Former CEO of California Stem Cell Agency Named to Board of Firm that Received $19 Million From the Agency

Alan Trounson, the former president of the $3 billion California stem cell agency, today was named to the board of a company that has received $19.4 million from the agency, raising fresh and serious questions about conflicts of interest at the state-funded research program.

Announcement of the appointment came only seven days after Trounson left state employment. Trounson has been dogged for some time with questions about his relationship to the company, StemCells, Inc., of Newark, Ca., and its co-founder, eminent Stanford researcher Irv Weissman, who sits on the company’s six-man board and is chairman of its scientific advisory board.

StemCells, Inc., announced Trounson’s appointment in a press release this morning. The publicly traded firm said it was “thrilled” to have Trounson on its board. The first sentence of its press release noted that he had served as head of “the largest scientific funding body for stem cell research in the world.”

Weissman is director of the Institute of Stem Cell Biology and Regenerative Medicine at Stanford. He has received $34.7 million from the agency. Stanford overall has received $281 million from the stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM). It is the No. 1 recipient of cash from the agency.

One California stem cell researcher, who asked to remain anonymous, said in an email,

“This looks like payback to Alan Trounson for all of the money that CIRM paid out to Irv Weissman (founder of StemCells, Inc.) and his friends at Stanford while Alan was president of CIRM.  Many people have pointed out that Alan seemed to be biased toward Stanford in his public and private comments. The facts bear that out: Stanford and StemCells, Inc., have had more than $300,000,000 of CIRM's $3 billion in funds awarded to them in grants.  Are they really more than twice as good as UCSF ($132,650,363), and three times better than USC ($104,858,348) and UC Irvine ($98,591,836)?”

As a member of the board of directors of StemCells, Inc., Trounson is expected to receive compensation including stock in the company. In 2013, members of the board received total compensation, including stock awards, ranging from $60,800 to $99,800, according to a Security and Exchange Commission filing.

StemCells, Inc., Weissman and the stem cell agency did not immediately respond to requests for comment. Trounson, who announced last fall he was leaving the agency to return to Australia, could not be reached. The California Stem Cell Report will carry the full text of their remarks when they are received.

Last year and earlier this year, conflict of interest questions concerning Trounson and Weissman came in a $40 million stem cell genomics award round that was won by a Stanford-led team last January. The round was marked by a conflict of interest connected to Trounson, CIRM grant reviewer Lee Hood of Seattle and Weissman. Hood and Weissman own a Montana ranch where Trounson has been a guest. Trounson recruited Hood to help review the stem cell genomics applications in 2013 in closed door meetings. Hood, however, failed to disclose his relationship with Weissman.  It only came to light after another reviewer pointed out the connections between the two men. The agency had failed to detect the conflict.

As the California Stem Cell Report has previously noted,,

“Prior to the genomics round Trounson had acknowledged he had a conflict-of-interest in connection with another Weissman-related proposal. In 2012 in a round not connected to genomics, Trounson, who has visited the Hood-Weissman ranch as Weissman's guest, recused himself from the board's public discussions of applications from StemCells, Inc., a company founded by Weissman.

“Under CIRM's procedures, Trounson does not vote on applications during the review process. But beginning last year the board gave him and his staff new authority to make recommendations on applications after they were acted on by reviewers.”

Trounson ultimately recommended board approval last January of the genomics application from Stanford after Weissman was removed from the proposal.

During last January’s meeting, Trounson touted the Stanford application and specifically mentioned Michael Clarke, who is the No. 2 person in Weissman’s stem cell institute at Stanford, and who was part of the Stanford application instead of Weissman.

According to the meeting transcript, Trounson said,

“I think he's (Clarke) an extraordinary good researcher, and I think the Stanford people are terrific at that.”

The agency said earlier this year it had begun an examination of the processes in the stem cell genomics round, which was criticized for irregularities,unfairness, score manipulation and Trounson’s role.   No results of that inquiry have been announced.

Since the agency's inception in 2004 questions have been raised about conflicts of interest at the agency, mainly due to the composition of its board. Roughly 90 percent of its grants have gone to institutions that have been linked to members of its board.  The Institute of Medicine, in a $700,000 study commissioned by the agency, said that the board members essentially make proposals to themselves about what should be funded. And in 2008 the journal Nature editorialized about "cronyism" at the agency.

California's Trounson Wants to 'Shame' the 'Malefactors' of Stem Cell Medicine

Alan Trounson at Cornell
Cornell photo

The former president of the California stem cell agency, Alan Trounson, has kept busy since leaving his post last month. Just this week he authored an opinion piece in The Scientist. Earlier this month he was at Cornell decrying the lack of federal funding for research.

In his article in The Scientist, Trounson called for the outing of stem cell clinics that sell untested and expensive treatments to desperate people.  “Malefactors” is what he called them.

He wrote,

 “It is time that a ‘shame file’ of unregistered and unscientific treatment centers is constructed and widely communicated to warn patients of the dangers of these unregulated and inadequately managed therapies being offered internationally.”

