The Afterlife of the California Stem Cell Agency: Venture Philanthropy and Big Pharma

The $3 billion California stem cell agency, which is facing its possible demise in five years, is exploring an afterlife that dips into "venture philanthropy" on a national level as well as investment ties with Big Pharma.

The Golden State's unprecedented research program laid out those possibilities in a "transition plan" sent this week to Gov. Jerry Brown and the state legislature. The plan was required under a law passed two years ago. The agency's future direction was also aired at a meeting last month in Los Angeles.

The California Institute for Regenerative Medicine(CIRM) will run out of funds for new grants in 2017. Its only real source of funding is cash that the state borrows (bonds). CIRM says that only $864 million remains for new research awards, and some of its recent grant rounds exceed $200 million. The current position of the agency is that it is "premature" to consider asking voters in financially strapped California to approve another multi-billion dollar bond measure.

The venture philanthropy effort involves creation of a nonprofit organization. CIRM Chairman Jonathan Thomas said in January that he is "test-driving (the proposal) with some high net worth donors we know to be interested in the stem cell space." Thomas was addressing the Citizens Financial Accountability and Oversight Committee, the only state entity specified charged with overseeing the agency and its directors. He said,

"We're busily putting together in conjunction with a national organization called the Alliance for Regenerative Medicine the plans for a nonprofit venture philanthropy fund."

He said it would "would accept applications for awards from researchers and companies all over the country, not just those funded by CIRM, but those funded by NIH or the New York Stem Cell Foundation or the state of Maryland or whatever."

The Alliance for Regenerative Medicine is an industry-dominated lobbying group, based in Washington, D.C.  The group's executive director and co-founder is Michael Werner, a longtime pharma and health industry lobbyist, who is also a partner in the influential Washington law firm of Holland and Knight.

The "biopharma investment fund" proposed by CIRM is less well developed. CIRM said it plans to explore opportunities with companies to fund stem cell research in California. The transition document uses as an example an $85 million deal between Pfizer and UC San Francisco, which gives the company special access to biomedical research.

The transition plan also touches on other issues such as winding down grants after its new grant money runs out, along with protecting intellectual property.

The plan could be considered a marketing tool for the agency's afterlife efforts. The document devotes a good portion of its nine pages to recounting the history of CIRM and touting its accomplishments.

Thomas used the occasion of the submission of the plan as a springboard for a piece yesterday on the CIRM research blog.He concluded his item by quoting from the plan itself. CIRM's achievements during the past seven years, he wrote, "will allow California to continue world (stem cell) leadership in the coming decades."

IOM's Lagging Effort for Comments on the $3 Billion California Stem Cell Agency

With the $700,000 Institute of Medicine inquiry into the performance of the California stem cell agency half complete – at least publicly – the blue-ribbon panel seems to be coming up short on comments from outside of the agency itself.

The major public effort by the IOM to secure comments is the passive posting of forms to be filled out on the IOM web site.

How many responses has the IOM received on those forms? The IOM has not disclosed that information despite two inquiries earlier this month by the California Stem Cell Report.

The prestigious institute is undertaking the study of $3 billion agency under contract with CIRM, which is paying the IOM $700,000. Some CIRM directors have expressed hope that the IOM findings will help build support for another multi-billion dollar state bond measure to renew financing for CIRM. It is scheduled to run out of money for new grants in five years.

So far, the IOM panel has held two public meetings, one in Washington, D.C., and one in the San Francisco area. The final California hearing is scheduled for April 10 in Irvine with the last public meetings scheduled for later this year in Washington.

So far, the panel has heard only from CIRM employees or directors as well as researchers who have received tens of millions of dollars in CIRM grants. The IOM has not heard publicly from a single independent witness.

The IOM has posted on its web site forms seeking comments from the public, grant recipients, beneficiary institutions and businesses. However, passive postings of forms are unlikely to generate more than a relative handful of responses. To produce significant numbers requires aggressive and targeted follow-up.

It is also unclear exactly what the IOM is doing to seek information from biotech businesses and unsuccessful grant applicants. Some businesses have complained publicly about the tiny share of funding that industry has received. And some CIRM directors have expressed concern for several years about the inadequacies of business funding.

On Feb. 12, the California Stem Cell Report queried the IOM about its efforts at outreach, asking for specifics on what is being done. Christine Stencel, a spokeswoman for the IOM, replied,

"The IOM has been obtaining and compiling lists of organizations and people to circulate the questionnaires as widely as possible among target groups. For example, IOM has sent a notice to some 300 stakeholder groups encouraging participation."

Other specifics were not forthcoming. (The full text of the questions and responses can be found here.)

On Feb. 15, the California Stem Cell Report followed up with these additional questions,

"Regarding the 300 stakeholder groups, how are those defined? Please give me a few examples.

"Based on your response, is it correct to say that the IOM is not sending out questionnaires directly to all CIRM grant applicants, including those who were rejected?

"Is it correct to say that no special effort -- other than that described in your response -- is being made to seek responses from stem cell businesses?

"The failure to provide numbers on the responses so far would indicate that the numbers are so small that the IOM is choosing not to disclose them. If that is not the case, please email me the numbers."

