Conference Underwriter

Transcription

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2 Conference Underwriter

3 Stem Cell Innovation: The Next-Frontier Economy?

4 Polling Question: Which Would You Prefer the Federal Government to Do? 1. Place No Restrictions on Government Funding of Stem Cell Research 2. Ease the Current Restrictions to Allow More Stem Cell Research 3. Keep the Current Restrictions 4. Government Should not Fund Stem Cell Research at All

5 Polling Question: In General, Do You Think that it Is Morally Acceptable or Morally Wrong to Use Human Cloning Technology in Developing New Treatments for Disease? 1. Acceptable 2. Wrong 3. Don t Know

6 Polling Question: How Important Do You Think it Is that California is a Global Leader in Medical and Scientific Research? 1. Very Important 2. Somewhat Important 3. Not Important

7 Polling Question: Where Will the Highest Rate of Return for California's Investment in Stem Cell Research Accrue? 1. Cures or Treatment of Disease for Residents 2. Jobs and Wages Created at Biopharmaceutical Firms in the State 3. State Government Guaranteed Rate of Return

8 Stem Cell Research

9 Stem Cell Research Centers

10 World Stem Cell Map

11 International Regulations Embryonic Stem Cell Research Extraction Prohibition Utilisation Utilisation and Extraction and Creation Austria Germany Australia Singapore Brazil USA Canada UK Costa Rica Greece Israel Denmark Japan China Equador Spain Ireland Sweden Peru The Netherlands Poland France

12 Who is Leading the Way? Stem Cell Research SOUTH KOREA Researchers refined a process to clone stem cells in human embryos (nuclear transfer, therapeutic cloning). CHINA As in South Korea, China s scientists benefit from regulatory standards less strict than ours. SINGAPORE The development of stem cell science is a national priority in Singapore. ISRAEL Israeli scientists have been leaders in the use of embryonic stem cells to study diabetes, heart disease and cancer. UK The United Kingdom has long been a leader in embryo sciences, creating groundbreaking fertility procedures in the 1970s and cloning Dolly the sheep in 1996.

13 Transplantation Stem Cell Research

14 Stem Cells Embryonic vs. Adult Stem Cells Embryonic Stem Cells are taken from the embryo that can form differentiated cells for all tissues in the body. Embryonic stem cells can self renew and be cultured as a cell line in vitro. Adult Stem Cells are undifferentiated cells found in a specialized tissue. Adult stem cells have the ability to make a limited range of specialized cell types. Adult stem cells are rare, difficult to isolate and have a limited capacity to divide.

15 Possible Sources of Stem Cells Embryonic Stem Cells, Embryonic Germ Cells, Adult Cells Embryos created via IVF (for infertility treatment or for research purposes) Embryos or fetuses obtained through elective abortion Embryos created via SCNT (somatic cell nuclear transfer, or cloning) Adult tissues (bone marrow, umbilical core blood)

16 Five-Year Cancer Survival Rate 1950s-1990s Percent s 1960s 1970s 1980s 1990s

17 Economic Value of Eliminating Deaths 2000 US$ Trillions Heart Disease Cancer Stroke AIDS U.S. Balance Sheet

18 Cost of Alzheimer s Disease CA Community Residents with Alzh. Disease US$ Billions (est.) 2040 (est.)

19 Economic Costs of Major Illnesses Illness Year Direct Costs Indirect Costs Total Costs Ratio of indirect to total costs US$ Billions Injury % Heart Diseases % Disability % Mental Disorders % Cancer % Alzheimer's Disease % Diabetes % Chronic Pain Conditions % Arthritis % Digestive Diseases % Stroke % Kidney and Urological Diseases % Eye Diseases % Pulmonary Diseases % HIV / AIDS % Other (10 further Illnesses) various % Total - 25 Illnesses %

20 Therapeutic Applications for Stem Cells Regenerative Medicine Cardiomyocytes for Heart Disease Islet Cells for Diabetes Neural Cells for Parkinson s Blood Cells for Cancer Chondrocytes for Burns

