Search Results for: double stemcell research

Los Angeles Times: StemCells, Inc., Award 'Redolent of Cronyism'

Posted: October 21, 2012 at 7:57 am

The Los Angeles Times this
morning carried a column about the “charmed relationship” between
StemCells, Inc., its “powerful friends” and the $3 billion
California stem cell agency.

The article was written by
Pulitzer prize winner and author Michael Hiltzik, who has been
critical of the agency in the past. The piece was the first in the major
mainstream media about a $20 million award to StemCells, Inc., that was approved in September by the agency's board. The bottom line of the
article? The award was “redolent of cronyism.”

Hiltzik noted that
StemCells, Inc., now ranks as the leading corporate recipient of cash
from the agency with $40 million approved during the last few months.

But he focused primarily
on September's $20 million award, which was approved despite being
rejected twice by grant reviewers – “a particularly
impressive” performance, according to Hiltzik. It was the first
time that the board has approved an award that was rejected twice by
reviewers.

Hiltzik wrote,

“What was the company's
secret? StemCells says it's addressing 'a serious unmet medical need'
in Alzheimer's research. But it doesn't hurt that the company also
had powerful friends going to bat for it, including two guys who were
instrumental in getting CIRM off the ground in the first place.”

The two are Robert Klein,
who led the ballot campaign that created the agency and became its
first chairman, and Irv Weissman of Stanford, who co-founded
StemCells, Inc., and sits on its board. Weissman, an internationally
known stem cell researcher, also was an important supporter of the
campaign, raising millions of dollars and appearing in TV ads. Klein,
who left the agency last year, appeared twice before the CIRM board
this summer to lobby his former colleagues on behalf of Weissman's
company. It was Klein's first appearance before the board on behalf
of a specific application.

The Times piece continued,

“But private enterprise
is new territory for CIRM, which has steered almost all its grants
thus far to nonprofit institutions. Those efforts haven't been
trouble-free: With some 90% of the agency's grants having gone to
institutions with representatives on its board, the agency has long
been vulnerable to charges of conflicts of interest. The last thing
it needed was to show a similar flaw in its dealings with private
companies too.”

Hiltzik wrote,

“(Weissman) has also
been a leading beneficiary of CIRM funding, listed as the principal
researcher on three grants worth a total of $24.5 million. The agency
also contributed $43.6 million toward the construction of his
institute's glittering $200-million research building on the Stanford
campus.”

CIRM board approval of the
$20 million for StemCells, Inc., came on 7-5 vote that also required
the firm to prove that it had a promised $20 million in matching
funds prior to distribution of state cash.

Hiltzik continued,

“The problem is that
StemCells doesn't have $20 million in spare funds. Its quarterly
report for the period ended June 30 listed about $10.4
million in liquid assets, and shows it's burning about $5 million per
quarter. Its prospects of raising significant cash from investors
are, shall we say, conjectural.

“As it happens, within
days of the board's vote, the
firm downplayed any pledge 'to raise a specific amount of
money in a particular period of time.' The idea that CIRM 'is
requiring us to raise $20 million in matching funds' is a
'misimpression,' it said. Indeed, it suggested that it might count
its existing spending on salaries and other 'infrastructure and
overhead' as part of the match. StemCells declined my request that it
expand on its statement.

“CIRM spokesman Kevin
McCormack says the agency is currently scrutinizing StemCells'
finances 'to see what it is they have and whether it meets the
requirements and expectations of the board.' The goal is to set
'terms and conditions that provide maximum protection for taxpayer
dollars.' He says, 'If we can't agree on a plan, the award will
not be funded.'"

Hiltzik wrote,

“The agency shouldn't be
deciding on the spot what does or doesn't qualify as matching funds.
It should have clear guidelines in advance.

“Nor should the board
overturn the judgment of its scientific review panels without
clear-cut reasons....The record suggests that the handling of the
StemCells appeal was at best haphazard and at worst redolent of
cronyism.”

