Stem Cell Matters Moving Into Gubernatorial Campaign

You might call him Stem Cell Steve. He is the only major candidate for governor of California with a section of his website devoted to stem cell issues.

He is Steve Westly, the elected controller of the state of California. Westly is running for the Democratic nomination for governor against Phil Angelides, who is the elected state treasurer.

The position of controller is pretty much a ho-hum office, hardly worth more than the proverbial bucket of warm spit, as a former vice president of the United States once described his own office. It is difficult to electrify the electorate when your main responsibilities as controller are primarily printing state payroll checks and dealing with "fiscal year-end procedures."

Only one California controller has managed to make it into the governor's office, Gray Davis, who was a colleague of ours some 30 years ago.

We ran across Westly's interest in stem cell matters when we saw a Google ad bearing his name on this web site. That means the Westly campaign is paying Google to place ads on sites that deal with stem cell issues.

(For the record: We -- the California Stem Cell Report -- do not have any control over which ads Google places on our pages. We do not receive any revenue from Google unless someone happens to click on Westly's ad or any of the others that may appear. Even then the amounts are inconsequential or less. Since Google ads began appearing on this blog in early 2005, we have not received one cent from the advertising. We hesitate to speculate about what that means.)

Westly's ad makes a pitch. "Stem cell research – why it's held up and how you can help," it reads. The ad contains a link that takes the curious to a section on Westly's campaign website called "Stem Cell Research Now!" It targets Gov. Schwarzenegger as allied with opponents of stem cell research who have sued the stem cell agency. Here is what it says:

"Right-wing troublemakers Ted Costa and Lew Uhler are behind the lawsuit. They also happen to be - surprise, surprise - two of Governor Schwarzenegger's biggest backers. Costa led the recall and Prop. 77 drives. Uhler was behind the union dues initiative, Prop. 75.

"So why doesn't the Governor call off his conservative cronies? Millions of people are waiting for cures. Stem cells may be the fastest way to get those cures. And Arnold's buddies are holding up the research."

The pitch includes an electronic petition that is designed to be sent to the governor with the electronic addition of a signature and email address from whomever may be viewing the site, whether they live in Korea or South Dakota. Our suspicion is that the petition, if it ever gets delivered, would contain no names from Korea. The Westly effort is undoubtedly designed to identify probable Westly supporters who are interested in stem cell research. Once identified, they can be targeted later for more specific pitches in support of Westly.

Westly's rival for the Democratic nomination, Angelides, does not have a similar focus on stem cell issues. One can only speculate on the stem cell strategy in Westly's campaign. But here is one theory: Westly's people read polls that say the public supports stem cell research. If the public knows Westly supports the research, that will generate voter approval. It will generate even more voter approval if the evil Gov. Gropenator is linked with the Luddites who oppose stem cell research and are suing to prevent it. Further, attacking the governor at this stage could also help weaken him in next fall's general election. Or so the reasoning may go.

We should note that Westly is a former top executive at eBay and has close links to the Silicon Valley financial community, which was a big supporter of Prop. 71. California stem cell chairman Robert Klein also donated $27,695 to Westly's campaign for controller, according to one report.

More Cash for CIRM This Month?

The financially hard-pressed California stem cell agency hopes to get a boost this month with the sale of bond anticipation notes to philanthropic investors.

Reporter Laura Mecoy of The Sacramento Bee quoted Zach Hall, president of CIRM, as saying that the agency hopes to secure enough funding by the end of January to move forward on some of the training grants it approved in September.

No money has been available for grants because litigation against the agency has made it unable to issue the $3 billion in bonds that voters authorized more than a year ago. The lawsuits are not expected to be resolved until 2007.

Mecoy's story Sunday morning also reported that the agency is "trying to determine whether state-funded research can use stem cell lines developed by other agencies that allow larger donor payments" than permitted under Prop. 71, which limits egg donor payments to reimbursement for expenses.

"There are other entities in other countries that operate in other ways. If we insist everybody do as our regulations say, our scientists will not be able to work on (stem cell) lines that deviate from our standards," Hall said.

The main focus of Mecoy's story was on the impact of the Korean scandal on legislation by State Sen. Deborah Ortiz, D-Sacramento, to tighten oversight of the stem cell agency, which we discussed on Dec. 20 (Christmas Comes Early for Sen. Ortiz).

Mecoy wrote:

"'The South Korean scandal makes it more difficult for opponents to allege this is a plot by the right wing,' Ortiz said of her legislation. 'It shows the best and the brightest in the scientific community couldn't catch these instances of fraud and overstated research.'"

Mecoy continued:

"'If their industry can't sufficiently police themselves and root out fraud, then government should step in,' the senator said. 'California would be leading the nation if we did the right thing.'

"Hall said the South Korean scandal 'emphasizes the importance of just the type of apparatus we are putting together' at the stem cell agency.

"But he said fraud is not unique to stem cell research: It has happened in various fields of scientific endeavor.

"'These things happen,' he said. 'The more intense the interest, the more likely they are to happen, and the more likely they are to be found out.'"

Regarding the sale of the bond anticipation notes, agency officials earlier said they hoped for funding last fall so we will have to wait and see whether the current expectations materialize. Agency officials have been circumspect on any pending deals, but on Oct. 31, an official from the state Treasurer's office said there was no interest from investors in purchasing the notes. However, that was two months ago and that official may not have been fully informed on efforts by stem cell chairman Robert Klein to peddle the notes. He seems to have taken on the sale as a personal project.

A sale of the notes in amounts that would not fully fund the first year of all the authorized grants raises interesting questions about which institutions would receive cash and in what amounts. Presumably that would be a decision that would be made by the stem cell Oversight Committee, which does not meet again until February. A politically astute grant recipient might promptly begin discreet lobbying of Oversight Committee members to assure that its programs receive favorable consideration.

A Korean Lesson: 'Money Breeds Corruption'

The California stem cell agency needs to start asking more questions about the Korean scandal and how it may relate to stem cell research in the Golden State, The Sacramento Bee said today in an editorial.

The Bee said CIRM can learn from the Hwang affair but only if the agency takes "the time to publicly grapple with this scandal. So far, they have acted as if Hwang is a distant aberration whose fabrications don't affect them. Nothing could be further from the truth."

The editorial continued:

"While California's institute can do only so much to combat scientific fraud - the responsibility lies largely in the hands of peer-reviewed journals - it can set standards for obtaining eggs and other biological material, and ensure those rules are enforced. The institute's medical standards working group is now preparing such regulations. Yet at their last meeting, on Dec. 1, the committee's members went out of their way to avoid any discussion of Hwang's mounting troubles."

In a separate opinion piece, Associate Editor Stu Leavenworth wrote that it is easy to learn the wrong lessons from Korea.

It is, he said, "laughable to hear people insinuate that this debacle could have been avoided if American researchers, and not the South Koreans, were leading the way.

"The annals of U.S. science are filled with researchers who faked findings, exploited human test subjects and enriched themselves while extolling their supposed ethics. Indeed, it is interesting that Hwang's fraud was exposed not because of scrutiny from U.S. researchers, but because his colleagues in South Korea had the courage to go public with questions about their 'supreme scientist.'"

He continued,

"The only lesson is an old one: Money breeds corruption. Rightly or wrongly, embryonic stem cell research is seen as the next big rainmaker in the biomedical field. With so much money riding on the outcome, some people are going to lie, cheat and steal.

"To combat such fraud, editors of science journals - and those of us in the media - need to be much more skeptical than we were in this case."

California Stem Cell Director Stresses Speed

One of the members of the Oversight Committee of the California stem cell agency spoke of the need for "urgency" in finding stem cell therapies in an interview with a newspaper printed today.

The quest for speed is one of the problems at the heart of the Korean stem cell scandal, according to some scientists.

Joan Samuelson of Healdsburg, CA, an attorney and president of the Parkinson's Action Network, is the committee member who did a Q&A with the Santa Rosa Press-Democrat. Given the nature of such Q&As, it is likely that she actually made her comments anywhere to a few days to a few weeks prior to their publication, probably at a time when the scandal was not as hot. The topic of Korea did not even come up in her printed remarks.

Nonetheless, one of the refrains heard from the patient advocates is the crying need for cures. Some, such as Samuelson, are living with diseases that could be alleviated through the results of stem cell research.

Here are a couple of excerpts from the interview:

"Prop. 71 seeks something that may be a first in biomedical history: not just research advances, but actual treatments and cures resulting from the investment of funds, and in a tight time frame. The National Institutes of Health, for example, spends about $30 billion each year in federal tax dollars to fund research, but requires no particular results.

