The Case of the FDA's $330,000 Stem Cell Pigs

Judy Roberson at podium, Bob Klein, former chairman of the California stem cell agency at left, Claire Pomeroy, former
UC Davis vice chancellor and agency director at right. UC Davis photo

Judy Roberson is a registered nurse from Sacramento, Ca., who has long been active with the California stem cell agency on behalf of patients with Huntington's disease. She lost her husband to the always fatal, inherited brain disease, and members of her family are at risk.

Roberson appeared before the governing board of the $3 billion California Institute for Regenerative Medicine (CIRM), as the agency is formally known, earlier this month to applaud its efforts and those of its CEO, Randy Mills, to persuade the federal Food and Drug Administration to ease its regulation of proposed stem cell therapies. Here is the text of her statement. 

"The Northern California Huntington's disease (HD)  advocacy community says BRAVO to President Randy Mills for his editorial directed at the FDA, "Give Us Our Cures."

"Over 40 HD advocates joined the CIRM Stem Cell Champion campaign in April, promoted by Kevin McCormack (the agency's director of communications), in the hopes that pressure from affected families will prompt the FDA to become open to stem cell therapies and allow the increased risks that naturally go along with new therapies.

"For people with Huntington's disease, which is 100 percent fatal and has zero therapies, we are willing to take on more risk since we're dying anyway.

"The FDA has delayed the fully enrolled, CIRM funded, first-in-human clinical trial using adult stem cells at UC Davis with Drs. Vicki Wheelock and Jan Nolta. The NIH RAC committee enthusiastically approved their novel therapeutic clinical trial. Then the FDA asked for additional animal studies, this time with three pigs at a cost of over $330,000 plus two years of additional research; costs will approach $1 million.

"One HD family from New York has funded one of the pigs, but this gap in funding has shelved this promising research!

"Devastated patients and their families see this add-on research requirement as a delay from the FDA, which means that this fully enrolled trial, with 24 patients who meet today's criteria will progress and may not qualify in two to four years even if this project later receives FDA approval to begin a phase one trial. FDA delays are killing us!

"We need a new FDA 2.0 because doing NOTHING is doing harm!"

California's Battle for Easing Regulation of Stem Cells Attracts Global Notice

Highlights
CIRM CEO Mills mentioned
FDA regulation/Regrow co-mingled
A tale of dubious stem cell treatments

California's $3 billion, 11-year-old effort to produce a stem cell therapy -- largely ignored by the mainstream media -- broke into global cyberspace today in a reasonably significant way.

The agency was featured in a piece on Buzzfeed, an online news operation that has chalked up more than 173 million unique visitors worldwide in the last 30 days.

The article by Dan Vergano focused on the efforts by the California Institute for Regenerative Medicine or CIRM, as the agency is formally known, and others to persuade the FDA to ease up on regulations so that stem cell therapies can be more quickly developed.

Vergano wrote,

"Despite a decade of scientific hype, progress has been slow in proving that these new treatments actually work. Some scientists are particularly frustrated with the slow pace of FDA review. In a Fox News op-ed published last month, for example, C. Randal Mills, the head of the prestigious California Institute for Regenerative Medicine (CIRM), called for the federal government to loosen its safety rules, promising “medical breakthroughs” for arthritis, back pain, and diabetes."

Mills has focused his efforts since last year on FDA regulation. But his campaign is being co-mingled in the media with the Regrow Act, an industry effort that the agency has not taken a position on.

Paul Knoepfler, a UC Davis stem cell researcher, also recently brought FDA regulation and Regrow together in a piece in the San Francisco Chronicle recently. Vergano interviewed Knoepfler for the Buzzfeed article,

"'We have been telling people to cut down the stem cell hype, and then we turn around and have this talk about miracles and beautiful medicine....Wishful thinking here could have a whole slew of dangerous consequences.' Most worrisome, (Knoepfler) said, is that desperately ill patients looking cures might end up with tumors instead."