21 Stem Cells Could Potentially Cure Stem Cell Research Diseases Cancer Heart Disease Osteoporosis Parkinson's Disease Diabetes Blindness Spinal Cord Injury Therapy By rebuilding tissues destroyed by disease By replacing ischemic heart tissue with healthy cardiac cells and by growing new blood vessels By repopulating bones with strong, new cells By replacing the brain's dopamine-producing cells By infusing the pancreas with new insulin-producing islet cells By replacing the cells of the retina lost to macular degeneration, glaucoma or diabetic retinopathy By replacing nerve cells in the spinal cord

22 Stem Cells Could Potentially Cure Cont. Stem Cell Research Diseases Kidney Disease Liver Disease Amyotrophic Lateral Sclerosis Alzheimer's Disease Muscular Dystrophy Osteoarthritis Autoimmune Disease Lung Disease Therapy By replacing the cells, tissues, or even the kidney itself By replacing liver cells or the liver itself By generating new nerve tissue throughout the spinal cord and body By healing and replacing brain cells By replacing muscle tissue and possibly delivering gene-based cures By helping the body re-grow cartilage By repopulating the cells of the blood and the immune system By growing new lung tissue

23 Federal Policy on Embryonic Human Stem Cell Research 2001 Federal funds can only be used on stem cell lines that have been derived before August 9, Lines have to be from unused blastocysts that were made for IVF. Originally 64 lines, now 21. All lines were made with mouse feeder cells. They have mouse antigens and many of the lines appear to have chromosomal rearrangements.

24 Funding for Stem Cell Research by NIH FY (est.) US$ Millions 700 Stem Cell Research Human Embryonic Stem Cell Research (est.) 2006 (est.)

25 Top 15 Diseases, Conditions, Research Areas by Level of NIH Funding FY (est.) NIH Funding US$ Millions Disease, Condition, Research Area FY 2003 FY 2004 FY 2005 (est.) FY 2006 (est.) Biotechnology 9,893 10,685 10,976 11,043 Clinical Research 8,028 8,495 8,712 8,792 Prevention 6,546 7,185 7,227 7,375 Cancer 5,432 5,547 5,643 5,641 Neurosciences 4,711 4,911 5,028 5,055 Brain Disorders 4,740 4,821 4,931 4,961 Genetics 4,236 4,535 4,620 4,637 Women's Health 3,498 3,478 3,525 3,531 Pediatric 3,066 3,132 3,195 3,204 Infectious Diseases 2,441 3,055 3,102 3,104 Behavioral and Social Sciences 2,684 2,932 2,992 2,998 Clinical Trials 2,723 2,877 2,946 2,966 HIV/AIDS 2,716 2,850 2,921 2,933 Health Disparities 2,430 2,590 2,646 2,663 Cardiovascular 2,286 2,360 2,409 2,420

26 Funding for Biomedical Research by Source US$, Billions Source National Institutes of Health Other Federal State and Local Government N/A Foundations, Charities, and Other Private Funds N/A Pharmaceutical Firms Biotechnology Firms Medical Device Firms Total Adjusted Total* *Adjuted by the Biomedical Research and Development Price Index

27 NIH List of Human Embryonic Stem Cell Lines Eligible for Use in Federal Research Name Number of Stem Cell Lines Eligible Available BresaGen, Inc., Athens, GA 4 3 Cell & Gene Therapy Institute (Pochan CHA University), Seoul, Korea 2 N/A Cellaritis AB, Goteborg, Sweden 3 2 CyThera, Inc., San Diego, CA 9 0 ES Cell International, Melbourne, Australia 6 6 Geron Corporation, Menlo Park, CA 7 N/A Goteborg University, Goteborg, Sweden 16 N/A Karolinska Institute, Stockholm, Sweden 6 0 Maria Biotech Co. Ltd. - Maria Infertility Hospital Medical Institute, Seoul, Korea 3 N/A MizMedi Hospital - Seoul National University, Seoul, Korea 1 1 National Center for Biological Sciences/Tata Institute of Fundamental Research, Bangalore, India 3 N/A Reliance Life Sciences, Mumbai, India 7 N/A Technion University, Haifa, Israel 4 2 University of California, San Francisco, CA 2 2 Wisconsin Alumni Research Foundation, Madison, WI 5 5 Total 78 21