Trounson suggested that the Institute of Medicine could host such a file and help protect uninformed patients. But he also said Alliance for Regenerative Medicine, an industry group that is also engaged in lobbying, could do better in helping to expose dubious stem cell clinics.

He said,

“While this organization and its members do not approve of unregistered clinical trials, they ought to be more active in ensuring the scientific integrity of all studies going forward.”

Trounson said that the $70 million Alpha clinic effort that he championed at the California stem cell agency is also aimed at tackling the problem. Grant applications in that program are due to be reviewed this fall. 

Trounson warned that fringe stem cell clinics damage the entire field.

“The activities of these medical tourism centers are a major barrier to the delivery of genuine cell therapeutic clinical trials by bringing the whole field of cell-based therapies into disrepute.”

At Cornell on June 6, Trounson, who is a senior scientific advisor at CIRM until the end of this month, was the keynote speaker for a symposium on stem cells that also featured broadcast journalist Charlie Rose.

The university put out an item on the appearance. Trounson was quoted as saying,

"The [federal] government looks handicapped in this area. You've got a budget situation where you cannot seem to put more money into research — in fact, less money is going into research. We have to convince the people elected to government that this is an incredible revolution and that we need to keep funding the science."

That could be a pitch for the California stem cell agency as well. It is scheduled to run out of money for new grants in less than three years and is currently looking at ways to develop new funding sources.

Trounson Calls for Closer Ties Between Biotech Industry and Academic Research

Alan Trounson, the departing president of the California stem cell agency, was in Australia earlier this month beating the drum for tighter links between science and industry.

Trounson, a native Australian, said researchers are “starving” in Australia and did not have much good to say either about the amount of the federal research funding in the United States.

According to an account on probonoaustralia, Trounson, who is now working as a senior adviser to the California agency, declared,

"What is hampering our smartness in converting high quality science discoveries to community benefit? Is Australian science research sustainable without the ability to expand beyond the publicly funded institutional base of universities, medical centers and (the national science agency)? Where is our biotech industry? Who spans the (funding) valley of death? There is a distinct scarcity of industry connecting with the Australian medical research community and a lack of venture investment in the biosciences."

He continued, 

“We need to really encourage the very smart academics to become interested in applying their discoveries for the community benefit – universities have to change how they recognize and reward scientists who enter this pathway – not penalize them. 

“It isn’t about number of publications or grants... – these are not the measure for making the innovative contributions needed. They probably handicap the conversion to a more effective system that the community will recognize and endorse. 

“The current federal grant system is broken in the USA...and would not be any better here. Money is trickling down an unsustainable pipeline that fails to encourage developments of use to the community. 

“The system must be fixed despite the inertia that exists even among the majority of scientists. We will have no viable research environment soon if we continue to look away from the problems that are evident and are turning away the smart young scientists.”

Trounson spoke during the 10th anniversary symposium of veski, an Australian group he helped to found. It is designed to foster an “innovation economy.”

Trounson's portrayal of Australian science was not all bleak. He cited major achievements scored by researchers down under. He said,

“We might have cause to be optimistic about the next 20 years! Maybe even expect Australia to have a minister of science driving high tech developments and a strong biotechnology industry employing scientists and medical graduates maturing in universities and research centers.”

Trounson's last day at CIRM is June 30. He is returning to his family in Australia.

New California Stem Cell CEO Begins Work May 15

C. Randal Mills, a man who has spent his entire professional life in the private sector, will take over on May 15 as the new president of the state of California's $3 billion stem cell agency.

Mills, 42, was named last week to succeed Alan Trounson, a longtime academic researcher who is leaving to return to his family in Australia. Mills, former CEO of Osiris Therapeutics of Maryland, is scheduled to begin half-time work in 10 days at the stem cell headquarters in San Francisco. At that point, Trounson will be designated as a senior scientific advisor to the agency. Mills' work will initially be half-time while he works out his move from Maryland.

The news from the agency, which is formally known as the California Institute for Regenerative Medicine (CIRM), came along with more details about Mills' employment agreement, including provisions that deal with outside activities that he might pursue.

Randy Mills (left) and Jonathan Thomas
CIRM photo

The information was contained in an “offer letter” from CIRM Chairman Jonathan Thomas to Mills, dated and signed by both men on April 28, two days before the agency governing board ratified its terms(see here and here). The letter was provided by the agency at the request of the California Stem Cell Report. The full text can be found at the end of this item.

As reported previously, Mills' annual salary will total $550,000, compared to the $490,008 earned by Trounson. Mills' total compensation at Osiris was $554,750 in 2013, according to company filings with the federal government. He left Osiris in December 2013 for “personal reasons.”

The

offer letter provided for $95,000 in relocation and travel costs for house-hunting and moving. Mills is also entitled to reimbursement for meals and temporary housing for 60 days, contingent on approval by the state Personnel Administration Department. That would amount to $40 a day for meals and $178 a day for lodging. That could run up to $13,080 if the full 60 days are used.

