Text of CIRM Statement on $250 Million in Recovered Funds

In response to questions from the California Stem Cell Report, the state's $3 billion stem cell agency prepared the following information on the amount of cash it has recovered from awards over the last 15 years. 

The money has helped to fund more research sponsored by the agency, which is currently running out of money.  (See here for an article on the practice.)

The practice of recovering funds from awards is not common with the National Institutes of Health, which is the largest funding organization in the United States.

Here is the text of what Kevin McCormack, senior director of communications for the agency sent along in response to our questions.  

"Right from the very beginning CIRM has always tried to be good stewards of taxpayer’s dollars so we have always had processes and policies in place that ensured we were closely managing our awards which has resulted in recovered funds.  

"Cancelled awards are a portion of the funds returned but recovered funds also includes unspent funds at the end of an award; reductions during contracting due to rebudgeting, unallowable costs, or inaccurate facilities rates; or a failure to meet a particular a condition of the milestones such as target patient enrollment which results in an award reduction.

"Awards can be canceled for not meeting milestones, changing the scope approved by the GWG, or other non-compliance issues.

"The total amount of recovered funds collected since 2005 is $250M which averages to an estimated $16.6M per year. Although we cannot break this number down by year, recovered funds were significantly smaller in the early days of CIRM as we began launching awards and then increased overtime as the portfolio grew.  Since implementation of operational milestones in 2016, recovered funds have totaled to the following:

2016 - $30M

2017 - $41.9M

2018 - $25.85M

2019 - $30.3M

"The number of awards cancelled is 32 and the total amount for that category is $122.3M.

  

"I think it is worth highlighting the key role that our Grants Management Team play in recovered funds as they work closely with our grantees to help them administer the funds they have been awarded. They monitor projects closely, including analyzing budgets, examining financial expenditures, and conducting financial compliance site visits, to ensure that the funds awarded are being spent in an appropriate manner and the Grantee is properly accounting for the use of CIRM funds. The goal of the GM team is always to try and help each project succeed and they are always working to provide guidance to our Grantees. However, if it becomes clear that the project is cannot meet its milestones or is not complying with the rules of our agreement then the GM team will take the necessary actions to correct the situation."  

California, Stem Cells and the Future of Human Suffering

Has California's $3 billion stem cell research agency "change(d) the future of medicine and human suffering?" 

It's a question and contention indirectly raised very briefly in a news article earlier this week published in the Long Beach Business Journal. 

While the Long Beach weekly does not have the reach of such other Southern California outlets as the Los Angeles Times, the question may well be at the heart of campaign to convince voters to approve an additional $5.5 billion for the California Institute for Regenerative Medicine (CIRM), as the agency is formally  known.  

Robert Klein

CIRM, created in 2004 by voters, is down to its last $27 million. It will begin to  shut down next fall if voters fail to approve the $5.5 billion measure in November. The proposed initiative will labor under a burden created by the ballot initiative campaign 15 years ago that raised expectations that stem cell cures were just around the corner. CIRM, however, has yet to finance a stem cell therapy that is approved by the federal government for widespread use. 

The Long Beach article by Alena Maschke provided a brief overview of the agency and its programs. Right at the top was a quote from Robert Klein, the Palo Alto real estate developer who is leading this year's ballot initiative campaign. He also led the effort in 2004 and was the first chairman of the agency.

Klein was also quoted as saying,

“The scientists and patient advocates in California have proven through the California stem cell initiative funding that they can change the future of medicine and human suffering. California funding has filled the gap of the federal government’s failure to fund this revolution in medicine.”

Mascke's article said Klein's efforts for stem cell research were initially triggered years ago by his concern for his son, Jordan, who had Type 1 diabetes.  The piece said, 

"In 2016, 26-year-old Jordan Klein died of complications related to the disease, two years after scientists first made significant progress on finding a treatment developed with the help of human embryonic stem cells. 

"Klein blames the federal government’s resistance to embracing stem cell research for the lack of adequate treatment options that lead to his son’s death. 'My youngest son died. If they hadn’t held it up in D.C., he would be alive,' he said. 'How many children, how many adults are going to die before they create enough stability to advance therapies that mitigate or cure these chronic diseases?'"

The Long Beach paper also tapped Aaron Levine, an associate professor at the

Aaron Levine, Georgia Tech photo

School of Public Policy at Georgia Tech. Levine was a member of the blue ribbon group that conducted a $700,000 study of the agency's work, an effort that was paid for by CIRM. 

"'CIRM stepped in to fill a gap when the National Institutes of Health was restricting its funding in this space,' Levine said. 'The research that CIRM has supported, as well as the training programs, has had quite a big impact on the field.'"

The article continued, 

"Levine also noted that the program has yet to resolve one crucial question: Who will pay for patients’ treatment with costly stem cell therapies once they’re ready to hit the market? Per-patient costs for stem cell therapies can easily reach several hundred thousand dollars and as research advances, more patients are expected to qualify.

 "'Suddenly, that’s just such a substantial sum of money that it becomes a fundamental challenge to how we pay for healthcare, how we pay for medicine in the United States,' Levine said. Subsidies for California residents, whose taxes helped pay for the research necessary to bring these cures and therapies to market, would be one option, Levine noted.