As of this writing, the IOM has not responded to those questions. We will carry its response verbatim when we receive it.

Text of IOM Statement on Efforts at Soliciting Comment on CIRM

Here is the text of the questions submitted Feb. 12 by the California Stem Cell Report to the Institute of Medicine concerning its attempts to secure comments on the operation of the $3 billion California stem cell agency along with the IOM response.

The response from Christine Stencel, a spokeswoman for the IOM, follows these questions from the California Stem Cell Report.

"I will be writing a piece on Wednesday dealing with the online surveys that IOM has posted. For that piece, please tell me very, very  specifically what the IOM is doing to generate responses. For example, is the IOM buying ads in newspapers or online, asking the public to fill out the forms? Is it hiring a polling firm to call households for responses?  Also please tell me exactly what is being done to generate responses on all the other surveys that have been posted.

"Additionally, please tell me how many responses that the IOM has received so far in each category on the survey forms for CIRM grantees, industry partners and leadership. Thank you."

The IOM response on Feb. 15:

"The IOM has been obtaining and compiling lists of organizations and people to circulate the questionnaires as widely as possible among target groups. For example, IOM has sent a notice to some 300 stakeholder groups encouraging participation. We do not have the resources to hire a polling firm or place ads.

"The purpose of these questionnaires is to extend the committee's information gathering beyond in-person meetings and the standard listing of an email address or phone number for the study on the project website. Not all people who might have useful experiences or perspectives on CIRM may be able to attend the in-person meetings and not all may visit the project website and find the study contact information. This is a proactive effort to reach more people.

"Anyone who knows of individuals or organizations with information on CIRM that would be useful for the committee's knowledge can share the links to the questionnaires with them. This will help spread the word and get the committee insights they need.

"I don't have information on the number of responses so far. Ultimately, as noted at the top of each survey, the responses will be aggregated and de-identified and placed in the public access file in addition to being shared with the committee.

"I trust this will be useful for your readers."

The California Stem Cell Report then asked the following questions on Feb. 15.

"Thank you for your response. A few follow-up questions:
Regarding the 300 stakeholder groups, how are those defined? Please give me a few examples.

"Based on your response, is it correct to say that the IOM is not sending out questionnaires directly to all CIRM grant applicants, including those who were rejected?

"Is it correct to say that no special effort -- other than that described in your response -- is being made to seek responses from stem cell businesses?

"The failure to provide numbers on the responses so far would indicate that the numbers are so small that the IOM is choosing not to disclose them. If that is not the case, please email me the numbers. Thank you."

The IOM had not responded to the follow-up questions as of this writing on Feb. 21.

ACT's Top Scientist Sells $1.5 Million in Company Stock

The mainstream media waxed enthusiastic last month when a California hESC clinical trial reported positive results dealing with blindness.

The report was first published account of a human trial of embryonic stem cell based therapy and involved Advanced Cell Technology, which is headquartered in Santa Monica, Ca. Despite a glowing reception of the trial's results, the firm is years away from being able to market the therapy at a profit – if it ever can do so.

The firm's chief scientific officer, Robert Lanza, moved quickly, however, to capture some monetary gain from the news, which was announced in a press release Jan. 23 by ACT.

On Jan. 23 and 24, Lanza sold 7.7 million shares in ACT for $1.5 million, according to SEC documents. He sold the stock at 18 and 19 cents a share. That compares to an ACT price of about 8 cents at the end of 2011. Lanza still holds 26 million shares in the firm. The acquisition price of the stocks is unknown.

There is nothing to suggest anything untoward about Lanza's sale. But it is a reminder that creating a successful stem cell therapy is about making money. Without a profit, there will be no therapy, as Geron reminded everyone last November when it dropped its longstanding hESC trial.

The California Stem Cell Report has asked Lanza if he has any comments about the sale of the stock. We will carry his remarks verbatim when we receive them.

The Seeking Alpha web site appears to have been the first to report the sale. Here is their complete item.

"Advanced Cell Technology, Inc. (ACTC.OB): ACTC is a development-stage biotech focused on the development and commercialization of human embryonic and adult stem cell technology in the field of regenerative medicine. On Wednesday, Chief Science Officer Robert Lanza filed SEC Form 4 indicating that he sold 7.7 million shares for $1.5 million, ending with 26.0 million shares after that sale. ACTC shares have rallied strongly since the beginning of the year, up from 8.2 cents at the end of last year to currently in 14-15c range after rising above 20c just earlier this week."

CIRM Contracting: $1.3 Million for IT, $887,282 for Legal

The California stem cell agency this week performed its semi-annual public disclosure of its contracts with outside firms, the second largest item in its operational budget of $18.5 million.

The contracts are scheduled to run about $3.3 million this fiscal year, according to the budget approved last May. That figure is up about 18 percent from the previous year.

According to the contract information posted this week, the two largest contracting expenditures this year are for information technology work, including the ongoing struggles with the grants management system – $1.3 million – and legal help – $887,282. The figures were compiled by the California Stem Cell Report. CIRM did not provide totals.

