MOORLACH UPDATE — SB 1004 and CIRM — September 10, 2018

The LA Times and the San Diego Union-Tribune jointly opined on their websites in favor of SB 1004, which I joint-authored with the good Senator from San Francisco, Scott Weiner, and encourage the Governor to sign it.

How’s that for working with those on the other side of the aisle? I have an established history with addressing how to better direct Mental Health Services Act funding. With that focus, Sen. Weiner requested my collaboration on his bill (see MOORLACH UPDATE — Joint Author Details — July 7, 2018). The lead editorial is the first piece below.

The second piece is more than a year in the making. I was interviewed by the San Francisco Chronicle last year. They have done some very exhaustive analysis over this time period on CIRM, the California Institute for Regenerative Medicine (see MOORLACH UPDATE — I Told You So! — August 26, 2017 ).

The bonds that funded this dubious venture cost the General Fund $313 million in the current fiscal year and will cost $309 million in the next! Your taxes are paying for what I believe is the most egregious ballot measure abuse in recent state history.

I’m not against stem cell research. But, if there is progress and money to be made in this area, the private sector and institutional investors will make it happen. But, in 2004, when Proposition 71 was up for a vote, I was one of the three signatories in opposition to this measure because it was self-serving, unaccountable, and would be a fiscal bust (as the major patents had already been secured by the University of Wisconsin).

I recently did try to address my concerns about CIRM through the legislative process (MOORLACH UPDATE — Millstones and SCA 7 — March 30, 2017) and through messaging (see MOORLACH UPDATE — Showmanship Let Down — October 7, 2017).

Now the Chronicle provides a review of where the money went. Although thorough, it is silent on the administrative costs. That may provide information on high salaries and, therefore, high pensions, for well situated individuals who served in cushy positions. The piece also begs the question as to facilities. You can do research in a rented commercial building. But, I’ll save the rest for your reading pleasure with the second piece below.

California is sitting on hundreds of millions of dollars for mental health programs. Let’s put it to use

https://www.msn.com/en-us/news/msn/editorial-california-is-sitting-on-hundreds-of-millions-of-dollars-for-mental-health-programs-lets-put-it-to-use/ar-BBN8fdG

http://www.sandiegouniontribune.com/la-ed-mental-health-funding-20180910-story.html

Like much of the rest of the nation, California went only halfway toward keeping its promise to improve mental health care. It closed psychiatric hospitals, some of which were really just costly warehouses for the sick rather than modern medical facilities offering effective treatment. But the state didn’t follow through on its commitment to provide better alternatives, like community-based clinics that deliver the treatment and services needed to integrate patients into society, working and living independently where possible.

We can see the result of those half-measures every day. About a third of homeless people in Los Angeles and across the country are on the street because of untreated mental illnesses that prevent them from staying housed or holding down a job.

We’ve begun to make amends, at least of a sort. Fourteen years ago, voters passed Proposition 63, known informally as the millionaires’ tax and more properly as the Mental Health Services Act. It raises billions of dollars for services.

The ranks of mentally ill homeless Californians are constantly being replenished.

More recently, Los Angeles voters adopted tax measures to raise money for supportive housing – units that will give homeless people, including those with serious mental health challenges, the opportunity for dignified and independent living while receiving the medical care and services they need to hold their illnesses at bay and stay off the streets.

These are fine programs, but if they’re all we’ve got they will be futile. The ranks of mentally ill homeless Californians are constantly being replenished. As fast as we can lead the sick and suffering into homes, they are replaced on the street by new generations of people whose mental illnesses were left undiagnosed or untreated at an early stage, when they still could have been held in check. If only California also had funding for that – for prevention, diagnosis, intervention and treatment early enough that patients’ illnesses do not progress to the point where they lose the ability to lead independent lives.

Actually, we do have the funding. The tragedy is that we haven’t spent it wisely, or in many cases haven’t spent it at all.

Twenty percent of Proposition 63 funding allocated to counties is supposed to be spent on prevention and early intervention programs and treatment. Yet a recent state audit found that counties hadn’t spent most of that money, despite statutory deadlines meant to deter hoarding. Hundreds of millions of dollars just sit in county accounts, still waiting to be put to use.

Why? There is too little guidance on how to effectively spend those tax dollars. A state Mental Health Services Oversight and Accountability Commission is supposed to direct counties to best practices, but that loose system has led us to where we are: unmet needs and unspent funds. There is little strategic vision. Programs aren’t measured for their effectiveness. Counties aren’t held accountable for results.

The law should be tightened to ensure data are gathered, outcomes are measured and the commission offers more exacting spending guidance that prioritizes treatment for young patients.

After all, researchers have found that signs and symptoms of mental illness – hallucinations, delusions and other evidence of psychotic episodes – first present themselves in the patients’ early teen years and into their mid-20s. Treatment at or just after the onset of these symptoms can prevent, or at least allow patients to manage, serious mental illness that worsens over time. Failure to respond quickly makes effective treatment later in life much more difficult – and feeds the pipeline that sends sick adults to the street.

A bipartisan proposal from state Sens. Scott Wiener (D-San Francisco) and John Moorlach (R-Costa Mesa) would provide the appropriate spending guidelines and promote some uniformity in treatment around the state while leaving counties the flexibility to spend on different priorities if they can make a persuasive case for them. The measure (Senate Bill 1004) cleared the Legislature and is now on Gov. Jerry Brown’s desk.

