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

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

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

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

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

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

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

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

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

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

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

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

Carrie Miceli
UCLA photo

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

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

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

Stan Nelson
UCLA photo

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

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

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

The news release said,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In her petition, Memarzadeh said,

Sanaz Memorzadeh
UCLA photo

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

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

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

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

Eugenio Cingolani
Cedars Sinai photo

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

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

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

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

California Stem Cell Agency: Two Researchers Seek to Overturn Grant Review Rejection

Two University of California scientists whose applications for millions of dollars were turned down by reviewers at the California stem cell agency are asking its governing board this Wednesday to overturn the rejections.

They are Jonathan Lin of UC San Diego and Sophie Deng of UCLA, who are seeking $3.1 million and $3 million respectively.

They have filed appeals using a process known as extraordinary petitions, which a blue-ribbon report by the Institute of Medicine last week said should be abandoned. The study on the performance of the $3 billion agency said the petitions “undermine the credibility and independent work” of grant reviewers.  However, under state law stem cell researchers and the public have the right to address the CIRM board on any issue whatsoever.

In recommending abolition of the petitions, the IOM cited the flap in Texas concerning its $3 billion cancer research program. Reviewers there resigned en masse to protest what they considered abuse of the grant review process.

Lin and Deng's petitions were written prior to the release of the IOM report.  But they come as the agency is already examining ways to tighten up its free-wheeling appeal process, which this year has seen a record number of appeals, backed by emotional presentations from patients and lobbying by the former chairman of the agency, Bob Klein.

In the grant round to be considered Wednesday, reviewers have approved 12 applications out of 27 generated by the “New Faculty Physician Scientist Translational Research” RFA. The approved grants have scientific scores ranging from 87 to 65. Positive decisions by reviewers are almost never overturned by the CIRM board. The approved applications total $36.2 million, according to California Stem Cell Report calculations. The agency budgeted $80 million for the round. One application, the proposal that scored 65, was approved for what CIRM calls “programmatic” reasons, which have been defined as “issues beyond scientific merit, such as disease representation and societal impact.”

In her petition, Deng challenged the reviewers' remarks that her proposal was not worthy of funding because it is “not exceptionally novel.”

Sophie Deng
UCLA photo

She wrote,

“This comment reflects a misunderstanding of translational research. There is a huge gap between a novel discovery and delivering a new therapy to the clinic; translational research is about bridging this gap, not the novelty of the discovery. If the discovery is not translatable, it is meaningless for patient care....Our approach might not be the most novel, but it has the highest potential to bring a new therapy to the clinic.”

Deng also said that “multiple criticisms” in her review “reflected flawed understanding” of its clinical aspects.

Lin's petiton was briefer. He said an attempt to approve the application for programmatic reasons during the review failed because “CIRM was already funding AMD (age-related macular degeneration), and that significant progress was being made elsewhere in the world.”

Lin said,

Jonathan Lin
UCSD photo

“I contest these claims because CIRM has not funded AMD-related research in prior New Faculty Physician Scientist Translational Research RFAs. Furthermore, stem cell research to treat AMD remains in basic science, preclinical research, and clinical safety phases in California. Significant research and clinical studies are still ahead before stem cells can be approved for therapeutic use in patients with AMD.”

CIRM did not disclose the scores of either Lin or Deng. Only the scores of approved applications were listed for this meeting. In some cases in the past, scores of some rejected grants have been listed on the CIRM web site. The agency did not disclose the names of the other applicants or their institutions. 

IOM Recommends Sweeping Changes at California Stem Cell Agency

A blue-ribbon study of the $3 billionCalifornia stem cell agency today said the program has “achieved many notable results,” but recommended sweeping changes to remove conflict of interest problems, clean up a troubling dual-executive arrangement and fundamentally change the nature of the governing board.

The recommendations from the 17-month study by the Institute of Medicine (IOM) would strip the board of its ability to approve individual grants, greatly strengthen the role of the agency's president, significantly alter the role of patient advocates on the governing board and engage the biotech industry more vigorously.

Harold Shapiro, chairman of
IOM-CIRM  panel
Princeton University Photo

Harold Shapiro, former president of Princeton University and chairman of the IOM study panel, said, “Overall, CIRM (the California Institute for Regenerative Medicine) has done a remarkably good job” in giving the state a prominent position in regenerative medicine. But he said the stem cell field has “evolved”and CIRM needs to change with it.

As for turning research into cures, the report said,

 “The challenge of moving its research programs closer to the clinic and California’s large biotechnology sector is certainly on CIRM’s agenda, but substantial achievements in this arena remain to be made.”

Asked for comment, J.T. Thomas, chairman of the CIRM governing board, said it was premature to offer an opinion on the report, which will be presented to directors Dec. 12 at their Los Angeles meeting. (See here for the full text of Thomas' remarks.)

The study was conducted at the behest of CIRM, which paid the IOM $700,000. The IOM is a prestigious non-profit organization that was created in 1970 to provide authoritative advice to policy makers and the public.