Source:
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Researcher Alert: Stem Cell Agency to Take Up Grant Appeal Restrictions

Posted: October 21, 2012 at 7:57 am

The move by the $3 billion California
stem cell agency to curtail its free-wheeling grant appeal process
will undergo its first public hearing next week.

The proposals will mean that scientists
whose applications are rejected by reviewers will have fewer avenues
to pursue to overturn those decisions. The changes could take effect
as early as next year.

The move comes in the wake of a record
number of appeals this summer that left the board complaining about
“arm-twisting,” lobbying and “emotionally charged presentations.”

Among other things, the new "guidelines" attempt to define
criteria for re-review – “additional analysis” – of
applications involved in appeals, also called “extraordinary
petitions.” The plan states that re-review should occur only in
the case of a material dispute of fact or material new information.
(See the end of this item for agency's proposed definitions.)

In addition to alterations in the
appeal process, the CIRM directors' Application Review Task Force
will take up questions involving “ex parte communications.” The
agenda for the Oct. 24 meeting did not contain any additional
information on the issue but it likely deals with lobbying efforts on
grants outside of public meetings of the agency. We understand that
such efforts surfaced last summer involving the $$214 million disease
team round and Robert Klein, the former chairman of the stem cell
agency.

Klein appeared twice publicly before
the board on one, $20 million application by StemCells, Inc., the
first time a former governing board member has publicly lobbied his former
colleagues on an application. The application was rejected twice by reviewers – once
on the initial review and again later on a re-review – but it was
ultimately approved by directors in September on a 7-5 vote.

The board has long been troubled with
its appeal process but last summer's events brought the matter to a
new head. The issue is difficult to deal with because state law
allows anyone to address the CIRM governing board on any subject when
it meets. That includes applicants who can ask the board to approve
grants for any reason whatsoever, not withstanding CIRM rules. The board can also approve a grant
for virtually any reason although it has generally relied on
scientific scores from reviewers.

The proposals to restrict appeals are
designed to make it clear to scientists whose applications are
rejected by reviewers that the board is not going to look with favor
on those who depart from the normal appeals procedure.

While the board almost never has
overturned a positive decision by reviewers, in nearly every round it approves some applications that have been rejected by reviewers. That has
occurred as the result of appeals and as the result of motions by
board members that did not result from public appeals.

Ten of the 29 board members are classified as patient advocates and often feel they must advance the cause of the
diseases that they have been involved with. Sometimes that means
seeking approval of applications with low scientific scores.

Here is how agency proposes to define
“material dispute of fact:”

“A material dispute of fact should
meet five criteria:(1) An applicant disputes the accuracy of a
statement in the review summary;(2) the disputed fact was significant
in the scoring or recommendation of the GWG(grant review group); (3) the dispute pertains
to an objectively verifiable fact, rather than a matter of scientific
judgment or opinion;(4) the discrepancy was not addressed through the
Supplemental Information Process and cannot be resolved at the
meeting at which the application is being considered; and
(5) resolution of the dispute could affect the outcome of the board’s
funding decision."

Here is how the agency proposes to
define “material new information:”

“New information should: (1)be
verifiable through external sources; (2) have arisen since the
Grants Working Group(grant review group) meeting at which the application
was considered; (3) respond directly to a specific criticism or
question identified in the Grants Working Group’s review; and (4)
be submitted as part of an extraordinary petition filed five business
days before the board meeting at which the application is
being considered."

Next week's hearing is scheduled for
Children's Hospital in Oakland with a teleconference location at UC
Irvine. Addresses can be found on the agenda.

Source:
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Researcher Alert: California Stem Cell Agency Tightening Budget Oversight on Grants

Posted: October 7, 2012 at 4:06 pm

Some of California's top stem cell
researchers are going to have to sharpen their spreadsheets if they
want to win money from the state's $3 billion stem cell agency.

The agency is moving to beef up
scrutiny of the high-profile, big-ticket grant applications
that it will consider during the next several years. The effort may well extend to all grant programs. The move also makes
it clear to researchers that the CIRM staff is in the driver's seat
when it comes to budgeting on research projects.

