California's Slow Pace on Stem Cell Snake Oil: State Medical Regulators May Take First Stab This Summer

California regulation of an industry that sells dubious and risky "stem cell" treatments now appears to be solely in the hands of the state Medical Board, which has been mulling the matter for at least 11 months.

Both nationally and in California, the number of unregulated clinics has risen sharply with estimates of more than 1,000 nationwide, with the largest number in California. 

Jonathan Thomas, chairman of the $3 billion state stem cell agency, has described the fast-growing clinics as snake-oil enterprises.

The clinics peddle what they call stem cell treatments to desperate patients. The treatments cost thousands of dollars. Some patients have reported losing their vision as a result. Last December, the federal government reported that 12 persons were hospitalized because of infections from treatment by a California clinic. Some of the material involved was contaminated with fecal bacteria.

The New York Times reported this week that across the nation the clinics have "attracted huge numbers of patients, who pay thousands of dollars for unproven, risky procedures." The Times piece echoed a bleak national picture that was painted earlier by the Washington Post. 

A spokesman for the California Medical Board, Carlos Villatoro, said this week that a task force of the board is expected to hold its first meeting this summer to deal with stem cell clinics. "The task force should be meeting soon and potentially holding an interested parties meeting, hopefully before the next board meeting," he said in an email to the California Stem Cell Report.

The next board meeting comes in August. The task force consists of two members of the state board:

Randy Hawkins, LA Sentinel photo

Randy Hawkins of Los Angeles, who is a clinical assistant professor of medicine at the Charles Drew University of Medicine and Science in Los Angeles, and Howard Krauss of Santa Monica, Ca., who is a clinical professor of ophthalmology and

Howard Krauss, PNI photo

neurosurgery at the John Wayne Cancer Institute at Providence Saint John’s Health Center in Santa Monica. 

State legislation to deal with the burgeoning problem is moribund and may or may not be resurrected.

Art Torres, vice chairman of the board of the California stem cell agency, has been working on the measure (AB617). He served for 22 years in the state legislature and is a former head of the California Democratic Party. 

Last month, Torres described the stem cell clinic measure as "dead." He said the reasons for its demise are "unclear," along with the failure of another bill dealing with sickle cell disease. Torres told the board, 

"They haven't told us why they opposed it, and even the author of the bills can't figure out why their bills remained in what's called the suspense file of the Assembly Appropriations Committee."

Torres later told the California Stem Cell Report that it was possible that the content of the bill could be amended into another measure that is farther along in the legislative process. But he said that no clear pathway to final passage was evident. 

In New York, the state attorney general has charged one stem cell clinic with fraud. In California, Attorney General Xavier Becerra has remained mum on the subject. 

Captain Kirk, Snake Oil and Stem Cell Treatments

It's time for stem cell whack-a-mole.

That's the game where regulators -- coming in late -- try to prevent snake-oil clinics from harming desperate patients with purported stem cell treatments and ripping off them for thousands of dollars.  

More than 1,000 dubious clinics are estimated to exist across the country with the largest number in California, which is lagging in its regulatory efforts.  More spring up every day with even Captain Kirk of Star Trek weighing in on the alleged benefits of the unregulated procedures.

William Wan of the Washington Post captured the national scene in an article late on Friday. He said don't get too excited about a favorable court decision involving one operation in Florida, which claims to turn body fat into beneficial stem cells.

Wan wrote,

"(T)he company said it would follow the federal judge’s ruling and stop selling the fat-based procedure. But it quickly followed up with a clarification: It would continue offering stem cell treatments, but instead of fat, rely on patients’ bone marrow and other tissues to harvest the cells it claims can cure conditions as varied as spinal cord injuries and erectile dysfunction.

"'It’s a bit like playing whack-a-mole,' said Peter Marks, FDA’s top official for biologic products."

The situation has been building for long time. Wan wrote,

“After years of largely ignoring the issue, the FDA is finally making more of an effort, but it’s not as if this marketplace is melting away,” said Leigh Turner, a bioethicist at the University of Minnesota. 

"Because no one had documented exactly how many stem cell clinics existed, Turner — working with collaborators (UC Davis researcher Paul Knoepfler) — began tracking them in a database several years ago. In 2009, there appeared to be only two in the United States; by 2017, there were at least 700. Turner believes there are currently more than 1,000."

"Turner compared the for-profit stem cell industry to a balloon. As the FDA and consumer advocates squeeze one end, other parts of the enterprise expand. 'For every one that’s disappeared, we’re finding seven more that are popping up.'"

Wan noted another effort in California that could affect a number of clinics. 

"Meanwhile, the government is pushing forward in a second federal court lawsuit against another stem cell business in California. That lawsuit has the potential to halt the fat-based stem cell treatment in multiple clinics because the government filed it against a company called Cell Surgical Network, which serves as an umbrella for dozens of affiliated clinics around the country."

An attempt to step up state regulation in California, however, has ground to a halt. Legislation (AB617) by Assemblyman Kevin Mullin, D-San Mateo, is now not even on life support. It is buried in the Assembly Appropriations Committee. Its content could surface in another measure that still has some technical life in the Capitol, but the outlook is more than dim. 

