CIRM: Elona Baum. Funding stem cell research at California institutions




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Video title: CIRM: Elona Baum. Funding stem cell research at California institutions
Released on: May 08, 2013. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at BioEurope Spring 2013, in Barcelona, Spain, Fintan Walton talks to Elona Baum, General Counsel and VP, Business Development at CIRM.
California Institute for Regenerative Medicine's initiative and it's fund
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BioEurope Spring, in Barcelona, in 2013. On this show I have Elona Baum, who is with the California Institute for Regenerative Medicine, welcome.
Elona Baum:
Thank you for having me.
Fintan Walton:
Pleasure. Elona, the California Institute for Regenerative Medicine was part of an initiative that took place back in 2004, probably before 2004, because this was a vote that was put to the Californian people about whether they want to support such an initiative particularly in the area of regenerative medicine and stem cell science, could you tell us a little bit about that background, and why that took place?
Elona Baum:
Sure, incredibly innovative approach that, I would call him sort of the founding father Bob Klein had envisioned, it was you probably know in a context where stem cell research embryonic was at a cross roads let's just say in the United States, it was headed for a challenge in terms of funding, and Bob Klein has a son who is affected with diabetes,he is very public about that and as a father you could only imagine that he wanted to do everything possible for his son, he was not pleased with the standard of care, he was very concerned and he saw what he thought could be an immense field with so much promise that was potentially going to be ignored at least in the United States because of some concerns about embryonic stem cell research and as a result of that he thought of the very innovative financing approach and that was bond issuance, so what he did which I think you can only do in the United States in California.
Fintan Walton:
Particularly there.
Elona Baum:
Yes it's of course the California initiative but he garnered enough signatures to get this particular initiative on the ballet and it won by a close to 60% of the vote. I don't think in another state you can do that, which is a beautiful thing in California although sometimes it's a little trying for the voters, because you have a stack this big of different propositions, but it got such a wide spread appeal because of the promise of this field and concerns that we really needed to accelerate this research.
Fintan Walton:
Okay, so once that was voted in favor of then this allowed a bond to be created?
Elona Baum:
Right it's a periodic issuance of bonds, it's creative in that it allows the cost of this research, $3 billion to be spread out over 30-years, because they are typically 30-year bonds and so ultimately it's more than the 3 billion it's approximately 6 billion that will be paid back over time, but the promise is, is that several fold, one that you will end up increasing and building what we call the economic engine in California for this field and equally importance is that you are bringing these cutting edge therapies to patients, so you are improving the care to patients while at the same time it's what I would like to say is shifting the cost curve of healthcare in the right direction, because if you look at any of other charts aging populations we are all, all over the world, the United States, the world in a very serious position if we continue business as usual, because healthcare costs are sky rocketing, these are transformative medicines that truly have the potential and we don't want to over sell it, but the potential to cure or to significantly improve patient care.
Fintan Walton:
Sure, so the money has been raised as you said through bonds and then that money is then distributed back to research centers that specialized in the stem cell or regenerative medicines, is that correct?
Elona Baum:
Yes, but I want to emphasis it's not just research centers in terms of academia, it could be companies as well, so one of our goals is as I said to build the economic engine for California, so that requires that we try to foster spin outs, try to foster companies, and company growth in California as well.
Impact on CIRM and it's funding companies
Fintan Walton:
Okay, now the initiative, the actual centre for regenerative medicine was started in 2004, so that's you are coming up to nearly 10-years of this initiative, what sort of impact has it had so far?
