Demons, Disease and Stem Cells

Nobel Prize winner Paul Berg says that social conservatives are "actively demonizing" some scientists for stem cell research and other work that offends the critics' sensibilities.

Berg, a Stanford University professor who serves as an alternate member on the California stem cell Oversight Committee, made the comment in a speech at a major stem cell conference in San Francisco earlier this week.

Berg said,

"Perhaps for the first time, the threat looms that certain lines of biomedical research could be forbidden, indeed, criminalized. Currently, legislation passed several times in the House and pending in the Senate threatens criminal penalties of 10 years in prison and a $1 million fine for using a procedure that involves cloning a patient’s genetic information in the form of embryonic stem cells. Never mind that this procedure is intended solely for creating a deeper knowledge of the genetic and cellular roots of disease; and, that the procedure is presently the only means for creating patient-specific embryonic stem cells for the treatment of several debilitating ailments. Even more ludicrous, are the same criminal penalties for providing or receiving any therapy if the development of that therapy involved the nuclear transfer technology. Consider the arrogance of withholding possibly life-saving aid from the American public because some members of the Congress are offended by the technology!"

He continued:

"I am concerned that the quality of the science may no longer be the sole or principal determinant in whether a particular line of research would be permitted; rather, theological and ideological pronouncements parading as fundamental ethical and moral values may increasingly take over. Vocal and organized minorities through their political representatives could become a prominent force in defining the boundaries and even the permissibility of scientific research."

Berg said,

"Presently, social conservatives are actively demonizing scientists conducting research on AIDS, reproductive technologies and fetal and embryo development. The call by social conservatives to limit certain lines of inquiry, as now exists for human embryo research, has been to restrict federal funding for the 'offensive' activity."

Berg also suggested that research is entitled to protection under the First Amendment and discussed legal arguments that support that position. He said,

"Abridging (the) implicit right to unfettered inquiry because it offends someone’s religious beliefs or ethical views is in my view no more justifiable than prohibiting press investigations that offend certain constituencies."

Berg spoke at The Stem Cell Meeting in San Francisco on Monday.

$50 Million for CIRM: All But In The Bag

California stem cell chairman Robert Klein says he now has commitments for the $50 million he has been trying to raise to fund grants approved six months ago by the stem cell agency.

Klein made the disclosure to a stem cell conference in San Francisco earlier this week. The next steps will come from the state treasurer's office to formally approve the bond anticipation notes and do the paperwork. An official in the treasurer's office said that process normally takes only a few weeks.

Of course, that assumes normal proceedings. However, it may also be necessary to arrange for some hoopla to recognize the buyers of the notes and maximize their public impact. State Treasurer Phil Angelides, who is seeking the Democratic nomination for governor, also may want to be sure the proceedings enhance his campaign.

With exception of one purchaser, Klein has not identified the buyers. But he has targeted philanthropic organizations. One reason is that the notes will not be repaid if the state loses the lawsuits against the agency. The risk involved means that the notes will carry a higher interest rate than normal state bonds.

Klein discussed the financing in appearances before The Stem Cell Meeting, sponsored by Burrill and Co., in San Francisco. Burrill is a life sciences merchant bank with more than $500 million under management. The conference drew hundreds of participants from across the nation and internationally.

The End to The Stem Cell Meeting

The following comes to you live from The Stem Cell Meeting in San Francisco.

At the end of the day came rhetoric about the culture of death, bald eagles and their eggs and how we all should be able to get along.

The last meeting of The Stem Cell Meeting in San Francisco concluded with a lively panel on ethics in stem cell research. It was heated at times, humorous and informative. But it did not change the mind of a single person (we think).

Following the final panel, the host of the conference, Steve Burrill, head of the firm bearing his name, told the audience the two-day conference was planned to avoid an event where business people talk only to business people and scientists only talk to scientists. And that it was, an interesting cross section of bureaucrats, executives, scientists, religious folks and so forth. Burrill promised another session the same time next year.

We will have more tomorrow on the events at the meeting.

Wisconsin to CIRM: Cough Up Some Cash

The following is coming live from The Stem Cell Meeting today in San Francisco, sponsored by Burrill and Co.

Wisconsin wants a piece of the California stem cell pie.

That's because the California stem cell agency has decided to give its own state 25 percent royalties on any inventions created with CIRM-funded embryonic stem cell research.

Wisconsin is involved because the Wisconsin Alumni Research Foundation has two patents that broadly cover the preparation of embryonic stem cells. Beth Donley, general counsel, Wisconsin Alumni Research Foundation, said that if CIRM stipulates 25 percent royalties for California that requirement amounts to commercialization. And that means WARF wants a payment from California.

How much would that amount to? Speaking during a panel session at The Stem Cell Meeting in San Francisco today, Donley said that licenses start at fairly low rates and mentioned a bottom figure of $75,000. In February of 2005, Peter Balbus, managing director at Pragmaxis LLC, of Glen Ellyn, Ill., estimated that Wisconsin could receive $200 million for $4 billion in stem cell product revenues. However, it is not clear whether that estimate is still valid.

Donley told industry representatives at the conference, sponsored by Burrill & Co., that she had spoken with CIRM officials on three occasions. The last time was on Monday when she told Robert Klein, California stem cell chairman, that the 25 percent royalty provision meant that CIRM was "trading on (Wisconsin) technology to build a (commercial) program." She said CIRM could provide the royalty in various ways. One would be to provide a stream of revenue from whatever California receives. Another would be to build it into grant arrangements with the nonprofit institutions.

Todd Lorenz, chair, Life Sciences and Health Care, Dorsey & Whitney LLP, another member of the panel, said Donley's statement raised the issue of "suffocation of product." The term refers to excessive layers of royalties of as much of 25 to 30 percent that stifle commercialization of therapies. Donley said Wisconsin was entitled to receive payments for use of its products and that the funds would go for research and education.

Warnings about Overhyping Stem Cell Science

The following is coming live from The Stem Cell Meeting today in San Francisco, sponsored by Burrill and Co.

California stem cell chairman Robert Klein is heading a panel called "Stem Cell Politics: Global Strategies for Supporting Research." Michael Werner of The Werner Group has just told the audience that no state in this country is "talking about the kind of money" that is likely to be available in California. The best prospects for significant stem cell research funding are in New Jersey, Maryland and Illinois. Angela McNab, chief executive of the Human Fertilization and Embryology Authority in the UK, warned that the audience that they cannot take public confidence in stem cell research for granted. She said excessive enthusiasm can lead to overhyping benefits and the speed with which they will be produced. She warned that when results are not forthcoming, opponents "will use the hype to discredit the science."

We will have more on the conference later today.

