California Stem Cell Face-Off: CIRM Directors Wrestle with Tough IOM Recommendations

Two days next week at the posh Claremont Hotel in the Berkeley hills could settle the fate of California's $3 billion stem cell agency.

At 9 a.m. next Wednesday, the governing board of the state research effort will begin a critical, two-day public session. On the table will be the $700,000, blue-ribbon report from the prestigious Institute of Medicine (IOM). The study recommends sweeping changes in the structure and operations of the California Institute of Regenerative Medicine (CIRM), as the stem cell agency is formally known.

The IOM report alone poses major challenges for the agency. But the recommendations are freighted with even more significance. Below the surface lies the hard fact of CIRM's dwindling resources and possible demise. In less than four years – without either renewed public support or private contributions – the research effort will begin a shriveling, downward spiral.

Claremont Hotel

The IOM report places a special burden on the agency governing board. The board paid the IOM to evaluate its performance. In 2010, then CIRM Chairman Robert Klein trumpeted the value of an IOM study, saying it would serve as a springboard for a new, multibillion-dollar state bond measure for the agency(see here and here). Given the state's difficult financial condition – not to mention the position of potential private sector investors – winning approval of that kind of investment will be more than difficult. 

California's major newspapers already have editorially backed the IOM proposals. Indeed, if the directors choose to ignore the major IOM recommendations, they will hand opponents a devastating weapon, one that could be used to convince voters to reject any proposal for continued funding. The board would also give private investors more major reasons to say no to CIRM pitches for cash.

Under Klein's leadership, the 29-member board has rejected similar proposals for changes in the past. When the IOM presented the study to the board just last month, the reception was not much different. Several board members bristled. One influential board member, Sherry Lansing, chair of the University of California board of regents, said the directors' “hands are tied” because some of the recommendations might require a vote of the people. Her comments echoed similar statements from Klein in 2009, when he said board members would violate their oath of office if they supported recommendations for changes that he opposed.

The IOM discussion in December, however, was relatively brief and less than definitive. Klein has been off the board since June 2011, replaced by Los Angeles bond financier Jonathan Thomas, who is regarded as a welcome change by a number of board members.

Nonetheless, the recommendations of the IOM could mean that some members of the board would lose their seats; others would lose important roles in the grant-award process or within the agency itself. Conflict of interest rules would be tightened. In some ways, the board would lose power, which would be shifted to the president. The board would no longer vote on individual applications – only a slate recommended by reviewers. Applicants for CIRM awards would be directly affected, being barred from making the sort of direct and public appeals that clogged the CIRM board meetings last year. And that would be just the beginning.

Thomas, the CIRM chairman, is expected to make his recommendations for action on the report, although they have not yet been posted on the CIRM web site. Under what might be considered “normal” leadership, Thomas would be testing sentiment among board members via personal conversations and phone calls. However, in California that would be illegal – a violation of open meeting laws that bar what are called “serial meetings” at nearly all public agencies.

Thomas' task is not easy. Rounding up a majority vote for anything significant among 29 strong-minded individuals is not simple. But it is even more difficult when facing a board that has a tradition of consensus management and oversight.

The site of next week's meetings is interesting. The nearly 100-year-old, iconic Claremont hotel has a troubled financial history. It was up for sale for $80 million last spring but there were no takers. In the early 20th century, the property on which it is located was lost and won in a checkers game in Oakland, or so the story goes.

The stakes are also high for the California stem cell agency. Moves next week by directors could easily determine whether CIRM becomes nothing more than an interesting scientific footnote or establishes a path that will lead it to long-lasting leadership in regenerative medicine.