May 30, 2020

The Niche

Knoepfler lab stem cell blog

StemCells, Inc. Faces Lawsuit With Serious Allegations

stemcellsinc-logoStemCells, Inc. is one of those stem cell-related biotech companies that we in the field hope will become a big success and help many patients in the future via stem cell technology.

There are a lot of obstacles facing such companies. Some are privately held, while others such as StemCells, Inc. are publicly traded (stock symbol STEM). Unfortunately, StemCells, Inc. has had to face two rather serious problems in the last few weeks.

First, former CIRM President Alan Trounson joined the leadership of StemCells, Inc. only days after leaving CIRM despite the fact that CIRM had granted the company almost $20 million during Trounson’s tenure as President. This move has faced criticism (e.g. see here) because of the appearance of a potentially serious conflict of interest. It appears CIRM was not aware of Trounson’s joining the StemCells, Inc. board until the news came into the public domain.

Second, today Courthouse News Service announced that a former StemCells, Inc. manager, Rob Williams, has filed suit against the company. David Jensen has also reported on this breaking case here and here.

Williams alleges potentially serious problems with the company’s procedures. He also claims wrongful termination and retaliation. The latter allegations center on the claim that once he made upper management aware of his concerns about the stem cell lines and manufacturing practices that he was terminated shortly thereafter. The actuall full lawsuit file can be read here (PDF; hat tip to Jensen).

From the suit, quoted on Jensen’s blog, come very serious and as yet unsubstantiated accusations:

“’Shortly after beginning his employment, plaintiff noted poor sterile technique, failure to adhere to current Good Manufacturing Practices in the company’s manufacturing process, and substantial deficiencies in the company’s Manual Aseptic Processing of HuCNS-SC (Human Central Nervous System Stem Cells) cell lines – failure and deficiencies that put patients at risk of infection or death during ongoing clinical trials,’ Williams says.

Update: StemCells, Inc. via Jensen’s blog, has issued a statement denying the charges:

“The Company has reviewed the complaint filed by Mr. Williams, a former employee whose employment was terminated for performance deficiencies, and finds no merit to the allegations.”

 

Of course, as with any ongoing litigation, those of us who are not parties to the case do not know the facts and StemCells, Inc. will certainly have its side to this case. Therefore, I’d encourage people not to rush to judgment. However, this is a concerning development for the company and the stem cell field.

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