California Stem Cell Lab Construction Not Entirely Up to Snuff

The California stem cell agency is reporting that one out of three grants is behind schedule in its $1 billion-plus stem cell lab construction program.

Nonetheless, CIRM produced an upbeat press release, declaring that “all were moving forward.” CIRM Chairman Robert Klein was quoted as saying the effort provided “extremely valuable contributions to the California economy.”

The timetable on the 12 projects is important by CIRM's own measure. Two years ago, CIRM ballyhooed the lab construction program because of its requirement for expedited construction with completion of the labs by May of this year. Applications for funding were also scored highly for their “urgency,” with 20 out of 100 points being possibly awarded in that category.

That said, few foresaw the unusual economic events of the last 18 months. However, most of additional needed financing should have been secured by the time economy nosedived.

Programs not up to snuff are located at UC campuses at Santa Cruz and Merced. Also behind is the $163 million Sanford Consortium facility involving UC San Diego, Salk, Scripps and Burnham. The fourth troubled effort is at the Buck Institute in Novato in Northern California. One could argue that others are behind schedule as well since they will not be completed by May, but instead one or two months later.

CIRM's press release on subject was a bit unusual. Normally the agency does not beat the drum about meetings of its working groups, where the official status report was discussed. But in this case, the lab construction program is one of CIRM's signature efforts.

The press release drew little attention. We found only two stories in a Google search: one about Buck by Ron Leuty in the San Francisco Business Times and the other about Sanford by Heather Chambers in the San Diego Business Journal.

One old rule in business holds that if you succeed 80 percent of the time, that is as good as you can expect. By that measure, CIRM's facilities program holds up reasonably well. But one of CIRM's foibles involves excessive rhetoric, such as bald statements that the facilities would be finished in two years.

Observers of the California stem cell scene would be well-advised to watch what CIRM actually does – along with what it promises to do.

San Diego's Stem Cell Consortium Still Hunting For Cash

San Diego's Sanford stem cell consortium is buoyed by the latest assurances that it will receive $43 million from CIRM to assist with its new research lab, but it still needs to borrow as much as $65 million more, the San Diego Union-Tribune reported today.

Reporter Terri Somers wrote:

"For months, the state could not sell bonds to support voter-approved projects such as the stem cell institute because it did not have an approved budget. And some lenders questioned whether the fiscally challenged state could make good on its promise to provide the consortium's funding. The escrow account should address those fears, said Louis Coffman, the consortium's vice president.

"UCSD Chancellor Marye Anne Fox also welcomed the news.

“We are happy to learn that we are now one step closer to building an important new stem cell research facility for the Sanford Consortium for Regenerative Medicine, which will enable researchers from the University of California San Diego, the Salk Institute, the Burnham Institute and The Scripps Research Institute to more effectively collaborate to find cures for some of the world's most devastating diseases,' Fox said."

Somers also wrote,

"'Now we can go to the market and say there is no risk associated with the California money,' Coffman said.

"To raise the rest of its financing, the consortium has selected Barclay's Capital as its investment banker to underwrite a bond offering, Coffman said.

"The underwriter typically agrees to buy a certain amount of bonds, and then sell them to investors on behalf of the consortium.

"The consortium has also applied for funding from the federal stimulus package, which would be administered through a grant from the National Institutes of Health, Coffman said. Any stimulus money received would reduce the amount of funding the consortium would have to raise through the bond financing, he said."

Somers reported that ground has not been broken on the project, which raises questions about whether the consortium can meet the CIRM completion deadline. The labs were to have been finished within two years, according to a CIRM news release May 7, 2008.

UCI Defends Lab Press Notice

The University of California, Irvine takes umbrage at our item that pointed out that the school did not credit the California stem cell agency (the California Institute for Regenerative Medicine) specifically by name in its press notice on the Oct. 24 ground-breaking for a stem cell lab financed in part with $27 million in agency funds.

The omission occurred in a news release sent out widely to the media. We characterized the omission as a minor PR gaffe and noted that one page on the UCI site carried a photo caption describing the lab as a "CIRM institute.'

Jennifer Fitzenberger, assistant director of media relations, sent us an email that said,

"Our stem cell center website and event invitation make very clear the new building will be a CIRM institute: http://stemcell.uci.edu/. CIRM is very clearly listed on more than one UC Irvine webpage in connection with our groundbreaking event, not just one as your blog item states."

The ground-breaking received extremely limited media coverage(three items in advancing of the event), based on a Google news search to this morning.

Here is a link to the news release that was issued on the day of the event. That release did mention the California Institute for Regenerative Medicine by its full name. Here is a link to the Sue and Bill Gross Stem Cell Research Center at UCI, which is the name of the stem cell research operation at the campus.

As we noted in the item below, this is not a major issue, at least for us. But CIRM directors have retained the power to approve the names of labs that they help finance – one indication of the importance that they attach to naming and the credit it implies. The reality is that none of these labs are going to be commonly known as CIRM facilities. Rather they will be referred by the names of the donors or some piece of vernacular originating on campus.

UC Irvine Breaks Ground on Stem Cell Lab

In a bit of a minor PR gaffe, UC Irvine announced its groundbreaking ceremonies on Friday for a new stem cell lab that will be partially financed with $27 million in CIRM funds without specifically mentioning the California stem cell agency by name.

