Stem Cell Scrutiny in the Golden State: California's Research Program Looks to Avoid Extinction

In just nine days, the California stem cell agency will take a close look at its future, examining its budget for the coming fiscal year as well as the possibilities for a ballot initiative in 2020 that could stave off its financial demise.

The $3 billion enterprise, known formally as the California Institute for Regenerative Medicine (CIRM), expects to run out cash for new research awards this year, perhaps as early as September.

It has sufficient funds to administer its remaining 211 ongoing awards and keep the lights on. But it has only $114 million left before its research coffers are empty. 

CIRM is attempting, however, to raise privately $220 million to bridge the gap in research funding between this year and late 2020. The success of that effort is still unknown.

CIRM was created in 2004 by Proposition 71, a ballot initiative that also financed the agency with California state bonds (borrowed money). Since then it has awarded $2.6 billion for stem cell research, including involvement in 53 clinical trials, which are the last stage prior to federal approval of a treatment for widespread use. 

Despite the rosy expectations of 2004 campaign, CIRM has not yet backed research that has led to a stem cell therapy that is widely available for public use.

CIRM has scheduled two significant meetings for Wednesday May 15. One involves the agency's budget for the fiscal year that begins July 1. The other involves "discussion of ideas for (a) new initiative."

For readers unfamiliar with the initiative process in California, it is a method for placing before voters proposals for new state laws and funding and basically bypasses the legislature. To qualify a measure for the ballot in the fall of 2020, stem cell research supporters will need to gather hundreds of thousands of valid signatures of registered voters. Usually that is done by hiring firms that specialize in that sort of collection.

Current estimates of the cost of each signature run around $6.00. Estimates of the total cost of a ballot campaign for a new stem cell initiative run in the neighborhood of $50 million, which would have to be raised privately by supporters of the research -- not the agency.

CIRM is stepping cautiously into the ballot initiative process because of legal constraints. Scott Tocher, CIRM's general counsel, said in a statement to the California Stem Cell Report, 

"While a public agency is not permitted to advocate for or against a ballot measure because it is barred from using public funds in an effort to convince the voters with respect to a particular policy position, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters. 

"For instance, the (California) attorney general has concluded that public agencies may engage in outreach to obtain input and assess the feasibility of a measure.  In our case, of course, we don’t even have a ballot measure on the ballot yet. The purpose of the meeting is to discuss elements that a future measure might contain, not to campaign for a measure’s passage."

The agency has not yet disclosed its proposed operational budget for the fiscal year that begins July 1. But CIRM is limited by the ballot initiative that created the agency to spending no more than 6 percent of the total it has awarded. This year's operational budget approached $17 million. The spending plan for the next fiscal year is expected to be less. 

In the next few days, the California Stem Cell Report will carry more on the upcoming CIRM meetings, including the perspective from Robert Klein, who headed the 2004 ballotcampaign. Klein was also the first chairman of the agency and is eager to see it funded anew with as much as $5 billion. 

Dollars Dribbling Away: California Stem Cell Scientists Appeal for More Research Cash

When the cash spigot starts to dry up, the appeals stack up.

Such is the case this week at the now $144 million California stem cell agency, which has been mostly referred to as a $3 billion enterprise. But the cash is dribbling away quickly. And the agency is sticking to its budget in a way that did not happen eight years ago.

The latest evidence comes on the agenda for Thursday's meeting of directors of the agency, known formally as the California Institute for Regenerative Medicine or CIRM. The agenda contains 10 letters appealing to the directors to approve awards for various research projects.

These are projects that have been recommended for funding by the agency's scientific reviewers. However, the reviewers did not have the constraints of meeting the agency's budget for this round of awards.

Only $865,282 is available under the agency's budget. The five applications in question total close to $7 million.

So letters appealing for the cash have been directed to the agency's board.
Here are a couple of samples from the letters.

Phil Beachy, Stanford photo

This one is from Philip Beachy of Stanford University, whose application (DISC2-11105), Beachy wrote, was scored at 90 out of 100 by reviewers. He is seeking $1.4 million for work related to bladder cancer.

