Saving CIRM: $5.5 Billion Ballot Campaign, Rhetoric and Winning

The campaign to save California's financially strapped stem cell research agency said this week that voter approval of a $5.5 billion rescue measure "has never been more important to the future of California’s health care, for the patients and their families, than it is now."

The pitch came in an opinion piece carried on the Capitol Weekly online news service. The article appears to be the first "op-ed" piece that the campaign has placed since qualifying the ballot initiative, Proposition 14. 

The article carried the byline of Robert Klein, chairman of the campaign effort, Californians for Stem Cell Research. Klein is the Palo Alto real estate developer who led the 2004 ballot campaign and directed the writing of the original initiative as well as the current one. He also was the first chairman of the agency, known officially as the California Institute for Regenerative Medicine (CIRM). 

Klein's article echoed rhetoric from the campaign web site, in some cases using identical phrasing, which is to be expected.  He wrote,

"CIRM funding has advanced research and therapy development for more than 75 different diseases and conditions, more than 90 clinical trials, more than 1,000 medical projects at 70 institutions across California and nearly 3,000 published medical discoveries. This investment has already saved and improved lives, including a high school student who was paralyzed in a diving accident and was able to regain function in his upper body and go on to college, a mother who went blind from a genetic disease has had some of her eyesight restored, two FDA-approved cancer treatments are already saving lives, and many more."

Klein's campaign piece pushed the envelope in some cases. One example is the mention of "more than 90 clinical trials." The agency itself only claims 64. The key to Klein's figure of 90 is the phrasing "CIRM funding has advanced ... more than 90 clinical trials." That is a different criteria than used by the agency. Klein is basing his figure on any kind of research connected in any way to any kind of trial. 

Klein's number of 90 has also climbed from 80 just 16 days ago.  

Additionally, Klein's claims in his article for the agency's economic benefits are based on studies that the agency itself has paid for as opposed to independent, third party analyses. The most recent example came last fall; the study cost CIRM $206,000. 

The 2004 campaign that established the agency was widely criticized for its hype. Most ballot campaigns can be criticized on the same grounds. However, none have dealt with science in the way that Proposition 14 does. But Klein's job is to win approval of the proposal. Without a victory in the fall, CIRM will begin to close its doors. 

California voters can expect to see more rhetoric like Klein's over the next three months or so, intensifying significantly in October. The same sort of rhetoric is  already coming from the opposition and can be more extreme. As the ChurchMilitant web site said on June 29, 

"California state officials have confirmed a ballot initiative that, if approved, would give a state biomedical agency $5.5 billion to kill human embryos in order to extract their stem cells."

All this -- Klein's envelope-pushing and opponents' emotional, religious screeds -- is part of the way ballot campaigns work in California. Cautious, deliberative discussions cannot be expected to carry the day for the partisans on both sides. It is war with a deadline. 

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​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

Quote of The Day: Noah's Ark and the California Stem Cell Agency

'''CIRM operates at the nexus of the Political (with a capital P), scientific, institutional, and business forces of an aggressive state that views economic development as a priority.' Its organization, (Hamilton Moses) adds, doesn't help. ' 'Noah's Ark' boards, where each member is appointed to represent a constituency, rarely work.'"
 --  Hamilton Moses is a biomedical consultant in Virginia who focuses on non-profit governance, quoted in Nature Reports Stem Cells, from article Sept. 13, 2007, by Monya Baker

Bert Lubin: A Memory from a Sickle Cell Moment in 2008

Bert Lubin died last week. He was a member of the board of the California stem cell agency for a number of years, but what I remember him for was an appearance he made before the agency's governing board in 2008. 

Back then he was not serving as a member of the board. Instead he was a supplicant. And he was the first person to appear before the board seeking to reverse a negative decision by CIRM's reviewers.  

Lubin lost but not without raising a not-so-discreet ruckus. 

One board member, Gerald Levey, then dean of the UCLA School of Medicine, was more than irritated by Lubin's appeal of the reviewers' decision. I wrote at the time, 

"Levey said, "I don't think we can run a board this way. If we do, it would be chaos." 

"Levey was responding to a request by Lubin for a 10 minute presentation...of Childrens' case. Levey warned that allowing the presentation would lead to 50 other rejected applicants coming to the board.

