lichtinger, president and CEO of Asterias, said,

  “We are especially enthusiastic about working with our new partner, (the California Institute for Regenerative Medicine or CIRM), in executing this clinical trial. The FDA clearance provides Asterias with imminent access to the previously announced $14.3 million CIRM grant, which provides non-dilutive funding to support both the clinical trial and other product development activities for AST-OPC1.”

The phase 1/2a trial will involve doses of up to 10 times higher than what was used earlier. Up to 13 patients will be treated within 14 to 30 days after their injury occurred. The hope is that it will be easier to detect the efficacy of the treatment with such dosages.

As for the early stage trial involving five patients, the company said,

“These five patients were administered a low dose of two million AST-OPC1 cells and have been followed to date for 2 to 3 years. No serious adverse events were observed associated with the delivery of the cells, the cells themselves, or the short-course immunosuppression regimen used.  There was no evidence of expanding masses, expanding cysts, infections, cerebrospinal fluid leaks, increased inflammation, neural tissue deterioration or immune responses targeting AST-OPC1 in these patients.  In four of the five subjects, serial MRI scans performed throughout the 2 to 3 year follow-up period indicate that reduced spinal cord cavitation may have occurred and that AST-OPC1 may have had some positive effects in reducing spinal cord tissue deterioration.”

Asterias was awarded the cash by the California stem cell agency in May. (See here and here.)

Randy Mills, president of the stem cell agency, said today,

“This is exactly the type of treatment, focusing on an unmet medical need, that CIRM was created to address.”

Katie Sharify, one of the patients involved in the trial when it was started by Geron, said in the CIRM press release,

“A lot remains unknown about human embryonic stem cells and that's exactly why this research is so important. The scientific community is going to have a much greater understanding of these stem cells from the data that will be collected throughout the study and I'm glad to have been a part of this advancement."

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.

Stem Cell Blowback on the Ice Bucket Challenge

Virulent opposition to research involving human embryonic stem cells is surfacing anew in the wake of the vast attention attracted by the Ice Bucket Challenge.

Sarah Pulliam Bailey wrote on Religion News Service that the objections have “gone viral” on the Internet because the beneficiary of the watery fundraising, the ALS Association, finances research involving human embryonic stem cell (hESC) lines.

For those of you who are not tuned into the icy effort, it involves celebrities and others pouring frigid water over themselves and challenging others to do likewise and donate to the ALS Association.  About $16 million has been raised so far and is still growing. Photos, news stories and blogs all chronicle the challenge on the Web.  A search this morning on the term “ice bucket challenge” turned up 57.2 million hits.

Our readers might ask how this involves the $3 billion California stem cell agency. The answer is that hESC research is the primary reason for the existence of the agency. It was created in 2004 by California voters after former President Bush restricted federal funding for research involving hESC.  Ironically Bush has participated in the challenge(see video above).

Bush’s restrictions, since lifted by President Obama, generated major controversy in the scientific community and raised fears that efforts to develop what seemed to be nearly magical therapies would wither and die. Without that concern, voters would have been unlikely to approve the measure, Proposition 71, and campaign contributors would have been unwilling to open their checkbooks.

The stem cell agency, however, has turned away from hESC research. Less than 250 of its 622 awards have gone to that field, according to the agency. Instead the agency is backing adult stem cell research, once an anathema to the organization, along with experiments involving reprogrammed adult stem cells. Leaders in the stem cell field, however, say human embryonic stem cells remain the scientific gold standard. (No figures were immediately available on the dollar value of the hESC awards.)

Continued funding of hESC research is linked to the agency’s search for alternative sources of cash as its current financing winds down. Efforts to develop a fresh stream from public sources will run up against the controversy involving hESC experiments, one of the reasons for the lack of interest by Big Pharma. The hESC opposition could also have an impact on development of private sources of funding who may not want to become embroiled in the flap, which can lead to picketing and public protests involving entities that support hESC research.