28 Investments in U.S. Companies Companies Conducting Embryonic & Adult Stem Cell Research, 2003 US$ Millions ViaCell Geron StemCells, Inc. Cythera, Inc.

29 FY 2006 President s Budget Request Total NIH Budget Authority: $28,740 Million Research Project Grants, 56% Research Training, 3% R&D Contracts, 11% Res., Mgmt. & Support, 4% Other Research, 6% Research Centers, 9% Intramural Research, 11%

30 History of Stem Cells Research and Therapeutic Applications Stem Cell Research 1998 First human embryonic stem cells derived and cultured from a blastocyst Potential for self renewal and differentiation recognized 1997 Cloning of Dolly by SCNT signaled the potential to produce embryonic stem cells with defined genetic make-up

31 Translation of New Technologies into Therapies Takes Time Stem Cell Research Recombinant DNA (1960s;1970s) Human Genome Sequence (2002) Human Growth Hormone; Factor VIII (1980s) Monoclonal Antibodies (1970s;1980s) New Cancer Therapies (Herceptin; Avastin) (2002-5) Stem Cells May Aid Drug Discovery New Therapy (20??)

32 Stem Cell Research Bills and Laws Prohibit all Human Cloning (incl. Therapeutic) Prohibit Reproductive Cloning Allow Therapeutic Cloning Specifically Ban Destructive Embryonic Research Allow Embryonic Stem Cell Research State AL X X AR Law Law AZ X X CA X X Law X Law CO X X CT X X DE X X FL X X GA HI IA Law Law Law ID IL X X X IN X X X KS X X X KY X X LA X X Law The Laws that have already been enacted are indicated by the word "Law" The Bills are indicated by an "X"

33 Stem Cell Research Bills and Laws, Cont d State Prohibit all Human Cloning (incl. Therapeutic) Prohibit Reproductive Cloning Allow Therapeutic Cloning Specifically Ban Destructive Embryonic Research Allow Embryonic Stem Cell Research MA X X X MD X ME MI Law Law X MN MO X X MS MT NC ND Law Law NE X X NH X X NJ X X X X NM NV NY X X X X The Law s that have already been enacted are indicated by the w ord "Law " The Bills are indicated by an "X"

34 Stem Cell Research Bills and Laws, Cont d Prohibit all Human Cloning (incl. Therapeutic) Prohibit Reproductive Cloning State OH OK X X OR X X PA Allow Therapeutic Cloning Specifically Ban Destructive Embryonic Research Allow Embryonic Stem Cell Research X RI Law X SC X X SD TN X X X TX X X X UT VA Law X VT X X WA X X X WI X X X WV X X WY The Laws that have already been enacted are indicated by the word "Law" The Bills are indicated by an "X"

35 Proposition 71 Stem Cell Research and Cures Initiative Establishes California Institute for Regenerative Medicine (CIRM) to regulate stem cell research and provide funding. Establishes constitutional right to conduct stem cell research; prohibits CIRM s funding of human reproductive cloning research. Provides General Fund loan up to $3 million for CIRM s initial administration/implementation costs. Authorizes issuance of general obligation bonds to finance CIRM activities up to $3 billion subject to annual limit of $350 million.