In 2010, when directors authorized the study, Robert Klein, then chairman of the CIRM board, and other board members said that they hoped the study would lead to another multibillion dollar state bond issue to support the agency(see here and here). Duane Roth, a San Diego businessman and co-vice chairman of the CIRM governing board, was the lone no vote on the study. He warned directors that that they could not “go in just sort of blind trust that (the IOM is) going to reach the conclusion you want them to reach.”

The agency will run out cash for new grants in four years. Currently California remains in the throes of state budgetary problems, and the agency has put on hold talk of another bond election. It has also broached the possibility of seeking private funding.

The IOM report said the agency should develop a full-blown “sustainability platform” and plans that would spell out its likely financial structure and future rules on grants and their administration, including intellectual property.

The study echoed concerns and complaints about CIRM's operation that were aired even before the agency was officially created by voters in 2004. One of those involves the built-in conflicts of interests on the CIRM governing board. As of September, 92 percent of the $1.7 billion handed out by the agency had gone to institutions linked to persons serving on the 29-member board.

The report said,

“Far too many board mem­bers represent organizations that receive CIRM funding or benefit from that funding. These com­peting personal and professional interests com­promise the perceived independence of the ICOC(the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”

The IOM cited an ongoing scandal in Texas dealing with that state's $3 billion cancer agency. The flap has led to mass resignations of the agency's grant reviewers. The IOM said,

“Recent controversy surrounding the Cancer Prevention and Research Institute of Texas grants process illustrates the importance of rigorous scientific review free from inherent or perceived conflict and the consequences when these boundaries appear to be breached.”

However, the IOM press release said,

“Because the committee was not charged with reviewing CIRM's past funding decisions, it did not identify any specific cases of conflict.”

The IOM surveyed members of the board (ICOC) about conflicts of interest. The report said,

 "While a majority of respondents stated that personal interests did not play a role in their work on the ICOC, some responses were more equivocal. One respondent replied that it was 'hard to tell' given that 'so many decisions take place off camera in secret meetings,' while another acknowledged that ICOC members are human, and of course their decisions are influenced by personal beliefs and interests."

To help deal with conflicts of interest, the IOM recommended that the CIRM governing board not be allowed to approve individual grants. Instead, the board would be given a slate of applications that would be approved as a block. All CIRM board members would be removed from the grant review committee and the grant review process would be turned over to the president of the agency, currently Alan Trounson.

The IOM recommended that a majority of the board consist of “independent” members and said that the board should not be increased beyond its current 29 members, although it could be shrunk.

Conflict of interest rules should be revised to deal with personal conflicts, which could have a major impact on the 10 patient advocate members of the board but also other directors and possibly staff who have family members with health issues. The report said,

“California law focuses primarily on financial conflicts of interest, but the committee believes that personal conflicts of interest arising from one’s own or a family member’s affliction with a particular disease or advocacy on behalf of a particular disease also can create bias for board members. Studies in psychology and behavioral economics show that conflict of interest leads to unconscious and unintentional 'self-serving bias' and to a 'bias blind spot' that prevents recognition of one’s own bias. Bias distorts evaluation of evidence and assessment of what is fair.”

The IOM said that the board is much too involved in operational matters, including the chair and the two vice-chairs. The report said,

“The board should transfer management responsibilities to management so it can provide truly independent oversight and evaluation of management, strategic planning, and broad direction for resource allocation.”

The IOM repeatedly and favorably cited a 2009 study by California's Little Hoover Commission, the state's good government agency. It noted that CIRM rejected most of the commission's recommendations. The IOM also cited recommendations by the agency's own “external review” panel in 2010 and suggestions this year from the first performance audit of the agency, which cost CIRM $234,944.

Many of the IOM's recommendations would require either legislative approval or another ballot initiative. However, changes in the Prop. 71, the ballot initiative that created CIRM, require a politically difficult super, supermajority vote (70 percent) of the both houses of the legislature and the signature of the governor. The requirement was written into the 10,000-word initiative and has been used by CIRM to block legislation that it did not favor.

Here is brief rundown on some of the other IOM recommendations:

• Greater engagement with industry to commercialize stem cell research. Noting that industry has received only 6 percent of the agency grants, the report said business representation on CIRM working groups and other committees “should be enhanced to leverage industry’s expertise and resources in product development, manufacturing, and regulatory approval in support of the ultimate goal of bringing therapies to patients.”
• Elimination of the current process in which applicants rejected by reviewers appeal publicly to the governing board. Noting that 32 percent of “extraordinary petitions” have been successful, the report said they “undermine the credibility and independent work” of grant reviewers. Instead appeals would heard only by staff behind closed doors.
• Creation of a new scientific advisory board, appointed by the CIRM president with a majority from outside of California, instead of multiple advisory groups. The report said,“Such an external board would be invaluable in vetting ideas for new RFAs, suggesting RFAs that otherwise would not have been considered, and helping CIRM maintain an appropriate balance in its research portfolio. Input from this board would help CIRM make fundamental decisions about dealing with challenges that cut across particular diseases, decide which discoveries should progress toward the clinic, and determine how best to engage industry partners in developing new therapies.”
• Funding of programs on bioethics and regulatory problems. The report said,“It is difficult for researchers to find appropriate funding for stem cell-specific ethics and policy work, and filling this funding gap is well within CIRM’s budget.”

