California Stem Cell Report Goes Dark for a Couple of Weeks

The California Stem Cell Report will take a break between now and early January.  New and exciting stem cell tales, however, will come readers' way probably in the first full week of the new year -- unless something big pops. Happy holidays to all.

North Korea, Sony and California Stem Cells

Lauren Miller, a California stem cell agency director, and Seth Rogen at
the Los Angeles premier of "The Interview" on Dec. 11. The appearance
 coincidentally followed the agency's board meeting. Getty Photo, Michael Tran

It would seem unlikely that California’s $3 billion stem cell agency would have a link – even tenuously – to a major international news story dealing with hacking, Hollywood and North Korea.

But it has happened.

The link to the flap is Lauren Miller, who was appointed as a patient advocate just one year ago this month to the governing board of the agency by Gov. Jerry Brown.

Miller is married to Seth Rogen, who starred, directed and co-wrote the now “disappeared” movie comedy,  “The Interview.” Rogen and Miller, an actress and writer, have worked together and co-founded an Alzheimer's awareness and fund-raising effort.

For those oblivious to things Hollywood, the film dealt with a couple of TV tabloid types on a mission to assassinate North Korean dictator Kim Jong-un. The plot has it that the dictator turns out to be a fan of their show.

The North Korean government did not care for the treatment and denounced it as “a blatant act of terrorism.” Federal officials said North Korea was behind a devastating cyber attack on Sony Pictures, which produced the $44 million film. Sony had planned to begin showing the film nationwide Christmas Day but concerns arose about threats from the hackers. Sony has since pulled the movie and is not allowing public showings, which will probably turn it into a cult film, secret, of course. 

Miller and Rogen co-founded Hilarity for Charity, which raises funds to combat Alzheimer’s Disease. On the stem cell agency Web site, Miller says,

“As the founder of Hilarity for Charity, an organization which raises awareness of Alzheimer's Disease among young people, I am truly thrilled to join the California stem cell agency Board as the Alzheimer's Patient Advocate,” Miller says. “To have the opportunity to learn about, and support the research for so many important diseases is such a great honor and responsibility and I look forward to starting.”

The item continues:

“Miller’s commitment to raising awareness about Alzheimer’s comes from her family’s battle against the disease. Her grandfather died of Alzheimer’s and her mother was diagnosed with it when she was just 55 years old.”

Former California Stem Cell CEO Zach Hall on Conflicts of Interest and Last Week's CIRM Board Voting

Conflict of interest issues have long been a difficult issue for the California stem cell agency, and so it was last week.

The matter involved a proposal to reduce the indirect cost funding rate for both businesses and nonprofit institutions from as high as 20 percent to 10 percent of an award. That recommendation quickly ran into objections from Donna Weston, who is chief financial officer at Scripps and also a member of the board (the ICOC). She and seven other representatives of nonprofit entities all voted to keep their institutions from losing the cash. The rest of the board members voting also went along, on a 17-0 roll call at the Thursday meeting.

During the session, the California Stem Cell Report queried James Harrison, general counsel to the agency, about whether the votes by the nonprofit representatives involved a prohibited conflict of interest. Harrison, who was at the meeting, replied via email,

"No, it is a standard, so it is exempt." 

The item drew the attention of Zach Hall, who served as the first president of the agency.  Here is the text of what he had to say in an email to this writer: 

“As a former President of CIRM and Vice-Chancellor for Research at UCSF, I have what I hope is a constructive comment about the issue of conflict of interest and CIRM indirect cost rates.   

      James Harrison's response to your question about conflict of interest of ICOC institutional representatives who vote on their own indirect costs may be correct by the rules of CIRM, but this voting arrangement constitutes a fundamental conflict by any reasonable standard. Institutional representatives on the ICOC are now disqualified from voting on CIRM grant applications from their own institution. In these instances, most of the money – the direct costs – goes to the investigator, rather than to administrative or infrastructure costs, and, in any case, the total amount is small compared to the overall institutional budget. In contrast, indirect costs rates are much more important for the institution, as they apply to all CIRM grants that an institution receives and all of the money goes to the administration for research support. Because it is so important, research institutions spend tens or hundreds of thousands of dollars to negotiate the best possible indirect cost rate with the federal government. In contrast, for CIRM grants, institutional representatives do not negotiate but actually vote on the size of their own indirect cost rate. By sitting on both sides of the table, they undermine the integrity of the whole process.

      As a former administrator at a California university, I know how important the indirect cost rate is for a research institution. I thus strongly support a rate of 20% on CIRM grants, a rate which is still below the cost of research support at most institutions. Nevertheless, I believe it is a mistake to allow institutional representatives to vote on the rates. This kind of conflict of interest, permitted by the current rules, is exactly what has provoked repeated criticism of the CIRM board structure. In my view, research institutions should make their case to the board and to the public, like any other recipient of CIRM funds, but their representatives should then be disqualified from voting. To increase the confidence of the public in the process, they might consider removing themselves voluntarily from the vote, if not compelled by law.”

Eleven Percent Stock Price Drop for StemCells, Inc., on Bad News From California Stem Cell Agency

Six month performance StemCells, Inc., stock price
Yahoo chart

The stock price of StemCells, Inc., of Newark, Ca., plummeted nearly 11 percent today following a federal filing that it had lost its $19 million award from the California stem cell agency.

