The Boom in Privatized Science and the California Stem Cell Agency

Billionaire science is booming, the New York Times said today, and it is raising serious concerns along with a hearty huzzah for the infusion of increasingly scarce cash for research.

The lengthy piece by William Broad was headlined, 

“Billionaires with big ideas are privatizing American science."

 Broad wrote,

“American science, long a source of national power and pride, is increasingly becoming a private enterprise. 

“In Washington, budget cuts have left the nation’s research complex reeling. Labs are closing. Scientists are being laid off. Projects are being put on the shelf, especially in the risky, freewheeling realm of basic research. Yet from Silicon Valley to Wall Street, science philanthropy is hot, as many of the richest Americans seek to reinvent themselves as patrons of social progress through science research. 

“The result is a new calculus of influence and priorities that the scientific community views with a mix of gratitude and trepidation.”

The trend has implications for California's $3 billion stem cell agency, which will run out of cash for new awards in 2017. It is currently engaged in what it calls a “sustainability” effort, which simply means it is searching for ways to raise more money. One possibility is another state bond measure, which would require voter approval and an expensive ballot campaign. Another more likely prospect is some sort of private funding arrangement, including creation of a nonprofit organization to accept donations from the very sort of billionaires, plus businesses, that the Times discussed.

In 2008, Eli and Edythe Broad gave $25 million
to UC San Francisco to help build a stem cell
research center funded by the California stem
cell agency. Then Gov. Schwarzenegger (at left)
attended the groundbreaking. Broad stands with
 his wife. Former CIRM Chairman Robert Klein
is in the background with a gray tie.
UCSF photo

The list in the Times is relatively long and includes Bill Gates of Microsoft, Eric Schmidt of Google and Larry Ellison of Oracle. Also mentioned was Eli Broad, who has made large contributions to stem cell efforts in California. Not mentioned, oddly enough, was Denny Sanford, who last fall donated $100 million for stem cell research at UC San Diego.

The Times article said the “personal setting of priorities is precisely what troubles some in the science establishment.” Also raising concerns is the enrichment of elite universities at the expense of poorer ones.

Nonetheless, reporter Broad wrote that the influence of billionaire donors is likely to grow given their wealth and the national budget wars. One study cited in his piece shows that at the 50 leading science research universities, private donors already account for roughly 30 percent of the schools' research money.

One of the priorities of the private donors is translational research, the type currently being emphasized by California's stem cell agency, which some fear could lead to the neglect of basic research. The Times cited an effort begun in 2000 by the Cystic Fibrosis Foundation. The Broad story said,

“With great skill, it used the money to establish partnerships across industry and academia, smashing through the walls that typically form around research teams. By early 2012, the financial surge produced the first treatment for an underlying cause of cystic fibrosis.”

The timeline on that treatment is not too different than what might be considered the timeline set in Prop. 71, which created the California stem cell agency. The ballot measure provided for 10 years of funding via money borrowed by the state. Although the measure was passed in 2004, legal battles delayed issuance of the bonds, meaning that the agency's financial clock has not yet completely run out. As for commercial cures built on agency research, no one at the agency is publicly predicting their entry into the market place within the next three years.

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.)

Tobacco Taxes and Stem Cells: Backers Still Not Talking, Questions Raised

Backers of a proposal that could rescue the $3 billion California stem cell agency from financial oblivion remained mum today as questions arose about the viability of the possible ballot measure.

The plan would raise roughly $700 million annually by increasing tobacco taxes, channeling about $200 million to the stem cell agency through a ballot initiative that would have to be approved California voters. The stem cell agency is scheduled to run out of cash for new awards in 2017 and is casting about for new sources of funding.

However, CIRM, as the agency is known, was largely caught by surprise last week by the release of the details of the proposal, which was filed by prominent Orange County attorney Frank Barbaro, former chairman of the county's Democratic Party.

Barbaro has not responded to email requests for more information about the backers of the plan and their financial commitment to an electoral campaign. Backers of a similar proposal that was narrowly defeated in 2012, Prop. 29, said they knew nothing about the effort.

The latest measure could go on the November ballot this year or the general election ballot in 2016 if it qualifies. The timeline for November is daunting. Responding to a query from the California Stem Cell Report, Sacramento political consultant Jeff Raimundo said in an email,

“Sounds like most people didn’t know this was coming. An Orange County attorney filing an initiative with no known backers?  Hmmm…formula for failure? 

“If stem cell agency folks didn’t know about it (and there’s no real reason to believe they did) and the cancer-fighting community had no knowledge, it’s hard to figure out how proponents are going to muster support from voters who only two years ago rejected a similar proposal from a more transparent and credible group. Prop. 29 barely failed, but it had a big push from advocacy organizations. 

“Too many questions right now to get a good handle on how effective such a campaign might be  -- who the REAL sponsors are, who would put up the money for the campaign, whether the OC attorney is a shill for someone else, whether those who back CIRM and its research role can be persuaded to back a new proposition. Many more initiative proposals are filed than are ever circulated. And many more are circulated than ever actually make the ballot in Californa. They’ve got a long way to go and not a lot of time to get there.”

The agency said last week that it has not endorsed the plan. Directors have not yet had a chance to consider it during a public meeting.

But CIRM Director Francisco Prieto, a Sacramento physician, told the California Stem Cell Report,

“I wasn’t aware of the tie-in to CIRM funding before (Friday). I don’t think they asked us first, but I’d be happy to see it pass, of course. I’m in favor of so-called 'sin taxes' – including those I pay when I support California’s wine industry. Raising the price of tobacco is one of the single most effective things that we can do to reduce smoking rates, especially among young people who are the most price sensitive. As the guy who has to sign the death certificates, I’m in favor of anything we can do to reduce smoking.”