One final note: As mentioned earlier, Duane Roth, co-vice chairman of the agency, was the only no vote on the board when it authorized the IOM study in 2010. The IOM today said,

“The critical tasks performed by the vice chairs should be reassigned to management. In particular, the important tasks of government relations and corporate relations both should be carried out by staff reporting to the president rather than by the vice chairs of the board.”

For more excerpts from the report, see this item.

,  

Update on Move To Curb Researcher Appeals at California Stem Cell Agency

Directors of the $3 billion California stem cell agency are still mulling details of changes in their free-wheeling and sometimes emotional appeals process for grant applications that are rejected by the agency's reviewers.

A special task force of directors met last week for the second time to discuss the likely alterations. Kevin McCormack, spokesman for the agency, said the group made no decisions. Another meeting will be held later at a date to be determined. The task force's recommendations will then go before the full board, probably in late January.

McCormack said members of the panel have asked for “more details regarding the process that would be employed if the appeals and extraordinary petition processes were merged.”

The agency has an odd, bifurcated appeals process. Early in its existence, the agency said appeals of reviewer decisions could be based only on conflicts of interest. However, researchers have a right under state law to speak to the governing board in public on any issue whatsoever. As some researchers began to use that avenue to ask for reconsideration of their applications, the CIRM board created what it called “extraordinary petitions” in an effort to control the process and limit appeals. Both the “appeals” and “extraordinary petitions” are, in fact, appeals but on different grounds and employing different mechanisms.

The task force was created in September after directors complained about “arm-twisting” and “emotionally charged presentations” in connection with a record number of appeals earlier this year.

Here is a link to an item about the task force's first meeting. Here is a link to an agency summary of the task force's deliberations prior to last week's meeting. The transcript of the session should be available on the CIRM web site within the next two weeks. It will be found under the meetings section of the web and then under the heading for the task force's November session.

California Stem Cell Agency Still in Talks on $40 Million for StemCells, Inc.

The California stem cell agency and StemCells, Inc., are still trying to reach agreement on a deal in which the company would receive $40 million from the state's taxpayer-funded research effort.

The sticking point is the $40 million in matching funds required from the Newark, Ca., firm under the terms of the two awards approved in July and September. The latter award was okayed on a 7-5 vote by the governing board after it was rejected twice by the agency's reviewers.

On Monday the California Stem Cell Report queried the agency about the status of the awards. Kevin McCormack, the agency's spokesman, replied,

“We are still in talks with them over the terms of the funding. Hopefully, we'll have an agreement soon.”

He did not elaborate further.

CIRM staff normally reviews applications after they are approved by the agency's governing board to be sure that all conditions are being met. However, in the case of the September award to StemCells, Inc., CIRM's governing board took the unusual step of publicly stating that the firm must demonstrate it has the $20 million in matching funds before it receives any payments from CIRM. The board did not take that sort of public position on the $20 million grant approved earlier in the summer, although matching funds are required in that case as well.

The former chairman of the $3 billion stem cell agency, Robert Klein, appeared twice before the board to lobby for approval of the second award to StemCells, Inc., which is a publicly traded firm.. It was the first such appearance by Klein before his former colleagues since leaving the agency in June 2011.

Action on the StemCells, Inc., awards attracted attention from the Los Angeles Times last month. Pulitzer Prize-winning columnist Michael Hiltzik wrote that the process was “redolent of cronyism.” He said a “charmed relationship” existed among StemCells, Inc., its “powerful friends” and the stem cell agency.

Texas Flap Looms Over California Stem Cell Agency's Grant Appeals

In nine days, the California stem cell agency plans to take another crack at finding ways to curb its free-wheeling appeal process involving scientists whose applications for millions have been rejected by reviewers.

It is a matter of considerable interest to researchers who need the cash to keep their labs running and remain in good standing with their host institutions.

The stem cell agency's governing board this fall created a task force to deal with the appeals issue after a record-breaking number of researchers made public appeals featuring emotional patient advocates. Even the former chairman of the agency, Robert Klein, made a two-time pitch for one applicant. Board members later complained publicly about “arm-twisting,” lobbying and“emotionally charged presentations.”

The agenda for the Nov. 30 task force meeting in Oakland -- with teleconferencing sites in San Francisco, Irvine, Palo Alto, Seattle and Rochester, N.Y. -- contains few clues on what the panel is hoping to specifically accomplish in next week's 90-minute session.

But interested researchers can check the transcript from the Oct. 24 meeting, during which CIRM President Alan Trounson described the problem as “very critical.” He said,

“I think this is a very serious matter that could really bite us very hard in a similar way to what's happened in Texas. Unless we come up with some kind of process that really addresses the science, it's a very large concern.”

Trounson's Texas reference was to the mass resignations of reviewers at that state's $3 billion cancer research effort. Questions have been raised about integrity of its grant review process and the program's political and biotech industry relationships. James Drew of the Dallas Morning News produced a bit of an overview this week. In another piece, Eric Berger of the Houston Chronicle provided quotes from emails from the infighting on a controversial $18 million grant.