Outside contracts are second to the cost of salaries and benefits at the agency. One reason for the size of the contracting expense is the small size of the CIRM staff, which is now about 50.

The contracting information will be presented to the CIRM directors' Governance Subcommittee next Friday. The committee is being asked to approve an increase in the contract with Kutir Corp., from $250,000 to $470,000. By the end of 2011, CIRM had already paid out $219,680 to Kutir. The firm provides software development services.

Infonetica, which provides technology advice, would also see an increase from $236,060 to $300,000, under the staff proposal.

A staff memo to the board said,

"(Kutir's) services are key as CIRM continues to progress in automating its grants management systems to meet the requirements of both new RFAs as well as ongoing reporting obligations.""

The public can participate in the Governance meeting at locations in San Francisco, Sacramento, Irvine, Los Angeles, South San Francisco and La Jolla. Specific addresses can be found on the agenda.

Stem Cell Agency on Bee Article and Voter Expectations

The California stem cell agency today said the seven-year-old "audacious vision" of voters when they created the $3 billion research effort "is still possible."

The comment was made in an item on the agency's blog by Amy Adams, the agency's communications manager.

Her entry point was an opinion piece in The Sacramento Bee on Sunday exploring some of the ins and outs of the agency. Among other things, CIRM President Alan Trounson was quoted by writer David Lesher as "optimistically" predicting successful California stem cell treatments in five years.

Adams wrote,

"Lesher makes clear that there are many challenges ahead in bringing new therapies to patients: he said of the voters who created CIRM, 'It was pretty audacious of them in 2004 to try to create another economic driver like Silicon Valley and save lives at the same time.'

"And while the vote was audacious, we agree with his conclusion that despite risks and challenges that vision is still possible." 

Blue-Ribbon Panel Seeks Public Comment on California Stem Cell Agency

The California public is being given a chance to weigh in with anonymous comments about what they think of the performance of the $3 billion California stem cell agency.

Their opinions are being sought by a blue-ribbon, Institute of Medicine panel. The IOM is being paid $700,000 by the agency to examine its operations.

The questions include the importance of stem cell research and CIRM's role, its openness and transparency, an assessment of its grant programs and how it should share information with the public, suggestions for improvements and more.

The online form was posted recently on the IOM web site and can be found here. The deadline for submissions is March 19.

The IOM also has survey forms for academic and non-profit CIRM grant recipients, CIRM grant recipients that are businesses(which the IOM calls "industry partners") and "leadership of CIRM-funded institutions." The deadline for those is March 19 as well.

Trounson Predicts -- 'Optimistically' -- Successful California Stem Cell Treatments in Five Years

Alan Trounson, president of the $3 billion California stem cell agency, says he is "optimistic" that some stem cell treatments developed in California will prove successful in humans in the next five years.

Trounson was quoted in The Sacramento Bee today in an opinion piece written by David Lesher, government affairs director of the Public Policy Institute of California. Lesher provided something of an overview of the agency, including pluses and minuses. He wrote,

"Those who speculate say that the most advanced stem cell treatments are still probably a decade away from becoming available to patients. And the cost to get them there will far exceed California's $3 billion investment."

But Lesher, a former political writer for the Los Angeles Times, also wrote,

"...(T)he president of the state's stem cell agency said he is 'optimistic' that at least a few California treatments will prove successful in humans in the next five years."

Lesher said,

"That may mean a genetically modified stem cell treatment to cure AIDS, (Trounson) said; it may mean a treatment that eliminates the need for some diabetics to monitor or inject insulin; there might be a treatment to restore eyesight to those suffering from a major cause of blindness.

"'These are the kind of things we need to get through,' he said. 'I hope that we have a number of them showing proof by 2015 or 2016. I'm optimistic. The caveat is that nothing is guaranteed.'"

The stem cell agency will run out of cash for new grants in 2017 and will go out of business shortly thereafter unless voters approve another multibillion dollar bond measure or it manages to secure private financing.

Lesher discussed the difficult financial environment for private financing of stem cell therapies and how it has changed since the the stem cell agency was created by voters seven years ago.

"The hope was that California's bond (financing for CIRM) would jump-start a biotech industry by building the laboratories and seeding early research to a point where private support would take over.

"But that point of commercial viability is a moving target as private investors have grown more risk averse and the regulatory path for such radical new therapies is unpredictable. So the biggest question today in the stem cell field is not whether the science will work someday. The big questions are how will we pay for it, how will regulators know when it's ready and when will it happen?"

Lesher said,

"The problem is that even the most advanced experiments in (CIRM's) translational portfolio are still a couple of years away from the same point in the regulatory pipeline where high cost and uncertainty forced Geron out of the field. And there is still no clear answer about how to resolve those same challenges, although the cost-benefit calculation will be different for other treatments."

Lesher concluded,

"Unlike high-speed rail, which continues to have strong support from the governor, the stakes surrounding California's stem cell investment have been largely invisible. That's too bad, because stem cell science is a much smaller investment for taxpayers with a greater possible return."