36 Proposition 71 Total Program Costs and Benefits Case 1: Limited Therapeutic Success Phase 1 Phase 2 Phase 3 Years 1-5 Years 6-14 Years Total US$ Millions Economic Costs to State Bugdet 56 1,289 4,010 5,355 Economic Benefits to State Budget 1) Tax revenues from Proposition 71 direct spending ) Tax revenues from 2.5% increase in life sciences activity ,796 2,206 3) Cost savings from 1% reduction in state spending ,062 3,444 4) Royalty revenues using 2% royalty rate Total ,385 6,426 % of Total Costs 227% 71% 134% 120% Additional Benefits to Californians Not Incl. in State Budget Health care cost savings from 1% cost reductions - 1,136 8,043 9,180 % of Total Costs 0% 88% 201% 171% Estimated Jobs Created (One Job for One Year = One Job Year) Job years from Proposition 71 direct spending 14,272 33,209-47,480 Job years from increase in life sciences activity 11,967 67, , ,847 Total 26, , , ,328

37 Proposition 71 Total Program Costs and Benefits Case 2: Increased Therapeutic Success Phase 1 Phase 2 Phase 3 Years 1-5 Years 6-14 Years Total US$ Millions Economic Costs to State Bugdet 56 1,289 4,010 5,355 Economic Benefits to State Budget 1) Tax revenues from Proposition 71 direct spending ) Tax revenues from 5.0% increase in life sciences activity ,592 4,411 3) Cost savings from 2% reduction in state spending ,123 6,887 4) Royalty revenues using 4% royalty rate ,054 1,073 Total 181 1,662 10,769 12,612 % of Total Costs 324% 129% 269% 236% Additional Benefits to Californians Not Incl. in State Budget Health care cost savings from 2% cost reductions - 2,273 16,087 18,359 % of Total Costs 0% 176% 401% 343% Estimated Jobs Created (One Job for One Year = One Job Year) Job years from Proposition 71 direct spending 14,272 33,209 47,480 Job years from increase in life sciences activity 23, , , ,695 Total 38, , , ,175

38 Proposition 71 Total Program Costs and Benefits Case 3: Expanded Therapeutic Success Phase 1 Phase 2 Phase 3 Years 1-5 Years 6-14 Years Total US$ Millions Economic Costs to State Bugdet 56 1,289 4,010 5,355 Economic Benefits to State Budget 1) Tax revenues from Proposition 71 direct spending ) Tax revenues from 5.0% increase in life sciences activity ,592 4,411 3) Cost savings from 10% reduction in state spending - 3,821 30,616 34,437 4) Royalty revenues using 4% royalty rate ,054 1,047 Total 181 4,718 35,262 40,161 % of Total Costs 324% 366% 879% 750% Additional Benefits to Californians not incl. in State Budget Health care cost savings from 10% cost reductions - 11,364 80,434 91,797 % of Total Costs 0% 882% 2006% 1714% Estimated Jobs Created (One job for one year = one job year) Job years from Proposition 71 direct spending 14,272 33,209 47,480 Job years from increase in life sciences activity 23, , , ,695 Total 38, , , ,175

39 CA Stem Cell Research and Cures Initiative Fiscal Fact Sheet Funds Life-Saving Research Generates New Revenue and Jobs for the State California will benefit from Patents and Royalties Construction of Research Facilities and new Jobs Sales and Income Taxes generated from Bond Proceeds are projected to reach $70 million in first 5 years Reduce Healthcare Costs by Billions Californians spend more than $110 billion annually on Healthcare Expenses

40 Korean Stem Cell Research Fact Sheet Derived 11 new lines, including lines from males, females. Furthermore, the new lines include patients with spinal cord injury, inherited blood disease and diabetes. Egg donation from one woman sufficient to derive a line. Conclusive demonstration that the cell line was genetically identical to the nuclear donor.

