California Stem Cell CEO Search: Lid Still on Until Late September

The  governing board of the $3 billion California stem cell agency, which is seeking a new president, does not plan to have another meeting of its presidential search committee until possibly this fall.

The committee has held only one meeting since May 2, when Randy Mills announced he would be leaving at the first of July.  Maria Millan, formerly vice president for therapeutics, has been serving since July 1 as interim president. She has the backing of Mills to fill the slot permanently. 

The meeting of the search committee occurred July 17. And the agency has remained virtually mum on the process of selecting a new president to oversee what some call the final stage of its life. It is scheduled to run out of cash for new awards in about three years. 

Last Monday (July 31) , the California Stem Cell Report carried an item on the dearth of information about the process of selecting a new president, including the lack of a public timetable and addressing such questions as whether a search firm would be involved. The position carries a salary of up to $575,000.

Following publication of the item, Kevin McCormack, senior director for communications at the agency, sent the following email. 

"Just to be absolutely clear, this is exactly the same process we followed when we were looking for a replacement for Alan Trounson. Then, as now, we did not disclose the results of the closed session meetings of the Presidential Search Subcommittee nor described the contents or outcomes.  From the very beginning of this process, and we mentioned this at the last board meeting, the intention was for the subcommittee to meet and evaluate the options for finding a replacement for Randy and then for the matter to be taken up at the very next meeting of the full ICOC (the governing board). There is no 'lack of information' nor is there any intention of holding another Presidential Search Subcommittee meeting before the full board meeting in September."

The agency, however, has a record of difficulty in recruiting new presidents, including rejected offers and board discord on the desired qualities in a CEO.  It also has in the past disclosed such things as timetables and search firms and more. (See here, here and here.)

Zipped Up in Oakland: California Stem Cell Agency Mute on Search for New CEO

More than mum -- a good description for the $3 billion California stem cell agency this morning as it wrestles with what is likely its most important decision of 2017.

And that is finding a new president to oversee what some call the "last stage" of its life and its search for a stem cell therapy that will fulfill the expectations of the voters who created the research program in 2004.

The governing board of the California Institute for Regenerative Medicine (CIRM), as the Oakland-based agency is formally known, has held one meeting of its presidential search committee since Randy Mills announced his resignation May 2.

No public utterances emerged, however, from the July 17 session. Did the panel set a timetable for selecting a new president? No response. Will the board hire a search firm to help recruit? No response. Is the search committee going to meet again? No response. Simple questions that have been dealt with openly in past presidential searches at CIRM.

The search for a replacement for Mills has special significance. The agency expects it will run out of cash for new awards in three years or less. In the world of stem cell research, that may not be a nanosecond but it is a very short period of time.

Maria Millan, CIRM photo

It raises the likelihood of an exodus of staff from the program, which has also lost another linchpin in the organization, general counsel James Harrison. Without some certainty and confidence about the next three years, some CIRM employees, of which there are only about 50, may look to other enterprises for their professional futures. The likelihood of more departures could increase unless the board moves to shore up stability and to help retain the energy that Mills brought to the program.

Maria Millan, formerly the vice president for therapeutics, is interim president. Mills publicly endorsed her to fill his slot, which carries an annual salary of up to $575,000. She has been in place for one month. She too may be wondering about the stability of her position and whether she should be looking elsewhere for a position.

The next meeting of the governing board of the agency is set for Aug. 24. CIRM Chairman J.T. Thomas usually gives a report to the board at many meetings. He skipped that at the board meeting in July. Will he will brief the board at the August meeting on the presidential search? That has not yet been publicly disclosed.

California's Stem Cell CEO Search: $3 Billion Agency Needs New President

California's $3 billion stem cell research program is looking for a new president to carry the state agency through what may be the last three years of its life.

The search committee of the agency's 29-member governing board meets July 17 to discuss the matter behind closed doors. But members of the public will have a chance to comment during an open portion of the meeting. Or they can email comments directly to the board at info@cirm.ca.gov ahead of the meeting.

So far, no comments have been received from the public concerning the selection of a new president, according to an agency spokesman.

Currently Maria Millan is the interim president and CEO of the 12-year-old program, replacing Randy Mills, who is taking a job in Minneapolis. Mills has said that Millan is his choice as a successor. Millan joined the agency in December 2012 and was vice president for therapeutics before her interim appointment.

Last month, directors of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, ratified her as interim president, voicing no reservations in public about the action.

The current salary for the position ranges from $311,000 to $575,000 annually.

The main location for next week's session is the Claremont Hotel in Berkeley. Teleconference locations where the public make direct audio comments to the board are available in Sacramento and at UCLA in Los Angeles. Details are available on the agenda.

The agency has projected that it will run out of funds for new awards in June 2020. However, the end of funding could come sooner or later depending on the agency's rate of spending for awards. The agency relies on money borrowed by the state (bonds), which roughly doubles the cost of the research to about $6 billion because of  interest costs.

Earlier, there was talk about a possible $5 billion bond election in 2018 to continue funding the agency. However, that possibility appears to have been delayed until November 2020, which would be beyond the date when the agency is currently expected to run out of cash.

Bob Klein, the Palo Alto real estatement investment banker who led the 2004 ballot campaign that created the stem cell agency, is the chief voice behind the idea of another bond issue. He has not responded to inquiries from the California Stem Cell Report about his latest bond plans. This blog will carry the full text of his comments if he does respond.

