International Stem Cell Corporation: Note From The CEO Andrey Semechkin

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"Since releasing our press release this morning announcing that ISCO.OB had successfully created enriched cell cultures that might be used to treat diabetes or liver disease, people have asked, 'What does that really mean?’

The simple answer is that it further proves ISCO’s Parthenogenetic stem cells can do the same things that can be done with embryonic stem cells, but without raising the ethical issues of using cells from fertilized embryos and with a real chance to solve one of the toughest problems in cell therapy—how do you keep the human body from rejecting a cell transplant before the transplant can treat the disease.

Scientists already know that they can treat liver disease and diabetes with human cells. The problems have been to find an ethical supply of cells in sufficient quantity and prevent the body from rejecting those cells. We think this is a major step toward the pathway and it enables ISCO to stand on the shoulders of 10 years of prior research to reach the next rung of the ladder to a cure for both of these life threatening diseases.

ISCO’s latest press release reflects a major step in the direction of treating diabetes and liver disease with its cells."

$127 Million in 'Good News' for San Diego Stem Cell Researchers

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Earlier today, an anonymous reader posted a comment on the California Stem Cell Report wondering where the "good news" was about the stem cell agency. We are not sure whether the reader was wondering about the content of this site or the mainstream media or both.

Sanford Consortium lab from live Webcam shot this weekend
on the Sanford web site. 

But the comment came less than 24 hours after a San Diego area newspaper published a glowing piece about the opening of a new stem cell research building under the auspices of five powerful research organizations – Salk, Scripps, Sanford Burnham, UC San Diego and the La Jolla Institute for Allergy and Immunology, a recent addition to the consortium.

Bradley Fikes of the North County Times wrote the story. He may be the last reporter in California to regularly, albeit infrequently, cover California stem cell issues for a mainstream newspaper.

Fikes' story heralded the $127 million structure. (The cost includes equipment.) He wrote,

"San Diego County's bid for supremacy in the fast-growing field of stem cell research will gain an iconic new image Nov. 29, when a gleaming headquarters for some of San Diego County's top stem cell researchers officially opens.

"The 132,000 square-foot building off in La Jolla will become the headquarters of the Sanford Consortium for Regenerative Medicine...."

The consortium was formed in the wake of voter approval of Prop. 71, which created California's $3 billion stem cell program and provided hundreds of millions of dollars for new labs. Edward Holmes, formerly vice chancellor at UC San Diego, is president and CEO of the consortium. Holmes is also chairman of the National Medical Research Council in Singapore. (For Holmes perspective on the consortium, see this 2010 interview.)

The building was financed with $43 million from the California stem cell agency, $65 million in bonds guaranteed by the University of California and $19 million from T. Denny Sanford, a South Dakota billionaire banker.

After CIRM approved funding for the building in May 2008, the consortium struggled with finding cash beyond what CIRM provided. The roadblocks delayed work on the facility, which was supposed to be completed by May 2010 at a cost of $155 million, according to the stem cell agency.

Like the other new labs assisted by $271 million in stem cell agency construction funds, the San Diego building is touted as conducive to bringing scientists together. Indeed, it has been dubbed a "collaboratory."

Fikes wrote,

"Even the staircases have been designed in keeping with the goal of making as much space as possible serve collaboration. The Sanford Consortium's staircases are wide, open and airy. They connect multiple 'laboratory neighborhoods' on different levels, so that scientists from different labs and floors will inevitably pass each other on their way to work."

Fikes said that at each level the staircases include areas with tables and chairs for quick chats. He quoted Louis Coffman, chief operating officer of the consortium, as saying,

"It's a lively interlude between floors. It creates an interesting space. More than that, it connects the physical locations of two different floors. So whereas people on different floors, who would otherwise be as disconnected as they would be in different buildings, hopefully they're going to make connections."

Source:
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Companies selectively targeting cancer stem cells

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Today, I posted this to Twitter:

3 Innovative Cancer Treatments...But Which Is The Best Bet? seekingalpha.com/a/fjed $GSK $IMUC $VSTM #cancerSC via @seekingalpha — Jim Till (@jimtill) July 17, 2012

The article is about three companies that are working on treatments designed to target cancer stem cells (CSCs). The companies are OncoMed, Verastem and ImmunoCellular Therapeutics. The article is interesting.

Source:
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California Stem Cell Agency Takes Initiative in PR 'War'

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Jonathan Thomas, chairman of the $3 billion California stem cell agency, took to the blogosphere today with an item promoting CIRM's progress, declaring that it is a record of which Californians can be proud.

In his debut performance as a blogger, Thomas declared that the agency has 43 research projects that are in various stages of moving towards clinical trials. He wrote on CIRM's research blog,

"Given that it normally takes a decade or longer for a basic science discovery to reach clinical trials, 43 projects seemed to me like quite an achievement – an achievement that the people of California should take pride in supporting. Not only is CIRM driving stem cell science in our state, but through our national and international collaborations California has become a stem cell hub that accelerates stem cell progress worldwide."