Jim Gass, NYTimes photo by Carlos Moreno

One such case was chronicled this week by New York Times reporter Gina Kolata. Her hair-raising story told the tale of patient Jim Gass, a 66-year-old lawyer from San Diego. The article began,

"The surgeon gasped when he opened up his patient and saw what was in his spine. It was a huge mass, filling the entire part of the man’s lower spinal column.

"'The entire thing was filled with bloody tissue, and as I started to take pieces, it started to bleed,' said Dr. John Chi, the director of Neurosurgical Spine Cancer at Brigham and Women’s Hospital in Boston. 'It was stuck to everything around it.'"

"He added, 'I had never seen anything like it.'"

Stem Cells, Long Odds and the 'Invisible Hand of Hype'

The headline on the California story pretty much told it all: "Stem Cells: Where Science, Hope and Hype Meet."

It could have added that it is also a meeting place for Big Pharma, Big Academia and Big Politics.

All of those yeasty ingredients are embodied in the $3 billion California stem cell agency, which is plugging away at developing a therapy promised to voters 11 years ago during a $36 million ballot campaign..

The headline appeared on the KQED Web site, a public television and radio outlet in San Francisco. The city, coincidentally, is where the world's largest aggregation of stem cell researchers, the International Society for Stem Cell Research (ISSCR), is meeting today. The conference is also just across the San Francisco Bay from Oakland, where the stem cell agency is headquartered.

Danielle Venton wrote the article for KQED. She covered a bit of the history of the California Institute for Regenerative Medicine or CIRM, as the agency is formally known. She noted that the agency is now participating in 16 clinical trials, although it has yet to chalk up production of a commercial therapy.

Venton wrote,

"(T)he frustration many voters feel about CIRM may have more to do with the problematic way researchers, institutional communicators and the media talk about scientific progress in general, and stem cells in particular, than it does with the agency’s performance.

Timothy Caulfield

"'There has always been this high-stakes, extreme rhetoric around stem cells,' says Timothy Caulfield, who teaches science and health policy at the University of Alberta. Caulfield says because stem cell research was so embattled, many spoke of its promise in hyperbolic terms.

"'People had to make bold statements about the future of stem cells in order to counteract those that wanted to have strict laws to stop it. So you have to say, ‘This is going to save lives. This is going to cure a variety of diseases.’ Right from the beginning, the late ’90s, you have that language appearing in the popular press.”  

Venton reported that the international scientists' group, the ISSCR, is "trying to tone things down" with new guidelines about how to talk about stem cell research and its impact. She said the effort "may be facing long odds." She quoted Caulfield as saying,

“It’s really the invisible hand of hype. In most cases these pressures are largely unconscious — whether you’re talking about the media, the researchers, the institutions or the funding agencies.”

Stem Cells and the FDA: California's Lobbying for Easier Approval Triggers Opposition

The $3 billion California stem cell agency came in for some sharp criticism last week in an opinion piece in the San Francisco Chronicle that was written by a UC Davis stem cell researcher who said the agency is engaged in politicking that "risks doing much more harm than good."

Paul Knoepfler, the scientist who also produces "The Niche" stem cell blog,  wrote,

"The California Institute for Regenerative Medicine (CIRM) has become politically active under its new president, C. Randal “Randy” Mills. Mills is lobbying for a radical departure in how the U.S. Food and Drug Administration (FDA) vets experimental stem-cell therapies, but such politicking risks doing much more harm than good."

Knoepfler wrapped in an attack on federal legislation known as Regrow Act. Knoepfler said the proposal would "force the FDA to conditionally approve still experimental stem cell therapies with relatively little data supporting them."

Randy Mills at left, USC photo

Knoepfler reported that Mills said he was not anti-FDA. Knoepfler also noted that the agency has not taken a position on the Regrow Act.  Knoepfler said the FDA effort and the Regrow Act are part of a larger effort to weaken the FDA, which has been under regular criticism for decades for moving too slowly.

The stem cell agency's attempt to modify the way the FDA approaches potential stem cell therapies has been underway for months. The California Stem Cell Report carried news on the subject as long ago as last winter(see here and here.)

