Critics Unmoved by Economic Report; Still Say No More Billions for California's Stem Cell Agency

This week's relatively rosy report on the economic impact of California's $3 billion stem cell research program has not convinced longtime critics to change their positions and support giving it an additional $5 billion.

In the eyes of some opponents, the stem cell agency is still a boondoggle, a waste of money and an inappropriate use of state bonds, the borrowed money that is the only significant source of cash for the program. Other critics recommended moving the program to the University of California and restricting it to "breakthrough medicine."

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), expects to run out of money for new awards this month. It is hoping that voters will see value in its efforts and approve -- in November 2020 -- a $5.5 billion ballot initiative that would refinance the agency.

The 2004 initiative that created CIRM was handily approved by 59 percent of the voters following a campaign that created expectations that nearly miraculous therapies were right around the corner. The agency has yet to back a treatment that is widely available to the public.

The California Stem Cell Report queried a smattering of CIRM's critics following the release of the economic study, which said the agency has provided a "handsome dividend" to the state. The report from USC said, among other things, that CIRM-generated benefits exceed $10 billion and have led to nearly 60,000 jobs.

That was not good enough for state Sen. John Moorlach, R-Costa Mesa. He said,

"It was a boondoggle when it started and it still is. It's held up by emotional appeals, sustained by empty promises, and now rationalizing to extend its existence."

He continued,

"This study does not bring to light anything new. Doling out $3 billion to any entity or entities would generate the same economic metrics. The study is a shell."

"CIRM did not produce or sell anything of substance. It was not a stadium that created jobs around it, like restaurants, bars, and hotels."

Marc Joffe, a senior policy analyst at the Reason Foundation, said,

"I oppose the use of state general obligation bonding authority for any purpose other than building well-conceived civil infrastructure projects. The fact that spending bond proceeds generates economic activity is not surprising and not a reason to support a new bond in 2020. Similar studies have been released in support of the ill-conceived high-speed rail project: We might not get a usable system that takes many passengers out of their cars, but at least we created a lot of jobs in the Central Valley! This is not a persuasive argument for imposing more debt on our children, who already have the challenge of paying for Baby Boomer retirements."

Joe Rodota also responded. Rodato has worked for two Republican California governors. He and Bernard Munos, a senior fellow with FasterCures and the founder of the Innothink Center for Research in Biomedical Innovation,
have advocated a change in California's stem cell program that would restrict funding to businesses with a significant California presence and move the effort to the University of California.

Rodota said,

"Under our proposal, in exchange for providing funding to private companies engaged in developing stem-cell therapies, the University of California would receive shares, alongside any shares sold to private investors. Although the report categorizes equity sold to private investors as part of the 'economic stimulus created by CIRM funding,' that equity is held by private investors, not the University of California."

You can read the full text of the critics' remarks here. 

Full Text: Critics on Economic Impact Report on California Stem Cell Agency

Here is the full text of the email responses of stem cell agency critics to the report on the economic impact of the agency over the last 15 years.

State Sen. John Moorlach, R-Costa Mesa, who responded directly to questions from the California Stem Cell Report (CSCR):

CSCR: "Does the USC study bring something to light that is new to you?"
Moorlach: This study does not bring to light anything new. Doling out $3 billion to any entity or entities would generate the same economic metrics. The study is a shell.
"CIRM did not produce or sell anything of substance. It was not a stadium that created jobs around it, like restaurants, bars, and hotels.
"CIRM spent $3 billion and it's costing the taxpayers that much, plus $800 million-plus in interest."
CSCR: "Does it lead you to modify your thinking about the California stem cell program?"
Moorlach: "The new report has not modified my thoughts on CIRM. It was a boondoggle when it started and it still is. It's held up by emotional appeals, sustained by empty promises, and now rationalizing to extend its existence."
CSCR: "What is your overall view of the agency at this point?"
Moorlach: "Stem cell research is important, but best left to the private sector. This was style drift and extremely expensive, including the necessity to raise taxes with Propositions 30 and 55."

From Marc Joffe, senior policy analyst with the Reason Foundation:

"I oppose the use of state general obligation bonding authority for any purpose other than building well-conceived civil infrastructure projects. The fact that spending bond proceeds generates economic activity is not surprising and not a reason to support a new bond in 2020. Similar studies have been released in support of the ill-conceived high-speed rail project: we might not get a usable system that takes many passengers out of their cars, but at least we created a lot of jobs in the Central Valley! This is not a persuasive argument for imposing more debt on our children, who already have the challenge of paying for Baby Boomer retirements."
"Also, for what it’s worth, I don’t oppose the existence of CIRM. If it can be financed privately, that would be wonderful. I just don’t think it should be imposing burdens of future taxpayers."

From Joe Rodota, who worked for Republican Gov. Pete Wilson and Republican Gov. Arnold Schwarzenegger.