"My 15 years of watching this process causes me to side with the scientists who believe that if every step is treated with great urgency, sharing of information, collaboration in approaches and adequate funding, that will start translating into the first treatments far sooner than they will if this process is left to chance."

"Several forces delay finding cures. For example, you might not get a cure for decades because researchers don't stick to the problem. They move on to something else, because they lose interest, because it's too hard, because there's no funding.

"But this won't happen at the institute because 10 of us wake up every morning saying, 'Please, God, let this succeed.' My vision is that the institute will be available to fund any piece of remaining research needed. We're going to have to work with the whole world."

The reference to "10 of us" is to the number of patient advocates on the board.

CIRM Scientific Conference Expenses Disclosed

The California stem cell agency's international scientific conference last October cost $128,489, coming in nearly $87,000 under budget.

The event drew a fair amount of news media attention (see "Everything" and "Clues" items on this blog) and was praised by editorially by at least one newspaper as one of the wisest expenditures CIRM has made. That said, the agency was a bit balky at releasing the budget figures.

The largest single expenditure was $48,643 for rooms, facilities and equipment at the PARC 55 Renaissance Hotel in San Francisco. Rooms were discounted 30 percent for the 32 persons that the agency picked up expenses for. CIRM paid $45,200 to Mosaic Event Management to run the event. Travel expenses for speakers and others ran an estimated $20,000. Another estimated $9,000 is slated to go to science writer Kelly LaMarco, who is preparing an executive report of the meeting.

The event generated $23,450 in registration and other fees.

The expenses do not include a reception for attendees that was hosted at the St. Francisco Hotel by the California Healthcare Institute, a biomedical industry group.

Why Do Scientists Cheat?

"If you're not in first place, you're no place," says one bioethicist in an article in the Christian Science Monitor about what it calls "a year of research ethics challenges."

The springboard for the piece by reporter Peter Spotts is the Korean affair. But Spott recounted scientific scandals at the Veterans Administration, MIT and the University of Vermont.

He also dealt with dubious dealings at NIH.

"In a survey of NIH-funded scientists, released in June, only 1.5 percent of 3,000-plus respondents acknowledged having falsified or plagiarized information. But 15.5 percent admitted to altering their research approach under pressure from funding sources, and 12.5 percent admitted to looking the other way when colleagues used flawed data."

The comment about "first place" came from Thomas Murray, president of the Hastings Center, a bioethics institute in New York state. He noted that scientists have the usual human failings but work in an intense environment where only the best ideas rise to the top. He did not say "perceived" best ideas, but he should have.

Christmas Comes Early for Sen. Ortiz

The Korean stem cell scandal is a bit of political gift to California state Sen. Deborah Ortiz.

While it certainly was not something she was hoping for, the hoo-ha surrounding Hwang Woo-suk has created an atmosphere that will aid Ortiz' efforts to tighten oversight of the California stem cell agency, protect egg donors and ensure that California reaps the benefits of its $6 billion research investment.

Ortiz, a Sacramento Democrat who is the most influential California legislator on stem cell matters, authored legislation earlier this year to protect egg donors. Public awareness of the bill was minimal, and it was vetoed, with little notice, by the governor.

Ortiz plans to re-introduce the measure come January. It will have a much more favorable environment given the heightened awareness created by the Korean cash-for-eggs affair, which involved egg donations from junior researchers as well. That is considered improper by some.

Her proposed constitutional amendment, SCA13, will also gain support as a result of the Korean scandal. The measure would increase state oversight of the agency and is intended to provide more benefits to California from research commissioned by CIRM. It requires a two-third vote of both houses and voter approval. But the proposal has key Republican support, which should help ease its passage in the legislature.

Ortiz is undoubtedly going to exploit – directly or indirectly -- what one observer has called the "flabbergasting" disclosures coming from Korea to bolster support for the proposal, which has been opposed by CIRM and its allies.

Term limits will force Ortiz out of the legislature at the end of 2006 so she has a limited time to accomplish her legislative objectives. She is reportedly eyeing a statewide office and also needs a solid record to campaign on.

Earlier this year – prior to the Hwang affair – Ortiz indicated that stem cell matters were at the top of her agenda.

"I have about a year left in the Legislature, but this will probably be my No. 1 priority.  The stakes are too important if we don’t meet the intent of the initiative, and if we don’t make good on the promises we made to the voters," she said during a hearing on intellectual property and CIRM.

Look for a major push by Ortiz after the turn of the year that will involve PR, op-ed pieces, public appearances, support-building among stem groups and more.

California Stem Cell Leaders Speak to Korean Scandal

A number of California stem cell researchers discussed the Korean stem cell scandal in a piece by reporter Bruce Lieberman in the San Diego Union-Tribune, including two members of the Oversight Committee of the California stem cell agency. Here are some excerpts from the article:

"'It's a black eye on the whole world of science,' Richard Murphy, president of the Salk Institute in La Jolla (and CIRM director), said. 'Exciting areas of research are always competitive . . . but healthy competition never justifies sloppy research, cutting corners or dishonest behavior.'"

"'We would have figured out very quickly that there was some problem here. . . . And the truth would have come out much sooner had we been in a position like we normally are – to be able to jump in and work with complete freedom,' said John C. Reed, president of the Burnham Institute in La Jolla(also a CIRM director). 'It's very important that we have laboratories throughout the country and around the world to . . . verify whether observations made by one group are reproducible by another.'"

"Dr. Evan Snyder, head of stem cell research at the Burnham Institute in La Jolla, said the embarrassing South Korea episode shows how science's built-in system of checks and balances can root out misconduct.
"'This was an example of the scientific community doing what it does routinely, which is police itself,' Snyder said.

The story also quoted Hallye Jordan, a spokeswoman for State Sen. Deborah Ortiz, the lead author of a proposed ballot measure to tighten controls on the California stem cell agency.

"'This whole unfortunate episode has pointed to the need for good governmental oversight of this important research," Jordan said last week. 'We want to maintain the public's confidence in stem cell research, and the best way to do that is through accountability and openness.'"

Korean Markets Warn Off Shy Stem Cell Investors

Those timid souls known as venture capitalists are not likely to be encouraged by the events in Korea, and that is likely to reflect poorly on the stem cell investment climate in California, at least for the short term.

Some, however, might argue that it is a buying opportunity – prices are down because of temporary market indigestion in swallowing the bad news out of Asia.

In the past few days the news has not been good for those holding Korean biotechnology investments. According to Reuters, prices in Korean biotech stocks "plunged" on Friday, one company by 15 percent.

The market reaction is another reason why private capital is not interested in funding the type of research that the California stem cell agency would if it were not snarled in a lawsuit.

Korean News Fuels Fire Against CIRM

As the negative news about stem cell research rolled in from across the Pacific, the Los Angeles Daily News (circulation 195,000) carried a hostile article about the California stem cell agency written by one of the minions of a "free market think tank" in Sacramento.

The opinion piece was authored by K. Lloyd Billingsley, editorial director of the Pacific Research Institute, which calls itself a "free market think tank." The facts of the piece are all familiar to followers of the agency.

However, he quoted Wesley J. Smith of the Discovery Institute, another similar organization, as arguing:

"Voters might be disposed to undoing Prop. 71" when they believe in alternatives "and when the problems of Prop. 71 permeate the public consciousness. One year after the vote, that is beginning to happen."

The views of such folks as Billingsley and Smith find fertile ground when the stem cell turf is disturbed by the Korean uproar. Two months ago such views would have had much less impact than they do now. Beyond that, the references to the voters disposition makes it clear that the opponents of Prop. 71 are looking at a ballot measure involving the agency. That means CIRM and its friends should be rallying anybody who could be considered their allies. The best bet for the agency is to keep a measure off the ballot, whether it is SCA13 or an initiative backed by well-financed fundamentalist forces.

Bioethics Blog Weighs Hwang Damage

In our earlier item on the implications of Hwang affair, we should have included the comments from the Editors Blog of the American Journal of Bioethics, which has spent a fair amount of time on the issue.

In a posting from today (Friday) on the site, blog.bioethics.net, they wrote:

"So what will happen as the story becomes a huge huge media story tomorrow is anyone's guess. The key questions though seem likely to involve a billion versions of: 'Will ethical lapses in this lab damage stem cell research elsewhere?'
Answer: yup. And no amount of late-in-the-day standards creation will change that. People are going to ask whether the mechanisms whereby stem cell money is doled out have to be made much more rigorous. And yet again, the U.S. government will be zero help, since our rule for how to fund stem cell research is based on the altogether stupid idea that some tiny collection of embryonic stem cells in Wisconsin are ok in terms of ethics and money, but anything made after August 9, 2001 is evil and not to be funded."

