Friday, May 28, 2010

IOM Study of CIRM to Come Before Stem Cell Directors in August

Directors of the California stem cell agency are moving forward with a proposal to commission a blue-ribbon study of their $3 billion effort by the Institute of Medicine.

The directors' new Science Subcommittee on Tuesday voted to bring the proposal, which is now connected to legislation to remove the CIRM staff cap, to the full board in August, said a spokesman for CIRM.

In response to an email query, Don Gibbons, chief communications officer for CIRM, said the panel directed the staff to “work with the leadership of the committee to develop the full scope of work for any IOM(Institute of Medicine)study.”

Gibbons also said that CIRM is seeking to verify that “this scope of work could qualify for the audit required” by SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose. The bill is now on the Senate floor, clearing the Appropriations Committee Thursday on a 10-0 vote.

CIRM and Alquist negotiated a compromise on the legislation that has won the approval of the CIRM board, the first time it has endorsed legislation that would alter the agency's activities. CIRM needs passage of the bill to remove the 50-person cap on CIRM staff.

During the negotiations, proposals for independent performance audits were stripped from the bill – ones that would be conducted under the auspices of the Citizens Financial Accountability Committee, a sister panel to CIRM. As it now stands, a performance audit would be required, but it would be commissioned and paid for by the agency itself. CIRM has made it clear that it is not interested in addressing the accountability concerns raised by the citizens committee.

The bill specifies that use of the state auditor would be acceptable. However, that agency might have difficulty with evaluating the science side of CIRM's performance. The state auditor could presumably hire a consultant to assist in that area. Instead of the state auditor, the stem cell agency could contract with a private firm, which is more likely to be susceptible to suggestions from CIRM about the conduct of the performance audit.

The Institute of Medicine may well tilt to the science side of CIRM's activities with a lesser focus on whether the people of California are getting a good return on their $6 billion (including interest) investment. The institute may also be less interested in CIRM's accountability and openness than would be the case with an audit done for the Citizens Financial Accountability Oversight Committee.

Still to be determined is the cost of the performance audit and timetable. Costs in the neighborhood of $400,000 have been mentioned for a performance audit. An IOM study could run more. To be useful, an audit should be done as quickly as possible. However, it is certain to take many months or more to complete.

CIRM Grant Appeal Rules to Receive More Scrutiny

Directors of the California stem cell agency plan to continue their review of key portions of the grant approval process, including the appeals that have been something of a bugaboo for both applicants and directors.

Don Gibbons, chief communications officer for CIRM, said in an email that the directors' Science Subcommittee on Tuesday concluded that “they need to devote a large chunk of a future committee meeting to just this issue.”

No further details were immediately known although a transcript of the meeting should be available in about 10 days. We will carry a fresh article on the subject at that point.

This is a matter that all California stem cell scientists should pay special attention to. It could have a significant impact on their livelihood.

For more details on the scope of the directors' concern, see this rundown on related documents.

Reading List on CIRM Grant Appeals

Here are links to items related to the CIRM grant appeal process and other pertinent issues. They include CIRM documents and items from the California Stem Cell Report.  

This list was revised and updated July 19, 2010.

Competing for California Stem Cell Cash: Rules of the Game Coming Under Scrutiny 5/18/2010

Stem Cell Grant Competition: Remove CIRM Directors From Appeals?

Sticky, Troubling Appeals by Rejected Researchers Targeted by Stem Cell Agency 7/18/10

Pre-application review – Most recent CIRM report (Jan. 2010) on the process

Extraordinary petition policy – Version as of 5/25/10

Appeal policy – Version as of 5/25/2010

Transcript of 5/25/10 Science Subcommittee meeting dealing with appeals issue

Tuesday, May 25, 2010

CIRM Directors Okay Compromise Legislation

Directors of the California stem cell agency today endorsed legislation that would remove the 50-person cap on its staff and which is also aimed at ensuring affordable access to stem cell therapies financed by taxpayers.

In response to a question from the California Stem Cell Report, Don Gibbons, chief communications officer for CIRM, said the vote was unanimous. No further details were disclosed.

It is the first time that CIRM directors have endorsed legislation that would modify the agency's operations.

The legislation, SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose, is now set for approval on Thursday by the Senate Appropriations Committee. Then it will go to the Senate floor.

Here is a link to an earlier item on the bill with more details on its current provisions.

CIRM Comments on New NIH Disclosure Rules

Don Gibbons, chief communications officer for the California stem cell agency, filed this comment today on our post, “Disclosure Proposal Likely to Affect CIRM.”
“Casual readers of your posts will take away the notion that NIH is now requiring scientist peer reviewers to post their financial conflicts on the web. That is not true. Existing NIH policy, which is mirrored by CIRM policy, as well as the revised NIH policy, pertains to recipients of NIH grants, not reviewers. Therefore, why does your headline assert the NIH policy change is "likely to affect CIRM." Yes, most of our grant reviewers have NIH grants and will need to post their financial forms on their home institution web sites, but that does not impact CIRM.”
Our point is that CIRM, whose chairman has repeatedly vowed to adhere to the highest standards of openness and transparency, cannot ignore a new standard for disclosure of industry ties by researchers. Currently CIRM scientific reviewers do not have to disclose publicly their financial interests. Under the new NIH rules, those reviewers will be disclosing their industry ties on their home institution Web sites. If CIRM does not disclose the same industry ties of its reviewers on its Web site, the agency will effectively be flouting what will be THE national standard for disclosure by researchers(albeit a weak one, based on what the Institute of Medicine has to say).

The financial interests of CIRM reviewers do have a potential impact on their grant application decisions, which CIRM acknowledges. As Francis Collins, director of the NIH, said, the rules are needed to preserve the “integrity of the scientific enterprise.”