Mills' agreement with CIRM allows him to use his “personal time and resources” to engage in outside activities that are compatible with his CIRM duties. Those outside activities include service on boards of for-profit companies, which can be lucrative, as well as service on non-profit boards. The agreement stipulates that such service be disclosed to the chairman of the board and that he confirm that the service is compatible with Mills' role as president.

Mills, who goes by the nickname Randy, is subject to the agency's conflict of interest policy which requires him to divest himself of any investments in companies that devote more than 5 percent of their research budget to stem cell research. In addition to the policy, Mills is required by state law to disclose his economic interests generally and is subject to the agency's “incompatible activities statement”(see below) and the “employee conflict of interest code.”

Mills will serve at the pleasure of the board. However, if the board fires him “without cause” within 36 months, he will be entitled to six months salary.. The agency's offer letter also said,

“You shall not be entitled to any payment if the (governing) board terminates you for cause, including knowing violation of state conflict of interest law and/or CIRM policy, willful or corrupt misconduct or a criminal conviction.”

The offer letter said the effective date of the appointment is June 2. However, Kevin McCormack, senior director of public communications, said last week that stipulation has been modified to reflect the May 15 start. McCormack said Trounson will serve as a scientific advisor to CIRM to June 30 “to help shepherd through a number of projects and commitments he has made.” Presumably that would include the closed-door review of applications in the $80 million Alpha stem cell clinic plan, which is scheduled to be acted on by the CIRM board later this year.

Here is the text of the April 28 offer letter and the agency's incompatible activities statement. 

Offer letter from California stem cell agency to Randy Mills

Incompatible Activities Statement California Stem Cell Agency

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.)

Alan Trounson's Opaque Messages, Genomics and $40 Million

Cryptic is probably a good word for the messages delivered last week by the president of the California stem cell agency, Alan Trounson, in his recommendations in the agency's $40 million genomics round. Odd might be another.

Some might say Trounson is ill-serving both the board that hired him and California taxpayers.

Alan Trounson
UCSD photo

In a document on the CIRM Web site, Trounson, who is a noted researcher from Australia, says the 29-member governing board of the agency should give $33 million to a Stanford-led consortium to create a stem cell genomics center. That coincides with the opinions of the agency's blue-ribbon scientific reviewers.

Trounson's rationale, however, is no more than a 23-word phrase among four paragraphs that are little more than a generic description of a stem cell genomic center. The Stanford proposal, he said, “will fulfill all of the aims of the RFA and provide an excellent, responsive and comprehensive genomics resource for California stem cell researchers.”

Trounson's recommendations on three competing proposals(here, here and here), all of which were also approved for funding by reviewers, are even more opaque. He simply says,

“CIRM Staff Recommendation: Do not fund”

Trounson's name is missing from the CIRM documents nixing the three proposals. But Trounson calls the shots at the agency and signs off on any advice to his board.

His recommendations would be a dramatic and major change in how the board treats the positive decisions of its reviewers. Over its nine-year history, the board has almost never overridden positive findings by reviewers. Invariably they are rubber-stamped with no discussion at public board meetings.

CIRM's directors are loathe to substitute their judgment for reviewers for a variety of reasons. One is that the board members do not see the actual applications – only the same review summaries provided to the public. The identities of the applicants are also withheld from directors prior to their vote on applications. Board members have repeatedly said they do not have sufficient information to reverse reviewer decisions. They also do not want to offend reviewers. The board fears that they might abandon the task of reviewing applications for the agency if their decisions are not supported by the board.

Trounson, who announced last fall he is leaving the stem cell agency, offered no explanation for his move to turn the longstanding board practice on its head. Nor did he discuss why the genomics round should be limited to one award when the RFA stipulated one or two.

He did not discuss the policy implications of the state of California giving a $33 million leg-up to a single consortium in a hot, fast-growing scientific and business arena. He did not comment on the possibility that this consortium would be less than welcoming to rival researchers. 

He did not discuss whether creation of this consortium was akin to creating an organization like WARF that sets the rules and controls the playing field on the use of important human embryonic stem cell lines, much to the displeasure of many scientists, including Trounson himself. Nor did he even publicly disclose the amount of money that was requested by researchers whose applications he would deny.

There may be good reasons for Trounson's position. But he owes the board and the public more than a cryptic decree sent forth from his post at 210 King Street in San Francisco.  Especially in light of the charges of unfairness, score manipulation and more leveled last week by rival researchers in the round.

Text of Trounson Letter Re Resignation

Last week the California Stem Cell Report emailed Alan Trounson concerning his continued tenure as president of the California stem cell agency. (See here for the earlier main story on his resignation late today.) The query noted that he had missed some meetings of the governing board of the agency and had been away for three months in Australia earlier this year, among other things. Here is the text of his response.

