The FDA’s case against the California Stem Cell network went forward last Thursday and Friday for the third and fourth days. Yesterday, Monday was an off day. The trial resumes today at 8:30 PDT.

Very briefly, (I hope because I have a lot on my plate today) here are my main observations:

1. The judge has already made up his mind about the case. In a sense that is an obvious implication of his decision denying the government summary judgment. He said the factual issue to be tried is whether what was removed was the same thing that was put back in. Framed in that fashion, it seemed clear that the defendants were going to win the case, and nothing about the judge’s actions or demeanor during the trial suggests otherwise. He does not seem super engaged by either side, and while he is listening politely, my sense is that he’s done, and just wants it over as quickly as possible so he can get about his business of writing the decision. Viewed another way, I don’t get the sense that the judge feels anything he is hearing on either side is particularly helpful.

2. It is obvious that the government doesn’t try many of these cases. The two FDA female doctors (one M.D. and one Ph.D.) were extremely knowledgable but between the defense counsel’s objections and cross-examination, the judge’s rulings, on what would be admissible testimony and their obvious and admitted lack of experience testifying (the MD at least), they were kept on a very tight leash and didn’t get to testify about everything they had to say. The FDA doesn’t have to try many of these cases, as the defendants usually cave in or the courts rule against the defendants on summary judgment. Doing trials on these complicated regulatory issues is a lot different from having an FDA attorney prepare a declaration for an FDA expert employee.

3. On the third day, there was much testimony on what is the same surgical procedure, as there should have been. The MD FDA witness tried to explain the difference between a surgical procedure and what the defendants were doing which was using a surgical procedure to harvest a product/material as a treatment. She also talked about the purpose of the surgical procedure, but I don’t think the explanation was clear as testified or as received by the judge. My sense was that he felt surgery is surgery.

4. The Ph.D. witness barely got to testify since apparently, the bulk of her testimony was about the ultimate legal issue in the case, namely whether SVF is a new drug because it is more than minimally manipulated and whether what was taken out was what was put back in. The judge ruled that expert testimony on the ultimate issue was not permitted under the rules of evidence. The Government lawyer cited some case law to the contrary. The judge pivoted to saying that since these were stated elements of the government’s case, it was his decision to resolve and didn’t need factual testimony about it. I’m not sure about that, but as a general matter, there is only one expert on the law in a trial, and that would be the judge. So to the extent an FDA regulatory expert tries to testify about the application of FDA law to the facts of a case, I think he’s on solid ground. And even on general legal principles of FDA law, let’s remember that the courts no longer give judicial deference to agency interpretations of its own regulations absent a finding of ambiguity.

5. I admit that I am not a big fan of FDA regulators and especially their actions in the stem cell field, but I have to say, between defense counsel’s overaggressive badgering and the somewhat unskillful redirect (and direct) by the government lawyer, even a guy with my predilection (bias), felt bad for the two FDA witnesses. Let me just repeat that the judge kept a very tight leash on what these witnesses were allowed to say. I think that caused some major problems for the government in presenting its case through these two witnesses. Still, even a biased guy like me gives credit where credit is due. Both witnesses were quite knowledgeable, straightforward, sincere, and came off well (to me). I think they handled themselves very well especially because of the above challenges (as painful as it is for me to admit it, though actually, it isn’t, since they both seemed like decent, dedicated, and hard-working professionals doing their jobs on sort of a grey area where they did not have any direct experience, and that wouldn’t a bad impression for the defense if the judge also thinks that).

6. The defenses: The cross-examination of these two witnesses clearly revealed the defenses main arguments or defense tactics: Make the point that the FDA doesn’t usually get involved/inspect surgical facilities and has no expertise in that area and that goes for these two witnesses (though they both watched the same video about a cornea operation, which is sort of pathetic). Make the point over and over again that the FDA doesn’t regulate the practice of medicine. Make the point over and over again that patients get opened up and that is surgery. Make the point that SVF has a bunch of different things in it, and what is taken out is the same thing that is put back in.

7. What about the vaccine stuff (ACAM something or other)? The defense is that the government confiscated the product from some other entity so the defendants no longer have it, and I suppose they will argue that what’s the point of enjoining something that the defendants no longer have and can’t get anymore.

8. What about the defense to the use of expanded stell cell products which prior persuasive authority has held to be more than minimally manipulated? I’m not sure about that, maybe just argue that the change in the deference standard makes the Regenerative Science decision bad law now. That might be persuasive to this judge.

9. The one thing that might have bothered the judge: There was evidence on direct from the Ph.D. that the enzymes used just don’t stop working; that they keep on breaking down tissue even after the product is reinjected back into the patient in the absence of chemical neutralizing process (I am a little unclear on the process required). The implication being that the defendants’ inadequate processes are going to limit or eliminate any beneficial effect the material/treatment might have. In response, the defense took her through the defendants’ article which claimed that the three washings removed over 99 percent of the enzyme. The witness was skeptical. I didn’t get a read on the judge’s reaction. So this is just my reaction that if there is anything that might have caught the judge’s attention and could impact him against his prior inclination that the defendants’ activities are not FDA regulatable, this was it.

10. The Ph.D. witness made the point that irrespective of the 1271.15 same-day surgical inspection issue, the defendants still had to comply with the FDA’s cGMP requirements. I think the defense’s counter was general about how the FDA doesn’t regulate surgical practices or procedures. The FDA’s response was yea but we regulate products. The judge: Hey let’s use the word treatment and I’ll decide if it is a regulatable product, and there were many variations of that basic point-counterpoint and counter-counterpoint.

11. “Did I read this correctly?” Really?

The craziest thing I saw technically was the defense counsel’s repeated question “Did I read this correctly” after reading a cherry-picked supportive statement contained in a defense article supporting the safety or efficacy of stem cells. Obviously, the defense was just using the witness to read to the judge these positive statements about stem cells. But what he didn’t do was ask any follow-up questions. Rather, he just moved to the next positive statement from the article and then to the next article and so on for each of quite a few articles.

I don’t get the government’s failure to object after the first time defense counsel pulled that nonsense. He should have made a speaking objection pointing out that without a follow-up question to the witness about whether she agreed or disagreed with the statement, the question posed was irrelevant. There is no issue in the case about whether defense counsel can accurately read a statement from a written text. The government attorney could have offered to stipulate that defense counsel has that reading capability (ok, maybe too sarcastic). I just didn’t get the govenment’s nonreaction other than these guys don’t have to try many of these kinds of cases. Defense counsel got away with it. I wish I could get away with stuff like that. The government did do some redirect on the point, but I don’t think it was sufficient in light of the hammering the witness took and the reading of all those cherry-picked statements. Tactically, some hard pushback including more extensive redirect on why the FDA expert thought those statements were incorrect or misleading.

My bottom line from these two trial days is that I think the defendants should be feeling pretty good about the case. The government, not so much. And the defense hasn’t even put on its full defense yet, though it is pretty clear what the defense is via the cross. I think that speaks well for the defense counsel’s preparation and execution. Good on them.

Rick Jaffe.