UC San Francisco and UC Davis Seek Millions for Recruitment of Scientists

LA JOLLA, Ca. -- The University of California at Davis and the University of California at San Francisco are both appealing rejection of multimillion dollar proposals that would help them recruit highly regarded scientists to California.

The proposals were turned down by reviewers for the California stem cell agency.  However, appeal letters were submitted to the board by Arnold Kriegstein, director of the stem cell program at UC San Francisco, and Thomas Vail, chairman of the Department of Orthopedic Surgery at the same institution.

The appeal letter from UC Davis was signed by Frederick Meyers, vice dean of its medical school; Jan Nolta, head of the school's stem cell program, and Diana Farmer, chair of the Department of Surgery.

The letters were not available online at the time of this writing.

Samuelson Resigns from California Stem Cell Agency Board

LA JOLLA, Ca. -- Longtime CIRM Director Joan Samuelson has resigned from her position on the governing board of the $3 billion California stem cell agency, it was announced this morning.

Samuelson has served on the board since its inception in 2004 and has been a strong advocate for potential treatments for Parkinson's Disease. Samuelson also has Parkinson's Disease and has not been able to attend a number of recent meetings.

The vacancy will be filled by State Controller John Chiang, who is soliciting applications and recommendations.

California Stem Cell Directors Open Meeting This Moning

LA JOLLA, Ca. -- Directors of the $3 billion California stem cell agency opened their meeting today at 9:09 a.m. PDT.  It is the first meeting for Randy Mills, the new president of the research program. Alan Trounson, his predecessor, was not at the meeting when it began although he is still an advisor to the agency.

CIRM Chairman Jonathan Thomas welcomed Mills, declaring that he was "passionate about patients."

Check This Web Site Tomorrow for Results of the California Stem Cell Agency Meeting

The California Stem Cell Report will provide live, gavel-to-gavel coverage of tomorrow's session of the governing board of the $3 billion California stem cell agency from the meeting location in La Jolla, Ca.

On the agenda is a $14.3 million award to Asterias Therapeutics to continue the hESC clinical trial begun by Geron. Directors are scheduled to receive an update on CIRM finances. The agency is scheduled to run out of money for new awards in 2017 and is attempting to find new sources of funding.

For those who want to listen to the daylong meeting on the Internet, instructions can be found on the meeting agenda. A live teleconference location is also available in San Francisco. The address can be found also on the agenda.

Results Heralded in Asterias hESC Clinical Trial

Two prominent stem cell patient advocates are hailing as a “giant leap forward” the initial results of a clinical trial involving a human embryonic stem cell therapy for spinal cord injuries.

Their remarks came in the wake of last week's announcement by Asterias Therapeutics of Menlo Park, Ca., that the trial had cleared its first safety hurdle. Asterias picked up the trial from Geron, which began it in 2010. Asterias and its parent, BioTime of Alameda, Ca., purchased Geron's stem cell assets after Geron abandoned the trial in 2011.

Asked for comment on the Asterias announcement, Roman Reed of Fremont, Ca., who was honored for his advocacy work in 2013 by the Genetics Policy Institute, said,

“Having started this groundbreaking research with Roman's Law funding of pioneer Dr. Hans Keirstead, I am extremely excited about the possibility of a paralysis treatment.

“My goal is paralysis cure. This research brings that dream closer to fruition for all of my paralyzed brethren. Onward & Upwards!”

Then California Gov. Schwarzenegger (left) with Don Reed
(center) and Roman Reed at 2007 stem cell agency press
 conference
AP photo

His father, Don Reed, also of Fremont and whose advocacy work along with Roman's led to passage of California's Roman Reed Spinal Cord Injury Research Act, said the search for a spinal injury stem cell therapy dates back some years.

 A major moment came, the elder Reed said “with the famous paralyzed  'rats-that-walked-again'” feature on '60 Minutes,' which made Christopher Reeve say, 'Oh, to be a rat today!' Today, the dream he embodied is a giant leap closer.”

Reeve was an actor who was famous for his screen portrayal of Superman and was paralyzed as the result of a horse-riding accident. He died Oct. 10, 2004, about one month before the California voters created the state's $3 billion stem cell agency.

Roman Reed, who is a candidate for the California state Senate in next week's election, is paralyzed as the result of a football injury to his spine in 1994. He coined the California stem cell agency's motto, “Turning stem cells into cures.”

Asterias is expected to receive a $14.3 million award from the California stem cell agency on Thursday to help continue the trial.

Asterias-Geron hESC Trial and Funding Reported in The Scientist

The Scientist magazine today picked up on the item on the California Stem Cell Report that said that Asterias Therapeutics would receive $14.3 million to continue the human embryonic stem cell trial that was abandoned by Geron.

The Scientist article by Jef Akst was headlined, “Geron hESC Trial to Resume? Nearly three years after Geron shuttered its stem cell program, BioTime receives funding to relaunch a Phase 1 trial for spinal cord injury.”