"Despite these concerns, Levine said he supports the measure to extend the program. 'Even though this is not the perfect measure, I think there’s a lot of value in CIRM and it makes sense to continue it,' he said. In the end, it will be up to California voters to decide. 

"'It largely will rise and fall on whether there’s a motivated campaign for and against it and what people who’ve never really thought about stem cell research as a state ballot issue are going to think about this particular initiative when it comes in the fall,' Levine said."

As for whether CIRM has changed the future of medicine and human suffering, some might argue that it alone has not, that other stem cell researchers around the world have been as instrumental. Others would argue that if revolutionary change has occurred, CIRM has fulfilled its mission and the people of California no longer need to fund it. 

As Levine points out, the voters of California will make the judgment in November. Their decision will come during an election that will focus intensely on presidential politics and much, much less so on the performance of the stem cell agency.  

The California Stem Cell Campaign for $5.5 Billion More Mounts a Web Site, Hires PR firm

The ballot campaign to pump an additional $5.5 billion into California's stem cell stem cell agency is now moving briskly and has a web site plus a well-known public relations firm that has handled more than 20 other ballot measures in the Golden State. 

The campaign has also spent $1 million, which is a tiny amount given that the campaign could cost upwards of $50 million, give or take some millions. The latest campaign disclosure statement shows that it had a zero balance as of Dec. 31 last year. 

The state stem cell agency is running out of the $3 billion originally approved by voters via a 2004 ballot measure. If the new ballot initiative is not approved in November, the agency is expected to whither and die. Its only significant source of cash has been the $3 billion in state bonds. 

The campaign web site is called "Californians for Stem Cell Research, Treatments and Cures." It carries a list of 43 organizations that it says support the ballot initiative, which has not yet qualified for the ballot. 

The groups range from the Alliance for Regenerative Medicine, an industry lobbying group in Washington, D.C., and the Loving Mind Institute, which deals with mental and addiction issues,  to the Arthritis Foundation and the International Society for Stem Cell Research, the largest organization of stem cell researchers in the world. 

Also listed as supporters are patient advocates, scientists and private parties. They include luminaries such as Nobel Prize winner David Baltimore. He served on the board of the stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM) from 2004 until June 6, 2007. 

Baltimore was also a co-founder and chairman of the board of a firm backed with millions by the stem cell agency. The firm, Calimmune, was incorporated March 23, 2006, in Delaware.  The firm has received $8.3 million from CIRM. Calimmune's initial award came as part of a $20 million award on Oct. 28, 2009.   Calimmune was sold to CSL Behring in 2017 for $91 million. 

(See here, here and here for more on Calimmune.)

A number of current board members of the stem cell agency are also listed by the campaign as supporters. The board has not yet taken a formal position on the initiative, but there is little doubt that it will support the proposal. Other supporters include a number of researchers who have received CIRM funding. 

The campaign web site features "success stories" in CIRM program, all of which have been carried earlier on the official CIRM web site. The campaign site asks for donations as low as $5 via credit cards. It contains a list of five stories and columns that are favorable to the agency, covering the period from 2016 to last month.

The campaign has also hired a well-known California public relations firm, Fiona Hutton and Associates, which has offices in Los Angeles and Sacramento. Hutton was involved in the 2004 stem cell campaign as well. 

Hutton's main web page promises "communications that shake up things and move mountains."

The American Association of Political Consultants says that Hutton is "one of only two women-owned businesses ranked in the Top 10 of national public affairs agencies and the Top 10 Los Angeles-based firms by leading PR trade publication O’Dwyer’s."

Former CEO of California Stem Cell Agency Leaves Top Post at Minnesota Non-profit

Randy Mills, the former head of the California stem cell agency who left it in 2017, has resigned as president of a large bone marrow non-profit known as "Be The Match" in Minneapolis.

A brief news release from the organization said he was leaving for "personal reasons."   Local news coverage of Mills' departure in Minnesota was scanty. Be The Match reported income of about $418 million in 2018.

Maria Millan, then vice president for therapeutics at California's stem cell agency, succeeded him as CEO and president of the agency and still holds that position. Mills was highly regarded at the agency and has been credited with helping to sharpen its focus and direction.

New California Stem Cell Ballot Initiative Hits $1 Million Campaign Spending Mark; Tens of Millions More Needed

The effort to persuade California voters to pony up an additional $5.5 billion to finance stem cell research has so far spent nearly $1 million on its campaign, and the proposal is not yet on the November ballot.

The spending was reported by the Californians for Stem Cell Research, Treatments and Cures, the campaign committee led by Robert Klein, a Palo Alto real estate developer who also directed the campaign that created the state stem cell agency in 2004 via a ballot initiative. 

The $942,005 in spending covers all of 2019 but not 2020. The report to the California Secretary of State shows that the committee received only  $712,254 in non-monetary contributions and had a zero balance as of the end of last year. All of the contributions came Klein Financial Corp. in Palo Alto, Ca., or from Klein, who is president of the real estate investment firm. 

