OAKLAND (CBS SF) — A Santa Clara County man has filed a lawsuit claiming that a Newark-based stem cell company fired him for complaining that manufacturing practices put patients’ lives at risk.

In his suit, which was filed in Alameda County Superior Court earlier this week, Rob Williams accuses StemCells Inc. of wrongful termination, retaliation and violating the California False Claims Act.

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The publicly-traded company receives millions of dollars in government funding, including grants from the California Institute for Regenerative Medicine, according to the suit, which was filed on Williams’ behalf by Sunnyvale attorney Daniel Velton.

Williams says in his suit that StemCells hired him last December to serve as its senior manager of manufacturing but fired him in May for making complaints about “dangerous/defective products the company was releasing into the commerce stream for human clinical trials.”

Among the problems that Williams says he discovered were “poor sterile technique,” failure to adhere to follow good manufacturing standards sets by the U.S. Food and Drug Administration and deficiencies in the processing of stem cell lines.

Williams says that when he raised his concerns with his supervisor, a long-time member of the company’s upper management, she “grew upset” with him and “directed her ire at him personally rather than at the
underlying problem in the manufacturing process that he had brought to light.”

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StemCells spokeswoman Andrea Flynn said in an email that Williams’ allegations are without merit and Williams was “terminated for performance deficiencies.”

Flynn said, “The elements of manufacturing practices that concerned Mr. Williams were immediately and carefully reviewed by the company. The company’s primary concern has always been, and will continue to be, the safety and tolerability of stem cell transplantation in its clinical trials.”

She said, “To date, no patients participating in the clinical studies have experienced any product related safety concerns.”

The lawsuit seeks unspecified general and punitive damages.

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