Two Days of Stem Cells: Founder Flight to Hyperventilation

Christopher Thomas Scott, executive director of Stanford's Program on Stem Cells in Society, is scheduled to set the scene Monday for a two-day international conference on stem cells in San Francisco.

"The business issues are profound," he says, "including access to patients, fragmented intellectual property and a new calculus of investment risk that includes whether the research is illegal and how to mitigate against 'founder flight' as entrepreneurs seek permissive jurisdictions to launch their businesses."

We asked Scott, who is co-chair of the conference sponsored by Burrill & Company, for a preview of his remarks. Here is what he supplied.

"No one can deny the promise of regenerative medicine. But the field has its shaky spots: an astonishingly young science, polarized politics, and fraught with ethical worry. Yet stem cell biology has been on a tear lately. In just a handful of years, the science has moved from hunting stem cells to the arcane secrets of signal transduction. The hyperventilation about which stem cells--embryonic or adult--will be clinically useful is largely lost on scientists. The questions facing them are more elemental: can stem cells be chemically reprogrammed to earlier, more powerful versions of themselves? On which branch of the family tree does a new stem cell rest? What gene signals cause a stem cell to make more stem cells, or change into the next cell type down the line? The last question is on every researcher’s mind, because signal pathways are critical to understand how a certain type of cell can be made from an embryonic stem cell line, or how millions of adult stem cells can be made from a just a few to treat disease.

"2006 was a watershed year in other ways. Most Americans support embryonic stem cell research, and so does Congress. Despite a vote in the House and Senate that would overturn a restrictive presidential mandate, it wasn't enough to override George Bush's first-ever veto. California pushed through a thicket of lawsuits to shake loose billions of dollars for regenerative medicine. Now, finally, there is light at the end of that tunnel. Legislation in other states is moving so quickly it's difficult to keep track: just last week, Illinois, Iowa, Minnesota signed laws to permit all types of stem cell research. As political winds fanned the flames stateside, stem cells went international, creating a different kind of global warming. In a mighty push, Australia overturned a ban on nuclear transfer. The world's researchers had a banner year, with Japan, Germany, Norway and others announcing major discoveries. Not all the offshore news was good, however. The heat created a conflagration with the biggest scientific fraud in memory, the South Korean scandal.

"One thing is certain--international politics and the legal landscape has altered the way we do biomedical research. Thomas Friedman's "global flattening" doesn't apply here. A mosaic of legislation and national policy means uneven terrain for funding, infrastructure and accessibility to embryos and lines. The business issues are profound, including access to patients, fragmented intellectual property and a new calculus of investment risk that includes whether the research is illegal and how to mitigate against "founder flight" as entrepreneurs seek permissive jurisdictions to launch their businesses. The vacuum in Washington has shattered the state legislative landscape. In one state, a scientist can go to jail for doing embryonic stem cell research. In another, embryos can't be used for research, but it is fine to ship them in across the border. And who would have predicted this in 2001, the year of Bush's pronouncement: once funding from California, Wisconsin, New Jersey, Connecticut, Illinois, Maryland, Massachusetts, and other states is fully unleashed, it will surpass by a wide margin any dedicated federal dollars, restricted or otherwise.

"With all the moving parts, it made sense to assemble a group of experts and scholars from many disciplines to address issues at the interface of science, business, economics, law, and policy. I was delighted when Burrill & Company asked me to develop an agenda that would explore these connections. As a rule, stem cell conferences tend to be monolithic, in part because the reach of regenerative medicine is too broad to be addressed in two or three days. But to my knowledge, no conference tackles these questions from an international perspective. I'm excited to learn what this stellar group has to say, and how the glimmering edge of biology's most promising frontier will look in 2007 and beyond."

We will attending the conference both days. Watch for continuing coverage of the event.

Rationale Behind Kuehl's Stem Cell Legislation

The new chair of the California State Senate Health Committee will "push the CIRM to live up to its promises," including insuring that all Californians will have access to any therapies developed as the result of state-funded stem cell research.

So says the January newsletter put out by Sen. Sheila Kuehl, D-Santa Monica. The newsletter carried a piece by Peter Hansel, staff director of the Senate Health Committee, that discussed the California stem cell agency at some length, including needed changes. Hansel, it should be noted, also served as a Health Committee analyst when it was chaired by Sen. Deborah Ortiz, who is now out of office.