"In July we were surprised to learn that our application was not selected for funding, whereas four proposals ranked below ours were funded. We have subsequently learned that an important component of the funding decision made by the ICOC (the CIRM board) is comments from scientists and patient advocates. We wish to have the opportunity to present our comments at the October 11 ICOC meeting, at which our proposal will be considered. Four scientists involved in this proposal will be attending the meeting, including myself (Philip Beachy, Ph.D.), Kyle Loh, Ph.D., Lay Teng Ang, Ph.D., and Joe Liao M.D., Ph.D.)." 

They also enlisted assistance from a patient advocate, Don Reed of Fremont, who is a regular at CIRM board meetings. He wrote,

"Is there a path to defeating the cancer and restoring the bladder’s natural function? Today I had lunch with two people, Drs. Lay Teng Ang and Kyle Loh, who (along with Drs. Philip Beachy and Joe Liao) may have the answer to this particular cancer. Their goal is to use embryonic stem cells to grow a healthy new lining of the bladder....But they need a grant from the California stem cell agency to do it."

Robert Rainey, USC photo

Here is an excerpt from another letter. This one was written by Robert Rainey, the primary research associate involved in an application (DISC2-11183) that seeks $833,282 to create a screen to protect against hearing loss caused by chemotherapy.  The proposal by Neil Segil, co-director of the USC Hearing and Communications Neuroscience Training Program, received a score of 87 from reviewers.

Rainey, who is profoundly deaf, wrote,

"In the entire history of CIRM, only three hearing loss-related grants have been awarded. This is not an oversight of CIRM, but rather a reflection of the paucity of experimental approaches for studying problems related to hearing loss in humans. Our approach can now overcome these problems, and the work described in this proposal will allow us to simultaneously improve the efficiency of our direct-reprogramming technique from human iPSCs, while allowing us to immediately begin pilot testing small libraries of FDA-approved drugs for hair cell-protective qualities during cancer treatment."
(Rainey's letter is in the same file as Segil's.)

Segil wrote,

"Talk about adding insult to injury! Imagine that you are the parent of a 4 year old child who has just been diagnosed with a deadly pediatric cancer. You are told that, in spite of this horrible diagnosis, a cure is possible, with a good chance of success. However, the cure has an extremely common side-effect, namely that your child will likely go deaf as a result of the chemotherapy. In fact, more than 60% of kids treated for pediatric cancer end up profoundly deaf."

Neither Segil's or Beachy's applications will be funded if the board sticks with its budget and abides by staff recommendations, which it has usually done in recent years.

You can find on the meeting agenda all the appeal letters, summaries of the application reviews and CIRM's rationale for the last award in this round. The transcript from the July board meeting also carries considerable discussion related to the financial pressures generated in this round along with how the initial decisions were made.

The Final $144 Million and the California Stem Cell Agency's Future

The Golden State's stem cell research program is down to its last $144 million after nearly 14 years of financing searches for therapies for everything ranging from diabetes to bubble baby syndrome. 

Funded with $3 billion in November 2004, California's stem cell agency has yet to back a therapy that is widely available to the public. Its directors are scheduled to meet on Wednesday to approve plans for what could be the last year for new awards. 

Known formally as the California Institute for Regenerative Medicine (CIRM), the agency was created by voters through a ballot initiative. The measure provided $3 billion in bond support but no additional cash beyond that. 

The agency is pinning its hopes for survival on a yet-to-be-written $5 billion bond measure for the November 2020. It is attempting privately to raise $200 million to bridge the gap between the end of 2019 and the election. 

On Thursday, CIRM's 2019 research award budget is slated to come before the Science Committee of its board of directors. The public can participate in the meeting via the Internet and at a number of locations throughout the state. More information about access can be found on the agenda. 

The agency's staff has proposed $123 million in awards for clinical trials during 2019 with another $20 million going for translational research, which is an effort to take basic research and translate it into a clinical application. An additional $600,000 is slated for "educational" awards. 

CIRM documents said there were "insufficient" funds to finance additional basic research. The agency also aims to limit its clinical/translational awards to research that has been previously backed by the agency.

By the end of this year, CIRM expects to have made $2.6 billion in awards. The remainder of the $3 billion has gone or will have gone for administrative expenses, which will continue for a few years as multi-year awards wind down. 