"This sentence (from the study) caught my attention 

"The estimates in the report are based on the economic stimulus created by CIRM funding and by the co-funding that researchers and companies were required to provide for clinical and late-stage preclinical projects. The estimates also include:
"Investments in CIRM-supported projects from private funders such as equity investments, public offerings and mergers and acquisitions, 

"Our (Rodota's) proposal, as outlined here, includes this language:
"In exchange for the funds they receive, companies would tender to the University of California shares of their common stock, with an estimated value as determined by the most recent outside valuation or price set by investors. These shares would become part of the UC endowment -- and the University of California be free to sell or leverage these shares, or acquire additional shares, as it sees fit.

"Under our proposal, in exchange for providing funding to private companies engaged in developing stem-cell therapies, the University of California would receive shares, alongside any shares sold to private investors. Although the report categorizes equity sold to private investors as part of the 'economic stimulus created by CIRM funding,' that equity is held by private investors, not the University of California."

'Handsome Dividend' -- California Stem Cell Agency and Its Economic Impact on the Golden State

This video was produced by Forty Seven, Inc., a firm in which California's stem cell agency has invested more than $15 million. 

California’s stem cell research program has had a “major impact” on the state’s economy, generating billions in sales revenue and creating tens of thousands of new jobs, according to a study released today.

Commissioned by the $3 billion state stem cell agency, the report comes as the program is hitting a difficult financial patch. Known officially as the California Institute for Regenerative Medicine (CIRM), the agency expects to run out of money for new awards by end of this month. CIRM is hoping that voters will refinance it with $5.5 billion via a ballot initiative in November 2020.

The 84-page study is expected to serve as a rebuttal to critics who have called the nearly 15-year-old agency a boondoggle. The report said, 

“The state’s investment in (the agency) has paid handsome dividends in terms of output, employment and tax revenues for California."

Adam Rose, USC photo

Dan Wei, USC photo

The study and a yet-to-be released companion report were commissioned at a cost of $206,000 by the agency. The economic study was prepared by Dan Wei and Adam Rose of the Price School of Public Policy at the University of Southern California. 

Maria Millan, CEO and president of CIRM, said in a news release that the study reflects the agency's role in building a stem cell "ecosystem" in the Golden State. 

Beyond CIRM's medical and scientific work, she said that the agency is "promoting economic growth in California  by attracting scientific talent and additional capital, and by creating an environment that supports the development of businesses and commercial enterprises in the state."

The report summarized CIRM's economic impact in four points. 

• "$10.7 billion of additional gross output (sales revenue)
• "$641.3 million of additional state/local tax revenues
• "$726.6 million of additional federal tax revenues
• "56,549 additional full-time equivalent jobs, half of which offer salaries considerably higher than the state average."

CIRM's news release on the report characterized the study as "independent." CIRM said it showed that the agency's efforts had a "major impact" on the state's overall economy, which totalled $3 trillion in 2017. 

The agency cited the assistance it has provided to create companies that ultimately will make CIRM-financed therapies available to the public at large.

While the agency's spending has not yet led to a widely available therapy, it is backing 56 clinical trials, which is the last stage before a treatment can be approved for widespread use. About 86 percent of clinical trials fail to result in a product, according to 2018 figures.

As an example of a fruitful collaboration, the agency cited Orchard Therapeutics of the United Kingdom, which plans to seek to qualify soon for speedier federal approval of its treatment for a version of  "bubble boy syndrome," a fatal immune deficiency. CIRM has awarded the firm $8.5 million.

The treatment was developed by Donald Kohn at UCLA with the help of $52 million in CIRM cash.  During clinical trials, it has saved the lives of more than 50 babies. Kohn said in a statement,

"I think one of the greatest strengths of CIRM has been their focus on development of new stem cell therapies that can become real medicines."

Orchard has offices in the San Francisco Bay area and plans to build a 150,000-square-foot manufacturing facility in Fremont. 

Also cited as an example was a company called Forty Seven, Inc., of Menlo Park, Ca., which is developing cancer therapies. Mark Chao, founder of the firm, said CIRM's support was "instrumental to our early successes."

The economic study also explored the "deal flow" funding that has aided commercialization of research. The study said it is expected that 

"...CIRM's past and current funding will attract increasing amounts of industry investment and lead to additional spending injections into the California economic in the years to come."

The companion report to today's economic study involves "health dividends" provided by the agency. That report is expected to be released next week. 

The agency has commissioned other economic studies in the past including one in 2012 that also lauded the agency. The request for proposals to perform that 2012 study said it must execute "a vibrant and aggressive strategy to support the goals and initiatives of CIRM.” 

Queried by the California Stem Cell Report, Kevin McCormack, a spokesman for CIRM, said four enterprises were solicited to develop this year's study. Three declined. The contract for the latest study stipulated that USC had control of the content. The latest study also laid out the methodology in considerable detail, something missing from the 2012 report. 