Here is a list of the members of the CIRM search group: Deborah Deas, Judy Gasson, David Higgins, Steve Juelsgaard, Al Rowlett, Jeff Sheehy, Jonathan Thomas, Art Torres and Kristiina Vuori. Biographical sketches can be found here.

Seeking a CEO: $3 Billion California Stem Cell Agency Faces Critical Leadership Challenges

California's 12-year-old stem cell research effort is expected to give away tens of millions of dollars in public this week, but its most important matters -- issues that deal with its survival and future -- likely will be discussed behind closed doors at a meeting Thursday of its governing board

On the table is the leadership of the $3 billion organization, which is scheduled to run out of cash in just three years, which amounts to a mere tick of the clock in the world of biomedical research. Beginning next week the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, will be minus its chief executive officer and its longtime counselor, who even predates the organization's actual creation in 2004.

CIRM directors are scheduled to meet Thursday at the San Francisco Marriott hotel in Burlingame, Ca., to confirm the appointment of Maria Millan, CIRM's vice president of therapeutics, as interim president of the agency. She will assume the duties of Randy Mills, who is leaving CIRM next week to head the National Marrow Donor Progam. 

Mills, who was paid $573,00 last year, also made it clear to the California Stem Cell Report in May that Millan is the appropriate person to take over the agency on a permanent basis after he leaves.

However, the decision is up to the 29-member board, which has scheduled an executive session Thursday to discuss the interim replacement for Mills. He joined the agency only three years ago but has left an impressive mark.

CIRM directors have also scheduled a July 17 meeting of their presidential search subcommittee to deal with the agency's leadership during what could be the last years of its life.

CIRM has a checkered record  in recruiting new presidents for a variety of reasons (see here, here and here). Some candidates have rejected offers. Other search efforts have been excessively prolonged.

Finding a new president from outside CIRM poses difficulties that would not have been in place, for example, five years ago. They include the tenuous future of CIRM along with the time needed for a normal executive search, plus the learning curve for a new CEO.

While CIRM is a small enterprise in some ways (less than 50 employees), it is an unusual mix of government, biotech business and academia, unlike any other state agency.  The combination has raised hurdles in the past.

The clock is running out fast at the agency. Any alterations in the plan put in place by Mills, Millan and company could slow its efforts to fulfill voter expectations that the agency would actually generate a widely available therapy. CIRM is helping to finance 27 current clinical trials, which are the last stages in research prior to a product reaching the market. The agency hopes to add 38 more trials over the next three years. But there are no guarantees that any will be successful.

Millan can step in and pick up the job relatively seamlessly.  Bringing in a CEO from outside could well take six months or more, including relocation. But serving as the head of  an organization that could be out of business in three years may not be appealing to many and could prolong recruitment.

If Millan is bypassed by the board, she may well leave the agency, triggering a cascade of departures as other CIRM employees also look to their own professional futures. An employee drain would hamper the agency's drive to come up with a commercial therapy.

James Harrison, the longtime counsel to the agency, is also leaving at the end of this week, returning to other pursuits at his private practice. Harrison has been a cornerstone of CIRM and has influence well beyond the not-so-simple legal matters involving the agency. He was also one of the authors of the 10,000-word ballot initiative that created the agency in 2004.

Scott Tocher, a longtime veteran of the agency, will replace Harrison. An announcement of the appointment is expected at the Thursday meeting.

Looming in the background is a gossamer plan for another ballot initiative to fund CIRM  beyond 2020. Bob Klein, a Palo Alto real estate investment banker who led the campaign that created CIRM, is talking about a $5 billion bond measure on the ballot as early as November of next year. Some political observers have predicted a less-than-warm-reception for such a proposal, given that the agency has yet to measure up to its 2004 campaign promises.

Another, rival proposal is being mentioned that would, in fact, move stem cell funding away from the agency.

One stem cell scientist, Paul Knoepfler of UC Davis, wrote last week about the agency's presidential search.

Commenting on his blog, Knoepfler said that CIRM directors should pick a "fantastic" person to replace Mills.  Knoepfler said the new president should have "strong leadership skills," a "big picture clinical vision" and "impeccable stem cell credentials," criteria that one could argue have not been met by most CIRM CEOs.

In the past, debate about presidential candidates centered on whether they should be stem cell stars or a leader who can execute an aggressive program that is already approved and in place. Given the current CIRM challenges, other criteria, such as speed and continuity, are also high.

The journal Nature this year said that the agency is in its "last stage." CIRM directors may well have that admonition on their minds as they consider fresh leadership for the program.

'As Soon as Mills Sat Down' -- CIRM Chairman on the Stem Cell Agency's New CEO

Officials at the California stem cell agency were extraordinarily taciturn during April as its governing board worked its way through selection of a new president.

Kevin McCormack, the senior director for public communications, would not even disclose the number of candidates being considered in the semi-final or final round, seemingly innocuous figures. On Wednesday, at least one reason for his reticence became apparent.

The 29-member governing board had only one candidate to consider at their final, closed-door meeting in Burlingame, CIRM Chairman Jonathan Thomas said. Their Presidential Search Subcommittee had, earlier this month, screened seven semi-finalists and eliminated all but C. Randal Mills, more commonly known as Randy Mills.

As Thomas commented today on the stem cell agency's blog,

“As soon as Randy Mills sat down we knew we had the person we were looking for.” 

Thomas cited Mills experience, “his sharp intellect and keen analytical mind” and told an emotional story about a 14-year-old leukemia patient involved in clinical trials for Prochymal, a stem cell treatment developed by Mills' then firm, Osiris Therapeutics.