The plan was laid out this week in a memo to directors of the California Institute for Regenerative Medicine (CIRM) by Ellen Feigal, the agency's senior vice
president for research and development. She said,

“Increasing the importance of
budgetary review will encourage applicants to propose rigorous,
realistic and vetted budgets, and will further our mission to be good
stewards of taxpayer dollars. These additions will not significantly
increase the workload burden on GWG members (grant reviewers) and
explicitly acknowledge that program goals, scientific plans, accurate budgeting and prudent spending are inextricably linked.”

The proposal comes before the CIRM
directors' Science Subcommittee next Monday and would alter the
closed-door grant review process in the following manner, according
to Feigal's memo.

• “To assist GWG review,
appropriate expertise on budget and financial matters (e.g., this
could be in the form of a specialist reviewer, or can also be
assigned to a GWG reviewer with the appropriate background and
expertise), will review applications for sound budgeting and provide
comments or questions to the GWG for consideration by the reviewers
before the reviewer’s final scores are entered.
• “If the financial/budgetary
matter potentially directly impacts on the design or feasibility of
conducting the project, the GWG may consider this issue in the
scoring; otherwise, budgetary and financial issues and questions will
not contribute to the scientific score.
• “As appropriate, review summaries
sent to the ICOC (the CIRM governing board) will identify scientific
as well as budget or other issues. To the extent endorsed by the
GWG, the review summaries will also identify potential resolution
should the ICOC approve a given award with budget issues.
• “CIRM officers should be provided
explicit discretion to consider the budget comments, as well as
budget or other issues. To the extent endorsed by the GWG, the
review summaries will also identify potential resolution should the
ICOC approve a given award with budget issues.”

Feigal's memo clearly indicates that
CIRM staff has experienced push-back from recalcitrant researchers
when efforts have been made to bring costs under control. She noted that
the agency's staff examines a research project's budget during the
“prefunding” review that follows board approval. However, Feigal
said, at that stage, “It is often challenging to make substantive
changes to the budget, based on appropriateness of study activities
and costs, given the ICOC approval at a given budget amount.”

The agency has already examined some
budgets prior to board approval. One grant review in a $200
million-plus round this summer, for example, declared that costs to
prepare regulation packages had “overlap” and were “excessive,”
along with costs dealing with manufacturing and per patient expenses.
That was for a high-scoring application by Antoni Ribas of UCLA, and
he was not alone.

In her memo, Feigal listed other cases
of budgetary shortcomings in recent applications:,

• “Budget does not align with the
program deliverables and milestones. For example, the budget
includes activities not relevant to project objective(s) or that are
out of scope.
•”Budget does not contain adequate
expenses for known costs. For example, an applicant may budget
$100,000 for a GMP manufacturing run of a biologic in which it is
generally accepted knowledge that the actual expenses are typically
much greater.
•“Budget item significantly exceeds
a known cost or seems excessive without adequate justification. For
example, an applicant may propose a surgical expense of $100,000 per
patient for a procedure with Medicare reimbursement set at $15,000.
•“Cost allocations are not done
properly. For example, an applicant is developing the same
therapeutic candidate for 3 indications, and is applying for CIRM
funding for 1 of the 3, but is charging CIRM for the cost of the
entire manufacturing run.”

Initially, the budgetary review would
be used in disease team, early translational, strategic partnership
rounds, and any new rounds “as deemed appropriate.” Feigal said,
however, that “all applications for CIRM awards should be
carefully examined for budgetary appropriateness.”

Our take: This seems to be a
well-advised move, albeit one that is not likely to find favor with
researchers accustomed to loose oversight. It moves budgetary review
to an earlier stage and gives the CIRM directors a chance to weigh in
on those matters prior to approval of grants, instead of creating a
sense of entitlement on the part of recipients that may pop up
following board approval of their applications. Indeed, the plan
makes such good sense that it raises the question why it was not in
place years ago.

A final note: Feigal's memo is an
excellent example of the type of information that clarifies issues
and helps CIRM directors make the best possible decisions. It
provides some history, good evidence for a change and an explanation
of benefits. Additionally, the memo is timely, having been posted on
the CIRM website sufficiently in advance of next week's meeting to give affected parties and others time to comment
and make constructive suggestions. The memo is also far superior to
the Power Point presentations that are often submitted to the board
minus any nuanced, written discussion of the issue at hand.