The news release named Robert Klein and the Independent Citizens Oversight Committee, but nowhere was the phrase "the California stem cell agency" or "CIRM" used. The Independent Citizens Oversight Committee is the ungainly official name for the CIRM board of directors, but few Californians would make that connection.

One page on the UC Irvine web site did, however, carry a small rendering (see photo) of the lab which identified it as the "Sue and Bill Gross Hall: A CIRM Institute." All of this PR hooha makes little difference to the stem cell effort. However, CIRM directors have expressed their firm desire for PR credit by retaining the right to approve the naming of labs that they finance with public money. The names are not official until approved by CIRM directors.

UC Davis Moves Ahead on $62 Million Stem Cell Lab

Some nostalgic folks in Sacramento were perturbed years ago when the California State Fair abandoned its location in a seedy part of the river city.

Last week, however, one of those old Fair buildings officially began a transformation into a state-of-the-art stem cell research laboratory.

The occasion was the groundbreaking Friday for the $62 million project, partially funded with $20 million from CIRM. It was the first-groundbreaking for a CIRM facility in Northern California.

CIRM Chairman Robert Klein was on hand along with Claire Pomeroy, vice chancellor for Human Health Services and dean of the medical school at UC Davis. Pomeroy also is a member of the CIRM board of directors.

The 92,000-square-foot lab is scheduled to be completed in late 2009. Jan Nolta, professor of hematology and oncology and a regular attendee at CIRM meetings, is director of what is officially tagged the "UC Davis Institute for Regenerative Cures, a facility supported by the California Institute for Regenerative Medicine."

The first groundbreaking for a CIRM-funded facility occurred earlier this month at USC. The Trojan marching band high-stepped through those proceedings. There is no word on whether the Aggie band turned out for Pomeroy's affair.
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San Diego's Sanford Center to Seek 16 Disease Team Grants

In the unlikely possibility that you missed it, the San Diego stem cell consortium announced earlier this month that it snagged $30 million from a South Dakota philanthropist, T. Denny Sanford(pictured).

That will come on top of the $43 million the consortium received from CIRM to build its new lab on a bluff overlooking the Pacific Ocean. Some 245 scientists will work out of the facility.

However, Heather Chambers of the San Diego Business Journal reported that the group is still $27 million shy of collecting enough cash to build and equip the $115 million, four-story facility. It is scheduled to be completed by December of 2010, or the consortium could face penalties from CIRM. Construction is scheduled to begin in January.

Terri Somers of the San Diego Union-Tribune put together a piece on the donation and its impact. Buried in her story was an interesting note on the consortium's plans to seek as many as 16 grants from CIRM in its upcoming disease team grant round. CIRM appears ready, however, to limit applications to four from an individual institutions.

The consortium consists of four organizations, Scripps, Salk, Burnham and UC San Diego. Based on Somers' story, it appears that the consortium plans to have each organization apply for four grants, which could run to $20 million or so each. Currently CIRM is allotting about $210 million, not including loans, for its disease team grants.

Obviously, there is not enough money for 16 grants at $20 million each for the San Diego quartet/consortium, not to mention other likely competitors from San Francisco to Los Angeles.

But San Diego's ambitious plans provide some indication of how tough the competition is getting for California stem cell cash.

We should also note that the consortium is no longer known as the San Diego consortium. Its name is now the "Sanford Center for Regenerative Medicine, an Institute of the California Institute for Regenerative Medicine." We should additionally note that Sanford, owner of First Premier Bank, has joined a number of other wealthy individuals who are making hefty contributions to help advance science and medicine. Sanford Center officials say more donors are welcome to help make up the $27 million shortfall, although raising cash in the current economic climate may be a tad tough.

CIRM Lab Grants: UC Santa Cruz on Hold

The California stem cell agency's sweeping, $1.1 billion stem cell lab construction program appears to have hit what we call here in Mexico a "tope."

The Silicon Valley Business Journal is reporting that lab plans at UC Santa Cruz have run smack into that perennial California issue – water. The proposal to build a stem cell research facility on the campus is now on indefinite hold.

Just two weeks ago, CIRM directors approved a $7.2 million grant to help with the center. However, the Business Journal piece by Lisa Sibley said the project cannot proceed until the university resolves its water fight with the Santa Cruz City and County. At issue is where the campus will find the additional water for its future growth.

All of which could amount to a significant "tope," as the bone-jarring speed bumps in Mexico are known.

Campus officials are minimizing the impact, however. In response to a question from the California Stem Cell Report, campus spokesman Tim Stephens said,

"While the EIR (environmental impact report) for the biomedical facility was challenged in court, all parties have been participating in mediation talks to settle the litigation. We are very optimistic about the outcome of these talks and expect that construction of the biomedical building, which will house the stem cell center, could begin early in 2009."

CIRM is requiring lab grant recipients to complete their projects in two years(2010), an admirable goal but one that may be difficult in a state that is famous for lawsuit-happy environmentalists, slow-working government bureaucracies that must issue permits and approve plans and activist community groups, such as the glider enthusiasts that are balking at stem cell lab plans in the San Diego area.

For readers not familiar with California, water is an enormous issue in the state, which is basically a desert, especially in the most populated areas. In many cases, water must be piped in hundreds of miles to meet the needs of industry and agriculture, which are by far the largest users of water. Households come in a distant third.

