Monday, October 26, 2009

How the Lucky 11 Made Their Way: A $200 Million Tale

Seventy-three pilgrims started out on California's disease team trail last March, looking to share $210 million. Only 11 have finished, unless the men and women who control $3 billion decide differently.

The initial number of stem cell argonauts was substantially less than predicted by Alan Trounson, president of the California stem cell agency, which is financed by $3 billion borrowed by the state.

Last January, Trounson told CIRM directors that he anticipated more than 100 applicants. The prizes were alluring: up to $20 million each.

But only 73 teams filed “pre-applications,” Trounson said in April. Thirty-two of those were invited to submit full applications following CIRM's new grant triage process, which involved scientific specialists from outside California and CIRM staff.

In June, Trounson reported to directors that eight of the 32 invitees had commercial partners or were led by a business. Nine involved international collaborations, down from 18 in preliminary process. (CIRM reported scores on only 31 applications. Presumably one of the 32 did not apply or failed to qualify for some other reason.)

CIRM is ballyhooing the international aspects of the disease team round, whose original California budget was $210 million with up to 12 successful teams. The 11 likely winners account for only $167 million. But funds from the United Kingdom and Canadian teams will boost the combined total to $200 million, according to CIRM.

The results of the disease team round could be an important indicator of CIRM-industry relations. Some businesses have expressed dismay in the past with CIRM after their applications were denied, sometimes appearing at board meetings to vent their concerns. They are generally rebuffed by directors.

Trounson and others, however, have been talking for months about improving ties with the biotech. The updated strategic plan(also up for a final vote this week) calls for closer links. And Trounson has created a new position (yet to be filled), vice president for research and development, to help encourage more amicable relations. He is hoping to attract a candidate with industry experience.

CIRM reviewers rejected 20 disease team applications. Based on our latest look at the agenda, none have sought to overturn the result via the agency's “extraordinary petition” process. But those appeal letters often show up late publicly. Any applicant can also appear before the board and ask for reconsideration of reviewers' decisions for any reason. Few have.

Only four applications received scientific scores above 80. The highest was 90. The other seven ranged in the 70s. Rejected applicants fell below that line, although their scores are not released publicly. The general ranking of the unsuccessful applicants can be determined by examining the listing of the grants. CIRM has made a practice of ordering all the application summaries by their score. For example, application 1480 is the first to fall below the 70 cutoff. If CIRM follows past practice, 1480 has a much higher score than the last application, 1449, listed on the summary.

Sometimes CIRM directors have discussed whether the difference between a score of 70 and 68 has any significance. Those discussions usually come up when they are considering moving an application out of the “not recommended” category. Given that there is more cash available, some directors may move to approve an application just below the cutoff line.

Directors, with the exception of those on the grant review group, do not have access to the full application. Nor are the names of the individuals or institutions disclosed to directors, although considerable information is contained in the review summaries that provide clues to applicants' identities.

Directors also are barred from voting or even discussing applications in which they have a conflict of interest. Usually directors vote on the top-tier grants as a block, officially recording their votes with this language, “Yes, except for those on which I have a conflict.”

Since many of the 29 directors come from institutions that often have applications before CIRM, the votes of the “non-conflicted” board members (mainly patient advocate representatives) are very important in order to complete legal action on the applications.

CIRM has a supermajority quorum requirement – 65 percent – written into state law by Prop. 71, which created the stem cell agency. The quorum is based on those eligible to vote. While quorum and attendance problems have hampered the board with some frequency in the past, we suspect that will not be the case this week. CIRM Chairman Robert Klein has more than once emphasized the importance of the disease team round in terms of producing results that will help CIRM find funding to continue its work beyond the 10 years it can issue bonds. Sphere: Related Content

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