Going Dark for Holidays

There will be no stem cell excitement on this web site until after the turn of the year. We are taking some time  off. Have fine and happy holidays.

San Diego Newspaper Calls for Major Changes at California Stem Cell Agency

The San Diego U-T today ran an editorial that was headlined “Stem cell research institute must fix itself.”

The editorial was written in response to findings by the Institute of Medicine that the $3 billion California stem cell should make sweeping changes to deal with issues ranging from conflicts of interest to management structure.

The San Diego U-T editorial came as part of a unanimous reaction so far from California newspapers.

The San Diego paper said,

“We hope we are wrong in thinking that, given the number of times the same criticisms of CIRM have come up over the past seven years, the agency doesn’t really take them seriously.

“If that is the agency’s attitude, it could well be a fatal error. CIRM has enough money remaining from the original $3 billion to continue awarding research grants for another four years. But it will either have to go back to California voters in 2014 or 2016 for another bond issue to continue its operations or find a different source of funding.

“Whichever CIRM decides, whoever is asked to foot the bill, either taxpayers or the private sector will demand transparency and accountability. We hope CIRM can demonstrate it.”

Boxing in the California Stem Cell Board

Robert Klein is much admired for his prodigious efforts on behalf of stem cell research, including his service as the first chairman of the $3 billion California stem cell agency.

Klein was adept at many tasks, such as directing the ballot campaign that resulted in passage of Proposition 71 in 2004 and creation of of the agency. One of Klein's less publicly recognized skills was putting the governing board of the agency in a box from time to time.

The 29 members of that board could well be headed for another box – this time in connection with their position on the Institute of Medicine's sweeping recommendations for major changes at the stem cell agency.

Here is how that could work based on a similar situation in 2009 involving Klein and the Little Hoover Commission, the state's good government agency.

Klein did not welcome the inquiry by the commission, which was requested by state lawmakers who had butted heads with Klein. He knew that the commission would come up with recommendations that he would find odious.

So even before the Hoover report was released in its final form, Klein had the board's outside counsel, James Harrison, prepare a legal memo on a draft version of the study. Harrison's memo said many of the most far-reaching recommendations of the commission would require a vote of the people – a more costly and unlikely proposition than a vote of the legislature.

Harrison's memo was dated June 23, 2009. The commission report was released June 26, 2009. On June 30, 2009, Klein warned directors in an email that support of some of the proposals would violate their oath of office. The first time a subcommittee of directors had to a chance to react publicly came on July 16, 2009. The full board did not have the Hoover report on its agenda until Aug. 6, 2009. By that time, they were thoroughly boxed in.

Their choices were minimal, even if they disagreed with Klein. To do anything other than go along with him would mean rejection of a 10-page legal opinion from Harrison, which could be interpreted as no-confidence vote on Harrison and possibly Klein. Board members were not interested in losing Harrison, who has been valuable asset to the board since day one. Overthrowing Klein was even less likely in 2009.

Harrison is currently revisiting his 2009 memo in the wake of the Institute of Medicine recommendations, which echo some of the major Hoover proposals. The board has also scheduled a workshop for Jan. 23 that will discuss the IOM proposals.

If Harrison produces another legal memo that is as explicit as the 2009 document, CIRM directors will have few choices.  The best procedure may well be for Harrison to continue his work on the memo until after the Jan. 23 meeting. Directors could then decide on initial steps in connection with the IOM recommendations and ask Harrison how they can proceed legally, although the task is really more of a political challenge than a legal one.

Directors paid $700,000 for the IOM's evaluation and advice. It is a prestigious body with virtually no critics in the scientific community. It would be odd, to say the least, for CIRM directors to now reject major recommendations from the blue-ribbon panel only because the proposals might require a statewide vote. The response is likely to be from some: Well, stem cell directors, let's have a statewide vote, and we expect you to support the IOM changes if you plan to seek additional state funding. 

Placing another stem cell measure on the ballot -- with or without related additional funding for the agency -- would bring into play a host of issues, including possible elimination of the agency. Not to mention disturbing existing stakeholder relationships and raising uncertainty in the scientific and biotech business communities. 

Directors believe the agency has made a major contribution both to California and to science. So does the IOM. The directors need to move forward on the IOM recommendations if they are to continue their research efforts beyond 2017, when cash for new grants runs out.  And putting the board in a box is not the best way to give them the room they need to maneuver. 

Exploring the Straw Man Argument Against IOM Reforms at California Stem Cell Agency

Constitutional objections to some of the Institute of Medicine's sweeping recommendations for changes at the $3 billion California stem cell agency amount to little more than a straw man, at least based on a legal memo produced earlier by the agency.

The legal objections to structural reforms at the agency were initially advanced in 2009 when the stem cell agency was fighting an unwelcome analysis of its activities by the state's good government agency, the Little Hoover Commission. The objections were voiced again at a meeting earlier this month by some governing board members, particularly Sherry Lansing, who is also chairwoman of the University of California regents. Her comments came within minutes of the start of the Institute of Medicine's (IOM) presentation to the board.

She said directors' hands “are tied” because of requirements in Proposition 71, the ballot initiative that created the stem cell agency, which is formally known as the California Institute for Regenerative Medicine(CIRM). While Lansing did not elaborate, some of the initiative is written into the state constitution, which can only be amended by a vote of the people. However, Proposition 71 can also be amended by a 70 percent vote of each house of the Legislature and the signature of the governor, which is no small task to achieve.

The 2009 legal memo (see the full text below) dealt with the recommendations of the Little Hoover Commission, some of which were cited and echoed by the IOM. The legal memo contended that the legislature was barred from making major changes in the structure of the stem cell agency governing board because the changes supposedly would not “enhance the ability of the (agency) to further the purposes of the grant and loan programs.” The argument was that only the people could make “non-enhancing” changes. The vague “enhancement” requirement was written into Proposition 71 by its authors, one of whom is James Harrison, the outside counsel to the board, who was also the lead author on the 2009 memo. Harrison is revisiting the supposed constitutional issues in the wake of the IOM study.

