California Gov. Brown's State Stem Cell Spending Figures

California Gov. Jerry Brown's proposed budget contains numbers for the state's stem cell agency although he can do nothing legally about its spending, even if he wanted to.

That's because the agency was created in such a manner that neither the governor or the legislature can get their fingers on stem cell research dollars. The idea was to protect research from politics. So Prop. 71, the 10,000-word ballot initiative that created the agency, made changes in both the state constitution and state law that gave the California Institute for Regenerative Medicine (CIRM) unique autonomy.

Brown's proposed budget does cast CIRM spending in a different light than seen in the agency's budget presentations. It shows that CIRM spending is expected to rise from $213 million in 2012-13 to $293 million in 2014-15, nearly all of which goes for research awards. The agency has legal authority to tap $300 million a year from money that the state borrows and that goes directly to the agency.

The proposed budget also projects 59.5 employees at the San Francisco-based agency in 2014-15 compared to 56.7 in 2012-13. Projected operating expenses amount to $15.6 million for 2014-15, compared to a $13.8 million in 2012-13. 

Both figures are interesting in light of CIRM's figures that show that its operational budget for the current fiscal year exceeds $17 million. No reason for the discrepancy was immediately available, but we suspect it is probably a case of different methods of accounting or perhaps off-the-mark figures from the stem cell agency to the state Department of Finance, which compiles the state spending plan.

The agency operates under a spending cap of 6 percent of its total expenditures, also imposed by Prop. 71. It will run out of cash for awards in 2017 and is currently trying to devise a way to finance its future operations. Another bond issue, which requires voter approval, has not been ruled out, but most of the discussion focuses on some sort of public-private partnership at a level much diminished from $300 million annually.

While Brown cannot chip away at CIRM spending by the usual state process, the agency does take notice of his desire for sharp-eyed budgeting. A few years ago, the agency cut back on out-of-state travel after Brown announced restrictions for other state agencies.

Knoepfler and Capricor Score Big This Week

Capricor's stock price has soared since Monday.
Chart from Google Finance

With the new year hardly begun, UC Davis stem cell researcher and blogger Paul Knoepfler has fulfilled one of his 10 predictions for the stem cell world in 2014.

On Dec. 29, Knoepfler predicted a “big announcement from Big Pharma” in 2014. He did not have to wait long to add some shine to his crystal ball.

On Monday, he wrote about the news that Johnson&Johnson was pumping $12.5 million into Capricor Therapeutics' stem cell therapy for heart disease. Capricor could see another $325 million from J&J if all goes well in its stage two clinical trial, which is being supported by $20 million from the California stem cell agency.

“I'd call that big money,” Knoepfler wrote. He also noted in his blog he has no financial interest in either company.

Investors liked the news as well. Capricor's stock closed at $7.05 today, more than double its $3.40 close on Friday, the business day just prior to J&J announcement. 

Big Pharma's J&J Buys Into California Stem Cell Therapy Research for Heart Disease

California's $27 million investment involving a Beverly Hills stem cell firm is paying off once again as the business attracted a major, financial vote of confidence from Big Pharma's Johnson&Johnson.

The firm, Capricor Therapeutics, last month received approval for a phase two clinical trial for its heart disease therapy. Yesterday, it announced that the Janssen Biotech arm of Johnson&Johnson was immediately pumping $12.5 million into the product with the potential of $325 million more, depending on the outcome of the phase two trial.

Linda Marban
Capricor photo

John Carroll of Fierce Biotech wrote that the move marked a “rare Big Pharma gamble on a field that is trying hard to mount a comeback.” The California stem cell agency, which is funding the phase two trial, said the news was “heartening”and a represented a “very good start” to the year for Capricor.

Linda Marban, CEO of Capricor, told Fierce Biotech that J&J had been probing Capricor for a year. She said, 

“One of the reasons why I was motivated to work on this deal is because of the statement it makes in the field. It says, OK, somebody very large and powerful is taking a look at this technology and saying there's something there, and that's the most exciting thing for me."

Interest from the “large and powerful” is of major importance not only to Capricor but to the stem cell agency, which runs out of state money for new research grants in 2017. It is slowly trying to develop other sources of revenue, and it has yet to bring a therapy to market despite promises to voters during the 2004 ballot campaign that created the agency. Votes of confidence from Big Pharma will go a long way in encouraging investment in the agency and the stem cell field generally.

Investors indeed were more than encouraged by the yesterday's news, which sent Capricor's stock soaring 48 percent. It closed at $5.06 yesterday, up from $3.40 on Friday. Marban has said the firm hopes to be profitable by 2018.