As Mark Twain once remarked, "Whiskey is for drinking. Water is for fighting over."

(Editor's note: Re tope(pronounced tow-pay): For those of you who do not read all the details of how this website is produced, it is written and reported principally from a sailboat on the west coast of Mexico.)

Ballyhoo, Economics and California Stem Cells

In an exuberant essay in the leading newspaper in Silicon Valley, an official of the California stem cell agency has touted its $271 million in lab construction grants as bold evidence of "the economic might of the little stem cell."

David Lichtenger (see photo), chairman of the Facilities Working Group at CIRM and head of Integrated Facilities Solutions of Palo Alto, Ca., wrote the op-ed piece that appeared May 16 in the San Jose Mercury News.

He said,

"Stem cells are tiny. In fact they are microscopic. Yet, they might prove to be the mighty engine not only for medical advances, but also for the ailing California economy.

"The economic might of the little stem cell was boldly evident earlier this month when the California Institute for Regenerative Medicine (CIRM), the state's stem-cell agency, awarded $271 million to 12 universities and research institutions to build new stem-cell laboratories."

The economic impact of stem cell research was one of the main arguments behind passage of Prop. 71, which created CIRM in 2004. It continues to play a major role in the justification for CIRM's $3 billion in spending.

We believe the agency has a responsibility to tell the story of its work and to maintain and build public support. Call it marketing, public relations, public education or whatever. Fundamentally, it is all the same thing and quite necessary. Without continued public support, the agency becomes vulnerable to assaults from many sides.

However, long after the last Prop. 71 vote was counted, the grandiose economic claims from the campaign generated blowback, including a study from a UC Berkeley economist Richard Gilbert debunking them. The agency last year also seemed headed for production of another economic study to justify its existence. More recently the proposed $500 million biotech loan program promised handsome returns even at default rates of up to 50 percent.

All of which indicates a need for some perspective. CIRM leveraged its $271 million in lab grants into a $1.1 billion program that will certainly generate hundreds, if not thousands of construction-related job. However, the biotech industry, which goes well beyond stem cells, is a tiny player in the California economy. It accounts for something over 100,000 jobs, according to a state report, a mere piffle compared to the total workforce of 18 million in an economy that runs at around a mammoth $1.7 trillion annually.

And CIRM's $271 million does not even surpass the $356 million being spent on San Quentin's "condemned inmate complex."

That said, CIRM's lab grants have indeed generated a long overdue investment in the science side of California's infrastructure. CIRM deserves ample credit for handily leveraging its dollars. The agency is also preparing to make another substantial contribution this year to the state's intellectual capital with $66 million in training programs.

Lichtenger's essay was reasonably measured and nicely written. However, it is doubtful that stem cells will be the "mighty engine" for the "ailing California economy" any time in the foreseeable future. It behooves CIRM to exercise judicious restraint as it touts its achievements. Managing expectations is the key, and the best course is to avoid over-promising.


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Media Coverage, Lab Needs and a Proposal for a New CIRM Mantra

Here are a few more links to some of the Internet coverage concerning the CIRM meeting this week during which directors awarded $271 million in lab construction grants for stem cell research.

Chronicle of Higher Education -- Jeffrey Brainard put together a bit of an overview, including discussion of conflicts of interest at CIRM.

The Niche, blog of Nature Reports Stem Cell – Monya Baker touches on some of the aspects of the media coverage and the need for the labs.

The Biopolitical Times, blog for the Center for Genetics and Society – Jesse Reynolds critiques stories by the Los Angeles Times and San Francisco Chronicle on the lab awards.

Consumer Watchdog -- John M. Simpson says the CIRM board of directors should begin each meeting by repeating the following quotation from Claire Pomeroy, one of its members and dean of the UC Davis School of Medicine, "All Californians are paying for Prop. 71 so all should benefit from it."

Pravda to Marin: A Look at Media Coverage of CIRM's Stem Cell Grants

The California stem cell agency's $271 million lab construction effort gained additional attention today, ranging from Pravda in Moscow to Merced in the fields of California's agricultural central valley.

Some stories, including those in the New York Times and on the Xinhau news service, did not use CIRM's $1.1 billion figure for the total impact of the grant program, which includes additional contributions required by CIRM of the applicants and other expenditures that are linked to the labs.

Many of the stories in California focused sharply on the local angles in the program, rather than the national and international implications. In an odd story, Pravda, for reasons difficult to understand, zeroed in on UC Davis.

One editor for an international news organization told us he considered the grant announcement a "local" story, which I told him was shortsighted. Adding 800,000 square feet in research facilities to house 2,200 scientists is likely to have a significant impact in the global stem cell arena for decades to come.

Here in California, it was important news locally as well.

Terri Somers of the San Diego Union Tribune reported primarily about the San Diego Consortium for Regenerative Medicine and its $115 million research center. CIRM is popping for only $43 million of the total. She wrote:

"'The fact that we want to build a stem cell research facility here in San Diego and the state is willing to give us $43 million to help make that happen is pretty good,' said Louie Coffman, the consortium's vice president. 'Forty-three million dollars is a pretty good head start.'"

While Coffman is out beating the bushes for cash, he said the consortium plans to seek a loan. The facility includes extra lab space that it could rent to pay off debt.

