Quarter-of a-Billion Dollar 'Salute' to California Stem Cell Agency; Japanese Firm and jCyte Sign Big Licensing Deal

A California stem cell company with major backing from the state's stem cell agency received a $252 million boost today when a Japanese firm cut a deal to develop the firm's therapy for an eye disorder that affects nearly 1.9 million people globally. 

The California company is jCyte, Inc., of Newport Beach. It has received $15 million from the California stem cell agency over the last few years to develop a treatment for retinitis pigmentosa. Its co-founder, Henry Klassen of UC Irvine, has received an additional $19 million from the agency for his work that led to creation of jCyte. The Japanese firm is Santen Pharmaceutical Co. Ltd., a publicly traded firm. 

In a comment for the California Stem Cell Report, Maria Millan, CEO of the agency, formally known as the the California Institute for Regenerative Medicine (CIRM), said, 

"This is exciting news for everyone at jCyte. They have worked so hard over many years to develop their therapy and this partnership is a reflection of just how much they have achieved.

"For us at CIRM it’s particularly encouraging. We have supported this work from its early stages through clinical trials. The people who have benefitted from the therapy, people like Rosie Barrero (see video above), are not just patients to us, they have become friends. The people who run the company, Dr. Henry Klassen, Dr. Jing Yang and Paul Bresge, are so committed and so passionate about their work that they have overcome many obstacles to bring them here, an RMAT designation from the Food and Drug Administration, and a deal that will help them advance their work even further and faster. That is what CIRM is about, following the science and the mission."

In its news release, jCyte said, 

"The treatment is a minimally-invasive intravitreal injection, which can be performed in an ophthalmologist’s office with topical anesthetic. The entire procedure takes less than 30 minutes. The principal mechanism of action is the release of neurotrophic factors that may rescue diseased retinal cells. jCell therapy aims to preserve vision by intervening in the disease at a time when host photoreceptors can be protected and potentially reactivated."

The company's statement continued, 

"Under the terms of the licensing agreement, jCyte will receive $50 million in upfront cash, $12 million in a convertible note offering, and $190 million in clinical and sales milestones based on regulatory approval and initial sales in Europe, Asia and Japan. The total deal is valued at up to $252 million. jCyte is also entitled to receive tiered, double-digit royalty payments on net sales of jCell therapy once commercialized outside the U.S."

Currently there no federally approved treatments for the rare, genetic affliction. In its clinical trials, jCyte has treated more than 100 patients,, and the federal government has given it a regenerative medicine advanced therapy designation based on the early results. That designation is aimed at speeding further federal review.  The company says the treatment could have application in other degenerative retinal diseases, including age-related macular degeneration and diabetic retinopathy.

In another rare instance, jCyte featured CIRM's role in funding the work. The agency was cited in the fifth paragraph of the company news release. The firm's web site also contains a glowing acknowledgement of the importance of CIRM support. In virtually all news releases from businesses or academic institutions, the role of CIRM's funding, which totals $2.75 billion over the last 14 years, is omitted. 

The deal with jCyte undoubtedly will be cited during possible efforts this fall to keep CIRM operating. It is running out of cash and is hoping a proposed $5.5 billion ballot initiative will be approved by voters to keep the agency operating.

Klassen co-funded the company along with Yang, also of UC Irvine. The cells used in the treatment are manufactured at a facility at UC Davis that was financed with funds from the stem cell agency. 

Pluses and Minuses: The Cases For and Against $5.5 Billion More for California's Stem Cell Agency

BURLINGAME, Ca. -- It was a case of dueling op-ed arguments -- one describing the state's $3 billion stem cell agency as a waste of money and the other touting its success and its current and future impact on human lives.

The articles appeared online on the web site of the San Diego Union-Tribune on the eve of a daylong conference here to lay out possibilities for the agency over the next several years. 

The articles and the meeting come at a critical point for the agency, known formally as the California Institute for Regenerative Medicine (CIRM). The nearly 15-year-old enterprise expects to run out of cash for new awards this year. It is hoping for a $5.5 billion infusion in November 2020 if California voters approve another bond measure for the agency.

The op-ed articles embodied many of the arguments -- pro and con -- that are likely to surface in the ballot measure campaign next year, a campaign that is expected to cost its supporters $50 million. 

In the San Diego newspaper, the case for giving the agency more billions was made by Larry Goldstein, a professor at UC San Diego; Aileen Anderson, a professor at UC Irvine, and Malin Burnham, chairman of the Burnham Foundation. The case against CIRM was made by state Sen. John Moorlach, R-Costa Mesa.

Moorlach argued that the agency has "produced close to no results." He cited articles in the journal Nature and the San Francisco Chronicle as evidence. Moorlach called CIRM a "dry hole." He wrote.

"Not only was the $3 billion for the research a bust, but taxpayers will be paying interest on the principal until 2039. California Treasurer Fiona Ma’s office told me the cost of the interest on the $2.59 billion of principal already spent will be $836.6 million. Interest rates lower than anticipated in 2004 kept that below the original $3 billion estimate."

Goldstein and his co-authors argued that more than 50 children have had their lives "given back" as the result of clinical trials funded by CIRM. They said, 

"CIRM funding has established an impressive pipeline of new stem cell-based therapies being tested in 78 human trials directly funded by CIRM or based on CIRM-funded research. CIRM funding has also led to over 3000 published medical discoveries." 

They continued, 

"In 2020, Californians can continue their commitment to the best forms of stem cell research and therapy development. While there are no guarantees in medical research, if prior achievement is any indication, the next initiative will push many breakthrough therapies across the finish line. Considering the potential benefits to Californians and the opportunities to improve lives and alleviate suffering, there is little to lose, and an incredible amount to gain."

California's 15-year Stem Cell Journey: Where to After 1,000 Research Awards, 56 Clinical Trials, $904 Million for Basic Research?

BURLINGAME, Ca. -- California's $3 billion stem cell research agency this year is nearing only its 15th birthday, but tomorrow it will wrestle with the question of whether there is life after 2020.

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is convening a passel of out-of-state scientists here to address the very real matter of what to do next year and thereafter. 

CIRM expects to run out of cash before the end of this year. It is hoping that California voters will approve a $5.5 billion bond measure in 2020 to continue its work. 

The scientists arriving for tomorrow's public meeting are non-California folks who have evaluated some of the more than 3,000 applications from California scientists for cash from CIRM.  The agency is barred by law from financing work outside the Golden State.