Johnson&Johnson's investment is not the first tied to a key executive at Capricor, Frank Litvack, who is executive chairman of the firm. Litvack, who unsuccessfully ran in 2011 against Jonathan Thomas for the chairmanship of the stem cell agency, sold Conor MedSystems to J&J for $1.6 billion in 2006.

Bradley Fikes of the San Diego U-T discussed the Capricor research late last month in some detail. One of the phase one trial sites was at Scripps Health. Fikes wrote,

“Mark Athens received Capricor’s treatment on Sept. 25, about a month after having a moderate heart attack. The Encinitas resident was the last treated under Phase 1, said Scripps cardiologist Richard Schatz, who performed the procedure. It will take about six months to know whether the treatment worked, Schatz said.”

Fikes continued,

“'All their previous work showed that the scar got smaller and the muscle tissue around it got more robust,' Schatz said. 'So two things happened: The viable tissue got bigger and the scar got smaller. And that should translate into some sort of clinical benefit down the road.'”

Here are links to the press release from Capricor and other stories in story Genetic Engineering and Biotechnology News and PharmaTimes.

Bloomberg Reports on the WARF hESC Patent Challenge

The California-based challenge to the WARF patents involving hESC research drew national media coverage this week on Bloomberg News.

Susan Decker of Bloomberg described the heart of the matter as a dispute over who profits from stem cell research. She wrote,

“'What we’re asking the government to do is say WARF has no right' to the patent, said Dan Ravicher, executive director Public Patent Foundation in New York, which is handling the challenge for Consumer Watchdog(of Santa Monica, Ca.) 'It’s like the government sent a check to WARF they didn’t deserve.'”

Dan Ravicher and Jeanne Loring at Post Office
when they filed the patent challenge July 17,
2006.  The photo was taken by an anonymous
 woman at the Post Office with Loring's camera. 

The challenge to the patents was filed by Consumer Watchdog and researcher Jeanne Loring of Scripps seven years ago. They contend that the patents are “too similar to earlier research” to be valid and that they hinder scientific research. They also contend that the Myriad decision by the U.S. Supreme Court that limits the right of ownership of human genes should also apply to stem cells. Ravicher successfully argued the Myriad case before the high court.

Decker said the issue is no small matter and involves major developments in medicine. She reported,

“'The next paradigm shift in medicine will be advances in cell therapy -- it’s under way,' said Jason Kolbert, senior biotechnology analyst with Maxim Group LLC in New York. He said pharmaceutical makers such as Teva Pharmaceutical Industries Ltd. (TEVA) of Petach Tikva, Israel, and Pfizer (PFE) Inc. of New York are working with stem-cell researchers on new therapies.”

Decker reported that written arguments from the U.S. Patent Office are scheduled to be delivered Jan. 17 to the federal district court of appeals in Washington, D.C.

Growing Stem Cells and Raising Cash in California

California's nearly 10-year-old effort to develop therapies from stem cells is riding a technology wave that some folks are saying will pick up considerable momentum this year.

That is good news for the state's $3 billion stem cell agency, the California Institute of Regenerative Medicine, which will run out of cash for new grants in 2017 and which is looking for new sources of revenue from the private sector.

The latest outlook for regenerative medicine was posted on re/code, a new technology Web site led by a couple of well-known refugees from the Wall Street Journal, Walt Mossberg and Kara Swisher. One of their writers, James Temple, weighed in with a piece on Jan. 1 about technology forecasts for 2014.

He said “five clear themes emerged” and one involved regenerative medicine. Temple, a former San Francisco Chronicle columnist, quoted James Canton, CEO of the Institute for Global Futures, as saying “major strides” are in the offing for 2014. In an email to Temple, Canton said,

“The most significant trends and breakthroughs in 2014 will be in regenerative medicine: The use of human stem cells to grow new organs, repair tissues (and) heal patients with numerous cardiovascular and autoimmune diseases.”

Another one of Temple's “futurists,” David Houle, author of “The Shift Age,” said that “sometime between now and 2020, 'our replacement parts will be superior to the parts we are born with.'”

Temple yesterday looked back to 2013 via a report by the National Venture Capital Association and Thomson Reuters. It said that the biotech industry accounted for 42 out of 82 venture-backed initial public offereings last year. The figure was five times more than the biotech sector offerings in the last five years.