However, the objections cited in his earlier memo are dubious and easily overcome. The meaning of “enhance” is so vague as to permit wide interpretations. Certainly, removing public suspicion about conflicts of interest would seem to help move the agency forward. Straightening out the muddled management structure of the agency, with its overlapping responsibilities for the chairman and president, would certainly seem to enhance the functioning of the agency. Assuring that the governing board has the full ability to exercise strong oversight over the conduct of the agency would certainly seem to be an enhancement and long overdue.

At least that is what the most prestigious body of its sort says. The Institute of Medicine studied the agency for 17 months under a $700,000 contract with CIRM. The IOM's charge was to evaluate the performance of the agency and make recommendations for improvements. The IOM recommendations echoed findings not only of the Little Hoover Commission, but some in two earlier studies also funded by the agency.

For CIRM directors now to reject the IOM findings and turn away would be to indicate that their earlier admiration and respect for the IOM was something of a sham or, more likely, now inconvenient.

As for removing ambiguity about what does or does not enhance the agency's mission, the 29-member board could simply adopt a resolution declaring that all the IOM recommendations would enhance the CIRM mission.

One of major obstacles to acting on the earlier recommendations for changes was Robert Klein, the first chairman of the agency board. Klein, an attorney and real estate investment banker, also directed the writing of Proposition 71 and wrote portions of it himself. He would often make numerical code citations to the initiative during agency board meetings.

Klein is now gone from the board, leaving in 2011 at the end of his term. He was replaced by Jonathan Thomas, a Los Angeles bond financier, who has ushered in a new and different era at the stem cell agency. Some might say a more reasonable era. He says he and governing board take the IOM study seriously. 

The report is scheduled for discussion Jan. 23 at a public workshop at the Claremont Hotel in Berkeley, Ca., the day before the regular board meeting. .

The IOM's recommendations have won theeditorial endorsement of all the California newspapers that have so far written about them. The newspapers believe that the proposals would indeed enhance the agency's mission and are, in fact, necessary if the agency is to survive beyond 2017, when the money for new grants runs out.

Directors of the stem cell agency are currently mulling the future of their efforts. If they are to be successful in raising additional hundreds of millions of dollars – be they private or public – the directors must confront the findings of the IOM in a forthright manner. And they must move to dispel the cloud that now hangs over the stem cell agency.

(Editor's note: The full text of the 2009 legal memo can be found below. Also below is another related legal memo from Americans for Cures, a stem cell lobbying group sponsored by Robert Klein at the same time he was chairman of the stem cell agency. Despite the language on the Americans for Cures memo, it is a public record. It became a public document when Klein submitted it to the Little Hoover Commission.) 

Legal Memo from California Stem Cell Agency on Little Hoover Recommendations 2009

Legal memo from Americans for Cures regarding the Little Hoover Commission Report 2009 

Balloting Begins on Stem Cell Person of the Year

The nominations are in. Voting has begun, with about 1,000 ballots cast so far. But only one vote truly counts. That belongs to Paul Knoepfler, who is running the The Stem Cell Person of the Year contest and will pony up $1,000 of his hard-earned cash to honor the winner.

On Monday, Knoepfler announced 16 finalists out of 30 nominees. They range from scientists to patients to advocates. Voting began instantly and will continue until Dec. 31 at 11:59 p.m. Votes will count for something, but Knoepfler makes it clear that they are only advisory. He makes the decision.

This is Knoepfler's first year at the contest. The UC Davis stem cell researcher, patient advocate and blogger wants to recognize someone who made a difference and took some risks in doing so.

You can find the entire list of candidates on Knoepfler's blog, but we wanted to note that they have a father and son competing against each other – Don Reed and his son, Roman. (Could be tense around the holiday tables in the Reeds' households.) Also on the list is Jeanne Loring of Scripps, whose nominator said engages the wider community with great effectiveness. I once heard Loring say that every stem cell researcher should have a spiel that could be delivered in five minutes in a taxi and that would not only explain stem cell research, but persuade the cab driver of its virtues.

All of the nominees have much to recommend them. Knoepfler will be chewing his fingernails before this is all over.  

California Editorial Unamity: Stem Cell Agency Needs Revamp

With the addition of another editorial this week, reaction among California newspapers so far has been unanimous that the $3 billion California stem cell agency should heed the sweeping recommendations of the prestigious Institute of Medicine.

The Riverside Press-Enterprise added its voice yesterday, declaring,

“Good intentions do not justify poor practice.”

Like others, the newspaper said that the agency “needs to revamp its governance structure to avoid potential conflicts of interest and boost public confidence in the agency.”

The Riverside paper focused on the conflicts of interest at the organization, which has seen about 90 percent of its funding go to institutions with ties to directors, but also supported other recommendations, including elimination of the dual executive arrangement at the research effort. 

The editorial said,

“An agency spending Californians’ money has no business being cavalier about good government practice and ethical safeguards — no matter how promising the potential therapies might be. The stem-cell institute is not a private fiefdom, but a taxpayer-supported undertaking. Yet many on the stem-cell institute’s board objected this month to the report’s recommendations.

“The agency also said that Prop. 71’s provisions mean that enacting many of the proposed fixes would require either a supermajority vote of the Legislature or another ballot measure. That prospect should warn Californians about the dangers of voting for complex, costly, politically driven initiatives that have little to do with fundamental state duties.

“Still, the stem-cell agency cannot just sit on these recommendations without damaging its credibility. The search for medical breakthroughs does not justify ignoring vital safeguards for spending taxpayer dollars.”

For a look at other editorials, see here and here.

Southern California Newspaper Tackles Stem Cell Agency and UC Irvine Grants

The Orange County Register today zeroed in on the $3 billion California stem cell agency and its relationship to the local University of California campus in the wake of sweeping recommendations for changes at the eight-year-old agency.

The article by Melody Petersen was headlined “Ties to stem cell board lucrative.”

Petersen began her article with story of the $20 million award to StemCells, Inc., earlier this year and the firm's partnership with Frank LaFerla of UC Irvine, which is located in Orange County.

The award was rejected twice by reviewers at the stem cell agency but the governing board of the agency (CIRM) approved it on a 7-5 vote in September following lobbying on behalf of the company by the board's former chairman, Robert Klein, and others.

Petersen said the award was not the first time that questions have been raised about stem cell agency grants. She said that the 17-month study by the prestigious Institute of Medicine (IOM) and some of its findings, particularly those dealing with conflicts of interest, echoed criticisms that have been raised for years.