Changes in California's grant appeal process may well be also discussed at the agency's board meeting Dec. 12 in Los Angeles. The board hopes to wrap up its action by late January.

Here is a link to an item with more specifics on material presented to the task force in October. Here is a link to an August 2012 list of articles and documents related to the CIRM appeals process.

Interested parties can address comments to the agency at info@cirm.ca.gov.   

Viacyte, bluebirdbio Win About $10 Million Each from California stem cell agency

BURLINGAME, Ca – Directors of the California stem cell agency this morning approved $19.5 million in awards to two companies for research aimed at completing an early stage clinical trial within four years.

The cash went to Viacyte, Inc., of San Diego, Ca., slightly more than $10.1 million for a diabetes project, and to bluebirdbio of Cambridge, Mass , $9.4 million for a B-thalassemia effort. CIRM directors approved the awards with virtually no discussion. The agency is limited to funding research by the companies that is performed in California

The awards are part of the agency's push to commercialize stem cell research and engage industry more closely. All of the six applicants came from industry. However, the firms that were turned down were not identified with the exception of Athersys, Inc., of Cleveland, Ohio.

CIRM Director Steve Juelsgaard asked for a discussion of an appeal by Athersys, Inc., of Cleveland, Ohio, whose application was rejected by reviewers who scored it at 60 out of 100. The two winners had scores of 88 and 73. .However, following a brief look at the application, the board rejected Athersys' application along with other proposals turned down by reviewers. .

Click on this link for the CIRM press release on the awards.  

Athersys Appeals California Rejection of $8 Million Proposal

One of the co-founders of Athersys, Inc., of Cleveland, Ohio, is attempting to overturn reviewer rejection of his company's application for an $8.3 million award from the California stem cell agency to assist in a clinical trial for a therapy for stroke victims.

The application by Robert Mays, who co-founded Athersys in 1995 and is head of neuroscience at the publicly traded firm, was turned down by reviewers who gave it a scientific score of 60 out of 100. Reviewers expressed “concerns related to limited preclinical data, lack of evidence that this therapeutic approach will benefit stroke, and concerns regarding manufacturing within the proposed timeline.”

A document from Mays that CIRM released said reviewers' objections could be addressed by “information that may not have been adequately conveyed at the time or with new information that has since become available.” The document laid out several “recent” studies that it said supported its pitch for funding in a phase two clinical trial.

CIRM's review summary also raised the question of how much of the work would be done in California. The stem cell agency is limited to funding research in California.

May's appeal said,

“We are conducting the phase 2 clinical study at many high volume clinical sites across the U.S., including in California. With respect to the process development work intended to support scaled-up / optimized manufacturing for subsequent phase 3 studies and commercialization, we plan to complete key elements of this work in California, with collaborators such as UC-Davis. We are in the process of building up our California beachhead, and plan that several California-based employees will manage the clinical study, as well as the process development work. Ultimately, success in the phase 2 clinical study and in the process development work would lead to the establishment of a manufacturing plant in California to support later stage development and commercialization in the western half of the U.S. and Asia.”

The Athersys application came in CIRM's first strategic partnership round. Two out of six applications were approved by reviewers. The winners, whose identities are being withheld until tomorrow by the stem cell agency, received scores of 88 and 73. The scores of the other applicants and their identities were also withheld by the agency.

The Athersys appeal will come before the CIRM governing board at its meeting tomorrow in Burlingame, Ca.

Texas Science Flap Cited as California Stem Cell Agency Eyes its Own Processes

OAKLAND, Ca. – Meeting against a backdrop from Texas that involves conflicts of interest and mass resignations of grant reviewers, a task force of the $3 billion California stem cell agency today began a partial examination of its own grant approval process, specifically focusing on appeals by rejected applicants.

The president of the California organization, Alan Trounson, told the task force that it was dealing with a “very serious matter” that in some ways is similar to what happened in Texas. He said the science community is “very much concerned.”

The situation in Texas involves the five-year-old Cancer Prevention and Research Institute, which like the California stem cell agency, formally known as the California Institute of Regenerative Medicine (CIRM), has $3 billion of borrowed money to use to finance research.

The chief scientific officer of the Texas organization, Nobel laureate Alfred Gilman, resigned Oct. 12 during a flap about its attempts “to simultaneously support basic research and nurture companies.”

Gilman's departure was triggered by a $20 million award made without scientific review. Reviewer resignations followed with letters that accused the Texas group of “hucksterism” and dishonoring the peer review process. (Writer Monya Baker has a good overview today in Nature.)

The situation in Texas came to a head AFTER the governing board of the California research group created its task force. The problems in Texas are bigger and not identical to those in California, which mainly involve the free-wheeling nature of the appeal process, not an entire lack of scientific review. Nonetheless, this past summer, directors of the California agency for the first time approved an award that was rejected twice by reviewers. The award went to StemCells, Inc., of Newark, Ca., which now has won $40 million, ranking the company No. 1 in awards to business from CIRM.

Earlier this month, Los Angeles Times business columnist Michael Hiltzik characterized the StemCells, Inc., award as “redolent of cronyism.”