Next week's meeting will be based in
San Francisco but also has teleconference locations in Irvine (2), La
Jolla, Stanford, Pleasanton, Oakland and Los Angeles where the public
and researchers can participate. The specific addresses can be found on the agenda.

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/30DY8fml4zE/researcher-alert-california-stem-cell.html

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Researcher Alert: California Stem Cell Agency Tightening Budget Oversight on Grants

Posted: October 7, 2012 at 4:05 pm

Some of California's top stem cell
researchers are going to have to sharpen their spreadsheets if they
want to win money from the state's $3 billion stem cell agency.

“Increasing the importance of
budgetary review will encourage applicants to propose rigorous,
realistic and vetted budgets, and will further our mission to be good
stewards of taxpayer dollars. These additions will not significantly
increase the workload burden on GWG members (grant reviewers) and
explicitly acknowledge that program goals, scientific plans, accurate budgeting and prudent spending are inextricably linked.”

The proposal comes before the CIRM
directors' Science Subcommittee next Monday and would alter the
closed-door grant review process in the following manner, according
to Feigal's memo.

• “To assist GWG review,
appropriate expertise on budget and financial matters (e.g., this
could be in the form of a specialist reviewer, or can also be
assigned to a GWG reviewer with the appropriate background and
expertise), will review applications for sound budgeting and provide
comments or questions to the GWG for consideration by the reviewers
before the reviewer’s final scores are entered.
• “If the financial/budgetary
matter potentially directly impacts on the design or feasibility of
conducting the project, the GWG may consider this issue in the
scoring; otherwise, budgetary and financial issues and questions will
not contribute to the scientific score.
• “As appropriate, review summaries
sent to the ICOC (the CIRM governing board) will identify scientific
as well as budget or other issues. To the extent endorsed by the
GWG, the review summaries will also identify potential resolution
should the ICOC approve a given award with budget issues.
• “CIRM officers should be provided
explicit discretion to consider the budget comments, as well as
budget or other issues. To the extent endorsed by the GWG, the
review summaries will also identify potential resolution should the
ICOC approve a given award with budget issues.”

In her memo, Feigal listed other cases
of budgetary shortcomings in recent applications:,

• “Budget does not align with the
program deliverables and milestones. For example, the budget
includes activities not relevant to project objective(s) or that are
out of scope.
•”Budget does not contain adequate
expenses for known costs. For example, an applicant may budget
$100,000 for a GMP manufacturing run of a biologic in which it is
generally accepted knowledge that the actual expenses are typically
much greater.
•“Budget item significantly exceeds
a known cost or seems excessive without adequate justification. For
example, an applicant may propose a surgical expense of $100,000 per
patient for a procedure with Medicare reimbursement set at $15,000.
•“Cost allocations are not done
properly. For example, an applicant is developing the same
therapeutic candidate for 3 indications, and is applying for CIRM
funding for 1 of the 3, but is charging CIRM for the cost of the
entire manufacturing run.”

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/30DY8fml4zE/researcher-alert-california-stem-cell.html

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Biotech Industry Applauds Introduction of the High Technology Small Business Research Incentives Act

Posted: October 2, 2012 at 3:21 am

NEW YORK, NY--(Marketwire - Oct 1, 2012) - The Biotechnology Industry has seen increased investor interest in 2012 as it continues to impress with strong gains. The iShares NASDAQ Biotechnology Index ETF (IBB) has gained over 35 percent this year, more than double the S&P 500 Index's gain of 15 percent. New legislation, increased mergers & acquisition activity as a result of major patent expirations have all been contributing factors to industry's rapid rise in 2012. Five Star Equities examines the outlook for companies in the Biotech Industry and provides equity research on StemCells, Inc. ( NASDAQ : STEM ) and Neuralstem, Inc. ( NYSE : CUR ).