Hansel wrote that Kuehl disagrees with arguments that CIRM should should go easy in terms of royalty requirements and affordable access to cures and therapies. He noted that CIRM has adopted some IP rules that respond to legislative concerns. Hansel continued:

"However, regulations governing the pricing of stem cell therapies in California run counter to assurances given to the Legislature. While at first proposing that grantees and licensees sell such therapies to publicly funded programs at the federal Medicaid price, the CIRM has recently reduced that to a requirement to sell at the same prices they offer them to the state’s new California Prescription Drug Discount Program, a significantly less favorable price. Similarly, the regulations for grants and loans to commercial entities propose to cap the amount of revenues coming back to the state associated with most products developed with Prop. 71 funds, as opposed to giving the state an open-ended return commensurate with its investment. By contrast, New Jersey, which also allows commercial entities to receive grants under its stem cell research program, requires such grantees to share a percentage of revenues—one percent—on an open-ended basis from licensing or commercialization of inventions (two other states that fund stem cell research, Illinois and Connecticut, do not allow for-profit entities to receive funding while another two, Maryland and Illinois have yet to develop policies for grants to for-profits). Capping returns from joint research ventures also appears to run counter to the practices of most universities who co-fund research with commercial entities and the venture capital industry.

"In addition, recent changes require grantees to grant exclusive licenses for inventions they develop to entities that agree to have plans at the time of commercialization to provide access to resultant therapies and diagnostics for uninsured patients, consistent with 'industry standards,' The current industry standard, the patient assistance programs that have been developed by the major drug companies, have been shown to be woefully inadequate in encouraging access to free or reduced price drugs for uninsured persons. Thus, it is incumbent on the CIRM to develop a more meaningful standard than this."

calif legislation, IP, affordability, access, skuehl, phansel

Ebert on WARF and the Patent Challenge

Lawrence Ebert, a patent attorney in New Jersey, has a different take on WARF and the stem cell patent matter. Among other things, he faults The Sacramento Bee and challenges the challenge to the patents:

"Patent claims are not invalidated because earlier researchers paved the way for later researchers. PubPat's anticipation argument for human embryonic stem cells is based on a prior reference which is not enabled as to human embryonic stem cells. To look in a different area, the work of Galileo (and others) may have paved the way for the Wright Brothers, but no one achieved three dimensional flight control before the Wright Brothers, or taught how three dimensional flight control could be achieved. PubPat's obviousness argument is based on the assertion: recipe for mouse embryonic stem cells renders obvious recipe for human embryonic stem cells. If this were true, it probably would not have taken 15 years between mouse and human."

Reading the Economic Entrails of ESC Research

Is embryonic stem cell research a cash cow? Or just another public policy chimera?

The questions have surfaced again in news reports concerning two old studies by economists. One is the much-noted 2004 campaign study by Laurence Baker of Stanford and Bruce Deal, managing partner of the Analysis Group of Menlo Park. The other was prepared in the middle of last year by Richard Gilbert of UC Berkeley. Gilbert's study was relatively pessmistic compared to the Baker study.

Writer Malcolm Maclachlan of the Capitol Weekly in Sacramento tackled both of the studies in a recent piece called "Stem Reality Check." Maclachan wrote:

"Gilbert was careful to note that he is not accusing Baker and Deal of any dishonesty in their study. For instance, Gilbert writes in his report that they were clear with their assumptions and the fact that these numbers were estimates of money that could be made many years in the future. If anyone took these numbers as guarantees, he said, they probably did not do so via a careful reading of Baker and Deal's report.

"'As with anything, people believe what they want to believe,' Gilbert said.

"However, Gilbert does bring up two main issues he has with assumptions made in the report. First, he said they take a 'prospective approach' to their estimates--that is, they try to estimate the number of viable new therapies that will be created. Gilbert said that a 'retrospective' approach would be more appropriate, 'based on actual royalty generation by research funded by universities, hospitals and research institutions.' That approach takes note of the fact that big money makers--for instance, the cancer drug Taxol, which made $67 million for Florida State University in 2000 alone--are exceedingly rare.

"Second, Gilbert takes the authors to task for not fully factoring in a concept called 'the time value of money.' Not only does inflation rob money of its value over time, Gilbert said, but money tied up in stem cell research is also money not available to be invested elsewhere. Though Gilbert writes: 'In their defense, the authors report only projected revenue flows, not the value of those revenues.'

"By combining these two concepts, Gilbert estimated that a better real money value of the returns California could see would be reduced to between $31 million to $62 million.

"'I don't think this is terribly surprising to a lot of people,' Gilbert said. 'Basic research is rarely a cash cow.'