She wrote,

“Repeated independent reviews of the agency, including one by the (IOM) released this month, have found that its board is rife with conflicts of interest. In fact, of the $1.7 billion that the agency has awarded so far, about 90 percent has gone to research institutions with ties to people sitting on the board, according to an analysis by David Jensen at the California Stem Cell Report, which closely follows the agency's operations.

While the agency has yet to produce a cure, Petersen said,

“What's clear already is that the money has transformed stem cell research in California and poured hundreds of millions of dollars into the state's universities, including UC Irvine.”

She noted that the CIRM governing board is dominated by members from the UC system, including two professors at UC Irvine.

Peterson continued,

“Before Proposition 71 (the measure that created the agency) passed, UC Irvine had less than ten stem cell scientists, who received about $1.5 million in funding each year. Now, after receiving $100 million in grants from the state agency, the university has sixty scientists working to advance stem cell research and teaching. It touts itself as one of the top stem cell research centers in the world. In 2010, it opened an $80 million four-story stem cell research center with the agency picking up $27 million of the cost.

“As UC Irvine has won increasing amounts of taxpayer money, its two professors who sit on the agency's board have risen in status on campus.

Susan Bryant
UC Irvine photo

“Professor Susan Bryant, an expert in regenerative medicine, was dean of the School of Biological Sciences when she was named to the agency's board in 2004. She was then promoted to vice-chancellor of research. In July, she was named the university's interim executive vice-chancellor and provost, its second most powerful administrator.

“When Professor Oswald Steward, a stem cell scientist, joined the agency's board in 2004, he was director of UCI's Reeve-Irvine Research Center for Spinal Injury. Since then, the scientists working in his center have received millions of dollars in grants from the agency. In May, the university rewarded Steward with an additional title: senior associate dean of research for the School of Medicine.”

“The two professors are prohibited from receiving any agency funds for their own scientific work. But so much money has been funneled into the stem cell field in California that it can be difficult to show their continued scientific efforts are not somehow benefiting. For example, Bryant co-authored a scientific article in 2009 with nine other scientists about the genetics of salamanders, which can regenerate limbs. In the report, the group recognized the state agency for partially funding their work. Bryant said that the money was received by another scientist in the group who was not employed by UC Irvine. She said the state agency has never given a grant for research involving salamanders. 'I have never-ever benefited from CIRM funding,' Bryant said using the agency's acronym.

Os Steward
UC Irvine photo

“Steward said he stopped his stem cell research when he joined the board in 2004. His board position, he said, 'has prevented me from taking on lines of research I otherwise would do.'

“Tom Vasich, a campus spokesperson, said Bryant and Stewart's positions on the agency's board played no part in their promotions and success at the school.”

Petersen additionally reported that Steward and Bryant are not allowed to vote on grants to UC Irvine.

Petersen pointed out that the University of California has 16 members on the 29-member board. One of those is the chairwoman of the UC Regents, Sherry Lansing. Petersen also noted that three of the UC officials, including Steward, hold seats on the board as patient advocates.

Petersen is a recent addition to the Register's staff, joining it in November as an investigative reporter. She worked as a business reporter for the New York Times and authored  "Our Daily Meds," a book about the pharmaceutical industry. She shared in the top award in newspaper financial journalism when she was at the San Jose Mercury News.  

Two More Editorials: The California Stem Cell Agency Should Heed IOM Recommendations for Reform

Two other major California newspapers today said the $3 billion California stem cell agency needs to “clean up its act” if it wants to be successful in continuing its efforts at turning stem cells into cures.

The editorials appeared in the Los Angeles Times, the state's largest circulation newspaper at more than 700,000, and the San Jose Mercury News in California's Silicon Valley. The Mercury News has a reported circulation of nearly 600,000, although that figure includes other Bay Area newspaper owned by the same chain.

Both editorials focused on the 17-month evaluation of the agency by the prestigious Institute of Medicine (IOM) as did earlier editorials in The Sacramento Bee and the San Francisco Chronicle. The IOM recommended sweeping reforms at the agency that would alter its structure and target conflicts of interest. 

The Times said,

“The $700,000 spent on the study...will be wasted if the institute's oversight board fails to heed the (IOM) committee's criticisms, which echo the findings of the Little Hoover Commission and other groups over the years.”

The editorial continued,

“The 29-member board is made up almost entirely of representatives of advocacy groups and research institutions that have a direct interest in how the money is spent.”

The Times cited the California Stem Cell Report's calculations that about 90 percent of the $1.7 billion awarded by CIRM has gone to institutions linked to current and former members of its governing board. 

The Times noted an award to a Northern California firm that has stirred some criticism. The editorial said,

“The board also overrode the advice of its scientific advisors — twice on a single application when it considered a grant for a well-connected company, StemCells Inc. based in Newark, Calif. The board granted the company $20 million after Robert Klein, the driving force behind the passage of Proposition 71, which created and funded the agency in 2004, and its former head, lobbied so intensively for the company that one board member described it as 'arm-twisting.'"

The Times concluded,

“The agency has used more than half of its funding and one day will almost certainly want to ask taxpayers for more. It should remember that voters will look for evidence of public accountability as well as respected research.”

The San Jose paper sounded a similar note about the agency. Its editorial said,

“(I)f it wants to survive...it should heed the Institute of Medicine's advice to eliminate conflicts of interest on its board -- and do it before awarding the remaining $1.2 billion of the $3 billion voters approved for stem cell research.”

But the paper said the stem cell agency should not be provided any more state funding.

“Long-term funding was never the intent when Proposition 71 passed in 2004. It was supposed to kick-start research at a time when federal funding was blocked and to establish California as a major player in the rapidly advancing medical field. 

“The agency could continue to bring value to the state as an advocate and funder of research, but only if it can attract private donors, partners and investors. For that to happen, it will need a board that passes the ethics test, with more independent experts and industry executives free of conflicts. 

“At the outset, stem cell advocates took immense pride in structuring the agency to keep it relatively free of legislative interference despite the use of public money. Politicians kept their hands off, which was good. But the agency created its own inappropriate influences in the way it constituted its board. Now it needs to clean up its act.“

Meager Coverage of Yesterday's Bristling IOM-CIRM Meeting

Mainstream news coverage today was skimpy, to put it mildly, of the testy session yesterday involving the governing board of the California stem cell agency and representatives of the prestigious Institute of Medicine(IOM).