Thomas went on to say,

“Ours is a complex organization. Not only do we fund ground-breaking scientific research, but we are also a state agency. Our mission is to find therapies and cures for chronic disease and injury as quickly as we can and, as a public agency, we operate in a fishbowl. The position of president requires a rather unique set of skills to be able to handle all aspects of the job. 

“We are also at a challenging point in our life. It is now almost ten years since the passage of Proposition 71, the voter-approved initiative that created us. In that time we have made extraordinary progress, helped fund 10 projects that are in clinical trials and have several more starting clinical trials this year. But our work is far from done. We have many other research projects that are making great progress and we want a new president who will help ensure that we are able to move those, as quickly as possible, from the lab and into clinical trials in people. 

“Randy is that person. He has the scientific knowledge, the organizational skills, the business acumen and the personal qualities that this position needs.”

For a very brief look at Mills' views on change and accomplishment, see here.

Media Coverage of California's New Stem Cell CEO: Mills, Prochymal and Fresh Eyes

Randy Mills (pink tie) and three CIRM directors following today's meeting. Left to
 right, Francisco Prieto, a Sacramento physician. Mills, Jeff Sheehy, a communications
manager at UC San Francisco, and Ken Burtis, a genetics professor at UC Davis
California Stem Cell Report photo

The appointment of Randy Mills, former CEO of a Maryland stem cell firm, attracted quick attention today from the mainstream media as well as the scientific press.

Here is a sample of the coverage as of early evening Wednesday California time.

Kelly Servick of the journal Science wrote,

“Under Mills’ leadership, Columbia, Maryland-based Osiris became the first company to receive regulatory approval for a stem cell drug. Canadian regulators in 2012 approved Prochymal to treat complications from bone marrow transplants. 'We need something like that to happen with some of our projects,' says (Jeff) Sheehy (a member of the CIRM governing board). 

“The board’s choice 'reflects an evolution of CIRM and how they look at themselves,' says Michael May, CEO of the Centre for Commercialization and Regenerative Medicine in Toronto, who in 2012 served on an Institute of Medicine panel tasked with reviewing CIRM’s structure and policies. 'The message is [one of] being more business-like.' Mills is viewed as a pioneer in the stem cell industry, May adds, and may help cultivate partnerships that support CIRM as it looks for new potential funding sources.”

Bradley Fikes of the San Diego U-T reported,

“Biotech reporter Adam Feuerstein dinged Mills last May for claiming Prochymal was the most widely used stem cell drug in the world, when it actually had no sales.

"'Mills has a different definition of 'widely used' than most investors,' Feuerstein wrote.

"Osiris sold Prochymal and the rest of its stem cell business in October to Australia-based Mesoblast for up to $100 million; $50 million in cash and stock and up to an additional $50 million in milestone payments.”

Monte Morin and Eryn Brown of the Los Angeles Times quoted CIRM Chairman Jonathan Thomas as saying Mills will “bring a fresh set of eyes and will help work with our staff on our directions going forward.”

Natalie Sherman of the Baltimore Sun and Erin Allday of the San Francisco Chronicle noted that Mills was part of the large panel of scientists who make the virtually all the decisions on funding grant applications. Chris Rauber of the San Francisco Business Times also had a story.

The agency's press release can be found here.

The California Stem Cell Report will carry an item tomorrow on additional coverage that is likely to surface. 

Former Osiris President Chosen as New CEO at California's Stem Cell Agency

BURLINGAME, Ca. – Directors of the California stem cell agency today selected Randy Mills, the former CEO of Osiris Therapeutics, Inc., of Maryland, to replace Alan Trounson as president of the $3 billion research enterprise.  

The governing board of the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, unanimously chose Mills, who will be the third CEO in the agency's history.

His strong private sector background will become increasingly important at the agency, given its aggressive push to commercialize stem cell research and bring it into the clinic.

Mills' appointment came as the agency faces its possible financial demise. Its funding for new awards is scheduled to end in less than three years. It has only $600 million left in uncommitted funds. CIRM is exploring new ways to raise cash, including some sort of public-private partnership. The new president will play an important role in finding the money.

Mills raised $160 million to support Osiris, said CIRM Chairman Jonathan Thomas. Mills told reporters later that his focus is 100 percent on bringing cures to patients.

Mills will be paid $550,000 annually and will receive $95,000 in moving and relocation expenses. Trounson, who is returning to Australia to spend more time with his family, was paid $490,008 annually, a figure that remained unchanged from 2008, when he joined the agency. CIRM said Mills' compensation was less than for similar jobs at universities and nonprofits. 

Thomas said that Mills will be examining the agency's operations to determine what it is doing well and what it can do better. No cures or therapies have been developed through research funded the agency. Nonetheless, Thomas recently said that the agency has a record that the state can be proud of. He said that CIRM currently has "10 projects that are in or have been in clinical trials – including therapies for heart failure and HIV/AIDS – and we anticipate several more in cancer, diabetes, sickle cell disease and blindness going into clinical trials this year.”

But even some of its directors have noted the difficult and lengthy task of turning research into cures. Stephen Juelsgaard, former executive vice president of the biotech firm Genentech, in recent months has cited figures that show only 10 percent of potential therapies entering clinical trials are approved for use.

Part of Mills' new job will be retention of the agency's highly skilled 56-person staff, which includes 29 persons holding Ph.D. or M.D. degrees. Some of those staffers may start looking for new positions if they believe the agency is not going to secure new funding In some business situations, that could be done with retention bonuses that would encourage key employees to stay on. However, the agency is limited by law to an operational budget of 6 percent of its research awards, which its directors generally agree is very tight.