Richard Halstead of the Marin Independent Journal also reported on the fundraising tasks ahead. He said,

"Now that it has the grant, the Buck Institute must figure out where it is going to find the other $20.5 million it will need to construct the building, plus at least another $1.4 million to stock it with equipment.

"'That is a big question,'said James Kovach, president and chief operating officer of the Buck Institute."

Halstead continued:

"Kovach said he will pursue several options simultaneously. He said philanthropic foundations that have adopted a results-oriented approach - 'what has been termed venture philanthropy' - should be interested in funding such a project."

Overall, a search this morning on the term "California stem cell laboratoraties" generated roughly 60 to 70 stories on Google News. Here are links to other stories: San Francisco Chronicle, Sacramento Bee, San Jose Mercury News, North County Times (San Diego area), Merced Sun Star, Madera Tribune, GlobeSt.com, Santa Cruz Sentinel, Earthtimes and Entrepreneur.com.

Beating the $1.1 Billion Stem Cell PR Drum

Most recipients of California stem cell largesse were quick to post news releases today dealing with their construction efforts backed by the state's stem cell agency.

UC San Francisco offered the most razzle-dazzle with multiple renderings, a campus map and a video. UC Irvine had a video as well. All the news releases offered a quick look at the specific impact at each location. More and technical details can be found in the applications themselves on the CIRM web site.

Here are links to all the recipient press releases we could find late this afternoon.

Buck Institute
San Diego Stem Cell Consortium – no release at the time of this writing
Stanford
UC Berkeley
UC Davis
UC Irvine
UCLA – no release at the time of this writing.
UC Merced
UC San Francisco
UC Santa Barbara
UC Santa Cruz
University of Southern California

New Stem Cell Labs for California: The $1.1 Billion CIRM Achievement

The California stem cell agency and 12 universities and research institutions today officially kicked off an unprecedented, $1.1 billion stem cell lab construction program that Gov. Arnold Schwarzenegger hailed as "good news" for both science and the economy.

The agency completed action on the grant program this morning and announced a new total figure for the building effort -- $1.1 billion instead of roughly $800 million. CIRM said the revised amount resulted from "additional institutional commitments for faculty recruitment packages and other related capital costs."

In a news release from CIRM, Schwarzenegger said,

"This will go a long way toward medical research that could save lives and improve them for people with chronic diseases. But also, this kind of public-private investment in a growing jobs sector is exactly the kind of good news our economy needs right now."

Robert Klein, chairman of CIRM, said,

"This Prop. 71 stem cell research facilities program is one of the largest building programs ever dedicated for a new field of medical science and it will deliver an impact that will be felt world-wide."

Alan Trounson, president of CIRM, said,

"These facilities will house basic and clinical researchers working collaboratively, with stem-cell-specific core labs literally ‘down the hall’ – an arrangement that is instrumental to our ability to accelerate the pace of research toward clinical application."

The news release from CIRM also quoted a number of the private donors who were tapped to provide additional funds to the institutions, including Eli Broad, whose foundation ponied up more than $50 million to UCLA and USC. He said,

"California is at the epicenter of stem cell research,.By creating new research centers and attracting the very best scientists from around the world, we will enable the rapid progress of one of the most promising areas of scientific and medical research today. The partnership between public institutions, the state, private foundations and donors demonstrates the unprecedented commitment California is making to stem cell research."

Also quoted by CIRM was Li Ka-shing, a Hong Kong philanthropist who contributed $40 million to UC Berkeley. He said,

"When I made a gift to support the establishment of the Li Ka Shing Center for Biomedical and Health Sciences at Berkeley, I was inspired by the passage of Prop. 71 and the promise of significant advances in stem-cell research."

The institutions receiving the government funding are the University of California campuses at Davis, Berkeley, San Francisco, Los Angeles, Merced, Santa Cruz, Santa Barbara and Irvine, the San Diego Stem Cell Consortium (which includes UC San Diego, Scripps, Salk and Burnham institutes), Stanford, USC and the Buck Institute north of San Francisco.

Eight of the applicants took a 9 percent reduction in the initially recommended amounts, opting to take the cash sooner rather than later.

CIRM's news release includes details about program, including a breakdown of what was requested and the amount granted.

Media Start to Roll on CIRM Lab Grants

The California stem cell agency called a news conference for this morning to trumpet its roughly $270 million in grants for stem cell lab construction. But even before the Los Angeles event occurred a number of stories and items popped up.

Three large, mainstream outlets that reach hundreds of thousands of readers or listeners carried generally positive reports.

A stem cell building "spree" was how Mary Engels described it in the state's largest newspaper, the Los Angeles Times, which generally has ignored the agency. Sabin Russell of the San Francisco Chronicle called it a lab construction "boom."

Russell also reported,

"This is an incredibly unusual opportunity that may never happen again, anywhere," said Ralph O'Rear, vice president for facilities and planning at Buck Institute for Age Research in Novato.

Buck is one of the institutions that applied for the grants.

The all-news radio station in San Francisco, KCBS, carried a brief item and probably will carry another later today. Coverage by radio and television is especially important for CIRM since most people get their news through those media. Radio stories on all-news stations also are often repeated a number of times throughout the day, magnifying the CIRM message.

On the smaller venues, the perspective on the lab program was more skeptical.