The Half Empty Implications of the Hwang Affair

Is the Hwang Woo Suk affair the WMD issue of stem cell research? Does it fuel the foes of embryonic stem cell work? How will it affect the California stem cell agency?

Just some of the questions being addressed as the affair has blossomed from cash-for-eggs to possible outright fraud.

In California, as elsewhere, the Korean stem cell scandal is something of a half-empty, half-full matter. Supporters say it demonstrates the need for solid research with top notch oversight and well thought out rules. On the other hand, foes certainly will use it to argue that stem cell researchers cannot be trusted. But there is little doubt that the tangled controversy will create confusion and uncertainty on the part of the public about stem cell research, which has recently enjoyed generally good press.

For CIRM it arguably creates an unfavorable climate for the sale of tens of millions of dollars in notes sorely needed to finance the agency. However, a case certainly will be made that now is the time to get behind CIRM and its high standards.

Zach Hall, president of CIRM, was somewhat circumspect in a statement:

“The withdrawal of the results by Drs. Schatten, Hwang and the South Korean group is a serious setback for stem cell research in the area of somatic cell nuclear transfer. Such incidents have happened before in science and are always unfortunate both for the field and for the scientists involved. The good news is that many talented researchers will continue their work on nuclear transfer and I am confident that the field will recover and quickly move ahead.”

The Center for Policy and Genetics in Oakland, a longtime CIRM critic, said on its web site:

"Given that investigative journalists, not scientists, uncovered the falsified data, how can the senior US and British scientists who asked the media to refrain from questioning the 'validity of the experiments' justify their request?"

The center continued:

"Now that it is clear that the voluntary guidelines for embryonic stem cell research recommended by lead scientific bodies in the US are inadequate, how can we move to put in place enforceable regulations that will protect women and allow legitimate embryonic stem cell research to advance?"

Reporter Gina Kolata of the New York Times touched on one of the deeper implications of the affair. She quoted Laurie Zoloth, director of the Center for Bioethics, Science and Society at Northwestern University, as saying it "raises questions about whether the science is good."

"'Good as in true and real and morally worthy of our funding,' she explained. 'That is so most especially in this twilight sort of terrain with a lot of open questions that people disagree about. 'Is this our version of WMD.?' Dr. Zoloth said."

Writing in the Wall Street Journal, reporters Antonio Regalado and Gordon Fairclough said:

"Regardless of the outcome, the case once again underscores the limitations of top scientific journals in verifying the results of the research they publish. Journals typically recruit independent reviewers to review papers. But such reviews don't involve actually repeating the experiments, which makes intentional fraud difficult to detect."

John Rennie, editor in chief of Scientific American, wrote online:

"How much of a colossal black eye will this scandal give to embryonic stem cell work in general? I commented on that point previously, back when it looked like Hwang's headaches all centered on the research ethics. But outright fraud carries this to a whole new level. Frankly, I've been surprised that some of the usually vociferous opponents of embryonic stem cell research haven't been making more of a fuss about the Hwang affair all along. I kept waiting to hear them argue that the ethical laxity of the Korean lab only proved that the moral of judgment of stem cell researchers couldn't be trusted--that no matter what promises the scientists made to uphold human dignity in their work, they would surely start committing atrocities once they were allowed to operate freely. (My hunch is that the clear willingness of so many in the stem cell community to push for strong codes of scientific ethics has blunted this attack so far.) Something tells me that those kinds of criticisms will become much more common shortly."

One industry perspective came in a piece by Barbara Demick and Karen Kaplan in the Los Angeles Angeles Times. They quoted Michael West, president and chief scientific officer of Advanced Cell Technology Inc. in Worcester, Mass., as saying his company "would redouble its research efforts now that there might be a fresh opportunity to be the first to create individualized embryonic stem cells."

"This is a chance for the U.S. to recapture the lead in this field," he was quoted as saying.

As for the opponents, Kolata talked to two, including Nigel Cameron, president of the Institute on Biotechnology and the Human Future at the Illinois Institute of Technology.

"'Where's the beef? Where are those cures? Why is it that there is no private money going into this research? The business community values it at zero,'" Kolata quoted Cameron as saying.

She also quoted Richard Doerflinger, deputy director of anti-abortion activities at the United States Conference of Catholic Bishops, as saying,

"'In one sense, this puts us back to where we were before May of 2005, when there still was some uncertainty about whether this would work at all. In another sense it does illustrate in my mind how hype and ambition have gotten ahead of the science.'

"'How am I going to exploit it?' he said. 'You don't have to. It's just speaking for itself.'"

Coming Up

Later today we will carry a report and assessment on how bad the news is out of Korea for stem cell research. What it means for the credibility of the work and more.

Korean Mess Bad News for Funding of California Stem Cell Agency

The tangled Korea-Egg scandal became more convoluted today with an adamant denial by Hwang Woo-suk that he falsified stem cell research findings.

His statement came after news outlets worldwide published reports quoting a co-researcher as saying that Hwang had essentially confessed.

That did not appear to be the case according to reporter Kwang-Tae Kim of The Associated Press.

"South Korean researcher Hwang Woo-suk on Friday stood by his purported breakthroughs in stem cell research despite accusations he falsified key evidence, saying his work would be authenticated after tests performed within days," The AP said.

Hwang said he was "shocked" by his co-researcher's statement that work was faked.

Bloomberg.com reported the Korean stock market declined as a result of the flap. Bloomberg wrote:

"'I apologize for creating this uproar both in and out of Korea,' Hwang told reporters at a briefing in Seoul today. 'The fact remains that our research team was successful in creating stem cells from patients' skin cells. Still, there were mistakes made, human errors, in taking photographs and in the preservation of the stem cells.' Hwang said he will seek agreement from his 24 coauthors to retract the study from Science."

Reuters reported:

"'Our six research members made 11 stem cells and all confirmed this,' Hwang said at the packed briefing in a lecture hall. 'We six researchers have no doubt.'" Hwang said the cells had been badly contaminated by a fungus and he planned to ask prosecutors to investigate his suspicion that they may have been tampered with or replaced."
Reuters continued:
"Hwang said he was retracting the paper from Science because of the uproar, even though he did not doubt his findings. He said a follow-up paper had been submitted to another journal and that would restore faith in his team."

Newspaper readers all across the country this morning will see stories about Hwang's alleged confession. If they hear anything on the radio or TV it will lead with his denial. The Internet will have it all. Major confusion will result until this is all sorted out, but meanwhile stem cell research will take a hefty PR hit. And that is not good for the folks trying to sell tens of million of dollars in notes to finance the California stem cell agency.

Does the Korea-Egg Affair Give California More Stem Cell Clout?

The editor in chief of Scientific American, John Rennie, has put together a review of the implications of the Korea-egg scandal, which he described as "flabbergasting."

Writing on his blog, Rennie said:

"In six months, this work went from being one of the most celebrated accomplishments of recent biotechnology--probably a strong contender for future Nobel consideration--to what may become a legendary scientific fraud akin to the Piltdown man."

Rennie addressed a number of questions, one of which was "how does all this affect the international competition for stem cell dominance?" Rennie's answer:

"If Hwang's work is illusory, though, the center of power would seem to have swung back over to the U.S. -- that is to say, California."

Rennie's final paragraph:

"There's an old wry observation that if you look back at disastrously bad decisions made throughout history, you could probably find someone connected to each who would have said, 'Well, it seemed like a good idea at the time.' But I can't see how anyone in the Hwang lab could have ever even thought that."

Korea Herald: Hwang Faked Stem Cell Research

The Korea Herald reports that "Hwang Woo-suk fabricated his stem cell research published in journal Science this year and asked the journal to retract his paper."

The newspaper said that Roh Sung-il, who co-authored a Science paper with Hwang, "admitted there remain no embryonic stem cells which his team claimed to create through cloning."

The newspaper continued:

"Lee Wang-jae, a senior SNU (Seoul National University) official, confirmed that the research was fake.

"'Hwang's research team admitted that there were no embryonic stem cells which it claimed had created,' said Lee who was tapped to lead a SNU committee to investigate his research. 'Today is the most shameful day for Korea's science community.'"

Should Women Be Allowed to Sell Their Eggs?

Some folks who take a jaundiced view of embryonic stem cell research are calling the Korea-egg affair the "first international scandal of the biotech century" and say California better watch its Ps and Qs.

Nigel M. de S. Cameron and M.L. Tina Stevens laid out their concerns in an opinion piece this morning in the San Francisco Chronicle. Cameron is chair of the Center for Bioethics and Culture in Oakland. Stevens teaches history at San Francisco State University.