Only two pieces appeared, one in the San Diego U-T and another on the web site of the Los Angeles Times. Both discussed what the Michael Hiltzik of the Times column called “overt hostility” on the part of several board members (see yesterday's item here). Bradley Fikes of the San Diego paper said the patient advocates on the board “strongly criticized” the IOM report on the grounds that it “unfairly suggests that they have a conflict of interest.”

One of the recommendations of the IOM is that the agency develop ways to manage personal conflicts of interest dealing with patient advocates and others at the agency.

Fikes wrote,

"'I'm a colon cancer survivor,' said Art Torres, vice chairman of the oversight committee, and a patient advocate designate. 'Does having colon cancer make me biased?'
“Jeff Sheehy, another patient advocate designate, protested what he called a 'defenestration' of patient advocates, whose interests often span multiple diseases.”

Ron Leuty of the San Francisco Business Times skipped the IOM matter and wrote about the awarding of $36 million in grants. However, a list of the most popular stories on the Business Times web site, ranked as No. 5 Leuty's story last week on the IOM study, just below an article about Stanford's $111 million concert hall.

Fikes also had a piece on ViaCyte, which is in his area, receiving another $3 million from CIRM.

Appeals at the California Stem Cell Agency: Worthwhile or Worthless?

Jon Shestack, a patient advocate member of the governing board of the California stem cell agency, weighed in today on the virtues of the grant application appeal process at the $3 billion research enterprise.

His remarks came in a “comment” filed on the Duchenne item that appeared yesterday on this site. (His full comment can be found at the end of that item.)

Shestack said that the handling of the $6 million CIRM grant involving Duchenne research is “a casebook study on why the special(extraordinary) petition is worthwhile. There was indeed new and relevant information that only became available after grant review. Scientific staff and leadership flagged it.”

The utility of the petitions is one of the reasons that we ran the story about Duchenne and the team at UCLA. The extraordinary petition process is currently under fire by both the Institute of Medicine and the stem cell agency itself, which has appointed a task force to come up with changes. But, while the petition process is certainly less than perfect, so is the peer review/grant review process.

The Duchenne application is not the only “case study.” An application by Karen Aboody of the City of Hope is often cited as another case. There are undoubtedly others.

The petition process was adopted several years ago by the board as a tool to manage willy-nilly appearances of scientists before the CIRM governing board whose applications were rejected by reviewers. Now the Institute of Medicine has recommended the petitions be abandoned, saying they undermine the integrity of grant review process. The IOM cited a major controversy in Texas involving its cancer research agency as an example of how grant reviews or the lack of them can go bad – not to mention conflict of interest problems there. CIRM has already started to look for better solutions regarding appeals. Many of its directors are troubled by emotional presentations from patients in connection with petitions and the lack of adequate information to make informed decisions on the spot about the contested matters.

Whether appeals can be put in a tidy, scientific box is debatable. Researchers have the right, under state law, to address the board on any issue whatsoever. And at least some of them will continue to do so -- regardless of any appeals changes --  when millions of dollars and their careers are at stake.

Opinions and decisions of CIRM reviewers are not holy writ. They can and do make mistakes, as we all do. In making changes in the appeals process, the goal of the agency should be to devise a public and transparent process rather than enshroud it in more secrecy. CIRM also should find a way to do a much better job of communicating to applicants the availability of appeals and precisely how to appeal when it becomes necessary.   

LA Times: On the California Stem Cell Agency and Wasting $700,000

The headline on the Los Angeles Times web site this afternoon read,

"Is California's stem cell program preparing to waste $700,000?"

The question was raised by Pulitzer Prize-winning columnist Michael Hiltzik, whowas commenting on the presentation today by the prestigious Institute of Medicine's (IOM) on its sweeping recommendations for changes at the state stem cell agency. 

Hiltzik wrote, 

"If you're betting that the California stem cell agency will spurn key recommendations of a blue-ribbon review panel that criticized its leadership and management structures, you might want to double that bet. Several board members showed overt hostility to the panel's recommendations during a public meeting today."

Harold Shapiro, chairman of the IOM panel and former president of Princeton University, delivered the briefing. The group's study took 17 months and cost the stem cell agency $700,000.

Hiltzik's piece summarized the IOM proposals, which echoed many criticisms that have been aired for years in California.  Hiltzik wrote, 

"CIRM Chairman Jonathan Thomas glided over those issues when he introduced Shapiro. Thomas observed that the Institute of Medicine report included many statements "validating CIRM, its process, what it was able to achieve," which is a bit like launching the investigation of a plane crash by focusing on all the planes that land safely every day. Thomas did mention that the Institute of Medicine had made numerous recommendation about how to "take something which is already a great experience and improve it even further." 

"Shapiro got only a few minutes into his presentation before board members started interrupting him with objections to the Institute of Medicine's recommendation for a majority of independent members."

Hiltzik concluded, 

"Thomas promised to stage a public workshop on the Institute of Medicine report soon and to subject them to 'lengthy discussion.' 

"Does that sound as if the board will be taking seriously the advice that it change the way it does business? Stay tuned, but don't hold your breath."

Winners From Today's Awards by the California Stem Cell Agency

The 12 winners in the latest round of grants from the California stem cell agency all come from institutions linked to directors on the agency's governing board. Board members with conflicts of interest are not allowed to vote on the grants or participate in the debate. Since the inception of the agency, more than 90 percent of its awards have gone to institutions linked to the directors. Here is a link to the CIRM press release on today's meeting.

Here is the list of researchers who won awards today.