Chris Thompson on East Bay Express had a jaundiced view on his blog -- he referred to the grants as "hot, sticky money."

J. Wesley Smith, an attorney, author and foe of hESC research, quoted from the Chronicle story on his blog, Secondhand Smoke, and deplored the effort.

"I would have hoped that at a time when California is literally drowning in a $20 billion in deficit, that some restraint would be shown. But who was I kidding? This is the kind of moral corruption, pigs-feeding-at-the-trough kind of excess that undermines the people's confidence in government and our ruling institutions.

"Somebody ought to sue: Hint. Hint."

In Sacramento, both the California Healthline, an Internet news digest service from the California HealthCare Foundation and the Capitol Basement Internet news service mentioned the Los Angeles Times article in a roundup of California governmental news.

Today's news conference is likely to generate some television coverage in the huge Los Angeles market. More stories are likely to ripple out as the 12 recipient institutions send out their news releases in the days ahead. The more aggressive will ship out their stuff today.

CIRM, of course, will have its own news release. Look for it sometime after 11:30 a.m. PDT today, the scheduled time for the news conference.

Response from Grant Applicants on Klein Contact

In an earlier item concerning private contacts by Robert Klein, chairman of the California stem cell agency, with some of the applicants for $262 million in stem cell lab construction grants, we mentioned that we had queried some members of the CIRM board about whether they or their staff had been dealing with Klein on their applications. We also queried other applicants that do not have representation on the CIRM board.

CIRM has since acknowledged that Klein has been in contact with some applicants. The agency contends he has done nothing wrong despite a no-contact rule in the agency's bylaws. (See the "zeal" item below.)

However, for the record, we received responses from five institutions. Two shunted the query to other entities. Three addressed the question at least partially or completely. Of those, only one responded fully to the question of whether he or his staff had contact with Klein. That answer was no.

Klein, Zeal and CIRM's No-Contact Rule

The chairman of the California stem cell agency, Robert Klein, has apparently violated his agency's bylaws by contacting applicants for $262 million in stem cell lab construction grants scheduled to be approved this week.

CIRM, however, contends Klein did nothing wrong. One non-longtime CIRM observer called the violations "technical." And Klein's actions are not likely to have any significant impact on funding or result in sanctions on him personally.
According to the San Francisco Business Journal(see item below), Klein has been dickering with applicants in an effort to convince them to reduce the size of their grant requests by 10 percent if they receive the money sooner rather than later. CIRM's board of directors is scheduled to take up the grants in Los Angeles tomorrow.

Bylaws for CIRM's Facilities Working Group, of which Klein is a member, forbid him from contacting applicants. Article Seven, section four, states:

"Members of the Facilities Working Group shall not communicate with an applicant about an application to CIRM."

In response to a query about Klein's actions, Don Gibbons, chief communications officer for CIRM, said,

"Chairman Klein was specifically authorized by the Facilities Working Group at its last public meeting to work with the institutions on this project in his capacity as board chair. This supersedes the language you cite."

However, our review of the transcripts and a grant administration policy document from the April meeting showed no such authorization. A possibility exists that the authorization is somewhere in the 418 pages, and we asked Gibbons to provide a citation.

Gibbons said he was too busy with other matters today to provide a citation. He said,

"The Facilities Working Group approved the Facilities Grant Administration Policy with the understanding that Mr. Klein, in his role as chair, would carry out the negotiation."

It is not clear what sanctions, if any, might apply if Klein is found to be in violation of the bylaws. As for the grants themselves, in our view, it is unlikely that any might be affected by Klein's contact with applicants.

We queried John M. Simpson, stem cell project director for Consumer Watchdog, on Klein's actions. Simpson, who was at the Facilities meetings on April 4 and 5, said,

"Given the working group's bylaws it would have been better if Bob Klein hadn't been the one to contact grant applicants about taking less CIRM money if the entire grant were paid up front. I think the idea is a good one and supported it enthusiastically at the working group meeting as a way to avoiding making more cuts. I still do.

"Based on the discussion at the meeting, I understood that Klein was one of those that would be contacting applicants. I thought that as long as all applicants were treated equally and offered the same discount in return for taking the money up front there was no problem.

"Re-reading the the working group's bylaws today, I reluctantly conclude that in his zeal to maximize the impact of CIRM's $262 million, Klein may have technically broken the rules."

The no-contact clause in the bylaw has existed since 2006 and was drafted by James Harrison, outside counsel to CIRM. During the meeting when the language was adopted, Klein said,

"The purpose of having a committee here is that we are able to gather information generally; but once there's an application in, you can't discuss anything with them...there has to be a bright line created here."

CIRM board member David Serrano Sewell also commented in 2006 on what he described as "ex parte discussions." He said,

"It sort of just goes without saying and common sense that an applicant doesn't have a one-on-one conversation about their particular application. Should that discussion happen, a, it's inappropriate, it's unethical, and, c, it's going to have to be disclosed on some level."

However, the 2006 meeting, which we attended, was mainly considering the process prior to facilities group action. No one at that meeting discussed a situation where the chairman of the CIRM would negotiate some terms of a grant privately following the facilities group action, but before the grant came before the full CIRM board, which has final authority on funding.

