Third Researcher Appealing Grant Rejection to Stem Cell Agency Board

The director of robotics and biosurgery at UC Davis is appealing rejection of his application for a $4.9 million grant from the California stem cell agency.

The scientist, W. Douglas Boyd, noted that his proposal was given a scientific score of 67, which was one point below the cutoff for most grants approved by CIRM's Grants Working Group. Thirteen grants fell in the 68 to 53 range, including Boyd's. Reviewers approved four in that range, including two with scores of 53.

Boyd's letter was brief, focusing on a letter of support from an Indiana firm, Cook Biotech, Inc., that would supply the "material and technical expertise to create a new bioengineered cardiac patch

material."

The appeal letter, along with other appeals(see here and here), will be given to CIRM directors in the agenda material for their meeting tomorrow in San Francisco. The board does not have to act on the petitions or discuss them. Researchers can also appear before the board to make a case.

Claire Pomeroy, CEO of the UC Davis Health Systems, is a member of the CIRM board. She will be barred from taking part in any discussion of Boyd's application or voting on it.

$22 Million for Biology: CIRM Directors OK Two Reviewer-rejected Grants

California stem cell directors today approved more than $22 million in basic biology grants, overturning negative decisions by reviewers on two applications.

The directors ratified all 14 grants supported by reviewers, plus applications from researchers at UC Davis and the Sanford-Burnham Institute in La Jolla. The total was well under the $30 million that CIRM budgeted for the biology grant round.

The Davis grant was the subject of an “extraordinary petition” by its top researchers, Eric Kurzrock and Jan Nolta. They said in their petition that reviewers “simply overlooked important details” and committed “factual errors.” The petition was initially rejected by CIRM staff but the board decided to approve the grant for “programmatic” reasons.

Nolta appeared before the board along with patient advocates, including a tearful mother with an ailing child. Nolta is one of the few researchers who regularly attend CIRM board meetings. Patient advocates also sometimes attend board meetings and speak on behalf of specific grants.

The Nolta grant was approved on an 11-9 vote, but the board cut the amount of the grant by one-third. CIRM listed the grant at nearly $1 million in its news release.

Another extraordinary petition was rejected by the board. It was filed by Edward De Robertis of UCLA, who is also a Howard Hughes Medical Investigator. He appeared personally before the board last night. De Robertis has not been a regular at board meetings. Nor did patient advocates speak on behalf of his research.

CIRM directors also approved a $1.6 million application by Huei-sheng Chen of Sanford-Burnham that reviwers had nixed.

Fourteen of the 16 grants went to institutions that have representatives on the CIRM board. That is in keeping with the pattern over the last five years. More than $900 million out of the $1 billion in grants so far have gone to institutions with links to board members. CIRM directors with conflicts of interest are not allowed to vote on or take part in the discussion about the applications affecting their enterprises.

Of the non-board-connected recipients, one $1.5 million grant went to a business, iPierian, Inc. a South San Francisco biopharmaceutical company, and researcher Barta Strulovici. Another $1.5 million grant went to Tony Wyss-Soray at the Palo Institute for Research and Education, a nonprofit involved with the Veterans Administration system.

CIRM received 154 pre-applications  in this round that were screened by staff and a few outside reviwers. Fifty-seven pre-applicants were invited to make full applications. Fifty-two applications were received and reviewed. Reviewers made positive decisions on 14, which they sent to the board. CIRM did not announce the number of applications received from businesses.

City of Hope Wins Initial Appeal

Directors of the California stem cell agency this morning gave a positive nod to an attempt to win approval of an application from the City of Hope in the agency's disease team round.

The board approved, on a unanimous vote, a motion to move the application into the first tier of grants expected to be approved later today.

The grant was proposed by Karen Aboody of City of Hope in Duarte, Ca., to study development of treatments for brain tumors.

Aboody filed an extraordinary petition to overturn a negative decision by CIRM reviewers, who gave the application a score of 43 on a scale of 100.

CIRM Vice Chairman Duane Roth said he would support the grant because information in the review was incorrect. Another director concurred with Roth's comments.

The size of the grant was not immediately available.

(Editor's note: The vote tally is based on votes that were audible on the board Web audiocast. The ultimate figure may vary slightly.)

CIRM Directors Nix Buck Appeal

Directors of the California stem cell agency turned back an attempt to win approval of a $17 million application from the Buck Institute on a stem cell research proposal involving Parkinsons disease.

The board rejected, on a 6-11 vote with one abstention, a motion to move the application into the first tier of grants expected to be approved later today.

The grant was proposed by Xianmin Zeng of Buck and co-PI Mahendra Rao, vice president of Invitrogen and former head of the stem cell group at National Institute of Aging.

Scientific reviewers gave the application a score of 53 and did not recommend it for funding.

Zeng filed an “extraordinary petition” and personally appeared before the board this morning. She said the criticisms by reviewers were minor or technical and have already been addressed or are being addressed.

The motion to move ahead on the grant was offered by CIRM Director Joan Samuelson, who has Parkinsons.

(Editor's note: The vote tally is based on votes that were audible on the board Web audiocast. The ultimate figure may vary slightly.)

Weissman's $20 Million Proposal Dodges Rejection

A $20 million grant application from reknown scientist Irv Weissman of Stanford tonight avoided disaster as CIRM directors overturned a decision by scientific reviewers to reject the proposal.

The application was moved, 14-2 vote with two directors abstaining, into the top tier of disease team grants that are headed for approval by the directors tomorrow morning.

Another $20 million application from Stanford's Gary Steinberg was also moved into the first tier on a separate vote, which was either 13-3 or 12-4. One director's vote was inaudible on the Web audiocast.

The Steinberg and Weissman applications bring to 13 the number of grants in the first tier for a total of $207 million. That is just under the $210 million budgeted for the disease team effort, the largest research grant round in CIRM history.

Both applications were the subject of an “extraordinary petition,” along with four other applications. One of those efforts was not successful tonight. No director made a motion to move a $12 million proposal by Aileen Anderson of UC Irvine to the first tier.

(Weissman's petition can be found here, Steinberg's here, Anderson's here. The other petitions are from Judith Shizuru of Stanford(here), Karen S. Aboody of the City of Hope(here) in Duarte, Ca., and Xianmin Zeng of the Buck Institute(here) in Novato, a town north of of San Francisco.)

The directors have recessed until tomorrow morning. They did not take up the other petitions tonight as they worked their way through the grants that CIRM's grant reviewers said were not worthy of funding. Weissman's application received a scientific score of 65, below the cutoff line of 70. Steinberg's and Anderson's scores were not available.

Regarding the Weissman application, CIRM Chairman Robert Klein said some of the reviewers may have been less than objective because they do not believe that cancer stem cells exist. The subject is a matter of some scientific dispute. CIRM President Alan Trounson disagreed with Klein on the possibility of prejudice but said that the grant could be worthy of funding.

Director Ted Love, who served as CIRM's chief scientific officer during the review, said the board could feel comfortable funding the grant or not. He said he did not think it would be “unwise” to fund the application.

Weissman's name was not mentioned during the discussion, but some commented about respect for the principal investigator. The United Kingdom is also involved in the grant, providing an additional $4.3 million, according to Trounson.

The board is scheduled to resume deliberations at 8:30 a.m. PDT tomorrow in Los Angeles. CIRM has scheduled an 11 a.m. news conference to formally announce the grant winners. The meeting will be audiocast on the Web. Directions for listening are on the agenda.

Weissman's Grant and Appeal Now Being Discussed

Currently being discussed by the CIRM board is a rejected grant (1485) by noted Stanford scientist Irv Weissman.

Six Rejected Grant Applicants Make Public Appeal to CIRM Board

Six research teams that lost out in CIRM's closed door reviews of their applications for up to $20 million dollars are now seeking to overturn the decisions.

The rejected applicants include three from Stanford(Irv Weissman, Judith Shizuru and Gary Steinberg), one from the City of Hope (Karen S. Aboody) in Duarte, Ca., one from UC Irvine(Aileen Anderson) and one from the Buck Institute(Xianmin Zeng) in Novato, a town north of of San Francisco.

Their “extraordinary petitions” are not yet available on the board's agenda, but their existence was confirmed by John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca. Simpson was attending the meeting in Los Angeles and supplied the applicants' identities from CIRM documents available at the session.

We queried him about the petitions after hearing a partial comment on the Web audiocast of the meeting, which has been largely muddled at our location in Mazatlan.