The agency may recover an estimated $30 million in 2019 from research that does not pan out, making those possible funds available for awards in 2020. 

Currently, CIRM is backing 49 clinical trials, the last stage before a therapy is certified for widespread use. But there is no guarantee that any of those trials will generate a treatment prior to the November 2020 election. 

California Stem Cell Agency Steps Up Public Access to Key Meeting This Week; Brain Cancer and Parkinson's On Tap

Stem cell researchers and the public -- from wherever they are around the world -- will have a chance Thursday to take part remotely for the first time during a meeting of the governing board of California's $3 billion stem cell agency.

The session will include approval of two awards totaling $9.5 million, approval of a $16.8 million operating budget, approval of a revised conflict of interest code along with a quasi-mysterious matter dealing with "programmatic tools."

At the time of this posting, the agency, formally known as the California Institute of Regenerative Medicine (CIRM), had not added online any background material supporting the cryptic, agenda item. However, the general subject deals with decisions that the board makes on applications for funding. In addition to scientific considerations, the board can base its decisions on non-scientific matters, such as whether the application really fits with the CIRM program.

(After this item was posted, the agency added to the agenda a number of slides dealing with the grant-making process and use of programmatic criteria. The California Stem Cell Report will carry an item on those slides tomorrow. Update: That item has now been posted.)

Interested persons will be able -- for the first time -- to make comments not only that matter but others from wherever they are. But they must be logged on to the audiocast/webcast of the session in order to be recognized. The agenda contains directions on how to do that. During the meeting, online participants will be asked if they have a comment. We recommend setting up the connection in advance of the meeting. It may require some tweaking, depending on your computer figuration.

The agency has successfully tested the new public comment feature on a few committee hearings. This will be the first experience with a full board meeting.

The awards expected to be made include a  $5.8 million application for Parkinson's disease and a $3.7 million application for glioblastoma, a form of brain cancer. Reviewers, meeting behind closed doors, have already approved the awards. The board must ratify their decisions in public. (Here are links to review summaries on the Parkinson's application and the glioblastoma application, plus comments by a Scripps Research Institute scientist on the Parkinson's application.

John Zaia of the City of Hope wrote a letter to the board commenting on the public summary of his glioblastoma application, critiquing reviewer comments. He said,

"Based on our experience with two previous FDA-approved pilot trials, we foresee no major hurdles to completing an IND, recruiting patients, manufacturing the therapeutic cell product, and eventually conducting the clinical trial."

The agency does not release the names of applicants until action is taken by the board, but when a letter is written by an applicant, his/her name becomes public along with the letter.

The proposed budget for the 2018-19 year stands at $16.8 million, up 7 percent from an estimated spending of $15.7 million for this fiscal year. The budget for research awards is separate and has been normally set in December. However, some board members have indicated that are are interested in trimming the amount of awards to be given annually in order to extend the life of the agency.

Under current spending rates, the agency expects to run out of money for new awards by the end of next year. It is pinning its hope for survival on a private fundraising effort now underway and voter approval of a proposed $5 billion bond measure in November 2020.  An update on the fundraising effort may be presented Thursday by CIRM board chairman J.T. Thomas.  

From Cystic Fibrosis to Zika: California Awards $21 Million for Stem Cell Research

The California stem cell agency last week approved nearly $21 million for research to tackle afflictions ranging from cystic fibrosis to Zika.

Awards were made to only 11 researchers although the agency's reviewers had earlier approved 14 awards totaling $25.5 million. The governing board, however, had allotted only $21 million for the awards, and it decided to stick to its budget.

The awards are part of an effort by the agency to finance projects that can move forward rapidly within the next two years.

Six scientists sent letters to the board prior to the meeting discussing details of their research and dealing with concerns of the agency's reviewers, who approved awards earlier in a closed-door session, prior to ratification by the board.

Here are links to letters of each researcher: Rosa Bacchetta, Stanford, application number DISC2-
09526; Tejal A. Desai, UC San Francisco, DISC2-09559; Mark Mercola, Stanford, DISC2-09542 (rejected); Julie Sneddon, UC San Francisco, DISC2-09635; Jin Nam, UC Riverside, DISC2-09645 (rejected), and Matthew Porteus, Stanford, DISC2-09637.

