California's $40 Million Genomics Round and Conflicts of Interest

Concerns about conflicts of interest have dogged the California stem cell agency since its earliest days, and they continue into this week's $40 million genomics round.

They were first raised in the ballot campaign of 2004 when California voters were asked to create the $3 billion research program. And they were of sufficient concern eight years later that the highly regarded Institute of Medicine said in a $700,000 study of the agency that it should act to minimize potential damage.

The institute said in its 2012 report, commissioned by the agency itself,

“Far too many board mem­bers represent organizations that receive CIRM funding or benefit from that funding. These com­peting personal and professional interests com­promise the perceived independence of the ICOC(the governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.

The latest concerns arise, however, not in connection with the governing board. They have surfaced in connection with the closed-door grant review process and subsequent recommendations by CIRM President Alan Trounson in a plan to create one or two stem cell genomic centers. Trounson advised the board to approve $33 million for a single proposal led by researchers at Stanford University.

Two applicants in the genomics round, UC San Francisco and the Scripps Research Institute, have complained in letters to the agency's board about unfairness, apparent preferential treatment and manipulation of scores on the Stanford application, among other things. The applicants do not specifically allege that conflicts of interest exist in the genomics round. Nor do they identify a motive behind what one applicant said were “appalling” actions.

But the round has a checkered history that does, in fact, involve actual conflicts of interest.  connected to Trounson, CIRM grant reviewer Lee Hood of Seattle and Stanford stem cell researcher Irv Weissman. Some concerns were also voiced privately by researchers as far back as 2012 when renown genomics researcher Craig Venter, now part of the Stanford application in this week's round, pitched the CIRM board on stem cell genomics. Only an hour or two following his presentation, the board, with virtually no discussion, approved the concept behind the genomics round along with a $40 million budget. Approval came on a voice vote with no dissent.

Applications came in about eight months later for what CIRM said would be one or two awards that would propel California into a world class leadership position in the new field. Trounson recruited Hood, who is another internationally recognized genomics expert, to serve as a grant reviewer. As reported by the California Stem Cell Report in May 2013, one reviewer in the first of two genomics grant review sessions raised a question about Hood's participation. Hood subsequently acknowledged that he failed to disclose his relationship with Weissman, who was involved in what was then a $24 million application from Stanford. The men are friends and partners on a ranch in Montana. CIRM staff had failed to detect the conflict.

Prior to the genomics round Trounson had acknowledged he had a conflict-of-interest in connection with another Weissman-related proposal. In 2012 in a round not related to genomics, Trounson, who has visited the Hood-Weissman ranch as Weissman's guest, recused himself from the board's public discussions of applications from StemCells, Inc., a company founded by Weissman.

Under CIRM's procedures, Trounson does not vote on applications during the review process. But beginning last year the board gave him and his staff new authority to make recommendations on applications after they were acted on by reviewers.

Following the Hood violation, the proposals were sent back to scientists for resubmission. By the time Stanford's proposal was approved by reviewers and came to Trounson for his consideration, Stanford had removed Weissman's name. According to a letter from Stanford, the associate director of Weissman's stem cell institute at Stanford, Michael Clarke, is now a “collaborator” on the project.

In documents on the CIRM Web site, Trounson also told the board, with no explanation, that it should not approve any cash for the applications for two competing proposals from UC San Francisco and Scripps and a third believed to be from UCLA. All three were recommended for funding by CIRM's blue-ribbon reviewers, all of whom are from out of state. Normally the board has rubber-stamped hundreds of such recommendations by reviewers. It would be a radical change for the board to turn its back on reviewers' opinions on three major proposals.

The California Stem Cell Report asked the agency last week whether all staff members, including Trounson, who were involved in the recommendations were screened for “personal, professional and financial conflicts.”

Kevin McCormack, senior director of communications for the agency, replied,

“Dr. Trounson’s participation in the staff recommendations regarding the stem cell genomics award was consistent with state law and CIRM policies.”

McCormack also said that the CIRM legal staff “ensured, as they always do, that employees with conflicts did not participate in the review of applications in which they had a conflict.”

Our take:

It is not unreasonable to consider that Clarke, the associate director of Weissman's institute, is a surrogate for Weissman in the Stanford proposal and presents at the very least the appearance of a conflict of interest for Trounson

The situation does not well serve the agency, which is in the process of trying to develop funding for its operations after 2017, when money for new grants will run out. Prospective investors, be they private or public, would expect the agency to act in such a manner that would avoid the sort of flap that has arisen in the genomics round. That is not to mention the need to maintain the confidence of the public and the stem cell community.