California Stem Cell Agency Moving This Month to Oakland, Pushed Out of San Francisco by High Rents

By the beginning of next month, California’s $3 billion stem cell research effort expects to be safely ensconced in its new headquarters in Oakland, once the stomping grounds of author Jack London and actor Tom Hanks and still the home of California Gov. Jerry Brown.

Building housing new HQ of CIRM

The move will cost about $1.8 million, according to the agency, which says it will save money over the long term compared to staying in San Francisco, across the bay from Oakland.  The cost of office space in San Francisco is soaring, fueled by tech firms awash in cash.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has enjoyed a rent-free, 10-year stay in what is now a sizzling real estate location in San Francisco. The agency’s offices were provided as part of an $18 million package offered by San Francisco, which was competing with other cities in California.

Maria Bonneville, CIRM’s director of administration, said in an email last month to the California Stem Cell Report,

“Given the cost of remaining at our current location, we had no choice but to move.” 

(The full text of her email is here.)

Figures in Bonneville’s email show that the move will cost an estimated $1.8 million, including $828,300 in tenant improvements. The landlord will pay an additional $891,520 for the improvements, which will total about $1.7 million. The next largest expense in the move, scheduled for the Friday after Thanksgiving, is $371,043 worth of new furniture.

Bonneville said the existing furniture, again donated, is 10 years old, not ergonomic and will not fit in the new space, which totals 17,000 square feet instead of the current 19,500. 

Some CIRM staffers will be losing their offices. The new space is slated for only 12 private offices compared to 39 at the current location.

Bonneville said,

“Although CIRM will incur some one-time costs as a result of its relocation, we believe that the space is better designed to facilitate the CIRM team’s execution of CIRM 2.0 and beyond, and CIRM will realize more than $2 million in savings over the course of the lease compared to the costs of remaining in its current space.”

She said,

 “Indeed, even at $75 per square foot for our current space, in the first year alone, CIRM will save approximately $1 million in rent ($501,569 in Oakland compared to approximately $1.5 million (19,500 sq. ft. x $75).

Bonneville elaborated,

“Over the next five years and four months, CIRM would pay approximately $8 million to remain in its current office space.  The costs for rent in Oakland will be approximately $3.975 million (assuming CIRM occupies the entire premises, including the 15th floor, for the full term).  Thus, even with CIRM bearing some of the costs of tenant improvements and other one-time relocation expenses, CIRM will realize substantial savings from the move and it will occupy space that is better designed to achieve the agency’s mission.” 

The agency has space on two floors of a building at 1999 Harrison Street with the lease on the 15th floor running three years and five years on the 16th. The agency is currently projected to run out of funds for new awards in 2020 and may see its current budgeted staff of about 55 shrink as that year approaches.

Capturing the headquarters of California’s world-renown stem cell agency is a nice score for Oakland. It has long been a poor cousin to San Francisco, lacking the glitter and romance of the city that was once known as Baghdad-by-the-Bay. No one sang about “losing their heart" in Oakland, as Tony Bennett has famously done about San Francisco.

Oakland, 1901. CIRM's  new HQ is on Lake Merritt, shown
at the lower left of  the map. 

But Oakland has its share of stories, famous personages and interesting history. Huey Newton, a co-founder of the Black Panthers, grew up in the city, along with Ed Meese, former U.S. attorney general and close advisor to former President Reagan. Clint Eastwood had his roots in Oakland in addition to Tom Hanks. Jerry Brown was mayor of Oakland for eight years. He still has his voting residence in that city.  

The site of CIRM’s new offices on Lake Merritt was once an important location for the Huchin tribe, which lived there for thousands of years.  Rocky Road ice cream was created in Oakland in 1929.  During World War II, the city was an important shipbuilding and food processing hub. The mai tai cocktail was first concocted in Oakland in 1944, according to Wikipedia. Misconduct by the Oakland police department led the city to pay $57 million from 2001 to 2011 to alleged victims, the largest sum of any city in California, according to local television station KTVU.  

Today the city is the home of Golden State Warriors, the National Basketball Association champions, who have played there since 1971, eschewing, however, the designation of “Oakland Warriors.” The Warriors are scheduled to leave Oakland in 2018, taking up residence in a $1 billion, combined basketball palace/commercial development, ironically only a short distance from the current offices of the stem cell agency. Some UC San Francisco scientists and others oppose the development because they fear it will push out biomedical enterprises now in the area and deter others.

 

As for Jack London, a section of Oakland bears his name.  As a boy, Jack London “studied” there in a saloon called the “First and Last Chance,” according to legend, and drank there, presumably when he was a little older.

The stem cell agency had its first chance in San Francisco to develop a commercial stem cell therapy. Now, its last chance may be in Oakland, only about a 30 minute walk from Jack London's waterfront watering hole.

California Stem Cell Agency Statement on its Move to Oakland

Here is the text of the response from the California stem cell agency concerning the specifics of the move of its headquarters later this month from San Francisco to Oakland. The information was provided by Maria Bonneville, director of administration for the California Institute of Regenerative Medicine (CIRM), as the agency is formally known. 

“In response to your questions about CIRM’s new office space, we’ve provided detailed information below about  CIRM’s search for new offices, our decision to move to Oakland, and the estimated costs of the move, including our decision to purchase new furniture.  We’re excited about the opportunity to move into space that is designed both for quiet work and collaborative efforts.

“In 2005, CIRM selected San Francisco as its headquarters.  San Francisco’s offer included ten years of free rent (including operating costs), free tenant improvements and furniture, and numerous other amenities, including discounted hotel rooms and free meeting sites with a value estimated at $18 million.  CIRM has saved more than $12 million on rent alone, but like all good things, CIRM’s free rent will  come to an end when our lease expires on November 1, 2015.  Given the cost of remaining at our current location, we had no choice but to move.