The scene is not much brighter with California's medical board. Last year said it would look into the dubious clinics. In April, it said hearings might begin no later than early this month. Nonetheless, a check of the agency's web site this weekend did not turn up any notice of such a meeting.

Trump Research Restrictions, the California Stem Cell Agency and Moral Obligations

The man expected to lead the drive for $5.5 billion more for California's stem cell agency today said the Trump restrictions on fetal tissue research represent a dangerous precedent that threatens the health of all Americans. 

Robert Klein, who was the first chairman of the state stem cell agency, said that "California has unique opportunity and obligation to maintain the scientific and medical options" that have led to development of the polio vaccine along with many others.

During an interview with the California Stem Cell Report, Klein said the people of California have a "moral" obligation to add more billions to the work of the 14-year-old, $3 billion stem cell agency.

Klein led the 2004 ballot initiative campaign that created the agency, formally known as the California Institute for Regenerative Medicine (CIRM).  The agency expects to run out of cash for new awards by the end of this year. It is staking its existence on a proposed ballot initiative that Klein would carry forward.

Klein's comments came as more reaction surfaced to the Trump action. San Francisco HIV advocate Jeff Sheehy, responding to a question, said in an email,

"Fetal tissue is used to make mice with human immune systems.  Testing new drugs for HIV is just one use--this animal model is used in research across a wide range of diseases to develop and test therapies, including vaccines for infectious diseases.  Stopping this research--which has been taking place for decades--is foolish, anti-science, and a threat to the health and safety of all Americans."

Kaiser Health News reported,

"The Trump administration’s announcement Wednesday about federal cutbacks in fetal tissue research is short of a total ban, but scientists in the field say it is concerning because it could affect work on treatments or preventions for key diseases, such as HIV and Parkinson’s."

Sara Reardon, reporting online for Nature, wrote,

"'It’s a decision that’s going to set back research,' says Andrew McMahon, a stem cell biologist at the University of Southern California in Los Angeles. 

"McMahon is studying ways to grow kidneys from human stem cells. He says that the only way to determine whether he and his colleagues have successfully mimicked natural development is to compare their proto-organs to kidneys in fetal tissue. Although biomedical research is often done using mice as proxies for people, mouse kidneys are too different from human kidneys to use in McMahon’s work."

McMahon was the recipient of a $5.7 million CIRM award dealing with kidney problems. A CIRM document filed in connection with his now concluded research said,

"Our analysis of the developing human kidney has provided the first comprehensive insight into developmental processes highlighting molecular and cellular events shared with the well-studied mouse model, but unique human features."

McMahon was recruited from Harvard to USC with the help of the CIRM grant. In response to an email query, he said that it was unclear whether his CIRM research would have become ineligible for federal support, given new Trump review processes. 

Bradley Fikes and Gary Robbins of the San Diego Union-Tribune wrote, 

"The sensitivity of the (fetal tissue research) matter surfaced recently when UCSD drew unwanted attention after one of its employees mistakenly solicited fetal pancreas samples from the Center for Medical Progress (CMP), an anti-abortion group whose surreptitious videos in 2015 galvanized efforts to end federal funding of Planned Parenthood."

Trump Action on Fetal Tissue Research: Likely Impact on $5 Billion More for California Stem Cell Agency

President Trump today sharply cut back on federal funding for fetal tissue research in a move denounced as both politically motivated and destructive of the hopes of millions of Americans suffering from life-threatening diseases. 

The action has long been sought by anti-abortion activists who say tax dollars should not go to create a "marketplace for aborted baby parts."

Trump's moves immediately cost UC San Francisco a $2 million grant aimed at new therapies for HIV. It also drew reaction from California's $3 billion stem cell agency. 

Asked for a comment, Kevin McCormack, senior director of communications, said the Trump action will not have any impact on the agency. He said in an email, 

"Because our money comes from California this does not affect any project we fund or our ability to fund any projects."

Trump's action echoes a situation that played a major role in the ballot initiative campaign of 2004 that created the stem cell agency, known formally as the California Institute for Regenerative Medicine (CIRM). 

In one of their key arguments, backers of the stem cell measure said it was needed because of then President Bush's restrictions on federal funding for human embryonic stem cell research.

Today's action by Trump is virtually certain to be cited as justification for an additional $5 billion for the agency, which will run out of money for new awards around the end of this year. CIRM supporters expect to mount another ballot initiative in November 2020.

The scope of Trump's move was described by the New York Times, which wrote, 

"As of last year, the N.I.H. spent about $100 million of its $37 billion annual budget on research projects involving fetal tissue. The tissue is used to test drugs, develop vaccines and study cancer, AIDS, Parkinson’s disease, birth defects, blindness and other disorders. For much of that work, scientists say there is no substitute for fetal tissue."

Sam Hawgood, chancellor of UC San Francisco and a former member of CIRM's governing board, said in a statement that the decision was "politically motivated, shortsighted and not based on sound science.”

Lawrence O. Gostin, a professor specializing in public health law at Georgetown University, told the New York Times that the federal action "is akin to a ban on hope for millions of Americans suffering from life-threatening and debilitating diseases." 

