Time Running Out, California Stem Cell Agency Yet to Produce Big Results

It’s been more than a decade since California launched an unprecedented experiment in medical research by direct democracy, when voters created a $3 billion fund to kick-start the hunt for stem cell therapies.

The bold plan, a response to federal funding limits for embryonic stem cell research, was sold with a simple pitch: The money would rapidly yield cures for devastating human diseases such as Parkinson’s and ALS.

That hasn’t happened.

A major reason, a STAT examination found, is that the California Institute for Regenerative Medicine has been slow to move promising experimental therapies into clinical trials. The National Institutes of Health has supported three and a half times as many human trials of stem cell therapies, dollar for dollar, as the California agency has funded since it started making grants in 2006. Just two of its clinical trials have been completed.

“I am floored by the disparity,” said Jim Lott, a health care consultant and member of the state board that monitors the agency, known as CIRM. If the numbers are correct, he told STAT, “that doesn’t settle well with me as a voter. That doesn’t settle well with me as a taxpayer. That doesn’t settle well with me as a member of the oversight committee.”

CIRM has used most of the $2.2 billion in grants it has distributed so far to build labs and pay for basic research at public and private universities, such as Stanford and the University of Southern California, and private companies.

It has given more than $300 million to 27 projects that include clinical trials — though much of that funding also supported preclinical work. Meanwhile, the agency has committed about $540 million to new labs and buildings.

In part, that’s because its directors chose to focus on infrastructure early on, as well as bench experiments and animal studies given that the biology of embryonic stem cells was not well-understood and there are formidable roadblocks to moving into human studies. Much more is known about the bone marrow stem cells that are the focus of many NIH-funded clinical trials.

But critics have noted that many top grantees come from institutions that hold seats on CIRM’s governing board. The respected Institute of Medicine, in a 2013 review, said institutionalized conflicts of interest have raised questions about “the integrity and independence of some of CIRM’s decisions.” CIRM later enacted reforms that barred board members from voting directly on grants for their institutions. But the changes didn’t prevent other financial conflicts involving CIRM officers and grantees, and the flow of funds to board members’ institutions continued unabated.

“You could make an argument that California taxpayer money should go to build new facilities on state university campuses,” said Marcy Darnovsky, who directs the Berkeley-based Center for Genetics and Society, a public affairs nonprofit. “But I don’t see an argument for Stanford getting fancy new buildings from California taxpayer money.”

Stanford, whose endowment is among the top five nationally, and USC have received more than $70 million for major building projects, and hundreds of millions more for labs and research. Stanford alone has been favored with $1 out of every $7 CIRM has approved.

But scientists outside California said CIRM’s record is a strong one. CIRM-funded researchers have published nearly 2,000 scholarly papers. That output has helped vault California into the top ranks of stem cell science, said Dr. George Daley, the new dean of Harvard Medical School and a leading stem cell scientist who describes himself as an informal adviser and cheerleader for CIRM. “When I look at the progress my colleagues have made in California, I am duly awed,” he said.

The institute announced a year ago that it would reinvent itself to emphasize clinical research until it runs out of money in 2020 — unless voters grant a new infusion of cash. CIRM plans to fund 50 new trials with its remaining $692 million, of which 10 were announced in 2016. Just 17 trials were funded in its first decade of grants.

C. Randal Mills, CIRM’s CEO since 2014 and architect of its new strategy, said he welcomed comparisons that help benchmark CIRM’s progress. Mills, former head of Osiris Therapeutics, the first company to commercialize an approved stem cell treatment, declined to comment on STAT’s specific findings, but defended the initial emphasis on labs and basic science as underpinning future clinical work.

“We’re running our own race. … What we have to do is just continually get better” to benefit patients, Mills said in an interview. “If we’re behind [NIH], we’re going to get better.”

Lott’s teenage daughter was paralyzed in an automobile crash and he hopes for a stem cell cure. He supports the goals of CIRM and applauds much of its work, but he now has second thoughts about the governance structure, which allows board members’ institutions to benefit from CIRM grants, as well as its financing. The ballot question that created CIRM, Proposition 71, authorized bond sales to pay for the agency’s budget, raising the total cost for taxpayers to $6 billion including interest. Financial experts, however, said that relatively low interest rates paid on long-term bonds can offer advantages over funding so large a venture directly from state coffers.