Thomas, a Los Angeles bond financier, pointed to a new document from CIRM, titled "Funding therapies: Fueling Hope." It summarizes some of the agency's work and touts the "incredible potential" of stem cells.

The document also explains the laborious process for creating a therapy before it can be brought to market and actually used to treat patients. The document said,

"Altogether, carrying out the basic research, translational work and preclinical data leading up to a clinical trial can take a decade or longer, and that's just to start the clinical trial. CIRM’s funding approach speeds that timeline by providing stable funding that eliminates pauses in the research to raise new funds, by strategically funding areas thought to be barriers to the clinic and by forming teams of researchers who work in parallel rather than sequentially to reach clinical trials faster."

When Thomas was elected chairman of the agency last June, he told directors that the agency was in a "communications war" in which its record was not fully appreciated by the public. He made telling the CIRM story one of his top priorities.

Today's blog posting by Thomas and, more particularly the "Fueling Hope" document, will be useful to CIRM in dealing with the overblown expectations of rapid cures that were generated by the hype of the 2004 ballot initiative campaign that created the stem cell research program.

The campaign generated impressions among voters that cures – specifically human embryonic stem cell cures – were just around the corner and that the Bush Administration, with its restrictions on hESC research, was the only thing standing in the way. Indeed, without George Bush, there would be no state stem cell agency  since his stand against hESC created an apparent need for alternative funding. For voters who expected instant cures, however, CIRM must be a sad disappointment since it has developed no therapy that is being used to treat people.

Managing expectations is a critical task for CIRM, which will run out of funds in 2017 and which is expected to be asking voters for another multibillion dollar bond measure sometime in the next few years.

Source:
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A difference between normal and cancer SC biology in the nervous system

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Neural Tumor-Initiating Cells Have Distinct Telomere Maintenance and Can be Safely Targeted for Telomerase Inhibition by Pedro Castelo-Branco and 12 co-authors, including Uri Tabori, Clin Cancer Res 2011(Jan 1); 17(1): 111-121 [Full text]. Translational Relevance:

Pediatric neural tumors (brain tumors and neuroblastoma) are the leading cause of morbidity and mortality in childhood cancer. This is due to their ability to recur after minimal disease is achieved. Telomerase is active in most malignant pediatric neural tumors. Therefore, telomerase inhibition may offer an effective treatment option for such patients. Because normal stem cells may require telomerase for continuous self-renewal, this therapy may have devastating effects on normal nervous system development and maintenance.

This study reveals that telomerase activation exists only in the tumor-initiating cancer subpopulation and is critical to sustain their survival and self-renewal potential. Importantly, normal neural or neural crest stem cells do not require telomerase for their self-renewal. Furthermore, as opposed to conventional chemoradiation therapies, telomerase inhibition results in irreversible loss of self-renewal capacity of tumor initiating cells in vitro and in vivo.

These observations uncover a difference between normal and cancer stem cell biology in the nervous system and suggest that telomerase inhibition may offer a specific and safe therapeutic approach for these devastating tumors.

For a commentary on this article, see: Anita B Hjelmeland and Jeremy N Rich, Clin Cancer Res 2011(Jan 1); 17(1): 3-5 (unlike the article, the commentary is not publicly accessible). Abstract:

Telomerase is an important mechanism by which cancers escape replicative senescence. In neural tumors, cancer stem cells express telomerase, suggesting that this may explain their preferential tumorigenesis. Oligonucleotide telomerase targeting selectively disrupts cancer stem cell growth through the induction of differentiation, adding to the armamentarium of anticancer stem cell therapies.

Parsing Geron's Stem Cell Foray: A Nature Journal Commentary

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Why did Geron "fail" in its
much ballyhooed pursuit of the first-ever human embryonic stem cell
therapy?

Christopher Scott, senior
research scholar at Stanford, and Brady Huggett,
business editor of the journal Nature, took a crack at
answering that question in a commentary in the June edition of
Nature.
Following the sudden abandonment last
fall by Geron of its hESC business and the first-ever clinical trial
of an hESC therapy, Scott and Huggett scrutinized the history of the
company. The financial numbers were impressive. They wrote,

"How did Geron’s R&D program
meet such a demise? After all, the company raised more than $583
million through 23 financings, including two venture rounds, and
plowed more than half a billion dollars into R&D (about half of
that into hESC work) through 2010. 

