California Stem Cell Agency Shifts Focus to Clinical Treatments

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CIRM would soon help repay its own bond funding, through royalty payments from grant recipients and other boons to the state economy.

Proposition 71’s backers saw embryonic stem cells as a potential source of replacement cells for patients with injured spinal cords or disease-damaged hearts, nerves, and other organs. They sought state money because federal funding was restricted during the George W. Bush administration due to moral concerns that embryonic stem cells were derived from human embryos, such as those unused by clients at fertility clinics.

The initiative’s supporters designed CIRM’s leadership structure to insulate the $3 billion state fund from political forces. Rather than designating the state legislature to allocate the money, Proposition 71 gave control to a board comprised of the 13 research institutions, along with 10 patient advocacy group members; four life sciences executives not involved in stem cell programs; the CIRM chair, and its co-chair.

Many of the conditions that gave rise to Proposition 71 have eased, however. President Obama has increased federal funding for embryonic stem cell research. Scientists have also created versatile stem cells derived from adult cells such as skin—bypassing the controversy over the creation of embryonic stem cells.

But CIRM’s funding is now as important as ever, says Jim Scopa, a managing director at MPM Capital’s San Francisco office. In a constrained economy, venture capital has shrunk for startups in the life sciences, he says. Those startups need enough capital to move their products into the early clinical stages, when large pharmaceutical companies are willing to take over the funding role as partners.

“That’s where I think CIRM’s money could be very helpful,” Scopa says. MPM Capital is part of a broad venture firm syndicate backing the South San Francisco company iPierian, which has received $4 million from CIRM for a research program on neurodegenerative diseases. The company is using stem cells not as potential therapies, but as research tools that may help identify the best drug candidates.

CIRM has already made funding commitments of more than $1.7 billion, though some of that money is yet to be paid in installments that depend on the progress of individual projects. From that $1.7 billion, 14 California companies have shared in about $132 million.

As stem cell science advanced, CIRM began devoting a greater percentage of funding to potential therapies. Much of that work has been done by academic researchers under CIRM’s Disease Team grants. But more businesses are starting to get involved. Two companies, Regenerative Patch Technologies and TheraBiologics, were created to commercialize the work of two academic teams.

In October, CIRM approved $10.1 million for ViaCyte’s work on experimental diabetes treatments, and $9.3 million for Bluebird Bio’s research on therapies for a life-threatening blood disorder, B-thalassemia.

According to CIRM’s 2012 Strategic Plan, the agency has about $836 million left in uncommitted funds. Of that, it plans to spend as much as $700 million on preclinical studies and early stage clinical trials.

The Institute of Medicine panel advised CIRM to bolster the role of industry representatives on its governing board, advisory groups, and disease teams as it finances the path to commercialization of therapies. Such advisors, with experience in product development, manufacturing, and regulatory hurdles, could help CIRM use its funds strategically, the panel said.

The panel also warned that CIRM’s intellectual property policies could discourage large pharmaceutical and biotechnology companies from … Next Page »

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