With more than 3.0 million page views and more than 5,000 items, this blog provides news and commentary on public policy, business and economic issues related to the $3 billion California stem cell agency. David Jensen, a retired California newsman, has published this blog since January 2005. His email address is djensen@californiastemcellreport.com.
The California stem cell agency today moved forward on
creation of new rules for its research awards, ranging from more fiscal scrutiny to elimination
of paperwork.
The aim of the move is to improve the quality of the
research and speed development of stem cell therapies by the $3 billion agency.
The Science Subcommittee of the agency’s governing board, as expected,
unanimously approved the rules, which are nearly certain to be ratified
Thursday by the full board at its meeting in Berkeley.
The proposals are part of CIRM 2.0, a major change at the
agency initiated by Randy Mills, who became president of the agency last May.
The grant reviewers, formally known as the Grants Working
Group, make the de facto decisions on all applications. The agency’s board has legal
authority to accept or reject applications, but has almost never rejected a
positive recommendation from its blue-ribbon scientific reviewers.
One change involving the scientific reviewers, all of whom
come from out-of-state, calls for them to exercise oversight on the progress of
the research and on “continued funding.” The reviewers would report their
findings to the full CIRM board or the agency’s president. That would be in
addition to CIRM staff monitoring and quarterly reviews by new panels of
advisors.
Another change in the review process calls for a patient
advocate member of the review group to be more actively involved in the review
of applications. One advocate would be asked for his or her views on an
application but would not score the application. All of the patient advocate
members of the review panel are also members of the agency board.
In addition to the seven members from the agency board,
including its chairman, each group of reviewers for a particular award round includes
15 scientists from outside California. They are drawn from a list of more than 100. Their financial and professional
interests are not disclosed to the public. Applicants are not notified which
researchers review their applications.
From cash
payments to conflicts of interest, the $3 billion California stem cell agency this
week is set to ratify a radical change in how it awards its largess and
oversees the research it funds.
Coming up
for approval today by a key panel of the agency’s directors are new rules
governing how scientists apply for millions of dollars and how they will
receive payments.
Instead of
checks rolling in primarily on a calendar basis, for example, they will reach
researchers only if they meet milestones approved by the agency, formally known
as the California Institute for Regenerative Medicine (CIRM).
The proposals
are part of CIRM 2.0, a label coined by UC Davis researcher Paul Knoepfler and
adopted by Randy Mills, who has been president of the agency since last May.
With CIRM
2.0, Mills hopes to generate faster and better results than in the past. The
main, direct impact will fall on the hundreds of California researchers who will
have future agency funding. But if Mills is successful, it will also pay off for
California citizens who are financing the agency with borrowed money at a total
cost of $6 billion including interest.
The rules
will apply immediately only to three clinical stage rounds, but Mills expects to
extend them to all future rounds. Officially they are called interim and are
subject to additional vetting through the state’s official rule-making process.
Here is a
brief look at some of the key features of the new rules, based on a memo prepared by Mills and his team. The rules were first considered in January but
final approval was put off until this month.
Payments:
Made only on completion of successful milestones. A CIRM memo said, “Additionally,
in many circumstances the grantee will be allowed to keep unspent CIRM funds
upon successful completion of the project, to be spent on any other project of
the grantee’s that is consistent with advancing CIRM’s mission. This new
process will incentivize grantees to advance the project in the most efficient
and shortest time possible, fulfilling CIRM’s goal to accelerate such projects.”
Background
check: Applicants will “undergo a background check to ensure no prior or
pending records of fraud or misuse of funds”
External
budget review: As soon as an application is received, it will scrutinized by an
external contractor “to identify where proposed costs diverge from established
market rates and where opportunities for budget tightening may be found.” This is
in addition to budget reviews by staff, the grant review group and the board.
Severe
appeal restrictions: Appeals by applicants will be
restricted to “a demonstrable financial, professional, or personal conflict of
interest, as defined in the (agency’s) conflict of interest policy, (that) had
a negative impact on the review process and resulted in a flawed review.
Differences of scientific opinion between or among PIs (principal
investigators) and reviewers are not grounds for appeal.” State law, however,
permits researchers to communicate directly with the CIRM board on any matter.
It is almost impossible for applicants to identify conflicts of interests
because the names of persons who review their applications are withheld by the
agency. Plus reviewers’ professional and financial interests are withheld by the agency.
Clinical
advisory panels (CAPs): These new panels “will provide real-time course
correction and will focus more on acceleration opportunities than pure
evaluation. CAPs will be tailored for the needs of each project and will
consist of CIRM and external members, more nimbly sized than prior (advisory) panels. CAPs
will meet on a quarterly basis (instead of annually…) and examine all relevant
information regarding project progression, possible roadblocks and avenues for
progression.”
Elimination
of documentation: Instead of requiring awardees to produce many documents, the
agency “will rely on certification of compliance by the applicant, with the
ability for CIRM to request supporting documentation if cause to do so arises”
The proposed
rules are expected to be approved today at the 2:30 p.m. PDT meeting of the Science Subcommittee of the CIRM
board and ratified on Thursday by the full board at its meeting in Berkeley. The public can address the subcommittee at meeting locations in Washington, D.C., two in the Los Angeles area and one each in San Francisco, San Jose, Irvine, Oakland and La Jolla. Specific addresses can be found on the agenda.
The California stem cell agency has postponed action on a
proposal that would have all but eliminated its $500 million loan program,
which has been deemed less than worthy.
A subcommittee of the agency’s board had been scheduled to
act on the new plan last Thursday. However, the meeting was postponed at the
last minute with no public explanation.
In response to a question, Kevin McCormack, senior director
for communications, said last week,
“The meeting was postponed so we could work on the proposal
some more before bringing it to the subcommittee. The document was removed from
the website because it was actually the wrong document. It was an earlier,
outdated version of the proposal and didn't reflect many of the changes that
were made.”
(On Monday March 23, the loan item was re-labelled as postponed on the full board meeting agenda. The plan was still available online via the link above as of this writing.)
Randy Mills, who was named president of the agency about 11
months ago, said in the March 13 memo to the board that the existing loan effort
was “overly complex, administratively burdensome, and, as reflected in the
number of loans issued, it does not appear to be attractive to industry.”
