California's $12 Billion Stem Cell Agency and Fresh Ruckus over Conflicts of Interest

The appointment of a new member to the governing board of California's $12 billion stem cell research program triggered additional comment and criticism today concerning conflicts of interest at the agency. 

The matter involves Larry Goldstein, a well-known scientist at UC San Diego, who has received $22 million from the California Institute for Regenerative Medicine (CIRM), the formal name for the stem cell agency. Goldstein's employer has received $232 million. 

Marcia Darnovsky
CGS photo

"Conflicts of interest at CIRM have been a major concern since the agency was founded, as pointed out by observers including the Institute of Medicine (IOM) and the Little Hoover Commission, California's independent oversight organization," said Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley, Ca., which has long opposed CIRM.  

"Proposition 14, which just last fall gave CIRM another $5.5 billion of public funding, should have been a chance for the agency to turn over a new leaf, but it made none of the changes that could have addressed the agency's built-in conflicts or other structural problems.

"Now CIRM has accepted a board member who has personally received some $22 million in CIRM grants, and whose institution has received far more. It appears that CIRM will continue to flout basic principles of good governance, despite being a public agency wholly funded by public dollars. This is a real and ongoing problem."

Last September, Capitol Weekly, California's respected government and political news service, carried an analysis of CIRM awards and their relationship to board members. It showed that 80 percent of the $2.7 billion awarded by CIRM has gone to institutions with links to past and present members of the CIRM board. 

The agency's 35 directors are barred from voting on specific awards to their institutions. However, they set the rules, scope and direction for the awards.

UC Davis stem cell scientist and blogger Paul Knoepfler, who supports the stem

Paul Knoepfler
UCD photo

cell agency, said in a comment this morning carried on the first item on this subject on the California Stem Cell Report,  

"I'm sure that Larry will do an excellent job on the board, and he brings a unique depth of knowledge on stem cell research. However, along the lines of what Aaron said as quoted in the piece, at the very least the appointment presents some challenges of perception of the agency."

Knoepfler's reference is to Aaron Levine, a Georgia Tech biomedical research policy expert who served on the IOM panel that conducted a $700,000 study of CIRM and recommended major changes in its governance and conflict of interest procedures. Levine told the California Stem Cell Report, 

“Larry Goldstein is, in many ways, an inspired choice for the CIRM board. He is a well-regarded stem cell scientist and former CIRM grantee with administrative experience and demonstrated interest in public policy. On the other hand, CIRM has, at the very least, a perception problem with conflicts-of-interest and appointing a former grantee to the board so soon after the passage of Proposition 14 seems to suggest that this challenge will persist.”

“More broadly, conflict of interest concerns reflect the structure of the CIRM Board dating back to Proposition 71 in 2004 and the broader challenge facing many organizations of recruiting interested, qualified, and independent board members. CIRM has taken a number of steps to help address conflicts of interest since the IOM report was published many years ago, but I would have liked to see the board structure adjusted as part of Proposition 14 to introduce more independence into the oversight structure and further address these concerns.”

CIRM was running out of money last year and was set to close its doors until voters approved Proposition 14, which provided $5.5 billion more and significantly expanded the scope of the agency. 

CIRM had an opportunity to deal with conflict of interest concerns during the formulation of the ballot measure in discussions with the sponsor of the measure, Robert Klein, a millionaire developer in Palo Alto. Klein also directed the writing of Proposition 71 in 2004 and served as CIRM's first chairman after writing into the initiative qualifications for the chair that applied uniquely to him.

The California Stem Cell Report asked Klein this morning whether he had made a recommendation to any party that Goldstein, who is co-chair of a scientific advisory panel to Klein's stem cell advocacy group, be appointed to the CIRM board. Klein replied in an email this morning:

"No. I learned of the appointment after the fact. Dr. Goldstein will be an outstanding board member. Given that he has closed his lab at UC San Diego and he is no longer conducting stem cell research, his extraordinary research record on neurodegenerative diseases and his experience in previously competing for CIRM grants will provide the board with important insights in advancing the search for therapies that are devastating to the brain, the body’s neurological system, and many other disease areas. 

"The State of California’s stem cell therapy development efforts and science generally will benefit greatly by Dr. Goldstein’s sacrifice of the remaining years he could have conducted scientific research, in favor of this new commitment to public service on the CIRM board, that will benefit patients everywhere." 

Lawrence Goldstein in lab at Sanford
Consortium, UCSD photo

Goldstein is barred by CIRM rules from applying for grants. The agency said yesterday that Goldstein has stepped away from his research with the exception of one project. 

(Update: CIRM told the California Stem Cell Report on Monday that it was speaking for Goldstein in its comments. Goldstein confirmed that in an email and did not respond otherwise.) 

It is technically possible today to make changes in the law dealing with conflicts at CIRM and the composition of its board. However, those would require a super, super-majority vote (70 percent) of both houses of the legislature and the signature of the governor, a politically difficult task. 

Recipient of $22 Million from California's Stem Cell Program Named to Its Board

Larry Goldstein, UC San Diego video

Larry Goldstein, a well-known stem cell researcher at the University of California, San Diego who has received nearly $22 million in awards from the California stem cell agency, today was named to its governing board.

