California Stem Cell Agency on its Need to Advance Biotech Industry and Restrict Information

The California stem cell agency yesterday posted a 245-word statement justifying its efforts to protect what it calls the "confidential" information of business applicants seeking some of the state's $3 billion in research funds.

The statement appeared on the agenda for next Wednesday's CIRM board meeting under a section dealing with material to be presented by President Alan Trounson. The agency posted no explanation about what led to creation of the document or why it was needed. We have queried CIRM concerning the circumstances surrounding the statement.

In the document, CIRM said its aggressive push into therapy development and closer ties to the biotech industry presents "special challenges." The agency said it must "protect the companies’ proprietary information and their ability to obtain follow-on financing." CIRM also justified its position based on CIRM's need to "advance the biotech industry in California to world leadership."

Earlier this year, CIRM embarked on its first-ever involvement in a clinical trial – Geron's historic trial of an hESC therapy. The $25 million loan was handled in a unique and unusual manner that deviated sharply from other grant rounds. CIRM failed to provide a scientific score on Geron's application, which has been standard practice on more than 1,000 other applications, including other businesses. CIRM failed to provide the usual summary of grant reviewer comments that were also provided on all previous business and academic applicants. The three other applicants in the $50 million round all withdrew prior to presentation to the CIRM board – another first in CIRM's grant program. And no public explanation was provided at the time for the departures from long-established procedures used for more than 400 other approved grants and loans.

The California Stem Cell Report subsequently reported the score – 66 out of a possible 100 – which is a public record. The CSCR also wrote in August about the unusual procedures and the 16-1 vote for Geron funding.

CIRM director Joan Samuelson, a patient advocate who has pressed hard for development of therapies, cast the lone vote in May against the Geron application. She said the trial was not ready, and CIRM was not ready. According to the transcript of the meeting, Samuelson said,

"There were lots of -- this is based on the peer review and the comments by the scientist members of the Grants Working Group. There were many concerns that many of the scientist members felt should be satisfied before embarking on a clinical trial and they weren't."

In August, James Harrison, outside counsel to the CIRM board, also invoked the need to protect business information in the case of the Geron application. In many ways, the most recent statement appears to be a summary of Harrison's earlier remarks to the California Stem Cell Report.

Here is the full text of yesterday's statement from CIRM.

"CIRM has historically balanced its obligation to provide information to the public with its responsibility to protect the proprietary information of applicants. With applications for basic research, for example, CIRM has provided detailed information regarding the applications and the recommendation of the Grants Working Group. Applications for awards involving therapy development, however, present special challenges. In order to succeed in its mission to provide therapies and cures for the millions of patients who suffer from chronic disease and injury and to 'advance the biotech industry in California to world leadership, as an economic engine for California’s future,' it is critical that CIRM work closely with the biotech and pharmaceutical sectors.

"Engaging industry requires that CIRM assure the companies with which it works of CIRM’s capacity to protect the companies’ proprietary information and their ability to obtain follow-on financing. This is particularly true for companies involved in clinical research. At this stage of commercial product development, many things are proprietary (e.g., FDA communications, data, clinical plans, etc.); therefore, CIRM has a significant challenge and responsibility to protect the confidentiality of the companies’ submissions as any violation could have adverse consequences for the companies, including a material disclosure, particularly for those companies that are publicly traded. Consistent with this responsibility and its over-arching mission, CIRM has taken what we think are reasonable and rational steps to protect confidential information while providing the public with critical information regarding therapy development projects and the Grant Working Group’s recommendation."