Judge drops a bomb on FDA in Cell Surgical Network stem cell clinic case

In a ruling that could turn FDA stem cell clinic oversight on its head, Federal District Court Judge Jesus Bernal last night ruled in favor of the stem cell clinic chain Cell Surgical Network and other defendants. The FDA had been seeking permanent injunction against them. Here’s the court ruling.

Drs. Mark Berman and Elliot Lander were also named in the suit as the leaders of Cell Surgical Network.

Strikingly, Bernal sided with the defendants in almost every way. To me, the language of his ruling sounded almost like it was written by the defendants.

Cell Surgical Network stem cell clinic chain
Dr. Mark Berman, a leader of the stem cell clinic chain Cell Surgical Network, demonstrating a procedure at a meeting. Image from a YouTube video.

At the heart of this case was the FDA argument that the clinics were selling unapproved drug products in the form of adipose cell mixtures.

Bernal wasn’t having any of it.

It is nearly certain that the FDA will appeal this case. Bernal’s judgment strongly conflicts with past federal court rulings. But for now, we have to contemplate a reality for a time in which FDA oversight of some stem cell clinics could be hamstrung. The ruling even has the potential to free up other stem cell clinics that don’t use adipose cells.

Things just got much messier in this arena.

The FDA Cell Surgical Network lawsuit

The adipose cell product at the issue is called stromal vascular fraction or SVF.

The DOJ filed two similar lawsuits seeking injunction against the California defendants, where we just got the ruling, and a Florida SVF stem cell clinic firm called US Stem Cell. The latter case earlier went in favor of the FDA on summary judgment. The agency also won the appeal of the Florida case.

Now Bernal has ruled that SVF is not inherently a drug. Further, remarkably he found that even expanding the SVF adipose cells in a lab does not make them a drug. In a third main part of the ruling related to a mixture of the SVF with a vaccine, Bernal also ruled for the defense, but it was kind of a moot point since the product is no longer being made or used.

Judge embraces stem cell clinic defense

I believe Judge Bernal erred in several key ways on the science.  For example, he wrongly concluded that SVF cells are not changed by the procedure to isolate them.

From Judge Bernal’s Findings of Fact and Conclusions of Law in  support of his final judgment in the case:

“The SVF Cells are not altered, chemically or biologically, at any point during the SVF Surgical Procedure.”

We don’t know that’s true. In fact, as a cell biologist I believe it is wrong.

The reality is that enzymatic treatment of cells more generally, such as happens during the defendants’ preparation of SVF, can dramatically alter major cell properties. Bernal instead accepted the claim by the defense that preparing SVF does not change the cells in any way.

Further, Bernal also seemed to completely buy the defense claim that SVF cells within the lab-generated product also naturally exist in the exactly same form in the body prior to the SVF manufacture:

“Unlike manufactured drugs, the SVF Surgical Procedure does not create any cellular or tissue-based product that did not previously exist within the patient.”

Actually there is no equivalent of SVF already in the body.

The diverse cells in the product SVF don’t congregate directly together in a person. They are artificially forced together through the SVF isolation procedure, which separates them from fat and then combines together the perhaps dozen or so cell types normally spread out in fat tissue. So Bernal is wrong again here.

In my view, Bernal also made a third key error on growing the cells in the lab, which I’ll discuss in a minute.

Bernal disregards FDA

But first, why did he rule this way?

I don’t have a good explanation. It’s puzzling.

However, in a way, I’m not as shocked as it might seem by this ruling.

Earlier Bernal had ruled against the FDA/DOJ requests for summary judgment at the start of all of this. I thought his words and tone in that initial ruling showed he already was strongly leaning against the FDA.

For that reason, from the beginning the agency might have been fighting a losing battle with this judge on this case.

Since I’m not an attorney, I don’t have a clear sense of how strong the government’s case was made in Bernal’s court.

Bernal judgment conflicts with previous major rulings

At a practical level, it’s important to point out that Bernal’s ruling here goes against some very important precedent.

It conflicts not only with a recent, relevant federal appeals court decision on the very similar case in Florida, but also with a past important case called US v. Regenerative Sciences.

In that latter case, the court held that lab-expanded marrow cells were a drug. When cells are grown in culture in a lab, their inherent properties can and often do change. They can acquire mutations or epigenetic changes. Contrary to this, Bernal’s ruling wrongly states:

“Replication or propagation is a natural state for stem cells and the Expanded MSC Cells retain all of the biological characteristics of the MSC Cells.”

All of the characteristics?