Klein was the first chairman of the stem cell agency, known officially as the California Institute for Regenerative Medicine (CIRM). The agency is running out of money and needs the additional billions to continue its work. It was funded with $3 billion in state borrowing 15 years ago. 

Robert Klein addressing CIRM board
 about the ballot measure in 2017

The campaign finance report showed that Klein personally contributed the largest amount, $534,340.  The contributions were all described as non-monetary. The term includes such things as employee services and "enforceable promises," involving such matters as a loan. 

Klein told the California Stem Cell Report in 2017 that he expected that the current stem cell ballot initiative campaign, including signature gathering, campaign advertising, etc., would run this year about $50 million. 

In a telephone interview last week, he demurred when asked about campaign finances and fundraising. 

Klein has reported to state election officials that the campaign has collected 25 percent of the more than 600,000 signatures needed to qualify for the fall ballot. That benchmark sets the stage for legislative hearings on the proposed initiative.

The legislature cannot modify the initiative but it could offer its own alternative approach. No date has been set for hearings, which must occur 131 days before the Nov. 3 election.    

California's Alpha Stem Cell Clinics: A Look at the $50 Million Effort in May

If you want to know what is happening with one of the signature efforts of the $3 billion California stem cell agency, mark Friday May 1 on your calendar. 

That's the date of a free, day-long conference in Sacramento dealing with the stem cell agency's statewide Alpha Clinic program, which has its northern most location at UC Davis. 

This is the 5th annual review of the Alpha Clinic effort, which was seeded with $50 million by the stem cell agency, formally known as the California Institute for Regnerative Medicine(CIRM). The Alpha clinics specialize in delivering stem cell clinical trials to patients. 

(See here for a UC San Diego video involving the Alpha Clinic program. You can skip the ad at the beginning by clicking on the "skip ad" box in the right hand corner of the video screen.)

The Alpha conference represents an opportunity for state policy makers and legislators to get a first-hand perspective on the state's 15-year-old stem cell agency, which is hoping that next November voters will approve an additional $5.5 billion for the program. 

The agency expects to phase out its work if the ballot initiative fails. 

In addition to UC Davis, other Alpha locations are at City of Hope, UC Irvine/UC Los Angeles, UC San Diego and UC San Francisco. 

The agenda for the May meeting is still being developed. But topics currently scheduled include unmet medical needs, cures for rare diseases, cancer clinical trials and the all-important topic of access and affordability.

In addition to researchers, the session includes a number of patients and patient advocates.

Reservations can be made by going to this page on the Internet.

California Stem Cell Agency Okays Major, Publicly Financed Conference During Ballot Campaign for $5.5 Billion More

OAKLAND, Ca. -- California's financially strapped stem cell agency this morning approved a $250,000, two-day public conference on the state of stem cell research that would be held in the midst of a ballot campaign to provide the agency with an additional $5.5 billion from taxpayers.

The proposal was approved on a unanimous vote after a brief discussion. 

The conference is expected to be held prior to the Nov. 3 election involving the proposed, $5.5 billion measure. Details and location are yet to be worked out.

Known formally as the California Institute for Regenerative Medicine (CIRM), the agency was created by voters in 2004 who provided it with $3 billion in bond funding. It is now down to its last $27 million for awards. The agency has additional cash to continue its administrative operations this year and wind down later if the proposed ballot initiative fails to win approval.

CIRM has held a number of large, public events over its 15-year life to bring together scientists and the public as part of its public information efforts to report on its activities and encourage collaboration among researchers. The conference approved today falls in that category, the agency says. 

The meeting, however, is likely to be targeted, sooner or later, by opponents of the agency as an improper use of public funds. The state has legal restrictions on use of public funds during ballot campaigns that involve many gray areas. But normal public information efforts are permitted. 

No member of the public spoke today against the conference, which was available live online and at a number of public teleconference locations throughout the state.  

The agency told the California Stem Cell Report earlier this week, 

"CIRM has conducted four grantee meetings since the agency’s inception.  These meetings are opportunities for grantees to share information about their progress, discuss bottlenecks in the field, and identify potential partnership opportunities.  This grantee meeting will be no different.  The meeting will comply with state laws governing the use of public funds in connection with ballot measure campaigns and will not include any advocacy for or against the ballot measure."

The CIRM conference proposal said that the public, CIRM grantees, interested funding organizations, patient advocates and stakeholders would be invited to the two-day session. An estimated 300-400 participants are expected. CIRM said the goals of the meeting are to:

• "Provide a public forum to learn about the most recent advances in stem cell research in California.
• "Encourage the sharing of information and data among CIRM grantees to foster collaboration and learning. 
• "Timely presentations to address and overcome key bottlenecks and challenges in the field to help advance existing projects. 
• "Showcase promising stem cell-based projects for partnership opportunities with investors, funders, or companies."

James Harrison, former general counsel to the agency and a well-known expert on campaign law, briefed the CIRM board last fall on the complex restrictions that surface during campaigns. He said, 

"Communications about a ballot measure should be delivered through CIRM’s ordinary communication methods, like its website, blog, newsletter, emails to interested persons, and public meetings, in the style CIRM normally uses to communicate other information. CIRM should avoid passionate or inflammatory language and modes of communication that it does not regularly employ, and should not encourage voters to vote in a particular manner." 