Mills initiated the lobbying effort with the FDA after an informal survey of California "stakeholders" showed that they perceived the FDA as the No. 1 obstacle to making stem cell therapies available for widespread use.

In an item on the agency's blog, The Stem Cellar, last December, Mills said that “patients are dying” because the federal government is “being so careful about safety,"

Yesterday, Knoepfler provided some personal insight -- a "backstory" -- on what led him to write about the all of this. His piece was carried on his blog and emphasized that he is a "big backer" of CIRM and still is. Knoepfler has received $2.2 million from CIRM. The CIRM web site has 60 links to mentions of Knoepfler on its Web site, including this one below. 

Knoepfler wrote,

"Most of the stem cell scientists that I have talked to (admittedly with a few notable exceptions that include some long time stem cell advocates and scholars) are opposed to CIRM’s lobbying on this front, but are uncomfortable speaking out."

Uncomfortable is a rather mild word for it based on the fact that the agency holds the key to a $3 billion vault containing the hopes of funding for the entire California stem cell community.

We should note that lobbying is not new to the agency. Its former chairman, Robert Klein, had a passion for it. At one point in 2009, he engineered the hiring of an exceedingly well-connected lobbyist named Tony Podesta for $200,000.  Mills has not ventured into that sort of game, however.

Knoepfler has much more to say on the subject of regulation, the need for it and the impact on patients and the dubious stem cell clinics that seem to be multiplying throughout the nation, despite the fact that the FDA has never approved a stem cell therapy for widespread use.

The California Stem Cell Report will be visiting the matters surrounding these issues and the California stem cell agency. Look for more here during the next week or so.

The California Stem Cell Agency: A Business with Scientists as Subcontractors?

The following commentary was submitted by a grantee of the California Institute for Regenerative Medicine (CIRM) in response to its $15 million award earlier this week to Quintiles, a clinical research organization. The person who wrote the item asked to remain anonymous.

Comments from readers are always welcome on the California Stem Cell Report.  They can either be filed directly on an item by clicking on "post a comment" at the end of each item or by sending them to djensen@californiastemcellreport.com. Here is the commentary on the direction of the stem cell agency.Scientis

"With the funding of Quintiles the last piece of the puzzle falls into place. Randy Mills is very proud of the fact that he transformed the company Osiris, which was research oriented, into a product-oriented company.

"Everything he has done since he became president of CIRM has been strategy to turn it into a product-oriented business.

"From start to finish, Mills is refashioning CIRM as a business. The grant applications have now become 'partnering opportunities,' and the researchers receiving those grants take on a role as subcontractors under  CIRM’s control rather than independent scientists.

"With grantees as partners and subcontractors, the next stage in commercialization is to hire a CRO (contract research organization) to funnel through all of the promising products, taking them out of the grantee’s hands.  Quintiles is a huge organization and the $15 million grant is insignificant for them -- they subcontract for drug companies to run clinical trials.  They have no stem cell experience.

"Subcontracting a CRO is a business strategy to avoid investing in employees and technologies the company needs.  The selection of grantees has also become business-oriented:  CIRM is recruiting companies outside California to fund so they can be added to its corporate profile.  Companies have also become the preferred recipients of CIRM grants, even if they are virtual companies set up by academics for the purpose of obtaining CIRM funding.

"CIRM is morphing into a corporation with centralized control, with the hope that the product pipeline will yield something that makes money.  The question is:  was this the intention of Prop. 71?  If so, why wasn’t it always a corporation?" 

(Editor's note: Prop. 71 is the ballot initiative that created the stem cell agency in 2004.)

California Stem Cell Agency Awards $15 Million to Quintiles to Accelerate Stem Cell Therapies

BERKELEY, Ca. -- The California stem cell agency today awarded $15 million to a North Carolina firm to create an organization that would be a key in making California the global leader in clinical application of stem cell therapies.

The five-year contract will go to Quintiles, a publicly traded firm that specializes in shepherding research through clinical trials and over federal regulatory hurdles. The governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, voted 13-0 to approve the award.