Asked whether he would support a similar ballot measure today, Lott said, “We were all caught up in the time, and the events were different when we first looked at this. But not today. Not at all.”

'Lives Will Be Saved'

Californians emphatically supported CIRM, creating the stem cell colossus with 59 percent of the vote in 2004. Many were upset that President George W. Bush had sharply limited federal funding for work with embryonic stem cells, which are derived from early human embryos and able to develop into any type of tissue or organ.

But Proposition 71 also won because it was shamelessly oversold, consumer advocates and science policy experts said. Desperate patients, Nobel laureates, and A-list celebrities such as Michael J. Fox — the Hollywood star and Parkinson’s sufferer — predicted “cures” that would “save millions of lives.”

“There are more Americans than … we can count who are sick now, or are going to be sick in the future, whose lives will be saved by Prop 71,” patient advocate Joan Samuelson said in another ad. The sponsors of the measure also predicted that CIRM-generated cures would drastically reduce health care spending. No one made specific promises for the 10-year timeframe initially planned for CIRM’s work, but miracles seemed just around the corner.

“You can support embryonic stem cell research, which we do and did, and still be pretty appalled by what was going down,” said Darnovsky. “The airwaves were swamped with guys in white coats who were identified with their academic affiliation even though they were principals of private companies (some of which later got CIRM grants), and basically saying, ‘We’re going to have cures by Christmas.’”

Mills, who was not involved at the agency’s genesis, called the idea sold to voters — impending, sweeping breakthroughs — “naïve.” Radical medical change usually takes decades from idea to cure.

“But here we are,” he said. “My sole mission is to create as much value for the resources we have left, for the people of California, that I can.”

California vs. NIH

Even under Bush-era restrictions — rescinded after President Barack Obama took office — the NIH continued to support substantial stem cell research.

Since 2006, it has spent $13.4 billion on stem cell science, six times CIRM’s budget during that period. But NIH fully or partly funded 571 clinical trials, according to STAT’s review — more than 20 times the number backed by California.

While NIH in that period funded 50 Phase 3 clinical trials of stem cell therapies — generally the last step before seeking approval to market a product — CIRM has supported just three.

One, the study of a treatment for skin cancer involving immune system cells, was terminated by Caladrius Biosciences, the grantee, when it determined that existing treatments had overtaken its approach. The others — testing altered immune cells to treat brain cancer and bioengineered veins to manage vascular problems — show promise, but are still recruiting patients and will not be completed for several years, according to the NIH website, ClinicalTrials.gov.

Daley called the NIH comparison “a little unfair,” because that agency emphasized hematopoietic stem cells — blood-forming cells from bone marrow, which had been studied for decades — unlike CIRM’s sharper focus on cutting-edge embryonic stem cells. A little more than half of CIRM’s awards have gone to support research on embryonic or induced pluripotent stem cells, which are created by modifying adult stem cells to act like embryonic ones.  It gave about a quarter of its awards to support adult stem cell work, and the rest for other research areas.

“In the early days of CIRM, the feeling was that the field needed deep and direct investments in the … fundamental foundation of stem cell biology, because the translational opportunities were not yet mature, certainly not using embryonic or induced pluripotent stem cells,” Daley said.

Paul Knoepfler, a University of California, Davis, researcher and CIRM grantee who writes a popular stem cell blog, agreed. “One almost had to invent a system for figuring out what would be a safe way to proceed with embryonic stem cell clinical trials because those cells are really much more powerful and also have different kinds of risks,” he said.

Knoepfler said he expected the basic science to spark clinical breakthroughs in time, citing, for example, promising early work on reversing paralysis from Asterias Biotherapeutics, located in Fremont, southeast of San Francisco. Jake Javier, a patient in a CIRM-supported Asterias trial, lost almost all use of his limbs in an accident diving into a swimming pool. He recently received an injection of a type of cell derived from embryonic stem cells that can help protect nerve cells damaged in spinal cord injuries. Javier has since regained some use of his arms — one of five patients in early trials who have shown improvement that CIRM and the researchers attribute to the treatment. The results have not yet been published in a peer-reviewed journal.