It was the first time in the history of the 16-year-old agency that a scientist who has received agency awards has been appointed to the board of the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is officially known. 

Goldstein's appointment raises once again questions involving conflicts of interest at the agency. Since its inception, CIRM has awarded $2.7 billion to California researchers and enterprises, including UC San Diego. Eight out of every ten dollars has gone to institutions with links to past or present CIRM board members, according to an analysis by the California Stem Cell Report. 

Conflict of interest issues have dogged the agency since before voters created it in 2004. In a report in 2012 commissioned at a cost of $700,000 by CIRM itself, the prestigious Institute of Medicine (IOM) 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 CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.” 

The IOM said the composition of the board, which is called the Independent Citizens Oversight Committee (ICOC) makes it neither “independent” nor capable of  “oversight.” 

In response to a question, Kevin McCormack, senior director of CIRM communications, said, 

"Larry is no longer involved in any active CIRM awards and has stepped away from his research work, with the exception of one project for which he does not intend to seek CIRM funds.

"He brings a wealth of knowledge to the board and a different perspective as a leading stem cell scientist and former CIRM-funded researcher. As for conflicts, he is precluded from voting on any applications and cannot even participate in the discussion of applications submitted by UCSD."

While members of the CIRM board cannot vote on specific applications involving their institutions, they set the rules for the grant competition and approve "concept plans" for new grant rounds. Those rounds can and do benefit board members' institutions. UC San Diego has received $232 million in total funding from the agency, making the campus the third-largest recipient.  

CIRM provided $43 million to help create the Sanford Consortium for Regenerative Medicine in La Jolla, which involved UC San Diego and other research institutions, all of which have been represented on the CIRM board.  Goldstein was the founding scientific director of the consortium.  

Goldstein, as a member of the CIRM board, is barred from applying for additional funding, CIRM said in response to a question.  

Aaron Levine
Georgia Tech photo

Queried by email, Aaron Levine, a member of the IOM panel that studied the stem cell agency and an expert in biomedical research policy at Georgia Tech, said, 

“Larry Goldstein is, in many ways, an inspired choice for the CIRM Board. He is a well-regarded stem cell scientist and former CIRM grantee with administrative experience and demonstrated interest in public policy. On the other hand, CIRM has, at the very least, a perception problem with conflicts-of-interest and appointing a former grantee to the Board so soon after the passage of Proposition 14 seems to suggest that this challenge will persist.”

“More broadly, conflict of interest concerns reflect the structure of the CIRM Board dating back to Proposition 71 in 2004 and the broader challenge facing many organizations of recruiting interested, qualified, and independent board members. CIRM has taken a number of steps to help address conflicts of interest since the IOM report was published many years ago, but I would have liked to see the board structure adjusted as part of Proposition 14 to introduce more independence into the oversight structure and further address these concerns.”

Proposition 71 is the ballot initiative that created CIRM in 2004 with $3 billion in state bonds. When the money ran out last year, voters approved Proposition 14, which saved the agency with $5.5 billion more. The total cost of the agency by the time the money runs out again is estimated to be $12  billion because of the interest expense of the bonds. 

Proposition 14 also expanded the board from 29 to 35 members, creating an increased likelihood of conflicts of interest. 

Bob Klein
California Stem Cell Report photo

A longtime observer of the agency and supporter of stem cell research, who must remain anonymous, was "quite
distressed" by the Goldstein appointment. "Don't they have any sense of what's appropriate," the person said. "He has benefitted in so many ways and is so intertwined with Bob Klein." 

Klein is the Palo Alto developer who crafted Proposition 14 and 71 and contributed millions to the ballot campaigns. Goldstein serves as co-chair of the scientific advisory board of Klein's stem cell advocacy group, Americans for Cures. 

In its news release, CIRM Chairman Jonathan Thomas said, 

“I have known Larry for many years and have nothing but the highest regard for him as a scientist, a leader, and a great champion of stem cell research. He is also an innovative thinker and that will be invaluable to us as we move into a second chapter in the life of CIRM.”

Reports filed by Goldstein on his research can be found on this CIRM web page and by clicking on the description of each award. He was appointed by UC San Diego Chancellor Pradeep Khosla and replaces David Brenner, dean of the UC San Diego Medical School, who has served two terms on the CIRM board. . 

California's Quest for Stem Cell Therapies: $5.5 Billion Reboot Kicked Off Today

California's ambitious stem cell agency today launched itself on a new, $5.5 billion journey, approving a plan to hand out $182 million to researchers by the middle of next year and beefing up its efforts to bring equality to therapies and scientific labs.

The moves came courtesy of Proposition 14, the ballot initiative that saved the financial life of the California Institute for Regenerative Medicine (CIRM), as the agency is officially known.  Just 12 months ago, CIRM was dealing with its possible demise as it was running out of the $3 billion that voters gave it in 2004. 

Proposition 14 sets the agency, which currently has only 33 employees, on a sweeping course that extends its work into areas such as mental health and "aging as a pathology." The agency's new, 17,000-word charter also provides up to $155 million for work dealing with affordability and access to possible stem cell therapies. 

CIRM was created 16 years ago by another ballot initiative following a campaign that raised voter expectations that stem cell therapies were right around the corner. The agency has yet to help finance a stem cell therapy that is approved for widespread use by the federal government, although CIRM is backing 68 clinical trials, a number that was considered unimaginable in 2004, the year the agency was born. 