New Faculty Physician Scientist Translational Research Awards

RN3-06530	Robert Baloh	Cedars-Sinai Medical Center	$3,031,737.00
RN3-06378	Reza Ardehali	University of California, Los Angeles	$2,930,388.00
RN3-06504	Jason Pomerantz	University of California, San Francisco	$3,084,000.00
RN3-06396	Mana Parast	University of California, San Diego	$3,013,252.00
RN3-06425	Tracy Grikscheit	Children's Hospital of Los Angeles	$3,408,000.00
RN3-06532	Tippi MacKenzie	University of California, San Francisco	$2,661,742.00
RN3-06479	Ann Capela Zovein	University of California, San Francisco	$3,084,000.00
RN3-06529	Alan Cheng	Stanford University	$3,091,595.00
RN3-06455	Ali Nsair	University of California, Los Angeles	$3,004,315.00
RN3-06460	Emanual Maverakis	University of California, Davis	$2,964,000.00
RN3-06510	Michelle Monje	Stanford University	$2,800,536.00
RN3-06525	Ophir Klein	University of California, San Francisco	$3,084,000.00
Total			$36,157,565.00

ViaCyte Wins Another $3 Million from California Stem Cell Agency

The California stem cell agency, which has awarded ViaCyte, Inc., $36 million, today pumped another $3 million in the firm following the collapse of an alliance between the San Diego firm and GlaxoSmithKline.

The now failed ViaCyte-Glaxo-CIRM arrangement was ballyhooed by the CIRM in October because it would have been the first deal involving Big Pharma and the stem cell agency. The resources of Big Pharma are needed to pursue the expensive path of turning stem cell research into cures.

Meeting in Los Angeles, the CIRM governing board approved the additional funds on a 13-0 vote with two abstentions.  The action came following a closed door session to discuss how the funds would be spent. No details were provided publicly on that matter.

ViaCyte has also told Biocentury that it is pursuing even more funding after the alliance with Glaxo broke down. CIRM President Alan Trounson said ViaCyte is likely to receive another $3 million from the Juvenile Diabetes Research Foundation. Trounson also said that other sources are being examined as well. 

Patricia Olson, executive director of CIRM, scientific activities said the agency's advisors continue to have faith in ViaCyte's effort to develop a treatment for diabetes. The company plans to start a clinical trial on its product in 2014.

The ViaCyte-Glaxo-CIRM deal was cause for celebration last fall. Alan Trounson, CIRM's president, said the deal would “resound” globally. He told directors,

 “This is verification of our program. To have (the head of Glaxo regenerative medicine program) join us through a partnership arrangement with GSK means that a project that we've shepherded from the basic science through to the preclinical work and is heading to the clinic we're now going to do in partnership with a very major organization.”

California Stem Cell Directors Adjourn Meeting

Today's meeting of the governing  board of the California stem cell agency has adjourned. We will have an item coming up shortly on approval of $3 million for ViaCyte, Inc., of San Diego.

Constitutional Questions Raised on Sweeping Changes at the California Stem Cell Agency

The outside counsel to the governing board of the California stem cell agency is preparing an opinion on whether some of the major changes recommended by the blue-ribbon Institute of Medicine(IOM) study might require a vote of the people.

More than three years ago, the same issue was raised  and used by the agency to resist unwanted changes.

Kevin McCormack, agency spokesman, said today that James Harrison of Remcho Johansen & Purcell of San Leandro will perform the analysis. Harrison has been counsel to the CIRM board since its inception. He also wrote part of Proposition 71, which created the stem cell agency in 2004.

Harrison's analysis was disclosed after CIRM Director Sherry Lansing, who is also chairwoman of the University of California Board of Regents, said this morning that the board's "hands are tied" concerning some of the IOM proposals because they could require a vote of the people. Other members of the board bristled at the IOM recommendations.

In 2009, Harrison tackled a similar task in connection with related, proposed structural changes at the $3 billion stem cell research effort. In reaction to proposals by the Little Hoover Commission, the state's good government agency, Harrison said,

“The Little Hoover Commission’s proposals would effect drastic and disruptive changes to CIRM’s governance and operating systems. Such changes run counter to the voters’ intent, and do not further Proposition 71’s purposes.”

The California Stem Cell Report wrote at the time, 

"The 10-page legal memo hung most of its arguments on a provision in Prop. 71 that states that it can only be amended by the legislature if the changes 'enhance the ability of the institute to further the purposes of the grant and loan programs.'
"Harrison's memo said the Hoover proposals (in question) could only be enacted through another ballot measure...."

The Little Hoover proposals dealt with the structure of the board and the conflicting responsibilities of the president and the chairman. The IOM has recommended major changes in both areas and approvingly cited the Hoover study .

Harrison's analysis will also delineate which IOM recommendations can be implemented by board action and which will require legislative approval.

The IOM report, which cost the stem cell agency $700,000, recommended a host of changes that critics for years have said are needed. But the 17-month study also went beyond what the critics had proposed. The IOM said that the 29-member governing board should be stripped of power to approve individual grants. Instead, the board would be limited to voting for or against a slate of applications.

The IOM also proposed far-reaching changes to remove conflict of interest problems, clean up a troubling dual-executive arrangement and fundamentally change the nature of the governing board. The recommendations would greatly strengthen the role of the agency's president, significantly alter the role of patient advocates on the governing board and engage the biotech industry more vigorously.

CIRM's governing board and its first chairman, Robert Klein, an attorney who directed the writing of the stem cell initiative and wrote parts of it, have mightily resisted related proposals. In 2009, Klein even warned of lawsuits if legislative action were initiated for reforms (see here and here). 

In an editorial today, The Sacramento Bee said changes are long overdue at the agency. The Bee said CIRM has "been consumed by a siege mentality that has prevented any real introspection.”  In another editorial earlier this week, the San Francisco Chronicle said that prompt and major changes are needed at the agency.

Many of the more significant recommendations clearly require either a rare, super, supermajority vote of the legislature (70 percent) and the signature of the governor or another ballot initiative, which is very unlikely. Achieving the 70 percent vote is exceedingly difficult except on the most noncontroversial matters before the legislature. The requirement permits only 13 members of the 40-member Senate to block any CIRM legislation, giving minority viewpoints extraordinary power over the content of any CIRM legislation.

(See here for a list of IOM recommendations that would likely require legislative action.)

CIRM Directors Approve $36.2 Million in Stem Cell Grants

Directors of the California stem cell agency today approved $36.2 million for 12 physician-scientists, turning down four appeals from scientists whose applications were rejected by reviewers.

Names of the winners were not immediately disclosed, although the agency will publish their names later today. The vote on the individual grants also was not announced.

Here are links to items dealing with the appeals and the grant round. See here, here and here.