“I missed the May and October Board Meetings. In May, I was completing as Chair of the Scientific Advisory Board review of the Max Planck Institute for Molecular Biomedicine, Muenster, Germany. In October, I was invited along with 50 other leading scientists from around the world to speak and participate in the Nature Medicine Conference on Stem Cells and Regenerative Medicine in Hanover – Issues to Solve for Biology and Medical Applications. This was a critical global meeting for CIRM to be represented at. On both occasions I requested the Board meeting be moved to enable me to be there but this was not possible. In both cases the Chair agreed I should attend the activities in Germany.

“Between Christmas and the end of February, I was in Australia but worked for CIRM for 50% of this time, excluding holidays, on reports, meetings (teleconferences, SKYPE conferences), articles for scientific journals for CIRM and meetings with collaborating partners and grantees there. I returned to San Francisco in mid-February for the Genomics GWG Review. I returned to Australia for my daughter’s wedding and then returned to San Francisco at the end of February. Dr Ellen Feigal and I were in continual communications while I was away and CIRM worked very smoothly and efficiently under her management and my guidance.

“When I was asked to become President, by Governor Schwarzenegger and previous Chairman Bob Klein,  I made a commitment to them for CIRM.  I did that with the understanding that my partner Karin and our young son could be with me in California.  They did move here for 3 years, but it turned out to be impossible for Karin to continue her career in women’s health research at a Californian university.  For her to work at any California institution would have created too many conflict issues, either because of the rules or because of 'appearance' concerns. Karin and our young son moved back to Australia, and I moved to an apartment 2 blocks from CIRM.  I work seven days a week for CIRM in the absence of my family. I have a 12-year old son who misses me terribly for the last 2.5 years we have been separated (as do the other 3 older children).  I have sacrificed considerable personal family rewards to continue to commit to driving CIRMs vision.

“The whole 'evaluation of the president' process with the board has always seemed (to me) to drag on forever with meeting after meeting.  I have not attended any of this year’s meetings, but my dialog with them has been about evaluating whether my role at CIRM could be modified in some way to accommodate my families needs.  Duane Roth was the key person for me in those discussions, as he was on so many issues.  It has taken some time to regroup after his untimely death and enable this to move forward again.”

CIRM Press Release on Trounson Departure

Here is the news release today from the California stem Cell agency on Trounson's resignation.

CIRM President Alan Trounson To Step Down
October 16, 2013
San Francisco, CA – Alan Trounson, PhD, has announced he is going to step down as President of the stem cell agency, the California Institute for Regenerative Medicine (CIRM), in order to spend more time with his family in Australia.

Dr. Trounson says the agency’s governing Board, the Independent Citizens Oversight Committee (ICOC), has asked him, and he has agreed, to remain as President, while the agency begins the search for a new President.

The agency is also discussing with Dr. Trounson the possibility of him remaining affiliated with the agency in a role to be determined.

“We have accelerated the development of regenerative medicine, and I would love to continue at CIRM as these advancements begin making a difference to patients with debilitating injuries and disease. But the agency needs a full-time President and I need to spend more time with my family. The two needs are incompatible, so it is necessary for me to step down as President. This was a very difficult decision to make,” says Dr. Trounson. “I have loved working at CIRM and being part of something truly pioneering – a revolution in stem cell science and medicine – but ultimately it came down to a choice between CIRM and a life including my family.”

“Alan has been a remarkable leader of the agency for almost six years,” says Jonathan Thomas, PhD, JD, Chair of the Board. “He has led us through some challenging times, been the driving force behind some truly innovative ideas – such as the Bridges and Creativity Training Programs, the Alpha Clinic model for delivering new therapies to patients, a stem cell genomics program and an iPS cell bank for interrogating the cause and developing new treatments for really serious and complex diseases. He has helped establish us as a world leader in the field of stem cell research. We are truly grateful for his vision, his expertise and his leadership. He has created a legacy which he can be proud of.”

Dr. Trounson joined CIRM in late 2007 after serving as Professor of Stem Cell Sciences and Founding Director of the Monash Immunology and Stem Cell Laboratories at Monash University in Melbourne, Australia. He also founded the National Biotechnology Centre of Excellence – more commonly called the ‘Australian Stem Cell Centre’, co-founded the Monash Institute for Reproduction and Development – and was a pioneer in the development of human in vitro fertilization (IVF).

"Since joining CIRM in 2007, Alan has helped transform not only this agency but the entire field of stem cell research," says Sherry Lansing, Cancer Patient Advocate and longtime Chair of the Board's Governance Subcommittee. "Alan has instilled a sense of urgency in our core mission -- funding research that is leading to faster clinical trials of treatments for deadly diseases."

Jeff Sheehy, another longtime Board member and a Patient Advocate for HIV says; "Alan has been an irresistible force in moving stem cell therapies into the clinic and, as a patient advocate, I am deeply grateful to him for his relentless determination.  One of the key features of his extraordinary leadership over the last six years has been his ability to achieve one of the seminal visions embedded in Proposition 71, the seamless integration of patients, industry and researchers into a harmonious, synergistic union.  We are much, much closer to cures, thanks to his efforts."

