Halloween Meeting Set for $3 Billion California Stem Cell Agency: Last Research Awards Expected to be Made

California's $3 billion stem cell agency next week is expected to give away the last of its funds for new research awards and hear a report on private donations that it may have received in the recent past or perhaps expects in the future. 

The donations report is something of a mystery, based on the agenda, but perhaps appropriate for the governing board's meeting, which comes on Halloween, Thursday Oct. 31. 

More details are likely to be posted online in the next week or so and reveal more clues about the direction -- over the next 12 months -- of the agency, formally known as the California Institute for Regenerative Medicine (CIRM).

The agency expects to run out of money for new awards at the end of this month unless a there is a surprise announcement that a private fund-raising effort has produced significant results. CIRM was created in 2004 by voters, who allotted it $3 billion in state bonds. No other source of cash was provided by the ballot initiative. 

In addition to consideration of applications for clinical and translation stage awards, also on next week's agenda are:

• "Use of public funds in connection with ballot measure presentation"
• Last week's report on the economic impact of the agency 
• Changes in the "administrative funds donor agreement and disclosure of funds received from donors." (Those changes were not available on the agenda but are likely to be available in the next few days.)

The ballot measure discussion involves the appropriate and legal role of the agency in connection with the $5.5 billion, proposed ballot initiative to provide additional support for CIRM. The measure is now before state officials for certification prior to being circulated for the 600,000-plus signatures needed to qualify for the November 2020 ballot. 

State law prohibits the use of state funds to support ballot campaigns. The agency has been careful to adhere to the law. But it is always a touchy area. A number of gray areas exist involving the agency's additional legal requirements to respond to questions and inform the public about the conduct of the taxpayer's business.

The public can comment and recommend changes in the proposed initiative between now and Nov. 12.  Suggestions for changes will be relayed to the backers of the measure.

Regarding the currently cryptic Halloween agenda, look for more details on the California Stem Cell Report between now and Oct. 31. We will be filing fresh items as the information emerges.  

Next week's meeting will be held at CIRM's Oakland headquarters. The public can attend and also participate via the Internet. Remote telephonic locations that are open to the public can be found in La Jolla, San Diego, Fresno and San Francisco. Directions and instructions can be found on the agenda.

California Stem Cell Health Dividends: A Whopping $900 Billion? Maybe Only $175 Billion?

A team of University of Southern California researchers said today that work by California's stem cell agency could pay off with nearly $900 billion in "health dividends" by 2050 by treating or curing afflictions ranging from diabetes to heart disease.

The study, commissioned by the agency, acknowledged the difficulty in forecasting the benefits of research backed by the the state program, which is unprecedented in California history. But the report said,

"We find that nearly half of Californians aged 50 and older will develop diabetes during their lifetime. Furthermore, more than one-third will experience a stroke, and between 5 and 8 percent will develop either breast, colorectal, lung, or prostate cancer.  

"Taking into account the high prevalence and the social and economic burden of these diseases, an intervention that reduces the incidence of these selected cancers, diabetes, and stroke by 50 percent would generate almost $900 billion in social value between 2018 and 2050.  

"A more modest 10 percent decline in incidence translates to $175 billion in social value during the same period. Put in this context, the CIRM investment would be worthwhile if it increased our chances of success even modestly. Against the billions of dollars in disease burden facing California, the relatively small initial investment is already paying dividends as researchers work to bring new therapies to patients."

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), was created by voters in 2004, who provided it with $3 billion. It has yet to fund a product that is widely available to the public. However, the agency is involved in 56 clinical trials, which are the last stage before a treatment is certified for widespread use.

CIRM expects to run out of cash for new awards by the end of this month. It hopes that a proposed initiative for the November 2020 ballot will provide it with an additional $5.5 billion. 

Today's report, titled "Future Health Dividends for California," and its companion study last week on the agency's economic impact are likely to be significant topics during the 2020 campaign. 

The 22-page study came up with a "social value" calculation using the Future Elderly Model -- "a microsimulation model of health and economic outcomes for older Americans." Basically it involves quality of life outcomes as well as more straight forward financial projections. The study also lays out its methodology and limitations including an acknowledgement that the projections are not guaranteed. 

