California's $12 Billion Stem Cell Agency and Fresh Ruckus over Conflicts of Interest

The appointment of a new member to the governing board of California's $12 billion stem cell research program triggered additional comment and criticism today concerning conflicts of interest at the agency. 

The matter involves Larry Goldstein, a well-known scientist at UC San Diego, who has received $22 million from the California Institute for Regenerative Medicine (CIRM), the formal name for the stem cell agency. Goldstein's employer has received $232 million. 

Marcia Darnovsky
CGS photo

"Conflicts of interest at CIRM have been a major concern since the agency was founded, as pointed out by observers including the Institute of Medicine (IOM) and the Little Hoover Commission, California's independent oversight organization," said Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley, Ca., which has long opposed CIRM.  

"Proposition 14, which just last fall gave CIRM another $5.5 billion of public funding, should have been a chance for the agency to turn over a new leaf, but it made none of the changes that could have addressed the agency's built-in conflicts or other structural problems.

"Now CIRM has accepted a board member who has personally received some $22 million in CIRM grants, and whose institution has received far more. It appears that CIRM will continue to flout basic principles of good governance, despite being a public agency wholly funded by public dollars. This is a real and ongoing problem."

Last September, Capitol Weekly, California's respected government and political news service, carried an analysis of CIRM awards and their relationship to board members. It showed that 80 percent of the $2.7 billion awarded by CIRM has gone to institutions with links to past and present members of the CIRM board. 

The agency's 35 directors are barred from voting on specific awards to their institutions. However, they set the rules, scope and direction for the awards.

UC Davis stem cell scientist and blogger Paul Knoepfler, who supports the stem

Paul Knoepfler
UCD photo

cell agency, said in a comment this morning carried on the first item on this subject on the California Stem Cell Report,  

"I'm sure that Larry will do an excellent job on the board, and he brings a unique depth of knowledge on stem cell research. However, along the lines of what Aaron said as quoted in the piece, at the very least the appointment presents some challenges of perception of the agency."

Knoepfler's reference is to Aaron Levine, a Georgia Tech biomedical research policy expert who served on the IOM panel that conducted a $700,000 study of CIRM and recommended major changes in its governance and conflict of interest procedures. Levine told the California Stem Cell Report, 

“Larry Goldstein is, in many ways, an inspired choice for the CIRM board. He is a well-regarded stem cell scientist and former CIRM grantee with administrative experience and demonstrated interest in public policy. On the other hand, CIRM has, at the very least, a perception problem with conflicts-of-interest and appointing a former grantee to the board so soon after the passage of Proposition 14 seems to suggest that this challenge will persist.”

“More broadly, conflict of interest concerns reflect the structure of the CIRM Board dating back to Proposition 71 in 2004 and the broader challenge facing many organizations of recruiting interested, qualified, and independent board members. CIRM has taken a number of steps to help address conflicts of interest since the IOM report was published many years ago, but I would have liked to see the board structure adjusted as part of Proposition 14 to introduce more independence into the oversight structure and further address these concerns.”

CIRM was running out of money last year and was set to close its doors until voters approved Proposition 14, which provided $5.5 billion more and significantly expanded the scope of the agency. 

CIRM had an opportunity to deal with conflict of interest concerns during the formulation of the ballot measure in discussions with the sponsor of the measure, Robert Klein, a millionaire developer in Palo Alto. Klein also directed the writing of Proposition 71 in 2004 and served as CIRM's first chairman after writing into the initiative qualifications for the chair that applied uniquely to him.

The California Stem Cell Report asked Klein this morning whether he had made a recommendation to any party that Goldstein, who is co-chair of a scientific advisory panel to Klein's stem cell advocacy group, be appointed to the CIRM board. Klein replied in an email this morning:

"No. I learned of the appointment after the fact. Dr. Goldstein will be an outstanding board member. Given that he has closed his lab at UC San Diego and he is no longer conducting stem cell research, his extraordinary research record on neurodegenerative diseases and his experience in previously competing for CIRM grants will provide the board with important insights in advancing the search for therapies that are devastating to the brain, the body’s neurological system, and many other disease areas. 

"The State of California’s stem cell therapy development efforts and science generally will benefit greatly by Dr. Goldstein’s sacrifice of the remaining years he could have conducted scientific research, in favor of this new commitment to public service on the CIRM board, that will benefit patients everywhere." 

Lawrence Goldstein in lab at Sanford
Consortium, UCSD photo

Goldstein is barred by CIRM rules from applying for grants. The agency said yesterday that Goldstein has stepped away from his research with the exception of one project. 

(Update: CIRM told the California Stem Cell Report on Monday that it was speaking for Goldstein in its comments. Goldstein confirmed that in an email and did not respond otherwise.) 

It is technically possible today to make changes in the law dealing with conflicts at CIRM and the composition of its board. However, those would require a super, super-majority vote (70 percent) of both houses of the legislature and the signature of the governor, a politically difficult task. 