“As a result, we began searching for new office space at the beginning of the year in the midst of a construction and commercial real estate boom.  CIRM’s goals were to minimize disruption and expenses.  CIRM’s team, led by Senator Art Torres, investigated available office space in San Francisco, South San Francisco, Oakland and Emeryville.  Although Senator Torres worked diligently with the City and County of San Francisco to identify suitable office space at a reasonable price, the demand for commercial real estate outstripped the supply and the available spaces were either prohibitively expensive, did not meet CIRM’s needs, or both.  As a result, CIRM shifted its focus to South San Francisco and the East Bay, while continuing to seek new opportunities in San Francisco.

“South San Francisco and the East Bay each offered substantially cheaper options, although rents are escalating quickly in these areas as well as result of the technology boom in the Bay Area.  After exploring the disruption that would be caused by moving to either location, including commute times and cost and access to public transportation, the CIRM team determined that the East Bay offered the best alternative.  Ultimately, CIRM selected Oakland as its new headquarters.  CIRM’s new offices are a short walk from BART and the City of Oakland has agreed to offer discounted parking to those employees who choose to drive.

“CIRM executed a lease with Divco West to rent office space at 1999 Harrison Street, across from Lake Merritt, where CIRM will be leasing space on the 16th floor (14,411 sq. ft.) and the 15th floor (2,686 sq. ft.).  The term for the 16th floor is five years, four months; the term on the 15th floor is three years, four months, with an option to extend by two years to coincide with the term on the 16th floor.  This will provide CIRM with the flexibility to reduce its space and rent burden, depending upon the circumstances.

“CIRM will pay $3.40 per square foot the first year, which will cost CIRM $58,129.80 per month.  CIRM will pay no rent on the 16th floor for the first four months of its lease, saving CIRM $195,989.60.  As a result, CIRM will pay a total of $501,569 for the first year of the lease.  The rent will escalate three percent per year.

“The 16th floor is shell space and requires substantial tenant improvements.  Although the 15th floor is already built out, it also requires improvements in order to accommodate CIRM’s needs.  In order to get the best pricing in light of the booming commercial real estate market and the demand for commercial construction contractors and subcontractors, CIRM ensured that the landlord competitively bid the project, which will cost approximately $1,719,820 in total.  The landlord has agreed to  pay $891,520 towards these improvements; CIRM will be responsible for approximately $828,300.  CIRM plans to use donated funds to pay its share of the tenant improvement costs.

“CIRM will also incur several one-time costs relating to the move, including costs for architectural and engineering services, cabling, AV, project management, security, moving, signage and furniture.  These items, and the estimated cost, are set forth below.

•  “Architect                                 $92,085
• “Engineers/Plumbing       $36,800
• “IT Cabling                                $60,200
• “AV                                              $160,000
• “Project Management     $134,740
• “Furniture                                $371,043
• “Security                                     $23,671
• “Signage                                    $9,300
• “Relocation                             $45,660

“You asked specifically about furniture.  As discussed above, CIRM’s existing furniture was included in the City of San Francisco’s bid.  Thus, CIRM incurred no costs for the furniture.  In evaluating whether to move the furniture to CIRM’s new office space, CIRM took into account the following factors before deciding to purchase new furniture:

• “CIRM is downsizing from almost 20,000 square feet to approximately 17,000 square feet.
• “CIRM currently has 39 private offices; the new space has 12 private offices, along with work stations and collaborative spaces.  The existing private office furniture cannot be re-configured to fit in work stations and is not suitable for the new space.
• “The cost of disassembling, moving and rebuilding the furniture would be significant; based on prior experience, CIRM’s Finance Director, Chila Silva-Martin, estimates that this cost would be approximately two-thirds of the cost of obtaining new furniture.
• “The furniture is ten years old and is not ergonomically designed.
• “CIRM utilized the State’s pre-negotiated contract (California Multiple Awards Schedule) for its furniture vendor, All-Steel, realizing savings of between 70-100% for the various items of furniture it has purchased. 

“Although CIRM will incur some one-time costs as a result of its relocation, we believe that the space is better designed to facilitate the CIRM team’s execution of CIRM 2.0 and beyond, and CIRM will realize more than $2 million in savings over the course of the lease compared to the costs of remaining in its current space. 

“Based on the latest information provided to CIRM by the Department of General Services, rents for comparable office space of 10,000 square feet or more near CIRM’s current location ranged from $79 to $86 per square foot.  Indeed, even at $75 per square foot for our current space, in the first year alone, CIRM will save approximately $1 million in rent ($501,569 in Oakland compared to approximately $1.5 million (19,500 sq. ft. x $75).

“Over the next five years and four months, CIRM would pay approximately $8 million to remain in its current office space.  The costs for rent in Oakland will be approximately $3.975 million (assuming CIRM occupies the entire premises, including the 15th floor, for the full term).  Thus, even with CIRM bearing some of the costs of tenant improvements and other one-time relocation expenses, CIRM will realize substantial savings from the move and it will occupy space that is better designed to achieve the agency’s mission.

“Please let me know if you have any questions.”

Need Work? The California Stem Cell Agency May Want You

Looking for a good job with an 11-year-old, but still fast-moving, cutting-edge organization?

The $3 billion California stem cell agency is looking for five folks who are willing to work in its new offices in Oakland and help turn stem cells into cures.

Here are the open positions: director or associate director,therapeutics; senior science officer, discovery team; senior science officer,therapeutics; grants management specialist and systems engineer.

The director/associate director position carries a salary of up to $250,065. Title and compensation will vary depending on the qualifications of the individual.

The Niche Rises -- Sort of Phoenix-like -- in California

California and the world has a “new” stem cell blog – at least new in name.

Welcome to The Niche (with an upper case T).

Paul Knoepfler, UC Davis photo

It is a rebranding of ipscell.com, the five-year-old effort by UC Davis stem cell researcher Paul Knoepfler.

He announced the change yesterday. Knoepfler wrote,

 “The Niche name better represents the sense that this site is a home and community including contributions by other writers and also commenters. I’m still working on a logo for The Niche.