Harrison drafted portions of the 2004 initiative that created the agency. He was also heavily involved in drafting the current proposed initiative. 

California Stem Cell Agency Approves $1.8 million to Speed Promising Research

OAKLAND, Ca. -- The California stem cell agency today approved the use of $1.8 million in newly recovered  funds to help researchers move promising basic research into products that would be available to the general public.

The action targeted acceleration of work from what the agency calls its Quest program. The agency said it had eight possibilities for awards in the pipeline. 

The money for the awards comes from $2.8 million that has been recovered from other CIRM-funded research that has not met its milestones. 

The agency expects to report on the status of any additional recovered funds in May. 

$5.5 Billion California Stem Cell Initiative Moving Quickly to Qualify for November Ballot

The effort to place a $5.5 billion stem cell research initiative on the November ballot hit a key milestone this week, chalking up at least 25 percent of the signatures needed. 

In an interview yesterday with the California Stem Cell Report, Robert Klein, chairman and founder of Americans for Cures, said that he expects to have about one million signatures in hand by the end of April. 

To be be placed before voters, the initiative must have valid signatures from 623,212 voters.  To achieve that number, many more signatures are gathered because a number of them are disqualified by elections officials. The deadline for signatures for the measure is June 15.

Klein sounded optimistic about the pace of the signature-gathering effort. He said it was running slightly ahead of 2004 when he led the effort for the ballot measure that created the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. 

"We're gaining momentum actually," Klein said in a phone interview. 

CIRM needs a major cash infusion this year because it is running out of money. The agency was provided with $3 billion in bond funding by voters 15 years ago. It is now down to $27 million for research awards. 

Klein sent a letter Feb. 1 to the California secretary of state, the state's top election official, declaring that the effort had acquired at least 25 percent of the signatures needed. The milestone triggers legislative hearings on the initiative. 

The hearing or hearings must be held no later than 131 days before the Nov. 3 election. The legislature cannot alter the proposal, but it can offer its own version. Supporters of a proposed measure can also withdraw it. 

"This means the legislature can offer alternative legislation as a compromise in an effort to convince petitioners to withdraw certified initiatives," according to Ballotpedia. 

Klein declined to discuss specific costs of the signature gathering effort. However, it is largely done in California through firms that are paid by a measure's supporters. In 2018, the average cost of a signature was about $6.00 and ran as high as about $9.00, according to Ballotpedia.  The average total cost in 2018 was $2.6 million for qualifying an initiative. 

Klein is a real estate developer based in Palo Alto. He directed the writing of both the original initiative and the latest one and was the agency's first chairman. Americans for Cures is the stem cell advocacy group that he founded. 

(The information on costs of signature gathering was not contained in an earlier version of this item.)

California's Stem Cell Agency Considers Mounting Major Public Forum During Upcoming Ballot Campaign for $5.5 Billion in Refinancing

California's stem cell agency has recovered $2.3 million from unsuccessful research awards and today proposed to split the amount between more research and a public forum later this year to discuss progress in the field.

The forum would be held after a proposed ballot initiative to refinance the agency with $5.5 billion is likely to have qualified for the November ballot. The proposal for the two-day event is the sort of conference that opponents of the agency are likely to raise questions about. 

Legal restrictions exist in California exist concerning how public funds may be used during a ballot campaign. In response to a question, a spokeswoman for the agency, formally known as the California Institute for Regenerative Medicine (CIRM), said this morning that the grantee conference would comply with state law and would not involve advocacy for the ballot initiative. 

The proposal, if approved by voters, would save CIRM from financial extinction. The agency is running out of money and needs more billions to continue its work. CIRM was created in 2004 by voters who provided $3 billion in state bond funding. It is now down to $27 million for awards. 

At its meeting on Thursday, the CIRM governing board is scheduled to be asked to allocate $1.8 million of the recovered funds for "progression" awards to help advance more basic level research into possible clinical use. A CIRM document said that two applications have already been received and another six appear to be in the pipeline.

Another $250,000 would be allocated for a public conference in the latter part of the year "to discuss advances and progress in the field of stem cell research in California." 

The event would occur after the proposed initiative qualifies for the ballot. Efforts to gather more than 600,000 signatures of registered voters are already underway. The deadline for qualification falls in June. 

State law bars agencies from spending public funds for activities that are strictly for ballot campaigns. However, the agencies are permitted to continue their regular public information practices.  

James Harrison, former general counsel to the agency and a well-known expert on campaign law, briefed the CIRM governing board last fall on the complex restrictions and gray areas. He said, 

"Communications about a ballot measure should be delivered through CIRM’s ordinary communication methods, like its website, blog, newsletter, emails to interested persons, and public meetings, in the style CIRM normally uses to communicate other information. CIRM should avoid passionate or inflammatory language and modes of communication that it does not regularly employ, and should not encourage voters to vote in a particular manner." 