Temple's pieces followed other stem cell forecasts from UC Davis researcher and blogger Paul Knoepfler, who is also optimistic. Knoepfler even predicted a “big announcement from Big Pharma” on stem cells or regenerative medicine.

Whether the forecasts are correct or whether the IPO trend will continue is a bit beside the point for the stem cell agency. What they can profit from is the fact that this kind of news generates excitement among investors and among those who might be willing to make a major bet on the Golden State's stem cell agency. Fund-raising becomes easier when the public rhetoric is more than optimistic. The band wagon effect takes hold. The visions of hope that entranced 59 percent of California voters in 2004 when they created the stem cell agency seem much closer to reality.

Catching this wave, however, is no easy matter, and the agency's 29 directors stalled last month when faced with a plan for a new financial future. Whether they can act with dispatch on this issue remains to be seen.

Job Opportunities at the California Stem Cell Agency

The $3 billion California stem cell agency has begun the year looking for several good people to help turn stem cells into cures.

On the top of the list, of course, is the position of president, which pays up to $561,959 annually. The impending vacancy has been known for some time, but the agency recently posted the official job opening on its Web site.

The agency is also looking for a senior medical officer to “manage a portfolio of grants, loans and contracts primarily focused on IND enabling and clinical development projects.” This is a key position that requires an M.D. or Ph.D. in biomedical science and substantial experience. The job pays up to $232,891.

Newly open is the position of communications manager for the agency's Web site and social media efforts, which are the chief public faces of the agency. Amy Adams held the position for several years, but has returned to Stanford to help with their science PR efforts. That position has a top salary of $136,306.

Additionally open is the job of grants management officer, who supervises management of the agency grants. Amy Lewis has left the post to become deputy to the chairman of the agency for public finance and governance. The top salary for the position is $153,316. Helping out the grants management officer will be a new grants management specialist with a top salary of $99,887.

The agency currently has only 57 employees to oversee its research portfolio and to initiate new rounds of awards for research. Additional employment information can be found here.

Golden State Milestone: Stem Cell Agency Announces its First Phase Two Clinical Trial

The California stem cell agency today scored a first with the announcement that one of its projects – a heart disease therapy -- has now advanced to a phase two clinical trial after successfully completing a phase one safety trial.

In a press release, Jonathan Thomas, chairman of the $3 billion research effort, hailed the Allstar trial by Capricor Therapeutics, Inc., of Beverly Hills. He declared,

"This is a highly significant announcement for us at CIRM as it's the first time we have funded a therapy into a Phase 2 clinical trial.

"Heart disease claims around 600,000 American lives every year, so clearly there is a huge need for new approaches and more effective therapies. We are hopeful this is the first of many treatments to turn the tide against this disease, and that this will be the first of many projects we are funding to get to a Phase 2 trial."

The adult stem cell therapy “uses unrelated donor-derived stem cells, called cardiosphere-derived cells, that are then infused into a patient’s artery with the aim of reducing scarring caused by heart attacks,” CIRM said.

Capricor Therapeutics, which has its roots in Cedars-Sinai in Los Angeles, describes itself as as “a diversified heart failure biotechnology company.” It came into being last summer as the result of the merger of Capricor and Niles Therapeutics. The company has benefited from about $27 million in support from the stem cell agency, including $6.9 million for early work by one of its founders Eduardo Marbán at Cedars-Sinai.

The company's stock price closed at $2.48 today, down 17 cents. Its 52-week range is from $2.48 to $2.65.

The firm's CEO, Linda Marbán, said the move into phase two was a “giant leap” for the firm and the heart therapy field.

The executive chairman of the firm is Frank Litvack, a heart surgeon who was the only other candidate for chairmanship of the stem cell agency when Thomas won the job in 2011.

The announcement today is a milestone for the stem cell agency, which is aggressively seeking results that will help to generate financial support after 2017, when its current state funding runs out.

The CIRM news release said,

“The next phase will involve an estimated 300 patients who have had heart attacks, and they will be evaluated in a double-blind, randomized, placebo-controlled trial.  This will be further broken down into two groups: one will include patients 30-90 days post attack, the second will be 91 days to one year after the incident.”

The phase two trial is to determine the therapy's effectiveness and further study its safety. If successful, it can move into a phase three trial to confirm its effectiveness, monitor side effects, compare it to common treatments and collect information that will allow the drug or treatment to be used safely.

Here is a CIRM video in which Eduardo Marbán discusses some of the issues involved in the therapy. Here is a link to a 2011 presentation to the CIRM governing board about the early research – a presentation that generated some excitement on the board.