Simpson also said that one key board member told him that the six petitions raise “substantive scientific issues.” The efforts to overturn the negative results raise some other interesting issues because CIRM budgeted $210 million for the disease team grant round while reviewers only approved $167 million.

The extraordinary petition process is relatively new at CIRM. It was created in September 2008 in response to public appearances by rejected applicants at CIRM board meetings. None have been successful using that method and none have been successful in using the extraordinary petition process.

A number of board members have been clearly uncomfortable with the public presentations by unhappy applicants. They have also been loath to overturn the decisions of the Grants Working Group and the scientists who are members of it.

The issue bubbled up in June 2008, leading to an extended public board discussion of the appeal or reconsideration process. CIRM allows "appeals" only in the case of conflicts of interest on the part of reviewers. However, reviewers do not have to publicly disclose their economic or professional interests.

The extraordinary petition process requires the applicant to file a request for reconsideration five days prior to a directors meeting. CIRM's president will then evaluate it and make a finding on whether it has merit.

Here is an account of how the petition process worked last January.

(Editor's note: An earlier version of this item incorrectly said the petitions were not available on the CIRM Web site.)

CIRM Staff Nixes Appeal Efforts from Two Scientists

The staff of the California stem cell agency has rejected two attempts to overturn negative decisions on two grant applications for a total of $2.8 million, one from the Bay Area and one from Southern California.

Following a relatively new procedure, CIRM President Alan Trounson said that the applicants failed to present "compelling evidence" for a change. Trounson referred to petitions by Susan Fisher(see color photo), a professor at UC San Francisco, who sought $904,172 , and Prue Talbot(see black and white photo), a professor at UC Riverside, who sought $1.9 million.

Both women disputed the decisions of the CIRM Grants Working Group on their applications, which were considered and voted on earlier behind closed doors. Later this week, CIRM directors could overturn the actions by reviewers. However, in December, in the only other instance of the use of the new petition procedure, the board stood by the decisions of reviewers after the CIRM staff could find no compelling evidence for a reversal.

Here is what Trounson had to say on Fisher's petition:

"We agree that reviewers considered this a meritorious application. The proposal to create an 'antibody tool kit for human embryonic stem cells and their progeny' was highly regarded but not unique. To clarify, there is at least one other application in Tier 2 that proposes the development of an antibody tool kit.

"In regard to the reviewer criticisms, we believe that reviewers were justified in raising concern about the PI’s overall commitments as the application lists 15 currently active projects that consume 87% of the PI’s effort. In addition, the PI lists 3 pending projects that would consume 40% effort. Regardless of additional personnel that can help lead the project, the PI is ultimately responsible for managing and ensuring that the project is carried out as proposed. We disagree that the only way to increase the percent effort of a given individual is to remove another individual from the project. The CIRM Grants Administration Policy limits the annual salary requests for each key person to $207,000. It does not, however, limit the percent effort that an investigator can commit to a project. In fact, a key person may contribute any effort between 1 and 100 percent without requesting any salary support from the CIRM grant. Therefore, the budget cap alone should not prevent an investigator from contributing greater effort when appropriate. We recognize that effort contributed to a project should be appropriately compensated, but the CIRM grant should not necessarily be viewed as the sole source of support."

Here is what Trounson said concerning Talbot's petition:

"We appreciate the arguments presented by Dr. Talbot on strengths of this proposal. Reviewers agreed that the institution’s designation as a Hispanic Serving Institution provides an important opportunity for the recruitment and training of underrepresented minorities and this point was highlighted and accounted for in the score and final recommendation. However, this important strength was balanced by the reviewers’ assessment of the overall quality and design of the training program. When compared to other competing proposals, this application did not convince reviewers that the training opportunities would provide sufficient depth and breath to trainees. It is also important to note that the existing training of students in stem cell biology referenced in the letter was not articulated in the application despite the opportunity to do so.

"The applicant’s letter also indicates that their application for the Training Grant Program in 2005 received a higher score and recommendation than for this review. We believe that there are many factors that might contribute to this difference including among others a general strengthening of competing programs in the last 3 years, a different composition of reviewers, and a different (although similar) proposal from the applicant. Reviewers based their recommendation on the proposal that was presented to them for the current competition and not the previous."

The links to Trounson's comments also contain the petitions filed by the two scientists and the public summary of their grant reviews.

(A footnote: Fisher is featured in a video on the CIRM home page and CIRMTV dealing with Obama's inauguration.)

(An earlier version of this item did not contain the amount requested by Talbot and the total for both grants.)

Links to CIRM Grant Review Process

Here are some links to documents relating to the California stem cell agency and complaints about fairness in its grant review process.

Consumer Watchdog Identifies Businesses Rejected for CIRM Grants

CIRM's August Proposal for a Reconsideration Procedure (this is likely to be modified for CIRM's September meeting)

Transcript of August CIRM Meeting

Cascade LifeSciences Seeks Reconsideration

Text of Cascade's Reconsideration Letter

CIRM Response to Cascade

Transcript of June CIRM Meeting Involving Cascade

Transcript of the January CIRM directors meeting, which heard the first public appeal of a scientific review. Search on the term "luben," which is the misspelling of the name of Bertram Lubin, president of Childrens Hospital Oakland Research Institute, who appeared before the directors seeking reconsideration.

Nature magazine article April 30, 2008, in which Lubin comments on CIRM

California Stem Cell Report account of part of the January meeting involving the Lubin appeal.

A Tardy CIRM Posting on New Grant Reconsideration Policies

Only hours before its directors meet today, the California stem cell agency has posted its proposed policy for handling requests for reconsideration of negative recommendations from reviewers on grant applications.

The proposal is an attempt to deal with a problem that has dogged CIRM since last January when an unhappy applicant asked the board to approve its grant despite a negative decision by reviewers.

The board was clearly uncomfortable with the attempt, both in terms of fairness to other applicants and because of the disruption of its normal procedures. The issue surfaced once again in June, leading to more extended public discussion of the appeal or reconsideration process. CIRM allows "appeals" only in the case of conflicts of interest on the part of reviewers. However, reviewers do not have to publicly disclose their economic or professional interests.

The proposed procedure requires the applicant to file a request for reconsideration five days prior to a directors meeting. CIRM's president will then evaluate it and make a finding on whether it has merit. The proposal is unclear on whether it means calendar days or business days.

The reconsideration requests, which CIRM calls "extraordinary petitions," will be posted on the CIRM website. Presumably the president's findings will be as well, although that is not specified.

The policy does not appear to eliminate an applicant's ability to appear publicly before the board to seek reconsideration. However, with a negative decision from reviewers and a "no merit" finding from the president, a disgruntled applicant is not likely to find a receptive audience.

It is unfortunate, to say the least, that this important proposal, which affects hundreds of scientists in California, has been posted at the very last minute. It deals with an issue that affects CIRM's credibility and the credibility of its reviewers. It is virtually impossible for those affected by this plan to comment intelligently to the board in a timely fashion.

Presumably, they could send an email with their comments at this late hour – if they are aware of the details of the proposal. It is our sense, however, that few scientists spend much time scouring the depths of the CIRM website, which does not even put a notice of its directors meetings on its home page.

For a look at previous items on this issue, search on the label "reconsideration" or "grant appeals."

Loans, Eggs, Contracts, Suppliers and $41 Million Top CIRM Agenda Next Week

Directors of the California stem cell agency will meet next week to hand out $41 million to 14 lucky scientists and wrestle with a host of other matters, ranging from the $2.7 million in outside contracts to a proposed $500 million biotech loan program.

Here is a quick look at the topics on the Aug. 12 agenda, which will probably be posted soon on the CIRM website.

Researcher Bonanza -- This a bit of a "do-over" of last year's $85 million faculty award program. That effort was tarnished when five CIRM directors violated the agency's conflict-of-interest policies by writing letters on behalf of applicants from their institutions. CIRM said the letters resulted from an "innocent misunderstanding," but disqualified the 10 applicants involved. No CIRM action was taken against the five directors. The full board decided to provide another grant opportunity, which was also open to applicants other than those disqualified. The latest effort, modified from the first offering, is scheduled for $41 million for 14 winners, with awards up to $2 million a year. CIRM received 55 letters of intent to apply for the grants but has not released the actual number of applications as far as we can determine.