Today's report and last week's economic study cost CIRM a total of $206,000. The work was performed at USC's Leonard D. Schaeffer Center for Health Policy & Economics. The authors are Bryan Tysinger, Karen Mulligan, Henu Zhao, Alwyn Cassil  and Dana Goldman.

Here is a link to an item on the CIRM blog about the study.

Making Changes in a $5.5 Billion Stem Cell Matter: What California Law Permits

Screenshot from state Department of Justice "active measures" website

A  California ballot proposal to spend an additional $5.5 billion over another 10 years on stem cell research is not locked in concrete or in even locked in its dense, legal language.

It can actually be modified between now and Nov. 17 if its sponsors so desire. That may be a big if, but it is possible as a result of 2014 changes in state elections law.

Here is the way it works. Any member of public can comment or suggest changes in proposed ballot initiative between now and Nov. 12 on this state web site.  The Department of Justice will pass along the suggestions to the sponsor of the initiative. The sponsor can make changes in the initiative up to Nov. 17.

Whether changes actually occur depends on pressures brought to bear by various constituencies that have something at stake in this multibillion-dollar game. Those interests include most of the Golden State's major universities and research institutes, the biotech industry, the fledgling California stem cell industry, patient advocate groups ranging from diabetes to cancer and even national regenerative medicine groups, not to mention religious or other groups that may have ethical concerns.

Of course, suggestions do not have to be filed with the attorney general. They can go directly to Robert Klein, who filed the initiative. Klein is a Palo Alto real estate investment banker, who founded the stem cell advocacy group, Americans for Cures. He led the 2004 campaign to create the agency and served as its first chairman. Klein directed the writing of the 2004 initiative as well as the current proposal.

His group also has a scientific advisory board that includes a host of California stem cell luminaries ranging from Irv Weissman of Stanford and Larry Goldstein of UC San Diego to Leslie Thompson of UC Irvine and Arnold Kriegstein of UC San Francisco. Klein has said he consulted with them in drafting the latest ballot proposal. They may well be interested in hearing comments on what is now being offered.

The California Stem Cell Report has already heard murmurings about changes that backers of the agency would like along with similar thoughts from opponents. But the measure is quite fresh and 30 pages long. So it may take a little time for solid suggestions for changes to emerge. 

The governing board of the stem cell agency, known formally as the California Institute for Regenerative Medicine (CIRM), has scheduled a meeting for Oct. 31, its first since the initiative was filed. It is expected to act on a number of awards, which are expected to be its last new awards until it receives additional funds. 

Asked last Friday whether board might make suggestions for changes in the initiative, Kevin McCormack, senior director for communications, replied via email, 

"Right now the CIRM board hasn’t taken a position on it. At some point in the future the board will discuss the initiative at a public meeting and take a position."

Here is the contact link for Klein's Americans for Cures and the email address for the stem cell agency: info@cirm.ca.gov 

Re the suggestion period and amendments to the initiative, here is the salient language from the California Secretary of State, the state's top elections official.

"Once a request for a circulating title and summary has been submitted, the Attorney General’s Office will post the text of the proposed initiative measure on their website and facilitate a 30- day public review process during which any member of the public may submit written public comments to the Attorney General’s Office via their website. The Attorney General’s Office will provide any written public comments received during the public review period to the proponent(s). (Elections Code § 9002(a).) During the public review period, amendments signed by all of the proponent(s) may be submitted to the Attorney General’s Office. Any amendments to the proposed initiative measure must be reasonably germane to the theme, purpose, or subject of the initiative measure as originally proposed. An amendment shall not be accepted more than five days after the public review period is concluded. (Elections Code § 9002(b).)"

It's Official: $5.5 Billion Ballot Measure Filed for California Stem Cell Agency

Backers of the financially stressed California stem cell agency yesterday filed their proposed ballot measure to refinance the agency with $5.5 billion if voters approve it in November 2020.

The complex, 30-page initiative would also restructure a number of aspects of the agency and provide for financial assistance for patients and their families who might be involved in clinical trials. The proposal was submitted by Robert Klein, the Palo Alto real estate investment banker who led the ballot campaign that created the agency in 2004. 