During its online meeting today, the agency's governing board approved, as expected, a $182 million plan to make 36 awards during the next six months. It calls for $100 million for clinical work, $22 million for basic research and $60 million for translational research, which involves attempts to move discoveries into the clinical stage, the last stop before they are approved for general distribution. 

A call for applications is expected to be posted soon. 

The board took its first step to address the affordability and access issues identified by Proposition 14. Eight persons were named to CIRM's new Affordability and Access committee. It will be led by CIRM's vice chair, Art Torres, a former state legislator and who also serves on the board of Covered California, a state body designed to deal with affordability issues in connection with the federal Affordable Care Act. More persons are expected to be named to the affordability committee next month. 

The CIRM board approved changes in how it evaluates applications for awards to require scientists to specifically address diversity and equity issues. Under its new rules, applications will be scored on how well the research deals with underserved communities. Applicants will also be scored on the diversity of their research teams. 

The agency's new operational budget calls for the hiring of 10 more employees between now and the end of June, ranging from a vice president for science to an administrative assistant. Job listings are expected to be posted soon. 

CIRM Chairman Jonathan Thomas laid out some details for crafting a new strategic plan for the next five years. It includes action on the plan by the end of June, which will mean that requests for applications will be issued soon thereafter.  The June date has been moved up from later in the summer.

The public and researchers will be able to weigh in with comments and suggestions during the development of the plan. 

Today's session stood in sharp contrast to the agency's first meeting this month in 2004, just after the voter approval of the ballot measure that created CIRM.  The fledgling agency did not have a single employee. It had no bank account, no offices and no phones. Spectators, interested parties and news reporters, nonetheless, crowded into the CIRM board's first meeting. Major stories appeared in the media throughout the state. 

Today, CIRM's online session was watched by only about 30 to 40 persons, most of whom were likely associated with the agency itself. And the meeting drew virtually no media attention.

More Information Available This Morning on Future Direction of $12 Billion, California Stem Cell Program

California's $12 billion stem cell research program, which is embarking on a major new pathway, has posted additional information online that provides some clues to its direction for the next five years. 

The information comes in the form of 33 pages of slides to be used today at a daylong, public meeting of the agency's governing board. The slides were created by Maria Millan, president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, and other top executives of the enterprise. 

While the slides need considerable explanation, which will be forthcoming later today, they provide a start for those seeking to understand how the 16-year-old agency is planning to spend $5.5 billion in the Golden State over the next decade or so. 

Beyond the 33 pages of slides, other information is being offered as well that deals with a $182 million awards budget for the next six months and new requirements for sharing research data and increasing diversity.  

Still missing is information on the launch of the agency's new effort at dealing with affordability and access questions involving stem cell treatments, a new task created by Proposition 14, the ballot initiative that saved CIRM's financial life. 

The agenda for Monday's meeting contains instructions for participating in the online meeting. Written comments are always useful as well as oral presentations. Written material can provide needed backup for the briefer oral comments and are directly in front of CIRM directors and staff. Comments should be emailed to kmccormack@cirm.ca.gov.

The session starts at 9 a.m. PST today.

Ties, Politics and Stem Cells: The Becerra Nomination

The Californian who is slated to head the vast federal agency that includes the National Institutes of Health (NIH) and the Federal Drug Administration (FDA)  got his start in politics with the man who is now the vice chair of the California stem cell research program. 

Xavier Becerra
Photo: Lucy Nicholson, Reuters

California Attorney General Xavier Becerra was nominated this week to lead the Department of Health and Human Services after a long career as a congressman and leader of the Democratic Caucus in the House of Representatives.  

Becerra was reared in Sacramento by Mexican immigrants, went off to Stanford as an undergraduate and also received a law degree from the Palo Alto university in 1984. Later, he went to work for then State Sen. Art Torres, now vice chair of the stem cell agency, and in 1986 moved to Los Angeles to direct Torres' district office. Torres, former state Democratic party chairman, and Becerra continue to have close political ties, we understand.

Becerra was elected to the state legislature and Congress with the support of Torres. Becerra served from 1993 to 2017 in the House of Representatives, a period that included top leadership positions. He will have his hands full in Washington. Some Republicans are opposing his nomination because of his stand on abortion and his work on the Affordable Care Act. The Los Angeles Times editorial board labelled Becerra as President-elect Biden's Obamacare "fix-it guy." 

While Becerra's professional life has largely been in politics, he does have a spousal, medical tie. His wife, Carolina Reyes, is a physician, educated at Stanford with an M.D. from Harvard. She is a maternal-fetal medicine specialist, has taught at USC and has been active in a wide range of professional and community activities. Currently she is a member of the governing board of the California Health Care Foundation.

"Reyes is recognized nationwide for her career-long efforts to improve the care of women with high-risk pregnancies — especially those in medically underserved communities," the foundation says. 

The $12 billion state stem cell agency has been working with the NIH and FDA to expedite approval of stem cell therapies that the agency has helped to finance. The agency points to its sickle cell initiative with the NIH as an example of federal-state cooperation. 