Only five loans have been made since the program was begun
in 2008. Only two loans are currently
active.
The agency has not responded to a March 18 query concerning whether any businesses provided direct input into the loan changes proposed by Mills.
The existing loan program was the brainchild of Robert Klein, a real estate investment banker who was the agency’s first chairman.
Mills plans to replace the loan program as part of his efforts to speed development of stem cell therapies. No awards have yet been approved under that effort, which began only on Jan. 1.
The California stem cell agency next Thursday is expected to
award $15.8 million to five scientists to help push their research into
clinical use for afflictions ranging from arthritis to the “bubble boy”
syndrome.
Another five researchers have been told that they need to
improve their proposals and can bring them back to the agency in July. They
will then be considered under the agency’s new, aggressive CIRM 2.0 program to
speed action on development of stem cell therapies.
CIRM is the abbreviation for the California Institute for
Regenerative Medicine, the official name of the $3 billion agency. Its president, Randy
Mills, who has been in place since last May, is overhauling the agency’s grant
process with sharp eye on faster development and calls the effort CIRM 2.0.
The top five applications received scores ranging from 90 to
75 and covered possible therapies involving spina bifida, arthritis,
Huntington’s Disease, diabetic wounds and SCID-X1(bubble boy syndrome).
The five in tier two total $27.3 million. A memo to the CIRM
board from Mills said,
“While CIRM recognizes that some applications not in Tier 1
do have the potential to positively impact the field, none was without flaw and
all could be improved with further refinement. Unfortunately, the application
and review system for this RFA does not accommodate iterative refinement and
resubmission, a key feature of CIRM 2.0. As a result, CIRM recommends that
interested applicants consider improving their submission and reapplying under
the CIRM 2.0 Translational program that will be brought to the ICOC (the CIRM board) in July.”
Mills also said the researchers may be able to resubmit
their proposals under the current CIRM 2.0 process which is accepting
applications at the end of each month.
The scores on each application in the two top tiers can be found on this 90-page document, which also includes summaries of the comments
made during the closed-door grant review process.
The names of the applicants
have been withheld by the agency, although they can often be deduced by
discerning readers. The names of the scientific reviewers are also not released. Scores on the rejected applications were not posted by the agency.
The California stem cell agency tomorrow is expected to all but
bury a $500 million loan plan pushed by its first
chairman, Robert Klein, and replace it with something exceedingly more modest.
The current loan effort is “overly complex, administratively
burdensome, and, as reflected in the number of loans issued, it does not appear
to be attractive to industry,” said agency President Randy Mills in a forthright memo to the agency board.
Robert Klein, CIRM photo
Klein’s dream was that loans would generate revenue through
interest payments and help to ensure the $3 billion agency’s existence. The
agency’s board paid $50,000 for a PricewaterhouseCoopers study that said $500 million in loans could generate a major return.
“How do you turn $500 million into as much as $1 billion
over 10 years? Loan it to struggling biotech companies that could default on
the loans at a rate of up to 50 percent.
“Sound too good to be true? Maybe, but that's what the California stem cell
agency is projecting….”
In 2007 and 2008, Klein, a real estate investment banker, bandied
about a variety of numbers that ranged up to $1 billion. The agency finally
settled in 2008 on $500 million to commit to loans. The concept had a special allure
because biotech companies are perennially cash-starved. But only five
companies ultimately received loans, two of which are outstanding. The agency has
made 666 research awards, including the five loans.
Mills plans to replace the existing loan effort in his first
foray into CIRM 2.0, a radical move to speed funds to researchers that he
intends to extend to all awards made by the California Institute for
Regenerative Medicine (CIRM), as the agency is formally known.
In his loan memo, also authored by two CIRM attorneys and
the agency’s business development officer, Mills said the initial recipients in
the CIRM 2.0 launch would
“…have the option to elect to convert their award from a
grant to a loan within a specified period of time from the effective date of
the award, e.g., seven years. Unless the
parties agreed to different terms, the awardee would be required to repay the
loan balance within ten days of making the election to convert from a grant to
a loan at an interest rate that would escalate based on the date of
repayment. For example, an awardee that
repaid CIRM within three years of the effective date of the award would pay a
lower interest rate than an awardee that elected to convert to a loan six years
after the effective date."
Mills said his plan is simpler, more realistic and
compelling to recipients than the agency’s current loan effort.
The board’s
Intellectual Property Subcommittee is expected to back Mills’ changes at its 10
a.m. meeting tomorrow with full board
ratification on March 26. The public and
potential recipients of CIRM loans can speak to the matter at two public locations in San Francisco, one each in Hawaii, Irvine, San Diego, Los
Angeles and Redwood City. Complete
addresses are available on the agenda.
Proposed changes in the loan program were initially
scheduled to be approved in January, but that attempt was suspended with no public
explanation.
(Editor's note: The meeting was postponed on March 19. No explanation was posted on the CIRM Web site. The link to the memo from Mills was removed from the IP agenda, but a copy still could be found (as of this writing on March 19) on the March 26 agenda for the board meeting.)
One week from today, a select panel of the directors of the
$3 billion California stem cell agency will meet for the first time to assess
the performance of its chairman, Jonathan Thomas, during his nearly four years
in office.
Thomas, a Los Angeles bond financier, was elected as chairman
of the agency in June 2011 on a 14-11 vote of the 29-member agency board. (See here and here.) He is
paid $400,000 annually for his part-time work (80 percent), according to a Sacramento Bee database. His salary has remained unchanged since he took
office.
Left to right, Robert Klein, Art Torres and Jonathan Thomas (2009 photo)
Thomas succeeded Robert Klein as chairman of the agency.
Klein was elected in December 2004 after shepherding the ballot
campaign that year to pass Proposition 71, which created the agency and funded it with
state government borrowing.
The agenda for next week’s meeting gave no clue to the
reason for calling this particular evaluation session. But good personnel practices would
seem to require regular evaluations, perhaps even more often than every four years.