Below is a May 31, 2019, 58-second video of the president of Orchard, Mark Rothera, discussing the company's work. More brief, 2019 videos of Rothera from same interview sequence can be found here, here, here and here. The videos were taken by the Alliance for Regenerative Medicine. 

California's $72 Million Diabetes Wager: ViaCyte Announces Major "Firsts" for Its Stem Cell Therapy

Vox Pop video/Viacyte

One of California's bigger stem cell bets -- $72 million -- turned up this morning with a strong positive report that included a couple of "firsts" in its search for a virtual cure for diabetes.

The announcement came from ViaCyte, Inc., of San Diego. The California stem cell agency has pumped $72 million into the company, making the firm the top for-profit recipient of state stem cell largess. 

The news comes as the agency, known formally as the California Institute for Regenerative Medicine (CIRM), is running out of funds and hoping that voters will give it $5 billion more. A major research score would be a big plus for that ballot initiative effort. 

The agency's president, Maria Millan, described the ViaCyte announcement as important and encouraging. 

ViaCyte is developing a tiny device that is implanted in a person's body and that generates insulin as needed. It is aimed primarily at type one diabetes, which afflicts more than one million Americans 

ViaCyte issued a news release on the developments at major, national stem cell conference in Carlsbad, Ca. The headline on the release said, 

"First demonstration of insulin production in patients from a stem cell-derived islet replacement therapy"

The release said,

"Preliminary data show that implanted cells, when effectively engrafted, are capable of producing circulating C-peptide, a biomarker for insulin, in patients with type 1 diabetes."

Paul Laikind, CEO and president of the firm, declared,

“ViaCyte is the first and only company in human clinical trials with a stem cell-derived islet replacement therapy candidate, and we are now the first to demonstrate production of C-peptide in patients receiving implanted stem cell-derived islets. These data show that our PEC-01 cells are functioning as intended when appropriately engrafted. “While there is still more work to be done, this is an important milestone. We plan to present additional data in the near future.”

Laikind continued,

“ViaCyte has achieved a number of firsts in this field. Now with the first demonstration of insulin production in patients who have received PEC-Direct, we are confident we can be the first to deliver an effective stem cell-derived islet replacement therapy for type 1 diabetes.”

Asked for comment, CIRM's Millan said,

"This is encouraging news. We are very aware of the major biologic and technical challenges of an implantable cell therapy for Type 1 Diabetes, so this early biologic signal in patients is an important step for the ViaCyte program."

ViaCyte is scheduled to present its findings later today at the Cell & Gene Meeting on the Mesa. That session can be seen live on the Internet 1:45 p.m. PDT. 

(An earlier version of this item contained a slightly different quote from Millan. CIRM re-submitted the latest quote, which adds information.)

Measure to Add $5 Billion-plus to California Stem Cell Agency Yet to be Filed

The official kickoff for a proposal to refinance California's nearly 15-year-old stem program with $5.5 billion has been delayed for at least a few more weeks. 

Backers of the proposed bond initiative told the California Stem Cell Report last week that the ballot measure will not be filed with state election officials until later in October. Previously, they had said it would be filed by the end of this month. 

Melissa King, executive director of Americans for Cures, said there was no major reason for the delay in filing the measure. She said it was just a matter of "wanting to get everyone's views heard, etc."

To qualify for the November 2020 ballot, backers will need to gather more than 600,000 signatures of registered voters. 

Americans for Cures is a stem cell advocacy group controlled by Robert Klein, who ran the initiative campaign in 2004 that created the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.
Klein was also the first chairman of CIRM. 

The agency expects to run out of cash for new awards this year and has no further source of major funding. 

Pluses and Minuses: The Cases For and Against $5.5 Billion More for California's Stem Cell Agency

BURLINGAME, Ca. -- It was a case of dueling op-ed arguments -- one describing the state's $3 billion stem cell agency as a waste of money and the other touting its success and its current and future impact on human lives.

The articles appeared online on the web site of the San Diego Union-Tribune on the eve of a daylong conference here to lay out possibilities for the agency over the next several years. 

The articles and the meeting come at a critical point for the agency, known formally as the California Institute for Regenerative Medicine (CIRM). The nearly 15-year-old enterprise expects to run out of cash for new awards this year. It is hoping for a $5.5 billion infusion in November 2020 if California voters approve another bond measure for the agency.

The op-ed articles embodied many of the arguments -- pro and con -- that are likely to surface in the ballot measure campaign next year, a campaign that is expected to cost its supporters $50 million. 

In the San Diego newspaper, the case for giving the agency more billions was made by Larry Goldstein, a professor at UC San Diego; Aileen Anderson, a professor at UC Irvine, and Malin Burnham, chairman of the Burnham Foundation. The case against CIRM was made by state Sen. John Moorlach, R-Costa Mesa.