They wrote:

"California needs to do some soul-searching. Some of us said all along that the only way cloning researchers would ever get anything near the number of eggs they needed would be through unethical channels. We thought they would go to poor women in poor countries, which is one reason so much of the developing world supported the U.N. global cloning ban. California should ban payments for egg donation for embryonic stem cell/embryonic cloning research. Stiff penalties for violations should be enforced. Moreover, it should proceed only after serious, independent, medical study aimed at addressing unanswered concerns over the long-term effects of hormones and egg extraction takes place. Only then can the state offer a meaningful and fully 'informed consent.'"

A couple of thoughts: CIRM currently bars compensation for egg donations. Cameron and Stevens apparently want to take this a step further and bar payments to cover expenses. Their piece also repeatedly uses the expression "human cloning" without noting that is forbidden by Prop. 71, leaving the reader to infer wrongly that the California stem cell agency is engaged in such activities.

The Korean egg business does lead to the question of whether women should be allowed to do whatever they want with their bodies including production of eggs. An international flat prohibition against payments for eggs also is certain to be violated, given the stakes involved in stem cell research. If payments are legal and regulated, presumably they can be policed appropriately with better oversight of how donors are treated.

That said, we are still withholding judgment on the question of cash for eggs. Let us know what you think about the matter. Should California allow women to be paid for providing their eggs for stem cell research? You can post your comments by clicking on the word "comments" at the end of this item. It allows you to post anonymously if that is your wish.

The Painful and Rocky California Stem Cell Experience

"A rocky year," "defensive," "a painful process" – some of the descriptions of the last year for the California stem cell agency.

They were contained in a front page story Saturday by reporter Terri Somers of the San Diego Union-Tribune, which circulates in one of the world's hottest hotbeds of stem cell research.

Somers is a biotech business reporter who has covered the agency since its inception. Here is how her piece began:

"In the 13 months since California voters approved spending $3 billion of their tax dollars on stem cell research, not a dime has gone to scientists.

"There have been 54 public meetings surrounding the start-up of the state's new Institute for Regenerative Medicine. Yet two of its most important policies and plans have not been established: a plan for how to handle ownership of discoveries resulting from institute-funded research and a scientific strategic plan, the cornerstone of the institute."

Here are some of the highlights of Somers' story:

"It's been a rocky year," said Dr. Leon Thal, a UCSD neuroscientist on the oversight committee. "I don't think some of us knew it would be quite as political as it has been."

"The (institute), for some reason, is coming from the position of being defensive all the time," said Dr. Jeannie Fontana, an advocate for patients with Lou Gehrig's disease who serves as an alternate member on the oversight committee."

"It's been a painful process at times," Fontana said(in a later quote). She said the oversight committee is much more complicated than other boards on which she serves and doesn't work as efficiently."

"I didn't realize how much administrative work had to be done in just setting up (the institute)," said Zach Hall, a neurobiologist serving as its president."

Our comments: Hall is a skilled, veteran and respected administrator as well as a respected scientist. As far as we can tell, he has a candid and gimlet-eyed view of agency's status.

But, speaking from the perspective of a person who has been involved in more than one start-up and studied them for years, we can say that few persons understand the difficulties involved in a creating a genuinely new enterprise of even the smallest size, unless they have been directly involved.

On another somewhat personal note, the start-up nature of CIRM was one of the motivations for creation of this blog. Going overnight from scratch to $300 million a year in a field fraught with complexities, cutting edge science, religion and politics and more offers, to put it mildly, a fertile field.

As for Somers' article and a similar overview, also on Saturday, by Andrew Pollack of the New York Times, they are the type of pieces that help shape public perspective on CIRM, for better or worse.

Searching for Stem Cell News in All The Wrong Places

Earlier we reported that we could not find online two stories by reporter Terri Somers of the San Diego Union-Tribune, a biotech business reporter who covers the agency regularly.

We saw them in a print edition of the paper during a visit to the city, but could not find them using a Google search or a direct search of the site. But two readers of the California Stem Cell Report, Jerry Ingle of Encinitas and another who must remain nameless, pointed us to their electronic location.

The technique, for those who want to use it, is to go the www.signonsandiego.com and click on today's paper and then look for the day that you are seeking. Then it will list all the stories prepared by the paper's reporters that day by various categories.

The lessons for us? 1. Never assume, which is a lesson we seem to need to learn more than once. 2. Google searches are not omnipotent. 3. Search engines on particular sites are also not omnipotent, including The Sacramento Bee and others as well as the San Diego site.

All of this brings us to our dear readers. If you folks out there see something of interest or something that needs to be corrected, please let us know. And if you want to make a comment, you can simply click on the comment line at the bottom of this item. We hope to hear from you often.

Here are links to Somers' Thursday story and her Saturday piece, which is the subject of a posting above.

Zach Hall Critiques Sacramento Bee Editorial

Zach Hall, president of the California stem cell agency, has responded to a Sacramento Bee editorial involving human eggs and cash.

In a piece printed in the opinion section of The Bee on Sunday, Hall said The Bee editorial Nov. 25 "gives the impression" that CIRM "has only recently examined these issues, (when) in fact we have been working on them long before the recent controversy in South Korea."

He noted that Prop. 71 prohibits "compensation" for eggs and requires "informed consent" for donations. Hall adds that egg donation has been the subject of considerable discussion at CIRM meetings and will be the topic of an upcoming session.

"As a final point," he wrote, "I am perplexed that The Bee cites figures for the efficiency of establishing cell lines that The Bee acknowledges to be out of date. The most recent work (Science, May 2005) shows that, on average, only 16 eggs (the approximate number obtained from a single donor) are required to develop a stem cell line, a figure that is 15-fold fewer than the number cited in the editorial. With continued advances, the number of eggs required will continue to fall and, in time, other methods, not requiring egg donation, may become practicable."

NY Times Looks at Beleaguered CIRM

Is the California stem cell agency stuck in an Iraqi-like quagmire? At least one Nobel laureate thinks there are similarities.

His remarks were contained in a piece today by reporter Andrew Pollack of the New York Times, whose article began like this:

"After nearly an entire morning of sometimes heated debate the other day, the board overseeing California's $3 billion stem cell research institute took action. It asked the organization's president to draw up a plan for how to draw up a strategic plan.

"That is the way it has been going lately for the state's closely watched foray into the frontiers of medical science. More than a year after 59 percent of Californians approved an ambitious program to harness human embryonic stem cells to treat diseases, not a single dollar has yet been spent on research."

Pollack noted the litigation, legislative and public pressure as well bureaucratic minutiae beleaguering the agency.

"'I liken it to the Iraq thinking - we won the war and didn't know what to do afterward,' said Paul Berg, a Nobel laureate from Stanford University who fills in on the institute's board when Stanford's medical school dean cannot attend," Pollack wrote.

His piece was something of a "situationer" on CIRM, bringing Times readers up-to-date. The newspaper has not carried much on the agency. Followers of CIRM, however, will find a fair amount of familiar ground in the piece. The article was also distributed on the Times' news service and has already appeared in one other paper in Milwaukee. It is likely be printed elsewhere.

Reporter Terri Somers of the San Diego Union-Tribune also put together a situationer for her paper, one that ran on the front page today. However, it is not available online as far as we can tell. We saw it because we were in San Diego for a visit. We will bring you excerpts from it later.

Spending on Litigation Seems to Please Stem Cell Foes

The foes of the California stem cell agency seem delighted to have forced CIRM to divert hundreds of thousands of dollars into litigation instead of finding cures for diseases ranging from cancer to Alzheimer's.

Steve Ertelt, editor of LifeNews.com, wrote today:

"Taxpayer and pro-life groups that oppose Prop. 71 have been successful in holding off grants for embryonic stem cell research and human cloning because of their lawsuits against the measure. They have also forced the stem cell panel to spend a quarter of its money on legal bills."

Ertelt described the agency's proposed research as "grisly."

In recent months, foes of the agency have contended their opposition is based on good government issues – not religion. But those statements seem to be something of an exercise in dissembling -- to be generous -- based on the comments of Ertelt and others. Earlier this week we noted one of their attorney's assertions about the creation of subhuman beings.

Ertelt's piece also seems to borrow some information, without attribution, from an article by reporter Terri Somers of the San Diego Union-Tribune. She wrote two stories this week out of the meeting Tuesday of the Oversight Committee in Duarte.

We previously linked to her first story on Wednesday. Her second story appeared in the actual newspaper but did not appear online as far as we can determine. We ran across the article in the printed version of the paper.

She reported that CIRM has a $240,000 bill from the state Department of Justice in addition to the $772,000 it is paying its private lawyers. That pushes the agency's legal costs to more than $1 million in less than a year or about $2,800 a day, by our calculations. Not all of that is tied to the litigation, but it remains a rather substantial sum.