Brown’s Department of Finance opposes it, arguing that the commission can do everything the bill can simply by changing the appropriate regulations. Perhaps it could – but the point is that it hasn’t.

Some critics object to the move to increase the focus on the young. Yet that’s where the greatest need is for prevention and intervention services, and where funding can provide the greatest value. Besides, the bill would also direct funding to programs that address the particular mental health challenges of older people as well. The bill is a targeted solution to an exasperating problem. It deserves the governor’s signature.

Taking stock of California’s $3 billion bet on stem cell science

Erin Allday and Joaquin Palomino

https://www.sfchronicle.com/news/article/Taking-stock-of-California-s-3-billion-bet-on-13215312.php

It was an extraordinary political proposal: Approve a $3 billion bond measure to fund the cutting-edge science of stem cell therapy, and soon some of the world’s cruelest diseases and most disabling injuries could be eradicated.

The 2004 measure was Proposition 71, the California Stem Cell Research and Cures Initiative. The campaign to pass it was led by a Palo Alto real estate developer whose son suffered from an incurable illness that he believed stem cells, the keystones of human biology, could heal. Other supporters included preeminent scientists, Hollywood celebrities, business leaders and elite investors.

The need was urgent, they said. Federal restrictions had recently been imposed on funding research involving human embryonic stem cells, then the most auspicious field of study.

Among the campaign’s promises: Nearly half of all families in California could benefit from stem cell treatments Prop. 71 would help create. One study it commissioned found that new, life-changing therapies could emerge in just a few years. And Prop. 71 would pay off financially, the campaign claimed, creating thousands of jobs and potentially returning the state’s investment more than seven times over.

“How many chances in a lifetime do you have to impact human suffering in a really fundamental way, including possibly even in your own family?” Robert Klein, the campaign leader, would say shortly after the vote.

In November 2004, Prop. 71 passed with nearly 60 percent approval. It created the California Institute for Regenerative Medicine, or CIRM, an agency tasked with administering the $3 billion and making the campaign’s lofty visions a reality.

Fourteen years later, the money voters approved is nearly gone, and supporters of CIRM and the research it funds are preparing to ask the public for another $5 billion in 2020. This time, taxpayers will want to know: Has California’s initial bet on stem cell science paid off?

Over the past several months, The Chronicle conducted an extensive analysis of CIRM’s spending, reviewing the nearly 1,000 grants the agency has made, tracking how the money has been spent, and gauging whether the promises have been realized.

It’s not a question that can be answered simply. Science often can’t be measured in quantifiable outcomes. Failures aren’t just common, they’re necessary — it’s impossible to expect every dollar invested in research to lead down a traceable path toward success.

CIRM can take credit for some notable progress.

It has helped make California a global leader in the field that’s come to be known as regenerative medicine. Anywhere significant stem cell research is taking place in the state, it almost surely has received support from CIRM.

At UCLA, doctors are using stem cells to cure a rare immune deficiency disease that kills children. At Stanford, early studies show that stem cells deposited deep into the brain could restore movement and speech to people devastated by stroke. At UCSF, a team is beginning human trials for a fatal genetic blood disease that involves transplanting stem cells into a fetus still in the uterus.

But as thrilling as such advances are, they fall far short of what Prop. 71’s promoters promised.

Not a single federally approved therapy has resulted from CIRM-funded science. The predicted financial windfall has not materialized. The bulk of CIRM grants have gone to basic research, training programs and building new laboratories, not to clinical trials testing the kinds of potential cures and therapies the billions of dollars were supposed to deliver.

Over that same time, many people suffering from incurable diseases have become impatient waiting for scientists to produce the miracle treatments the Prop. 71 campaign said were within reach.

Instead, a thriving, for-profit industry of clinics offering dubious stem cell therapies based on half-baked science has sprung up, defying attempts at government regulation and requests from scientists to proceed cautiously.

Now, as CIRM supporters prepare to approach voters again, some say its achievements shouldn’t be measured only against the claims made by the campaign that created it.

“What was promised was not deliverable,” said longtime CIRM board member Jeff Sheehy, a former San Francisco supervisor. “However, I would distinguish the promises from the impact and value. We have developed a regenerative medicine juggernaut.”

Klein, though, is unapologetic about the campaign he led. Indeed, as he lines up advocates and testimonials for the coming campaign, his message is familiar: Fund this research and we will save lives. Slow it down and the consequences will be grave.

“Do you want your son to die? Are you going to wait?” Klein asked recently. “Is that the price you are prepared to pay?”

In his airy, sunlit lab at San Francisco’s Gladstone Institutes, cardiologist Deepak Srivastava has used skin cells to produce heart cells. As they pulse in a petri dish, their steady, calming beat feels familiar, even viewed through the lens of a microscope.

Someday, he hopes, the work of his team at Gladstone’s Roddenberry Stem Cell Center will lead to a therapy that can reverse the effects of a heart attack.

“We got this far purely because of CIRM,” said Srivastava, the center’s director.

The dream of exploiting the human body’s remarkable ability to heal itself — to grow skin and bone, to replace muscle lost to wasting or disease, to undo systemic damage caused by infection — has long captivated medical scientists. In the late 1800s, they began to suspect that specific cells in the body were responsible for this repair and regeneration work.

A century later, in 1981, UCSF scientist Gail Martin gave the most powerful of these cells a name: embryonic stem cells.