Monday, May 24, 2010

IOM Proposal Not So Good, Says One CIRM Director

One director of the California stem cell agency is less than enamored of a proposal for a study of the agency by the prestigious Institute of Medicine.

Jonathan Shestack
, co-founder of Cure Autism Now and a Hollywood producer, said in an email,
“We may have complaints about CIRM, but they are not of the sort we expect IOM, its cultural and ideological doppelganger, to point out.

“Unless there is a glaring problem, having CIRM pay for an IOM report with its own money is the height of folly and a parody of good government.”

The director's Science Subcommittee is scheduled to take up the proposal at a meeting tomorrow(Tuesday).

State's Top Fiscal Officer Lauds Disclosure Proposal Likely to Affect CIRM

State Controller John Chiang, chairman of a key panel overseeing the California stem cell agency, today praised proposed NIH financial disclosure rules that are almost certain to have an impact on CIRM, one that the agency has avoided so far.

Chiang, the state's top fiscal officer, is head of the Citizens Financial Accountability Oversight Committee(CFAOC), a sister group to CIRM and one that was also created by Prop. 71.

Chiang was commenting on the NIH's new, proposed regulations that are likely to lead to the public disclosure of the financial interests of the reviewers who make de facto decisions on $3 billion in CIRM grants. The stem cell agency has adamantly refused to release the conflict-of-interest information.

In remarks made in response to a query from the California Stem Cell Report, Chiang said,
"I applaud the NIH's proposal to improve transparency and accountability by publicly posting financial disclosure reports of scientists and researchers who receive NIH funding. In January, the Citizens Financial Accountability Oversight Committee, which I chair, voted to post our members' statements of economic interest on our website, and to urge CIRM's governing board members and staff to post the same information on the CIRM website.

"As I said at the time, Californians voted to provide billions of public dollars to find cures for chronic, debilitating and deadly diseases that affect millions of Americans each year. To ensure that taxpayer dollars are spent lawfully, wisely and successfully - and to maintain the public's confidence in their investment - CIRM must pursue the highest standards of transparency."
Although the CFAOC is a creature of the legal draftsmanship of CIRM Chairman Robert Klein and others, the agency has moved away from the panel after facing its questions. In recent legislative negotiations, CIRM representatives were successful in removing a provision that would require the Chiang panel to conduct the first-ever performance audit of the CIRM and its board of directors. Now, the bill, SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose, instead contains a provision for a performance audit that would be commissioned by CIRM itself rather than by an outside group.

The CFOAC recommendations for more accountability and transparency at CIRM triggered a smattering of negative newspaper articles. Michael Hiltzik, a business columnist for the Los Angeles Times, the state's largest newspaper, said CIRM should exemplify not only good science, but good government. A scathing San Diego Union-Tribune editorial carried the headline, “Stem-cell shenanigans / Lawmakers should force state institute to shape up.”

Both Chiang and Gov. Arnold Schwarzenegger post online the statements of their top officials along with their expense claims. Chiang's listing of the material is much more user friendly than the governor's, which are harder to find and harder to navigate.

Sunday, May 23, 2010

Stem Cell Grant Competition: Remove CIRM Directors From Appeals?

An individual connected to an institution with a substantial number of CIRM grants sent along a note concerning this Tuesday's examination of the appeal process for grants rejected by scientific reviewers.

The person, who must remain anonymous, said,
“All appeals of grants working group decisions should return to the grants working group. The ICOC (the CIRM board of directors) should NOT be in the business of hearing appeals to scientific reviews. The ICOC is not qualified to render an opinion on such appeals, and the forum is inappropriate for such discussions.”

“In order to legitimize the review process, the scientific review group needs the leading international experts in the field. CIRM should raise the stipend of scientific reviewers in order to attract the participation of the most knowledgeable and respected scientists in stem cell biology and research.”
Complaints about the appeal process for CIRM applications have rumbled around for several years now. Both the board and applicants do not seem pleased with the situation. We should note that rejected applicants would be expected to be unhappy. But for the few applicants who go public with complaints about the process, we hear grumblings from many others. They decline to speak out because of the possibility that they could incur the wrath of an organization that could severely damage their livelihood.

CIRM will never be able to satisfy all parties with the way it handles appeals. That is the nature of such a process. Somebody is going to have to lose out. But most of the affected parties should be able to perceive the process as fair. That means doing more than burying a notice about an examination of the issue in the CIRM Web site. Tuesday's review of the matter was not noticed on the home page of the CIRM Web site. It was not the subject of a press release. Nor was it even brought up as an "announcement."

CIRM has many constituencies, one of which is the research community. It would behoove the organization to listen carefully and AGGRESSIVELY seek out critical analysis of the grant appeal process from scientists -- in both business and academia -- along with constructive suggestions for improvements.

CIRM Takes a Crack at Stem Cell Banking

Stem cell banking is the subject of a day-long CIRM meeting on Wednesday as the stem cell agency wrestles with the costs, distribution and collection of stem cells.

Panels of leading researchers will be taking part in the public session at the Marriot Union Square Hotel in San Francisco. While the workshop will cover a great deal of ground, CIRM singled out one particular area of interest. In a briefing memo, the agency said,
“It would be valuable for the (CIRM) Standards Working Group to give special attention to the segment on privacy, provenance and safety regulation.”

Bee Carries Article on Stem Cell Agency and the State's Financial Crisis

The Sacramento Bee today carried an op-ed piece by yours truly dealing with the California stem cell agency and ballot-box budgeting.

It is a slightly altered version of the item – “Folly of Ballot-Box Budgeting” – that appeared last week on the California Stem Cell Report.

Saturday, May 22, 2010

Players in the Negotiations on the CIRM Cap Removal Legislation

Art Torres, co-vice chairman of the California stem cell agency, sent along the following regarding the negotiations on the legislation to remove the 50-person cap on CIRM staff.

