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Dr. Karen Aboody estimates that she has cured several hundred mice of a cancer of the central nervous system called neuroblastoma.

First she injected them with specialized neural stem cells that naturally zero in on the tumors and surround them. Then she administered an anti-cancer agent that the cells converted into a highly toxic drug.

In her tests, 90% of the animals were rid of their tumors while healthy brain tissue remained undamaged.

To hear Aboody tell it, that was the easy part.

"People are curing mice right and left," said the City of Hope neuroscientist. The real challenge is convincing the Food and Drug Administration to let her try this on people with brain tumors.

Reams of safety data must be amassed to satisfy the FDA. Scientists struggle to navigate all that red tape. Many don't even try.

Now the California Institute for Regenerative Medicine has stepped in -- with an $18-million grant financed by state taxpayers, courtesy of 2004's Proposition 71, which created the state agency.

Aboody's windfall is just one manifestation of the agency's changing mission, galvanized by the 2008 hire of a director with a track record of moving discoveries from lab to clinic.

For 3 1/2 years, the agency focused on the basic groundwork needed to someday use human embryonic stem cells to replace body parts damaged by injury or disease. Such cures are still far in the future.

Now the institute has a more immediate goal: boosting therapies that are much further along in development and more often rely on less glamorous adult stem cells. It is concentrating its vast financial resources on projects that could cure conditions such as age-related macular degeneration, AIDS, sickle cell disease and various types of cancer.

In shifting its focus, the agency is moving to fill a void known as the "valley of death" -- a point at which projects are typically too commercial to vie for federal funds, yet too risky to entice private investors.

This is how the agency -- with its constitutional mandate to invest $3 billion in stem cell research over 10 years -- plans to stay relevant as the state slashes billions from education, public safety, health and welfare programs to close a gargantuan budget hole.

"If we went 10 years and had no clinical treatments, it would be a failure," said the institute's director, Alan Trounson, a stem cell pioneer from Australia. "We need to demonstrate that we are starting a whole new medical revolution."

Other changes helped spur this new direction. In March, President Obama said he would expand federal funding for research on embryonic stem cells beyond the narrow limits set in 2001 by President Bush, making state funding less crucial.

And since Proposition 71 was passed, scientists have created new kinds of stem cells -- known as induced pluripotent stem cells -- that can be coaxed to form many different types of tissues but are made without harming embryos and thus are eligible for federal funding.

When the institute handed out nearly $230 million in October to 14 research teams, including Aboody's at City of Hope, it was its largest scientific investment by far. But it came with strings attached: In four years, recipients should have a clinical trial request ready to file with the FDA. Only four of the projects involve embryonic stem cells.

A new emphasis

It is a significant change in direction for an effort originally designed to bolster research on human embryonic stem cells.

Proposition 71 was set in motion in August 2001, when Bush announced that federal funds could be used to study stem cell lines derived from human embryos. It marked the first time money from the National Institutes of Health and other government agencies was made available to the growing cadre of biologists who believed the cells could be transformed into replacement tissues that would cure a range of diseases.

But there was a catch. Like many Americans, Bush was opposed to the idea of destroying human embryos for any reason, including medical research. So he restricted federal funding to about 20 embryonic stem cell lines that had already been created.

Scientists were soon complaining that the Bush policy was unworkable. Many of the lines had chromosomal abnormalities or were contaminated with animal products, rendering them unsuitable for use in humans. Newer lines developed with private money could only be used in separate labs built without federal money.

The situation was also frustrating to patients who stood to benefit from the research. Bay Area real estate developer Robert Klein, whose son has Type 1 diabetes, proposed a radical solution: raise $3 billion through the sale of state bonds to fund stem cell research in California.

Backers of the California Stem Cell Research and Cures Initiative, better known as Proposition 71, emphasized the potential for these flexible cells to reverse paralysis from spinal cord injuries and cure intractable diseases such as Parkinson's, diabetes and Alzheimer's. Scientists, not normally known for grandstanding, rallied voters across the state. Californians approved Proposition 71 in November 2004 with 59% of the vote.

