OAKLAND, Calif. — It’s been more than a decade since California launched an unprecedented experiment in medical research by direct democracy, when voters created a $3 billion fund to kick-start the hunt for stem cell therapies.

The bold plan, a response to federal funding limits for embryonic stem cell research, was sold with a simple pitch: The money would rapidly yield cures for devastating human diseases such as Parkinson’s and ALS.

That hasn’t happened.


A major reason, a STAT examination found, is that the California Institute for Regenerative Medicine has been slow to move promising experimental therapies into clinical trials. The National Institutes of Health has supported three and a half times as many human trials of stem cell therapies, dollar for dollar, as the California agency has funded since it started making grants in 2006. Just two of its clinical trials have been completed.

“I am floored by the disparity,” said Jim Lott, a health care consultant and member of the state board that monitors the agency, known as CIRM. If the numbers are correct, he told STAT, “that doesn’t settle well with me as a voter. That doesn’t settle well with me as a taxpayer. That doesn’t settle well with me as a member of the oversight committee.”

CIRM has used most of the $2.2 billion in grants it has distributed so far to build labs and pay for basic research at public and private universities, such as Stanford and the University of Southern California, and private companies.

It has given more than $300 million to 27 projects that include clinical trials — though much of that funding also supported preclinical work. Meanwhile, the agency has committed about $540 million to new labs and buildings.

In part, that’s because its directors chose to focus on infrastructure early on, as well as bench experiments and animal studies given that the biology of embryonic stem cells was not well-understood and there are formidable roadblocks to moving into human studies. Much more is known about the bone marrow stem cells that are the focus of many NIH-funded clinical trials.

But critics have noted that many top grantees come from institutions that hold seats on CIRM’s governing board. The respected Institute of Medicine, in a 2013 review, said institutionalized conflicts of interest have raised questions about “the integrity and independence of some of CIRM’s decisions.” CIRM later enacted reforms that barred board members from voting directly on grants for their institutions. But the changes didn’t prevent other financial conflicts involving CIRM officers and grantees, and the flow of funds to board members’ institutions continued unabated.

“You could make an argument that California taxpayer money should go to build new facilities on state university campuses,” said Marcy Darnovsky, who directs the Berkeley-based Center for Genetics and Society, a public affairs nonprofit. “But I don’t see an argument for Stanford getting fancy new buildings from California taxpayer money.”

Stanford, whose endowment is among the top five nationally, and USC have received more than $70 million for major building projects, and hundreds of millions more for labs and research. Stanford alone has been favored with $1 out of every $7 CIRM has approved.

But scientists outside California said CIRM’s record is a strong one. CIRM-funded researchers have published nearly 2,000 scholarly papers. That output has helped vault California into the top ranks of stem cell science, said Dr. George Daley, the new dean of Harvard Medical School and a leading stem cell scientist who describes himself as an informal adviser and cheerleader for CIRM. “When I look at the progress my colleagues have made in California, I am duly awed,” he said.

The institute announced a year ago that it would reinvent itself to emphasize clinical research until it runs out of money in 2020 — unless voters grant a new infusion of cash. CIRM plans to fund 50 new trials with its remaining $692 million, of which 10 were announced in 2016. Just 17 trials were funded in its first decade of grants.

C. Randal Mills, CIRM’s CEO since 2014 and architect of its new strategy, said he welcomed comparisons that help benchmark CIRM’s progress. Mills, former head of Osiris Therapeutics, the first company to commercialize an approved stem cell treatment, declined to comment on STAT’s specific findings, but defended the initial emphasis on labs and basic science as underpinning future clinical work.

“We’re running our own race. … What we have to do is just continually get better” to benefit patients, Mills said in an interview. “If we’re behind [NIH], we’re going to get better.”

Lott’s teenage daughter was paralyzed in an automobile crash and he hopes for a stem cell cure. He supports the goals of CIRM and applauds much of its work, but he now has second thoughts about the governance structure, which allows board members’ institutions to benefit from CIRM grants, as well as its financing. The ballot question that created CIRM, Proposition 71, authorized bond sales to pay for the agency’s budget, raising the total cost for taxpayers to $6 billion including interest. Financial experts, however, said that relatively low interest rates paid on long-term bonds can offer advantages over funding so large a venture directly from state coffers.

Asked whether he would support a similar ballot measure today, Lott said, “We were all caught up in the time, and the events were different when we first looked at this. But not today. Not at all.”