It wasn’t until 1998 that the first human embryonic stem cells were isolated and replicated in a lab. These cells are uniquely potent, responsible for building every part of a human body. As an embryo matures, it rapidly replicates, transforming into bone cells and muscle cells, brain cells and heart cells.

Some doctors believed if they could harness stem cells, they could use them to treat all but the most disastrous threats to the body, perhaps even reverse the natural effects of aging.

The process of isolating them, though, involved destroying days-old embryos. Religious and antiabortion groups decried the science as unethical. In 2001, President George W. Bush instituted far-reaching limitations on federal grants for embryonic stem cell research.

In California, advocates for regenerative medicine sought a way around the funding restrictions. Their solution: Prop. 71, which would generate $3 billion in general obligation bonds, the type more often used for infrastructure projects like highways or dams. Including principal and interest, the total cost to taxpayers would be roughly $6 billion.

State-funded scientific research on that scale had never been attempted and, despite the campaign’s pitch, there was no guaranteed payoff. The state Legislative Analyst’s Office offered a cautious assessment: The potential financial benefits were unknown.

Klein, then a major Silicon Valley developer, helped conceive, bankroll and write Prop. 71. For him, the effort was personal. His son, Jordan, had recently been diagnosed with Type 1 diabetes, and Klein had become a ferocious advocate for people with brutal conditions and little hope.

More than 20 Nobel Prize laureates backed the proposal. So did Hollywood celebrities such as Michael J. Fox and Brad Pitt. Million-dollar donations came from the founders of eBay and the owner of the Cleveland Cavaliers basketball team.

Radio and television ads featured gut-wrenching appeals from people with incurable diseases. Patient advocate Joan Samuelson, later appointed to CIRM’s board, said in one ad that Prop. 71 “will rescue me, and a million people with Parkinson’s disease.”

In another, “Superman” actor Christopher Reeve, paralyzed from the neck down after a horseback-riding accident, said “stem cells have already cured paralysis of animals,” and called them the “future of medicine.” Dependent on a ventilator attached to his trachea, he struggled to breathe and to speak in the ad. He died before the spot aired.

Almost immediately, critics filed lawsuits. CIRM, the new stem cell institute, lacked public accountability, they said. While technically it was a state agency, the measure gave the Legislature little direct oversight of it. The legal challenges eventually were dismissed, but they slowed funding for nearly two years.

Meanwhile, the confident claims of the campaign were being tempered with more modest expectations. A year after moving into its San Francisco headquarters, CIRM would unveil a 10-year plan dramatically scaling back the pledges made by Prop. 71.

The field of embryonic stem cell research was still young, the report warned. The road to marketing new therapies would be long and expensive. Most research never reaches human clinical trials, it explained, and most of those trials fail. Potential treatments for just a handful of diseases might be tested, and it was doubtful that a single approved therapy would be developed from the state’s investment.

“The whole tenor of the campaign, what was said on television ads that flooded the state and by Bob Klein and his lobbying group, was that if California would fund this work, there would be cures,” said Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley. “People that were saying that must have known you can’t schedule medical breakthroughs. Those hopes were just that, hopes, and completely speculative.”

But as CIRM ramped up, The Chronicle’s review shows, it began doling out grants at a furious pace, averaging more than $7 million a week in 2008, its first year of full-fledged operation. To date, CIRM has spent or committed more than 90 percent of its $3 billion allowance.

The grants can be broadly divided into four categories: basic science and training; infrastructure; translational and preclinical, which is the work that goes toward moving laboratory science into human studies; and clinical trials.

The Chronicle reviewed CIRM grants through May 2018, tracking who received money and how it was spent.

Bay Area institutions have been especially well-funded, with more than one-fifth of the bond money funneled to Stanford, UCSF, UC Berkeley and the Gladstone Institutes. Stanford, the biggest beneficiary, has received $360 million in grants. CIRM’s funding of Stanford, a private institution supported by a hefty endowment, has at times been sharply criticized.

Nearly 40 percent of the total bond money, more than $1.1 billion, has gone into training programs and basic research — work largely aimed at improving scientists’ understanding of stem cells and how they might be best used in medicine.

These basic biology studies have helped scientists develop techniques that could prevent immune rejection from an organ transplant. They discovered weak points in cancer stem cells that might become new targets for drug therapies. In addition to Srivastava’s beating heart cells, scientists have used stem cells to build mini-organs, including “brains” in petri dishes for testing drug therapies and learning more about diseases like Alzheimer’s.

CIRM’s focus, meanwhile, has expanded beyond embryonic stem cells. It has funded research involving adult stem cells, which exist in pockets throughout the body and are cheaper and less controversial than embryonic stem cells. It’s also invested in induced-pluripotent stem cells, first developed in 2006. Produced from other types of cells, they look and act like embryonic stem cells.

CIRM-funded researchers have published more than 330 scholarly articles in four of the most respected stem cell and academic journals. Each represents a new discovery in the field and has enabled the work California has funded to reach scientists around the world.

CIRM’s investments in infrastructure have amounted to $482 million — 16 percent of the bond money. Most of that went toward building a dozen stem cell research centers.

UCSF received a $35 million grant to help raise a glass-and-metal structure on the hillside overlooking its Parnassus campus. The independent Buck Institute for Research on Aging received $20 million toward a sleek white building on its Novato grounds. Stanford University won the largest single grant: $43.6 million toward a four-story structure at the edge of its medical school campus built around a glass-walled atrium.