Moorlach argued that the agency has "produced close to no results." He cited articles in the journal Nature and the San Francisco Chronicle as evidence. Moorlach called CIRM a "dry hole." He wrote.

"Not only was the $3 billion for the research a bust, but taxpayers will be paying interest on the principal until 2039. California Treasurer Fiona Ma’s office told me the cost of the interest on the $2.59 billion of principal already spent will be $836.6 million. Interest rates lower than anticipated in 2004 kept that below the original $3 billion estimate."

Goldstein and his co-authors argued that more than 50 children have had their lives "given back" as the result of clinical trials funded by CIRM. They said, 

"CIRM funding has established an impressive pipeline of new stem cell-based therapies being tested in 78 human trials directly funded by CIRM or based on CIRM-funded research. CIRM funding has also led to over 3000 published medical discoveries." 

They continued, 

"In 2020, Californians can continue their commitment to the best forms of stem cell research and therapy development. While there are no guarantees in medical research, if prior achievement is any indication, the next initiative will push many breakthrough therapies across the finish line. Considering the potential benefits to Californians and the opportunities to improve lives and alleviate suffering, there is little to lose, and an incredible amount to gain."

California's 15-year Stem Cell Journey: Where to After 1,000 Research Awards, 56 Clinical Trials, $904 Million for Basic Research?

BURLINGAME, Ca. -- California's $3 billion stem cell research agency this year is nearing only its 15th birthday, but tomorrow it will wrestle with the question of whether there is life after 2020.

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is convening a passel of out-of-state scientists here to address the very real matter of what to do next year and thereafter. 

CIRM expects to run out of cash before the end of this year. It is hoping that California voters will approve a $5.5 billion bond measure in 2020 to continue its work. 

The scientists arriving for tomorrow's public meeting are non-California folks who have evaluated some of the more than 3,000 applications from California scientists for cash from CIRM.  The agency is barred by law from financing work outside the Golden State.

A presentation prepared by the agency for the session asks:

• "What should CIRM be thinking about now to prepare for a possible life beyond 2020?
• "How can CIRM deliver the greatest impact in the future?
• "What opportunities might CIRM seize to accelerate the field?• 
• "What challenges must be addressed?
• "What types of CIRM programs should be sustained or expanded?
• "What is missing, or needs more support?"

The day-long program also includes a 49-page, information package dealing with CIRM programs, ranging from basic research to clinical activities. It is the most comprehensive, recent, public look at CIRM's efforts that the agency has prepared.

Here are some of the highlights of the fresh data overview from CIRM: 

• 56 clinical trials
• More than 1,000 awards
• More than 1,200 patients in CIRM-initiated Alpha stem cell clinics
• $904 million for basic research
• Stimulation of $3.7 billion in outside investments
• 2,700 alumni from CIRM training programs 

The session begins at 8:30 a.m. PDT. It will be available also on online. Instructions for access can be found on the meeting agenda.

State Medical Regulators To Take Up Dubious Stem Cell Clinics in November: Adverse Events, More Education on Table

The next step in possible California state regulation of rogue stem cell clinics will come Nov. 7 at a meeting of the state's medical board. 

The news follows a meeting last week by a two-person task force of the medical board to deal with the growing use of unproven treatments. (See here and here.)

The California stem cell agency reported on its blog, in a piece by Yimy Villa, about possibilities the board is considering:

• "Guidance and education materials for medical practitioners
• "Sample informed consent documents designed to inform patients about the potential risks and benefits of stem cell treatments
• "Public education materials
• "An adverse event reporting system"

In response to a query by the California Stem Cell Report, Carlos Villatoro, a spokesman for the board, said it would hear an update at its meeting in November in San Diego.
He released a statement that said.

"The board’s Stem Cell and Regenerative Therapy Task Force will continue to work on this issue with the goal of providing recommendations on stem cell and regenerative therapies and developing some guidelines that California physicians and patients can follow. The task force would meet again to obtain input on any recommendations and/or guidelines."

The California stem cell agency has taken a "Three Rs" position on the rogue clinics: "Regulated, Reputable and Reliable."

No public meeting of the task force is scheduled at this time. Interested parties can send comments and suggestions to April.Alameda@mbc.ca.gov.

Peering into California's Stem Cell Future: Public Conclave Scheduled for Next Week

California's nearly 15-year-old stem cell research program, which expects to run out of cash this year, has called a meeting for next Thursday to explore its future if voters approve a proposed, $5.5 billion ballot measure next year. 

"The goal of the meeting is to gather feedback, suggestions and recommendations for how (the agency) might deliver the greatest impact in regenerative medicine should it have the opportunity to do so in the future," said Maria Bonneville, vice president of administration for the agency.

In response to a query yesterday, Bonneville said about 30 persons were expected to be involved in the session, including a number of the scientists who participate in the closed-door reviews of grant applications from other researchers. The grant reviewers are all from outside California and make the de facto decisions on awards.