Another CIRM director who responded to our queries, Jeff Sheehy, a communications manager at UC San Francisco, said that conceptually the proposal could make sense.

 "It's a better source of funds.  However, it does create a well-funded opposition campaign.  Still trying to  figure out if this is a good thing or not," Sheehy said.

Other board members as well said they had no advance knowledge of details of the measure.

Robert Klein, the former chairman of the agency, also responded, saying that that he was not involved in the proposal. He said he questioned the structure and funding approach but declined to elaborate.

Earlier last month we asked Klein about talk in the California stem cell community that he was involved in another bond measure effort for CIRM. Bonds are the current source of funding for the agency.

A spokeswoman for Klein replied,

“There is no campaign. We have done a single one scientific briefing on the progress of Proposition 71(the measure that created CIRM in 2004). It is strictly informational and does not constitute a campaign. We will decide in late 2015 what the next steps will be based on the scientific research at that time.”

Our take: In terms of the financial structure, Barbaro's tobacco tax proposal has at least one downside for CIRM. If the measure is successful in its goal of reducing smoking, the amount of money it raises from tobacco consumption will decrease. That, of course, would mean a dwindling amount of cash for the agency.

Launching a campaign for next fall's ballot would require a prodigious effort at this late stage even if some of the millions needed are already nailed down. The groups that backed the measure in 2012 are not likely to jump aboard immediately given their surprise at the latest proposal. They also may have other priorities as well at this point. Organizationally, work would have to begin now even though there is the possibility that not enough signatures could be gathered by the end of May to qualify for the fall ballot.

Opposition from the tobacco industry would be fierce. It raised $47 million in 2012 for its campaign compared to $12.3 million from the backers of the tobacco tax.

Tobacco Tax Looms as Financial Rescue for California Stem Cell Agency

California's stem cell agency, which is facing near financial death in 2017, could be rescued by a proposed ballot initiative that could channel roughly $200 million a year to the research effort.

Frank Barbaro
OC Register photo

The measure was filed this week with state officials by attorney Frank Barbaro of Santa Ana, a major figure in Orange County Democratic politics. It appeared to be modeled after a 2012 ballot initiative to raise tobacco taxes to fund cancer research that was very narrowly defeated.

The latest proposal would increase taxes on cigarettes by about $1 a pack and raise roughly $700 million a year, based on estimates for the 2012 initiative, Prop. 29. Barbaro's proposal would set aside 30 percent of that revenue to flow directly to the stem cell agency for research into a wide range of brain disorders and “dysfunctional conditions,” including spinal cord injury, heart disease, stroke, autism, cancer and much more.

Fifty percent of the funds would go to a new California Brain Research Citizen's Oversight Committee (CBRCOC), which would consist of 11 members, of whom four would be appointed by the governor. The others would be top executives of the University of California and its campuses. The new brain research operation would be similar to that of the state stem cell agency and would be able to award grants and loans and fund buildings and equipment.

Barbaro submitted the 14-page initiative to the state attorney general's office on Monday for preparation of a title and summary. The immediate hurdle for the measure is to collect roughly 1 million signatures to qualify it for the ballot, presumably November of this year. In 2012, hiring persons to collect signatures cost anywhere from $1 for each signature to as much as $5 to $6.

The California Stem Cell Report has queried Barbaro via email for additional comment on the measure, its backers and sources of funding. We will carry his comments when they are received.

The $3 billion California stem cell agency, which subsists on money borrowed by the state, is slated to run out of cash in 2017 for new awards. It has been considering some sort of public-private effort to generate additional funding.

The 2012 tobacco tax initiative was rejected by voters by an exceedingly slim margin, 50.3 percent to 49.7 percent, a difference of less than 30,000 votes. Political gamblers are likely to bet that the latest measure would win approval next fall, although the tobacco industry is likely to mount a tough fight.

Big Pharma's J&J Buys Into California Stem Cell Therapy Research for Heart Disease

California's $27 million investment involving a Beverly Hills stem cell firm is paying off once again as the business attracted a major, financial vote of confidence from Big Pharma's Johnson&Johnson.

The firm, Capricor Therapeutics, last month received approval for a phase two clinical trial for its heart disease therapy. Yesterday, it announced that the Janssen Biotech arm of Johnson&Johnson was immediately pumping $12.5 million into the product with the potential of $325 million more, depending on the outcome of the phase two trial.

Linda Marban
Capricor photo

John Carroll of Fierce Biotech wrote that the move marked a “rare Big Pharma gamble on a field that is trying hard to mount a comeback.” The California stem cell agency, which is funding the phase two trial, said the news was “heartening”and a represented a “very good start” to the year for Capricor.

Linda Marban, CEO of Capricor, told Fierce Biotech that J&J had been probing Capricor for a year. She said, 

“One of the reasons why I was motivated to work on this deal is because of the statement it makes in the field. It says, OK, somebody very large and powerful is taking a look at this technology and saying there's something there, and that's the most exciting thing for me."

Interest from the “large and powerful” is of major importance not only to Capricor but to the stem cell agency, which runs out of state money for new research grants in 2017. It is slowly trying to develop other sources of revenue, and it has yet to bring a therapy to market despite promises to voters during the 2004 ballot campaign that created the agency. Votes of confidence from Big Pharma will go a long way in encouraging investment in the agency and the stem cell field generally.

