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.

12 thoughts on “StemCells, Inc. Faces Lawsuit With Serious Allegations”

  1. I’m glad that people are interested. 🙂 The only problem is that once I think about it, I’m not so sure of what the best way is to actually provide that link… Paul, can I provide a direct link? Or no? Is there a way to msg people here? I don’t want to get into trouble on this wonderful blog… 😉

      1. I would like the link as well. I can be reached via the Stem Cell Pioneers or LinkedIn. Thank you.

  2. I have been posting and writing about my serious concerns with Stemcells, Inc’s work since February of this year. I’ve had many, many issues with a very large number of (IMHO) problematic areas, all of which I have written about extensively. I think that for the sake of avoiding problems, I will stop right there. But this latest news does not surprise me at all. And I have to admit, I’ve been going to the boards where nobody wanted to hear about this before and posting a lot of variations on “I told you so.” If anyone wants to see what I’ve written about what this company is doing this year, just let me know, and I’ll provide a link, but I think I’d better not do that in the replies either.

    1. How can I contact you? I am co-founder of the Stem Cell Pioneers and our members are greatly disturbed by these allegations. I think that all of us deserve to have as much information available as possible, so I would be interested in having you provide the link.

  3. All of these allegations are extremely troubling for patients. Especially since most of the players involved have warned patients time and time again about the very things that are supposedly happening with StemCells Inc. I’m with you all….I hope that none of this is true! Because of situations like this, medical tourism will remain alive and well. I shake my head and wonder what it would be like for all “no option” patients to be able to receive adult stem cell therapy right here in the United States. When I hear “law suit” “wrongful termination” “lab sterility issues” I think set back, set back, set back. And the funny thing is, none of it had to be this way 🙁

  4. Barbara Hanson

    As a patient on the receiving end of continual admonitions from some in the industry, that having stem cell treatment anywhere but in an approved clinical trial was “risky”, “unproven”, not safe,”etc., I do hope that the whistleblower’s allegations are not true. I say that sincerely. Scientists should be held to the highest of standards. I am shocked to be reading this quite frankly. It will have serious implications for the credibility of the industry if this is true.

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