Coming Up

Today we are attending The Stem Cell Meeting in San Francisco sponsored by Burrill and Co. The conference will be discussing the investment environment for stem cell research along with ethical issues, among other things. Topics include "Where is The Money" and "The Business of Stem Cells." We hope to post items from the conference as it occurs, if the opportunity is available. If not, we will post news from the conference this evening (Pacific Standard Time).

No Teleconferencing for Research Working Group Meeting

Earlier this month we reported that some sort of teleconferencing arrangements were in the works for today's meeting of the research working group of the California agency. However, the reference to those arrangements has been stripped from the agenda posted on the Web. We queried the agency about the matter. They responded that teleconferencing is available only for members of the working groups – not the public.

The New, Obscure Run at California Stem Cell Research Guidelines

Belatedly and quietly, another California state agency is looking into ethical standards for embryonic stem cell research. And at its first meeting two members suggested that it might be appropriate to pay women for donating eggs.

The agency in question is the Department of Health Services. Under 2003 legislation by California state Sen. Deborah Ortiz, chair of the Senate Committee, the department was required to develop guidelines for embryonic stem cell research by Jan. 1, 2005, with the use of an advisory committee.

That 13-member committee was not appointed until six months after that deadline. It did not hold its first meeting until Feb. 24 of this year with the only public notice coming on an obscure website within the Department of Health Services.

Lea Brooks, chief of the public information section of DHS, said the department has no plans to notify the public about committee meetings other than by postings on the website, even if individuals request notification. The committee is expected to have two more meetings before concluding its work this fall.

The committee's guidelines affect all embryonic stem cell research in California, except for that financed by the California stem cell agency, which already has approved its own rules. CIRM is constitutionally independent of DHS and and is not required to adhere to the DHS guidelines.

Members of the advisory committee, however, seem to be in agreement on creating guidelines that are consistent with CIRM regulations, based on a somewhat garbled transcript of the Feb. 24 meeting, which was not covered by the media.

However, the ticklish issue of payments for eggs, which CIRM has shied away from, was raised by committee member Elliott Dorff, a professor of philosophy, who, according to the transcript, said:,

"One issue is just simply how realistic it is to expect women to donate their eggs free of charge. That the UCLA Bruins -- I can’t say the law school at UCLA -- every single time, there are ads for women to donate their eggs for purposes of fertilizing other couples. And while the standard used to be $5,000 plus expenses, I’ve seen ads as high as $80,000 for a particular kind of egg. And so one issue that - I mean I understand why the guidelines don’t want to have any exchange over this, but if the case, I’m sort of wondering whether is it at all realistic."

Committee member Gregory Stock also expressed concerned about a ban on remuneration.

The delay in implementation of the guideline law is a matter of some dispute. Questions have also been raised about reported changes in the committee's composition.

Brooks said the law, as originally passed, did not provide funding. However, other sources indicated that the governor attempted to "defund" it in his first budget. Brooks said it took from June 7, 2005, the date of the committee's appointment, until recently to get all members of the committee to agree to serve and to agree on a meeting date.

Another source said one list of committee members was circulated but that it was changed without notifying persons who were on the original list. The implication was that the committee was altered to be less restrictive on research. Brooks said there was only one list.

It is not clear how much privately funded embryonic stem cell research is underway in California. However, Stanford and UC San Francisco both have private grants to build facilities to do privately funded research. The state also has a number of privately funded stem cell companies.

The bulk of the first advisory committee meeting was largely occupied with background briefings and organizational issues, based on the transcript.

The next public meeting may come in May or June with the final session later this year, according to Henry Greely, chairman of the panel. During the interim, subcommittees will work privately to prepare material for the full committee meetings.

Here is the official list of the committee members: Elizabeth Helen Blackburn, Ph.D, Professor, Departments of Biochemistry and Biophysics, University of California, San Francisco; Samuel H. Cheshier, M.D., Ph.D. Neurosurgical Resident, Department of Neurosurgery, Stanford University School of Medicine; Gregory Stock, Ph.D., M.B.A., Director, Program on Medicine, Technology and Society, University of California, Los Angeles; Irving Weissman, M.D.Director and Professor, Institute of Cancer/Stem Cell Biology and Medicine, Division of Neurosurgery, Department of Medicine, Stanford University School of Medicine; Otoniel Martinez-Masa, Ph.D. Professor, Department of Obstetrics and Gynecology, David Geffen School of Medicine, University of California, Los Angeles; Fred Gage, Ph.D. Laboratory of Genetics, The Stalk Institute for Biological Studies; Bertram H. Lubin, M.D. President, Children’s Hospital Oakland Research Institute and Director of Cord Blood Program; Bernard Lo, M.D. Director of Program in Medical Ethics, Professor of Medicine, University of California, San Francisco; David Magnus, Ph.D. Director, Stanford Center for Biomedical Ethics and Associate Professor, Department of Pediatrics, Stanford University; Henry Greely, J.D. Professor of Law, Stanford Law School; Radhika Rao, J.D. Professor of Law, University of California, Hastings College of Law, San Francisco; Elliot Dorff, Ph.D. Professor of Philosophy, University of Judaism, Los Angeles; Margaret R. McLean, Ph.D. Assistant Director, Markkula Center for Applied Ethics and Director, Biotechnology and Heath Care Ethics, Santa Clara University.

More information on the committee can be found at this website.

Coming Up

A little later today we will look at the other California state agency that deals with stem cell research issues. Obscure and dilatory seem to be its hallmarks, although its actions could be far-reaching.

The California Stem Cell Trial: 'Purely Political'

If you missed the piece by the UCLA law professor arguing that the California stem cell trial was a waste of valuable court time, you might want to check out a version of it that appeared this morning in the San Francisco Chronicle.

The article was written by Russell Korobkin. He said, among other things:

"So far, the judicial system has been complicit in the use of the courts for purely political purposes. Because the lawsuit clearly lacked legal merit, the case could have, and should have, been thrown out months ago. Instead, an overly cautious Alameda County Superior Court judge told the plaintiffs that, although she found their written arguments unconvincing, she would afford them another opportunity to convince her by presenting evidence at trial."

Penultimate Clashes in the Stem Trial

The almost final arguments in the California stem cell trial have now been filed. Rebuttals are due next week.