The session is open to the public.   Bonneville said parts of the meeting will be audiocast on the Internet. She said the $3 billion agency expects to produce a report out of the meeting. 

Members of the public can submit written testimony to the agency in advance of the meeting and afterwards by emailing it to info@cirm.ca.gov.

Backers of the $5.5 billion initiative to be placed on the November 2020 ballot expect to formally file it with state election officials by the end of this month.

California Regulators and Dubious 'Stem Cell' Clinics: Possible New Rules Sometime Next Year

The California state Medical Board is expected to come up with new regulations to deal with rogue "stem cell" clinics sometime next year, the San Francisco Chronicle reported yesterday. 

The rules could require more patient education about the treatments and risks as well as providing more information to physicians about federally permissible treatments. The chairman of the state's $3 billion stem cell agency has described the unproven treatments as "snake oil."

The Chronicle story by Erin Allday emerged from a hearing yesterday by a small panel of the Medical Board. Any proposal for more regulation would have to go to the full board and run through the lengthy state administrative process before taking effect.

UC Davis stem cell scientist Paul Knoepfler, who also testified at the hearing, wrote about the session on his blog. He said that physician and patient education could be "helpful." He added,

"(B)ut I wonder whether the board will actually take more direct action on the few physicians who are arguably running the riskiest clinics here in our state. Such a step would do the most to rein in the problem."

Knoepfler, who has long studied the dubious clinics, described yesterday's hearing as a "positive development." He added, 

"I just don’t know how much concrete action will come out of it and when."

Chronicle reporter Allday wrote,

"The state has come under increasing pressure by stem cell experts to tamp down on the booming consumer industry in recent years, but almost no action has been taken. Wednesday’s meeting in Sacramento, attended by a few dozen scientists, patient advocates and stem cell providers, was largely informational, and medical board representatives repeatedly noted that they have limited authority over the industry.

"But they also acknowledged concerns that 'some providers are deceiving patients and placing them at risk,' said Dr. Randy Hawkins, co-chair of the stem cell task force organized by the California Medical Board."

Also testifying was the president of the state stem cell agency, Maria Millan. Here is a link to an item earlier this week on Millan's presentation.  

Here are links to a presentation by Mehrdad Abedi of UC Davis, a specialist in bone marrow transplantation,  on biologics regulation of stem cells and to a presentation by Charity Dean, assistant director of the State Department of Public Health.

Update on California's $72 Million Bet on a Diabetes Cure: Gene Editing Holds Promise

Viacyte video

A San Diego stem cell firm fueled by $72 million from the state of California this week announced an "important step" in its search for a diabetes cure in collaboration with a Massachusetts gene-editing enterprise.

The California business is ViaCyte, Inc., a privately held company that has received more funding from the California stem cell agency than any other business. 

It ranks 9th on the list of all recipients of cash from the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. The ranking places it ahead of such highly regarded research institutions as Salk in La Jolla and Gladstone in San Francisco.

The East Coast firm is CRISPR Therapeutics, AG, a publicly traded firm that aims at "developing transformative gene-based medicines for serious human diseases."

CRISPR and Viacyte announced on Tuesday that their research is now showing that ViaCyte's "CyT49 pluripotent stem cell line, which has been shown to be amenable to efficient scaling and differentiation, can be successfully edited with CRISPR. The CyT49 pluripotent stem cell line is currently being used to generate islet progenitors for clinical trials."

Paul Laikind, CEO of ViaCyte, said in a news release that the latest news brings the firms "potentially one step closer to a transformational therapy for patients with insulin-requiring diabetes through the development of an immune-evasive gene-edited version of our technology."

Laikind described the gene editing result as "an important step" in achieving "yet another first, the development of an immune-evasive cell replacement therapy as a potential cure for type one diabetes."

In 2017, CIRM gave ViaCyte $1.4 million for work on the CyT49 line. Maria Millan, president of CIRM, said at the time,

“Development of an immune-evasive cell therapy would increase the chances of engraftment and durable effect of a cell replacement therapy for diabetes."

Investors were not energized by the CRISPR/ViaCyte announcement. CRISPR's stock price closed at $49.40 today, down from a $49.67 close on Monday, the day prior to the announcement. The 52-week high for the firm is $53.97. The low is $22.22. 

CRISPR and ViaCyte announced their $15 million collaboration a year ago. Here is a 2018 overview of Viacyte by Bradley Fikes of the San Diego Union Tribune.  

'Regulated, Reputable, Reliable:' A California Call for More Regulation of Dubious 'Stem Cell' Clinics

The president of the $3 billion California stem cell agency, Maria Millan, this week is recommending a new approach to state regulation of rogue "stem cell" clinics that are preying on desperate patients.

In a presentation prepared for a meeting Wednesday of the

Maria Millan
CIRM photo

stem cell task force of the State Medical Board, Millan listed standards for patient care, declaring that the field should be "regulated, reputable and reliable."