Our comment? In what CIRM Chairman Jonathan Thomas has declared as a "war" for public support, today's piece in The Bee was a bit of a victory. Although the article did mention difficult issues, it was generally upbeat about CIRM. The piece focused on the wonders of the science and bypassed many of the negatives about CIRM, including its built-in conflicts of interests and its reluctance to correct long-identified problems. Also absent was a discussion of how CIRM signed a $25 million loan agreement with Geron only three months before the company abandoned its clinical trial. That omission could be considered a PR plus for the agency. Overall, the folks at CIRM should be pleased by the article.

California Stem Cell Agency Seeking More Help on Push for Cures

The California stem cell agency has decided to put more manpower behind its push to drive therapies into the clinic.

The agency this week posted an opening for a senior development officer, who would be paid up to $226,108 annually.

The new hire would have a strong background in industry and an advanced degree. The job posting calls for a minimum of 10 years experience and expertise in "in developing, designing and assessing preclinical and early clinical safety and efficacy, within regulatory framework."

The position reports directly to Ellen Feigal, CIRM's VP for research and development. The job description says the person would "directly interact with investigators on CIRM’s clinically applicable research programs to help provide product development guidance from preclinical, manufacturing, and first in human to early phase clinical regulatory perspectives."

The $3 billion agency, which has yet to produce the cures promised to voters in 2004, is re-examining its strategies, particularly with an eye to backing a product that would actually be used on patients.

A $25 Million 'Cautionary Tale': CIRM and Geron

California's $25 million venture into the financing of what once was the first hESC clinical trial in the nation serves as a "cautionary tale" for states that use taxpayer dollars to boost technology, according to a New York public policy expert.

The comments by James W. Fossett, who directs the Rockefeller Institute of Government health, Medicaid studies and bioethics research programs, come midway through an Institute of Medicine examination of the performance of the $3 billion California stem cell agency. Its directors are also currently involved in a revision of of the agency's strategic plan.

Writing on the Rockefeller Institute's web site, Fossett analyzed the fallout from Geron's decision last fall to abandon its clinical trial after it determined the effort was too costly. Just three months earlier, the California stem cell agency had signed a $25 million loan agreement with Geron.

Fossett said,

"For the many states using taxpayer dollars to stimulate jobs in a wide range of technologies, this is a cautionary tale."

He wrote,

"(Geron's) decision has attracted widespread opprobrium from bloggers, stem cell advocacy groups, bioethicists and more than a few newspaper columnists — one blogger called it the 'stem cell misstep of the year.'

"This disapproval has also spilled over onto the California Institute for Regenerative Medicine (CIRM) — the state agency that operates the $3 billion California stem cell research program."

He continued,

"CIRM is coming under considerable political pressure to produce viable therapies to justify the large amount of money it’s been spending, and some have interpreted its hasty involvement with Geron as motivated by the desire to have something concrete to brag about."

Fossett said, however,

"There may be less here, however, than all the rhetoric would suggest. While Geron’s trial had acquired a lot of symbolic baggage because of its status as a 'first,' the decision to pull the plug only reflects one decision by one company about one therapy. The company was looking at having to spend a lot more money over a long period to get the therapy through the clinical trials process for what would likely be a small return.

"The political difficulties that Geron’s withdrawal have caused CIRM, however, have lessons for states proposing to spend significant amounts on biotechnology and other research in hopes of stimulating economic growth. Spending money on research intended to develop new therapies is highly risky. The science is difficult, expensive and evolves at a rapid pace that is difficult to integrate with earlier understandings. There are considerable cultural, political and financial obstacles to getting new products out of the lab and into the clinic."

Fossett suggested several approaches that might ease some of the risks. He cited the 2010 CIRM external review report that recommended adjusting priorities. Fossett said,

"States might experiment with providing more support to biotech companies and entrepreneurs with successful track records and less to basic research, which could increase the odds of short-term success."

At last month's CIRM board meeting, directors engaged in what CIRM is inclined to call a robust discussion of priorities for basic research vs. more focused funding for driving therapies into the clinic.

Fossett cited another external review recommendation that CIRM seek out research with a "high probability of clinical success that could 'come from either inside or outside CIRM-funded research, perhaps out of industry and even from outside of California.'" 

Fossett additionally mentioned the use of venture capital techniques that would give states "a chance to participate in the (financial) benefits of successful therapies."

Nonetheless, he wrote,

"Most products and most companies will likely continue to fail."

Last Public Hearing in California for CIRM Performance Evaluation Scheduled for April

The blue-ribbon Institute of Medicine panel looking into the performance of the $3 billion California stem cell agency will hold its final public hearing within the state on April 10 at UC Irvine.

No details have yet have been posted online about the matters to be discussed or the witnesses to be heard. So far, the panel has not heard publicly from a single independent witness. The panel's final report and recommendations are scheduled to be released this fall, following its only remaining public meeting, scheduled for Washington, D.C.

The IOM has also posted a list of documents provided to the panel during a closed session last month in South San Francisco, its only public hearing in California so far. Virtually all of documents came from the CIRM itself, which is paying the IOM $700,000 for the study.

One exception was the 2009 report by California's good government agency, the Little Hoover Commission.

In its report, the commission concluded,

"CIRM’s governance structure is not adequate to protect taxpayers’ interests or serve its own ambitious goals."