Outside Contracting – Perhaps the most important item in the $13 million operational budget of the stem cell agency is the $2.7 million it spends for outside contracting. That figure is up 50 percent from last year. It is the second largest item in the budget, behind only salaries and benefits. CIRM will have spent more than $2 million for outside legal help by the end of this year and has spent hundreds of thousands for executive searches. In 2005, directors imposed restrictions on outside contracts and required quarterly reporting after they were surprised by published reports about the size and impact of those dealings. On Aug. 12, it appears that directors will be asked to reduce the reporting from quarterly to annual. That would be a mistake. CIRM's board should keep a close eye on the process because of importance of contracting to CIRM and the ticklish issues of overseeing those contractors. Earlier this year, directors had to retroactively approve additional funding for its main outside counsel, Remcho, Johansen, & Purcell of San Leandro, Ca., after work had already been performed. CIRM Chairman Robert Klein also told CIRM directors that Remcho is unique in its abilities, that basically no other firm in the state can perform the work. Thus, Klein reported, the attorney general's office has said the contract does not need to go out for bid. See the Remcho item below for more on Klein's explanation of the relationship between him, Remcho and CIRM and the opinion of the state attorney general. Here is the latest list of outside contracts. Here is the budget for 2007-08.

The $500 Million or So Biotech Loan Program -- The formal agenda topic is "CIRM loan policy." CIRM Chairman Klein earlier this year said he hoped to have the biotech loan program approved this month. But this cryptic agenda item may mean that the board will not be presented this month with the whole package for this ground-breaking and novel effort. See the item below for links to various CIRM documents on the loan proposal. Search this blog on the term "biotech loans" for even more.

Definition of California Supplier – Perhaps hundreds of millions of dollars are at stake in this item. It involves the Prop. 71 requirement that California suppliers be given preference on purchases by CIRM grantees. Legislation is being considered in Sacramento along with separate regulatory language being worked out at CIRM. Here is a link to the latest version of the legislation involved and the transcript of the June CIRM directors meeting at which the topic was discussed briefly. This is an area that has changed swiftly and may well again even before next week's meeting.

Grant Appeals – CIRM is wrestling with the issue of how to handle requests for reconsideration of negative recommendations from the Grant Review Committee. Basically CIRM directors follow the recommendations from reviewers and have been uncomfortable with the few public attempts to override the Grants Committee. Two items could be related to this subject: One deals with RFA applicant policies and the other with creation of a policy for dealing with "extraordinary petitions" to directors for grants. Search this blog on the term "grant appeals" for some background stories, including a proposal by CIRM director Jeff Sheehy.

Egg Matters – Directors will be asked to authorize a procedure for using stem cell lines derived before November 2006 in CIRM-financed research. A subtext of this involves the looming question of egg shortages and cash, although it is not formally on the agenda. CIRM President Alan Trounson has said researchers are "floundering" because they do not have enough eggs. If this subject is important to you, you should be at the meeting.

CIRM is likely to post the agenda for the Aug. 12 meeting at Stanford on Monday, which is six business days ahead of the session. We hope to see additional background material posted early as well. That information would help shed light on exactly what the board will be asked to do next week, beyond the brief listings in the initial version of the agenda.

CIRM Director Sheehy Proposes Changes in Grant Appeals

Jeff Sheehy, a member of the board of directors of the California stem cell agency, offers the following thoughtful perspective on the problems with appeals/reconsideration of grant applications. His comments include suggestions for changes that could ease concerns of some applicants and what he describes as a "muddle."

Sheehy is a member of the Grants Working Group and has participated in the reviews of hundreds of grant applications at CIRM. He has served as its acting vice chairman on a number of occasions. Here is the text of his comments.

"I think we have gotten into a muddle over the question of appeals by applicants to CIRM and the ICOC(CIRM's board of directors). First, as Don Gibbons has reiterated in this item, objective process complaints such as one involving potential undisclosed conflicts of interest by reviewers are allowed by CIRM and given appropriate consideration with appropriate action if needed.

"However, appeals/comments concerning the content of reviews cannot be considered by CIRM staff. To do so would make CIRM staff effectively reviewers. In addition, CIRM staff could be placed in the position of making decisions regarding the funding of grant applications. Prop. 71 clearly gives the Grants Working Group (GWG) responsibility for reviewing grants and the ICOC takes those reviews as advice and then is solely empowered to make decisions to approve or not approve a grant application.

"CIRM and the ICOC could decide to implement a resubmission process allowing applications with disputed reviews to be re-reviewed by the GWG. I personally am undecided on this approach but think it is unlikely to be adopted.

"What is confusing is that appeals/comments about any item under consideration by the ICOC are expressly allowed. California public meeting laws govern a state agency with a decision-making board that meets in public. That means public comments/appeals are expressly allowed, as the ICOC has already experienced. In addition, letters to the ICOC regarding applications or any matter under consideration are also allowed and we have received them on an application and other matters.

"Instead of obfuscating and stonewalling, CIRM should be direct and forthright about this existing appeal process. In that context, the process could then be properly organized. Those who wish to use public comment can be informed of our current 3-minute limit and advised that the limit could be shortened to 2 or even 1 minute if we get a significant number of individuals who wish to comment. In addition, we could suggest length (hopefully a couple of pages) and format for written appeals (i.e., formats easy to post on CIRM¹s website). We could also inform applicants who wish to use this process that their letters will be made public and the application score and identity will be revealed upon receipt/posting of letters or after public comment.

"From my perspective, written comments/appeals from applicants would be preferable and I would hope to receive them early enough to consider thoughtfully as I review materials prior to ICOC meetings.

"Part of the rationale for the composition of the ICOC is to have on hand scientific expertise to inform decisions around grant applications. I have confidence that my colleagues can digest any additional input from applicants and make appropriate decisions. After all, the ICOC has already considered and made decisions regarding applications appealed to it."

CIRM Responds to Cascade Complaints

The California stem cell agency today defended its grant review process in the wake of complaints by an applicant, Cascade LifeSystems of San Diego, concerning the fairness of CIRM's procedures.

We asked CIRM if it had any comments concerning the item we wrote dealing with Cascade's concerns. We also specifically asked CIRM the following question: How can an applicant appeal on the basis of a conflict of interest if it does not know the names of the specific reviewers who evaluated their application?

Here is the text of the response from Don Gibbons, chief communications officer for CIRM.

"The company would note anyone on the review panel whom it believes has a potential conflict, then staff would see if that person was a primary or secondary reviewer, or if not, whether they made substantive comments during the review that could have influenced scores.

"You should know that CIRM does not believe that the reviewer citing 0.3 percent instead of 0.66 percent is a substantive error. The latter would still require 150 eggs to get one cell line, and that was a significant weakness in the application. The three percent or one-in-30 number cited elsewhere in the application by the firm is noted to come from preliminary data, something that we felt was not peer reviewed and not substantiated, and therefore outside of the realm of consideration for review. There were several other weaknesses in the application cited by the reviewers.

"CIRM’s success rate for grant applications is already considerably higher than for NIH applicants."

Our comment on the conflict of interest question raised by Cascade: The names of all the scientists on the review panel are public. Only in cases of the names of individuals assigned specifically to a specific application are the names secret, as we understand the process. An applicant can see the names of all reviewers in advance, do some research on the individuals and ask CIRM ahead of the review to bar particular reviewers from evaluating its application.

We suspect that no applicant has performed that sort of due diligence, but we could be wrong. In fact, raising such an issue ahead of a review could have a negative impact on consideration of an application. Few reviewers are likely to be fond of having their integrity questioned. And an accusation of a conflict of interest cannot be fully investigated without informing the reviewer involved.

Multimillion Dollar Hooha Over CIRM Grant Reviews

As part of a burgeoning flap over grant reviews at the $3 billion California stem cell agency, one rejected applicant has formally asked for reconsideration of its request for funds, citing errors in fact by reviewers, among other things.

Such a request might seem routine, but for CIRM it is novel and fraught with pitfalls. At stake is the reputation for fairness and credibility of the still young California Institute for Regenerative Medicine.

Created only in 2004 with its first grants approved in 2005, CIRM has struggled with its processes. It has been helped, but also hamstrung by the ballot initiative that created it. The measure, which bypassed the legislature and the governor, also locked in a host of restrictive procedures. One of those involves the grant review process, which is also governed by policies approved by the CIRM board of directors.