Klein was also the first chairman of the agency, known formally as the California Institute for Regenerative Medicine (CIRM).  He is chairman of the stem cell advocacy group, Americans for Cures.

The $3 billion agency expects to run out of cash for new awards at the end of this month.

In addition to stem cell research, the proposed initiative would provide for awards for other "vital research" opportunities. 

Training for professionals would emphasized. The governing board of the agency would be increased from 29 to 35 persons. Representatives of the California state university system would have a greater official role in addition to representatives from the University of California. 

Additional changes are proposed in priorities along with alteration in conflict of interest rules and its public records provisions.

The measure, "Initiative No. 19-0022," will need 633,212 valid signatures to qualify for the ballot. The first step in the months long process is review of the measure by the attorney general's office, which will prepare the official summary.

The initiative said,

"Although California's stem cell research funding institute has made great gains, much work remains to be done. With new federal restrictions on important research, an anti-science agenda on the rise, and threats to reduce federal research and development funding, California once again must take the lead to ensure that this promising area of research continues and to advance projects from the research stage to the clinic. 

"Without additional funding, many of these promising research and development projects will be forced to stop work on potentially life-changing medical therapies. California's stem cell research institute needs additional funding to help bring promising discoveries through the development process, including clinical trials, with the goal of making treatments available to California patients with chronic diseases and injuries"

The public can file comments on the proposal at this page on the web site of the attorney general. 


(An earlier version of this article did not include the paragraphs beginning "Although California's..." and "Without additional...")

Critics Unmoved by Economic Report; Still Say No More Billions for California's Stem Cell Agency

This week's relatively rosy report on the economic impact of California's $3 billion stem cell research program has not convinced longtime critics to change their positions and support giving it an additional $5 billion.

In the eyes of some opponents, the stem cell agency is still a boondoggle, a waste of money and an inappropriate use of state bonds, the borrowed money that is the only significant source of cash for the program. Other critics recommended moving the program to the University of California and restricting it to "breakthrough medicine."

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), expects to run out of money for new awards this month. It is hoping that voters will see value in its efforts and approve -- in November 2020 -- a $5.5 billion ballot initiative that would refinance the agency.

The 2004 initiative that created CIRM was handily approved by 59 percent of the voters following a campaign that created expectations that nearly miraculous therapies were right around the corner. The agency has yet to back a treatment that is widely available to the public.

The California Stem Cell Report queried a smattering of CIRM's critics following the release of the economic study, which said the agency has provided a "handsome dividend" to the state. The report from USC said, among other things, that CIRM-generated benefits exceed $10 billion and have led to nearly 60,000 jobs.

That was not good enough for state Sen. John Moorlach, R-Costa Mesa. He said,

"It was a boondoggle when it started and it still is. It's held up by emotional appeals, sustained by empty promises, and now rationalizing to extend its existence."

He continued,

"This study does not bring to light anything new. Doling out $3 billion to any entity or entities would generate the same economic metrics. The study is a shell."

"CIRM did not produce or sell anything of substance. It was not a stadium that created jobs around it, like restaurants, bars, and hotels."

Marc Joffe, a senior policy analyst at the Reason Foundation, said,

"I oppose the use of state general obligation bonding authority for any purpose other than building well-conceived civil infrastructure projects. The fact that spending bond proceeds generates economic activity is not surprising and not a reason to support a new bond in 2020. Similar studies have been released in support of the ill-conceived high-speed rail project: We might not get a usable system that takes many passengers out of their cars, but at least we created a lot of jobs in the Central Valley! This is not a persuasive argument for imposing more debt on our children, who already have the challenge of paying for Baby Boomer retirements."

Joe Rodota also responded. Rodato has worked for two Republican California governors. He and Bernard Munos, a senior fellow with FasterCures and the founder of the Innothink Center for Research in Biomedical Innovation,
have advocated a change in California's stem cell program that would restrict funding to businesses with a significant California presence and move the effort to the University of California.

Rodota said,

"Under our proposal, in exchange for providing funding to private companies engaged in developing stem-cell therapies, the University of California would receive shares, alongside any shares sold to private investors. Although the report categorizes equity sold to private investors as part of the 'economic stimulus created by CIRM funding,' that equity is held by private investors, not the University of California."

You can read the full text of the critics' remarks here.