"There are problems with being at
the forefront of unknown territory. Of Geron’s development efforts,
the hESC trial was the most prominent, and fraught. Therapies based
on hESCs were new territory for the US Food and Drug
Administration (FDA), and it eyed Geron warily. The
investigational new drug application (IND), filed in 2008, was twice
put on clinical hold while more animal data were collected among
fears that nonmalignant tumors would result from stray hESCs that
escaped the purification process. Geron says it spent $45 million on
the application, and at 22,000 pages, it was reportedly the largest
the agency had ever received."

The California stem cell agency also
bet $25 million on the company just a few months before it pulled the
plug. Geron repaid all the CIRM money that it had used up to that point.
Geron suffered from a lack of revenue
despite its vaunted stem cell patent portfolio. Scott and Huggett
reported that Geron received only $69 million from 1992 to 2010 from
collaborations, license and royalties. At the same time losses were
huge – $111 million in 2010.
The Nature article noted all of that
was occurring while other biotech companies – such as Isis
and Alnylam – found ample financial support, revenue and
success.
Scott's and Huggett's directed their
final comment to Advanced Cell Technology, now the only
company in the United States with a clinical trial involving a human
embryonic stem cell therapy.

"Your technology may be
revolutionary, your team may be dedicated and you may believe. But it
does not matter if no one else will stand at your side."

Our take: The California stem cell
agency obviously has learned something from its dealings with Geron.
The company's hESC announcement was an unpleasant surprise, to put it
mildly, coming only about three months after CIRM signed the Geron
loan agreement. Today, however, the agency has embarked on more,
equally risky ventures with other biotech enterprises. Indeed, CIRM
is forging into areas that conventional investment shuns. It is all
part of mission approved by California voters in 2004.
The dream of cures from human embryonic
stem cells or even adult stem cells is alluring. And CIRM is feeling
much justifiable pressure to engage industry more closely. All the
more reason for CIRM's executives and directors to maintain a steely
determination to terminate research programs that are spinning their
wheels and instead pursue efforts that are making significant
progress in commercializing research and attracting other investors.  

Source:
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Royalty Rules at the California Stem Cell Agency: Business Friendly Changes Proposed

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If you are looking to follow the money
trail at the $3 billion California stem cell agency, next Thursday's meeting of its 29-member board of directors is a good place to start.


On the agenda are revisions in its
intellectual property rules, which are all about who gets paid and how much and when – should an agency-financed product generate
significant cash.
The key question about the proposed changes is whether they will generate an appropriate return for the state, given its $6 billion investment, including interest on the bonds that finance CIRM. The impact of the changes is not crystal clear. And the staff memo does not mention two important definition changes that appear to be quite business friendly.

During the 2004 ballot campaign that
created the stem cell agency, California voters were told that the
state would share as much as $1 billion or more in royalties. Eight
years later, no royalties have materialized since CIRM research has
not yet resulted in a commercial therapy. 
At next week's meeting in Burlingame,
directors will be asked to modify CIRM rules for royalties that CIRM
staff said "could be a disincentive" for business. A staff memo said the proposals would alter provisions that create "administrative challenges and uncertainty." The memo asserted
the proposed changes would ensure "a comparable economic
return to California" equal to the existing provisions.
However, the memo provided no explanation or evidence for how that
result would come about. The proposed changes could also be applied
retroactively with the agreement of CIRM and the grantee.
Currently CIRM grantees and
collaborators must share as much as 25 percent of their licensing
revenue in excess of $500,000, depending on the proportion of agency
funding for the product. The IP rules also contain a provision for
payments in the event of development of a "blockbuster" therapy.
The staff memo described how that would work.

“It provides that grantees and
collaborators must share revenues resulting from CIRM funded research
as follows: after revenues exceed $500,000, three times the grant
award, paid at a rate of 3% per year, plus upon earning
$250M(million) in a single calendar year, a onetime payment of three
times the award, plus upon earning revenues of $500M in a single
calendar year, an additional onetime payment of three times the award
and, finally, in the instance where a patented CIRM funded invention
or CIRM funded technology contributed to the creation of net
commercial revenue greater than $500M in a single calendar year, and
where CIRM awarded $5 million or more, an additional 1% royalty on
revenues in excess of $500 million annually over the life of the
patents.”

The proposed changes would exempt "pre-commercial revenues" from the state's revenue sharing, the
memo said, in order to maximize the amount businesses can "re-invest
in product development." The proportionality payment provision
would be changed to require only 15 percent of licensing revenues if
CIRM's investment is less than 50 percent and 25 percent if it is
more than 50 percent. Revenue sharing would be extended to "commercializing entities." No definition of "commercializing entities" was provided in the board agenda material, but a June version of the changes defined them as "A For-Profit Grantee and its Collaborator or Licensee that sells, offers for sale or transfers a Drug, product(s) or services resulting in whole or in part from CIRM-Funded Research."