Elona Baum:
Let me just back up a little bit because even though it was technically voted on in 2004 it promptly went into litigation by those challenging the proposition for if and I won't get into specifics of why, one can only imagine. So it took another two-years before we were really up and running so 2006, and then to answer your question, what do we see and what are the impacts, and I think you sort of have to look at it threefold, I think you need to look at what've built in terms of infrastructure, what we were funding in terms of true science and therapeutics, and then perhaps may be a little bit about sort of economic development. So let me start my just referring to the infrastructure, we've built 12 state of the art stem cell facilities all around the state, and I think that this will be a terrific footprint from which future generations, researchers will be able to practice the trade of stem cell and regenerative medicine, so we've built that. We've also are in the process of building an iPS stem cell bank that could be used worldwide, we have the goal of 3000 disease lines, so that's another infrastructure and we had to actually train scientists, there weren't that many stem cell scientists in California at the time, so we had a number of training programs, so that's our first phase. I think of our first phase as sort of the building of the infrastructure and all along that time we were starting to develop the basic biology and mostly recently we've been building the therapeutic pipeline, so that's another great story we have to tell, we have 77 translational projects from everything from cancer, to neuro diseases, to eye diseases everything under the sun and we're starting to link these up and we are in the beginning stages with pharma companies, with VCs, so it's starting to really bear a lot of fruit and I think the next phase we'll see the fruit maturing where we see these projects going through the clinic and hopefully ultimately having a couple of proof of concepts after a Phase II, and then in terms of economics we've created jobs and we have about $200 million generated in taxes, we've actually attracted another 800 actually closer to $900 million in additional co-funding along the way, so it's we are in the middle our story right now, but we are bearing a lot of fruits.
Fintan Walton:
Right, so just in terms of these facilities that you've been building around the State of California, where are they based? Are they close to other academic research centers or where have you located these facilities?
Elona Baum:
They are actually in all of or many of the academic centers up and down the state, so there is 12 of them, there are some core labs meaning that outsiders can have access to them and that was a portion of some of what we've funded.
Fintan Walton:
And in terms of those companies that are showing interest, that are on the other side of the translational research activity, are these new start-ups or existing companies? Are they all in California or they outside California?
Elona Baum:
Okay, very interesting and let me parts that out, it's part of what we want to do is some economic development, so I will start with your last question first, or they in or out of California, they have to be in California in order to be eligible but they don't, the whole company the headquarters doesn't have to be in, and so the question was what do we do in order to help build this economic engine in California when there are terrific companies outside of California. As you might have heard Boston is starting to attract a lot of biotech and regen med companies, we want to get a footprint in California, so we, and I was part of it, drafted our funding mechanisms, we call them RFA's so that if they had at least an outpost so to speak in California they'd be eligible and we have Bluebird Bio [PharmaDeals ID = 49285] for instance coming into California, there were a Fierce 12 company last year, so a terrific company and they've set up shops so to speak in California and I am hearing about others that are interested in doing so if they get our funding, so that's the first thing, we are attracting new companies and some of the existing companies were there and in part because of sort of my understand that they decided to situate in California and they were very, very young with a promise of potentially being eligible for our funding, so and we continue to try to find some, fund some of those VistaGen [PharmaDeals ID = 40868], BioTime [PharmaDeals ID = 38334] [PharmaDeals ID = 33218], ViaCyte, all companies that we'll see more of I hope, StemCell, Inc [PharmaDeals ID = 42810], again another company and then finally we are starting to see spin out companies emerge from at least part of the CIRM funded inventions, they are very, very young.
California Institute for Regenerative Medicine's funding opportunities
Fintan Walton:
Okay, now you mentioned also VCs, because obviously you are putting funds into these organizations both the academic but also these actual companies that are setting up their operations in California, do your funds work alongside VC funding or they independent of that?
Elona Baum:
We work together, for instance we have the strategic partnership funding program that was one way that we were gearing towards two things, is assuring a mechanism to attract follow what I call follow on funding, or follow on financing and so we required that whoever applied to us either have a biotech agreement in place like academic that have a biotech agreement in place that would hopefully provide this funding especially for Phase III or VC funding and what we've been doing lately, I've just hired someone to help me, is to go to the VCs and say look we funded ex amount of dollars and we can continue to fund this, but what we like is a partial match and then you can get additional funding from us.