"Director Joan Samuelson said that even 100 persons would be okay with her. She provoked laughter when she declared that the number would show more interest than at any other board meeting," the California Stem Cell Report wrote.

Ironically, the application involved sickle cell disease, a program that Lubin pioneered at Children's Hospital Oakland. In 2008, sickle cell was receiving little or no attention from CIRM. Today the agency is more than proud of its sickle cell arrangement with the National Institutes of Health.

Earlier this week, Kevin McCormack, senior director of communications for CIRM, wrote an item on Lubin for the agency's blog, The Stem Cellar. McCormack quoted Lubin as saying, 

"When I became the director of the research program we had $500,000 in NIH grants and when I left we had $60 million. We just grew. Why did we grow? Because we cared about the faculty and the community. We had a lovely facility, which was actually the home of the Black Panther party. It was the Black Panthers who started screening for sickle cell on street corners here in Oakland, and they were the start of the national sickle cell act so there’s a history here and I like that history. 

"Then I got a sense of the opportunities that stem cell therapies would have for a variety of things, certainly including sickle cell disease, and I thought if there’s a chance to be on the CIRM Board, as an advocate for that sickle cell community, I think I’d be a good spokesperson. So, I applied. I just thought this was an exciting opportunity."I thought it was a natural fit for me to add some value, I only want to be on something where I think I add value.” 

"Bert added value to everything he did."

Celularity and $750K from California Stem Cell Agency: Where is the Money Being Spent?

The New Jersey firm that was awarded $750,000 by the California stem cell agency to help finance a Covid-19 clinical trial has four trial sites in two states, but has not identified any in California. 

State law requires that awards from its taxpayer-funded stem cell agency be spent for work in California. 

The firm is Celularity, Inc., which is developing a product that has been fast-tracked by the federal government and which has the support of President Trump's personal attorney, Rudy Giuliani. 

According to the National Institutes of Health website this morning, Clinicaltrials.gov, Celularity has three clinical trial sites in its home state of New Jersey and one in Washington state for the Covid therapy. The information shows that all of those sites are currently recruiting patients. The estimated primary completion date of the work is Nov. 30, 2020.

Although the stem cell agency said on Sunday that a trial site existed in California, it declined to disclose the location. The agency referred questions about a site in California to the company, which has not responded to three requests yesterday and today for information.

Corey Casper, interim president of the Infectious Disease Research Institute in Seattle, is listed as the principal investigator for the trial by Celularity. Casper spoke to stem cell agency directors on May 15 on behalf of the application. Casper also did not respond to inquiries about the location of the California work. 

Six weeks ago, when Celularity's application first came before directors of the California Institute for Regenerative Medicine (CIRM), Casper said the treatment "has a biologic plausibility for being very important and very unique in its treatment for Covid disease."

He continued,

"I think that we have adequate safeguards that have been put into the trial to really assure the safety of the participants."

Safety concerns have been raised by CIRM's grant reviewers as well as by other scientists. The reviewers, who are from outside California, originally rejected the application, giving it a score of 84, one below the cutoff point. After Celularity addressed reviewers' concerns, it scored 85 and was sent to directors who approved it last Friday with no debate.

It is CIRM's 64th clinical trial.

Rudy Giuliani and Covid-19: A California Stem Cell Angle

Capitol Weekly, an online service that covers California government and political news, this morning carried an article dealing with an award last week involving a Covid-19 clinical trial. Here is an excerpt from the freelance piece by yours truly. 

"California’s stem cell agency last week awarded $750,000 to a New Jersey firm to help finance a clinical trial for the firm’s proposed Covid-19 treatment — a therapy that has been hailed by President Trump’s personal attorney as having “real potential.” 

"The firm is Celularity, Inc. Its president and co-founder is Robert Hariri, who describes himself as a longtime friend of Rudy Giuliani, Trump’s personal lawyer. The speedy passage of Celularity’s proposed product through the federal drug approval gauntlet has attracted attention from the New York Times as well as the respected STAT biomedical online news service and other media. 

