Signature Drive Ends for $5.5 Billion California Stem Cell Initiative; Will it Qualify for the Ballot?

Backers of a $5.5 billion ballot initiative to save the California stem cell research program from financial extinction said today that they had finished their petition drive to qualify the measure for the November ballot and expressed confidence that they had the more than 600,000 signatures needed. 

The announcement came after the campaign had missed three of its self-imposed deadlines for collecting 950,000 signatures as well as the state-recommended deadline of April 21.  The campaign said that the petitions have been delivered to county election officials around the state for verification of the signatures, a lengthy process that must be completed by June 15. If the work is not finished by then, the measure will not appear on the ballot. 

The initiative needs 623,212 valid signatures to qualify. The campaign's news release today said it had 925,000, down from its goal of 950,000. However, disqualification rates can run as high as 50 percent. Early last month after its public signature-gathering was halted because of coronavirus restrictions, it said had only 915,000. The campaign then kicked off what it called an "unprecedented," Internet, mail-in campaign to solicit signatures.  Later it began a direct mail effort, also unusual for an initiative qualification drive. 

The stem cell agency was created in 2004 by another ballot initiative and financed with $3 billion in state borrowing. It is now running out of money and will begin closing down in the fall if substantial funding is not received. 

Robert Klein, chairman of the campaign, said he was "confident" that the campaign had enough valid signatures to qualify for the ballot. He said, 

“Submitting signatures in time to qualify for the general election would not have been possible without our coalition of patient advocates, who banded together to help us
overcome the unprecedented challenge of signature gathering during a global pandemic – the effort is emblematic of our movement that has been widely supported and driven by patients and their families from the beginning”

Klein, who led the 2004 ballot campaign that created the agency, also cited the $5 million special, Covid-19, grant round now being conducted by the stem cell agency as example of the valuable work performed by the agency, officially known as the California Institute for Regenerative Medicine (CIRM).

One of the recipients of  a $750,000 award in the covid round, John Zaia of the City of Hope, was quoted in the campaign news release as saying,  

“We could be on the brink of medical discoveries that could save the lives of patients impacted by Covid-19 and other diseases, and this research simply would not be possible without the initial investment Californians made in the state’s stem cell program in 2004.

“Now, it is absolutely critical that this investment is renewed, allowing researchers like myself to continue to discover treatments and cures that can improve or save the lives of patients today and for generations to come.”

The City of Hope and many other recipient institutions have had a seat on the CIRM governing board since its inception.  According to CIRM figures, the City of Hope has received $117 million in grants since 2005. Zaia has received $33 million. 

The process of verifying and counting signatures is tedious under normal circumstances. County officials are now further hampered by work-related restrictions created by the coronavirus crisis. 

It is not clear whether enough signatures can be verified by June 25. That's the state deadline for qualifying for the November ballot. Two other unrelated initiatives failed or were withdrawn yesterday, state election officials said. Ironically one of the proposals would have allowed for the gathering of signatures online as a way to speed the task. 

The campaign has removed from its web site the outdated information concerning its petition solicitation effort, including the phrase "time is running out," which ran on its home page. But here is a link to the petition page from April 22 as archived by the California Stem Cell Report:  

A Stem Cell Ballot Initiative in Your Mailbox: Thank you Montgomery Ward

The campaign to refinance California's stem cell agency took a tool from Montgomery Ward in its effort to qualify a $5.5 billion measure for the ballot this fall. The unusual -- for a ballot initiative -- tactic was part of a last gasp push to secure 950,000 signatures. Whether it was successful will be determined in the upcoming weeks. Here is a piece from Capitol Weekly, where it was initially posted, that examined how the direct mail effort worked. The article was written by yours truly.

For survival, stem cell agency hunts for ‘wet signatures’

BY DAVID JENSEN POSTED 05.05.2020

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The folks who are trying to save the $3 billion California stem cell agency from financial extinction are using a well-worn technique that goes back to ancient Egypt, at least by some accounts.

It is expensive, depending on what you are peddling, and generates a return as low as 1 percent. It is direct mail, but with a significant twist. It involves the collection of “wet signatures” and the signing of documents that must be produced in a fussy, legal fashion.

The process requires a bit more commitment from voters than, say, returning a pitch from the Readers Digest Sweepstakes. And it is likely that the effort is the first time that anyone has made a major push — both by direct mail and online — to collect tens of thousands of voters’ signatures to qualify an initiative for the ballot in California.