41 European Stem Cell Research Organizations EuroStemCell (European Consortium for Stem Cell Research) Cambridge (UK) Stem Cell Institute Institute for Stem Cell Research, University of Edinburgh, Scotland Lund Stem Cell Center (Sweden) Karolinska Institute (Sweden) Danish Stem Cell Research Center (Denmark) National Center for Stem Cell Research (Norway)

42 Regulations in Selected EU Member States Human Embryonic Stem Cell (hes) Research Allowing procurement of hes cells from supernumary embryos by law Prohibiting procurement of hes cells from human embryos but allowing importation of hes cell lines Prohibiting procurement of hes cells from human embryo No specific legislation regarding human embryo research Prohibiting creation of human embryo for research purpose and for procurement of hes cells by law Country Austria X X Belgium X Germany X X Denmark X X Greece X X Spain X X Finland X X France X X Ireland X X Italy X X Netherlands X X Poland X Portugal X X Sweden X United Kingdom X

43 Somatic Cell Nuclear Transfer Dolly the Sheep

44 Human Embryonic Stem Cells Self-Renewing Source for the Scalable Manufacturing of Replacement Cells for Every Tissue in the Body Blastocyst Human Embryonic Stem Cells Hepatocytes Chondrocytes Osteoblasts Islets Hematopoietic Cells Drug Discovery Neural Cells Cardiomyocytes Diabetes Bone Marrow Transplant Osteoporosis And Bone Fractures Arthritis Spinal Cord Injury Parkinson s Disease Heart Failure

45 Take Home Message of CCST s Interim IP Report CA has taken a bold step CIRM-funded research will benefit state in significant ways But, expectations of short-term revenue stream and quick availability of new treatments overstated Near-term benefits: Magnet effect for talent to come to CA Enhanced business activity to support research Long-term benefits: Creation of new high-tech jobs Stimulation of the economy and tax revenues Will result in new products and therapeutic treatments--but will take time Overriding IP consideration for grantees should be to move technology from research to other entities as effectively as possible for the public benefit

46 Expectations Taxpayers return on investment is one issue that figured prominently in literature used to promote Prop 71. We find that these proposals, and the statements and studies on which they were based, have unrealistic assumptions about the potential economic impact of CIRM s research program. All interested parties must be mindful of overestimating both the projected revenue stream from IP generated by CIRMfunded grants and the timeline to achieve it.

47 Examples of Unrealistic Assumptions Therapies will use many patents from many sources Royalties from CIRM research alone small US universities receive about $1B from licensing for $40B investment Only 1 in 400 inventions generate more than $1M over lifetime CIRM s $300M may generate $10M Companies pay for commercialization and will not partner if many restrictions

48 Expectations Cont. While expectations of a short-term revenue stream and quick availability to the public of new treatments overstated, CIRM-funded research can be expected to benefit the state in significant ways, particularly in the long term. Improved quality of life for those who suffer from debilitating diseases Attractiveness of CA as a location for biotech companies Development of research tools that will drive research forward

49 Context of CA Stem Cell Funding CIRM funding $300 M per year for 10 years NIH Biomedical research budget $30 B Federal funding of research in higher education, private research institutes, and national labs in California $14 B per year Industry funded R&D in California $45 B per year

50 Expenditures on Biological and Biomedical Research at Largest CA Universities, 2003 Institution Expenditures(millions) UCSF $643 UCLA $607 Stanford $333 UCSD $330 UCD $248 USC >$201 Total >$2.3 Billion

51 State Funded R&D Total state funded R&D approximately $300 M/year Major state programs: PIER and Natural Gas Research HIV-AIDS Breast Cancer Tobacco-related Disease Sustainable Agriculture Research Health & Human Services Child & Family Trust Geothermal Resources Development $74.5 M/year $9.2 M/year $14.9 M/year $14 M/year $7.5 M/year $5.2 M/year $17.9 M/year $4.6 M/year TOTAL $148 M/year In addition, California Institutes for Science and Innovation $920M over five years

52 Current Stem Cell Research Centers in California The Burnham Institute The Salk Institute The Scripps Research Institute Stanford University UC Berkeley UC Davis Center for Regenerative Science and Therapies UC Irvine The Reeve-Irvine Research Center UCLA Institute for Stem Cell Biology and Medicine UC San Diego UC San Francisco UC Irvine The Reeve-Irvine Research Center