I’m not aware of good evidence that growing adipose cells in a lab leaves all of their properties unchanged. To the contrary, there is compelling evidence that cell properties can change substantially when they are cultured in the lab. The cells can also be contaminated in labs.

Cell proliferation in a dish in the lab has many inherent differences from when cells expand inside the body.

This is arguably the most dangerous error in Bernal’s ruling. I hope we don’t see more clinics selling lab-grown cells that haven’t been vetted by the FDA. It’s risky. Many clinics do not follow good manufacturing practices when growing cells either.

As to the Florida case against US Stem Cell, the judgment in that court held that SVF was a drug, which was supported on appeal as well in the Eleventh Circuit. In fact, the appellate ruling made a point of disagreeing with Bernal in some ways:

From the appeals court:

“The Clinic next draws our attention to the opinion of a district court in California that, in a similar suit against a clinic offering a similar procedure, rejected the FDA’s interpretation…If significant processing steps expose the HCT/Ps to foreign substances and alter their form prior to reimplantation, then the HCT/Ps cease to be the same as they were at the time of removal. This interpretation seems, at the outset, to be the more natural of the two readings. The FDA’s view is all the more persuasive because it is consistent with its early (as well as its recent) pronouncements”

That’s a stark difference.

How will FDA oversee the stem cell clinic space for now?

A major question now, assuming the FDA appeals, is whether the specific appeals court that ultimately handles the Cell Surgical Network case appeal will see things more like Bernal or all the other judges.

The Bernal ruling will not be a good thing for careful oversight of stem cell clinic practices.

There has been a sense that the FDA may have been holding back on large-scale actions on the hundreds of SVF clinics operating in the US until this Bernal ruling came down.

This new judgment in favor of SVF clinics could make the FDA even more cautious on taking action on unproven clinics more generally.

At the same time, some clinics are likely to be emboldened by Bernal’s ruling.

It’s concerning to think about more people being put at risk. At the same time, it’s aggravating as a scientist to see a court get the science so wrong.

Notes

  • I testified for the FDA/DOJ in this case and clearly have strong opinions about it.
  • Defendant Dr. Mark Berman died of COVID in May of this year.

14 thoughts on “Judge drops a bomb on FDA in Cell Surgical Network stem cell clinic case”

  1. Stem cell therapy is the future. All the bleeding heart liberals don’t understand the benefits. Unfortunately if you need them you have to go to another country. FDA wants money for approvals. That is how America “doesn’t” work. Glad a judge stuck it to the FDA. The author has hurt feelings that his side list. Boo hoo. 😭

  2. Good to know from Paul that the expansion of cells in the control environment changes their characters. He claims that he is a champion of cell biology (which I doubt). I reviewed the last several years of cell biology publications and did not find a single one demonstrating the expansion of cells in a controlled environment changes the character of the cells significantly. If that part is considered all the time, no in vitro cell related study will hold credibility. The court also said that the cells do not change significantly in first few passages. It would be a great help to cell biology if Paul can publish a paper showing the extent cells change with the expansion in a controlled environment.
    Robert Miller

  3. This ruling includes Expanded MSCs. “Expanded MSCs” is redundant: MSCs are an in vitro expanded product by definition. It is a mistake to include them in the ruling.

    1. I have seen reference to primary MSCs that have not been cultured (SVF falls into this category for some folks, although actual stem cells are only a minority part of the cell mixture) and MSCs that have undergone repeated expansion in the lab. I think that’s the distinction. SVF without any further description usually refers to uncultured cells.

  4. @RAYMOND L. PIERCE, MD – uh, you might want to check that claim of 25,000 patients “In their network treated” and NO supposed adverse events ?

    I know for a fact that a doctor “in their network” is being civil ligated as we speak for gravely harming a female patient. That case is “live” in FL as I type this.

    There are many others – I won’t go into details, name names of law firms etc. But there is far, far from “NO” adverse events per their so called “Network of doctors”. Not by a long shot.

    I can provide case numbers, dates, what kind of harm occurred, who were the lead attorneys, etc.

    The FDA-DOJ even spoke about some of the “adverse events” they “know of” as it’s often buried and kept hidden on purpose, for obvious reasons. And it wasn’t like the harm occurred due to the supposed, “well, all medical procedures have complications”, NO !

    Civil trial lawyers are finding an entire new niche “law practice” and stream of clients and phones ringing off the hooks – just from these pay-to-treat so called “stem cell clinics”, enough to keep them busy for a long time to come.