The commission recommended a number of changes to strengthen CIRM's governance structure, improve accountability and reduce conflicts of interest. They included restructuring and reducing the size of the 29-member board and eliminating the controversial dual executive arrangement at CIRM.

CIRM strongly resisted nearly all of the recommendations, some of which would have required legislative or voter approval. As of last week, the IOM panel had not contacted the Little Hoover Commission for testimony.

(Click on the "closed session summary" at this location to find the information about the documents that were provided.)

The IOM also has posted a list of topics discussed by its panel in closed session last month. They included a follow-up on bias and conflicts of interest, committee composition, discussion of the previous day's hearing and discussion of data needs.

The April meeting is being held at the Beckman Center at UC Irvine, which has received $77 million from CIRM. The agency's board of directors includes two top academicians from UC Irvine: Oswald Steward, who serves on the board as a patient advocate and is director of the Reeve-Irvine Research Center for Spinal Cord Injury, and Susan Bryant, associate executive vice chancellor for research at Irvine and who serves on the CIRM board as in her capacity as an executive officer from a UC campus with a medical school.

 

CGS: Broader Perspective Needed in IOM-CIRM Performance Evaluation

The Center for Genetics and Society has filed a brief statement with the Institute of Medicine panel examining the performance of the California stem cell agency, expressing the hope that the inquiry will include "a broader range of sources."

Marcy Darnovsky, associate executive director of the Berkeley group, said that "a meaningful review by (the IOM) committee could make an important contribution to needed changes at the agency." Darnovsky's organization has followed the stem cell effort since its inception.

She noted that CIRM is "a public agency spending increasingly scarce public resources" and has raised the possibility of seeking another multibillion dollar bond measure from voters.

The IOM inquiry has finished half of its public process and is yet to hear an independent analysis of the stem cell agency, which is paying $700,000 for the study.

Earlier Darnovsky told the California Stem Cell Report that the Institute of Medicine has not contacted her organization for comments, although she has spoken with the public relations person for the IOM.

Here is the text of Darnovsky's statement sent to the IOM.

"The Center for Genetics and Society is a public interest organization working to ensure responsible uses and effective societal governance of human genetic and reproductive technologies.  We support embryonic stem cell research, but have been concerned for some years about a number of aspects of the field, and of the California Institute of Regenerative Medicine in particular.

"We have been closely following CIRM since the campaign for Proposition 71 that established it in 2004. We have attended numerous meetings of the agency’s governing board and Standards Working Group, worked with other public interest groups who share our concerns about CIRM, written frequently about CIRM in our publications, and been cited dozens of times in articles about CIRM in key state and national news outlets.

"In 2006, we published The California Stem Cell Program at One Year: A Progress Report, which assessed CIRM's performance to that date and offered recommendations. See http://www.geneticsandsociety.org/downloads/200601report.pdf

"In 2008, CGS policy analyst Jesse Reynolds gave invited testimony to the Little Hoover Commission’s hearing on CIRM. See http://www.geneticsandsociety.org/article.php?id=4386

"We are encouraged that the Institute of Medicine is undertaking an independent assessment of CIRM, though we hope that you will invite input from a broader range of sources than were represented at the meeting last month in San Francisco. With key questions about the future of CIRM unresolved, and its leadership contemplating a campaign for another bond measure.

"As I wrote in a recent commentary that expressed our disappointment with the roster of speakers at last month’s hearing,

"Ballot measure or no ballot measure, CIRM will continue to disperse the public money it controls – another billion and a half dollars. This is a public agency spending increasingly scarce public resources. It is funding a field of research in which we place great hopes for medical and scientific advances. These factors make it all the more crucial that CIRM follow the basics of good governance and public accountability, and eschew the hyperbole and exaggerated promises that have tainted stem cell research for so long.

"See  http://www.geneticsandsociety.org/article.php?id=6045

"Please let us know if we can be of help. We would be very glad to share our insights and recommendations."

IOM Coming Up Short on Independent Analysis of the California Stem Cell Agency

The blue-ribbon panel examining the performance of the $3 billion California stem cell agency is midway through its public process and is yet to hear from a single independent witness during its open sessions.

The panel's report and recommendations are due this fall and are expected to have a major impact on the seven-year-old agency and its future.

So far, the IOM panel has heard only from employees or directors of the agency and persons representing institutions that have received $418 million in CIRM cash.

The panel of scientists and academics was put together by the prestigious Institute of Medicine under a $700,000 contract with the stem cell agency itself. At the 2010 meeting during which agency directors approved the contract, they expressed hope that the IOM panel's findings would bolster public support for another multibillion dollar bond measure for the agency, which expects to run out of funds for new grants in 2017.

Last week, the California Stem Cell Report asked the IOM about its plans to gather independent or critical information about the stem cell agency's performance. With only one more California public meeting scheduled, the IOM said that it is seeking the "full range of perspectives" but did not respond directly to questions about the specifics of how it is going to fulfill that task.