Kevin McCormack, senior director for the stem cell agency’s public communications, wrote about the ice bucket fad last week on the agency’s blog. He said it “shows how a little bit of creativity can create so much more interest in a disease, and the people suffering from it, than any amount of well-meaning, more traditional attempts at education.” And he poured a bucket of water over his head.

Nonetheless, the opponents hold their views with great passion and zeal and have little respect for hESC science. Here is what one person said today in a comment posted on the Religion News Service article. The individual was identified only as “jamadan.”

“My father died of ALS 6 years ago. My father was and my family is ‘pro-life’, meaning we believe abortion to be murder and embryonic research akin to Nazi medical testing on dead camp victims. Nothing can make us ‘accept’ abortion or anything that benefits from it. Not even our own lives. I think you’ll find that true for all Christians, who by definition, must be pro-life.” 

For other commentary involving objections to the Ice Bucket Challenge, see here, here and here.

(A footnote: This item marks the first video appearance of former President Bush and Kevin McCormack on this blog.)

California Edges Forward with $39 Million Stem Cell Diabetes Effort

California’s $39 million bet on a new stem cell therapy for diabetes today moved a notch ahead today with word that the treatment's developer has received federal approval to begin a clinical trial.

“Very encouraging news” was how the new president of the state stem cell agency, Randy Mills, described the announcement by Viacyte, Inc. “Exciting” was the word used by Jonathan Thomas, chairman in a pressrelease from the California Institute of Regenerative Medicine (CIRM), as the $3 billion agency is formally known. CIRM began financing Viacyte six years ago.

The go-ahead by the FDA was for an early stage trial aimed at testing safety and preliminary efficacy for treatment for type 1 (juvenile) diabetes. While the move is a good sign, only one out of any 10 potential therapies that begin a trial emerges as a full-blown treatment.  That statistic is for ordinary treatments – not therapies based on human embryonic stem cells (hESC). No hESC therapy has ever been commercialized, and they face unique regulatory and financial obstacles.

CIRM’s press release described the treatment like this:

“ViaCyte’s approach uses a thin plastic pouch, containing an immature form of pancreatic cells, to mimic the blood glucose regulating function of the pancreas. When the device is implanted under the skin these cells are designed to become insulin-producing and other cells needed to regulate blood glucose levels. It is believed that these cells will be able to sense when blood glucose is high, and then secrete insulin to restore it to a healthy level.” 

In addition to the news release, the stem cell agency ran a blog item on the announcement, which is useful, since there is more than one audience for the news. The agency did not link to the press release from Viacyte, which noted that the Juvenile Diabetes Research Foundation also supported the research.

Paul Laikind, president of Viacyte, said in his press release that he was “pleased” by the FDA action.  That was the most ebullient word in the company’s announcement, which focused on the more technical aspects of the potential therapy.

In news coverage, Bradley Fikes of the San Diego U-T wrote that the company has said the treatment could serve as a “virtual cure” for type 1 diabetes, which afflicts more than two million persons in the United States.

'De-risking' Stem Cell Therapy with Government Cash and Assistance

Nature Biotechnology this month took a crack at what it called “therapies of the state,” three government- financed efforts at turning stem cells into cures.

The piece by Beth Schachter discussed “thorny technical challenges,” safety issues and regulatory and IP risk – not to mention the dreaded “reimbursement” risk. (Reimbursement is a PR euphemism that revolves around industry fears of losing money.)

Greg Bonfiglio
Proteus photo

In addition to California’s $3 billion effort, Schachter wrote about Cell Therapy Catapult in the UK and Canada’s Center for Commercialization of Regenerative Medicine, whose board is chaired by Greg Bonfiglio, who is also founder and managing partner of Proteus Venture Partners of Palo Alto, Ca.

Schachter said that all three are to attempting to “de-risk the perilous process of advancing cell therapies that show potential in animal studies through human testing to commercialization.”