"Last Friday, directors of the taxpayer-funded stem cell agency, formally known as the California Institute for Regenerative Medicine(CIRM), approved Celularity’s $750,000 application with no discussion. The headline on a STAT article on March 31 said, “Rudy Giuliani wants FDA to fast-track a stem cell therapy for Covid-19; critics see political meddling.”" 

For more details, see Capitol Weekly.

Quote of the Day: 'Immunity to Science'

“We’re now in this position where scientific information is treated as something that you believe or don’t believe because of your partisan leanings. We’ve become a society that has developed an immunity to science, that has said, well none of these guys can be believed.”
 -- Lucy Jones, seismologist, in Los Angeles Times

Directors of the California Stem Cell Agency Back $5.5 Billion Stem Cell Ballot Measure -- With One Exception

Directors of the financially strapped, California stem cell agency this morning endorsed a $5.5 billion bond measure to refinance the enterprise and set it on a new path for the next 10 to 15 years.

"It's a no brainer that this is a huge benefit for California and that (the agency) does just a fantastic job for curing major diseases over a period of time," said George Blumenthal, chancellor of UC Santa Cruz and a member of the governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

Endorsement came on 21-1 vote after about a 30-minute discussion. Jeff Sheehy, a patient advocate member of the board since its inception in 2004, voted no. He did not speak out during the meeting, which heard no dissent from other board members or the public.

The board has 29 slots. Only 22 members were present for the morning. online vote. Two seats are vacant.

Sheehy released a statement to the California Stem Cell Report in which he cited a wide range of reasons for his negative vote. They included,

"(The) state assuming additional debt at the onset of a recession of indeterminate length (that could become a depression) AND the absence of the original purpose for CIRM (the no longer existing federal restrictions on embryonic stem cell research funding) plus the abundant Federal and private sector funding for identical research, the failure to maximize return on investment plus a blatant giveaway to Pharma AND the handcuffs placed on the legislature."

Sheehy also said, 

"(A)fter spending all of this money ($3 billion), CIRM has yet to produce a single FDA approved product and the State has not achieved any healthcare cost savings from therapies developed by CIRM." 

(See the full text of his lengthy statement here.)

The initiative would cost California taxpayers an estimated $7.8 billion, according to official state figures. The total could be lower or higher depending on interest rates because the $5.5 billion is borrowed money. The initiative also significantly expands the scope of the agency, including a heavy emphasis on making any stem cell therapies affordable and accessible.

CIRM, however, has not helped to finance any stem cell therapies that are widely available to the public.

(Here is a link to the description of the measure by the state's legislative analyst, including its $7.8 billion cost. Here is the actual text of the more than 10,000-word proposal)

Endorsement of the proposal by the stem cell agency board was a foregone conclusion. Sheehy's dissent was not, although he expressed some concerns earlier about the measure. Directors previously had indicated support informally. Without voter approval of the proposition on Nov. 3, CIRM will begin closing its doors next fall as it runs out of its original $3 billion. 

Today's meeting also included a contingency budget to wind down CIRM, which currently has only 33 employees. Over the last 15 years, the number of employees has never numbered higher than in the mid 50s.

CIRM directors were laudatory of the measure and Robert Klein, sponsor of the proposal. Klein is leading the campaign as he did in 2004. He was also the first chairman of the agency. Speaking to the board, Klein touted economic benefits of the measure and minimized its interest costs. He said it would not detract from other state priorities, a matter of significant concern to Sheehy.

Klein said the measure is aimed at "reducing human suffering and saving the lives of those we love." (The text of his comments is being sought from the campaign.)

David Higgins, a board member/patient advocate for Parkinson's disease and who has Parkinson's, said his family includes many persons who have had the affliction.  Higgins, who choked with emotion at one point, said the efforts of CIRM are "very personal" for him.

The agency is barred by law from using state funds to support the ballot campaign, but it is permitted to provide the endorsement as it did today.

Text of Sheehy's Statement on His Negative Vote on $5.5 Billion Stem Cell Measure

Here is a statement from Jeff Sheehy, a director of the California Institute for Regenerative Medicine (CIRM) concerning his "no" vote on the $5.5 billion bond measure to refinance the agency. Sheehy has served as a patient advocate member of the board since its inception in 2004. He is a former member of the San Francisco County board of supervisors and a longtime patient advocate for HIV/AIDs. Sheehy's statment follows.