In addition, Mills noted that grants for new labs included provisions that required grantees to raise other funds — to “leverage” economic benefits to taxpayers — and to assist future trials. The institute, for example, gave $30 million to the contract research firm Quintiles to create facilities that will conduct preclinical research, manage regulatory issues, and provide clinical support for CIRM-supported stem cell trials, all at a steep discount.

“There is no iPhone 4 without an iPhone 3 or a 2 or a 1,” Mills said. But in a world where technology advances rapidly — Apple is already selling the iPhone 7, after all — voters are still waiting for the promised cures.

So far, CIRM has one literal poster child to show it can deliver. Four-year-old Evangelina Padilla Vaccaro, featured on the cover of CIRM’s recent annual report, was born with severe combined immunodeficiency. She had no operating immune system. Some such children have been kept alive in sterile isolation tents for a time — hence the term, “bubble baby” — but most have died from infections within a few years. A lucky few who received matching bone-marrow transplants survived.

UCLA’s Dr. Donald Kohn, supported by CIRM, cured Evangelina by extracting some of her blood stem cells, altering them to correct the genetic defect, and returning them to her body. She’s now thriving with a robust immune system.

That little girl, and 29 children like her, “are getting immunizations, they’re going to school, they’re swimming in public swimming pools, they’re eating dirt, they’re doing all the things that little kids are supposed to do,” said Steven Peckman, associate director of UCLA’s Broad Center of Regenerative Medicine and Stem Cell Research. “They get sick and their own bodies attack those viruses and bacteria. And they survive. If there’s going to be something that’s called a cure, this is it.”

That inspiring triumph was partly funded by CIRM, but Kohn’s work took three decades, was well underway long before CIRM existed, and didn’t involve embryonic stem cells — the key gap CIRM was founded to fill. Evangelina was saved by hematopoietic stem cells, the type that NIH has been more focused on.

Racing the Clock

As much as Mills defends the old CIRM, last year he announced “CIRM 2.0” — a drastic shift to speed up clinical trials before the organization’s clock runs out.

Asked whether Californians are getting good value for their money from CIRM, Mills cited economic gains to the state, then added: “I focus a lot more on the return in relief of human suffering. We’re just starting to lift off the ground on that. I hope in history, in time, the record shows CIRM was a great deal.”

To that end, CIRM has said it will focus in 2017 primarily on clinical trials and work it hopes will lay the foundation for such studies.

If the studies show clear results, Mills said, “I think it will be self-evident that CIRM should be continued” with new funding.

Lott, the state overseer, called CIRM 2.0 long overdue. “They needed to at least create something a little more tangible, more specifically measurable, for the billions of dollars that they’ve allocated,” he said. “But it may be a little too late,” he added, to convince taxpayers that CIRM should get a new infusion of funds, given its governance structure.

Even Daley — unbridled in his enthusiasm for CIRM’s work — hesitated when asked if it was a model to emulate, though for a different reason. “I reluctantly endorse it,” he said, “in part because I think it’s another argument that allows the federal government and the NIH to abdicate its responsibility for investments in biomedical research, which benefits us all.”

Yet, just as President Bush’s policy on stem cells led to CIRM’s creation, the incoming Trump administration might bail out the institute just in time. The president-elect has not weighed in on federal funding, but Representative Tom Price, his nominee for Health and Human Services secretary, has long opposed federal funding of embryonic stem cell research — a view shared by Vice President-elect Mike Pence.

“If the Trump administration takes a hostile mind toward embryonic stem cell research, and perhaps some kinds of important fetal research are restricted as well, it may give another source of energy to CIRM,” said Knoepfler. “I don’t think Californians like to be told what we can or cannot do, research-wise.”

This story was originally published by STAT, an online publication of Boston Globe Media that covers health, medicine and scientific discovery.