Scientist Jeanne Loring, who is with Scripps Research and Aspen Neuroscience in the San Diego area, said in response to a query, 

"Fetal brain tissue transplants containing immature dopamine neurons laid the groundwork for the Parkinson’s disease neuron replacement therapy we are developing now  The outcomes were inconsistent, but some patients recovered from the disease.  Without that pioneering work in the 1990s, I wouldn’t be so confident about the potential of our planned therapy using dopamine neurons derived from Parkinson’s patients’ own induced pluripotent stem cells.

"This is one specific instance of how fetal tissue profoundly changed our view of degenerative disease.  I think that going forward, most of the regenerative therapies will be based on pluripotent stem cells, which weren’t available 30 years ago. But I don’t like to rule out the possibility that there is still pioneering work like this to be done, and so I hope that some researchers will not lose access to fetal tissue for groundbreaking medical research."

(Editor's note: Look for additional news tomorrow on the impact of the Trump decision in California and elsewhere on the California Stem Cell Report.)

Proven Value -- California's Stem Cell Agency Garners Praise in State's Largest Newspaper

California's $3 billion stem cell agency scored a significant media win this morning with an endorsement from one of its harshest critics, a Pulitzer Prize-winning columnist in the state's largest circulation newspaper, the Los Angeles Times.

Michael Hiltzik, who has written two books on massive public projects, wrote in the Times,

"California’s stem cell program has proved its value to the state and to science. It has earned the opportunity to show what it can achieve with an additional 10 years of life and billions more."

Hiltzik's piece appeared this morning in the print version of the newspaper, which says it has a readership of 2.1 million in the print version alone on Sundays. Hundreds of thousands more would be added online, where the column surfaced on Friday. 

Hiltzik began his column with some very bright news for the agency, known formally as the California Institute for Regenerative Medicine(CIRM). He said that Jonathan Thomas, chairman of the agency, told him that a CIRM-funded cure is headed for the marketplace. Hiltzik described it as "a major achievement."

He wrote,

"A stem cell-based cure developed by a team at UCLA for a rare disease — a 'bubble baby' disease that deprives children of a functioning immune system — is on a path toward expected approval by the Food and Drug Administration as early as next year. It would be the first treatment funded by the program to reach the market."

The achievement would come as the agency faces what Hiltzik called an "existential inflection point." CIRM expects to run out of cash for new awards later this year. The agency was created by voters in 2004 with $3 billion that the state borrowed.

The agency's existence depends on whether voters approve an additional $5 billion in additional bonds that would come from a yet-to-be-written ballot measure on the November 2020 ballot. Voters will need to be convinced that the agency has not frittered away its original $3 billion.

Hiltzik noted the agency's "ups and downs," including hype, conflicts of interest concerns and the affordability of stem cell therapies. He said a new ballot initiative offers an opportunity to make improvements in CIRM's operations.

Hiltzik wrote, 

"Klein told David Jensen of the California Stem Cell Report that he is contemplating a provision in the next initiative for “funding the infrastructure to work on access, to work with insurance companies, to work with Covered California, to work with Medicare, to make sure that there’s access, to make certain that public hospitals and public clinics in California get discounted prices.” That would be worthwhile, if it can be done."

Like most state agencies, CIRM labors invisibly. Its story and value proposition receive little public attention despite its attempts at ground-breaking science. Reporters are rarely seen at its meetings. Few articles are written about its affairs. 

That will change somewhat come the 2020 election season. However, media coverage will be dominated by national politics since it will be a presidential election year.  Given the scarce resources of the media nowadays -- along with other, expected, pressing California matters in the 2020 election -- stem cell research is unlikely to be on any front page (print or electronic) except infrequently, at best. 

Nonetheless, Hiltzik's column will be one of the key pieces that other journalists will dredge up electronically next year as they research ballot initiatives. And how the Times and Hiltzik have framed CIRM's work will be an important element in how other news stories are shaped. 

Faustian Bargains and Biotech Millions: A Fresh California Yarn

It is a California tale: The search for millions in cash to research and develop cures for terrible afflictions that destroy people's lives. 

But it is not centered in an office building in downtown Oakland, with great views of San Francisco Bay and overlooking Lake Merritt. 

The official plot summary goes like this:

"Desperate to secure funding for her med tech startup, an idealistic scientist and her husband strike an outrageous deal with a mysterious investor."

As Damian Garde wrote on STAT this morning, 

"There’s a new Netflix series involving biotech, venture capital, and Faustian bargaining. It's called 'What/If' and it’s about the founder of Emigen Molecular Sequencing who, despite her scientific acumen and noble goal of saving cancer patients, cannot seem to convince Silicon Valley’s ocean of vest-clad VCs to invest in her genomics company. ('I’m afraid Big Pharma would drown us in litigation,' says one, inexplicably.)

"That’s when she meets the all-powerful investor Anne Montgomery, played by Renée Zellweger, who seems to be splitting the difference between 'Basic Instinct' and 'Devil’s Advocate.' Montgomery offers her the money she needs to keep Emigen afloat, but the deal has dark implications for her earnest and unfortunately sideburned husband, who is a pro baseball player-turned-EMT with a night job as a bartender.

