Tuesday, October 25, 2005

Chronicle Primer on Stem Royalty Issue

Reporter Bernadette Tansey of the San Francisco Chronicle produced a primer on the royalty tax law issue affecting the California stem cell agency. Here are a few excerpts.

"A state would be barred from using tax-exempt bonds to build a sewage treatment system tailored to the needs of a manufacturing plant in an area where few other ratepayers need such service.

"To guard against such selective private boons, the IRS looks not only at who is benefiting from the bond money but also at who is repaying the state bond debt. If private business involvement is too high on both counts, the IRS withholds tax-exempt bond status.

"The question is whether these rules could raise any barriers for the stem cell institute, whose grants can be sought by private biomedical firms as well as private research institutions and state-funded universities. The grants to businesses might not pose a problem by themselves, unless the state also repays the bonds with a significant level of revenue coming back from the businesses."

Proposal for a California Stem Cell Venture Fund

How does the Golden State of California get a return on its $6 billion investment in stem cell research? Certainly the question of the month. Two separate hearings involving the issue, including one session today in Sacramento, are scheduled for the final six days of October.

Now comes a suggestion that the state create a venture fund with a single investor (the state) so that all the proceeds from stem cell investments flow back to the state.

"It seems a lot simpler than some of the other proposals put forth," says David J. Pyrce, who operates Bear Creek Advisors, a California life science consulting firm.

Pyrce made his suggestion in an email to the California Stem Cell Report. He pointed to Maryland which has a venture capital fund that has invested $24 million since 1994 and generated $48 million.

Here is how Pyrce thinks the California Stem Cell Venture Fund might operate:

"1. The State of California creates a for-profit investment fund, with a commitment of $3 billion.
"2. This fund makes investments in stem cell based research efforts.
"3. In exchange for that investment, the fund establishes an ownership position in that research.
"4. This is commonly done in academia. When a pharmaceutical company invests in research efforts of an academic, it is called
sponsored-research.
"5. From that point forward, the fund will own a percentage of any products resulting from that funded research.
"6. The administrative process of this investment vehicle is also quite simple, typically run with an organization of less than 10
people."

Such a proposal may well require changes in the law that created the California stem cell agency. But a vehicle for those changes, SCA13, is before the California State Senate, should this concept attract interest.

Monday, October 24, 2005

"Big-headed?" -- Stem Cell Perspective from South Korea

Last week, South Korea announced plans for a Stem Cell Hub that would have operations in California. Here is a comment from Digital Chosun, a Korean news outlet on the Web.

"It is a precious accomplishment for our country's bioengineering brains, who immersed themselves in research and sacrificed their private lives to the extent of being sometimes portrayed as an army.

"We are one step ahead: there is no need to get big-headed. For cell cloning technology to be used in clinical treatment, we need the technology to grow stem cells into particular organ tissues, and there we lag behind the U.S. and Britain. The California state government, spurred by the Hwang team's success in cloning somatic cells, is pouring W3 trillion (US$3 billion) over 10 years into bioengineering. Britain, where bioengineering started much earlier, is also a strong contender. "

"The Right to Be Cured, Quickly"

Reporter Ralph Brave of The Sacramento News and Review examined the performance of the California stem cell agency recently. His piece was heavy on science and short on firm conclusions about whether the agency was fulfilling the promise of the campaign.

Here are a couple of excerpts:

"The tension between the hope for cures embodied in California’s big stem-cell adventure and the scientific challenges in meeting those hopes is almost palpable at every stem-cell meeting and conference. The lectures from most scientists almost always include a proviso that stem-cell therapies or cures are a decade or more away. But there is clearly pressure building to find stem-cell cures rapidly, and there’s at least one proposal to move toward the first human clinical trials next year."

"No matter one’s view on the issues involved, this has to stand as some of the most unusual language in any constitution anywhere in the world: a constitutional right to a particular line of scientific research, directly tied to a prospect for cures that are to come 'as speedily as possible.' In a way, it’s an expression of the ultimate California dream: the right to be cured, quickly."

Sunday, October 23, 2005

Will California Produce Biology's Holy Grail?

Some of California's top business leaders are going to get a fast sell on the future of stem cell research next Monday, assuming that the three men and one woman selected to make the presentation follow the program.