Harrison drafted portions of the 2004 initiative that created the agency. He was also heavily involved in drafting the current proposed initiative. 

In response to a query from the California Stem Cell Report, Maria Bonneville, a spokeswoman for the agency, said,

"CIRM has conducted four grantee meetings since the agency’s inception.  These meetings are opportunities for grantees to share information about their progress, discuss bottlenecks in the field, and identify potential partnership opportunities.  This grantee meeting will be no different.  The meeting will comply with state laws governing the use of public funds in connection with ballot measure campaigns and will not include any advocacy for or against the ballot measure."

The CIRM conference proposal said that the public, CIRM grantees, interested funding organizations, patient advocates and stakeholders would be invited to the two-day session. An estimated 300-400 participants are expected. CIRM said the goals of the meeting are to:

• "Provide a public forum to learn about the most recent advances in stem cell research in California.
• "Encourage the sharing of information and data among CIRM grantees to foster collaboration and learning. 
• "Timely presentations to address and overcome key bottlenecks and challenges in the field to help advance existing projects. 
• "Showcase promising stem cell-based projects for partnership opportunities with investors, funders, or companies"

California's New Stem Cell Initiative and Its $7.8 Billion Cost, Including Interest

The price tag for refinancing California's unique and ambitious stem cell research program could run to close to $7.8 billion, give or take a few hundred million dollars or more. 

So says the state's legislative analyst in a financial analysis of a proposed ballot initiative that is likely to be on next November's ballot. The measure would provide $5.5 billion more for research awards to California scientists by the California Institute for Regenerative Medicine (CIRM), as the state stem cell agency is formally known. 

The increase in the price tag is caused by the fact that the $5.5 billion would be borrowed money -- bonds that would be issued by the state. The legislative analyst estimated that the interest costs could total $2.3 billion, bringing the actual expense to taxpayers to $7.8 billion. 

Significant caveats exist, however. The legislative analyst, who prepares these sorts of analyses for all ballot measures, cautioned that the $7.8 billion estimate could rise or fall depending on how interest rates rise or fall. Another unknown involves the length of the payback period. 

What the legislative analyst has to say is a significant matter for the proposed initiative, whose success will determine the financial survival of the agency. CIRM is running out of cash. It was funded by voters 15 years ago with $3 billion. If the proposed initiative fails, CIRM will wither away over the next two to three years. 

Should the initiative qualify for the ballot, the seven-page financial overview of the measure would be delivered, via the state's official voter's guide, to about 20 million California voters prior to the election. The overview would also serve as the basis for news stories in virtually all of the media, which is always looking for bottom line figures.

Beyond the interest costs, the analysis carried other financial bits of interest. It said that over an initial, five-year period the agency would use some the bond proceeds to pay the interest on the money it is borrowing. The analyst said, 

"Were the state to begin issuing bonds shortly after approval of the measure, CIRM would likely make interest payments totaling in the low hundreds of millions of dollars from bond proceeds by the end of 2025."

The proposed initiative also places a 6.5 percent cap on total funding for certain operational expenses including administration and grant oversight. Other changes would give more freedom to the agency, which originally had a 50-person cap on staff. That cap was later removed by state legislation. The new initiative would set the cap at 70 with a provision for more employees beyond that number, under certain conditions involving, among other things, compensating them with cash raised privately. 

The new initiative stipulates that the agency improve access to stem cell therapies, funding that effort with up to 1 percent of the $5.5 billion, a change from the current law involving CIRM.  Other changes from the current situation: 1.5 percent for starting "community care centers" for new clinical trial sites, $1.5 billion for research into brain and nervous system diseases and up to 0.5 percent for a shared lab program. 

Royalties from any therapies financed by CIRM research would go to the agency and not the state general fund, as currently is the case. So far, royalties have totaled only about $200,000. Larger amounts are likely to appear in the next decade as the therapies emerge from the research that was financed years ago. 

Regarding possible savings as the result of more cost-effective therapies, the analysis said, 

"To the extent the measure results in new treatments that are more cost-effective than existing treatments, state and local governments could experience savings in some programs such as Medi-Cal, the state’s subsidized health care program for low-income people. The magnitude of these and other indirect effects is unknown."

The stem cell agency, which was created by voters in 2004, has yet to finance research that has led to stem cell treatments that are approved for general public use. 

In 2004, the legislative analyst prepared an interest cost estimate of $3 billion on the original amount for awards, also $3 billion. However, the projections did not anticipate the recession of 2008, which resulted in a long-term drop in interest rates. Today, the interest on the original $3 billion is expected to be about $1 billion.

Here are links to more information on proposed initiative and related matters:

SUNDAY, DECEMBER 08, 2019

LA Times: $5.5 Billion Measure for California Stem Cell Agency Could Actually Be a 'Downfall'

FRIDAY, NOVEMBER 15, 2019

$5.5 Billion Stem Cell Ballot Measure: Questions in California but Apparently No Foot-Dragging

MONDAY, NOVEMBER 04, 2019

California Stem Cell Agency Chalks Up its 60th Clinical Trial as Funds Dwindle

Federal Stem Cell Regulation Setback in California; Case Involves Treatments with Fat Cells

Dubious stem cell clinics in California were in the news again this week with a piece in the Los Angeles Times declaring that a federal judge had dealt a blow to regulators trying to crack down on the much-criticized enterprises. 