None of the four organizations in California that have an independent perspective on CIRM have been contacted by the IOM, the California Stem Cell Report has been told. They are the state's Little Hoover Commission, the Center for Genetics and Society, Consumer Watchdog and the Citizens Financial Accountability and Oversight Committee, which is the only state body specifically charged with oversight of CIRM and its directors and which is chaired by the state's top fiscal officer, Controller John Chiang. A spokeswoman for the IOM panel said, however, it plans to touch base with at least some of the four.

In response to questions from the California Stem Cell Report, Christine Stencel, the IOM spokeswoman, said the IOM also wants to hear comments from businesses whose applications have been rejected by CIRM. However, she said the panel is still working on "ways to get them." She did not respond directly to questions about how many of such businesses would be interviewed or how they would be selected. The tiny number of CIRM grants to business is a sore spot with industry. Even directors and CIRM's own "external review" panel have said much more is needed.

In response to a question about complaints about conflicts of interest on the part of CIRM reviewers, Stencel was also non-specific, saying only that the panel wants to "obtain all relevant insights." She did not respond directly to a question about whether the panel would examine "private complaints" filed with CIRM by rejected applicants.

Currently the IOM has forms posted online that interested parties, if they know about the existence of the forms, can use to comment on CIRM. We asked whether the panel plans to do more than passively post the forms, specifically whether it plans to email them to all CIRM applicants who were rejected. We also asked about IOM plans to follow up to generate an adequate response. Stencel said the IOM is "proactively working" to get survey responses but did not say what specific steps it was taking.

Our comment?

The IOM has a well-deserved reputation for rigor and thoroughness. However, the IOM is all but unknown to 99 pecent of the public, which will be the ultimate consumer of its findings on the stem cell agency. The fact that the IOM is being paid $700,000 by CIRM will undoubtedly raise questions in the minds of some about IOM's own objectivity. The panel itself consists of persons who have like-minded interests and sympathy with CIRM and its 485 grant recipients. No member of the panel is likely to publicly discourage more scientific research, even if CIRM is deemed to be failing to fulfill the voters expectations in 2004 when they created the agency. All the more reason to aggressively seek out those with contrary views about CIRM's performances, if the IOM's report is to have maximum credibility.

Earlier this week we heard from a knowledgeable and longtime observer of the research scene, who said that the IOM looks at things "differently than regular people" and views scientists who receive funding from CIRM as "independent." The IOM's Stencel responded by reiterating that the IOM is seeking the full range of information from the full range of sources.

The IOM evaluation of CIRM's performance is much too far along not to have progressed further with its attempts to hear from independent and critical voices about CIRM. Generalizations to the effect that "we are going to get to it" do not serve the panel well. The IOM should lay out publicly and quite specifically its plans to aggressively seek thoughtful analysis from parties that do not have financial or professional links to CIRM, as well as from those who feel they have received a short shrift from the $3 billion enterprise.

You can read the full text of the questions from the California Stem Cell Report and the IOM responses here.

Text of IOM Responses to Questions about Lack of Independent Analysis

Here is the text of questions from the California Stem Cell Report and answers from the Institute of Medicine concerning its plans to secure independent perspectives during the IOM's examination of the California stem cell agency. So far, the IOM has not heard publicly from any independent sources.

Christine Stencel, a spokeswoman for the IOM, responded for the IOM. She first gave an overall statement. Then she answered the specific queries. We have inserted the questions from the California Stem Cell Report into her text  in order to make the Q&A easier to follow.

The IOM's general comment:

"The committee and staff are planning their next info gathering sessions. Specifics of these events haven't all been worked out yet, but one overall point is that the committee believes it is important to hear the full range of perspectives and experiences with CIRM and the committee members are actively pursuing sources of information that will allow them to adequately answer the questions they've been tasked to explore. The study is ongoing and there are still a lot of people and resources to tap and information to learn.

"To your specific questions:"

California Stem Cell Report:

"Does the IOM have plans to talk with or seek statements from such groups as the Little Hoover Commission and the Center for Genetics and Society or state Controller John Chiang?"

IOM response:

"Yes. And the committee is reading all the past reviews of CIRM."

California Stem Cell Report:

"Does the IOM plan to seek comments from grant applicants rejected by CIRM, particularly businesses? If so how many? How would such applicants be selected by the IOM for interviews or comments?"

IOM response:

"Yes, the committee wishes to hear these perspectives and is seeking ways to get them."

California Stem Cell Report:

"Does the IOM plan to do more than passively post forms for comment from others? Does it plan to email those forms, for example, to all CIRM grant recipients and applicants who were rejected? Does it plan to follow up to be sure an adequate response is generated?"

IOM response:

"The IOM is proactively working to get survey responses and encouraging people to respond."

California Stem Cell Report:

"What does the IOM mean by 'industry partners' on its (online) forms for comment?"

IOM response:

"Industry partners means CIRM investigators representing for-profit companies."

California Stem Cell Report:

"Does the IOM plan to examine both public and private complaints about conflicts of interest on the part of CIRM grant reviewers? By private, I mean written complaints to CIRM that the agency retains but has not made public."

IOM response:

"The committee is looking into the grants review process and working to make sure that the members obtain all relevant insights and information. The committee members intend to invite people who can provide a broad range of experiences with and perspectives of CIRM to the upcoming meeting in April."