The brief piece largely cited information contained in our May 22 item. Akst also said that Asterias, a subsidiary of Biotime, and the California stem cell agency, which is expected to provide the cash, declined to comment.

Asterias also has reported successful results from the first phase of the trial. 

Where California's Stem Cell Spending is Going: Less Than a Half-Billion Left

Breakdown of projected spending by the California stem cell agency
CIRM graphic

California's stem cell research effort appears to be down to its last $468 million after nearly 10 years and 630 awards to scientists and their institutions.

Nearly half-a-billion dollars sounds like a lot, but when grant rounds hit $70 million, as is expected in the Alpha stem cell clinic round later this summer, the money vanishes quickly.

A caveat does exist on the $468 million figure. It does not include $409 million for award rounds approved only in concept by the stem cell agency's governing board. The agency has not yet solicited applications for those rounds. Its governing board, at any time, could cancel those proposed rounds.

In 2004, the agency started with $3 billion but really did not get rolling until 2007. Funds for new awards are scheduled to run out sometime in 2017. The agency has been working on plans for future financing, which may be discussed at Thursday's governing board meeting in San Diego. At least the agenda contains an item called “finance update.”

The latest figures on the agency's research spending are contained in a presentation for the meeting by Patricia Olson, executive director of scientific activities and one of the veterans of the agency.

Under current funding plans, the presentation shows that 38 percent of the agency's research funding will go for “development and clinical trials” compared to 15 percent for basic research. Development and clinical trials is defined as “preparation for and conduct of clinical testing of stem cell-based therapeutic candidates, safety and proof- of–concept in humans” and “infrastructure for clinical applications of cell therapies.”

Readers should be aware of some additional caveats on the charts in the presentation. They show $1.869 billion awarded by the agency. However, the CIRM Web site shows $1.784 billion awarded, an $85 million difference.

A presentation chart labeled “future funding” shows $467.9 million potentially available, meaning that no RFAs have been issued in those areas. But another chart apparently based on board decisions last December and called 'future funding approved” shows the same figures plus additional sums for a total of $664.8 million. We are querying the agency concerning the figures.

A separate question late last week generated another perspective on research spending in relation to administrative and other costs. Kevin McCormack, senior director for public communications, replied in an email that the agency is expected to spend $2.746 billion for research and facilities (buildings and laboratories) during its current projected lifetime. He said $180 million is allotted for operational and grant administration expenses. Legal expenses are expected to run at $26.9 million with $12.5 million having been spent through April of this year.

By law, the agency can spend only 6 percent of the amount of the awards for administrative expenses. Legal costs have no cap.

Another $47.1 million has been budgeted for “capitalized interest,” although total interest costs are expected to be in the neighborhood of $3 billion or so. That will be paid by through the state budget. The agency operates on money borrowed by the state (bonds). The interest costs are associated with the bonds.  

$37 Million Slated for California Stem Cell Research

Directors of the California stem cell agency this week are expected to hand out $37 million to businesses and scientists for projects involving human embryonic stem cells(hESC), spinal injury and urinary incontinence.

About $20 million will go to enterprises involved in later stage research. A $14.3 million award is expected to go to Asterias Therapeutics of Menlo Park, Ca., which has purchased the stem cell program that originated with Geron Corp. Asterias plans to move forward with the hESC clinical trial that Geron began amid much ballyhoo. However, Geron abandoned the effort in 2011 for financial reasons. (See here and here.)

A $5.6 million award is expected to go a previous but unidentified grant recipient for work involving HIV/AIDS. (Late today, an anonymous reader said in a comment at the end of this item that the award is for Sangamo Biosciences in Richmond, Ca.)

At their meeting Thursday in San Diego, directors of the agency are also expected to approve $16.2 million to help recruit three out-of-state scientists. The academic recruitment program was created to help California lure star scientists to the Golden State. The awards range from $6.4 million to $4.6 million. Two additional applicants were classified as by reviewers as additional possibilities for funding depending on the druthers of the board. The names of the applicants are being withheld by the agency

The recruitment program was originally budgeted some years ago for $44 million. Twenty-three million dollars was added in 2013. Prior to this week, the awards helped to finance the recruitment of seven scientists.

Information about the $900,000 urinary incontinence award can be found here. 

Next Action on Stem Cell Agency Budget on June 5

Final decisions on the proposed, $18 million operational budget for the California stem cell agency has been delayed until some time in June in order to give the agency 's new president, Randy Mills, time to put his mark on it.

The governing board's Finance Subcommittee has scheduled a meeting for June 5 to re-examine the plan. The panel took a first look at it earlier this month. Following action by the subcommittee, the spending plan will go to the full board. No date has been set for that session.

Details of the new version of the budget are not publicly available. When they are posted on the agenda for the June 5 meeting, they may give some sense of Mills' priorities.

Correction

The "major step forward" item earlier today incorrectly identified the Asterias vice president as Mary Lebkowski. Her correct first name is Jane.