Today's session of the CIRM task force focused primarily on an aspect of the agency's appeals process that CIRM labels as “extraordinary petitions.” They are letters which rejected applicants use to challenge decisions by grant reviewers. The researchers follow up with public appearances before the governing board, often trailing squads of patients making emotional appeals.

Both researchers and patients have a right under state law to appear before the CIRM board to discuss any matter. CIRM, however, is trying to come up with changes in the appeal process that will make it clear to researchers on what the grounds the board might overturn reviewers' decisions. The agency is also defining those grounds narrowly and aiming at eliminating appeals based on differences in scientific opinion.

At today's meeting, CIRM Director Jeff Sheehy, a patient advocate and co-vice chair of the grants review group, said peer review is an “extraordinary way of analyzing science, but it is not always perfect.” However, he also said that “as a board we are not respecting input” from scientists and thus allow the perception that we can be “persuaded against the judgment of scientists.”

CIRM Director Oswald Steward, director of the Reeve-Irvine Research Center at UC Irvine, agreed with a suggestion by Sheehy that board must act with “discipline” when faced with appeals by rejected applicants. Steward said, 

“The process has gotten a little out of hand.”

It was a sentiment that drew no dissent at today's 90-minute meeting.

Missing from today's meeting, which had teleconference locations in San Francisco, Irvine, La Jolla and Palo Alto, were any of the hundreds of California scientists whose livelihoods are likely to be affected by changes in the grant approval process. Also absent were California biotech businesses, along with the only representative on the task force from CIRM's scientific reviewers.

Our comment? When researchers and businesses that have millions at stake fail to show up for key sessions that set the terms on how they can get the money, it is a sad commentary on their professional and business acumen.

Bert Lubin, a CIRM director and chairman of the task force, indicated he would like to have two more meetings of the task force prior to making recommendations to a full board workshop in January with possible final action later that month. Lubin, CEO of Children's Hospital in Oakland, said the matter is “really important for the credibility of our whole organization.”

Los Angeles Times: StemCells, Inc., Award 'Redolent of Cronyism'

The Los Angeles Times this morning carried a column about the “charmed relationship” between StemCells, Inc., its “powerful friends” and the $3 billion California stem cell agency.

The article was written by Pulitzer prize winner and author Michael Hiltzik, who has been critical of the agency in the past. The piece was the first in the major mainstream media about a $20 million award to StemCells, Inc., that was approved in September by the agency's board. The bottom line of the article? The award was “redolent of cronyism.”

Hiltzik noted that StemCells, Inc., now ranks as the leading corporate recipient of cash from the agency with $40 million approved during the last few months.

But he focused primarily on September's $20 million award, which was approved despite being rejected twice by grant reviewers – “a particularly impressive” performance, according to Hiltzik. It was the first time that the board has approved an award that was rejected twice by reviewers.

Hiltzik wrote,

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

The two are Robert Klein, who led the ballot campaign that created the agency and became its first chairman, and Irv Weissman of Stanford, who co-founded StemCells, Inc., and sits on its board. Weissman, an internationally known stem cell researcher, also was an important supporter of the campaign, raising millions of dollars and appearing in TV ads. Klein, who left the agency last year, appeared twice before the CIRM board this summer to lobby his former colleagues on behalf of Weissman's company. It was Klein's first appearance before the board on behalf of a specific application.

The Times piece continued,

“But private enterprise is new territory for CIRM, which has steered almost all its grants thus far to nonprofit institutions. Those efforts haven't been trouble-free: With some 90% of the agency's grants having gone to institutions with representatives on its board, the agency has long been vulnerable to charges of conflicts of interest. The last thing it needed was to show a similar flaw in its dealings with private companies too.”

Hiltzik wrote,

“(Weissman) has also been a leading beneficiary of CIRM funding, listed as the principal researcher on three grants worth a total of $24.5 million. The agency also contributed $43.6 million toward the construction of his institute's glittering $200-million research building on the Stanford campus.”

CIRM board approval of the $20 million for StemCells, Inc., came on 7-5 vote that also required the firm to prove that it had a promised $20 million in matching funds prior to distribution of state cash.

Hiltzik continued,

“The problem is that StemCells doesn't have $20 million in spare funds. Its quarterly report for the period ended June 30 listed about $10.4 million in liquid assets, and shows it's burning about $5 million per quarter. Its prospects of raising significant cash from investors are, shall we say, conjectural.

“As it happens, within days of the board's vote, the firm downplayed any pledge 'to raise a specific amount of money in a particular period of time.' The idea that CIRM 'is requiring us to raise $20 million in matching funds' is a 'misimpression,' it said. Indeed, it suggested that it might count its existing spending on salaries and other 'infrastructure and overhead' as part of the match. StemCells declined my request that it expand on its statement. 

“CIRM spokesman Kevin McCormack says the agency is currently scrutinizing StemCells' finances 'to see what it is they have and whether it meets the requirements and expectations of the board.' The goal is to set 'terms and conditions that provide maximum protection for taxpayer dollars.' He says, 'If we can't agree on a plan, the award will not be funded.'"