53 Models for IP Policy Bayh-Dole Patent and Trademark Amendments Act of 1980 rationalized and simplified the process of moving technologies generated by federally funded research from university laboratories to the private sector Difficult to measure direct effect of Bayh-Dole on tech transfer, but is generally considered to have contributed positively to development of some technologies In many ways, situation in California today regarding state-funded research resembles federal situation prior to passage of Bayh-Dole Federal policy takes precedence over state policy

54 Biomedical R&D Long and Costly Average time to development of a therapy from basic research: 10 years Vast majority of inventions don t lead to therapies

55 War on Cancer Case Study: Development of Rituxan by Biogen Idec

56 Recommendations: CIRM IP Policy Objectives (1) Support open dissemination of research results and transfer of knowledge Ensure that discoveries & research tools are made broadly available To the extent possible, preserve ability for grantees to leverage non-cirm funds in stem-cell related research Encourage practical application of CIRM-funded research results for broad public benefit Accelerate translation of discoveries from research to commercially available diagnostics and treatments To extent possible, balance existing investments with state investments so each receives appropriate return

57 Recommendations: CIRM IP Policy Objectives (2) Promote collaboration between commercial entities and non-profit institutions Encourage private investors to invest in further research and development of new technologies resulting from CIRM-funded research Minimize costs of administering policies Be mindful of time delay and private investment needed before significant benefits accrue to the state

58 Return on Investment (1) Ownership of intellectual property central issue to any IP policy Under Bayh-Dole, ownership resides with grantee In considering IP ownership, important for CIRM to consider: Relative importance of a policy consistent with Bayh-Dole statute Who is best able to manage resulting IP Existing financial models in place to make appropriate investments in protecting early-stage results

59 Return on Investment (2) Defining return on investment complicated Revenues often modest and years in coming Various options for distribution of revenues State must balance desire for financial return on investment with effectiveness of CIRM-funded research; some federal agencies, such as the National Institutes of Health, have noted decreased effectiveness of programs when focus on financial returns to funder Whatever California chooses to do, must realize that conditions of CIRM grants need to be competitive

60 General Principles for State IP Policies CIRM recommendations are in line with general principles we are likely to recommend for state-funded research in final report, which include: Consistency with the Bayh-Dole Act Creating incentives for commerce in California from statefunded research to the greatest extent possible Encouraging timely publication of results Diligent development of IP into products that benefit the public CIRM may want to adopt interim policies guided by this interim report and final policies after review of final report to state in December 2005

61 Recommendations for CIRM IP Policies (1) 1. Permit grantees to own IP rights from CIRM-funded research. 2. Require that grantees (individuals, institutions, or both) provide a plan describing how IP will be managed for the advancement of science and California public benefit. 3. Grant basic research funds without requiring that grantees commit to providing a revenue stream to the state. If, however, a revenue stream develops over time, revenues will be reinvested in research and education. 4. Generally, make CIRM-developed research tools widely available to other researchers. 5. Require diligent efforts to develop CIRM-funded IP into therapeutics and diagnostics that can benefit the public.

62 Recommendations for CIRM IP Policies (2) 6. Retain within CIRM Bayh-Dole-like rights to step in if the owner of IP is not undertaking appropriate steps to transfer technology to benefit the public. 7. Leave license particulars to the owner who is in the best position to judge how best to ensure that discoveries are made widely available through commercialization or otherwise. 8. Reserve the right to use IP by or on behalf of CIRM. 9. Establish and maintain a CIRM database to track all IP generated through CIRM funding.

63 CA s Research Machine Powerful University of California Research Centers: Biotechnology (n=138)

64 Industry Clusters Around Research Centers

65 Wealth Created in Silicon Valley By Stanford Alums Is Staggering Of the 150 largest* publicly traded companies in the Valley, 37 Stanford alumni-founded companies (25% of total) represent $453 billion in market value (46% of total)** $138 billion in revenue (47% of total) * Ranked by 2003 revenues ** As of March 31, 2004 Read-Rite