Sheehy Steps Back from Stem Cell Agency Positions; Cites His Opposition to Prop. 14

A longtime member of the governing board of the $3 billion California stem cell agency has stepped away from two leadership roles in the wake of his vote against the ballot measure that would refinance the research enterprise, which is running out of money. 

Jeff Sheehy, an HIV/AIDs patient advocate on the board since 2004, made the moves after becoming the only member of the 29-member board to vote against endorsing Proposition 14, which would provide $5.5 billion for the California Institute of Regenerative Medicine (CIRM), as the agency is formally known. 

The proposal would also make significant changes in the operations of the agency, enlarge its scope, lock up money for certain purposes and expand the size of its board from 29 to 35.

Sheehy voted against the endorsement on June 26 and released a statement to the California Stem Cell Report which cited a wide range of reasons for his negative vote. 

The actual vote on Proposition 14 was 21-1. Some members of the board were not present. Two vacancies also exist on the board. 

Sheehy was chairman of the board's science subcommittee. He was also a member of CIRM's grant working group and for years directed the evaluation by the full board of the billions of dollars in grant applications. 

Responding to a question last week, Sheehy said,

 "I instigated the change. I believe that it doesn't make sense for me to have any leadership roles given that I do not support Proposition 14.  I can imagine a scenario where the reality of my opposition becomes stark, and I don't want to drag the functionality of the board or the agency into any potential, campaign back-and-forth."

The changes in Sheehy's role became apparent last Friday when another board member led the evaluation of the Covid-19 applications. It came as a surprise to at least one board member, Vice Chairman Art Torres, who inquired at the beginning of the Friday meeting about the change. 

"What happened to Mr. Sheehy? He's not running these things anymore?" Torres asked.

Chairman Jonathan Thomas replied briefly, "Mr. Sheehy is is not going to be running the application review."

Torres replied, "Sorry to hear that."

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

Quote of The Day: Noah's Ark and the California Stem Cell Agency

'''CIRM operates at the nexus of the Political (with a capital P), scientific, institutional, and business forces of an aggressive state that views economic development as a priority.' Its organization, (Hamilton Moses) adds, doesn't help. ' 'Noah's Ark' boards, where each member is appointed to represent a constituency, rarely work.'"
 --  Hamilton Moses is a biomedical consultant in Virginia who focuses on non-profit governance, quoted in Nature Reports Stem Cells, from article Sept. 13, 2007, by Monya Baker

Calfornia's Stem Cell Pie for 2020: State Agency to Slice Up Nearly Final Millions Next Week

It ain't over yet -- at least that's the word from what could be deemed the financial center of stem cell research in California.

The governing board of the California stem cell agency is scheduled to meet Feb. 6 to allocate unspecified additional millions for stem cell research and peer down the road that awaits it beginning Nov. 4 of this year.

That is the day after California voters are expected to deliver their judgment on whether the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, should continue and receive an additional $5.5 billion.

The agency is running out of money. Its initial $3 billion is now down to $27 million for awards. A ballot initiative to give the agency the additional billions is expected to be on the ballot this fall, Nov. 3 to be precise.

But in just 10 days, the CIRM board will reveal the amount of cash that has been recovered from research awards that failed to meet milestones during 2019. The board is scheduled to make decisions on how that money, which is likely to run into tens of millions, is to be allocated during the remainder of this year.

Also on the agenda is a three-word topic: "strategic plan themes."  This is likely to involve possible directions of the agency should it receive additional funding from the ballot initiative. That proposed measure substantially expands the scope of the agency and specifies it move into in certain new areas, including attempting to assure the affordability of agency-financed therapies whose costs could run upwards of $2 million.

The agenda includes an update on most major programs involving CIRM, information that will come widely into play as the next fall's election receives more attention.

The meeting will be based at CIRM's headquarters in Oakland. But it will also be available electronically at a number of other public locations throughout California and via the Internet. Members of the public will be able to comment and ask questions through the Internet. Details are available on the agenda. 

Latina Cancer Advocate Ysabel Duron Named to California Stem Cell Board

Ysabel Duron

The governing board of the $3 billion state stem cell program has a new member, Ysabel Duron, an award-winning Latina journalist and president of the Latino Cancer Institute.

Her appointment comes as Sherry Lansing, who was the first woman to head a major Hollywood studio, has left the board. Lansing is president of the foundation bearing her name, which is involved deeply in cancer research, and is a member of the University of California board of regents. 

On its blog, the stem cell agency said,

"Ms. Duron was a journalist and TV news anchor for more than 43 years winning numerous awards, including two EMMYS. She has been inducted into the Hall of Fame of the National Association of Hispanic Journalists and given the Living Legacy Award by the Chicana/Latina Foundation.

"As a journalist she covered her own battle against Hodgkin’s Lymphoma, using her reporting to help raise awareness about the disease and the health disparities involved in treating it in communities of color."

The agency quoted Duron as saying,

"Usually I am looking for the best return for the public health! This appointment gives me a new learning opportunity to understand a very complex issue, and, make it bite size so the public, patients and advocates will understand how these scientific revelations will impact lives in the short term and the long run. As a steward of taxpayer dollars, I also want to make sure there is equity for communities across California, and that the research serves all of us."