Termination of the Alzheimer’s research award to the publicly traded company was announced last Thursday by the $3 billion state agency. The publicly traded firm filed a report with the Security and Exchanges Commission on Friday, but it was not seen widely until today.

The price of the company’s stock fell 10.78 percent in heavy trading, 2.2 million shares compared to an average volume of about 676,000. It closed at 91 cents, still above its 89 cent low for the last 12 months. The stock continued to sink in after-hours trading. The 52-week high is $2.43. 

The award has been controversial since it was approved in 2012 on a thin, 7-5 vote by the 29-member governing board of the agency, formally known as the California Institute for Regenerative Medicine (CIRM). It was the first CIRM award approved that had been rejected twice by CIRM’s blue-ribbon grant reviewers. It was the first involving heavy, public lobbying by the first chairman of the agency, Robert Klein. And it was the first award involving a company that later appointed a top CIRM executive, former President Alan Trounson, to its board of directors. (See here and here.)

The company’s brief, SEC filing said the forgivable loan was cancelled because of a failure to meet a milestone it had negotiated with the stem cell agency. The filing echoed comments by CIRM.

Last Thursday morning the California Stem Cell Report requested a comment on the CIRM announcement from Martin McGlynn, president of StemCells, Inc., which was co-founded by eminent Stanford researcher Irv Weissman and serves on its board of directors.  McGlynn responded this afternoon.

He said that the company had reported on its research Nov. 20 at an investor event in New York. He said that “we did not see the research showed an improvement in the predetermined measures of memory enhancement.”

The firm has collected $9.6 million from the state. In response to a question about whether the agency would be repaid any of the loan, Kevin McCormack, senior director of communications for CIRM, replied,

“We are in the process of winding down that loan so as we do that we'll get a better idea of the final financial picture.”

StemCells, Inc.,’s stock price has been falling since July 3, when it hit its 12-month high at $2.43.  On July 7, the company announced the appointment of Trounson to its board, only seven days after he left the stem cell agency. The move surprised the agency. Its subsequent limited investigation said that it could find no evidence of illegal actions. The California Stem Cell Report suspects that most investment analysts would not link Trounson's appointment to the price drop. 

Here is the text of McGlynn’s response.

"Thank you for your email, and your request for comment, which I have provided below:

"As you know, Alzheimer’s Disease is significant unmet medical need. The funding for our Alzheimer’s program was in the form of a forgivable loan. Thus, the loan would be forgiven in the event that certain predetermined preclinical milestones were not accomplished. Those milestones included a “go/no go” goal of replicating certain behavioral changes observed in mouse models of relevance for Alzheimer’s, obtained in a small pilot study that had been conducted by our collaborator, Dr. Frank LaFerla, Chancellor's Professor and Chair, Neurobiology and Behavior School of Biological Sciences, University of California Irvine, and described in detail in the original application for funding under the CIRM Disease Team RFA. It has become clear to both the CIRM and StemCells that this goal has not been achieved, so the parties have begun the process of winding down the program.

"We presented this data during our recent Analyst & Investor Event in New York on November 20th. The conference was webcast live and a replay of that event is available at http://www.media-server.com/m/p/m8h3mw5w. During the conference, the Company presented data showing that the Company’s proprietary human neural stem cells, HuCNS-SC® cells robustly engrafted into the hippocampus for up to 3 months post transplantation (the longest time point tested). The Company also presented compelling data derived during the preclinical testing, showing that HuCNS-SC transplantation significantly increased the number of pre- and post-synaptic hippocampal spines in the AD mice, suggesting an increase in synaptic density in this important brain region.

"Unfortunately, despite this compelling histological data, we did not see an improvement in the predetermined measures of memory enhancement and the Company stated that in the absence of consistent behavior modification in the animal models tested, pre-determined success criteria were not met, and that it would be working with the CIRM on an orderly wind down of the program.

"Importantly, we do not view this as a “loss”, rather, we believe we have made a significant contribution to the field. We are of course disappointed that we didn’t see the preclinical efficacy that we had hoped for, but we are grateful to have had the opportunity to collaborate with Dr. LaFerla and CIRM to pursue this worthwhile cause. It is possible that in the future, more reliable and validated animal models of memory enhancement will emerge, at which time StemCells, Inc. will be well positioned to reenter the arena.

"Thank you
"Martin McGlynn"

Stanford Pulls Its $10.9 Million Alpha Stem Cell Clinic Application

Stanford University has withdrawn its $10.9 million request to the California stem cell agency to create an Alpha stem cell clinic on its campus, along with a complaint that an illegal conflict of interest was involved in reviewing the proposal.

No further details about the alleged conflict were disclosed by the stem cell agency, which cloaks such matters in secrecy.

The Stanford application last October came before the board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. It was pulled from the agenda without a vote shortly before it was to be considered because of the late allegation of a conflict.

The application was to have come again before the CIRM board yesterday but again was removed. Kevin McCormack, senior director for communications, said that both the proposal and the complaint had been withdrawn by the applicant.

McCormack did not disclose the identities of the reviewers in the Alpha round nor the identity of the applicant, which the agency keeps secret. But the California Stem Cell Report has learned that it was Stanford.