Recipient of $22 Million from California's Stem Cell Program Named to Its Board

Larry Goldstein, UC San Diego video

Larry Goldstein, a well-known stem cell researcher at the University of California, San Diego who has received nearly $22 million in awards from the California stem cell agency, today was named to its governing board.

It was the first time in the history of the 16-year-old agency that a scientist who has received agency awards has been appointed to the board of the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is officially known. 

Goldstein's appointment raises once again questions involving conflicts of interest at the agency. Since its inception, CIRM has awarded $2.7 billion to California researchers and enterprises, including UC San Diego. Eight out of every ten dollars has gone to institutions with links to past or present CIRM board members, according to an analysis by the California Stem Cell Report. 

Conflict of interest issues have dogged the agency since before voters created it in 2004. In a report in 2012 commissioned at a cost of $700,000 by CIRM itself, the prestigious Institute of Medicine (IOM) said, 

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

The IOM said the composition of the board, which is called the Independent Citizens Oversight Committee (ICOC) makes it neither “independent” nor capable of  “oversight.” 

In response to a question, Kevin McCormack, senior director of CIRM communications, said, 

"Larry is no longer involved in any active CIRM awards and has stepped away from his research work, with the exception of one project for which he does not intend to seek CIRM funds.

"He brings a wealth of knowledge to the board and a different perspective as a leading stem cell scientist and former CIRM-funded researcher. As for conflicts, he is precluded from voting on any applications and cannot even participate in the discussion of applications submitted by UCSD."

While members of the CIRM board cannot vote on specific applications involving their institutions, they set the rules for the grant competition and approve "concept plans" for new grant rounds. Those rounds can and do benefit board members' institutions. UC San Diego has received $232 million in total funding from the agency, making the campus the third-largest recipient.  

CIRM provided $43 million to help create the Sanford Consortium for Regenerative Medicine in La Jolla, which involved UC San Diego and other research institutions, all of which have been represented on the CIRM board.  Goldstein was the founding scientific director of the consortium.  

Goldstein, as a member of the CIRM board, is barred from applying for additional funding, CIRM said in response to a question.  

Aaron Levine
Georgia Tech photo

Queried by email, Aaron Levine, a member of the IOM panel that studied the stem cell agency and an expert in biomedical research policy at Georgia Tech, said, 

“Larry Goldstein is, in many ways, an inspired choice for the CIRM Board. He is a well-regarded stem cell scientist and former CIRM grantee with administrative experience and demonstrated interest in public policy. On the other hand, CIRM has, at the very least, a perception problem with conflicts-of-interest and appointing a former grantee to the Board so soon after the passage of Proposition 14 seems to suggest that this challenge will persist.”

“More broadly, conflict of interest concerns reflect the structure of the CIRM Board dating back to Proposition 71 in 2004 and the broader challenge facing many organizations of recruiting interested, qualified, and independent board members. CIRM has taken a number of steps to help address conflicts of interest since the IOM report was published many years ago, but I would have liked to see the board structure adjusted as part of Proposition 14 to introduce more independence into the oversight structure and further address these concerns.”

Proposition 71 is the ballot initiative that created CIRM in 2004 with $3 billion in state bonds. When the money ran out last year, voters approved Proposition 14, which saved the agency with $5.5 billion more. The total cost of the agency by the time the money runs out again is estimated to be $12  billion because of the interest expense of the bonds. 

Proposition 14 also expanded the board from 29 to 35 members, creating an increased likelihood of conflicts of interest. 

Bob Klein
California Stem Cell Report photo

A longtime observer of the agency and supporter of stem cell research, who must remain anonymous, was "quite
distressed" by the Goldstein appointment. "Don't they have any sense of what's appropriate," the person said. "He has benefitted in so many ways and is so intertwined with Bob Klein." 

Klein is the Palo Alto developer who crafted Proposition 14 and 71 and contributed millions to the ballot campaigns. Goldstein serves as co-chair of the scientific advisory board of Klein's stem cell advocacy group, Americans for Cures. 

In its news release, CIRM Chairman Jonathan Thomas said, 

“I have known Larry for many years and have nothing but the highest regard for him as a scientist, a leader, and a great champion of stem cell research. He is also an innovative thinker and that will be invaluable to us as we move into a second chapter in the life of CIRM.”

Reports filed by Goldstein on his research can be found on this CIRM web page and by clicking on the description of each award. He was appointed by UC San Diego Chancellor Pradeep Khosla and replaces David Brenner, dean of the UC San Diego Medical School, who has served two terms on the CIRM board. . 

Proposition 14: The Scientist Magazine Digs into California's Stem Cell Agency and the Ballot Measure

The Scientist magazine yesterday published a more detailed look at the state of California's stem cell agency and a $5.5 billion ballot measure that would send it into arenas that it has previously not explored. 

The article by Katarina Zimmer said the California Institute for Regenerative Medicine (CIRM) has "helped transform its state into an innovation hub of stem cell science."  The article was more complete and detailed than many of the news pieces prepared by California media.