Not mentioned in the CIRM staff memo were two new provisions in the rules involving the definition of licensing revenue and the sale of a therapy. Both could be construed as quite favorable to businesses. According to the June version of the changes, licensing revenues are defined as a figure minus "a proportion of expenses reasonably incurred in prosecuting, defending and enforcing related patent rights equal to CIRM’s percentage of support for development."  The sale provision says that royalties on "net commercial revenue" are not due until received from sales in the United States or Europe. That provision would appear to exclude California from receiving royalties on product sales in most of the world, where it is easier to receive regulatory approval for sale of new therapies and drugs. (See here -- page 2 -- for royalty provision and here for definition of "first commercial sale"-- page 3.)

The existing IP regulations are
enshrined in a 2011 state law. However, the law also provided that
they can be altered by the agency, the CIRM memo said, “if it
determined that it was necessary to do so either to ensure that
research and therapy development are not unreasonably hindered as a
result of CIRM’s regulations or to ensure that the State of
California has an opportunity to share in the revenues derived from
such research and therapy development.”

The memo continued,

"The proposed amendments re-strike
the balance both to ensure that industry will partner with CIRM and
to ensure that the State has the opportunity to benefit from
successful therapy development."

Board action next week will give the
go-ahead for posting the proposals as part of the official state
administrative rules process. They are subject to additional changes
in that process. 
The agenda originally contained the full text of the changes. However, that material has been dropped from the board agenda. An earlier version can be found here and here. We have queried the agency about the reason for dropping the text in the board agenda.

(Editor's note: The agency has now reposted the version of the text of the changes that was on the agenda earlier, saying that it was having problems with its web site. For the definitions of terms, however, it is still necessary to refer to the June documents.)

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California Stem Cell Agency Seeking More Help on Push for Cures

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The California stem cell agency has decided to put more manpower behind its push to drive therapies into the clinic.

The agency this week posted an opening for a senior development officer, who would be paid up to $226,108 annually.

The new hire would have a strong background in industry and an advanced degree. The job posting calls for a minimum of 10 years experience and expertise in "in developing, designing and assessing preclinical and early clinical safety and efficacy, within regulatory framework."

The position reports directly to Ellen Feigal, CIRM's VP for research and development. The job description says the person would "directly interact with investigators on CIRM’s clinically applicable research programs to help provide product development guidance from preclinical, manufacturing, and first in human to early phase clinical regulatory perspectives."

The $3 billion agency, which has yet to produce the cures promised to voters in 2004, is re-examining its strategies, particularly with an eye to backing a product that would actually be used on patients.

Source:
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Michael J. Fox Backs Away From Stem Cell Cure for Parkinson's

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It was not exactly a case of "Back
to the Future," the hit movie starring Michael J. Fox,
but it did offer a reflection on the past.

It involves the actor's
changing views on stem cell research in connection with Parkinson's
disease, which he has had since the 1990s.
Fox's 2004 Ad
Early on, Fox was well-known for his
support of human embryonic stem cell research. ABC News
recently described him as having become "one of the country’s
most visible advocates for stem cell research." In California, Fox was a prominent promoter of the ballot initiative, Proposition 71,
that created the $3 billion California stem cell agency in 2004. "
He filmed a TV commercial that was
aired widely during the 2004 campaign to create the stem cell agency,
declaring,

 "It could save the life of someone you love."

Today he is considerably less
confident. In an interview last week with ABC, he cited "problems
along the way." Fox said,

“It’s not so much that [stem cell
research has] diminished in its prospects for breakthroughs as much
as it’s the other avenues of research have grown and multiplied and
become as much or more promising. So, an answer may come from stem
cell research but it’s more than likely to come from another area.”

Source:
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Live Coverage of Tomorrow's California Stem Cell Meeting

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The California Stem Cell Report will
provide live coverage of tomorrow's meeting of the governing board of
the $3 billion California stem cell agency. Directors are expected to
make major decisions about the agency's future direction, hear the results
of the first-ever performance audit and award about $95 million in
grants or loans.

The meeting will be held near the San
Francisco airport with another public teleconference location at UC
San Francisco. Los Angeles will also have two public teleconference
locations. Another will be in La Jolla.
The meeting will be audiocast live on
the Internet, which the California Stem Cell Report will monitor from its
base in Panama near the Pacific entrance to the Panama Canal.
Instructions for listening in on the
audiocast can be found on the agenda along with specific addresses
for the public teleconference locations. The meeting is scheduled to
begin at 9 a.m. PDT.  

Source:
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The CIRM 'Debt' to George Bush and Disgraced Korean Researcher

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It was brief but pointed comment on the differences in the stem cell world of 2004 compared to the stem cell world of 2011.

Larry Ebert, a patent attorney, made the remark on his blog, IPBiz. He was writing about an observation on this website that without George Bush and his restrictions on federal hESC research, there would have been no California stem cell agency.