Somers also quoted Dana Cody of the Life Legal Defense Fund as saying, "This is a taxpayer issue and Bob Klein managing to have access to taxpayer money that he isn't entitled to, no matter how Bob Klein spins it."

Ertelt appears to have picked up that quote from Somers without noting that it came from her piece. Of course, it could have come to Ertelt directly from Cody as well.

Cody's concern about tax funds notwithstanding, it is abundantly clear that the Life Legal Defense Fund would not be suing CIRM if it did not plan to fund the "grisly" embryonic stem cell research.

Klein Discusses Korea Trip and Other Matters

California stem cell chairman Robert Klein has discussed his trip to South Korea, litigation against CIRM and the financial benefits of stem research in an interview with Capitol Weekly in Sacramento.

He estimated the lawsuits could take as much as 15 months to go through the appeals process. He said the journey to Asia was a "general trip to look at the full range of research in Korea and to have talks with the Korean government on their future commitments, which they have expanded substantially." He did not mention the name of Woo Suk Hwang.

He also said the $1.1 billion royalty figures supplied by a study commissioned by the Prop. 71 campaign have been taken out of context.

The hour-long interview was conducted by Capitol Weekly reporter Malcolm Maclachlan.

Depositions Could Be Illuminating

The Sacramento Bee has an interesting analysis of the lawsuit against the California stem cell agency which says that the judge's ruling last week "was hardly a victory for the institute."

In an unsigned editorial, the newspaper also says the depositions in the case should be illuminating.

"One important question is how Robert Klein II, the author of Prop. 71, devised the stem cell institute, and what promises he made in doing so. Did he, for instance, promise universities and organizations seats on the oversight board if they endorsed Prop. 71?"

It also notes that the plaintiffs are on a "crusade" to stop all embryonic stem cell research.

U. of Pittsburgh and the Schatten/Hwang Affair

The flap about South Korea stem cell research is not getting much current attention in the US media, but that could change.

The latest reports from South Korea say that the University of Pittsburgh is paying to help South Korean researchers secure permanent resident status. Obviously, employers assist with immigration matters regularly, but the Koreans suspect skulduggery.

Here is a report from Digital Chosun in South Korea:

"Fears mounted on Wednesday that key cloning technology developed by stem cell pioneer Prof. Hwang Woo-suk and his research team could be leaked abroad after it emerged that two former team members have applied for permanent residence in the U.S. The two are party to sensitive inside knowledge on core stem cell technology.

"A source in Hwang's team said the two were seconded to the University of Pittsburgh last year and now applied for residence in the U.S.

"One of them is said to be Park Eul-soon, who made headlines last week by dropping out of sight and severing contact with the Seoul National University team. She is party to a newly developed technique for the removal of an egg's nucleus for cloning and has played a key role in Pittsburgh Prof. Gerald Schatten's cloning of monkey embryos. The other former team member has inside knowledge of embryonic stem cell cultivation technology."

The Schatten/Hwang affair has implications for the conduct of stem cell research in California. One of which is that maximum disclosure of all significant financial interests is needed, given the built-in conflicts with the stem cell agency. Sunshine is the best preventative, as we have noted earlier.

We have queried the University of Pittsburgh concerning its role and will carry its response when we receive it.

Tiny Turnout at Stem Cell Agency Meetings

Public attendance at meetings of the Oversight Committee of the California stem cell agency seems shockingly small.

Perhaps our reaction is that of one who believes, however naively, that what public agencies do is important, especially one that is as unique, new and important as CIRM.

The number of persons in the audience in Duarte Tuesday ranged from 10 to 20 persons and probably included some media. The Oversight Committee itself, without including CIRM staff, outnumbered the public.

We also attended an Oversight meeting in September in Sacramento that had a rather sparse crowd. One of the regular attendees at all the meetings has told us that the lean turnout is pretty regular.

From our own experience in covering state agencies, we can tell you that huge crowds rarely show up for any state agency meetings. But usually a goodly number of representatives from businesses, nonprofits or other institutions affected by the agency appear. So far, that does not appear to be the case for CIRM.

As for our own dismal attendance record at the Oversight Committee meetings, we would like to attend more but we live fulltime on a sailboat in Mexico, returning by air to the Old Country only for intermittent visits. It is then that we take in meetings and chat with some of the players involved in California stem cell issues. Meantime, we stay in contact with stem cell matters via the Web and email.

Reviewing Today's Coverage of the Stem Cell Agency

The San Francisco and San Diego newspapers carried stories this morning on actions involving the California stem cell agency, dealing with intellectual property and lawsuits against CIRM.

Missing were reports from the Los Angeles Times and the New York Times, both of which covered the stem cell meeting Tuesday in Duarte. However, we would expect to see pieces from them, perhaps on Thursday.

The Oversight Committee meeting ended late in the day, making it difficult to file a story for the next day's papers. The reporters involved may well be working on a different type of piece than the usual daily report on what was relatively routine action – at least in terms of conventional news values.

Which brings us to one of the reasons for the existence of the blog. Conventional news values put a severe limit on the amount and depth of information available in newspapers concerning the agency. Newspapers emphasize high profile events and conflicts. When matters are relatively routine, attention wanes. They have little interest in the type of details that are important to those with a deep interest in a subject. The rather sparse coverage of intellectual property issues, over the last few months, involving the stem agency is one example. IP is technical, complex and marginally understood by editors, many of whom view their own intellectual product (the daily newspaper) as having little lasting value. Once it is a day old, it is fish wrap material.

One of our goals is to carry more information and analysis on issues of concern to the California stem cell community than is available through the mainstream media, to use an expression which has already become an Internet cliché. Much of it has little conventional news value so you are not likely to find it in the press. If you would like to weigh in our performance or have suggestions for additional coverage, just click on the "comments" link at the end of this posting. You can even do it anonymously.

But back to today's coverage. Reporter Terri Somers of the San Diego Union Tribune wrote a piece on the IP action by the agency. Her story began:

"Scientists who make a patentable discovery with grant money from California's fledgling stem cell institute will be able to retain ownership of that discovery under an interim policy approved yesterday by the committee overseeing the institute."

Reporter Carl Hall of the San Francisco Chronicle focused on developments in the lawsuit against CIRM.

He wrote that foes of the agency "face tight deadlines for gathering evidence, which may include depositions from the 29 members of the stem cell institute's governing board, known as the Independent Citizens Oversight Committee, as well as outside participants in advisory working groups."

"'Our goal is to win,' said Dana Cody, executive director of the Life Legal Defense Foundation in Sacramento, one of the attorneys working on the case.
"She and her allies clearly have no plans to drop the litigation even if they lose at trial. Barring some 'glaring factual discovery,' Cody said, 'we will be going on to the appeals court and then to the Supreme Court if we have to,'" according to Hall's story.

We should note that the stem cell agency is a bigger story for San Francisco and San Diego than other areas. San Francisco is the home to the agency and has the largest concentration of biotech firms in the state. San Diego comes in a close second. Both cities have substantial stem cell research communities as well.

Coming Up

On Wednesday morning, we will carry a rundown of coverage of the meeting of the Oversight Committee of the California stem cell agency. The panel met at the City of Hope in Duarte Tuesday with reporters from the New York Times, the Los Angeles Times, the San Diego Union Tribune and possibly others in attendance. We will also have more of our own coverage from the stem cell meeting.

For those of you far removed from Southern California, Duarte is a bit of hard-scrabble community east of downtown Los Angeles. The City of Hope, with its beautiful gardens, is not too far from such establishments as "Miss Kitty's Topless Gentlemen's Club."

Foxes, Chickens and Stem Cells

The California stem cell agency moved forward today with interim principles for intellectual property for its training grant program despite concerns that the concepts did not protect the taxpayers' investment in stem cell research.

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights of Santa Monica, targeted a proposal that would give nonprofit institutions ownership rights on discoveries.

"Asking the grantees to do the right thing after giving away the farm is like asking the fox to cough up the chickens after giving him the key to the hen house," Simpson told the Oversight Committee. (The full statement from the Foundation can be found here.

Jesse Reynolds of the Center for Genetics and Society also asked the board to ensure that stem therapies would be truly available to all Californians.

The panel approved the interim rules after modifying them slightly from the draft version (see "Not Like to Satisfy."). Inserted was a preference for non-exclusive licensing. Removed was a reference to a "tax" on royalties that might be imposed by the state. Instead the language was changed to indicate that the state might want to share in royalties in the future.

Some Oversight Committee members objected to language giving preference to therapies for underserved groups. Joan Samuelson, a committee member and president of the Parkinson's Action Network, said it could delay development of therapies for other groups.

But Marcy Feit, president of ValleyCare Health Systems, said removal of the language would "kill funding" for the stem cell agency.