In 2012, then outside counsel to the board, James Harrison,
prepared a memo for the subcommittee discussing evaluation procedures. In the
memo, Harrison, now general counsel to the agency but still an independent
contractor, summarized procedures that called for Thomas to submit his job
goals for 2012-13.
Also to be evaluated, according to the memo, was Art Torres, vice chairman of the
board. Torres was also elected by the board and works part-time (80 percent) at an annual salary of $225,000. The subcommittee has not scheduled a meeting to
evaluate Torres’ performance. Torres has been paid $225,000 annually during the
last two years. However, his pay ran up to $247,000 in 2012, $239,000 in 2011 and
$230,000 in 2010, according to The Bee database, which is drawn from public
records.
(In response to a question, the stem cell agency said later today that the money paid to Torres in those three years was for unused vacation time. Earlier versions of this item did not contain that response.)
The Evaluation Subcommittee has six members, including
Thomas and Torres. However, Thomas is not likely to be sitting in on his own
evaluation next week. Chairman of the panel is Francisco Prieto, a Sacramento
physician. The others are Stephen Juelsgaard, former executive vice president of Genentech; Sherry
Lansing, former head of a Hollywood studio and a University of California regent, and Jeff Sheehy, a
communications manager at UC San Francisco.
The subcommittee has met six times since Thomas was elected.
All of those meetings dealt with assessment of Alan Trounson, former president
of the stem cell agency, according to agendas.
Next Friday’s meeting will be almost entirely behind closed
doors, but the public does have an opportunity to comment. Two locations for the public exist in San
Francisco and one each in Los Angeles, Calistoga and Napa. Specific addresses
can be found on the agenda.
The California stem cell agency isn’t quite at the stage of
“Ain’t Got No Home,” the title of the immortal hit song from 1956. But the search
for a new roost for the research effort is intensifying.
And it will likely add another $1 million or so to the
agency’s annual operating costs.
The $3 billion agency now operates out of free digs in San
Francisco in a gentrified neighborhood that was a tad gritty back when the
agency moved in a decade ago. Today the area is much tonier. Even the Happy
Donuts shop down the street (open 24 hours) has cleaned up its signage, and a chichi pizza
parlor is located on the ground floor of the stem cell agency’s building.
Come next fall the agency will be moving out of its roomy offices
that were built to its custom orders. No more free rent – a benefit valued at about $1 million annually by the agency’s auditor. Gone will be the free parking, a matter of great
import in San Francisco.
The free office space came as the result of a $17-$18 million package
put together by San Francisco to entice the agency to the city.
The California Institute for Regenerative Medicine (CIRM),
as the agency is formally known, is looking for about 12,000 to 18,000 square feet(see
specifications list below). On Nov. 14, 2005, when the agency moved into its
current space, it had about 20,000 square feet with 18 window offices, 17
internal offices and 19 cubicles, according to a CIRM document. That was for about 25 to 30 employees. Those employees currently number in the mid-50s, not a large number to be handling $3 billion.
In December, the governing board’s Governance Subcommittee
briefly discussed what the agency is seeking. The specifications call for a facility that could accommodate the meetings of its board of
directors, which would be a major change. CIRM would like a room that could handle 50 to 75 people. Twenty-nine persons sit on the board. The space would appear to be large enough to handle normal public and staff attendance but fall short of the space needed for the few occasions when large crowds appear.
Board meetings have generally involved rented conference rooms at
hotels. The hope is that a meeting room within CIRM offices could defray meeting
costs.
Office space costs have skyrocketed in San Francisco over
the last several years, pushed upward by the booming tech industry. According to one office space expert, 12,000 square
feet of Class A office space in the city of San Francisco could run as much
$900,000 a year with additional parking costs of up to $450 a month per stall. If the
agency wants 18,000 feet, the cost climbs to roughly $1.4 million.
Given that situation, CIRM has expanded its search to
include cheaper locations across the bay from San Francisco, including Oakland,
where California Gov. Jerry Brown has a home, and Emeryville, a city once known
as Butchertown because of its slaughterhouses. Today Emeryville businesses include the
Pixar Studios. CIRM was also housed in Emeryville in 2005 while it waited for
its offices in San Francisco.
At the December governance meeting, Art Torres, vice
chairman of the agency, said that the city of South San Francisco is also on the
list of possible locations. Genentech has its headquarters there and sponsored
a sign declaring the city as the “Birthplace of Biotechnology.”
During the Governance Subcommittee meeting, one board
member, Al Rowlett of Sacramento, pressed for consideration of other cities. Torres,
who was leading the discussion, rebuffed him, according to the transcript of the meeting. Torres said that the four locations
are being considered because the staff lives in them or nearby. He continued,
“I
would just hate to move to an entirely different new city and then people have
to make very difficult decisions on whether they could do so or just leave CIRM.
At this critical stage of our development, I would feel that would be a burden
that would be very heavy for us.”
Torres also said he is working with the city of San
Francisco to see if it can persuade landlords to ease rent or provide some
other kind of support.
Randy Mills, CEO of CIRM, told directors in January that the
office move could lead to some disruptions in its activities. The agency last week reported no major new developments in
the office space search. In 2009, the agency considered the possibility of use of a nonprofit to own the office space, given the legal cap on CIRM's operational budget. However, that possibility has not surfaced publicly in recent years.
For those who want to know more about the inimitable Clarence "Frogman" Henry, who wrote and sang "Ain't Got No Home," here is a link to his Web site.
Here is the list of specifications discussed by directors
in December.
A Canadian scientist this week took issue with treatment
on this Web site of stem cell diabetes research as a Massachusetts-California duel.
James Johnson, a primary member of the Diabetes Research
Group at the University of British Columbia, referred to an item yesterday on theCalifornia Stem Cell Report.
James Johnson, UBC photo
In an exchange of emails this week with this writer, Johnson
said “there are at least 25 large groups working in this sphere, not two.”
One of those groups is the Diabetes Research Group in
British Columbia, whose research is backed by a subsidiary of Johnson &
Johnson.
In a follow-up email, Johnson said,
“My point was that I think portraying it as a race between
2-3 groups misrepresents what is a global effort.”
He added,
“Personally I doubt Harvard or ViaCyte (a San Diego firm) will be the
first to market such a therapy.”