Millan said patients are being harmed by unproven treatments at clinics in California and elsewhere. The chairman of the board of her agency, Jonathan Thomas, has called the treatments "snake oil." (The agency is formally known as the California Institute for Regenerative Medicine (CIRM).)

A small task force of the State Board is laying the groundwork for additional regulation of the industry, which has grown rapidly in recent years. Estimates are that 1,000 clinics exist across the country with the largest number in California. 

Earlier this year, a measure to set standards for the clinics died in a legislative committee. The board itself initiated its task force more than a year ago. This week is its first public hearing. 

Millan's slide presentation for the meeting did not go into details. But she called for improved informed consent from patients and raised the following considerations:

• Creation of publicly available registries of stem cell treatment options  
• Creation of a method for patients to self-report outcomes or harm from unregulated regenerative medicine treatments 
• Requiring "clear visibility" for patients of the treatment team's credentials
• Creation of a "mechanism for investigating those holding healthcare  licenses suspected of violating professional        standards when providing unproven stem cell interventions,  particularly those outside their scope  of training" 
• Registration of treatments that involve human cellular and tissue products along with a clear distinction between federallly authorized treatments and practice of medicine

The public can file comments on the matter by emailing them to April.Alameda@mbc.ca.gov.  Check here for details on Internet access to the meeting.

$1 Million StemGenex Bankruptcy: Only $300 in the Bank

The tale of a La Jolla firm called StemGenex appears to be winding down with a bankruptcy filing that says it owes more than $1 million and has assets of less than $156,000.

The current state of the "stem cell" enterprise, which is facing a patient lawsuit and federal scrutiny, was disclosed this week in the Los Angeles Times and on the blog of UC Davis stem cell researcher Paul Knoepfler. 

Knoepfler has followed the firm for years. In his posting Wednesday, he said the company's bankruptcy filing shows that it owes money to its landlord, some former employees, some of its attorneys and has only $300 in the bank. 

Yesterday, Michael Hiltzik of the Los Angeles Times, who also has followed the company for some time, wrote, 

"The filing opens a window into the scale of StemGenex’s business. It discloses revenues of more than $8.2 million dating back to Jan. 2, 2017. Based on the firm’s standard fee of about $14,900 per treatment, suggesting it may have had as many as 550 customers over that period; some have said they had more than one treatment, for which they were charged separate fees."

Hiltzik said that company officials could not be reached for comment and that the firm's attorney did not respond to a query. The company's web site no longer shows a phone number and identifies the firm as only an "educational stem cell resource."

Hiltzik reported that the lead attorney in the patient class action lawsuit says he will continue to press the company, including physicians formerly associated with it. 

A task force of California's state Medical Board next Wednesday is scheduled to begin hearings in Sacramento on possible regulations dealing with operations of dubious stem cell clinics and physicians associated with them.   

Meeting Delays and the California Stem Cell Agency: A Matter of Many Millions of Dollars

For the second time in two months, the governing board of the $3 billion California stem cell agency has postponed important meetings which had been expected to deal with its final research awards and its declining finances. 

The latest postponement involved a Sept. 25 meeting. On the table would have been redirection of tens of millions of dollars and the question of financing awards already approved by the agency's reviewers.

Last month, an Aug. 22 session involving major awards was  cancelled. As of today, the next meeting of the agency's board will not come until Oct. 31.

The governing board of the agency, known formally as the California Institute for Regenerative Medicine (CIRM), has before it far more reviewer-recommended awards than it can fund. Agency officials hoped that funds received from cancelled research projects would help fill the gap.

CIRM is financed with $3 billion in state bonds but has no source of significant cash beyond that. It expects to run out of money for new awards -- most likely by the end of next month -- depending on how it deals with the applications in its award pipeline. Those decisions are now likely to be made at the meeting currently scheduled for Oct. 31. 

Queried about the reason for delaying this month's meeting, Maria Bonneville, executive director of the board,  replied, 

"There were some scheduling issues and, as you know, getting the whole board together isn’t easy. (The) soonest I could get a quorum was Oct 31."

CIRM's future depends on a proposed, $5.5 billion ballot measure in November 2020 that would allow it to continue at the pace of the last 14 years. The agency also has been engaged for some time in an effort to raise privately more than $200 million to bridge the funding gap between now and the 2020 election. 

No specific progress has been publicly announced concerning that effort. However, the financial plight of the agency has received more public attention in recent months. That attention may have generated the loosening of the purse strings of some potential donors. 

The agency also may well have made a pitch to California Gov. Gavin Newsom for some sort of interim funding, possibly payable back with 2020 bond proceeds. Newsom was an important supporter of the agency in 2004-05 and engineered a $17 million package to lure its then headquarters to San Francisco when he was mayor of that city.