    Moreover, several state’s Attorneys General have successfully sued and won judgements against numerous of these stem clinics. NY being probably the most recent one I’m aware of – that was a $5.1 million settlement the NY AG won, so we’re not talking penny anti money here either.

  5. Raymond L. Pierce, MD

    Professor Knoepfler
    How ca n possibly say the cells themselves are changed in this separation from fat process – that is like saying the red blood cells are changed when separated from whole blood. Cell Surgical Network has over 25,000 patients in its database with NO adverse events from the cells. This is safe and published. And it is proving to be effective for many things. Judge Bernal is spot on with this ruling. Time for government overreach to stop.

    1. @ Dr. Pierce,
      It’s not that simple and your analogy isn’t valid.

      Blood cells float in liquid blood. They freely interact with each other. Also, they can easily be separated by gentle centrifugation or other non-intensive methods.

      By contrast the cells of SVF start out largely separate from each other in the semi-solid adipose tissue. They mostly do not interact with other. To get the diverse cells that become SVF by the laboratory procedure, often people use enzymes. There are consistent data that enzymatic digestion changes cells, sometimes in major, permanent ways. Here’s just one paper: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6434486/.

  6. Without question this is the proper decision. It shouldn’t even be a close call. Arguing that the use of adipose derived stem cells isn’t helpful is one thing, but arguing that a person’s own SVF is a drug is outlandish. As someone in the medical field, I know that there aren’t many less invasive, safe procedures than procuring stem cells from fat and delivering them elsewhere in the same person within a few minutes.

    The invasion of privacy and use of one’s own body is absurd.

  7. @Dr Paul, I am also going to be very interested to see if a ;”stay” will/would be granted if/when the FDA appeals to the 9th circuit ?

    I also was able to read in detail the Bernal memorandum or conclusion of law (whatever the technical legal term is called) and IMO, he punted on this entire thing. I believe it was just science/medical over his head or ability to understand – so he sat on it and via a very busy and backed-up schedule literally gave as weak a ruling as possible and just literally punted. Kicked it and where the ball lands – it’s now not his problem anymore is my “take” on how Bernal handled this, or failed to handle it.

    It’s a paltry 19 pages long “memorandum of supporting law” by Bernal and thus when you subtract the couple of cover sheets etc, it’s what, maybe 14 or 15 pages of his entire “conclusion of law” ?

    Most important, as you stated, I get the 100% feeling that he almost literally just cut-n-pasted the text of the defendant’s as presented at the bench trial, and I mean literally ! I see no “original thought on law” by Bernal or deep thinking written, “here is why the law applies from the standpoint of a federal judge and my understanding of same” etc.

    It literally reads like a near verbatim copy of the defense, and I mean almost literally verbatim in many parts. With a mere “the court finds” added and then “insert text written by the defense attorneys” – like they wrote this decision and not Bernal or his clerk’s under his guidance ?

    The FDA would be silly to go this far and not appeal this – as it appears Bernal had near zero understanding of what anything means as related to the actual science and/or medical processes taking place.

    I believe there is even some obvious and really gross errors – where in the process of the judge using cut-n-paste of what the defendants wrote, he sort of twists it all up to where it literally makes no sense (again, showing he is 100% clueless as to what he heard during his bench trial – and that was my impression of this judge at the bench trial, clueless and largely disinterested in the science/medicine).

    I’d summarize his ruling as sort of “Well, they’re doctors and got medical degrees and stuff. And I don’t know, they say they use mechanical separation and use this enzyme stuff for which they say there’s no issues. Oh, and they told me these cells, they don’t do anything weird in the body, even though I never even asked about how could these cells which are in the fat possibly have effects on ALS, MS, COPD, brain injury and pretty much any other serious malady known to mankind” etc.

    That is in stark contrast to the Judge Douglas Ginsburg 11th circuit panel written decision- where they specifically illuminated these “claims” of “One process, one drug that can supposedly treat nearly every serious malady known to mankind – and that is troubling as no science of any kind supports such a known process, drug, treatment to ever exist or ever be supported by medical literature or science” (Paraphrasing of course judge Douglas Ginsburg, and the appeal his panel wrote expressing deep introspection of “the law” and also science, medicine, how could this stuff “treat” such a swath of the most complex ailments ever know, and all via a “simple clinic procedure” with no real published large scientific basis to support any of it, etc).

    ALL that blew right over Bernal’s head IMO let alone did it even seem to interest or concern him, which is troubling to say the least ?