Johnson makes a good point concerning the worldwide effort
on diabetes. The search for a stem cell cure or therapy for diabetes goes well beyond
California and Massachusetts.
A “duel” existed, nonetheless, between them as the result of
an article in the MIT Technology Review and an item on the blog of UC Davis
stem cell researcher Paul Knoepfler. In the
MIT piece, Harvard researcher Doug Melton commented critically on the ViaCyte
effort. Paul Laikind, CEO of the San Diego firm, defended his project on the
Knoepfler blog.
The California Stem Cell Report, which focuses almost
entirely on California stem cell matters and the $3 billion state stem cell
agency, was particularly interested in all this because the agency has pumped
$55 million into ViaCyte. It is the largest amount that the state has invested
in a single company.
Additionally, ViaCyte’s clinical trial is also the only
diabetes clinical trial in the United States based on human embryonic stem
cells, which, of course, generate far more controversy than adult stem cells.
As for the worldwide state of diabetes stem
cell research, perhaps it could be described as a global scrum, the grunting and heaving moment in rugby when multiple players tussle to control the ball.
One might call it a California-Massachusetts stem cell
face-off. The tussle is over a stem cell cure of sorts for diabetes.
The players are Doug Melton of Harvard and Paul Laikind, CEO
of ViaCyte in San Diego.
Recently in separate forums, the men critiqued each other’s
approaches to diabetes.
Most recently it was Laikind three days ago on the blog,
ipscell.com, of UC Davis researcher Paul Knoepfler. Laikind was responding in a
Q&A carried by Knoepfler.
Knoepfler asked about Melton’s comments in the MIT Technology Review last month. Melton was described in an article as being “worried”
that ViaCyte’s technology, now in a first stage clinical trial, would not work. The California stem cell agency has invested $55 million in the firm's approach.
Knoepfler continued,
“(Melton) raised concerns more specifically about the
Encaptra capsule, for example, functionally becoming fibrotic and mentioned
worries about your cells being immature and taking a long time to mature. Any
response on capsule and cells? He also has suggested that his beta cells will
be a better option.”
Laikind replied,
“Dr. Melton’s work on the beta cell is very interesting. As
to the cells, we made the choice to use the pancreatic progenitor cells. An
important consideration is that when you first put in cells, they are in a hypoxic
environment. Beta cells are sensitive to low oxygen levels, which can
negatively affect their survival and function. Beta cells typically exist in a
mature highly vascularized organ. The pancreatic progenitor cells that we use
undergo an organogenesis-like process, more similar to how they behave in
nature, and thus we believe they should be better able to handle low oxygen.
They also are believed to release angiogenic and other factors to promote
vascularization.
“In regards to the capsule, we do expect there to be a
foreign body reaction in patients after implantation, which will generate a
fibrotic capsule. In fact, we see a thin fibrotic capsule around the device in
mice. But in the mouse model this capsule around the device is very well vascularized.
The vasculature is right up against the device membrane on the outside,
allowing for oxygen and nutrient diffusion to the cells inside.”
Laikind said situation involving Melton and BetaLogic was “healthy competition.”
He continued,
“There’s room in this area for multiple efforts and we
aren’t especially concerned with competition. Yet we do feel we are ahead of
others and we have substantial intellectual property that they will need to
navigate (~50 patents issued in the United States, and a couple hundred pending
patent applications, including international). At ViaCyte we view the real competition
as the biology rather than with the efforts of others as we seek to cure this
devastating disease.”
Laikin had more to say about his firm’s product and Melton’s
comments. He also discussed ViaCyte’s clinical
trial, which now has four patients with a goal of 40. He said the initial
evaluation of efficacy could occur by late 2016. Within five years, he hopes to
see “success” with the product and “be moving to market.”
Responding to a question about “product placement,” Laikin
said the firm is currently inserting its tiny device in the lower back of
patients. Laikin said,
“The reason for that placement is that while the device can
withstand the impact of a 60 mph baseball (based on cadaver testing), a needle
could go right through it, so we want to put it where patients don’t typically
inject insulin.”
Concerning Melton’s views on ViaCyte, the Feb. 12 MIT
Technology Review piece said,
“Douglas Melton, a biologist at Harvard University who has
two children with type 1 diabetes, worries that the ViaCyte system may not
work. He thinks deposits of fibrotic, scarlike tissue will glom onto the
capsules, starving the cells inside of oxygen and blocking their ability to sense
sugar and release insulin. Melton also thinks it might take immature cells up
to three months to become fully functional. And many won’t become beta cells,
winding up as other types of pancreatic cells instead.
“Melton says the ‘inefficiency’ of the system means the
company ‘would need a device about the size of a DVD player’ to have enough
beta cells to effectively treat diabetes. ViaCyte says it thinks 300 million of
its cells, or about eight of its capsules, would be enough. (Each capsule holds
a volume of cells smaller than one M&M candy.) Last
October, Melton’s group announced it had managed to grow fully mature,
functional beta cells in the lab, a scientific first that took more than 10
years of trial-and-error research. Melton thinks implanting mature cells would
allow a bioartificial pancreas to start working right away.”
The California stem cell agency today announced that one of
its multimillion dollar efforts to come up with a cure for HIV/AIDS is moving
into the first stage of clinical trials involving human beings.
The effort includes the City of Hope in Duarte, Ca., the
University of Southern California and Sangamo BioSciences, Inc., of Richmond,
Ca.
The agency, formally known as the California Institute for
Regenerative Medicine (CIRM), said the FDA had approved the initial trial to
determine the safety of the treatment.
CIRM’s press release said that the plan is to “take blood
stem cells from HIV infected individuals, then treat them with zinc finger
nucleases (ZFNs), a kind of molecular scissors, to disrupt the CCR5 gene in
those cells. The hope is that this will make those stem cells, and their
progeny, resistant to HIV. The modified cells will then be reintroduced into
the patient with the hope that they will create a new, AIDS-resistant immune
system.”
The effort is intended to replicate what occurred with the “Berlin
Patient,” a man who has apparently been cured of AIDS as the result of a mutation.