Here is part of what reporter Bernadette Tansey of the San Francisco Chronicle had to say about the filings:

"Robert Taylor, an attorney for the taxpayer group People's Advocate, argued that members of the independent committee charged with distributing billions in stem cell grants represent the interests of the universities and disease advocacy organizations from which they are drawn, not the interests of the state at large. But the state prosecutor defending the stem cell initiative said the challengers had failed to produce any evidence at trial to prove their claims. The testimony demonstrated that the new research institute is subject to supervision and control by state authorities including the treasurer's office and the Legislature, wrote Deputy Attorney General Tamar Pachter...."
"The opponents will have a last chance to counter each other's written arguments Wednesday, when final reply briefs must be filed with Alameda County Superior Court Judge Bonnie Sabraw. She will then issue a written ruling, possibly within weeks. But even if the plaintiffs lose, their appeals could take another year."

It appears that Tansey was the only reporter to file a story this morning on the filings, but, of course, that statement has to be qualified by proficiency of the usual search engines, which do not find everything.

Four Stem Cell Biggies Form Consortium

San Diego is on a stem cell roll this week. First it was the public embryo bank – the nation's first ever. Now it is a plan to become the world's epicenter of stem cell research.

Reporter Terri Somers broke both of the stories in the San Diego Union-Tribune. Her piece today said that "four La Jolla research institutes plan to join forces and seek state funding to build a facility for human embryonic stem cell research."

They are the University of California, San Diego, and the Burnham, Scripps and Salk institutes. The site would be on the UC campus, which is close to the other three organizations. Somers said their agreement would create a nonprofit entity to plan and build the embryonic stem cell research facility. They would also pledge not to individually seek grants from CIRM.

Somers said, "A new building is important because federal limitations on stem cell research make it impossible to do much of the work in labs that receive federal funding."

Part of the consortium's strategy is to create a better chance of receiving grants, Somers wrote.

"'Individually all of the consortium institutes are stellar, but together we will be a tour de force and become the epicenter of stem cell research in the United States, and therefore the world,' said Dr. Edward Holmes, UCSD vice chancellor of health sciences."

Holmes, John Reed, president of Burnham, and Richard Murphy, president of Salk, are all on CIRM's 29-member Oversight Committee.

"In that role, they vote on who they think should receive research grants; however, the three would not be allowed to vote on grant requests from the consortium," Somers reported.

Zach Hall, president of CIRM, praised creation of the consortium, saying CIRM istrying to encourage the pooling of resources.

"Hall, a former vice chancellor at UC San Francisco, helped draft a plan for creating four distinct research institutes within the University of California.
"'They were all within the University of California and it was still difficult because each has different cultures, different personalities and different rules,' Hall said. 'The fact that these four institutions have put this together I think is a wonderful signal. I'm tremendously impressed with the effort that must have gone into this.'"

One of the players credited with pushing the effort during the last year is John Moores, who owns the San Diego Padres baseball team and is on the UC Board of Regents and the Scripps board. Reed said Moores was an important catalyst in pushing discussions forward.
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For those of you outside of California, Jolla is pronounced hoy-yah. It is derived from the Spanish word "joya," which means jewel. There is a pun in there someplace about stem cell jewels and crowning consortiums, but we are not going to look for it.

Los Angeles Readers Told of Stem Cell 'Silliness'

LA Weekly, a 207,000-circulation alternative newspaper, has offered up its status report on the California stem cell agency in a piece headlined "The Stem Cell Debate Gets Silly."

Regular readers of this blog are not likely to find new information in the article by Steven Kotler. However, it does quote us on the subject of the stem cell trial, which obviously makes the piece worth checking out. It also quotes bioethicist Alta Charo as saying the stem cell debate is still "about everything but stem cells."

Kotler also wrote good-reading piece in 2003 on the state of stem cell research, which still retains freshness. A sample:

"Irv Weissman doesn’t look the bear-eating sort. He’s of middle height, middle weight, mildly balding, with fine clothes, a jovial aspect and a long, wispy beard. He looks like a Russian poet or an aged food critic. But, beneath this exterior, he’s just a boy from Montana. Which is to say he comes from a culture of bear eaters."

Kotler's website makes it difficult to provide a direct link to the story, but you can find it under "articles" Jan. 1, 2003.

CIRM Faces State Performance Audit

The California stem cell agency is facing a new and tougher official examination of its performance.

That is the result of approval of a request by Sen. Deborah Ortiz and 10 other legislators for a review of CIRM by the California auditor general. The audit should be significantly more rigorous than the ones authorized by state law involving the state controller's office.

Ortiz' office released the following statement:

"In presenting the audit request, Sen. Ortiz said the audit will review the administrative expenditures as well as the policies and procedures to ensure they are consistent with the intent of the initiative and with best practices for research organizations and public agencies – critical steps to ensure that up to $7 billion in public money is being spent appropriately.

"'I believe the audit will help ensure that the program is on sound footing as it moves into its grant-making phase next year,' she said.

"In her testimony, Sen. Ortiz noted CIRM and ICOC will have spent close to $8 million in administrative funds by the end of the year and approved $40 million in training grants in September 2005, which they hope to finance through loans from philanthropic organizations since the public bonds authorized by voters in approving Proposition 71 are held up by litigation.

"As some of you know, the program has stumbled in its first year of existence,' Ortiz said. 'It has struggled with implementation of open meeting procedures as well as policies to guard against conflicts of interest on the part of its working group members. In addition, it has issued contracts for some questionable things, including a $27,000 per month contract for public relations work, a $300,000 contract for private legal counsel and a $10,000 per month contract for lobbying.'

"State Auditor Elaine M. Howle said the audit would evaluate the CIRM’s and ICOC’s strategic plans, including determining whether they are clearly defined. Her office also will determine whether CIRM and ICOC are properly identifying and avoiding conflicts of interest, establishing realistic timetables realistic, have in place effective management controls to ensure they are complying with state laws and whether they are protecting the state’s interest. She said her office also would evaluate the development of policies and procedures, including contracting for facilities, hiring practices and the procurement of goods and services.

"Howle estimated the length of the audit will be six months. She did not say when the audit would begin."

The legislature's joint audit committee approved the audit today by a 9-0 vote. Reporter Steve Johnson of the San Jose Mercury News wrote a story on the decision. You can read it here.

CIRM: Remarkable But a State Budgetary Wisp

The budgets proposed by the governors of California in January are always a bit of wishful thinking. They are projections for proposed spending by the state of California for the fiscal year beginning in July. They are usually revised significantly in May.

Nonetheless, it is useful to consider how the state currently regards the California stem cell agency in terms of its budget. The governor's budget places CIRM in category 6445, under higher education, along with the University of California and the California State University system. The governor's budget states that spending by CIRM will run at about $309 million during the next fiscal year, which means that it assumes that court challenges to CIRM will fail. Keep in mind that the budget reflects figures provided by the agencies.

A month or so after the governor proposes his budget comes the legislative analyst's report, dissecting the spending plan agency by agency. In California, the legislative analyst is generally considered the most authoritative source on state fiscal matters.