The column by Michael Hiltzik said,

"A Los Angeles federal judge has rejected a government motion that could have shut down a network of clinics offering customers allegedly unauthorized stem cell treatments.

"The ruling by Judge Jesus G. Bernal potentially deals a setback for the Food and Drug Administration’s campaign against treatments using stem cell preparations that the FDA has not approved. 

"In the ruling published late Monday, Bernal denied the government’s motion for summary judgment in its lawsuit against the Rancho Mirage-based California Stem Cell Treatment Center, the Cell Surgical Network, and the latter’s founders, Mark Berman and Elliott Lander. Bernal ruled that the case was suitable for trial."

UC Davis stem cell researcher Paul Knoepfler also wrote about the case on his blog.

"The reasons why Bernal said he rejected the summary judgment request are concerning and don’t fit with my view of the medical science here as a stem cell biologist. 

"Unfortunately, this all leaves the door potentially still open for hundreds of clinics to sell the unproven fat stem cell product at the heart of this case called 'stromal vascular fraction' or (SVF)."

This lawsuit was first filed in May 2018 and is likely to continue for some time, possibly involving lengthy appeals. 

The controversy over unregulated clinics is of concern to those who support refinancing California's stem cell agency with $5.5 billion via a hoped-for voter approval of a ballot measure in November. The fear is that the flap could create voter confusion and besmirch the entire field. 

The agency was created in 2004 by voters who provided it with $3 billion. It is now down to its last $27 million for research grants. That figure is likely to increase next week as agency directors hear a report on the amount of cash recovered from awards that did not meet benchmarks.

Calfornia's Stem Cell Pie for 2020: State Agency to Slice Up Nearly Final Millions Next Week

It ain't over yet -- at least that's the word from what could be deemed the financial center of stem cell research in California.

The governing board of the California stem cell agency is scheduled to meet Feb. 6 to allocate unspecified additional millions for stem cell research and peer down the road that awaits it beginning Nov. 4 of this year.

That is the day after California voters are expected to deliver their judgment on whether the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, should continue and receive an additional $5.5 billion.

The agency is running out of money. Its initial $3 billion is now down to $27 million for awards. A ballot initiative to give the agency the additional billions is expected to be on the ballot this fall, Nov. 3 to be precise.

But in just 10 days, the CIRM board will reveal the amount of cash that has been recovered from research awards that failed to meet milestones during 2019. The board is scheduled to make decisions on how that money, which is likely to run into tens of millions, is to be allocated during the remainder of this year.

Also on the agenda is a three-word topic: "strategic plan themes."  This is likely to involve possible directions of the agency should it receive additional funding from the ballot initiative. That proposed measure substantially expands the scope of the agency and specifies it move into in certain new areas, including attempting to assure the affordability of agency-financed therapies whose costs could run upwards of $2 million.

The agenda includes an update on most major programs involving CIRM, information that will come widely into play as the next fall's election receives more attention.

The meeting will be based at CIRM's headquarters in Oakland. But it will also be available electronically at a number of other public locations throughout California and via the Internet. Members of the public will be able to comment and ask questions through the Internet. Details are available on the agenda. 

Tiny Poll Heartens Backers of California's Financially Beleaguered Stem Cell Agency

The first public opinion poll of 2020 is out concerning the financial fate of California's $3 billion stem cell agency, and the result is "upbeat." 

However, there is one caveat that is as consequential as the failure of a phase 1 clinical trial. That is the go, no-go stage at which the safety of a stem cell therapy is tested in humans. 

The poll covers only 83 people out of the roughly 20 million California voters. 

The testing of public sentiment was conducted in the past week or so by UC Davis stem cell scientist Paul Knoepfler, who well knows the weakness of the non-scientific sample. But he still thinks it is something of a promising sign. 

Writing on his blog, The Niche, Knoepler reported that 48 percent of his self-selected respondents, who filled in the poll on the blog, believe that the agency will be refinanced with $5.5 billion from California voters come November. 

Sixty-three percent of those polled also said it should be.  

The agency is now down to its last $27 million, which is only a relative drop in the stem cell research bucket. 

Knoepfler described the poll results as "upbeat." He said that he thought that the 63 percent figure was an especially good sign for the agency, known formally as the California Institute for Regenerative Medicine (CIRM). Knoepfler wrote, 

"I actually thought this one might swing the other way since we have many readers here on The Niche who run stem cell clinics or are fans of the clinics, and seem to have a dislike or skepticism for organizations such as CIRM, ISSCR (an international group of stem cell researchers), etc."

Backers of the agency are currently in the process of gathering more than 600,000 voter signatures to qualify the $5.5 billion ballot measure for the fall ballot. 

The results of that signature drive, which is being handled by professional signature-gathering firms, may not be known until June. 