Quoted by Zimmer were stem cell scientists Jeanne Loring, co-founder of Aspen Neurosciences, Inc. of La Jolla; Larry Goldstein of UC San Diego, and Jeff Sheehy, who has served on the CIRM board since its inception in 2004. 

Zimmer also cited the 2012 Institute of Medicine (IOM) study that was commissioned by CIRM at a cost of $700,000. Directors of the agency expected a "gold standard" endorsement of the agency, but the IOM cited significant problems with conflicts of interest on the board. The study also recommended major restructuring of the board and the agency. 

An analysis last month by the California Stem Cell Report showed that 79 percent of CIRM awards -- $2.1 billion -- has gone to institutions that have links to past or present board members. 

Robert Klein, the sponsor of the $5.5 billion Proposition 14, did not include any of the more significant recommendations from the IOM in his 17,000-word, proposed revision of CIRM's legal charter. Klein was a strong advocate for commissioning the study by the prestigious IOM.  Klein was not quoted by The Scientist. 

Zimmer's piece covered many of the arguments pro and con on Proposition 14 that are familiar to readers of this web site. However, her piece is not likely to find significant numbers of readers among California's 20 million voters. Only a tiny fraction of them read The Scientist magazine. 

However, The Scientist does reach a significant number of persons globally that are interested in such things as stem cell research.

For more on the IOM report and CIRM's actions on its recommendations, see the new book, "California's Great Stem Cell Experiment: An Inside Look at a $3 Billion Search for Stem Cell Cures."

$2.1 Billion in California Stem Cell Awards Goes to Institutions Linked to Directors of State Stem Cell Agency

Editor's note: The following article by yours truly was published as a freelance piece this week on Capitol Weekly, an online state government and politics news service. 

By David Jensen

Over the last 15 years, California’s stem cell agency has spent $2.7 billion on research ranging from arthritis and blindness to cancer and incontinence. The vast majority of the money has gone to enterprises that have ties to members of the agency’s governing board.

All of which is legal. All of which is not likely to change.

Eight out of every ten dollars that agency has handed out have been collected by 25 institutions such as Stanford University, multiple campuses of the University of California and scientific research organizations. Their combined total exceeds $2.1 billion.

All 25 have links — directly or indirectly — to past or present members of the board of the agency, according to an analysis by the California Stem Cell Report, which has covered the agency since 2005.

“They (the agency’s directors) make proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight,” says Harold Shapiro, who led a 2012 study of the agency by the prestigious Institute of Medicine (IOM), which is now called the National Academy of Medicine. The study recommended a major restructuring of the agency’s board to help deal with the problem.

The longstanding, conflict-of-interest issues are not addressed in Proposition 14 on the Nov. 3 ballot. The measure would give the agency, officially known as the California Institute for Regenerative Medicine (CIRM), $5.5 billion more and expand its scope of activities and research. The ballot measure is likely to increase the problems by increasing the size of the agency’s governing board from 29 to 35.

Another ballot initiative, Proposition 71, created California’s stem cell program in 2004. Ever since, conflict of interest questions have dogged CIRM. Indeed, critics of the agency can today point to the top five recipients of CIRM largess as examples of conflict problems. Stanford University ranks as the No. 1 recipient with $388 million. UCLA is No. 2 with $307 million. It is followed by UC San Diego, $232 million; UC San Francisco, $199 million, and UC Davis, $143 million.

All have had a representative on the CIRM board since the inception of the program.

(Editor’s note CIRM’s totals may change slightly as the result of the agency’s internal accounting procedures.)

IOM and public confidence in CIRM
The IOM study, with its criticism of conflicts, was commissioned by CIRM at a cost of $700,000. Directors expected that it would provide a “gold standard” evaluation of the agency that would support a ballot measure for additional funding. The study’s scope went well beyond conflicts of interest. In fact, it said it did not search for evidence of specific conflicts because the task was not part of the agreement with CIRM. The IOM did say that “studies from psychology and behavioral economics show that conflict of interest leads to unconscious and unintentional ‘self-serving bias’ and to a ‘bias blind spot’ that prevents recognition of one’s own bias.” While all of the study’s findings were consequential, the matter of conflicts attracted the most public attention.

“Ties to stem cell board lucrative,” said a headline in the Orange County Register shortly after the IOM report was released.

“The agency has used more than half of its funding and one day will almost certainly want to ask taxpayers for more. It should remember that voters will look for evidence of public accountability as well as respected research,” said the Los Angeles Times in an editorial in December 2012.

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

The IOM said the composition of the board makes it neither “independent” nor capable of “oversight,” although the board is legally dubbed the Citizens Independent Oversight Committee (ICOC).

Placing deans of medical schools and patient advocates on the board who are linked to specific diseases “raises questions about whether decisions delegated to the board—particularly decisions about the allocation of funds—will be made in the best interests of the public or will be unduly influenced by the special interests of board members and the institutions they represent. Such conflicts, real or perceived, are inevitable….”

The situation involves more than legalisms. “Properly understood,” the IOM said, “conflict of interest is not misconduct, but bias that skews the judgment of a board member in favor of interests that may be different from or narrower than the broader interests of the institution.”