Major Step Forward on hESC Stem Cell Treatment for Spinal Cord Injury

The “first-in-man” clinical trial of a human embryonic stem cell therapy has cleared its first safety hurdle, Asterias Biotherapeutics, Inc., reported yesterday.

The Menlo Park, Ca., firm said the spinal cord injury treatment caused “no serious adverse” events in its phase one safety trial. The therapy was originally developed by Geron Corp., which abandoned the trial in 2011 and sold its stem cell business to Asterias, which is a subsidiary of Biotime, Inc., of Alameda, Ca.

Asterias also said in a press release, 

“In four of the five subjects, serial MRI scans performed throughout the 2-3 year follow-up period indicate that reduced spinal cord cavitation may have occurred and that AST-OPC1 may have had some positive effects in reducing spinal cord tissue deterioration. This effect was seen in the animal model testing of AST-OPC1.”

Jane Lebkowski
Asterias photo

Jane Lebkowski, president of research and development at Asterias, said,

“The safety demonstrated in this trial positions Asterias to start a new phase 1/2a clinical trial in 2014, subject to clearance from the FDA .”

The California stem cell agency appears ready to award $14.3 million to Asterias to assist in that new clinical trial, as reported yesterday by the California Stem Cell Report. The agency also had loaned Geron $25 million for its clinical trial. The money has since been repaid.

(Asked to clarify the genealogy of the Asterias clinical trial, Katy Spink, vice president of Asterias, said in an email,
"AST-OPC1 is the former GRNOPC1.  The results presented by Jane Lebkowski at ASGCT and referred to in (the) press release are from the clinical trial that was started by Geron in 2010.  Slides from that presentation are on our website.  We are unfortunately not at liberty to comment on the question of potential CIRM funding, or on details of our future development plans beyond what is described on our website and in our SEC filings.")

Stephen McKenna, director of the Rehabilitation Trauma Center at the Santa Clara Valley Medical Center, said,

“Spinal cord injury represents a tremendous unmet medical need that not only results in severe disability, but can also significantly shorten the projected lifespan of affected individuals. There are no approved therapies that can repair spinal cord injuries.”

Asterias said 12,000 persons suffer a spinal cord injury each year in the United States and about 1.3 million Americans are estimated to be living with a spinal cord injury.

(An earlier version of this item incorrectly said that Asterias announced the results in a press release today. The press release was dated yesterday. An earlier version also carried an incorrect first name for Jane Lebkowski. The material about the genealogy of the treatment was added shortly after the original version of this item was posted.)

California Stem Cell Agency Expected to Pump $14 Million into Revival of hESC Clinical Trial Dropped by Geron

Geron's abandoned clinical trial for a spinal cord therapy based on human embryonic stem cells appears to be back on again but at a different company and with $14.3 million in help from the California stem cell agency.

An eagle-eyed anonymous reader of the California Stem Cell Report pointed out the upcoming award to Asterias Biotherapeutics/Biotime, which purchased the stem cell operations of Geron Corp. Geron ditched the trial in November 2011 for what it said were financial reasons.

Here is what the reader said in a comment posted on the “Trounson" item that appeared recently on this blog.

“The Strategic Partnership III Award reviews are in: Asterias Biotherapeutics / BioTime will get $14 million to restart spinal cord injury trial with GRNOPC1.”

The reference is to an item on the agenda for the May 29 meeting of the governing board of the $3 billion agency.

The exact title of the application is “A Phase I/IIa Dose Escalation Safety Study of [REDACTED] in Patients with Cervical Sensorimotor Complete Spinal Cord Injury.”

The information provided by the anonymous reader goes beyond what is currently available on the CIRM Web site, and he or she seems to have special knowledge of the nature of the application. That includes the names of the applicants, normally kept secret by CIRM, and the nature of the material involved in the proposal, GRNOPC1.

The staff recommendation is virtually certain to be approved by the CIRM governing board, which rarely rejects such positions.

Another $9.8 million proposal for a spinal cord therapy project was rejected by the staff. The applicants, however, may make an appeal directly to the board on May 29.

CIRM was also involved with the original Geron proposal, which was the first clinical trial for a therapy based on human embryonic stem cells. The stem cell agency loaned the company $25 million only three months before Geron bailed out on the project. It was an unpleasant surprise for the agency and shock to many patients. Geron paid back the loan with interest.

Asterias was headed by Tom Okarma, once the CEO of Geron, and BioTime is headed by Michael West, who founded Geron many years ago.

Our thanks to the anonymous reader for pointing out the information on the award.

(The day following publication of this item, Asterias reported clearing the first safety hurdle on the trial.)

(Okarma left Asterias in April. An earlier version of this item said Okarma was still head of the company.)

Art Caplan on Fake Stem Cell Research: 'Off-the-Rails Syndrome?'

One of the more prominent bioethicists in the nation, Art Caplan, is asking,

“Why so Much Fake, Unduplicable Stem Cell Research?”