The proposal received a low score, 64 or below, from the agency’s blue-ribbon reviewers, all of whom come from out-of-state, and was not recommended for funding. It was a rare loss for the Palo Alto institution, which has been the most successful in the state in winning money from CIRM. It has collected $298.3 million in 90 grants. The figure far surpasses the No. 2 institution, UCLA, which chalked up $215.3 million in 75 grants.

The winners in the $34 million round were the City of Hope in Duarte, UC San Diego and UCLA-UC Irvine. All of the institutions involved have representatives on the CIRM governing board. They are not allowed to vote on applications from their institutions.

In addition to Stanford, the other losing applicants in the round were UC Davis and UC San Francisco. 

See below for a CIRM list of the conflicts of interest in the round involving various directors.

   Conflict List -- Alpha Stem Cell Clinics -- Directors of California Stem Cell Agency

San Francisco Business Times: CIRM 2.0 is 'Business-Friendly,' 'All-Out Charge' for Stem Cell Cures

Official approval yesterday of the California stem cell agency’s new, $50 million fast-track research effort has generated a lengthy piece in the San Francisco Business Times, a weekly newspaper that circulates widely in an area known for its biotech enterprises.

Ron Leuty authored the article, which could be considered an anniversary overview of the agency as much as anything else. The springboard was the CIRM board action yesterday on CIRM 2.0. Kathy Robertson of the Sacramento Business Journal also had a piece albeit briefer.

Leuty described the plan as “business friendly” and critical to the agency’s future if it is to secure funding beyond 2020.  He wrote,  

“CIRM leaders always stressed that the road from research to the clinic would is unavoidably long and winding. But now, as they talk of seeking another round of cash — possibly asking taxpayers for $5 billion to make its mission permanent — they realize that a high-profile medical victory in the next 24 months may be the only realistic way to make their case.”

Leuty said that Randy Mills, who has served as president of CIRM only since May, “is leading an all-out charge to make the agency more responsive with its remaining six years of cash — and to show the results that could convince others that CIRM must continue to be a long-term stem cell research player.”

Leuty continued,

“Plans for a warp-speed CIRM is not without its critics. 

“Some researchers think the agency should be investing more in basic stem-cell research that may provide the progress that could give private investors confidence. They include people like Dr. Arnold Kriegstein, director of the stem cell program at the University of California, San Francisco.

 "'A modest investment in basic science will pay greater dividends,’ Kriegstein said.

 "A speed-focused CIRM may also not be best for taxpayers, said John Simpson, an advocate with Consumer Watchdog and a frequent CIRM critic.

 "’I understand that they want to be more efficient,’ Simpson said. ‘I question whether they can do it with the necessary and thorough vetting of proposals.’" 

Leuty also had this from Kriegstein: 

"Even in pharma, with all the experience and depth, the likelihood of success is relatively small. The stem cell pathway is less certain. There's bound to be more risk." 

The California Stem Cell Report would like to note that the California stem cell community has been all but silent on the Mills’ CIRM 2.0 plan. The agency has had four hearings on the matter since September. The number of persons from the research community commenting at those sessions has numbered less than 10, perhaps less than five. Kriegstein was not on the scene nor was Simpson.

We should also note that researchers, with a few notable exceptions, have rarely appeared before the the CIRM board over the last 10 years as it has set its priorities and established the rules for the funding that have had a major impact already on hundreds of California scientists.

The California stem cell agency offers a valuable opportunity for researchers to influence decision-making and priorities. They should take advantage of it. Coming before the board after the fact and complaining about this or that flaw in CIRM processes is far too late.

California Stem Cell Agency Press Release on its $50 Million, Fast-Track Plan

Here is a link to the press release by the California stem cell agency on its radical plan to change and speed up its approach to funding research. The board approved $50 million to kick start the drive. You can find the story from the California Stem Cell Report here.

California Stem Cell Agency Concludes Meeting

The governing board of the California stem cell agency adjourned its meeting at 11:40 p.m. PST today. The California Stem Cell Report will post shortly a few additional items on the session today. (The additional postings concluded at 12:55 p.m. PST. Also please note that an earlier version of this item incorrectly said the meeting ended at 1:40 p.m. instead of 11:40 a.m. It was one of the shortest, regular meetings ever for the board.)

California Launches $50 Million, Fast-Track Stem Cell Drive

Directors of the $3 billion California stem cell agency today approved a $50 million plan that will radically reshape its efforts to produce a widely available stem cell treatment, a goal that it has not yet reached after 10 years of trying.

Speed is what the new push is all about – shortening the agency’s funding cycle for awards from nearly two years to about four months.

The plan was devised by Randy Mills, who has been president since last May of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. He has dubbed the effort “CIRM 2.0” and says,

“We are in the business of trying to save people’s lives….We have to behave with the appropriate sense of urgency.” 

CIRM 2.0 will begin next month for awards related to clinical trials with $50 million allotted for the first six months of the year. The program will be extended to other award programs as well. The agency hands out cash at an average rate of $190 million a year and has about $1 billion left.

The program appears akin to a venture capital process but without face-to-face pitches by those seeking funds.

Researchers from both business and nonprofits will be able to apply on the last business day of each month instead of very sporadically. No caps will be stipulated on the grants, but budgets will be closely scrutinized prior to reaching reviewers.

CIRM directors from nonprofit institutions vigorously balked at a 10 percent cap on indirect costs in the awards.  The indirect funds go to the institution and not for research. Some of the indirect rates currently run as high as 20 percent of the total award and are much valued by California research institutions, most of whom have members on the CIRM board of directors.