The rejected applicant, Cascade LifeSciences of San Diego, was routinely denied funding last month by the CIRM board of directors, based on the decisions of scientific reviewers. The board has almost universally ratified the $500-million-plus decisions of its scientific reviewers, who conduct their sessions in private and whose economic or professional interests are not publicly known.

Rejected applicants do not have the right of appeal except in the case of a conflict of interest. But Cascade says it does not know the identity of reviewers of its grant so it is impossible to know whether a conflict of interest exists. However, the board itself is filled with conflicts of interest -- all legal -- that even Nature magazine has warned about.

Ken Woolcott, chief business officer for Cascade, appeared before the CIRM directors last month to express concern about the grant review process. At the time, he did not seek an appeal or reconsideration of the firm's application. He had been told by CIRM that no appeal was possible. After he left the meeting, another rejected grant, albeit in a slightly higher category, won funding after a CIRM director read a letter from the applicant.

On July 3, Woolcott wrote a letter to CIRM Chairman Robert Klein and CIRM President Alan Trounson that includes a request for reconsideration of his firm's grant. Woolcott's letter does not seek an appeal.

Much of the information in it is contained in an earlier posting on the California Stem Cell Report. But Woolcott has fine-tuned the letter and added important significant details. The entire letter follows as a separate posting. Here is a sample.

"The information on the 0.3% efficiency presented to the Study Section by the Reviewer #2 is factually incorrect. Even if the reviewer was mistakenly relying on our Nov. 2007 Nature publication, that efficiency was reported as 0.66%. More importantly, on pages 5 and 8 of this grant application we provided information that the efficiency of SCNT in primates was 3.3% (1 ESC line per 30 oocytes)."

We have asked CIRM if it has any comment on the situation. We will carry its response when it provides one. Here is the link to the public summary of the CIRM scientific review of the Cascade application.

Text of Reconsideration Letter From Cascade

Here is the text of the reconsideration letter from Cascade concerning its application for a grant from the California stem cell agency.

July 3, 2008
Mr. Robert Klein, J.D.
Chairman, ICOC Committee
210 King Street
San Francisco, CA 94107
Re: Request for Reconsideration - New Cell Line Development RFA 07-05 Review Process

Dear Committee Member:
Last Thursday evening, 26 June 2008, I had the pleasure of appearing before your Committee, officially on behalf of Cascade LifeSciences (See Exhibit A) and perhaps unofficially as a voice for industry, regarding our expectations and experience with the RFA and Grant Review noted above. To quote Mark Twain, “I apologize for the length of my letter; I did not have time to write a shorter one.” Three minutes to comment on a $1MM decision is remarkably challenging. For the benefit of the Committee and with the luxury of a written response, let me see if I can more clearly articulate our expectations, experience and suggestions going forward.

First, I would like to start at the beginning. Prop. 71 is a very innovative and groundbreaking paradigm shift in the funding of research. We applaud the CIRM mission and the stewardship of the Committee. The mission statement of Prop. 71 makes very clear that although science is a laudable goal it is not the end game. Products that treat, cure, or enhance our lives are the end game. Fast forward 10 to 15 years and I would like to be so bold as to suggest that the ultimate arbiter of the success of CIRM or Prop. 71 will be PRODUCTS. Not research achievements, not publications, not patents, not even Nobel Prizes. All of these are important milestones that will advance our efforts and may even contribute to the economy of California. But “John Q. Public” will only benefit directly by the development of innovative stem cell related PRODUCTS that I believe will change medical approaches to disease in fundamental ways.

In the interest of full disclosure, I prefer to admit my biases up front. I have a bias toward products. I am also a lawyer, the Chief Business Officer of Cascade LifeSciences, and a taxpayer. My product bias has been cultivated over 20 years with two of the San Diego biotech pioneers, Hybritech and IDEC. (See Exhibit B, Background). What I know about Stem Cells I have learned, but what I know about product development, I have lived.

I believe that industry and CIRM share the same goal of enhancing product development. Although funding cutting edge research and academic inquiry are part of the larger goal, I believe that industry will be the ultimate conduit through which products must run the clinical, regulatory and marketplace gauntlet.

RFA 07-05 and Cascade’s Expectations

Upon understanding that CIRM was opening up funding under the RFA process to for-profit entities, we were quite pleased and encouraged. Funding critically important translational research that can neither be funded by the NIH nor is of interest to all but a very few private investors seems prudent and product focused.

The specific language in the Objective of RFA 07-05 perhaps set our expectation too high:

Page 1 -- Somatic cell nuclear transfer (SCNT) , a method for reprogramming that is well-established in several mammalian species, has not yet been achieved with human cells, but recent success has been reported in non-human primates. " [This is Dr. Mitalipov's work published in Nature and exclusively licensed by Cascade]

Page 2. "The needs may in the future be met by derivation of hESC following SCNT..."

Page 2. "CIRM proposes a new program to address the need for new types and sources of human pluripotent stem cell lines and for the optimization of existing methods for their derivation." To be candid, we believed that the translation of our SCNT primate work into the SCNT generation of hESC was right in the "strike zone" of the RFA as written. The alternate non-embryo sourced approach, iPS is a very important scientific avenue of research and should be funded as well. That said, SCNT is a very compelling opportunity to develop genetically matched cell lines that may lead to human therapeutic products.

Cascade’s Grant Review Experience

Our responses to the Reviewers’ comments are beyond the scope of this letter but are attached as Exhibit C for independent review. For the record, we filed a formal request with Dr. Trounson to rebut the conclusions and comments of the reviews but were told by Staff that there was no such process. We were told that the only avenue for rebuttal would be based on conflict of interest. As the reviewers are anonymous, it is unclear how this would ever be realistic. Two additional points are striking in this regard. First, we now understand that after our departure on Thursday evening, Rusty Gage, one of our esteemed colleagues here in San Diego was allowed to rebut reviewer comments and, hence, did receive funding. We are unclear on how this rebuttal process works and why we were denied any opportunity to dialogue on the merits of our grant application. Second, I understand second-hand that an ICOC member believed my discussion at CIRM was flawed, for example, because I did not address the mistake regarding efficiency of our SCNT. This is unfortunate, as we were told our request for rebuttal was rejected and that we were not allowed to discuss the merit or lack of merit of the specific review of our application but our three minutes was limited to expressing our concerns about the process and our suggestions for improvement from an industry perspective.

By way of example, we would like you to better understand the disconnect between our expectations and our experience with this Grant Review. As you will note in Exhibit C, most of the review comments we received on our Grant Application were factually incorrect. We are unable to reconcile the review committees’ comments with the stated objectives of the RFA, the articulated criteria for review and our actual grant submission.

For example, Reviewer #1 comment was:
"Lack of Novelty, pure translation of the non-human primate work into humans."
This seems to defy logic and the mission of human therapeutics. Moreover, this does not seem to be consistent with the objectives published by CIRM in its RFA, which specifically calls out the "hurdle" of human SCNT as a fundable goal. I would venture to suggest that successful application of SCNT to humans will be a scientific achievement and will be an “above the fold” kind of worldwide news story. Finally, at the CIRM ICOC meeting, Dr. Uta Grieshammer, presented the review committees grant criteria and noted specifically that the review team was advised that "novelty" was NOT a priority for these types of grants.

Also at the meeting, Dr. Trounson announced that no SCNT grants had been funded due to some sort of vague policy concern about access to human oocytes and the challenges this had created in other countries. (We are aware of Grant#R31-00404 related to SCNT that was previously funded).

First, this was "moving the goal posts" after we had submitted our grant application. Second, we appreciate the challenge of securing oocytes but we at Cascade had been fortunate enough to secure a collaboration with La Jolla IVF clinic to supply all the oocytes we need to proceed with our cell line development effort. Moreover, if this was truly the reason for flagging our grant application as non-fundable, CIRM should have just told us that in writing and explained how they were going to proceed, if at all, in the area of SCNT.

A factually incorrect assumption about our “efficiency” may have been the fundamental error that doomed our application. The CIRM reviewer commented:
The ability to generate individualized human embryonic stem cell lines using somatic cell nuclear transfer from either healthy individuals or patients with specific disease states is an exciting and yet technically demanding prospect. To date, no one has successfully cloned human embryonic stem cells, although recently, a group at University of Oregon Heath Sciences Center has successfully derived primate embryonic stem cells, with an efficiency of approximately 0.3%
This is factually incorrect at two levels. First, we are unclear where the reviewer got the 0.3% efficiency rate. This is not a number we have used. Our November 2007 Nature paper calls out 0.66% efficiency at page 497. Our grant application (filed Jan 2008) describes in detail at page 8, "These results represent a significant reduction in the number of oocytes required to produce a single ESC line over previously reported efficiency (from 152 to 30) providing the important foundation to conduct the proposed studies in humans." 1 ESC cell line out of 30 oocytes is actually 3.3%.