Global Growth in 2020 for Regenerative Medicine While California's Stem Cell Program Faces Extinction

ARM graphic

SAN FRANCISCO -- Leaders of the stem cell and regenerative medicine industry gathered yesterday at a sumptuous hotel here, and the talk was of billions of dollars in business, not to mention medical treatments that can cost millions. 

Just 11 miles away across the famed San Francisco Bay, however, was another sort of stem cell scene. It could be found in the not-so-posh, Oakland headquarters of the state stem cell program, known officially as the California Institute for Regenerative Medicine (CIRM) . 

CIRM is going broke. Its original $3 billion has shrunk to $27 million over the last 15 years. 

On the other hand, global financing for therapies and treatments in the regenerative medicine field totaled nearly $10 billion in 2019, marking the second highest year ever, the leading U.S. industry group reported at the session at the Parc 55 hotel.

Janet Lambert, CEO of ARM -- ARM photo

"2019 (was) a year of significant growth in the regenerative medicine sector," said Janet Lambert, CEO of the Alliance for Regenerative Medicine (ARM), told a standing-room-only crowd of more than 500 gathered for its annual briefing. "We enter 2020 poised for continued expansion."

Lambert said,

"The pipeline is robust, with several next-gen technologies entering the clinic and an increase in clinical trials for indications with large patient populations."

Her comments came as CIRM faces a financing shortfall that could mean its virtual extinction. 

The agency, created in 2004 by state voters, is down to its last $27 million of uncommitted cash. CIRM has often spent close to $300 million a year. The agency is hoping voters next November will provide it with $5.5 billion more under the terms of a ballot initiative yet to qualify for the ballot. CIRM's only significant source of funding is bonds issued by the state. 

Lambert's organization has more than 350 members, including CIRM. The largest percentage of ARM's membership comes from cell and gene therapy companies. The global financing it reports is almost entirely private. 

ARM's 2019 survey tracked nearly 1,000 companies globally, including 534 in the United States. The second largest number, 237, includes Europe and Israel. Lambert said the fastest growing area is Asia, which has 180.

ARM counted 94 phase three clinical trials globally, the last stage before a therapy is approved for widespread use by the federal government. 

CIRM is helping to finance 60 clinical trials, including three that are still active in phase three. It has yet to back research that has led to a widely available product.

Here are links to CIRM's phase three trials: BrainStorm Cell Therapeutics,  $16 million, ALS, PI Ralph Kern; Humacyte, Inc., $10 million, kidney failure, PI Jeffrey Lawson; Medeor Therapeutics, $11 million, kidney failure, PI Karen Smith. 

Here is a link to Lambert's slides. In the near future, ARM expects to mount online a video of her presentation including two additional panel sessions that examine the current and future outlook for regenerative medicine.   

Gold-Plated Stem Cell Treatments, Multi-billion Dollar Benefits and Potential Industry Profits

One of the nation's leading regenerative medicine industry groups is touting multi-billion dollar savings that may be achieved with the type of stem cell and gene therapies that are being developed with cash from California's financially beleaguered stem cell program.

The industry group is the Washington, D.C.,-based Alliance for Regenerative Medicine (ARM). It is tackling one of the major issues facing development of commercial stem cell therapies -- sticker shock at their expected prices, running upwards of a $1 million or more.

Without a willingness from health care insurers to cover the costs and provide a pathway to profit, it is unlikely that the biotech industry will embrace production of the therapies.

In a study released last Friday, the group said,

"Advances in molecular biology and genetics are leading to new treatments for rare diseases that require new ways of assessing value. CGTs (cell and gene therapies) are directed at the underlying cause of a condition and offer durable, potentially curative, or near-curative benefits. These transformative therapies create challenges for current reimbursement frameworks as they (the therapies) require significant upfront costs but are expected to provide a lifetime of benefits. The recurring treatment costs of chronically-managed patients can be greatly reduced and even eliminated with a one-time administration or short course of these novel therapies. 

"As CGTs arrive on the market, payers need new models for assessing their value. These treatments could potentially end the patient’s burden of illness, resulting in cost offsets (eliminating or reducing the need for long-term treatment, hospitalizations, and other care) and productivity gains that span a lifetime. Manufacturers incur a high per-patient development cost for these therapies and payers who bear the cost of treatment may not realize the long-term financial benefits due to health plan switching."

The ARM study predicted cost savings of as much as $33.6 billion over about a decade in connection with three afflictions: sickle cell disease (SCD), multiple myeloma (MM) and hemophilia A (Hem A). 

California's stem cell agency was not mentioned in the study, but it has funded research in all three areas. The agency is a member of ARM.

The study, backed by ARM and performed by the Marwood Group, said,

"Access to CGTs for even a modest number of patients with MM, SCD, and Hem A each year can reduce overall disease costs by nearly 23% over a 10-year period. The savings from lowering healthcare costs and raising productivity are considerable, approaching $34 billion by 2029. Of the savings, $31 billion are from a reduction in healthcare costs and $3 billion are from productivity gains."

The model used by ARM assumed CGT prices as high as $2 million. The study said,

 "The model has tested more than 180 different prices across the three potential CGTs that ranged from a minimum test price of $150,000 and up to a maximum price test of $2,000,000. The prices entered into the model created 60 different cost savings curves for all three of drugs in this model. Prices were distributed with more than 50% of test prices in the $100,000-$600,000 price per administration range."