A presentation prepared by the agency for the session asks:

• "What should CIRM be thinking about now to prepare for a possible life beyond 2020?
• "How can CIRM deliver the greatest impact in the future?
• "What opportunities might CIRM seize to accelerate the field?• 
• "What challenges must be addressed?
• "What types of CIRM programs should be sustained or expanded?
• "What is missing, or needs more support?"

The day-long program also includes a 49-page, information package dealing with CIRM programs, ranging from basic research to clinical activities. It is the most comprehensive, recent, public look at CIRM's efforts that the agency has prepared.

Here are some of the highlights of the fresh data overview from CIRM: 

• 56 clinical trials
• More than 1,000 awards
• More than 1,200 patients in CIRM-initiated Alpha stem cell clinics
• $904 million for basic research
• Stimulation of $3.7 billion in outside investments
• 2,700 alumni from CIRM training programs 

The session begins at 8:30 a.m. PDT. It will be available also on online. Instructions for access can be found on the meeting agenda.

California's Stem Cell Agency Says It Has Saved Lives and Is Building a Foundation to Save More

Evie Vaccaro, whose life was saved with research backed by the stem cell agency

California's $3 billion stem cell agency took its message this week to the op-ed pages of the
San Francisco Chronicle, declaring that the agency's efforts have saved lives and created a world class network of clinics to develop therapies for all.

Maria Millan, CEO of the agency, and Jonathan Thomas, chairman of its board, said in an op-ed article,

"Have we achieved all we wanted to? Of course not. The first decade of CIRM’s life was laying the groundwork, developing the knowledge and expertise, and refining processes so that we can truly accelerate progress. As a leader in this burgeoning field of regenerative medicine, CIRM needs to continue its mission of accelerating stem cell treatments to patients with unmet medical needs."

The Millan-Thomas article came in the wake of a Chronicle editorial that said the agency, formally known as the California Institute for Regenerative Medicine (CIRM), did not merit additional funding based on its results to date. The Chronicle also carried a lengthy news piece that concluded the agency has not met the expectations of voters who created it through a ballot initiative in 2004. 

The agency expects to run out of cash for new awards at the end of next year. Its hope for survival lie with a yet-to-written bond measure that would appear on the November 2020 ballot. 

Millan and Thomas said the agency is now backing 49 clinical trials and has a host of accomplishments. They said, 

"Today the therapies resulting from the institute’s work are not just changing lives — they are already saving lives.

"Lives like Evie Vaccaro, who is alive today because of a treatment CIRM is funding. Vaccaro was born with SCID, also known as “bubble baby disease,” an immune disorder that often kills babies in their first two years. Vaccaro, now 6, and dozens of other babies were given stem cell treatments thanks to the institute. All are showing improvement; some are now several years past treatment and considered cured. 

"An accident left Jake Javier from Danville paralyzed from the chest down on the eve of his high school graduation. Javier was treated in a CIRM-funded clinical trial. Today, he has regained the use of his arms and hands, is driving a car and is a sophomore at Cal Poly San Luis Obispo. Five other patients treated at the same time as Javier all have experienced improvements meaning that instead of needing round-the-clock care, they can lead independent lives."

Critiquing the California Stem Cell Story: 'Continuums' vs. Cures

It was a genuine “where's the beef” session for California's nearly 10-year-old, $3 billion state stem cell agency.

A member of the only state body legally delegated to oversee the California Instititute of Regenerative Medicine (CIRM) and its governing board wanted an answer to a simple question: What cures has the agency produced as promised during the 2004 ballot campaign that created the state program?

The occasion was a meeting Jan. 22 in downtown Los Angeles of the Citizens Financial Accountability and Oversight Committee, a group headed by state controller John Chiang. It meets once a year to examine the activities of the agency.

Jim Lott
COPE photo

Jim Lott, a long-time member of the panel and an executive vice president of COPE Health Solutions of Los Angeles, was pressing CIRM Chairman Jonathan Thomas and Ellen Feigal, CIRM's senior vice president for research and development.

According to the transcript, Lott, who described himself as a “big supporter” of CIRM, said, 

“I think when many voted for this, they thought there were going to be some cures coming out of this effort. And my bias is I have a 13-year-old daughter who has a spinal cord injury, partial break. I'd like to go home and tell my wife that this did something to advance the medical therapy that will ultimately provide her with the opportunity to walk again. What can you tell me that we've done that's going to get my daughter out of her wheelchair sooner (rather) than later after all this money has been spent?”

Thomas and Feigal struggled at some length to give him satisfying answers to his question. 

It was a tough series of exchanges with Thomas and Feigal talking about “incremental” work and “continuums” along with unrealistic, high expectations raised by the 2004 campaign. Those expectations burden the agency's current efforts to find new funding for awards beyond 2017, when the cash runs out.

At one point, Lott said it would be a “hard sell” to get voters to back more funding. Thomas acknowledged that and said it is “not stuff that readily translates into good sound bites.”

“You don't have a good message,” Lott said, declaring that he raised the issue two years ago.

“You guys are not speaking to people in ways that they understand the value of what you are doing. And that bothers the heck out of me.”  

Here is an exchange from early in the meeting involving Feigal and Lott, who has spent 23 years in the California hospital industry.

Lott:

“What can we say we've done to advance to a cure or to cures? It's fine that we've got all -- we've contributed to all. What can you say that we've actually done? We don't really have any -- I'm going to just say this because it's a bias and I know it's a bias. We don't have any tangible specific and measurable results that I can point to.”

Ellen Feigal

Feigal:

“Actually –”

Lott:

“Tell me if I'm wrong and demonstrate it to me. I want to understand where the results are.”

Feigal:

“So I'm happy to tell you the results, but I guess the issue is the expectations. And when this was funded, it probably was an expectation that (if we) give them money and within a very, very, very short period of time, and frankly ten years is a relatively short period of time, and, as you may not know, the funding didn't start till 2006, but if you try -- we're trying to do things in a very accelerated way. The funding actually for the disease teams and strategic partnerships just started three years ago. Part of it is advancing....”

Feigal continued in that vein for a few more minutes. Lott then asked about CIRM's return on investment(ROI), which amounts to $6 billion that the state will have to pay to support the agency, including the interest on the money that was borrowed for grants.

Jonathan Thomas
CIRM photo

Thomas, a bond financier from Los Angeles, jumped in,

“The results are, do we have any cures? No, we don't have any cures, but the results are many. They're incremental, but they are all moving along a research continuum that any sort of drug therapy would follow.....”