The IOM study additionally surveyed board members about conflicts of interest and reported, “While a majority of respondents stated that personal interests did not play a role in their work on the ICOC, some responses were more equivocal. One respondent replied that it was ‘hard to tell’ given that so many decisions take place off camera in secret meetings,’ while another acknowledged that ICOC members are human, and, of course, their decisions are influenced by personal beliefs and interests.”

The ‘inherent’ conflicts
The conflicts were built in by Proposition 71, which dictated the composition of CIRM’s 29-member board. CIRM’s general counsel, James Harrison, once described the situation as “inherent conflicts of interest.”

Under Proposition 71, representatives from virtually all the California institutions that stood to benefit were given seats at the table where spending plans are approved and awards handed out. Directors are not allowed to vote on specific awards to their institution. But they control the direction of the agency and what CIRM calls “concept” plans, including specific elements and budgets for the award rounds. Some of those rounds run into hundreds of millions of dollars.

One of the “concept” plans created a $47 million program to help California institutions recruit star scientists to the Golden State. Another plan created the $50 million Alpha Clinic Network at five academic centers all connected to board members.

Following the IOM report, the CIRM board did remove most institutional directors from meetings where awards are ratified. Jonathan Thomas, chair of the board, declared then that financial conflict issues were “put to bed once and for all,” a position that the agency holds today. In May 2019, Thomas told directors that several “authoritative entities” have studied CIRM and produced written reports that dealt with conflict matters.

Thomas said, “Each had in it sort of quite vehement language about the conflict of interest issue, which has always been just perceived…..With respect to any given funding award, there’s never been an actual conflict.”

During the 2019 meeting, the board did not discuss issues involving board action on “concept” plans. They continue today to modify and approve “concept” plans.

Beyond the CIRM board
Conflicts of interest at CIRM go beyond the 29-member board. In 2014, the agency was shocked by a case involving a former president of the agency, Alan Trounson, and StemCells, Inc., a company that was awarded $40 million while he was serving as the top executive at CIRM. (The company later declined one of the awards.) Only seven days after his final day at CIRM, Trounson was named to the board of directors of StemCells, Inc.

He served on the company’s board for about two years and received $443,500 in total compensation, including stock options, according to StemCells, Inc., documents filed with the Securities and Exchange Commission.

Following the announcement of the Trounson appointment, CIRM looked into some of Trounson’s work at CIRM. In July of 2014, the agency said that its “severely” limited investigation found no evidence that its former president attempted to influence action on behalf of StemCells, Inc., during the previous month. The state’s political ethics agency, the Fair Political Practices Commission, said in a Feb. 6, 2015, letter to Trounson that there was “insufficient evidence to demonstrate” a legal violation.

Even before the agency was created, critics warned of conflict-of-interest problems. Writing in an opinion piece in October 2004 in the San Francisco Chronicle, David Winickoff, then a professor at UC Berkeley, said, “Contrary to what its name suggests, the ICOC is neither ‘independent’ of interest-group politics nor does it include any ‘citizen’ members. Hard- driving university scientists, disease group advocates and private industry executives who will make up the ICOC all have vested interests in how the money is to be used.”

A sampling of conflicts
The California Stem Cell Report, which calculated the percentage of awards linked to institutional directors, has chronicled the conflicts issues at CIRM over the past 15 years. In 2012, its analysis showed that 92 percent of awards had been collected by institutions tied to past and present directors. The figure dropped to 79 percent by this summer as the types of grantees have widened. Here is a sampling of conflict issues that have surfaced publicly over the years.

In 2007, violations involving five board members resulted in voiding applications from 10 researchers seeking $31 million. The applications included letters of support signed by deans of medical schools who also sat on the CIRM board of directors. Directors are barred from attempting to influence a decision regarding a grant. The agency blamed its employees for the problem.

In 2008, public complaints by one applicant from industry about conflicts of interest on the part of a reviewer were briefly aired at a public board meeting. The then chair of the CIRM board, Robert Klein, told the applicant the board needed instead to discuss naming CIRM-funded labs and then go to lunch. CIRM later refused to release the letter from the applicant detailing the problem.

In 2009, board member John Reed, then CEO of the Sanford-Burnham Institute, was warned by the state’s Fair Political Practices Commission about his violation of conflict of interest rules. Reed intervened with CIRM staff on behalf of a $638,000 grant to his organization. Reed took his action at the suggestion of then CIRM Chair Klein, an attorney who led the drafting of Proposition 71.

Also in 2009, then board member Ted Love, who had deep connections in the biomedical industry, served double duty for the agency. He was the interim chief scientific officer and helped to develop the agency’s first, signature $225 million disease team round while he was still serving on the board. As chief scientific officer, Love would have had access to proprietary information and trade secrets in grant applications.

When questioned, CIRM said that Love would serve only as a part-time advisor to the agency president, not as chief scientific officer. Nonetheless, in 2012, the board adopted a resolution with high praise for Love and his performance specifically as the chief scientific officer.