So what does that legislative analyst think about the CIRM budget? It doesn't. The budget item, 6445, is not included in the analyst's report. Why is that, we asked the head of the higher education unit in legislative analyst office, Steve D. Boilard? Here is his response verbatim:

"It was intentionally omitted. In the short time we have to review the budget proposal, we just focus on major issues. The Gov's budget proposes to spend about $300 million in bond funds ($276 million of which would be provided for research grants) to carry out Prop 71. Of course, the fact the actual selling of bonds is tied up in the courts casts some doubt on whether this will in fact happen."

Boilard is correct. CIRM is not a major issue for the legislative analyst's office. But it goes beyond that. CIRM's budget is not subject to approval by the California legislature or the governor. Even the State Supreme Court must have its $42 million-a-year budget approved by the legislature. But CIRM does not, which, of course, makes it one of the most remarkable agencies in California history and one of the reasons we write about it in this blog.

CIRM Makes "Progress" Says Monitor

Jeanne Loring, co-director of the stem cell center at the Burnham Institute in La Jolla, reports that her staff is taking pay cuts to keep grad students and post doctoral clinicians on payroll until the money starts flowing from the California stem cell agency.

So said writer Daniel Wood of the Christian Science Monitor in a piece on the agency and its current state of affairs. Known as a "situationer," the article said,

"By most accounts, the CIRM has made significant progress on practically every front. It has filled out its governing board with some of the top scientists in the country and has held over five dozen public meetings to air concerns."

The article, which also appeared in USA Today, was generally favorable. Wood reported,

"'The CIRM has been subjected to an extraordinary amount of attention from public, press, and legislators and has responded with extraordinary openness through the past year,' says R. Alta Charo, a law and bioethics professor at the University of Wisconsin in Madison."

A couple of comments: Perhaps the attention seems "extraordinary" to Charo, but the reality is that it has amounted to only a minor blip. The attention CIRM has received has been higher than that given to the creation of the department created by Prop. 65 a few years ago in California. But Prop. 65 did not carry a $6 billion price tag. Extraordinary attention is what the gubernatorial recall election received in 2003.

The other comment: CIRM continues to assert that because it has held something in the neighborhood of 60 meetings, that means it is moving forward. And reporters, constrained by media obligations to report even the weakest of assertions, repeat the claim. We all know that what counts, at least in business terms, is product sold, contracts signed and money in the bank. So far, CIRM still is living on the dole and has not funded a grant. Purchasers of bond anticipation notes are not going to be fooled by a tally of meetings as a measure of progress. The agency has other, better benchmarks. CIRM should drop the feeble claim. Perhaps they could schedule a meeting to officially retire the assertion.

Public Embryo Bank Started at Secret San Diego Location

A secret location in San Diego houses what is believed to be nation's first public embryo bank, which seeks to tap into the more than 400,000 human embryos frozen at in vitro fertilization clinics around the country, the San Diego Union-Tribune reported this morning.

Reporter Terri Somers wrote the story, which said that scientists are gathering the leftover embryos with plans to "send them to stem cell researchers around the globe."

The embryo bank is called the Stem Cell Resource. Somers said it was "created by a local in vitro fertilization doctor, two scientists from the Burnham Institute for Medical Research and a fourth person whom the others declined to identify." The location is being kept secret for security reasons.

"The impetus behind the bank's creation was a combination of a shortage of embryonic stem cells for research purposes and the desires of women to do something with embryos that they said would never have a chance of life," Somers reported.

"'Until now, patients who decided that they wanted to donate their embryos to research had no place to send them,' said (one) of the bank's founders, Dr. David Smotrich, who founded his own practice, La Jolla IVF, six years ago."

"'We've already been contacted by scientists in Israel, and we've talked to people at Harvard and elsewhere around the country,' said Jeanne Loring, one of the founding scientists."

Somers continued:

"A few in vitro clinics have had agreements to supply embryos to researchers. Advanced Cell Technologies, a biotechnology company started in Massachusetts to conduct stem cell research, has had agreements with a few different doctors, Chief Executive William Caldwell said.

"But Caldwell, (Pamela)Madsen (founder of the American Fertility Association) and others contacted for this story believe the Stem Cell Resource might be the first embryo bank of its kind, making collections from various doctors and screening who will receive them.

"Mindful of the federal funding crunch, the Stem Cell Resource plans to make the embryos available to vetted researchers at no cost, said Loring, an embryologist with the Burnham Institute and one of the bank's founders. Dr. Evan Snyder, a pediatrician and stem cell researcher at the Burnham Institute, is also a founder."

Somers wrote:

"Smotrich used his own money – about $100,000 so far – to fund the startup of the embryo bank. He has been reimbursed in part by private funds through the Burnham Institute. And he hopes that the facility will eventually be eligible for grants from the California Institute of Regenerative Medicine, which was created by Proposition 71.

"Everyone who works at the Resource does so without pay, including Smotrich, several Burnham scientists and an embryologist who performs the in vitro fertilization work for Smotrich's practice."

The Stem Cell Trial: A View From an Advocate

For a view of the California stem cell trial from the very personal perspective of a Prop. 71 supporter and tireless advocate, take a look at some of the Web postings by Don C. Reed.

We have mentioned Reed previously. He is an amiable fellow and easy to underestimate.

He attends CIRM meetings religiously and was present at each day of the trial last week. Here is a sample from one of his postings about the trial on his web site, stemcellbattles.com.

"Describing the Judge herself is difficult, without sounding like I am kissing up.

"But anyone wanting to know how to maintain control while still allowing everyone their dignity, should visit the courtroom of Judge Sabraw.

"Once when an attorney thrust his arm almost violently into the air, so eager to be heard, the Judge smiled and said, “I see that ___________ is champing at the bit.” Her tone was polite, but she immediately softened it anyway, saying, “But I do not wish to make light of it; what would you like to say?”

"Before deciding on any point, even the smallest procedural matter, she would check both sides repeatedly, allowing argument until every slightest nuance was explored.

"Just once a lawyer argued a little bit too long—after her decision had been made.

"She interrupted him.

"'That objection was overruled," she said.

"She spoke ever so softly, and she smiled, but there was just the faintest tinge of frost in the air.

"It was suddenly quiet in the room, and the attorney did not find it necessary to comment any further on the matter."

Reed also wrote about a two-day conference last week at UC Berkeley on stem cell issues that went totally unreported elsewhere, if you are to believe Google searches.

You can see more of Reed's commentary by going to his archives.

