On August 15, the California State Assembly Select Committee on Biotechnology held a hearing to update the Legislature on CIRM and California’s biotech sector. The committee heard from CIRM President and CEO Dr. Maria T. Millan, Board Vice Chair Senator Art Torres (Ret.), two CIRM Patient Advocates (Pawash Priyank and Don Reed), and Dr. Jan Nolta, Director of the Institute for Regenerative Cures at UC Davis.
The final speaker was David Jensen, whose California Stem Cell Report blog has covered CIRM since its inception. At CIRM, we know not everyone agrees with us or supports every decision made since voters approved us in 2004. Still, we value open, thoughtful debate about all aspects of stem cell research. Jensen’s presentation reflected that spirit, and we are sharing it here in full.
For those who prefer video, here is the recording of the entire hearing.
https://www.assembly.ca.gov/media/assembly-select-committee-biotechnology-20180815/video
California’s Stem Cell “Gold Rush:” A Brief Overview of the State’s $3 Billion Stem Cell Agency
Prepared testimony by David Jensen, publisher/editor of the California Stem Cell Report, before the Assembly Select Committee on Biotechnology, Aug. 15, 2018
I was in Mazatlan, Mexico, in the fall of 2004 when I first heard about the creation of California’s stem cell agency. I was reading the Wall Street Journal online and saw a headline saying a new Gold Rush was about to begin in California, this one involving stem cells instead of nuggets.
“Holy Argonauts,” I said to myself, using the term for the tens of thousands of people who rushed to California’s gold fields in 1849. I wanted to know more about what might happen with this new stem cell gold rush.
Today, nearly 14 years later, I still want to know more about the California Institute for Regenerative Medicine, or CIRM, as the agency is formally known. But I can tell you a few facts.
Borrowing and Autonomy
The agency is unique in California history and among states nationwide. It is the first state agency to fund billions of dollars in scientific research, all borrowed. At one point, the agency was the world’s largest single source of funding for human embryonic stem cell research.
The agency operates with financial and oversight autonomy rare in California government, thanks to the ballot initiative that created it. But that measure also proved to be both a blessing and a curse. The agency’s financial autonomy has allowed it to provide a reasonably steady stream of cash over several years, which is necessary to sustain the long-term research critical to developing widely available treatments.
At the same time, the ballot measure carried the agency’s death warrant: no more money after the $3 billion ran out. Cash for new awards is now expected to run out at the end of next year. Over its life, the agency has had a national and somewhat more modest global impact, both as a source of funding and international cooperation, but also in staying the course on human embryonic stem cell research when the federal government was backing away from it.
Beyond that, the stem cell agency is the only state department whose primary objective is to produce a marketable commercial product. In this case, a cure or treatment for afflictions now nearly untreatable.
Finally, I am almost certain that CIRM is the only state agency that takes back money when a project goes off the rails. By the end of last month, that figure totaled more than $34 million in recent years across two major award categories. Federal research dollars don’t work this way. With CIRM, the money goes back into the pot for more research aimed at treating horrible afflictions.
Evaluations of the Research Effort
Nonetheless, the agency has hit some shoals from time to time. In 2010, the agency’s governing board commissioned a $700,000 study of its efforts by the prestigious Institute of Medicine. Two years later, the IOM reported to CIRM that it had some significant flaws.
The IOM study said that the agency had “achieved many notable results.” But it also recommended sweeping changes to remove conflict-of-interest problems, clean up a troubling dual-executive arrangement, and fundamentally change the nature of the governing board.
The report said, “Far too many board members represent organizations that receive CIRM funding or benefit from that funding. These competing personal and professional interests compromise the perceived independence of the ICOC (the CIRM governing board), introduce potential bias into the board’s decision-making, and threaten to undermine confidence in the board.”
The ballot measure built in these conflict issues by giving potential recipient institutions seats on the 29-member governing board. Indeed, in 2017, the last time I calculated the correlation between the board and awards, roughly 90 percent of the money CIRM gave out went to institutions with ties to members of the governing board.
About two months after the IOM presented its report, the CIRM board approved a new policy that bars 13 of its 29 members from voting on any grants to address questions about conflicts of interest.
