California's $40 Million Stem Cell Genomics Award: Irregularities, Complaints and Integrity

A number of firsts were recorded last month as the California stem cell agency gave $40 million to a Stanford-led consortium to put California in the global forefront of stem cell genomics.

Not all of those firsts necessarily enhanced the reputation of the California Institute of Regenerative Medicine (CIRM), as the $3 billion agency is formally known.

The unusual events and irregularities surrounding the award, CIRM's largest research grant, merit additional attention, given their implications about the integrity of the agency's grant review process and how the agency does its business.

The California Stem Cell Report recently asked a number of persons connected with the round and other knowledgeable individuals about the process. Their comments included a judgment that the agency staff “took a lot of liberties behind closed doors.” One of the rejected applicants "unequivocally" disputed assertions by CIRM President Alan Trounson that all applicants were informed by him about the need for matching funds, a key criteria for grant reviewers. The request for applications did not contain such a requirement.

The comments came in addition to earlier complaints by rejected applicants that scores had been manipulated in an “appalling” fashion and that scientific merit was not the first order of business in assessing the top four applications.

Also surfacing was a problem generated by Proposition 71, the ballot initiative that created the stem cell agency in 2004. The measure set up a 29-member governing board, including deans of medical schools and others with ties to research organizations. The board was supposed to exercise its expertise on funding decisions. However, only seven members of the board actually voted in the genomics round. Most of the rest had legal conflicts of interest and were not allowed to even participate in the discussion. It is not unusual for that sort of situation to arise during funding decisions by the board.

The CIRM stem cell genomics story began publicly in a scientifically big way with an article in the journal Nature Biotechnology in January 2012  by Trounson and two members of his staff. In it, Trounson said his proposal was needed so that the agency could take a "firm and lasting grip" on stem cell leadership.

Later that month, the governing board of the agency approved the concept for one or two genomics award. In February 2013, grant reviewers for CIRM, whose identities are withheld by the agency, took a crack at the applications. However, they declined to send any applications forward to the board for final action. It was the first time in the agency's nine-year history that has occurred. The reviewers offered no public explanation for the move.

The closed-door review session was marked by a conflict-of-interest violation by Lee Hood of Seattle, Wash., an internationally known genomics specialist, who was recruited by Trounson to be a reviewer in the round. Hood is a close friend of Irv Weissman, who heads Stanford University's stem cell institute. Weissman was named in Stanford's then $24 million application. Hood and Weissman also own a ranch together in Montana.

Trounson has been a guest at the ranch. In 2012, he recused himself during CIRM board discussions of two applications involving Weissman. The applications were from StemCells, Inc., of Newark, Ca., for $20 million each. StemCells, Inc., was founded by Weissman, who still holds a large amount of stock in the firm and serves on its board of directors.

Following the unsuccessful genomics review in February 2013, the applications were sent back to researchers with reviewer comments. The proposals could be retooled for a re-review in the fall, they were told.

After the fall review, the reviewers – minus Hood -- sent the applications to the board with recommendations to fund all four despite the fact that they would cost $146 million, well above the $40 million budgeted for the round. It was the first time that reviewers had made such a decision. Normally they stay within the budget, but they offered no public explanation for their actions in the genomics round.

At that point the CIRM staff, headed by Trounson, became more involved. Under new procedures, the staff may make recommendations concerning applications. In this case, they recommended that only the Stanford application be funded, but only after restoring a provision eliminated by reviewers. Trounson also recommended no funding for the three other top applications in the round. It was the first such major intervention by Trounson and the most aggressive staff move on grant applications.

Trounson offered only a 23-word phrase for recommending the Stanford application and no explanation for rejecting the other three. Stripped from the public review summaries for the three competing applications were the dollar amounts that they had requested. It has been the longstanding practice of the agency to include those figures. The amounts ultimately were made available to the board at its Jan. 29 meeting.

At that meeting, Trounson strongly backed retention of funding in the Stanford application for a project led by Michael Clarke, associate director of Weissman's stem cell institute at Stanford. Following the 2013 conflict violation involving Hood and Weissman, Weissman was removed from Stanford's application. Clarke was included, however. No questions were raised at last month's board meeting about whether Clarke could be regarded as a surrogate for Weissman's interests and whether that would involve a conflict of interest for Trounson.