Lott:

“Here's my problem. As you said earlier, and I agree with it completely, I think it's a question of expectations. I know when I voted for this, and I did vote for it, I had some expectations. And my expectations were (that) we were going to see something in terms of cures at the end of the rainbow after we spend $3 billion, whatever it is that we're spending here.

“So when I asked for an ROI -- and I do understand what you are trying to tell us. I do get it, but it's not translatable. It doesn't translate to the expectations that many of us voters had.”

Lott kept coming back to his essential question

“The point is if we did spend all this money, what did we
get for it?”

Thomas and Feigal, aided by their Power Point presentations, continued to talk about CIRM's partnerships, disease teams and funding mechanisms.

Thomas:

“So if we do go back for a subsequent bond measure, I think we will be able to tell a story that will make California proud of being on the cutting edge and having facilitated the acceleration of the research, which, as Ellen said --”

Lott:

“Not if you don't get beyond the marketing problem you got. I'm telling you, pal, I would have a hard time voting for it again."

Thomas:

“That's fair.”

Our take: The California stem cell agency is virtually unknown to most of the people of California, which is not an unusual situation for most state agencies. Since Thomas was elected chairman in 2011, however, it has vastly improved its communications efforts. Nonetheless, it has not fulfilled the campaign promises of cures and won't be able to do so in the next two years. It does have a story to tell, albeit one that does not fit with the mythology of magical stem cells. Telling that story is hindered by mind-numbing Power Point presentations, which are little more than outlines that would be better replaced by nuanced, written documents. The challenge for the agency is to present not only the dry numbers but package the key figures with information that will connect viscerally and persuade people of the virtues of CIRM. Packaging and sizzle are the watchwords, depending on the audience. Each group has different concerns that need to be researched in advance and then addressed in tailored presentations. Whether CIRM's efforts so far have been worth $6 billion remains to be determined, but it is clear that it has not yet made its best case.

"Comfort News" for California's Stem Cell Research Effort

The California stem cell agency has enjoyed a spate of good financial and scientific news this week from the biotech industry as the research effort pushes on with its mission of turning stem cells into cures.

The $3 billion agency is scheduled to make its last grants in less than three years and, given the glacial pace of medical research, needs all the help it can get by then to bring a stem cell therapy close to the marketplace – the promise it made to voters when the agency was created nine years ago.

CIRM, as the agency is known, requires not only steady scientific progress but also a rosy outlook for the industry, which has languished in past years as major investors shunned the field. This week, CIRM garnered good news on both fronts.

There was enough so that the agency even touted it on the agency's research blog in an item by Neil Littman, CIRM's business development officer. He said it all helps to leverage CIRM investments and create a favorable investment climate. The good news included yesterday's announcement that Viacyte, Inc., of San Diego, Ca., has come up with $10.6 million needed to match a $10.1 million, much-ballyhooed award from CIRM last fall. The Viacyte financing includes important support from Big Pharma, in the form of Johnson & Johnson. CIRM has pumped a total of $39.4 million into Viacyte.

Another CIRM award winner, Cellular Dynamics International, Inc., of Madison, Wisc., yesterday announced its price on its upcoming stock offering to raise up to $53 million. Cellular Dynamics scored $16 million from the agency last March.

The “comfort news” for CIRM also included Monday's announcement that Capricor, Inc., a private Beverly Hills company benefiting from $27 million from the California stem cell agency, is merging with publicly traded Niles Therapeutic, Inc., of San Mateo. The merger is aimed at providing better access to capital.

And then there was Tuesday's news that a $20 million CIRM disease team award is paying off with the beginning of a clinical trial by Calimmune of Tucson, Az. for an HIV treatment.

All on top of the news in June when bluebird bio of Masschusetts brought in $101 million on its stock offering. Bluebird is the recipient of a $9.4 million CIRM award.

The rosy news comes amid a generally better outlook for biotech in general. John Carroll, editor of Fierce Biotech, this week noted that there were only 11 biotech stock offerings last year. He wrote,

“In the last 6 months, though, the industry has seen a tremendous rebound, with almost twice that number of IPOs in half the time. And there's no sign that the great leap into the public market is waning, with 10 more IPOs in the queue.”

Carroll's comments were echoed in a piece by Peter Winter on Bioworld headlined “Bubbleology and Biotech's Bull Run.”

All of this plays into what some might call the “everybody's-doing-it dance" or the “lemming syndrome,” depending on your point of view. The reality is that big investors and venture capitalists are timid souls and need the comfort of companionship-in-risk as they fork over tens or hundreds of millions of dollars on something that may not pay off for a decade or more. No one wants to be the out-front pioneer who winds up with financial arrows in his or her back. Being in a crowd provides an illusion of safety.

Of course, there is always the caveat about how markets and investors are fickle. A piece of bad news can translate quickly into major reversals as Apple has learned over the last year. Nonetheless, the folks at the stem cell agency have to  be feeling good today.

California Stem Cell Achievements: The Perspective from Robert Klein

The former chairman of the $3 billion California stem cell agency -- Robert Klein -- last week fired off an email touting the accomplishments of his tenure in a statement that had many of the earmarks of an election campaign document.

The 3,770-word missive was emailed under the auspices of Americans for Cures, Klein's stem cell lobbying group which has the same address as his Palo Alto real estate investment banking firm. Presumably the email went to a national audience.

Americans for Cures said in an introduction to the statement that Klein is now preparing "for the next installment of this magnificent effort," which could well be another statewide bond election seeking additional billions for stem cell research. Klein directed the 2004 ballot campaign that created CIRM.

CIRM will run out of cash in about 2017. It relies on borrowed money – state bonds – for its operations and grants. Interest costs double the real expenses of the program, making what appears to be a $20 million grant actually cost around $40 million.

Another stem cell bond measure is not likely to be attempted until 2014 or later. California's current financial crisis makes it unlikely that a bond measure would win voter approval any time soon.

In his statement, Klein soft-peddled the state's current economic downturn, declaring that California was under "maximum financial stress" also in 2004. (Editors note: Unemployment in California was 6 percent just before the Proposition 71 election that created CIRM. In contrast, joblessness stood at 12.1 percent in June of this year.)

Titled "Bob Klein's last words as chair of the stem cell board," the document clearly reflects Klein's view of the California stem cell world. Almost needless to say is that there are other, more measured perspectives.

Here is the email from Americans for Cures and Klein.Statement by Robert Klein, Aug. 4, 2011, on his term as chairman of the California stem cell agency

Op-ed in San Jose Merc: Stem Cell Agency a Bust

The headline on the op-ed article in the San Jose Mercury News read "Old Boss or New Boss, state stem cell agency still a bust."

