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Calif. Stem Cell Agency Aims To Strengthen Ties With Biotech And Pharma Under Updated Strategic Plan

The California Institute for Regenerative Medicine is reviewing a draft update of its strategic plan that calls for it to build relationships with biotechnology and pharmaceutical companies, in hopes of speeding up the development and commercialization of new drugs based on regenerative medicine technologies.

CIRM's draft plan includes among its goals "collaborating with industry," and lays out five strategies designed to fulfill that goal:

• Ensure that CIRM's internal programs, policies, and regulations "embrace" industry participation.

• Reach out to the pharmaceutical and biotechnology industry to better understand its needs and encourage its participation in CIRM programs.

• Serve as a resource to support industry involvement in stem cell research and development.

• Educate key stakeholder constituencies about industry's critical role in accomplishing CIRM's mission.

• Provide loans to support later stages of research leading to clinical trials and new therapies.

"In each aspect of its work, CIRM will be mindful of the benefits of industry participation as well as the impact of CIRM policies and practices on such participation, removing obstacles where appropriate," concluded the draft strategic plan, titled 2009/2010 Strategic Plan Update: Accelerating the Opportunity for Cure. "Working together, CIRM and its industry partners have unlimited potential to realize CIRM's lifesaving mission."

The plan was made public at the Aug. 19-20 meeting of CIRM's governing board, the Independent Citizens Oversight Committee. At the meeting, CIRM President Alan Trounson briefly discussed the draft report with ICOC members, from whom he invited comments.

"We're engaging the biotechnology, pharma, and investment sectors as significant partners," Trounson said, according to a transcript of the Aug. 20 session. While CIRM has done "fabulously well" in the not-for-profit sector, "there's a considerable critique that we've not done … as well with the biotechnology and the other two sectors. In fact, we really haven't done very much at all with the particular investment sector," he added.

CIRM is expected to forge ties with one branch of the investment community later this year, when the ICOC selects one or two of the three banks now under consideration to oversee the agency's new $500 million loan program, intended to assist startups by helping fund preclinical and clinical trials of new therapies based on their research, while generating revenue for the state through interest payments. The three banks are Comerica Bank, Silicon Valley Bank, and Square 1 Bank, according to a June 30 transcript of the ICOC's finance committee.

That program will include provisions to assure for California's state and local governments "preferential" pricing of drugs emerging from CIRM-funded research, as well as ensure the drugs will be affordable for uninsured state residents, according to the draft strategic plan update.

The strategic plan update's emphasis on closer ties with industry worries a longtime CIRM observer.

"CIRM seems to be saying, 'We want to partner with everyone under the sun,' and that's the kind of thing I'm worried about," John Simpson, stem cell project director at Santa Monica, Calif.-based nonprofit Consumer Watchdog, told BioRegion News. "I am concerned about this emphasis on a closer relationship with business entities without really enough spelling out of how that's all going to work."

Simpson said one worrisome example of what he considers too close an alignment with business interests came when the ICOC brief considered changes to the agency's proposed intellectual property policies that would have altered the definition of "exclusive licensee" to "Any individual or entity receiving by license directly from a grantee, grantee personnel, or collaborator all rights to make, use, sell, offer for sale and/or import in one or more fields of use or territories a CIRM-funded technology or a CIRM-funded invention."

An earlier version of the proposal defined exclusive licensees as "any individual or entity receiving all rights to make, use, sell, offer for sale and/or import in one or more fields of use or territories a CIRM-Funded Technology or a CIRM-Funded Invention, whether by assignment, license, or other mechanism," without use of the word "directly."

Another proposed change would have allowed grantees to "retain or transfer all or a portion of any of grantee's right, title or interest to any CIRM-funded invention or CIRM-funded technology or CIRM-funded research and to any patent or patent application relating thereto." One proposed IP policy requires that "grantees must ensure that all arrangements entered
with grantee personnel and collaborators, and all transfers of all or any portion of right, title, or interest concerning CIRM-funded research, CIRM-funded inventions or CIRM-funded technology comply with these regulations.”

Simpson argued that the changes would have created a loophole allowing business recipients of CIRM funding, namely buyers and assignees of license holders, from having to ensure the drugs they produced through CIRM-funded research were affordable and accessible to state residents without insurance. CIRM withdrew the proposal after Simpson wrote a letter to the ICOC complaining about the change.

"When push comes to shove, and the lights are kind of dark, they're trying to sneak a thing through that would exempt a lot of businesses from those [access] requirements. That's the kind of thing that I'm worried about. And that seems to be the sort of attitude that is being espoused in the strategic plan," Simpson said. "They need to remember that they're not only a funding agency, but that they're also a regulatory agency. And they shouldn't lose sight of those things.

