Thursday, December 22, 2016

California Stem Cell Agency Says Companies Seeking "Better Deal" in Unique, $150 Million Plan

Five responses to plan
Application process is not a negotiation
Protection of state taxpayers paramount
More talks with companies planned

The president of the California stem cell agency, Randy Mills, yesterday said that the firms that responded to an ambitious proposal to create a $150 million public/private partnership were seeking to make a "better deal" than the agency had offered.

Mills said that the agency was "not going to give away something that is not in the best interests of the people of California."

Randy Mills, FDA photo
Mills was responding to questions raised earlier this week as a result of a report on this web site that
the proposal has hit a significant snag. The plan is aimed at creating a unique enterprise to speed development of stem cell therapies and to help establish California as a global stem cell powerhouse. The new company would be backed by a $75 million state loan (discounted to 50 percent payback)  with a matching $75 million coming from a successful applicant. The company would have the pick of agency research that did not already have a commercial partner.

The deadline for applications was Oct. 31. Up until yesterday, the agency had not even disclosed the number of responses to the request for applications(RFA). Nor had it gone beyond vague expressions of the issues troubling the proposal.

In a telephone interview with the California Stem Cell Report, Mills said that five responses were received on Oct. 31. But he said none were eligible for consideration because they did not meet the requirements of the RFA. He said the responses indicated that the companies viewed the application process as a "negotiation." Mills said "all kinds of terms" were proposed that were "different than in the RFA." He said,
"We put forward what we thought was a very good deal. The heads of the companies wanted to make a better deal."
Mills added,
"The deal is as good as the deal is going to get."
He said the $3 billion agency, known formally as the California Institute for Regenerative Medicine (CIRM), has to be willing to walk away if the deal is not appropriate.  He said the agency had a fiscal responsibility to taxpayers. "My investors are the people of California," Mills said.

Mills said, however, he was going to discuss the proposal further with those who responded to determine whether it was a matter of "terms or time." He said the proposal was innovative and unusual, posing challenges for both the companies and the agency.

Mills comments came as he was responding to questions raised by a reader of the California Stem Cell Report, Ed Snively, of El Centro, Ca. Snively is a longtime participant in local affairs in his area in Imperial County and has long followed stem cell agency matters.

He wrote in an email to California Stem Cell Report,
"Thank you, David, for this interesting observation on selective transparency by the agency. The comments by Mills regarding state regulatory compliance and taxpayer procedure acceptance were curious to me. I think Mills owes an explanation of his remarks to taxpayers. If this 'bold' plan violates the terms of the agency contract with the state and stakeholder/taxpayers then Mills needs to explain why that is. What he has done is make me think that something right on the legal edge is going on behind closed doors. I hate that in public agencies."
The California Stem Cell Report emailed the comments to the agency, asking if it would like to respond.

In the subsequent telephone interview, Mills said that he did not want the agency to be perceived as selectively transparent and that he had "no problem" in answering any questions.  He said that if his earlier comments were not clear that it was his fault, and he elaborated on the issues involved.

But under the agency's longstanding rules, it does not disclose the names of applicants nor does it disclose their applications -- only a review summary when they come before the agency's governing board for final action.  However, the terms of contracts with successful applicants are a public record.

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