Stem Cell Trial Date Set, Legal Coffers Replenished

The California stem cell agency goes on trial Feb. 27 in California's "Apricot City."

Judge Bonnie Lewman Sabraw set the date today, according to stem cell agency officials, fulfilling her promise to expedite proceedings in the lawsuits that have blocked funding of $3 billion in stem research grants, approved by California voters 13 months ago.

The lawsuits were filed by anti-tax groups and another group that was a key player in the Schiavo case. The stem cell foes contend the agency is unconstitutional although it was created by voters in a constitutional procedure. (See "Showdown in Apricot City.")

The judge told lawyers to return Dec. 13 with plans for discovery of evidence. Completion of discovery was scheduled for Jan. 3.

At a meeting of the CIRM Oversight Committee in Duarte, stem cell chairman Robert Klein expressed pleasure with the legal schedule. He has been trying to sell bond anticipation notes to provide interim financing for the agency. A quick trial and decision will help eliminate investor uncertainty about the financial instruments.

Following announcement of the news at today's meeting of the CIRM Oversight Committee, the panel approved an additional $252,000 for outside legal help, most of which will go for contesting the challenge to the existence of the agency.

Claire Pomeroy, an Oversight Committee member and dean of the UC Davis School of Medicine, said the lawsuit has forced the agency to divert funds from possible research, indicating that voters would be irate at impact of the tactics of the stem cell foes.

Nonetheless, we suspect the agency's opponents are delighted that they are stalling the agency and preventing it from spending money on research. After all, one earlier version of the litigation, filed by David Llewellyn, a Citrus Heights, Ca., attorney, alleged that loopholes exist in the Prop. 71 that would permit the funding of "test tube babies, or even adult human beings, for body parts, companionship or a permanent worker class of subhuman beings (a la Aldous Huxley's Brave New World)” despite the measure's ban on human reproductive cloning. The ludicrous assertion was clearly aimed at stirring up irrational fears among the constituencies that support the foes of CIRM. (see the Feb. 23 item called "Illegal" on this blog.)

A quick and favorable trial decision certainly will help the agency to peddle its notes, but the case is expected to be appealed by whichever side loses. One estimate predicts that the legal matters will not be completely settled until 2007.

The official name of the Apricot City, by the way, is Hayward, which is an Alameda County community once better known for its fine fruit than stem cell shenanigans.

IP Proposals Not Likely to Satisfy

The California stem cell agency is beginning to leave sharper clues concerning its direction on intellectual property policies – the rules that will determine what kind of return the state receives on its $6 billion research investment.

At its meeting Tuesday in Duarte, the agency is scheduled to consider basic, interim IP regulations for its training grant programs, which are aimed at training more stem cell researchers and are not expected to result in discoveries that need IP protection. But just in case, the Oversight Committee is moving forward with some regulations.

On the agenda is a simple document about "concepts" for IP policies on training grants. Here it is in its entirety.

"Ownership: CIRM grantees will own CIRM-funded discoveries.

"Data/Biomedical Materials Sharing: CIRM strongly supports a broad sharing policy. CIRM will expect grantees to share data and biomedical materials widely, and beyond current practices. CIRM will 'push the envelope of current practice toward much more open' sharing.

"Research Exemption: CIRM will create a research exemption to allow the use of patented CIRM-funded discoveries for research purposes.

"Licensing: CIRM will encourage the commercialization of CIRM-funded discoveries. In licensing activities, CIRM will require that preference be given to companies with plans for access to resultant therapies for underserved patient populations. It is anticipated that any resultant royalties from CIRM-funded discoveries may be subject to a 'tax' to benefit the state of California.

"March-in rights: CIRM will retain march-in rights in the event of: Failure to develop CIRM-funded discoveries, public health and safety reasons"

The agenda contained no draft of proposed rules or any discussion of the pros and cons of the concepts outlined above. But they do suggest that the agency may push to make discoveries available widely as well as to often ignored groups of patients.

It is not likely that these concepts will go far to satisfy those who want major changes in the current economic models for IP and taxpayer-funded stem cell research.

Tight Budget, Hiring Freeze for CIRM

The California stem cell agency is preparing a budget for the next seven months that includes a hiring freeze and no funds for the already approved multimillion dollar training grant program.

The $5.4 million spending plan, prepared by CIRM staff, is up for consideration this coming week by the Governance Subcommittee and by the full Oversight Committee.

The proposed budget is for 2005-2006 and compares to $3.9 million in spending for 2004-2005, which actually only covered about seven months while CIRM was just coming into existence.

The proposal calls for a cap on the existing staff level at 19 persons. Salaries and benefits are the single biggest item at $2.4 million. Contracts with outside agencies or businesses consume $1.3 million. Meetings and conferences are budgeted at $626,000($260,000 for working groups, $196,000 for the Oversight Committee and subcommittees and $170,000 for CIRM-sponsored scientific meetings and conferences).

The budget documents (see them here and here) contain no information on the status of efforts to sell bond anticipation notes to finance the $38 million training grant program.

The documents can only be found on the agenda for Oversight Committee meeting Tuesday. Although the Governance Subcommittee is scheduled consider them a day earlier, they were not available on the Web at the time this item was posted.

CIRM Contracts Hit $1.8 Million

The California stem cell agency has run up $1.8 million in contracts with outside firms, ranging from legal assistance to shredding.

The agency also is likely to boost payments to the law firm of Remcho, Johansen & Purcell of San Leandro by $252,200, bringing the total for the firm to $772,200. The amount could increase as the cost of litigation against CIRM rises.

Remcho has the biggest contract with CIRM. The Edelman PR firm is No. 2 with a $378,000, 12-month contract that began last April. Only $152,068 had been paid to Edelman as of Oct. 31, the latest date for contract information from CIRM. Edelman is also performing PR work for the Alliance for Stem Cell Research of Santa Monica, an organization that morphed out of the California Research and Cures Coalition, a group formerly chaired by Robert Klein, now chairman of CIRM. The value of Edelman's contract with Alliance is not known.

At the other end of the scale, Shred Works, Inc. had a $960 contract for "confidential destruction."

The latest figures for the contracts were posted on the CIRM Web site as part of the agenda for next Tuesday's meeting in Duarte. Also on the agenda is the agency's budget, formation of a strategic planning subcommittee and a report from the task force on intellectual property.

While the meeting is less than two working days away, no background information for the meeting was available to the public on either the agency's budget or intellectual property as of the time of this posting.

The Voices of the Stem Cell Barristers

If you want to hear interviews with the key attorneys in the California stem cell case, check this report on California Politics Today.

Reporter Marc Strassman also offers more details on what the lawyers have to say about discovery in the case. Both sides predict a spring trial.

Another Year for Legal Squabbling

The New York Times carried a report this morning on the lawsuit against the California stem cell agency, but story contained little that was new to California readers.

However, reporter Andrew Pollack quoted stem cell chairman Robert Klein on his estimate of the length of the legal proceedings. Another year is what he said. The full story is here.

Conflicts and Records Targeted by CIRM Foes

Foes of the California stem cell agency are going to dig deeply into the doings of CIRM as they push their effort to exterminate the $6 billion program.

Reporter Carl Hall of the San Francisco Chronicle offered up a few more details this morning of the anti-CIRM strategy in the wake of Tuesday's court ruling to proceed with a trial on the challenge to the agency.

He quoted Dana Cody of the Life Legal Defense Foundation in Sacramento, one of the opposing attorney, as saying she and her colleagues intend "to amass extensive evidence during the discovery phase leading up to a trial."

"One of her allies, David Llewellyn, who represents the bioethics group, said he looked forward to documenting 'very clear' financial conflicts among those charged with distributing Prop. 71 grants.

"He said the plaintiffs also would show that voters had been misled during the 2004 campaign about the real cost of embryonic stem cell research -- interest expenses on the $3 billion in grants, for instance, are estimated to total as much as $3.7 billion over the long run -- and the likelihood of a payoff for taxpayers anytime soon.

"Litigation hasn't yet been filed to block the expected $50 million financing plan, but Llewellyn said that might happen once state officials moved toward selling special 'bond anticipation notes' to investors who would be repaid only if the lawsuits were resolved and the Prop. 71 bonds were sold," Hall wrote.

Meanwhile, the San Jose Mercury News editorially called on
the judge in the case to dismiss the whole matter on Tuesday. Don't thwart the will of the people was the newspaper's position. It also said:

"It's true that Prop. 71 left inevitable gaps in areas of ethics and accountability. No proposition of this magnitude will ever dot every 'i' and cross every 't.' But the Legislature, led by Sen. Deborah Ortiz, D-Sacramento, is working hard to close those gaps and made significant progress in the last legislative session."