Reviewers rejected any application that scored below 85. All of the three applications denied by the board stood right at the cutoff line with scores of 85. Mercola was the only one of the three to write a letter to the board. The agency did not disclose the names of the other two on its web site since they had not written a letter, which is a public record. The Nam application scored 84 and was not recommended for funding by reviewers.

Here is a link to a document that contains summaries of the reviews of all applications scored at 65 or above.

Here is a link to the agency's press release that contains the names of all the winners and a one line summary of their research. More details can be found in the summaries of the reviews.

California Stem Cell Agency: 5 Percent Budget Increase for Coming Fiscal Year

Directors of the California stem cell agency today approved a $17.4 million operating budget for the fiscal year beginning July 1, an increase of 5.1 percent over spending for the current year.

As usual, the agency tries to portray its budget as a decrease in spending. Directors were told that it represented a 3 percent decline from the current year. However, the comparison is not made to actual spending for this year. Instead, the staff compares the 2013-14 budget to budget figures proposed last May, which are now no more than time-worn ephemera.

Most of the budget goes for salaries and benefits ($12.2 million ) with outside contracting running next ($2 million). (See here for details.) The budget projects 59 employees for next year compared to 57 currently. CIRM staff said the number of employees is expected to remain about the same until 2017 or so when its workload is projected to diminish.

The agency is expected to run out of money for new grants in 2017, but it is working on a plan to develop a combination of private and public funding to continue its work.

The spending plan reflects the cost of overseeing about $1.8 billion in nearly 600 grants and loans plus developing new research proposals that are likely to be funded in the next few years. The operational budget is capped by law at 6 percent of the amount of funds the agency distributes over its lifetime.  

Stem Cell Agency and its $2.4 Million Legal Costs: Proposal to Add Staff Lawyer Slips Away

The California stem cell agency has dropped a plan to add an additional lawyer to its staff on top of its $2.4 million yearly legal budget.

The proposal was eliminated from the agency's spending plan for the fiscal year beginning in July after it ran afoul of complaints in April from Art Torres, co-vice chairman of the agency, that legal spending was "awfully bloated."

At the time, CIRM's President Alan Trounson and general counsel Elona Baum argued, however, that the position was needed to protect CIRM's intellectual property. They said that grantee institutions were failing to take necessary steps to protect the IP and were putting CIRM "at risk."

The discussion occurred during a public meeting, but was settled behind the scenes before last month's approval of the budget by the CIRM board of directors. Instead of containing $221,000 for salary and benefits for another lawyer, the budget contained $203,000 for an external contract for the IP legal work.

The issue of hiring additional staff has implications beyond the most obvious. CIRM is laboring under a legal budget cap that hampers its operational flexibility. Plus the agency will move into a shutdown mode in about five years unless it derives a new source of financing.

During the April discussion, Baum cited a "very in-depth memo" justifying the addition of an attorney but did not present it at the time. The California Stem Cell Report subsequently asked the agency for a copy. The first version that CIRM supplied consisted of a single page and was mostly a list of tasks. It was also heavily expurgated by CIRM, although the agency did not initially disclose that information had been removed. The actual document turned out to be two pages long but still was something less than in-depth.

CIRM said the information was removed under attorney-client privilege. CIRM spokesman Kevin McCormack said it contained "reflections and advice about particular legal issues" from Baum to Trounson.

Our take: It is poor management to place privileged information in what should be a routine budget justification for adding staff. The result is a breakdown in openness on the part of the California stem cell agency. It is not the first time that CIRM has hidden information under attorney-client privilege. In 2008, the agency concealed public relations advice from a New York firm using that rationale. The matter involved an Australian researcher "under investigation for improprieties who worked in the stem cell laboratory run by CIRM's incoming President Dr. Alan Trounson," CIRM said at the time.

A final note on budget matters at the May board meeting: With little discussion, the board approved an overall budget of $17.9 million for coming fiscal year, an 8.5 percent increase over the estimated $16.5 million spending for the current fiscal year. The budget calls for a handful of new hires, raising the size of the staff of the $3 billion agency to the equivalent of 59.