Late in the meeting, Trounson also said that he had personally told all the applicants, with the exception of Stanford, that matching funds were expected as part of the applications, an assertion disputed following the meeting by Jeanne Loring of the Scripps Research Institute, whose rejected proposal contained no matching funds.

She said in an email,

"During the ICOC (governing board) meeting, Alan Trounson said that he had told us during his visit to all of the first round grantees that it would be important provide money for 'matching' funds. I state unequivocally that he did not tell me or anyone in my lab about this."   (Loring's boldface)

Stanford said its application contained $7 million in matching funds. The agency withheld the figures when they were requested by the California Stem Cell Report prior to the Jan. 29 board meeting, although it has released the figures in at least one other grant round.

Complaints about manipulation of the scores were raised prior to the board meeting by Pui-Yan Kwok,  leader for an application from UC San Francisco and UC Berkeley. He said that the scores of the top to applications were “based on the reviewers removing from consideration the poorest performing center-initiated projects.” He described the situation as appalling.

The agency defended its practices at the board meeting and in response to questions. It said the scoring procedures were permitted under the RFA. It said that while the procedures may be different than those of the NIH so is the stem cell agency. It said that all persons involved had been screened for conflicts of interest under CIRM rules and state law. 

In response to a query by the California Stem Cell Report concerning the process and the questions that needed to be addressed, Loring replied,

“I am concerned about the interference of the CIRM president in influencing the ICOC decisions. He has de facto power to promote or defeat specific applications, and he often wins by promoting one applicant over another. Stanford and Stanford faculty-founded companies such as Stem Cells. Inc., should not be so blatantly promoted over others. The relationship between the president and the head of the stem cell program at Stanford involves personal favors which make him conflicted and he should at the very least recuse himself from any discussion or recommendation of Stanford faculty's applications.”

Loring continued,

“The 29-member board is difficult enough to deal with, but now that most of the members are considered to be conflicted and are not allowed to even discuss the applications, we are left with a small number of non-scientists making decisions about scientific merit.

“I know that at least 5 members of the ICOC were very upset that they were unable to voice their opinions about what should be their mission- to guide CIRM's policies and choices for funding so that they are in the best interest of the voters.”

(For the full text of Loring's remarks see here.)

Other critical comments came from a longtime observer of the agency, who asked not to be identified, and who said,

“It appears that CIRM staff took a lot of liberties behind closed doors in driving this initiative to its final outcome. For example, what happened to require a resubmission and re-review etc. Did they change anything about this initiative in the process?  Were certain criteria shared with some but not all applicants?

“It also appears that the board was taken by surprise and not prepared to deal with the complexities in this initiative.  Clearly staff has not kept them in the loop and they had little access to the details of the process and how reviewers were managed.  They have always funded the vast majority of what the reviewers scored highly, and still did not break the bank.  This is a brand new situation where the reviewers recommended more grants than they could afford to fund.  This happens a lot in the NIH (especially today with severe budget cuts), so NIH has developed many processes to deal with this.  CIRM has not seen anything like this before.”

During the board meeting, some board members questioned parts of the grant review process. The anonymous observer said, 

“The questions (all legitimate) raised by the certain members of the board were by and large not understood or picked up by the other voting members, so they went nowhere. 

“Too many thoughtful board members were conflicted out, leaving the decision-making to a handful who are not prepared to deal with this complex situation.  I blame the IOM (Institute of Medicine) report in giving too much power, without the appropriate process, to staff.  Staff can recommend, but if the board has no information other than what staff provides, then they are acting in the dark.”

(For the full text of those remarks see here.)

In response to the same query, Michael Snyder of Stanford and Joe Ecker of the Salk Institute in La Jolla, co-leaders of the Stanford-led effort, did not raise any questions about the CIRM review process. They said,

“The net result (of their proposal) is that this center will help bring cutting edge technologies to all stem cell researchers in California and along with the funded projects will help keep California at the leading edge of two important fields: stem cell research and genomics, and thereby help accelerate both the science and therapeutics treatments possible in this field, and spur industry and economic development. questions.”

(For the full text of their remarks see here.)

(Editor's note: An earlier version of this item incorrectly said the first name of Michael Clark was William.)