The event is the 2005 State of the State Conference sponsored by the Milken Institute, which says that 20 percent of the attendees have been chairmen, president or CEOs of their companies. Fifty percent hold the title of CO, chairman, president, vice president, CIO, partner or director.

The event includes a one-hour panel on "Stem Cell Innovation: The Next Frontier Economy?" The program notes for the session say:

"It is hoped that this holy grail of modern biology will yield not only treatments and cures for things like spinal cord injuries, Parkinson’s and Alzheimer’s, but maintain California’s global leadership in technology – one of its key economic drivers. Several states are following California’s lead, but the U.K., South Korea, Singapore and other countries have been providing a research-rich environment. Among the issues this panel will tackle: Where are we in terms of research capacity relative to other countries? How far away are we from developing therapeutic products? What are realistic expectations for commercial success? Will this translate into high-quality jobs? How will the state receive a return on its investment? "

Charged with exploring the topic are Robert Klein, chairman of CIRM;Peter Mountford, CEO, Stem Cell Sciences Ltd.; Thomas Okarma, president and CEO, Geron Corp., and Susan Hackwood, executive director, California Council on Science and Technology; professor, electrical engineering, University of California, Riverside.

Registration for the Los Angeles event is $495. For more information, see here.

California Stem Cell Calendar

(This calendar appears late Sunday or each Monday on the California Stem Cell Report. If you would like an event placed on the calendar, please send it to djensen@californiastemcellreport.com.)

October

No meeting of the CIRM Oversight Committee is scheduled for October.

Oct. 24

10 a.m. - 6 p.m. -- CIRM Scientific and Medical Accountability Standards Working Group, Luxe Hotel Sunset Blvd., 11461 Sunset Blvd., Sunset Ballroom, Los Angeles, discussion of regulations, "ESCRO" membership, banking requirements and compensation.

Oct. 25

2 p.m. - 6 p.m. -- CIRM Intellectual Property Task Force, Sacramento Convention Center, Room 103, 1400 J St., Sacramento, consideration of the IP report prepared by the California Council on Science and Technology. For more on this, see "Report Negative," "Report Released," "Who Benefits."

Oct. 28

9 a.m. -12 noon (estimated) – CIRM Facilities Working Group, Grand Hyatt at Union Square, Ballroom East, 345 Stockton St., San Francisco, consideration of bylaws, review procedures for facilities grants. See www.cirm.ca.gov for full agenda.

Oct. 31


9:30 a.m.-2 p.m. -- Informational hearing on IP issues and CIRM, State Senate and Assembly Health Committees, Hiram Johnson State Building, Milton Marks Conference Center Auditiorium 455 Golden Gate Ave., San Francisco. For more on this subject, see links in item above.
9:35 a.m.-10:35 a.m. -- "Stem Cell Innovation: The Next Frontier Economy," State of the State Conference, sponsored by the Milken Institute, Beverly Hilton Hotel, Los Angeles, registration $495, see full program here.

November

Nov. 2

8:30 a.m.-5:30 p.m. (estimated) – CIRM Oversight Committee meeting, Moscone Center South, Room 304, San Francisco, subjects include conflict of interest code, formation of strategic planning subcommittee, IP report, guidelines for embryonic stem cell research, training grants policy and criteria. See http://www.cirm.ca.gov/ for full agenda.

Nov. 17

8:30 a.m. -- Alameda Superior Court hearing on lawsuit against CIRM, Department 512, Hayward. For more on this see "Apricot City Showdown."

December

Dec. 6
Oversight Committee, City of Hope, Duarte. No agenda available. No teleconferencing available.

For a national and international calendar of scientific stem cell conferences, see this one prepared the International Society for Stem Cell Research.

Web Mystery

We have had a bit of mystery involving the Internet during the past several weeks. As a result, we have not had the best links to some documents posted by the California stem cell agency. For some unknown reason, we and others in the same geographic area here in Mexico have not been able to access the CIRM site or the California home page and the governor's home page. On the other hand, we have been able to access other California state agencies, such as the Department of Justice. An American information tech specialist, who researched the issue, tells us the problem lies somewhere in the Web as opposed to difficulties locally with our computers or ISP. We have queried the folks handling the California web pages, seeking their assistance as well as CIRM. The point being: Bear with us until the problem is resolved, and we can once again bring you timely and direct links to CIRM documents.