Investors indeed were more than encouraged by the yesterday's news, which sent Capricor's stock soaring 48 percent. It closed at $5.06 yesterday, up from $3.40 on Friday. Marban has said the firm hopes to be profitable by 2018.

Johnson&Johnson's investment is not the first tied to a key executive at Capricor, Frank Litvack, who is executive chairman of the firm. Litvack, who unsuccessfully ran in 2011 against Jonathan Thomas for the chairmanship of the stem cell agency, sold Conor MedSystems to J&J for $1.6 billion in 2006.

Bradley Fikes of the San Diego U-T discussed the Capricor research late last month in some detail. One of the phase one trial sites was at Scripps Health. Fikes wrote,

“Mark Athens received Capricor’s treatment on Sept. 25, about a month after having a moderate heart attack. The Encinitas resident was the last treated under Phase 1, said Scripps cardiologist Richard Schatz, who performed the procedure. It will take about six months to know whether the treatment worked, Schatz said.”

Fikes continued,

“'All their previous work showed that the scar got smaller and the muscle tissue around it got more robust,' Schatz said. 'So two things happened: The viable tissue got bigger and the scar got smaller. And that should translate into some sort of clinical benefit down the road.'”

Here are links to the press release from Capricor and other stories in story Genetic Engineering and Biotechnology News and PharmaTimes.

Sharp Exchanges as Stem Cell Board Tables Future Funding Proposal

A plan to finance the California stem cell agency after its $3 billion runs out in 2017 was shunted aside today after it ran into sharp opposition and questions from several of the agency's governing board members.

Vice chairman Art Torres attacked the preparation of the report as "offensive" because none of the patient advocates on the board, of which he is one, were consulted in its preparation. He said the CIRM staff should have prepared the $150,000 report -- not a consultant. Torres said the issue of sustained funding for the agency is the responsibility of the Chairman Jonathan Thomas, not the outgoing President Alan Trounson.

Torres' heated remarks drew a sharp retort from Trounson, who summarized the report for the board and said it was part of his management goals. Trounson said that he considered Torres' remarks an "attack on me," an assertion that Torres denied.

Other board members, including Thomas, said the report requires further thought and testing. They said the new president, who will replace Trounson, should be involved. CIRM Director Jeff Sheehy, another patient advocate, moved to table the report and put it in the hands of Thomas with the proviso that no further funds be spent on it pending further action. Sheehy's motion was approved on a voice vote.

The report was aimed at dealing with the loss of state bond funding for the agency.  The report called for private-public partnerships that would mean closer ties to industries. The funding would undoubtedly be considerably less than the $300 million or so that the agency currently hands out annually.

The proposal would also mean a considerable change in the nature of CIRM's program, likely focusing even more on research that is close to the marketplace.

Another bond issue for funding the agency has not been ruled out by the agency. But taking it to the voters is difficult politically and financially. The initiative campaign in 2004 that created the stem cell agency cost more than $30 million.  Stem cell scuttlebutt has it that former CIRM Chairman Robert Klein is talking up another bond election and perhaps even raising campaign funds.

Here is a link to Trounson's Power Point presentation today.

California Stem Cell Agency: $200 Million Approved to Speed Up Stem Cell Cures

The California stem cell agency today set aside $200 million to accelerate research into early stage clinical trials over the next several years.

The plan was unanimously approved as directors considered ways to generate therapeutic results as they strive to fulfill promises made to California voters in 2004 when they approved creation of the $3 billion research effort.

Ellen Feigal, senior vice president for research and development for the agency, told directors that about 14 existing projects would be examined for acceleration with possibly up to six to eight ultimately selected. The grants review group would consider the projects, and its recommendations would be brought to the governing board for final approval. One key criteria would be the likelihood that the trial would demonstrate proof of concept by 2017. (See here for her presentation and full criteria for selection.)

The $200 million set aside would go for possible phase two clinical trials. Some directors said more money was needed because costs generally rise. Additionally stem cell research is a new field and is likely to be more expensive than conventional research. The agency would also beef up support for the projects with more advice from external advisers and CIRM staff.

Funding for the agency is set to expire in 2017, and the agency is seeking results that will support a drive to raise additional cash.

California Stem Cell Meeting: CIRM Directors Decide to Press Harder on Therapy Development

Directors of the California stem cell agency today voted to intensify their focus on a handful of projects most likely to advance through clinical trials despite concerns that other efforts by the agency could suffer as a result.

On a unanimous roll call vote, the board approved a motion to create a priority system as recommended by its new Scientific Advisory Board.

"It is time for us to be brutal," said CIRM Director Sherry Lansing, a former Hollywood studio chief and former chair of the University of California board of regents. She said,

"Unless we have a home run in something...it will be extremely difficult to get more funding."

The agency is expected to run out of cash for new grants in 2017. It is in the process of trying to devise a plan for some sort of private-public financial partnership. Discussion at the meeting also made it clear that another bond ballot measure has not been ruled out by some directors, who emphasized the need to show results to voters.

Several directors expressed concern that by making a decision to establish priorities the agency would be forgoing efforts to create "the strongest possible foundation" for stem cell science. They questioned whether the agency should behave like a business "trying to hit a home run." However, no votes were registered in opposition to setting priorities.

During this morning's meeting in Los Angeles, CIRM staff briefed directors on the status of CIRM research. The governing board was told that six to eight projects could be selected out of 23 with the goal of accelerating them into phase one and phase two clinical trials.

A figure of $200 million was mentioned as a possible set aside to help the projects move ahead, but the directors this morning did not approve a specific amount. That may come later today.