"Baker took the critique in stride. He noted that circumstances have changed greatly since he wrote the report, especially in terms of an improving political situation for stem cell research in Washington.

"'It's a complicated area that's evolving all the time,' Baker said. 'I don't know if there's a right way to do the estimates.'"

The Capitol Weekly also wrote:

"So why should people be paying attention to a 7-month-old critique of a 28-month-old report? Because other states are starting to propose big money for stem cell research--and at least one of the same players from Prop. 71 is involved in other states initiatives, said Jesse Reynolds, project director on biotechnology accountability with the Oakland-based Center for Genetics and Society.

"For instance, Deal wrote a report used to promote a stem cell initiative in Missouri which estimated that the state could save up to $3.8 billion in healthcare costs over 20 years from stem cell research. Amendment 2 merely protects stem cell research in the state; it did not put forth any money. It passed in November with a bare 51.2 percent of the vote. Deal did not return a call seeking comment for this story.

"This coming November, New York voters will decide on a $1 billion bond for stem cell research. In neighboring New Jersey, they'll vote on $500 million. Both of these dwarf the previous number 2 state stem cell effort, Reynolds said, the $100 million over 10 years approved by the Connecticut General Assembly in June, 2005."

Here's what really lies at the bottom of ESC petri dish: If there were sure money to be made in ESC research, venture capitalists would be pumping gazillions into it. And there would be no need for efforts like the California stem cell agency.

The Stem Cell Race: How California is Like the Cobbler's Children...Sort Of

California's stem cell effort, still yet to dispense a single research dollar, has served as lever globally to boost funding for the field in locations ranging from New Jersey to Australia.

That's one of the conclusions of the third article in a three-part series in the San Diego Union-Tribune called "The Stem Cell Race."

Written by reporter Terri Somers, the piece examines California's $3 billion effort, which has been hampered by a legal tussle over its legitimacy. Somers wrote:

"While San Diego's large stem cell research community has been waiting to tap the state funding, the Harvard University area – supported largely by philanthropists – has become the U.S. science cluster best known internationally for embryonic stem cell research.

"Also pushing ahead have been the governments of Singapore, China, Japan and several European nations, which have supported their embryonic stem cell scientists with money and favorable policies.

"'Proposition 71 is supposed to help the economy by creating jobs first, then new tools and treatments, but until it really gets moving it's just an old Jag in the garage," said Tom Okarma, chief executive of Geron, a Menlo Park stem cell research company."

Somers continued:

"New York Gov.-elect Eliot Spitzer plans to push a $1 billion 10-year stem cell initiative that mirror's California's. On Friday, New Jersey's legislature approved borrowing $270 million to fund stem cell research. And Connecticut has floated a $100 million 10-year initiative. Part of the states' impetus was the fear of losing top researchers to California and abroad."

The San Diego article also reported:

"Scientists and government officials from 15 nations have visited the stem cell institute over the past year, said Zach Hall, the institute's president. Delegations from India, Israel, the United Kingdom and China were eager to forge relationships and take home ideas and the possibility of collaborations."

Nonetheless, Somers reported that 30 "notable" scientists have come to California in the last two years because of the state effort. An informational graphic with the story showed that private and federal funds totalling $234 million have poured into the state, boosting research efforts. And she noted that CIRM now has $181 million in hand, ready to dispense on research.

"'With these loans California's funding is now six times the nation's funding through the (National Institutes of Health) and California is squarely in the global leadership of this breakthrough field of medical research,' said Robert Klein, chairman of the California Institute for Regenerative Medicine."

Stem Cell Snippets: UC Irvine, Loring and Windows of Opportunity

Here are some links to stories of interest related to California stem cell matters

UCI – Thomas Yuen, chairman and CEO of Prime Cell Therapeutics of Irvine, Ca., has donated $1 million for embryonic stem cell research at UC Irvine, according to a piece by reporter Gary Robbins of the Orange Country Register. Prime Cell is a privately held stem cell engineering firm currently involved with adult stem cells, according to its web site. Robbins said Yuen, 54, has kidney disease and quoted him as saying, "My illness exposes me to a lot of people who are sick and suffering. And I believe stem-cell work holds the promise of treating a multitude of age-related and chronic diseases."


WARF – Reporter David Wahlberg of the Wisconsin State Journal takes a crack at the WARF patent dispute. An excerpt from his balanced article: "WARF's stance, that Thomson's work is worthy of patents, 'is like saying that just because heating in water works for cooking a chicken egg, it's novel to consider using heating in water to cook a duck egg,' said Jeanne Loring, a stem-cell researcher at the Burnham Institute for Medical Research in California."


