State Bets on the Promise of Stem Cell Research

With the passage of a $3-billion stem cell bond measure, California moves into uncharted territory, becoming the first state to create a massive program to fund a single field of scientific research.

The approval of billions in new state spending -- a tough sell even when the state is not deeply in debt -- was a sign of Californians’ deeply rooted optimism about science, said Jack Pitney, a professor of government at Claremont McKenna College.

“It’s a combination of sympathy for people with illness and the spirit of the space program,” Pitney said. “This is a massive application of American know-how and marks the belief that we can reach the next frontier.”

The decision to put the state in the forefront of embryonic stem cell research took on added significance with the reelection of President Bush and the gains made by Republicans in both houses of Congress.

The Republican victories will, at minimum, probably lock in place current federal restrictions on funds for embryonic stem cell research.

California’s Proposition 71, which won 59% of the vote, was designed to repudiate Bush’s decision three years ago to greatly restrict the use of federal money for embryonic stem cell research.

The research is controversial because the stem cells -- which can become any type of cell in the body -- are derived from human embryos that are destroyed in the process.

In addition to restricting federal money, Bush has twice backed measures in Congress that would have criminalized one type of embryonic stem cell research.

The bills, which have been blocked in the Senate, would impose prison sentences of 10 years and fines of $1 million for any type of cloning using human cells, including procedures that research advocates call therapeutic cloning.

Proposition 71 specifically earmarked money for therapeutic cloning, in which the DNA of an unfertilized egg is replaced with the DNA of an individual, producing stem cells that are a genetic match with the donor.

Researchers hope that cloned stem cells might allow scientists to study how diseases such as Alzheimer’s develop. The work might also lead to treatments that would not be rejected by a patient’s immune system.

Supporters of embryonic stem cell research said Wednesday that, despite the Republican gains in the Senate, they believe they have the votes to continue blocking any federal ban. They hope that if the California research effort leads to breakthroughs, political opposition will wane.

The decision by California voters to push embryonic stem cell research forward with $300 million a year for each of the next 10 years marks the first significant break from the nation’s reliance on the National Institutes of Health, which has been the principal source of funds for biological research in the country for 117 years.

NIH spokesman Don Rabolvsky said Wednesday that officials there would not comment on Proposition 71 because they considered its passage a “state matter.”

Supporters of the measure said they saw a clear message in its wide support.

“This was a massive undertaking in a negative national environment which usurps the federal government’s ability to stop embryonic stem cell research,” said Thomas Coleman, a conservative home builder from Bakersfield.

Like many donors to the $26-million Yes on 71 campaign, Coleman got involved for personal reasons: His 28-year-old daughter Sara was diagnosed with juvenile diabetes when she was 5.

The biggest immediate winner from the passage of Proposition 71 will be the state’s universities, particularly the University of California system, which is expected to receive a large portion of the grant money.

Money from Proposition 71 must be spent in the state, with 10% of the funds -- $300 million -- going for new facilities in the first five years.

University leaders already have targeted researchers in other states they hope to entice to California.

“The university enthusiastically takes up the challenge adopted by California’s voters, and we are committed to doing our part to carry out their will,” UC President Robert C. Dynes said in a written statement.

Stem cell researchers are looking into treatments for spinal injuries at UC Irvine, Alzheimer’s disease and heart injuries at UC San Diego, and liver disease at UC Davis.

Stanford University and other private institutions would also be in a strong position to get grants.

At a victory party Tuesday night, Irving Weissman, director of the Institute for Cancer/Stem Cell Biology and Medicine at Stanford, smiled broadly as he described his plans to start calling top stem cell researchers to lure them West.

Foreshadowing what will likely be a highly competitive process, Evan Y. Snyder, director of the stem cell and regeneration program at the Burnham Institute in La Jolla, said San Diego-area research groups hope to bid for $100 million or more a year in grants.

Leaders in the state’s biotech industry said Wednesday that they believe the $3-billion investment will attract experts in the field to California and draw more young scientists into stem cell research -- people who are likely to be tapped by private industry down the road.

But biotech leaders were split on how quickly the new spending might spur businesses. Some said the impact could be almost immediate. Others cautioned that years could pass before new companies are spawned.

Under Proposition 71, work begins immediately to set up the agency that will govern the $3 billion in research funds.

The money will be raised through the sale of tax-exempt state bonds and will cost taxpayers an estimated $6 billion over the 30-year term of the bonds.

Before the first grants can be made, the new agency, the California Center for Regenerative Medicine, must create guidelines on ethics of the research, how the state would share in potential patents, and how any breakthroughs made using taxpayer money would be shared among scientists.

“Now that it’s passed, the real work starts,” said Stanford law professor Hank Greely, a specialist in bioscience issues who served as an unpaid advisor to the proposition’s organizers.

The agency will launch with an immediate $3-million loan from the state treasury.

Although it will distribute an enormous amount of public money, the center will be overseen by a board, the Independent Citizen’s Oversight Committee, not the Legislature. The agency also will set its own auditing and conflict-of-interest rules.

Supporters contend those provisions, extraordinary for any state agency, were necessary to shield the money from politics.

Lack of governmental controls drew continued criticism Wednesday.

“This is a really big pot of public money, and we want to assure that there are public financial returns for it,” said Marcy Darnovsky, an opponent of the initiative and associate executive director of the Center for Genetics and Society in Oakland.

“There are no guarantees that taxpayers’ investment will result in a financial return if treatments are developed, and there are no guarantees that the treatments Californians helped pay for would be affordable for everyone.”

Darnovsky said she and others with such concerns will be closely following appointments to the oversight committee.

Under terms of the proposition, the 29 members of the board must be named within 40 days. The governor, other top state officials, lawmakers and the chancellors of five UC campuses all are allowed to make some appointments.

The ballot measure tightly restricts who can be appointed. Board members must come from specific universities and patient advocacy groups, as well as the nonprofit research institute community and private industry.

Once the board is complete, its members will select a chairperson. Bob Klein, who led the Proposition 71 campaign and contributed more than $3 million to the effort, has been mentioned as a possible candidate.

Klein, who has a background in bond financing and helped create the California Housing Financing Agency three decades ago, meets the mandatory requirements set forth in the proposition.

Joan Samuelson, founder and president of the Parkinson’s Action Network, said she hoped that the same collaborative effort that helped pass the initiative would continue among the disease advocacy groups.

But she described the potential for conflict as stressful.

“Nothing great is easy,” Samuelson said.

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Times staff writers Stuart Silverstein, Denise Gellene and Veronica Torrejon contributed to this report.