The piece by K. Lloyd Billingsley, editorial director of the Pacific Research Institute, a conservative think tank in San Francisco, said,

"...Californians do not get what they pay for....CIRM's own scientists acknowledge that no CIRM-produced cures have trickled down to California patients."

Billingsley also focused on salaries at CIRM, including that of the new chairman, CIRM President Alan Trounson and co-vice chairman Art Torres.

Billingsley additionally quoted this writer as saying,

"Voters' expectations are certainly an important measure in assessing the stem-cell agency. At this point, I suspect most voters would not say that their expectations have been fulfilled."

The piece generated extremely modest reader reaction. It included one comment from stem cell scientist Paul Knoepfler of UC Davis. He said,

"I think this opinion piece is a bust. It is full of misleading information and bends everything to fit the extreme agenda beneath the surface. CIRM has done an enormous amount of good and as a stem cell scientist I am confident that new treatments and cures will be created via CIRM." 

Billingsley's piece appeared online July 17.

NY Times and San Diego UT on New CIRM Chair; LA Times and SF Chron Ignore Election

The New York Times and the San Diego Union-Tribune have published the most comprehensive stories on the election of Jonathan Thomas as chairman of the California stem cell agency, including brief updates on CIRM's progress.

The Times article was posted yesterday on its web site. Andrew Pollack wrote that Thomas was "taking over at a time when the state's fiscal crisis could jeopardize financing for the effort." Pollack wrote that Thomas' financial experience

"... including dealing with government bond issues, seemed to appeal to the (agency's) board. The stem cell effort is financed through bond sales so it has actually been quite well insulated from the budget deficits that have forced huge cuts to many other state programs, including the University of California system.

"Still, the state’s fiscal crisis is now impeding the ability of the state to sell new bonds. That could eventually leave the stem cell agency short of funds, though probably not until next year."

Pollack also mentioned differences between Thomas and Frank Litvack, the other candidate for CIRM chair and a Los Angeles cardiologist, concerning the dual executive arrangement at CIRM. Litvack said the chair's job should be parttime and concerned mainly with oversight. Pollack continued,

"But Mr. Thomas said there was enough work for the chairman to do full time, without conflict with the role of the president."

Pollack's story summarized the current state of CIRM's efforts with three paragraphs:

"Scientifically, it is still too early to determine how successful the program will be. Certainly, it has not yet produced the cures for various diseases that were promised to voters, but realistically it is too early to expect that.

"But from a governance point of view the agency has been criticized by consumer groups, a state commission and newspaper editorials for lack of accountability, an unwieldy structure and conflicts of interest. Many members of the board represent universities and hospitals that receive funding from the agency, though members are not allowed to vote on items that concern their employer.

"The agency is now shifting its emphasis from basic research toward testing potential new therapies in clinical trials, which means it will be giving more of its money to biotechnology companies in the future."

Darce's piece covered more of the debate about the chairmanship. Additionally, Darce wrote:

"The new chairman said he also will try to clean up the institute’s image by launching a public relations campaign focusing on the scientists who have received state funding and the work they have produced.

"'If the true nature of what CIRM does became common knowledge, then the people of California would see this as the amazing success story that it is,' Thomas said. 'They would be very proud to know that California has become the largest center for stem cell research in the world.'"

The Los Angeles Times, the state's largest circulation newspaper, and the San Francisco Chronicle (CIRM's headquarters is in San Francisco) so far have not published any stories on Thomas' election.

Science magazine has carried a brief item by Greg Miller on the election.

Here is CIRM's press release on the election. It does not mention Thomas' $400,000 salary or the actual vote, which is not unexpected for a press release, but which is basic information for a news story.

The Sacramento Bee's story yesterday has triggered 44 comments as of this morning, mostly hostile because of Thomas' salary. But the number of comments is modest compared to other, more high profile stories.

CIRM's Sheehy Says CIRM to Pay Off in Cures and Economic Development

On Sunday, we carried an item dealing with the political environment in California surrounding a possible additional $4 billion bond measure to continue financing the California stem cell agency.

CIRM Director Jeff Sheehy, chairman of the board's Scientific Subcommittee, longtime patient advocate and communications manager at UC San Francisco, sent along the following response. It was received before the federal court ruling on hESC research, which Sheehy could have added as a reason for CIRM support.

“I think, David, you are looking at this as a game of 'zero sum' economics in which you assume every dollar spent on stem cell research is a dollar lost to some other worthy state budget item.

“The reason states issue general obligation bonds is that economists recognize that certain investments (historically in physical infrastructure like roads, bridges, ports, and school and university buildings for instance) create value that returns more than to the cost of the investment back to the state. Not only does building a bridge or road hire and pay companies and workers who then pay state income taxes and sales taxes, but there is a multiplier effect by which their personal spending of their wages, etc., on other items circulates through the economy creating additional spending. Further, the new bridge or road speeds other Californians to work faster and more efficiently saving hours of productive time that would have been spent in traffic, creating additional value. Ambulances or fire trucks get to emergencies faster saving lives or property. Given that some investments produce more money for the state in the long run than the money initially invested, states routinely issue government obligation bonds rather than try to budget this funding out of annual general fund dollars. The revenue from the increased economic activity deriving from the investment more than covers the bond repayments that come out of the general funds.

“The more salient question for CIRM is whether it is actually building a platform for the creation of future wealth or building a 'bridge to nowhere' that does little to increase the productive capacity of California. And the Institute of Medicine report, if it is to have any value, must answer that very question. Are the investments in the dozen new facilities for stem cell research, the training of new scientists and technicians from the undergraduate level through the post-doc level, and stem cell research from the basic, laboratory level on through to the clinic creating a platform by which additional wealth for California will be created far beyond the repayment costs of the bonds?

“And while I need a solid IOM report to definitively answer the question, I do believe that overall (minus a lot of superfluous contracts and overly high salaries and a cavalier attitude towards ensuring value for the taxpayers by many CIRM staffers) the investments in intellectual infrastructure made through Prop. 71 will pay off hugely for California as it leads the world in developing and deploying regenerative medicine.

“If CIRM does nothing else but functionally cure HIV infection as the LA Times article suggests is possible, the savings for the state will be huge in lowered medical costs and in income for the state from profits and the growth of Sangamo, based in Richmond CA. This approach targeting HIV may not work, but I feel strongly that eventually some cure for some disease or condition will come out of this spending.