IP Policy for Business Upcoming Along With Grants Rules

The California stem cell agency is busy laying the ground work for some tough work on intellectual property policies involving grants to biotech businesses and research firms.

This is likely to be more difficult than development of the policies on IP for non-profit institutions, which were approved last month. Money, of course, is the key: How to provide sufficient profit motive to stimulate development of therapies.

Patient advocates on the Oversight Committee have already indicated that they are likely to favor policies that will speed treatments. Watchdogs of the public purse are likely to be less generous with the results of state-funded research.

We are also likely to see more comments from the biotech industry. Look for the first public hearings on this issue late this month. Development of a complete policy is likely to take some months. If you want to weigh in with comments prior to the first hearing, you can contact the agency via its web site.

While the IP policy gets underway, Zach Hall, president of CIRM, says his top priority right now is fund-raising for two, previously announced conferences, one this spring and another later this year. Hall is no stranger to fund-raising. He was the man who initially presented the proposal to the Broad Foundation that resulted in a $25 million donation last month to USC for stem cell research. Hall's presentation was made three years ago, but he was pretty pleased with the outcome when we talked to him at the stem cell trial last week. Hall made the pitch while he was working at USC.

Also coming up is a meeting of interest to folks who are interested in receiving a grant from CIRM. The matter at hand is the grants administration policy that is being formulated by the agency. The Research Working Group will consider the proposal on March 14 at UC San Francisco. Some sort of teleconferencing is planned for remote locations, but the details are not available on the agenda.

The text of the proposed grants administration policy is also not available on the agenda, but you can find a summary here and the full proposal here.

The Stem Cell Trial: 'Reaching for The Water Pitcher'

The California stem trial is now in the hands of the judge, who is awaiting final written arguments that will be filed later this month.

The arguments will include statements from both sides and then a rebuttal from each. They are due by March 15.

The trial came to an end on Thursday with perhaps only one reporter in attendance, Andrew Pollack of the New York Times. He reported:

"Don C. Reed, a supporter of stem cell research who watched the entire trial, said the plaintiffs seemed disorganized and nonaggressive.

"'There was a great deal of reaching for the water pitcher,' said Mr. Reed, whose son was paralyzed in a football accident. 'It was not at all the savage attacks I had expected.'"

Reporter Paul Elias of The Associated Press took in Wednesday's proceedings. You can read his report here. Russell Korobkin, professor of law at UCLA and a senior fellow at the UCLA Center for Society and Genetics (not to be confused with the Center for Genetics and Society in Oakland), commented on the trial in an op-ed piece in the Los Angeles Times. He said the court challenge to the California stem cell agency was an example of "frivolous arguments" made "to obscure issues or just to create delay."

"What is most troubling is not that the plaintiffs' arguments lack legal heft but that they no doubt realize this, yet argue anyway. The three groups fighting Prop. 71 — two pro-life associations and an anti-tax organization — are not what you would describe as passionate about technical governance issues. But because they know the state cannot issue the bonds to fund research while litigation is pending, they are using weak legal justifications to delay the inevitable," Korobkin said.

One of the attorneys in the case, David Llewellyn, is a graduate of the UCLA law school, but did not have the opportunity to study under Korobkin, who joined the faculty only in 2000.

The stem cell agency also received some attention this week on "Forum," a program on San Francisco public radio station KQED. Discussing CIRM were Christopher Thomas Scott, executive director of the Stanford Program on Stem Cells and Society; California state Sen. Deborah Ortiz, D-Sacramento; Jesse Reynolds, project director on Biotechnology and Accountability, Center for Genetics and Society, and Pilar Ossorio, assistant professor of law and medical ethics, University of Wisconsin Law School. You can listen to the program here.

Chron Story on Stem Cell Trial

The San Francisco Chronicle, in fact, carried a report this morning on the California stem cell trial. A couple of readers called it to our attention. It was the third item in a series of brief. Bernadette Tansey was the reporter.

Stem Cell Trial Coverage and Silent Testimony

News coverage of the California stem cell trial dropped sharply today with stories apparently only in the San Diego Union-Tribune and the Oakland Tribune. The San Francisco Chronicle sent a reporter Tuesday but apparently did not carry a story, based on a look at their web site.

The trial could be over today and is unlikely to produce any significant developments, which is why we aren't there today. The affair certainly will be over on Thursday. The next major development will be the filing of the final briefs and rebuttals by both sides.

Reporter Terri Somers of the Union-Tribune led with the focus on the constitutional issues involving CIRM and testimony by stem cell Chairman Robert Klein. She quoted Klein as saying,

“I'm thoroughly under the control of a spectrum of agencies of the government of the state of California.”

Reporter Rebecca Vesely of the Oakland Tribune wrote:

"Plaintiffs attempted to argue in Alameda County Superior Court that Klein, his board and agency staff operate outside state control and therefore violate state laws.

"'I'm extremely surprised by that concept,' Klein told the court. 'I am convinced we are under the authority and control of the state of California.'"

You could say that Klein's position on the relationship between CIRM and other state agencies has evolved. Last spring, the CIRM-Legislature connection was nearly malignant, but has since become less virulent.

But even at the worst stages, it would be hard for the plaintiffs to make the case that CIRM is outside of control of all state agencies. CIRM is certainly an extraordinary agency. Nothing like it has existed in California history. And it operates with greater freedom and lack of oversight than virtually any other branch of state government. But Tamar Pachter, deputy attorney general, has produced an impressive list of minor and major links between CIRM and other state agencies to make the case that CIRM is really a part of state government – not some other bureaucratic beast, as argued by plaintiffs. It was an enlightening display of how many state agencies could make serious mischief or worse for CIRM if it gets on the wrong side of some officeholders.

In another venue Tuesday, there was silent testimony to the weakness of the plaintiffs case. Advanced Cell Technology celebrated the relocation of its national headquarters to California, specifically Alameda, a small city on an island in San Francisco Bay.

Business reporter David Morrill wrote in the Oakland Tribune:

"'We came to California from Massachusetts because it allows us to be in an environment that we really believe will be the center or hub of this industry segment for the next 10 years,' said William Caldwell, chief executive of Advanced Cell Technology. 'We feel California provides more opportunities than Massachusetts because it not only provides an openness to do the research, but they are also funding that opportunity.' Advanced Cell's new 15,000 square-foot headquarters at 1201 Harbor Bay Parkway in Alameda were formerly used by Avigen Inc., which also has its headquarters on Harbor Bay Parkway."

ACT obviously does not believe the plaintiffs will prevail in their attempt to kill off CIRM.

Weak Case Made by CIRM Opponents

It has been a sow's ear of a stem cell trial.