Access to the full company reports can be found at: http://www.FiveStarEquities.com/STEM http://www.FiveStarEquities.com/CUR

The Biotechnology Industry Organization (BIO) has recently praised the introduction of the High Technology Small Business Research Incentives Act. The new legislation would allow investors of joint venture R&D projects to utilize the losses and tax credits.

"Through the tax code, Congress historically has provided opportunities that encourage private investment in pre-revenue, R&D-intensive companies. The early growth of the biotech industry in the 1980s was due in part to the ability of investors to support projects aimed at finding new cures and treatments through similar joint ventures. This legislation will help spur greater private investment in biotech and other R&D intensive industries." BIO's President and CEO Jim Greenwood said in a statement.

Five Star Equities releases regular market updates on the Biotech Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at http://www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

StemCells is engaged in the research, development, and commercialization of cell-based therapeutics and tools for use in stem cell-based research and drug discovery. Shares of the company surged last Thursday after it reported it has enrolled its first patient in a Phase I/II clinical trial for the treatment of a chronic spinal cord injury.

Neuralstem's patented technology enables the ability to produce neural stem cells of the human brain and spinal cord in commercial quantities, and the ability to control the differentiation of these cells constitutively into mature, physiologically relevant human neurons and glia. The company recently reported it has been approved to commence an ischemic stroke trial in China.

Five Star Equities provides Market Research focused on equities hat offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: http://www.FiveStarEquities.com/disclaimer

Excerpt from:
Biotech Industry Applauds Introduction of the High Technology Small Business Research Incentives Act

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Reproducing Research Results: Removing a Scientific Roadblock

Posted: September 23, 2012 at 3:55 pm

The California stem cell agency faces
no easy task in trying to translate basic research findings into
something that can be used to treat patients and be sold commercially.

Even clinical trials, which only begin
long after the basic research is done and which involve more ordinary
therapeutic treatments than stem cells, fail at an astonishing rate.
Only one out of five that enter the clinical trial gauntlet
successfully finish the second stage, according to industry data
cited last spring by Pat Olson, executive director of scientific activities at the stem cell agency. And
then come even more challenges.

But at a much earlier stage of
research there is the “problem of irreproducible results,” in the
words of writer Monya Baker of the journal Nature. Baker last month reported on
moves by a firm called Science Exchange in Palo Alto, Ca., to
do something to ease the problem and speed up preclinical research.
The effort is called the Reproducibility Initiative and also involves
PLOS and figshare, an open science Internet project.

Elizabeth Iorns
Science Exchange Photo

Science Exchange is headed by Elizabeth
Iorns, a scientist and co-founder of the firm. She wrote about test-tube-to-clinic translation issues in a recent article in New
Scientist that was headlined, “Is medical science built on shaky
foundations?”

Iorns said,

“One goal of scientific publication
is to share results in enough detail to allow other research teams to
reproduce them and build on them. However, many recent reports have
raised the alarm that a shocking amount of the published literature
in fields ranging from cancer biology to psychology is not
reproducible.”

Iorns cited studies in Nature that
reported that Bayer cannot “replicate about two-thirds of published
studies identifying possible drug targets” and that Amgen failed at
even a higher rate. It could not “replicate 47 of 53 highly
promising results they examined.”

The California Stem Cell Report earlier
this week asked Iorns for her thoughts on the implications for the
California stem cell agency, whose motto is "Turning stem cells into cures." Here is the full text of her response.

“First, I think it is important to
accept that there is a crisis affecting preclinical research. Recent
studies estimate that 70% of preclinical research cannot be
reproduced. This is the research that should form the foundation upon
which new discoveries can be made to enhance health, lengthen life,
and reduce the burdens of illness and disability. The
irreproducibility of preclinical research is a significant impediment
to the achievement of these goals. To solve this problem requires
immediate and concrete action. It is not enough to make
recommendations and issue guidelines to researchers. Funders must act
to ensure they fund researchers to produce high quality reproducible
research. One such way to do so, is to reward, or require,
independent validation of results. The reproducibility initiative
provides a mechanism for independent validation, allowing the
identification of high quality reproducible research. It is vital
that funders act now to address this problem, to prevent the wasted
time and money that is currently spent funding non-reproducible
research and to prevent the erosion of public trust and support for
research.”