“I also think companies will form and grow just like Intel, Apple, Google and eBay did from the investments made in research at California universities and institutes. Genentech and Gilead are both biotech giants that emerged from research done at California institutions that are generating substantial dollars in economic activity and creating jobs and tax revenue for the state. iPerian, forming and locating here thanks to CIRM and mentioned by you in an earlier column, might be a wealth generator like those mentioned above or it could be one or more of the many small biotech firms working in regenerative medicine up and down the state.

“So David, while I always greatly appreciate your commentary and your reporting, I think to put CIRM funding in the same barrel as annual general fund financing for schools is off the mark. With a five-year-old in public school in San Francisco, I am as frustrated with Sacramento¹s inability to adequately and consistently provide funding on an ongoing basis to educate our children as anyone could be. But pitting annual school funding against capital investments for our future will not stimulate the types of debate that will lead to answers for the respective, relevant questions.”

CIRM Scrutinizes Grantee Performance: The Tale of Three Terminations

Playing the rich uncle to California stem cell researchers is unquestionably satisfying, but the folks at the state's $3 billion stem cell agency sometimes bear messages for scientists that may be less than warmly received.

That's when they become regulators and stewards of the public's money. Particularly when they exercise that responsibility in a more rigorous way than is the practice at the NIH.

CIRM is not making much of the fact that it has revoked three grants because of a lack of progress. It took us more than a month to secure the identities of the researchers who fell under CIRM's scrutiny. The agency, however, should take pride in its oversight. It enhances the credibility of the $3 billion agency and serves notice to all grantees that CIRM is more than a sugar daddy and takes its responsibilities seriously.

Only four months ago, CIRM directors heard a report on monitoring of grants that merits attention following approval of the largest research grant round in the agency's five-year history. The $230 million in disease team grants pose special challenges for the tiny agency. Its staff, currently without a chief scientific officer, will be called on to make go, no-go decisions on continued funding as researchers hit or miss bench marks in projects involving as much as $20 million.

One can only imagine the ruckus if CIRM staff recommends that funding be halted on a $20 million, four-year grant involving such high-profile and respected institutions as UC San Francisco, UCLA, Stanford, Salk and City of Hope, among others.

CIRM opened the window a bit on its oversight of grants at the board meeting in San Diego last June. Marie Csete, then chief scientific officer for CIRM, described in a positive fashion her office's monitoring of the $45 million SEED program, the first ever research grants by CIRM. She said CIRM's efforts saved some grants that would have perished. But it took a question from director Ricardo Azziz, chairman of the Department of Obstetrics and Gynecology at Cedars-Sinai Medicial Center, to bring out the information that three grants had been terminated.

As for the issues raised during the monitoring, Csete said,

“In general, I have to say it was slow progress. It wasn't bad progress. And it allowed us to identify some issues that are, I think, endemic with a new agency and new ideas. Institutions had trouble getting lines for their investigators. People had trouble hiring post docs who were able to do the work. We had trouble getting some of the (grants) out the door for various reasons.”

CIRM director Floyd Bloom, former editor of Science magazine and executive director, science communication, at Scripps, praised Csete and her staff's work. He said,

“This kind of nurturing, interactive relationship with the PIs's is absolutely unique in the grant world. And so I think it's a wonderful thing that you've instituted. It's going to be a tremendous amount of additional work on your staff to be able to do that, but it's highly commendable, and it's going to make the difference between success or failure, particularly for these intermediate level of successful early experiments where they have to be encouraged to go on and push.”

We spoke by telephone with two scientists whose grants were revoked and exchanged email with the third, who was out of the country. None are particularly pleased about losing their grants, but their comments offer insight into the process. We are not identifying them in this piece. To do so would place an unnecessary onus on them, given the current practices in the scientific grant community and the different monitoring procedures at the NIH. None of the issues with the grants appear to involve malfeasance.

One of the researchers said he was “bitter” about CIRM's action, declaring it caused a “huge uproar” at his institution. (Prior to our conversation, we had heard unconfirmed reports about significant unhappiness on the part of recipient institutions.) This researcher said CIRM's monitoring practices were a departure from those of the NIH, which allows “the liberty to take the research where it leads you.” Nonetheless, he continues to support CIRM.

Another scientist said he parted “amicably” with CIRM but confirmed that its practices are different than the those of the NIH. (The NIH has not responded to our queries concerning how many grants it has revoked for lack of progress.)

This researcher told us,

“I think that it is very important for CIRM to closely monitor its grantees. As a California taxpayer, I want to know that state revenues supporting the CIRM effort are well utilized. Furthermore, CIRM (and its grantees) need to make good on the promise of translating the science of stem cell biology into novel therapies.”

The third told us in an email that his grant had been “prematurely terminated.” He said the work has been completed without the CIRM support and the research accepted for publication in a prestigious journal next year. He also called CIRM a “great organization” and expressed the hope that it will lead to “great cures.”

The round of grants that Csete reported on involved only $45 million, substantially less than the $230 million in the disease team round. The stakes are now much larger. Powerful teams, some international, will be at work. Impending clinical trials will also create a vision of handsome profits, in addition to hoped-for prestige and accolades. CIRM directors have indicated they expect some of the disease team grants to fail. But revoking funds for one of those grants or loans will require a lot of steel on the part of the CIRM staff.

Csete abruptly resigned from CIRM after the June meeting. Her departure and the workload at CIRM likely meant that some of the monitoring efforts were pushed back. Most of the work is done by science officers, but at crucial points, it requires the intervention of CIRM's highest level scientist.

In the wake of Csete's departure, CIRM President Alan Trounson created a new position, vice president for research and development. A search firm has been hired for $100,000 to help recruit a candidate who will make go, no-go decisions on the disease team round along with other grants. Trounson is hoping to find someone with substantial experience in the biotech industry.

Whoever fills the job should not only be something of a scientific diplomat but also be able to face the big dogs of stem cell science and tell them no. CIRM's first responsibility is to generate results for the people of California and to serve as ardent stewards of the public's money.

(Below is a transcript of the entire discussion by the CIRM board in June concerning Csete's monitoring effort. Also below is a piece concerning our decision not to publish the names of the scientists whose grants were revoked as well as another item dealing with CIRM's efforts to ensure compliance with its ethical and research standards.)

Editor's note: The California Stem Cell Report first published an item on the termination of CIRM grants last April. Here is a rundown on all the stories published on this site as of Nov. 9, 2009, concerning grant termination.

Novocell First Business to Score CIRM Cash

The California stem cell agency chalked up a couple of firsts this past week.