Out Front – Hartford Courant columnist Dan Haar writes: "The federal ban (on ESC research)has created a window of opportunity for Connecticut, California, Illinois, New Jersey, and perhaps a few other states that have had the foresight to front their own cash. 'When the ban goes away, there are only going to be a few places in the country that already have this,' said Marc Lalande, a UConn geneticist and associate dean who heads the university's stem cell working group. 'We are going to have a leg up. We will be able to compete successfully for federal funding.'"

Strategic Plan – The Red Herring web site posted a piece on CIRM's strategic plan, saying "for the most part" it received an "informal endorsement."

Text of Statements from CGS on Politics of Stem Cell Research

Here are the texts of remarks made by officials of the Center for Genetics and Society at a Sept. 19 briefing for reporters and editors on the politics of stem cell research. The statements are not currently available on the center's web site.

Remarks by Marcy Darnovsky , Associate Executive Director, Center for Genetics and Society


I’m going to talk first about several kinds of over-promising and distortion that are common in the stem cell debate. Then I’ll say a few words about some shifting political alignments and developments.

[Exaggerating cures]

Exaggeration is really one of the hallmarks of this issue. It’s pervasive on both sides of the debate, and each side’s hyperbole feeds the hyperbole of the other.

Opponents of embryonic stem cell research consistently overplay the current capabilities and the future potential of adult stem cells, and downplay what most scientists believe about the promise of embryonic stem cell research. Their major point is undeniable – that deriving stem cells from embryos necessarily destroys those embryos. But their objection is a minority position in the U.S., and one that’s being imposed on the majority.

The focus on embryos does another kind of disservice as well. The divide in our country over the moral status of human embryos, and over abortion rights, has overwhelmingly dominated the discussion of stem cell research, burying other important concerns. We need to look at this issue through a different lens.

Turning now to the situation among supporters of embryonic stem cell research: Far too many scientists, politicians, biotech entrepreneurs, and research advocates regularly exaggerate the likelihood and imminence of medical advances. The use of the word “cures” is routine – though as Jesse mentioned, the research is at an early stage, and right now there are no treatments or therapies based on embryonic stem cells, let alone cures.

Nonetheless, both the 2004 California ballot initiative and this year’s voter initiative in Missouri have the words “stem cell research and cures” in their titles, and the supporters of the Missouri initiative call themselves “The Missouri Coalition for Lifesaving Cures.”

And just recently the Democratic Senate candidate from Missouri, who strongly supports the stem cell initiative, used the words "lifesaving," "cure," or "save [a life]" 22 times in a 732-word interview published by the Associated Press.

Statements like these seriously degrade public understanding and distort political discourse. Perhaps more surprisingly, similar exaggerations have also become common in the world of science, in statements by scientists about stem cell research. It’s always been considered a matter of scientific integrity to refrain from making claims in the absence of clear evidence. But in the stem cell world, that principle is being regularly violated.

One example: It’s common to hear that embryonic stem cell research will result in cures for Alzheimer’s disease, when in fact, unfortunately, the idea that stem cells have the potential to treat Alzheimer’s is far-fetched.

Knowing this, Rick Weiss, the Washington Post’s science reporter, called a prominent stem cell and neurology researcher to ask why he and his colleagues weren’t correcting the misunderstanding. The scientist’s answer: "To start with, people need a fairy tale... they need a story line that's relatively simple to understand."

[Other distortions]

Other sorts of exaggerations and distortions are also rampant in the stem cell debate.

Opponents of embryonic stem cell research regularly blur the distinction between reproductive and research cloning. This can be seen as a logical extension of their position that an embryo is a full-fledged human being. But failing to acknowledge the difference between a cloned child and a cloned embryo certainly skews consideration of the issue.

Opponents of embryonic stem cell research often misrepresent concerns voiced by women’s health advocates and groups like the Center for Genetics and Society about issues such as procuring eggs for research. In Missouri, an anti-abortion rights group that opposes the initiative used our words to support their position, neglecting to mention that we support embryonic stem cell research

On the pro-embryonic stem cell research side, we’ve seen a clear pattern of overstating the economic benefits of allowing or funding research.

The coalition backing Missouri’s Amendment 2 is promoting a study that claims the initiative will "reduce state health care costs by billions." To the extent that it’s supported at all, this conclusion is based on savings that would be realized by curing a list of diseases that includes very unlikely candidates for stem cell research, such as stroke and Alzheimer's.