Judge Sets High Hurdle for Stem Cell Foes

The courtroom tussle over the existence of the California stem cell agency will resume briefly next Tuesday with all parties optimistic that they will prevail.

The judge said she will set a trial date at that point, which means that the matter will continue on well into the next year. Regardless of her ultimate ruling, it is expected to be appealed.

However, she did state that foes of CIRM had failed to prove that Prop. 71 was unconstitutional. Meanwhile stem cell chairman Robert Klein said the agency can make do financially until the middle of next year.

Reporter Megan Garvey of the Los Angeles Times wrote:

"'The Supreme Court has stated that it is the court's solemn duty to uphold an initiative, resolving all doubts in its favor, unless its unconstitutionality' is unmistakably clear, Alameda County Superior Court Judge Bonnie Lewman Sabraw wrote in a 24-page decision on pretrial motions in the cases.

"Sabraw said the plaintiffs — People's Advocate, the National Tax Limitation Foundation and the California Family Bioethics Council — had 'not satisfied" that 'substantial test.'"

Klein released a statement today that said:

"Her explanation for denying these claims provides CIRM with a strong basis for moving forward successfully in this case. On the question of the constitutionality of Prop. 71, the plaintiffs have a high bar to clear in the hearing. They must introduce evidence that they have failed to introduce over the past year. We remain encouraged by this ruling and look forward to hearing what the court will permit on an expedited basis on December 6th."

Reporter Steve Johnson of the San Jose Mercury News quoted Dana Cody , who represents agency foes, as saying that she was not at all disappointed and is pleased with a prospect of a trial.

The story that most folks across the country were likely to see was written by Paul Elias of The Associated Press. He wrote that the decision meant Cody and her clients will have to "clear high legal hurdles to win the case."

Here is a link to the text to the judge's decision. Klein's statement follows in a separate item since it is not yet available on the CIRM web site.

Text of Klein Statement

STATEMENT BY ROBERT KLEIN, CHAIR OF THE INDEPENDENT CITIZENS' OVERSIGHT COMMITTEE, REGARDING JUDGE SABRAW'S RULING

"On behalf of the California Institute for Regenerative Medicine (CIRM), our governing board and the patient, medical and academic organizations who signed an amicus brief in support of stem cell research, we are very pleased the court has denied many of plaintiffs' challenges to Proposition 71, and we have great confidence in the judicial process.

We appreciate the time and care that Judge Bonnie Sabraw took in writing this decision-we are grateful for the depth of her opinion, the numerous citations and her extensive narrative supporting the conclusion that Proposition 71 is constitutional. She states that it is the 'Court's solemn duty to uphold an initiative, resolving all doubts in its favor, unless its unconstitutionality clearly, positively and unmistakably appear.' Judge Sabraw repeats this theme later in the decision, stating that 'all presumptions and intendments favor the validity of an Act,' and then goes on to rule that the California Family Bioethics Council has not met its burden of demonstrating that Proposition 71 is unconstitutional on 'any of the five grounds asserted.'

Her explanation for denying these claims provides CIRM with a strong basis for moving forward successfully in this case. On the question of the constitutionality of Proposition 71, the plaintiffs have a high bar to clear in the hearing. They must introduce evidence that they have failed to introduce over the past year. We remain encouraged by this ruling and look forward to hearing what the court will permit on an expedited basis on December 6th.

The CIRM looks forward to working with the Attorney General and Remcho, Johansen & Purcell, which serves as special counsel to the CIRM, as well as Munger, Tolles, and Olson, which represents nearly thirty national and statewide advocacy organizations, university and research hospitals and research institutions who have signed an amicus brief in support of Proposition 71, as the case moves forward (http://www.cirm.ca.gov/pressreleases/2005/10/10-12-05.asp).

This opinion should be extremely helpful in providing broad support for the Bond Anticipation Note program of the CIRM. We believe it is critically important to demonstrate that democratically mandated scientific and medical research funding programs for chronic disease cannot be tied up in court by a small group that is politically opposed to stem cell research. For California patients suffering from chronic diseases and injuries, every day counts in advancing our understanding of disease and our search to improve therapies to alleviate human suffering. We look forward to the institute funding stem cell research during the course of the litigation."
###

Hwang Denies Patent Demand Report

South Korean stem cell superstar Hwang Woo-suk says the University of Pittsburgh scientist whose actions precipitated disclosure of the eggs-for-cash scandal did not ask for a share of a patent.

Here are the first and last paragraphs from a report on english.chosun.com:

"Prof. Gerald Schatten of the University of Pittsburgh demanded to share a patent for stem cell cloning technology developed by geneticist Hwang Woo-suk and his team, press reports said Monday. Hwang and his team deny the report. Schatten recently ended his collaboration with Hwang citing ethical flaws in occyte procurement for an earlier project."

"The most likely interpretation is that Schatten did informally ask for a share of the patent but Hwang did not officially discuss the issue with his team and the government. Schatten has not commented on the allegation."

CIRM Survives Initial Court Test

The California stem cell agency has turned back a good portion of the challenges to its very existence, but there is little doubt that the legal struggle will continue.

According to a report by Carl Hall in the San Francisco Chronicle, Alameda County Superior Court Judge Bonnie Sabraw "denied essentially every legal argument brought by the plaintiffs in litigation alleging that Prop. 71 violated the state Constitution because it would allow taxpayer-backed bond revenues to be distributed without direct legislative control."

Sabraw was appointed to the bench by Gov. Wilson, a fact that should not be an encouragement to foes of CIRM.

Hall continued:

"In a 24-page decision issued late Tuesday, Sabraw said the plaintiffs had failed to overcome a fundamental presumption that voter mandates must be honored unless they were shown to be "clearly, positively and unmistakably unconstitutional."
"She denied five separate motions seeking summary judgment, any one of which might have been enough to put the closely watched California stem cell enterprise on ice for a very long time, if not out of business.
"Arguments turned aside by the judge included claims that the initiative deals with more than one subject, allows financial conflicts of interest in awarding stem cell research grants and would "alter the basic governmental framework."
"The judge did not throw out the lawsuits entirely. Instead, she set a hearing for Tuesday for lawyers to work out a plan for the next critical proceedings in court.
"But because Sabraw turned back virtually all of the plaintiffs' arguments, it appears they will have to be extraordinarily creative if they hope to keep the lawsuits moving forward -- and the stem cell institute standing still."
Hall continued: "She denied everything the plaintiffs asked," Klein said. "I would go into any hearing with this on our side."

Hall also reported that Dana Cody, executive director of the anti-abortion Life Legal Defense Foundation in Sacramento, one of the lawyers seeking to overturn Prop. 71, didn't return telephone calls late Tuesday. Other lawyers on the plaintiffs' side couldn't be reached for comment, according to Hall.

A Sad Tale of Stem Cell Conflicts?

By now we all know about the Korean egg flap, but Bloomberg News offers a special insight about previously unreported possible conflicts of interest involving the scientist whose actions precipitated the disclosure of the Korean matter.

Here is what the report by John Lauerman and Heejin Koo says:

"The public furor arose after former colleague Gerald Schatten, a University of Pittsburgh stem cell researcher, ended his 20-month collaboration with Hwang. Schatten said he had learned there might be truth to charges Hwang had used egg cells that were unethically obtained.
"Schatten asked Hwang for a half share in the patent for patient-specific stem cell cloning six weeks before his withdrawal from the project, South Korea's JoongAng Ilbo newspaper reported yesterday. Hwang's World Stem Cell Hub spokesman Sung Myung Whun declined to confirm or deny the report.
"'We feel that it is inappropriate to comment on the report at this time,' Sung said at a press conference held at the institute in Seoul today."

The article continued, "Michele Baum, a University of Pittsburgh spokeswoman, said she didn't have any information about the patent issue. Schatten wasn't immediately available for comment."

This is a sad business. We assume all involved are well-meaning individuals, but perhaps they are not. Nonetheless, it reflects poorly on stem cell research wherever it occurs.

What it means for the California stem cell agency is disclosure, disclosure, disclosure and more disclosure. If that is uncomfortable for some in the scientific community, so what? CIRM is the single largest source of stem cell funding research funding in the world. If the activities of some researchers can't stand the light of day, they should move on. The California stem cell agency does not have to play the good-old-boy game.

Eggs and Ethics: CIRM's Proposed Rules

Given the circumspection of our bureaucratic friends, the Korean egg affair may not even be mentioned at a key CIRM meeting on Thursday.

But the matter will still be lingering in the air, a little distasteful but impossible to ignore.

It is just the sort of issue that the panel -- the Scientific and Medical Standards Accountability Working Group – should confront explicitly and directly. In fact, it amounts to a case study for CIRM, albeit one that is a tad fuzzy. But the reality is that such matters are usually less than clear cut. Facts are elusive; memories become weak.