    Yeah – I’m betting APPEAL by FDA and a big interest on do they ask for a “STAY” while it works through what will be a slow slog through the very backed-up and notoriously slow 9th circuit.

    And again, the 11th circuit has jurisdiction over FL, AL and GA so nothing changes there – they being an appellate court “trumps” the lower district court ruling for their geographical territory.

    This is a long on-going saga and I think far, far from over or settled yet IMO.

  8. My guess – is the FDA will almost for certain appeal this. The cards are in their favor, seeing how a very, very Sr and long sitting highly respected judge on the 11th circuit court of appeals wrote the final opinion in that case, and staunchly in opposition to what a lower court judge Bernal just ruled.

    If one checks Bernal’s record- he’s got a fairly high rate of being overturned at the 9th circuit, the appellate court that covers his region. And the 9th circuits isn’t exactly stellar – in that, they often get overturned at the Supreme Court (I believe at a higher rate than any other appellate court in the nation).

    Judge Bernal did not award attorney’s fees to the CA Stem Clinic – thus this cost them a pretty penny to defend this case. The FDA aka Federal Govt essentially has an unlimited budget and unlimited time on their hands – thus, they can weather a 2 yr or longer appeals process and it makes no difference to the FDA – as DOJ attorneys are staffed and get paid no matter what. The CA clinic chain has to fund their fight – and that cost major big bucks.

    It’s now a Federal court “split” – the 11th circuit appeals court has BANNED SVF in FL, AL and GA. That is now law in those states, if and until this matter ever reaches the Supreme court of the United States.

    Bernal – he only sits on a CA federal court- thus his ruling does not usurp the 11th circuit ruling and it’s geography it covers.

    That leads me to conclude – the FDA will appeal. The odds tilt in their favor IMO – Bernal is one federal judge in one state at a district court. He just “split” with a 3 judge appeals court panel (One notch below the Supreme court of the entire USA) and again, those 3 judges were very, very Sr and well respected with judge Ginsburg writing the court’s opinion. Judge Douglas H. Ginsburg, he was “brought in” as a Sr judge for the case – as he “technically” sits most often on the D.C. (District of Columbia) court of appeals – but is at times “called in” to the 11th circuit and helps them out on complex cases, etc. His reputation is nothing short of stellar and he left ZERO ambiguity in his final written ruling speaking for the 11th circuit ruling against SVF via the U.S. Stem Cell and Kristin Comella case.

    An appeal IMO – it might mean the FDA asks for a “Stay” on any SVF treatments by the CA Stem Clinic chain until the case works its way through the 9th circuit, one of the most backed-up of the already slow appellate courts. I’d think another 2 yrs or longer is a very realistic expecation.

    My bet – is on the FDA releasing some sort of major press release and then moving to file their appeal, as they have a limited time window in which to do so.

  9. I am very pleased with this decision. Finally a courageous judge who understood the issues. The FDA and Health Canada violated the foundational principle of bioethics: that of patient choice and autonomy. Autologous stem cell deployment is a bedside medical procedure and the federal bureaucracy had no business “regulating” it in the first place. The practice of medicine is regulated by state medical boards. So why all this vitriolic nonsense about the dangers of cell therapy? In two words: Big Pharma. What is the number one grossing drug in the world? Very few know the answer: Humera. Over $20 billion in sales and it is used as an immune modulator (just like stem cells!) Now look up side effects of the #1 drug on earth on the FDA website: over 13,000 deaths and 168,000 “serious adverse effects” have been reported. How many patients have died following autologous stem cell deployment? Zero. Once stem cell lines are genetically engineered (and patented due to the genetic modifications) they will be touted as the greatest scientific medical breakthrough of the 21st century. Humera and all it’s cousin drugs will mysteriously disappear and we will pay dearly for these patented cells. Many academics and industries have no interest in seeing autologous therapies become main stream. My clinic performed over 400 autologous deployments prior to the federal authorities ordering us to stop. I witnessed amazing results in the majority of patients who had failed conventional medical therapies for a variety of medical ailments. Of course this treatment does not lend itself easily to randomized controlled trials as there is nothing to patent. However if the government was truly interested in our health and welfare the NIH would have sponsored clinical trials to determine efficacy (safety is already obvious – it is actually idiotic at this point to state autologous cells are unsafe). The USA and Canada are far behind Asia and many other parts of the world regarding stem cell therapies. Hopefully we can move forward now.

  10. This is the right decision. It’s been a long time coming. An appeal by the FDA would be a suboptimal use of its limited legal resources. The ruling is a victory for all sick and disabled Americans. This is just the beginning…

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