"Anyway, by the end of the pilot, there’s an embattled startup, a fractured marriage, and an unsolved assault. Your correspondent (Damian Garde) did not make it to episode two."

As for that Oakland enterprise mentioned earlier, it is the $3 billion California stem cell agency, which is running out of cash and looking for $5 billion more.  

Stem Cell 'Teething Problems' -- Pricing to Manufacturing, the European View

From Europe this morning comes a perspective on the "three obstacles" that are blocking cell therapy from the mainstream.

It is a subject, of course, that resonates in the United States and particularly in California, where the $3 billion state stem cell agency is running out of cash and needs a boost.

The article appeared on Labiotech, which bills itself as "leading digital media covering the European biotech industry." Written by Helen Albert, the piece actually lists more than a trio of "teething problems" for the stem cell industry. They are:

• "A reliable, consistent and scalable manufacturing system" 
• "Excessively high pricing"
• Safety, regulation and a knowledgeable workforce

Albert interviewed a number of industry executives in Europe. She also mentioned Orchard Therapeutics, which has a tie to California.  It has received an $8.5 million award from the state stem cell agency, formally known as the California Institute for Regenerative Medicine.

The United States is ahead of the game on regulation, according to the folks in Europe. Albert wrote, 

"The US regulators are currently in the lead when it comes to keeping up with the research and being open to changing their processes, according to (Alan O’Connell, partner at Irish life sciences VC Seroba). Although he says Europe is not too far behind. 'Certainly, the EMA (European Medicines Agency) is responding, but from my perspective, the FDA is taking the lead, at least currently.'"

The Albert piece said, 

"With the first CAR T-cell therapies (technically a combination of gene and cell therapy) to treat blood cancers gaining US and European approval last year and global investment of over €6.7B in cell therapy in 2018, the question on everyone’s lips is ‘is cell therapy about to hit the big time?’"

Labiotech's answer? "2019 certainly appears to be the start, if not the end, of cell therapy’s move to the big time."

No. 54: Counting California Stem Cell Agency's Clinical Trials, This One for Diabetes

The California stem cell agency has awarded $11 million to help treat type one diabetes, an affliction that affects 1.25 million persons nationally.

The award brings to $194.6 million the amount given to UC San Francisco (UCSF) since 2005 by the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

UCSF has held a seat on the governing board of the $3 billion agency since it was created by voters in 2004. About 90 percent of its funding has gone to institutions with ties to board members. They are not allowed to vote on awards involving their institutions, but the board can create or eliminate funding programs. 

The $11 million phase one clinical trial award last week went to Peter Stock of UCSF and was his first for a trial from the agency.  It is the 54th investment by the agency in a clinical trial. CIRM said in a news release:

"Transplantation of beta cells, contained in donor pancreatic islets, can reverse the symptoms of diabetes. However, due to a poor islet survival rate, transplants require islets from multiple donors. Furthermore, since islet cells are transplanted directly into the vessels that enter the liver, it is extremely difficult to monitor and retrieve these cells should the need arise.

"Dr. Stock’s clinical trial at UCSF aims to address these limitations. The trial will be using parathyroid glands to aid in the success and viability of the transplant procedure."

CIRM's review of Stock's application (CLIN2-11437) noted that questions had been raised about commercialization of his research. It said, 

"If efficacious, the proposed therapy could lead to US regulatory approval for islet transplantation and clear the commercialization path for this and future diabetes treatments in a field that needs innovation. Overall, the enthusiasm from clinical experts for the potential of a new approach outweighed commercialization concerns and the panel recommended the application for funding."

Looking Back and Forward at the California Stem Cell Agency: 1,000 Awards, $2.6 Billion, 1,200 Patients in Clinical Trials

A CIRM slide from tomorrow's presentation
on the stem cell agency's work.

The California stem cell agency has whomped up a fulsome presentation on its progress since it was created in 2004 and plans to unveil it at a public meeting tomorrow in Oakland. 

The presentation covers everything from cell therapy to de-risking stem cell investing for biotech companies. Maria Millan, CEO of the $3 billion enterprise, will run through the agency's 1,000 awards and 53 clinical trials during tomorrow's meeting of the governing board of the research effort. 

Her presentation comes at an increasingly critical time for the agency. It expects to run out of cash for new awards later this year. It is attempting to raise $220 million privately to help tide it over until November 2020, when it hopes to persuade California voters to give it another $5 billion. 

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is making the meeting available to the public through its usual Internet audiocast in addition to teleconference meeting sites in Riverside, La Jolla, South San Francisco, Fresno, San Diego, Palo Alto and two in Los Angeles.  That is in addition to the main meeting site in Oakland. (Full directions are on the meeting agenda.) The public can also ask questions via the Internet or the teleconference locations. 

Also up for tomorrow's meeting is discussion of possibilities of changes in CIRM's operations that might be embodied in a ballot initiative in 2020. Two governing board committees mulled over a wide range of options at a session last week, but no decisions were made. The measure is yet to be written but will need to be officially filed later this year. 