The agency approved its first grant to a California business and its first grants for research into the area of reprogramming adult stem cells.

Novocell of San Diego, Ca., won the business grant. The amount was small -- $48,950. It went for a disease team planning effort.

Reporter Terri Somers of the San Diego Union-Tribune wrote:

"Novocell's Chief Science Officer Edward Baetge will lead a team that will receive a $48,950 planning grant to chart a course for tackling diabetes. The company has shown it can coax stem cells to develop into insulin-producing pancreatic beta cells. The team will seek a larger grant to purify the cells and scale up production of them so they can be moved into clinical trials."

Some of the folks at CIRM and on its board of directors had to be disappointed that more companies did not receive positive funding decisions from the Grants Working Group. Twelve companies had applied for the new cell grants and nine for the disease team grants.

Several directors have noted in the past that it is companies that most directly bring therapies to the marketplace – not academic institutions.

Coming up, however, are other rounds of grants where businesses can compete against nonprofit and academic institutions for California cash. They include the $20 million tools and technology round. CIRM received 140 letters of intent to apply for those grants, including 50 from businesses.

Earlier this year, news of successful research involving reprogramming adult stem cells triggered questions about whether CIRM could or would fund grants in that area. Prop. 71 tilts CIRM's priorities heavily towards hESC research, but it has always had the capability of funding stem cell research in whatever area it desires.

Proof that came on Thursday when CIRM's board of directors ratified decisions to fund a number applications involving reprograming.

CIRM Dredging Up Old Economic Controversy

Four years ago, supporters of California stem cell research ballyhooed the economic impact of the Prop. 71, the ballot measure that created the state's $3 billion inquiry into human embryonic stem cells.

A $200,000 study commissioned by the Prop. 71 campaign predicted healthcare savings of as much as $12.6 billion over 30 years and a net state government profit of at least $1 billion. The study was instantly a bone of contention during the campaign and long after and held up as an example of stem cell hype.

"Hopelessly optimistic" was how one reasonably detached writer, David Hamilton, described the campaign analysis in a "biotech bubble" story for Slate.com.

The study was ordered up by then Prop. 71 campaign chief Robert Klein. Now chairman of the California stem cell agency, Klein has commissioned another economic impact report by the same organization, Analysis Group of Palo Alto, Ca. This time the study will cost only $49,900 but it comes at the expense of taxpayers – not campaign donors. It also diverts funds from other activities of the stem cell agency. The question is why?

With few exceptions, no one is likely to deny that California's stem cell research can benefit the state economically. The principal dispute is about the magnitude of the impact. However, this latest study suffers from the same problem as the first. It is not likely to produce a finding that runs contrary to the beliefs of Chairman Klein and other supporters of the stem cell research. That leaves CIRM open to credibility challenges.

The study is also not necessary to convince true believers. And adamant opponents will never believe it. That leaves only a tiny segment of the population as a propaganda target, if one is to believe Klein. He has repeatedly minimized the size of that group, citing overwhelming support for hESC research among the general population.

The study will certainly generate several results – none of which is favorable for CIRM. It will raise questions about unnecessary spending of taxpayer money. It will rekindle a debate about the true economic impact of CIRM, stirring up controversies better left dormant. And it will feed concerns about stem cell hype on the part of the agency and raise questions about its credibility.

Here are samples from the David Hamilton's piece Feb. 6, 2007, in which the former Wall Street Journal reporter wrote that the campaign study appeared "hopelessly optimistic."

"To begin with, they assume that stem-cell treatments will work in the first place. Many of the most hyped biotechnology innovations of the last 25 years have yet to live up to their early promise. And when they do work, they often tend to improve medical care at the margins instead of revolutionizing it."

"What about the potential of stem-cell research to spur economic development—can a state that sponsors stem-cell research hope to attract cool scientists who will then draw others, plus a coterie of entrepreneurs and venture capitalists? Biotech companies do tend to cluster in places like San Francisco and Boston, but their overall impact on regional economies tends to be limited. While they often pay high salaries, the vast majority of these companies are tiny, unprofitable startups with fewer than 100 employees. They frequently collapse well before they earn a dollar in sales. Even successful biotech ventures are often bought out by distant drug companies, which sometimes shut down the acquired company while transferring its research activities and any products elsewhere."

Hamilton also cited a study by Richard Gilbert, a UC Berkeley economist, who estimated California's potential royalty income from CIRM research could be as low as $18 million compared to $1.1 billion suggested by the 2004 study by the Analysis Group.

We could be wrong about all this. Perhaps the Analysis Group will produce a study that is hailed as balanced, objective and useful. CIRM tells us to look for the report, originally scheduled for January, to appear later this month.

Time for a Party at CIRM Central

California's stem cell agency has roughly 800 million reasons to celebrate this week, and well it should.

By this time tomorrow, it will have launched a massive wave of construction of labs for research into human embryonic stem cells – certainly the largest in the nation's history and perhaps globally. The final figures are not yet set but the value of the construction could exceed $800 million.

Building the labs will serve as a short-term stimulus economically, something to be applauded in these difficult economic times. But more importantly the construction will create a base for scientific growth in California for many decades to come, even if the stem cell dream proves elusive. And that is saying something for a state whose parsimonious government has short-changed its infrastructure since the 1970s.

The California Institute for Regenerative Medicine, as the agency is formally known, will set off its building wave with $262 million in grants to 12 universities and research institutions, ranging 600 miles from Sacramento to La Jolla. To earn the taxpayer's largess, the institutions had to come up with additional contributions that pushed the ultimate size of the effort beyond $800 million. And they aggressively tapped private donors for hefty chunks of cash.

The grants are the single largest round for CIRM, which has had its difficulties in the past and will have more in the future. But the agency, created by voters in 2004 and unprecedented in state history, has served as a beacon for scientific research nationally and internationally.

The agency's grants, which will total more than $500 million by the end of this week, have stimulated a beneficent buzz at a time when researchers bemoan the slow strangulation of research funding at the national level. The agency's actions undoubtedly played a role in the migration of at least 50 scientists to California since Prop. 71 passed, including several luminaries in the stem cell field. More are likely to come in the future.

Last January, we reported for Wired.com on the importance of CIRM's effort. Sean J. Morrison,director of the University of Michigan Center for Stem Cell Biology and board treasurer of the International Society for Stem Cell Research, commented on the significance of CIRM to the Golden State. He told us then:

"The resources invested by CIRM will help to maintain California as an international leader in biomedicine during this period of declining federal investment."