The discussion of the costs of stem cell therapies has special resonance in the Golden State where voters are likely to be asked next fall to give $5.5 billion more to its stem cell agency, known formally as the California Institute for Regenerative Medicine (CIRM).

The agency, funded with $3 billion in 2004, is down to its last $27 million. A new, proposed ballot initiative is focusing hard on affordability of stem cell treatments. The initiative has no specific solutions but stipulates that a new version of CIRM  -- if the ballot measure is approved -- should devise some ways to come up with answers for insurers who are not likely to warm easily to $1 million therapies.

The 2020 Outlook for Regenerative Medicine: Major Industry Briefing Available Monday on Internet

One of more significant conferences of the year involving stem cells and regenerative medicine begins Monday in San Francisco with an overview of the industry and state of research. 

And there is an opportunity for those not on the scene to sample the presentations Monday morning via the Internet, including emerging therapies for cancer and next generation cell and gene therapies. 

The event is a state-of-the-industry presentation by the Alliance for Regenerative Medicine (ARM) in conjunction with the annual J.P. Morgan Health Care Conference.  

Something like 500 persons are expected to attend the ARM event. Below is the agenda for the Monday morning program. All times are PST. A live webcast will be available here, according to ARM.  Also available at the same Internet page location is a video from last year's presentation. 

Look for coverage also of the event next week right here on the California Stem Cell Report. 

8:00 – 8:20am | Introduction & Industry Update
Janet Lambert, CEO, Alliance for Regenerative Medicine

8:20am – 9:05am | Emerging Cell Therapies for Cancer
Claudia Mitchell, Senior VP, Production & Portfolio Strategy, Astellas (moderator)
Pascal Touchon, CEO, Atara Biotherapeutics
Matthew Kane, Co-Founder and CEO, Precision BioSciences
Samarth Kulkarni, CEO, CRISPR Therapeutics

9:05am – 9:50am | Next Generation Gene and Cell Technologies
Timothy Miller, Co-Founder, President, & Chief Scientific Officer, Abeona Therapeutics
Shelia Mikhail, CEO, AskBio
Laurence Cooper, CEO, Ziopharm
Emile Nuwaysir, President & CEO, BlueRock Therapeutics
Tim Lu, Co-Founder and CEO, Senti Bio

Doubters and Hard Choices: Challenges for California's Stem Cell Program

California's 15-year-old, $3 billion stem cell program received a modest smattering of attention during the holidays, first in an article in the Los Angeles Times and another in Bloomberg Law.

The Times, the state's largest circulation newspaper with 2 million readers on Sunday, called it one of eight, global science stories to watch in the coming year. Specifically, the brief item by Karen Kaplan referred to the proposed bond measure to refinance the agency, known formally as the California Institute for Regenerative Medicine (CIRM). She wrote about the impact of the cash handed out by the agency and said, ,

"A CIRM-funded treatment developed at UCLA has led to a cure for dozens of children who were born without a functioning immune system.

"All of this was made possible by CIRM’s initial allocation of $3 billion. Now that money has been spent, and voters will be asked to renew their commitment to stem cell science by approving a $5.5-billion ballot initiative in November 2020."

At Bloomberg Law online, Joyce Cutler wrote that supporters of the agency are refining their pitch and this month will begin seeking more than 600,000 verified signatures of registered voters to place the proposed initiative on the  ballot.  She wrote,

"They will face doubters and lots of competition for voters’ attention and tax dollars. 

"'I think that a funding decision by popular vote that locks in a substantial income stream over a decade over a particular use is not good social policy. It’s not to say that the money isn’t being used for a good purpose,' said Ken Taymor, deputy director of the Forum for Collaborative Research at the University of California Berkeley School of Public Health. 

"The question, said Taymor, is 'can we afford to spend it on what CIRM is doing as opposed to other public health needs?'"

Cutler covers more ground than does the piece in the Times. She has comments from Jeff Sheehy, a CIRM board member since 2004; Arnold Kriegstein, a CIRM grant recipient and director of UC San Francisco’s Developmental and Stem Cell Biology Program, and Zev Yaroslavsky, a specialist in state politics and government and director of the Los Angeles Initiative at UCLA’s Luskin School of Public Affairs, and Jeanne Loring, a CIRM grant recipient and chief scientific officer of Aspen Neuroscience.

Two samples:

Sheehy said he would give the agency an A plus for advancing science. He continued,

"We supported the field, we’ve grown biomedical research and biotech in California tremendously. I think if you look at returns to the state, you might say B minus. And that speaks to one of my frustrations as we try to move forward, as we talk about moving forward, that we really haven’t grappled with the mechanics of ensuring that the state gets a real return on its investment."

Yaroslavsky said,

"They’re (voters) are going to have to make a decision whether roads are more important than stem cell research, is education more important than water infrastructure."

California Stem Cell Report Taking Break

The California Stem Cell Report is on holiday until Jan. 6. Look for a fresh posting then. Happy New Year to all.