Fintan Walton:
So is the funding, just to be clear the funding is in the form of grants, it's not in the form of equity?
Elona Baum:
It is grants, there is actually a choice between grants or loans, in the old days you had to take a loan if you are a for-profit and now we will allow any awardee to take a grant versus a loan, most of them are taking grants, grants have a royalty that's attached to them. The loans in a way were really in many respects like a grant, because there was a form that actually was forgivable if the project wasn't successful which is a different name.
Fintan Walton:
Yes, forgivable loan is a grant basically?
Elona Baum:
Yes it is.
Fintan Walton:
It can be quickly turned into a grant.
Elona Baum:
Yes, the only difference was you asked about equity so with respect to those loans at least during one phase of CIRM's life part of those loans didn't have equity but they had a warrant requirement.
Fintan Walton:
Okay, so they are convertible to some element of that into equity?
Elona Baum:
Yes.
CIRM's success and it's impact on stem cell therapy
Fintan Walton:
Okay, so how would you measure your success?
Elona Baum:
Well you always need a sort of a measuring tool, right, so I think that, I think we've been grandly successful, but I don't want to oversell, I don't want to say that in a year or two somebody will be walking out of a wheel chair. If you measure success on how many people will be getting up and walking out of a wheel chair next year, there might be some dissatisfied folks, but in terms of building this pipeline that is moving through the clinical stage I am absolutely confident in ten years when we look back every Californian would be very pleased that they took the initiative, took the risk and funded this area, and I think the world will be happy, extremely pleased because I really think that we are changing the face of medicine.
Fintan Walton:
Sure, and just one final question Elona is that clearly doing stem cell research, using stem cells for therapeutic use is obviously novel, it's new, how much are you influencing the way the FDA will accept this form of therapy, because obviously they have to change the way they think how cell therapy can be used, which obviously is different to drug, so what impact are you having on that?
Elona Baum:
It is a great question, in my prior years before joining CIRM I was at Genentech and I spent a couple of years in the regulatory policy, so I was always of the minds that we needed to be friends and collaborative with the FDA, and I think I brought that to CIRM before we even had our Senior VP of R&D and started building the rapport and the relationship, because we really need to teach each other, the science is very young and you might have heard Geron had a lot of work it needed to go through in order to get through the clinic initially. And when I started at CIRM about four-years ago there was a lot of concern about the regulatory pathway and the uncertainty of it, and I always felt it was prudent to work with the FDA so that we could all understand better the science, because it's really an uncertain science, it's not so much an uncertain regulatory path, if the science was so certain the regulatory path would be much more certain. So we are working together to figure out ways to improve regulatory science and create a more a understandable or more certain regulatory path and I think we are making great strides there, I am very pleased with where we're heading.
Fintan Walton:
Elona Baum, thank you very much indeed for coming on the show.
Elona Baum:
Thank you, its terrific opportunity, great.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Elona Baum
General Counsel and VP, Business Development
At the time of this PTV interview Elona Baum serves as General Counsel and VP of Business Development at California Institute for Regenerative Medicine (CIRM). Elona Baum is the General Counsel and Vice President of Business Development for the California Institute for Regenerative Medicine (CIRM). She is an experienced attorney with more than 20 years of practice, mostly in the life sciences and drug development field. As a member of CIRM's executive team, Ms. Baumis responsible for the strategic initiatives of the agency, as well as overall management of the legal function. Prior to joining CIRM, Ms. Baumheld the positions of Associate General Counsel and later Director of Regulatory Policy and Strategy at Genentech, Inc. (1996 to 2009). Prior to Genentech, she practiced law at private firms. Ms. Baumreceived her BA in Economics from the University of California and her JD from the University of San Francisco School of Law. She served as an extern for Justice John A. Arguelles, California Supreme Court.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialization.
California Institute for Regenerative Medicine
CIRM was established in November 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Act. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was overwhelmingly approved by voters, and called for the establishment of an entity to make grants and provide loans for stem cell research, research facilities, and other vital research.