CIRM Directors to Consider $600,000 Online Journal Plan

Coming up in only three business days is a meeting of the Finance Subcommittee of the California stem cell agency, which is expected to act on a $600,000 proposal to create an online scientific journal and alter CIRM's fledgling loan program for biotech businesses.

No specifics are available, however, from CIRM's Web site, which makes it difficult for interested parties to comment thoughtfully. In fact, the agency's de facto policy of regularly withholding until the last minute details on proposals coming before its directors discourages the public from commenting.

Also on tap is “consideration” of projected cash flows for the agency in connection with its strategic plan, which is scheduled for a sweeping, two-day, closed-door review next week. It is unclear why the cash flow matter is coming before the directors' Finance Subcommittee since it would not appear to require action. It may be a discussion proposal to set the stage for creating a policy for future expenditures – such as spending the agency's cash more rapidly -- sooner rather than later.

Regarding the loan policy, the agenda for the Finance meeting said only that the program, which originally was touted as a $500 million effort, would be amended. No other clue was offered concerning the changes. CIRM has made only one, $20 million loan in the program.

The journal proposal is part of the CIRM budget that was approved last June. At the time, CIRM President Alan Trounson told directors,

“What we would like to do is create an interest in one of the journals to bring out a translational journal which was focused on stem cell translation and for them to do all of the independent editing and all the reviewing and so forth.”

He said it was needed to provide a forum for discussion of regulatory issues and publication of research with negative results. He said that currently “translational papers” are scattered and hard to find.

We later asked for more details from CIRM. Don Gibbons, CIRM's chief communications officers, sent along a draft of an RFP. The proposed RFP dates back to July 26 and may well change. But it says that raising unique translational issues to a higher priority in journals would accelerate the entire field.

The draft RFP called for a three-year subsidy of the online, open access publication and required a business plan that would demonstrate self-sustainibility at the end of that period.

During next Tuesday's meeting, the public can participate at teleconference locations in San Francisco, San Diego, Stanford, Irvine and La Jolla. Specific addresses can be found on the meeting agenda.

No Ten Year 'Sunset' on CIRM Horizon

California's unprecedented, $3 billion stem cell research program is widely perceived as a 10-year effort, but, like much conventional wisdom, that view is simply wrong.

The agency, created as the result of a 2004 political campaign, theoretically could continue to function for eons. The only relatively immediate, “life-and-death” question facing CIRM involves the cash needed to continue its grant and loan programs, which have already pumped out $1 billion to California researchers.

The fiscal hitch comes from Prop. 71, the initiative that spawned the California Institute for Regenerative Medicine. The measure provided for only $3 billion in state bond funding. When that borrowed money runs out, CIRM will have to find more -- if it wants to continue operations. But CIRM does not, in fact, face a mandatory “sunset” provision that will bring down the curtain on its offices near the San Francisco Giants baseball park.

Mainstream news organizations have continued, nontheless, to describe the state's stem cell research as a 10-year effort, including at least two reports in recent months.

The error seems to stem from the 2004 campaign, when it was in the interest of Prop. 71 supporters to allow voters to believe that they were not voting to create a big-bucks bureaucracy that would exist in perpetuity. The campaign was run by Bob Klein, who wrote much of the ballot measure and who is now chairman of CIRM.

News stories at the time commonly described the measure as having a 10-year limit. Those stories went uncorrected, presumably because the Prop. 71 campaign did not want to make an issue of it. In fact, the Prop. 71 campaign Web site carried this statement:

“Funds will be allocated incrementally over 10 years (~$295 million per year) for California-based stem cell research at leading universities and research institutions.”

The campaign Web site has now vanished into cyberspace and its domain name is for sale. But the campaign document can be found on the Web site of the world's largest organization of stem cell researchers, the International Society for Stem Cell Research. The society reports to this day that California is engaged in a 10-year program.

Last week, we discussed CIRM's life expectancy with James Harrison, the agency's outside attorney, at a meeting of the CIRM board at the Hotel Whitcomb in San Francisco. He assured us that there is no “sunset” looming for CIRM.

Later we asked him to provide his perspective via email, the full text of which is in a separate item below. Harrison is with Remcho, Johansen & Purcell of San Leandro, Ca., and is one of the authors of Prop. 71. He said,

"We wrote Prop. 71 to protect the voters' mandate against ideologically motivated litigation that could deny Californians the opportunity to have ten full years of medical and scientific advances for therapies. With ten full years of funding, the public will have an opportunity to evaluate CIRM's performance and the value of Prop. 71 to California's patients and the health care budget. At the end of this period, CIRM expects to be able to demonstrate an extremely persuasive performance.”

Harrison continued,

"Numerous (media) interviews were given to explain how Prop. 71 would adjust for delay by extending the effective time frame. Similarly, many interviews focused on the ability to reduce funding in a particular years if the scientific quality dropped in that year, with the funds saved to be used in later years, perhaps adding a year or two to the program term."

