Following the passage of Prop. 71 in California, which allocates $3BN over 10 years to the California Institute for Regenerative Medicine (which will give out the grants and loans to the California universities and related labs) for stem cell research, most thought that it would reinvigorate the industry which had been in a bit of a lull due to the ban on federal funds for therapeutic cloning. But few predicted that it would be reinvigorated so quickly and with such enthusiasm.
The new money in California has set off a new "gold rush" of sorts, with at least one company outisde of California already committing to opening a lab in California just to be eligible for the bonanza. Advanced Cell Technology, Inc. headquartered in Worcester, MA, is putting plans into motion to set up a shop in the Bay Area. More impressive to me, the CEO has personally moved from Massachusetts to the Bay Area (having lived in both places, they're are not immediately interchangeable and it may be a bit of an adjustment). This sort of activity will be a huge boon to the California economy, bringing in more corporate income and property taxes (not to mention increased consumer spending by employees of companies moving there).
It's also ratcheted up the competition, and we may soon see some good-natured smack-talking between the coasts. New Jersey has recently opened its own center, the Stem Cell Institute of New Jersey. Those working at the center are already recruiting for researchers, but in the wake of California's new funding, they understand that the money in California will be hard to beat. The good news is that all of the $300M per year likely won't be going to just one lab, and will be passed around in parcels, so if the Institute offers more attractive perks to researchers (more autonomy, a piece of future licensing revenue, etc.) that they may not receive at either a private company or academic center in California, New Jersey will still enjoy its spot near the top of the biotech research ladder.
One of the aspects of Prop. 71 that I am looking forward to seeing is the makeup of the Independent Citizen's Oversight Committee (29 people chosen from various aspects of government and industry) and what rules they eventually suggest be put in place for the doling out of funds and use of resulting technology. According to the language of the proposition, the ICOC is supposed to come up with a modified version of the Bayh-Dole Act, establishing standards to be used in all intellectual property agreements regarding the patents, royalties and licenses for all technology coming out of research funded by grants or loans (Cal. Health & Saf. Code, Sec. 125290.30(h), as will be implemented). The ICOC will also be setting out the informed consent rules for research conducted with the funds.
And a couple final interesting tidbits for practitioners whose clients may be receiving funds - the bill explicitly states that the Institute can sue and be sued, but all grantees shall indemnify or insure and hold harmless the institute for all losses, etc., arising out of the research conducted by the grantee with no qualification being made for those losses coming from the grantee's own actions or omissions, never mind them being willful or grossly negligent. So if grantees are completely on the hook with regard to what happens, even if following the rules set out by the ICOC (now, the case would likely be dismissed or settled, but that's still after some sure-to-be-nasty publicity and expenses just to file a response to the complaint). While this isn't awfully unusual to receive government funding, it's good to know as your clients are thinking of obtaining funds and then conducting the research.
If I read the text of Proposition 71 right, there will be some sort of retained financial right (royalties?) that California will have in connection with grants. It appears that it will be more than just a Bayh-Dole style retained "march in" right. I'm curious to see what sorts of financial terms will be presented to businesses working on very early stage stuff...
Also, I'm curious whether the focus on stem cell research might miss the boat. I'm always weary of government trying to pick winners in science or business (or both, in this case), so I wonder if California might be better served by grants to biotechnology generally, including but not limited to stem cell technology based companies. One argument in favor would be this fills the gaps where NIH leaves off, but these grants seem to be targeted at a different pool of possible recipients than NIH grants are.
- Jeff Donohue
[My personal view, not the view of my employer...]