Hiltzik wrote,

“The agency shouldn't be deciding on the spot what does or doesn't qualify as matching funds. It should have clear guidelines in advance.

“Nor should the board overturn the judgment of its scientific review panels without clear-cut reasons....The record suggests that the handling of the StemCells appeal was at best haphazard and at worst redolent of cronyism.” 

Researcher Alert: Stem Cell Agency to Take Up Grant Appeal Restrictions

The move by the $3 billion California stem cell agency to curtail its free-wheeling grant appeal process will undergo its first public hearing next week.

The proposals will mean that scientists whose applications are rejected by reviewers will have fewer avenues to pursue to overturn those decisions. The changes could take effect as early as next year.

The move comes in the wake of a record number of appeals this summer that left the board complaining about “arm-twisting,” lobbying and “emotionally charged presentations.”

Among other things, the new "guidelines" attempt to define criteria for re-review – “additional analysis” – of applications involved in appeals, also called “extraordinary petitions.” The plan states that re-review should occur only in the case of a material dispute of fact or material new information. (See the end of this item for agency's proposed definitions.)

In addition to alterations in the appeal process, the CIRM directors' Application Review Task Force will take up questions involving “ex parte communications.” The agenda for the Oct. 24 meeting did not contain any additional information on the issue but it likely deals with lobbying efforts on grants outside of public meetings of the agency. We understand that such efforts surfaced last summer involving the $$214 million disease team round and Robert Klein, the former chairman of the stem cell agency.

Klein appeared twice publicly before the board on one, $20 million application by StemCells, Inc., the first time a former governing board member has publicly lobbied his former colleagues on an application. The application was rejected twice by reviewers – once on the initial review and again later on a re-review – but it was ultimately approved by directors in September on a 7-5 vote.

The board has long been troubled with its appeal process but last summer's events brought the matter to a new head. The issue is difficult to deal with because state law allows anyone to address the CIRM governing board on any subject when it meets. That includes applicants who can ask the board to approve grants for any reason whatsoever, not withstanding CIRM rules. The board can also approve a grant for virtually any reason although it has generally relied on scientific scores from reviewers.

The proposals to restrict appeals are designed to make it clear to scientists whose applications are rejected by reviewers that the board is not going to look with favor on those who depart from the normal appeals procedure.

While the board almost never has overturned a positive decision by reviewers, in nearly every round it  approves some applications that have been rejected by reviewers. That has occurred as the result of appeals and as the result of motions by board members that did not result from public appeals.

Ten of the 29 board members are classified as patient advocates and often feel they must advance the cause of the diseases that they have been involved with. Sometimes that means seeking approval of applications with low scientific scores.

Here is how agency proposes to define “material dispute of fact:”

“A material dispute of fact should meet five criteria:(1) An applicant disputes the accuracy of a statement in the review summary;(2) the disputed fact was significant in the scoring or recommendation of the GWG(grant review group); (3) the dispute pertains to an objectively verifiable fact, rather than a matter of scientific judgment or opinion;(4) the discrepancy was not addressed through the Supplemental Information Process and cannot be resolved at the meeting at which the application is being considered; and (5) resolution of the dispute could affect the outcome of the board’s funding decision."

Here is how the agency proposes to define “material new information:”

“New information should: (1)be verifiable through external sources; (2) have arisen since the Grants Working Group(grant review group) meeting at which the application was considered; (3) respond directly to a specific criticism or question identified in the Grants Working Group’s review; and (4) be submitted as part of an extraordinary petition filed five business days before the board meeting at which the application is being considered."

Next week's hearing is scheduled for Children's Hospital in Oakland with a teleconference location at UC Irvine. Addresses can be found on the agenda.

Stem Cell Orthodoxy and Peer Review

Going against the grain can be difficult as UC Davis stem cell scientist Paul Knoepfler learned again in connection with his research that dealt with similarities between cancer and iPS cells.

His “unsettling” findings troubled some scientists who reviewed his paper prior to its publication in September in Stem Cells and Development. (See here and here.)

As many readers know, iPS or reprogrammed adult cells are currently a hot research avenue in stem cell research because they avoid many of the ticklish ethical and political problems connected with human embryonic stem cells.

Knoepfler shared his thoughts on the publication and peer review process on his blog last week. He wrote,

“Not surprisingly...there are certain members of the stem cell field who would rather focus away from the ideas that iPS cells are similar in some respects to cancer.”

Knoepfler, whose research was financed in part by the California stem cell agency, wrote,

“Once we had a manuscript together comparing iPS cells to cancer cells, we sent it to several high profile journals without much luck. We thought that the fact that our data indicated that iPS cells are similar to cancer cells might make reviewers and editors excited. We thought that the paper was novel and thought provoking in a number of ways. At the same time I realized the theme of the paper would be controversial. 

“I would say two general things about the review process at the two journals that turned down the paper. First, the reviewers at these journals were enormously helpful with their suggestions and helped us improve the paper substantially. Second, they were clearly very uncomfortable with the notion that iPS cells are related in some ways to cancer so unsettled in fact that I believe it influenced their reviews.”

At one journal, a reviewer said the findings were either “not sufficiently novel” or “trivial.” “Little useful insights” said another. And a third said, “many unsettling results....”