I am unclear how this fundamental oversight occurred. Mistake? Miscommunication? Pre-existing bias? Misunderstanding? Suffice it to say, we believe that the incorrect information about efficiency was the driving force behind the reviewers’ comments and failure to fund.

Suggestions and Action Items for Consideration.

Our hope is that thru expressing our concerns and our experience we will be able to make industry (For-Profit) a viable partner in the mission of Prop 71. With that in mind, we would like to suggest the following ideas for review and consideration by the ICOC:

Industry representation on CIRM grant review teams

Formal appeal process or ability to respond in writing to reviewer comments. See, for example, SBIR, STTR, NIH funding for models of review cycles.

Holding the review team to the published review criteria--e.g., novelty is not a priority criteria.

One of the review criteria should always be the impact of the research on the advancement of human product development. If the Rusty Gage review reconsideration is as I understand it, it seems that there is one set of rules for a deservingly prominent scientist and a different set of rules for Cascade LifeSciences/Industry. We also filed a letter with CIRM asking for the opportunity to comment on our grant review and were denied. This seems, without more complete information, to be unfair.

Perhaps separate academic/not-for-profit grant application review from for-profit review. Comparing not for profit grants (institutions that are Grant Writing Machines) with the grant applications of fledgling biotech companies is fundamentally unbalanced.

Although I believe that Industry is a key element of Product development and we desire to work with CIRM to advance the cause, if CIRM’s funding criteria or standards are inconsistent with industry participation or pragmatic product development, we need to know that earlier rather than later.

I am personally and professionally committed to assist CIRM in making industry an equal partner in achieving the mission of Prop 71. I would look for guidance from the ICOC on how we can work through some of these administrative and structural challenges.

Although we are disappointed by the CIRM review and admittedly discouraged by the process, I trust that the agency and the applicants will evolve favorably with time and experience.
As our distinguished Governor would say.............."We'll be Back."
Sincerely,

Kenneth J. Woolcott
Chief Business Officer
Cascade LifeSciences Inc
10398 Pacific Center Ct.
San Diego, CA 92121
kjwoolcott@aol.com
858-945-4667

KJW/rrc
cc: Alan Trounson, President CIRM
Howard Birndorf
Sophia Khaldoyanidi


Exhibit A

Cascade LifeSciences

Founded 2004
San Diego, CA
Howard Birndorf, Chairman
Kenneth Woolcott, Chief Business Officer
Sophia Khaldoyanidi, Ph.D, MD, Chief Scientific Officer
Larry Respess, General Counsel
Exclusive Licensee of Novel SCNT technology developed at Oregon Health Sciences University (OHSU) and published in Nature, Nov 2007. (First successfully SCNT in Primates)
Dr. S. Mitalipov, inventor of SCNT patents and consultant on human SCNT effort.
Exhibit B



KENNETH J. WOOLCOTT


6100 La Jolla Scenic Drive South
2000 First Avenue
La Jolla, CA 92037
Suite 2304
858-454-8496 phone/fax
Seattle, WA 98121
kjwoolcott@aol.com
206-795-4667 phone


GENERAL COUNSEL & LICENSING EXECUTIVE
Strategic Advisor . . . Entrepreneurial Counsel . . . Transactional Architect


Summary: Executive with over 20 years of experience and outstanding accomplishment in the Biopharmaceutical Industry, including 12 plus years of key legal and management responsibilities at IDEC Pharmaceuticals Corporation (now Biogen IDEC) through its growth from a market cap of $50M to a company with a valuation of over $10B. Provided counsel and craftsmanship on over $1B in global corporate alliances and public financings. Contributed legal leadership and team influence in the development and FDA approval of two oncology drugs, RITUXAN (first antibody approved for cancer) and ZEVALIN (first radioimmunotherapy approved for cancer), currently generating annual U.S. sales of over $1.9B. Provided leadership in diverse and challenging roles based on the growth and needs of the organization, for example:

Strategic advisor with entrepreneurial zeal and global biopharma perspective.
Counsel with intra-disciplinary experience, scientific background and a proven track-record of incisive legal analysis and problem-solving.
Executive officer with achievement in operational management, strategic planning, business development, team building, and change agent in development of company’s core values as it grew from 70 to over 800 employees.
General Counsel and Corporate Secretary with broad experience in public company matters, corporate governance, SEC compliance, FDA issues, intellectual property strategy, transactional negotiation and crafting, corporate partner management, litigation management, and government relations.
PROFESSIONAL EXPERIENCE AND KEY METRICS

Woolcott Bioscience Strategies 2002-present
Transactional and Business Development Consulting Services

Chief Business Officer, Cascade Lifesciences Inc 2007 to present

Strategic Advisor 2005 to 2007
Nativis, Inc. San Diego, CA

Acting Vice President, Business Development & General Counsel 2004-2005
Imagine Pharmaceuticals, San Diego, CA




IDEC Pharmaceuticals Corp., San Diego, CA 1989-2002

VP, General Counsel, Licensing Executive and Secretary 1994-2002
General Counsel, Licensing Executive and Secretary 1992-1994
Deputy General Counsel and Secretary 1991-1992
Intellectual Property Counsel 1989-1991

Counsel to approximately $700M in IDEC Public Equity & Debt Financings:

Initial public offering (IPO): (1991--$52 M)
Follow-on equity offerings: (1994 – $8M; 1996 -- $50M; 2000 -- $473M)
“LYONS” convertible debt offering: (1999 -- $113M)

Counsel and negotiator for approximately $300M in corporate alliances from 1991-00, including:

Zenyaku/Rituxan – 1991, $10M SmithKline/CD4 – 1992, $60M
Mitsubishi/B7 – 1994, $12M Seikagaku/CD23 – 1995, $26M
Genentech/Rituxan – 1995, $57M Eisai/gp39/CD40L – 1995, $38M
Kirin, BI, and Chugai/ Upjohn/9AC – 1997, $12M
Expression System – 1995-7, $15M
Schering AG/Zevalin –1999, $47M Nordion /Yttrium – 2000, $20M
Member of core team of executives that led turnaround from $50M valuation and six months of cash in 1994 to pivotal Genentech partnership/cash infusion and over 800% increase in stock valuation in 1995.
Managed key patent litigation (IDEC v. Corixa et al), including selection process for lead counsel and development of declaratory judgment strategy over a multi-year period. Strategically, IDEC prevailed in securing venue in San Diego Federal District Court, while actions in Delaware and Northern District of California were dismissed. In October 2003, summary judgment was granted in favor of IDEC declaring invalid and unenforceable all of Corixa’s subject patents. The case was ultimately settled on favorable terms
Executive Committee level advisor on IND, clinical strategy, Advisory Committee meeting, manufacturing subcontracting and inspection, approval and launch of RITUXAN and ZEVALIN.
Early advocate and adopter of Rule 10b-5 executive stock selling plans, including successful initiation of amendment to California State Securities Laws to conform with provisions of new Federal law
Managed preparation and filing of SEC corporate disclosure documents including crafting of numerous sensitive and challenging press releases.
Managed legal aspects of “Poison Pill” adoption and revision
Lead legal analysis and selection of RITUXAN and ZEVALIN trademarks
Coordinated legal and peer analysis for stock splits 2:1 21 Dec ’99 and 3:1 18 Jan ‘01
Built and managed a high-performance Legal Team of thirteen professionals
Managed Corporate Policy on Insider Trading and Stock Trading Windows
Member of Executive Committee, Corporate Secretary and liaison with Board of Directors
Strong presentation skills and recognized public speaker

Christensen, O’Connor, et al., Seattle WA 1987-1989
Associate


Hybritech, Inc., San Diego, CA 1985-1987

Intellectual Property and Licensing Counsel 1986-1987
Patent Counsel 1985-1986

EDUCATION
George Washington University, Washington, D.C.
Juris Doctorate, 1985
Leader, Save the Night Law School Campaign, 1984
President—Evening Division, Student Bar Association, 1984

University of Maryland, College Park, MD
MS candidate/Chemical Engineering, 1980-81

Pacific Lutheran University, Tacoma, WA
B.S,. Biochemistry, Cum Laude, 1980

PROFESSIONAL ORGANIZATIONS

California State Bar Association
Washington State Bar Association
District of Columbia Bar Association
United States Patent Office
Registered Patent Attorney (#30,824)
American Corporate Counsel Association
Founding Director of San Diego Chapter, 1994
American Association of Corporate Secretaries
Biotechnology Industry Organization
Founder of General Counsel Committee, 2001

COMMUNITY AFFILIATIONS

Burnham Institute for Medical Research, La Jolla, CA
Trustee and Chairman of Technology Transfer Committee., 2004 to present
Basketball Club of Seattle, L.L.P.
Partner, 2002 to 2006
The Jimmy V Foundation for Cancer Research
Friends of V Member
The Starlight Foundation for Children
Freshstart , Inc.




