Monday, May 23, 2011

Litvack vs. Thomas for Chair of the $3 Billion Stem Cell Agency

California State Controller John Chiang today nominated Frank Litvack, a "serial entrepreneur" and cardiologist, to become the new chairman of the $3 billion California stem cell agency.

Chiang cited Litvack's deep background in medical business development and "unique combination of skills." The controller said,
"Litvack knows from personal experience what it takes to develop new medical technologies and move them through the regulatory process to adoption in the market place."
Chiang, the state's top fiscal officer, said that Litvack "has been a clinician, a researcher and an entrepreneur, who has found or led several medical technology companies."

The controller continued,
"Dr. Litvack is a strong proponent of the oversight model of governance, as I have advocated. I believe he has the executive, medical, regulatory and financing experience, as well as the leadership skills that are needed to successfully guide the ICOC (the CIRM governing board) and CIRM through this upcoming transition and onto further success in the coming years. His interest in serving as ICOC's next chair is grounded in such a strong sense of civic duty and belief in CIRM's mission of saving lives that he will serve in the position at the lowest salary being offered, irrespective of his commitment to spend whatever amount of time is necessary to work with the ICOC and CIRM management to ensure that the next chapter in CIRM's history is as successful as the first."
The CIRM board will meet June 22 and 23 in San Diego to choose between Litvack and Jon Thomas, chairman of Saybrook Capital of Santa Monica, Ca., to succeed Robert Klein, a real estate investment banker and attorney who has resigned as chair of the organization.

Thomas was nominated last week by Gov. Jerry Brown and state Treasurer Bill Lockyer. Lt. Gov. Gavin Newsom is also expected to nominate Thomas. (Later in the day, Newsom did nominate Thomas.)

By law, the 29-member CIRM board can only a elect a chairman from candidates nominated by the four state officials.

Thomas reportedly favors the current controversial dual executive situation at CIRM in which the chairman and president have overlapping responsibilities. That has lead to public conflict in the past and has been much criticized, particularly by the state's good government agency, the Little Hoover Commission. It said CIRM was personality driven.

Controller Chiang, also chair of the only state entity charged with review of CIRM and its board, last March said that oversight of CIRM is "severely compromised" when the chair is part of management.

Klein favors continuation of the existing dual executive relationship. A reliable source told the California Stem Cell Report that Klein favors Thomas, although the board's outside counsel denied that on behalf of Klein.

Litvack is disposed to more of an oversight role for the chair, a position that the CIRM board seems more inclined to support, at least as of its March meeting. The board also has designated the job as part-time – only 50 to 80 percent. The post carries a salary that tops out at $529,100. However, the board is looking at paying no more than $400,000 with a low of $137,500 because of its part-time nature.

The pay apparently is another difference between the two men. Thomas is reportedly seeking a salary at the high end of the range while Litvack would accept $137,500.

Litvack has been involved with a number of firms, most notably Conor Medsystems Inc. of Menlo Park, Ca. He was CEO when it was purchased by Johnson & Johnson for $1.4 billion. Conor was developing a new kind of stent.

Thomas' firm, which he co-founded, specializes in distressed and defaulted municipal bonds, a financial category that includes state bonds. The stem cell agency is funded virtually entirely by California state bonds. The state has the lowest bond rating of any state in the nation.

The CIRM directors' Evaluation Subcommittee is expected to meet behind closed doors soon to interview the candidates. They are expected to make a public presentation at the San Diego meeting at which time the public can make comments or raise questions. Sphere: Related Content

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