Knoepfler commented on this blog,

“Yeah, it may be unsettling that iPS cells share traits with cancer cells, but if that is the reality, isn’t it important that people know that and think about it, talk about it, and address the issue with eyes open?”

Knoepfler's item and similar comments from other researchers that can found elsewhere on the Internet indirectly raise questions about the California stem cell agency's process of peer review of applications for hundreds of millions of dollars in funding, especially in the wake of this summer's unprecedented rash of appeals of decisions by grant reviewers.

The key question is whether the agency's closed-door process reinforces orthodoxy or, in fact, is all but controlled by what amounts to scientific conventional wisdom. Obviously, no researcher likes to see a paper rejected or a grant denied. But the record number of appeals at CIRM and other private complaints could well indicate that potentially profitable proposals are receiving a less than welcome reception behind closed doors from agency reviewers.

The agency's board itself is hard-pressed to make such determinations. It is hamstrung by procedures that do not permit it to expand an application directly – only a staff-written summary. Names of applicants and institutions are censored, although the board is required by law to discuss in public most aspects of a research proposal. Exceptions are permitted for proprietary information. Additionally, a handful of the 29 members of the governing board do participate in the reviews, which come before final action by the board. 

Currently the agency is pushing hard to commercialize stem cell research and fulfill at least some of the promises to voters that were made in 2004. To do that, the agency may well have to step outside of the normal comfort zone of the good burghers of stem cell science.

California Stem Cell Firsts: From Emotional Appeals to $40 Million Awards

During the last few months, the $3 billion California stem cell agency, which is approaching its eight-year anniversary, has chalked up a number of important firsts.

Most of them came during the July and September meetings of its 29-member governing board and were related to strenuous efforts by researchers to win approval of awards of up to $20 million each. Several firsts involved the agency's former chairman, Robert Klein, who could be considered the father of the state's stem cell research effort.

So here is the California Stem Cell Report's list of firsts at the California Institute of Regenerative Medicine (as CIRM, the stem cell agency, is formally known) for the summer of 2012.

It was the first time that a single company – in this case, StemCells, Inc. , of Newark, Ca. – received two awards in the same round.

It was the first time any company has been awarded as much as $40 million. Again, StemCells, Inc.

It was the first time that Klein has lobbied his former board (see here and here) on behalf of a particular grant application. That occurred in both July and September with one of StemCells, Inc.'s application.

It was the first time that the board has approved an application that has been rejected twice by reviewers, again the StemCells, Inc., proposal backed by Klein.

It was the first time that board has received such a large outpouring of appeals by rejected applicants.

It was the first time that the board has received such lengthy presentations of emotional appeals by patient advocates on behalf of rejected applicants.

It was the first time that action on a grant round has been extended over three months(see here and here). The disease team round began in July. Action will not be completed until the end of October.

It was the first time that the governing board has sent so many applications back for re-review – five, six if the one to be acted on in October is included.

It was also the first time that the board has ordered a full-blown review of its grant appeal process with an eye to making making major changes in it.

Several reasons exist for the number of firsts racked up by CIRM. One is the high stakes involved in the disease team round that began in July and the low number approved by reviewers – six compared to the 12 approved by the board, as of today, out of 21 applications. Another reason involves the increasing understanding on the part of many scientists that they can appeal directly to the board when reviewers reject their applications. However, it is also clear that not all applicants grasp the full range of appeal possibilities. A third reason involves the agency's muddled appeal process, which has been a problem for years. And a fourth reason involves the board's push to drive research into the clinic and commercialization, which applicants are quickly learning how to exploit.

Readers should feel free to add their own firsts to this list. They can do so – even, anonymously – by clicking on the word “comments” at the end of this item.

StemCells, Inc., Gunning for Another $10 Million from California Stem Cell Agency

Fresh from winning $40 million from the California stem cell agency, StemCells, Inc., is shooting for another, $10 million award from the state research effort.

The latest proposal comes as the publicly traded firm also faces the task of raising $40 million that it has promised the agency to match the earlier awards. That figure could well rise to $50 million given the new application.

Martin McGlynn, CEO of the well-connected Newark, Ca., firm, disclosed StemCells, Inc.'s, latest proposal in an article by Catherine Shaffer in BioWorld. She wrote,

“Already looking ahead, StemCells has set its sights on one more CIRM initiative designed to fund early stage clinical trials over a four-year period. StemCells has applied for that grant, worth up to $10 million, to fund a Phase II trial in PMD(Pelizaeus-Merzbacher disease).”

The article did not disclose the timing on the new application.

StemCells, Inc.'s lobbying efforts with the stem cell agency were vigorously aided by the former chairman of the $3 billion California stem cell agency, Robert Klein (see here and here). And Wednesday evening, the company convinced the state agency's board to overturn two successive reviewer rejections of a $20 million proposal for Alzheimer's research. The vote was 7-5.

Klein's efforts came in a record-breaking round of appeals and emotional presentations by patient advocates, which triggered complaints from the board this week about "arm-twisting" and politicking. 