Jeff Sheehy, a longtime CIRM board member and HIV/AIDS
advocate, said in the press release,
“This trial is enrolling HIV patients whose immune cells
have not returned to normal levels even after success in suppressing the virus
with antiretroviral therapy, and even if it doesn’t lead to a cure it could
still result in a therapy that offers clinical benefit to patients at risk for
opportunistic infections.”
‘While we have a number of drugs that are effective in
holding HIV at bay, we have nothing that cures it. In addition, for many
patients, these medications come with significant long-term problems so there
is a real need for a therapy that can help eradicate the virus from a patient
completely. That is where our work is focused.”
The agency is also funding a clinical trial involving an alternative approach to HIV/AIDS. That effort includes UCLA and an Arizona
company, Calimmune, Inc., co-founded by a former member of the CIRM governing
board, David Baltimore. Calimmune also has an address near UCLA in Los Angeles.
CIRM said,
“Calimmune, an HIV gene medicines company focused on
developing cell-based therapies for HIV, began its human clinical trial in July
2013 and has already shown that the first group of patients treated did well
enough for the company to start treating a second group more intensively.”
Jonathan Thomas, chairman of the CIRM board, said,
“This kind of work is too important to just try one method
at a time and sit back and wait to see if it is effective.”
The U.S. Supreme Court yesterday appeared to have put an end to a
California’s group nine-year effort to overturn patents on human embryonic stem
cells held by the Wisconsin Alumni Research Foundation (WARF).
The court refused to hear the case that was brought by
Consumer Watchdog of Santa Monica, Ca., and Jeanne Loring, head of the stem
cell program at Scripps. The court issued its decision with no comment.
An article by Lisa Shuchman in The Litigation Daily said,
“The high court's denial leaves in place a ruling last year
by the U.S. Court of Appeals for the Federal Circuit, which found that Consumer
Watchdog lacked standing to appeal the findings of the PTO's (Patent and
Trademark Office) administrative patent review board.”
Royalties from WARF patents in California alone generated an
estimated $200 million in 2006 for the foundation. Executives of biotech firms
in California have complained that WARF’s restrictions have posed a significant
barrier to private investment.
Asked for comment, Loring said,
"This doesn't mean they believe that human cells can or cannot be patented, but only that they decided that we had not been sufficiently harmed by the patent for them to become involved.
"Even without a Supreme Court decision, we have succeeded. WARF wanted their patents to include iPS cells as well as ES cells, but they had to narrow their claims as a result of our challenge, and they cannot claim ownership of iPSCs."
Doing the legal lifting in the WARF challenge was Dan
Ravicher, executive director of the Public Patent Foundation of New York.
Shuchman carried a comment from Ravicher on yesterday’s ruling. She wrote,
“Ravicher said Monday that the Supreme Court's decision
could impact many would-be patent challengers. ‘This case could have severe
consequences for other third parties that challenge patents with IPRs or the
other proceedings created under the America Invents Act,’ Ravicher said. ‘Now
they will have no right to appeal an adverse decision.’
“But he also said the decision wouldn't preclude individuals
who can claim direct harm, such as stem cell research scientists, from
challenging WARF's patent—much the same way doctors successfully challenged the
Myriad patents.
“Under the America Invents Act, third parties, such as
nonprofits, public interest groups and industry organizations, have the right
to challenge patents at the PTAB (Patent Trial and Appeal Board). But under the
Federal Circuit’s ruling that now stands, they don't have the right to appeal a
PTAB decision.”
Shuchman also recounted briefly some unusual history on the
federal appellate ruling that declared Consumer Watchdog had no standing to
sue. A more detailed account of that hearing can be found here.
The California Stem Cell Report has asked Consumer Watchdog and WARF for comments. We will carry them when we receive them. Here is the full text of what Loring had to say.
"Being involved for nearly 9 years in the challenge of WARF's patent
on human ES cells has given me a fascinating glimpse into our legal
system. I hoped that the Supreme Court would decide on the patentability
of human embryonic stem cells. But ultimately, the Court decided not to
take our case. This doesn't mean they believe that human cells can or
cannot be patented, but only that they decided that we had not been
sufficiently harmed by the patent for them to become involved. Even
without a Supreme Court decision, we have succeeded. WARF wanted their
patents to include iPS cells as well as ES cells, but they had to narrow
their claims as a result of our challenge, and they cannot claim
ownership of iPSCs.
"I've learned that the law
is every bit as complex as scientific research, and have gained great
admiration for people like our attorney, Dan Ravicher, who relentlessly
pursue the question of patent ethics - what should and should not be
patented in the public interest. Dan brought the issue of patenting the
human genome to the Court, and won (the Myriad Genetics case). Working
on this challenge with Dan and John Simpson (of Consumer Watchdog) has been a joy, and if they
ever want my help in the future, I'd agree in a second."
The San Diego U-T newspaper today reported the first criticism
of the $100 billion stem cell/genomics research plan being floated by the former chairman of the California stem cell agency, Bob Klein.
The challenge to the proposal came from John Simpson of
Consumer Watchdog of Santa Monica, Ca., in an article by reporter Bradley Fikes.
Simpson, a longtime observer of the agency and once heavily
involved in formulation of its intellectual property rules, said the proposal
for the international consortium “boggles the mind.”
Fikes reported that Simpson found the international plan flawed on several
counts: It would lock money into specific areas of research regardless of the
state of the science; it would be cumbersome to run, and it would be expensive
because it would use borrowed money.
Fikes wrote,
"’I don't understand how this could possibly work,’
Simpson said in a Monday interview. ‘The logistics of getting together such a (15
nation) coalition boggles the mind.’”
Simpson said Klein, a real estate investment banker who left
the agency in 2011, was peddling illusory benefits. Fikes reported,
"'That's the same premise as he's tried to argue with
Prop. 71, and I don't think that's been true at all,’ Simpson said. While the (California
stem cell) program has resulted in some major research advances, it hasn't yet
generated enough of an economic return and proven treatments to justify it, he
said.