Torres, who was a key figure in the process, said,
"Please credit our chief counsel James Harrison and counsel Scott Tocher as our chief negotiators and Duane Roth and Bob Klein, who all played significant roles in our efforts with Senator Alquist and her staff, and Senators Steinberg, Florez and Senator Kehoe and their staffs, who were all very helpful in these negotiations and the input of our president, Alan Trounson, and our scientific staff."

Friday, May 21, 2010

Compromise on Legislation Removing CIRM Staff Cap

Legislation to remove the 50-person cap on staff at the California stem cell agency and ensure affordable access to taxpayer-funded therapies was modified Thursday with the intent of winning the support of the CIRM board of directors.

CIRM Co-Vice Chairman Art Torres and others negotiated the changes in SB1064 by state Sen. Elaine Kontominas Alquist, D-San Jose. Torres is expected to seek the endorsement of the full CIRM board at a special telephonic meeting Tuesday. The measure is expected to come before the Senate Appropriations Committee on Thursday.

CIRM dearly wants the 50-person cap removed. CIRM President Alan Trounson has warned that the quality of CIRM work could suffer if it doesn't have more help. The agency has awarded more than $1 billion in grants and loans to more than 300 researchers. Another $2 billion will be handed out over the next several years. The cap is a bit of redundancy in Prop. 71 since the measure also includes a limit on CIRM's operational budget.

Eliminating the provision, however, is not a trivial legislative matter, also because of Prop. 71. The ballot initiative wrote into law a stipulation that the legislature can only make changes in CIRM with a rare, super, super-majority vote (70 percent) of both houses. As a result, both Alquist and CIRM have compromised on the legislation.

As the legislation now stands, in addition to removing the staff cap, the bill would:
  • Write into law provisions aimed at ensuring affordable access to CIRM-financed therapies. Some flexibility for exceptions would be permitted for CIRM under controlled and public processes.
  • Assure that potential profits from the taxpayer-funded therapies would go to the state's general fund. Prop. 71 was vague on where such cash would go, raising the possibility it would go to CIRM directly. Any such revenue is far, far down the road given the slow nature of research and federal approval of new therapies.
  • Require performance audits of CIRM every three years, beginning in 2010-11, at CIRM's expense
  • Permit the expansion of the grant review committee beyond 23 members and 15 scientists
  • Require leadership succession planning at the agency. Its first and only chairman, Robert Klein, has said he will be leaving his post in December. Klein has been the dominant and driving force at the agency, even leading the electoral campaign that won approval of Prop. 71 in 2004.
  • Require creation of a financial transition plan to address issues that CIRM faces when its current bond funding expires several years from now.
Earlier provisions were removed from the measure that would have changed the selection of chairman and vice chairman of the agency and altered the roles of the chairman and president. The role of the chairman is likely to redefined by the board as it deals with Klein's departure.

Much of the original measure had its origins in the findings of the Little Hoover Commission study of the stem cell agency. The commission recommended a wide range of changes at CIRM, some of which remain in the Alquist bill.

Alquist's bill declared,
“Since its inception, questions and concerns have been raised about the institute's practices, its governing board, and how the state directly and financially benefits through this sizeable investment. These criticisms divert the attention and focus of the institute to drive transformational scientific research and find cures.

“It is the intent of the Legislature to further enhance the ability of the institute to manage this investment made with public funds by addressing public concerns regarding oversight and transparency.”
The bill also said that it was intended to maximize state revenues that might result through CIRM grants.

The public may attend the CIRM board meeting on Tuesday at a number of locations throughout the state. Individuals may also comment on the bill and any action by the board. Specific addresses can be found on the agenda.

Thursday, May 20, 2010

New NIH Conflict Rules and Their Impact on CIRM

The NIH today unveiled proposed new conflict-of-interest rules that will reach deep into stem cell research circles in California, touching the state's stem cell agency and affecting 40,000 scientists nationwide.

Francis Collins, director of the NIH, said the rules are aimed at preserving public trust in research ethics and the “integrity of the scientific enterprise.”

According to a report on GenomeWeb News, Collins said,
"As the NIH director, I think I can say with great sincerity that the public trust in what we do is just essential, and we cannot afford to take any chances with the integrity of the research process."
Rob Stein of the Washington Post wrote,
“Among other changes, the new guidelines will reduce from $10,000 to $5,000 the minimum payment that researchers will be required to report and mandate that universities, colleges, research institutes, businesses and other entities that employ researchers who receive NIH funding monitor compliance with the new reporting requirement. Funding information would have to be posted on a publicly accessible Web site. Violators could be subject to losing their funding.”
The rules would require recipient institutions to create a Web site that would display the statements of economic interests filed by their faculty. Some institutions, such as Stanford, already do that. Stanford labels the pages as “industry relationships.

The NIH announcement focuses new attention on a recommendation last January that CIRM post on the Internet the statements of economic interest filed by members of its board of directors. A sister organization to CIRM, the Citizens Financial Accountability Oversight Committee, said that CIRM should follow the example of California Gov. Arnold Schwarzenegger. He requires his appointees to file their economic interests online along with their monthly expense claims. State Controller John Chiang, the state's top fiscal officer and chairman of the oversight committee, said the postings and other changes were needed to improve transparency and accountability at CIRM.

Last Friday, the California Stem Cell Report asked Don Gibbons, CIRM's chief communications officer,  whether the agency intended to act on the recommendation for online postings. We have received no response.

The NIH requirement is also likely to raise questions about CIRM's policy of secrecy concerning the economic interests of the scientists who make the de facto decisions on CIRM grants. Currently grant reviewers only have to disclose their interests to a select group within CIRM. Applicants (and the public) have no way of knowing the economic or professional interests of scientists who review their applications. However, with the new NIH rule, virtually all of those scientific reviewers, given the likelihood they hold an NIH grant, will have to post their economic interests at their home institutions but not at CIRM.