“It’s been an amazing time, working with some of the most dedicated people and inspirational individuals,” says Dr. Trounson. “I feel both fortunate and honored to have been part of something that is transforming the face of medicine, and part of an organization that is helping lead the world in that transformation. I have been privileged to work with some very special colleagues at CIRM and I know their expertise, professionalism and dedication will be a tremendous resource for my successor.”

About CIRM: CIRM was established in November 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Act. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was overwhelmingly approved by voters, and called for the establishment of an entity to make grants and provide loans for stem cell research, research facilities, and other vital research.

Trounson Resigns as President of $3 Billion California Stem Cell Agency

The California stem cell agency today announced the resignation of Alan Trounson, who has served for nearly six years as president of the $3 billion research enterprise.

Trounson, an internationally known pioneer in IVF research, said he was resigning so that he could rejoin his family in Australia, where he has spent most of his personal and professional life.

Trounson's wife and youngest son moved back to Australia from California about three years ago. In a news release from the stem cell agency, Trounson said,

“(T)he agency needs a full-time president, and I need to spend more time with my family. The two needs are incompatible, so it is necessary for me to step down as president."

In an email to the California Stem Cell Report, Trounson said,

“I have a 12-year old son who misses me terribly for the last 2.5 years we have been separated (as do the other 3 older children). I have sacrificed considerable personal family rewards to continue to commit to driving CIRM's vision.”

Trounson joined the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, in late 2007. He was personally recruited by Robert Klein, the first chairman of the stem cell agency, during a trip to Australia. Trounson also said today that then Gov. Schwarzenegger asked him to serve.

During Trounson's tenure, the agency's portfolio has soared from $283 million and 156 awards to its current $1.9 billion and 570 awards. It has about $600 million remaining in uncommitted funds.

Trounson's departure comes at a critical moment for the agency, which is trying to find a way to continue with major operations beyond 2017, when the money for new grants will run out. It is also pressing hard to commercialize stem cell research, the primary goal of Prop. 71, the ballot initiative that created the agency in 2017.

CIRM said Trounson has agreed to stay on as the agency begins its search for a new president. The agency said it is discussing the possibility of some sort continued affiliation for Trounson with the stem cell effort.

Members of the agency's governing board had high praise for Trounson today. Jonathan Thomas, chairman of the board, said in the CIRM news release that Trounson helped established the agency as a “world leader.”

“He has led us through some challenging times, been the driving force behind some truly innovative ideas – such as the Bridges and Creativity Training Programs, the Alpha Clinic model for delivering new therapies to patients, a stem cell genomics program and an iPS cell bank for interrogating the cause and developing new treatments for really serious and complex diseases.”

Sherry Lansing, chair of the directors' Governance Subcommittee and a former Hollywood studio head and former chair of the University of California regents, described Trounson as an “irresistible force.” She said,

“We are much, much closer to cures, thanks to his efforts."

Trounson's years at CIRM were not without controversy. In 2009, Marie Csete left the agency as its chief scientific officer. She told the journal Nature her advice was “not respected” at the agency.

This year, news surfaced on the California Stem Cell Report concerning Trounson's conduct in connection with a $21,630 gift from Klein to the agency along with a conflict-of-interest case involving a scientific grant reviewer who Trounson recruited.

The stem cell agency has had difficulties recruiting candidates for president in the past -- for among other reasons -- the early legal challenges and because of its dual executive arrangement legally dictated by Prop. 71. The dual CEO situation means that the chairman and president have overlapping responsibilities. CIRM is also an unusual mix, at least for a state agency, of science, academia, business and politics. Previous presidential searches also have become enmeshed in an internal debate over whether the president should be a big name scientist or more of an administrator.

The agency currently has new challenges that include creation of a“strategic road map” for its future and tough decisions on which projects to back for commercialization – not to mention the agency's short life span if it cannot find new financing.

In response to a query, Kevin McCormack, a spokesman for the agency said no severance is being provided to Trounson. The spokesman said Trounson's current salary is $490,008, the same as when he joined the agency.

You can find the CIRM press release here. Here is the text of Trounson's email to the California Stem Cell Report.

California Stem Cell Directors Adjourn

Directors of the California stem cell agency adjourned the public portion of their meeting at 2:02 p.m. today. They moved into a closed personnel session to discuss the evaluation of CIRM President Alan Trounson. No further public action is anticipated today.

Trounson to Make London Appearance

Alan Trounson, president of the California stem cell agency, is scheduled to speak later this month in London at King's College.

The event is slated for Oct. 28. Trounson will be hosted by Fiona Watt, who is a member of the stem cell agency's newly created scientific advisory board and director of the Center for Stem Cells and Regenerative Medicine at the school.