“As The Niche continues to evolve look for it to include a wider range of contributors. As you may have noticed we have an increasing number of posts on genetics and genetic modification as well in addition to stem cells and regenerative medicine.”

The Niche, as some may recall, was the name of an excellent blog mounted by the journal Nature a few years back. It was shuttered by Nature for what must be presumed to be financial reasons.

Monya Baker and Natalie DeWitt were the overseers of that effort. Baker remains with Nature. DeWitt moved on to the California stem cell agency where she was a top aide to its then president Alan Trounson. She left the agency in June 2014 for Stanford and has been with NDA Partners LLC of San Francisco for the past five months.

Speedy Session Today for Directors of $3 Billion California Stem Cell Effort

The $3 billion California stem cell agency today whipped through a 28-minute meeting that featured no public comment on its activities and almost no questions from its governing board.

Approved unanimously were three items that its governing board treated in routine fashion. They included changes in its loan program and conference grants along with appointment of new grant reviewers. 

The changes in the loan procedures and other related grant administration rules must go through additional state processes before final action.

Today’s meeting had 22 teleconference locations throughout the state but no members of the public or the scientific or business community spoke up from those sites. The board has another teleconference meeting scheduled for Nov. 19. The next in-person governing board meeting will be in Los Angeles on Dec. 17. 

Today's California Stem Cell Meeting Open to All at 22 Locations

If you would like to speak directly to the overseers of California’s $3 billion stem cell research effort, today would be a good day.

The agency will have the most ever sites available for public access in its nearly 11-year history to a meeting of its governing board. Twenty-two teleconference locations around California are scheduled to be accessible, ranging from Davis to Fresno to La Jolla as well as major population centers such as Los Angeles and the San Francisco Bay Area.

The meeting begins at noon. The public is entitled to speak to the board on any subject, including its proposals for spending its last $800 million to $900 million. (See here, here, here and here.)

Items on the brief agenda include three non-controversial matters. As usual, the California Stem Cell Report will provide live coverage of the session.

The teleconference sites are in San Francisco (3), Los Angeles (4), San Diego (2), La Jolla (2) and one each in Davis, Sacramento, Redwood City, Irvine, Oakland, Fresno, Berkeley, Elk Grove, South San Francisco, Stanford and San Jose. Specific addresses can be found on the agenda.

California Stem Cell Loan Rules Coming Up Later This Month

The governing board of the $3 billion California stem cell agency has scheduled a brief, teleconference meeting for Oct. 22 during which the public or researchers can address any concerns they may have, including its priorities and spending.

The items on the agenda are routine, but as always there is an opportunity for the public to comment on any topic, whether it is on the agenda or not.  That includes how the agency plans to spend its last $800-$900 million.

There are plenty of teleconference locations spread around the state including two each in San Francisco, Los Angeles, San Diego, La Jolla and Irvine. Other locations are in Davis, Sacramento, Redwood City, Oakland and Fresno. Specific addresses can be found on the agenda.

On tap at the meeting is formal approval of loan and other rules in the clinical stage program, changes in conference grants and appointments of new grant reviewers.  

The agency is also in the midst of finalizing changes in its strategic plan for the next few years. Its money for new awards is scheduled to run out in about four years. Although the changes are not expected to be adopted until December, the public can speak directly to the board on the matter at Oct. 22 meeting. 

For more on the choices facing the agency over the next few years, see here, here, here and here.

LA Times: California's Stem Cell Agency and Rising Concerns About Drug Costs

Bloomberg News describes this $1 million gene therapy
as the world's most expensive medicine

Highlights

CIRM's affordability role

Risk-reward calculations

Burden on industry and CIRM

The Los Angeles Times has a Sunday readership of 2.4 million, and tomorrow they will be seeing this headline.

“Sky-high price of new stem cell therapies is a growing concern”

The article under the headline has much to do with California’s stem cell agency, which was founded on the promise that it would reduce health care costs, among other things, by as much as $18 billion.

The piece, available online last night, was written by Pulitzer Prize-winning columnist Michael Hiltzik. He noted that the agency is engaged in two, phase three clinical trials, the last step before a therapy is approved for widespread use.  

Hiltzik, author of the recently published book, “Big Science,”  wrote,

“If successful, they'll be firsts for the program, which is formally known as the California Institute for Regenerative Medicine. But they may also put CIRM smack in the middle of a burgeoning debate over how to ensure access for all patients to life-enhancing or life-saving cures.” 

Hiltzik pointed to stem cell and other advanced biologic treatments now reaching the global market that cost as much $1 million. One of those therapies was developed by Osiris Therapeutics when the current CEO of CIRM, Randy Mills, was the CEO of Osiris. The product, Prochymal, is being offered in Canada for $200,000 for a full treatment.

Hiltzik wrote that Mills “argues that CIRM's duty is to nurture therapies that can't be developed under conventional pharmaceutical business models and therefore may not yield profits like conventional drugs.”

Hiltzik continued,

“'If there was a risk-reward profile that was so attractive’ for such products, (Mills) says, ‘CIRM wouldn't have to exist.’ The public should have ‘an expectation of some return, but not of some great return,’ he says. 

“Mills argues that the public's concerns about drug pricing often may be misplaced, especially for treatments that reduce or eliminate lifelong treatment of chronic diseases. ‘In general, cell therapy may be more expensive to deliver,’ he says. ‘But if it's curative, that almost doesn't matter.’"

“He also cautions against allowing the political debate over drug pricing to distract from CIRM's ‘primary mission, which has been to bring cures to patients suffering from unmet medical needs.’ That explains the CIRM board's past resistance to the imposition of more stringent price regulation or higher revenue-sharing requirements. ‘We should be funding those things that, without our funding, wouldn't exist.’" 

Hiltzik concluded, 

“Still, public outrage over high drug prices isn't likely to ebb any time soon, and may only intensify as cutting-edge therapies reach the market at stratospheric prices. The burden will be on the biotech industry and its backers, including CIRM, to show taxpayers and patients that the price of treatment corresponds to the cost of research and development, rather than reflecting merely what the market will bear.”