At this year's April meeting of the facilities group, attorney Harrison presented language that would permit the reduction in the size of grants if applicants agreed to take the lesser amount up front. He did not mention the no-contact rule in the bylaws involving members of the facilities group. It appears, however, that no restriction exists on staff negotiating a hold-back on funding with grant applicants.

One final note on yesterday's item below, which was written before we turned up the no-contact rule. We raised a series of questions about whether Klein had contacted members of the CIRM board who had lab grant applications pending this week. We asked CIRM to respond to those questions. Here is Gibbons' response:

"The discount proposal was discussed at the April 5 public meeting of the Facilities Working Group, at which time Citizens Watchdog's John Simpson said it 'bordered on brilliant,' per the transcript on the CIRM web site.

"All discussions on the proposal subsequent to that time have been conducted in collaboration with CIRM legal counsel in full compliance with all regulations governing CIRM, so the chair did not negotiate with any board members."

We have queried members of the CIRM Oversight Committee who have applications pending concerning contacts with Klein. We will report on their responses tomorrow, but so far it appears that none had contact.

(The actual discussion of the "hold-back" or "discount" plan begins on page 45 of the transcript of the April 5 meeting.)

$800 Million in New Stem Cell Labs: Haggling Over 10 Percent

The California stem cell agency and some of the nation's top stem cell research institutions are dickering over the final details of perhaps the world's largest-ever wave of new lab construction for human embryonic stem cell research.

Reporter Ron Leuty of the San Francisco Business Journal pulled together pieces of the process in a report Friday. The implications of his article raise fresh questions about the ongoing conflicts of interest among CIRM directors.

Twelve institutions, 10 of which have representatives on the CIRM board, are seeking $336 million from CIRM this week. A CIRM panel has approved $289 million, leaving a shortfall of about $47 million. The agency required applicants to match the grants plus more, pushing the total amount of construction proposed to $832 million. Robert Klein(see photo), chairman of CIRM, offered a "hold-back" plan at a CIRM meeting in April. John M. Simpson of Consumer Watchdog reported on April 7 that CIRM grant reviewers expressed support for asking some institutions to take less if they get their money up front.

Leuty reported fresh details of how this is playing out in the final days before CIRM directors meet Tuesday afternoon in Los Angeles. Leuty said Klein is telling institutions that if they agree to lower their requests by roughly 10 percent, they will get the cash sooner rather than later.

Leuty wrote:

"'CIRM has been very aggressive about putting this idea forward,' said Chris Shay, project manager for the planned $200 million, 200,000-square-foot headquarters for the Stanford Institute for Stem Cell Biology and Regenerative Medicine. 'They don't want to do any more cutting.'"

Leuty said Stanford has already made a counter to the 10 percent offer.

He also wrote:

"'We're the only independent (applicant),' said Ralph O'Rear, vice president of operations for the Buck (Institute), which could receive $20.5 million in CIRM funding for a 65,700-square-foot, $70.1 million facility. 'We don't really have the kind of means and the resources that Stanford or USC have, so (early CIRM cash is) really something more meaningful for them than us.'"

Leuty continued:

"'We're interested in doing it if we can make it pencil out for us,' said Glenn Lucas, executive vice chancellor at UC Santa Barbara, which could land $3.5 million in CIRM funds for a $6.4 million project. 'They're essentially asking us to take less money up front to buy down the risk.'"

Last week Nature magazine warned of "cronyism" at CIRM because of the dual roles of medical school and research institution executives who also serve as directors of CIRM. In the case of the bargaining over the 10 percent discount, some questions arise:

-- Have Klein or others at the agency discussed the discount plan outside of public meetings with CIRM directors whose institutions would be financially affected?

-- Have the institutions' staffs informed their deans/CIRM directors of the negotiations or sought their advice?

-- Have the deans/directors given advice formally or informally to their staffs about negotiating with CIRM or Klein?

We are querying CIRM concerning these matters. We will carry an update on its response Monday afternoon.

We should also note that CIRM directors whose institutions are applying for the grants will be barred from voting on or even discussing them at this week's meeting.

(Editor's note: An earlier version of this item used the expression "10 percent discount" in the third paragraph. That has been changed to "hold-back.")

Sunshine and $66 Million in Stem Cell Training Grants

The California stem cell agency is proposing a new, $66 million round of training grants that will reach into the undergraduate level as well as honing the skills of more advanced students and scientists.

The proposals also offer an fine opportunity for CIRM to break out of its usual, closed-door grant review procedures and open the process to overdue public scrutiny.

The training plans will come up next week for conceptual approval at CIRM's Oversight Committee meeting. The proposals include a three-year, $48 million offering aimed at pre-doctoral, postdoctoral and clinical fellow levels. The second, $18 million training plan targets lower academic levels and could involve as many as 100 students over a possible three-year period.

The latest proposals are a continuation of an effort begun in September 2005, when CIRM approved its first-ever grants, $39 million for training 170 scientists over three years. Those grants were reviewed behind closed doors by scientists whose financial interests are not publicly disclosed, an arrangement that has persisted to this day.

Closed door reviews are a long-standing custom in the scientific community. Changing that process is uncomfortable for many. CIRM has argued that the private process is necessary to encourage candid comments from reviewers and to avoid embarrassing rejected applicants. Unspoken is the possibility that disappointed applicants might later vent their displeasure on the CIRM grant reviewers, perhaps by acting negatively on the reviewers' own grant applications before the NIH or other institutions or taking some other professional retaliatory action.