About $388 million has gone toward preclinical and translational research: studies that take science out of the lab and try to apply it to humans. This phase of research, seldom backed by the federal government, can be particularly challenging. A therapy that looks promising when tested on a cluster of cells in a laboratory-controlled environment often fails when given to more complex organisms.

The preclinical studies funded so far reflect the immense possibilities stem cells offer: Scientists have examined a gene-modifying technique to try to treat HIV. They’re studying small molecule drugs that could destroy leukemia stem cells. They’re developing a gel derived from pig muscles that could stave off amputations among people with a disease that weakens blood circulation.

The research has helped CIRM-backed scientists license 107 invention disclosures. Some of the studies have paved the way for clinical trials, while others have hit dead ends.

CIRM funding helped push UC Irvine scientist Henry Klassen’s work from lab studies to clinical trials testing a stem cell therapy for a rare form of blindness. His research, which has shown success, has largely been carried out in a building at UC Irvine partly underwritten by CIRM.

“The whole reason I’m here in California is because of CIRM,” said Klassen, who had been working in Singapore and took a job at Irvine shortly after Prop. 71 passed. “This consistent source of funding has been critical as we go from the bench to the bedside.”

Still, critics and supporters alike say those who pushed Prop. 71 significantly oversold the short-term medical and financial prospects of stem cells.

No federally approved treatments have been produced. And without marketable therapies, the public is still far from reaping the up to $91 billion in health care savings by 2040 the campaign predicted.

CIRM has funded nearly 50 clinical trials, but just four have been completed, meaning scientists enrolled all the patients they said they would and finished compiling data. One of those trials was an observational study that tested no new therapy. The others involved treatments that are still years, at best, from reaching the market.

The state, once told to expect as much as $1.1 billion in royalties from CIRM-backed discoveries within 35 years, so far has received just a tiny fraction of that amount: a single payment of $190,000 from the City of Hope medical research center in Los Angeles County.

Other economic benefits, such as tax revenue and new jobs, have been measured only a handful of times. The most recent study, which CIRM commissioned using public funds and published in 2012, showed the state investment had helped create tens of thousands of jobs and generate hundreds of millions in tax revenue.

The aim of the report, however, was to aggressively support the goals and initiatives of CIRM, according to the California Stem Cell Report, a blog that has diligently tracked the institute.

CIRM and its 29-person governing board, meanwhile, have been a frequent target of attack.

State lawmakers have introduced multiple bills aimed at making the institute more accountable to the public and at ensuring that all taxpayers, not just biotech companies and universities, would benefit from the public investments.

Almost every effort has failed, in part due to the unusually restrictive language of Prop. 71: Any change in CIRM’s structure needs a voter initiative or a 70 percent vote in both houses of the Legislature and the governor’s approval.

The proposition also specified the precise makeup of the agency’s governing board, placing representatives of many of the institutions that CIRM funds to oversee its grants. Having such built-in conflicts of interest without the oversight expected of a public agency has undermined CIRM’s legitimacy, critics say. They have likened it to an insiders’ club that enriches its own members.

“These guys got away with an incredible amount of personal enrichment,” said state Sen. John Moorlach, R-Irvine, a longtime critic of CIRM. “And all they gave us was debt.”

CIRM leaders say they have strong protections to ensure that personal interests don’t influence funding decisions: Board members don’t discuss or vote on proposals they have a financial stake in, and an out-of-state review panel has a major say in which projects are funded.

Multiple audits, however, have found the sheer volume of recusals troubling.

Records obtained by The Chronicle showed that board members abstained from voting on grants roughly 1,770 times since 2006 due to reported financial conflicts. Tens of thousands of additional recusals were triggered by a CIRM policy that bars certain members from weighing in on any application.

In some cases, nearly half of the board was unable to vote on major and controversial proposals due to conflicts of interest.

One board member, UC Regent Sherry Lansing, a former film studio executive, has recused herself from more than 400 grant discussions because of a tangle of conflicts, most related to the universities she oversees. Lansing’s role is to advocate for cancer patients.

A pivotal Institute of Medicine review in 2012 found that such widespread conflicts had caused some to “question the integrity and independence” of CIRM, and it recommended sweeping reforms. Many of the suggestions were not enacted, although CIRM did make some significant changes shortly after the report published.

Klein, CIRM’s board chairman during its first seven years, has been a divisive figure. Despite his role at CIRM, he continued to run a patient advocacy group that regularly dismissed concerns about the agency and attacked many people, including legislators, who challenged it. A 2009 Little Hoover Commission report called him “a lightning rod for calls for more accountability.” There were multiple demands for his resignation.

“There’s a reason you have checks and balances, transparency and accountability when you use that much in public funds, and unfortunately none of that was in place,” said former state Sen. Deborah Ortiz, who strongly supported Prop. 71, then became a CIRM critic. “You can’t go to the voters and say, ‘Let’s use $3 billion in state funds,’ then say, ‘We don’t want the terrible government to bother us.’ ”

Even some of CIRM’s most ardent supporters — patients and patient advocates who stand to benefit most directly from stem cell therapies — have become critical. Their chief complaint: The science is taking too long, and they’re running out of time.

At the Gladstone Institutes’ Mission Bay campus last fall, CIRM held a public meeting to update patients about the research going on throughout California.