We saw similar hand-waving in the campaign for the California initiative – in fact, the economic studies were done by the same hired group.

[Why it matters]

Why do the exaggerations and over-promising matter?

First, they do real damage to public understanding, and to the possibility of a meaningful debate on a set of complicated issues.
Second, overblown claims can be very hurtful to those who suffer from debilitating diseases, cruelly raising hopes that are likely to be dashed.
Third, hype about stem cells has played a role in overheating the environment to the extent that we’re seeing fraud and embezzlement – as in the case of South Korean cloning researcher Hwang Woo Suk – and questionable claims like the announcement a few weeks ago by Advanced Cell Technology that seemed based more on their need to raise money through a stock spike than on any real advance.
And finally, hype is bad for science. It sets the stage for backlash or bad policy or both.


[Political alignments and developments]

I want to say just a few words about the political alignments on stem cell research. We’ve talked a fair amount on this call about the distortions caused by the political polarization on this issue. But in fact, there’s growing bipartisan support for stem cell research using embryos produced but not used for assisted reproduction. We’re seeing a growing realization that Americans can be religious and support embryonic stem cell research; that they can be liberal and support responsible regulation of stem cell and cloning research.

We’ve looked at opinion polling on this question. Stem cell research is even more subject to wording effects than many other issues. But our analysis of polls that provide balanced background statements shows clearly that

support for embryonic stem cell research has been growing,
significant uneasiness about the use of cloning techniques for stem cell research has persisted

Though some Democrats continue to use embryonic stem cell research as a wedge issue, the recent Congressional vote on extending federal funding showed that more and more conservatives are supporting it. There will eventually be a less restrictive federal funding policy, and it’s past time to shift the conversation to the question of how stem cell research will be conducted – what oversight and what rules of the road do we want to put in place.

This is particularly important when it comes to research cloning. An important piece of that story rests on the issue of women’s eggs for research. Here in California, the Center for Genetics and Society and several women’s health groups worked with a Democratic state senator on an eggs-for-research bill. It passed both the California Senate and House with near-unanimous votes, and is now sitting on the Governor’s desk awaiting his signature.

Let me wrap up with 3 points that we think are key:

First, the stem cell debate until now has focused so much on the status of embryos that some really important issues have been eclipsed
Second, the political polarization on embryonic stem cell research has created an atmosphere of hype, distortion, and as a result, public misunderstanding
Third, responsible oversight and enforceable regulation of stem cell research – the kind that are in place in many other countries with research efforts – are a high priority for the U.S. Putting a comprehensive policy in place will be a plus for everyone.

Remarks by Jesse Reynolds, Project Director- Biotechnology in the Public Interest, Center for Genetics and Society


These basics of science and policy can be complex, and key distinctions are easy to overlook. I’m sure you are familiar with much of this, but I want to try and get everyone on the same page.

The distinction between stem cells from adult body tissue and those from embryos has nearly monopolized the debate about stem cell research. But many people are not clear about a second distinction between two sources of embryonic stem cells. And its in describing these techniques where perhaps the most frequent mistakes in the coverage of stem cell research occur.

The first, which has been used to produce all currently existing embryonic stem cell lines, is to use embryos created but not used in fertility treatments.

The other is to use embryos created by the cloning process, called somatic cell nuclear transfer, to derive new stem cell lines with specific genetic compositions. This process of cloning for stem cells is sometimes called research cloning, therapeutic cloning, or just SCNT.

Cloning in stem cell research remains at an early, speculative stage. Although it has been receiving much attention, it is a tiny portion of stem cell research. Only a handful of labs in the world are working on such research cloning.

Research cloning brings up issues of concern beyond the moral status of the embryo.
First, is how to treat the women who may provide the eggs has been an issue of debate, particularly whether to pay them. Unlike “normal” stem cell research, many human eggs are needed for it. Egg extraction is a procedure with significant medical risk.
Second, treatments from cloning-based stem cell research are likely to be extremely expensive – and that they might therefore increase health inequities.
Third, the technique opens the door to unacceptable applications such as reproductive cloning.

Because “cloning” has a strong negative connotation, advocates and opponents for research cloning manipulate the language. The advocates just call it SCNT, imply that no embryo is created, and also imply that it is currently a critical part of stem cell research. The opponents will call it “human cloning,” in an effort to blur the distinction between cloning for stem cell research, and cloning for reproduction.