It is a life or death matter for the California Institute for Regenerative Medicine (CIRM), otherwise known as the state stem cell agency. CIRM is running out of money and will begin to close its doors next fall unless it receives a life-preserving jolt of cash. The proposed ballot initiative would do that nicely with an injection of $5.5 billion.

Ordinarily, qualifying a measure for the ballot in the Golden State is simple. All you need is money. The cash goes to firms that hire hundreds of people to solicit hundreds of thousands of signatures in public places. The coronavirus put a stop to that sort of public behavior back in March.

The result was a big crimp in the plans of the “Californians for Stem Cell Research, Treatment and Cures,” as the campaign has dubbed itself.

It announced that 35,000 more signatures were needed. “Time is running out,” the campaign warned on its web site.

On hand were 915,000 signatures. Qualifying the measure for the ballot requires only 623,212 signatures of registered voters. But disqualification rates for ballot initiative signatures can run as high as 50 percent, and the campaign wanted a bigger cushion.

It fired up what it described as an “unprecedented,” effort online, but one that is a tad complicated.

First, someone interested in finding a stem cell petition to sign must know that they can find one on the Internet, which is a big ask. Then, if their search leads them to the proper web site, they will encounter lengthy instructions.

The process is not simple. The campaign’s web site mentions “wet signatures,” ones that are signed in ink. Then there is the need to print out the 16 pages of the petition from the web site and the need to complete the “circulator declaration.” A seven-minute, “sign-at-home training”  video was posted by the campaign to guide wandering supporters along the signature trail. 

About April 13, the campaign quietly boosted its cyberspace pitch with direct mail, presumably targeting households likely to be sympathetic to spending $5.5 billion for stem cell research via the ballot initiative.

A packet of the direct mail material surfaced recently in Santa Barbara.  The California Stem Cell Report subsequently asked the campaign about the direct mail effort, but it has remained all but mum, with the exception of providing a rough start date for direct mail effort. Unanswered are such questions as how many packets were mailed, their return rate and cost and whether there is a precedent for mailing out petitions in this fashion?

The campaign’s direct mail effort is significant and holds some promise. But the  tasks for recipients take time and pose some barriers that can lower a response rate.

The question is whether the unusual effort will pay off?  To answer that, let’s assume that the direct mail pitch generates a 2% return with an average of one signature per household, which may be generous based on what is known about direct mail efforts. Let’s assume that the campaign would like to gather by direct mail only a portion of the 35,000 signature shortfall, for example, about 15,000. That would mean producing and mailing 750,000 packets to collect 15,000 signatures, which, of course, also need to come from verified registered voters.

Costs are not insignificant. Aside from postage, one web site estimates that production costs for business direct mail range from 30 cents to $10 each, depending on size and complexity.

Direct mail does work. That’s why it has been around in a significant way for many decades and fills your mailbox every day. It is not clear who in the campaign came up with its direct mail plan. But the campaign is very much the creature of Robert Klein, a Palo Alto real estate developer who also directed the 2004 campaign that led to the creation of the stem cell agency. He spent more than six years as its first chairman and is the chairman of his own stem cell advocacy group, Americans for Cures, which has offices in Klein’s Palo Alto building.

Klein is acutely aware that next November could mean the extinction of an enterprise he has devoted years to. Few good alternatives exist beyond passage of this year’s initiative. It’s this year or never, he basically told CIRM directors in 2017.  No one, however, could have predicted the coronavirus crisis that halted normal signature gathering. So today Klein is emulating the direct marketing examples of a landowner in ancient Egypt and of a man named Aaron Montgomery Ward who launched his first one-page catalog in 1872 and who can be considered the father of modern direct mail.

California will soon know whether Klein has been as successful as Mr. Ward, whose catalog became imbued in American culture as the nation’s “Wish Book.”

The Covid-19 Fight: More Applications for Cash Coming into California's Stem Cell Agency

California's $3 billion stem cell agency has now collected 12 fresh applications from researchers hoping to tap into it for millions to fight the coronavirus and Covid-19. Today is the deadline for more. Another deadline for applications comes up in two weeks.

The agency reported that the 12 include three from biotech firms. The other nine are from nonprofits.  The agency's application reviewers will meet online May 12 and in private make the de facto decisions on which to fund.

The agency's directors are expected to meet a few days after the application review session and ratify the decisions.

Last month the directors approved a total of $1 million for three applications. The funds went to the City of Hope and two to researchers at UCLA.  The agency has allotted $5 million for the covid effort.

The total number of applications to come before researchers now stands at 24, including new 12.