I do not support the new ballot measure authorizing $7.8 billion in new funding for CIRM for the following reasons. In referencing the new measure, I note the true cost of the bonds including interest, as opposed to the headline figure of $5.5 billion. I hope that Governor Gavin Newsom, whom I served as HIV/AIDS Adviser when he was Mayor of San Francisco, other State policymakers and voters will consider these points when deciding whether they will support this measure.

First, I'm concerned about the cost to the State at a time of fiscal crisis. CIRM has spent $3 billion over the last 15 years. The Legislative Analyst calculates a repayment period of 25 years and currently CIRM is costing the State $327 million a year to pay back the bonds for the first tranche of funding authorized by voters in 2004 via Proposition 71. I think CIRM has provided value. But after spending all of this money, CIRM has yet to produce a single FDA approved product and the State has not achieved any healthcare cost savings from therapies developed by CIRM.

I look at the current fiscal crisis the State faces and I know we will see cuts in education, healthcare, and housing not only this year, but for several years into the future. Issuing bonds does not mean they are “free money”. They have to be paid back, and the $327 million California is paying annually is $327 million the State does not have for other needs.

The Legislative Analyst estimates that the new measure will add at a minimum another $310 million a year in annual repayments from the General Fund. That means California taxpayers will be paying close to $650 million a year for stem cell research—research that is currently well funded by the federal government and the private sector. To reiterate, State imperatives such as education, healthcare, and housing that are funded by the General Fund are not only chronically under-resourced, but in moments such as our current situation with a deficit, will actually be second in line behind repaying bonds for stem cell research. Bonds have to be repaid first leaving more important priorities to be cut. We must be honest and acknowledge that paying for stem cell research means that other needs will not receive funding. Adding debt in what may be the biggest fiscal crisis California has experienced since the Great Depression is a terrible idea.

Second, CIRM was created because the Federal government restricted human embryonic stem cell research. This is not longer true and the rationale for the State of California going into debt to fund this research no longer exists. The Federal Government will spend $306 million this year and $321 million next year on human embryonic stem cell research — more than CIRM has spent in any single year of its existence. The Federal government will spend another $593 billion on human induced pluripotent stem cell research and $605 million on non embryonic stem cell research this fiscal year. In total, the Federal government will spend $2,129 billion on stem cell research this year. This spending dwarfs what California will spend.

In addition, the Alliance for Regenerative Medicine estimates the private sector spent almost $10 billion in 2019 on regenerative medicine. Growth in private sector investment in regenerative medicine is on a steep upward curve.

Third, the new measure fails in several ways to fix flaws in the original Proposition 71. This new measure does nothing to change the absurd requirement that any changes to it requires a 70% vote of the legislature. This agency should not be outside oversight by the elected representatives of the people. Originally this was justified by opposition to human embryonic stem cell research and the perceived need to insulate the research from political considerations. Now that the Federal restrictions have been lifted and this research can be freely funded, this requirement makes no sense. An agency that will end up costing the State $650 million a year should be fully accountable to elected officeholders.

In addition, the new measure should ensure that CIRM fulfill a key promise made in Proposition 71 that CIRM funding will “benefit the California budget by… providing an opportunity for the state to benefit from royalties, patents, and licensing fees that result from the research.” According the Legislative Analyst, “since 2004, grant recipients have contributed $352,560 in total invention-related income to the State.”

I would note that CIRM has helped produce a therapy that holds significant promise. This product, an anti-CD47 monoclonal antibody for cancer, has 
been acquired by a major pharmaceutical company and will lead to substantial revenue. CIRM has spent roughly $38 million on developing the monoclonal antibody and should receive upwards of $30 million (perhaps as much as double this number) in return. While the Board has worked hard to put in place policies to obtain a return for the State, that return, which could have been enormous, is constrained because the State cannot hold equity in the product. The California Constitution prevents the State from holding equity. CIRM should have asked the legislature to amend the constitution in this ballot measure to allow CIRM to hold equity. Equity provides the opportunity to fully vest in the products supported by CIRM funding and would recognize CIRM’s role as a source of venture capital. Failing to maximize the return on the State’s investment, especially when it is paid for with debt financing, is fiduciary malpractice. From my perspective, millions are gifted to pharmaceutical companies under the current law.