The distinction between research cloning and embryonic stem cell research in general is key to understanding and describing the scientific and political landscape. But this blurring between them has led to many outright inaccuracies in reporting. As an example, just last week, a columnist in a major Missouri newspaper wrote about a person whose cancer had been put into remission by a cloning-based stem cell treatment– when in fact stem cell lines have never been successfully derived from clonal embryos.

Moving on to policy, I’d like make a second key distinction – this one among what is allowed, what is regulated, and what is funded. I’ll start with federal policy.

There are no bans on stem cell research at the federal level, despite the rhetoric of some research advocates. Of course, laws that apply to medical research in general apply. Congress has supported a ban on research cloning, but the bill lacks votes to overcome a filibuster in the Senate.

There are also no regulations specific to stem cell research at the federal level. This is unlike other countries that have stem cell research programs, and despite widespread recognition among scientists that this work raises new oversight and regulatory concerns

The only national guidance is the area comes from the National Academies, a nongovernmental organization. It’s issued recommended guidelines for the conduct of stem cell research. These, for example, oppose paying women who provide eggs for research cloning. But these are not enforceable regulations, and some researchers have indicated that they will not necessarily follow them.

As you know, federal funding of human embryonic stem cell research has been restricted to the funding of work with lines created before August 2001. The recent bill that resulted in President Bush’s first veto, would have undone these restrictions. The passage and signing of this bill would have provided the opportunity to have discussions about federal oversight of this important research.

Moving on to the states: The lack of federal funding, and the accompanying lack of federal oversight, has resulted in an emerging patchwork of state laws and regulations. One state – South Dakota – bans the human embryonic stem cell research entirely. At least five other states ban research cloning. Research cloning is explicitly permitted in six states. Of course, when not cited in law, these practices are implicitly allowed.

Only two states are developing regulations for human embryonic stem cell research, California and Massachusetts. California will have two sets of regulations – one for state funded research, and another for any other source of funding.

Five states publicly fund stem cell research: California, Connecticut, New Jersey, Maryland, and Illinois. At $300 million per year for ten years, California’s program dwarfs the others. All these state funding programs except Maryland’s intend to fund research cloning.

Finally, I’d like to provide some details on Missouri, which is currently the site of the most prominent stem cell research debate. The Constitutional amendment before the voters would ensure that all stem cell research that’s legal at the federal level remains legal in the state. Because there are currently no laws specific to stem cell research in Missouri, the amendment would simply preserve the status quo.

It’s true that each year some conservative legislators introduce a ban on all cloning, including research cloning. But this ban is very unlikely to become law – it’s never even gotten out of committee in either house, and the governor has promised a veto. Moreover, research cloning is not even being done in Missouri. It is strange that the proponents of the proposed Amendment raised sixteen million dollars, as of the end of June, just to preserve the status quo. That is already more than has ever been spent on any race in the state.

The powerful emerging technologies of stem cell research are being developed largely without oversight. Some politicians talk of bans, and others advocate for protective constitutional amendments. But what’s missing is effective regulation to ensure that it is done right.

Looking at Legislation to Aid Biotech Biz

"Investors' disinterest" in California biotechnology came up for examination in a recent piece in the Vacaville Reporter, the daily newspaper for the community that lies between San Francisco and Sacramento.

The article by business writer Amanda Janis focused on the "realities of the manufacturing side of biotech." It was of interest to Vacaville readers because of the area's efforts to land biotech manufacturing facilities. But the piece also has interest to California as a whole.

Janis wrote:

"Industry leader Genentech chose to build its new $250 million facility in Oregon, where corporate income tax structures are more favorable. Then there was the start-up firm that passed on Vacaville in order to capitalize on biotech tax breaks offered in Washington. And most recently Chiron parent Novartis announced it would build a $400 million vaccine plant in the United States, but not in California."

She touched on state legislation aimed at helping the biotech business.

"Proposed bills include changing the corporate income tax structure with a four-year phase-in of single sales apportionment tax (an issue Genentech calls its primary legislative concern); sales and use tax exemption on manufacturing equipment; extension of research and development tax credits; and the allowance for companies to sell their net operating losses to other companies, which would gain a tax credit.

"The latter proposal, which has found success in states like New Jersey, has some of the greatest potential impact because of the loss-operating nature of the biotech industry, according to Matt Gardner, president of trade organization BayBio.

"'It takes 15 years for us to get a product,' he noted.

"Another proposed bill in California would help level the playing field, he said, because it would allow for designated "shovel-ready" land, or land that has been pre-zoned, with environmental impact reviews completed."

Legislation to help out the biotech industry has received little notice. But it is likely to become increasingly important to the industry as the CIRM investments ramp up.

