California’s Stem Cell Bid Stuck in Neutral

Times Staff Writer

When California voters signed off on a $3-billion investment in embryonic stem cell research last fall, the state seemed poised on the scientific cutting edge, armed with the money to circumvent White House policy viewed by many as holding the U.S. back.

More than six months later, however, the effort remains mired in litigation that has delayed the sale of bonds and forced advocates to consider alternative funding sources. In addition, stem cell agency officials have expressed serious concerns about a constitutional amendment now being debated in Sacramento that would give state lawmakers some control over their operations.

The agency’s board meets today in San Jose and is expected to issue a formal response, arguing that passage of the amendment as currently written would threaten operation of the agency, the California Institute for Regenerative Medicine.

The significance of the delays increased after last week’s news that South Korean researchers were able to efficiently create cloned human stem cell lines -- a difficult accomplishment viewed by many scientists as key to understanding disease and creating rejection-free treatments.


Almost immediately, President Bush responded by reiterating his strict limits on federal money, saying he was prepared to use the first veto of his presidency to stop bipartisan congressional efforts to expand funding to new embryonic stem cell lines. The push by some lawmakers to loosen federal grants stops far short of funding cloning experiments like the one conducted in South Korea. Use of embryonic stem cells for research is controversial because the creation of new lines requires the destruction of embryos.

The developments turned many eyes toward California, where $300 million a year in grants, more than 10 times the total yearly federal funding, is supposed to be available. Unlike federal policy, the California initiative specifically funds somatic cell nuclear transfer -- or therapeutic cloning.

With no relaxation of restrictions on the federal horizon, hurdles facing the state’s funding efforts have taken on a new sense of urgency, said Bob Klein, chairman of the stem cell agency’s board and author of Proposition 71, the ballot measure that created the agency.

“It makes it terribly frustrating,” said Klein, a real estate lawyer whose son, Jordan, now a teenager, was diagnosed with insulin-dependent diabetes several years ago. “It means all the tools we expected to be out there are on the table today. They’re not possibilities. They’re real, and we can’t get money out.”


California universities have been recruiting researchers and students, using the lure of the state funding to get top talent from places such as Harvard and the University of Michigan. Numerous schools in California also have earmarked millions of dollars for stem cell research in anticipation of grants being available soon.

But several legal problems face the agency -- whose board members have an agenda today filled with items dealing with state and federal stem cell legislation, as well as a closed session on pending lawsuits. Beyond legal matters, Proposition 71 left open issues of conflict of interest, ethical and scientific guidelines and how the state would share in any financial success from the research. The initiative also exempted the agency from some open meetings requirements, all of which has led to stumbles and criticisms, even as board members have worked to establish guidelines.

Atty. Gen. Bill Lockyer has advised the agency that lawsuits challenging the constitutionality of the initiative must be resolved before Wall Street will finance the sale of the voter-approved tax-exempt bonds. The sale of bonds will cost taxpayers about $6 billion over the 30-year loans, according to estimates. One suit alleges the initiative is illegal because it gave the agency’s board control over spending taxpayer dollars without legislative oversight -- concerns also driving another matter confronting the agency.

State Sens. Deborah Ortiz (D-Sacramento) and George Runner (R-Lancaster) have written a constitutional amendment -- which could go to voters as soon as November -- imposing several requirements on the stem cell agency. Proposition 71, as written by Klein, largely exempted the stem cell institute from legislative controls, something Klein says was intended to insulate the controversial research from political interference.

The constitutional amendment is an effort to sidestep Proposition 71’s three-year prohibition on changes by state lawmakers, which after that period requires a 70% vote of both houses. Among matters the proposed constitutional amendment addresses: broad imposition of conflict-of-interest requirements and guarantees that any potential treatments be made available at an affordable cost to low-income residents.

Ortiz was a staunch supporter of Proposition 71 and campaigned for its passage. However, almost immediately after it passed, with 59% of the vote, she raised concerns about how the agency would function, saying she believed she had an “obligation to make sure this area is regulated.” Ortiz and Runner also had proposed a three-year moratorium on egg donations for research purposes, citing concerns about women’s health issues, but dropped that idea. Such a moratorium would have complicated, perhaps even prevented, research like the experiment done by the South Koreans, regardless of funding availability.

The board today also is scheduled to consider adoption of the guidelines for embryonic stem cell research issued last month by the National Research Council and the Institute of Medicine. The guidelines are intended to fill the breach left by the lack of federal regulations. They were finalized ahead of schedule to meet California’s timetable.

Zach Hall, the interim president of the state’s stem cell agency and a former head of one of the National Institutes of Health, said therapeutic cloning should be a top research priority once research grants are made.


To get cloned human stem cell lines, an egg is stripped of its genetic material and the DNA of a donor is inserted. The process would be the same if the intent was to create an embryo for reproductive cloning -- something widely viewed as unethical, although not against U.S. law. The stem cells are then extracted from the embryo, which California law requires must be done no more than 12 days after creation. If successful, the process generates stem cells that are a match to the donor and could potentially become any type of cell.

Therapeutic cloning, however, is highly controversial, even more so than embryonic stem cells harvested from embryos donated by people no longer planning to use them to try to have a baby, the traditional source in this country.

The U.S. House of Representatives has twice voted to criminalize therapeutic cloning. The proposed ban would create lengthy prison sentences and financial penalties for anyone who engaged in such research or benefited from it. Similar legislation is before Congress again this year, but is expected to be blocked in the Senate, as it has been before.

For backers of California’s $3-billion investment, Bush’s vow last week to stop expansion of federal funding underscored the importance of moving the state agency forward as soon as possible. The lines eligible for federal money, about 20, all have been shown to be contaminated, which probably makes them unusable for therapies. Bush opposes the use of taxpayer money to create any new lines, saying he believes it is wrong to sanction the destruction of embryos for research.

“I think it speaks volumes that on the day the Koreans announce a significant advancement that holds scientific and medical hope, the president announces he will cut off a much more modest and weaker proposition,” said Hall.

The Korean breakthrough, Hall said, highlighted disadvantages the U.S. has in the basic science of embryonic stem cells. Limited federal funding, for instance, has meant relatively few U.S. technicians have trained to work with the delicate cells.

Many scientists believe embryonic stem cells -- and cloned stem cells in particular -- hold great promise for treating and understanding diseases such as Parkinson’s, Alzheimer’s and insulin-dependent diabetes. Researchers, however, caution that therapies remain a long way off. Woo Suk Hwang, the lead researcher from Seoul National University, cautioned that it could be decades before treatments result from his work. But the advance excited researchers, who say that if other labs can replicate the work, the field will have taken a major step forward.

“What the Koreans are doing makes it clear that this work is going to go on and it’s going to go on all over the world,” Hall said. “We’re poised and ready to go. We could be doing that here. We need to be doing that here ... and we’re not even out of the starting blocks.”