Source:
http://californiastemcellreport.blogspot.com/feeds/posts/default?alt=rss

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Reproducing Research Results: Removing a Scientific Roadblock

Posted: September 23, 2012 at 3:54 pm

The California stem cell agency faces
no easy task in trying to translate basic research findings into
something that can be used to treat patients and be sold commercially.

Elizabeth Iorns
Science Exchange Photo

Iorns said,

“One goal of scientific publication
is to share results in enough detail to allow other research teams to
reproduce them and build on them. However, many recent reports have
raised the alarm that a shocking amount of the published literature
in fields ranging from cancer biology to psychology is not
reproducible.”

“First, I think it is important to
accept that there is a crisis affecting preclinical research. Recent
studies estimate that 70% of preclinical research cannot be
reproduced. This is the research that should form the foundation upon
which new discoveries can be made to enhance health, lengthen life,
and reduce the burdens of illness and disability. The
irreproducibility of preclinical research is a significant impediment
to the achievement of these goals. To solve this problem requires
immediate and concrete action. It is not enough to make
recommendations and issue guidelines to researchers. Funders must act
to ensure they fund researchers to produce high quality reproducible
research. One such way to do so, is to reward, or require,
independent validation of results. The reproducibility initiative
provides a mechanism for independent validation, allowing the
identification of high quality reproducible research. It is vital
that funders act now to address this problem, to prevent the wasted
time and money that is currently spent funding non-reproducible
research and to prevent the erosion of public trust and support for
research.”

Source:
http://californiastemcellreport.blogspot.com/feeds/posts/default?alt=rss

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StemCells, Inc., Discloses How it Will Generate $40 Million in Matching Funds

Posted: September 16, 2012 at 3:56 pm

StemCells, Inc., said yesterday that it
will come up with the $40 million needed to match loans from the California
stem cell agency through “existing infrastructure and overhead”
and will not be issuing stocks or warrants to the agency.

In a statement to shareholders, Martin
McGlynn, CEO of the publicly traded firm, discussed the $40 million in loans awarded by agency this summer, including $20 million last
week. The stem cell agency's governing board, after it emerged from
an executive session on the matter, last Wednesday night adopted a
motion requiring the company to demonstrate that it has the matching
funds.

CIRM Chairman J.T. Thomas, a Los Angeles bond financier, said that
concerns were expressed during the executive session that the agency
“would account for such a large part of the assets of the company.”
At his suggestion, the board approved the loan on the condition that
“it show it has access” to the $20 million in matching funds that
company offered during the application process. StemCells, Inc., also
offered a $20 million match on another loan approved in July by CIRM.

The latest financial reports from
StemCells, Inc., which is based in Newark, Ca., show that it had
assets of $17 million as of June 30 and liabilities of $11.6 million.
The company reported net income for the second quarter of $833,522
compared to a loss of $4 million for the same period a year ago.

In its filing with the SEC, the company
said,

“We have incurred significant
operating losses since inception. We expect to incur additional
operating losses over the foreseeable future. We have very limited
liquidity and capital resources and must obtain significant
additional capital and other resources in order to provide funding
for our product development efforts....”

In his statement yesterday, McGlynn
said the California stem cell agency had “doubled down” on
StemCells, Inc., in approving the two loans. He said the company is
not concerned about meeting the matching requirements. McGlynn said,

Martin McGlynn
StemCells, Inc., Photo

“To be clear, we do not interpret the
diligence requirement as an obligation to raise a specific amount of
money in a particular period of time, and we wish to correct the
misstatements made by some uninformed third parties that the ICOC is
requiring us to raise $20 million in matching funds. In
point of fact, we expect that a substantial amount of our
contribution towards these projects will come from existing
infrastructure and overhead, salaries for our existing personnel, and
other contributions in kind. Furthermore, we will soon be
reviewing the budgets for both projects in detail with CIRM
staff. Because each disease team budget was prepared on a
stand-alone basis, we expect to see significant economies and
efficiencies now that the company has in fact been awarded funding
for both.”