StemCells, Inc., was founded by the eminent Stanford stem cell researcher Irv Weissman, who helped to raise millions for the ballot initiative that created the stem cell agency. He additionally appeared in in the campaign's TV advertising. The campaign was headed by Klein, who ultimately raised $35 million to convince voters to create the agency. Weissman is currently on the board of the StemCells, Inc. His wife is executive vice president.

In July, the stem cell agency board approved the first $20 million award to the firm for research involving spinal injury.

McGlynn told BioWorld,

"We're the only company that has programs going on in all three regions of the central nervous system: the brain, the spinal cord and the eye."

Not discussed in the BioWorld article was a requirement, imposed by the CIRM board, that StemCells, Inc., show it can deliver $20 million in matching funds on the Alzheimer's award before receiving any state funds. CIRM said no such board requirement existed on the spinal award, but the firm has promised to match the $20 million on that award as well.

BioWorld described the awards as grants. In fact, they are loans. But under the terms of the loans, if the research is not successfully commercialized, it will be forgiven.  

Arm-twisting and Emotion: Stem Cell Directors Move to Reform Appeals on Multimillon Dollar Grants

Frustrated with politicking, “arm-twisting,” lobbying and “emotionally charged presentations,” the governing board of the $3 billion California stem cell agency today approved short-term changes in its grant appeal process and ordered up a study to prepare long-term reforms.

The moves followed a prolonged series of appeals on grant applications that began in July and continued through today, setting records for the number of appeals and generating hours of sometimes tearful and emotion-laden presentations from members of the public.

The board adopted changes in the appeal process for its next few meetings that are aimed at curbing its free-wheeling nature and making it more understandable to the public and applicants. The board also directed creation of a panel to make recommendations by the end of the year for more wide-ranging reforms.

Directors of the agency were clearly not happy with the appeal process this summer. However, it has been a problem since 2008 when Bert Lubin, now a director of the stem cell agency and CEO of Childrens Hospital of Oakland, Ca., was the first applicant to make a public pitch before the board to overturn reviewer rejection of his application.

One director, UCLA medical school dean, Gerald Levey, said at the time,

"I don't think we can run a board this way. If we do, it would be chaos." 

Today, CIRM Director Carmen Puliafito, dean of the USC School of Medicine, said that “lots of lobbying” was going over the last couple of months. He predicted there will more lobbying and “more politicking.” Puliafito said,

“On big money grants, people will be calling their friends.”

The name of former board chairman, Robert Klein, was not mentioned during this afternoon's discussion. But Klein vigorously and successfully backed an appeal (see here, here and here) by StemCells, Inc., of Newark, Ca., for a $20 million application that had been rejected twice by reviewers. Last night the board approved the award on a 7-5 vote. It was the first time the board has approved an award that was rejected twice by its reviewers.

Director Jeff Sheehy, co-vice chairman of the review group and a communications manager at UC San Francisco, said the agency is dealing with “big money grants” that are “incredibly complex.” He also referred to “certain arm-twisting by certain individuals.”

Several board members made references to appearances by persons who have diseases or conditions that might be affected by CIRM-financed research. Director Duane Roth, head of CONNECT, a San Diego business development organization, said the board is making decisions in “an emotionally charged setting.”

Other issues cited by directors include the integrity of review process, fairness, consistency, shifting appeals procedures, transparency and board discipline on appeals.

James Harrison, outside counsel to the board, said the board's action today includes "eliminating the reference to unpublished data in the discussion of 'material new information," imposing a 3-page limit on other correspondence, explaining that applicants should have seven business days from the time the (grants review group) recommendation is made available to them to file an (extraordinary petition), and posting all of the information regarding these policies in one place on CIRM’s website."

For a list of articles and CIRM documents dealing with the appeal process, see here.

California Stem Cell Agency Okays $38 Million for Basic Research

Directors of the California stem cell agency today approved about $38 million for research into basic biology, including two appeals by researchers on applications initially rejected by reviewers.

The governing board turned down five appeals in the round, which attracted 357 applications in its "pre-app" process, 64 of which were invited to apply. Reviewers approved 25 applications.

The following appeals in the biology round were approved:

• $1.3 million, Deborah Lieu of UC Davis. (Review summary here, appeal here.) 764
• $1.4 million, Yanhong Shi  of the City of Hope. (See review summary here and appeal here.)

The board also approved another application that was rejected by reviewers based on a recommendation by CIRM President Alan Trounson.  It is very unusual for the board to approve rejected applications based on staff recommendations following a review. Trounson described the grant addressed a major bottleneck in stem cell science.

 The California stem cell agency is expected to post a press release shortly with the names of all recipients. The agency usually withholds names of applicants until the the board formally acts.
(An earlier version of this item reported that the board approved $37 million in grants.)

Two Additional Appeals Rejected in Disease Team Round

The governing board of the California stem cell agency last night rejected appeals by two applicants -- OncoMed Pharmaceuticals of Redwood City and Albert Wong of Stanford -- in the $200 million disease team round.

Both petitions generated little discussion. You can find more on their petitions here and here.

The board also approved changes in its intellectual property and grant administration rules. Both proposals will now enter the state's official administrative law process for more comment and possible change.