California Stem Cell Funding Flap: Stanford Ponies Up $1.8 Million

Stanford University has come through on matching funds for state-financed stem cell research, coughing up $1.8 million after California's stem cell agency applied a little financial pressure.

The matter involves Stanford  researcher Judith Shizuru, who is conducting a clinical trial that is aimed at treating the "bubble boy" genetic affliction without requiring high-risk chemotherapy or radiation. Her work has implications for reducing the need for the dangerous treatments in other diseases. 

In 2012, Shizuru was awarded $19 million by the stem cell agency for her trial. Late last year, she applied for $6 million more. 

Sharp questions arose, however, from the governing board of the $3 billion California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. It was the first time that the CIRM board had publicly rebuked a grantee and an institution on co-funding.

The board noted that the $19 million grant required $1.8 million in matching funds that had not been forthcoming.  

Directors pointed out that Stanford was well-endowed and should not be hard-pressed to provide cash to help develop a potentially "transformative" product that would eliminate the toxic impact of chemotherapy for a number of diseases. 

That was back in January. The CIRM directors set a May 1 deadline for seeing the cash. 

Last month the agency, which expects to run out of funds for new awards later this year, received a letter from Robert Harrington, the chairman of the Department of Medicine at Stanford. 

The letter said, 

"This letter is to confirm that the Department of Medicine will provide funding in the amount of $1,784,953 to meet the required co-funding for Operational Milestones #3 and #4 disbursements as referenced in your email dated 3/14/19 for the above referenced grant. These funds are available immediately to Dr. Shizuru for the study."

The flap also led to an inside look at how research funding works at the stem cell agency in a case involving a rare affliction, delays in clinical trials and the financial pressures now facing CIRM. 

Over its 14-year life, the agency has awarded $2.6 billion. Stanford is the No. 1 recipient with $383 million. Its total far exceeds the No. 2 recipient, UCLA, which has chalked up $284 million. 

Nine out of the top 10 recipient institutions, including Stanford and UCLA, have members on the CIRM governing board. They are not allowed to vote on awards to their institutions, but they establish the research award programs and their rules. 

Legislation to Regulate 'Snake Oil' Stem Cell Clinics in California Hits Fiscal Speed Bump

California legislation to crack down on "snake oil" stem cell clinics has stalled after a cost of $100,000 was assigned to the measure, which is backed by the state's stem cell research program. 

The bill was sent last week to a "suspense" file, which holds fiscal legislation while lawmakers juggle priorities in the Golden State's yet-to-be-approved, $213 billion budget.

If all goes well, the measure could clear the Assembly Appropriations Committee in the next month or so and be sent to the floor of the Assembly. It would then go to the Senate for more committee hearings and a Senate floor vote.

No public opposition has yet surfaced to the measure (AB617), authored by Assemblyman Kevin Mullen, D-San Mateo. It would not take effect any earlier than 2020.

The bill would require California's Medical Board to move on the clinics, which have proliferated across the country in recent years. California has more than 100, according to the latest estimates. 

The clinics charge thousands of dollars for treatments using substances that they describe as stem cells. However, in virtually all cases, the treatments have not been tested scientifically. Some have led to serious injuries. 

The state Medical board would be required to create a stem cell advisory group by February 2020 that would make recommendations by July 2020 for regulation of the dubious clinics.

The new group would have nine members. Three would be appointed by the California stem cell agency, three by state Medical Board, two by the state osteopathic medical board and one by the state nursing board. 

The group could also recommend emergency regulations that could be adopted by the state Medical Board with a 90 day notice. 

Last week, a committee of directors of the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known, endorsed the bill. The full board is expected to ratify that endorsement on Thursday. An analysis prepared by the legislative staff already lists CIRM as a supporter. 

Exploring California's Stem Cell Future: A Start Today on the 16th Floor in Oakland

OAKLAND, Ca. -- "Phantom equity," the affordability of $1 million cures, maximizing returns to the state and conflicts of interest -- all that and more was on the table today at the $3 billion California stem cell agency.

The occasion was a discussion of "ideas for enhancement" by some of the directors of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

This was more than simply kicking around possibilities. The meeting was called because the agency expects to run out of money for new awards later this year.

Its hopes for financial survival rest largely on a possible $5 billion bond initiative on the November 2020 ballot. Writing an initiative also means an opportunity to improve agency operations. To pass an initiative, California voters would also need to be inspired by the work the agency has done and how it will do even better in the future. 

So the governing board put together today's session to hash over ideas, starting with a 10 page list of initial thoughts. No decisions were reached, however. The discussion will carry on next Thursday at a meeting of the full board, which will also be held in CIRM's 16th floor offices here. But internally the agency plans to begin to explore some of the areas in more depth.

The implications of changes could have a major impact not only on California researchers but biotech businesses looking for possible products that could generate profits, preferably large ones.

One area of concern by CIRM directors was maximizing the return to the state for its $6 billion investment, which includes the interest on the $3 billion borrowed for the CIRM program. One of several suggestions included the use of "phantom equity," a loose term that implies having an investment but not ownership in a company that is tied to the value of its shares.  (CIRM is barred from actually owning stock.)