For a couple of reasons. One is that it lacked drama. Two, the presentation of CIRM's opponents. They have taken their best shot, and it is way off the mark.

We may be wrong, but it appears that their best arguments were made months ago -- before the trial -- and rejected already by the judge.

Today's proceedings did not advance their case significantly and was dominated by CIRM's presentation, which appeared far more professional than the plaintiffs. Although CIRM's counsel had a couple of procedural fumbles with exhibits, it was nothing like the ones that plagued the opposing counsel.

CIRM's foes had an enormous burden. They had to prove that CIRM basically was not a state agency or controlled by the state. Today, Tamar Pachter, deputy attorney general, made point after point that a host of state agencies, ranging from the Department of Finance to the Legislature, can or have messed about in CIRM affairs.

Stem cell Chairman Bob Klein painted a nearly glowing picture of cooperation with the legislature and various state departments. The rocky side of that relationship was hardly touched on by the anti-CIRM people.

Mercifully, the entire affair will be put out of its misery in a couple of days. The state will call one more witness tomorrow, CIRM President Zach Hall. There will be some more haggling over additional evidence, which may require another witness from the plaintiffs to discuss the meaning of IP policy.

The judge indicated that everything could be wrapped up by Thursday. She is proposing written final arguments and only very brief oral closing arguments, if that.

But both sides have made it clear that the case will be appealed. The ultimate resolution looks like sometime next year, as predicted earlier.

Another Recess and Back At It

The following report on the California stem cell trial comes live from the Alameda County courtroom where the legal proceedings are underway. Your comments or questions are welcome as the trial progresses this afternoon.

We are just back from another recess. Bob Klein is off the stand. An official with the state treasurer's office has come and gone. Walter Barnes, chief administrative officer for CIRM, is on the stand. He came to CIRM from the state controller's office. He has been with CIRM since early in 2005. Barnes is detailing how warrants are prepared by state government. As you can tell from this and previous reports, the drama here is overwhelming. The hottest item I have is a hallway tidbit from Klein. He said CIRM had to produce 37,000 pages of documents for the folks who are suing to eliminate the agency. Stand by for more exciting reports.

Break Time Again

The following report on the California stem cell trial comes live from the Alameda County courtroom where the legal proceedings are underway. Your comments or questions are welcome as the trial progresses this afternoon.

We have just broken for a mid-afternoon recess. The plaintiffs are looking for a document that they say they haven't read. But they want to question Bob Klein about it. Attorney David Llewellyn became a tad more animated a few minutes ago as he pressed Klein on whether there were any guarantees that the state would earn any royalties from stem cell inventions financed by CIRM. Klein said no.

Lunch is Over

The following report on the California stem cell trial comes live from the Alameda County courtroom where the legal proceedings are underway. Your comments or questions are welcome as the trial progresses this afternoon.

Robert Klein continued his testimony following the lunch break. More discussion of CIRM documents continued. Klein answered questions about CIRM's intellectual property and ethical policies. He also discussed selection of working group members. He said the selection process started with 800 names. Media attention is way down today. The San Francisco Chronicle and San Diego Union-Tribune are here. No TV, however.

Stem Cell Trial Recesses for Lunch

The following report on the California stem cell trial comes live from the Alameda County courtroom where the legal proceedings are underway. Your comments are or questions are welcome as the trial progresses this afternoon. .

The California stem cell trial has recessed for lunch until 1:30 p.m. Tamar Pachter, deputy attorney general, will continue questioning stem cell chairman Robert Klein this afternoon. In his most recent testimony, Klein said that Oversight Committee members bring valuable expertise and knowledge to CIRM as the result of their backgrounds, which the plaintiffs contend create insurmountable conflicts of interest. Pachter is attempting to show that CIRM operates within the framework of state government and is a constitutional agency.

Klein Testifying About State Control of CIRM

Stem cell chairman Robert Klein is testifying this morning about how CIRM has worked with other state agencies, from the treasurer's office to the legislature. The line of questioning is being pursued by Tamar Pachter, deputy attorney general, in an effort to show that state oversight of CIRM does, in fact, exist. One contention of the foes is that CIRM operates so independently that it is unconstitutional. Klein has testified that the legislature, controller's and treasurer's offices and governor's office have all participated in developing various procedures and policies at CIRM.

Foes Probe Conflicts of Interest

Opponents of the stem cell agency this morning finished questioning stem cell chairman Robert Klein -- at least for the time being. Tamar Pachter, deputy attorney general, has just picked up questioning of Klein. CIRM foes focused this morning on conflict of interest, particularly in working groups. Largely the testimony was factual, dealing with requirements of rules and how the policy works. CIRM opponents contend that conflicts of interest are so great within the agency that it cannot operate as a constitutional state agency. They also contend that the CIRM working groups actually make decisions not recommendations. So far testimony has not proven that allegation.

Stem Cell Trial Resumes This Morning

The California stem cell trial has resumed this morning in Alameda Superior Court. Stem cell chairman Robert Klein is back on the witness stand and is being questioned by attorney David Llewellyn concerning the meaning of Prop. 71. We are filing directly from the courtroom as Klein testifies. Your comments and questions are welcome throughout the day.

Fumbling Marks First Day of Stem Cell Trial

It was a $6 billion playbill, but if you wanted good theater, you couldn't find it on Monday.

At issue is the existence of the California stem cell agency, which some conservative and Christian right organizations are seeking to terminate.

Their basic contention is that CIRM, created by voters through approval of a ballot initiative in a constitutionally authorized process, is actually unconstitutional because the agency is purportedly not under the control and exclusive management of the state.

The case of the CIRM foes moved slowly on Monday with fumbling over exhibits and evidence, tedious readings of long and short documents and a lengthy opening statement that tested the patience of Alameda Superior Court Judge Bonnie Lewman Sabraw.

No new ground was broken and about the only surprise was that the plaintiffs said they would base their case solely on exhibits.

Late in the day, they summoned stem cell chairman Robert Klein to answers questions about the meaning of CIRM documents. One series of questions attempted to clear up whether he was responding for CIRM, the Oversight Committee or simply as chairman. Another line of questioning, ultimately dropped, involved the meaning of "categories" and "programs."

At one point, attorney David Llewellyn, representing the California Family Bioethics Council, read a segment of the ballot analysis of Prop. 71 to Klein.

"Did I read that correctly," he asked Klein.

"Yes, you read it correctly," Klein responded.

Llewellyn apologized early to the judge for not having his exhibits in order.

Speaking for CIRM was Tamar Pachter, deputy state attorney general, who gave a 15-minute opening statement, the only presentation made by the defense in the day-long proceedings.