The California voter pamphlet, which goes to all registered voters statewide, also said in 2004,

“The measure states its intent, but does not require in statute, that the bonds be sold during a ten-year period.”

The pamphlet, however, came during both a presidential election year and a California election that was loaded with ballot measures. Both voters and reporters paid scant attention to it.

As for the language in the “intent” section of the measure, it says that Prop. 71 would

“Authorize an average of $295 million per year in bonds over a 10-year period to fund stem cell research and dedicated facilities for scientists at California’s universities and other advanced medical research facilities throughout the state.”

As far as we can tell, that is the only reference in the 10,000-word measure to a 10-year limit.

So what does all this mean? The intent language and the campaign's action/inaction could encourage a cantankerous attorney to make legal mischief by arguing in court that CIRM must wind up its affairs within the decade specified. We suspect such an effort would fail, but it would waste time and money at CIRM.

More importantly, the matter touches on the agency's credibility, which is likely to be examined as part of its bid for future funding. CIRM has already embarked on a course (creation of a communications task force and its disease team grants) to gin up support for more cash. If CIRM's credibility is suspect, some potential benefactors – be they lawmakers or philanthropists – may view the agency's new pitch with skepticism.

Klein already has been labeled as less than straightforward in connection with campaign claims. In one case involving allegations of deceit, the San Francisco Chronicle reported that Klein failed to disclose during the campaign negative financial details to the tune of $1 billion. Klein did not respond publicly to the 2005 article.

John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., today put CIRM's life expectancy in the broader context of the California's budget crisis.  Writing on his organization's blog, he said that when CIRM asks for more public cash,

"...(It) will be necessary to ask whether, after committing $6 billion, counting interest on taxpayer money, CIRM deserves more.  The question will be: Given California's other challenges, can it afford more money for stem cell research?  I don't know what the answer will be then.  If the choice were being made today, my answer would be definitely not."

(You can read recent news stories here and here that contain a reference to a 10-year program. You can read campaign news stories that contain a reference to 10 years here, here and here. The item below carries the verbatim text of what Harrison sent the California Stem Cell Report concerning the life expectancy of CIRM.)

Snippets: CIRM Bonds, Clinicial Trials and TV Coverage

California Bond Picture – The state is moving ahead to unfreeze $500 million in funds to keep bond-funded projects on track. The Pooled Money Investment Fund approved the action on Wednesday, helping to restore a partial sense of normality to the Californa bond scene, according to John Myers of KQED. That's a tiny bit of good news for CIRM and its efforts to market bonds privately. Tom Petruno of the Los Angeles Times also reported today about the sale of California tax-exempt bonds next week to individual investors with interest rates of 5 percent or so. That makes them extremely attractive to California residents, who do not have to pay federal or state taxes on the interest. However, CIRM's bonds will be taxable, which will push their rates higher, costing the state more but making them appealing investments to the enterprises that may purchase them. No mom-and-pop sales on the stem cell bonds.

CIRM Board Audiocast – The CIRM board meeting drew 165 listeners last week to its audiocast, with 121 using the web address, the stem cell agency told us. The 45 others used a phone connection. The figure compares to 108 at the highest level at the January board meeting, the first time an audiocast was available. This is a worthwhile effort by CIRM, offering much wider access to its proceedings. Normally a public audience of about one-tenth the size of the audiocast listeners actually attends CIRM board meeting. However, the audiocast did suffer last week from a lack of promotion. The notice of the audiocast needs a mention on CIRM's home page for at least several days proceeding the board meeting. And it wouldn't hurt to get the various constituent groups to let their members and other interested parties know that an audiocast is available.

Secondhand Smoke on CIRM – Robert Klein, chairman of the California stem cell agency, came under heavy fire this week on the Secondhand Smoke blog by Wesley J. Smith, an author and self-professed "trouble maker." Smith said Klein's leadership was "reminiscent of the entire financial mess at the federal level in a microcosm," among other things. Also this week, The Sacramento Bee carried a less vitriolic op-ed article by Smith on stem cell issues.

TV Time – The California stem cell agency scored some significant TV time in San Francisco on Tuesday with a 2 minute and 43 second piece. The ABC station, KGO, aired the story, which was keyed to a CIRM meeting aimed telling the public more about stem research. Carolyn Johnson did the narration. Stanford's Renee Reijo Pera held forth. Unfortunately Johnson reported that research at Stanford is funded "privately" by CIRM. As we all know, CIRM is in a very public funding situation. Nonetheless, TV coverage of CIRM is rare, and the agency should be tickled with the story.

CIRM on Clinical Trials – A 20-page summary of last month's clinical trials workshop conducted by CIRM is now available online. Readers would want to couple it with the transcripts from the session of the Standards Working Group at which it was discussed. They can be found here and here. The use of somatic cells and reporting requirements for oocyte donation were also part of the meeting.