Some influential groups have taken positions indicating the proposed NIH rules are not strict enough. Jocelyn Kaiser of Science magazine wrote,
“Although these are big changes, they fall short of advice from an Institute of Medicine panel and the Association of American Medical Colleges (AAMC). Both think that researchers should report all potential financial conflicts to their institutions, with no minimum dollar threshold.”

Wednesday, May 19, 2010

IOM Study of California Stem Cell Agency Proposed

A directors subcommittee of the California stem cell agency next week will consider commissioning a blue-ribbon, outside study of its work, ranging from its organizational structure to its scientific performance.

The study would be conducted by the prestigious Institute of Medicine and be paid for by CIRM. The proposal comes as legislation is being considered in Sacramento that would require peformance audits of CIRM. The agency has also scheduled a three-day review in October of its strategic plan by a panel of outside experts.

The new Science Subcommittee of CIRM directors will take up the IOM proposal at its meeting on Tuesday. The agenda contains no detailed justification for the proposal. It simply says,
“Consideration of commissioning IOM study regarding CIRM, including organizational structure, financial structure, conflicts policies, operations, scientific performance, and best practices, to enhance operations and scientific performance and identify critical scientific opportunities in the near term.”
Jeff Sheehy, chairman of the subcommittee, supports the proposal. In an email, he said,
“If you look at what the IOM does (and I have seen a couple of IOM reports--they were spectacular in their rigor and thoroughness, along with being absolutely objective), and what we should be providing in the way of a progress report to the people of California, it makes a lot of sense to have the gold standard IOM look at us.”
The institute is extremely well-regarded in science circles and regularly studies scientific issues. More than 600 reports are listed on its Web site, mostly dealing with scientific as opposed to public policy matters, although there is considerable overlap on those concerns when public financing is involved.

One longtime observer of the California stem cell scene, who must remain anonymous, said,
“What is probably true is that the IOM would not be so concerned about closed reviews and public disclosure of financial information from reviewers, but will focus on whether the money has been given out in a fair way and what has resulted from it.”
The IOM did produce a report in 2009 on conflicts of interest in medical research and educational institutions. In the case of CIRM, Prop. 71 built into the agency a wide range of conflicts of interest. The IOM study did not examine CIRM or the NIH, but it said,
“(T)here is growing concern among lawmakers, government agencies, and the public that extensive con­flicts of interest in medicine require stronger measures. Responsible and reasonable conflict of interest policies and procedures will reduce the risk of bias and the loss of trust while avoiding undue burdens or harms and without damaging constructive collaborations with industry.”
An IOM study would not be the first involving CIRM. It asked the group to put together a one-day workshop in 2006 on the risks of human egg donation. CIRM approved a $124,185 contract with the IOM. The report from the workshop is now being sold on the Internet by the IOM for $26.78.

Another IOM study would be expensive and could take possibly as much as a year to complete, one source told us. The performance audits proposed in the state legislation are estimated to run about $400,000 each.

The IOM proposal is not being offered as alternative to the audits and was being discussed prior to the legislation, we understand. However, the possibility of such an evaluation could become part of the ongoing negotiations on SB1064 by state Sen. Elaine Kontominas, D-San Jose. A special telephonic meeting of the full CIRM board is also scheduled for next Tuesday if an agreement is reached on the measure, which includes removal of the 50-person cap on CIRM staff. CIRM is eager to see that limit revoked.

Earlier CIRM scheduled and then cancelled a meeting on the Alquist legislation. The one next week could also be cancelled if negotiations are not successful.

Members of the public can sit in on both the full board meeting and the Science Subcommittee session at a variety of locations around the state. Specific addresses can be found on the agendas.

CIRM Legislation Noted on HealthyCal

Legislation to remove the 50-person cap on the number of employees at the California stem cell agency drew a smidgen of notice on, a relatively new Web site that deals extensively with health policy issues.

Dan Weintraub, former columnist for The Sacramento Bee, posted a brief item linking to our piece last week on the measure. Among other things, he said,
“A lot of people have forgotten about California’s stem cell research agency, which is spending billions of public dollars with little scrutiny. But blogger David Jensen is one person who is keeping a close eye on the place.”

Tuesday, May 18, 2010

Competing for California Stem Cell Cash: Rules of the Game Coming Under Scrutiny

Every California stem cell scientist and researcher looking to join the field – be they from academia or business – should pay very close attention to a meeting next week of a key group of directors of the $3 billion California stem cell agency.

They plan to discuss possible changes in how scientists compete for stem cell cash, which is no small matter since CIRM has another $2 billion to hand out over the next several years.

On the table Tuesday May 25 at the first meeting of the directors' Science Subcommittee will be such matters as:

Appeals of unfavorable decisions by scientific reviewers. Some applicants have appeared personally before the board and turned around a negative decision but some CIRM directors are quite uncomfortable with that process.

The relatively new pre-application process that weeds out what CIRM staff and some outside reviewers consider dubious proposals. Only those who pass muster are invited to continue with their bids for cash.

Staff scrutiny of grant proposals prior to funding. At least two approved grants have publicly run afoul of CIRM rules during that process.

Progress reports from scientists on their research. Three scientists have lost funding during those reviews.

Scaling back funding on some applications prior to presentation to the CIRM board for approval.

Some of these issues have troubled directors for several years. They came up again at last month's directors meeting, leading one, Jeff Sheehy, a communications manager at UC San Francisco, to push for an airing of the matters with an eye to finding solutions. Others expressed concerns, including Vice Chairman Duane Roth, a San Diego area businessman. He warned about creating a "slippery slope" of public appeals. Publicly debating appeals could create a situation, he said,  in which directors could “expect everyone show up, and I don't think that is what we want to do.”