Randy Mills, president of CIRM, said that the plan to create the operation specializing in stem cells in San Diego would speed development of commercial therapies for widespread use. Mills said that effort "may be the best thing that CIRM does." He said it will give the state a "big competitive advantage."

The award requires that Quintiles begin its work on what CIRM calls an "accelerating center" within 45 days. The company expects to base its effort at its existing facility in San Diego.  It said it will scale up employee levels as needed.

Quintiles, headquartered in Research Triangle Park, N.C., is a Fortune 500 firm with 35,000 employees around the world. According to Wikipedia, it is "the largest provider of biopharmaceutical development and commercial outsourcing services."

No stem cell therapies have yet been approved by the Food and Drug Administration. Mills said that novel nature of the therapies means longer review periods of potential therapies that can run into years. Unforeseen issues also surface in the process of testing stem therapies.

Avi Kulkarni, senior vice president of Quintiles, made an unusual public presentation to the CIRM board prior to action by directors. Applicants are almost never allowed to make lengthy public presentations to the board. Three other unidentifed enterprises applied for the award but failed to be recommended by reviewers.

Kulkarni said the goal of his clinical research organization is to improve the probability of success in developing therapies.  He said the stem cell market is poised for "significant growth." But he said the existing models for therapy development do not serve the market well.

Queried  by Anne Marie Duliege, a CIRM board member, Adrian McKemey, also a senior vice president of Quintiles, said that Quintiles has been involved in 10 to 20 clinical trials related to regenerative medicine.  About half of those deal with stem cells, he said.

The board did not discuss concerns by grant reviewers about what they described as Quintiles lack of stem cell experience and their questions involving the top management of CIRM/Quintiles contract.

CIRM grant recipients will be the first beneficiaries of the Quintiles arrangement and will receive discounts on its services that Mills estimated will total $22.5 million.

The Quintiles executives said they expect to be involved with researchers even prior to formally filing applications. They also said Quintiles will assist in bringing additional stem cell efforts into California.

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

(An earlier version of this item, based on incorrect information supplied by a Google search, incorrectly identified Quantiles as headquartered in Colorado.)

Delay on Action on Pay-for-Eggs Legislation in California

Legislation to allow women to be paid when they provide human eggs for research was put off in the state Senate Health Committee this week.

The proposal (AB2531) by Assemblywoman Autumn Burke, D-Inglewood, was not taken up Wednesday as scheduled. Burke asked that the hearing be postponed because two members of the committee were absent, according to Ruff Allison, a spokesperson for her office.  Often that occurs when a measure does not have sufficient support among the members of the committee who are present.

The bill is expected to be taken up in the committee next Wednesday.

$15 Million California Stem Cell Agency Award to Firm Lacking Stem Cell Experience

California's stem cell agency is set to award a key, $15 million contract to a yet to be identified business despite an acknowledgement that the firm "lacks expertise in stem cell clinical and product development."

The five-year award is aimed at helping to make California a world leader in clinical application of stem cell research. It is also linked to the ambitious Alpha Clinic program of the California Institute for Regenerative Medicine (CIRM), as the Oakland-based stem cell agency is known. All CIRM projects initially will receive preferential treatment from the awardee although other outside efforts will be serviced later.

The winning firm is supposed to provide regulatory, operational and consultative services to clinical trial sponsors and "accelerate the regulatory review process and the conduct of high quality clinical trials using stem cell treatments," an agency document said.

The agency's blue-ribbon, out-of-state reviewers gave the firm's application a score of 89 out of 100 during a closed door meeting earlier this spring, according to a presentation prepared for the CIRM board meeting next week. The cut-off line was 85. The other three applicants fell below that level.

A summary of the review published by the agency said,

"The applicant lacks expertise in stem cell clinical and product development."

It stated,

"While there is a lack of stem cell experience in the team, there is a clear commitment and plan to aggregate stem cell expertise and leverage knowledge gained over time to build a center focused on accelerating progression of stem cell projects toward commercialization."