Ebert said,

"IPBiz notes that when the California voters voted Prop. 71 in, scientists thought Huang Woo Suk's work on hESC was real. In 2011, the current state of the art is still not up to what Huang Woo Suk falsely reported in the journal Science. Californiastemcellreport should give Huang Woo Suk some credit for the passage of Prop. 71."

Consider Woo Suk duly credited.

Source:
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Hype, Geron and Stem Cell Research: A Hard-eyed View from the North

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From Canada last week came a stem cell "reality check" that pulled together a professional football quarterback, a Yankee baseball pitcher, a Republican presidential hopeful and Geron.

Timothy Caulfield,
U. of Alberta Photo

What do they all have in common? Stem cell therapy, answered Timothy Caulfield, a Canadian academic, writing on the Canadian version of the Huffington Post. Declaring that stem cell treatments are being ballyhooed as a "miracle cure" and "elixir of life," Caulfield wrote,

"But does it actually work? I think not -- at least not yet."

Caulfield is not one of your stereotypical opponents of stem cell research. In fact, he describes himself as a "believer" in the likelihood of development of effective stem cell therapies. Caulfield also springs from a deep academic background. He is research director of the Health Law Institute at the University of Alberta and has published a plethora of scholarly articles related to stem cell research.

Caulfield wrote that Geron's abandonment of hESC research "underscores the cavernous gap between the well-publicized (and completely legitimate) promise of stem cell research and actual, efficacious, therapies."

He said the California company's decision "generated both shock and anger. And for the patients hoping for a near-future cure, it was nothing less than heartbreaking."

Caulfield continued,

"Not only did the company decide to stop this particular trial, it decided to get out of the field of stem cell therapies altogether. So definitive was the decision that Geron gave back millions of public research dollars(to the California stem cell agency)."

Caulfield warned, however,

"We need to be careful not to over-interpret the Geron pull out. This is one company and one trial. There are now a few other clinical experiments in the pipeline (emphasis on a few), such as one to treat a form of blindness. And we must remember that not all things that are called 'stem cell therapies' are the same. "

Caulfield continued with his "reality check,"

"First, ignore the hype. I believe there is little evidence that any of the often advertised stem cell therapies, embryonic or otherwise, work. Yes, there are a handful of decades-old treatments ….

"(Peyton) Manning, (Bartolo) Colon and (Rick)Perry may have had a positive experience (the placebo effect is a powerful thing, after all), but, to date, I believe good clinical evidence simply does not exist.

"Second, despite the hope of many, it isn't going to be easy to make money off stem cell research -- at least with a treatment that is scientifically legitimate, appropriately tested and approved by the relevant regulatory agencies (three characteristics missing from most of the stem cell therapies currently offered in clinics around the world). "Economic growth has often been one of the ways that the huge public investment in stem cell research has been justified. Just a few weeks ago, for example, the UK government announced that it was committing millions in a stem cell research centre with the hope that it will help drive the UK economic recovery.

"But the ability of emerging stem cell technologies to stimulate the economy and create jobs is far from certain. Indeed, economics is the explicit reason for the Geron pull out. The company press release stated that the decision was made after a strategic review of the costs, timelines and 'clinical, manufacturing and regulatory complexities associated' with this kind of research. In other words, stem cell research is not, from the perspective of this company, worth it."

Caulfield concluded,

"I don't mean to be a downer. In fact, I believe that stem cell research holds tremendous potential. I remain fully confident that, one day, therapies will emerge. But the inappropriate hype associated with this area hurts policy debates, leads to unmet expectations, and has the potential to mislead the public about the actual state of the science. The Geron story is a sober reminder that promise is not reality, even in a field as exciting as stem cell research."

Source:
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The Ins and Outs of CIRM's Push to Keep the Geron hESC Effort Alive

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The $3 billion California stem cell agency has confirmed that it is looking for companies to take over Geron's hESC business, but remained vague on the details of just what it is proposing as well as any financial incentives.

A certain ambiguity may appropriate because Prop. 71, the ballot initiative that created CIRM seven years ago, constrains the state research effort, which is engaged in an aggressive push to bring stem cell therapies into the marketplace.

After last week's New Scientist article in which CIRM President Alan Trounson said he was talking to at least three companies, the California Stem Cell Report emailed this inquiry to the agency:

"Re Trounson's comments about CIRM trying to find an enterprise to pick up the Geron hESC business, what form is that taking? Are CIRM officials contacting companies, asking them to consider the Geron business? Are promises being made that Geron's loan would be passed along to a new company? Are CIRM officials giving any sort of assurance that the new enterprise would be looked on favorably in terms of possible CIRM financing help, even a wink or some such thing?"