Wednesday, October 19, 2005

California and the South Korean Stem Cell Network

The California stem cell agency says it is not going to participate at this point in South Korea's plans for a worldwide stem cell consortium. Nonetheless, the network expects to have facilities in San Francisco and ties with organizations in California.

Reporter Carl Hall of the San Francisco Chronicle reported the developments in a story today that said, "South Korea is moving to establish an international consortium to generate hundreds of stem cell lines from human embryos using controversial cloning technology, possibly the boldest foray yet in the sizzling new field known as regenerative medicine."

The network is being created by stem cell superstar Woo Suk Hwang and his colleagues. The Chronicle quoted Hwang as saying California would be the best place for its US facility because of its stem cell-friendly climate.

Hall wrote that Stanford and UC San Francisco were recruited "but so far have declined, citing reservations about the project's legal and bioethical framework."

"The biggest issues include figuring out how to protect the health of research participants, set out financing and intellectual property rules, and ensure that any stem cell treatments will be affordable," Hall said.

As for CIRM, Hall wrote, it "has opted against becoming a formal part of the network. The California program's chairman, Robert Klein, traveled to Seoul to appear today with Hwang and his colleagues, but a spokeswoman said Klein's appearance was intended mainly as an endorsement of 'the science the South Korean government has made such a priority,' rather than as an endorsement of the network itself.

"Zach Hall, president of the California institute, said it's unclear how successful the South Korean venture might be given all the uncertainties.

"Hwang has been 'quite open,' Hall said, 'and we're delighted with that and want to encourage that. But whether this world stem cell hub will be helpful remains to be seen. We don't know enough about it to have any sort of opinion on it ... and at this time we felt it was premature for us to affiliate with them in any formal way.'"

The Chronicle said that women in California are likely to be recruited to donate human eggs. Hall noted that the governor recently vetoed a measure (SB18) by Sen. Deborah Ortiz, D-Sacramento, to add additional protection for egg donors.

Pacific Fertility Center, a San Francisco infertility clinic, will work with the network to procure eggs, according to the Chronicle.

"One of the first research projects is expected to be financed by grants from a Santa Barbara patient-advocacy organization called the Children's Neurobiological Solutions Foundation, which promotes research on pediatric brain disease," Hall said.

"'Our foundation wants to be a founding partner of this world stem cell effort,'" said Shane Smith, Bay Area-based science director for the foundation."

Soothing Anxieties in the Stem Cell Sector

The California stem cell agency has taken pretty much of a get-along, go-along position in its relationships with the stem cell industry and existing academic and research procedures.

That is not likely to change much as CIRM begins formally to establish the rules which will help determine who gets the potentially huge profits that could be generated from the $3 billion in research it intends to finance.

The business executives on the agency's board understand that the corporate world likes predictability. If a business is to undertake development of a stem cell therapy, it wants to eliminate as much risk as possible. Development of a product could cost hundreds of millions of dollars or more over years. Novel royalty or compensation arrangements introduce uncertainty into the possible return on investment. Uncertainly creates fear. Fear creates an unwillingness to even begin development of a new product.

CIRM plans to hold a hearing Monday in Sacramento on intellectual property issues. The focus will be on a report released earlier this year by the California Council on Science and Technology. Many on CIRM's Oversight Committee will find comfort in much of the council's work. For example, this advice on private investment:

"Encourage private investors to invest in further research and development of new technologies resulting from CIRM-funded research. Venture capital investment plays a critical role in the development of IP after initial research and before late-stage R&D which is more generally funded by private industry."

As it resists efforts to impose new IP rules, CIRM is also likely to cite the council's conclusion on share-the-wealth proposals:

"Royalty revenue sharing may have negative impacts on both non-profit and for-profit grantees. Revenue sharing imposed by CIRM on its non-profit grantees may act as a disincentive to invest the effort and cost necessary to secure patent protection, find an appropriate licensee, and ultimately transfer a promising technology to the commercial sector for the development of treatments and drugs that prove beneficial to the general public. In addition, for non-profit grantees, a royalty sharing requirement could, depending on how it is administered, prevent them from maximizing the impact of CIRM funding by using it to leverage federal funds, since federal funding rules require them to use net royalties for education and research purposes. Royalty revenue sharing imposed on for-profit grantees could discourage their participation in CIRM funding altogether."