Several directors commented that today's meeting on priorities and future funding plans may well be the most significant in years.

The board is now at lunch.

The Californa Stem Cell Agency: A Blueprint for Living Without $300 Million a Year

The likely future of the $3 billion California stem cell agency was unveiled this week, and it envisions an enterprise no longer tied to state funding and much more closely linked with industry as a collaborator and “bundler” of resources.

Gone would be the $300 million a year in cash that the state borrows so that agency can award grants to academics and occasionally to business. Likely to be missing are faculty recruitment awards, non- business training programs and perhaps most of the agency's basic research effort.

Instead, the California Institute for Regenerative Medicine(CIRM), as the agency is formally known, would build a relatively small number public-private partnerships to back projects close to turning out commercial therapies. It would ally itself with the Alliance for Regenerative Medicine, a national lobbying and industry group in Washington, D.C. And the agency's funds would come possibly from foundations, philanthropists, investors, biopharma, the health insurance industry and federal agencies such as the NIH and Medicare.

That is part of the scenario painted in a $150,000, 69-page report by consultant James Gollub of Tiburon, Ca. CIRM earlier this year commissioned the report because the agency will run out of state funds for new grants in 2017.

The governing board of the stem cell agency will hear a report on the Gollub's recommendations at its Dec. 11 and Dec. 12 meeting in Los Angeles. The report will come as part of consideration of proposals by the agency's new Scientific Advisory Board that the agency should sharpen its focus on six to eight projects to push them closer to bearing commercial fruit. The proposed “strategic roadmap” also comes as the agency is looking for a new president to replace Alan Trounson, who is leaving to rejoin his family in Australia.

Trounson has prepared an outline of a plan on how to start implementing the proposals.

Gollub made three major recommendations, one of which would require a $50 million investment from CIRM with another $50 million to $100 million coming from other sources, including wealthy individuals such as businessman Denny Sanford who recently gave UC San Diego $100 million for stem cell research.

The report said additional costs, including those for outside consultants, could be absorbed by CIRM or funded through awards on a charge-back basis. In others words, a grant would include funds that a researcher would have to pay to the agency for its “internal program management services.” CIRM is limited by law to an operating budget that can total only 6 percent of its $3 billion, which keeps its overhead quite lean.

Gollub noted that that CIRM has already moved partially into the areas of his three proposals, all of which would begin in the next year or so. They are:

• Create public-private partnerships to move projects into early clinical trials, focusing on specific disease areas. Co-funders providing at least $50 million would screen and select the projects from those presented by CIRM. This could be scaled up from a pilot project next year and possibly involve creation of a nonprofit group by CIRM.
• Create a “regenerative medicine accelerator” to provide “commercial readiness services” to each(Gollub's italics) grant recipient whether academic or business. The accelerator effort would be linked to agency's proposed $70 million Alpha Clinic plan. The accelerator also would assure that the “clinical trials structure meets pharmaceutical industry expectations.”
• Create a pre-competitive regenerative medicine R&D program that would organize collaborative efforts to break through barriers to development of therapies. This would involve production but also what the biotech industry calls “reimbursement,” which is a catch word for making a profit from development of a therapy. One of the issues in the industry is the expense of some medical treatments, and stem cell therapies are expected to be very high. The idea is to work with the insurance industry and the federal government to be sure the appropriate cost is supported by Medicare and insurance programs. Partnering with the Alliance for Regenerative Medicine would enter into this effort, which would be ultimately funded by both CIRM, the new non-profit and other partners.

The general direction of the recommendations is to “de-risk” stem cell therapy development and provide a focal point for overcoming many of the regulatory and manufacturing obstacles facing a new medical technology.

The report said CIRM has as a “strong innovation feedstock” of more than 90 projects that are close to moving into clinical trials. Some of those projects are likely to appeal to Big Pharma, which has been increasingly looking outside of its own companies for R&D.

For donors willing to pay for the privilege, Gollub's “strategic roadmap” recommended that CIRM create a group that would have “'a seat at the table' to see early stage  research, discoveries and clinical performance.”

The report said the CIRM's new world would require a “robust, dedicated fundraising group” within the agency, which now has minimal capacity in that area. However, the study envisions members of the governing board, many of whom are top notch fundraisers, as making a major effort to raise cash.

Scaling up the initial public-private partnerships, accelerators, etc., would also require additional staff. Gollub's report did not present costs beyond the initial pilot project stage.

New Public Finance Aide Appointed at California Stem Cell Agency

The California stem cell agency has named a veteran staffer to fill a key slot in developing a plan for its financial future beyond 2017.

Amy Lewis
CIRM photo

She is Amy Lewis, who has been with the agency since the very beginning. Indeed, her work in connection with CIRM, as the agency is known, dates back to the ballot initiative campaign that created CIRM in 2004.

In response to an inquiry, Kevin McCormack, chief spokesman for the agency, said Lewis previously served as grants management officer after working as deputy chief of staff to then CIRM Chairman Bob Klein. Her new title is deputy to the chair for public finance and governance.

During the campaign for Prop. 71, she was the “lead development staffer” in Northern California, McCormack said. She has an MBA from the University of San Francisco with an emphasis in finance.

Lewis will be a key aide to CIRM Chairman Jonathan Thomas, who is working on a plan to finance the agency after its money for new grants runs out in 2017. The position that she fills was reconfigured after the departure of Lynn Harwell to spell out that it would involve “meeting the financing and sustainability goals” of the agency.