In response, Maria Bonneville, executive director to the CIRM board, said yesterday,

"Dr. Trounson is encouraging companies to take a hard look at the potential of this project. If any companies express a solid desire to continue the project, they would be thoroughly vetted through CIRM's existing procedures."

The stem cell agency is limited by law in what it can do encourage a deal for Geron's orphan business. Nonetheless it will have to move quickly if it wants to keep Geron's hESC team intact. Otherwise, those folks will be heading for more secure employment.

With some crafty lawyering, however, CIRM might be able to move its $25 million Geron loan over to a some sort of new entity if the clinical trial remains virtually identical.

The agency might also find a way to use a newly created $30 million "strategic partnership" program to support a deal involving Geron's stem cell program. CIRM's new program is industry friendly and aimed at early stages of clinical development.

However, by law, only a public vote of the 29-member board of directors can approve a loan or grant. That vote is taken in what is supposed to be a blind process in which the names of the applicants are not known. However, it is clear from last May's approval of the Geron loan that the directors knew the identity of the applicant although it was not announced publicly until after the formal 16-1 vote. The agency's procedures also call for action prior to the board vote by its grant review group, which makes the de facto decisions on grants.

The timeline on normal award rounds is lengthy – more than a year from concept to finish – and may not be appropriate in this case. Plus the rounds are open to more than one applicant.

CIRM's current award rounds for business involve loans not grants. The loan policy was developed, in part, because businesses objected to the financial hooks in grants. Originally, the loan program was created to fund business projects that otherwise could not find funding. The program was originally slated to run as high as $500 million. The interest was expected to finance additional research.

The agency also has geographic constraints. It cannot pay for work outside of California. So that would mean that a potential buyer probably would need a substantial presence in California unless the agency could put together a deal in which Geron is still in the game and doing some of the work.

The agency can receive warrants in loan deals but does not make stock investments. It probably cannot legally directly buy a stake in a company and thus provide a cash infusion.

A new arrangement for Geron's hESC business would need some likelihood of a substantial stream of cash over the next several years, based on what Geron said last week. But the current environment for early stage biotech investment is quite difficult. And then there is the FDA, which authorized the clinical trial and is likely to have something to say about who operates it.

Whether CIRM can overcome all these obstacles would seem to be problematic. But, of course, Geron is also shopping its business around. And some buyers might be attracted by a bargain basement price enhanced by the expectation of continued cash from the California stem cell agency.

Source:
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A Look Inside the CIRM-Geron Loan Documents

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The $25 million loan that the California stem cell agency awarded to Geron was the largest ever made by the research enterprise.

Directors approved the loan last May during a hearing that was a major departure from its usual procedures. The loan agreement was signed Aug. 1., about three months before Geron announced that it was abandoning the hESC business.

Geron last week repaid the $6.42 million that it had received from CIRM up to that point. Geron also paid the agency $36,732.33 in interest. CIRM additionally received 537,893 warrants to buy Geron stock at $3.98, CIRM told the California Stem Cell Report. Geron closed at $1.50 yesterday. The warrants expire in 10 years.

Last summer the California Stem Cell Report requested copies of the loan documents, which can be found at the end of this item, although the agency blacked out much of the information.

In a note accompanying the documents, Ian Sweedler, deputy legal counsel to CIRM, said,

"Geron requested and justified redactions to the milestone document, to those parts that describe specific activities, plans and data within the overall project.  Geron asserted and justified a claim that these details meet the legal standard for trade secrets that are exempt from production.  For the milestones, Geron agreed to leave enough unredacted to give a sense of the intent, at a level of detail that is not confidential.  For example, it will be possible to see that a milestone refers to enrolling a certain number of patients, but not what that number is, or other specifics about that stage of the project.  There are also accompanying comments with technical details and alternative approaches considered.  For these comments, we were unable to find a way to leave any meaningful text that would not disclose trade secret information.  The comments have therefore been completely redacted.

"Geron similarly justified redaction of information about how it will divide funds among different aspects of the project.  They explained that their internal costs, processes, and sequences are confidential, competitive trade secret information.  The redacted versions therefore show the amount of funding CIRM will provide, but not when and how Geron will allocate that to different activities."

Here are the loan documents.
CIRM-Geron 8-1-11 Loan Agreement

CIRM 7-28-11 Geron Loan Term Letter

Geron-CIRM Loan Agreement Appendix B

Geron-CIRM Loan Timetable Appendix C

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Letter to the International Stem Cell Corporation Shareholders and Followers