CIRM representatives and scientists told the story of a mother who had her vision partially restored after enrolling in Klassen’s trial at UC Irvine. They talked about an East Bay teenager, paralyzed the day before graduating high school, who regained some movement after receiving a stem cell transplant.

The $3 billion bond, they said, had made these achievements possible.

“What you will see over the next decade,” Srivastava of the Gladstone Institutes told the crowd, “are a series of breakthroughs for many diseases based on that investment.”

Not everyone shared his enthusiasm.

“I’ve met hundreds, thousands of people with spinal cord injuries,” Franklin Elieh, a quadriplegic man and patient advocate, said at the same meeting. “Millions are suffering needlessly and endlessly. Billions (of dollars) are being spent needlessly and endlessly. What can be done to really accelerate this?”

Elieh, like many people living with incurable diseases or conditions, is disillusioned with the dearth of clinical trials CIRM has backed.

Clinical trials are the goal of laboratory medical science. They are the moment that a possible treatment, studied only in a test tube or a dish or an animal, finally is tested on a human subject.

The first two trial phases primarily test safety: Does this treatment, when given to a human being at an effective dose, cause intolerable side effects? Phase 3 trials are typically the first to tell scientists how well a therapy works in large groups of patients, if it works at all. They are often the last step before scientists — usually working with a for-profit company that has financed the increasingly expensive research — seek FDA approval.

About 900 patients have been involved in the 49 clinical trials CIRM has backed so far, The Chronicle’s review shows. Nearly a fifth of CIRM’s funds, about $530 million, has gone to support the trials. Most of those grants were awarded in the past three years, part of a deliberate effort by the agency to direct more money toward testing treatments.

“Every single project we have is spectacular, and just a couple of years ago may have been considered science fiction,” CIRM President Maria Millan told a state legislative committee in August as she outlined many of the clinical trials the agency has funded.

Only six of the clinical trials, though, have been phase 3 studies. Of those, two were terminated or suspended, three are still recruiting patients, and one — for a bioengineered blood vessel that can be used in dialysis — is under way.

Meanwhile, the National Institutes of Health, the primary federal funding agency for medical research, has far outpaced CIRM in supporting clinical trials in stem cell research. A 2017 analysis by STAT, a science and health news publication, found that, dollar for dollar, the NIH funded 3½ times as many clinical trials as CIRM from 2006 to 2016.

In 2009, President Barack Obama lifted most of the restrictions on federal funding of embryonic stem cell research, but for both agencies, trials using those cells remain rare.

“When we voted for Prop. 71 we wanted clinical trials, we didn’t want basic research,” said Judy Roberson, a longtime CIRM supporter who has lost five family members, including her husband, to Huntington’s disease. Roberson has 17 other relatives who are also at high risk of developing the hereditary neurological disorder, which slowly erodes a person’s ability to walk and talk.

“Our loved ones are going to die. They’re sitting on time bombs,” she said. “You could do basic research for 100 years, but you’re never going to learn everything. So just get in there and try something.”

But accelerating the push of basic science toward human trials is not without its critics. The International Society for Stem Cell Research — the largest body of scientists looking at policy and politics in regenerative medicine — has cautioned against that approach. Many scientists say that, in general, it’s too early to be experimenting on people, particularly with embryonic and induced-pluripotent stem cells, which may cause tumors.

Gene therapy, a field related to stem cells, underwent more than 30 years of grueling research and repeated setbacks before establishing its first commercial successes in 2017: two cancer treatments approved by the FDA.

Embryonic stem cells were isolated for the first time just two decades ago. Induced-pluripotent stem cells were made only 12 years ago. Adult stem cells — the cells responsible for regular repair and upkeep — have been used in bone marrow transplants for more than 50 years, but their application beyond that started to be deeply studied only in the 1980s.

The science simply isn’t there yet, said Arnold Kriegstein, head of UCSF’s stem cell center, who has received $2.5 million from CIRM for basic research.

“CIRM touts 50 or so projects moving toward the clinic, and many of them will likely fail,” Kriegstein said. “It might be more prudent to spend dollars solving basic research problems, where a relatively modest investment can have a huge impact.”

Some suggest that CIRM’s recent aggressive support for clinical trials is directly tied to its plan to return to voters for more funding. The fact that its work is supported by taxpayers increases the urgency to produce results, said Timothy Caulfield, a Canadian law professor at the University of Alberta who closely follows CIRM.

“That creates a lot of pressure to frame the work in terms of near-future miracles, and that will almost always fail,” Caulfield said. “True medical breakthroughs with broad application are incredibly rare.”

To patients desperate for cures, CIRM leaders say stay hopeful. The work may be taking longer than promised, but it will pay off in the end. And the state has too much invested now to give up. Such hope, though, isn’t easy to come by for those beginning to realize that any therapies to help them probably will arrive too late.

“We see how slow progress is, and we know a lot of people are never going to be candidates for a treatment,” said Elieh, who is co-founder of the Northern California Spinal Cord Injury Foundation, a nonprofit patient support group.

Elieh, 54, was injured in a diving accident in 1989, shattering his vertebrae and damaging his spinal cord so badly that he lost movement in his legs and upper body. In the years afterward, he enrolled in clinical trials and costly rehab programs, but none helped.

During the Prop. 71 campaign, Elieh watched celebrities talk about the miraculous ability of stem cells to regenerate tissue. He saw videos of paralyzed rats that could walk again after receiving an injection of stem cells. Clinical trials, scientists said, were just years away.