Other studies about the agency’s performance resulted from a 2010 law that modified the initiative to require triennial performance audits paid for by the agency itself. The requirement specifically excluded “scientific performance” from the audit.
The first audit results came in 2012 and contained 27 recommendations for improvement. The most recent performance audit came last spring. The audit firm, Moss Adams, recommended improvements in private fundraising, staff retention, and better use of board members. The board was told that the agency had made “incredible progress” and that the auditors “usually see a lot of good things.”
The Story of CIRM 2.0
In recent years, the agency has been on a self-improvement regimen. The effort began in 2014 and was dubbed CIRM 2.0, a term a stem cell researcher at UC Davis originally coined.
The agency described the new direction and emphasis as “radical.” It aimed to speed up, improve efficiency, and foster innovation. And it seems to have largely succeeded.
In 2014, it took almost two years for a good idea to move from application to final funding. The goal was to shorten that to 120 days. Funding delays are a particular concern for businesses, often for cash flow reasons, but they also delay treatment development.
This week, the agency said the cash delivery figure now stands at less than 90 days for clinical awards and about 120 days for translational awards.
In 2014, the agency participated in nine clinical trials, the final stage before the federal government certifies a treatment for widespread use. Today the agency is involved in 49. In 2014, about 50 patients were involved in those trials. Today the figure is more than 800.
One of the more interesting aspects of CIRM 2.0 is that it marked a departure from what might be called an academic pass-fail approach to the “final exam” for scientist applications. Instead, CIRM takes a more partner-oriented approach, similar to some businesses.
Instead of flatly failing an application that is not quite ready for prime time, the idea is to coach applicants along to help bring them up to approval level. Today, the agency can count 30 applications that were approved through that process. All of which could have slipped away in the more distant past.
CIRM and the Biotech Biz
CIRM is now much more engaged with industry than in its earlier years, when some business executives criticized it bitterly. Engagement with biotech firms is critical to bringing a treatment to the public. CIRM is not in the business of actually manufacturing, marketing, and selling products. That is a matter left to the private sector.
One reason for closer business connections involves maturation of the work in the field, which has brought research closer to reality. But it also reflects a shift in focus within the agency as top management has changed.
One of the more difficult areas involving stem cell research and likely treatments is their cost. Researchers and companies rarely talk forthrightly in public about specific dollar amounts. But drug and treatment costs are a high-visibility issue for patients and elected officials. And estimates of stem cell treatments have run up to at least $900,000.
In 2010, the California legislature moved to help ensure affordability by requiring grantees to submit affordable access plans, with the caveat that the agency could waive the requirement. How that will ultimately play out as products enter the marketplace remains to be determined.
The Public Policy Questions
Several major public policy questions surround California’s stem cell program, including how it was created and how it operates. These include:
• Is a ballot initiative the best way to launch research programs? Initiatives are hard to change when priorities shift.
• Does the state have higher health priorities—such as prenatal care—than providing research funds that scientists might obtain elsewhere?
• Is borrowing money to finance research appropriate, given that interest doubles the cost of a $20 million award?
• Should executives of institutions eligible for funding serve on a board that awards hundreds of millions to their employers?
This is only a short list. After nearly 14 years of CIRM’s work, more questions can—and should—be asked.
Lives Saved but No Widespread Therapies
Returning to our earlier list of clear facts about CIRM, another fact is that clinical trials the agency helped finance have saved lives. The youngster from Folsom mentioned earlier in this hearing is one of several cases.
That said, these patients received treatment in clinical trials, which may or may not lead to a commercial therapy.
CIRM has advanced the stem cell field and built critical mass in California. UC Davis’ growing program, supported by $138 million in CIRM funding, is one example. Another is the $50 million Alpha Clinic network, which strengthens collaboration within institutions and across the state. The network includes UC Davis, UC San Francisco, UCLA, UC Irvine, UC San Diego, and City of Hope.
Still, CIRM has not yet backed a stem cell therapy ready for widespread use, nor met voters’ 2004 expectation that cures were imminent.
The agency also faces a political and scientific deadline. Supporters hope for another ballot initiative in November 2020 to provide $5 billion and prevent the program from winding down. Developing a stem cell treatment that resonates with voters could help sustain this unique effort, even if California’s stem cell “gold rush” has not matched the drama of the one 169 years ago.