The Nature Biotech piece said that until recently Big Pharma and venture capitalists have steered clear of the cell therapies coming out of academia. Schachter wrote,

“For one thing, big pharma’s business model is very different from what is needed to translate cell therapies into practice. The pharma model involves mass manufacturing of products that can be stored in warehouses and distributed through pharmacies to large markets of patients. Cell therapies, on the other hand, may be highly individualized, are incompletely characterized, are expensive to produce, have a short shelf life and onerous supply chain, must be transplanted into patients by skilled healthcare workers and have complex regulatory requirements. These challenges, along with a dearth of cell-therapy successes, have kept away investors, too.”

As for the stem cell agency in California, Schachter wrote,

“In developing (its) extensive program, the CIRM has, in a sense, been standing in for the National Institutes of Health (NIH). It has also been taking the role that venture capital might have assumed, had the US government given the go-ahead on human embryonic stem cells, thereby building a robust preclinical/translational research program. As Bonfiglio it, ‘CIRM galvanized the industry, putting regenerative medicine on the map, both in terms of what the politicians and the lay people saw and in terms of maintaining scientific training in that arena.'” 

Schachter said that it is not clear how long taxpayer cash will be needed or wanted. She wrote,

“Also not clear is how each of the governments will assess the success or failure of these programs. How will governments know when the time is right to wean the programs from public monies? Will they consider job creation, the number of companies spun out, or launching successful products in the marketplace? Given the complexity of cell therapies and regulatory uncertainty, none of these things may happen for decades. Perhaps a better measure is whether any of the companies created gets traction with big pharma. That might indicate that the commercial promise of these therapies is finally evident.”

Scientist/Parkinson's Advocate With Biotech Background Appointed to California Stem Cell Agency Board

A retired San Diego scientist with a background in the biotech industry was named this week to the 29-member governing board of the $3 billion California stem cell agency.

David Higgins
Parkinson's Association photo

David Higgins, who is also president of the San Diego Parkinson’s Association, was appointed by State Controller John Chiang, replacing Joan Samuelson, who resigned from the board earlier this year.  Samuelson had been a member of the board since 2004.

Higgins fills a slot designated for a patient advocate for Parkinson’s Disease. He was diagnosed with Parkinson’s Disease in 2011.

The stem cell agency press release yesterday on the appointment emphasized Higgins’ personal and family perspective on the affliction. Chiang was also quoted as saying,

“As a trained molecular biologist, his involvement in drug development and business operations places him in a unique position, understanding both science and process.”

Higgins has worked at Invitrogen, Chiron and Idun Pharmaceuticals. Most recently he was executive vice president for business development and head of U.S. operations for BioMedica, Inc., a UK-based gene therapy company.

Higgins is currently a business/scientific advisor to iDiverse, Inc., a Del Mar, Ca., a gene technology firm that markets to biopharmaceutical firms as well as companies involved in fuel ethanol and industrial enzymes.

Higgins brings a perspective not found elsewhere on the board because of a variety of community service activities.

He serves on the executive committee of the Center for Ethics in Science and Technology in San Diego. He was once president of the board of the ACLU for San Diego and Imperial counties. He also served as foreman of the San Diego County Grand Jury, a 19-member citizens watchdog group, in 2006-7..

Higgins said in the CIRM press release,

“One thing I feel strongly about is that, yes I’m the Parkinson’s patient advocate on the board, but first and foremost I’m an advocate for everyone and I want to make sure that we spend our money wisely, and that we use our resources to identify and nurture the most promising stem cell projects across all target diseases.”

Higgins earned his Ph.D. in molecular biology and genetics from the University of Rochester followed by a postdoctoral fellowship at the National Cancer Institute.

The agency's board now has three vacancies on it left by the departure of Marcy Feit, Michael Goldberg and Robert Birgeneau. 

$40 Million California Stem Cell Genomics Agreement Signed; A Checkered Past

The California stem cell agency and a Stanford-led consortium have reached agreement on a $40 million stem cell genomics project that triggered complaints about irregularities, unfairness, score manipulation and the role of its then president, Alan Trounson.

The agreement was concluded last month with Stanford, UC Santa Cruz and the Salk Institute in La Jolla, five months after the award was approved by the governing board of the $3 billion agency, which is known as CIRM. The final signature came July 2 when Santa Cruz signed. Salk signed on June 26 and Stanford June 18, according to Kevin McCormack, a spokesman for the agency.