CIRM has pioneered in other areas as well. Its research standards are a benchmark nationally. It has crafted intellectual policies in areas where you might say no man has gone before. It has fought a court battle to survive and raised tens of millions of dollars in private contributions to get through its early days. All the while operating with a tiny staff (26 or so) that is hardly larger than the number needed to run a 24-hour Burger King.

But these no folks are hamburger flippers. Some are scientists in their own right. All are skilled and dedicated. And they all put in incredible effort and hours.

Yes, it is time for a party for the stem "cellists" down at CIRM Central in San Francisco. Congratulations.

'Nature' Assesses CIRM, Warns of Conflicts of Interest

Nature magazine took a run at the California stem cell agency today, producing a fine overview and an editorial that warned of "cronyism" on its board of directors.

The occasion for the coverage is the upcoming approval next week of $262 million in funding for stem cell lab construction, an event that is likely to trigger a number of articles about CIRM in the California media and perhaps nationally.

The article by Erika Check Hayden recapped the history of tiny organization (staff about 26) and said,

"If $3 billion seemed like a dream four years ago, it is now a reality that is changing not only the way science is done in California, but is resonating across the US biomedical landscape."

Nature highlighted some of the conflict of interest problems on the Oversight Committee, as CIRM's board of directors is known. Its editorial said,

"Several episodes over the past year have highlighted an inherent problem with the CIRM's structure: the board that distributes its funding is stacked with representatives from the universities that benefit most from those disbursements. The CIRM has enacted rules to try to limit the conflicts of interest posed by this arrangement. They don't go far enough. At one meeting in January, for instance, CIRM board members from institutions that had applied for a facilities grant voted to deny one of these grants to an institution that has no representatives on the CIRM board."

The editorial continued,

"For the agency to succeed, patient advocates and other public representatives must fight the tendency of the academic institutions on the board to hoard dollars. As the patient advocates grow into their roles as full partners, and with help from well-intentioned lawmakers such as (State Sen. Sheila)Kuehl, the CIRM must be coaxed into serving its most important constituency — the taxpayers of California. The roles themselves are not unusual in the world of governance, but here the stakes are exceptionally high."

Hayden's overview said,

"...(E)ven as the agency is changing California's scientific outlook, it is also facing pressure to prove its worth to voters — and to show that it can deliver the medical and economic benefits it promised in order to convince taxpayers to fund it in the first place. Which raises the biggest question about the CIRM: will scientists be able to deliver the results it promised? This is an urgent concern for the leaders of the CIRM, because it won the hearts of California voters by saying it would produce cures for a number of debilitating diseases."

Hayden discussed legislation by Kuehl, D-Santa Monica, as one of the responses to the questions about delivering on Prop. 71 campaign promises.

Hayden also wrote about the recent complaints that CIRM overstated its funding role in UCSD research that has led to clinical trials and about the conflict-of-interest flap involving CIRM director John Reed. Both cases were first reported by the California Stem Cell Report, a fact that Nature did not mention, but media coverage of CIRM was incidental to the article.

Hayden continued:

"...CIRM's structure has, at times, seemed to hamper its own mission. That was painfully evident at a meeting in January, when one doctor found himself begging for funding from 13 board members who were competing directly against him for money."

As we reported in January, Bert Lubin(see photo), head of the Children's Hospital Oakland Research Institute, unsuccessfully appealed a negative recommendation by scientific reviewers to the full Oversight Committee, which has final say on grants. (The committee has reversed a positive recommendation for funding once (Sept. 9,2005) and never reversed, as far as we can recall, a do-not-fund decision by scientific reviewers.)

Lubin told Nature,

"We're not in the 'in' crowd. So a project that was really going to go into patients was essentially triaged."

The Nature article said,

"The episode is only one in a series of incidents that have raised questions about the wisdom of putting the institutions that benefit from the CIRM in charge of governing it."

(Editor's note: An earlier version of this item incorrectly said the Oversight Committee has never reversed a positive recommendation for funding. In fact, committee rejected, on a 4-20 vote, a recommended training grant proposal (T3-00005) in its first round of grants Sept. 9, 2005. The grant was given a 70 score out of 100 by reviewers. However, some CIRM Oversight members said they were concerned about the lack of appropriate faculty at the unidentified institution and "under developed" lab space. The actual vote tally on the grant was not announced during the meeting nor in the minutes from the session. Our 4-20 vote count was arrived at by going through the 323-page transcript).

Were Some Scientists' Concerns about CIRM's Claims Worthy of Note?

If the California stem cell agency had its druthers, no one would know that there is a dissenting view about its role in the San Diego research that led to clinical trials on a treatment for a blood disorder.

The $3 billion agency has stoutly defended its claim and bolstered its statement with additional evidence, following questions by the California Stem Cell Report.

However, the agency would have preferred that no complaints were publicly raised and nothing written about them if they were.

We first reported the matter on April 15. We are writing today not to rehash the substance of the complaints, but to share with our readers some of the reasoning behind our decision to report the story and to discuss a few of the nuances of how the media work.

CIRM's position is that our item concerning CIRM's original statement relied on a single, anonymous source and would not have been carried by most newspapers. They are partially correct on that point. We did use one anonymous source – "at least one well-regarded, California stem cell researcher" was the phrasing. We had two, but the other one did not go into the details of the issue. We did not want to characterize both as having identical positions. The item also referred to "concerns among some stem cell scientists." But because of the use of a single, anonymous source, many newspapers would not have carried the story as matter of policy.

Anonymous sources usually have an agenda, sometimes one that is hard to detect. Anonymity protects the source from having to take public responsibility for his or her words. We weighed the possibility of not writing about the concerns of these scientists, but decided to proceed.

The scientists' position was supported by evidence; it was not just one person's opinion. If these two were concerned, undoubtedly many others were as well. There is an axiom in business that for every one complaining customer, nine more exist who are unhappy but who are silent. That axiom seems to apply in this case. Finally, California researchers are loath to publicly criticize CIRM. Who wants to offend the three-billion-pound gorilla and risk losing its financial support?

The question appeared significant as a part of the culture of science. It dealt with the credibility of the agency. CIRM's role was regarded as so important that it merited enthusiastic comment from Gov. Arnold Schwarzenegger -- a move presumably promoted by CIRM. The issue also went to the more general question of hype involving embryonic stem cell research. The agency itself, stem cell research advocates and opponents all have warned repeatedly about dangers of exaggeration and promising too much in this highly charged field.

Since the story has appeared, we have learned of more scientists who agree with the essential points made by our sources.

