USC vs. UC San Diego: Unprecedented $50 Million Settlement in Academic Recruiting War

The University of Southern California in Los Angeles is coughing up $50 million and publicly apologizing for its tactics in recruiting a star Alzheimer's resarcher from UC San Diego, it was reported Thursday.

The Los Angeles Times story about the unprecedented settlement described the case as an "ugly academic war." It had the potential of bringing $340 million in research grants to USC.  

The move settled a $185 million lawsuit that at one point involved two directors of the $3 billion California stem cell agency, along with researcher Paul Aisen.

The Times story said the "unprecedented litigation in which UC accused its private rival of repeatedly stealing away top scientists and their lucrative research grants with 'predatory' practices and a 'law-of-the-jungle mind-set.'"

Aisen was a neurology professor at UC San Diego. He and his lab staff left the La Jolla school in 2015. The Times reported that the departures were secretly orchestrated by top administrators at USC.

The Times story, written by Harriet Ryan and Teresa Watanabe with additional reporting by Bradley Fikes, said,

"The self-described 'quarterback' of Aisen’s recruitment was then dean of USC’s Keck School of Medicine Carmen Puliafito, subsequently revealed to have been using drugs and partying with criminals during the time he was courting the scientist."

At the time, Puliafito and David Brenner, dean of the UC San Diego medical school, were both members of the governing board of the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. Aisen, however, has not received funding from CIRM, which has financed $56.5 million in other Alzheimer's research. 

According to the Times, the apology said that the recruitment tactics "did not align with the standards of ethics and integrity which USC expects of all its faculty, administrators and staff."

The Times story continued,

"UCSD Chancellor Pradeep Khosla welcomed the settlement and said he was open to working with USC in the future.
"'For California and the country, it’s good that two great research universities can work on the Alzheimer’s problem,' he said in an interview. 'I look forward to a constructive collaboration in the future in solving other societal problems.'
"It is not unusual for professors to move to other institutions, but it is often a collegial process in which the universities work together to transfer grants and research."

The Aisen case was not the first instance of USC researcher poaching. The Times wrote,

"In 2013, Puliafito lured two well-funded brain researchers from UCLA, outraging the state university, which complained to government regulators. USC agreed to pay UCLA more than $2 million in a confidential settlement."

$185 Million California Rumpus over Researcher Raiding

To some outside the California scientific and academic community, it might seem like a cat fight replete with allegations of  a "law-of-the-jungle mindset," loyalty oaths, "petty academic politics" and -- literally -- paper clip theft.

All of which is mentioned in court filings in the squabble, if you want to call it that. But this is not minor stuff. It involves a $185 million, 2015 lawsuit by the University of California (UC) against the University of Southern California (USC), a private school in Los Angeles. Basically, UC wants the money from USC because UC thinks one of its high-powered scientists was hijacked by USC.

Some of the details emerged today in the Los Angeles Times, which wrote about the case in connection with the Carmen Puliafito affair. He is the former dean of the USC school of medicine as well as being a member of the governing board of the $3 billion California stem cell agency, a position he no longer holds.

The headline on the story said,

"USC dean drug scandal could take costly toll on school's legal battle with UC system"

Puliafito was dean of the medical school when it hired away from UC San Diego a star Alzheimer's disease researcher, Paul Aisen, who had the potential of bringing $340 million in research grants to USC. In addition to the prestige of having Aisen on campus, the school would receive a significant percentage of the grants as part of overhead costs.

The Times reported that during Puliafito's eight years at USC, he spearheaded an effort that lured more than 70 "transformative faculty" from UC schools, Stanford, Harvard and other prestigious rivals.

One was USC's longtime athletic rival, UCLA. According to the Times, the successful wooing of Arthur Toga and Paul Thompson, two well-funded neurology researchers, in 2013 "outraged" UCLA, which complained to federal regulators.

The Times wrote,

"It was not unusual for professors to move to other institutions, often with the first university cooperating in the transfer of grant funding to the new school. But in UC’s view, USC had acted beyond accepted norms by targeting academics based on grant funding and strategizing secretly with those researchers while they were still employed by UC about moving grants to USC. The schools reached a confidential settlement requiring USC to pay UCLA more than $2 million, according to a copy of the agreement obtained through a public records request."

The lawsuit is now in San Diego Superior Court. No trial date has been set.

Craig Venter's "Road to the Cure" Stem Cell Venture

Craig Venter aboard his research yacht in 2004.
Sidney Morning Herald/Dallas Kilponen photo

Craig Venter, the international genomics superstar, is staking out a claim on stem cell turf.

The move comes with the formation of Human Longevity, Inc.(HLI), Venter's new company in the La Jolla, Ca., area.

Venter kicked off the enterprise this week with the announcement that it had $70 million in backing. The company press release said the firm is a “a genomics and cell therapy–based diagnostic and therapeutic company focused on extending the healthy, high performance human life span.''