“Everyone you talked with thought, ‘Wow, we’re going to put $3 billion into this,’ ” Elieh said. “It was really creating hope. And, unfortunately for me, false hope.”

Over the past decade CIRM has funded two clinical trials testing the same treatment for spinal cord injuries. The therapy, though, applies only to people newly injured, not the hundreds of thousands of men and women like Elieh who have been paralyzed for years.

So far, the therapy has proved safe. A handful of patients in the second trial regained some movement, though it’s too soon to say whether stem cells are the reason. While CIRM supporters are keen to hold up that trial as an example of the stunning potential of stem cell therapies, Elieh and many of his peers are more cautious.

“We’ve still barely taken the first step, and we have no idea when the second step will land,” Elieh said. “We all had a lot of hope back then, and we’ve just kept hoping.”

Seated on a stage before 50 people in a town hall-style meeting in Mill Valley, Art Torres had one word to describe the results of the CIRM-funded trial for spinal cord injuries: “Miraculous.”

Torres, former state senator and longtime member of the CIRM board, was enthusiastic in a way that would have made the more cautious scientists running the trial cringe. But CIRM needs a home run.

The looming end of its funding — and the need to ask voters for billions more — presents an existential moment.

Since 2004, the political and scientific climate has changed significantly. Federal funding for embryonic stem cell research is no longer tied up, and many voters are savvier about the limitations of regenerative medicine. The scientists backed by CIRM, meanwhile, face unconventional competition from an unexpected source: a vibrant consumer-clinic industry that’s marketing unproven therapies to those tired of waiting for cures.

Prop. 71’s most tangible achievements — cutting-edge academic buildings, discoveries in petri dishes, advances in lab rats, pioneering trials in human subjects — aren’t necessarily going to resonate with voters. What will are visible triumphs in real people. Those successes are what CIRM’s most ardent supporters are rallying around.

On the cover of the agency’s 2017 annual report was Ronnie, a wide-eyed infant who was cured of an immune deficiency disease called SCID, or “bubble-baby disease.” Children who have the condition typically live in isolation to protect them from fatal infections.

CIRM has helped fund four trials, all at different institutions, testing stem cell therapies for SCID. Ronnie was treated at UCSF using a treatment developed at St. Jude Children’s Research Hospital in Tennessee. A therapy out of UCLA, which has been in clinical trials since 1993, could win FDA approval — a first for CIRM-backed research — in a year or two, say the scientists who developed the treatment. In all, 40 babies have been treated with the UCLA therapy.

And there’s Rosie Barrero.

In a video posted on CIRM’s website, Barrero sits in a sunny room at the agency’s headquarters, now in Oakland, Lake Merritt glittering behind her. She’s earnest as she talks about retinitis pigmentosa, the disease that has slowly blinded her.

Barrero was treated in 2016 in Henry Klassen’s trial for patients with RP. Within months, she could pick out colors and shapes she hadn’t been able to see for years. She could tell her daughters apart. She has regained about “a pinhole” of sight, but that she’s had any improvement at all, she said, is amazing: It means that the therapy works.

“We’re definitely hoping that this work continues to get funded,” Barrero said in an interview. “It’s incredibly important, to all of us.”

If a new bond isn’t approved in 2020, said CIRM President Millan, it could devastate stem cell research in California. Private industry is still reluctant to back research that has yet to produce a treatment, let alone show it can be profitable.

And so, CIRM proponents are turning again to Klein, who plans to lead the 2020 campaign for more research dollars.

In Klein’s downtown Palo Alto office, a series of photos — colorful, fantastical close-ups of stem cells studied by CIRM scientists — hangs above his desk. Once they’d hung in CIRM’s offices. Today they reflect the deep connection he’s retained with the agency, despite not having an official role since stepping down as board chairman seven years ago amid a flurry of criticism.

Late last year, Klein addressed the CIRM board at a meeting about the fate of the agency. According to polls he had paid for — the full results of which he declined to share — 70 percent of voters would support another stem cell funding proposition. No other options for future financing — not private fundraising, not legislative efforts — would work, he said.

It was his son Jordan’s battle with Type 1 diabetes that drove Klein into patient advocacy and stem cell research. But the therapies that Klein believed were imminent did not arrive in time to save Jordan. Two years ago, at age 26, he died from complications related to the disease.

The loss seems to have cemented Klein’s resolve.

“We couldn’t get there fast enough for Jordan,” Klein said. “We have to get there for everyone else.”

Klein rejects the notion that expectations for CIRM were overhyped or voters misled in the 2004 campaign. If cures aren’t yet at hand, they’re surely years closer than they would be without CIRM, he said, and people already are benefiting from research paid for by Prop. 71.

During an interview in his office, Klein played a brief video of a young man who is part of the spinal cord injury trial CIRM has helped fund. Made quadriplegic after a devastating car accident, the man is shown in the video lifting weights.

“After the stem cell surgery, I’m able to live my life again,’ the man says in a quiet, halting voice. “Thank you for giving me my life back.”

Klein turned off the video, his eyes bright.

“I wish all the voters could see this,” he said. Christopher Reeve, whom he considered a friend, “would have been absolutely ecstatic” to have seen such a video, he added.

“In 2004 we had a vision of the future and data on animals,” Klein said. “In 2020, we will have patients who were paralyzed, patients who were blind, patients with cancer who will tell their story. The public will decide.”