She denied that the agency, which will cost California $6 billion, was unconstitutional. She said the voters used their constitutional powers through the initiative process to "tear down barriers" and "strike directly through to their desired end." Pachter said CIRM opponents were using a "tortured interpretation of the (state) constitution" to support their case.

Following the day's proceedings, Mike Claeys of the Alliance for Stem Cell Research said he was "astonished by the lack of coherent arguments" and the "level of disorganization" of the plaintiffs.

CIRM's opponents did seem ill-prepared and poorly organized. But this was day one in the nonjury trial, which is certain to be appealed and ultimately not resolved for another 12 months or so. And a fumbling, country-boy routine may be part of the strategy.

Outside of the courtroom, four Bay Area TV stations collected sound bites from all the principals, including Llewellyn, who sounded crisper and more on message than he was in the courtroom. We understand that at least two radio stations covered the affair along with the usual gaggle of print reporters, but none from out of state.

What appears on TV is not likely to reflect courtroom fumbling, but rather the interviews in the corridors with Llewellyn and his fellow attorneys as well as with Klein and his supporters including four who showed up in wheelchairs.

It is the second venue for CIRM. It needs to win both in court and with the public.

CIRM On The Mark With Media Info

The California stem cell agency moved adroitly last week to stay on top of the media agenda in connection with the beginning of today's trial challenging the very existence of the institute.

Nicole Pagano, a spokeswoman for CIRM, released a notice to the media on Feb. 23 containing the various times, names and basic details of the trial. It was the kind of stuff that rarely makes its way in an obvious fashion into news stories but is quite helpful to reporters, particularly out-of-town reporters and those not well-versed in the issue.

The email notification went beyond those matters to include attachments that will help set the tone of the reporting during the trial and expose reporters to information that they may not have seen until now. The attachments included an 1,862-word rundown on the key attorneys in the case, including the CIRM opponents; a 1,378-word background paper on the organizations involved, again including the CIRM opponents; a 1,796-word timeline on the litigation, and a copy of the 42-page filing by the state on behalf of CIRM.

The material was generally straightforward, quoting from the web sites of CIRM's opponents, even using some of their special terminology such as "the unborn." When sources were not specifically cited, it appeared that the information was the result of pretrial research into the opposing attorneys and their public records.

All of this is quite helpful to reporters, even if they don't use it immediately in stories. The information also has subtle effects that accrue to CIRM's benefit. It tends to make CIRM the lead source for information on the trial and set the agenda for the terms of the public debate about the trial. It tends to create an aura of authority for CIRM, that contrasts favorably to its opponents, at least so far. The information also tends to bolster CIRM's contention that the main motivation of its opponents is religious as opposed to a desire for good government and policy. That kind of background is likely to filter into many news stories.

Providing such information certainly comes under the legitimate functions of any state agency, although some might argue whether it is appropriate for CIRM to release short biographies of opposing attorneys.

Nothing similar was available from CIRM's foes.

As of this writing, the background information is not available on CIRM's website. Presumably, you can receive it by sending an email to npagano@cirm.ca.gov. If that doesn't work, send a request to us, djensen@californiastemcellreport.blogspot.com, and we will forward the information to you.

Coming Up

For those of you who have forgotten, the California stem cell agency goes on trial in the Apricot Capital of the World on Monday. More specifically in Alameda County Superior Court in Hayward, Ca. The nonjury trial is scheduled to begin at 9:30 a.m. Pacific Standard Time. We will be in attendance and will file a report at least by early evening on Monday, perhaps sooner, depending on time constraints and Internet accessibility. Here is a link to a piece Sunday by reporter Paul Elias of The Associated Press, setting the stage for the showdown. Here is another piece by Rebecca Vesely in the Oakland Tribune.

The Wages of Eggs

Cash and human eggs – some folks simply do not want to see them linked together, only reluctantly recognizing that women who donate eggs should be reimbursed for their expenses.

The California stem cell agency recently decided to permit reimbursement for lost wages, a position that troubles California state Sen. Deborah Ortiz, chair of the Senate Health Committee and author of legislation that would regulate egg donations involving non-CIRM funded research.

She cites ethical and fairness issues, among other problems, in implementing a policy of reimbursement for lost wages.

We asked Ortiz' office, via email, for an elaboration on her position, including examples of how reimbursement would amount to coercion or inducement.

Hallye Jordan, director of communications for Ortiz, said the senator's general concern

"is that it would be difficult to establish a fair system for reimbursement of lost wages, particularly when the pool of subjects may include professional women who would be compensated for high hourly earnings and low-income women who may be compensated at minimum wage.

"For a higher income, professional subject, her employer may be able to accommodate her lost time if she is paid by salary. In that case, a credible argument could be made that payment for lost wages that isn't necessary could constitute a monetary reward that goes beyond the 'direct' expenses.

"For women who don't work, or are paid on a seasonal, informal basis, a lost wages policy won't benefit them, anyway. That suggests others steps may be needed to increase diversity among egg donors."

We pursued the question a bit further with Jordan, while noting that the whole question is a bit murky. Here is our subsequent question and Jordan's response.

California Stem Cell Report:
How could a $40,000-a-year woman afford to take off any substantial amount of time if she loses pay? Or even a $70,000-a-year person? Most households in that range do not have the economic slack to accommodate big losses in wages. And workers in that range are not likely to be excused with pay by the employers in order to make egg donations. As for non-working women and seasonal workers, that could be even tougher. A woman who does not work outside of the home makes a genuine, measurable economic contribution to a household. If she is away for any length of time, presumably somebody would have to be paid to perform her tasks.

As for the seasonal workers or informal workers, what "other steps" might be taken? If successful diversity efforts are to be made, something has to be done to recognize the economic situation of persons in minority groups.

Jordan:

"Good points, all. But I don't see how CIRM could pay for lost wages to awoman who has no income. Would they then reimburse her for child care,cooking, cleaning, if she hires someone to take her place in the home? That opens up that whole arena of non-direct expenses, which Prop. 71 prohibits, and (CIRM chairman Robert) Klein said, at the Aug. 30 meeting, includes lost wages. So, all I can say is 'tis a sticky situation."

As Jordan indicates, the final word has not yet been written on this matter. Ortiz' legislation is in its early stages and subject to considerable modification. CIRM itself indicated when it adopted its regulations that it was open to changes. Whether it will go so far as to change the wage reimbursement provision is unclear, but probably unlikely.

Stem Cell Ethics Rules "Flawed"

The Center for Genetics and Society says that the recently adopted ethics standards of the California stem cell agency are "fundamentally flawed" and that its intellectual property rules are unlikely to come close to recouping the cost of the agency's program.

