Stem Cell Parsimony: California's New Stem Cell CEO Has Sharp Budget Knife

In his first major public act, the new president of the $3 billion California stem cell agency this week whacked away at its proposed operational budget for the coming fiscal year, cutting $200,000 here and $20,000 there.

When he was done, Randy Mills offered up a $17.3 million budget that reflected basically the same level of spending as this year. It could be even less given inflation and the vagaries of estimating expenditures for the current fiscal year.

Current spending is estimated to hit $17.4 million by June 30, the end of the fiscal year. But that estimate is a month old and is likely to change somewhat. The budget proposed in early May by former CIRM President Alan Trounson hit $17.9 million, a 9.5 percent increase over estimated expenditures for this year.

Mills' tight budget sent a parsimonious message to the agency staff and the agency's governing board. It also gave him more maneuvering room in upcoming years. The agency is limited by law to spending no more than 6 percent of its grant awards on administrative expenses. A possibility exists that it could run out of operational funds if it does not carefully watch its spending. Some members of the board have expressed concern in the past that the capped amount is too small for effective management and oversight of the agency's large portfolio of awards.

The new CEO's budget also reflects the first time that the agency has not seen a significant year-to-year increase in its proposed spending compared to actual spending. 

Mills, former CEO of Osiris Therapeutics of Maryland, did not make across-the-board cuts in Trounson's initial CIRM budget. Rather Mills surgically excised the cash, including $50,000 from his own office.

In terms of agency activities, the category of “reviews, meetings and workshops” took the biggest hit. Mills sliced $333,000 from what once was a total of $2.5 million. A meeting for the 600 CIRM grantees was eliminated along with $100,000 worth of meetings with outside advisors on the agency's complex disease team projects. Other outside contracting was lopped by $160,000. But even relatively small items were hit. A plan to spend $5,000 for a sponsorship at a personalized medicine conference fell by the way. Plans for training in the finance department were trimmed by $2,120.

Mills' budget will now go to the full board in a telephonic meeting on June 13 for what is expected to be routine approval. A number of public locations are available where interested parties can listen and comment. The specific locations can be found on the meeting agenda.

Sparse News Coverage This Morning of California Stem Cell Agency Action

LA JOLLA, Ca. -- Media coverage of the resurrection of the Geron's landmark human embryonic stem cell trial was light today in the wake of a $14.3 million award by the California stem cell agency to support its continuation.

The San Diego U-T and the San Francisco Business Times both carried stories but none others appeared this morning in a Google search.

Bradley Fikes of the San Diego newspaper attended yesterday's CIRM board meeting here. He wrote,

"A potentially groundbreaking trial to treat spinal cord injuries with tissue grown from human embryonic stem cells will resume, after being funded by the California's stem cell agency."

Both he and Ron Leuty of the San Francisco Business Times also noted the award to Sangamo BioSciences of Richmond, Ca. Leuty wrote,

"Sangamo BioSciences Inc. (NASDAQ: SGMO) of Richmond will split a $5.6 million California Institute for Regenerative Medicine award with Dr. John Zaia of the Beckman Research Institute at the City of Hope near Los Angeles to take blood stem cells from HIV patients and cut and replace a gene that is key to the spread of the AIDS virus."

Asteris issued a press release this morning that said,

“We are preparing to initiate the dose escalation Phase 1/2a clinical trial of AST-OPC1 in patients with cervical injuries in 6-9 months subject to FDA clearance,” stated Edward Wirth III M.D., Ph.D., Asterias’ Chief Translational Officer. “Achievements in this CIRM-supported program could also help accelerate further development of AST-OPC1 in other neurodegenerative diseases such as stroke and multiple sclerosis. We are currently evaluating the function of AST-OPC1 in nonclinical models of these diseases.”

“This award provides significant non-dilutive funding to accelerate the development of AST-OPC1 for patients with spinal cord injury. Given the lack of any approved therapies for spinal cord injury and the high level of disability, substantial costs of care, and shorter life expectancy of injured individuals, AST-OPC1 has the potential to address a substantial unmet medical need in this condition,” stated Katharine Spink, Ph.D., Asterias’ Chief Operating Officer."

BioTime's stock price was up 22 cents this morning at the time of this writing to $2.95. It has risen from $2.42 on May 22 when the California Stem Cell Report first carriednews of the California stem cell agency award.

Sangamo has not yet issued a press release, but its stock price was at $13.68 this morning, up 16 cents.

CIRM Press Release on Today's Meeting and the Asterias Award

LA JOLLA, Ca. -- Here is a link to the press release from the California stem cell agency on today's meeting of its board of governors, which has just concluded.

California Stem Cell Agency Approves $14 Million for Landmark hESC Clinical Trial

Above is a CIRM video involving one of the participants in the original Geron trial.

LA JOLLA, Ca.  – The state of California today pumped $14.3 million into an historic clinical trial for a stem cell therapy that was once abandoned because it was deemed too risky financially by the firm that devised the treatment.

The action came when the governing board of the California Institute for Regenerative Medicine (CIRM) approved the award to Asterias Therapeutics of Menlo Park, Ca., a subsidiary of BioTime, Inc., of Alameda, Ca. The firms purchased the spinal cord injury treatment along with the human embryonic stem cell assets of Geron Corp., also of Menlo Park, in 2013.