Speaking with BRN, Simpson acknowledged that "it is necessary that business has a key role in bringing about cures."

"But business has all too often proved that it needs oversight and regulation, particularly when you're talking about things that affect people's health," he added. "One of the appropriate roles of a governmental agency when there are clinical trials is not necessarily to partner with the business that is performing the clinical trial, but to make sure the clinical trial is done appropriately."

CIRM has countered Simpson's arguments by contending that the promise of quicker development of new drugs through closer collaboration with industry fulfills the agency's mission and outweighs concerns about potential conflicts.

"Without the injection of such expertise into CIRM programs, either independently or through formal collaborations between industry and universities and other not-for-profit organizations, CIRM's ability to accomplish its mission will be jeopardized," the strategic plan concluded. "Therefore, one of CIRM's primary goals is to promote and facilitate the involvement of corporations in CIRM's programs so as to harness the resident expertise and resources in regulatory, clinical, manufacturing, and R&D areas."

To that end, the draft strategic plan update recommended:

• Including industry experts "who are qualified to recognize what is necessary for commercial success" on the Grants Working Group that evaluates grant applications.

• Launching regular consultations with life-sci business executives on industry trends and needs, as well as on CIRM's interactions with industry.

• Joining or establishing formal liaisons with national industry groups with a stake in stem cell research, such as the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America, as well as regional California life-sci groups such as San Diego's BIOCOM, the Los Angeles/orange County region's SoCalBio, and BayBio, which represents the industry in the San Francisco Bay Area and northern California.

• Providing a conduit for communication with the US Food and Drug Administration and other federal agencies, to allow for conveying information on regulatory issues and concerns relevant to stem cell research.

• Raising awareness with state lawmakers and the public about "industry's unique ability and extensive track record of success in bringing valuable therapies to patients, and the need for pharmaceutical or biotechnology companies' involvement to help drive similar stem-cell based therapeutics."

• Advocating for policy changes and "clarifications of various state and federal agency rules that hinder industry involvement in stem cell research and development." That effort, the draft strategic plan update said, might involve submitting amicus briefs in court cases, submitting "white papers" to government agencies, and testifying before governmental bodies.

The draft report also concluded that with President Obama's administration increasingly expected to boost the National Institutes of Health budget for basic research grants, CIRM should "concentrate support on the translational, preclinical and clinical programs that will deliver applications in cell therapeutics to patients."

The commitment to closer cooperation with industry also addresses occasional criticism CIRM has faced because most of the funding it has approved for research has been to investigators based at academic and independent nonprofit research institutions, rather than at biotech or pharma businesses.

As of Aug. 21, according to CIRM's funding summary on its web site, the agency has awarded 307 grants totaling about $781.9 million to 307 institutions, seven of them businesses that won a combined nine grants totaling nearly $15.5 million. Of the top 10 recipients of CIRM grant funding, eight are academic institutions, one is an independent nonprofit research center (Scripps Research Institute), and one a combination of research and academic institutions (the Sanford Consortium for Regenerative Medicine in San Diego, which combines Scripps with the Salk Institute for Biological Studies, the Burnham Institute for Medical Research, and the University of California, San Diego).

The issue of CIRM funding for businesses surfaced at ICOC's Dec. 10 meeting, during which the ICOC awarded grants to six life sciences businesses totaling nearly $5.3 million [BRN, Dec. 15, 2008].

Until then, the only life-sci business to win CIRM funding was San Diego-based Novocell, which in June 2008 received a $48,950 grant to help it develop a cell-replacement therapy product for insulin-dependent diabetes.

"We think that a task force of some … means of public input from industry would be very important at this time," Daryl Basham, vice president of San Diego-based DNAmicroarray, told the ICOC, according to a transcript of the meeting.

Basham said companies like his would stand a better chance of obtaining CIRM funding if the stem cell agency revised its definitions so that principal investigators like those found in academic institutions would not be expected to have the same duties as the public developers employed in many life-sci businesses.

"It seems like the force of or the thrust of the background for a PI seems to be … his or her strong publication track record, the fact that they have advanced degrees, and that they can manage a particular project," Basham told the ICOC board. "The PD wants to put a product into development or into the stream of commerce."

Addressing the ICOC last month, Trounson acknowledged growing interest by life-sci companies in research collaborations with CIRM, as well as what he said was room for improvement in the agency's relations with industry.

"Pharma is very much now in our interest. They're very close to us. They're wanting to become partners. They're looking at ways to enhance their relationship with us," Trounson said. "And the biotechnology industry, while disappointed at not getting the attention and the rewards for their grant applications, remain steadfastly interested in being part of the delivery program. And we need to enhance and engage in that sector better than we've been doing."

Email author Alex Philippidis at: aphilippidis@genomeweb.com