California’s Stem Cell Agency Will Run Out Of Money In Three Years. Should Voters OK Spending More?

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Evangelina Padilla-Vaccaro – a pink bow in her hair – was likely the first 6-year-old ever to address the leaders of California’s $3 billion stem cell research program.

“Thank you,” she whispered.

Her mother said more: “Thank you for keeping my family complete.” Alysia Padilla-Vaccaro’s voice cracked, and tears flowed on that cool December morning at the meeting at an Oakland hotel.

Evangelina had much to be thankful for. She was born with “bubble baby” syndrome, which meant that she had no functioning immune system. Scientist Donald Kohn of UCLA cured her of the rare affliction by using her own blood stem cells to alter a troublesome gene. It was an experimental treatment not readily available to the public at large. Kohn’s research has been supported with nearly $52 million by the state stem cell agency, known formally as the California Institute for Regenerative Medicine.

Evangelina’s story is just what Californians hoped for when they created the Oakland-based agency in 2004 via Proposition 71. Voters were told that stem cell therapies would ease afflictions found in nearly 50 percent of California families. The agency would create the “cures for tomorrow,” then-Gov. Arnold Schwarzenegger said.

Since its first awards in 2005, the agency has given away money at a rate of $22,000 an hour, seven days a week, 24 hours a day. But it has yet to come up with a therapy that reaches the general public despite rosy expectations raised by the ballot campaign.

Today, the future of the program is unclear. The agency calculates that it will run out of cash in just three years. Whether it lives on could depend on the likelihood of another multibillion-dollar bond issue, not to mention the success – or the lack of success – of as many as 60 or more clinical trials and even the policies of the newly elected president of the United States, Donald Trump.

Stem cell therapies, it turns out, are expensive and difficult to bring to market, and their use may be limited to a handful of diseases – albeit some big ones such as diabetes. On Monday, Nobel Prize-winning stem cell scientist Shinya Yamanaka said as much in an interview with The New York Times. Because of a wide variety of constraints, he said, “We can help just a small portion of patients with stem cell therapy.”

In this context, heartwarming stories of individual patients such as Evangelina could be some of the strongest selling points for CIRM’s continued existence. They could fire the enthusiasm of voters and embolden businesses to partner with CIRM to bring therapies into the marketplace. The number of these emotional stories is increasing.

Evangelina was not alone at the CIRM meeting last month. Three more patients stepped up during a look at the agency’s performance. They included a 22-year-old man, also with a rare immune-deficiency disease, a paralyzed 19-year-old man and a 70-year-old cancer patient – all of whom had experienced major improvements during clinical trials. All told, the agency has pumped $113 million into the research that has benefited the four patients.

Evangelina’s story had special significance for Jan Nolta, head of the UC Davis stem cell program. Nolta began her career working with Kohn at Children’s Hospital in Los Angeles in early research involving the “bubble baby” affliction.

“CIRM has funded Don’s continued work in this area, and he has now functionally cured over 20 children with this disease,” she said in an email. “These kids now need no expensive medicine and treatments to keep them alive. They are functionally cured.”

In Evangelina’s case, she was able to join her fraternal twin sister, Annabella, in living a normal childhood.

CIRM funding has also fueled the growth of the UC Davis stem cell program, which barely existed before the creation of CIRM. Today, Davis has chalked up $129 million from the agency. “We have 16 stem cell or regenerative medicine clinical trials ongoing or recently completed, with more than 20 in the pipeline,” Nolta said.

Davis ranks as the No. 5 recipient of funds from the agency, trailing only Stanford, $314 million; UCLA, $269 million; UC San Diego, $170 million; and UC San Francisco, $139 million.

Since CIRM’s inception, it has awarded $2.2 billion to 853 researchers and institutions. It estimates that it will award another $692 million before money runs out.

Like most other recipient institutions, UC Davis has representation on the CIRM governing board. The California Stem Cell Report, which has monitored the agency since 2005, has calculated that about 90 percent of the agency’s cash has gone to institutions with links to past or present board members. Those members are barred from voting on awards to their institutions, but they do vote on the nature of the award rounds and approve the rules.

Concerns about conflicts of interest have long been a bugaboo for the agency. Last September, The Sacramento Bee reported that its former president, Alan Trounson, received $443,500 in total compensation after being named in 2014 to the board of directors of StemCells Inc. of Newark. Trounson’s appointment to the company’s board came only seven days after he left the agency at the end of June 2014.

Trounson was replaced by C. Randal Mills, who had been president of Maryland-based Osiris Therapeutics Inc. Under Mills’ leadership, Osiris was the first company in the world to commercialize a stem cell drug, qualifying it for use in Canada.

Mills and the CIRM team – currently made up of 48 people – recrafted the agency’s objectives and established measurable benchmarks for success. The agency is financing 27 clinical trials and has more than 250 projects under its management.

The agency has experienced a few hiccups since Mills arrived. He acknowledges he is still working to attract businesses to turn scientists’ research into cures.

An ambitious effort to create a unique, public-private, $150 million enterprise to develop stem cell therapies and cures stumbled late last year when no qualified applicants surfaced from the private sector. The agency hopes to recast the proposal in such a manner that it will find a partner.

One of those watching the agency since its beginning is Hank Greely, director of the Center for Law and the Biosciences at Stanford University. He said in an email, “CIRM has been spending money from Proposition 71 for about 10 years. Once initial hopes of finding low-hanging fruit disappeared, this kind of slog toward treatments became inevitable.

“The next few years should determine just how good California’s investment has been. It is encouraging to see CIRM supporting so many clinical trials; it will be much more exciting when – and I do expect ‘when’ and not ‘if’ – one of those trials leads to an approved treatment.”

John M. Simpson of Consumer Watchdog of Santa Monica has also observed the agency for years. “CIRM’s fundamental problem is that supporters of Proposition 71 wildly oversold” the agency by promising quick, miraculous cures, he said in an email.

“CIRM-funded research has made important contributions to science, but has yet to deliver what voters were promised,” Simpson said, noting that management has improved under the regime of CIRM Chairman Jonathan Thomas and Mills.

Simpson, who was heavily involved in development of the agency’s intellectual property policy, also raised questions about the failure of the agency to generate the $1.1 billion in royalties for the state promised by its backers.

“The CIRM annual report cites the number of ‘inventions’ CIRM has funded – more than 180. What share of royalties have taxpayers received as a result? Anticipated revenue from CIRM-funded inventions was a big selling point for Proposition 71,” Simpson said.

Another selling point for the ballot measure came inadvertently from former President George Bush, who had restricted federal funding for human embryonic stem cell research. Backers of the ballot measure said it was needed to compensate for Bush’s action. His restrictions were lifted by President Obama. But many researchers are worried that the Trump administration will once again limit federal support for stem cell research.

“The election of Donald Trump and the continuation of a Republican-controlled Congress could create an increased need for extending CIRM,” Greeley said. “If the federal government pulls out of some research on basically religious grounds, California may want to step in again.”

Simpson has another view. While CIRM has made important contributions to science, its results “in no way justify another bond issue,” he said. His opinion: The agency should continue only under the normal state budgetary process.

Mills avoids public discussion of such things as bond measures. But at a meeting last fall, he likened the research program to a “giant flywheel.”

“It takes a long time to get started, and you move it imperceptibly. Once that thing gets turning, it’s almost impossible to stop.”


Jensen, a retired Bee editor, has covered the agency since 2005 and published more than 4,000 items regarding CIRM on his blog, the California Stem Cell Report.

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