Parsimony and Stem Cells: California's Changing Cash Outlook

Last week it was California Gov. Jerry Brown's financial “reality sandwich.” This week it is Mac Taylor's prodigious fiscal feast.

Both men are key players in California's economic scenario and quite possibly the future of the California stem cell agency.

Taylor does not have the household name that the governor does. But he is the state's legislative analyst, the bipartisan and widely respected expert and adviser to the California Legislature on state spending and income.

Taylor's message this week came in sharp contrast to the picture of parsimony drawn last week by Jerry Brown when he warned UC Regents to lower their expectations about their request for $120 million more than he thinks they should have. The governor said there are many competing interests that have legitimate claims to state funding in addition to the University of California. It was language that could apply to the stem cell agency, which will run out of cash for new grants in 2017 and is hoping for more public support.

Brown's remarks covered really only the next 18 months. Taylor on the other hand covered that period and beyond, into 2020.

Gone are $100 billion in cumulative state deficits over the last four years. Instead, by 2018, the state could be running annual budget surpluses of $10 billion, according to an article by James Nash on Bloomberg News concerning the legislative analyst's report.

Taylor's analysis is not necessarily directly at odds with Brown's views. They were both discussing the budget but in different ways. Nevertheless, it comes as good news for the agency. More state cash means a greater likelihood that large amounts can be funneled into stem cell coffers.

Taylor's forecast was also widely celebrated by the many other petitioners who have seen their favorite programs suffer during the Great Recession.

Jerry Brown, however, was not sanguine about California's spending. According to David Siders of The Sacramento Bee, the governor is not budging from frugality and plans “to say no when necessary.” Siders quoted him as saying,

“We have deferred maintenance on our roads, that is serious, we have unfunded and growing liabilities in our pension and retiree health – state, university and local level. That’s real.”

Timing is everything for the stem cell agency. If it can catch the state on an upward financial bounce and show results that resonate with policy makers, good things could happen. But Taylor also noted that even a modest economic downturn could send the state once again into deficit spending. And, ironically, rising costs for health care, an issue of considerable concern to the stem cell agency, could be one of the competing interests that could squeeze out spending for stem cell research.

Sharing Jerry Brown's 'Reality Sandwich:' The California Stem Cell Angle

California Gov. Jerry Brown yesterday served up a “reality sandwich” that may not augur well for the financial future of the $3 billion California stem cell agency.

It was a “lower-your-expectations” message that harkened back to Brown's first term in office when he surprised many in the state with his frugal ways.

Brown delivered the news to the University of California regents, one of whom is also Sherry Lansing, a longtime and influential member of the 29-member governing board of the stem cell agency.

Brown told the regents that he plans to budget the university for a $146 million increase (5 percent) in state funds during the upcoming fiscal year. The regents want an additional $120 million. Brown said that was not going to happen.

David Siders of The Sacramento Bee reported that Brown, who once studied for the Catholic priesthood, told regents that they may think that his "Jesuitical harshness is not nice.” But he said that there are many competing interests within the state and "that's kind of the reality sandwich we have to chew on."

UC Regent Lansing said that she is not ready to give up on more cash for UC and that she believed in UC's “power of advocacy,” according to Katy Murphy, writing in the San Jose Mercury News. Last summer, at the stem cell agency's governing board meeting in July, Lansing also stressed the need for “renewal of the (state) bond money” that finances the operations of the agency, which is known as CIRM.

The stem cell enterprise faces a more serious fate than the University of California. The agency will run out of money for new awards in 2017. It is looking at some sort of public-private partnership to continue its efforts. Its initial assumptions include as much as $200 million in public support.

The state's economic situation could improve within two years. However, the pressing demands of a host of high priority needs in California will increase as well. Stem cell research will face tough competition against the many compelling state problems that have been given short shrift during the past five years or more.

That's all part of the “reality sandwich” for CIRM to sample in December when its directors will be briefed on a new plan for financing the agency's future.

Scientific Advisors to Stem Cell Agency: Time to Move 'At Speed'

John Bell, chair of CIRM SAB
Academy of Medical Sciences photo

The $3 billion California stem cell agency is preparing to take a close look at recommendations from key advisors that it should focus more sharply on a handful projects in order to transform research rapidly into commercial therapies.

The governing board's Science Subcommittee on Nov. 22 will examine the proposals by its new Scientific Advisory Board(SAB), created last summer as the result of a $700,000 Institute of Medicine study. Among other things, the advisory board said CIRM directors should zero in on six to eight projects that would lead to early stage clinical trials.

The recommendations come as the agency, known as CIRM, is wrestling with its own mortality. Cash for new awards will run out in 2017. The directors next month will hear a consultant's report on a plan for financing the agency's future. It is expected to involve some sort of public-private funding, which will only be forthcoming if the agency demonstrates research results that resonate with possible funding sources.

At last month's governing board meeting, CIRM director Sherry Lansing, a former Hollywood film studio chief, former chair of the UC regents and a prodigious fundraiser, sounded an urgent note.

She said that the agency is “trying desperately to get a win.” She raised the possibility of putting out a “do-you-need-help” RFA which would target applicants that have well-developed projects that could be moved ahead rapidly with some cash.

The Oct. 9 board meeting was the first time that Lansing and the other 28 CIRM directors had seen the recommendations, which were prepared outside of public view. They were only received by the agency staff two days before the board meeting.

The agency has yet to post on the Internet the full SAB document. However, the California Stem Cell Report asked for a copy, and the complete text can be found at end of this item.