Director Donna Weston, chief financial officer of the financially troubled Scripps Institute, led the move against the 10 percent cap. Others indicated that researchers at some nonprofits would not be allowed to apply for grants that only contained a 10 percent rate. As result, the board agreed on a 10 percent cap on indirect costs for businesses and 20 percent on nonprofits.

No opposition was heard online during what appeared to be a unanimous vote. The California Stem Cell Report queried CIRM about whether it is a legal conflict of interest for directors from nonprofit institutions to vote on the indirect cost change that would benefit their institutions.

James Harrison, general counsel to the board, replied,

"No, it is a standard, so it is exempt."

Mills’ plan calls for researchers to receive their money within about four months of submitting an application. Board approval is scheduled for 90 days after submission. Work must begin within 45 days after board action. Unsuccessful researchers with applications that have potential will be coached by the agency so that they can turn in a successful proposal. Successful applicants will see greater involvement in their work by CIRM staffers and will face go-no go milestones. Failing to meet a milestone will mean loss of funding.

Moving the cash quickly to biotech businesses is critical, says Mills, who was a CEO of a stem cell firm for 10 years. Most operate on a thin financial edge and are perpetually raising money. Business applicants, however, will have to show six months of cash-on-hand to win approval. Matching funds will be required in some of the first rounds, and in some cases also from non-profits.

   

Mills predicts that CIRM 2.0 will result in higher quality applications because of the coaching and because proposals are less likely to be submitted prematurely in order to conform to CIRM’s previous funding cycles.

CIRM directors also approved Mills’ reorganization plan that is likely to break up silos at CIRM that may have formed over the past eight years. Mills said his structure will be more efficient and encourage innovation. The new plan calls for the staff – Mills prefers the word “team” – to be organized on much different lines than previously. Units will be organized on therapeutic lines such as “blood and cancer” and “organ systems.” Currently the CIRM team has been organized into such things as “research and development” and “scientific activities.”

For more on CIRM 2.0, see here, here and here. Here is a link to the CIRM press release.

California Stem Cell Agency Opens Board Meeting in Berkeley

The California stem cell agency governing board opened its meeting at 11:05 a.m. PST today with an announcement that the session will be abbreviated because of a massive storm in the San Francisco Bay Area. Some flights have been cancelled in and out of San Francisco airports.

Chairman Jonathan Thomas is now discussing his activities in recent months.

California Stem Cell Agency Cancels $19 Million Award to StemCells, Inc.

StemCells, Inc. has lost its controversial, $19 million award from the California stem cell agency, it was disclosed today.

Cancellation of the forgivable loan was revealed in slides posted on the agency's Web site as part of the presentation today by its new president, Randy Mills, to the agency's board of governors.

The slide said the Alzheimer's award was "discontinued due to lack of functional improvement observed in preclinical studies" after the agency had provided the publicly traded firm with $9.6 million. It was not immediately clear whether any of the money will be repaid.

The company has not yet announced the loss of the award but has been asked for comment.

The most recent cash infusion came last spring in a move that coincided with the appointment of former CIRM President Alan Trounson to the StemCells, Inc., governing board. Trounson joined the board only seven days after leaving the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.  The move surprised and shocked the agency, but it said its limited investigation detected no illegal action in the disbursement to the company. (Also see here.)

The StemCells, Inc., application was approved by the 29-member CIRM board in 2012, on a 7-5 vote,  after being rejected twice by the agency's blue-ribbon reviewers. The approval followed heavy lobbying by the former chairman of the agency, Robert Klein. It was the first time that the board had approved an award that reviewers had turned down twice. It was also the first case of such public lobbying by Klein.

Later in 2012, Pulitzer Prize-winning columnist Michael Hiltzik of the Los Angeles Times wrote that the award was "redolent of cronyism."  Hiltzik asked rhetorically what was the company's secret in winning approval of the award. He then wrote,

“StemCells says it's addressing 'a serious unmet medical need' in Alzheimer's research. But it doesn't hurt that the company also had powerful friends going to bat for it, including two guys who were instrumental in getting CIRM off the ground in the first place.”

Hiltzik referred to Klein and eminent Stanford research Irv Weissman, a co-founder of StemCells, Inc., who still sits on its board and holds considerable shares in the Newark, Ca., company.

Weissman was a key backer of the ballot measure that created CIRM in 2004 and helped raise money for the ballot campaign.  Trounson has recused himself on some matters dealing with applications connected to Weissman. Trouson has been a guest at Weissman's ranch.

New President and Organizational Tea Leaves from the California Stem Cell Agency

The new organization chart at the $3 billion California stem cell agency looks much different than the way it has looked has over the last 10 years.

Gone is the office of research and development, once headed by Ellen Feigal, who resigned last month. Gone is the office of scientific activities. Instead CIRM will have a “blood and cancer” unit and an “organ systems” unit, among other things.

CIRM President Randy Mills, who devised the plan, says it will be flatter, speedier and more efficient than the structure that has been in place more or less for the last 10 years. Mills joined he agency last May. CIRM directors are expected to ratify his plan later today.

Another interesting note popped up in examining the current organizational chart. James Harrison, who formerly was described as outside counsel to the CIRM board, is now listed as general counsel to the entire agency, albeit an independent contractor.