Randall Mills
C. Randal Mills, CEO of the California Institute for Regenerative Medicine, in his office. Elizabeth D. Herman for STAT

‘Lives will be saved’

Californians emphatically supported CIRM, creating the stem cell colossus with 59 percent of the vote in 2004. Many were upset that President George W. Bush had sharply limited federal funding for work with embryonic stem cells, which are derived from early human embryos and able to develop into any type of tissue or organ.

But Proposition 71 also won because it was shamelessly oversold, consumer advocates and science policy experts said. Desperate patients, Nobel laureates, and A-list celebrities such as Michael J. Fox — the Hollywood star and Parkinson’s sufferer — predicted “cures” that would “save millions of lives.”

“There are more Americans than … we can count who are sick now, or are going to be sick in the future, whose lives will be saved by Prop 71,” patient advocate Joan Samuelson said in another ad. The sponsors of the measure also predicted that CIRM-generated cures would drastically reduce health care spending. No one made specific promises for the 10-year timeframe initially planned for CIRM’s work, but miracles seemed just around the corner.

“You can support embryonic stem cell research, which we do and did, and still be pretty appalled by what was going down,” said Darnovsky. “The airwaves were swamped with guys in white coats who were identified with their academic affiliation even though they were principals of private companies (some of which later got CIRM grants), and basically saying, ‘We’re going to have cures by Christmas.’”

Mills, who was not involved at the agency’s genesis, called the idea sold to voters — impending, sweeping breakthroughs — “naïve.” Radical medical change usually takes decades from idea to cure.

“But here we are,” he said. “My sole mission is to create as much value for the resources we have left, for the people of California, that I can.”

California vs. NIH

Even under Bush-era restrictions — rescinded after President Barack Obama took office — the NIH continued to support substantial stem cell research.

Since 2006, it has spent $13.4 billion on stem cell science, six times CIRM’s budget during that period. But NIH fully or partly funded 571 clinical trials, according to STAT’s review — more than 20 times the number backed by California.

Clinical trials of stem cell treatments, 2006-16: NIH vs. CIRM

Talia Bronshtein/STAT Sources: California Institute for Regenerative Medicine, National Institutes of Health. *Several CIRM trials included here were announced shortly after Sept. 30, 2016, the cut-off for the NIH data. **NIH spending for 2006 and 2007 is estimated because exact figures were unavailable.


While NIH in that period funded 50 Phase 3 clinical trials of stem cell therapies — generally the last step before seeking approval to market a product — CIRM has supported just three.

One, the study of a treatment for skin cancer involving immune system cells, was terminated by Caladrius Biosciences, the grantee, when it determined that existing treatments had overtaken its approach. The others — testing altered immune cells to treat brain cancer and bioengineered veins to manage vascular problems — show promise, but are still recruiting patients and will not be completed for several years, according to the NIH website, ClinicalTrials.gov.

Daley called the NIH comparison “a little unfair,” because that agency emphasized hematopoietic stem cells — blood-forming cells from bone marrow, which had been studied for decades — unlike CIRM’s sharper focus on cutting-edge embryonic stem cells. A little more than half of CIRM’s awards have gone to support research on embryonic or induced pluripotent stem cells, which are created by modifying adult stem cells to act like embryonic ones.  It gave about a quarter of its awards to support adult stem cell work, and the rest for other research areas.

“In the early days of CIRM, the feeling was that the field needed deep and direct investments in the … fundamental foundation of stem cell biology, because the translational opportunities were not yet mature, certainly not using embryonic or induced pluripotent stem cells,” Daley said.

“We’re running our own race. … If we’re behind [NIH], we’re going to get better.”

C. Randal Mills, CEO of CIRM

Paul Knoepfler, a University of California, Davis, researcher and CIRM grantee who writes a popular stem cell blog, agreed. “One almost had to invent a system for figuring out what would be a safe way to proceed with embryonic stem cell clinical trials because those cells are really much more powerful and also have different kinds of risks,” he said.

Knoepfler said he expected the basic science to spark clinical breakthroughs in time, citing, for example, promising early work on reversing paralysis from Asterias Biotherapeutics, located in Fremont, southeast of San Francisco. Jake Javier, a patient in a CIRM-supported Asterias trial, lost almost all use of his limbs in an accident diving into a swimming pool. He recently received an injection of a type of cell derived from embryonic stem cells that can help protect nerve cells damaged in spinal cord injuries. Javier has since regained some use of his arms — one of five patients in early trials who have shown improvement that CIRM and the researchers attribute to the treatment. The results have not yet been published in a peer-reviewed journal.