McGlynn also said,

"Under this particular CIRM
program (RFA 10-05), funding for companies will be in the form of
unsecured, non-recourse, interest-bearing, term loans, which will be
forgivable in the event the funded research fails to result in a
commercialized product. On the other hand, should the product be
successfully commercialized, CIRM would earn milestone payments
depending on how successful the product becomes. Because CIRM
shares the downside risk, and could participate handsomely on the
upside, the structure makes the loan about as close to 'equity' as one could, without having to dilute existing shareholders in order
to gain access to significant amounts of capital. The company
will not issue stock, warrants or other equity to CIRM in connection
with these awards.

"Of course, we realize that CIRM
prefers that applicants from industry provide evidence of their
ability to secure whatever additional funds may be needed to complete
any CIRM-funded project, in this case the filing of an IND for each
indication. This is stated in the text of RFA 10-05 itself and
was repeated in various comments by CIRM staff during the application
process. When making the second award on September 5, the
ICOC naturally recognized the sizeable commitment it was making
to StemCells, so it instructed CIRM staff to satisfy themselves
of the company's ability to access the capital needed to fund the
project, namely the Alzheimer's program through to the filing of the
IND.”

McGlynn also said firm's bid for
another $10 million from CIRM could come in the form of a grant
instead of a loan. He said,

"Finally, I can confirm that in
June of this year the Company applied for up to $10
million under CIRM's Strategic Partnership I program
(RFA 12-05). Unlike the disease team awards under RFA
10-05, if companies are approved for funding under RFA 12-05, they
may elect to take such funding in the form of a grant, not a
loan. Our application under RFA 12-05 is for a controlled Phase
II clinical trial of HuCNS-SC cells in Pelizaeus-Merzbacher disease
(PMD), a rare myelination disorder. StemCells completed a Phase
I study in PMD in February 2012 and in April announced that
all of the patients from that study showed evidence of cell-derived
myelination and three of the four patients in the study showed
measurable gains in motor and/or cognitive function.”

According to CIRM, the awards in the strategic partner round will be approved either next month or in December.

StemCells, Inc. stock was trading at
$1.85 at the time of this writing. Last week, it rose to $2.43.
During the last 12 months, its high was $2.67 and its low was 59
cents.

Source:
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StemCells, Inc., Discloses How it Will Generate $40 Million in Matching Funds

Posted: September 16, 2012 at 3:55 pm

In its filing with the SEC, the company
said,

“We have incurred significant
operating losses since inception. We expect to incur additional
operating losses over the foreseeable future. We have very limited
liquidity and capital resources and must obtain significant
additional capital and other resources in order to provide funding
for our product development efforts....”

Martin McGlynn
StemCells, Inc., Photo

“To be clear, we do not interpret the
diligence requirement as an obligation to raise a specific amount of
money in a particular period of time, and we wish to correct the
misstatements made by some uninformed third parties that the ICOC is
requiring us to raise $20 million in matching funds. In
point of fact, we expect that a substantial amount of our
contribution towards these projects will come from existing
infrastructure and overhead, salaries for our existing personnel, and
other contributions in kind. Furthermore, we will soon be
reviewing the budgets for both projects in detail with CIRM
staff. Because each disease team budget was prepared on a
stand-alone basis, we expect to see significant economies and
efficiencies now that the company has in fact been awarded funding
for both.”

McGlynn also said,

"Under this particular CIRM
program (RFA 10-05), funding for companies will be in the form of
unsecured, non-recourse, interest-bearing, term loans, which will be
forgivable in the event the funded research fails to result in a
commercialized product. On the other hand, should the product be
successfully commercialized, CIRM would earn milestone payments
depending on how successful the product becomes. Because CIRM
shares the downside risk, and could participate handsomely on the
upside, the structure makes the loan about as close to 'equity' as one could, without having to dilute existing shareholders in order
to gain access to significant amounts of capital. The company
will not issue stock, warrants or other equity to CIRM in connection
with these awards.