CIRM Chairman J.T. Thomas also told the board the agency is assured of cash for its operations and research funding through the end of this year. CIRM relies on money borrowed by the state – general obligation bonds. However, under an arrangementarrived at last year, the funding is being provided through short-term borrowing – commercial paper. The state expects to offer another round of bonds this fall, but it is not clear whether CIRM bonds will be included. Gov. Jerry Brown is adamant about reducing the cost of state borrowing, which has skyrocketed in recent years.

Here is a copy of Baum's memo.

CIRM IP attorney job description

Stem Cell Agency Budget Up for Review on Monday: 7 Percent Increase Proposed

The proposed $17.8 million operational budget for the California stem cell agency will receive more public scrutiny at a meeting next week in San Francisco, with additional public participation sites ranging from Boston to La Jolla.

The spending plan for 2012-13 is 7.2 percent higher than the estimated expenditures for the current year. By law, CIRM's budget is not subject to cuts by the legislature or the governor, who are trying to find solutions to the state's ongoing financial crisis.

Next week's hearing will be the last before approval of the budget in late May by the directors of the $3 billion research program. No significant changes are expected from the document to be presented on Monday.

Public sites where the public can participate in the CIRM directors' Finance Subcommittee meeting include South San Francisco, Stanford, Berkeley and Boston. You can find more information about the specific locations on the meeting agenda, but if you are interested in attending you need even more details from CIRM prior to the actual meeting. Email a request to info@cirm.ca.gov.

Tracking CIRM Grants: "Thin Ice" Lurking?

Directors of the California stem cell agency today approved a $15.7 million operating budget for next fiscal year – 28 percent higher than this year's spending – and requested a report from its staff concerning its critical grants management system.

The report was sought after CIRM Director Michael Friedman, CEO of the City of Hope, said he wanted to “express in the strongest possible terms my discomfort” with the decision by CIRM staff to build a custom grants management system.

He said that “unless you are prepared to spend enormous amounts of money, you are stepping on some very thin ice.”

“Everybody has seen horrible examples of custom-designed system that go bad.”

Friedman asked if any subcommittee of directors had approved the decision to go forward with a custom system. The answer was no, but that the decision had been carefully considered by CIRM staff.

At that point in the meeting, we lost the Internet connection to the CIRM audiocast. By the time it was restored , the budget discussion had concluded with approval of the spending plan. Don Gibbons, chief communicastions officer for CIRM, told us by email that the report had been requested. (We will revisit the budget discussion after the agency posts a transcript of the meeting.)

On Monday, when we reported some of the details of the budget, we noted that spending on information technology is scheduled to jump 53 percent from $817,000 to $1.2 million, an increase of about $433,000. Most of that goes for the grant system.

CIRM is trying to oversee more than $1 billion in grants to more than 300 recipients and, at the same time, hand out many hundreds of millions more in the next year or so. It is building custom programs for entire process, from applications to oversight. Currently, CIRM has a $125,000 RFP out for “systems analysis and software development services” and hopes to have a company on board next month.

The board also discussed the strategic financing report(see here and here), which will be wrapped into an external review of CIRM's strategic plan next fall. There appeared to be no clear consensus at this point whether the agency should make grants as speedily as possible or husband its resources to deal with unexpected opportunities in the fast-moving stem cell field. Related to that was a discussion of the CIRM grant portfolio. No action was needed on either item.

Comments by John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., were discussed briefly after they were read into the record. Simpson said he was “troubled” by what appears to be a lack of a level playing field for grant applicants from business and the dominance of academic institutions, who constitute a plurality on  the board.

CIRM Chairman Robert Klein said he did not think that the biotech industry agreed with Simpson's concerns about whether business grant applications were being treated fairly. Klein noted that BIO, a national biotech industry group, recently recognized him with a national award, indicating that the group valued CIRM's contributions. But Klein said more progress was needed.

Vice Chairman Art Torres indicated that he took Simpson's concerns about the seriously but said the public does not understand just how stringent are the conflict of interest standards at the agency.

Directors also approved the a concept proposal for a $45 million round of grants for basic biology research.