Applications for the CIRM training grants, however, will come from institutions – not individuals. It is very difficult – although probably not impossible – to embarrass, for example, UC Berkeley, especially during a review of an application for a training program.

Some have argued that CIRM should not diverge from NIH closed-door review practices. However, CIRM and the NIH are much different animals. The NIH is subject to control by the president and Congress. CIRM is all but immune from fiddling by the governor and the legislature because it is enshrined in the state Constitution and given special protection under the terms of Prop. 71.

CIRM officials have said that the agency's review process does not need to be changed because no problems have come up. However, an ounce of prevention can help to avoid unexpected scandal. No one last year would have predicted the mess that resulted when one CIRM director intervened with CIRM staff in an attempt to secure a grant to his institution. No one would have predicted that the director's action would come as the result of advice from the chairman of CIRM, who is an attorney intimately familiar with CIRM law and rules.

While its scientific reviews are closed, the stem cell agency has conducted public hearings on the construction phase of applications for $262 million to build stem cell labs. John M. Simpson, stem cell project director for Consumer Watchdog, participated in those open sessions.

In response to a query, he said they worked out well. He added,

"The Facilities Working Group review of applications for funding laboratories was public and everyone benefited. The scientific review was secret, implying that it's perfectly OK to embarrass an institution because it can't build a building, but that it's wrong to suggest publicly it can't do decent science.

"It's time to open the closed scientific brotherhood to scrutiny and conduct the scientific reviews of the training programs in public. What do scientists have to hide?"

Earlier this week, Nature magazine warned of "cronyism" at CIRM and called for "strong governance" of the stem cell agency. However, the political realities in California are such that the built-in conflicts of interest on the Oversight Committee are not going to disappear any time soon.

Letting a little sunshine in on this round of training grants would be salutary for CIRM and well serve both its own interests and the interests of the people of California.

San Diego UT: Down with Gliders, Up with ESC

"Lamentable in the extreme" – that's how the San Diego Union-Tribune characterizes the opposition of glider airplane fans to the $115 million stem cell research facility proposed in La Jolla.

The lab is being planned by the San Diego Consortium for Regenerative Medicine, which wants $50 million from the California stem cell agency to help build it.

An editorial in the San Diego paper this week cited the "enormous potential" for development of therapies at the laboratory and said,

"It would be a tragedy of enormous proportions if glider advocates succeeded in snuffing out this promising initiative."

It should be noted that embryonic stem cell research is a hot issue in the San Diego area, which has a strong, conservative element. The newspaper's editorial on behalf of the consortium did not contain the word "embryonic," which we assume is deliberate, although the newspaper has supported embryonic stem cell research in the past.

The editorial also contained more details on the opposition. It said:

"The Associated Glider Clubs of Southern California and the Torrey Pines Soaring Council are attempting to kill the project because it would be built on North Torrey Pines Road near the Torrey Pines Gliderport(see photos from the Associated Glider Clubs). The unpaved airstrip, on land owned by UCSD, is used intermittently by glider pilots, while a larger number of hang-gliders use the nearby cliffs to launch into flight over the Pacific.

"The new research lab, about 60 feet tall, would have no impact on the hang-gliders. But there is fierce disagreement over whether it would interfere with conventional glider operations, which are relatively few and scattered throughout the year.

"Opponents claim the new building would force closure of the gliderport, an assertion they also made unsuccessfully in their bid to prevent UCSD from building a 14-story dormitory on a nearby parcel. Supporters of the lab point out, however, that it would be no taller than the surrounding eucalyptus trees, which glider pilots have been negotiating for years. An environmental impact report compiled for UCSD concludes the lab would not prompt the end of glider operations, but that it could require pilots to alter their flight patterns. In the end, both the California Coasstal Commission and Caltrans' aeronautic division must issue permits for the lab's construction."

The newspaper also printed two letters concerning the project , including one from Rolf Schulze, president of the Associated Glider Clubs of Southern California. He commented on the meeting Monday night on the environmental impact report for the laboratory, which the newspaper did not cover. Schulze said:

"Some speakers in opposition to the location of the stem cell facility not only mentioned their vote for the stem cell initiative in 2004 but also their personal interest in the anticipated benefits of such research due to their own, or a relative's illness, which could perhaps be cured.

"UCSD owns many other nearby sections of land that would be even more suitable for the stem cell facility, while not resulting in the destruction of a world-renowned and historic aviation facility used by Charles Lindbergh and many other aviation pioneers."

Chippewa to San Francisco: The $758 Million Stem Cell Media Challenge

The Associated Press files stories every day to 1,700 newspapers and 5,000 radio and television outlets in the United States. So when it reports on California stem cell news, the stories have an impact – one that goes well beyond, shall we say, the surf-scrubbed sands of La Jolla.

The case in point is an article by reporter Terri Somers of the San Diego Union-Tribune, the most diligent biotech reporter in the state. She writes more often on biotech and stem cell research than any other newspaper reporter in the state.

But her stories usually are only seen – at least the print versions -- in San Diego, far from the key East Coast news axis of New York and Washington, D.C.

However, she wrote Sunday about a $115 million stem cell research complex proposed in La Jolla – a structure that could be funded with as much as $50 million from the California stem cell agency.