The accountability group consists of five patient advocate members of the Oversight Committee, nine scientists and clinicians "nationally recognized in the field of stem cell research," four medical ethicists and Robert Klein, chairman of the California stem cell agency.

At the meeting in San Francisco, the group is scheduled to consider rules that would prohibit any cash-for-egg programs involving CIRM. The proposed language states:

"No payments, cash or in-kind, have been provided for donating oocytes, gametes, blastocysts, or eggs. Individuals may be reimbursed for expenses incurred as a result of a clinical procedure, as determined by (a review group). Individuals who consent to donate stored gamets, blastocysts or eggs may not be reimbursed for the cost of storage prior to the decision to donate."

Missing from the agenda material posted on the Web is anything other than the technical language of the draft regulations, which are rather intimidatingly labelled "do not cite or quote." But never fear. If you discuss them, you are probably not going to be called before a grand jury a la the Karl Rove case.

Also up for consideration is a report from the task force on intellectual property, another complex and important issue. But there is no clue on CIRM's website concerning the contents of that report.

If CIRM truly desires to fulfill its promise of being responsive, it is going to have to do much better at providing background that is accessible to the public. It should examine the type of work done by the state legislative analyst as well as analyses prepared by legislative staffers in Sacramento. All of which is prepared in a timely fashion and generally available online.

The accountability group is co-chaired by Sherry Lansing, a former Hollywood movie executive and now a cancer patient advocate, and Bernard Lo of UC San Francisco, whose expertise is listed by CIRM as "biomedical ethics related to oocyte, embryo and stem cell research." You can see all of the members the group at this link.

The Korean Lesson: More Sunshine Needed in California

"I am very sorry that I have to tell the public words that are too shameful and horrible." -- Hwang Woo-Suk

"It won't be the first time that a scientist has lied to journalists...." -- Chris Shaw, professor of Neurology at Kings College London

"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants." -- Louis Brandeis

Can the California stem cell agency learn something from the South Korean cash-for-eggs affair?

The answer is a resounding yes. A few days ago, The Sacamento Bee noted that the whole egg extraction business is a dicey waypoint in the "minefield" of stem cell research. The Bee commended the agency's plans to look more deeply into the issue.

But the story about the Korean researcher and the milieu in which he operates has additional implications. Some involve different cultures – not only Korean and US but those of other societies. The case also involves jingoistic ambitions – here and elsewhere – and economic aspirations.

But we are going to focus on another aspect of the affair – the need for maximum disclosure and transparency on the part of the California stem cell agency. Its unique structure contains built-in conflicts of interest with little direct oversight from any other California governmental entity. "Trust us" says CIRM.

The South Korean stem cell story, however, makes clear what we all know; temptations are great on the cutting edge of science. Prestige, honors and potentially billions of dollars are at stake. Even the high priests of science are not immune from infection.

CIRM's own peculiar governmental DNA is likely to make it more susceptible to abuse. The best vaccine, as Justice Brandeis suggests, is a good dose of sunshine. Open the doors more widely. Do a better job of making records available on the Internet. Be more straightforward about financial affairs. Require more disclosure of financial interests on the part of scientists, contractors and others associated with the agency.

Obviously, transparency is not going to prevent all wrong-doing. The truly crooked are less likely to be deterred. Then there are the well-intentioned, presumably such as the South Koreans who paid cash for human eggs. They will find excuses for what they are doing.

Hwang is the global superstar of stem cells. He will survive this scandal. But the California stem cell agency would be hard-pressed to come through a similar affair.

CIRM should resist its natural, insular tendencies. If its dealings are truly open and transparent, those who are tempted by money or ambition will find it more difficult to operate. The public will have an opportunity to examine the agency's affairs. And when the inevitable scandal – small or large – surfaces, CIRM can say it has done all it could to prevent wrongdoing.

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The quotes from Hwang and Shaw at the beginning of this post are from an article by Stephen Pincock in The Scientist.

Wandering The Seas

We are putting to sea once again. That means that postings will be intermittent on the California Stem Report until we arrive at a location a little later this month that has Internet access. Meantime, feel free to post comments on any subject. Just click on the comments link at the end of each item.

Chopped Mitochondria?

State Treasurer Phil Angelides says tax-exempt financing of stem cell research "may not always offer the lowest-cost choice" for the California stem cell agency, according to the web site, California Politics Today.

Reporter Marc Strassman disclosed the treasurer's position, quoting from an Oct. 26 letter by Angelides to the stem cell agency.

"It is more likely that the Institute will want to pursue a strategy that involves a mix of taxable and tax-exempt financing, as the state will do with the recent housing bond approved by the voters," Angelides wrote to CIRM.

Strassman said Angelides, who is seeking the Democratic nomination for governor, "distanced" himself from other proponents of the Prop. 71 in the October document.

In the letter, Angelides said his staff estimated that if the state were to use taxable bonds to fund the agency, the increased interest costs would be $423 million. Other estimates have placed it as high as $700 million.

Strassman said that under Angelides' scenario, the state would spend $6.5 billion for stem cell research with a net return of $1.1 billion. Strassman continued:

"How many of the venture capitalists clustered on Sand Hill Road in Menlo Park up in the hills behind Stanford, whose investments in existing and future bio-tech start-ups could see triple-digit increases in value as a result of Prop. 71-funded grants, would accept a deal like that....?

"Would Treasurer Angelides be willing to make, or be allowed to stay in office after making, any other investment on these terms with the billions of dollars of taxpayer money under his control as the State's chief financial officer? Would any CFO?

"Why then should the voters and taxpayers of California accept such terms either? What do the folks in and around the Stanford bio-tech venture capital community think the rest of us are, anyway, chopped mitochondria?"

Strassman carried another item that recounted a history of Angelides' statements concerning tax-exempt financing of the agency and expectations of significant returns for the state. Also included was a similar history for state Controller Steve Westly, who is also seeking the Democratic gubernatorial nomination. Look for the material towards the end of the article which leads with the state's bond counsel refusing further comment about conversations with Angelides.

Klein Speaks at Stanford Conference

The Stanford Graduate School of Business is hosting a conference this Saturday that will feature California stem cell chairman Robert Klein and address the "entrepreneurial challenges" that the agency has faced.

The session will also include Philip A. Pizzo, dean of the Stanford School of Medicine; Hank Greely, Stanford law professor, and Amy DuRoss, chief of staff for the stem cell agency.

The session will be at 11:50 a.m. at the Graduate School of Busines, 518 Memorial Drive, at Stanford University. The full agenda can be found here.

Klein Says He Knew about Federal Tax Problem Prior to Election

California stem cell Chairman Robert Klein has confirmed that he knew that Prop. 71 had a $700 million problem prior to last fall's election that created the agency he now heads.

Associate Editor Stu Leavenworth of The Sacramento Bee reported today that Klein confirmed in an interview "that one of the state's bond lawyers - Chas Cardall, of the firm Orrick, Herrington & Sutcliffe - briefed him during the campaign about the IRS complications. (That fact, without the lawyer's name, was reported by the San Francisco Chronicle last week.) Because of advice from Cardall and others, Klein says he purposely wrote Prop. 71 to allow use of both tax-exempt and taxable bonds."

Klein also told Leavenworth that he did not disclose the problem with tax-exempt bonds to analysts who prepared an economic study touting the economic benefits of Prop. 71.

"Why didn't he?" Leavenworth wrote in a column. "Klein equivocated when asked that question. 'I'd want to go back and review this area,' he said, unable to provide more information."

"Laurence Baker, a Stanford University professor who helped write the economic study, said he now wishes he had known that IRS rules could limit the receipt of royalties. Baker's study projected that stem cell research could bring in $537 million to $1.1 billion in royalties over 20 years.

"Now, says Baker, it appears that any royalties might be partly or completely offset by higher interest rate costs(which could run to $700 million).

"'Had we known, we would have factored it into our analysis,' said Baker. 'We worked hard to incorporate as much information as we could into our report.'"

Leavenworth continued:

"The integrity of Prop. 71 is at stake in the royalty debate. During the campaign, advocates of Prop. 71 mentioned royalties repeatedly, with Klein touting it on the PBS NewsHour with Jim Lehrer. This wasn't by accident. California was in the midst of a budget crisis, so Klein needed to create the impression - no matter how tenuous - that Californians would get some direct return on their investment."

Leavenworth described the conduct during the campaign at best misleading. "At worst, it was a cynical ruse," he wrote.
We should note that the interview with Leavenworth is the first time that Klein has publicly said he knew of the issue prior to the election. He would not comment on the question for the Chronicle.