Trounson's topic is “The California Institute for Regenerative Medicine: How to invest $3 billion in stem cell research.”

Vatican Funding for California Stem Cell Agency?

So what's with the Vatican sending cash to the California stem cell agency? One would imagine that is an improbable event since the agency is involved in human embryonic stem cell research, which is an anathema to the Roman Catholic church.

However, CIRM President Alan Trounson earlier this week disclosed the payment in an interview with Patt Morrison of the Los Angeles Times. He said,

“Last year I was invited to the Vatican to present a paper, but when I sent in a summary of what I was going to say, they decided not to have it. They sent a check to the treasurer of California and the treasurer rang us up and said, "What the heck is this check from the Vatican for?" It was for the inconvenience!”

We wanted to know a little more about this so we queried the agency about the matter. Kevin McCormack, a CIRM spokesman, said,

“The money was actually a wire transfer from the Vatican to us for $453.23 and it went to CIRM's account. It was to reimburse us for money spent on plane tickets, etc., for Dr. Trounson to attend the Vatican conference on stem cells.”   

Nature Reports on Lee Hood Conflict Case

The journal Nature and genomeweb.com today picked up the story from the California Stem Cell Report about the conflict of interest case at the California stem cell agency involving renown scientist Lee Hood of Seattle, Wash.

Science news aggregators on the Internet also relayed various versions of the story. The facts were first reported on this blog yesterday. The matter involved a $24 million application for a genome project involving Irv Weissman of Stanford. Hood was one of the reviewers in the round. Hood and Weissman are longtime friends and own property together in Montana. They have also have a number of professional relationships.

In piece by Ewen Callaway, Nature additionally referred to ongoing conflict of interest issues at the agency, including the findings of an Institute of Medicine study. Harold Shapiro, head of the study, said the agency directors make "proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight." 

The genomeweb item was also brief and did not mention the IOM study.

Grant Reviewer Conflict in $40 Million Round at California Stem Cell Agency

Internationally renown scientist Lee Hood, winner of a National Medal of Science, violated the conflict of interest policies of the California stem cell agency earlier this year when he was involved in reviewing applications in a $40 million round to create genomics centers in California.

Lee Hood
Institute of Systems Biology photo

The agency quietly disclosed the February violation in letters dated April 2 to the leadership of the California Legislature. The letter (full text below) said that Hood “agreed that there was a conflict of interest that he had overlooked.”

The conflict of interest involved a $24 million application that included participation by another eminent scientist, Irv Weissman of Stanford University, and funding for facilities at Stanford.

Hood owns property jointly with Weissman in Montana. In 2008, San Francisco Magazine, in a well-reported piece on the ballot measure that created the stem cell agency, described the property as a ranch and Hood as Weissman's “good buddy.” Hood has co-authored research papers with Weissman. Both are on the scientific advisory board of Cellerant Therapeutics, Inc., of San Carlos, Ca., a firm co-founded by Weissman. Hood's nonprofit firm, Institute for Systems Biology in Seattle, lists Stanford as a partner in the genetics of aging in humans. At Stanford, Weissman is director of the Institute for Stem Cell Biology and Regenerative Medicine, whose research involves aging. Weissman also serves on the Hood's institute's scientific advisory board.

Hood has not responded to an inquiry yesterday by the California Stem Cell Report for his perspective on the conflict of interest matter.

The conflict was not discovered by the agency during the review. It was raised by another reviewer at the end of the review, which, for the first time in CIRM history, failed to conclude with a decision supporting any of the proposals. Reviewers' comments have been sent back to applicants with another review scheduled for November. The agency said Hood will not take part in that session.

CIRM spokesman Kevin McCormack said today that Hood's conflict was “clearly a case of a new reviewer making an innocent error.” McCormack said it was not a violation of the state's conflict of interest law. The agency's conflict policies go beyond economic issues and deal with personal and professional conflicts. 

The agency's letter to the state legislative leadership said,

“Dr. Hood had not previously participated in a meeting of the GWG(grant review group), and as a result, he was not familiar with CIRM’s conflict of interest policy, particularly the policy’s inclusion of 'personal' conflicts of interest.  Thus, when he completed the conflict of interest form for the Genomics Awards review, he inadvertently neglected to indicate that he had a personal relationship with an investigator who was involved in one component of a joint application submitted by two institutions. Dr. Hood and the investigator are close personal friends and their families own vacation property together. Because of his personal relationship with the investigator, Dr. Hood had a conflict of interest with respect to the joint application under CIRM’s conflict of interest policies.”

The agency's letter said that Weissman would have received $11,000 over five years under the terms of the application, but that it also involved  "creation of a data center at one institution and three research projects that would be undertaken at (Weissman's) institution (Stanford). 

The California Stem Cell Report asked the agency about the involvement of CIRM President Alan Trounson, who has been a guest at the Montana ranch, and whether he recruited Hood as a reviewer. Last year, Trounson excused himself from participating in public discussion of another application involving Weissman.