The scientists who reviewed the Asterias application said the therapy could have a “highly significant impact” on the spinal cord injury, which afflicts more than 200,000 people nationwide. According to a CIRM review summary, the reviewers said a successful result from the trial would be a “high visibility achievement for the entire field of stem cell-based/regenerative medicine.”

The Geron clinical trial was the first ever in the United States for a therapy based on human embryonic stem cells, an area of research roiled by controversy. Some persons believe that deriving such cells is tantamount to killing a human being.

Geron submitted nearly 28,000 pages of material to the FDA in its years-long bid to start the trial, which began in 2010. However, in November 2011, the company stunned the stem cell world by giving up on the trial, citing business reasons.

The action also shocked the stem cell agency, which less than four months earlier had signed an agreement loaning the company $25 million. The agency's governing board gave the go-ahead on the loan during a process that involved major departures from its normal procedures. Geron repaid the loan with interest.

Approval of the funds for Asterias was not unexpected. The California Stem Cell Report carried an item on the matter May 22.

Today, Jonathan Thomas, chairman of the CIRM board, said in a statement,

“This new investment means we have a chance to build on the lessons we learned first time around. If this therapy can achieve even very modest improvements for patients, it could have an enormous impact on the quality of their life, and the lives of their families."

CIRM's scientific grant reviewers, all of whom are from out-of-state, gave the Asteria application a score of 76 out of 100 during their closed-door review of the proposal. Asterias, which currently has 17 employees including some from Geron, said in its application,

“Initial clinical safety testing was conducted in five subjects with neurologically complete thoracic injuries. No safety concerns have been observed after following these five subjects for more than two years. The current project proposes to extend testing to subjects with neurologically complete cervical injuries, the intended population for further clinical development, and the population considered most likely to benefit from the therapy.

“Initial safety testing will be performed in three subjects at a low dose level, with subsequent groups of five subjects at higher doses bracketing the range believed most likely to result in functional improvements. Subjects will be monitored both for evidence of safety issues and for signs of neurological improvement using a variety of neurological, imaging and laboratory assessments.”

Asterias' application continued,

“By completion of the (Phase 1/2a) project, we expect to have accumulated sufficient safety and dosing data to support initiation of an expanded efficacy study of a single selected dose in the intended clinical target population.”

The complete application is not available. CIRM released only selected excerpts on its Web site. See here for the text of the CIRM review summary.

While reviewers praised the bulk of the proposal they also raised concerns. They “questioned the strength of the preclinical efficacy data.” They “expressed concern regarding the manufacturing plan and strategy to support future development, which they viewed as risky.” They also said the budget “may be high.”

BioTime, which is headed by the founder of Geron, Michael West, is a publicly traded firm. Its stock price closed at $2.73 yesterday. Its 52-week price range runs from $2.21 to $4.82.

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

Text of the CIRM Review Summary of the Asterias hESC Clinical Trial Proposal

Here is a copy of the summary of the review of Asterias application 

for funding for its hESC clinical trial involving spinal cord injury. 

Lunch Break for California Stem Cell Directors

LA JOLLA, Ca. -- Directors of the California stem cell agency have adjourned for lunch. Later this afternoon, they are scheduled to approve a $14.3 million award to Asterias Therapeutics for an historic hESC trial.

Researchers Seek to Overturn Negative Decisions by California Stem Cell Agency

LA JOLLA, Ca. -- Three rejected applicants for millions of dollars from the California stem cell agency have appealed negative reviewer decisions in the agency's business-friendly strategic partner program.

The agency's staff rejected two of the appeals but is sending one back to reviewers.

Names of the applicants and the amounts sought were withheld by the agency. The agency also withheld the contents of the appeal letters, material that was, until recently, was routinely disclosed.

California Spending $16.2 Million to Lure Stem Cell Scientists

LA JOLLA, Ca.  -- Directors of the California stem cell agency this morning approved $16.2 million to recruit three star researchers to UCLA, UC Berkeley and the Gladstone Institutes in San Francisco.

The move came on a 6-2-1 vote by the 29-member board. Most of the directors were disqualified from voting because of conflicts of interest.

The recipients are Todd McDevitt of the Georgia Institute of Technology, who is being recruited by Gladstone; Xavier Darzacq of the Ecole Normale Superlieure in Paris, who is being sought by UC Berkeley, and John Chute of Duke, who is being recruited by UCLA. Chute is the second researcher from Duke to be lured to California with the help of a CIRM grant.

Appeals by UC San Francisco and UC Davis were rejected by the board.

The vote on the awards followed an unsuccessful effort to scrap the entire recruitment program.

California Stem Cell Researcher Recruitment Program Narrowly Survives

LA JOLLA, Ca. -- Directors of the $3 billion California stem cell agency this morning rejected an attempt to reject proposals to spend $16.2  million to recruit star scientists to the Golden State.

The move failed on a 4-5 vote on the 29-member board. Most members of the board were disqualified because of conflicts of interests. The major beneficiaries of the program all have representatives on the CIRM.

Names of the researchers and the recruiting institutions were not disclosed.

The motion was made by Francisco Prieto and seconded by Steve Juelsgaard. Prieto said the grants are "not the best place to for the (agency) to put its money right now."

The discussion of the matter is continuing following the vote.

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.)