Caplan weighed in on Medscape.com today, citing the STAP flap involving Japanese and American researchers as well as a scandal involving a false but widely accepted – for a time -- claim that a Korean scientist had cloned human embryos.

Caplan said,

“Stem cell research seems again and again to go off the rails when it comes to the ethics of research.”

He continued,

“I think there are a couple of reasons why this particular area has gotten itself in so much hot water. One is that there is a relative shortage of funding. Because of the controversial nature of cloning -- getting stem cells from human embryos -- some avenues of funding have dried up, and it puts pressure on people to come up with other ways to try to make human stem cells. With less funding, there is more pressure. Sometimes people cut corners. I think that can lead to trouble.

“Another problem in the stem cell field is that if you can come up with a way to produce human stem cells without sacrificing or cloning embryos from humans, you are going to find yourself being a hero to the world. That is what happened in Japan.”

Caplan said,

“There is a lesson here: Until somebody replicates and until somebody can show that they can also do what has been alleged, there isn't a breakthrough. There is only confirmation and then breakthroughs. I think we have to be a lot more careful -- both in science and in media coverage -- before we start saying, 'Aha -- here is a single study, a single report, a presentation. Now we have shown that something can be done.'”

Caplan said,

“Another major problem in the stem cell field is that the number of people doing research in this area has shrunk. It is obviously of keen interest to come up with regenerative medicine solutions to all kinds of healthcare problems. I think a lot of post-docs and graduate students are saying, "I am not sure that I want to set my career track into a field that is sometimes controversial and where funding may be dipping." That may mean that there are fewer people to watch one another. It is not a big field, so maybe part of the reason that it keeps getting in trouble is less ability to do peer review.”

Our thoughts: There is no doubt some spectacular fraud has surfaced in stem cell research. But the problem of replication within stem cell research may not be entirely out of line with problems elsewhere in science. Los Angeles Times columnist Michael Hiltzik wrote last fall about a study by Amgen that examined 53 “landmark papers” in cancer research and blood biology. Only five could be proved valid, a shocking result, according to Amgen. Similar results were turned up by Bayer in Germany, Hiltzik said.

Additionally, as Caplan notes, the stem cell community is small and the hype is grand. With stupendous expectations come the likelihood that every missed shot – fraudulent or not – becomes an equally stupendous failure that is colored by suspicions of scientific misdeeds. Plus there are truly bogus practitioners at work, charging desperate people large sums for untested and potentially harmful treatments.

The mavens of science, those who control the medical schools and set the standards, may have some responsibility for some of the problems with replication. Writing May 8 on the blog of the Global Biological Standards Institute, scientist Beth Schachter touched on this in a post headlined, 

“What are science trainees learning about reproducibility?”

She asked one Ph.D. student at UC San Francisco what sort of training are he and his fellow students receiving on reproducibility and standards. The response?

“None.”

'Immortal' Stem Cells and Informed Consent in California

The California stem cell agency is looking for some help in connection with a $32 million stem cell banking program to be sure that people who donate tissue understand that their cells will be transformed and made “immortal.”

The agency has issued a $150,000 request for proposals (RFP) for a 12-month study dealing with informed consent matters in the banking effort. The agency's RFP said it is “a unique program because it involves the creation of 9,000 iPS cell lines, from 3,000 individuals” that could increase to 5,000.

The RFP requests a report that will provide “in-depth analysis of donors' current understanding with respect to the informed consent process” and “recommendations for education materials that may improve program performance over time.”

Issues dealing with informed consent and research were highlighted a few years ago in a book, "The Immortal Life of Henrietta Lacks," that was on the New York Times hardcover bestseller list for more than 40 weeks. 

The California stem cell agency's RFP said,

“Unique aspects of the tissue collection for disease modeling awards that is critical for donors to understand include that researchers intend to:
“• Test donors blood and skin samples for infectious disease
“• Transform donor cells and make them into immortal iPSC lines
“• Record the genetic sequence of donor their cells
“• Distribute donor cells and associated medical and genetic information widely
“• Use cells and associated information to develop commercial medical products with no financial compensation to donors.
“In addition, minors and/or individuals with cognitive impairments will be recruited for this research and consent may be obtained from their legal guardian."

The proposed California study is linked to a $4 million segment of its $32 million stem cell banking effort approved in March of 2013. Former CIRM President Alan Trounson said at the time,

“This initiative will provide scientists with access to multiple cell lines that should have much of the genetic variations that represent the variety within any human disease such as Alzheimer’s, heart disease, lung fibrosis and autism.”

The deadline for applications is June 1. Here is a link to a 2010 CIRM report on issues involved in the stem cell banking program, which was only a proposal at the time.

Capricor and California Stem Cell Agency Say All is Well With $27 Million Investment

One recent headline in Forbes magazine read, 

“Stem Cell Therapy To Fix The Heart: A House Of Cards About To Fall?”