The effort is aimed at paving the way for therapies tailored to a patient’s genetic make-up and positioning California as a world leader in stem cell genomics.

Trounson’s role came under fire when he recommended approval of the Stanford application. The agency’s blue-ribbon grant reviewers, whose advice is rarely rejected by the CIRM board, also recommended funding three competitors. 

The round had a checkered history as a result of a conflict of interest involving scientist Irv Weissman of Stanford and scientist Lee Hood of Seattle, who own a ranch together in Montana. Trounson, who has visited the ranch as Weissman’s guest, recruited Hood to review the applications, including Stanford’s proposal which then specifically included Weissman.

The Stanford application that was ultimately approved did not include Weissman.  Michael Clarke, the No. 2 person in Weissman’s stem cell program at Stanford, was included, however, and was praised by name by Trounson during board consideration of the Stanford application. (See here for discussion of conflicts preceding the board action.)

Seven days after leaving CIRM at the end of June, Trounson was named to the board of directors of StemCells, Inc., of Newark, Ca., which holds $19.4 million in awards from the agency. The firm was co-founded by Weissman, who now sits on its board.  The Trounson appointment surprised the agency and triggered a rash of bad publicity for CIRM. (See here and here.)

The agency’s new president, Randy Mills, banned CIRM employees from communicating with Trounson about StemCells, Inc., matters and announced that he would not accept employment from CIRM grantees until one year after he leaves the agency.

Another Perspective on the Trounson Flap: Columnist Lists It as Example of 'Possible Corruption'

The $3 billion California stem cell agency was mixed up with some bad company this week – part of the fallout from last month’s Trounson Affair. 

The agency was lumped together with some ne’er-do-wells in a column in California newspapers that was headlined:

“California state government awash in corruption, conflict of interest”

The piece was written by Tom Elias, a middle-of-the-road, longtime columnist whose work appears twice weekly in 93 newspapers with a circulation of 2.2 million. Elias wrote,

“To some, it seems almost as if California has lately become New Jersey West. Incidents of possible corruption and conflict of interest are seemingly exposed at least once a month these days, with almost no consequences for anyone involved.”

Top on his list was the business involving Trounson, who left the California stem cell agency June 30. Seven days later, he was appointed to the board of StemCells, Inc., which holds $19.4 million in awards from the agency, formally known as the California Institute for Regenerative Medicine (CIRM).

Second on Elias’ list was a case involving a consultant at another state department that was reminiscent of another situation at the stem cell agency. Elias said,

“A month earlier, this column caught the state Energy Commission earmarking more than $28 million in ‘hydrogen highway’ grants for a new company co-founded by a consultant who only months earlier drew the map determining where hydrogen refueling stations will go and then trained commission staff on how to evaluate grants.

“No conflict of interest there, the commission insisted. Right.”

The case at CIRM involved a “special advisor” by the name of  Saira Ramasastry, managing partner of Life Sciences Advisory, LLC, of Emerald Lake Hills, Ca. In 2012, she was named to the board of Sangamo BioSciences, Inc., a publicly traded firm based in Richmond, Ca. At the time of her appointment to the board, the firm shared in a $14.5 million grant from the agency. She also worked as a consultant to Sangamo.

Since then, Sangamo has received another $6.4 million from CIRM. The president of Sangamo, Edward Lanphier, told the agency last January,

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

In 2013, Ramasastry received $99,662 in cash and stock options from the company, according to its filings with the Security and Exchange Commission.

The New, Official Life Expectancy of the California Stem Cell Agency

Randy Mills' calculations on cash for future CIRM funding

Randy Mills, the new president of the $3 billion California stem cell agency, rewrote some of the agency’s history last week and extended the life span of the now nearly 10-year-old enterprise.

All that talk about the agency running out of money for new awards in 2017? Bushwa, he basically said. “It’s simply not true,” he told the directors of the agency at their meeting in Millbrae.