"Of course, we realize that CIRM
prefers that applicants from industry provide evidence of their
ability to secure whatever additional funds may be needed to complete
any CIRM-funded project, in this case the filing of an IND for each
indication. This is stated in the text of RFA 10-05 itself and
was repeated in various comments by CIRM staff during the application
process. When making the second award on September 5, the
ICOC naturally recognized the sizeable commitment it was making
to StemCells, so it instructed CIRM staff to satisfy themselves
of the company's ability to access the capital needed to fund the
project, namely the Alzheimer's program through to the filing of the
IND.”

McGlynn also said firm's bid for
another $10 million from CIRM could come in the form of a grant
instead of a loan. He said,

"Finally, I can confirm that in
June of this year the Company applied for up to $10
million under CIRM's Strategic Partnership I program
(RFA 12-05). Unlike the disease team awards under RFA
10-05, if companies are approved for funding under RFA 12-05, they
may elect to take such funding in the form of a grant, not a
loan. Our application under RFA 12-05 is for a controlled Phase
II clinical trial of HuCNS-SC cells in Pelizaeus-Merzbacher disease
(PMD), a rare myelination disorder. StemCells completed a Phase
I study in PMD in February 2012 and in April announced that
all of the patients from that study showed evidence of cell-derived
myelination and three of the four patients in the study showed
measurable gains in motor and/or cognitive function.”

According to CIRM, the awards in the strategic partner round will be approved either next month or in December.

StemCells, Inc. stock was trading at
$1.85 at the time of this writing. Last week, it rose to $2.43.
During the last 12 months, its high was $2.67 and its low was 59
cents.

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StemCells, Inc., Gunning for Another $10 Million from California Stem Cell Agency

Posted: September 9, 2012 at 3:58 pm

Fresh from winning $40 million from the
California stem cell agency, StemCells, Inc., is shooting for
another, $10 million award from the state research effort.

The latest proposal comes as the
publicly traded firm also faces the task of raising $40 million that it
has promised the agency to match the earlier awards. That figure
could well rise to $50 million given the new application.

Martin McGlynn, CEO of the
well-connected Newark, Ca., firm, disclosed StemCells, Inc.'s,
latest proposal in an article by Catherine Shaffer in BioWorld. She
wrote,

“Already looking ahead, StemCells has
set its sights on one more CIRM initiative designed to fund early
stage clinical trials over a four-year period. StemCells has applied
for that grant, worth up to $10 million, to fund a Phase II trial in
PMD(Pelizaeus-Merzbacher disease).”

The article did not disclose the timing on the new application.

StemCells, Inc.'s lobbying efforts with the stem cell agency were vigorously aided by the former chairman of the $3 billion
California stem cell agency, Robert Klein (see here and here). And Wednesday evening, the company convinced
the state agency's board to overturn two successive reviewer rejections of a
$20 million proposal for Alzheimer's research. The vote was 7-5.

Klein's efforts came in a record-breaking round of appeals and emotional presentations by patient advocates, which triggered complaints from the board this week about "arm-twisting" and politicking.

StemCells, Inc., was founded by the
eminent Stanford stem cell researcher Irv Weissman, who helped to
raise millions for the ballot initiative that created the stem cell
agency. He additionally appeared in in the campaign's TV advertising.
The campaign was headed by Klein, who ultimately raised $35 million
to convince voters to create the agency. Weissman is currently on the board
of the StemCells, Inc. His wife is executive vice president.

In July, the stem cell agency board
approved the first $20 million award to the firm for research involving spinal injury.

McGlynn told BioWorld,

"We're the only company that has
programs going on in all three regions of the central nervous system:
the brain, the spinal cord and the eye."

Not discussed in the BioWorld article
was a requirement, imposed by the CIRM board, that StemCells, Inc.,
show it can deliver $20 million in matching funds on the Alzheimer's
award before receiving any state funds. CIRM said no such board
requirement existed on the spinal award, but the firm has promised to
match the $20 million on that award as well.

BioWorld described the awards as
grants. In fact, they are loans. But under the terms of the loans, if
the research is not successfully commercialized, it will be
forgiven.

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