At the same time, directors also said they did not want to raise financial obstacles that would stop biotech firms from turning CIRM research into cures.

CIRM Director Jeff Sheehy, who has served on the board since its inception in 2004, brought up affordability and access suggestions by the man who led the 2004 campaign, Robert Klein. 

In a recent interview with the California Stem Cell Report, Klein said he was interested in seeing more stringent requirements to assure that state-backed therapies are available to all.  Esimates of costs of some legitimate stem cell treatments have ranged up to $1 million or more. 

Another subject of some discussion was the matter of perceived conflicts of interest involving the current structure of the CIRM board. About 90 percent of the awards made by CIRM have gone to institutions with links to members of the board. While some board members acknowledged the importance of perceptions, they said no conflicts of interest have actually occurred. 

A proposed initiative will have to be filed late this year in order to qualify for the November 2020 ballot. In the interview with Klein, he said he was looking at filing around the middle of September.

California Stem Cell Crossroads: A Researcher Muses About the Golden State's Research Program

OAKLAND, Ca. -- A California stem cell researcher weighed in this morning on the future of the state's $3 billion stem cell agency, a topic that its leaders will delve into here today for two hours.

Paul Knoepfler, writing on his blog, said,

"We are at a crossroads for stem cell research in California as the original form of the California Stem Cell Agency (CIRM)winds down. Will CIRM get a new infusion of billions in state funding via a ballot initiative a la Proposition 71 from more than a decade ago? Will CIRM instead find a different source, probably much smaller, of research funding such as via philanthropy? Could CIRM cease to exist within a few years?"

Knoepfler is a longtime supporter of the agency. He wrote,

"CIRM has such strong clinical momentum right now, I hope it continues robustly for another 10 years."

The agency, however, expects to run out of cash for new awards late this year. It is pinning its hopes on a possible $5 billion ballot measure in November 2020. 

Knoepfler speculated about other sources of fund, including some from the legislature and possible private support. He wrote,

"While California has been very successful in getting NIH research funding for stem cell research by individual labs, the feds don’t fund state-wide efforts. The stem cell-related biotech industry in California is robust and should there be a few blockbuster successes from ongoing clinical trials here, which I expect will occur in the coming decade, this will likely draw in much more funding in that area."

Knoepfler also discussed the impact of "snake oil" stem cell clinics on the future of the agency. 

"In my view," Knoepfler said, "a newly funded CIRM is also going to have to deal directly with the unproven stem cell clinic problem in our state. With more than 100 such clinics here, Californians are at risk but so is stem cell research funding from these rogue efforts. The new bill on stem cell clinics could be the ticket, should it become law."

The California Stem Cell Report will be covering live this morning's hearing on the agency's and will file reports as warranted.

California Eyes "Makeover" -- Sort Of -- For Its $3 Billion Stem Cell Research Program

One might say that the $3 billion California stem cell agency is going into the botanical business this week. That's because tomorrow it will be "let-a-thousand-flowers-bloom" time at the agency.

For a start, the agency has posted 10 pages of "ideas for enhancement" of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. And it wants even more suggestions. 

The initial ideas include barring persons from sitting on the CIRM governing board who have connections to institutions that receive CIRM funds. Others involve creation of a mechanism that would permit CIRM to act more like a venture capitalist.

Still others include topics such as the current 6 percent administrative budget cap, prohibitions on CIRM owning stock, restructuring the research application review process and the expense of renting office space, which drove the agency from its previous headquarters in San Francisco. 

The wide-ranging discussion, scheduled for two hours, is driven by the fact that CIRM will run out of money for new awards this year, possibly as early as September. The agency is hoping for passage of a new ballot initiative in the fall of 2020 that will provide it with $5 billion more.

A fresh, citizen-written initiative means an opportunity to recast CIRM from version 2.0 into version 3.0 with improved abilities to develop stem cell therapies, to deal with the changing economics of medicine and to fix things that weren't quite right in Proposition 71, the 2004 measure that created the agency. 

"CIRM has a unique perspective to offer regarding possible enhancements to Proposition 71 that might further CIRM’s mission more efficiently and improve its operations," the agency said in a document prepared for tomorrow's meeting. 

The agency also that said that the ideas offered in advance "are intended to spark discussion and are not intended to limit discussion topics."

Robert Klein, who led the 2004 campaign and was the agency's first chairman, has indicated that he is once again ready to move forward on a new campaign. He offered other ideas involving a new initiative in an interview recently with the California Stem Cell Report. 

As for the "thousand flowers" business, that is a phrase that is often attributed to Chairman Mao who reportedly actually said 100 -- not 1,000. His remark came in 1957 and was ripe with financial and political implications. So it is once again this week in connection with ideas for what could be CIRM 3.0. 

Tomorrow's meeting will be carried live and interactive on the Internet. Members of the public will be able to listen in and comment. Instructions are on the agenda. 

The meeting will be based in Oakland with teleconference locations for CIRM board members, which the public can share, in Riverside, South San Francisco, San Diego, Napa, San Francisco, Irvine, La Jolla and Rancho Cordova. Specific addresses can be found also on the meeting agenda. 