Mills' comments appeared to be directed at media stories, including those on this Web site, that mention the 2017 timetable. However, the date was not concocted by the writers of those stories. It came directly from the agency itself, which has never challenged it until Mills did last week. The timetable was even referenced as recently as December 2013 by the agency’s directors.

Randy Mills

That said, Mills’ view of the spending possibilities for the California Institute for Regenerative Medicine(CIRM), as the agency is formally known, is not inaccurate. It comes from his fresh, business-oriented analysis of the agency’s finances. It is based on different assumptions than those used previously by the agency.  His perspective does not appear to assume, for example, that all the grant rounds approved in concept by the board will go forward at their existing levels.

A case in point came last week when Mills recommended and the board approved slicing $5 million out of a $15 million component of the agency’s Alpha clinic RFAs. It was the first time that the board has so heavily cut a previously approved "concept" figure.

The agency's last major review of the cash available for awards occurred at last December’s board meeting. CIRM Chairman J.T. Thomas said at the time, 

“We now find ourselves with the reality that, having started with $3 billion, we are down now to how to deploy our last $600 million….”

Pat Olson, executive director of scientific activities, said,

“There’s essentially $950 million yet to be awarded, 321 (million) of the concept approved and the 629 (million) of the future.”

Steve Juelsgaard

Steven Juelsgaard, a CIRM board member and former executive vice president of Genentech, however, looked at the numbers with basically the same view as Mills. Juelsgaard, who has been chipping away at some of the financial assumptions of the agency, said,

“So we’ve been talking for the longest time as if we have three to four years worth of money to spend, right? I asked myself, well, why is that true? Who made that decision that it’s three to four years? That length of time is driven by how quickly we spend our money, not by anything else. So if we spend our money more slowly, we could go for six years or eight years or whatever the number is that you want to pick. It’s all a matter of burn rate.”

Enter Mills five months later as president. By last week, he was telling board members that, yes, they have enough money to give out awards until 2020 at a rate of $190 million a year.  He said that about $1 billion is available.  

“We will be able to fund most anything that meets our criteria.”

Of course, if the agency spends more than $190 million a year, the money will run out faster. And the  agency is engaged in clinical trials and commercialization efforts, which are far more expensive than basic research.

But Mills’ 2020 timetable has some significant advantages even if it slows the pace of awards. It gives the agency substantially more time to arrange some sort of financing for the future. Currently its only real source of funding is state bonds. Its ability to authorize those bonds ends in 2017, according to the agency. Currently Thomas is examining the possibility of some sort of private-public financing arrangement. Asking voters to approve another bond measure has not been ruled out, but it could be problematic politically.  The additional time would improve the possibility that clinical trial results would emerge that would resonate with the public as well as with private funding sources.

While Mills paints a rosier financial picture than the agency previously offered, he also has demonstrated a clear fondness for focused austerity. It fits with the mood of the board. Juelsgaard, who is chairman of the agency’s Finance Subcommittee, is also attempting to bring a sharper financial perspective to the agency at a time when directors are clearly feeling a pinch.  

Gone are the days when $120 million was added with modest discussion to one round of grants. No longer is the governing board throwing another $23 million at already hefty efforts to lure stem cell stars to California labs.

Instead last December, after directors were told that only $629 million out of $3 billion was left uncommitted, CIRM Director Jeff Sheehy, in a comment echoed in tone by other board members, said,

“I just think all of us are starting to get concerned about the burn rate. We’re just flying through the money.”

 One of Mills’ first public actions involved the agency’s $17 million annual operational budget, which is limited by state law. On top of those limitations, in May he whittled the spending plan down to the point where it could be described as less than the previous fiscal year, given inflation.

Also in May, when directors were considering elimination of what was left of the $57 million researcher recruitment program, Mills basically disengaged himself from support of the effort. He told directors,

“It’s not that I don’t like the concept of recruiting great people….It’s just we have to make sure we recruit the people we need.”