In addition, Mills noted that grants for new labs included provisions that required grantees to raise other funds — to “leverage” economic benefits to taxpayers — and to assist future trials. The institute, for example, gave $30 million to the contract research firm Quintiles to create facilities that will conduct preclinical research, manage regulatory issues, and provide clinical support for CIRM-supported stem cell trials, all at a steep discount.

“There is no iPhone 4 without an iPhone 3 or a 2 or a 1,” Mills said. But in a world where technology advances rapidly — Apple (AAPL) is already selling the iPhone 7, after all — voters are still waiting for the promised cures.

So far, CIRM has one literal poster child to show it can deliver. Four-year-old Evangelina Padilla Vaccaro, featured on the cover

CIRM patient - Evangelina
Evangelina Padilla Vaccaro in November 2016. Nancy Ramos

of CIRM’s recent annual report, was born with severe combined immunodeficiency. She had no operating immune system. Some such children have been kept alive in sterile isolation tents for a time — hence the term, “bubble baby” — but most have died from infections within a few years. A lucky few who received matching bone-marrow transplants survived.

UCLA’s Dr. Donald Kohn, supported by CIRM, cured Evangelina by extracting some of her blood stem cells, altering them to correct the genetic defect, and returning them to her body. She’s now thriving with a robust immune system.

That little girl, and 29 children like her, “are getting immunizations, they’re going to school, they’re swimming in public swimming pools, they’re eating dirt, they’re doing all the things that little kids are supposed to do,” said Steven Peckman, associate director of UCLA’s Broad Center of Regenerative Medicine and Stem Cell Research. “They get sick and their own bodies attack those viruses and bacteria. And they survive. If there’s going to be something that’s called a cure, this is it.”

That inspiring triumph was partly funded by CIRM, but Kohn’s work took three decades, was well underway long before CIRM existed, and didn’t involve embryonic stem cells — the key gap CIRM was founded to fill. Evangelina was saved by hematopoietic stem cells, the type that NIH has been more focused on.

Racing the clock

As much as Mills defends the old CIRM, last year he announced “CIRM 2.0” — a drastic shift to speed up clinical trials before the organization’s clock runs out.

Asked whether Californians are getting good value for their money from CIRM, Mills cited economic gains to the state, then added: “I focus a lot more on the return in relief of human suffering. We’re just starting to lift off the ground on that. I hope in history, in time, the record shows CIRM was a great deal.”

To that end, CIRM has said it will focus in 2017 primarily on clinical trials and work it hopes will lay the foundation for such studies.

If the studies show clear results, Mills said, “I think it will be self-evident that CIRM should be continued” with new funding.

Lott, the state overseer, called CIRM 2.0 long overdue. “They needed to at least create something a little more tangible, more specifically measurable, for the billions of dollars that they’ve allocated,” he said. “But it may be a little too late,” he added, to convince taxpayers that CIRM should get a new infusion of funds, given its governance structure.

Even Daley — unbridled in his enthusiasm for CIRM’s work — hesitated when asked if it was a model to emulate, though for a different reason. “I reluctantly endorse it,” he said, “in part because I think it’s another argument that allows the federal government and the NIH to abdicate its responsibility for investments in biomedical research, which benefits us all.”

Yet, just as President Bush’s policy on stem cells led to CIRM’s creation, the incoming Trump administration might bail out the institute just in time. The president-elect has not weighed in on federal funding, but Representative Tom Price, his nominee for Health and Human Services secretary, has long opposed federal funding of embryonic stem cell research — a view shared by Vice President-elect Mike Pence.

“If the Trump administration takes a hostile mind toward embryonic stem cell research, and perhaps some kinds of important fetal research are restricted as well, it may give another source of energy to CIRM,” said Knoepfler. “I don’t think Californians like to be told what we can or cannot do, research-wise.”

Correction: An earlier version of this story left out the reason that a CIRM-funded skin cancer trial was terminated.