 The report said,

“(F)or stem cell research to continue to advance at its current pace in California, future potential investors and supporters of stem cell research must perceive a tangible benefit to human health, and this can only happen through a clear success at the stage of clinical proof of concept. It is important that this occurs during the currently projected lifespan of CIRM, so that deserving projects and resources are positioned in the strongest way possible to attract future investments after expiration of the current CIRM funds.”

The agency's scientific advisors, only one of whom is from California, said the agency has a “strong chance of success” in securing additional funding if it moves “at speed.”

The panel, chaired by Sir John Bell of Oxford University in the United Kingdom, said it was “optimistic” that “a clinical proof of concept can be achieved in one or more settings with CIRM projects within the next three years.”

The report contained some comments that indicate that the advisors are not fully aware of all the circumstances surrounding CIRM. The panel prepared its report after being briefed by CIRM staff and four academic recipients who had received CIRM awards. No representatives from industry were heard. The advisors' report said,

“The SAB had a very positive view of the interactions between CIRM and the commercial sector.”

Many in the biotech community, however, have been less than pleased with CIRM, to point of holding a private dinner to air their grievances with then CIRM Chairman Robert Klein, filing multiple appeals of grant reviewer decisions and testifying before the Institute of Medicine. Only a tiny percentage of the $1.9 billion in CIRM awards has gone to business.

The agency, however, is working diligently to improve its industry relations, which are critical to turning research into something that can actually be used in the marketplace.

The advisors, handpicked by departing CIRM President Alan Trounson, praised CIRM's achievements so far as “considerable” and “transformative.” But it noted that the agency lagged behind other funding bodies in terms of “attention and attribution.”

The panel said,

“CIRM has been catalytic in generating many of the scientific advances in this field, but its brand recognition internationally and even nationally is limited and this should be corrected.”

The agency has suffered in the past from PR missteps but has been moving with some success in the past year to gain more favorable attention. However, it remains a relatively young organization. It receives almost no coverage in the mainstream media and very little more in the scientific media. Breaking through the media clutter is difficult, especially given that CIRM has not been part of major stem cell developments that naturally generate front page attention.

The SAB recommendations have been largely endorsed by the agency's staff. Following the Nov. 22 meeting on the proposals, they will go to the full governing board at its December meeting for action. The public can attend the meeting Nov. 22 in San Francisco and a teleconference location in Duarte at the City of Hope. Advance comments can be filed with CIRM via email at info@cirm.ca.gov.

  Scientific Advisory Report California Stem Cell Agency October 2013

For The Record

The California Stem Cell Report yesterday reported on an opening at the California stem cell agency for a high-level person to work on charting a future sustainability course for the enterprise.


The new position redefines the role of the deputy to the chairman of the agency and renames the position. For the record, the post was held previously by Lynn Harwood, who left the agency when her husband took a job at Harvard, the agency said.

Zeroing in on Therapies at the California Stem Cell Agency

BURLINGAME, Ca. -- Directors of the California stem cell agency today mulled over a recommendation that they focus intensely on a handful of research projects that are most likely to result in commercializing a stem cell therapy.

No decisions were made, but directors raised questions about whether such a move would mean a reduction of funding for other research efforts or affect other projects in a negative way.

The recommendation and others came from agency's new scientific advisory board(SAB), appointed by CIRM President Alan Trounson at the behest of an Institute of Medicine study. The agency received the panel's report only on Monday and cobbled together staff responses for today's directors' meeting.

The SAB proposals were bad news for the agency's shared labs program, which costs CIRM $7.5 million a year and is set to expire in 2014. The panel recommended an end to the program after that date. CIRM agency staff agreed, declaring that the original rationale was no longer valid and that the program could be wrapped into the recipient institutions' budgets, if they wished to continue with it.

The SAB, which has only one California member, said the stem cell agency should focus on six to eight projects that would lead to early stage clinical trials involving safety and proof of concept(stage one and 2A).

Discussion of the plan came after Ellen Feigal, senior vice president for research and development, briefed the directors on 70 agency grants that are moving well along the clinical development pathway. She told them, however,

“We are not going to take 70 projects forward.”

The agency currently has $600 million in uncommitted funds after handing out $1.9 billion over the last nine years. However, it could come up with more funds if it decided to “uncommit” some grant rounds conceptually approved but for which applications have not been solicited. CIRM is scheduled to run out of cash for new grants in 2017.

Feigal said that the SAB proposal could have “downstream implications” if extra money is required to intensify efforts on six to eight projects. However, she also said the agency could simply provide an “expedited pathway.”

CIRM Director Sherry Lansing noted that the agency is “trying desperately to get a win.” She suggested putting out a “do-you-need-help” RFA which would target applicants that have well-developed projects that could be moved ahead rapidly with some cash. 

Director Jeff Sheehy said the agency needs to “talk about sustaining what we have built.” He said,

 “It is not like our folks are going to graduate from our funding to NIH funding.”

The NIH is already suffering from a major cash crunch.

The recommendations from the SAB and staff reaction will be heard by the directors' Science Subcommittee, chaired by Sheehy, before the directors' December meeting. The December meeting is also expected to include a briefing on a proposal for creation of a “strategic roadmap” for future CIRM funding.

Here is the Power Point summary of the recommendations and staff responses. We have asked the agency for a copy of the original document from the SAB.

Scientific Advisors Take First Look at $3 Billion California Stem Cell Agency

Directors of the California stem cell agency on Wednesday will hear the first recommendations from a newly formed scientific advisory board, created to provide “cohesive” advice that a blue-ribbon study said has been lacking at the agency.