You can find slides from the report by CIRM President Alan Trounson here. He discussed recent stem cell research, a proposal for a CIRM online journal and upcoming CIRM workshops. The slides also include those used for the budget presentation.

Fresh Info, and Plenty of It, From CIRM for Big Meeting Next Tuesday

The California stem cell agency today presented to the public an impressive array of information on its operations and plans, ranging from the nitty gritty of the budget of its chairman's office to a scenario that would see its operations extending into 2023.

All of the topics are scheduled for discussion or action at the CIRM board's two-day meeting that begins next Tuesday in San Diego.

We have been critical of CIRM's failure to provide the public with adequate and timely information concerning its activities. Today's postings represent a dramatic improvement. The agency and its staff are to be commended.

CIRM offered plenty of grist – more than we can do justice to in a quick summary. But here are a few highlights.

One of the more interesting matters to be considered by the 29 CIRM directors next week involves a long-range look at its expenditures and its strategic goals.

The staff's 12-page analysis had the following to say about a plan that would have the agency running through its $3 billion by 2019.

“This scenario raises the concern that CIRM may be pushing its programs forward too fast to meet its mission. Stem cell science is a rapidly progressing, fast moving field. However, it is still a young discipline. The next big advances to come out of basic research can only be imagined but it is not unreasonable to expect additional paradigm-shifting results in the next couple of years that will rival the initial development of iPS technologies. CIRM may well be in position to contribute to those breakthroughs but will it have enough money and time remaining to push them into the clinic? Currently, there are programs in the pipeline with potential for significant clinical benefits but, given the early stage of stem cell research and the well-documented studies of success rates in drug development, it is difficult to predict how many, if any, of them will fulfill that promise. However, as the field matures there will surely be many more therapeutic candidates and it is reasonable to predict that some of the later ones will have a greater chance of success because they will be able to take advantage of more advanced technologies.”

The staff also took a crack at the issues on a scenario into 2023.

The budget information, which has been the subject of some attention recently on the California Stem Cell Report, is vastly improved over last year. Detail is heaped on detail. Legitimate year-to-year comparisons are made. Expenses can be viewed by “cost centers,” meaning the office of the chairman, the president and so forth.

The proposed budget for the fiscal year that begins in two weeks totals $15.7 million, compared to the $9.7 million spent through May. Last year, directors approved a $13 million budget for the agency. CIRM ran significantly under budget on its payroll costs, the largest item in the budget, and external contracts, the second largest.

For next year, CIRM projects that salaries and benefits will increase by $1 million beyond last year's approved budget. However, the proposed figure of $8.5 million is well above the $6.3 million spent through May. CIRM has 45 employees currently and hopes to hit 50. It may exceed that if legislation passes removing the 50 person staff cap. Even without hiring beyond 50, benefit costs will rise by $400,000 because of state-mandated retirement benefits for some employees.

Other significant increases include $633,000 for grant working group meetings, $1.1 million compared to $574,000 approved for this year but even higher when compared to actual spending of $337,000 through May. External contracts will rise $506,000, hitting $2.8 million compared to last year's approved figure of $2.3 million. But the jump is much greater when compared to actual expenses through May of $1.4 million. Information technology, which appears to mainly involve continuing work on CIRM's critical grant management system, will jump $431,000, from $818,000 approved last year to $1.2 million. Actual spending through May is only $610,000.

Also up for consideration at the board meeting is a $45 million grant round for research into basic biology. The three-year awards will be available to both business and academic researchers.

CIRM also reported for the first time a partial accounting of some of the benefits it is receiving from the City of San Francisco's package to win placement of the agency's headquarters in Baghdad-by-the-Bay. For the current fiscal year, they included:

“• Rent – valued by auditors at $1 million
“• Overhead on office space - $650,000 (approximate)
“• Free internet line - $15,000
“• Use of Moscone Center for ISSCR annual meeting - $100,000
“• Use of City Hall Rotunda (2 receptions) - $10,000 each”

CIRM should compile an overview of the entire package in the not-too-distant future.