Also, in 2015, CIRM is scheduled to lose its free office space in San Francisco, a benefit received as a result of San Francisco's successful bid for the headquarters. It has yet to locate new space in the city, which is experiencing skyrocketing rates for office leases. Several years ago, the agency's outside auditor estimated it would cost CIRM $1 million annually to replace the space. That figure would be much higher today because of the rising leasing costs in San Francisco.

California Stem Cell CEO Decision Still Up in the Air

BURLINGAME, Ca. -- Directors of the California stem cell agency are still huddling behind closed doors as they try to decide today on a new president for the $3 billion research effort. The governing board worked through lunch after interviewing candidates, who were not visibly on the scene here at the Hyatt Regency hotel.

Today's meeting is scheduled to end at 5 p.m. PDT.

Closed-Door Session Begins for Selection of New CEO for California Stem Cell Agency

BURLINGAME, Ca. -- The governing board of the $3 billion stem cell agency is meeting behind closed doors this morning to pick a new president to lead the organization.

The session began at 9:13 a.m. PDT at the Hyatt Regency here. CIRM Chairman Jonathan Thomas said prior to the meeting that he expected the session to go smoothly. The session is not scheduled to adjourn until 5 p.m. PDT.

The CIRM directors are scheduled to interview an undisclosed number of finalists, all of whom who are believed to come from the private sector. Warren Ross of the Korn/Ferry search firm, which was hired to assist in recruitment, told the California Stem Cell Report that roughly 20 persons applied originally. He said eight to 10 were given serious consideration, and he had high, general praise for their qualifications.

The new president will replace Alan Trounson, who is leaving to rejoin his family in Australia.  

Picking a New Prez: Finalists for California Stem Cell Agency Post Coming from Private Sector

The Sacramento Bee today carried a piece on the upcoming selection of a new president for the $3 billion California stem cell agency.

The article was authored by yours truly and briefly spelled out some of the issues that will be facing the new president. The California Stem Cell Report has also been told that the remaining candidates, who are scheduled to be interviewed by the agency's governing board on Wednesday, are all from the private sector. Asked repeatedly whether, in fact, the finalists for the job are all from the private sector, the agency has remained firmly tight-lipped. Here is the piece from The Bee, which is the only daily newspaper in California's Capital. 

State stem cell agency’s at a crossroads

By David Jensen
Special to The Bee

Published: Sunday, Apr. 27, 2014 - 12:00 am

Last Modified: Sunday, Apr. 27, 2014 - 7:38 am

In a few days, the $3 billion California stem cell agency is slated to pick a new president who will oversee what could be the last years of its life.

The governing board of the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, is scheduled to make the decision Wednesday on the new CEO and his or her pay, which may top $500,000 annually and predictably stir public outrage.

It is a watershed moment for the nearly 10-year-old agency. Not only does it need a new president, it needs more cash, along with results that will resonate widely with the public and potential funding sources. Money for new research awards is scheduled to run out in 2017. To help build support and attract cash, CIRM has begun an aggressive push to commercialize stem cell research. The hope is to fulfill the promises of cures that were made during the ballot initiative campaign that created the program in 2004.

Overall, the agency, which has 56 employees, has handed out about $1.7 billion since it was created by California voters when they approved Proposition 71. The measure funded the agency directly from state borrowing (bonds), with no intervention by the governor or Legislature. No cures have yet resulted from CIRM’s spending.

The agency’s new chief will replace scientist Alan Trounson, who said last fall that he was resigning to rejoin his family in Australia. Trounson was hired in 2008 at an annual salary of $490,008, where it remains today.

Late last year, the agency pointedly specified that the new CEO did not have to be a scientist. Hiring someone from the private sector, however, could mean offering a salary higher than Trounson’s.

The new president and the agency face other issues, particularly developing what the agency calls a “sustainability” plan that would finance it beyond 2017. CIRM Chairman Jonathan Thomas is examining the possibility of a public-private partnership and is pitching the agency’s achievements to possible funding sources.

Asked last week to summarize CIRM’s accomplishments, Thomas said in an email, “In just a few short years – we didn’t start funding research in earnest until 2007 – we have helped make California the world leader in stem cell research and advanced the science much faster than anyone imagined would happen. Just 10 years after the passage of Proposition 71, 10 projects (that) we have funded are in or have been in clinical trials – including therapies for heart failureand HIV/AIDS – and we anticipate several more in cancer, diabetes, sickle cell disease and blindness going into clinical trials this year. It’s a record the people of California can be proud of.”

CIRM’s message, however, did not resonate at a meeting in January of the only state body charged with oversight of the enterprise – the Citizens Financial Accountability Oversight Committee, which is chaired by state Controller John Chiang.

One member of the committee, Jim Lott, a hospital industry executive in the Los Angeles area and backer of Proposition 71, was sharply critical of a presentation by Thomas and Ellen Feigal, CIRM’s senior vice president for research and development. According to the transcript of the meeting, Lott said, “What can you tell me that we’ve done that’s going to get my (13-year-old) daughter out of her wheelchair sooner (rather) than later after all this money has been spent?”

Not satisfied with Thomas and Feigal’s response, Lott told Thomas that the agency had a serious “marketing problem.” Lott said, “I’m telling you, pal, I would have a hard time voting for (Proposition 71) again.”