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To the shareholders and followers of International Stem Cell Corporation:
You’ve likely seen stem cells in the news recently, and we’d like to take an opportunity to give you our views on two of the recent announcements. 
First, International Stem Cell Corporation announced yesterday earnings for the third quarter 2011.  We’ll be hosting a conference call on Thursday, November 17, 2011 at 10:00 AM PST to discuss key developments in the quarter, provide our outlook and answer your questions.   Individuals interested in listening to the conference call may do so by dialing 877-407-8033 for domestic callers or 201-689-8033 for international callers, or from the webcast on the investor relations section of the Company’s Web site at http://www.internationalstemcell.com. 
Second, Geron’s decision, announced yesterday, to terminate its stem cell R&D program in no way affects ISCO’s current strategy or developmental activities, nor does it alter our optimism for the potential of stem cells to eventually treat a broad-range of diseases and conditions.  While Geron may be reprioritizing programs, we are committed to the course we are on. 
Additionally, ISCO will continue its discussions with CIRM regarding possible funding for our truly unique parthenogenesis technology, particularly in light of the $25 million previously earmarked for Geron coming available for other investments.
Thank you for your interest in ISCO.  We hope you will join us for the conference call.
Sincerely,
Ken Aldrich

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International Stem Cell to Hold Business Update Conference Call on November 17th 10am PST/1pm EST

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International Stem Cell Corporation (OTCBB: ISCO) today announced that it will hold a conference call and webcast on Thursday, November 17, 2011 at 1:00 p.m. Eastern (10:00 a.m. Pacific). President and Chief Operating Officer Kurt May and Co-Chairman Ken Aldrich will provide an update on the business, including a discussion of recently announced third quarter results.
Individuals interested in listening to the conference call may do so by dialing 877-407-8033 for domestic callers, or 201-689-8033 for international callers, or from the webcast on the investor relations section of the Company's Web site at http://www.intlstemcell.com.
A telephone replay will be available approximately one hour after the conclusion of the call by dialing (877) 660-6853 for domestic callers, or 201-612-7415 for international callers, and entering the account code: 286 and the Conference ID: 383602. The webcast will be available on the Company's Web site for 60 days following the completion of the call.
About International Stem Cell Corporation
International Stem Cell Corporation is focused on the therapeutic applications of human parthenogenetic stem cells (hpSCs) and the development and commercialization of cell-based research and cosmetic products. ISCO's core technology, parthenogenesis, results in the creation of pluripotent human stem cells from unfertilized oocytes (eggs). hpSCs avoid ethical issues associated with the use or destruction of viable human embryos. ISCO scientists have created the first parthenogenic, homozygous stem cell line that can be a source of therapeutic cells for hundreds of millions of individuals of differing genders, ages and racial background with minimal immune rejection after transplantation. hpSCs offer the potential to create the first true stem cell bank, UniStemCell™. ISCO also produces and markets specialized cells and growth media for therapeutic research worldwide through its subsidiary Lifeline Cell Technology, and cell-based skin care products through its subsidiary Lifeline Skin Care. More information is available at http://www.internationalstemcell.com.
To subscribe to receive ongoing corporate communications, please click on the following link: http://www.b2i.us/irpass.asp?BzID=1468&to=ea&s=0 .
International Stem Cell Corporation
Kenneth C. Aldrich, Chairman
760-940-6383
or
LHA
Don Markley
310-691-7100

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California Stem Cell Agency Trying to Line Up Buyers for Geron hESC Business

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The president of the $3 billion California stem cell agency, Alan Trounson, says it is in talks with at least three firms in an effort to salvage Geron's orphan stem cell business.

Andy Coghlan of New Scientist magazine reported Trounson's remarks in an article on Friday headlined, "Is there life for stem cells after Geron."

The Menlo Park, Ca., firm last Monday abandoned its stem cell therapy development program and terminated a much-heralded clinical trial that was the first-ever in the nation for an hESC therapy. The California stem cell agency loaned the firm $25 million just last May as part of its push towards bringing therapies to market. Geron last week paid back the $6 million of the loan that it had received up to that date.

Details were sketchy in New Scientist about CIRM's attempt to serve as a stem cell matchmaker. Coghlan had only this to say,

"Alan Trounson, the institute's president, told New Scientist that CIRM is now talking to at least three other possible backers to take over the spinal trial. 'We'll have to wait and see, but it's important that it happens in a short time [because] once it gets beyond a couple of months, it gets very difficult to hold people together,' he said."

Coghlan noted that Geron, in addition to the spinal therapy clinical trial, had three other hESC possible trials lined up for diabetes, heart disease and arthritis.

Last week, several names surfaced in the media of a number of possible buyer/partners/backers for Geron's stem cell business. They included Pfizer, which is involved with Peter Coffey of UC Santa Barbara in another possible hESC trial; BioTime of Alameda, Ca., which has a number of Geron alums, and Teva Pharamaceutical of Israel. UC Irvine researcher Hans Kierstead, whose work led to the Geron spinal trial, was also in the mix, according to a report in the Orange County Register. Pat Brennan, who interviewed Kierstead, wrote that the researcher said "he is exploring alternative funding to continue the trials." Keirstead, who is on the scientific advisory board of California Stem Cell of Irvine, Ca., also said the trial may well go overseas.