Erin Allday and Joaquin Palomino are San Francisco Chronicle staff writers. eallday, jpalomino Twitter: @erinallday, @JoaquinPalomino

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MOORLACH UPDATE — I Told You So! — August 26, 2017

It’s time to seriously discuss the California Institute for Regenerative Medicine, also known as CIRM (see MOORLACH UPDATE — Millstones and SCA 7 — March 30, 2017 march 30, 2017 john moorlach).

When Proposition 71 was on the ballot in 2004, I was one of the three signatories to write the argument against this ballot measure and campaigned against it.  So let’s see what I said and wrote some 13 years ago.  Here are three published interviews and a copy of the ballot argument for a refresher course.

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“It’s financially unsound,” Moorlach said in a Friday interview.  “It doesn’t have a guaranteed revenue stream other than the state budget to pay off the bonds.  The state’s budget as of yesterday is already under water by $8 billion.  To add another $3 billion over 10 years is poor stewardship.”

Arguments that government funding is needed to do research private companies aren’t willing to tackle are a “rationalization,” Moorlach said.

If the pharmaceutical companies conclude it is too long a time or there is a high risk that we won’t see a benefit, that should be telling the rest of us something really loud and clear,” Moorlach said.

(“California’s ambitious embryonic research program gets going.”  North County Times, December 19, 2004)

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“We’re adding debt when our state is in the worst shape it’s ever been historically,” Moorlach said.  “If the research does not produce any royalties or residuals, then the payments have to come out of the general fund.  Most of the patents on stem cell research have already been pulled.  We’re not talking about anything dramatic here . . .  Some of the holders of the patents are the biggest funders of Prop 71, so it’s sort of a big money grab.”

(“Prop 71 opposition opinions vary—While churches oppose the proposition for several reasons, Orange County treasurer’s resistance to the measure is purely fiscal.” Daily Pilot, October 26, 2004)

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Orange County Treasurer John Moorlach:  “I see it as another financial boondoggle.”

George Skelton, columnist for the LA Times“Is Stem Cell Research the Next Big Thing for California?”, October 14, 2004

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ARGUMENT Against Proposition 71

WE SUPPORT STEM CELL RESEARCH, NOT CORPORATE WELFARE

It’s wrong to launch a costly new state bureaucracy when vital programs for health, education, and police and fire services are being cut. We cannot afford to pile another $3 billion in bonded debt on top of a state budget teetering on the edge of financial ruin.

General Fund bond debt will grow from $33 Billion on May 1, 2004, to a Legislative Accounting Office projection of $50.75 Billion in debt by June 30, 2005-a staggering 54% increase in just 14 months!

WHO BENEFITS?

Backers will cynically use images of suffering children and people with disabilities in their commercials, but pharmaceutical company executives and venture capitalists contributed $2.6 million to put this measure on the ballot. By getting taxpayers to fund their corporate research, they stand to make billions with little risk.

NO ACCOUNTABILITY

And who will oversee how this money is spent? According to the fine print, the proponents give themselves power to exempt their “Institute for Regenerative Medicine” from aspects of our California “open meeting” law (specifically passed to stop this kind of backroom deal-making).

Why do proponents want to keep what they are doing a secret? If we’re being asked to pay for this research, then it should be freely available to all, not just to those who will be “awarded” special contracts by the “Institute.” The initiative also grants the “Institute” power to rewrite California’s medical informed consent safeguards.

Most importantly, the fine print specifically prohibits the Governor and Legislature from exercising oversight and control over how this money is spent-or misspent. Even if the state teeters on the brink of financial ruin, our elected representatives will still have to borrow and spend this money, because the proponents are putting this money grab into our Constitution.

BAD MEDICINE

Opponents of this boondoggle include liberals, conservatives, Republicans, Democrats, Independents, medical professionals, and stem cell researchers. We all strongly support Stem Cell Research, but oppose this blatant taxpayer rip-off that lines the pockets of a few large corporations.

If there was any doubt about the true motives of the corporate promoters of this bond debt, one need only look at what it doesn’t fund. The fine print does not initially fund adult and cord blood stem cell research. Adult and cord blood stem cell research has already produced more than 74 major medical breakthroughs, but this measure excludes support for these proven areas of research, without a two-thirds vote of the Institute’s “working group.”

Consider just one example: Cord blood stem cells are being used to treat sickle cell anemia with a staggering success rate of 90%. That’s real progress, helping real people, but it may not receive one penny from this initiative.

Join with millions of your fellow citizens in demanding an end to “corporate welfare” and bonded debt. This is no time to spend billions we don’t have on a self-serving sham.

Vote “NO” on Proposition 71. It’s not what they say it is.

www.NoOn71.com

TOM McCLINTOCK, California State Senator

JOHN M.W. MOORLACH, C.P.A.
Orange County Treasurer

  1. REX GREENE, M.D., Cancer Center Director and Bioethics Consultant

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Thirteen years later, and my fears were realized.  CIRM did not generate any revenues and left the taxpayers holding the debt “bag,” with payments in the 2017-18 Budget of some $728 million!!  Can you imagine how many roads that could fix.  This time I’m saying it:  I told you so!

The San Francisco Business Times provides some amazing news below.  Miracle of miracles, a royalty check will finally be forwarded to the State of California.  It breaks my heart to see the public sector abused like this.  False promises. Personal enrichment.  No accountability.  Leaving innocent taxpayers holding the bag.  Wait.  Innocent taxpayers.  Not really.  They voted for Proposition 71.