Over at the Boston Globe, another story this month said,

 “A provocative new study calls into question the rationale for using stem cells to repair the heart — a much-hyped experimental therapy that grew out of insights from a groundbreaking Boston researcher’s laboratory.”

Eduardo Marban
Cedars-Sinai photo

But it appears that heart stem cell regeneration is like cheese, you might say. There are many different varieties. And in the case of a $27 million investment in heart cell regeneration by the California stem cell agency, all the players say things are just fine with their project.

The state's research effort involves a publicly traded company called Capricor Therapeutics. The Beverly Hills firm and one of its founders. Eduardo Marban, director of the Cedars-Sinai Heart Institute in Los Angeles, received the $27 million from the state stem cell agency.

In the wake of the news reports involving heart stem cell regeneration, the California Stem Cell Report queried both Marban and the stem cell agency. Marban replied within 37 minutes last week. Here is the text of what he had to say in his email.

“All of the critiques have been leveled at competing technologies. Indeed, I have been among the more vocal critics (for example see http://www.tctmd.com/show.aspx?id=124193).

“Although some alarmist headlines have inappropriately questioned all cardiac stem cell work, the issues have to do with only one specific subtype of cardiac stem cell, which is marked by the expression of an antigen called c-kit. This is NOT the cell type being developed by Capricor; in fact, my laboratory has found that c-kit-positive cells play no role in Capricor’s cell product. That product, known as CAP-1002, contains a small fraction (less than 5 percent) of c-kit-positive cells which can be completely removed with no loss in potency. CAP-1002 is believed to work by indirect 'paracrine' mechanisms that differ fundamentally from those postulated for the c-kit-positive cells.

“By way of background, the critiques of c-kit-positive heart cells have come in two forms: first, in concerns expressed by the editors of the Lancet regarding data integrity in the SCIPIO trial; this was conducted by Piero Anversa and colleagues using c-kit-positive cells. Second, a recent Nature paper (attached in case you do not have a copy), of which I am an author, questions the claim that c-kit-positive cells are true cardiac progenitors.

“These concerns in no way undermine Capricor’s technology. In fact, CAP-1002 remains the only heart-derived cell product in commercial development. I am proceeding full speed ahead with mechanistic and translational work on CAP-1002, and Capricor continues to feel bullish about the product, which is now in phase 2 trials (the furthest along of any CIRM-funded project).”

Kevin McCormack, a spokesman for the stem cell agency, also said that Capricor is using a different method and a different stem cell than the one being called into question.

You can hear the May 15 Capricor conference call on its first quarter results here. Its stock price jumped from $6.15 on May 14 to as high as $7.65 during the day May 15. Its 52-week low was $1.15 and its 52-week high $17.15.

(Editor's note: If you would like a copy of the Nature paper that Marban referenced, please send an email to djensen@californiastemcellreport.com.)

Trounson Calls for Closer Ties Between Biotech Industry and Academic Research

Alan Trounson, the departing president of the California stem cell agency, was in Australia earlier this month beating the drum for tighter links between science and industry.

Trounson, a native Australian, said researchers are “starving” in Australia and did not have much good to say either about the amount of the federal research funding in the United States.

According to an account on probonoaustralia, Trounson, who is now working as a senior adviser to the California agency, declared,

"What is hampering our smartness in converting high quality science discoveries to community benefit? Is Australian science research sustainable without the ability to expand beyond the publicly funded institutional base of universities, medical centers and (the national science agency)? Where is our biotech industry? Who spans the (funding) valley of death? There is a distinct scarcity of industry connecting with the Australian medical research community and a lack of venture investment in the biosciences."

He continued, 

“We need to really encourage the very smart academics to become interested in applying their discoveries for the community benefit – universities have to change how they recognize and reward scientists who enter this pathway – not penalize them. 

“It isn’t about number of publications or grants... – these are not the measure for making the innovative contributions needed. They probably handicap the conversion to a more effective system that the community will recognize and endorse. 

“The current federal grant system is broken in the USA...and would not be any better here. Money is trickling down an unsustainable pipeline that fails to encourage developments of use to the community. 

“The system must be fixed despite the inertia that exists even among the majority of scientists. We will have no viable research environment soon if we continue to look away from the problems that are evident and are turning away the smart young scientists.”

Trounson spoke during the 10th anniversary symposium of veski, an Australian group he helped to found. It is designed to foster an “innovation economy.”

Trounson's portrayal of Australian science was not all bleak. He cited major achievements scored by researchers down under. He said,

“We might have cause to be optimistic about the next 20 years! Maybe even expect Australia to have a minister of science driving high tech developments and a strong biotechnology industry employing scientists and medical graduates maturing in universities and research centers.”

Trounson's last day at CIRM is June 30. He is returning to his family in Australia.

CIRM 2.0, Randy Mills and Crystallization

Two California stem cell bloggers, one a UC Davis researcher and another a veteran patient advocate, earlier this month hailed the appointment of biotech industry veteran Randy Mills as the head of the $3 billion stem cell agency.