The change recognizes a reality that has been in place for 10 years. Indeed, Harrison, who is a partner in Remcho Johansen & Purcell of San Leandro, Ca., wrote portions of Prop. 71, the ballot initiative that created the agency in 2004.

Remcho is under a $500,000-a-year contract to provide services to CIRM, which it has been doing for the last decade.

The charts available this week for the new structure did not contain a list of employees in each unit nor did they list how many persons worked in the chairman’s office. In 2011, 12 of the 53 persons at the agency worked partly or entirely within the chairman’s office. That number had dropped to eight as of this week but prior to approval of the new structure.

The relationship between the chairman and the president of the agency has been rocky at times in the past because Prop. 71 gives them legally overlapping responsibilities. The situation has stirred public flaps, hampered executive recruitment and been criticized as harming accountability.

It is worth noting that for several early years in CIRM history, the number of its employees was less than the 29 persons who served on the agency’s governing board.

Here are two charts on the CIRM organization. The first contains the structure as of yesterday. The second is one that being presented to CIRM directors today. 

Old CIRM Structure Above

Stay on Top of California Stem Cell Research: $50 Million Fast-Track Program Up for Action Tomorrow

Follow all the developments at tomorrow's meeting of the governing board of the $3 billion California stem cell agency right here on the California Stem Cell Report.

We will bring you gavel-to-gavel coverage, beginning at 9 a.m. PST, as agency directors move forward to dramatically speed up funding of stem cell research in an effort to more quickly produce cures. The agency is scheduled to budget $50 million for a six-month start-up.

The California Stem Cell Report will monitor the Berkeley event online from its post aboard a sailboat in La Cruz de Huanacaxtle in Mexico and file stories as warranted.

For those of you who want to attend outside of Berkeley, teleconference locations are available in Sacramento, Woodside, La Jolla, two in San Francisco and two in Los Angeles. Persons at those locations can ask questions and make comments. Addresses can be found on the agenda. Specific room locations can be had by emailing mbonneville@cirm.ca.gov.

Three different methods of monitoring the meeting online are also on the agenda. The Webex procedure will permit access to the slides being shown to the directors. It is virtually impossible to understand what is occurring without access to the slides.

CIRM 2.0 -- California's New Urgency for Stem Cell Therapies

This is a big week for Randy Mills, the man who took control of the $3 billion California stem cell agency just seven months ago.

His proposals for radical changes at the agency are expected to be approved by its governing board on Thursday along with a restructuring aimed at improving speed, efficiency and innovation.

It all comes under the rubric of “CIRM 2.0,” a phrase coined by UC Davis stem cell researcher Paul Knoepfler and adopted by Mills after he became president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.  

 How important are the changes? Important enough for the agency to tout their mere outline in a press release out of last October’s board meeting instead of focusing on the hard news of the approval of its much-ballyhooed Alpha stem cell clinic program.

Randy Mills
CIRM photo -- Todd Dubnicoff

Mills has made his career in business, serving as 10 years as the CEO of Osiris Therapeutics of Maryland. He managed to make Prochymal the world's first government-approved stem cell drug approved for use on an off-the-shelf basis. Mills likes to move fast, which is largely the point of CIRM 2.0, and says that he wants to make the agency “radically more effective and efficient.”

The agency’s news release in October quoted Mills as saying,

“Right now it can take almost two years for a promising idea to go from the application to the final funding stage. That’s just unacceptable. We are going to shorten that to just 120 days.”

He also told directors at their October meeting,

 “We are in the business of trying to save people’s lives….We have to behave with the appropriate sense of urgency.” 

Mills knows that stem cell companies can’t sit around waiting two years for cash. Most operate on a short financial leash and are perpetually having to raise money. Mills also knows that researchers with non-profit institutions cannot wait for whenever it is convenient for the agency to bless them with greenbacks. Those researchers want to be first with their findings. And they need cash to meet payrolls and to satisfy their sponsoring institutions.

So Mills says,

“We’re not just making it faster, we’re also making it easier for companies or institutions with a therapy that is ready to go into clinical trials to be able to get funding for their project when they need it. Under this new system they will be able to apply anytime, and not have to try and shoehorn their needs into our application process.” 

At the end of January, the agency will begin accepting grant applications related to clinical trials on a monthly basis. The promise is for quick decisions and quick cash. Rejected researchers will – if their thinking has CIRM potential – be coached and guided into preparing a fundable project. Accepted researchers will find themselves working more closely than ever with CIRM staffers to develop something that will emerge as a marketable product. 

Mills is convinced that CIRM 2.0 will also improve applications, generating more proposals that will be scored at 95 out of 100 by scientific reviewers instead of the many applications scored at 75 that have been regularly approved.  

All of the details of the plan are still not clear. But $50 million will be set aside for the first six months of next year. Applicants can ask for whatever amount they want, but budgets will be scrutinized before they even get to the scientific reviewers. Appeals will not be allowed.  Milestones must be met or the cash dries up.  

The whole process sounds a bit like a venture capital operation minus face-to-face pitch meetings.

 

New rules dealing with conflicts-of-interest on the part of reviewers will be in place. They will allow applicants to seek to disqualify up to three reviewers for almost any reason. However, applicants will not be told who is reviewing their applications behind closed doors. They will have to guess by ferreting out reviewer names from CIRM’s list of more than 100.