Earlier this year, the CIRM staff analyzed a May version of SCA13. Many of the staff's critical remarks no longer apply because of changes made in the legislation. But some of its comments are likely to surface again in one form or another.

"Prop. 71 was carefully written with the involvement of three separate law firms and based upon case law research to avoid the constant litigation that would be likely should SCA 13 become law as written," the staff report said.

"The legal battles could paralyze the institute’s mission for years to come. While well-intentioned, these provisions could have a host of unfortunate and unintended consequences, including discouraging industry from involvement with the Institute.

"Private industry is a critical partner in developing scientific discoveries into safe and effective drugs and treatments that benefit the public. If an affordable drug-pricing requirement or a revenue sharing requirement were to discourage industry from participating in technology transfer, it would be to the detriment of the public health and well being."

Later, stem cell chairman Robert Klein commented that SCA13 could "create major legal problems and obstacles for the Institute in the development of therapies."

A venture capitalist once told told us that VCs decide to make an investment when their greed overwhelms their fear. We can expect CIRM to sooth anxieties in the private sector as it establishes its rules for sharing the stem cell wealth.

Tuesday, October 18, 2005

The Higher the Risk, the Higher the Reward?

Think of the state of California as a venture capitalist putting up seed money for risky endeavors. In the private sector, venture capitalists enjoy enormous rates of return. But they also lose lots on enterprises that fail.

Acting through the California stem cell agency, the state is serving as something of a venture capitalist, providing funds for research that private sector is unwilling to pay for because of risk. In the private sector, the higher the risk is, the higher the potential reward. The cost to state will be $6 billion. What should be the payoff to the state?

That is the question at the heart of the intellectual property discussions involving CIRM and a proposed constitutional change that could be on the ballot next June.

California's most influential state legislator on stem cell issues is the lead author on the measure, SCA13. Sen. Deborah Ortiz, D-Sacramento, proposed the legislation earlier this year. It already has cleared three committees in the Senate with bipartisan support and with no negative votes. It is now on the Senate floor.

The proposal includes language to tighten accountability and openness of the stem cell agency. But for our purposes today we are going to deal only with the issues of return on California's investment.

In its current form, SCA13 requires CIRM "to ensure that treatments, therapies, products, and services resulting from technologies and inventions derived from grants awarded are accessible and affordable to low-income residents, including those residents eligible for state and county-funded health care programs," according to a Senate staff analysis.

Ortiz removed more sweeping language after discussions with Robert Klein, chairman of the stem cell agency, which remains opposed to the ballot measure, largely on the grounds that its requirements would be so costly that it would discourage or prevent development of stem cell therapies. (We will have more on CIRM's position later this week.)

She has scheduled hearings for Oct. 31 in San Francisco on intellectual property and stem cell research. CIRM has its own hearing one week from today in Sacramento. Changes in the measure could easily come out of developments at the hearings.

Ortiz, who was a supporter of Prop. 71, has signalled her intent to aggressively pursue avenues that will lead to greater returns to the state than CIRM supports.

After the California Council on Science and Technology told California this summer to lower its expectations about big returns on stem cell research, she said, "As the council notes, there is an expectation that intellectual property policies need to direct a revenue stream to the state. The council also acknowledges that federal tax laws prevent Prop. 71, as written, from delivering on its promise to provide royalties or revenue streams back to the state while using tax-exempt bonds.

“Senate Constitutional Amendment 13, however, would establish a method for providing benefits to the state without jeopardizing the use of tax-exempt bonds. SCA 13 would require that the state’s public health programs have access at affordable, below-market costs to the products, medicines and therapies that eventually will be developed under Prop. 71. California should not have to pay twice for medical therapies that can assist our citizens who suffer from debilitating and life-threatening chronic conditions."

Following the earlier meeting between Klein and Ortiz, she said they both agree that the state should have some sort of return on its investment. She suggested that CIRM should examine "the model used by the International AIDS Vaccine Initiative, which requires entities receiving funding to commit to make vaccines available at reasonable prices and in sufficient supplies."

Klein suggested directing a "portion of the royalty payments negotiated by the ICOC into programs or initiatives to promote access to low cost therapies."

Also opposed to SCA13, according to the Senate analysis, are the Bay Area Science and Innovation Consortium, Bay Area Economic Forum and the Bay Area Council.

Supporting the measure are the California Association for Tax Reform, California Public Interest Research Group, Californians Aware and Common Cause.