(For more on the stem cell agency and affordability, see here and here.)

Will Stem Cell Treatments Mean "Your Money or Your Life?"

Highlights
Outrage about prices
Industry euphemisms
Handy demons
California's stem cell direction

Halloween is just around the corner and some stem cell folks here in California are doing their best to wish away a particularly frightening specter.

They barely can bring themselves to name the force they fear, at least based on what this writer heard in a brief visit to the live Web cast yesterday of the “Stem Cells on the Mesa 2015” conference.

Some of the rhetoric amounted to no more than whistling in the dark. Investors, researchers and business executives danced around what almost certainly appear to be extremely high treatment costs for stem cell treatments.

Those costs are the type that have stirred recent outrage among consumers and among some physicians. The controversy has emerged anew in the presidential race and last week knocked the stock market around a bit. 

This week, NBC News is airing a series of reports called “Your Money or Your Life.” The episode

yesterday featured a woman with cystic fibrosis who said about a drug maker,

“They put a price on my life.”

Inevitably meetings like the Mesa conference rarely deal directly with the tough and emotional issues that are typified by the ire expressed by that woman, Klyn Elsbury, who lives a few miles north of the Mesa meeting.   Instead biotech executives retreat behind such euphemisms as “reimbursement,” which is a catch-all term for “how do we make a profit.”

Yesterday the matter of pricing did come before one panel. While this writer came in late and did not hear all the names, the general response could be called “if we build it, they will come.”

Many of the potential products being tested now involve “unmet medical needs,” and thus the demand could be extraordinarily high. In other words, if you want to live, you will have to pay our price.

It would be “super transformative” in the market place, one speaker said, if a company has produced the only drug that will save a person’s life. Another said “the system will eventually find a (pricing) model.”  Which is where whistling in the dark comes in. But if the industry doesn’t directly face the emotional and medical concerns about predatory business actions, the industry, in all likelihood, will be hoist on its own pricing petard.

Lawmakers and regulators – fueled by public outrage – may well react to overly aggressive prices and begin to impose what could amount to some sort of profit rationing. After all good public health is a virtuous thing. And if prices stand in the way, something needs to be done about it. Or so the reasoning will go. Every politician needs a demon to rail against. Big Pharma and related stem cell firms could be that handy demon.

The argument in some circles maintains that prices will start out sky high and then decrease over time. But that does not mean the public and other payers will wait for decades and patiently pay $1 million per treatment.

That figure popped up this week in an item by UC Davis stem cell scientist Paul Knoepfler.  He wrote on his blog, ipscell.com, about a pricing model that did, in fact, run as high as $1 million.

Knoepfler said the stem cell community needs to answer following question and soon.

“Where’s the stem cell price sweet spot where we can help the most patients, but also generate a needed profit for the biotechs?” 

California’s $3 billion stem cell agency, in particular,  has an economic dog in the pricing hooha. The agency is in the midst of determining how to spend its last $800 million or so. It can decide to put that money into research that offers the likelihood of relatively affordable treatments or instead into $1 million cash cow therapies for Big Pharma.

What the agency does now will affect whether it vanishes in a few years for lack of funding or can find additional support from the state and/or private sources. If its only product after running through $6 billion (including interest) is a $1 million therapy, some might look askance at providing additional cash.

The Science Subcommittee of the agency’s governing will take up the revisions in its strategic spending plan some time in November. The proposal is scheduled to be approved by the full board at its Dec. 17 meeting in Los Angeles. (See here and here for more on the plan.)

Comments and suggestion for the plan can be sent to kmccormack@cirm.ca.gov.

From Wounds to Regulatory Speed-Up: California Conclave Examines Stem Cell Business and Research

Highlights

The Grafix story

Japanese ambitions

California's Alpha Clinics

Hundreds of representatives of the world’s stem cell community are meeting today and tomorrow in California mulling over everything from pricing to the possibilities of commercial cures.

The occasion is the Stem Cell Meeting on the Mesa 2015 in La Jolla, Ca., and if you are not there, it is still possible to see some of the presentations live and later on video.

Some can be dramatic, including one from Lode Debrabandere, CEO of Osiris Therapeutics of Maryland. This afternoon he pulled up a slide involving an Osiris product called Grafix, which is “a cryopreserved placental membrane that is designed for direct application to acute and chronic wounds.”

The photographs on the slide showed an open wound with an exposed tendon before and after

Osiris/Meeting on Mesa graphic

treatment. Debrabandere said the Grafix treatment led to closure of the wound in five months. He said the patient "is walking around and still has his foot.”

Osiris is the firm once headed by Randy Mills, president of the $3 billion California stem cell agency, known officially as the California Institute for Regenerative Medicine(CIRM). Mills speaks tomorrow morning to the conclave. The agency is one of the major organizers of the three-day session and contributed $50,000 to the program.  Other organizers are the Alliance for Regenerative Medicine and the Sanford Consortium for Regenerative Medicine, which has received $43 million from CIRM.

The conference has received little attention in the mainstream media with the exception of the San Diego Union Tribune. The newspaper's biotech reporter, Bradley Fikes, has filed two major stories tied to the conference.

One dealt with the burgeoning number of stem cell clinical trials. The other explored the ambitious stem cell research effort in Japan. Fikes wrote,   

“In the second half of the 20th century, Japan emerged as a world leader in automobiles and consumer electronics. In the first half of this century, the country plans to do the same with stem cells and regenerative medicine.”

Fikes said the Japanese stem cell market “was estimated at $90 million in 2012, projected to reach $950 million in 2020, $10 billion by 2030 and $25 billion by 2050.”

Fikes also pointed out how the Japanese have streamlined the regulatory process, something that CIRM President Mills thinks the United States should emulate. Last week, Mills was in Washngton, D.C., talking to regulators and others, presumably advancing his case for faster action on stem cell therapies.