News Coverage of Capricor and California Stem Cell Agency Less Than Abundant

Capricor Therapeutics' stock price retreated today after soaring 253 percent yesterday on the news that one of its products had successfully treated a small group of critically ill, Covid-19  patients.

The price closed today at 7.00, down from yesterday's close of $8.50. That was the highest price for the Beverly Hills firm since 2018.

While the news about its CAP-1002 treatment excited investors, it did not stir the news media. In the glut of hundreds of stories about the coronavirus, the mainstream media did not even mention Capricor. Nor did the Los Angeles Times, virtually the home town paper for the firm. As for the California stem cell agency, which has pumped nearly $25 million into Capricor-related research, the role of the agency was also among the missing.

The Los Angeles Business Journal did carry a tidy and straight forward story, again one that did not mention the stem cell agency, which is hoping that California voters will save its financial life next fall. That is, if they approve a proposed, $5.5 billion, ballot measure that has already missed one state-recommended deadline (April 21) for qualifying for the ballot. BioWorld also had a story that did not mention the California agency's role. 

The agency is running out of the $3 billion that voters provided for it in 2004 when they created the unprecedented state research program. It will begin closing its door in six months unless major funding is found.

The sparse news coverage of the agency will be a challenge for the agency's backers as they seek voter approval of the ballot measure, assuming it qualifies.

A Covid-19 Success, 300 Percent Stock Price Increase and the California Stem Cell Agency

A company that the California stem cell agency has backed with nearly $18 million scored big this morning on news that one of its products had generated a 100 percent survival rate with a small group of critically ill Covid-19 patients.

The company is Capricor, Inc., a publicly traded company based in Beverly Hills, Ca. Its stock soared more than 320 percent at one point this morning from its previous close of $2.41 based on the news about its CAP-1002 therapy. Shares stood at $9.09 at the time of this writing.  

The company said in a news release that it had generated "100 percent survival in critical Covid-19 patients who were treated with Capricor’s lead asset, off-the-shelf ('allogeneic') cardiac cell therapy CAP-1002, at Cedars-Sinai Medical Center as part of six compassionate care cases." 

The company said the federal government has approved 20 additional patients for treatment. Capricor also said it is developing "a randomized, placebo-controlled trial planned to treat patients with moderate and severe disease which is intended to be funded by non-equity capital."

Capricor and its underlying research have long been embedded with the state stem cell agency, which is formally known as the California Institute for Regenerative Medicine (CIRM). In addition to $17.8 million given directly to the company, another $7 million went to Cedars-Sinai for much of the early development work that led to the creation of Capricor. 

Speaking to the agency's governing board in 2016 concerning CAP-1002, CIRM director Jeff Sheehy, chair of its Science Committee, said, 

"This is pretty much a pure CIRM product. They came into our first disease team to develop the product. We've supported two of the three clinical trials. So if this turns out to be a major success, this will be a real feather for CIRM. We've been with them all the way. So I'm optimistic." 

In 2018, a clinical trial involving CAP-1002 was begun at UC Davis as part of CIRM's separate Alpha Clinics program, an ambitious statewide effort to lead the way nationally on stem cell research.

In a news release this morning, Linda Marban, CEO of Capricor, said, 

"As the global medical community continues to come together in its battle against COVID-19, the results of our initial compassionate care cases are extremely promising and what we had anticipated. We look forward to continuing to treat additional patients under our recently approved expanded access program Investigational New Drug application.

“CAP-1002 is an easy-to-deliver intravenous therapy that has been administered successfully to over 150 patients to date. Given its novel mechanism of action, it could be a potential game-changer in helping countless Covid-19 patients.”

The Capricor product initially targeted Duchenne muscular dystrophy (DMD), "a muscle wasting condition that steadily destroys the muscles in the arms and legs, heart and respiratory system" of boys and "never lets up," CIRM says.

The CAP-1002 treatment has demonstrated immunomodulatory properties that come into play with Covid-19. Capricor said, 

"Multiple published peer-reviewed studies of CDCs have demonstrated favorable modulation of various inflammatory cytokines and regulation of the immune response. The current understanding of Covid-19’s later stages are thought to be due to overstimulation of the immune system, which triggers a cytokine storm in which the body is overwhelmed with pro-inflammatory molecules. This immune response may become excessive and pathologic, inducing pneumonia, organ failure and death. Therefore, it can be the body's overreaction to Covid-19, rather than the virus itself, that delivers the fatal blow."

Capricor is also working on a Covid-19 vaccine involving a different technology.