Democratic leaders in the Legislature want to force drug companies to divulge price increases with SB 17.  Its ironic that its own “lab” couldn’t get anything accomplished in 13 years, but the monopoly party has the audacity to rail that private sector pharmaceutical companies are gouging patients.  And, even more absurd, the Democrats want to extend this heart-tugging financial boondoggle that is compensating former legislators with massive salaries.  You can’t make this stuff up.

Let’s hope a crack journalistic investigative reporter team starts to peel this onion.

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1st CIRM royalty check in mail — 13 years after California voters OK’d $3 billion stem cell agency

By Ron Leuty

California’s stem cell research funding agency will send a royalty check to the state’s general fund soon — the first such payment since California voters 13 years ago approved the sale of $3 billion in bonds to support stem cell research.

It is a big deal for the Oakland-based California Institute for Regenerative Medicine, or CIRM, and for California taxpayers. Spinning grants and loans made to researchers and companies into product gold, generating revenue, royalties and a payback to the state’s general fund, could have huge political, financial and PR benefits for the agency.

CIRM continues to face political pressure against the backdrop of an already-stressed state general fund that must make principal and interest payments — potentially totaling $6 billion — to the buyers of CIRM bonds.

To date, CIRM has spent more than $2.5 billion since voters passed Proposition 71 in 2004, and officials are looking at making their last grants by mid-2020. The agency has funded more than 30 clinical trials, most of which are ongoing, and has aggressive plans to fund 40 more over the next four years. But bringing products out the other end of that pipe is tough.

Those trials still must make it through the rough-and-tumble clinical trial process — not to mention win Food and Drug Administration approval, get uptake from doctors and patients, and are covered by insurers and other payers — that can take years and cost hundreds of millions of dollars.

“We are expecting the first check to be delivered to the state very soon,” CIRM spokesman Kevin McCormack said in an email.

Yet even as a public state agency, CIRM officials are holding tight to key information about the first royalty check: How large (or small) is the check? When will the check actually be forwarded to the general fund? And from which CIRM-funded project did it spring?

“The royalty check is something that is still being worked out so it’s premature to say anything at the moment,” McCormack said in a followup email. “Sorry to sound so secretive but it is a big deal, the first of what we hope will be many such repayments for the state’s investment.”

CIRM has reason to seek maximum PR benefit from the royalty check. The Prop. 71 campaign was highly charged, coming out of President George W. Bush’s restrictions on federal stem cell research spending on certain embryonic stem cell lines.

Religious conservatives fought that work because it involves the destruction of embryos, which they consider human life, to extract the vital stem cells. Fiscal conservatives were against the eye-popping $3 billion figure. Researchers saw the money as vital, given the federal limitations, since they were prohibited, for example, from using federally funded equipment on restricted stem cell lines that were funded by CIRM or others.

Challenges to Prop. 71 effectively delayed the agency from getting up and running until 2006 and much of CIRM’s early work was just that — early in a just-emerging field. The agency also spent hundreds of millions on new buildings — at Stanford University, the University of California, San Francisco, and the Buck Institute for Research in Aging in Novato, among other sites — so CIRM-funded projects on restricted cell lines could continue without worrying about who paid for which piece of equipment.

CIRM has funded basic research on stem cells even as the field expanded beyond embryonic to the emerging field of induced pluripotent stem cells. Those cells — created from adult, or mature, stem cells that are engineered to be embryonic-like and prodded by researchers to become another type of mature cell — have provided scientists with flexibility.

CIRM also has funded translational research. But, as CIRM Chairman Jonathan Thomas pointed out at a June board meeting in Burlingame, the timeline to move experimental stem cell therapies from basic research to human trials is eight years; non-stem cell therapies take 3.2 years.

“We want to cut that time in half to four years,” Thomas said.

Then there is CIRM’s funding of clinical trials — more than 30 to date. CIRM leaders are betting on those trials, including one at UCSF dealing with a genetic blood disease that is deadly for fetuses, to produce results. That means new therapies as well as revenue/royalties.

“We don’t want these clinical trials just to be run,” Thomas said. “We want them to go and impact patients and patient lives.”

But putting money into the state’s general fund means a lot — so does the size and rate of those payments — as CIRM considers whether to ask California voters to support a new round of bond sales. Other options could be a combination of philanthropic and venture capital cash or a straight-up funding from the state.

All of those roads are long and tough if there’s no sign of CIRM-funded work producing revenue.

And the political road hasn’t gotten any easier. Earlier this year, for example, Republican state Sen. John Moorlach of Costa Mesa introduced a bill that would have put a Prop. 71 repeal on the ballot.

The state, according to a fact sheet from Moorlach’s office, has spent $1.2 billion servicing Prop. 71 debt.

Moorlach believes Prop. 71 “did not live up to its promises,” spokesman Jacob Ashendorf said in an email. “Therefore, it would make sense to stop future debt from being incurred for that program.”

The bill, supported by the California Pro Life CouncilCalifornia Catholic Conference and the influential Howard Jarvis Taxpayers Association among others, was halted after Thomas spoke at a Senate health committee meeting in Sacramento. Accompanying Thomas on the trip was Art Torres, a powerful former state senator who is vice chairman of CIRM’s board.

The bill could be reconsidered.

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This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.

If you no longer wish to subscribe, just let me know by responding with a request to do so.

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