Beginning in 2010, a stem cell firm, iPierian,Inc., whose major investors contributed nearly $6 million to the ballot measure that created the stem cell agency, received $3.9 million in awards from the agency. The contributions were 25 percent of the total in the campaign, which was headed by Bob Klein. (See here and see here.)

In 2011, the chairman of the CIRM grant review group resigned from his position as the result of another violation, which the agency felt necessary to report to the California legislature. John Sladek, former president of Cal Lutheran University in Los Angeles, co-authored scientific publications with a researcher who was listed as a consultant on a CIRM grant application.

In 2012, StemCells, Inc., was awarded $40 million by the CIRM board despite having one of its $20 million applications rejected twice by grant reviewers. The action came after the board was vigorously lobbied by Klein, who had left his post as chair the previous year. Klein, who ran the Proposition 71 campaign, had campaign connections to researcher Irv Weissman of Stanford, who founded StemCells, Inc., and was on its board. Weissman was featured in a TV campaign ad for Proposition 71 and helped to raise millions for the 2004 ballot campaign.

The StemCells, Inc., awards were the first time that CIRM had approved that much money for one company, and the first time Klein lobbied his former board.

In 2012, an incident surfaced that illustrated how non-profit, disease-oriented organizations sometimes expect increased funding as the result of the appointment of sympathetic individuals to the board. That occurred when Diane Winokur was appointed to the board as a patient advocate. The chief scientist for The ALS Association, said Winokur will be “a tremendous asset in moving the ALS research field forward through CIRM funding.”

The IOM study identified as a problem the personal conflicts of interest involving the 10 patient advocates on the board. It said, “(P)ersonal conflicts of interest arising from one’s own or a family member’s affliction with a particular disease or advocacy on behalf of a particular disease also can create bias for board members.”

In 2013, internationally renowned scientist Lee Hood, winner of a National Medal of Science, violated the conflict of interest rules of the California stem cell agency when he was involved in reviewing applications in a $40 million round to create genomics centers in California. The conflict involved connections between Hood, Weissman and Trounson. It was not discovered by the agency during the closed-door review and was raised by another reviewer at the end of the review. The review had to be redone later in the year.

Hood never commented publicly, but CIRM said he acknowledged the conflict.

In January 2014, the genomics round surfaced again. The applications were by then before the CIRM board for public ratification of reviewers’ decisions. The reviewers’ actions are taken behind closed doors with no public disclosure of reviewers’ personal, professional or economic conflicts.

The genomics round riled some researchers who complained publicly in letters to the agency’s board about unfairness, apparent preferential treatment and manipulation of scores.

Only seven of the 29 members of the 29-member board could vote on the applications. Conflicts of interest and CIRM rules barred the rest from voting. The final vote on the award was 6-1 for a group led by Stanford. Two years earlier, however, when the “concept” plan was approved by the CIRM board, no directors were disqualified, even though some of their institutions were likely to benefit. The plan was approved on a show of hands. The transcript of the meeting does not indicate any negative votes or absentions.

The hidden review process
Under CIRM’s rules, the scientists who review the applications must come from out-of-state. They do not have to disclose publicly their economic, personal or professional conflicts despite the fact that they make the de facto decisions on the applications. The board rubber stamps nearly all of the reviewers’ actions to approve funding. A CIRM examination of the practice in 2013 showed that 98 percent of reviewers’ decisions were ratified by the board. Since then, the agency has not produced a similar report. Occasionally, however, the board will approve an application that was not recommended for funding.

The CIRM governing board has resisted requiring public disclosure of the interests of reviewers. The subject has come up several times, but board members have been concerned about losing reviewers who would not be pleased about disclosing their financial and other interests.

Nonetheless, public disclosure of economic interests among researchers is routine in scientific research articles. Many universities, including Stanford, also require public disclosure of financial interests of their researchers.

At the time of Hood-Weissman-Trounson flap, Stanford’s policy said, “No matter what the circumstances — if an independent observer might reasonably question whether the individual’s professional actions or decisions are determined by considerations of personal financial gain, the relationship should be disclosed to the public during presentations, in publications, teaching or other public venues.”

Proposition 71 placed the legal authority for grant approvals in the hands of the CIRM board. Traditionally in the world of science, other scientists (“ peer reviewers”), however, are deemed to be the most capable of making the scientific decisions about grant applications. The traditional practice calls for the reviewers to be anonymous and meet in private, which is also CIRM’s practice.

If the CIRM board concedes the decisions to the grant reviewers, state law is likely to require public disclosure of their financial interests, a move that the board has opposed for years. Former CIRM Chairman Klein repeatedly advised the board during its public grant approval processes that reviewers’ actions were only ”recommendations,” and that the board was actually making the decisions.

Proposition 14 implicitly recognizes, however, that a problem exists with directors approving “concept” plans for awards that could benefit their institutions.

To ease that problem legally, Klein inserted language in the new proposition that excludes adoption of “strategic plans, concept plans and research budgets” from being considered as matters involving conflicts of interest.