Formation of the panel was recommended last December by the prestigious Institute of Medicine (IOM) in its $700,000 report on the performance­ of the stem cell agency. The IOM said a scientific advisory board would be invaluable in helping the agency to “make fundamental decisions about dealing with challenges that cut across particular diseases, decide which discoveries should progress toward the clinic and determine how best to engage industry partners in developing new therapies.”

The report from the eight-member panel is not yet available to the public although only two business days remain before the agency's governing board meeting in Burlingame, Ca.

The panel was created last July and has held at least one meeting, which was not noticed publicly. The members include only one Californian, Corey Goodman, co-founder of venBio, a San Francisco biotech venture capital firm. According to an article by Bernadette Tansey on Xconomy, his current advice to biotech industry executives is:

 “Don’t do what I did. That worked then—it won’t work now.”

The other scientific advisors are: Sir John Bell, Oxford University, Great Britain; Christine Mummery, Leiden University Medical Center, The Netherlands; Sean Morrison, Children’s Research Institute at UTSW, Texas; Stu Orkin, Harvard Medical School, Dana Farber Cancer Institute, Mass., and also a member of the IOM panel that studied CIRM; Fiona Watt, Centre for Stem Cells and Regenerative Medicine, King's College London; John Wagner, University of Minnesota Stem Cell Institute,who is also a member of the CIRM standards group, and Maria Grazia Roncarolo, San Raffaele-Telethon Institute for Gene Therapy (TIGET).
(More information on each member is available by clicking on their names.)

In response to queries from the California Stem Cell Report, Kevin McCormack, senior director of public communications, said that the members of the board will not receive compensation but will be reimbursed for their expenses. McCormack said that they have been screened for conflicts of interest.

CIRM, as the $3 billion stem cell agency is known, has not yet prepared a written description of its new advisors' duties. McCormack instead referred to the IOM's description of what the board should be doing.

The IOM recommended formation of “a single Scientific Advisory Board, as opposed to multiple advisory boards as proposed in the 2012 strategic plan, (that) would provide cohesive, longitudinal, and integrated advice to the president regarding strategic priorities, which is lacking in the current CIRM organizational structure."

At its July 25 meeting, the CIRM governing board was told by President Alan Trounson that the scientific advisory board “may or may not be supportive completely of our strategic plan, but it will be a recommendation we'll bring to the board for further discussions about how we orient ourselves.”

The IOM cited several areas where CIRM has “made strategic decisions that resulted in the omission of some important areas.” They included “addressing the novel ethical and regulatory aspects of clinical applications of potential stem cell therapies” and preparation of “academic institutions in California for collaboration with the private biotechnology or large pharmaceutical sectors.”

The IOM report said,

“(T)he notable absence of industry representatives on most disease teams demonstrates the inadequate emphasis of CIRM’s translational/development RFAs on what is needed to enable regulatory approval for cell-based therapies.”

Also scheduled for Wednesday's governing board meeting is a review of its translational grant portfolio. That report is also not yet available publicly. In the past, such reports were often limited to a Power Point outline and not available to the public until their presentations were underway during the board meeting.

Here is the text of the IOM's summary of its recommendation for creation of the scientific advisory board.

“CIRM proposes to create a Clinical Advisory Panel and Industry Advisory Board. Although the committee supports CIRM’s intent to establish advisory boards, it recommends that one Scientific Advisory Board be established. Striking the proper balance in research across the portfolio of basic, translational, and clinical studies will require that CIRM solicit broad input in executing its strategic plan. The committee believes the proposed Scientific Advisory Board could serve an invaluable role in this process.

“Recommendation 4-1. Establish a Scientific Advisory Board. CIRM should establish a single Scientific Advisory Board comprising individuals with expertise in the scientific, clinical, ethical, industry, and regulatory aspects of stem cell biology and cell-based therapies. A single Scientific Advisory Board, as opposed to multiple advisory boards as proposed in the 2012 strategic plan, would provide cohesive, longitudinal, and integrated advice to the president regarding strategic priorities, which is lacking in the current CIRM organizational structure. The majority of the members of the Scientific Advisory Board should be external to California, appointed by and reporting to the CIRM president. Such an external board would be invaluable in vetting ideas for new RFAs, suggesting RFAs that otherwise would not have been considered, and helping CIRM maintain an appropriate balance in its research portfolio. Input from this board would help CIRM make fundamental decisions about dealing with challenges that cut across particular diseases, decide which discoveries should progress toward the clinic, and determine how best to engage industry partners in developing new therapies. The board’s reports and the president’s response to those reports should be delivered to the ICOC(the CIRM board) and discussed in sessions open to the public.”

Selling Stem Cell Sizzle: The Future of a $3 Billion Effort

All stem cell research is not created equal, a truism that found fresh validity this week.  Particularly research that could play a role in whether the California stem cell agency can find more cash to continue its operations. 

The difference was highlighted yesterday by articles on the stem cell agency’s blog. The pieces dealt with findings – some esoteric and some not-so-esoteric -- that received international attention. The articles written by CIRM staffers Amy Adams and Don Gibbons were fine as far as they went. But it is one thing to deal with the nuts and bolts of research and another to look at it from the perspective of whether it resonates with the public. 

The research in question is from Spain and Stanford. Researchers in Spain  reprogrammed adult cells in a living mouse to become like embryonic stem cells. Those results received much “gee whiz” attention in the mainstream media, most of which overlooked problematic aspects  involving its cancer-linked results(see researcher Paul Knoepfler's take here and Gibbons' item here).  

The other findings out of Stanford dealt with people and Down syndrome, along with cognitive function, aging and Alzheimer’s.