The California Stem Cell Report queried the firms identified last week concerning their intentions towards Geron. All declined to comment specifically. Michael West, CEO of BioTime, also said,

"I think the commentary you heard was a deduction based on my prior role at Geron, our being so geographically close to Geron, and, of course, our entire focus on hES cells and reprogramming. I will only add that I continue to believe passionately in the cause. More than ever, we have an historic opportunity to impact the practice of medicine. That is about as far as I can go."

West founded Geron and has served as president of Advanced Cell Technology of Santa Monica, Ca., which is conducting an hESC trial at UCLA involving eye disease.

Brokering a deal for Geron's stem cell business places the California stem cell agency in a novel position and will test its business skills. CIRM's activities have been largely devoted to awarding grants and loans. Its loan to Geron was only approved by directors just six months ago. The loan agreement was not actually signed until August.

Under CIRM's procedures, companies receiving loans are supposed to be vetted during a private due diligence process. However, one might question the quality of that due diligence given Geron's withdrawal from the business only three months after the loan was finalized.

The key question, in trying to attract buyers for Geron's orphan stem cell project, will be not so much about whether it is good science but whether it is a good business.

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The Wall Street Transcript Exclusive Interview With The Co-Chairman And Co-Founder: International Stem Cell Corporation (ISCO) – Kenneth C. Aldrich

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November 14, 2011 - The Wall Street Transcript has just published Biotechnology and Pharmaceuticals Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.

Kenneth C. Aldrich is Co-Chairman and Co-Founder of International Stem Cell Corporation, a publicly traded regenerative-medicine company. International Stem Cell has created a new class of human stem cells that can do all the things embryonic stem cells can do, but without the ethical issues that arise from the use of human embryos and with the potential to solve the problem of immune rejection in stem cell therapy. Mr. Aldrich holds degrees, with honors, from both Harvard University and Harvard Law School and practiced law with the Los Angeles-based firm of O'Melveny & Myers before leaving in 1969 to build a career in finance.

TWST: Let's start with a short history and overview of International Stem Cell Corporation's operations.

Mr. Aldrich: International Stem Cell (ISCO) began back in 2007 as a public company built around our development of a new class of stem cells that had all of the positive characteristics of embryonic stem cells in that they could become any cell in the body but avoided the ethical issues because we didn't use a fertilized egg. These cells are called parthenogenetic stem cells. We built the company around that core technology, in-licensed over a 100 different patents and patent applications from other companies, primarily from Advanced Cell Technology, as well as having our own recent patents covering the process for developing parthenogenetic stem cells. So we are in a group of companies that use a true pluripotent stem cell, which is a cell that can become any cell in the body.We are different from embryonic stem cells in that we do not involve a fertilized egg, and there is no destruction of human life or anything that could become human life.

TWST: Your first series of preclinical studies designed to support the safety and utility of neurones was successful. Would you comment on the opportunity addressed by this study and its success?

Mr. Aldrich: Yes, we actually are involved in three studies of animals. These are not FDA preclinical. They're our own laboratory animal studies conducted through third-party universities. We've done work with retinal cells demonstrating that they do indeed engraft and do not produce teratomas, which can become a cancer. We've also produced liver cells and performed similar studies with those, and with positive results.

Most recently, we've done the same thing with neuronal cells that we've developed. So we've developed three classes of cells that are now being tested in animals, and we'll repeat those tests until we're very confident that we have the kind of data that we are ready to go into the FDA with. All the indications are very, very good so far.In addition, we've grown a human cornea in a petri dish, and we're working now outside the U.S., primarily in India, to develop those corneas as a cornea transplant, a substitute for using cadaver corneas.

TWST: Are there other companies working along the same lines as International Stem Cell? What are your competitive advantages?
The remainder of this 27 page Biotechnology and Pharmaceuticals Report can be immediately viewed by purchasing online.

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Decitabine may target ovarian CSCs?

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Two-Drug Phase I Trial Shows Promise in Treating Late-Stage Ovarian Cancer, ScienceDaily, June 13, 2010. Excerpt:

"Our hypothesis is that decitabine isn't just targeting active ovarian cancer cells, but also cancer stem cells that seem to survive the first treatments," [Kenneth] Nephew said. "By keeping tumor suppression genes from being methylated, carboplatin and other platinum-based treatments for ovarian cancer have a better chance of success in the late stages."

This news release is about the publication entitled: A phase 1 and pharmacodynamic study of decitabine in combination with carboplatin in patients with recurrent, platinum-resistant, epithelial ovarian cancer by Fang Fang, Curt Balch and 9 co-authors, including Kenneth P Nephew and Daniela E Matei, Cancer 2010(Jun 8) [Epub ahead of print].