"'Pay as you can afford to pay,’ Simpson said. ‘I think
that's a better approach to research, generally. That's what democratically
elected governments are supposed to do, is come up with appropriate funding for
the various things they're faced with. If you had this kind of money to throw
at certain problems, it's not entirely clear to me, by any means, that stem
cells would have the biggest impact. You might do a hell of a lot more with
simple things like malaria eradication.’"
Bob Klein at UC San Diego last week Bradley Fikes/San Diego U-T photo
More details are emerging on the $100 billion, international
stem cell/genomics research proposal being offered up by Bob Klein, the first
chairman of California’s stem cell agency.
Klein’s plan was discussed in a piece by Bradley Fikes of
the San Diego U-T, the only daily newspaper in California’s second largest
city. The article yesterday also carried videos of Klein pitching his plan.
Klein, a real estate investment banker, cited California’s $3 billion stem cell agency as an example to
be emulated internationally. It operates on money that the state borrows
(bonds), which roughly doubles the cost of the research because of the interest
expense.
He said an international research organization could be
supported by bonds which are backed by pledges from 15 countries, including the
United States.
Fikes quoted Klein, who left the California agency three
years ago, as saying,
"Because the borrowing is so much cheaper than anything
a country can do, from the surplus funds we raise, which are about 35 percent
to 40 percent more than most countries can raise from the same amount of money,
we can have an international pool, where we can collaborate and compete through
peer review."
Fikes continued,
“Klein pointed to the International Finance Facility for
Immunization as an international public-private partnership as a financial
model. Using long-term government pledges as collateral, the agency can raise
capital as needed from the bond markets.”
Neither article also carried any reference to Klein’s earlier
proposal for another $5 billion bond issue to continue the operations of the
California stem cell agency, which will run out of money in 2020 based on
current spending rates.
Klein and U.S. Rep. Scott Peters, D-San Diego, shared an
appearance at a cancer conference last week at UC San Diego. Both extolled the
power of using patient advocates as the leading edge of lobbying for research
funds.
Fikes wrote,
“Peters…said scientists must broaden their political base
beyond their traditional bastions if they wish to become more influential.
Patient advocates are key.
"'When we're fighting for NIH funding, a lot of the
voices for that come from people who are in universities and in areas of
science, and a fairly narrow political spectrum,’ Peters said. ‘Frankly, they
tend to be people from Boston, and San Francisco and San Diego, who don't
always vote the same way that people from West Texas, or Kansas or rural
Wisconsin vote. So patient advocates provide a huge imput for folks from all
across the country."
“Klein recounted an example of how that coalition succeeded
in keeping diabetes research money flowing in 2002 when that funding was
threatened with interruption. He said the bill, which required unanimous
consent, got through the House with the support of then-House Speaker Denny
Hastert, an Illinois Republican, who had a staff member with Type 1 diabetes."
Fikes continued,
"'Oklahoma is not a hotbed of scientific support, but
through a weekend effort, JDRF (Juvenile Diabetes Research Foundation) was able to get 25,000 emails generated,' Klein said. ‘But more importantly, the patient advocates working as informed
advocates with the scientists from the Type 1 research and clinical areas got
to enough chairmen of the boards and board members and CEOS of major
corporations in Oklahoma that they shut down the switchboards of Sen. Nickles'
offices in Oklahoma and Washington D.C. with calls.’"
“Nickles released his hold on the bill.
"'We had unanimous consent of the U.S. Senate, two
hours before the end of the special session, because scientists informed and
teamed up with patient advocates ... ' Klein said."
The most widely read item in the last 10 years on the
California Stem Cell Report is one that deals with the cost of a possible stem
cell treatment.
Newscom image
The piece contains a $512,000 figure and has chalked up 10,714
page views as of this evening. It deals only with a potential treatment in
a fully legal and medically acceptable situation. The item is also nearly two
years old. The $512,000 number is likely to have been modified by the researchers
involved.
Now comes an item by UC Davis stem cell researcher Paul
Knoepfler, who has put together a survey of prices of stem cell “treatments”
that are being offered around the world. The costs are for procedures available largely outside established medicine with its accompanying government certification
and testing.
Knoepfler reported today on his blog that American
clinics – non-FDA approved – run about $10,000 per procedure, with more than
one treatment usually described as necessary. Outside of the United States, the
procedures run up to $100,000.
Knoepfler wrote,
“Whether inside or outside the US, insurance does not cover
the costs of these potentially dangerous, unproven treatments.”
He noted that high profits are associated with the
procedures. He said,
“Part of the way that clinics cut corners to boost their
profits is by not following FDA regulations, putting patients in danger.
Clinics typically do not do pre-clinical studies to get evidence of safety and
efficacy before starting to sell their offerings to patients. Clinics also do
not include sufficient follow up in the cost of the treatments. They do not
publish their data to get peer review and feedback. They often do not have GMP
compliant facilities or devices.”
Knoepfler concluded,
“Of course other costs to patients going to dubious
clinics, sometimes not considered, include the price of false hope, potential
injury due to dangerous stem cell ‘treatments,’ possibly being excluded from a
real clinical trial in the future and injury from deferring other arguably more
real treatments.”
The high readership on the 2013 cost item on the California
Stem Cell Report is likely due to readers who are considering some sort of stem
cell procedure. Knoepfler will also likely
see a similar trend.
The strong interest in stem cell costs is something for the
California stem cell agency to consider as it invests in clinical trials. Obviously
the expense is of considerable concern to those not ensconced within the stem cell
community, where the focus is on a euphemism called "reimbursement," shorthand for making a handsome profit. Stem cell insiders sometimes shrug off the possibility of
a severe, negative kickback on prices.
But it has already happened in other areas of medicine. A physician protest involving the cost of a particular cancer treatment received national attention in 2013. The article about it in the New York Times received 500 reader comments.
Obviously no stem cell therapies will reach the marketplace if they do not offer the potential for profit. Nonetheless, if one of the California agency's trials is
successful but also carries a prodigious pricetag, California taxpayers who have
financed the agency are likely to look askance at the agency’s work.
The man some consider the father of the California stem cell
agency has come up with another grand research plan – a $100 billion, 14-nation
effort plus California, along with creation of a federal research “trust.”