The AP decided to pick up the story – rewrite it in a much shorter version, but without crediting Somers or the San Diego paper – a standard and legal practice for the news service. The AP then sent the story out across a good portion of the globe. It appeared on websites of more than 100 news outlets ranging from Dallas to the UK. Time magazine carried it as did ABC, CBS, Forbes, the Washington Times, an Arizona TV station, a Florida newspaper, CTV in Canada, FoxNews, not to mention the Chippewa Herald in Wisconsin.

The AP missed the much larger story – that the California stem cell agency is about to set off a $758 million, stem-cell-lab-building spree, the likes of which have never been seen before in this country. But that is not to disrespect The AP, but to explain a little bit about how news works.

It takes a lot to push a story out into the national or international market. It also takes luck and receptive reporters and editors. The California stem cell agency, however, has a chance to make major headlines come May 6 when it approves a couple hundred millions of dollars to help build those nearly three-quarter-of-a-billion dollars in labs.

But CIRM can only do it by starting to prime the news pump now, alerting key reporters and editors and providing them in advance with the background needed to make sense out of a somewhat complex process: Photos, drawings, map and chart material, good quotes (not the gobbledygook that sometimes comes out of the mouths of some top CIRM officials) and referrals to knowledgeable and friendly third party experts who can explain the significance of the effort in language that readers can understand.

In California, the mainstream media has so far successfully largely ignored the lab grant program, with the notable exception of Somers. Ironically, the San Diego project, while quite substantial, is not the largest. Stanford has proposed a $200 million stem cell research center. The San Francisco Bay area altogether could see something like $400 million in stem cell lab construction if the visions dancing in the heads of the scientists materialize. But nary a peep about the magnitude of the program has been seen in the mainstream media in Northern California.

Meanwhile, Somers, who like most reporters is undoubtedly underpaid and under-appreciated, will have to be satisfied with the psychic reward of seeing her work spread, albeit anonymously, throughout the world.

San Diego Consortium's Stem Cell Lab Plans and How They Came About

The folks in San Diego call it a "collaboratory" – a $115 million structure to be built under the auspices of four of the world's stem cell research powerhouses.

They are the Scripps, Burnham and Salk institutes and the University of California campus at San Diego – all united under the banner of the San Diego Consortium for Regenerative Medicine.

Reporter Terri Somers of the San Diego Union-Tribune Sunday took a front-page look at the project (see drawing), which is seeking $50 million in construction funding from the California stem cell agency. It is scheduled to make decisions in early May on grant applications from throughout California that would led to $758 million in stem cell lab construction.

Somers story was chockablock with interesting stuff. She wrote:

"It took three men the scientists fondly refer to as 'the town elders' – real estate mogul Malin Burnham, Padres owner John Moores and Qualcomm founder Irwin Jacobs – to help it become a reality.

"'Without their pressure, encouragement and support, (the consortium) wouldn't have happened,' said Fred Gage, a stem cell researcher at Salk."

(Moores was a key financial supporter of CIRM, purchasing $2 million in bond anticipation notes from CIRM when its finances were tied up in litigation.)

Somers also reported,

"An out-of-state philanthropist, whom the consortium declined to identify, has pledged to donate $30 million, with $10 million paid upfront. The remainder would be in $2 million annual increments."

Somers said that Moores gave the consortium $250,000 in seed money and requested the institutes come up with $50,000 each. The 7.5 acres for the building comes from UCSD and is valued at $15 million,

She reported that collaborative efforts sometimes have had difficulty in the past, including one involving UC San Francisco and Stanford. Somers wrote,

"The difficulties arise from every institution having its own culture. Smaller institutes relish their autonomy and operating freedom in contrast to larger, more bureaucratic institutions, such as UCSD.

"Issues ranging from who will be the boss to fear of losing donations, or disputes over who will own scientific discoveries, often kill such partnerships before they start, said Zach Hall, founding president of the California Institute for Regenerative Medicine.

"'It's a testament to the vitality and sense of community that is in San Diego that this has happened,' said Hall, who is now retired. Three years ago, when putting together the strategic plan for the state stem cell institute, Hall listed fostering collaboration as a top goal.

"'For these San Diego institutes to overcome all the obstacles is a real payoff for the long-term vision that San Diego had years ago in setting aside some space for the development of scientific activities,' he said."

CIRM scientific reviewers ranked the project at the top of the 12 lab grant applications. Facilities reviewers ranked it No. 4.

However, that does not matter much to some folks who are not pleased about the project. They say it would mean the end to the Torrey Pines Gliderport, which is in the National Register of Historic Places. A meeting is scheduled for Monday night at which some of the concerns of the glider folks are expected to be aired. In Napa, some 600 miles to the north, on Wednesday night, the state Historical Resources Commission will consider whether to expand the borders of the Gliderport.

Somers story picked up some reader reaction on the Internet, which can be found at the end of her story or here. One reader complained about "greedy scientists fighting over patents." Another decried "welfare for professionals in these lean financial times." One reader suggested the lab be located inland in El Cajon to save money. Responded another reader, "All the Right Wing Christian Coalition fanatics in that town would chase them out. EL Cajon is only known for strip bars, meth dens and a nut case mayor."

(An earlier version of this item described the Monday meeting involving the gliderport as a protest meeting. The meeting is actually part of the EIR process.)