Scientist Paul Knoepfler, who also considers himself a patient advocate, said, 

“Biotech leader (Randy) Mills (formerly of Osiris) serving as the new CIRM president ushers in a fundamentally new era for CIRM, and so it immediately kicks off CIRM 2.0.”

Knoepfler said that CIRM was originally all about pluripotent stem cells but that has changed.

“The notion of a leader with a primarily for-profit mesenchymal stem cell(MSC)-centered focus at the helm of CIRM would have seemed impossible even just a few years ago. However, a tidal shift just happened. Okay, so it didn’t happen all at once overnight and observers of CIRM could see this trend begin a few years ago, but the appointment of Mills as the new CIRM prez crystallizes this change.”

MSCs can be isolated from fat, bone marrow or placenta and are the hottest type of adult stem cell today with 306 clinical trials.

Knoepfler, who is a recipient of a CIRM grant, continued,

“The CIRM of today and the future is primarily going to be about focused stem cell clinical product development (the main goal of Prop. 71) and raising capital to support that development beyond 2017.”

Patient advocate Don Reed, a longtime follower and supporter of the stem cell agency, said on the Daily Kos,

“My impression? Overwhelmingly positive.”

Reed noted that Mills “worked his way through college in the emergency room, so he has a strong sense of urgency for the work at hand. About himself, he stressed that he was 'patient centered... We are going to work relentlessly for the benefit of the patients and the people of the state of California.'”

Last year, Knoepfler posted a four-part series on mesenchymal stem cells, the stuff Mills developed as CEO of Osiris. The series was based on an interview with Arnold Caplan of Case Western University, the father of mesenchymal stem cells. The four items deal with the science but also touch on FDA regulation and medical tourism. The series begins here.

Knoepfler also carried an item last October on the sale of Prochymal by Osiris to the Australian firm Mesoblast in a $100 million deal. Mills left Osiris two months later for “personal reasons.”

Randy Mills: Stepping into a $3 Billion California Adventure

SAN FRANCISCO – A 42-year-old former business executive from Maryland is expected to slip his spanking new card key into a slot this morning outside of the third-floor offices here of the California stem cell agency.

It will open the door to a $3 billion adventure into scientific research, California politics and government and one of the riskier areas of the biotech industry – one that is also filled with visions of nearly miraculous cures and revolutionary changes in medicine.

Randy Mills
Osiris photo

C. Randal Mills, more commonly known as Randy, begins his first day on the job today as CEO of the state's nearly 10-year-old stem cell research effort, the California Institute for Regenerative Medicine (CIRM). It is an enterprise that has been praised for its contributions to science but now

faces financial extinction unless it develops new sources of funding. The borrowed money that finances the agency's new grants will run out in 2017, leaving CIRM with only the task of winding down existing research.

Mills, the former CEO of Osiris Therapeutics of Maryland, embodies changes already underway at the agency, which is pushing hard to commercialize stem cell research. With the arrival of Mills, the three top executives are all more tied to industry than academia. Ellen Feigal, the No. 2 person at the agency, was with Amgen prior to joining CIRM. Elona Baum, general counsel and vice president for development, was with Genentech.

Mills has given no public clue about whether he is planning major changes at the agency. In a very brief comment April 30, when he was named to the post, he said only that patients were his top priority. In announcing the appointment, CIRM Chairman Jonathan Thomas said Mills will take a “fresh look” at the agency and will “evaluate what we are doing right and what we can do better.”

It is clear that Mills, who has a Ph.D. in drug development from the University of Florida, will bring a definite business mindset to CIRM, which has been dominated by a culture closer to academia than industry. In 2009, he told PharmExec.com,

“When I came to Osiris in 2004, Osiris was what I called Osiris University. It was highly academic, brilliant people doing great science, but there was no commercial focus. That's changed nicely over the last four years....”

The previous two presidents of CIRM, Zach Hall and Alan Trounson, came from largely academic and non-business backgrounds. Mills' career has been spent in business, including an eight-year slog to drive the stem cell product Prochymal into the market. In 2012, Prochymal became the world's first government-approved stem cell drug approved for use on an off-the-shelf basis. That occurred in Canada. However, the drug is currently only available in the United States under special, limited access standards set by the FDA. Prochymal was sold last fall to Mesoblast of Australia in deal that could reach $100 million.

Mills, as might be expected, has remained mum on any personnel changes he may have in mind. He may have something to say about the five positions that were eliminated by Trounson in his proposed budget, which is due to be presented to the CIRM board May 29.

The elimination of the positions did not involve firing any employees. They involved jobs vacated by departures or ones that had not been filled. Nonetheless, the five slots represent nearly 10 percent of the existing 56 employees. Mills may want to have the ability to hire some additional staff on his own in an effort to implement matters he considers important. But any action he might take would be limited by the budget cap imposed by state law on CIRM.