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  • This article is seriously flawed in failing to report on why CIRM was proposed in the first place, let alone why it needed to support the building of new facilities. To place it in context, research on embryonic stem cells (ESCs) was hugely controversial during the second Bush administration, as creation of ESCs required the creation of embryos and subsequent harvesting of their stem cells. The administration promulgated regulations placing tight restrictions on research on embryonic stem cells, including barring research on ESCs from being conducted in any facility built in whole or part with federal support or using any equipment that had been acquired with federal support. Further, no federal funding was available for ESC research unless it used one of a limited number of ESC cell lines in existence when the regulations went into effect. These regulations were intended to, and did, sharply restrict research using ESCs in the academic facilities then in existence. CIRM was created to fund much broader research into ESCs than permitted under the federal regulations then in force. And, since the federal regulations restricted ESC research in facilities that had been supported by federal funding, to conduct research beyond that permitted under the federal rules, new labs were needed that were built without federal support. These labs may well have largely duplicated already-existing facilities, but were required to allow research to be conducted that otherwise could not legally have been conducted in the U.S.

  • I am a researcher and I am say: it took all of you the general media, as usual, too long to figure out that most of the money will be wasted to further the interest, reputation, and careers of basic scientists, most of them already academic, destitute, and in need of free labor in their labs or “education programs”, and some surprisingly having little stem cell backgrounds or no work to speak of. Yes, the research hasn’t caught on but money is being spent frivolously for seemingly, anything biotech as long as a small focus (some made up on the spot) for stem cells, for example – from Community College Biotech programs and CSU master programs, and the partnership of these programs with major university labs that do stem cell research, although some of these labs are not necessarily well established (maybe the incentive is that they were paid by the programs to house student interns, etc.). There is alot of investigation that needs to be done regarding the use and return of the money. So, in other words, another federal agency misusing tax payer dollars.

    If the objective is to further research trials, ESCs or iPSCs research certainly have not provided much, if any, practical efforts. If the objective of the money was to incentivize an industry niche to move forward, most researchers in california, even PhDs from leading institutions, are not well trained in the lab, let alone generate and deliver on novelty.

  • Plainly, it’$ ALL about the MONEY folks … the “movers & shakers” in the initiative are milking CA public and focused purely on MONEY not cures, sadly.

    Doubt it? then follow the money through objective forensic auditing…

  • In my experience, there is a strong bias in CIRM for long-term investment in IPSC, which are far away from market. Meanwhile, there are closer-term therapies, like bone marrow and hematopoietic stem cells that could provide therapies within 3-5 years. It will be much longer to wait for IPSCs. CIRM scientific review is run by acadmics, heavily invested in ‘mechanism of action’ and by general public, who have little grasp of the science. Thus there is a gap, and no strategy, for staging long-term vs. short-term therapies. Staging therapies into a pipeline to market could expedite access for short-term solutions while longer term therapies incubate. Until CIRM is able to grasp the time-to-market and develop a strategy around that, they will continue to fund basic science, at the expense of applied medicine.

  • I was surprised the author didn’t differentiate that the stem cell advances that have done well, shown the most promise and won Nobel prizes, have come from Adult stem cells and pluripotent stem cells. Not the embryonic stem cells. In 2003, scientists, celebs, and the media proclaimed the embryonic stem cells were the holy grail. Anyone who said otherwise (including the President or Catholic bishops) were ignorant, or obstructionists, or anti science, or simply didn’t understand the great intellect of the experts. Turns out the “experts”, with the media in tow, were looking in the wrong direction. They were insisting that the money go to embryonic stem cell research, and away from other ethical sources of stem cells. American scientists got it wrong, but they won’t say so. Imagine what admitting an error like that would do for their funding sources. In the meantime, the rest of the world got to work on adult stem cells, and pluripotent cells. Ethical sources of stem cells that were available the whole time. Thoughtful readers will have to educate themselves on the variety of stem cells sources and their associated cures, because neither the American science community, STAT, or the mainstream media will have this discussion.

    • Pluripotent stem cells include embryonic stem cells and iPSC. You seem to be distinguishing embryonic stem cells from pluripotent, but they are actually the same thing. Adult stem cells certainly have incredible clinical benefit and have even proved their value already for gvh disease. From an ethical point of view, embryonic cell sources are not the controversy that Tom Price and Mike Pence believe them to be. “Before I formed you in the womb I knew you…” Jeremiah 1:5. An embryonic stem cell are cells that have not ever been formed int he womb. They are extra embryos that have come from IVF treatment but are never implanted. A womb is never formed. These embryos were created to assist couples with fertility issues, and will never be implanted to create life. On the other hand, I can see controversy in fetal stem cells (a certain adult stem cell type) that are sourced from life.

