California Stem Cell Institute Unveils ‘CIRM 2.0’

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The first life that California's stem cell research funding agency saves may be its own.

With the clock ticking 10 years and $2.2 billion into an as-yet-unfulfilled quest for new cures, the San Francisco-based California Institute of Regenerative Medicine is overhauling itself with a new, business-friendly approach aimed at speeding therapies to patients' bedsides.

The board of CIRM, as the agency is known, on Thursday voted to fund the concept plan with $50 million through the end of June. It is designed for clinical-stage projects ready to start within 45 days of being approved for funding.

The move is critical — for the millions of people with a wide ranges of diseases who could be helped, and for the future of the stem-cell institute itself.

CIRM leaders always stressed that the road from research to the clinic would is unavoidably long and winding. But now, as they talk of seeking another round of cash — possibly asking taxpayers for $5 billion to make its mission permanent — they realize that a high-profile medical victory in the next 24 months may be the only realistic way to make their case.

To date, CIRM has spent some $2.2 billion of $3 billion in state bonds, which were approved by voters in 2004. That money has gone toward shiny research labs, workforce development and funding research into ways to direct and manipulate cells that form, replenish and repair the heart, skin, liver and other organs.

In all, 285 programs are in CIRM's portfolio, aimed at curing diabetes, AIDS, Alzheimer's disease and other deadly conditions.

Along the way, the agency also has battled foes and, at times, itself. Those struggles have highlighted operational challenges and have led to conflict of interest charges as well as raised questions about how the agency's money is parsed.

But as CIRM-backed programs push into clinical trials, new President and CEO Randy Mills is leading an all-out charge to make the agency more responsive with its remaining six years of cash — and to show the results that could convince others that CIRM must continue to be a long-term stem cell research player.

"We are playing for the long game here in some respects," Mills said.

Delays equal deaths

Mills and other agency officials call the remake CIRM 2.0. The plan centers on radically shortening the amount of time it takes for CIRM to get cash into the hands of companies doing research.

CIRM's rigorous grant and loan review process — including financial screening, an external scientific advisory board and full CIRM board approval — takes nearly two years on average. CIRM 2.0 is designed to cut that decision time to 90 days by creating three buckets of programs — late-stage preclinical products, clinical stage projects and follow-on funding for projects that need a boost — for which applications are taken monthly rather than in bulk.

CIRM also would accelerate the review process, though it wasn't clear in an agency document outlining the plan how that would be done. Applicants today must pass through a couple of reviews, including a scientific review by other researchers.

CIRM's traditional checks-and-balances grant-review process "may be OK in academic institutions," Mills said at the Piper Jaffray Healthcare Conference earlier this month. "But from a corporate standpoint, (it) could cost you more to wait 22 months than the funding is worth."

Touching on his experience as president and CEO of regenerative medicine company Osiris Therapeutics Inc., Mills painted a stark picture of what that delay means im medical terms, using the example of the graft-versus-host disease common in bone marrow transplant recipients.

"Twenty-two months equals 700 dead kids. … That's a real delay," he said. "We said, 'That's not OK. We've got to find a way to be a better partner, a more responsive partner.'"

What's more, CIRM 2.0 will also start funding work done in California for companies that are not based here.

"We're looking for the best programs," Mills said. "We're not just looking to fund more programs."

Plans for a warp-speed CIRM is not without its critics.

Some researchers think the agency should be investing more in basic stem-cell research that may provide the progress that could give private investors confidence. They include people like Dr. Arnold Kriegstein, director of the stem cell program at the University of California, San Francisco.

"A modest investment in basic science will pay greater dividends," Kriegstein said.

A speed-focused CIRM may also not be best for taxpayers, said John Simpson, an advocate with Consumer Watchdog and a frequent CIRM critic.

"I understand that they want to be more efficient," Simpson said. "I question whether they can do it with the necessary and thorough vetting of proposals."