Decisions are likely to come faster under Mills. Trounson was almost fabled for his globe-trotting absences which tended to delay things at CIRM. Under his tenure, CIRM had a host of lingering management problems that were cited in a 2012 performance audit that was required by state law. The agency says it is addressing those deficiencies. Along with faster decisions may come a turn away from consensus-driven action, a slow and cumbersome process that many business executives avoid, believing it is impossible to make everyone happy.

Some of the decisions for Mills could involve as much as $400 million. CIRM has only about $600 million in uncommitted funds. However, that figure does not include board-approved conceptual plans for handing out the $400 million. No RFAs have yet been posted for those rounds. If Mills is looking for new directions or would like to pour more money into an existing effort, such as those aimed at later stage clinical trials with businesses, he could either slow the release of specific RFAs or go back to the board to ask it to reconsider the efforts.

The 29-member board is unlikely to turn down requests from their new CEO. Rejection of a Mills' proposal would be interpreted as a sign of a lack of confidence in him.

At least initially, Mills is also likely to have a smooth road in connection with the controversial and much criticized dual executive arrangement at the agency. Under Proposition 71, which created the $3 billion agency in 2004, the chairman and the president have overlapping responsibilities. That has led to public tensions in the past, particularly with the first agency chairman, Robert Klein. However, under Trounson, public airing of those problems has subsided. Plus current chairman Thomas has a much different management style than Klein.

Thomas has main responsibility for finding new sources of funding for the agency and is talking about some sort of private-public partnership. Mills' role in the fund-raising is not publicly well defined. But Thomas has praised Mills' ability in raising $160 million for Osiris. Thomas may want to harness Mills' presentation and persuasion talents.

As CEO of CIRM, Mills will be the person responsible for generating the type of research results that will resonate with potential private investors as well as the public. One advantage he has is that the agency is little known to the vast majority of the California population. In such situations, public opinion is more easily shaped.

Nonetheless, the San Francisco Chronicle recently took the occasion of Mills appointment to say that CIRM has not lived up to its hype. The newspaper's editorial said the agency should not expect more public funding.

The biotech industry is likely to be pleased with the appointment of one of their fellows as president of CIRM. The industry has been critical of the agency in the past, although it is currently dancing closer to business. The key issue has been the meager amount of awards to industry. According to CIRM calculations, only about 7 percent of the $1.7 billion in awards has gone to business, up from about 4 percent calculated by the California Stem Cell Report a few years ago. More cash has trickled down via subcontractors hired by grant recipients.

The increasing coziness with industry is necessary to develop an actual FDA-certified product that can be used to treat patients. But ties to industry also raise conflict-of-interest issues. CIRM has been dogged by conflict questions since its inception because of the nature of its board, which was dictated by Proposition 71. Roughly 90 percent of dollar value of the awards has gone to institutions with links to past and present members of CIRM's governing board, according to calculations by the California Stem Cell Report. (See here and here.)

In 2010 in the New England Journal of Medicine, Bernie Lo of UC San Francisco, chairman of the CIRM Standards Group and who also led an Institute of Medicine(IOM) study on conflicts of interest, warned that "irreconcilable differences" exist involving medical research and the private sector because of sharply divergent priorities.

The IOM study said,

"Despite their benefits, relationships with industry create conflicts of interest that can undermine the primary goals of medical research. Where there are conflicts, legitimate and serious concerns can be raised about the openness of research and potential bias in the design, conduct, and reporting of research "

Mills' left Osiris in December of last year for what were reported as “personal reasons.” At 42, he has a long career ahead of him. Carrying on well at CIRM, which is facing its financial demise, could be a springboard to a large leap forward for Mills in a few years into another position in the biotech industry, as well elsewhere.

$17.9 Million California Stem Cell Spending Plan to be Scrutinized by New CEO

The new president of the California stem cell agency, Randy Mills, will take a crack at the agency's proposed, $17.9 million operational budget before sending it to directors for approval later this month.

The budget represents a 9.5 percent increase over estimated spending for the current fiscal year, which ends June 30. Mills has not yet had a chance to put his stamp on it. He was appointed as CEO of the agency on April 30. He will assume his responsibilities on Thursday.

The spending plan was examined this afternoon by the CIRM directors' Finance Subcommittee, which is chaired by Stephen Juelsgaard, former executive vice president of Genentech. It was Juelsgaard's first meeting as chairman of the panel, and he systematically sought explanations for a number of items that had large dollar or percentage increases.

The budget did not come to a vote by the committee. Juelsgaard said it needed a review by Mills to see if he wants to make changes prior to submitting it to the full board May 29. Mills has given no public indication of whether he might make substantial changes in the agency's operations. 

There was little discussion of a new, $600,000 item in the agency's budget for rent costs beginning in November 2015. The agency loses its free office space Oct. 31, 2015, and is facing the task of finding a new headquarters in a sizzling office market in San Francisco. However, it was noted that the $600,000 figure could change as CIRM becomes more deeply enmeshed in a search for new space.