CIRM Directors Discussing $36 Million in Grants

Directors of the California stem cell agency are currently discussing possible awards in a more than $36 million round of grants. One appeal seems to have failed when one director backed away from an expression of interest. The appeal involved research on a stem cell-based pacemaker by Eugenio Cingolani of Cedars Sinai in Los Angeles.

(An earlier version of this item said the amount was more than $32 million.)

A Singular Scientific Story: Duchenne's Disease, a Family and the California Stem Cell Agency

Unusual and personal conditions, including a tie to the $3 billion California stem cell agency, surround a promising scientific development reported today by a husband and wife research team at UCLA. 

Their research involves Duchenne muscular dystrophy (DMD), an inherited disease that afflicts about one in 3,600 boys and results in muscle degeneration and, eventually, death.

Carrie Miceli
UCLA photo

The researchers, Stan Nelson and Carrie Miceli, said they have discovered a promising FDA-approved drug that could advance the fight against the affliction.

Miceli and Nelson have an 11-year-old son, Dylan, with the disease. They have been studying the affliction for some time, but their most recent and ambitious research plan was rejected earlier this year by stem cell agency grant reviewers, a process that normally kills an application. Undaunted, Miceli and Nelson appealed to the full stem cell agency board last July. Backed by an emotional presentation involving patient advocates, they won approval of a $6 million grant.

Adding to all this, their appeal used a process known as an “extraordinary petition,” which the Institute of Medicine (IOM) last week said should be abandoned because it undermines the integrity of the CIRM grant review process.

Stan Nelson
UCLA photo

Even prior to the IOM recommendation, the CIRM board was moving to restrict its free-wheeling appeals procedures.

As for the $6 million CIRM grant, it will carry the important burden of advancing the findings that were published in the journal Science Translational Medicine. However, the money was not used in the study reported today.

The research showed that dantrolene, the FDA-approved drug, “provides a powerful boost to the (Duchenne) therapy currently being tested in clinical trials,” according to a UCLA press release.

The news release said,

“(The researchers) hope this one-two punch used in combination will overcome the genetic mutations that cause DMD, restore a missing protein needed for proper muscle function and allow those affected by the disease to lead relatively normal lives.”

“Their youngest son, Dylan, 11, was diagnosed with DMD in 2004. While he’s still ambulatory – many DMD patients require the use of wheelchairs by about age 10 – Dylan can no longer run or climb stairs and he can’t shoot a basketball over his head like other boys his age.  Despite these challenges, Miceli said Dylan remains a happy, funny and engaged boy, full of life and passion.

“'We entered into this field because of the diagnosis of our son, but we hope our research can help many others,' she said. 'There are drugs that can help manage the symptoms of the disease, but nothing that changes its course dramatically. We’re trying to correct the defect that causes DMD with highly personalized genetic medicine.'” 

UCLA said the grant from CIRM will be used for “longer term studies of their drug combination therapy in mouse models to ensure it can restore dystrophin levels to normal or near normal levels. They also will explore whether DMD patients with other mutations can benefit from the combination therapy.”

Asked for comment, Kevin McCormack, a spokesman for the stem cell agency, said today's findings "are certainly very encouraging." He continued,

"Clearly there is still a long way to go before we know if this approach will work in people but we're delighted that funding from the stem cell agency is helping  the researchers move their work forward....This is what voters set out to do when they approved Proposition 71 to create the stem cell agency."

Some California Stem Cell Board Members Bristle at IOM Recommendations

Some directors of the $3 billion California stem cell agency today sharply challenged recommendations by the Institute of Medicine(IOM) concerning conflicts of interest and the role of patient advocates on the governing board.

Much  of the criticism came from the 10 patient advocate members on the board, whose roles would be significantly altered  under the IOM recommendations. Jeff Sheehy, a patient advocate for HIV/AIDs and vice chairman of the agency's grant review group, said he saw no evidence in the IOM report for its recommendations regarding patient advocates. He said,

 "If you had some here, I would be more comfortable." 

He continued,

"We are not all powerful. We are a minority on the (29-member) board." 

Jonathan Shestack, another patient/adovcate director, said the IOM's conclusions on "conflicts of interest could not possibly be more incorrect than they are." He said,

"Advocates are here to advocate."

Harold Shapiro, chairman of the IOM study, said, "We are not against patient advocates." He said that the IOM supports advocates and that its recommendations could increase the role of patient advocates, albeit in a different manner.

Shapiro added that conflicts of interest do not necessary bar participation by board members. He said, however, they must be disclosed and managed.

Director Robert Price of UC Berkeley said,

 "We have gone to great lengths to manage conflicts of interest."

The IOM recommended that all board members be removed from the grant review process, which would be turned over to the CIRM president. The board would only vote on a slate of applications, not individual grants. More disclosure would be required of personal conflicts of interest, including health matters, that the board said research has shown can create bias.

 The IOM report said,

 “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 CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”

More than 90 percent of the $1.7 billion that the CIRM board has awarded has gone to institutions that are represented on the CIRM governing board.

J.T. Thomas, chairman of the CIRM board, said that the agency takes the recommendations "very seriously" and that they would discussed further at a board workshop in early January. The workshop is scheduled to be public but the date and location has not been announced. Thomas said the recommendations will receive "lengthy discussion" thereafter and review by appropriate subcommittees of directors.

No one from the public commented during the roughly 90 minute discussion.  Eighteen out of 29 board members were present at the beginning of today's meeting.

IOM Report: Many Major Changes at Stem Cell Agency Require Legislation

As the Institute of Medicine began its presentation today to the governing board of the $3 billion California stem cell agency, one of its key directors, Sherry Lansing, pointed out that some of the IOM recommendations require legislative action and perhaps a vote of the people.

Her essential point was that the agency is hamstrung by the very measure that created it in 2004. She did not elaborate on her comment, but here is a look at some of matters she was talking about. (Lansing is chairwoman of the UC board of regents and former CEO of a Hollywood film studio.)

The ballot measure locked in management minutia and more, and then slapped on tight restrictions that make it nearly politically impossible to alter even such matters as who is in charge of production of the annual report. (By order of law, the chairman, in case you are wondering.)

And if the 29-member governing board -- so sized and specified to every nit and nat by the ballot measure -- wants to make the sweeping changes recommended by the IOM, agency directors face a formidable task in California's Capitol.