The California Stem Cell Report later asked the IOM if it wanted to comment on a quote that we were considering using, which said,

"In the eyes of the IOM, scientists who draw funding from CIRM and other sources are 'independent.' They look at these things differently than regular people would."

The IOM responded,

"As to the quote you sent, as a response we would just reiterate that the committee is methodically going about its task and during the course of the study aims to gather the full range of information, experiences, and insights relevant to CIRM from a full range of sources."

Stem Cell Researchers 'Uneasy" in California

The prestigious journal Nature today said that asking California voters for more billions for stem cell research in a few years "may strike residents as a luxury that they can ill afford."

The comment came in a piece by Erika Check Hayden dealing with the future of the California stem cell agency, which is expected to run out of money for new grants in about 2017. She wrote,

"Given that California is facing severe budget shortfalls, several billion dollars more for stem-cell science may strike residents as a luxury that they can ill afford. It may also prove difficult for CIRM’s supporters to point to any treatments that have emerged from the state’s investment. So far, the agency has funded only one clinical trial using embryonic stem cells, and that was halted by its sponsor, Geron of Menlo Park, California, last November.

"Yet the institute has spent just over $1 billion on new buildings and labs, basic research, training and translational research, often for projects that scientists say are crucial and would be difficult to get funded any other way. So the prospect of a future without CIRM is provoking unease. 'It would be a very different landscape if CIRM were not around,' says Howard Chang, a dermatologist and genome scientist at Stanford University in California."

Chang was a scheduled witness recently at a public meeting in California of the blue-ribbon Institute of Medicine panel examining the performance of the Golden State's $3 billion stem cell research effort. Chang is the recipient of $3.2 million in CIRM funding. Hayden wrote,

"Chang has a CIRM grant to examine epigenetics in human embryonic stem cells, and is part of another CIRM-funded team that is preparing a developmental regulatory protein for use as a regenerative therapy. Both projects would be difficult to continue without the agency, he says. Federal funding for research using human embryonic stem cells remains controversial, and could dry up altogether after the next presidential election (see Nature 481, 421–423; 2012). And neither of Chang’s other funders — the US National Institutes of Health (NIH) and the Howard Hughes Medical Institute in Chevy Chase, Maryland — supports his interdisciplinary translational work. Irina Conboy, a stem-cell engineer at the University of California, Berkeley, who draws half of her lab’s funding from CIRM, agrees that in supporting work that has specific clinical goals, the agency occupies a niche that will not easily be filled by basic-research funders. 'The NIH might say that the work does not have a strong theoretical component, so you’re not learning anything new,' she says."

Conboy was also a scheduled witness at the IOM hearing. She holds $2.2 million in CIRM grants.

Magazine Survey on CIRM Shows Mixed Results

The magazine GEN this week produced two relatively lengthy articles dealing with the current state of affairs and the future of the $3 billion California stem cell agency.

Much of the material is familiar to readers of the California Stem Cell Report, but GEN, which says it reaches "221,035 biotech and life science professionals, also produced an online survey that asked its readers: "How helpful has CIRM been in advancing stem cell science?"

At the time of this writing, the results showed that 40.9 of respondents said CIRM was "very helpful."  An identical percentage said "not very" or were undecided. The survey showed 18.2 percent as ranking the agency "somewhat" helpful. The number of respondents was not disclosed.

The two articles (see here and here)by Alex Philippidis also discussed the possibility of a bond issue in a "few years," before CIRM runs out of cash in 2017. Philippidis wrote,

"By then CIRM hopes to have won what ICOC (the CIRM governing board) chairman Jonathan Thomas, Ph.D., has called the 'communications war' the agency is fighting with California newspapers and the CIRM-focused blog California Stem Cell Report. Both have criticized the agency over a host of governance and pay issues."

For the record, the California Stem Cell Report has not criticized the agency in connection with the level of its executive pay. We have pointed out that many California voters have a highly negative and visceral reaction to high public salaries, which is a matter that CIRM must deal with in connection with retention of public confidence. We have also noted that the salaries represent a tiny, tiny fraction of CIRM spending.

IOM Panel Ends California Visit With No Mainstream Media Coverage

The blue-ribbon Institute of Medicine panel examining the performance of the $3 billion California stem cell agency has quietly concluded its first public hearing in California without so much as a smidgen of daily coverage in the mainstream media.

Instead, the big state news in California yesterday was a lawsuit filed by lawmakers against the state's top fiscal officer to prevent him from cutting their pay again when they fail to pass a balanced budget.

It would have been extremely unlikely, however, to have seen any daily coverage of the IOM session. The mainstream media generally ignores the affairs of the California stem cell agency.

Other than what has appeared on the California Stem Cell Report, the most comprehensive look at the $700,000, IOM examination of CIRM was provided on Tuesday by Marcy Darnovsky of the Center for Genetics and Society, which has followed CIRM, and the ballot measure that created it, since 2004.