Lansing served on the agency's 29-member board since its inception in 2004. In her letter of resignation, she said,

"This is just the beginning for stem cell research, and yet we are at a critical inflection point in the life of this organization - with funds coming to an end and promising research that must wait for the next CIRM(the stem cell agency). It is for this reason that I am stepping down now, so that I can dedicate more time to getting the next initiative on the ballot."

State Controller Betty Yee appointed Duron. The agency's board currently has two vacancies.

$5.5 Billion Stem Cell Ballot Measure: Questions in California but Apparently No Foot-Dragging

Some directors of the California stem cell agency this morning expressed a number of reservations about a $5.5 billion ballot initiative to stave off its financial demise, but none appeared likely to oppose the proposal 

In a special, two-hour meeting of the agency's governing board, questions were raised about provisions that would restrict the board or mandate programs, ranging from training to lab equipment. A provision to increase the size of the board from 29 to 35 was criticized and supported. A new effort to deal with the affordability of stem cell therapies was praised. But some aspects were questioned.   

The topic of the day was a complex, 30-page, proposed ballot initiative sponsored by Robert Klein, the first chairman of the agency, who has already announced changes in his proposal. More alterations appeared to be in the works as the result of today's hearing, including elimination of some language dealing with pricing. The meeting did not go into details about that subject.

In addition to requiring the state to borrow $5.5 billion for stem cell and other "vital" research, Klein's proposal would expand the scope of the agency and alter its governance. It would be required to develop and finance efforts at making stem cell research more affordable. Brain disease research would receive special attention with a dedicated $1.5 billion out of the $5.5 billion. Training programs would be mandated and expanded at community and state colleges and much more.

(The CIRM summary of the initiative can be found here. A summary by the California Stem Cell Report can be found here.)

(Here is the text of the initiative as filed in October. Here is the text of the measure with Klein's proposed changes as of Nov. 14.)

The agency began its life in 2004 with $3 billion in state bond funding, authorized by California voters through a ballot initiative.  Known formally as the California Institute for Regenerative Medicine(CIRM), it is down to its last $27 million, which is devoted to a sickle cell program with the federal government. At its peak, the agency was giving away up to $300 million a year.

Today's meeting began with several of the board members declaring that the public should not perceive their questions and comments as indicating they did not support the effort to refinance the agency. Some had expressed concerns that opponents might use board comments to defeat the initiative next November. 

Steve Juelsgaard
CIRM photo

The board moved rapidly through the initiative during the morning meeting. CIRM director Steve Juelsgaard and others raised questions about the size of the board, declaring that large boards become disengaged from an enterprise. Os Stewart, who has served on the board since 2004, said he initially thought 29 members were excessive but feels differently after 15 years. 

Several members expressed concern about mandates that would tie the hands of the board. CIRM Director Francisco Prieto said, 

"The science can surprise us."

Klein told the board that "we have fundamental obligation to give the voters an idea where their money is going." He also said that the mandates do not have legal timetables.

Today's meeting was very lightly attended, according to an agency spokesman, mostly by CIRM staffers. Only one member of the public addressed the board, Don Reed, a longtime patient advocate and supporter of the board.

Questions about the measure arose publicly this month after longtime director

Jeff Sheehy
CIRM photo

Jeff Sheehy authored a 3,300-word critique of the Klein measure, declaring it amounted to "too little and too much."  At the end of today's meeting, Sheehy did not express reservations that would prevent him supporting the measure. 

Klein unofficially modified his measure this week. He has until Monday at 5 p.m. to actually file the changes with state elections officials. The official comment period for the initiative is closed. But Klein said yesterday that interested parties can send comments and suggestions to him through Saturday at this email address: castemcell2020@gmail.com. 

Comments filed directly with Klein are not a public record. If a reader would like to share his/her comments with the public, please send a copy of them to the California Stem Cell Report at djensen@californiastemcellreport. We will carry them verbatim.

Here is a link to a guide to the stem cell initiative information maze, which is updated as other key information surfaces.

Survival of the Financially Strapped California Stem Cell Agency? It Can Write Its Own Ballot Initiative

Directors of the California stem cell agency --- some of whom are not happy with a proposed $5.5 billion ballot initiative that would rescue the agency -- have a choice: They can write their own ballot measure. 

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is permitted under state law to draft its own ballot initiative, a provision that escaped notice at the governing board's meeting last week. 

It was during that session that the dissatisfaction among some CIRM directors  surfaced significantly. A number of board members expressed reservations about the proposed ballot initiative, which would make major changes in the agency's operations. "Not helpful," was one characterization. "Handcuffs" was another. 

Another meeting was called for a week from today (Nov. 15) to consider the $5.5 billion proposal, which has a deadline of Nov. 18 for making changes. Any alterations can only come from Robert Klein, the sponsor of the initiative and the first chairman of the 15-year-old agency. 

Not discussed last week's board meeting was a sentence in a legal memo prepared by James Harrison, the former general counsel of the agency. In addition to the memo, Harrison briefed directors with a slide presentation on the restrictions on the use of public funds to support a ballot initiative. The sentence said,

"However, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters."