• Read more articles by David Jensen

Read more here: http://www.sacbee.com/2014/04/27/6355379/state-stem-cell-agencys-at-a-crossroads.html#storylink=cpy

California Stem Cell Directors Nearing Decision on New CEO and Salary

In less than 10 days, the $3 billion California stem cell agency could well have a new president to oversee what could be the last years of its life.

Directors of the unprecedented state enterprise have scheduled a full-day meeting April 30 in Burlingame to make a decision on a candidate and decide what he or she is worth. As usual, compensation will be touchy, at least in terms of how it is perceived by the public.

Most of the governing board's session will be behind closed doors. However, the actual vote on the president and the compensation package will occur in open session. The public will have a chance to comment on both matters.

The current president of the California Institute for Regenerative Medicine(CIRM) , Alan Trounson, has a salary of $490,008. He has not had a pay raise since 2008, when he began work. Salaries of the public officials, however, are one of  those visceral issues with large numbers of the public, which is incensed by anything that they perceive as excessive. Predictably, Trounson's salary and others at CIRM triggered outrage. (See here, here and here.) The salary of the new president is also likely to be greeted with less than enthusiasm, regardless of how the agency dresses it up.

The task of the new CIRM CEO will be far different than his or her predecessors. In 2005, the first year of the agency's operation, the president faced legal and organizational challenges and had to devise a plan for spending $3 billion in a nascent field. Today, the agency is down to its last $600 million and is scheduled to run out of funds for new awards in less than three years. It has embarked on a “sustainability” effort focusing on the possibility of some sort of public-private financing. That effort so far has failed to generate any public result.

The agency currently subsists on cash from state bonds, money borrowed by the state. The possibility of asking California voters for more state borrowing is still on the table. However, California political realities suggest that it would be difficult, to say the least, to mount another successful bond election to provide more billions for the agency.   

California Stem Cell CEO Search: Three to Four Candidates Remain, Fewer Tomorrow

A key panel of the directors of the $3 billion California stem cell agency today is expected to whittle down its list of candidates to become the new CEO of the organization, which is facing financial extinction in 2017.

Currently there are three or four candidates, all from the private sector, the California Stem Cell Report understands. The agency, however, did not comment on the number or nature of the candidates.

Kevin McCormack, senior director of public communications, only said this morning in an email,

“The full board is meeting to interview the short-listed candidates on April 30 at which point we hope they will be able to agree on the top candidate. If that candidate then agrees to take the job the announcement will be made at the May (29) board meeting(in San Diego).”

 

Today will mark the conclusion of two days of closed-door meetings of the directors' Presidential Search Subcommittee. The focus on industry candidates reflects the agency's push to drive stem cell research into commercialization. The effort is aimed at fulfilling the promises of the 2004 election that created the agency as well as making it more likely to find future sources of funding for the agency, which now subsists on money borrowed by the state. The agency has only $600 million left. Cash for new awards is scheduled to run out in about three years, and no therapies have been produced.

Agency President Alan Trounson announced last fall that he was leaving his $490,008-a-year post to return to Australia. He has continued to fill in on an interim basis.

Rao Joins New York Stem Cell Foundation

The New York Stem Cell Foundation announced today that Mahendra Rao, former head of the NIH Center for Regenerative Medicine, has been hired as its vice president for regenerative medicine, a new position at the organization.

Rao left the NIH March 28, apparently unhappy with its lack of funding to advance stem cell clinical trials. At one point, Rao was also being discussed as a potential successor to Alan Trounson as head of the California stem cell agency.

The agency says it is on schedule to name a new president late next month.

California Stem Cell CEO Search: Rao Out, Closed-Door Meeting Next Week

Mahendra Rao
NIH photo

Speculation surfaced this week but was quickly squelched that Mahendra Rao, until recently the head of the federal Center for Regenerative Medicine, is a candidate to become the new president of the $3 billion California stem cell agency.

Rao's departure from the NIH's $52 million stem cell effort took many by surprise yesterday when it surfaced in an online story from Nature. The piece by Sara Reardon said that Rao left the NIH on March 28 and that the move has left NIH researchers “in the dark.”

She wrote,

“Relations seem to have soured last month owing to an NIH decision to award funding to only one project aiming to move iPS cells into a clinical trial. Rao says he resigned after this became clear. He says that he had hoped that five trials would be funded, especially because the centre had already sorted out complex issues relating to tissue sources, patents and informed consent.”

In the wake of the story, the California Stem Cell Report learned that Rao is not a current candidate for the California stem cell agency position. He is also not expected to take a fulltime research position in California. Rao did not respond to an email inquiry about the matter. (The New York Stem Cell Foundation announced later that it has hired Rao as vice president for regenerative medicine.)

Rao's departure from the NIH was reported as early as March 3 in a little-noticed press release from Cesca Therapeutics of Rancho Cordova, Ca.. The Sacramento-area firm was formerly known as Thermogenesis. The company said that Rao was joining its board of directors April 1 following his “planned departure” in March from the NIH.

Yesterday, Stemedica Cell Technologies of San Diego announced that Rao was joining its scientific advisory board. Stemedica was mentioned in a New York Times story last September involving international medical tourism. The company's Web site says it “is currently supporting clinical trials in Kazakhstan and Mexico and anticipates supporting similar initiatives in several other countries in 2013.”

Meanwhile, the agency is still on schedule to hire a new CEO by the end of May, according to Kevin McCormack, senior director of public communications. The current president, Alan Trounson, announced last fall that he was leaving to return to his family in Australia.