Stem Cell Treatments on the Installment Plan, Cash for Patient Families, State Grants for Stem Cell Training? Perhaps Part of a New, $5 Billion California Ballot Measure

In November 2017, Robert Klein appeared before directors of the California stem cell agency to discuss a new bond initiative for the agency. He had more to say last month. See story below.

 California Stem Cell Report photo. 

PALO ALTO, Ca. -- The man regarded as the father of the $3 billion California stem cell agency is thinking about changes in the program to help win voter approval of another $5 billion for the research program. 

They include a stronger requirement to make state-backed, stem cell therapies more affordable and accessible and to provide more cash for creating a greater stem cell work force in the Golden State.

Robert Klein, the real estate investment banker who led the formulation of the 10,000-word ballot initiative that created the stem cell agency, recently told the California Stem Cell Report,

"The original initiative stated really a commitment to the idea of access....

"It's my intention to actually put a directive in for funding the infrastructure to work on access, to work with insurance companies, to work with Covered California to work with Medicare, to make sure that there's access, to make certain that public hospitals and public clinics in California get discounted prices."

Klein discussed some of his thinking for another ballot initiative in 2020 during a 70-minute interview last month in the offices of Klein Financial Corp. 

Also housed in his building is the office of Americans for Cures, a nonprofit stem cell advocacy group. Klein, who founded the group and is its chairman, said he is consulting with its scientific advisory group to develop possible changes in CIRM. 

The co-chairs of the group are Irv Weissman, director of Stanford's Institute of Stem Cell Biology and Regenerative Medicine, and Larry Goldstein, director of the UC San Diego stem cell program.

Klein's thoughts on affordability and access were expansive. 

"We need to also address the issue of how do patients get treatment. They need transportation to get there right? They need housing for their family member who's going to take care of them."

As for possible costs of $1 million for a single treatment, Klein called for fresh thinking in terms of insurance coverage and financing. He notes that stem cell therapies can result in a total cure, eliminating the need for recurring, expensive treatments. He said,

"These curative therapies -- we need to work on a new business model for biotech where instead of paying $500,000 upfront or something where companies price it."

As for payments by insurance companies for treatments, Klein said,  

As long as you're in remission from cancer, they pay for it, but they pay for it over a period of five years or 10 years. Right? It’s pay for performance and medicine, which is important to access. Right?"

As for training medical professionals to handle what Klein hopes will be a burgeoning industry, he said,

"I'm looking at a directive section that deals with specifically broadening the doctors who are specifically educated. The only way you can do that is to buy a part of the residency time. Otherwise they don't have time to do anything other than deal with current patients and current methodologies, which are radically insufficient as compared to the new cellular therapies. 

"In terms of having the workforce that can implement these new therapies.... You need individuals that are trained in high speed cell sorters. You need individuals that understand the handling of cellular therapies, keeping frozen transportation, the procedures within the operating rooms on delivery, specific structures that have been created to be able to precisely insert them at the right place."

Klein, who was the first chairman of CIRM, has more ideas that may well be aired at a CIRM meeting Wednesday to discuss a possible $5 billion bond initiative to rescue the agency from financial death.

The bond funds that were authorized in 2004 are expected to run out for research awards as early as September.

Wednesday's meeting involves the science and governance committees of the agency's 29-member board. The session will be aired live over the Internet. The public can participate as well. Instructions are available on the agenda. 

The meeting will be based in Oakland with teleconference locations for CIRM board members, which the public can share, in Riverside, South San Francisco, San Diego, Napa, San Francisco, Irvine, La Jolla and Rancho Cordova. Specific addresses can be found also on the meeting agenda. 

$15.6 Million Operating Budget Slated for California's Stem Cell Agency

California's 14-year-old stem cell research program is set this week to approve a $15.6 million operating budget as its funding is drawing to a close.

Cash for new research awards is expected to run out later this year. But the agency, known formally as the California Institute for Regenerative Medicine (CIRM). still needs to administer multi-year awards for the next few years. It has set aside money to wind down those existing programs.

The proposed operating budget for the 12 months beginning July 1 totals $15.6 million, up from an expected $14.9 million in spending in the 2018-19 fiscal year. The budget is slated to taper down to $1.8 million in 2023-24.

For the new fiscal year, employee salary and benefits consume most of the budget, accounting for $11.4 million, up slightly from $11.3 million this year.  The most recent body count at CIRM shows about 45 employees. 

The second largest spending category for next year is "external services," largely outside contracting. That area totals $1.5 million, up from $1.1 million for the current year.

The 2019-20 budget provides $838,000 for grant application reviews, meetings and workshops. That is up from $794,000 this year.

The $838,000 appears to assume the success of a private, $220 million fundraising drive that is now underway. It would allow the agency to continue its awards in a significant fashion. However, no public announcement of any major fund donations has yet been forthcoming.

The budget comes before the Finance Committee of the agency's governing board on Wednesday. The committee routinely approves the annual operating budget with few, if any, major major changes. The spending plan will then go to the full board next month for ratification.

More details of the budget can be found on the agenda for the meeting. The session will be aired over the Internet. The public can listen in and ask questions online as well. Instructions for participating can be found on the agenda.