Ortiz shelved SCA13 earlier this year when the Senate's Democratic leadership indicated it wanted to focus on the measures currently on the November ballot in California.

Once the election is past, the proposal is expected to clear the Senate and move on the Assembly, where it could be substantially modified by Ortiz.

CIRM staged a late, but major effort last spring to stall the proposal on its merits. But largely not discussed publicly was the potenial impact of another stem cell measure on the ballot in California less than two years after approval of Prop. 71.

SCA13 would likely become a referendum on the conduct of the stem cell agency, attract major attention from the conservative and religious right and become a major distraction from CIRM's primary efforts.

Correction

We incorrectly identified an organization in our Monday item, "Who Gets the Money?" It should have been the Center for Genetics and Society instead of the Center on Policy and Genetics.

Monday, October 17, 2005

Correction

Earlier today, we incorrectly reported that SCA13 had passed the California State Senate and was now in the Assembly. The measure, however, is still awaiting passage in the Senate. The error occurred in an item called "Who Gets the Money?"

CIRM Lawsuit Filings Available

If you are interested in receiving copies of the actual filings last week by the California attorney general and amicus brief in the lawsuit against CIRM, please send a note to djensen@californiastemcellreport.com. We will send them to you promptly.

Who Gets the Money?

Probably the biggest question of the year for the California stem cell agency is: Where's the money?

The second biggest is: Who gets the money?

That is what is at the heart of the intellectual property issue and CIRM. Two major hearings are scheduled for this month on the topic. One is being held by the stem cell agency on Oct. 25 in Sacramento. The other will be conducted by the Health committees of the State Senate and Assembly in San Francisco on Oct. 31.

During the election campaign one year ago, California voters were told to expect billions of dollars in benefits from passage of Proposition 71. A few months ago, a report from the California Council on Science and Technology said, "Get real." Don't expect huge bags of swag anytime soon, the council reported.

But State Sen. Deborah Ortiz, chair of Senate Health Committee, has authored a proposed constitutional amendment that would provide for greater benefits to the state than now proposed by stem cell agency leaders. The measure, SCA13, has already passed the Senate and is before the Assembly. It could be placed on the ballot in June of next year.

Look for folks from the Center on Policy and Genetics, Greenlining and the Foundation for Taxpayer & Consumer Rights to testify at one or both of the hearings. All three have indicated that they differ sharply with CIRM on IP issues.

Later this week we will have more to say on SCA13 and CIRM's position on intellectual property.

At this point, neither of the two hearings has remote access, either on the Web or otherwise. You can find the physical locations of both sessions in the California Stem Cell Calendar below.

Friday, October 14, 2005

Stem Cell Showdown in Apricot City

The stem cell stage is now set for a bit of courtroom drama Nov. 17 at 8:30 a.m. in a community east of San Francisco that was once known as "The Apricot City."

Directing the affair in Department 512 in Hayward will be Superior Court Judge Bonnie Lewman Sabraw, who was Alameda County trial judge of the year in 2001 and who was named to the bench by former Gov. Pete Wilson.

At stake is the existence of the California Institute for Regenerative Medicine. The Life Legal Foundation, which was deeply involved in the Terry Schiavo case, and a couple of conservative groups called People's Advocate and the National Tax Limitation Foundation, want to euthanize the stem cell agency.

Their contention is that CIRM violates the California constitution despite the fact that it was created by a constitutional amendment approved by voters in a process permitted by the constitution. Their suit says that the agency is not under "the exclusive control" of the state government.

California Attorney General Bill Lockyer argued in a brief earlier this week, "The voters' will as expressed through the initiative process is entitled to great deference. Yet the mere pendency of these challenges, even though they are without merit, has effectively prevented the state from marketing the bonds(to fund stem cell research).''

Entering the stage this week was an array of groups that filed an argument supporting the state's position. Prepared by the Los Angeles law firm of Munger, Tolles & Olson, it said, "Given the highly politicized nature of the subject, embryonic stem cell research remains especially vulnerable to shifts in political winds and the political fortunes of particular officials and candidates."

The brief continued, "No one wants to start down a new path of research that shows great promise only to have funding for that research up for grabs every election cycle."

The filing by Munger, whose clients include Warren Buffet, noted that the petitioners had something at stake. For example, Munger said, some of the organizations are engaged in scientific research and, "like other scientific institutions in this country, have benefited from public financial support."