On the agenda tomorrow morning is a panel dealing with clinical trials at the Sanford Consortium. The effort is tied to the Alpha stem cell clinic effort at UC San Diego  (see here ), which is funded by $8 million from CIRM. The agency initiated the Alpha program, which totals $24 million, in an effort to develop  a world-leading, one-stop program for stem cell treatment.

The Mesa meeting program said, “The CIRM Alpha Stem Cell Clinic at UC San Diego provides infrastructural strength to enable the complex interaction required for success” in stem cell treatments. 

Nominations for Stem Cell Person of the Year Being Taken This Week

Now is the time nominate a few good men or women for the 2015 Stem Cell Person of the Year.

UC Davis researcher Paul Knoepfler is collecting names for the annual award that he funds with a $2,000 prize. He is looking for the person who had “the biggest positive impact in the stem cell and regenerative medicine world in 2015.”

Knoepfler wrote last week,

 “This award is unique in a number of ways. For example, anyone in the world is eligible to be nominated: both scientists and non-scientists alike. The nominee should also be someone who thought outside the box and took risks, which are novel areas of emphasis for this stem cell and regenerative medicine award.” 

Paul Knoepfler, CIRM photo

The deadline for making nominations is Oct. 13. The finalists will be selected from the nominees by an Internet vote. However, Knoepler himself will choose the ultimate winner. Nominations should be emailed directly to Knoepfler at knoepfler@ucdavis.edu.

Knoepler listed the previous winners last week.

“Dr. Masayo Takahashi won in 2014 and this year also received the inaugural Ogawa-Yamanaka Stem Cell Prize.

“Dr. Elena Cattaneo received the award in 2013 and went on to get the ISSCR Public Service Award in 2014 along with colleagues.

“In 2012 the winner was top stem cell patient advocate Roman Reed, who went on in 2013 to receive the GPI Stem Cell Inspiration Award.”

Fifteen Clinical Trials: Better Marks for California Stem Cell Agency This Year

California's stem cell agency today received higher marks than nearly two years ago when it was last examined by the only state body charged with oversight of the $3 billion research enterprise.

The occasion was a meeting of the Citizens Financial Accountability and Oversight Committee, chaired by the state controller. One of its members, Jim Lott, in January 2014 had some harsh words for the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

But after a presentation that showed the agency will be involved in 15 clinical trials by the end of this year, Lott said CIRM had improved its pitch, although most of what he was said was lost in a poor quality audiocast of the meeting.

Jim Lott

The California Stem Cell Report asked him to summarize his views. Lott replied in an email,

"I've always felt that CIRM performs well. They needed to better communicate their achievements to justify the $2 billion the agency has spent thus far.  They needed to make their business case.  They did that today, and it would seem that their new president is the change that occurred to make this and other needed transformational efforts happen."

State Controller Betty Yee, chair of the oversight committee, also seemed satisfied with the agency's progress. Her comments were also largely lost in the audiocast. Her office declined to provide a summary of her views for this item today.

Jonathan Thomas, chairman of CIRM, and other agency executives provided an overview of the agency's progress and changes in its strategic plan, most of which is familiar to readers of the California Stem Cell Report.

Some fresh tidbits from the presentations.

-- The move to the agency's new headquarters in Oakland at the end of November will cost roughly $380,000. The agency is losing its rent-free office space in San Francisco and cannot afford the expensive leases in the city of San Francisco.

-- Randy Mills, president of CIRM since May 2014, has brought a sharp-eyed business approach to the agency, accord to Chairman Thomas. He said the agency "needed a business person" as opposed to an academic as the result of its emphasis on financing clinical trials. Thomas said Mills put "discipline and perspective" of business in place at the agency.

Michael Quick, USC photo

-- Thomas was "delighted" to hear Yee ask what the state could do to help the agency in the future. Thomas said the agency is developing a strategy in which the state could play a "very prominent role." Presumably that would involve more state funding since the agency is expected to run out of funds for new awards in about four years.

The controller's office also announced the addition of a new member to the oversight committee, Michael Quick, provost and senior vice president of academic affairs at USC.

As the school's No. 2 executive, he reports to Carmen Puliafito, president of USC and who also sits on the CIRM governing board. USC, which has held a seat on the board since 2004, has received $107 million from CIRM.

The oversight panel is required by state law to examine the agency on an annual basis. The last such session occurred 21 months ago. Asked to explain the delay, Taryn Kinney, a spokeswoman for Yee, said in an email,

"Since her inauguration earlier this year, (the controller) focused on building her staff and strengthening the many core internal functions of the state controller’s office."

Oversight Panel Concludes Hearing on California Stem Cell Agency

Today's oversight meeting involving the operations of the $3 billion California stem cell meeting concluded at 11:10 a.m.  The agency presented a general update on its operations. No members of the review panel voiced major criticism of the agency. In fact, one who was sharply critical of the agency nearly two years ago appeared to be quite satisfied with its performance. However, much of what he had to say was muddled in the audiocast. We expect to carry an item with more details later today.

Oversight Panel Begins Session Involving California Stem Cell Agency

Today's meeting of the Citizens Financial Accountability and Oversight Committee began about five to 10 minutes ago. Members are hearing presentation of routine audit results already aired publicly by the California stem cell agency.

At 9:18 a.m., the meeting achieved a quorum. That enables it to take official action. A new member was sworn in this morning. However, his name was not audible on the audiocast of the meeting. The California Stem Cell Report has asked for information on the appointee.

California's Stem Cell Oversight Meeting to Begin Shortly; Directions for Listening Online

Today's 9 a.m. meeting of the oversight committee for the California stem cell agency is available online -- listen only -- using the following information.  The slides for the meeting are available here.

Public call-in number (listen only): (800) 260-0718 

Access Code: 369689

 

Listen to the meeting online: https://im.csgsystems.com/cgi-bin/confCast

Conference ID: 369689  

Connecting With the Public and Stem Cell Stakeholders: A New and Inexpensive Tool

For years the California stem cell agency has given the public access to the meetings of its governing board via a one-way audiocast over the Internet and by phone.