The California Stem Cell Report this week queried Jeff Sheehy, one of the less-than-pleased CIRM directors, for a comment on the possibility of pursuing an alternative to the Klein initiative. He said in an email:

"I have to admit that I had no idea that CIRM could draft its own ballot measure. I am surprised that this option was not brought to the board earlier. I think CIRM drafting its own ballot measure is a great idea and we should start this process as soon as possible, assuming that the rest of the board supports doing so."

 (Update: In response to a question, Art Torres, vice chairman of the CIRM board, said following initial publication of this item today, 

("The agency could write its own initiative but no power to place it on the ballot or circulate it for signatures. I think the meeting on Friday is the best way to collect recommendations to pass on." )

Harrison made it clear last week that running a campaign is illegal for CIRM. Someone from outside the agency would have to step in to do that as well as raising the tens of millions of dollars needed to place it on the ballot and conduct the campaign.

CIRM, meanwhile, is running out of the $3 billion that voters provided it in 2004 and will have to start winding down next year unless voters provide it with more cash. The most obvious source has seemed to be the ballot measure offered up by Klein, a Palo real estate investment banker who also directed the writing of the initiative that created the agency in 2004.

Time is running out for initiatives for the November 2020 ballot. A lengthy signature gathering process is involved in addition to an array of statutory requirements. 

However, an initial draft of a measure -- sort of a placeholder -- could be submitted quickly after a sponsor stepped up. The measure could be fleshed out and refined during the 30-day comment period with revisions made after that period closes.

In another possible scenario, Klein could withdraw his current initiative if he needs time to consider changes desired by the board. A new proposal then could be drafted and submitted for fresh ballot certification. 

Supporters of the agency could also go to the state Legislature and ask lawmakers to place a funding measure on the ballot. That would involve some major political obstacles and negotiations. So far, CIRM directors have not been inclined to move in that direction.

Here is a link to additional legal discussion of how local California governmental agencies can engage in drafting a ballot initiative and placing it on the ballot. 

$5.5 Billion, Stem Cell 'Handcuffs' in California? CIRM Directors Have Questions on Ballot Proposal

OAKLAND, Ca. -- Some directors of the California stem cell agency are less than pleased with aspects of a proposed, $5.5 billion ballot measure to save the program from financial extinction, including one longtime board member who said it would "handcuff"  the research effort.

A sometimes testy discussion of the initiative arose late in the board's meeting yesterday with a number of board members expressing reservations about provisions in the measure that were "not helpful."

"These are handcuffs," said Jeff Sheehy, who has served on the board of the agency since its inception in 2004. "The board has a responsibility...to look at this measure while it still can be changed."

Jonathan Thomas, chairman of the stem cell agency board, said he is calling a meeting of the board sometime in the week beginning Nov. 11 to discuss the ballot initiative.  The deadline for public comments to go state election officials is Nov. 12. Changes can be made up to Nov. 17.  (See here for how the process works.) 

Changes can only be made by the sponsor of the initiative, who is Robert Klein, a real estate investment banker who was the first chairman of the agency, formally known as the California Institute for Regenerative Medicine (CIRM).  Klein is a real estate investment banker and the founder and chairman of Americans for Cures, a stem cell advocacy group.

CIRM has only $27 million left for new awards out of the $3 billion that voters provided for it in 2004. However, those funds are reserved for a federal-state sickle cell program. Efforts to raise significant private funds have been unsuccessful.
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The proposed ballot measure goes well beyond simple re-funding of the 15-year-old program. It would alter the structure of the board, basically defer control of its conflict of interest rules to a national scientific organization, create new programs, expand the scope of its work and more.

CIRM Director Steve Juelsgaard said the proposal would make "significant changes" including some that "frankly I don't think are very helpful."

On Wednesday, prior to yesterday's meeting, Sheehy' released a 3,300-word critique of the measure that was published by the California Stem Cell Report. He raised his concerns again yesterday directly with CIRM's governing board after board chairman Thomas offered a schedule for revising the agency's strategic plan sometime next year.

The CIRM board's sometimes heated discussion did not go into all of the measure's specifics. It focused primarily on whether the board should have an additional meeting on the matter and take a formal position. Several members of the board said they wanted to know more about the proposal and expressed concern about unspecified aspects of the measure.

Sheehy told the 29-member board that it would be "an abdication of our responsibility" if the board fails to weigh in on the proposal when it still can be changed. He said the initiative was drawn up in private in a process that was not publicly disclosed.

Art Torres, vice chairman of the board and former state legislator, expressed reservations about bringing the proposal before CIRM directors in a public session. He said that the state had a formal process for filing comments that could be used by concerned board members.

Some members of the board said a formal position by the board could have considerable weight in generating needed changes.. Some, however, were concerned that board criticism of initiative at this point could be used by opponents in the ballot campaign next year even if the board ultimately endorsed measure.

CIRM is in the process of setting a date and time for its review of the ballot measure. It is scheduled to be a telephonic meeting that would have multiple public remote locations. It would also be available on the Internet with public participation access. The California Stem Cell Report will report the time and date of the meeting when it is available and is asking Klein for his comments as well.

A Peek Inside the California Stem Cell Research Machine: $25 Million, Babies, Bonds and Dwindling Cash

California's stem cell agency this week dished up rare public details of an advanced effort to create "transformative" therapies that would help cure afflictions ranging from diabetes to always fatal immune disorders.