Little public criticism of the plan has been heard at the two initial briefings that Mills has given board members. It is clear that there will be hiccups or worse, like any new process. One question involves transparency. Will the public or other scientists know which applications have been rejected along with the subject of their research, as they do currently. Another question involves board involvement. Currently seven members of governing board sit on the review committee. How will they participate on a monthly basis?

Coaching rejected applicants can lead to better or more targeted proposals. But is that something that researchers will readily accept? Does the whole process move the board farther away from the grant-making process. Already the directors have turned over what once were public appeals by rejected applicants to agency staff to be handled behind closed doors. However, applicants can still speak directly to the board on their own on any subject under a state law that CIRM cannot change.  But none has been successful recently in winning grant approval through that route.

Mills says his reorganization plan for CIRM staff – he prefers the word “team” – will create “organizational clarity and operational efficiency.”  It will certainly help to break up ossified structures that may have grown up during the tenure of former President Alan Trounson, who was not known for his managerial or organizational skills.

The plan also would seem to have some impact on the controversial dual executive arrangement involving the president and the chairman of the agency, Jonathan Thomas, who is also salaried. On the surface, the reorganization would seem to remove some responsibilities from the chairman and cost him some of his staff. However, the agency has not responded to questions concerning that area.

Kevin McCormack, senior director of communications for CIRM and who is also one of the top executives at the agency, will no longer be reporting, for example, to both the chairman and the president. That shared reporting was insisted on by former Chairman Robert Klein when the position that McCormack came to occupy was created. 

The dual executive arrangement, which is enshrined in state law, has been criticized for minimizing accountability at the agency. It has also led to tussles between Klein and other executives, although no serious disputes have surfaced in public for several years.

CIRM 2.0 holds great promise. It also depends mightily on Mills' leadership and managerial skills in a considerably different environment than he has previously experienced. Will CIRM 2.0 make a favorable impression in the scientific community and with the public? That depends, of course, on the outcome of the research it generates. So far, CIRM 2.0 is barely visible in the stem cell community -- at least according to an item on the blog of UC Davis researcher Knoepfler. His readers were recently asked to vote on the top stem cell story of 2014. CIRM 2.0 came in last with 0.44 percent of the vote.

That sort of response does not discourage Mills.  He said, in an item on Knoepfer’s blog prior to the 0.44 percent showing:

 “We think the more the word gets out about this and all of the other great features of CIRM 2.0, the more high quality interest we will see from industry and academia alike.”

The details of the plan were approved yesterday by the Governance Subcommittee of the CIRM governing board. The plan will come before the full board at its meeting Thursday in Berkeley, with teleconference locations in Los Angeles, San Francisco and Sacramento and is virtually certain to be approved.

 (Here are links to the CIRM blog item on the 2.0 plan and to Mills’ slides that he presented to CIRM directors nearly two months ago. The transcript of that meeting has not yet been posted by the agency. Perhaps Mills can add posting of transcripts to his fast-track efforts.)

California Stem Cell Agency Overhauls Grant Review Conflict Rules; Secrecy Remains

The California stem cell agency this week is expected to begin sweeping out its current conflict-of-interest rules for multi-million dollar research applications and giving applicants wider range to disqualify some grant reviewers in advance.

Little about the operation of the rules, however, will be disclosed to the public or applicants, although the regulations are critical to the integrity of the $3 billion operation.

The new grant review procedures received a preliminary go-ahead Nov. 24 from the Governance Subcommittee of the governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. The proposals will come before the full board this Thursday at a meeting in Berkeley.

James Harrison, the outside counsel to the CIRM board, described the changes concerning scientific grant reviewers as “substantial” in a memo to the board. One key provision would involve “a screening mechanism that would permit applicants to identify up to a total of three individuals (including labs and companies) whom the applicants believe could be biased (whether for personal, professional, competitive, or any other reasons).”

The exact mechanism was not otherwise described in Harrison’s memo. 

CIRM’s grant review process is currently shrouded in secrecy in keeping with tradition in the scientific research community and will remain that way under the new rules. Virtually all of the grant review is performed behind closed doors. Identities of specific reviewers on an application are withheld. Names of applicants are withheld. Financial and professional interests of the reviewers are withheld, revealed only to some CIRM staffers.

When an applicant files a complaint about a financial conflict of interest on the part of reviewers, all of the information is withheld.

That is the environment in which the agency’s scientific reviewers operate while they make the de facto decisions on virtually all of the $1.8 billion that has been handed out over the last 10 years. The governing board rarely overturns a positive decision by its reviewers, all of whom come from out of state.  

In response to a question today, Kevin McCormack, a spokesman for the agency, said that the secrecy would continue under the new rules. He said applicants could examine the list of more than 100 potential reviewers if they had concerns about conflicts. A much, much smaller number is actually involved in a specific application review. Those names are withheld. 

No restrictions exist, however, on applicants publicly disclosing their conflict-of-interest concerns either directly to the board or to any other private or public entity.

The proposed conflict changes would also disqualify reviewers from evaluating an application from a person who has “been on opposing sides of a formal legal dispute.”  A reviewer would be required “to recuse himself or herself if the member believes his or her objectivity could be compromised for any reason.”

Other changes would expand the scope of financial conflicts by including relationships with partnering organizations and subcontractors.