California vs. Wisconsin: Dangerous Monopoly?

An op-ed piece recently in the Los Angeles Times ripped into the hold that the Wisconsin Alumni Research Organization has on stem cell patents, saying that the organization"may exert a dangerous monopoly."

The article by Jennifer Washburn, author of "University , Inc.: The Corporate Corruption of Higher Education, says the patents pose a "new and potentially even more worrisome challenge" to the California stem cell agency than its difficulties since January of last year.

WARF has already served notice that it wants cash from California. This blog was the first medium to publish that news March 14.

Washburn's predictions, however, have been challenged by Lawrence Ebert, an intellectual property attorney in New Jersey. "There may be a visceral reaction to lash out against patents perceived to be overbroad," Ebert wrote, but he said negotiation and a "research safe harbor" in federal law could protect California from being ravaged by WARF.

Can WARF Collect Stem Cell Royalties From California?

Earlier this month, we reported on a call by the Wisconsin Alumni Research Foundation for royalties from California-funded stem cell inventions.

The issue was addressed today in IPBIZ, a blog by patent lawyer Lawrence Ebert. He raises questions about WARF's position and includes a number of legal citations. Here are a few excerpts from the item:

"First of all, the information in the (California Stem Cell Report) post is worth consideration by people in California, and in New Jersey, Maryland, Connecticut, and Illinois, about state-financed funding of stem cell research."

He continues:

"My second point is, notwithstanding the significance of WARF's expressed position on March 14, it does not really constitute a threat to the other states. [There may be other things that do constitute a threat, but that's another story.]"

Ebert also says:

"Moreover, there's another reason the folks at WARF ought to be careful. CIRM is a state agency. Accusations of patent infringement against states play out a bit differently than the garden variety suit against a garden variety defendant."

Warnings about Overhyping Stem Cell Science

The following is coming live from The Stem Cell Meeting today in San Francisco, sponsored by Burrill and Co.

California stem cell chairman Robert Klein is heading a panel called "Stem Cell Politics: Global Strategies for Supporting Research." Michael Werner of The Werner Group has just told the audience that no state in this country is "talking about the kind of money" that is likely to be available in California. The best prospects for significant stem cell research funding are in New Jersey, Maryland and Illinois. Angela McNab, chief executive of the Human Fertilization and Embryology Authority in the UK, warned that the audience that they cannot take public confidence in stem cell research for granted. She said excessive enthusiasm can lead to overhyping benefits and the speed with which they will be produced. She warned that when results are not forthcoming, opponents "will use the hype to discredit the science."

We will have more on the conference later today.

Greenlining Enters Fray with Emphasis on Minorities

A relatively new and influential critic – the Greenlining Institute – is rejoining the public debate over the California stem cell agency.

"The health and well being of our families is on the line," the organization said in an e-mail to the California Stem Cell Report. "It is time for California’s minority communities to take ownership of their billion dollar investment by asking questions, demanding answers, speaking up, and being heard."

Greenlining, a self-described "multi-ethnic public policy think tank bridging together a coalition of more than 40 non-profits throughout the state," popped up last spring during a legislative hearing involving the stem cell agency but has been silent since.

In the wake of the grant announcement on Friday, Joe Tayag, health policy associate at Greenlining, said, . "We feel that it’s time for communities of color to participate in this dialogue and we’ll be starting our public advocacy campaign soon."

Tayag also offered the following commentary, which he titled "The Color of Stem Cells: Why the benefits of stem cell research might not be for people like me."

Here are his remarks in full since they are not available elsewhere on the Internet:

"After losing half of one of my lungs to tuberculosis while volunteering in the Andes last year, I assumed that life would just never be the same again. By this I meant that the flight of stairs to my apartment would always seem twice as long and that I would have to give up things I enjoyed like taking long runs on Sunday mornings.

"However, the promise of therapeutic treatments derived from stem cell research gives individuals like me a hope for normalcy. Yet, as an immigrant from a low-income family, I can’t stop from cringing at the thought that the low-income and marginalized communities of the state still have no explicit guarantee of access to the promised 'cures' of Prop. 71—much less to adequate health care in general.

"Last Friday, the Independent Citizen’s Oversight Committee (ICOC) allocated a little over $39 million to prestigious research institutions like UCLA, UC Berkeley, Stanford, USC, and Cal Tech among others. Yet, it’s unclear from perusing through many of their grant proposals just how much focus these research institutions will give to communities of color and their health needs.