The agency's presidential search committee has scheduled a two-day, closed-door meeting for next Tuesday and Wednesday to screen candidates. According to the agency's timetable, the teleconference session is intended to produce the finalists for the job, who will undergo additional interviews either late this month or early next month. A vote by the agency's 29-member governing board is expected at its meeting in San Diego May 29.

Next week's meeting does provide for comment from members of the public, who can attend the public portion of the meeting. The main location is in Los Angeles, The address can be found on the meeting agenda.

California Approves $72 Million for Stem Cell Commercialization

Directors of the California stem cell agency today approved $72 million to help drive stem cell research into the clinic and commercialization, despite concerns that it would damage the agency's ability to hire a new president.

The total for two concept proposals will consume roughly 14 percent of the agency's remaining cash, leaving only $402 million for future awards.

Director Jeff Sheehy said that the agency is going through money at an "alarming pace" and that approval of the plans would limit the agency's future ability to take advantage of research opportunities. He said the board was basically telling presidential candidates that we want "to hire you to manage the last embers of a dying fire."

The agency is scheduled to run out of cash in 2017.

Other directors were concerned about losing the agency's research momentum. Some said businesses could not wait many months or a year to gain funding.

A motion to delay a decision was rejected on a 7-12 vote. Directors then approved one of the two concept proposals, a $32 million program, on a 14-3 vote with two abstentions.

The proposal will provide up to $32 million for possibly three awards in the agency's business-friendly strategic partnership program ranging from $10 million to $12 million. The objective would be completion of a phase one or phase two clinical trial within three years. Matching funding would be required. Both businesses and non-profits would be eligible with forgivable loans a possibility for businesses.

The largest new proposal will provide up to $40 million for four or five preclinical development awards and was approved on a 19-0 vote. It is aimed both at development activities prior to a phase one clinical trial and at helping to attract future funding. Businesses and non-profits would eligible with businesses possibly taking a forgivable loan.

The posting of a request for applications is scheduled for April and May. Board action on applications would come early next year.

(Editor's note: This item has been revised from an earlier version to reflect action on both proposals and to add new figures on the amount of cash remaining for CIRM.)

California's $40 Million Stem Cell Genomics Award: Irregularities, Complaints and Integrity

A number of firsts were recorded last month as the California stem cell agency gave $40 million to a Stanford-led consortium to put California in the global forefront of stem cell genomics.

Not all of those firsts necessarily enhanced the reputation of the California Institute of Regenerative Medicine (CIRM), as the $3 billion agency is formally known.

The unusual events and irregularities surrounding the award, CIRM's largest research grant, merit additional attention, given their implications about the integrity of the agency's grant review process and how the agency does its business.

The California Stem Cell Report recently asked a number of persons connected with the round and other knowledgeable individuals about the process. Their comments included a judgment that the agency staff “took a lot of liberties behind closed doors.” One of the rejected applicants "unequivocally" disputed assertions by CIRM President Alan Trounson that all applicants were informed by him about the need for matching funds, a key criteria for grant reviewers. The request for applications did not contain such a requirement.

The comments came in addition to earlier complaints by rejected applicants that scores had been manipulated in an “appalling” fashion and that scientific merit was not the first order of business in assessing the top four applications.

Also surfacing was a problem generated by Proposition 71, the ballot initiative that created the stem cell agency in 2004. The measure set up a 29-member governing board, including deans of medical schools and others with ties to research organizations. The board was supposed to exercise its expertise on funding decisions. However, only seven members of the board actually voted in the genomics round. Most of the rest had legal conflicts of interest and were not allowed to even participate in the discussion. It is not unusual for that sort of situation to arise during funding decisions by the board.

The CIRM stem cell genomics story began publicly in a scientifically big way with an article in the journal Nature Biotechnology in January 2012  by Trounson and two members of his staff. In it, Trounson said his proposal was needed so that the agency could take a "firm and lasting grip" on stem cell leadership.

Later that month, the governing board of the agency approved the concept for one or two genomics award. In February 2013, grant reviewers for CIRM, whose identities are withheld by the agency, took a crack at the applications. However, they declined to send any applications forward to the board for final action. It was the first time in the agency's nine-year history that has occurred. The reviewers offered no public explanation for the move.

The closed-door review session was marked by a conflict-of-interest violation by Lee Hood of Seattle, Wash., an internationally known genomics specialist, who was recruited by Trounson to be a reviewer in the round. Hood is a close friend of Irv Weissman, who heads Stanford University's stem cell institute. Weissman was named in Stanford's then $24 million application. Hood and Weissman also own a ranch together in Montana.

Trounson has been a guest at the ranch. In 2012, he recused himself during CIRM board discussions of two applications involving Weissman. The applications were from StemCells, Inc., of Newark, Ca., for $20 million each. StemCells, Inc., was founded by Weissman, who still holds a large amount of stock in the firm and serves on its board of directors.

Following the unsuccessful genomics review in February 2013, the applications were sent back to researchers with reviewer comments. The proposals could be retooled for a re-review in the fall, they were told.

After the fall review, the reviewers – minus Hood -- sent the applications to the board with recommendations to fund all four despite the fact that they would cost $146 million, well above the $40 million budgeted for the round. It was the first time that reviewers had made such a decision. Normally they stay within the budget, but they offered no public explanation for their actions in the genomics round.

At that point the CIRM staff, headed by Trounson, became more involved. Under new procedures, the staff may make recommendations concerning applications. In this case, they recommended that only the Stanford application be funded, but only after restoring a provision eliminated by reviewers. Trounson also recommended no funding for the three other top applications in the round. It was the first such major intervention by Trounson and the most aggressive staff move on grant applications.