Currently the agency has 19,500 square feet for 56 employees. The value of the current lease was placed at $1.2 million annually as of June of last year.

Asked earlier today about assumptions in the $600,000 figure, Kevin McCormack, senior director for public communications, replied,

“The assumptions for the $600,000 are that we will have a smaller space in a less trendy neighborhood, and while it would be lovely for employees to get free parking, it's not something that we are counting on.”

Parking in San Francisco is scarce and expensive. The public parking lot in the CIRM building charges $3.00 for every 20 minutes for ordinary customers.

During the examination of the budget, Juelsgaard raised questions about which expenses fall within the legal cap on operational spending. By state law, CIRM can spend no more than 6 percent of its grant total on its operational budget with the exception of legal expenses.

Juelsgaard and Jeff Sheehy, another CIRM board member, both questioned whether spending for BayBio and Biocom, biotech industry organizations, could be justified as legal expenses and thus be exempt from the limit, according to the terms of Proposition 71. That measure is the 2004 ballot initiative that created CIRM. The staff indicated those expenses would be moved out of the budget for the legal office and into another area.

Sheehy said that if CIRM has, in the past, placed such spending in the "legal" category it should retroactively correct that. Legal expenses for the coming year are budgeted at $1.9 million, including $711,200 for outside contracting, compared to $2 million for the current year. 

Juelsgaard also asked about expenses in a category called “reviews, meetings and workshops,” which totals $2.5 million. It is the second largest spending category in the budget, falling behind compensation, which is expected to total $12.1 million.

The category includes $300,000 for a conference involving hundreds of CIRM grantees. The agency did not stage such a conference last year, but has in previous years. The CIRM staff also noted that grant review meetings can cost up to $150,000. Some of the closed-door sessions last two days. All of the scientific reviewers are scientists from out-of-state, including some from overseas. The agency has nine reviews scheduled for the coming year.

Today's budget session involved new figures for the estimated spending for the current year, which alters the budget increase reported in an item Friday on the California Stem Cell Report. The earlier increase was based on calculations based on what then were the latest CIRM estimates for its current spending.

New Home for the California Stem Cell Agency? A Million-Dollar-Plus Matter

The California stem cell agency is located south of Market Street in San  Francisco, close to the San
 Francisco Giants ballpark (upper right).  It is one of the hottest  office leasing areas in the city. 
 Since  the agency has been there, the area has changed from seedy to gentrified.

The $3 billion California stem cell agency has a 19,500-square-foot problem.

That is the amount of free office space that the agency will be losing in a little over a year. What's more, it puts the agency square in the middle of a red-hot office leasing market in San Francisco, where its headquarters is located. Rates have shot up 70 per cent since 2010, according to a leasing industry estimate.

One tech company executive said in March that she just signed a lease that was so expensive “it made me want to throw up,” according to a report in March on Business Insider.

Eleven months ago, the value of CIRM's space and unspecified “incentives” was estimated at $1.2 million annually by the agency's outside auditor. That estimate would be considerably higher today and even higher next year when the agency would be signing a new lease. However, the California Institute of Regenerative Medicine(CIRM), as the agency is formally known, is allotting only $600,000 annually for office rental, according to figures released Friday afternoon.

That would seem to mean that the agency will be either moving from San Francisco or cutting way back on its square footage or both. Remaining at its current location with less space may not be possible, given the agency's rocky history with its landlord, who donated the space as part of an $18 million package offered by San Francisco to lure CIRM to the city. Additionally, the agency has a legal cap on its budget, which means that it would be difficult to accommodate a large increase in rent.

A move to another city would be a major disruption for some employees who have made housing decisions based on the location of the headquarters. Relocation additionally can be anxiety-producing for employees worried about their work space as well as posing issues for moving computer servers and other hardware that needs to be functional virtually around the clock.

According to a 2006 CIRM document, the agency's space includes 18 offices with windows, 17 internal offices and 19 cubicles. The agency's space also contains a number of conference rooms and common areas in addition to a large reception area.

The headquarters houses 56 employees. Employment is likely to remain close to that level for the next two years. Some consultants and outside attorneys also work at the agency from time to time. After 2017, the number of employees is likely to decline unless new funding is secured. Without additional cash, the agency will be limited to overseeing the waning number of research grants that would still be underway.

As of a few years ago, free parking was provided to employees, a substantial benefit in a city where parking can cost $15 a day or more. Continuing that benefit could add to office space costs. Parking is so tight in San Francisco that a Web site has been created that focuses on the matter. More than one smart phone app has been created to deal with parking, including one that allows a driver leaving a public parking space to auction off the space to other drivers for prices up to $20.

CIRM's vice chairman, Art Torres, former head of the state Democratic Party, is looking into the possibility of securing some sort of subsidies through the city of San Francisco to maintain the agency's headquarters within the city. However, he has not publicly discussed that endeavor since last May.