"The initiative passed last November with overwhelming minority support. Despite this, there has been no mention of issues crucial to communities of color especially with regard to the California Institute of Regenerative Medicine’s research and staffing diversity. After all without minorities represented at CIRM’s decision making bodies, who will listen to the needs of the African American communities who are more susceptible to heart disease? Or to the Latino communities who suffer from diabetes? Or to the Asian Pacific Islanders who are more prone to sickle cell anemia?

"Without a more diverse governing board, these questions will be left to dwindle in uncertainty as California drafts the first ever model of state-sponsored stem cell research arrangements that will be referred to by the rest of the nation. New Jersey and North Carolina are already following suit and unless California sets a proper example of diverse representation, we’re bound to see the ignorance of minorities’ needs ripple throughout the rest of the country.

"To prevent this, minority communities should be represented proportionate to their numbers in California in each of the following areas of Prop. 71’s implementation:

-- The institute’s governing board (also known as the Independent Citizen’s Oversight Committee). As it stands, only 3 members of the ICOC are minorities.

-- The recipients of the $39 million in grants going toward the training of lab technicians, medical students and social scientists.

-- The groups of people on whom the medical products are tested to ensure compatibility amongst all communities.

"Due to scarce resources, we currently have a kind of disease hierarchy with regard to research priorities. Diseases that disproportionately affect communities of color (such as diabetes, heart disease, HIV/AIDS and sickle cell anemia) should be considered and represented in any discussion of the allocation of grants and research goals—but who will uphold the needs of the underserved when communities of color are not being allowed at the decision-making table?

"The reverse is also true: just as the minority public deserves to be represented, the state-sponsored agency needs to report the proper information to the minority public. CIRM is notorious for releasing important information as late as hours before its public hearings and thus, does not allow enough time for people to digest their materials—much less understand them.

"The last September meeting of the Independent Citizen’s Oversight Committee is evidence of this. Although the ICOC meeting agenda contained some background material on several matters such as the proposed budget and guidelines for embryonic stem cell research, the items were not 'translated' to the public in terms that regular citizens could understand.

"Though the 'translation' from scientific jargon to understandable speech seems like a difficult task, the request does not seem even close to colossal considering that CIRM currently has an almost $30,000 a month public relations contract with the Edelman PR firm. With $30,000 a month going to public relations, why is it that communities of color still hide at the sound of the words, 'stem cell research?' I would argue that it is due to the lack of outreach and education in our communities that many people of color believe that the issue does not concern them."

In contrast, the $3 billion that minority communities pledged to give to stem cell research clearly means that it does concern them. The legislative fate of these tiny cells is calling for communities of color to ask questions such as: will the treatments derived from the research that I am helping to fund cure my ailing loved ones? And even if they will, will the treatments be affordable to my community?

"The health and well being of our families is on the line. It is time for California’s minority communities to take ownership of their billion dollar investment by asking questions, demanding answers, speaking up, and being heard."


,

New Jersey Lessons for California

While California is just embarking on a $3 billion stem cell research effort, New Jersey has already poured hundreds of millions of dollars into the biotech biz in its state. And it is considering pumping another $380 million into stem cell research.

New Jersey's efforts and its difficulties have some obvious implications for California. Reporter Clint Riley of the Record in New Jersey provided some perspective on the situation in the Garden in a couple of articles.

He reported on Sunday: "New Jersey's partnership with biotech is already running into problems. It is cloaked in secrecy and riddled with the potential for conflicts. Its goals are at times nebulous."

On Monday Riley wrote, "Secrecy is important to the biotech industry, in both its business and research incarnations. After all, this is a world where the sole ownership of ideas is the basis of profits. The picture is more complicated on the public side of the biotechnology partnership.
In particular, a closed-door culture poses significant challenges for those concerned about conflicts of interest."

His reports detail examples of where New Jersey's public interests and those of the private sector do not necessarily coincide. He also noted that New Jersey ponied up $500,000 for promotion at the 18,000-attendee BIO 2005 conference mentioned in the item below.

The articles make interesting reading for those following the affairs in California.

More on CIRM Presidential Candidates

The Johnson & Johnson scientist being considered for the presidency of the California stem agency apparently is Per Petersen – not Per Pedersen.

Petersen is chairman of research and development of the J&J Pharmaceuticals Group in New Jersey, according to normally reliable sources. He was formerly with Scripps in San Diego.

Earlier reports spelled the man's last name as Pedersen. The latest information on him is not backed by the full and credit of the U.S. Government but it does appear to be relatively sound.