Exhibit C

Rebuttal letter & REQUEST FOR rECONSIDERATION
sophia Khaldoyanidi, ph.d., m.d.,
chief scientific officer
cascade lifesciences, inc.

RL1-00656-1: Generation of human ESC lines using SCNT
Executive Summary Comments
Comment #1: The proposal lacks a detailed description of how the resultant cell lines will be assessed and characterized for pluripotency.

Response #1: This concern was raised by the Reviewer #2. However, the description of the pluripotency tests is described on page 5 of the grant application (Step 4 of our protocol). We proposed to evaluate pluripotency of SCNT-ESC lines based on stemness marker expression and both in vivo and in vitro differentiation using standard state-of-the art methods. These methods include immunocytochemistry, flow cytometry, quantitative RT-PCR, embryoid body formation and teratoma assay. All these assays are standard in stem cells biology field and are routinely used by the members of our scientific team (see list of publications provided in Part C of this grant application).

Comment #2: No data is presented suggesting that these assays [for pluripotency] are routinely available in the applicant’s laboratory.

Response #2: Due to the space constrains of the Preliminary Results and Feasibility section (2 pages), we have chosen to present the results supporting the novel and scientifically-challenging aspects of the SCNT technology. The concern regarding our ability to run the pluripotency tests was raised by the Reviewer #2 and the rationale for this concern is not clear to us: the assays for pluripotency are standard techniques used in every stem cell laboratory including laboratories leaded by the members of our scientific team. The fact that we are familiar with the standard techniques used in our field is supported by our publications (Part C of this grant application).

Comment #3: The collaborator with the primate cloning expertise proposes to spend 25% of his/her time in the applicant’s laboratory in California. However, reviewers expressed serious concern that it will be logistically difficult for the out-of-state collaborator to be available at the time when the oocytes are donated.

Response #3: Anyone with experience with IVF understands that the day of oocyte harvesting is predicted in advance based on the rigid hormone treatment schedule for each donor. Based on this well known schedule, the travel for Dr. Mitalipov from Portland to San Diego (2.5 hour duration) can be easily planned in advance.

Comment #4: Regarding the source of the oocytes, which will be obtained from an in vitro fertilization (IVF) clinic, one reviewer felt that the procurement of 100 oocytes per year seems reasonably achievable. However, others felt that not enough information is presented in the application to firmly support that the applicant can obtain the high quality eggs.

Response #4: Due to the space constrains, we did not have an opportunity to explain in the body of the grant as to how human oocytes will be obtained. This information is provided very clearly in the letter of collaboration from Dr. Smotrich of La Jolla IVF Clinic (Part C). Dr. Smotrich established a list of young and healthy volunteers who desire to donate oocytes specifically for this SCNT project. All these donors were pre-tested and demonstrated a high oocyte production (20-25 oocytes per cycle) in response to hormonal stimulation. We do not intent to use oocytes that have been obtained for the purpose of IVF treatment and were not used due to poor quality.

Comment #5: If they [Cascade LifeSciences team] have access to 100 eggs, some reviewers argued that it would not be enough to make a cell line in 1 year, given the primate success rates (0.3%).

Response #5: The information on the 0.3% efficiency presented to the Study Section by the Reviewer #2 is factually incorrect. Even if the reviewer was mistakenly relying on our Nov. 2007 Nature publication, that efficiency was reported as 0.66%. More importantly, on pages 5 and 8 of this grant application we provided information that the efficiency of SCNT in primates was 3.3% (1 ESC line per 30 oocytes)

Comment #6: Reviewers mentioned that there is no consideration of how the resultant cell lines, if any, will be distributed to other research groups and under what conditions as requested in the application.

Response #6: This is factually incorrect. This concern was raised by the Reviewer #2. However, this information has been provided on page 10 of the application (last paragraph).
In summary: Our response demonstrates that the Reviewer #2 provided factually incorrect information to the Study Section. In particular, the efficiency (which is an important parameter) was erroneously reported. Moreover, despite the challenges others may legitimately face in securing oocyte donors, we were able to secure reliable and excellent source of oocytes to advance our work in humans. Finally, to suggest our proposal is not novel is a flawed conclusion as Human SCNT is a stated goal of the RFA and the stated RFA review criteria specifically noted that “novelty” was NOT a measure for funding. As a result of these factual errors and an unknown change in SCNT funding philosophy in mid-review, our project received a non-fundable score. We requested an opportunity to rebut. We were denied.
REQUESTED ACTION: We respectfully request that the ICOC reconsider our grant application for funding.

CIRM's Grant Review Process: Complaints About Errors and Appeals

California's stem cell agency has pumped out more than $554 million in awards for stem cell research, but this year grumbling has emerged about its secretive awards process, which officially does not permit rebuttal in the case of errors and allows appeals only in the case of conflicts of interest.

On Sunday, reporter Terri Somers of the San Diego Union-Tribune became the first mainstream media writer to examine the issue in some detail.

Somers used June's meeting of the CIRM board of directors to discuss the subject, including additional interviews with researchers.

Somers wrote that CIRM is

"...basing its funding decisions on recommendations from panels of scientists who sometimes make significant factual errors in their reviews of grant requests, some applicants say.

"Yet there is no way for applicants to point out or rebut the errors – at least not through a formal appeals process, such as the one used by the National Institutes of Health.

"'I cannot tell you how frustrating it is to get turned down for a grant and have no recourse other than to shred it and all the time you spent doing it,' said Jeanne Loring(see photo), a researcher at the Scripps Research Institute in La Jolla.

Somers said CIRM has no plans to change its policies concerning appeals or error. She quoted CIRM Chairman Robert Klein as saying the NIH appeal process is too slow for CIRM. He said an NIH appeal can take as long as two years.

Somers did not raise the closed-door nature of the grant reviews as an issue, but applicants do not have access to the proceedings. Nor do apparently many of them know that they can appear publicly before CIRM directors and ask them to change the recommendations of scientific reviewers or even write a letter to that effect.

Directors have final authority on grant approval but generally ratify decisions of the scientific reviewers, without even officially knowing the identities of the research applicants. Their identities are withheld but in many cases can be discerned through the public summary of reviewers' comments.

Somers quoted one CIRM director, Jeff Sheehy of the University of California, San Francisco, about the review process. Sheehy is also a patient advocate member of the CIRM grant review group and played a role last month in airing concerns by one scientist, Fred Gage of the Salk Institute.

Sheehy told Somers:

"We may have missed some good science, but I don't think we have funded (bad science)."

While CIRM does not plan changes in its review process, Klein did tell Somers about one option for disgruntled applicants. She wrote:

"If a scientist wants to rebut an error of fact of great scientific importance, he or she should point it out to institute President Alan Trounson or Chief Scientific Officer Marie Csete, Klein said.

"Those scientists could then sort out the issue with the reviewers and decide whether it needs to be brought to the board's attention, he said."

Our take: If that is CIRM policy, all applicants should be informed about that possibility as they apply. Fairness and the appearance of fairness are critical to CIRM's credibility.

Here is a link to a detailed critique by one applicant and our report from the June meeting of CIRM directors.

Cascade LifeSciences Critiques CIRM Grant Review Process; Questions Raised about Fairness and Facts

Cascade LifeSciences of San Diego is one of the few companies to appear at a meeting of the board of directors of the $3 billion California stem cell agency in connection with rejection of its grant application.

Kenneth Woolcott, chief business officer of the firm, expressed dismay last Thursday night concerning CIRM's scientific grant review process. Among other things, he said that reviewers appeared not to have read the application very carefully.