Concern was also expressed about top level management. The summary said,

"Reviewers were not convinced that the proposed center director is sufficiently experienced to direct the CIRM Accelerating Center. However, there is great confidence in the parent organization, which alleviated some of the concerns."

Nonetheless, the reviewers' bottom line indicated that they believed their qualms could be overcome. The summary said,

"Reviewers thought the applicant to be highly capable of delivering the required core services and establishing and sustaining the proposed CIRM Accelerating Center. More importantly, reviewers thought the applicant had given great thought about how best to partner with CIRM to accelerate delivery of stem cell treatments to patients with unmet medical needs by leveraging CIRM Infrastructure Programs and offering innovative and impactful preclinical and clinical development resources to both CIRM and non CIRM-funded investigators."

It is customary for the agency to withhold the names of winning applicants until the board formally ratifies the reviewers' decisions. That will come next Wednesday at the board's public meeting in Berkeley. The names of competing applicants are generally withheld indefinitely by the agency, although the agency has made exceptions.

CIRM reviewers make the de facto decisions on all applications, always behind closed doors. In the agency's 11-year history, the agency's governing board has almost never overridden a positive funding decision by its reviewers.

The reviewers' economic and professional interests, however, are not disclosed publicly. At most state agencies, financial decision-makers are required to disclose their economic interests.

The review process in this case did deviate somewhat from other past practices.  CIRM applicants are normally evaluated based only on a written submission. In this case, however, applicants were permitted to make a 20-minute, face-to-face presentation to reviewers, who then had a chance to ask questions. The agency's regular practice is to withhold the identity of specific reviewers from applicants.

The goal of the "Accelerating Center" is to speed submissions to regulators and assist with clinical trial management, the tests that are conducted before regulators will approve a therapy for widespread public use. The center is also supposed to deal with data management, biostatistical and analytical services.

It will be a key component in the Alpha Clinics Network, a $34 million CIRM project. The Alpha Clinics were pushed forward with the intent of making the Golden State the global leader in stem cells, although the plan was scaled down financially from an original $70 million. (See here and here for more).

Three centers were funded: a combined project involving UCLA and UC Irvine and one each at the City of Hope in Duarte in the Los Angeles area and UC San Diego.

Here is a link to a CIRM presentation made for applicants in the $15 million Accelerating Center round. Here is a link to the CIRM request for applications.

Here is a link to  CIRM's Alpha Clinics Network page with interviews of some of the leaders in the program.

The Human Egg Business: California Lawmakers Consider Paying Women for Research Eggs

If you are interested in the buying and selling of human eggs, you might want to take in a California legislative hearing tomorrow in Sacramento.

Up for action in the state Senate Health Committee is a measure that would permit paying women who provide the eggs if they do so for the purposes of research. The compensation is condemned by some because of the risk of providing the eggs, which requires heavy hormonal stimulation. But legalizing payment is sought by others as an aid to science and  as a matter of equality for women.

Currently women cannot legally be paid in California for providing eggs for research but they can be paid for providing them for fertility purposes. Compensation can range upwards of $50,000, according to an analysis by the Health Committee.

The legislation, AB2531 by Assemblywoman Autumn Burke, D-Inglewood, is sponsored by the fertility industry, which is largely unregulated.  A similar measure was vetoed in 2013 by Gov. Jerry Brown who said,

"Not everything in life is for sale nor should it be."

Burke's bill passed the Assembly April 28 on a 65-3 vote. It now requires full Senate approval before going to the governor.

Opposition to the measure includes Dorothy Roberts, a nationally recognized bioethicist who serves on the research standards group of the California stem cell agency. Also opposed is the Center for Genetics and Society in Berkeley. Marcy Darnovsky, executive director of the group, said this spring, 

"Offering large sums of money encourages women in need to gamble with their health. It’s what bioethicists call 'undue inducement.'"

She noted that the proposed law conflicts with the standards of the California stem cell agency and recommendations of the prestigious National Academy of Sciences.

According to the Senate analysis by Melanie Moreno, Assemblywoman Burke says,

"AB 2531 ensures that women are treated equally to all other research subjects - allowing them to actively evaluate their participation in research studies and be paid for their time, trouble and inconvenience when they do participate. Given that compensation is allowed in 47 other states, and there is no evidence of abuse, it’s time to reconsider our ban, just as New York did." 