Trials and errors

There's no question that CIRM-funded research is making progress. In August, for example, Menlo Park's Asterias Biotherapeutics Inc. received the Food and Drug Administration's blessing to start a study of its experimental stem cell therapy for spinal cord injury patients, and Viacyte Inc. of San Diego was told it could start testing its treatment for Type 1 diabetes.

Still, those programs could take five years or more to progress through clinical trials to an FDA approval.

Spinal cord injury is likely among the first candidates for FDA approval of a therapy that uses embryonic stem cells, or those that are obtained by destroying a human embryo, because the number of cells required is relatively small, said Jane Lebkowski, Asterias' president of research and development. What's more, because the science behind stem cells has matured, she said, the goals of a spinal cord trial are better defined than they were three to five years ago.

The path traveled by Asterias is in many ways indicative of the inherent difficulties of life sciences moon shots that may — or more often, may not — turn into therapies years or decades in the future.

The program originated at Geron Corp., which landed a $25 million CIRM loan in May 2011. Geron enrolled five newly paralyzed patients with spinal cord injuries in a Phase I safety trial. Yet before even learning the trial's results, Geron stopped the study that November in a cost-cutting push. It repaid the roughly $6.5 million it had received from CIRM.

The trial largely went dark until Geron founder Michael West, now CEO of Alameda's BioTime Inc., inquired about picking up the work. In a creative financing deal that including forming Asterias as a subsidiary and redistributing 6.5 million shares of Asterias stock to Geron shareholders, BioTime ultimately got control of the technology.

West also is vice president of technology integration at Asterias, and roughly two-thirds of Asterias' 22 employees, including former Geron chief scientific officer Lebkowski, came from Geron.

The program received a fresh $14.3 million CIRM loan this summer.

"It feels great to have this opportunity again," Lebkowski said.

'Unexpected results'

Other CIRM-funded therapies are wending through the scientific process, but CIRM still needs a high-profile success story if it wants taxpayers to support another multibillion-dollar bond program.

As it is, the state is on the hook for the roughly $3 billion in interest payments to bond buyers unless CIRM-backed drugs get to market and pay part of that from royalties.

Bob Klein, the man behind the 2004 ballot measure that created CIRM, Proposition 71, is independently contemplating a November 2016 bond measure, said Jonathan Thomas, chairman of the agency's oversight board. Klein's decision on whether to pursue a new ballot measure will largely depend on the results of public opinion polling next year.

The last of CIRM's awards are expected to be approved in 2020. Because those likely will be multi-year awards, the last Proposition 71-related cash would be disbursed in 2023 or 2024.

CIRM is looking at a number of strategies, Thomas said. Those could include alliances between Big Pharma and CIRM grant winners as well as link-ups of disease-specific philanthropies and CIRM projects.

But if CIRM leaders want to win over the public for another multibillion-dollar round of funding, they must explain the agency's role in a complex clinical trial process that offers chances to fail at every twist and turn. Only 64 percent of therapies in the first phase of clinical development make it to Phase II, according to one study. Less than one-third of therapies rise from Phase II to Phase III, and 60 percent of those go from Phase III to a new drug application with the FDA.

Even then, the study funded by Sagient Research Systems and the Biotechnology Industry Organization found, the FDA rejects 17 percent of new drug applications.

Given that the scientific understanding around how to control and track stem cells is evolving and that researchers don't have a deeply documented safety record in humans, FDA approvals will likely be lower for stem cell therapeutics, said UCSF's Kriegstein.

"In many, many ways it's underappreciated how CIRM has leveraged (its money). It's led to unexpected results that improve our understanding of stem cells," Kriegstein said.

Translating that understanding into cutting-edge cures, however, carries greater risks, he said.

"Even in pharma, with all the experience and depth, the likelihood of success is relatively small," Kriegstein said. "The stem cell pathway is less certain. There's bound to be more risk."

Ron covers biotech, higher education & sports business.

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