The Harrison memo said,

“The intent of this change is to capture other financial interests that could create a conflict of interest with respect to a particular application because they are significant participants in the proposed project or stand to benefit financially if the project is successful.”

The proposed rules originated more than a year ago as an outgrowth of a discussion at a stem cell agency board meeting involving earlier possible changes. The board was told that only two cases have surfaced involving violations by reviewers. No names were mentioned during the board meeting.

One case involved reviewer Lee Hood, a renown scientist from Washington state, in a conflict connected to another internationally known scientist, Stanford researcher Irv Weissman, in a $40 million round. The other involved John Sladek of the University of Colorado, who was head of the grant review group, in a $45 million round.  The violations were first disclosed publicly by the California Stem Cell Report. The agency did not post the violations on its Web site, reporting them only to the California legislative leadership as required by law.

At the October 2013 agency meeting of the agency governing board meeting, Jeff Sheehy, a board member and communications manager at UC San Francisco, asked if the Hood and Sladek violations would also be considered violations under the rules being proposed at that 2013 meeting.  Sheehy was told that they would not, according to the transcript of the meeting. Sheehy replied,

“Well then, I think it's not possible for me to even support the initiation of this process because in the last case(Hood-Weissman), at least what I've been told, the identification of the conflict, which was the reviewer and the grantee held property together, and the identification of that conflict was made by a fellow reviewer. So if we have a conflict that is deemed material by members of the scientific community, it's hard for me to understand why the net that we're casting should make the holes bigger in order to let the fish out.”

After some discussion of Sheehy’s remarks and other concerns voiced by board member Stephen Juelsgaard, former executive vice president of Genentech, the proposed changes were sent to the Governance Subcommittee for revision.  

Harrison’s memo for this week’s meeting did not specify whether the two past violations would now also be considered violations under the latest rules.

The new rules would apply initially to the agency’s new, $50 million fast-track clinical program and then be extended to all applications.  The action this week will impose the regulations on an interim basis while they work their way through the state’s official rule-making process during which the public may comment.

In addition to the Berkeley meeting location, interested parties can participate at a teleconference location in Sacramento and two in Los Angeles.  Specific addresses can be found on the agenda. Room numbers can be learned by emailing mbonneville@cirm.ca.gov.  Comments or suggestions can be sent to that email address as well.

'Radical' Improvements Coming at California Stem Cell Agency

The new president of the $3 billion California stem cell agency is not interested in “staying the course” on development of stem cell therapies in the Golden State.

Randy Mills has bigger goals in mind. He told ipscell.com that the opportunities in California go well beyond what has already been done at California Institute for Regenerative Medicine (CIRM), as the agency is formally known.  Mills said,

“If you believe in the potential of regenerative medicine and cell therapy as I do, there is no place in the world you could go to have a bigger impact. No company, no other state, not even a country can have the impact California can have in bringing these treatments to patients.

“My interest at CIRM isn’t to ‘stay the course’ – it is to be as innovative as possible to make the agency radically more effective and efficient.”

For a look at some of what's coming, see the $50 million, California stem cell speed-up item here.

Mills’ remarks were reported last Friday in an email interview on the blog produced by Paul Knoepfler, a stem cell scientist at UC Davis.

Mills had high praise for the CIRM staff, discussed CIRM’s financial position, identified his top priority for stem cell therapy treatments and named his favorite stem cells.

Mills, who made his career in business prior to joining CIRM last May, described the CIRM team as “remarkable.” He said,

“It is such a gift for a new leader to be able to come into an organization and have such talent to work with.”

Mills also discussed his revision of previous CIRM predictions that its funding for new grants would run out in 2017. He said,

“It’s funny, I was able to extend the funding life of CIRM until at least 2020 by using a little trick I once learned called “math.” Not to put to fine of a point on it, but I basically looked at how much money we actually had left to spend (approximately $1 billion) and divided it by how much money we actually awarded each year – about $190 million. And there you have it, 2020.”

Mills also questioned assumptions that all concepts approved by the board would be funded at the amount initially proposed.

Knoepfler asked about the challenges facing the regenerative medicine field. Mills replied,

“The single most important thing for us to do in cell therapy is to generate clear and convincing evidence of efficacy in humans. All of the other major issues surrounding regenerative medicine, such as high product cost and scalability can and will be solved once there is obvious and compelling proof of concept data for a product. Looking ahead, I am really excited about some of the things coming down the CIRM pipeline that have the potential to reach this high standard.”

Knoepfler also asked,

“Do you have a favorite kind of stem cell and why?”

Mills replied,

“It’s a toss up between mesenchymal mint chip and pluripotent pasticcio – they are both delicious! 

“In reality, no. I am agnostic as to stem cell type. My favorites are the ones that help patients.”

California Stem Cell Speed-Up: $50 Million for New, Rapid-Action Program

The mystery at the $3 billion California stem cell agency has cleared up.

The agency yesterday posted a document that provided some details on just what is to be considered next week by the agency’s board of directors, and it is very big stuff -- $50 million worth.

It involves what the agency’s new president, Randy Mills, calls CIRM 2.0 and is intended to speed considerably the agency’s work on research that is closer to reaching the public. (The agency is commonly referred to as CIRM after its official name. the California Institute for Regenerative Medicine.)

The information on the new effort came only one business day prior to scheduled action on the plan by the directors’ Scientific Subcommittee, which meets Monday. The proposal is expected to win approval at the board’s full meeting next Thursday in Berkeley.