For more on paying women for their eggs, see here, here, here and here.

California's Stem Cell Agency Approves Nearly $19 Million Operational Budget

CIRM's budget comparisons. The column in the center reflects estimated final spending for this year.

A key committee of the California stem cell agency today approved an $18.9 million operational budget for its next fiscal year, a nearly 10 percent increase over its current level of spending.

The money will go for such things as salaries, meetings, travel and office supplies at the $3 billion state enterprise. It does not affect the size of its grant program, which has seen the agency hand out roughly $2 billion since 2005.

The increase of 10 percent largely reflects its failure to fill vacant positions at the Oakland-based organization, which has a staff of about 55.

The spending plan was approved unanimously by the Finance Subcommittee of the agency's governing  board with little discussion during a 20-minute teleconference meeting. The budget is expected to be ratified by the full board at its meeting June 15 in Berkeley. It will take effect July 1.

For more on the budget and the agency's unusual 6 percent budget cap, see here and here.

$18.9 Million Spending Plan for California's Stem Cell Agency, Up Nearly 10 Percent

The California stem cell agency is set to approve tomorrow an $18.9 million operational budget for its coming fiscal year to pay for such things as employee salaries and pencils, an increase of nearly 10 percent over its current spending levels.

The budget will come before the Finance Subcommittee of the agency's governing board, which is expected to approve the proposal with few changes. The full board is expected to ratify the budget at its meeting June 15 in Berkeley.

The $3 billion agency operates under 6 percent spending cap imposed by Proposition 71, the ballot measure that created the research effort in 2004. The agency has $180 million (6 percent of the $3 billion) to spend on operational matters over its life, not including research grants. It has run through roughly $105 million.

When the $180 million is gone, that is the end of the money unless the agency can wangle extra cash from the legislature or private sources. Funding for both expenses and research grants is expected to run out in 2020.

CIRM documents show that the 10 percent budget increase over estimated spending for this fiscal year is tied largely to the fact that the agency did not hire as many persons as expected during the current fiscal year.  In the budget proposal, presented by Finance Director Chila Silva-Martin, the agency said it plans to fill out its staff about 55 in the coming year, although retention issues are likely to surface in the next few years because of the lack of funding beyond 2020.

Also playing a role in the bigger budget is a step up in the number of grant review sessions.

The largest expenditure for the fiscal year beginning July 1 -- $13.3 million --  is for salaries and benefits. The figure is up from $11.5 million for the current year. The second largest expense categories come from outside contracting and application reviews and meetings. Both categories have nearly identical totals -- about $1.8 million each. Outside contracting is about the same as last year but reviews and meetings are up from $1.4 million.

The public can listen in on tomorrow's session via a toll-free number. A teleconference site where public comment is possible is located in Irvine. That site is in addition to the main location in Oakland. Full details can be found on the agenda.

California's StemCells, Inc., Flatlines; A Look at the Implications

StemCells, Inc. stock price performance -- Google chart

Highlights
Layoffs, clinical trial closed
Conflicts of interest
Implications for CIRM
Risk and stem cell research
Twenty years ago, StemCells, Inc., was more than riding high. Its stock price (split adjusted) had skyrocketed to $2,160 in January of 1996. Its outlook was ebullient. But times have changed. Today the company's stock plummeted as low as 51 cents after it announced that it was closing its doors.

The company said yesterday that it is possible that its shareholders will wind up with nothing. Its 50 employees will lose their jobs this summer. And its latest clinical trial for spinal cord injury has been cancelled because the results do not merit spending any more money.

The company's sudden shutdown surprised and shocked some, but it also demonstrated the level of risk in stem cell research and offered implications for California's $3 billion stem cell agency, which is pushing aggressively to bring a stem cell therapy to market.