The measure does nothing to deal with matters involving the de facto, closed-door approval of awards by researchers who are unknown to the public and who do not have to publicly disclose their interests.

At the time the IOM report was released nearly eight years ago, some board members complained that its recommendations were unrealistic because of the likely, lengthy difficulties of altering a state law that had been created by the initiative. But since then, directors have not asked state lawmakers to change the structure of the board or to comply with the other $700,000 worth of IOM recommendations.

CIRM directors, however, missed an opportunity last year to seek conflict-easing changes through the $5.5 billion stem cell measure now on the ballot, Proposition 14.

Some board members have said they discussed the initiative privately with Bob Klein, who crafted the proposal last year.

Revision of CIRM’s conflict rules was discussed at a board meeting in May 2019. Several board members expressed concerns about the loss of valuable insights from board members who cannot vote on applications. Some also expressed concerns about whether loosening the rules would damage the possibility of voter approval of a ballot measure to refinance the agency. Several, including CIRM Chair Thomas, also said “there’s never been a conflict” involving a funding award and a board member. No action involving conflicts was taken at the meeting.
—
Editor’s Note: David Jensen is a retired newsman who has followed the affairs of the $3 billion California stem cell agency since 2005 via his blog, the California Stem Cell Report. He has published thousands of items on California stem cell matters in the past 15 years. This story is an excerpt from his book, California’s Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures, which is available for pre-order on Amazon.

The California Stem Cell Campaign for $5.5 Billion More Mounts a Web Site, Hires PR firm

The ballot campaign to pump an additional $5.5 billion into California's stem cell stem cell agency is now moving briskly and has a web site plus a well-known public relations firm that has handled more than 20 other ballot measures in the Golden State. 

The campaign has also spent $1 million, which is a tiny amount given that the campaign could cost upwards of $50 million, give or take some millions. The latest campaign disclosure statement shows that it had a zero balance as of Dec. 31 last year. 

The state stem cell agency is running out of the $3 billion originally approved by voters via a 2004 ballot measure. If the new ballot initiative is not approved in November, the agency is expected to whither and die. Its only significant source of cash has been the $3 billion in state bonds. 

The campaign web site is called "Californians for Stem Cell Research, Treatments and Cures." It carries a list of 43 organizations that it says support the ballot initiative, which has not yet qualified for the ballot. 

The groups range from the Alliance for Regenerative Medicine, an industry lobbying group in Washington, D.C., and the Loving Mind Institute, which deals with mental and addiction issues,  to the Arthritis Foundation and the International Society for Stem Cell Research, the largest organization of stem cell researchers in the world. 

Also listed as supporters are patient advocates, scientists and private parties. They include luminaries such as Nobel Prize winner David Baltimore. He served on the board of the stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM) from 2004 until June 6, 2007. 

Baltimore was also a co-founder and chairman of the board of a firm backed with millions by the stem cell agency. The firm, Calimmune, was incorporated March 23, 2006, in Delaware.  The firm has received $8.3 million from CIRM. Calimmune's initial award came as part of a $20 million award on Oct. 28, 2009.   Calimmune was sold to CSL Behring in 2017 for $91 million. 

(See here, here and here for more on Calimmune.)

A number of current board members of the stem cell agency are also listed by the campaign as supporters. The board has not yet taken a formal position on the initiative, but there is little doubt that it will support the proposal. Other supporters include a number of researchers who have received CIRM funding. 

The campaign web site features "success stories" in CIRM program, all of which have been carried earlier on the official CIRM web site. The campaign site asks for donations as low as $5 via credit cards. It contains a list of five stories and columns that are favorable to the agency, covering the period from 2016 to last month.

The campaign has also hired a well-known California public relations firm, Fiona Hutton and Associates, which has offices in Los Angeles and Sacramento. Hutton was involved in the 2004 stem cell campaign as well. 

Hutton's main web page promises "communications that shake up things and move mountains."

The American Association of Political Consultants says that Hutton is "one of only two women-owned businesses ranked in the Top 10 of national public affairs agencies and the Top 10 Los Angeles-based firms by leading PR trade publication O’Dwyer’s."

The Quest for Stem Cell 'Franchise Players:' California's $47 Million Recruitment Program

 Robert Weschler-Reya briefly discusses some of the implications of his research.

Nine years ago this month, the California stem cell agency kicked off a $47 million recruiting effort to lure star stem cell scientists to the Golden State in what was then an even more fledgling field than it is today.

The first recipient was Robert Weschler-Reya, who left Duke University to join the Sanford Burnham Prebys Medical Discovery Institute in La Jolla, Ca. Weschler-Reya surfaced again last week in an item on the stem cell agency's blog, The Stem Cellar, which discussed the research that he hopes will help children with a deadly brain cancer.

Back in April 2010, directors of the state's $3 billion stem cell agency awarded nearly $6 million to Weschler-Reya. But it took him months to make the decision to come to California. (For more on the process see here and here.)

Ultimately, the agency helped to bring eight other scientists to California through the recruitment effort. All of the awards in the program benefited institutions with past or present representation on the agency's governing board. Those directors could not vote on specific grants to their institutions, but they all voted in favor of creating the recruitment effort.