The press release by Krista Conger from Stanford said,

"'Conceptually, this study suggests that drug-based strategies to slow the rate of stem cell use could have profound effects on cognitive function, aging and risk for Alzheimer’s disease in people with Down syndrome,' said co-author Craig Garner, PhD, who is the co-director of Stanford’s Center for Research and Treatment of Down Syndrome and a professor of psychiatry and behavioral sciences.”

Both the press release and the CIRM blog item briefly noted that funding from CIRM helped to sustain the research. Stanford buried the information at the end of its release. CIRM mentioned it much higher in its item. 

In neither case were specific funding figures mentioned. Nor was there any attempt to say whether this research would have been slow in coming or not coming at all without CIRM help. 

Why does that matter? The $3 billion state stem cell agency will run out of funds for new grants in about three years, not very long given the length of time it takes to develop major funding sources and the rather deliberate pace at which CIRM works on some matters. 

Currently the agency spends about $300 million year on research and is not likely to be able to renew its funding at that level. But if it wants to play at even the $50 million level, it will have to generate some sizzle from the research that it has funded. 

Sizzle is what the Stanford research has. It resonates with people. We all know somebody or a family with issues such Alzheimer’s, Down syndrome or cognitive problems. Missing largely, however, from the press releases, media stories and even the CIRM blog is some sort of way of assessing whether CIRM funding played a KEY role. 

And that is the clincher for agency. That is the sizzle that will sell the agency as absolutely necessary if it truly wishes to turn stem cells into cures.

(Editor's note: Shortly after this item was posted, we searched the agency's Web site. One of the results disclosed that agency gave $1.4 million to Michael Clarke of Stanford for the research. He has filed two progress reports on his findings.) The research received additional support from CIRM as well, but the amounts were not readily apparent.)

Future Financing Plan for California Stem Cell Agency Coming Up in December

The California stem cell agency today released the $150,000 contract and proposal from James Gollub Associates to create a “strategic road map” for the $3 billion state program, which is scheduled to run out of cash for new grants sometime in 2017.

The goal of the road map, according to the contract, is to develop a “preferred model for a public-private sponsored entity to fund the most desirable translational projects in the CIRM portfolio.” That would appear to rule out future funding for basic research and training, which the agency has supported well during its nine-year history.  It would also be an acknowledgement that the agency cannot count on $300 million a year for grants as it has in the past.

Under the terms of Prop. 71, which created the agency in 2004, the effort is currently financed by state bonds, money borrowed by the state of California that flows directly to the agency without oversight by the governor or legislature. Authority to issue the bonds expires in 2017.

The contract calls for an initial report from the Gollub by Nov. 30 with the agency to decide by March 1, 2014, on whether it wants an operations and business plan from the Tiburon, Ca., firm.  Presumably the agency’s governing board would hear recommendations from Gollub at its December meeting.

The contract, signed July 16, specifies that Gollub will conduct at least 20 interviews with stakeholders to evaluate four possible models that it will develop. The stakeholders will include “investment, academic and government groups” and possibly others to be determined later.

The proposal presented by Gollub contains more information on the firm and the persons who will be working on the project. In addition to Gollub, they include Steve Marshall, Amy Rassen and Annika Barnes, all Gollub employees. The contract and proposal can be found below.

  Gollub Proposal by DavidJensen

  Gollub-CIRM Strategic Roadmap Contract by DavidJensen

California Stem Cell Agency's $150,000 Search for Its Financial Future

A San Francisco consultant, who is often known as an “economic therapist,” has been selected to devise a “strategic road map” for the financial future of the $3 billion California stem cell agency.

James Gollub: 'economic therapist'
Gollub Associates photo

James Gollub, managing director of the firm bearing his name, is under a $150,000 contract to lay out by this fall a detailed plan for the agency. The nine-year-old research effort is scheduled to run out of money for new awards in 2017.

Gollub was selected after the agency posted a request for proposals (RFP) last spring. The RFP assumed an additional $50 million to $200 million in a onetime “public investment.” The RFP also assumed additional private funding of a yet-to-be-determined nature.

Gollub is described as a co-founder of the field of cluster-based economic development. One web site said he is known as an “economic therapist.” The website for his current firm says,

“A leading expert in innovation bridge building....
“Global experience assisting universities, institutes, government agencies and public-private partnerships link innovation sources to innovation seekers.
“Committed to the goal of increasing flow of needed solutions, optimizing financial returns and sustainable economic impacts from innovation.”

Gollub's current firm dates back to March of this year. His Linked In profile says,

“James Gollub Associates (JGA) LLC was launched to build on 36 years of Gollub’s professional research and consulting experience. That experience began with 16 years at SRI International, three years at DRI/McGraw-Hill, five years at IDeA, nine years at ICF International and three years with E-Cubed Ventures LLC. During that time Gollub has worked globally to deliver economic strategies for over 30 national, state and metropolitan regions, develop strategies to accelerate growth of new industries (clusters), plan public and private R&D institutes and advise on over 15 science and technology parks.”

The need for a financial transition plan for CIRM was publicly identified as long ago as 2009 by the Little Hoover Commission in its lengthy study and has been reiterated periodically by other bodies since then. Under the terms of Prop. 71, which created the agency, CIRM has only  a 10-year authority to issue state bonds, the borrowed funds that have sustained the research effort. Legal maneuvering blocked the issuance of bonds until 2007.

The California Stem Cell Report asked the stem cell agency on May 31 for a copy of Gollub's response to the RFP. Yesterday we asked for a copy of the contract with Gollub. Those documents will be published when they are received.