Most of the news coverage concentrated on genomics. But the firm's press release also said,

“The company will be embarking on an ambitious multi-pronged effort utilizing stem cell therapy advances to enhance and improve the healthy life span. HLI's work is premised on the theory that as the human body ages many biological changes occur, including substantial changes and degradation to the genome of the differentiated, specialized cells found in all body tissues. There is also a depletion and degradation of healthy regenerative stem cell populations in the body over time. HLI will monitor the genomic changes which occur during stem cell differentiation, normal aging, and in association with the onset of disease.

"'The global market for healthy human longevity is enormous with total healthcare expenditures in those 65 and older running well over $7 trillion,' said Dr. (Bob) Hariri. 'We believe that HLI's unique science and technology, along with our business leadership, will positively impact the healthcare market with novel diagnostics and therapeutics.'"

Bob Hariri
HLI photo

Hariri. the former CEO of Celgene Cellular Therapeutics, is vice chairman and co-founder of the new firm, which is located on a street called “Road to the Cure.”

Writing on Biopolitical Times, Pete Shanks of the Center for Genetics and Society in Berkeley picked up part of the conference call earlier this week announcing the company. Shanks said, .

"Asked on this conference call if HLI would be in touch with the new Sanford Stem Cell Clinical Center (at UC San Diego), Venter blandly noted that Larry Goldstein, who heads the center, is on the HLI advisory board. (Peter) Diamandis added:

'Stay tuned for more announcements on the stem cell side.'"

Diamandis is a co-founder of the firm and CEO of the X Prize Foundation. The Sanford stem cell center was funded with $100 million last fall from billionaire Denny Sanford. Goldstein has received $21 million in funding from the California stem cell agency. Three other representatives from UC San Diego are on the HLI scientific advisory board including David Brenner, a longtime member of the governing board of the California stem cell agency.

Venter was a featured speaker at a California stem cell agency governing board meeting in 2012. The J. Craig Venter Institute is a partner in the $40 million genomics stem cell award made by the agency to a team led by Stanford in January during a controversial award process.

Denny Sanford Donates $100 Million for Stem Cell Research at UC San Diego

Denny Sanford, UC San Diego photo

The richest man in South Dakota, a state that looks askance at human embryonic stem cell research, is giving $100 million to promote the stem cell field in California.

He is Denny Sanford, a 77-year-old billionaire who made his fortune in the credit card business. Sanford is donating the money to UC San Diego. In a press release from the university, he said,

“I believe we’re on the cusp of turning years of hard-earned knowledge into actual treatments for real people in need. I want this gift to push that reality faster and farther.”

The gift is not Sanford's first to stem cell research in the San Diego area. He gave $30 million to Sanford Consortium for Regenerative Medicine in 2008.

The announcement of the $100 million donation is the sort of news that excites the stem cell field globally but especially in California, where the state is funding stem cell research to the tune of $3 billion. The news helps generate optimism about the stem cell field and can create an environment that could attract more philanthropy and business investments.

That is not a small matter for the state's stem cell agency, which will run out of cash for new grants in 2017. Next month, directors of the agency are scheduled to take their first look at a proposed strategic roadmap for future funding, which may well involve a combination of public and private funding.

According to Gary Robbins of the San Diego UT, Sanford's latest gift is part of a $275 million stem cell effort at UC San Diego. Robbins said it will allow the university to hire 20 to 25 scientists, many of whom will be seeking stem cell agency grants, and also help to support recruitment of patients for clinical trials. UC San Diego has already received $138 million in 61 awards from the stem cell agency, ranking fourth among institutional recipients.

The UC San Diego press release yesterday also quoted David Brenner, vice chancellor for health services at the campus and a member of the California stem cell agency governing board, as saying,

“We are the only academic medical institution in the region with the scientists, physicians, facilities and clinical delivery system to bring the promise of stem cell therapies to fruition. No place in the world has a better chance of success.”

Larry Goldstein, currently director of the UC San Diego stem cell program, will head the new Sanford Stem Cell Clinical Center at the school.

The news coverage on the gift, which included stories in the Los Angeles Times and other publications, contained a number of mentions of the state stem cell agency, a plus for the enterprise, which is working hard to raise its public visibility.

Sanford's latest gift is not his largest. He gave $400 million to Sanford Health, a diabetes research center in South Dakota in 2009. He has donated more than $1 billion altogether and intends to give away all his money by the time he dies. He likes to say, “Aspire to inspire before you expire.”

Sanford lives in Sioux Falls but has a home in the San Diego area, where he has long been active in the community as well as in support of Prop. 71, the measure that created the state stem cell agency in 2004.

Sanford is also a sailor, a particular point of interest for this writer, who has lived on a sailboat for the last 15 years south of the border. Sanford has been active in San Diego sailing circles for some time. But his interest goes back a number of decades. He raced sailboats on Lake Minnetonka in Minnesota, where he grew up. And in 1973, he received the Bail Bond Award from the Wayzata Yacht Club on Lake Minnetonka for unspecified acts that demonstrated “the greatest love, spirit, and care for the Wayzata Yacht Club.”