Reporter Terri Somers of the San Diego Union Tribune, in fact, pointed out that the Burnham Institute, the Salk Research Institute, Stanford University and the University of Southern California, which supported the Munger filing, have been selected for CIRM grants worth millions of dollars.

Other supporters include the Christopher Reeve and Michael J. Fox foundations. A complete list can be found in the CIRM press release.

While the friend-of-the-court filing noted that Proposition 71 created CIRM "notwithstanding any other provision of the constitution," its main focus was on the effectiveness and history of the peer review process that has been used at the national and other levels to make grants.

It said, "In the United States, decisions concerning government funding of research proposals have largely been separated from politics. That separation has been achieved by a system that allows political input when establishing broad policy goals, followed by scientific decision-making through the peer review process to determine which specific proposals should be funded to achieve those goals. Peer review ensures that the quality of research proposals is judged by scientific merit and by the likelihood that the research proposal will achieve the goal of improving public health."

We should note that the People's Advocate and National Tax Limitation Foundation are two groups that have supported the virtually unfettered right of the people to the initiative process. It is odd that they now find the voters' will dubious.

Reporter Bernadette Tansey of the San Francisco Chronicle also wrote about this week's filings.

Wednesday, October 12, 2005

Stem Cell Legislation to Rise Again

In California's Capitol, few things are certain – even death and taxes.

Particularly the death of legislation.

Few measures ever truly die, they just are reincarnated in one fashion or another. Such is the case with the stem cell measure (SB18) vetoed recently by our governor. It would have required a performance audit of the California stem cell agency and provided protection for egg donors.

The bill by Sen. Deborah Ortiz, D-Sacramento, cleared the legislature with only two votes against it. But only one vote really counted – Arnold's.

Her office says the measure will rise once more when the legislature returns. Some changes are likely, but the California Institute for Regenerative Medicine cannot rest easy yet.

Low Hanging Fruit vs. Embryonic Stem Cell Research

"Scientists want to be free," according to the New York Times, which reports that the California stem cell agency is going to have to sort through conflicting agendas involving patient groups and scientists as it dispenses billions of dollars in stem cell research funds.

Reporter Nicholas Wade wrote Tuesday about the agency's stem cell conference earlier this month, extensively quoting Zach Hall, CIRM's president.

"Perhaps his most formidable problem is that the public's hopes for immediate success run high," said Wade, "but scientists at the conference warned that many basic problems with human embryonic stem cells remained to be solved - a sign that no therapeutic use of the cells is likely for years. Underlining that caution, few companies are in the cell therapy field and venture capitalists have shown little interest, some speakers complained."

Wade continued, "Because of the pressure for quick progress, several scientists urged Dr. Hall to focus on the 'low hanging fruit,' meaning research with the adult stem cells like the blood-forming cells of the bone marrow. Bone marrow transplantation has been developed into a routine though still hazardous therapy that can now treat eight diseases and could be extended to more, said Dr. Robert S. Negrin, chief of the Stanford blood and marrow transplant program.

"The idea of seeking quick gains from adult stem cells was resisted by some patients' advocates who said the intent of Proposition 71 was to focus on the research with human embryonic stem cells that the federal government cannot support.

"The new institute will have to sort through other conflicting agendas. Scientists want to be free to follow long-term goals, and some voiced the fear that patients' advocates would seek to force short-term solutions or channel the most money to the diseases with the most sufferers."

Wade did not really discuss the role of the Oversight Committee in making decisions about research strategy. Nor did he spend much time on the role of stem cell chairman Robert Klein. His name was only mentioned once in the piece in the New York Times, which has rarely reported on CIRM. Chalk up the Times' attention to the staging of the international stem cell conference, which was partially aimed at generating this sort of article, among other many other things.

Tuesday, October 11, 2005

Villains, Big Pharma and Stem Cell Research

California political life has some perennial villains. For example, Big Oil. You can't go wrong attacking Big Oil, goes the general political wisdom.

A newcomer to that pantheon is Big Pharma. While the phrase does not exactly roll off your tongue, Big Pharma has major problems with its public image. And now Big Pharma is being invoked in connection with the California stem cell agency. At issue is who stands to benefit from $3 billion in taxpayer-financed stem cell research.