But patients, advocates, scientists and business folks have not had the opportunity to comment and make suggestions re the doings of the 29-member board of directors through the same method. The public could only listen unless they were on the scene.

However, that could change if the $3 billion stem cell enterprise follows the lead of the state Treasurer John Chiang. This summer he began opening up meetings of the many important boards in his office to live, two-way, teleconference connections with the public.

Chiang also uses the same sort of service and company as used by the stem cell agency. But he has added an inexpensive touch that genuinely opens up the meetings to the public.

We recently stumbled across Chiang's press release on the move, which may well be unique in California state government. We queried Drew Mendelson, a spokesman in the treasurer’s office, for more details. 

Mendelson said,

“Participants on the phone are in listen only mode, but when the meeting chair calls for public comments, callers can press a set of numbers to indicate they want to speak.  The conference call is monitored online by (treasurer’s) staff and the call monitor must click on the caller in the queue to allow the person to speak.”

 Mendelson continued,

“Under our state contract with AT&T, we determined that an hour long meeting with 10 callers would cost less than $15.  The cost increases significantly if you have AT&T provide conference monitoring services.  We chose to monitor the calls ourselves.  What we are using is a basic conference call service with an online component where the monitor sees the list of callers to know how many people are on the line and when someone indicates they want to speak.”

Mendelson said that the move was generated by Chiang's desire to enhance public access and his “desire to increase public participation in and increase awareness of the many boards, commissions and authorities" that he chairs.

On-the-scene public participation in CIRM meetings is slim. One of the reasons is that the sessions often require travel and overnight stays that pose barriers for many persons, particularly patients and their advocates. The agency would make it easier for its stakeholders and enhance its reputation for openness and transparency by instituting this inexpensive practice. It also fits with the goal of Randy Mills, the president of the agency, to provide more clarity in what the agency does. 

Oversight Panel of California Stem Cell Agency Schedules First Meeting in 21 Months

The only governmental body specifically charged with oversight of the $3 billion California stem cell agency, an enterprise that operates beyond normal state controls, announced yesterday that it would meet in just three days.

The session of the oversight panel comes 21 months after the last meeting of the Citizens Financial and Accountability Oversight Committee(CFOAC). The panel is required by state law to meet annually. Its last meeting in January 2014 saw the agency criticized harshly by one of the members of the oversight panel.

The committee is chaired by the state controller, who currently is Betty Yee. At the time of the last meeting, the controller was John Chiang, who is now state treasurer.

The agenda for this Thursday's meeting contains no items that would seem to be controversial, only a review of a routine audit and a presentation by the agency itself.

In January of 2014, Jim Lott, one of the members of CFAOC, made it clear at some length that he was not pleased with the agency's performance. He said in part:

“What can we say we've done to advance to a cure or to cures? It's fine that we've got all -- we've contributed to all. What can you say that we've actually done? We don't really have any -- I'm going to just say this because it's a bias and I know it's a bias. We don't have any tangible specific and measurable results that I can point to.”

The $3 billion state stem cell agency is exempt from the usual state budgetary controls. It receives its funds directly from bond proceeds without intervention by the governor or the legislature. The agency’s independence was authorized by voters when they created the agency in 2004 through a ballot initiative that altered the state constitution.

Two sites are available for the public to observe and participate. One is in Emeryville in the San Francisco area and the other is in Los Angles. Addresses can be found on the agenda. The public can also listen to an audiocast of the proceedings. Directions are also on the agenda. 

Building a 'Beautiful Machine:' California's Last $900 Million for Stem Cell Research

Intense, passionate, zealous – some of the words that could have applied yesterday to the CEO of a California enterprise devoted to the dispassionate world of scientific research.  

Randy Mills, president of $3 billion California stem cell agency, started with what could have been a mind-numbing overview of a revision of the agency’s strategic plan – a subject that draws yawns from many.

Randy Mills at an earlier strategic plan event in La Jolla.
San Diego UT photo

Plus he was not talking directly to his key audience – the directors of the governing board of the stem cell agency, who were listening to him from 18 different teleconference locations.

Mills eased into his presentation, backed by 30 pages of PowerPoint slides. He was speaking by phone from room 3803 in the Sanford Consortium in La Jolla, a facility partially financed with $43 million in agency funds.

His pace and fire escalated as talked about transforming the agency and fabricating a “great, beautiful machine.”

He told the directors,

“We have created very beautiful pieces – but they have existed as pieces”

Now is the time, he said, for California to create a “giant engine that will accelerate the research in a way that exists nowhere else in the world”  – a “giant coordinated stem cell machine.”

Mills said the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, is “by far the largest regenerative institute in the world.”  At the same time, it “needs to be better appreciated.” He promised to generate a “dramatic increase” in awareness of the agency.

Mills, who has been with the agency for about 16 months, skimmed over the numbers: $2 billion out the door, $900 million left for research awards, $400 million to go to clinical research, 50 new clinical trials.

Mills has already increased the speed of funding for clinical programs, dropping the time from years to months. But he wants to do more for what is called the translational stage – bringing developments out of  basic research into clinical phases in three years instead of eight.

Mills’ efforts yesterday were limited by time, however. The meeting was scheduled for only 90 minutes and the board had other business as well.

Individual board members had brief comments, including Jeff Sheehy, a communications manager from UC San Francisco. He raised questions about Mills’ plan to clear out obstacles at the FDA. Sheehy wanted to know more about how much it would cost and how it would be pursued.

Another asked whether there was a sufficient research base in California to achieve all that Mills proposed, a risk that Mills had identified in his PowerPoint slides. Yes, Mills said, it could be that CIRM will not be able to do 50 new clinical trials.

Mills’ report was a midpoint update on how the agency plans to spend its final $900 million in what could well be its last strategic plan.