One said,

"The problem with the original CIRM (statement) is that it referred to the SEED grant, which was funded only weeks before the paper was submitted and dealt with an entirely different disease and... was specified by the RFA to be specifically for human embryonic stem cells which are not at all involved in the UCSD experiments....

"They (CIRM) did overstate it and ... it is embarrassing that the Governor's office picked this up as a first example of CIRM's success. It would have been much better to say that CIRM is proud to be associated with such an outstanding success and to feature something about the trainee."

Another said,

"It does all of us a disservice to pretend that CIRM was responsible for the initiation of a clinical trial when every scientist and biotech manager knows that it is simply untrue."

As mentioned earlier, many newspapers would not have carried the story because of policies regarding the use of anonymous sources. Over decades of experience as a newspaper editor and reporter, we have seen those policies, along with others, paralyze newspapers. They know a story is factually accurate, but because people are afraid to speak up and the subjects of stories stonewall and delay, the stories never run. As a result, the public debate suffers. In the case of the CIRM statement, however, the story would not have reached that level. The subject would not have been pursued by mainstream newspapers because it would have have been deemed too arcane and picayune for the general public. However, the issues raised by our sources are important to our tiny, but deeply involved band of readers, who range from Korea to the United Kingdom.

The California Stem Cell Report is a blog and fundamentally a matter of the opinion of yours truly. Many blogs are nothing more than opinion. Over the years, however, we have taken to reporting stem cell news in a more traditional fashion because of the lack of hard information in the media about CIRM affairs. We have also engaged in analysis and commented negatively and positively about how CIRM is spending $3 billion of public money, virtually free from normal governmental oversight. It is a unique endeavor that has had a far-reaching and positive impact on the national and international stem cell scene.

We think California's unprecedented program is worthy of considerable attention. We will continue to offer a home to those who are willing to make thoughtful comments on its performance – even anonymously.

(We provided an advance copy of this commentary to CIRM and told the agency that we would carry its comments verbatim, if it chooses to offer any. Providing advance copies of articles and offering opportunities for verbatim responses are virtually unheard in the mainstream media.)

Sacramento Bee: Curb Klein's 'Political Adventures'

"Nagging problems" persist at the California stem cell agency, including "political adventures" by its chairman, Robert Klein, The Sacramento Bee said today.

In an editorial, The Bee said that in addition to Klein's dabbling in politics, the problems include efforts by the biotech industry to weaken CIRM rules to generate revenue and affordable care and failure to disclose the economic interests of scientists who review applications for hundreds of millions of dollars in grants.

The Bee had some good things to say as well. CIRM is now "the nation's largest financier of embryonic stem cell research," which is what voters approved in 2004, newspaper said.

In its "memo" to CIRM, The Bee said:

"You've also hired a fine scientific staff to help administer grants and design a strategic plan. These employees will help your institute transition to new leadership, since President Zach Hall will be retiring in June and you are currently interviewing for his replacement."

But the newspaper said,

"Your board chairman, Robert Klein, continues to dabble in political adventures that don't comport with his responsibilities as a public official. Last year, he used a nonprofit organization to campaign against state Sen. Deborah Ortiz in her bid for secretary of state, after Ortiz had sought reforms in the stem cell institute. Klein's nonprofit also took sides in the lieutenant governor race. Rarely have we seen the head of a state agency create his own separate political apparatus to punish enemies and reward friends. These tactics have hurt the institute's standing and you need to put an end to them."

The editorial also said:

"So far, you've resisted public disclosure, claiming it could scare away qualified reviewers. Yet researchers make such disclosures all the time. As one of your reviewers, Rainer Storb, told The Scientist last year, such disclosures "are a bit of a nuisance. But I'm perfectly fine with things being made public."

Beyond $131 Million: Looking Ahead at CIRM

You could call it the pipeline and presidency issue. Even before the directors of California's stem cell agency approved an unprecedented $75 million in grants, some of them were worrying about what happens next.

Brian Henderson, dean of the USC medical school, told his fellow members on the CIRM Oversight Committee, "We do not want to congratulate ourselves too much."

CIRM, however, does have something to congratulate itself about, as Los Angeles Mayor Antonio Villaraigosa reminded them during a Friday morning news conference. "Put a smile on your face," he said.

CIRM has pumped out $131 million in grants so far this year, making it clearly the largest single source of embryonic stem cell research funding in the world. More millions will come later this year. And before the end of the year, with a little luck, they will see even bigger bucks flowing in through the sale of state bonds that have been delayed because of litigation.

However, the 22-member staff of the agency has been working extraordinarily long hours. "Heroic" was a word that came up often during last week's two-day meetings to describe the work of the staff. One example that was cited was the case of one staffer, who was up until 4 a.m. readying documents for the first day of the meetings. While that may be a tad exceptional, Oversight Committee members for some time have expressed concern about the workload of the agency.

As Michael Friedman, president of the City of Hope, put it last week, the agency has been sprinting, and "we are in for a marathon."

The "challenges" facing CIRM include the loss of President Zach Hall in June, the search for his successor, the void until the new president comes aboard and the need to fill the pipeline with more grants as well as administering the ones already approved.

Several board members said momentum needs to be maintained to provide opportunities for the new scientists that have been arriving in California to tap CIRM's $3 billion research effort. They urged Hall to fill staff positions as rapidly as possible to maintain the workflow. "Please don't scrimp," Friedman said.

CIRM is not likely to have a new president on board by the time Hall leaves, which will accentuate the normal uncertainty that arises with the arrival of new CEOs, especially in small, new organizations. However, something of a model exists for working through that period. Hall will take a vacation this month and has designated two persons to act in his stead, Arlene Chiu, scientific program director, on scientific matters and Lorraine Hoffman, chief financial officer, on other issues. How they fulfill their responsibilities will be a good test for June and later in the summer.

The 29 members of the Oversight Committee hold an important key to CIRM stability and momentum. They should curb their micro-management urges, some of which are possessed in abundance by some members of the board, and focus on filling the presidency as quickly as possible. Twenty-nine busy fingers in the CIRM pie are likely to leave a pretty mess.

Henderson and the others are right to worry about a letdown, which can easily happen during or following periods of intense effort, which has been the story since January 2005. Avoiding a letdown and leaving a healthy organization may be one of Hall's most important tasks in the next few months. But much of the burden will fall on senior CIRM management, the folks who will ride through the transition. After all, they are the ones who will be left to engineer the giveaway of a piddling $2.8 billion or so over the next 10 years.