Cost-saving Stem Cell Cuts Puzzle California Scientists

Jeanne Loring, the head of the Scripps stem cell program, reflected last week on the move by the $3 billion California stem cell agency to scuttle a program that she and other scientists believe is critical to the research effort.

Writing on ipscell.com, she discussed the effort to save the “shared” labs program at 17 institutions around the state. Continuation of the program was axed by directors last week in a cost-saving move. The agency is down to its last $600 million or so, and the governing board was feeling the pressure last week of having to deal with competing interests.

The board has 29 members, but only six in attendance could vote on the program because of the board's longstanding conflict-of-interest problems. Four approved the recommendation by CIRM staff and its Scientific Advisory Board to halt the lab program. That was all it took – the votes of four directors out of 29.

Loring and 11 other scientists attended last week's board meeting in an unsuccessful effort to the save the labs. She later wrote,

“We are back home now, but still puzzled about why CIRM would destroy one of its most successful programs.  The irony is that the board would like to continue to support training.  The training is done in the shared labs.  There are no more courses without the shared labs. 

“We aren’t giving up; we’re just taking some time to think.  Meanwhile, the positive side:  we did an amazing thing:  we are normally very competitive with each other, but on Wednesday we came together from all over California to support a single cause that is dear to our hearts.  That will remain a high point for me, even though I also feel a profound sense of loss.”

Bad Link Repaired

A bad link in the "$61 Million" item has been fixed, thanks to an anonymous reader who called it to our attention. The link is to the list of all the applications in that round.

Wish List on Criteria for New President of $3 Billion California Stem Cell Agency

Directors of the $3 billion California stem cell agency today moved closer to possibly selecting a non-scientist as the new president of the nine-year-old research enterprise.

On a unanimous voice vote with no discussion, they approved criteria that did not make it mandatory that a scientist fill the position being vacated by Alan Trounson, a noted IVF researcher who is returning to Australia.

Instead, the governing board decided that candidates should have “experience with and personal commitment to medical and scientific research including familiarity with stem cell research.”

In terms of academic credentials, the criteria state that the new president have either or both an M.D. or Ph.D. degree or “equivalent industry experience or similar body of knowledge developed in professional roles.”

The criteria that was approved was not available to the public today on the CIRM Web site prior to board action. It had been altered on Tuesday night from an earlier version that was posted on the Web site.

Here is the text of what appear to be the only alterations (all additions) in the new criteria.

• "Comfort working in the public sector, including an awareness of the need to comply with the laws that govern them, such as transparency, conflict of interest, and public accountability laws." 
• "Experience dealing with, and commitment to, diversity and gender equality in the workplace."

It is ironic that the addition of the need for awareness of the need for transparency was added but the document was not available to the public prior to board approval.

CIRM Chairman Jonathan Thomas said yesterday that the agency is on verge of signing a contract with a search firm, Korn Ferry, to help in finding the new president. Directors have been emphatic about the need for speed in finding the new president.

Trounson has agreed to stay on for an unspecified period, but he could leave at any point. If he leaves before a new president is chosen, presumably Ellen Feigal, senior vice president at the agency, would pick up his duties temporarily, as she did earlier this year for three months.

She is also likely to be a candidate for the top spot, and if she is not selected after serving again on an interim basis, she might well decide to look for opportunities elsewhere.

California Stem Cell Agency Board Quits for the Day

The governing board of the California stem cell agency adjourned its two-day meeting in Los Angeles at 2:40 p.m. PST today. We will have an item coming up shortly on approval of the criteria for selection of the new president. The board approved a revised criteria that was not available to the public prior to board action. It is unclear whether any of the changes were substantive.

Stem Cell Agency Identifies Grant Recipients

The California stem cell agency has posted its press release on this week's meeting of its governing board. The press release includes the identities of the grant recipients. All of the recipients are affiliated with institutions represented on the CIRM board. Here is a link to the press release.

$61 Million Approved for Stem Cell Clinical Trials

Directors of the California stem cell agency today handed out $61 million in its ambitious disease team program that is designed to push stem cell research into clinical trials.

Action on the six awards followed yesterday's move by the board to set aside $200 million to beef up its efforts for stage one and two clinical trials. The agency is focusing ever more intently on commercializing its research.

The $3 billion program is expected to run out of cash for new grants in 2017. Its efforts to develop a new stream of funding depend a great deal on showing results that resonate with the public and possible funding sources.