StemCells, Inc., was co-founded by two respected academic stem cell researchers, Irv Weissman of Stanford, and Fred Gage of the Scripps Institute. The Newark, Ca., firm, however, has a checkered history, particularly involving the $3 billion California stem cell agency, which once awarded StemCells, Inc., a record $40 million in 2012.

Conflict-of-interest controversies involving the business and the agency's former president, Alan Trounson, and its first chairman, Robert Klein, have surfaced in past years. Trounson was named to the StemCells, Inc., board seven days after he left the agency. In his first and only lobbying appearance before his former board, Klein was successful in winning approval of a $20 million award to the firm despite the fact that it was rejected twice by the blue-ribbon reviewers of the California Institute for Regenerative Medicine(CIRM), as the agency is formally known. It was the only time that the CIRM board has overridden its reviewers in such a fashion. (For more on Trounson and Klein, see the links at the end of this item.)

In its final days, StemCells, Inc., no longer enjoyed financing from the agency. The last award was terminated in 2014 because of poor results. But the outlook for the firm appeared brighter during the past 12 months when its stock climbed to $9.19 and stock analysts were bullish. So how did the company slip into liquidation?

The headline on an item on Barron's by Ben Levisohn said it was a "lesson in biotech risk."

Sam Maddox, writing on the blog on the Web site of the Christopher and Dana Reeve Foundation, which has a special interest in spinal cord injury, commented on the firm's final clinical trial,

"So what happened? You can read the full, depressing press release here. The gist of it is that yes, there was a measured effect of the stem cell injections but the 'magnitude' of effect over time did not trend well enough to spend more money running the trial." 

Larry Goldstein of UC San Diego told STAT reporter Meghana Keshavan,

“Biotech is like prospecting for gold — only a small fraction of companies make it through the gauntlet. Disappointing clinical trial results happen all the time. … You can’t get too alarmed when one thing, such as StemCells Inc., fails.”

One longtime observer of the stem cell world said the company's failure indicated that the state stem cell agency should be wary of  cozy engagement with industry, citing the profit imperatives that drive companies. The observer, who must remain anonymous, told the California Stem Cell Report,

"Academic institutions at least do not exist at the whims of investors, they can manage risk of failure (it happens all the time), and grant money goes much further."

UC Davis stem cell scientist Paul Knoepfler, writing on his blog The Niche, said the company's demise was "sad." He added,

 "A fair question today is how we should now process (the agency's) sizable investment in (the firm). Is there anything that can be learned from it for the agency and the field?"

Irv Weissman, who was on the StemCells, Inc., board at the end, said in a statement reported by the San Francisco Chronicle by Victoria Colliver,

“Given the collective strength of past data with these cells, we sincerely hope others will pick up the many questions we have about the variability of results seen in the Pathway Study (dealing with spinal cord injury).” 

And the California stem cell agency released this comment from Kevin McCormack, its senior director of communications:

"It’s always disappointing when a company that has been trying to pioneer treatments for diseases such as Alzheimer’s or conditions like spinal cord injury fails. We know how hard everyone at the company worked to develop treatments addressing conditions that right now have no viable alternatives. It is the nature of science that not every experiment will work yet even in failure we can learn a lot, and it’s our hope that the lessons learned from StemCells, Inc.'s work will help inform other researchers and ultimately lead to effective therapies." 

Here are excerpts and links to some previous articles dealing with StemCells, Inc., and the California stem cell agency.

Wednesday, September 05, 2012

StemCells, Inc., Wins Another $20 Million From California Stem Cell Agency

Following a second impassioned pitch by its former chairman, Robert Klein, the governing board of the California stem cell agency approved a $20 million award to a financially strapped biotech firm, StemCells, Inc., of Newark, Ca.

Thursday, September 06, 2012

Arm-twisting and Emotion: Stem Cell Directors Move to Reform Appeals on Multimillon Dollar Grants

Frustrated with politicking, “arm-twisting,” lobbying and “emotionally charged presentations,” the governing board of the $3 billion California stem cell agency today approved short-term changes in its grant appeal process and ordered up a study to prepare long-term reforms.