Posted by: Jeff Donohue | November 11, 2004 at 07:01 AM
Hi Jeff -
You're right (or so I think) about the retained financial rights, so yes, it will be more than just march-in rights. I share your basic concern about government leaping on the bandwagon for any one technology (and also for shutting the door on pursuing a certain technology). I'm not as concerned here as they've given themselves an "out" with regards to where the money is directed. Section 2 of the Constitutional amendment will allow the Institute to direct funding not only to stem cell research but also "other vital research opportunities" related to "major diseases, injuries and orphan diseases." So it's an incredible amount of money but if in a few years it looks like there really won't be promise in the area, they can start directing the monies to other areas of research that touch on the same diseases, but are for different therapies. I think this funding will at least be a good start to see if there is something to stem cell therapies, so that we don't close off a potentially large avenue to cure the diseases that afflict so many.
No matter what the therapy, when the science is in its infancy, there is always a chance it won't work out after all. But, IMHO, it's better to explore it a bit and at least check out what the potential could be rather than cutting it off at the knees.
I think the NIH grants would be there for this pool if the current administration did not insist on its policy of no federal funds for embryonic stem cell lines and research.
Posted by: Cece Gassner | November 11, 2004 at 08:15 AM
Hi Jeff -
You're right (or so I think) about the retained financial rights, so yes, it will be more than just march-in rights. I share your basic concern about government leaping on the bandwagon for any one technology (and also for shutting the door on pursuing a certain technology). I'm not as concerned here as they've given themselves an "out" with regards to where the money is directed. Section 2 of the Constitutional amendment will allow the Institute to direct funding not only to stem cell research but also "other vital research opportunities" related to "major diseases, injuries and orphan diseases." So it's an incredible amount of money but if in a few years it looks like there really won't be promise in the area, they can start directing the monies to other areas of research that touch on the same diseases, but are for different therapies. I think this funding will at least be a good start to see if there is something to stem cell therapies, so that we don't close off a potentially large avenue to cure the diseases that afflict so many.
No matter what the therapy, when the science is in its infancy, there is always a chance it won't work out after all. But, IMHO, it's better to explore it a bit and at least check out what the potential could be rather than cutting it off at the knees.
I think the NIH grants would be there for this pool if the current administration did not insist on its policy of no federal funds for embryonic stem cell lines and research.
Posted by: Cece Gassner | November 11, 2004 at 08:16 AM
I am a 50 year old woman with ms that I have had for 18 years. Last month I traveled from New York to SanDiego so that I could receive a cord blood stem cell transplant in Mexico. The clinc in Mexico sent a shuttle to my hotel and picked up my self and others over 3 days to take us to Mexico for treatment. We should not have to go out of the country for this. Everyone is so hung up on the embryonic stem cells that they seem to miss the point that cord blood stem cells are proven to do as good (if not better) than the embryonic cells. I wish everyone would stop pushing and shoving and just get on with this research. Until then people will be going to Mexico and (after April) Toronto, Canada for these treatments. (By the way, I am seeing small improvements with my MS every week)
Posted by: ann philips | November 24, 2004 at 08:19 AM
Hi Ann,
I'm not aware of any proof of efficacy for embryonic stem cells or umbilical cord stem cells for treatment of MS. Can you direct me to literature that documents this PROOF? If its anecdotal, then don't bother.
thanks
Posted by: Fred | November 24, 2004 at 01:08 PM
Ann,
I do sincerely hope your MS improves.
I think we're talking about two different things, though. The ban that CeCe is referring to applies to funding research of embryonic stem cell lines; it does not cover non-embryonic stem cells (like umbilical cords). The ban is not the reason why you can't get the treatment in the US.
The fact that you couldn't get cord blood stem cell treatment for your MS in the US is a result of the fact that the FDA has not approved any such treatment yet. Based on what I've seen, the reason the FDA has not approved it is that there hasn't been sufficient scientific evidence presented to the FDA to demonstrate that it is safe and effective. While it may be the case that some day, someone will be able to demonstrate this (and there are many companies working on just that with huge financial incentives to succeed), right now it's certainly questionable.
You might find this link interesting:
http://www.quackwatch.org/06ResearchProjects/stemcell.html
- Jeff Donohue
Posted by: Jeff Donohue | November 30, 2004 at 10:02 AM