The directors seem primarily focused on smoothing out and rationalizing the appeal process, which currently consists of two entirely different procedures.

No final action is expected on the issues, but some changes are likely to be suggested for approval in the coming months. Most of the directors are open to hearing from researchers about their views. Now would be a good time to make comments, preferably in writing as well as in person.

If you are interested in participating in the telephonic meeting, seven locations are currently scheduled around the state. They include San Francisco(2), Irvine(2), Duarte, Healdsburg and Stanford. More may be added. The specific addresses can be found on the agenda, but some are missing room numbers or other necessary detail. Interested parties can contact CIRM for the information.

A list of Science Subcommittee members has not yet been posted on the CIRM Web site. We will carry a short item when it becomes available.

Monday, May 17, 2010

The Folly of Ballot Box Budgeting and Stem Cell Research

California Gov. Arnold Schwarzenegger last week inadvertently highlighted one of the fundamental flaws in the nature of the state's $3 billion stem cell agency.

The action came when the governor released his revised budget for the state of California, which is floundering in a years-long budget crisis. The Golden State is at least $19 billion in the hole, and prospects for clambering out of that financial pit are bleak. Meanwhile, California's debt is climbing, requiring the state to allocate more cash for interest costs. California has the lowest credit rating of any state in the nation and is sometimes compared to Greece.

To deal with crisis, Schwarzenegger wants to eliminate the state's main welfare program for families, making it the only state in the country without one. Nearly one million children would lose state support as a result. State employees would continue see their salaries reduced by 15 percent. In-home health care for the elderly and disabled would be slashed by $750 million. Childcare would end for 142,000 youngsters. All to take care of a deficit so large that it exceeds California's combined spending on prisons and its four-year universities, as Daniel Weintraub of pointed out.

Contrast that to California's $3 billion stem cell agency, which is providing whopping, multi-million dollar grants to many already comfortable researchers (more than 300 in all). Hundreds of millions of dollars more will be handed out over the next 18 months, regardless of the state's money woes. And CIRM salaries, among the highest for state employees, will continue to top $500,000. More debt to do all this will be piled on California, which has seen its interest costs soar in the last few years.

However, that does not mean that CIRM's stem cell research is not worthwhile. And it does not mean that the spending by CIRM does not have something of a beneficial economic impact. What the disparity illustrates is the folly of ballot-box budgeting and locking minutia into state law, which is precisely what Prop. 71 did when it was approved in 2004, creating the California stem cell agency.

One can support the goals of the California Institute for Regenerative Medicine, as we do, and still deplore the process by which it was created along with the less than salubrious results of Prop. 71, which in some ways is one of CIRM's worst enemies.

We have written more than once about problems that have been created by inartful language in Prop. 71 and dubious mandates. One requires a rare, super, super-majority legislative vote (70 percent) to make any changes in laws affecting CIRM. Currently, the agency is bedeviled by a foolish, 50-person cap on the number of its employees, a provision in the 10,000-word measure. The cap is redundant; another also exists on its operational budget. The agency has constant problems gathering enough of its 29 directors so that they can take legal action. That's the result of another super-majority requirement – this one for quorums of its governing board. The board itself is ungainly. The size, which impedes CIRM's work, was dictated by Prop. 71 authors to give all stakeholders a seat at the money table and thus win their political support in the 2004 election. The list can go on and on.

In a perfect world or even a not-so-perfect world, lawmakers would examine all state spending and weigh the immediate benefits of feeding hungry children, not to mention schooling them, against the desire to find cures for horrendous diseases, a process that can take decades or more. But Prop. 71 froze out the governor and the legislature. The folks in the Capitol cannot touch CIRM's cash, a situation that weakens thoughtful state budgeting. If such restrictions were limited to CIRM, the situation would not be so dire. But other cases of ballot-box budgeting have also hampered the elected representatives who are supposed to keep California's 37 million residents out of this sort of sorry financial mess.

So far, CIRM's cushy cash position and largess have not drawn public attention or even come under serious, visible scrutiny in the Capitol. But they could become a liability – one that could damage CIRM's public support – should an unfortunate event surface or an unfriendly, publicity-savy lawmaker seize on the situation.

All that can be done short-term is to work with legislators on the measure (SB1064) that would remove the 50-person cap and make other needed changes. At the same time, CIRM should carefully manage expectations and avoid the hyberbole that marked the 2004 campaign and that still surfaces from time to time from some of the agency's leadership.

Over the long-term, changes are also overdue in the ballot initiative process. But that is battle for another time and place.

Sunday, May 16, 2010

Longtime CIRM Watchdog Expanding Beyond Stem Cells

Zach Hall, the first president of the California stem cell agency, once called John M. Simpson a “constructive critic” of the state's $3 billion stem cell research effort.

Today Simpson still monitors CIRM but he has other responsibilities that have put him on the front page of the business section of the Washington Post. One week ago the newspaper described him as a “thorn” in the side of a $162 billion corporation called Google.

Simpson's prickly Google performances have surfaced in other media outlets as well. They are all part of an effort by Consumer Watchdog of Santa Monica, Ca., (Simpson's employer) to hold Google to its promise “to do no evil.”

In addition to Simpson's forays, Consumer Watchdog has mounted a major Internet push on an investigatory Web site it calls “Inside Google.” It includes articles ranging from antitrust concerns to privacy to Google's search performance.

Last Sunday's lengthy piece on Simpson(pictured) and Google, written by Cecilia Kang, garnered 98 comments and 140 Tweets. She wrote that Simpson's “singular focus is turning up the regulatory heat on Google.”