More troubling, the new initiative introduces changes that will lead to the State receiving NOTHING for the General Fund from future returns. Per the Legislative Analyst, the new measure “would require the State to use any income from CIRM agreements to improve the affordability of stem cell treatments.”

Thus, CIRM/State of California will fund development of products if this new measure is approved. The return from investing in those products will then be given back to companies to pay for the products CIRM invested in. This is literally the worst possible giveaway, robbing the State of a return on investment and freeing companies from any price restraints on products since CIRM will make up the difference. We could actually see the company (famous for aggressively pricing Hepatitis C cures and HIV preventive medications) that acquired the anti-C47 monoclonal antibody return funds to the State and see the State forced to use those funds to buy the drug for patients. It would have been far better if the new measure had been written with provisions that ensure a fair return to the State’s General Fund via the ability to hold equity and that require fair pricing for products funded by CIRM. The original intellectual property policies adopted by CIRM did include a provision that required grantees to offer public entities in the State of California the lowest available price.

I note that the new measure does include “accessibility and affordability” provisions, but the focus is on insurance coverage. Fair pricing and improving the State’s return on its investment are not included, presumably to avoid offending Big Pharma.

I continue to have serious concerns around Board member conflicts of interest, with the majority of the Board coming from institutions that have received the bulk of CIRM’s spending. Rather than being addressed in the new measure, conflicts of interest are exacerbated with the new measure adding Board members from institutions that receive funding.

I also have concerns about governance with a 35 member Board—too big to function, and surreally, a Board member for every 2 CIRM employees—and the chief executive role awkwardly split between the Board chair and CIRM’s president.

For these reasons—the State assuming additional debt at the onset of a recession of indeterminate length (that could become a depression) AND the absence of the original purpose for CIRM (the no longer existing Federal restrictions on embryonic stem cell research funding) plus the abundant Federal and private sector funding for identical research, the failure to maximize return on investment plus a blatant giveaway to Pharma AND the handcuffs placed on the legislature—I cannot support the new $5.5 billion measure.

Jeff Sheehy
CIRM Governing Board Member
Appointed 2004 by State Senate President Pro Tem John Burton
Re-appointed 2012 by State Senate President Pro Tem Darrell Steinberg

Peering into California's Stem Cell Future: A Vision for Next November if Voters Give Go Ahead

So what happens on Nov. 4 if California voters approve $5.5 billion more for the state's 15-year-old stem cell research program?

Well, as someone famously has said -- sort of -- there is a plan for that. And its essence will be presented tomorrow morning online for the entire world to see and discuss.

Nov. 4 is the day after the election in which voters will say yea or nay to the initiative to refinance the California Institute for Regenerative Medicine (CIRM), which needs lots of money to keep its doors open in Oakland.

Maria Millan, CEO of CIRM, and its lean team of 33 have been working hard on what might be called CIRM 3.0 -- CIRM 2.0 being its current state. She has prepared 16 pages of presentations that are now available for viewing on the CIRM website.

Millan will formally offer them up tomorrow morning at a public meeting of the CIRM governing board that will be on YouTube and audiocast beginning at 9 a.m. PDT.  Instructions for participating are on the agenda, including how to speak directly to all those logged on, how to raise questions and make suggestions.

As usual the slides are an outline -- not a fully fleshed-out proposal -- which CIRM's 29 directors may change or reject. But it is likely that the essential elements of the proposal will move forward . The concept plan is also likely to affect the professional lives of the few thousand folks folks working in stem cell research in California.

What is more important is the measure of the success of the proposal, which basically is a  development effort aimed at aggressively pushing stem cell therapies into the marketplace. The agency currently lists 63 clinical trials that it is assisting, an area that is likely to become more important if the initiative passes.

At the beginning of the presentation, Millan asks the question, "Where do we want to be?"

Her three-point response is:

• "Accelerate the development of near term and future innovative regenerative medicine approaches to deliver effective cures and treatments

• "Expand therapeutic delivery and equitable access to patients with unmet medical needs 

• "Partner with key stakeholders and structure internal operations to accomplish the above"

Californians will hear more tomorrow about how CIRM might use $5.5 billion over the next 10 to 15 years. Then CIRM will once again have to start looking for more cash. The new initiative provides no funding beyond that time frame.