Trounson offered only a 23-word phrase for recommending the Stanford application and no explanation for rejecting the other three. Stripped from the public review summaries for the three competing applications were the dollar amounts that they had requested. It has been the longstanding practice of the agency to include those figures. The amounts ultimately were made available to the board at its Jan. 29 meeting.

At that meeting, Trounson strongly backed retention of funding in the Stanford application for a project led by Michael Clarke, associate director of Weissman's stem cell institute at Stanford. Following the 2013 conflict violation involving Hood and Weissman, Weissman was removed from Stanford's application. Clarke was included, however. No questions were raised at last month's board meeting about whether Clarke could be regarded as a surrogate for Weissman's interests and whether that would involve a conflict of interest for Trounson.

Late in the meeting, Trounson also said that he had personally told all the applicants, with the exception of Stanford, that matching funds were expected as part of the applications, an assertion disputed following the meeting by Jeanne Loring of the Scripps Research Institute, whose rejected proposal contained no matching funds.

She said in an email,

"During the ICOC (governing board) meeting, Alan Trounson said that he had told us during his visit to all of the first round grantees that it would be important provide money for 'matching' funds. I state unequivocally that he did not tell me or anyone in my lab about this."   (Loring's boldface)

Stanford said its application contained $7 million in matching funds. The agency withheld the figures when they were requested by the California Stem Cell Report prior to the Jan. 29 board meeting, although it has released the figures in at least one other grant round.

Complaints about manipulation of the scores were raised prior to the board meeting by Pui-Yan Kwok,  leader for an application from UC San Francisco and UC Berkeley. He said that the scores of the top to applications were “based on the reviewers removing from consideration the poorest performing center-initiated projects.” He described the situation as appalling.

The agency defended its practices at the board meeting and in response to questions. It said the scoring procedures were permitted under the RFA. It said that while the procedures may be different than those of the NIH so is the stem cell agency. It said that all persons involved had been screened for conflicts of interest under CIRM rules and state law. 

In response to a query by the California Stem Cell Report concerning the process and the questions that needed to be addressed, Loring replied,

“I am concerned about the interference of the CIRM president in influencing the ICOC decisions. He has de facto power to promote or defeat specific applications, and he often wins by promoting one applicant over another. Stanford and Stanford faculty-founded companies such as Stem Cells. Inc., should not be so blatantly promoted over others. The relationship between the president and the head of the stem cell program at Stanford involves personal favors which make him conflicted and he should at the very least recuse himself from any discussion or recommendation of Stanford faculty's applications.”

Loring continued,

“The 29-member board is difficult enough to deal with, but now that most of the members are considered to be conflicted and are not allowed to even discuss the applications, we are left with a small number of non-scientists making decisions about scientific merit.

“I know that at least 5 members of the ICOC were very upset that they were unable to voice their opinions about what should be their mission- to guide CIRM's policies and choices for funding so that they are in the best interest of the voters.”

(For the full text of Loring's remarks see here.)

Other critical comments came from a longtime observer of the agency, who asked not to be identified, and who said,

“It appears that CIRM staff took a lot of liberties behind closed doors in driving this initiative to its final outcome. For example, what happened to require a resubmission and re-review etc. Did they change anything about this initiative in the process?  Were certain criteria shared with some but not all applicants?

“It also appears that the board was taken by surprise and not prepared to deal with the complexities in this initiative.  Clearly staff has not kept them in the loop and they had little access to the details of the process and how reviewers were managed.  They have always funded the vast majority of what the reviewers scored highly, and still did not break the bank.  This is a brand new situation where the reviewers recommended more grants than they could afford to fund.  This happens a lot in the NIH (especially today with severe budget cuts), so NIH has developed many processes to deal with this.  CIRM has not seen anything like this before.”

During the board meeting, some board members questioned parts of the grant review process. The anonymous observer said, 

“The questions (all legitimate) raised by the certain members of the board were by and large not understood or picked up by the other voting members, so they went nowhere. 

“Too many thoughtful board members were conflicted out, leaving the decision-making to a handful who are not prepared to deal with this complex situation.  I blame the IOM (Institute of Medicine) report in giving too much power, without the appropriate process, to staff.  Staff can recommend, but if the board has no information other than what staff provides, then they are acting in the dark.”

(For the full text of those remarks see here.)

In response to the same query, Michael Snyder of Stanford and Joe Ecker of the Salk Institute in La Jolla, co-leaders of the Stanford-led effort, did not raise any questions about the CIRM review process. They said,

“The net result (of their proposal) is that this center will help bring cutting edge technologies to all stem cell researchers in California and along with the funded projects will help keep California at the leading edge of two important fields: stem cell research and genomics, and thereby help accelerate both the science and therapeutics treatments possible in this field, and spur industry and economic development. questions.”

(For the full text of their remarks see here.)

(Editor's note: An earlier version of this item incorrectly said the first name of Michael Clark was William.)

New CEO for California Stem Cell Agency in May

The California stem cell agency expects to make a decision on a candidate for a new president by May, the chairman of its governing board said this morning.

J.T. Thomas opened this morning's meeting by addressing the search for a new president to replace Alan Trounson, who has resigned but is serving temporarily.

Warren Roth, a representative of the Korn Ferry search firm, said that it expects to present candidates in late March. He said the board would be able to interview candidates in April.

The board has a regular meeting scheduled for May 29.