Kang reported,
“With its brand appeal, (Simpson) says Google is an ideal target. He's turned the tables, digging up data on the giant that tracks every move its users make and collects information without their knowledge. Also, he said, the company unfairly uses its size to barrel into new businesses.”
One might think Simpson has wandered far afield from CIRM. Not entirely so. Google has a $100,000 connection to CIRM. Sergey Brin, Google's co-founder made a loan in that amount to the Prop. 71 campaign, which was directed by Robert Klein, who is now chairman of CIRM, which was created by the proposition.

Brin's wife,  Anne Wojcicki, has a strong interest in biotech. She co-founded 23andMe, a genetic testing firm that was initially backed by Mohr Davidow Ventures of Menlo Park, Ca., one of whose partners, Michael Goldberg, is a member of the CIRM board. Mohr has since sold its interest in 23andMe and invested in a rival, Navigenics of Foster City, Ca.

Google's new venture capital arm has also started to make investments in biotech companies and has expressed an interest in regenerative medicine. It could only be a matter of time before a Google-backed company applies to CIRM for some of CIRM's billions.

Irvine Opens New Home for 60 Stem Cell Researchers

The stem cell folks at UC Irvine on Friday officially unveiled their new research facility, which was pushed along by a $27.2 million grant from the California stem cell agency.

The structure cost $80 million in all. An additional $10 million came from Bill and Sue Gross, with the remainder from the UC system and private funding. Gross co-founded PIMCO, a well-regarded bond fund management company.

Joseph Serna wrote about the facility for the Los Angeles Times, which rarely covers CIRM activities, noting that UCLA and USC also received support from CIRM, $19.9 million and $27 million respectively. Irvine's building will house more than 60 researchers in a dozen labs. Peter Donovan, late of John Hopkins, is head of the UC Irvine stem cell program.

Robert Klein, chairman of CIRM, said,
"With this, it's not just California speaking. This is tangible evidence that the science is at a world-class level. California is now the world leader in stem cell research and biomedical research."
The event did not trigger much in the way of media coverage, but an earlier Irvine announcement led to a number of stories including this on May 8 by China's Xinhua news agency:
“The first major stem cell research center in California will open next week as the state steps up its efforts to promote stem cell research, it was announced on Saturday.

“The center, run by the University of California in Irvine (UCI) near Los Angeles, is the first major stem cell research facility in the region, the UCI said in a statement.”
Obviously, that language could lead to a serious misunderstanding elsewhere in the world about the scope of stem cell research in California.

Friday, May 14, 2010

CIRM Staff Cap/Reform Legislation Hanging Fire

With less than two weeks remaining before a key deadline, directors of the California stem cell agency have cancelled a meeting on legislation to remove the 50-person cap on its staff, and no additional sessions have yet been scheduled.

In response to a query, CIRM Vice Chairman Art Torres told the California
Stem Cell Report
that a final agreement had not yet been reached on the terms of the legislation by state Sen. Elaine Kontominas Alquist, D-San Jose. He hopes to reach a compromise that CIRM directors could support.

The bill, SB1064, must clear the Senate by May 27 if it is to be enacted this year. CIRM is eager to remove the staff cap and has warned that the quality of its work is likely to suffer without more employees. The agency has approved more than $1 billion in grants and loans to more than 300 researchers. Another $2 billion or more is scheduled to handed out over the next four years or so.

As Alquist's bill now stands, it contains provisions that the agency has vigorously opposed. The legislation is aimed at ensuring that taxpayer-financed therapies are affordable and accessible. It would also reform management and accountability provisions at CIRM with the intention of creating more transparency and openness.

Thursday, May 13, 2010

CIRM Cancels Board Meeting on Compromise Reform Legislation

The California stem cell agency has postponed the meeting next Tuesday of its board to consider a position on legislation that would remove the 50-person cap on its staff.

No reason was given immediately for the cancellation of the session. But previously CIRM Vice Chairman Art Torres indicated that it might be delayed if progress was not made on negotiations on SB1064 by state Sen. Elaine Kontominas Alquist, D-San Jose. We are checking with Torres for further information.

As it stands now, in addition to removing the cap, the bill would also seek to ensure affordability of taxpayer-financed therapies and enact reforms aimed at increasing transparency and accountability at CIRM. However, Torres is engaged in negotiations that could lead to significant changes in the measure.

Wednesday, May 12, 2010

Negotiations Underway on CIRM Reform Legislation; Staff Cap Removal Included

Legislation to remove the 50-person cap on staff at the $3 billion California stem cell agency comes before the organization's directors next Tuesday morning as negotiations on the bill appear to be reaching a critical stage.

The proposal must clear the state Senate by May 27, or CIRM will have to wait a year to make another attempt. That would pose difficulties for the agency, which is trying to administer more than $1 billion in grants to more than 300 recipients. CIRM President Alan Trounson warned earlier this year that the quality of CIRM work will suffer without the ability to hire more staff.

Removal of the cap is part of a bill, SB1064 by Sen. Elaine Kontaminas Alquist, D-San Jose, chair of the Senate Health Committee. While CIRM would like to see the cap removed, other provisions in the current measure are not viewed with pleasure by the agency. They include an effort to guarantee affordability of taxpayer-financed stem cell therapies and proposals to improve transparency and management at the five-year-old organization, which is unprecedented in state history.

In the case of the staff cap, CIRM is hoist on a petard of its own making. The cap was written into law by CIRM Chairman Robert Klein and others in an effort to defuse potential arguments against Prop. 71 that it would create a huge new state bureaucracy. Also written into law by Prop. 71 was a unusual requirement that makes it nearly impossible to change such things as the staff cap. Such alterations require a rare, super, super-majority vote of 70 percent of both houses and the signature of the governor. That means that CIRM will have to do some horse-trading to get what it wants.