The first grants went out in April 2006, after fighting off legal challenges. Hundreds of millions of additional dollars followed.

Money put to work

USC, for example, used a grant to build its Center for Regenerative Medicine and Stem Cell Research essentially from scratch.

The university hired Martin Pera, a colleague of Trounson's, to lead the effort. It was quite a coup: In Australia, Trounson and Pera's team was the first to show that human embryonic stem cells could grow into mature cells in laboratory dishes.

Within three months of his arrival, USC received a $600,000 grant to support graduate students and postdocs working on stem cell projects. The following year, the university racked up nearly $4 million in state funding for scientists to study basic properties of human embryonic stem cells.

An additional $2.2 million from the agency allowed USC to set up its Stem Cell Core Facility, where staffers can derive, grow and maintain stem cell lines for researchers. And $27 million more helped finance a new stem cell research building. By the time construction wraps up this summer, Pera said he hopes to recruit two additional research groups using more state grants.

It may seem extravagant, especially in light of California's broken budget. But Pera sees stem cell science as a sound long-term investment.

"This is going to be a key area of scientific research," he said. "What's wrong with making this state a national and worldwide leader in this technology?"

Until a few months ago, these types of grants were the institute's bread and butter. The agency has financed 29 new labs and more than 350 researchers at 51 California institutes, from UC San Diego to Humboldt State. Scientists funded by the California Institute for Regenerative Medicine have produced 412 publications describing heart muscle cells, liver cells, retinal cells and others grown from human embryonic stem cells, among other experiments.

But those academic achievements don't matter much to average taxpayers, Trounson said. People who voted for Proposition 71 "want to see some clinical treatments happen."

A better therapy?

Count Karen Aboody among the impatient masses.

Watching her sister-in-law struggle with breast cancer that spread to the brain, she saw up close how the side effects of treatment can be as devastating as cancer itself. Aboody is convinced that stem cells can provide more effective, less debilitating therapies.

It all hinges on her discovery that neural stem cells flock to a chemical that cells make when they need new blood vessels. Tumors, which need blood to grow, release that chemical in abundance. And so stem cells flock to tumors.

Now she is using her Proposition 71 money to engineer human neural stem cells that produce a key enzyme. The cells are injected into a patient's brain, and a drug called CPT-11 is administered. As the enzyme and drug interact, they produce a powerful chemotherapy agent that kills tumor cells as they divide but leaves surrounding tissues intact.

The team will spend the next few years honing the process while regulatory specialists compile toxicology data, details on the cell manufacturing process and other safety information that the FDA will need when it considers granting permission for a clinical trial in patients with recurring malignant brain tumors.

The institute grants also went to 13 other research teams that believe they are on the verge of bringing stem-cell-based therapies to patients.

Among them is a group from UCLA and Childrens Hospital Los Angeles that hopes to cure patients with sickle cell disease by genetically modifying their blood-forming stem cells so that they produce healthy red blood cells; and researchers at Cedars-Sinai Medical Center who want to inject heart-attack patients with concentrated amounts of their own cardiac stem cells, which naturally repair heart tissue.

Some scientists who study basic stem cell biology say the new emphasis on clinical trials is premature. They say many fundamental questions about stem cells still need to be answered, and diverting money from basic science means that revolutionary therapies -- still many years away -- will take even longer to materialize.

Trounson acknowledged that the shift has elicited "a bit of a reaction from scientists" despite the institute's commitment to continue steering millions of dollars to basic biology. But, he said, the investments will have to produce actual therapies "if we're going to be relevant to the community."

Even under the best of circumstances, Aboody's brain tumor therapy wouldn't win FDA approval for general use for at least a decade, she said.

But, she added, the Proposition 71 money will shave at least four years off the process.

"We can cure mice forever in our labs," she said, "but moving this from the lab to the patient is the ultimate goal."

karen.kaplan@latimes.com

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