Mills’ plan calls for spending $50 million between now and next July on grant applications that will be received every month, instead of sporadically as in the past.  The objective of the program is to create "a more streamlined process for awarding and administering grants that will include frequent and predictable submission opportunities followed by rapid review, quick funding decisions, streamlined contracting and the prompt initiation of research."

Applicants can ask for as much money as they want. No caps are being set in advance, but the research budgets will be thoroughly analyzed prior to review. Indirect costs will be limited, however, to only 10 percent of the award. That is a major reduction.  Kevin McCormack, a spokesman for CIRM, said last year that a 20 percent cap exists on indirect costs on awards. Grants also provide for “facilities” costs at an additional percentage that can be much higher than the 20 percent.  The rate varies from institution to institution.  

Matching funds will be required by both business and nonprofit applicants in some cases in the three-stage program. Business applicants will have to show that they have six months of “cash on hand” from the date of the application submission. 

Applications will be due on the last business day of each month, presumably beginning Wednesday Dec. 31. The CIRM board would act on the award about 90 days following submission. Work must begin within 45 days of approval of awards by the full board, about 130 days after submission of the application, according to Mills' memo to the CIRM board. 

Mills’ plan also calls for a major change in appeals of negative reviews, saying they would be limited to “demonstrable conflicts of interest” as defined by CIRM’s existing policies. Mills’ memo said the change was being made because of “the open opportunity to apply and amend  rejected applications.”

Mills has said successful applicants will be strongly guided by CIRM. Unsuccessful applicants will be coached by CIRM on how to alter their proposals if the agency feels their plans have strong potential.

Parties interested in commenting on the plan or suggesting changes can send their remarks to the directors by emailing them to mbonneville@cirm.ca.gov. They can also participate in Monday’s 90-minute meeting at teleconference locations in San Francisco, Duarte, Los Angeles, Irvine, La Jolla and Oakland. Addresses can be found on the meeting agenda, but specific room numbers are not given. Those can be obtained by calling CIRM at 415-396-9100 or email to mbonneville@cirm.ca.gov.

The California Stem Cell Report will have more on this and other CIRM 2.0 changes prior to next Thursday’s meeting.

A Public Mystery at the $3 Billion California Stem Cell Agency

The latest proposal by the California stem cell agency for apparent clinical testing of stem cell therapies could be a $2 million effort or $20 million effort. It could be designed to tackle Alzheimer’s or cancer. It could involve commercial firms or just research institutions.

But no one – outside of the agency – really knows. With only two business days before the proposal is scheduled to be considered by the agency’s directors, it remains under wraps as far as the public is concerned. It is a public mystery.

All that the public is allowed to see as of noon today is a cryptic, eight-word description – “concept plan for new clinical phase development program.”  Indeed, it might not even be a clinical testing program. The language is so vague it could be some other sort of clinically related effort.

The agency’s transparency rules require that agendas for meetings be posted 10 days in advance. However, they do not require that anything truly meaningful be supplied on the agenda. Back in the not-so-good, old days at the agency, important material explaining what was to be considered sometimes was not even available until the day of a meeting. Sometimes board members complained about delays in seeing material for meetings. Sometimes meetings were cancelled as a result.

In many ways, CIRM, as is the agency is known, is now exceedingly open and transparent. In other ways much less so. The problem with the clinical item to be considered Monday by the CIRM directors’ Scientific Subcommittee is an example of the latter.

The agency makes much of its attempts to engage and inform the public – not to mention researchers and the stem cell community.  CIRM says it wants input from all the stakeholders. But no comment – good, bad or indifferent – can be made when the only information available is so limited that it is meaningless.

Researchers particularly have something at stake. Poorly conceived concepts result in poor requests for applications which then result in poor proposals from scientists. Without spelling out just what is being considered well in advance, it is impossible for researchers to comment constructively or otherwise in a timely fashion.

CIRM can and should do better. 

California Stem Cell Research: Juggling Safety and Speed

Robert Klein, the first chairman of the California stem cell agency, is a relentless salesman for the potential of stem cell research.

Certainly such was the case on Nov. 20 when he and a host of others celebrated the 10th anniversary of the Golden State’s $3 billion research effort. Klein said the dream of patients has already become a reality.  But Klein, as he has done in the past, also warned that there would be setbacks.

He might be called prescient. One day later, news emerged from Great Britain about the deaths of four children involved in a stem cell transplant.

It was a reminder that there are considerable risks involved in the field, which is often viewed uncritically by patients and the public. In the case of the British children, Owen Bowcott of The Guardian reported on Nov.25 that the exact cause of the problem with the treatment is still not known.  The cells involved passed all the normal protocols, however.

The California stem cell agency is now involved in 10 clinical trials of stem cell treatments. These are very early stage trials primarily involving safety. The agency will be pushing aggressively and rapidly in the next few years for more trials. “We need a home run,” said Sherry Lansing, a member of the board of directors of the agency, late last year.

The agency is expected to run out of money for new grants in 2020, a date that has been revised from 2017.  Future funding will depend in large part on marketable successes that resonate with future potential sources of funding, be they private or the general public via another bond issue.

Balancing speed with care and safety can be a difficult task. But a catastrophic event can squash the agency’s efforts just as thoroughly as the lack of home runs.