Following the meeting, we emailed him and asked if he would like to comment further with an eye to making constructive suggestions for changes in the review process. We are asking CIRM if it has any comment on Woolcott's remarks, the text of which follows:

"We were disappointed by the CIRM review and discouraged by the process. I trust that the agency and the applicants will evolve favorably with experience. As our distinguished Gov would say..............'We'll be Back.'

"Our real hope is that through expressing our concerns we will be able to make industry (For Profit) a viable partner in the mission of Prop. 71.

"The mission statement of Prop. 71 makes very clear that although science is a laudable goal it is not the end game. Products that treat, cure, or enhance our lives are the end game. Fast forward 10 to 15 years and I would like to be so bold as to suggest that the ultimate arbiter of the success of CIRM or Prop 71 will be PRODUCTS. Not research achievements, not publications, not patents, not even Nobel Prizes. All of these will advance our efforts and are important metrics and may even contribute to the economy of California. But John Q. Public will only benefit directly by the development of innovative stem cell related PRODUCTS that I believe will change medical approaches to disease in fundamental ways.

"I am a lawyer and the CBO of Cascade LifeSciences, but I am also a taxpayer. I also have an industry bias cultivated over 20 years with two of the San Diego biotech pioneers, Hybritech and IDEC. What I know about stem cells I have learned, what I know about product development I have lived.

"I believe industry and CIRM share the goal of product development. Although cutting edge science and academic excellence are part of the goal, we believe that industry must be the conduit through which PRODUCT run the clinical, regulatory and marketplace gauntlet.

--------
(Editor's note: Here is a brief sketch of the firm provided by Woolcott.)

"Cascade LifeSciences

"Founded 2007
"San Diego, CA
"Howard Birndorf, Chairman
"Kenneth Woolcott, Chief Business Officer
"Sophia Khaldoyanidi, Ph.D, MD , Chief Scientific Officer
"Larry Respess, General Counsel
"Exclusive Licensee of Novel SCNT technology developed at Oregon Health Sciences University (OHSU) and published in Nature, Nov 2007. (First successfully SCNT in Primates)
"Dr. S. Mitalipov , inventor of SCNT patents and consultant on human SCNT effort.

----------

"Our Expectation

(Editor's note: Woolcott's detailed comments follow.)

"CIRM RFA 07-05: New Cell Line Awards

"Page 1, Program Objectives --'Somatic cell nuclear transfer (SCNT), a method for reprogramming that is well-established in several mammalian species, has not yet been achieved with human cells, but recent success has been reported in non-human primates.' [This is Dr. Mitalipov's work published in Nature and exclusively licensed by Cascade]

"Page 2. 'The needs may in the future be met by derivation of hESC following SCNT...'

"Page 2. 'CIRM proposes a new program to address the need for new types and sources of human pluripotent stem cell lines and for the optimization of existing methods for their derivation"

"Cascades Reasoned Expectation:

"Translation of our SCNT primate work into the SCNT generation of hESC is right in the 'strike zone' of the RFA. We were very pleased the CIRM had seen the wisdom of opening up the grant process to industry to help fund this critically important translational research that can neither be funded by the NIH nor is of interest to all but a very few private investors.

"Cascades Competitive Appreciation.

"iPS is a very important scientific avenue of research but SCNT is a very competitive alternative especially for PRODUCTS that are intended for human use.

"Cascades Experience with the Grant Review

"Grant review comments were factually incorrect. Not a matter of subjective scientific debate. Hence, the conclusions were fundamentally flawed. For example, reviewer #1 comment was 'lack of novelty, pure translation of the non-human primate work into humans.' This seems to defy logic and the mission of human therapeutics. Moreover, this does not seem to be consistent with the objectives published by CIRM in its RFA, which specifically calls out the 'hurdle' of human SCNT as a fundable goal.

"A second example of a reviewer's factual error is the comment 'The ability to generate individualized human embryonic stem cell lines using somatic cell nuclear transfer from either healthy individuals or patients with specific disease states is an exciting and yet technically demanding prospect. To date, no one has successfully cloned human embryonic stem cells, although recently, a group at University of Oregon Heath Sciences Center has successfully derived primate embryonic stem cells, with an efficiency of approximately 0.3[s1] %.' This is factually incorrect at two levels and we are unsure of where the reviewer got the 0.3% efficiency rate. Our November 2007 Nature paper calls out 0.66% efficiency at page 497. Our grant application (filed Jan 2008) describes in detail at page 8, Confidential, non-published information, 'These results represent a significant reduction in the number of oocytes required to produce a single ESC line over previously reported efficiency (from 152 to 30) providing the important foundation to conduct the proposed studies in humans.' One ESC out of 30 oocytes is actually 3.3%.

"As we all know development of therapeutics for the monkey population is a very low margin business. [Sorry could not resist]

"Moreover, at the CIRM IROC meeting Dr. Uta Grieshammer, specifically presented the review committees grant criteria and noted specifically that the review team was advise that 'novelty' was NOT a priority for these types of grants. Also at the meeting, Dr. Trounson announced that no SCNT grants had been made due to some sort of vague policy concern about access to human oocytes and the challenges this had created in other countries. First, this was 'moving the goal posts' after we had submitted our grant application. Second, we appreciate the challenge of securing oocytes but we at Cascade had been fortunate enough to secure commitment from LJ IVF clinic to supply all the oocytes we need to proceed with our effort. Moreover, if this was truly the reason for flagging our grant application as non fundable, CIRM should have just told us that in writing and explain how they were going to proceed, if at all, in the area of SCNT.

"We filed a formal request to rebut the conclusions and comments of the reviews but were told there was no such process. We now understand that after our departure on Thursday, Rusty Gage, one of our esteemed colleagues here in San Diego was allowed to rebut reviewer comments and did receive funding. We are unclear on how this rebuttal process works and why we were denied any opportunity to dialogue on the merits.

"We are now told that my discussion at CIRM was flawed because I did not address the mistake regarding efficiency of our SCNT. This is unfortunate, as we were told our request for rebuttal was rejected and that we were not allowed to discuss the merit or lack of merit of the specific review of our application but our 3 minutes was limited to expressing our concerns about the process and our suggestions for improvement from an industry perspective.

"How did this happen? Mistake? Miscommunication? Misunderstanding? Bias?

"Suggestions and Action Items for Consideration

"Industry representation on CIRM grant review teams

"Formal appeal process or ability to respond in writing to reviewer comments. See, SBIR, STTR, NIH funding for models of review cycles.

"Holding the review team to the published review criteria--e.g., in this RFA, novelty is not a priority criteria.

"One of the review criteria should always be the impact of the research on the advancement of human product development.

"If the Rusty Gage review reconsideration is as I understand it, it seems that there is one set of rules for a deservingly prominent scientist and a different set of rules for Cascade LifeSciences. We also filed a letter with CIRM asking for the opportunity to comment on our grant review and were denied. This seems, without more complete information, to be unfair.

"Perhaps separate academic/not-for-profit grant application review from for profit review. Comparing not-for-profit grants (institutions that are grant writing machines) with the grant applications of fledgling biotech companies is fundamentally unfair. Anyone who knows me will tell you I am a basketball fan. Using that sport as an analogy, this is like the USA basketball team of young college players competing against the Soviet National Team of grown men that had played together for four years. We all know how that worked out.

"Although I believe that industry is a key element of product development, and we desire to work with CIRM to advance the cause, if their funding criteria or standards are inconsistent with industry participation or pragmatic product development, we need to know that earlier rather than later.

"I am personally and professionally committed to assist CIRM in making industry an equal partner in achieving the mission of Prop. 71. I would look for guidance from the ICOC (CIRM's board of directors) on how we can work through some of these administrative and structural challenges.

"Hope this helps. It is a complex issue for industry as well as for CIRM."

More California Dough -- $23 Million -- Rolls Out the Door for Stem Cell Research

BURLINGAME, Ca. -- Directors of the California stem cell agency Thursday night approved $23 million for research grants to develop new cell lines, including reprogramming efforts.

However, they put off until today approval of about $1 million in disease planning grants.

The agency did not announce the names of the 16 winners out of the 50 applicants for new cell line grants. But all of those recommended for funding by scientific reviewers were routinely ratified. Another two grants that reviewers did not think warranted approval for scientific reasons were also approved.

The directors of the $3 billion agency decided to give cash to the two on the basis of "programmatic" and other reasons.