CIRM Vice Chairman Art Torres, a former state legislator and head of the state Democratic Party, is leading the closed-door negotiations on a possible compromise on the bill. On Tuesday, he hopes to be able to recommend that the CIRM board support a revised bill. In response to a query on Monday, he told the California Stem Cell Report via email that no final agreement had been reached on the legislation. Torres said that the negotiators were awaiting specific language. He said it is possible that no agreement will have been reached by next Tuesday. Another source said, “We're hopeful to have something soon.”

The legislation is now before the Senate Appropriations Committee. If the bill clears that committee, it will go to the Senate floor.

The staff of the committee this week released its analysis of the bill. Among other things, the analysis by committee consultant Katie Johnson said the bill would create additional costs ranging from $400,000 to possibly millions. The $400,000 would be for each of new performance audits of CIRM and its board of directors. The audits would be required every six years, beginning this year. The millions would come into play for additional staff salaries, although that would not affect the state's general fund. The cost would be borne by CIRM, which is financed directly by state bonds(money borrowed by the state).

Johnson wrote,
“Although CIRM is currently under the (staff) cap with 43 employees, it is reasonable that as they make more grants and further develop the loan program, more staff would be needed. CIRM's administrative expenses, including salaries, are capped at 6 percent of bond funds: 3 percent for research and research facilities, including the development, administration, and oversight of the grant making process and the operations of the working groups and an additional 3 percent for the costs of CIRM general administration. CIRM is within their administrative cap, and while paying salaries for new employees would put expenses closer to the cap, it is unlikely to exceed it.”
Members of the public who would like to tell the CIRM board what they think of the legislation will have that opportunity at a host of locations around the state. The specific sites, which range from Healdsburg to Irvine, can be found on the agenda. If you plan to attend, it would be advisable to tell CIRM in advance so there are no glitches in gaining entrance. All of the locations are open to the public by law, but some are in businesses or other locations that may not be accustomed to admitting the general public. The list of locations currently on the agenda is short and more are likely to be added in the next few days, including sites in Sacramento and San Diego.

Tuesday, May 11, 2010

Keeping the Cash in California: CIRM's Rules

The California Stem Cell Report aims to please. In a comment on the “parochial” item, a reader who identifies himself as Arno has asked for the specific language concerning geographic funding restrictions on research supported by the $3 billion California stem cell agenda.

We have pulled some language from the “Tools and Technologies Awards II” RFA, which is the most recent on the CIRM Web site. Similar, if not identical language, can be found in other RFAs.

The text below is from the “institutional eligibility” section of the RFA.
"All CIRM-supported research must be conducted in California. Principal Investigators may apply from non-profit and for-profit research organizations that are, at the time the Preliminary Application (PreApp) is submitted, conducting research at a site in California.

“'Non-profit organization' means: (1) a governmental entity of the state of California; or (2) a legal entity that is tax exempt under Internal Revenue Code section 501(c)(3) and California Revenue and Taxation Code section 23701d.

“'For-profit organization' means: a sole-proprietorship, partnership, limited liability company, corporation, or other legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners. Such organizations also are referred to as 'commercial organizations.'”
Here is related text from the PI eligibility section.
“The PI must have an M.D., Ph.D. or equivalent degree, and must be authorized by the applicant institution to conduct the proposed research in California.”
Here is related text from the budget section.
“Salaries for Key Personnel may include the Principal Investigator, Co-Investigators,  esearch Associates, and technical support staff (all of whom must work in California) based on percent of full time effort commensurate with the established salary structure of the applicant institution.”
Here is related text from the research design section.
“For applications from CIRM/CFP(collaborative funding partner) teams, the proposed work should be presented as an integrated project. However, applicants must clearly delineate the  research that will be performed in California and funded by CIRM from the research that will be funded by the CFP.”
(The CFP on this application is Germany.)

Monday, May 10, 2010

Parochial or Global? The California Research Spending Rule and Science

UC Davis stem cell researcher Paul Knoepfler (left) has triggered an interesting discussion on his blog centering on the question: “Does it matter where stem cell research happens.”

This is of considerable interest here in the Golden State, which has a rich, $3 billion stem cell research effort that it is basically limited to California. The reason for that is entirely political. It would have been folly to ask voters to approve the program, as they did in 2004, if the money were going to flow to Harvard, Great Britain and Singapore.

Enforcing and defining the limits on spending are not small issues. The California stem cell agency has written its rules in such a way that companies headquartered elsewhere and also with major operations elsewhere still can receive grants.

One example is the $3.7 million CIRM grant to Maine's Jackson Laboratory. The justification is that the money is largely being spent at the company's Sacramento facility. Out-of-state spending also nearly sank a $5.4 million grant to Evan Snyder at Sanford-Burnham.

However, stem cell research is global. A powerful argument can be made that funding should be global if the science is to avoid pursuing a pinched path of parochialism. Should poor or even average science be funded because it is peculiar to California? Of course, considerable differences do exist on just what is “good” science.

On his blog, Knoepfler cites the case of Advanced Cell Technology of Santa Monica, Ca., which moved its headquarters to California largely because of the passage of Prop. 71. The company, however, apparently has no significant research operations in California. All are in Massachusetts, where it was previously headquartered.

ACT has not received funds from CIRM. Has it sought any? CIRM won't say. The agency cloaks its applicants in secrecy, so it is nearly impossible to tell whether a specific company has applied for taxpayer funds. But one of ACT's researchers complained to the CIRM board about a negative decision on a grant application. The researcher said one of the reviewers had a conflict of interest, which CIRM denied.

Knoepfler and others commenting on his blog wrestle with some of the important issues of geography-based funding, which even extends to choices within California. The main argument, however, for maintenance of the ban on non-California grants is political. Support for CIRM would vanish if it were to send its billions to out-of-state researchers, regardless of the worthiness of their efforts.