  • I am a paraplegic. I know that the medical industry is a scam, just like education. I cant even trust my own mother to drive my Mercedes without ruining it, you really think we can trust 3 Billion dollars with people who say that they want to help cure diseases? Come on let’s get real that money was swindled before it even had a chance to get anywhere. Corruption everywhere, there will never be a cure for a lot of things. Not because we can’t, but because we won’t. Add the 3Billion dollars to the rest of the money wasted throughout the years. Greed is everywhere.

    • True unfortunately is true. People are constantly deceived and a lot of “dreamers” who want to come to the USA for a better life they find them self where they left off with the slight exception they able to send money back home to their families and loved ones. The criminal activity in the us is so big the government doesn’t have enough people to prevent and treat the problem. I am constantly come across situation where there is a fraudulent act and a deliberate fraud born out of it it not just grow and spread like a virus it had become a Neverending devils vicious circle. What appears to be to me is there is a massive amount of overhead of insufficient budget deficit in both sectors private and government sector and they are playing a catch up game and at the same time playing with people’s lives taking advantage of the most vulnerable because the next best thing after having a ton of money is the one thing money can’t buy:LIFE.

    • I’m very sorry to hear about your unfortunate illness, it must be devastating. The stem cell industry may be able to help spinal cord injury, but the treatment must come within a very short time following the injury.

      The link shows a man that was formerly paralyzed from the neck down following a stem cell derived treatment. If only the Bush era ban hadn’t paused the research, we could have been 8 years further in the trial and it might be available. I can only pray that we don’t make the same mistake again under this administration.

      Good luck.

  • My name is Tom Bechmann. I’m a veteran of the U.S. Army. I have 4 kids. I was diagnosed with SCA in Ft. Banning, Ga in 85-86. Since I’ve been staying active and lifting weights. In the last 5+ years it caught up to me. I’ve been following stem cells for the last 6 years! I see a neurologist at the VA but will not refer me to get stem cell therapy because it’s not FDA approved! I then turned my attention to the FDA but all I got back was stupid stuff why it’s not approved! It seems as though the FDA is getting paid by big pharma to extinguish the practice!
    I have been accepted by 2 clinics for stem cell therapy. I have 1,500 for this and that’s it! The fund raising was very unsuccessful. How much will It cost me! I’m broke! Can I get help?

    • Tom I’m so sorry the fda have no idea what they are doing I’m from Hungary and the food and drug administration doesn’t allow me to donate blood because in the 1980s we had a mad cow disease and that’s it. No further explanation nothing. But here are the facts: donated blood can be stored only for 6 months ; today we can donate:anti bodies plasma and stem cells . Fact#2.: Only 15% of earth’s population have negative blood type out of the 15% only 6.3 lives in the us I am one of them my blood type is so rare yet I’m being rejected but the truth behind the rejection is they still learning how else they can categorize into sub-category and up until now they had no way of storing an enormous database witch in a lot of cases is an outsourced job of an other mostly private company,when it’s comes to genetic database red tape is nearly as problematic as a very disorganized full of policy bureaucratic nightmare not counting human error into the tangled Web of the US healthcare. If you read news articles there are articles are out there detailing the negligence of government employees about class 3 bio hazard substance, and most Americans (tax payers) doesn’t know how the government hired a private company to develop vaccines for mass pandemics cost: 150 billion dollar. I don’t think this country priority is the individual because everyone everything is set up for improvisation.

    • creutzfeldt jakob disease has no diagnostic so the only way to combat the transmission is through patient history. The incredible good that your blood type can do is cancelled out by the higher probability of transmitting creutzfeldt jakob disease. Prions are awful, they can infect everything in the blood, can’t be disinfected and can’t really be detected. If given the choice between CJD and waiting longer for a blood transfusion, I would choose to wait longer.

      If only we had more people like you willing to donate blood. The millennial generation is turning out to be the worst generation for blood donation…

  • I’d not be too critical of CIRM or most other operatives in the stem cell field. Much stem cell reporting is frankly, little more than “gee whiz” level stuff, the issues faced are huge. Most fields of new medicine take decades longer than early proponents hoped. Look at gene therapy itself or even monoclonal antibodies – decades to move from the theory books to the Dr’s clinic.

    No-doubt now though, stem cells, particularly adult lineage are starting to make big impacts. aGVHD is but one example of what the near term potential is.

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