All of the recipients and their grant reviews can be found here, minus their names. The approved applications are color-coded with either white or grey.

The new stem cell round of grants was the first opportunity for businesses to receive research cash from CIRM. Twelve firms applied. But scuttlebutt at the meeting was that none of the businesses won grants. CIRM Chairman Robert Klein declined even to say whether any businesses were in the "recommended for funding" category, when asked by John M. Simpson, stem cell project director for the Consumer Watchdog group.

Ken Woolcott, chief business officer of Cascade Life Sciences of San Diego, Ca., appeared before CIRM directors to express dismay about the grant process. His firm was not recommended for funding. While he did not ask for reconsideration, he said "reviewers simply did not read our application (No. 656) very carefully." He said that with NIH grants, applicants get a chance to respond to reviewers' comments prior to final action – something that CIRM does not formally provide. Woolcott said the firm's "experience was very different from our expectations."

The public review of the Cascade application said the research was "based on a collaboration between the applicant and the only group known to have successfully cloned primate cells." Reviewers expressed concerns that the firm could not get enough human eggs for its work, among other comments.

The two "programmatic" grants won approval after two unusual pitches were made on their behalf. One emotional appeal came from Judy Robertson of Sacramento, Ca., a Huntington's Disease advocate. She has lost four members of her family, including her husband to the disease. The family has donated $500,000 to UC Davis for a Huntington's clinic.

She complained that the review was "factually incorrect." The board discussed the assertion at some length, including comments from audience and staff, without reaching a conclusion on the accuracy of the information. Ultimately, the board approved the grant because it appeared to want to include Huntington's in CIRM's "program."

CIRM Director Jeff Sheehy made an appeal for funding the other of the two "programmatic" proposals. He read a letter from Fred Gage of the Salk Institute, stoutly defending the application. Directors had the letter before them but it was not available to the public, which Klein said was a mistake. Sheehy carried the day, and the Gage grant was approved on a 9-7 vote with one abstention. (The committee officially has 29 members, but only 17 were present and qualified to vote Thursday night.)

Sheehy's reading triggered a discussion not only of the merits of the application but of the sanctity of the review process, which was reminiscent of the flap in January when Childrens Hospital of Oakland Research Institute was the first applicant to publicly appeal a negative decision by scientific reviewers. Childrens was ultimately unsuccessful in that effort

By law, directors have the right to make the final decision on grants. However, they have approved 168 grants since 2004 and rejected only one recommended by scientific reviewers. Any applicant may appear before directors or write an appeal, a fact not well known to applicants. Few have appealed. Presumably they have not done so either out of ignorance or because they do not want to offend an agency which holds the key to their professional lives.

Some CIRM directors were uncomfortable with the Childrens Hospital appeal, and some were still uncomfortable Thursday night.

Oswald Steward, a CIRM director and chairman of the Reeve, Irvine, Resarch Center, UC Irvine, raised the issue of fairness in connection with Sheehy's reading of the Gage letter. Steward said other rejected applicants may not have understood that they could also seek to overturn a negative decision by scientific reviewers.

Marcy Feit, a CIRM director, president of ValleyCare Health Systems of Livermore, Ca.,and a member of the Grants Working Group, said she would "hate to see us redo those reviews." She said was against an "extensive rebuttal process" because it would "undermine" reviewers.

CIRM President Alan Trounson told directors they should accept that reviewers do a "reasonable job" and that disappointed applicants will naturally find fault with the system, which may sometimes include incorrect information. He warned that overturning scientific reviewers decisions could mean the loss of the reviewers, who are already being worked hard.

In January, directors seemed to be looking to CIRM staff for a proposal on how to deal with appeals from applicants. However, other chores, including a $1.1 billion lab building effort, have consumed a great deal of time. We suspect the appeal process may gain more attention in the very near future.

As for the names of the grant recipients and CIRM's take on Thursday night's soirée(It was a thrill a minute!), look for a press release on the CIRM website later today.

Childrens Hospital Loses Bid for Lab Grant; 12 Survive

In their most heated public session in their short history, directors of the California stem cell agency Wednesday night rejected a bid by Childrens Hospital Oakland Research Institute to overturn a negative recommendation on a grant to build a lab to fight sickle cell anemia.

Childrens' request failed on a 5-10 vote despite an impassioned plea by CIRM director Jeff Sheehy.

"This is a no-brainer," said Sheehy. "This is a very promising area of research."

Other board members argued that Childrens' public appeal, the first ever directed to the Oversight Committee, violated the agency's processes, was unfair to other rejected applicants and needed consideration in some future round of grants.

Sheehy didn't buy the arguments. "Let us study it," he said caustically. "Let another person die."

The board's action came during a session that resulted in the relatively routine approval of 12 institutions to advance to the next round of the $262 million stem cell lab grant program, which will judge the actual building plans. Today's review focused on the research proposed for the facilities. All 12 approved Wednesday night were identified earlier as being recommended for funding following a closed-door session involving scientific reviewers who are not required to disclose publicly their financial interests.

Childrens Hospital received a "do-not-fund" decision by the reviewers. Bertram Lubin, president of the hospital, appeared before the Oversight Committee Wednesday night after sending three letters to the members of the panel. (Two of have appeared on this web site.)

He told directors that the grant reviewers did not appreciate the type of research proposed by Childrens. Sheehy, who participates in the closed-door review sessions, concurred.

Lubin also told directors, "When you report on what CIRM has done, this (funding his program)would be a major accomplishment." He said it could result in actual treatments in a year or two, which is a far cry from almost all of the research financed by CIRM.

Some directors, including Chairman Robert Klein, have pushed aggressively for faster work on therapies. Ironically, earlier in the day, a CIRM Task Force explored details of how it could launch a massive loan program, totaling as much as $750 million, to speed development of therapies.

Gerald Levey, dean of the UCLA School of Medicine, did not agree with Childrens' appeal. "I don't think we can run a board this way. If we do, it would be chaos." He was responding to a request by Lubin for a 10 minute presentation Thursday of Childrens' case. Levey warned that allowing the presentation would lead to 50 other rejected applicants coming to the board.

Director Joan Samuelson said that even 100 persons would be okay with her. She provoked laughter when she declared that would show more interest than at any other board meeting.

CIRM's new president, Alan Trounson, who was attending his first board meeting, expressed concern about whether allowing Lubin to make a 10 minute presentation on Thursday would be fair to the five other rejected applicants. He suggested that they might need to be notified and allowed to make a similar pitch, perhaps by phone.

Ted Love, another director, said, "We can't fund everything. He said that if Childrens' research is "really good," they will find funding elsewhere. Both Klein and Trounson indicated that Childrens research might find favor in another round of grants.

However, the board rejected, on a 3-10 vote with one abstention, Samuelson's motion to permit a 10 minute presentation. Lubin was allowed to make his appeal during the comment period alloted to the general public. Speakers are supposed to be limited to three minute presentations, but enforcement of is sometimes lax.

While Childrens was frustrated in its bid on Wednesday, other applicants are going to be disappointed this spring in the second round of the competition. CIRM staff said that if all 12 were funded at the midrange of the amounts alloted in each category of competition, $320 million would be required. The board has already said it will only spend $262 million.

Following the meeting, CIRM released the following statements:

Klein said,

"Investment in facilities to extend California’s state-of-the art research capacity is a critical part of CIRM’s Scientific Strategic Plan to sustain and build California’s global leadership in stem cell research. Through the Major Facilities Grants we are leveraging the impact of Proposition 71 funds with contributions from donors and non-profit research institutions. Our goal is to exceed $550,000,000 in research facility investments that will advance critical stem cell research. Achieving this goal would mean that every one dollar of State funding from Proposition 71 would deliver two dollars in research facility investment."

Trounson said,

"The facility investments CIRM will make through these grants will continue to propel California as a leader in stem cell research. Providing the necessary infrastructure for research is a critical step in laying the foundation for eventual therapies and cures."

The Oversight Committee meeting will continue today with an appeal by the Human BioMolecular Research Institute San Diego of reviewer rejection of its grant application.

The 12 institutions that survived Wednesday night's judgments are Buck Institute, the San Diego Consortium for Regenerative Medicine, Stanford, UC campuses in Berkeley, Davis, Irvine, San Francisco, Merced, Santa Barbara, Los Angeles and Santa Cruz and the University of Southern California.

The agency's press release is not likely to be available on its web site until sometime Thursday morning.