Monday, September 10, 2012

California Stem Cell Firsts: From Emotional Appeals to $40 Million Awards

During the last few months, the $3 billion California stem cell agency, which is approaching its eight-year anniversary, has chalked up a number of important firsts.

Wednesday, October 17, 2012

Los Angeles Times: StemCells, Inc., Award 'Redolent of Cronyism'

The Los Angeles Times this morning carried a column about the “charmed relationship” between StemCells, Inc., its “powerful friends” and the $3 billion California stem cell agency.

Friday, April 05, 2013

StemCells, Inc., Rejects $20 Million from California Stem Cell Agency

When does a financially struggling biotech company turn down a $20 million forgiveable loan?

Thursday, April 11, 2013

StemCells, Inc., Nails Down Controversial, $19 Million Award from California Stem Cell Agency

The stock price of StemCells, Inc., price today jumped as much as 9 percent after the company disclosed it had finally concluded an agreement with the California stem cell agency for a $19.3 million forgivable loan for research twice rejected by the agency's scientific reviewers.

Sunday, May 05, 2013

Cash and Favors: Robert Klein Gives $21,630 to the California Stem Cell Agency

A seemingly innocuous $21,630 gift to the California stem cell agency has kicked up new questions about a controversial $20 million research award and generated a wave of special favors for the donor that stretched out to include a gold mining multimillionaire from Canada.

Wednesday, May 15, 2013

Klein, StemCells, Inc., and $31,000 in Consulting Fees for Torres

The Robert Klein-StemCells, Inc., affair has taken another turn with the disclosure that a vice chairman of the California stem cell agency was paid at least $31,000 over a two-year period by Klein and also voted on behalf of Klein's effort to win approval of a $20 million award for StemCells, Inc.

Monday, July 07, 2014

Former CEO of California Stem Cell Agency Named to Board of Firm that Received $19 Million From the Agency

Alan Trounson, the former president of the $3 billion California stem cell agency, today was named to the board of a company that has received $19.4 million from the agency, raising fresh and serious questions about conflicts of interest at the state-funded research program.

Wednesday, July 09, 2014

California Stem Cell Agency Bans Some Communications with its Former President; Conflict of Interest Feared

The California stem cell agency today banned its employees and governing board from communicating with its former president, Alan Trounson, about matters involving StemCells, Inc., which holds a $19.4 million award from the state program.

Friday, July 25, 2014

Los Angeles Times: Flawed Investigation Magnifies California Stem Cell Scandal

The Los Angeles Times is carrying another column excoriating the $3 billion California stem cell agency, and it involves the same set of players, the agency’s former president and a San Francisco area stem cell company.

StemCells, Inc., 'Winding Down' Its Business; Shareholders Could Be Left in Cold

StemCells, Inc., a publicly traded firm that once held close ties to the $3 billion California stem cell agency, this morning said that it was going to close its doors and that its shareholders may not receive a dime in the liquidation.

The announcement was buried deep in a press release focusing largely on the termination of the firm's spinal cord injury trial, which the California company said was not showing sufficient benefit to patients to continue. The news release continued,

"The company also announced that, in light of the decision to terminate the Pathway Study, the company’s available strategic alternatives and its current cash position, the board of directors approved a plan to wind down the company.  As part of this process, the company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.

"As of May 31, 2016, the company had cash and cash equivalents of approximately $5.5 million. The company cannot determine with certainty the amount of any liquidating distribution to its stockholders and it is possible that there will be no liquidating distribution to stockholders. The amount of any cash distributed to its stockholders will depend upon, among other things, the company’s current liquid assets offset by its known and unknown liabilities as well as operating expenses associated with the wind down."

StemCells, Inc., was co-founded by Irv Weissman, a Stanford stem cell researcher. It was the only company to be awarded $40 million in a single round by the California stem cell agency. The awards followed vigorous lobbying by the former chairman of the agency, Bob Klein,

StemCells, Inc., also appointed Alan Trounson to its board just days after he left his post as president of the agency, triggering a controversy about conflicts of interest. 

The California Stem Cell Report will have more on the closure of StemCells, Inc., later.