Mills' actuarial exercise was not the first involving CIRM's mortality. Back in 2004, it was widely believed that the agency had only a 10-year life, a belief held by some of its staffers, which would have meant this year would have been the agency's last. That misconception grew out of the agency's 10-year authorization to issue bonds. That authorization is now commonly believed to have begun in 2007 because that was the year litigation about the agency was ultimately resolved. It may well be that the date of CIRM's final reckoning will change once again before its last check goes out the door.

California Stem Cell Agency and the Revolving Door: A Need for More Safeguards

The revolving door and related conflict of interest issues remain open at the $3 billion California stem cell agency despite the pledge by its new president, Randy Mills, to refrain from taking a job with a recipient of the agency’s largess for at least a year after he leaves.  

Mills’ action last week came in response to the controversial appointment of the agency’s previous president, Alan Trounson, to the board of StemCells, Inc.(SCI),  just seven days after he left the agency.  The firm was awarded $19.3 million while Trounson was its top executive.  Last year, members of the SCI board received as much as $99,000 in stock and cash. 

Mills’ move applied only to himself and excluded other members of the agency’s staff. He said they should not be denied the ability to seek employment with businesses or research organizations that the agency has funded.

John M. Simpson of Consumer Watchdog of Santa Monica, Ca., said, 

"The high profile Trounson Affair  focuses attention on CIRM’s potential revolving door problem that the agency needs to deal with.  Randy Mills' pledge not to take a job with a company funded by the agency for at least a year after leaving is a good step.  There  should be such a formal policy covering all employees. “Serious thought should also be given to the implications of employees leaving for jobs with non-profit entities that CIRM has funded and what safeguards are necessary.”

State laws do exist to deal with revolving door situations, but some consider them weak. (See here for an explanation of the laws.) Trounson’s appointment is an example of the circumscribed nature of the laws. Mills said the agency's “severely” limited investigation into the appointment did not show any illegal activities. Simpson said a more rigorous, independent investigation was needed. 

Mills’ move did send a clear message about his own views on some ethical matters and set a tone that should be helpful at the agency. Some employees might also view it as an example to emulate.

Playing a role in the revolving door concerns is the financial future of the agency. It is facing its effective financial demise in 2017 when funds for new awards are scheduled to run out, according to longstanding calculations by the agency itself. Last week Mills cast that financial picture in a more optimistic light. (The California Stem Cell Report will have more on his analysis in the next few days.)

Nonetheless, as the money runs out and there is no assured refinancing in sight, some employees are naturally going to be considering other employment. Three employees have departed or announced they are leaving since Mills was named. The move of Natalie DeWitt, who was a top aide to Trounson, was already reported by the California Stem Cell Report. DeWitt went to work for researchers at Stanford who have received about $5 million from the stem cell agency.

Elona Baum, general counsel and vice president for business development , this month left her $298,000-a-year job to take a position at Coherus Biosciences of Redwood City. The company yesterday refused to disclose her job title or whether she had already started work. Kevin McCormack, senior director for public communication for the agency, said he did not know her job title. He said the company “has no funding from us or any other business with us.”

The Coherus Web site says the company was founded in 2010 and is “the leading biologics platform company developing biosimilar(generic) therapeutics for global markets.”

The third employee scheduled to leave is Celeste Heidler, financial services officer. McCormack said she is retiring. The agency has posted an opening for her position.

McCormack said it has not been determined whether Baum’s position will be filled.  In addition to legal matters, she played an important role in relations with the biotech and stem cell industry.

Consumer Watchdog’s Simpson said more needs to be done to clear the air concerning the Trounson appointment.

In response to a query, he said,

“There must also be a deeper probe into Trounson’s relationship with StemCells Inc, and it its executives and directors.  Margaret Prinzing’s report, a small step in the right direction, only looked back as far as May 1.  Trounson’s relationship with StemCells Inc. since at least the beginning of 2012 should be examined and the investigation should be conducted by an entity not as closely tied to the agency as the Remcho, Johansen & Purcell firm.  I think the Citizens Financial Accountability Oversight Committee, chaired by the state controller would do a good job."

The committee is the only state entity charged with oversight of the stem cell agency. The governor and legislature have no legal ability to control its operations since it was created by a ballot initiative that specifically spelled out that they had no role.