The proposal will be examined once again by the Science Subcommittee of the agency’s governing board in November before it goes to the full board in December for approval.

The plan is likely to have a major impact on stem cell research in California and on the lives of hundreds of researchers. Only one scientist was present to comment yesterday at the meeting, Jeanne Loring of the Scripps Institute. She told Mills that his presentation was “terrific,” which sparked applause from about 20 patient advocates in the room at the Sanford Consortium.

As for the fate of the agency after 2020, when funds for new awards run out, CIRM Chairman Jonathan Thomas said that would be discussed at the December board meeting.

But as Mills noted, 

“We don’t have a lot of time left.” 

The agency is open for more comment from the public. Mills said suggestions, criticism, etc., can be sent to kmccormack@cirm.ca.gov.

More information about the strategic direction of the agency can be found here and here.

Those directly affected by CIRM spending – or who want to be affected by it -- would be well advised to listen to Mills’ presentation on a recording of the teleconference meeting. The recording can be found on the audiocast link on the meeting agenda, beginning at about 38 minutes into the meeting.

Stock of California Firm Jumps 17 Percent on News of Golden State Award

Google chart

ImmunoCellular Therapeutics’ stock price shot up 17 percent today in the wake of formal approval of a $20 million award from the California stem cell agency for a clinical trial involving a rare brain cancer.

The price has been climbing since last week when the California Stem Cell Report first disclosed that the company was set to secure the funding for the phase three clinical trial, the last step before widespread commercialization.

In an interview today, Andrew Gengos, president of the Calabasas, Ca., firm, confirmed that the trial is expected to cost $40 million to $50 million. The company has said it will add $34.4 million to the $20 million from the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

Gengos said the five-year trial is expected to get underway in November with the enrollment of the first patients. He said it will probably start in the United States with expansion to Canada and Europe. About 400 patients are expected to participate.

ImmunoCellular has not had any revenues since 2010. Asked about the source of the $34 million, Gengos said the company had $31 million on hand at the end of June with no debt. He added that the company can access additional cash through the sale of more stock.

In reponse to a question, Gengos said he first became aware of the possibility of funding the clinical trial with the help of CIRM as the result of a conversation with a colleague at the J.P. Morgan health care conference in San Francisco last January.

Gengos followed up by asking an ImmunoCellular co-worker to look into the process. As the result, the company made its initial application which CIRM sent back with suggestions for improvement. In the second review, reviewers voted 9-0 to fund the project.

Gengos told the CIRM board today that the trial would take five years to complete.

“Frankly, this time period is outside the interest of most public market investors in terms of their investment horizon and therefore, in their eyes, handicaps our project compared to other projects that can execute in a shorter time frame.

“The result is that investment capital is hard to come by for these types of promising and highly innovative therapies when the investment horizon is long, and a small company without product revenues is at the helm.”

Gengos continued,

“I do not think it is an overstatement to say that without CIRM’s support, this program would not go forward. California’s innovative biotechnology community needs institutions like CIRM. Clearly – we need CIRM. Brain cancer patients need CIRM.”

Here is the text of the company’s press release today.

Here is the text of Gengos statement to the CIRM board.

   Statement by CEO of ImmunoCellular to CIRM board Sept. 24, 2015

Coming Up

We expect to post a piece tomorrow on the impassioned presentation today by Randy Mills, CEO of the California stem cell agency, of his proposed strategic plan for the $3 billion research engterprise. He envisions a "great machine" that will set a new standard for the world stem cell community. Look for the article tomorrow.

Faster Action Approved in California on Stem Cell Therapy for Parkinson's

To cheers and applause, directors of the $3 billion California stem cell agency this morning moved to speed action on a much-lobbied effort to fund research on a therapy for Parkinson's disease.

Randy Mills, president of the agency, said the action would mean that a request for applications would be posted within the next seven days instead of sometime next spring.

He spoke from the Sanford Consortium in La Jolla during a teleconference meeting with 18 locations. Parkinson's advocates at his site cheered and applauded the news.

A giddy Jenifer Raub, one of the leaders of the Summit4StemCells group, told agency directors,

"I feel like a kid at Christmas."

It was a feeling echoed by other members of the group, which had protested the delay at a CIRM board meeting in July and also earlier this month. About 17 were in attendance at Mills' location this morning.

The San Diego Parkinson's group is backing research by Jeanne Loring, head of stem cell research at the Scripps Institute in La Jolla. (See here and here.)

The unanimous vote by the board gave Mills more flexibility in scheduling upcoming rounds of awards involving basic and translational research. Loring's research fits in the translational area. The basic research round will now apparently be put off until next spring.

California Stem Cell Meeting Concludes: More Upcoming on Parkinson's Research, Creation of a 'Stem Cell Machine' and ImmunoCellular

Directors of the California stem cell agency concluded their meeting today at 11:43 a.m. They gave the go-ahead to speedier action on funding for Parkinson's disease research and heard an impassioned presentation from President Randy Mills on his plan to create a "great machine" that will "change regenerative medicine in the world." We will have more on both subjects later along with an interview with the president of ImmunoCellular Therapeutics, which received a $20 million award today.

California Stem Cell Agency Backs Calabasas Firm with $20 Million in Search for Brain Cancer Therapy

Directors of the California stem cell agency today unanimously approved a $20 million award to help boost into the marketplace a therapy for a rare brain cancer known as glioblastoma.

The funds will go to ImmunoCellular Ltd, a tiny, publicly traded firm based in the Los Angeles suburb of Calabasas, which has close ties to Cedars-Sinai Medical Center.

Andrew Gengos, president of the firm, told the directors,

"Without (the agency's) support this program would not go forward. Brain cancer patients need CIRM."

It is the second, phase three clinical trial for the agency, formally known as the California Institute for Regenerative Medicine (CIRM). The $3 billion research enterprise is pushing to develop a commercial therapy before funds for new awards run out in about four years.  (See here for the CIRM  press release on the award.)