The overall approach was approved in 2009 by directors of the agency, known formally as the California Institute for Regenerative Medicine (CIRM). Backers said it would lure "paradigm-shifting," "franchise players" to the state.

CIRM Director William Brody, then head of the Salk Institute in La Jolla but also a former president of John Hopkins University in Maryland, said that when California voters created the stem cell agency in 2004,

"I was sitting in Baltimore (and) the big concern was that there would be this big sucking sound for the senior people. And that, by and large, I don't think has happened because there's not been an appropriate mechanism to bring them, and I think this would do that."

As for Weschler-Reya, CIRM quoted him on its blog last week as saying that his research has developed "a valuable tool that will increase our understanding of the biology of the cancer and allow us to identify and test novel approaches to therapy. This advance brings us one step closer to a future where every child survives—and thrives—after diagnosis with CPC (choroid plexus carcinoma).

In his year-seven report on his CIRM research, Weschler-Reya said,

"The goal of our studies has been to elucidate the role of stem cells in development, regeneration and tumorigenesis in the cerebellum. We have made significant progress towards this goal during the course of our work.

"Our studies have provided insight into the types of cells derived from cerebellar stem cells during development, and shown that cerebellar stem cells can serve as cells of origin for pediatric brain tumors. Moreover, we developed several new stem cell-based animal models of pediatric brain tumors, and used them to study mechanisms driving tumorigenesis and metastasis. Importantly, we also used these models to screen for compounds that might be effective inhibitors of tumor growth, and identified a number of promising candidates. 

"Our long-term goal is to move these agents toward clinical trials, to improve outcomes for pediatric brain tumor patients."

Here is a list of all the recipients in CIRM's recruitment program. 

Institution	Researcher name	Grant Title	Award Value
University of California, Berkeley	Xavier Darzacq	Single Molecule Biophysics and Biology of Cellular Identity	$4,247,155
Gladstone Institutes, J. David	Todd McDevitt	Engineering microscale tissue constructs from human pluripotent stem cells	$5,884,058
University of California, Los Angeles	John Chute	Niche-Focused Research: Discovery & Development of Hematopoietic Regenerative Factors	$5,174,715
Cedars-Sinai Medical Center	Barry Stripp	Epithelial progenitors and the stromal niche as therapeutic targets in lung disease	$4,841,830
Stanford University	Hiromitsu Nakauchi	Generation of functional cells and organs from iPSCs	$5,427,512
University of California, San Diego	Eric Ahrens	Molecular Imaging for Stem Cell Science and Clinical Application	$5,920,899
University of Southern California	Andrew McMahon	Repair and regeneration of the nephron	$5,672,206
University of California, Santa Barbara	Peter Coffey	Development of Cellular Therapies for Retinal Disease	$4,690,963
Sanford-Burnham Medical Research Institute	Robert Wechsler-Reya	The role of neural stem cells in cerebellar development, regeneration and tumorigenesis	$5,226,049
			47085387

The $50 Million, Semma-Melton Quest: Looking for a Cure for Diabetes

An eminent Harvard stem cell researcher who is searching for a cure for an affliction that plagues 29 million Americans stood on a San Francisco stage this week and spoke of "things we don't understand."

Doug Melton, photo Harvard Gazette/B.D. Colen

The scientist is Doug Melton, who is on a deeply personal quest for a cure for diabetes. Both of his children have the disease. And the state of California is helping out on his search with $5 million.

The occasion for Melton's remarks was the presentation of the Ogawa-Yamanaka Stem Cell Prize, a $150,000 award for his work in cellular reprogramming.

Here is how Hannah Robbins of the Harvard Gazette described the results of Melton's research:

"As a pioneer in programming insulin-producing beta cells from stem cells, Melton’s lab can now generate therapeutic quantities of functional, stem cell-derived beta cells, which Melton hopes will someday soon replace the life-saving yet painful daily insulin injections for diabetics."

The $5 million from California is a grant made last March by the state's $3 billion stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM).

The cash is going to a firm in Cambridge, Ma., called Semma Therapeutics, Inc., which Melton co-founded and which is named after his two children, Sam and Emma. Melton now serves on the firm's board of directors. The business is only two years old, but has raised roughly $50 million to translate Melton's work into actual treatments.

His grant application to CIRM in March was titled simply "Personalized Cell Therapy for Diabetes." The proposal (application number TRAN1-08561) received a score of 90 out of 100 from the agency's scientific reviewers who are from out-of-state. A summary of the closed-door review said the proposal was "strong, well-­designed, feasible. and high impact." The research "has excellent product development plans and great regulatory support," reviewers said.

The stem cell agency is limited to funding only work that is done in California. Semma announced earlier this month that it has set up arrangements with UCLA, Cedars-Sinai and the City of Hope in the Los Angeles area to generate "suitable clinical grade" cells from patients and "to establish a path leading to the transplantation of these cells back into patients in a clinical trial."