The proposal comes from Robert Klein, who led the 2004 ballot
campaign to create the $3 billion state stem cell agency. He was also its first
chairman and a figure revered by some.
Katherine Connor of the San Diego Transcriptreported today on Klein’s quest for a “new paradigm in
funding scientific research.” During remarks at an oncology symposium yesterday
at UC San Diego, Klein said his collaborative venture is needed given the current
state of federal research funding.
Connor wrote,
Robert Klein
“Klein is working on spearheading such a collaboration,
where 22 different partners -- including 14 nations, the NIH and the state of
California -- commit to long-term funding of scientific research on stem cells
and genomics via a World Bank bond. The money invested by each partner would be
used to fund work by that entity."
Connor continued,
“He said if Congress would appropriate a long-term
commitment to support this international bond, the research community could
leverage it up to a $100 billion program with surplus funds around 35 to 40
percent more than what each individual country or partner could raise from the
same amount of money.”
Klein is a California real estate investment banker who
works closely with bond financing. He said his proposed research venture “would go a
long way in diffusing the ingrained competitive attitude toward funding.”
Connor continued,
“'The fundamental problem here is that, long term, we have
difficulty holding these interest groups together,' Klein said. ‘In California,
with Prop. 71, the way it approached that was if you have a unitary decision,
you’re either for the bond or against the bond. You can’t go and say 'I want my
appropriation,' you have a unitary decision -- it brings all those groups
together as a coalition, they have to work together.’”
The ViaCyte clinical trial is aimed at producing a “virtual”
cure for Type 1 diabetes among children, but the first implantation of the
device involved an adult man.
That information was reported by the MIT Technology Review
and raised a question about whether the article was in error or whether something
else was involved.
The California Stem Cell Report queried Paul Laikind, CEO of
ViaCyte, which is based in San Diego, about the matter.
The media chief at the $3 billion California stem cell
agency yesterday put together a first-rate piece that invoked Meryl Streep,
Carl Sagan and Lindsay Lohan and said that scientists can learn something from them.
The item by Kevin McCormack, senior director of
communications for the stem cell agency, dealt with telling the story of the
facts and the romance of science. Not to be too crass about it, but his item
piece also dealt with generating the public enthusiasm that will lead to more cash
for researchers’ labs. Maybe even do some public good.
McCormack, who has labored both in public relations and in
the grimy trenches of journalism, wrote about the American Association for the
Advancement of Science conference last week in San Jose on science
communications. The session explored ways to get the public to both understand
and care more about science and technology and to get scientists to do a better
job of explaining both to them.
A number of problems have plagued science communications for
decades. One is that science is sometimes difficult for the general public and
reporters to understand. It is also difficult to find researchers who can “speak
English” – explain what they are doing and why it is important in ways that resonate
with the media and their readers and viewers.
Another problem is that sometimes scientists who are good at
explaining are dismissed by their colleagues as less than professional or as not
really good scientists.
One rendering of invidia at work
McCormack said there is a risk. He wrote,
“Some scientists reported facing a backlash from colleagues
who felt they were trying to hog the limelight. They fell victim to what is
called the ‘Carl Sagan’ effect, which holds that if someone is spending that
much time and effort communicating science to the public they must not be a
very good scientist to start with.”
From what I have seen over the last decade of
watching the stem cell agency, such a reaction also often seems a
case of invidia at work. Seeing another researcher’s name in print
can trigger a serious case of irritation.
McCormack quoted Stanford’s Noah Diffenbaugh on reasons for
taking his science to the public.
“I feel it is my responsibility to answer questions from the
public when asked, because my research group is publicly funded by taxpayer
dollars through agencies like the NSF. And as a public citizen I feel
responsible that if we are having a public dialogue about climate change that I
should be part of that dialogue.”
McCormack’s piece on the stem cell agency’s blog, The Stem Cellar, is a good
reminder that the science community cannot take for granted public support for
science and research funding. Most people are heavily focused on other matters
that they believe are more relevant to their lives, such as their jobs and getting
their children off to school.
It is up to researchers to make building support and
educating the public and the media about the benefits of their efforts a
regular part of their profession. Perhaps the stem cell agency could even
encourage it by adding a communications component to their awards.
As for Meryl Streep and Lindsay Lohan, it is best to go directly to McCormack’s piece to see how their communication works. It could be
inspirational.
The state of California has invested $55 million in a San
Diego firm that last week attracted some East Coast attention for its efforts
to develop a “virtual” cure involving Type 1 diabetes.
The firm is Viacyte, which is in a stage one clinical trial
involving its therapy. The MIT Technology Review looked at the potential product
on Feb. 12.
“In October, a San Diego man had two pouches of lab-grown
pancreas cells, derived from human embryonic stem cells, inserted into his body
through incisions in his back. Two other patients have since received the
stand-in pancreas, engineered by a small San Diego company called ViaCyte.
“It’s a significant step, partly because the ViaCyte study
is only the third in the United States of any treatment based on embryonic stem
cells.”
All three of those trials involve California. A spinal cord injury treatment is being tested by Asterias Biotherapeutics of Menlo Park, Ca.
It has received $14.3 million from the California stem cell agency. The other trial is for macular degeneration and is being conducted at UCLA by Steven
Schwartz for Ocata Therapeutics of Massachusetts, formerly known as Advanced Cell
Technology. The firm applied multiple times for California funding but was
rejected.
Viacyte, which has received more funding from the stem cell
agency than any other company, began its efforts optimistically years ago.
Alexander wrote,
“'When I first came to ViaCyte 12 years ago, cell replacement
through stem cells was so obvious. We all said, ‘Oh, that’s the low-hanging
fruit,’” says Kevin D’Amour, the company’s chief scientific officer. 'But it
turned out to be a coconut, not an apple.'”
(Robert Henry at UC San Diego is conducting the trial on behalf of ViaCyte.)
Alexander continued,
“Douglas Melton, a biologist at Harvard University who has
two children with type 1 diabetes, worries that the ViaCyte system may not
work. He thinks deposits of fibrotic, scarlike tissue will glom onto the
capsules, starving the cells inside of oxygen and blocking their ability to
sense sugar and release insulin. Melton also thinks it might take immature
cells up to three months to become fully functional. And many won’t become beta
cells, winding up as other types of pancreatic cells instead.
