Sunday, August 03, 2008

Loans, Eggs, Contracts, Suppliers and $41 Million Top CIRM Agenda Next Week

Directors of the California stem cell agency will meet next week to hand out $41 million to 14 lucky scientists and wrestle with a host of other matters, ranging from the $2.7 million in outside contracts to a proposed $500 million biotech loan program.

Here is a quick look at the topics on the Aug. 12 agenda, which will probably be posted soon on the CIRM website.

Researcher Bonanza -- This a bit of a "do-over" of last year's $85 million faculty award program. That effort was tarnished when five CIRM directors violated the agency's conflict-of-interest policies by writing letters on behalf of applicants from their institutions. CIRM said the letters resulted from an "innocent misunderstanding," but disqualified the 10 applicants involved. No CIRM action was taken against the five directors. The full board decided to provide another grant opportunity, which was also open to applicants other than those disqualified. The latest effort, modified from the first offering, is scheduled for $41 million for 14 winners, with awards up to $2 million a year. CIRM received 55 letters of intent to apply for the grants but has not released the actual number of applications as far as we can determine.

Outside Contracting
– Perhaps the most important item in the $13 million operational budget of the stem cell agency is the $2.7 million it spends for outside contracting. That figure is up 50 percent from last year. It is the second largest item in the budget, behind only salaries and benefits. CIRM will have spent more than $2 million for outside legal help by the end of this year and has spent hundreds of thousands for executive searches. In 2005, directors imposed restrictions on outside contracts and required quarterly reporting after they were surprised by published reports about the size and impact of those dealings. On Aug. 12, it appears that directors will be asked to reduce the reporting from quarterly to annual. That would be a mistake. CIRM's board should keep a close eye on the process because of importance of contracting to CIRM and the ticklish issues of overseeing those contractors. Earlier this year, directors had to retroactively approve additional funding for its main outside counsel, Remcho, Johansen, & Purcell of San Leandro, Ca., after work had already been performed. CIRM Chairman Robert Klein also told CIRM directors that Remcho is unique in its abilities, that basically no other firm in the state can perform the work. Thus, Klein reported, the attorney general's office has said the contract does not need to go out for bid. See the Remcho item below for more on Klein's explanation of the relationship between him, Remcho and CIRM and the opinion of the state attorney general. Here is the latest list of outside contracts. Here is the budget for 2007-08.

The $500 Million or So Biotech Loan Program -- The formal agenda topic is "CIRM loan policy." CIRM Chairman Klein earlier this year said he hoped to have the biotech loan program approved this month. But this cryptic agenda item may mean that the board will not be presented this month with the whole package for this ground-breaking and novel effort. See the item below for links to various CIRM documents on the loan proposal. Search this blog on the term "biotech loans" for even more.

Definition of California Supplier – Perhaps hundreds of millions of dollars are at stake in this item. It involves the Prop. 71 requirement that California suppliers be given preference on purchases by CIRM grantees. Legislation is being considered in Sacramento along with separate regulatory language being worked out at CIRM. Here is a link to the latest version of the legislation involved and the transcript of the June CIRM directors meeting at which the topic was discussed briefly. This is an area that has changed swiftly and may well again even before next week's meeting.

Grant Appeals
– CIRM is wrestling with the issue of how to handle requests for reconsideration of negative recommendations from the Grant Review Committee. Basically CIRM directors follow the recommendations from reviewers and have been uncomfortable with the few public attempts to override the Grants Committee. Two items could be related to this subject: One deals with RFA applicant policies and the other with creation of a policy for dealing with "extraordinary petitions" to directors for grants. Search this blog on the term "grant appeals" for some background stories, including a proposal by CIRM director Jeff Sheehy.

Egg Matters
– Directors will be asked to authorize a procedure for using stem cell lines derived before November 2006 in CIRM-financed research. A subtext of this involves the looming question of egg shortages and cash, although it is not formally on the agenda. CIRM President Alan Trounson has said researchers are "floundering" because they do not have enough eggs. If this subject is important to you, you should be at the meeting.

CIRM is likely to post the agenda for the Aug. 12 meeting at Stanford on Monday, which is six business days ahead of the session. We hope to see additional background material posted early as well. That information would help shed light on exactly what the board will be asked to do next week, beyond the brief listings in the initial version of the agenda.

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