Here is how the matter was defined in an op-ed piece Monday in the San Jose Mercury News written by Jerry Flanagan, health care policy director for the Foundation for Taxpayer and Consumer Rights, and Deborah Burger, president of the California Nurses Association:

"The proposal to apply federal ownership rules to California stem-cell research raises key questions: Do taxpayers who are funding stem-cell research deserve a return on their investment? Should private industry be allowed to charge the public whatever price it chooses to access medical treatments whose discovery and development the public already paid for?"

The article gave this example of past performance involving Big Pharma: "The rights to the blockbuster glaucoma drug Xalatan, developed with $4 million in taxpayer grants at Columbia University, were sold to Pharmacia Corp. for less than $150,000. Pharmacia made $507 million on Xalatan in 1999 alone, charging U.S. patients $50 a bottle for ingredients that cost only pennies."

Flanagan and Burger also noted that there are some signs that Californians should be wary of the intellectual property position of the California stem cell agency.

"At least 13 of the 16 applicants to receive the first round of Proposition 71 grants have already fostered deep ties with the drug and biotech industries," they wrote. "For example:

•"One university grant recipient, the University of California-San Francisco, has staff who serve on pharmaceutical company boards and the stem-cell oversight board (which approves grant applications), receives funding from one of the world's largest drug manufacturers (Bristol-Myers Squibb), and has a research center on campus paid for by biotech giant Genentech.

•"At least eight of 11 universities to receive grants have staff serving on the boards of, or are employed by, pharmaceutical and biotech companies such as Amgen, Genentech, Bristol-Myers Squibb and Johnson & Johnson.

•"The private Burnham Institute has four board members with ties to biotech or pharmaceutical companies and its president is a member of the stem-cell oversight board."

Monday, October 10, 2005

The Bee: Stem Cell Conference Wise, But CIRM Leaders Still Bogus on Disclosure

The Sacramento Bee does not find many matters to be pleased about concerning the California stem cell agency.

Editorially it has been been a frequent and vociferous critic. But during the weekend, it wrote approvingly about the $215,000 stem cell conference earlier this month. That was the one with the secret budget that we wrote about earlier.

The Bee called the session "one of the wisest expenditures we've seen yet from this agency." The conference "exposed the challenges researchers face in studying embryonic stem cells, which have the ability to develop into any tissue and organ of the body."

As an example, The Bee wrote, "Say that scientists find a stem cell cure for Type 1 diabetes, which afflicts 1 million Americans. How do you mass-produce the billions of islet cells needed to treat these people? Should that be a private or public enterprise? If it is private, will only the rich be able to afford it?"

The editorial continued, "Unfortunately, in assembling a series of panel discussions that were broad in scope, conference organizers ignored any discussion of the many ethical quandaries that confront this field. One key question is how research institutes will ensure that women aren't exploited, or put at undue risk, when they donate eggs and embryos for research. Similar concerns surround people who may one day volunteer for experimental - and potentially risky - stem cell therapies.

"At the moment, lawsuits have blocked the stem cell institute from distributing grant money, so these issues may seem premature. They are not. During this period of limbo, institute leaders would be smart to deal with all outstanding concerns about the institute's operations, so they can hit the ground running if and when they have money to spend.

"Speaking of outstanding concerns, it was heartening to hear scientists publicly disclose their business relationships during presentations at the conference. For months, institute leaders have claimed that scientists wouldn't want to serve as advisers if they had to publicly reveal their economic interests. Last week's confab, once again, proved such claims are completely bogus."

Friday, October 07, 2005

“Everything” Targeted in Stem Cell Research

Reporter Edie Lau of The Sacramento Bee had another take on last weekend’s stem cell conference that we missed in our search.

She wrote, “What should California spend its stem cell money on to produce good medicine? Scientists called together over the weekend to give their ideas had, in sum, a short answer: On everything.”

She noted that stem cell research is still in the early stages and that much needs to be done.

She also had this: “Dr. Irving Weissman, director of the Institute for Cancer and Stem Cell Biology and Medicine at Stanford University, said one method for testing cells is by putting them into mice and seeing how the cells behave.

“Weissman acknowledged that the step is, to some minds, objectionable. That's because in creating animals possessing human cells, scientists would be creating human chimeras, calling to mind monsters of Greek mythology. Nevertheless, Weissman said the work is essential, and raised concerns over a bill in Congress that would ban such research.”

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