(Editor's note: A very early version of this item did not contain the information about the ACT researcher's complaint about a conflict of interest.)

Friday, May 07, 2010

CIRM's Klein Honored by BIO

The largest biotech industry organization in the world this week honored Robert Klein, the first and only chairman of the $3 billion California stem cell agency, as its Biotech Humanitarian of 2010.

Jim Greenwood, president of the Biotechnology Industry Organization (BIO), said of Klein,
“His vision and determination to create alternatives to federal funding for stem cell research helped make the sate of California a global leader in disease research, giving hope and inspiration to millions of patients and families around the world,"
Klein, a Palo Alto real estate investment banker, directed the election campaign that resulted in the passage of Prop. 71 in 2004. The ballot initiative, of which Klein was a key author, created the stem cell agency, an entity which is unprecedented in California history. It also was the first government agency to use borrowed funds (state bonds) to finance scientific research.

Since 2005, CIRM has handed out more than $1 billion in grants and loans to more than 300 recipients.

The BIO award carries a $10,000 prize. Klein donated the funds to Americans for Cures, his personal stem cell lobbying group.

Klein has said he will step down as chairman of the stem cell agency at the end of this year. No names have yet surfaced as a potential successor.

Monday, May 03, 2010

WARF Loses Latest Round on Challenge to hESC Patents

Two watchdog groups said today they have scored a “major victory for unfettered scientific research” in a case involving a WARF patent on human embryonic stem cells.

Consumer Watchdog
of Santa Monica, Ca., and the Public Patent Foundation of New York City filed the challenges to the WARF patents on work by Jamie Thomson of the University of Wisconsin.

The groups said in a news release that federal patent regulators have “agreed with the groups that the creation of human embryonic stem cell lines was obvious in the light of work that had been done in other species. In order to obtain a patent, work must be both new and non-obvious.”

WARF, which can appeal the decision, released the following statement.
“WARF has been invited by the Board of Patent Appeals to continue prosecution of this application and plans to do so and vigorously pursue these claims with the patent office. This decision regarding ‘913 does not affect the patent office’s 2008 decision to reaffirm WARF’s two most important base stem cell patents for primate and human embryonic stem cells, ‘780 and ‘806. These reaffirmed patents are not eligible for further appeal in this reexamination process.”
Geron Corp., of Menlo Park, Ca., which holds a license on the patent, said the decision will not “impact” the firm's “dominant human embryonic stem cell patent position.”

The 2006 challenge to the WARF patents was supported by Alan Trounson, then connected to Monash University but now president of the California stem cell agency, Douglas Melton and Chad Cowan of Harvard and Jeanne Loring, director of the Center for Regenerative Medicine at Scripps.

Loring said,
“This is great news for medical research. Human embryonic stem cells hold great promise for advancing human health, and no one has the ethical right to own them.”
The challenge involved three patents. Federal officials originally ruled unfavorably.

The Consumer Watchdog news release said,
“Under current patent law only one of the three (earfier) patent rulings could be appealed by the two groups.  That was the patent rejected by the Board of Appeals and Interferences. However, said the groups, the latest ruling by the Board of Appeals is a strong decision that could set a precedent leading to the revocation of the other two patents as well.

“The two public interest groups noted that the original three patent challenges  had already improved the situation for stem cell researchers; shortly after the PTO launched its initial re-examinations in 2006 at the groups’ request,  WARF announced a substantial easing of its licensing requirements.

“'WARF executives were acting like arrogant bullies blinded by dollar signs,' said (John M.)  Simpson (of Consumer Watchdog). 'Our challenges prompted a more co-operative stance towards the stem cell research community on their part.'”

“Both Consumer Watchdog and the Public Patent Foundation stressed that while University of Wisconsin researcher James Thomson deserved acclaim for his research that isolated human stem cells, important scientific accomplishments are not necessarily patentable.  They said one of the main reasons he was able to derive a human stem cell line was because he had access to human embryos and financial support that other researchers did not have.”
Geron issued a news release on the decision. The company said,
"'This is not a final rejection of the patent claims,' noted David J. Earp, J.D., Ph.D., Geron's chief patent counsel and senior vice president of business development. 'We are confident that WARF will make a strong case in support of the patentability of these claims in continued examination.'"

Saturday, May 01, 2010

More Info on Palo Alto Institute Grant

Stanford University shed some light on a basic biology grant approved earlier this week for a researcher linked to the Palo Institute for Research and Education.

Here is what Stanford said in a news release about grants involving the school:
“A fourth Stanford researcher also received funds from CIRM, but the funds will flow through a different organization. Tony Wyss-Coray(at right), PhD, associate professor of neurology and neurological sciences, will receive about $1.52 million to study molecular and environmental factors in the adult brain that support the differentiation of neural stem cells. Understanding how old brains may generate new neurons may help researchers devise ways to combat age-related neurodegenerative diseases. Wyss-Coray has a joint appointment with the Veterans Affairs Palo Alto Health Care System, and will conduct the research as part of the Palo Alto Institute for Research and Education. “

Modest Coverage of Wechsler-Reya Recruitment

The San Diego Union-Tribune has picked up on the story that a Duke cancer stem cell researcher is being recruited to its fair city with the help of a nearly $6 million grant from the California stem cell agency.

Gary Robbins had a brief item yesterday on Robert Wechsler-Reya being courted by the Sanford-Burnham Institute, which is actually in La Jolla, just north of San Diego but totally contiguous. Wechsler-Reya was also mentioned in a piece by Heather Chambers in the San Diego Business Journal, which dealt with grants received earlier this week by local scientists.

The recruitment of the Duke scientist with taxpayer funds was first reported by the California Stem Cell Report last Tuesday.

A Google search turned up no further articles on the subject, although some parties in North Carolina are looking at the story.

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