$5.5 Billion Stem Cell Ballot Measure: California Backers Taking First Formal Step This Month

CIRM graphic

Backers of a California ballot initiative to provide $5.5 billion more for the state's cash-strapped stem cell agency say they will take their first official step by the end of this month. 

That's when they will submit the proposed measure to California election officials and trigger a many-months-long process. The effort is aimed at ensuring that the nearly 15-year-old research effort survives in a meaningful way beyond next year.

The stem cell agency, officially known as the California Institute for Regenerative Medicine (CIRM), expects to  run out of money for new awards as early as late October.  It has already cut off grant applications except for a joint sickle cell effort involving the National Institutes of Health. 

Robert Klein, a Palo Alto real estate investment banker, and his stem cell advocacy group, Americans for Cures, are leading the way on the initiative. Melissa King, executive director of the organization, told the California Stem Cell Report last week that the wording of the initiative is still being crafted.

King said, however, that she expected the measure to be submitted to the California secretary of state before October. She said that one area still being drafted involves providing assistance for low income patients and their families in rural areas who do not have the wherewithal to travel to and participate in clinical trials.  

The initiative filing will trigger a lengthy process to gather the  633,212 signatures of registered voters necessary to qualify the  proposal for November 2020 ballot. Gathering those signatures is a task performed by specialized firms. It could cost something in the neighborhood of $5 million or more, which Klein will have to raise on his own.

Many more signatures than the minimum are gathered because significant numbers of the signatures are commonly determined not be valid.

The ultimate deadline for qualification is June 25 of next year, 131 days before the Nov. 3 election. But the signatures will have to be submitted well before then.

The stem cell agency was created in 2004, also by a ballot initiative, with $3 billion in state bond funding. The new initiative will likewise use bond funding, which roughly doubles the cost to taxpayers because of interest expense on the borrowed cash.

The 2004 ballot campaign was supported by Hollywood stars and Nobel Prize-winning scientists. It generated grand expectations that stem cell therapies were right around the corner. While CIRM is currently involved in 56 clinical trials, it has yet to back a therapy that is widely available. Clinical trials are the last step before a medical treatment is approved for widespread use and have a high failure rate. 

Klein led the campaign in 2004 and became the first board chairman of the agency. Klein has been gathering information, statistics and support for the effort at his Palo Alto offices. 

In June, he told the California Stem Cell Report:

"This medical revolution holds the promise of restoring health and quality of life for many of California’s individuals and families suffering from chronic disease and injury.

"However, the last tactical mile to bring this broad spectrum of therapies to patients will require more funding and the thoughtful support of California’s public as the human trials and discoveries are refined and tested, overcome numerous obstacles or complications, and ultimately serve to improve the life and reduce the suffering of every one of us."

Google to Halt Advertising by Dubious Stem Cell Clinics, Cites 'Bad Actors'

Google says it is cracking down on advertising by rogue "stem cell" clinics, which it characterized as a rising tide of "bad actors" who are fleecing patients yearning for cures. 

The announcement came Friday and was quickly picked up by the Washington Post and then numerous other outlets, ranging from Yahoo to the MIT Technology Review. 

Google's move, which takes effect next month, would seem to add impetus to a growing cry for more and faster regulation of the dubious clinics by state and federal regulators. Both the Food and Drug Administration and California have been slow to act although the problem has been known for years. (See here, here and here.)

Injuries, blindness and deaths have been reported globally as the result of the so-called stem cell treatments. No assurances exist that the substances being used are, in fact, stem cells. 

The MIT article by Antonio Regalado noted that Google hauls in more than $110 billion annually in advertising revenue. The first sentence of his piece said, 

"After brazenly taking ad money from health-care scammers, Google is finally saying no to ads for unproven stem-cell treatments."

A UC Davis researcher, Paul Knoepfler, a national leader and pioneer in documenting the reach of the rogue clinics, said on his blog,

"I see the new policy by Google as a positive step and support them taking it. Perhaps some mainstream media outlets will follow suit and also adopt policies whereby they do not run these risky biomedical ads."

He also noted, 

 "These ads and certain particularly risky clinics also are a real threat to the legitimate stem cell and gene therapy fields."

Deepak Srivastava, president of the International Society for Stem Cell Research and head of the Gladstone Institutes in San Francisco, said in a statement, 

“Google’s new policy banning advertising for speculative medicines is a much-needed and welcome step to curb the marketing of unscrupulous medical products such as unproven stem cell therapies.”

The California State Medical Board has scheduled a Sept. 18 hearing into the clinics with an eye to strengthening regulation of treatments at the clinics. 

California Regulators Fleshing Out Details of Hearing on Regulation of Rogue Stem Cell Clinics

California state regulators have posted the line-up for a meeting later this month to deal with rogue stem cell clinics that peddle "snake oil" treatments that have led to injury and financial loss.

The meeting comes as Google announced this week that it is cracking down on advertising involving the dubious clinics. Also this week, the president of the largest group of stem cell researchers in the the world warned of the dangers of unproven treatments. 