Many of the most important recommendations for the California stem cell agency require a vote of the California legislature and signature of the governor. The IOM's choice of words – that these proposals “may” need legislation – is conservative. There is little doubt that legislative action would be needed to fully implement the recommendations below.

The vote needed is no simple majority. It is a rare, super, super-majority (70 percent) of each house. The requirement was also written into state law by Proposition 71, the 10,000-word ballot initiative that created the stem cell agency. The 70 percent requirement gives extraordinary power to minority viewpoints that must be dealt with to win passage of legislation. In the state Senate, for example, it would take only  13 senators to block a bill.  

With that background, here are direct quotes from the IOM report on its legislative recommendations.

Separate Operations from Oversight

The board should focus on strategic planning, oversee financial performance and legal compliance, assess the performance of the president and the board, and develop a plan for transitioning CIRM to sustainability. The board should oversee senior management but should not be involved in day-to-day management. The chair and the board should delegate day-to-day management responsibilities to the president. Each of the three working groups should report to management rather than to the ICOC.

Change the Composition and Structure of the Board and Working Groups

CIRM should put systems in place to restructure the board to have a majority of independent members, without increasing the size of the board. It should include representatives of the diverse constituencies with interests in stem cell research, but no institution or organization should be guaranteed a seat on the board. Consideration should be given to adding members from the business community. The terms of board members should be staggered to balance fresh perspectives with continuity.

The chair and other ICOC members should be prohibited from serving on the working groups. During the reconstitution of the working groups, the current level of representation of disease advocates should be maintained, such board members being replaced with other disease advocates who are not board members.

Revise Conflict of Interest Definitions and Policies

CIRM should revise its definitions of conflict of interest to recognize conflicts arising from nonfinancial interests, such as the potential for conflict arising from an individual’s interest in a specific disease, and should reassess its policies for managing conflict of interest in light of this broader definition.

Restructure the Grant Review and Funding Process

CIRM should restructure the grant review and funding process to separate oversight and strategic planning from day-to-day operations. The ICOC should remain responsible for oversight and articulation of an overall strategic plan. However, grant management, funding recommendations, and grant administration should be the responsibility of the CIRM scientific staff, reporting to the president. This restructuring would help mitigate concerns related to conflicts of interest and would also put the review and funding process in the hands of those best equipped to make those decisions.

The committee recommends several changes pertaining to the development and approval of RFAs, composition of the Grants Working Group, reordering of rankings by CIRM staff, notification of applicants, and process for making final decisions.

Enhance Industry Representation in Key Aspects of CIRM Organization

Industry representation on the ICOC, the Scientific Advisory Board, the Standards Working Group, and the Grants Working Group should be enhanced to leverage industry’s expertise and resources in product development, manufacturing, and regulatory approval in support of the ultimate goal of bringing therapies to patients.

Consider Harmonizing Intellectual Property Policies with Policies of Bayh-Dole Act

 As other sources of funding for stem cell research become available and as the field of regenerative medicine advances from the laboratory to the clinic, the ICOC should reconsider whether its goal of developing cures would be better served by harmonizing CIRM’s IP policies wherever possible with the more familiar policies of the Bayh-Dole Act.  

IOM Presentation Begins

The first order of business at today's meeting is the presentation by the Institute of Medicine of its $700,000 study of the $3 billion California stem cell agency. Harold Shapiro, chairman of the IOM study, and Terry Magnuson, vice chairman, will conduct the briefing.

Stem Cell Board Meeting Begins

Today's meeting of the governing board of the California stem cell agency has just begun. Roll is being called. The pledge of allegiance is being recited.

Covering the California Stem Cell Agency from Panama

For those of you interested in the unlovely details of how we cover the  California stem cell agency, here is a quick look at the process for today's meeting.

We are anchored in a sailboat in Panama Bay off the City of Panama. We will attempt to log into a phone broadcast of the agency's governing board meeting in Los Angeles using the instructions provided on the meeting agenda. That will happen, we hope, using Skype, which can sometimes be dicey here. Our Internet connection is a via a USB modem to a Claro 3.5G wireless phone service. It is a prepaid account for "unlimited" use at $15 a month. We also have a cellular phone with prepaid service, as a possible backup, with a different provider. But that could prove to be very expensive for an eight-hour meeting.

On past board meetings, we used CIRM's Internet audiocast, which had its problems from time to time. CIRM appears to have dropped that service.

Sacramento Bee and IOM: Restructuring Needed at California Stem Cell Agency

The Sacramento Bee today praised the Institute of Medicine (IOM) recommendations for wide-ranging changes at the $3 billion California stem cell agency.

The newspaper's editorial and an earlier one in the San Francisco Chronicle come as the IOM formally presents its findings this morning to CIRM directors, some of whom would likely lose their seats if the recommendations are implemented.

The Bee said that for years “numerous outside critics” have recommended similar changes at the state agency to avoid conflicts of interest and possible misuse of public funds. The Bee wrote,

“Instead of listening, leaders of this institute(CIRM) – a poster child of how ballot initiatives can be manipulated to create quasi-public institutions with little public oversight – have been consumed by a siege mentality that has prevented any real introspection.”

The Bee noted that about 90 percent of the $1.7 billion handed out by the eight-year-old agency has gone to institutions connected to members of the 29-member governing board. One of the IOM recommendations would bar the board from voting on individual grant applications. Instead, the applications would be voted on as a block.

The Bee continued,

“It is to CIRM's credit that it solicited the Institute of Medicine report last year. Although some taxpayers may blanch at the report's $700,000 price tag, it will be worth the cost if it leads to a restructuring of how CIRM operates. 

“Of course, if it fails in that task, it will only affirm the view of many voters that they should never again endorse a California research initiative, especially one like Prop. 71 that lacks proper controls and accountability over taxpayer dollars.”

Coming Up: Live Coverage of IOM Presentation to Directors of the California Stem Cell Agency

The California Stem Cell Report will begin its live coverage today of the meeting of the governing board of the California stem cell agency at 9 a.m. PST (Noon EST). On today's agenda is the official presentation of the IOM's sweeping recommendations to the agency's directors. Stories will be filed as warranted.

For information on how to listen to the meeting live or find one of the teleconference locations in California, see this item.

Neil Littman: New Business Development Officer at the California Stem Cell Agency

The California stem cell agency this week mentioned the hiring of a business development officer as part of its plan to engage industry more robustly but did not identify him.