California's Stem Cell CEO Search: Dangling a 16-page Lure

The California stem cell agency yesterday posted what could be called a recruiting brochure for the effort to hire a new president to replace Alan Trounson.

The document, which was prepared by the search firm Korn Ferry, is couched in language designed to stimulate interest in those seeking a challenge and opportunity.

• “Few technologies have captured the imagination of the public quite like human stem cells,” the brochure begins.
• “Transformative public funding,” it says at one point.
• “One of the most influential agencies in the universe of stem cell research,” it says at another.

The 16-page brochure deals directly with less pleasant aspects of the job such as the likelihood that the agency could wind up in hospice care in three years when the money for new grants runs out.

It is also surprisingly forthright about the longstanding and controversial problem of the dual executive arrangement decreed by law. It may be the first time that the agency has so directly admitted publicly and formally that the overlapping responsibilities of the president and chairman have caused serious difficulties. 

The document says,

“This unique partnership has amply demonstrated its value when the president and chair have worked well together, but the organization has suffered when this has not been the case. An ability to adapt to this model of governance and management will be a critical attribute for the next president.”

The CIRM/Korn Ferry brochure is explicit about the direction of the agency towards pushing therapies into the marketplace and clinic. That is significant because of continuing pressures to well fund basic research, which means less money for efforts that are closer to clinical use. The document says,

"With the remaining resources of the state’s commitment, it is CIRM’s intention to focus its funding decisions increasingly on a host of projects with particular clinical promise, bringing the science it has strategically cultivated to the fruition of human therapy.  Both the governing board and the staff of CIRM are committed to this pivot in organizational priorities, driven to fulfill the dream of the people of the State...."

It is unclear when a new president will be on the scene. There is talk about a hire being made by April or May, but having the new person actually in the office five or more days a week could be a different matter. Trounson said last November he would stay on for awhile. But his family remains in Australia, where he is seeking to return.

The directors' Presidential Search Subcommittee meets tonight in Berkeley to discuss the brochure, which the agency labels a "candidate position statement." Korn Ferry has a $160,000 contract with the agency. The agency has previously used search firms in its presidential recruitment. None of them have come up with the person that was ultimately hired.  

Teleconference locations where the public can comment are available in Costa Mesa, La Jolla and San Francisco. Specific addresses can be found on the agenda.

(Editor's note: The three sentences on the size of the Korn Ferry contract and the success of previous search firms were not contained in an earlier version of this story.)

CEO Search at California Stem Cell Agency: Board Discussions Set for Late This Month

Directors of the $3 billion California stem cell agency late this month will act on what it calls a “candidate position statement” in its search for a new president for the research effort.

The agency scheduled a meeting Jan. 28 of its Presidential Search Subcommittee to consider the document, which was not available on the CIRM Web site as of this writing. On Jan. 29, the full CIRM board is expected to act on the document at its meeting in Berkeley.

The agency's agenda material did not specify what it means by a “candidate position statement.” In normal parlance, a candidate position statement is offered by a person seeking a position. Our best guess is that what CIRM is considering is a document that would specify the positions that it would like a candidate for president to address. The board last month approved a statement of criteria that implied that candidates should address certain questions. We are querying CIRM concerning the matter.

Both the subcommittee meeting and the full board meeting include closed-door sessions during which the search for a new president will be discussed. The current president, Alan Trounson, has announced that he is resigning to return to Australia. Directors of the agency have said they are emphasizing speed in selection of a replacement. Trounson announced his departure more than three months ago.

Teleconference locations for the subcommittee meeting Jan. 28 where the public can participate are located in La Jolla, San Francisco and Costa Mesa. The base for the meeting is at the Claremont Hotel in Oakland. Specific addresses can be found on the agenda. 

Wish List on Criteria for New President of $3 Billion California Stem Cell Agency

Directors of the $3 billion California stem cell agency today moved closer to possibly selecting a non-scientist as the new president of the nine-year-old research enterprise.

On a unanimous voice vote with no discussion, they approved criteria that did not make it mandatory that a scientist fill the position being vacated by Alan Trounson, a noted IVF researcher who is returning to Australia.

Instead, the governing board decided that candidates should have “experience with and personal commitment to medical and scientific research including familiarity with stem cell research.”

In terms of academic credentials, the criteria state that the new president have either or both an M.D. or Ph.D. degree or “equivalent industry experience or similar body of knowledge developed in professional roles.”

The criteria that was approved was not available to the public today on the CIRM Web site prior to board action. It had been altered on Tuesday night from an earlier version that was posted on the Web site.

Here is the text of what appear to be the only alterations (all additions) in the new criteria.

• "Comfort working in the public sector, including an awareness of the need to comply with the laws that govern them, such as transparency, conflict of interest, and public accountability laws." 
• "Experience dealing with, and commitment to, diversity and gender equality in the workplace."

It is ironic that the addition of the need for awareness of the need for transparency was added but the document was not available to the public prior to board approval.

CIRM Chairman Jonathan Thomas said yesterday that the agency is on verge of signing a contract with a search firm, Korn Ferry, to help in finding the new president. Directors have been emphatic about the need for speed in finding the new president.

Trounson has agreed to stay on for an unspecified period, but he could leave at any point. If he leaves before a new president is chosen, presumably Ellen Feigal, senior vice president at the agency, would pick up his duties temporarily, as she did earlier this year for three months.

She is also likely to be a candidate for the top spot, and if she is not selected after serving again on an interim basis, she might well decide to look for opportunities elsewhere.