Peter Butler, chief of Endocrinology, Diabetes and Hypertension at UCLA, will be dealing with patient selection. Dhruv Sareen of the Induced Pluripotent Stem Cell Core Facility at Cedars-Sinai will direct derivation and analysis of pluripotent stem cells from each patient’s blood. The cells will be transferred to the City of Hope for manufacture of products for clinical trials.

Overseeing the entire project is Felicia Pagliuca, principal investigator on the CIRM grant. She is also scientific co-founder of the firm, the vice president of Cell Biology Research and Development and a lead on the original research in Melton's lab.

Felicia Pagliuca and Robert Millman
 photo Boston Globe/Dina Rudick

The financial backers are led by MPM, a venture capital firm with offices in South San Francisco and Cambridge, Mass. Robert Millman, formerly of MPM, is CEO of Semma. Other investors include Medtronic, Novartis, Fidelity Biosciences, Arch Venture Partners and the Juvenile Diabetes Foundation.

Semma is still hiring and has openings listed for five positions on its web site, ranging from scientists to a director of device development and manufacturing.

Here is a video recording of the award ceremony in which Melton discusses his research and "the things we don't understand" in the science.

(Editor's note: An earlier version of this story contained an inaccurate description of the roles of Cedars-Sinai and the City of Hope involving the CIRM-funded work.) 

Revolving Door Policy Tightened at California Stem Cell Agency

BERKELEY, Ca. -- Directors of the California stem cell agency today approved a measure aimed at easing conflicts of interest involving employees who may seek employment with recipients of the agency’s largess.

On a unanimous voice voice, the governing board  of the California Institute for Regenerative Medicine (CIRM) set a new revolving door policy that says,

“To prevent even the appearance of a conflict of interest, CIRM employees should contact CIRM’s general counsel or deputy general counsel if the employee has begun discussions with a prospective employer that has received or is currently applying for CIRM funding. CIRM’s attorneys will maintain the confidence of this information and advise the employee of his or her obligations under state law, and the employee will be precluded from participating in any decisions relating to the prospective employer.­­"

The new policy is a slight extension of the state law and was offered in the wake of the appointment of former CIRM President Alan Trounson to the board of directors of StemCells, Inc., of Newak, Ca., which holds $18.4 million in awards from the agency. 

Trounson was named to the board seven days after he left the agency and did not inform the agency he was considering a position with the firm. The news triggered a wave of unfavorable publicity for the agency.

Tightening the Revolving Door at the California Stem Cell Agency

Directors of the California stem cell agency next week will consider a proposal aimed at partially addressing revolving-door and conflict-of-interest problems at the $3 billion research enterprise.

The proposal comes in the wake of a wave of unfavorable publicity this summer that embarrassed the agency when its former president, Alan Trounson, was named to the board of a stem cell company only seven days after he left the state research effort.

The Newark, Ca., firm, StemCells, Inc.,  is the recipient of $18.4 million in awards from the California Institute of Regenerative Medicine (CIRM), as the agency is formally known.  The news surprised the agency and prompted its new president, Randy Mills, to sign an agreement that he would not accept employment from a CIRM grant or loan recipient for at least a year after he left the agency.

Michael Friedman
CIRM photo

In a memo to CIRM board members yesterday, Mills said he was offering a new proposal on revolving door matters after CIRM Director Michael Friedman, president of the City of Hope, made such a suggestion in July.

Mills wrote,

“Under the proposed policy, CIRM team members (employees) would remain free to pursue other employment opportunities, including with CIRM-funded institutions. To prevent inadvertent violations of California’s conflict of interest laws and to ensure the integrity of CIRM’s decision-making process, however, the policy would request that CIRM employees notify CIRM legal counsel when the employee begins employment discussions with a CIRM grantee or current applicant. CIRM’s legal counsel will maintain the confidentiality of this information and advise the employee of the steps he or she needs to take to remain in compliance with the law. Thus, the policy balances the privacy interests of CIRM employees with the need to protect the integrity of  CIRM’s decisions.”

Mills said,

“As Dr. Friedman recognized, CIRM has a highly talented team. It is therefore understandable that California institutions, including those that receive CIRM funds, would be interested in recruiting them. Currently, there is no prohibition on CIRM team members accepting employment from CIRM funded institutions, however I believe additional clarity regarding this topic would help avoid potential conflict of interest occurrences.”

The board will act on the proposal at its meeting in Berkeley next Wednesday.

 Our comment: The proposal will not eliminate revolving door problems at the nearly 10-year-old agency as it winds down its funding and employees may want to seek other employment.  The proposal contains ambiguities that make it difficult to adhere to, such as the question of when employment discussions begin. It also does not contain any indication of the consequences for violation of the policy. However, coupled with the Mills’ personal declaration on future employment and the deplorable situation involving Trounson, the new policy helps make it clear that actions such as Trounson’s do not measure up to what is now expected at CIRM.  Mills has also produced a fresh perspective on CIRM’s future finances that would stretch them out to 2020 instead of 2017, another action that removes an incentive for employees to consider seeking employment elsewhere.