Neil Littman
Linked In photo

The California Stem Cell Report queried the agency about the new hire. Kevin McCormack, the agency spokesman, identified him as Neil Littman, who most recently worked as a senior associate in the merchant banking group at Burrill & Co. in San Francisco.

Littman's responsibilities will include “facilitating opportunities for outside investment in stem cell research in California for both CIRM-funded and non CIRM-funded programs by biopharmaceutical strategic partners, equity investors and disease foundations.”

McCormack said that Littman's “strategic advisory experience includes buy-side and sell-side M&A, as well as in-licensing and out-licensing of both development stage and commercial products.”

Littman also worked at Thomas Weisel Partners and at Deutsche Bank Securities. He received a M.S. in biotechnology with a concentration in biotechnology enterprise from The Johns Hopkins University, and a B.A. in molecular, cellular and development biology from the University of Colorado Boulder in 2002. 

Littman's salary at CIRM is $160,000 annually.

StemCells, Inc., and California Stem Cell Agency Remain Stalled over $40 Million

The California stem cell agency and StemCells, Inc., are still stalled in negotiations over how the firm will become eligible for $40 million from the state research effort – three months after the agency's governing board approved the awards.

The key issue is whether the agency is satisfied that the Newark, Ca., firm can provide $40 million in matching funds that it promised under the terms of two $20 million awards approved in late July and early September. The September award was approved on a 7-5 vote by agency directors after it was rejected twice by CIRM reviewers.

In response to a query by the California Stem Cell Report, Kevin McCormack, an agency spokesman, yesterday said the company and CIRM have not reached agreement.

CIRM directors okayed the September award in an appeals process that used a mechanism called “extraordinary petitions.” Last week, a blue-ribbon, Institute of Medicine study of the agency said the petitions should be abolished because they damage the integrity of the grant review process.

The September approval was the first time that agency directors approved an application that was rejected twice by reviewers. The action followed two appearances by the former chairman of the agency, Robert Klein, on behalf of StemCells, Inc. It was his first such appearance on behalf of an applicant.

The StemCells, Inc., award also triggered a column in the Los Angeles Times by Pulitzer Prize-winning columnst Michael Hiltzik. He wrote that the process was “redolent of cronyism” and said a “charmed relationship” existed among StemCells, Inc., its “powerful friends” and the stem cell agency.

StemCells, Inc., stock price reached a 52-week high on Sept. 4 of $2.67, well up from its 52-week low of 59 cents June 4. The stock was trading at $1.78 at the time of this writing.   

IOM-Stem Cell Agency Coverage Planned for Tomorrow

The California Stem Cell Report tomorrow will provide complete, live coverage of the Institute of Medicine (IOM) presentation to the directors of the $3 billion California stem cell agency. The IOM last week recommended sweeping changes at the agency, but this is the first chance for the agency governing board to hear directly from the panel.

Harold Shapiro, chairman of the IOM study committee and former president of Princeton University, and Terry Magnuson, vice chairman of the panel and vice dean of research at the University of North Carolina, will perform the briefing for the 29 members of the CIRM governing board.

The meeting is scheduled to begin in Los Angeles at 9 a.m. PST. Our best guess is that the IOM presentation will come up shortly after the meeting starts.

Those who would like to listen live to the meeting can dial 866-254-5937 and use the code 274426 to hear the meeting on a one-way connection. The stem cell agency is no longer providing an Internet audiocast.

In California, teleconference locations that permit comment and participation in the meeting are available in San Francisco, Pleasanton and La Jolla. A previous location in Oakland is no longer available. Persons interested in those locations should check with CIRM for more details on the specific locations than is provided on the agenda.

The agency has also published its Power Point presentations dealing with the initiation of a $40 million basic biology round, the proposed awards of more than $36 million for translational research and the agency's industry engagement plan. Four rejected applicants have appealed in translational research round, which was budgeted for $80 million.

You can read more about the IOM report here, here, here and here.

Four Researchers File Appeals with Stem Cell Board for Millions of Dollars

Two more scientists are seeking to overturn rejection by reviewers of their applications for millions of dollars from the California stem cell agency, bringing to four the number of appeals in the award round to be considered Wednesday by agency directors.

The latest two are Sanaz Memarzadeh of UCLA and Eugenio Cingolani of Cedars Sinai in Los Angeles. Memarzadeh is seeking $3.1 million for research into the causes of endometriosis. Cingolani is seeking $2.8 million to research the possibility of a stem-cell based heart pacemaker.

Both have filed “extraordinary petitions” with CIRM, an appeals process that the Institute of Medicine last week said should be jettisoned by the agency. The IOM said the petitions undercut the integrity of the grant review process. At the same time, directors of the agency are mulling changes in the appeals process, which has seen a record number of appeals, including emotional presentations by patients at board meetings. Both petitions were written prior to the release of the IOM report.

In her petition, Memarzadeh said,

Sanaz Memorzadeh
UCLA photo

“Endometriosis is the third most common non-lethal chronic disease in California affecting 1 in 10 reproductive age women and costing the state $25 billion annually.”

Endometriosis occurs when cells from the uterus grow in other areas of the body often causing debilitating pain and sometimes pelvic cysts, according to the NIH, and the best chance for a cure is removal of reproductive organs.

Memarzadeh said the cause is unknown as are the best ways to treat the affliction. She wrote,

“To our knowledge CIRM has not funded any work related to women’s gynecologic diseases. Funding work related to endometriosis through this proposal is an opportunity for CIRM to fill a critical gap and make a major impact in this understudied field of research.”

Eugenio Cingolani
Cedars Sinai photo

Cingolani also said his research is not represented in the CIRM portfolio. He said,

“While CIRM has laudably invested in ischemic heart disease studies, no grants have been awarded in the area of heart rhythm disorders. This is a huge area of public health need. The current application has the potential to fill an important gap in the current CIRM translational research portfolio, expanding the focus to treat heart rhythm disorders.”

In this round, which was budgeted at $80 million, 12 grants were approved by reviewers. Fifteen were rejected. The amount required for the 12 grants is $36.2 million.

The stem cell agency did not release the scores of the grants that were rejected. They are likely to be disclosed at the Wednesday meeting.