CIRM is also proposing to award $400 million over the next four years to support clinical level research and participate in 65 clinical trials.

The ImmunoCellular trial is expected to produce preliminary results by the end of 2019.  The trial will involve 414 patients and  begin recruiting in November of this year. (See here for recruitment and other information.)

Despite some caveats, the agency’s blue ribbon reviewers concluded that the proposed therapy “could become a new standard of care and extend survival of glioblastoma patients.” Other firms, however, are competing in the field, the reviewers noted. Earlier this year, reviewers approved the award during closed door proceedings on a 9-0 vote, an action that virtually assured formal approval today.

Immunocellular’s closing stock price has risen 13 percent since the California Stem Cell Report disclosed on Sept. 17 that the firm was set to receive the $20 million award. Today, the stock opened at 48 cents. At the time of this writing today it stood at 52 cents.

Information presented to the CIRM board today did not indicate potential cost of therapy to consumers. Nor did the information discuss the financial condition of the company other than to state that it would provide $34.4 million in co-funding. There was little discussion this morning of the application by the CIRM board. 

The company’s filings with the Security and Exchange Commission show that the firm has reported no revenues since 2010 and a loss of $9.4 million in 2014. It reported that it had $23.2 million in cash or cash equivalents in 2014. In February of this year, it reported raising $14.6 million from Roth Capital Partners, LLC.

Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd., both registered in the Cayman Islands, hold 9.22 percent of the company’s stock, according to company documents.

Capital Ventures International, another Cayman Island firm, owns 5.54 percent. John S. Yu, chairman and chief scientific officer of the ImmunoCellular and a neurosurgeon at Cedars-Sinai, owns 6.65 percent. The CIRM governing board has one member from Cedars-Sinai who was not permitted to vote on the award.

ImmunoCellular has six fulltime employees, Gengos said today.

The public summary of the review said,

“In the initial review of this application, reviewers were enthusiastic as glioblastoma represents a serious unmet medical need. Additionally, the applicant presented strong preclinical and clinical data to support the proposed Ph3 registration trial and there was a reasonable plan to obtain regulatory approval of the proposed therapeutic. However, reviewers had feasibility concerns regarding the applicant’s ability to enroll the trial and maintain the reagent supply chain to support manufacturing of the product.

“Reviewers also had concerns with the trial design, which centered around selection of the patient population targeted in the registration trial and the lack of immune monitoring proposed in the trial. The applicant was provided the opportunity to address these concerns in a revised application, and their responses and modifications to the proposal reassured reviewers that the applicant could enroll and conduct the Ph3 trial as proposed and that, if endpoints are met, the trial design could support licensing approval by FDA.”

New Reviewers Appointed by California Stem Cell Agency

The governing board of the California stem cell agency this morning approved the consent calendar on the meeting's agenda. Those are matters that have no controversy. Today they included appointments of new scientific grant reviewers.

Directors of California Stem Cell Agency Open Meeting

Today's meeting of the California stem agency began this morning at 10:04 a.m. PDT with the pledge of allegiance and a roll call.

A $6 Billion Question: Affordability of California's Stem Cell Therapies

Imagine this headline popping up on the Internet and in the New York Times in about four years:

“$6 Billion for ‘Price Gouging' Stem Cell Therapy” 

The possibility of such a news story is not all that fanciful -- given the growing tension and anger over exorbitant drug prices being set by a variety of Big Pharma firms. The likelihood of such a report and its impact is a matter for careful consideration by the 29 directors of the $3 billion California stem cell agency.

They are presiding over an effort that will cost the Golden State’s taxpayers roughly $6 billion by 2020.  Nominally, the agency is giving out $3 billion in research awards. However, the cost is approximately doubled because the state is borrowing money to finance the research, a move approved by voters in 2004.

No therapies for widespread use have yet emerged from the agency, formally known as the California Institute for Regenerative Medicine (CIRM). But the agency is pushing hard. It could have a therapy on the market within four years. The question is whether it will be something that is perceived as affordable or something available only to the wealthy few.

CIRM is now expecting to be involved in 65 clinical trials by 2020. One of those trials is currently in phase three, which puts the proposed treatment on the cusp of commercialization.

A second phase three trial – with a $20 million taxpayer investment -- is all but certain to be approved tomorrow during the CIRM directors meeting. The session also includes a strategic discussion about how the agency will spend its last $890 million – for basic research, clinical trials, infrastructure and so forth.

Not on the table, however, is what those therapies are likely to cost consumers. The spending plan does not address the question of whether a publicly financed agency should back development of therapies that could cost, for example, $512,000. (See here and here.) Or whether it should focus on more affordable treatments.

The issue of high cost of drug therapies has roiled the medical community and the public for some years. The matter has now moved to a higher level and is not likely to vanish during the next five years, as it has in the past. It is tied to the income inequality debate and the upsurge in patient advocacy. (See here and here.)

The issue surfaced this week in the presidential campaign. Democratic aspirant Hillary Clinton used words like “gouging” and “outrageous,” causing biotech stock prices to drop. Republican presidential candidates used the problem to attack Obamacare. Folks in the scientific community said they were “shocked.” 

This afternoon, a Google search on the term “high drug prices” turned up 33.7 million results. “Outrage,” “huge spike,” “4,000 percent” and “insanely high” were some of the words in the headlines.

The affordability question is not new to the California stem cell agency. It popped up in the ballot campaign that created the agency in 2004 but has largely died down in recent years. (See here, here and here.)

It could surface again in the California legislature and elsewhere as lawmakers see a public desire to curb perceived greedy pharmaceutical companies that prey on the weak and afflicted.

It is not a prospect that would be pleasant for the California stem cell agency. And it would put a major damper on efforts to continue funding of the agency from both public and private sources.

As they consider their strategic direction, the CIRM directors of the agency may be well advised to move earlier rather than later on the question of high prices and affordability. As Ben Franklin’s medical homily goes,

"An ounce of prevention is worth a pound of cure."