Doug Melton -- Harvard photo
“Melton says the ‘inefficiency’ of the system means the
company ‘would need a device about the size of a DVD player’ to have enough
beta cells to effectively treat diabetes. ViaCyte says it thinks 300 million of
its cells, or about eight of its capsules, would be enough. (Each capsule holds
a volume of cells smaller than one M&M candy.) Last
October, Melton’s group announced it had managed to grow fully mature,
functional beta cells in the lab, a scientific first that took more than 10
years of trial-and-error research. Melton thinks implanting mature cells would
allow a bioartificial pancreas to start working right away.”
The piece in the MIT Technology Review is a plus for the California stem cell agency, which is seeking to raise its profile. The agency's president, Randy Mills, is making a push to draw interest from non-California enterprises that might find funding from California attractive even with restrictions that it be used in the Golden State.
California scientist Paul Knoepfler yesterday posted a
synopsis of the recent stem cell ethics session at UC Davis that touched on topics
ranging from Right to Try laws to hype about hype in stem cell research.
Writing on his blog, Knoepfler estimated the attendance at
70 to 80 persons including patient advocates as well as scientists, attorneys
and institutional compliance officers.
One presenter was Alison Sorkin, deputy general counsel for
University of Colorado Health, who dealt with her state’s Right to Try law.
Knoepfler wrote that she said that the law is actually quite limited. Knoepfler
wrote,
“She also discussed problematic issues with the specifics of
the law such as that patients would be responsible for paying for all of their
own healthcare for 6 months after treatment under Right To Try as insurers
would be exempt from having to provide ANY coverage. There seems to be a
growing sense that Right To Try in Colorado may not actually lead to any
patients getting non-FDA approved drugs.”
Tim Caulfield, a professor, Faculty of Law and School of
Public Health at the University of Alberta, dealt with hype. Knoepfler wrote,
“Tim focused on hype in the stem cell field and in
particular hype involving scientific publications. He even talked about
hype about hype. In the current environment there are strong pressures for
scientists to hype their work, including in particular in abstracts. What is
the relationship between hype in science articles and in the media?”
The session was the second annual such event for UC Davis, which will presumably stage another next year.
Attention stem cell scientists: Want to know who is going to
be scrutinizing your budget in your next application for financing from the $3
billion California stem cell agency?
The California Institute for Regenerative Medicine (CIRM),
the formal name for the agency, is hiring outside firms to examine the budgets currently being submitted in a $50 million clinical stage award round.
The two firms that are being considered have a host of other clients, some of whom might be competitors with California scientists applying for state funding. CIRM plans to require the experts to self-report any
conflicts of interest, basically excusing themselves if such a situation occurs
during their work.
It is all part of CIRM 2.0, a radical and ambitious plan to
speed funds to researchers and improve quality of applications. The budget review is a new and critical step
for researchers. If their financial plans, including a new financing contingency
requirement, do not pass muster, the applications will not even be sent to
the agency’s blue-ribbon reviewers.
“An external team of budget professionals will review the
proposed budget to provide information to CIRM regarding how the proposed costs
compare with established market rates for similar activities (or how well the
costs are justified when market rates are not established).
“When a proposed
budget differs significantly from market rates, adjustments to the budget will
be required by CIRM prior to further review of the application. Applicants will
be notified of the specific discrepancies and applications will not be
forwarded for scientific review until an amended budget has been submitted and
approved by CIRM.”
Last month the agency posted a 37-page request for proposals
on its Web site. It contained details of how the work is to be performed,
budget templates and much more material that offers insights into the agency’s
new, CIRM 2.0 thinking.
The firms that responded to the RFP are
Amarex Clinical Research of Germantown, Md., and Integrium Clinical Research of
Tustin, Ca.
“Integrium does not have experience in providing the type of
service required in the RFP. However, we have many years of experience in which
we have internally reviewed budgets that we prepared for our clients.”
It appears to have offered to review each application’s
budget for $2,740 each.
“Amarex has experience in conducting budget negotiations for
services across all types of clinical sites, and knows what appropriate market
rates are. Our clients are both
privately funded, and government funded, so we are also aware of the difference
in budgeting requirements for both types of clients.”
The Amarex proposal appears to have a cost of $703 for each budget, with expenses such as travel billed to CIRM plus a 10 percent fee.
The agency’s RFP said,
“CIRM anticipates selecting multiple budget review firms
pursuant to this RFP and will alternate work among them based on relative
expertise in specific areas, timelines, and the avoidance of potential
conflicts of interest.”
Both of the firms are well-established organizations and
have a considerable history of work with a variety of clinical trials. Their
clients are not identified but could be competitors with the organizations that
apply for California funding.
The RFP does not speak directly to those sorts of conflicts
although it is more specific about financial ties with CIRM employees. Regarding the budget review consultants, the
proposed CIRM contract said,
“The (budget review) firm must be free from actual conflicts
of interest not only at the time of selection, but also throughout the term of
the contract.”
The agency has a substantial number of outside contractors.
On at least one occasion, a conflict has arisen in public. The case was first reported by the California
Stem Cell Report in 2012 and involved a “special advisor” to CIRM who was
elected to the board of directors of Sangamo, Inc. At the time, Sangamo was
the recipient of $5.4 million from the agency as a co-participant on an award. In
2013, the Richmond, Ca., firm received another $6.4 million directly from CIRM. (See here and here for details.) In January 2014, the firm’s president told CIRM,
“We wouldn't be where we are
today without you.”
The RFP requires that the firms sign a contract that states,
“The consultant affirms that to the best of his/her
knowledge there exists no actual or potential conflict between the consultant's
family, business or financial interest and the services provided under this
Agreement, and in the event of change in either private interests or service
under this Agreement, any question regarding possible conflict of interest
which may arise as a result of such change will be raised with CIRM.”
The RFP does not make it clear whether the form 700s would
be publicly disclosed or simply held privately by CIRM. However, the agency has never disclosed any reports involving conflicts of interests of its consultants.
Here are the proposals, which are public records, from the
two companies.