McCormack said,

“Alan helps recruit many reviewers, including in this case Dr. Hood, but he is not involved in assigning reviewers to individual applications.”

The conflict of interest involving Hood was easily detectable in routine searches on the Internet, including a Google search on the search term “lee hood irv weissman.” The first two entries in that search yesterday turned up serious red flags.

Asked whether the agency performed “any sort of serious examination” of the confidential statements of interests filed by reviewers prior to review sessions, McCormack said,

“Yes, we do a serious examination of statements of interest from all our reviewers. However, this conflict was not identified by the reviewer either in the financial disclosure statement or identified in the conflict of interest list. Normally we do not check Google for all possible combinations of 15 GWG reviewers times about 200 individuals listed in these applications. That would be about 3000 independent Google searches to identify a possible conflict.”

The agency's legislative letter said that it plans to “amend its regulations to add greater clarity in an effort to prevent future conflicts from arising and to augment its efforts to educate reviewers, particularly new reviewers.”

Our take?

This is the latest in a series of questionable activities involving the stem cell agency, which is trying to come up with a plan to sustain itself after its state funding runs out in 2017(see here, here and here). The agency is giving more-than-serious consideration to an effort to raise funds from the private sector, which can lead to new and more difficult ethical considerations than a state-funded agency would normally face.

What these questionable activities demonstrate is that the $3 billion agency needs to give much more thought, to put it mildly, to its policies ranging from conflicts of interest to incompatible employee/director activities to the conduct of top management in providing special treatment for donors.

It also is clear that the statements of interests of reviewers are not examined closely for their accuracy by CIRM staff and attorneys. McCormack's remarks clearly indicate that the agency does not think it has time to be sure that no conflicts exist among its plethora of reviewers. That is precisely the reason reviewers' statements of interests – economic, professional and personal – should be made public rather than kept under wraps by CIRM. Then, interested parties, presumably mainly applicants, can check a panel of reviewers, if they wish, for conflicts in a particular round. Obviously, the agency can and should withhold the names of reviewers examining a specific application – the release of the names on the panel in a given review session is sufficient.

Tomorrow the CIRM governing board's evaluation subcommittee meets privately to discuss Alan Trounson's performance. It appears to be the second part of an evaluation process that began last October. Trounson's involvement with Weissman and Hood -- and his actions in connection with a $21,630 gift from a member of the public, albeit a not-so-ordinary member of the public -- should also be on the evaluation subcommittee agenda.

  California Stem Cell Agency Letter Re Lee Hood Conflict

Feigal Interim President at Stem Cell Agency

The $3 billion California stem cell agency has a new CEO – at least until early March – when Alan Trounson is scheduled to resume his fulltime duties.

Ellen Feigal, vice president for research and development, is the interim president at the agency while Trounson is in Australia. Trounson left California Dec. 20.

Trounson told the board last fall that he would be reducing his time at work to 50 percent while he is in Australia. Trounson, who was recruited from Australia to head CIRM, said he wanted to spend more time with his family. Trounson's wife and 11-year-old son live in Australia.   

Trounson Going Halftime in January and February

BURLINGAME, Ca. -- The president of the $3 billion California stem cell agency, Alan Trounson, will be working half-time while living in Australia during January and February of next year.

Trounson told the governing board of the agency of his plans at the beginning of its meeting here morning. He said he needs to spend more time with his family, which lives in Melbourne.

Trounson has an 11-year-old son with whom Trounson said he hasn't spend much time in the last 18 months.  Trounson said he intends to teach his son to surf. Trounson's daughter also will be getting married in February.

Meanwhile, directors are currently discussing approval of grants in its $20 million-plus strategic partnership round.

Trounson on Cancellation of Vatican Appearance: 'I Am Disappointed'

The California stem cell agency has issued a statement from its president, Alan Trounson, concerning the cancellation of a Vatican stem cell conference at which Trounson was scheduled to speak.

According to the Catholic News Agency, the meeting was terminated because of the scheduled appearances of researchers such as Trounson, who support hESC research. The Catholic church opposes such research.

The news agency last week quoted one Vatican insider as saying the conference had generated a scandal within the higher echelons of the church. However, the Vatican later claimed it was cancelling the meeting because of "organizational, logistical and economic factors."

Trounson's statement said,

"I am disappointed that the decision was made to cancel the conference because it offered the opportunity for a constructive dialogue on all types of stem cell research.

"Open dialogue can enhance the field as a whole and accelerate our efforts to provide new therapies for patients in need."

'Scandal' in Vatican Over Stem Cell Conference: Appearances by Trounson and Others Cancelled

The Vatican has cancelled a controversial scientific conference that would have featured scientists, including the president of the California stem cell agency, who support human embryonic stem cell research.