Deepak Srivastava, president of the Goldstone Institutes in San Francisco and leader of the International Society for Stem Cell Research, said the promises of the largely unregulated clinics "aren’t true--they’re propagated by people wanting to make money off of a desperate and unsuspecting or unknowing public."

The state Medical Board scheduled its meeting for Sept. 18 in Sacramento as a precursor to possible regulation of the activities of medical professionals at the clinic.

Scheduled to testify are Maria Millan, president of the $3 billion state stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM), and Mehrdad Abedi of UC Davis, a physician, cancer specialist and stem cell researcher. 

Abedi is a key figure in UC Davis' Alpha Clinic, which is designed to coordinate and sharpen the focus of clinical stem cell research and treatment. 

Also scheduled to appear are representatives of the State Department of Public Health. The meeting is scheduled to be available via the Internet. The public can attend and comment at the session. 

The medical board said earlier that another session may be scheduled later this fall. Recommendations for regulations could come to the full medical board in January. See here for more details on the board's plans.

New Warning on Shady Stem Cell Clinics that Prey on Desperate Patients; California Hearing Coming Up

The head of the largest organization of stem cell scientists in the world this week spoke out about rogue stem cell clinics that are fleecing and endangering desperate patients. 

Deepak Srivastava
Gladstone photo

Deepak Srivastava, president of the International Society for Stem Cell Research and president of the Gladstone Institutes in San Francisco, said advertisements and pseudo news articles are promising cures for everything from autism to cerebral palsy.

"The claims simply aren’t true--they’re propagated by people wanting to make money off of a desperate and unsuspecting or unknowing public," Srivastava wrote on the web site of the Scientific American.

The headline on his article said, 

"Don’t Believe Everything You Hear about Stem Cells

"The science is progressing rapidly, but bad actors have co-opted stem cells’ hope and promise by preying on unsuspecting patients and their families"

The piece comes as California is preparing to take another step in regulation of the clinics, which have burgeoned across the nation.  Estimates are that the number of clinics exceeds 1,000 with the California having the largest share. 

The state Medical Board has scheduled a hearing on the clinics Sept. 18. The head of the state's $3 billion stem cell agency, Maria Millan, is slated to testify among others. Members of the public may testify as well. The Sacramento hearing will be broadcast on the Internet. 

(About eight hours after this item was published, the Medical Board board posted its agenda for the meeting.)

UC Davis stem cell scientist Paul Knoepfler and Leigh Turner of the University of Minnesota were the first to chronicle the scope of the dubious clinics. Knoepfler wrote this week about a follow-up study that he has published that showed that regulators have a whack-a-mole problem. 

Knoepfler said that his study "indicates that stem cell clinics are in general a fairly rapidly-changing type of business and many disappear or change over a few years. This makes overseeing this clinic industry harder for (regulators)." 

Both state stem cell agency and the international stem cell  group, which has more than 4,000 members in 60 countries,  provide information aimed at helping patients separate legitimate stem cell activities from bogus ones. Here is a link to the ISSCR advice. Here is a link the state stem cell agency's information. 

Kaiser Healthline: California's Stem Cell Program Short on Cash and Cures

An overview by Kaiser Healthline of California's nearly 15-year-old stem cell research program received attention in California and nationally last month. 

"Despite Failed Promises, Stem Cell Advocates Again Want Taxpayers To Pony Up Billions" said the headline on the article by Ana Ibarra.

Her piece carried both positive and negative comments on the performance of the $3 billion agency, which is running out of cash for new awards. The enterprise hopes voters will approve in November 2020 another $5.5 billion to continue its work.

The article quoted Marcy Darnovsky, executive director of the Berkeley-based Center for Genetics and Society, a longtime critic of the agency, which was created through a ballot initiative campaign in 2004. 

Darnovsky said that if the agency, known formally as the California Institute for Regenerative Medicine (CIRM), is measured against the campaign promises, “then CIRM has been a flop.”  

The agency, however, pointed to its 56 clinical trials, along with the stories of patients who have benefitted from that research, ranging from children who are alive today as the result of experimental treatment to spinal cord injury victims who are seeing their lives improve. 

Ibarra's article was picked up nationally by Salon. Politico noted it in its California newsletter.  The Sacramento Bee, the only daily newspaper in the state capital, published it as well.  

Webinar on Navigating FDA Stem Cell and Regenerative Regulations

Confused about federal regulation of stem cell therapies? That is the question being asked this morning by a Washington, D.C., law firm that plans to try to provide answers later this month.

The firm, Buchanan Ingersoll & Rooney, said it will stage a webinar on Sept. 17 to explain Food and Drug Administration "regulations and enforcement, and how stem cell stakeholders (pharma/biotech companies, healthcare providers) can best comply."

Fees for the session range from $287 to $487. More information can be found here.