'War With a Deadline' and Its Casualties: A California Stem Cell Perspective

One way to look at campaigns for such things as a $5.5 billion stem cell ballot initiative or a political race for governor is that they are "war with a deadline."  

The bottom line is to win -- in the case of the stem cell measure -- by Nov. 3. If the proposition fails, the California stem cell agency dies.

Many commentators argue that often the first casualties of such "wars with deadlines"  are "facts" and "truth." And then there are matters that are arguable, at least in the eyes of some. 

Consider the monetary description of the initiative. The proposal is dubbed a $5.5 billion measure. That is the amount of state bonds that would be issued. But bonds are simply borrowing by the state. There is interest that needs to be paid by California citizens -- an estimated $2.3 billion. 

So is it a $5.5 billion or $7.8 billion measure? Which is correct? Which figure should the mainstream media use? Which figure should the California Stem Cell Report use? Is it a "lie" to indicate that the measure amounts to only $5.5 billion? We are deeply interested in how this is perceived. It will affect how we write about the measure over the next four months. Please send your responses to djensen@californiastemcellreport.com. 

In all fairness, we have used a $5.5 billion figure almost entirely, and a $3 billion figure for the last 15 years for a quick shorthand reference to indicate the size of the effort since 2004. We have had qualms about using the figures and have laid out the interest costs from time to time. 

Another possible casualty of the "war with a deadline" involves what seems to be simple: the number of clinical trials that have been backed by the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. 

The campaign issued a news release on Monday that reported 80 trials. The CIRM website says only 63. What gives? 

We asked the campaign about the matter yesterday. It responded quickly with an explanation that basically said it was counting all clinical trials anywhere that somehow involved results generated from CIRM-financed work. 

Is that a "factual" way to describe to voters how many clinical trials the state of California/CIRM is participating in or has participated in? Or is it exaggeration/hype that will ultimately discredit the campaign or the stem cell agency? Especially when it becomes part of a host of claims that seem to push the envelope. 

Again, I invite readers to weigh in at djensen@californiastemcellreport.com. Or you can respond by using the comment function at the end of this item. 

Here is what the campaign sent the California Stem Cell Report yesterday on the clinical trial question. Our thanks to them for a quick and straight-forward reply.

"Our news release from earlier this week said 'CIRM’s program has already saved and improved lives through the advancement of more than 80 clinical trials.'

"This has been done through CIRM directly funding 60+ clinical trials and another 20+ trials conducted based off CIRM funded scientific discoveries. Please see below for list of trials and their clinical trial ID that would not have been able to advance to clinical trials without the initial funding from CIRM."

	Disease Category	Clinical Trial ID
1	Brain Cancer	NCT02192359
2	Blindness/Macular Degeneration	NCT01691261
3	Hematologic Malignancies	NCT01546038
4	Myelofibrosis	NCT01420770
5	Myelofibrosis	NCT00631462
6	Myelofibrosis, Polycythemia vera	NCT01523171
7	Polycythemia Vera and Essential Thrombocythemia	NCT01420783
8	Polycythemia, Essential Thrombocythemia	NCT01437787
9	Cardiomyopathy (CADUCEUS)	NCT00893360
10	Cardiomyopathy (DYNAMIC)	NCT02293603
11	Spinal Cord Injury	NCT01772810
12	Advanced Malignancies	NCT01697527
13	Cancer	NCT04023071
14	Solid Tumors	NCT02216409
15	Ovarian Cancer	NCT03558139
16	Non-Hodgkin's Lymphoma	NCT02953509
17	Hematologic Malignancies (CAMELLIA)	NCT02678338
18	Bladder Cancer	NCT03869190
19	Acute Myeloid Leukemia	NCT03922477
20	Non-Hodgkin's Lymphoma	NCT03527147
21	Knee/Hip Arthroplasty	NCT03981419
22	Alzheimer's Disease	NCT03765762
23	Parkinson's Disease	NCT03713957
24	Danon Disease	NCT03882437
25	Hematologic Malignancies	NCT03833180