Also available as of this evening are five "extraordinary petitions" by researchers seeking to overturn negative decisions on their applications for immunology grants. They are Genhong Cheng of UCLA, Jeanne Loring of Scripps, Olivia Martinez of Stanford, Elaine Reed of UCLA and Defu Zeng of the City of Hope.

The postings of the petitions also came earlier than those for previous meetings of the CIRM board.

California Stem Cell Directors to Give Away $30 Million Next Week and Tackle Budget

One day after a one-hour meeting to consider its budget for the coming fiscal year, directors of the California stem cell agency are scheduled next week to approve the $13 million-plus spending plan.

The budget, which will go into effect at the beginning of July, was the subject of a recent kerfuffle involving the failure of the agency to post publicly its expenditure plans. The budget is among the matters to be approved by directors of the $3 billion research effort June 22-23 at a meeting in San Diego. The directors are also expected to give away $30 million in about 20 grants that are likely to involve researchers in Australia and Germany.

The grants are for stem cell transplantation immunology research, a matter of special interest to CIRM President Alan Trounson. He has said immumnology issues need to be resolved before therapies can be fully developed. Plus, the international applicants could well include some of his former colleagues in the state of Victoria in Australia. Foreign collaborators, however, must find funding elsewhere. CIRM is barred from financing research outside of California.

As usual, no details or other background information is available on the matters to be considered by the full board nor for the one-hour, budget meeting of the Finance Subcommittee. Last year, however, directors approved a $13 million budget. Presumably that figure will rise somewhat for the coming fiscal year. Maybe more, if it includes spending for hiring substantially more staff, which would be permitted under legislation pending in Sacramento.

Other matters to be decided by the board include the concept behind a new round of grants for basic biology research, appointment of new member to the Standards and Grants Working Groups and a “technical” change in the CIRM compensation program.

Also on the agency is discussion of strategic financial projections. While it is widely believed that CIRM has a 10-year life that began in 2004, no such legal limit exists. CIRM Chairman Robert Klein has discussed a timetable that extends CIRM's life to 2017. It could continue beyond that if the agency can secure additional funding after its existing $3 billion in state bonds run out.

Another discussion topic for directors is something called “development candidate portfolio review.” CIRM's agenda offered no clue to what that matter covered.

The San Diego meeting is unusually long -- scheduled for two full days. Normally the board begins late in the afternoon and then continues into the evening on the first day of a two-day meeting. It has been finishing up on the second day in mid-afternoon. Next week's meeting begins at 10 a.m. on the first day and runs to 8 p.m. The second day is scheduled for 9:30 a.m. to 4:30 p.m.

The board's Evaluation Subcommittee is in the process of conducting the first-ever evaluation of Klein's performance. It held one closed-door session last week and has another scheduled this week. A personnel session is included in the full board meeting next week. If the board takes some action on Klein, it might be announced following that executive session.

The Finance Subcommittee will hold its teleconference meeting on the budget with public access available in San Francisco, Los Angeles, La Jolla, Irvine and San Diego. Specific locations can be found on the agenda. The public will have an opportunity to participate at those locations.

The meeting of the full board is likely to be available on an audiocast on the Internet, but public participation is not available by that means. Directions for the audiocast are expected to be posted later.

Festering Issues Surface at Contentious Stem Cell Meeting

SAN DIEGO – A bit of a rumpus broke out Thursday at the board meeting of the California stem cell agency. Nominally, the dispute was about hiring an additional staffer to help support the 29 persons who serve on the board that oversees the $3 billion enterprise.

But the heated discussion raised a host of issues, some of which have been festering behind closed doors for years. They included staff support for the 10 patient advocates on the 29-member board, the two-tier board structure, conflicts of interest, super-quorum requirements, ill-conceived legal limits on staff size, CIRM hiring plans, micromanagement and the agency's budget for the coming year.

“Festering” was a word used more than once by board members. It was connected to concerns of patient advocates about the lack of CIRM staff support for their CIRM-connected responsibilities. The discussion also highlighted the fact that other board members can designate alternates to attend meetings, but the patient advocate members cannot.

Those who are permitted to use alternates are executives at research institutions, universities or businesses. They also can use their own staffs to assist with their CIRM responsibilities. But some of the patient advocate members do not have jobs that allow them to do that.