The disclosure involves Stanford University researcher Judith Shizuru, severely ill babies, toxic chemical treatments, delays in clinical trials and stem cell agency board members who are acutely aware of the $3 billion agency's rapidly dwindling resources.

Judith Shizuru
Photo by Flynn Larsen, Ludwig Institute

All this plus more is on the table Thursday at a meeting of the directors of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

The agenda nominally contains one item, an application by Shizuru for $6 million from CIRM. But the issues reach back to 2013 and provide insight into difficult research pathways and how the agency manages its programs. 

At the top of the matter is the fact that the state agency expects to run out of cash for new awards by the end of this year. It is pinning its hopes on a proposed $5 billion bond measure on the November 2020 ballot.  Meanwhile, directors are trying to raise privately $200 million to tide it over until then. 

Avoiding Toxic Chemotherapy

That was the backdrop Wednesday Jan. 30 when directors convened to consider application number CLIN2-11431 by Shizuru for $6 million. She is seeking a way to avoid chemotherapy treatments and their toxic side effects in the case of a rare genetic affliction often referred to as the bubble baby syndrome. 

In December, CIRM's grant reviewers, meeting behind closed doors, approved Shizuru's application, an action that nearly invariably is rubber-stamped by directors. But last month was different, and a bit of CIRM history was brought up.

Shizuru received  a $19 million CIRM award in 2012 which has led to a phase one clinical trial with positive results for her therapy. Cost per each of the six patients so far averages $917,000, according to a CIRM document. 

However, additional patients are needed, along with more funding, before the potential product can reach the marketplace. The average cost of per patient will run about $333,333 during the final portion of the phase one trial.  Her latest application is aimed providing assistance with those costs. 

Questions about Delays and Co-Funding

Last month, questions arose among directors about months of delays in the clinical trial and a current shortfall in co-funding, among other things.

Steve Juelsgaard

Steve Juelsgaard, a former Genentech executive and chair of the directors' Finance Committee, said, 

"It's not clear to me that they're being frugal with the money that they have been given."

Juelsgaard also said,

"Delay doesn't necessarily add up to more money. They obviously spent the money on something that they didn't anticipate or under-budgeted or something. There's something more to it."

Another director, Jeff Sheehy, chair of the board's Science Committee, said,

"Financially, it seems very muddy to me."

Other directors weighed in as well, ultimately leading to a motion to delay action on the application to provide more time to find answers to questions.

At that point, Shizuru, who was in the audience, rose to respond.

"I understand CIRM's concerns, and I can see you're very thoughtful about how this money is being spent," she said, according to the transcript.

 The Sheehy-Shizuru Exchange

The Stanford researcher said that without additional funding the trial would have to suspend enrollment of additional patients, prompting this exchange between her and Sheehy.

"Shiruzu: Budgetarily we're better off using it (the remaining funding) to continue to follow the patients that we've already transplanted. From that budgetary standpoint, we should delay the trial. We should delay treating any more patients on the trial.

"Sheehy: So Stanford won't front you 1.6 million to (treat) patients if we don't give you the money today?

"Shiziru: I hesitate to say what they would do.

"Sheehy: To Stanford...they would actually put patients at risk?

"Shiziru: I'm not at liberty to say what Stanford would do."

Stanford is the No. 1 recipient of CIRM awards, chalking up $379 million over the past 14 years. It also has always had a member on the CIRM board of directors, who is not allowed to speak or vote on awards to Stanford.

Following Shizuru's comments, CIRM directors approved the motion to delay action until this week's meeting. Since the January session, Shizuru has provided the agency with more than five, single-spaced pages of explanation about her research, plus other material that has been kept under wraps for what CIRM has indicated are proprietary and legal reasons.

The information from Shizuru, as well as additional documents from CIRM, provided an unusual, public look into the agency's grant-making process as well as the hurdles encountered in advanced clinical research. In the past, reviews of applications approved by reviewers have received little or no discussion.

Shizuru's Perspective

In her material, which is available on the agenda for this week's meeting, Shiruzu said one, eight-month delay was caused by CIRM itself because of internal concerns. Another nine-month delay was caused by age-restrictions on patients.

"Significant delay" was also caused because of what might be called a supply and demand issue. The bubble baby syndrome is rare. Only one in out of 50,000 to 100,000 births results in a baby with the affliction: severe combined immunodeficiency.

Three other clinical trials are also competing for those rare patients. 

Nine letters of support were received by CIRM supporting the research, with some describing the potential result as "transformative." The letters also said Shizuru's approach could find use in a wide range of other afflictions, an expectation also agreed upon by CIRM. 

Shizuru said she is working on securing the needed co-funding for her first award, which is not yet concluded. As for commercialization, she said she and her colleagues have formed a company, whose name was not disclosed. She said she has a letter of support from one investor regarding "an intention to co-fund pending completion of due diligence."

In a final comment during the vote last month to delay consideration, one CIRM board member, a San Diego patient advocate for Parkinson's disease, praised the board's close examination of the application. David Higgins said, 

"I want to acknowledge fellow board members (for) their continued concern about spending taxpayer's money wisely because I think this is a great example of that."

(The public can listen to and participate in the Thursday meeting via the Internet. Instructions are on the meeting agenda.) 