This grant round was originally budgeted for $100 million, but directors today were loath to approve additional funding. They noted that the agency is now living an era of financial limits.

Today's awards are aimed at cancer (three grants), sickle cell anemia, macular degeneration and severe airway obstruction. Size of the awards ranges from $20 million to $4.4 million. Terms range up to four years.

The agency did not immediately release the names of the winners, in keeping with its policy of secrecy until after the board votes. However, the names of the applicants could be determined by a knowledgeable person searching articles in the various fields. A CIRM news release is expected shortly with the names of the researchers and institutions. (Here is a link to the press release. All of the recipients are employed at institutions represented on the governing board.)

Thirteen applications, including one from a business, were considered by reviewers.

Here are links to the information provided by CIRM staff on the grant applications: summaries of the grant reviews, staff justification for funding tier two applications, Power Point presentations to be made to directors on the applications, including the range of scores on individual applications. However, the range of scores on the rejected applications was not provided.

Stem Cell Board Nixes $13.4 Million to Help Cure Cartilage Disorders

Directors of the California stem cell agency today rejected a $13.4 million proposal that would have been the first disease team research that it has backed that would deal with cartilage disorders.

The project would have built on earlier research funded by CIRM. The agency staff cited work at UC Davis  by Kyriacos Athanasiou and at Scripps by Peter Schultz. Funding of the application was supported by the CIRM staff, which did not identify the applicant.

However,  the governing board, however, went along, on a 10-1 vote, with arguments by Director Jeff Sheehy and others that the agency had finite resources and had to make difficult decisions. He noted that many alternative treatments exist for cartilage problems. Sheehy said,

"We are here to make progress on serious diseases and conditions."  

Former Chairman Robert Klein, in an unusual appearance as a member of the public, urged approval of the grant. He said that it would address conditions "very prevalent in the older population."  Klein told the board that the research would be a "very important milestone that will help you get more money in the future."

While Klein did not mention it, older persons participate in elections to a much greater degree than younger persons. They would be an important group in winning support for another bond issue to fund CIRM, which runs out of cash for new grants in 2017.

$13.9 Million Approved for Sickle Cell Research at UCLA

The California stem cell agency today effectively approved a $13.9 million grant involving UCLA to develop stem cell gene therapy for sickle cell anemia.

CIRM directors acted on a staff recommendation to place the grant in a category that is automatically approved by the board.

(Here is a press release that was issued later by UCLA. The investigator is Donald Kohn.)

CIRM Directors Reject $16 Million Eye Research Application

Directors of the California stem cell agency today rejected a $16 million application from Cedars-Sinai for research involving retinitis pigmentosa.

The action came on a split vote despite a personal appearance by the principal investigator, Kent Small, and a patient advocate.

CIRM staff had recommended rejecting the grant because the agency is funding a number of other eye research projects. The vote was 7-4 to approve the staff recommendation.

Small and Clive Svendsen, also of Cedars-Sinai, noted that other diseases have many grants from CIRM and have not been subjected to the same sort of objection. They noted that the eye is a particularly good target for stem cell therapy compared to other areas of the body.

$4.4 Million Grant Approved for Severe Airway Obstruction

The governing board of the California stem cell agency today effectively approved a $4.4 million grant for research involving severe airway obstruction.

The board approved a staff recommendation to place the grant in a category that the board automatically votes to fund. Names of the applicant and employer have not been released by the agency.

Disease Team Applications Under Discussion

The $100 million disease team round applications are under discussion currently at today's meeting of the governing board of the California stem cell agency.

CIRM Chairman Jonathan Thomas outlined the appeal process prior to the discussion and cautioned rejected applicants in the audience that the board is not the first avenue of appeals.

The board has revised its appeal process in the last year to discourage appeals directly to the board.  Over the last couple of years, the appeals have often involved emotional presentations by patient advocates seeking to support applications.

Nonetheless, under state law, any person has a right to address the board on any subject.

CIRM Board Meeting Begins in Los Angeles

Directors of the California stem cell agency opened their meeting at 9:08 a.m. PST today with a presentation on the annual audit.

Live Coverage Upcoming of CIRM Board Meeting: Presidential Selection, $100 Million in Grants on Table

The California Stem Cell Report will provide live coverage of today's meeting of the governing board of the $3 billion California stem cell agency beginning at 9 a.m. PST.

Directors are scheduled to approve criteria for selection of a new president and award roughly $100 million in their ambitious disease team program, which is aimed at pushing stem cell research closer to the marketplace.

Here is a link to the agenda, which has background material on most of the items.