The conference reportedly created a "scandal" in the Vatican, according to a report by David Kerr of the Catholic News Agency. Kerr wrote,

"'I am infinitely relieved that the Church has avoided a major blunder which would have confused the faithful for decades to come,'” said one member of the Pontifical Academy who asked for anonymity in commenting to (the Catholic News Agency)."

The Catholic church opposes hESC research because of its belief that it destroys human life.

The conference would have taken place at the Vatican April 25-28 and included an audience with the pope. In addition to an appearance by CIRM's Alan Trounson, the key lecture was scheduled to have been given by George Daley of Harvard.

Kerr quoted the member of the Vactican's Pontifical Academy for Life as saying,

"The Holy Spirit has certainly shown to be present through those faithful members who drew attention to the ambiguity of the choice of speakers. I hope and pray that a review will be affected of the basis on which these congresses are planned."

Kerr also quoted another anonymous member of the academy as saying that the presence of speakers such as Trounson and Daley was "a betrayal of the mission of the academy and a public scandal."

Trounson Talks Stem Cells in Qatar

Qatar Conference Center

If our readers in the Middle East are looking for a first-hand assessment of the state of stem cell research, they might want to take in the four-day conference this week in Qatar, which features the president of the $3 billion California stem cell agency.

Alan Trounson is one of a number of international stem cell notables at the session at the new Qatar Conference Center in the tiny nation in the Persian Gulf. The country is putting on the conference as a means of developing its own stem cell research capabilities.

Qatar had a gross national product of $129 billion in 2010, with a per capita income of $138,000, according to the U.S. State Department. The population is about 1.7 million, more than 75 percent of whom are foreigners with temporary residence status.

In addition to Trounson, other California and CIRM-connected researchers are speaking at the conference in the Qatar center, which just opened in December.  They include David Baltimore, Nobel Laureate and a former director of the stem cell agency. A company Baltimore co-founded, Calimmune, of Tucson, Az., is sharing in a $20 million CIRM grant. Other CIRM grant recipients or representatives of recipient companies appearing at the conference are Irv Weissman of Stanford; Deepak Srivastava of the Gladstone Institute, and Ann Tsukamoto Weissman of Stem Cells Inc. of Newark, Ca.

Social activities at the conference include sand dune "bashing" in off-road vehicles, camel tracking along with a look at their "robot jockeys" and a visit to the original Arabic Oryx farm.

Trounson, Parthenotes and International Stem Cell

The president of the California stem cell agency, Alan Trounson, popped up in a recent article in Scientific American dealing with a method for creating pluripotent stem cells from unfertilized human eggs.

The piece by Julia Galef said that "many investigators remain frustrated" that the method "remains offlimits" for federal funding, a barrier that does not apply to financing from the $3 billion California stem cell agency.

Galef wrote that one California firm, International Stem Cell Corp., of Carlsbad, is using the method to develop products. She said the firm's work involves "a process called parthenogenesis, in which researchers use chemicals to induce the egg to begin developing as if it had been fertilized. The egg—called a parthenote—behaves just like an embryo in the early stages of division. Because it contains no genetic material from a father, however, it cannot develop into a viable fetus."

Trounson was quoted as saying, nonetheless, that "proving that unfertilized eggs will produce stable tissues in humans remains an obstacle." He said other labs need to replicate the work.

International Stem Cell has applied unsuccessfully several times for research funding from the California stem cell agency.

The Scientific American article said,

"International Stem Cell scientists have converted them into liver cells and plan to convert them into neurons for treating Parkinson’s disease, pancreatic cells for diabetes, and other tissues. Meanwhile teams at the Massachusetts-based Bedford Stem Cell Research Foundation are working to improve the efficiency of methods of deriving stem cells from parthenotes."

As researcher interest in parthenotes gains attention, the NIH is being urged to change its negative position. Late last year, Teresa Woodruff, founder and director of the Institute for Women's Health Research at Northwestern University Feinberg School of Medicine, and others called for a lifting of the NIH ban on funding for parthenotes.

California is not constrained by NIH limitations. One of the key reasons, if not the only reason, that voters approved in 2004 the ballot initiative that created the $3 billion stem cell agency was to fund research that the federal government did not. At the time, the focus was on the Bush ban on financing hESC research.

Ken Aldrich, co-chairman of International Stem Cell, circulated the Scientific American article, touting its significance.

We found this posting on the Stem Cell Pioneers web site in which Aldrich said,

“We at International Stem Cell Corporation (ISCO.OB) are finding it increasingly gratifying that mainstream and highly respected publications like Scientific American are now beginning to take notice of the fact that our parthenogenetic stem cells may well turn out to be a viable alternative to the embryonic stem cells that have dominated research and headlines for the last 10 years.

"Like embryonic stem cells, our parthenogenetic stem cells can be converted into almost any kind of cell that might ever be needed for therapy, but can also provide a solution to the two biggest issues that have surrounded embryonic stem cell research: 1) the ethics of destroying a fertilized embryo, which our process never does, and 2) the problem of immune rejection by the patient. We hope you enjoy the attached article."