California Stem Cell Board Meetings: A Chance to Meet its Directors and Speak to its Staff

The $3 billion California stem cell agency reports that its governing board will meet 12 times this year, mostly in teleconference sessions that will also have access on the Internet.

The business of the board is largely ratifying awards approved earlier by its grant reviewers. However, its financial survival will be a topic of regular discussion this year. The agency expects to run out of cash for new awards before the end of the year. It is hoping that voters will renew its funding with $5 billion in the fall of 2020.

Four "in-person" meetings are scheduled this year during which most of the board will gather at the agency's headquarters in Oakland. They are scheduled to occur in March, May, September and December. Those will be also accessible on the Internet, both for listening or participating.

The meetings of the board offer opportunities for members of the public, including researchers and business representatives, to speak directly to board members and staff of the agency. The in-person sessions are particularly valuable in that regard because of the informality before and after the meetings, as well as during breaks.  Seating is somewhat limited at the meetings at the headquarters of the agency.

Dates and times of the meetings may change, however, and should be double-checked as the sessions near. The first meeting of the year is scheduled to be conducted via teleconferencing and is set for Jan. 30.

The official name of the board is the Independent Citizens' Oversight Committee. The formal name of the stem cell agency is the California Institute for Regenerative Medicine. 

New California Stem Cell Agency Board Member: Suzanne Sandmeyer of UC Irvine

A woman who is a medical doctor as well as a professor of both chemical engineering and microbiology and molecular genetics is joining the governing board of the $3 billion California stem cell agency.

She is Suzanne Sandmeyer, vice dean of research in the School of Medicine at UC Irvine. Her appointment by the UC Irvine chancellor was announced today by the California Institute for Regenerative Medicine (CIRM). 

UC Irvine has long held positions on the 29-member governing board of the agency, which was created by California voters in 2004. UC Irvine and its researchers have received $114.3 million from CIRM, ranking sixth among all recipients. Roughly 90 percent of CIRM awards has gone to institutions with ties to members of its board.

In its news release today, the agency quoted Sandmeyer as saying,

“Our country has one of the most expensive systems of medical care, and yet we don’t have the longest-lived population. I want to work toward reducing the burden of medical expenses for people. I am very excited about the potential of stem cells to treat many disorders and the potential for new technologies like CRISPR to further empower that approach.”

The agency's news release also noted Sandmeyer's broad range of interests outside academia.  She was quoted in a CIRM blog item as saying:

"I go through phases like everyone. There is never enough time. My favorites are astronomy, bird photography, guitar, biking, kayaking, reading and of course German shepherd dogs."

She replaces Howard Federoff also of UC Irvine, who is stepping down to devote more time to his research, CIRM said.

CIRM Board Member Sheehy Exiting as San Francisco Supervisor; Says SF Voters Favorable on Stem Cell Work

Jeff Sheehy, a member of the governing board of the $3 billion California stem cell agency, will be leaving his fulltime post as a member of the San Francisco board of supervisors later this year, but he says his unsuccessful election campaign disclosed favorable perceptions of stem cell research.

Sheehy disclosed his plans not to seek re-election in the media in the Bay Area. In a statement, he said it was "immensely rewarding" to have served the city. He also had this to say yesterday to the California Stem Cell Report,

"I have been asked about the implications for CIRM (the stem cell agency) and, based on polling around my bio that my campaign conducted, stem cell research remains very popular.

"When we asked voters about what prior work of mine resonated with them, the tagline, 'Fights for stem cell cures for deadly diseases and conditions as a founding board member of the California Institute for Regenerative Medicine,' was one of, if not the most popular items listed in my background.

"I had multiple conversations with voters about our work at CIRM and they were very supportive and very impressed with the what we have accomplished."

Sheehy is a patient advocate member of the stem cell board and has served on it since its inception in 2004. He is also chair of the Science Subcommittee of the board, participates in closed door reviews of applications for funds by scientists and oversees board discussion of the reviewers' decisions.

Sheehy's term on the 29-member board expires in 2020. The agency expects to run out of cash for new awards by the end of next year, 2019.

Parkinson's Patient Advocate Pitches for More California Stem Cell Funding

Sometimes things move quickly at meetings of the governing board of the California stem cell agency, which is formally known as the California Institute for Regenerative Medicine(CIRM).  At the meeting this month, it ended before a patient advocate had a chance to make her voice heard.

She is Jenifer Raub, president of the Summit for Stem Cell Foundation of San Diego. She requested that this web site carry the comments she would have made to the board. We are delighted to provide them below.

“On behalf of Summit for Stem Cell Foundation we applaud the efforts of CIRM to move Stem Cell Research forward. We task you specifically with addressing and funding a stem cell-based cell therapy for Parkinson’s Disease  (PD) Research. There is tremendous enthusiasm within the PD community for an autologous iPSC-based therapy. Parkinson’s Advocates are a vocal group as you well know. Funding assistance from CIRM for an autologous iPSC-based therapy for PD would easily result in Parkinson’s Advocates gratefully voicing support for funding for CIRM on the 2020 ballot.”

The California Stem Cell Report welcomes comments and lengthier commentary from persons interested in the $3 billion stem cell agency. Please send them to djensen@californiastemcellreport.com.