One patient advocate director, Marcy Feit, CEO of ValleyCare Health Systems of Pleasanton, Ca., pointed out that patient advocates must attend more CIRM meetings -- of which there are many -- than other directors because that is the only way that CIRM, in many cases, can get its business done. She described the workload as “incredible.”

The meeting attendance problem arises because of the board's super-majority quorum requirements, which are embedded by Prop. 71 in state law. Conflicts of interests also regularly disqualify many board members from being counted as part of a quorum, voting and even participating in debates. One example occurred at the Wednesday meeting of the board, when only six board members could vote on $41 million in funding for training grants. All the rest in attendance were barred from the discussion.

Why do the conflicts of interest exist? Because Prop. 71 required the appointment to the board of the very persons whose institutions and enterprises benefit from CIRM largess. And Prop. 71 is all but impossible to change, also because of language the ballot measure wrote into the law.

Patient advocate director Jeff Sheehy, a communications manager at UC San Francisco, triggered Thursday's contentious discussion when he said he would not vote for the proposed budget unless another person was added to the support staff for the board. Currently, virtually all of the support goes through a single person, Melissa King, executive director of the board.

While Sheehy and other patient advocates had high praise for King, they said CIRM staff often was not responsive to their concerns. They said “significant difficulties” have arisen when they have tried to get information from staff.

Patient advocate director Jonathan Shestack, a Hollywood film producer, said that the problems have been festering “since the five-month mark” in CIRM's life. Shestack said,

“The truth is for many patient advocates they have other jobs that do not support the work here.”

He added that “I for one gave up at a certain point” trying to get the information and support that he needed. He said board members cannot go easily to staff to find explanations about complex bond financing or scientific issues.

Patient advocate director David Serrano Sewell, a deputy city attorney for San Francisco, resisted a suggestion from one board member that Thursday's discussion take place in private instead of at a public meeting. He said that efforts have been made in the past to resolve the problem both cordially and in private. But he said they have failed.

Some directors objected to Sheehy's attempt to add help for the board. They said it amounted to micromanagement and would be “demotivating” for top CIRM management. Sheehy flared at comments by Ed Penhoet, former co-founder of Chiron, that singling out a specific individual to be added to staff constituted micromanagement. Sheehy said the Penhoet's comments were “condescending,” something that Penhoet said later that he did not intend.

Board Chairman Robert Klein said the concerns of the patient were legitimate. He said,

“The organization is under stress.”

Sheehy said, however, that Klein has failed to address the concerns for much too long.

Director Michael Friedman, CEO of the City of Hope in Los Angeles, noted that CIRM has not reached its legal cap of 50 employees, suggesting it could be fully staffed to help solve some of the issues. Director Ted Love, president of Nuvelo of San Carlos, Ca., asked,

"Are we trying to do much too inexpensively?”

He said the staff should not be subjected to “extraordinary unbearable long-term situations.”

CIRM President Alan Trounson indicated that staffing was a bit of a juggling act. He said more persons would be needed in the science office as CIRM gives out more money and adds more complex research to its oversight responsiblities.

At one point, Klein, who says he wrote Prop. 71, said,

“I made the mistake perhaps of setting a 50 person cap.”

Sheehy was upset about the inadequate budget documents presented to the directors' Finance Subcommittee last week. And he said the budget material presented this week also was not up to snuff. He said basic year-to-year financial comparisons remained missing along with “global” figures that would show complete totals for spending in various categories, such as legal and communications. Sheehy said he had asked for budget figures by function, which were not provided. And he declared that the proposed budget amounted to a “dereliction of our fiscal duty.”

Klein bridled at the comment, which he called a “gross distortion.” He said,

“I understand your frustrations but we have a mission. Let's not destroy our mission.”

Ultimately the budget was adopted on a 19-4 vote with the requirement that a 5 percent contingency fund be included. Added also was a requirement that Klein and Trounson come up with a plan within two weeks to solve the board support problem. The board will convene in a teleconference meeting to consider the proposal.

Following Thursday's session, Penhoet said,

“The board deserves more support if they think they need it.”

But Sheehy said, also after the meeting, he had little faith that the issue would be properly resolved, given past performance.