Darnovsky brought her readers on the Biopolitical Times up to speed on CIRM matters. She noted that CIRM will need more cash in a few years when its bond funding runs out. She concluded,

"But ballot measure or no ballot measure, CIRM will continue to disperse the public money it controls - another billion and a half dollars. This is a public agency spending increasingly scarce public resources. It is funding a field of research in which we place great hopes for medical and scientific advances. These factors make it all the more crucial that CIRM follow the basics of good governance and public accountability, and eschew the hyperbole and exaggerated promises that have tainted stem cell research for so long."

The California Stem Cell Report emailed a 1,370-word statement to the panel. The study director of the IOM panel said the statement would be placed in the panel's record.

The document provided perspective on the formation of CIRM, the political context in which it operates and discussed some of the potential pitfalls of CIRM's necessary but delicate courting of industry. Suggestions were offered for changes to ease potential conflicts of interest and to open to the public the statements of the economic interests of the grant reviewers who make the de facto decisions on CIRM's funding.

Here is the full statement from the California Stem Cell Report.
CSCR Statement to IOM-CIRM Performance Inquiry

The California Stem Cell Agency and the ACT Opportunity

A promising, positive story on stem cell research in California popped up in the news this week, involving improvements in vision as the result of the only hESC clinical trial in the nation.

The story came after Jonathan Thomas, chairman of the $3 billion California stem cell agency, said in the San Francisco Business Times that what he likes least about his job is that "the coverage in the press chooses to focus on items besides the extraordinary work that our scientists are doing."

The good news about the eye research appeared in the New York Times, Los Angeles Times and across the nation. However, it did not involve work at the stem cell agency, probably for reasons that likely have to do in good part with CIRM. The research involves a firm headquartered in Santa Monica, Ca., Advanced Cell Technology, that moved its base to the Golden State in hopes of securing CIRM funding. ACT has applied more than once for CIRM cash but has never received a grant. And it is one of the rare companies that has complained publicly to the CIRM governing board about a conflict of interest on the part of a CIRM reviewer. In ACT's case, its complaints received a public brushoff at a CIRM board meeting in 2008.

ACT's results in its clinical trial are quite tentative. They involve only two persons. One of the UCLA scientists involved said part of the results could have been the result of a placebo effect. Nonetheless, the reports carried the kind of story line that CIRM yearns for. Indeed, Thomas stressed the need for positive news when he told CIRM directors last June that the agency is in a "communications war" that is tied to its ultimate fate. (The agency runs out of cash in 2017.)

The New York Times' Andy Pollock wrote,

"Both patients, who were legally blind, said in interviews that they had gains in eyesight that were meaningful for them. One said she could see colors better and was able to thread a needle and sew on a button for the first time in years. The other said she was able to navigate a shopping mall by herself."

On its research blog, CIRM described the ACT results as a "milestone." CIRM's Amy Adams wrote,

"It’s the first published paper showing that—at least in this small number of patients for the first few months—the cells are safe."

She quoted Hank Greely of Stanford as saying that the news from ACT is "at least, a little exciting – and in a field that saw its first approved clinical trial stopped two months ago, even a little exciting news is very welcome."

Greely's reference, of course, was to Geron's sudden abandonment in November of its hESC trial, only three months after CIRM gave the firm a $25 million loan. It was widely believed that ACT was one of the initial applicants in the round that provided funding for Geron, although CIRM does not release the names of non-funded applicants.

Last week, CIRM directors spent a fair amount of time discussing the agency's future. The talk was of priorities, hard choices and generating results that would resonate with the people of California.

This week's news from a company that was not funded by CIRM will give them more to ponder.

LA Times: Deck Stacked at the IOM Hearing

The Los Angeles Times web site today carried a sharply worded piece about the upcoming Institute of Medicine hearing on the performance of the $3 billion California stem cell agency.

Written by Pulitzer-prize winning columnist Michael Hiltzik, the item was headlined,

"Stacking the deck on the stem cell program."

The piece referred to Tuesday's meeting of the Institute of Medicine panel looking into the stem cell agency's affairs. The Times article was based largely on a piece yesterday on the California Stem Cell Report that reported that six of the 11 witnesses at the IOM hearing were coming from institutions that had received $418 million from CIRM. The item also reported that the only other witnesses were either CIRM employees or on its governing board.

Hiltzik wrote,

"The insular character of the stem-cell research community always has made objective evaluations of CIRM difficult -- most of the experts in the field are in a position to seek grants from the program or work with it on grant review. The IOM study could have been a counterbalance to that. But that doesn't look like it's about to happen."

State Controller to Hold Hearing on Stem Cell Agency Finances

The only state body specifically charged with oversight of the $3 billion California stem cell agency and its board will meet next Friday in Los Angeles for a look at the enterprise's financial affairs.

The group is the Citizens Financial Accountability and Oversight Committee, chaired by the state's top fiscal officer, Controller John Chiang. It was created by Proposition 71, the ballot initiative that established the stem cell research effort.

The agenda is a tad shy of details on what is likely to be brought up although it does mention a briefing by CIRM on "CIRM’s financial performance, current budget,update of grants awarded and grant process."

CIRM Chairman Jonathan Thomas is expected to attend along with the agency's new and first chief financial officer, Matt Plunkett.