Stem Cell Scrutiny in the Golden State: California's Research Program Looks to Avoid Extinction

In just nine days, the California stem cell agency will take a close look at its future, examining its budget for the coming fiscal year as well as the possibilities for a ballot initiative in 2020 that could stave off its financial demise.

The $3 billion enterprise, known formally as the California Institute for Regenerative Medicine (CIRM), expects to run out cash for new research awards this year, perhaps as early as September.

It has sufficient funds to administer its remaining 211 ongoing awards and keep the lights on. But it has only $114 million left before its research coffers are empty. 

CIRM is attempting, however, to raise privately $220 million to bridge the gap in research funding between this year and late 2020. The success of that effort is still unknown.

CIRM was created in 2004 by Proposition 71, a ballot initiative that also financed the agency with California state bonds (borrowed money). Since then it has awarded $2.6 billion for stem cell research, including involvement in 53 clinical trials, which are the last stage prior to federal approval of a treatment for widespread use. 

Despite the rosy expectations of 2004 campaign, CIRM has not yet backed research that has led to a stem cell therapy that is widely available for public use.

CIRM has scheduled two significant meetings for Wednesday May 15. One involves the agency's budget for the fiscal year that begins July 1. The other involves "discussion of ideas for (a) new initiative."

For readers unfamiliar with the initiative process in California, it is a method for placing before voters proposals for new state laws and funding and basically bypasses the legislature. To qualify a measure for the ballot in the fall of 2020, stem cell research supporters will need to gather hundreds of thousands of valid signatures of registered voters. Usually that is done by hiring firms that specialize in that sort of collection.

Current estimates of the cost of each signature run around $6.00. Estimates of the total cost of a ballot campaign for a new stem cell initiative run in the neighborhood of $50 million, which would have to be raised privately by supporters of the research -- not the agency.

CIRM is stepping cautiously into the ballot initiative process because of legal constraints. Scott Tocher, CIRM's general counsel, said in a statement to the California Stem Cell Report, 

"While a public agency is not permitted to advocate for or against a ballot measure because it is barred from using public funds in an effort to convince the voters with respect to a particular policy position, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters. 

"For instance, the (California) attorney general has concluded that public agencies may engage in outreach to obtain input and assess the feasibility of a measure.  In our case, of course, we don’t even have a ballot measure on the ballot yet. The purpose of the meeting is to discuss elements that a future measure might contain, not to campaign for a measure’s passage."

The agency has not yet disclosed its proposed operational budget for the fiscal year that begins July 1. But CIRM is limited by the ballot initiative that created the agency to spending no more than 6 percent of the total it has awarded. This year's operational budget approached $17 million. The spending plan for the next fiscal year is expected to be less. 

In the next few days, the California Stem Cell Report will carry more on the upcoming CIRM meetings, including the perspective from Robert Klein, who headed the 2004 ballotcampaign. Klein was also the first chairman of the agency and is eager to see it funded anew with as much as $5 billion. 

New Effort to Require California Medical Board to Act on Snake Oil Stem Cell Clinics

A California measure aimed at regulating "snake oil," stem cell clinics sometime next year has taken a major turn as it wends its way through the legislative process in Sacramento. 

The bill, AB617, was amended this week to require California's Medical Board to move on the clinics, which have proliferated across the country in recent years. California has more than 100, according to the latest estimates.  An earlier version of  the measure placed responsibility with the state Department of Public Health. 

The clinics charge thousands of dollars for treatments using substances that they describe as stem cells. However, in virtually all cases, the treatments have not been tested scientifically. Some have led to serious injuries. 

According to the latest version of the measure, the state Medical board would be required to create a stem cell advisory group by February 2020 that would make recommendations by July 2020 for regulation of the dubious clinics.

The group could also recommend emergency regulations that could be adopted by the state Medical Board with a 90 day notice. 

The new group would have nine members. Three would be appointed by the California stem cell agency, three by state Medical Board, two by the state osteopathic medical board and one by the state nursing board. 

The changes in the bill mean that it will require a 70 percent vote by both houses of the legislature. The previous version would have required only a majority vote. The increase is dictated by the fact that it changes Proposition 71 of 2004, which created the state stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM). 

A spokesman for CIRM said today,

"CIRM is working with legislators to help them pass a bill that will regulate clinics offering unproven and unapproved stem cell therapies."

The California Stem Cell Report has asked Mullin's office for comment on the rationale for the latest amendments. We will carry his comments verbatim when they are received. 

(Following the posting of this item, Mullin released a statement that said: 

(“An important part of the legislative process is working with stakeholders to make sure legislation is as effective as it can be. Our amendments to move the requirements of AB 617 to the California Medical Board's jurisdiction will have a positive outcome. I look forward to continuing to work with MBC, CDPH, CIRM and others to address the serious issues related to potentially fraudulent stem cell clinics.")

The bill has cleared its first Assembly committee and is now before the Assembly Appropriations Committee. 

(An early version of this item said that a staff analysis of the bill said it was supported by CIRM. That phrasing was replaced in this version by the quote from CIRM.)