In its most recent newsletter, the center, a longtime critic of CIRM, says,

"While the research standards adopted by the governing board of the California Institute for Regenerative Medicine (CIRM) have some improvements in the details, the core of the policy remains inadequate. It leaves the approval of research protocols to local 'Stem Cell Research Oversight Committees' that will be formed by, and affiliated with, the institutions doing the research.

"These committees will consist largely of stem cell researchers themselves and their colleagues from related scientific fields, whose sympathies and loyalties are likely to lie with their institutions and with the research. Further, there will be no oversight of these committees, and key information will not be available to the public for scrutiny."

The center continued,

"The state's share of revenues under the new policy on intellectual property is unlikely to make a significant dent in the $6 billion cost of the program, and it is far from clear that this huge public investment in stem cell research is the best use of funds to promote the health of most Californians."

The center noted that the campaign for Prop. 71 promised that the program would pay for itself. Of course, those promises were based on a study that the campaign purchased.

The center's newsletter, Genetic Crossroads, provides a useful overview of recent events involving CIRM, including links to other coverage. But it includes many other topics as well. For example, the Feb. 23 edition includes research cloning, a recap of the latest developments in the Hwang affair, coverage of the Schatten case and other stories on related matters in this country and abroad. The newsletter is available by free electronic subscription.

CHI, Stem Cells, Love and Morrow

The California Healthcare Institute made some stem cell news this month with the appointment of a new director to its board and with the involvement of its chief counsel in an faith-based political flap.

CHI, a biomed industry group and supporter of the California stem cell agency, named Ted Love, chairman and CEO of Nuvelo Inc. of San Carlos, a biopharmaceutical firm, to the CHI board of directors. Love is also a member of the Oversight Committee of the California stem cell agency.

Earlier this month, CHI and stem cell research surfaced in a different way in the congressional campaign of Republican state Sen. Bill Morrow. His wife, Barbara, is vice president and general counsel of CHI.

Her connection to CHI became an issue, at least for some, because CHI supports embryonic stem cell research, something that Christian activists oppose.

According to the Agape Press web site, whose motto is "reliable news from a Christian source:

"Senator Morrow does not deny that his wife is employed at the Institute. But he claims her work as general counsel does not require her to promote the company's position on ESCR. The state lawmaker explains that his wife took the job after much prayer and consideration.

"'We sat down with pastors and nationally known bioethicists who were Christians and ministers ... before we accepted that position,' Senator Morrow says.

"Morrow states that he and his wife felt 'very comfortable' with the advice they received -- specifically, that it would clearly understood Mrs. Morrow would not be called on to lobby in support of ESCR. 'And under those conditions, which they've held up to, that's what she's done,' he adds."

Stem Cell Audit Proposal Delayed

Consideration of a proposal to have the legislature's auditor general examine the California stem cell agency has been put off until March 8 or later.

The office of Sen. Deborah Ortiz, who backed the audit along with a bipartisan group of 10 other legislators, announced the delay. No further explanation was offered.

$25 Million for Stem Cell Research and Other Stuff at USC

Funding for stem cell research in California received a big boost today from a self-made billionaire who is the son of Lithuanian immigrants.

The money -- $25 million – is going to USC to create the Broad Institute for Integrative Biology and Stem Cell Research. The institute will be named after Edythe and Eli Broad, who provided the funds through the Broad Foundation.

USC said the 215,000-square-foot facility will be the largest stem cell research center in California when it opens in 2008. The program will involve Childrens Hospital in Los Angeles and teams from Caltech and other regional scientific institutions.

Eighteen new investigators will be involved in the Center for Stem Cell and Regenerative Medicine and another 18 will be engaged in transplant biology, cardiovascular disease, diabetes and other metabolic diseases.

Broad co-founded the Kaufman and Broad home building firm and once owned SunAmerica insurance company, which he sold to AIG in 1998 for $18 billion, according to Forbes magazine. Broad was estimated to be worth $6 billion by Forbes.

Frankenstein, Train Wreck or Good Listener?

The Los Angeles Times has joined The Sacramento Bee in calling for more public disclosure of the financial interests of scientific advisors to the California stem cell agency.

In an editorial today, the Times said,

"One issue the institute still must confront is making the financial disclosures of its scientific advisors open to the public. These scientists will recommend which grant proposals should be approved, and it's important for the public to know that the reviewers, who often have links to companies and universities, will not be enriched by the advice they give.

"The agency's leaders argue that no worthwhile scientist would stand for such disclosure. But it's entirely reasonable — and increasingly common — to ask stem cell scientists to disclose their financial and research relationships. If a scientist wants to help decide how California spends $3 billion on stem cell research, he or she should be willing to take steps to assure the public that its money is being well spent."

The editorial generally lauded the agency, particularly the ethics and intellectual property rules approved earlier this month. But it added,

"It has taken more pressure from public interest groups than it should have to set the institute on the right path. That's probably because the governing board has no members from such groups, something the Legislature should correct once the three-year moratorium on amending Proposition 71 is over. Still, the board showed that it has learned how to listen and respond, one of its most promising steps so far."

On Sunday, the agency was likened to a Frankstein monster in an op-ed piece in the San Francisco Chronicle. Dana Welch, executive director of the Berkeley Center for Law, Business and the Economy, posed a series of questions about the agency, ranging from the direction of CIRM's priorities to IP rights.

"Prop 71 left these questions and more wide open. Answer any one wrong, or leave them to chance, and we risk a South-Korean-like train wreck, potentially setting back by years the development of potential cures. Answer these questions right, and California becomes a model for other states and countries conducting stem cell research," she wrote.

The questions raised by Welch are identical to the ones being discussed at a conference early in March at Boalt Hall in Berkeley. Her group is one of the sponsors.

Ortiz Seeks Performance Audit of CIRM; Westly Says "Tough Oversight" Needed

Acting on a suggestion of Gov. Schwarzenegger, California State Sen. Deborah Ortiz and nine other legislators are calling for a performance audit of the California stem cell agency.

Their request will come before the Joint Legislative Audit Committee on Wednesday at 1:30 p.m. in room 447 of the state Capitol.

In the letter calling for the audit, Ortiz, a Sacramento Democrat, said the review should include:

"...the strategic policies and plans developed by the CIRM and the ICOC; policies and procedures for issuance of research and facility contracts and grants; policies for hiring and compensation of staff and for procurement of goods and services; policies for managing conflicts of interest for ICOC and working group members; and policies and procedures relating to management of intellectual property rights associated with research funded or commissioned by the CIRM."

She noted that a performance audit of CIRM would have been required by her legislation (SB18) that was vetoed by the governor. She said the governor's veto message urges the legislature to pursue an audit through the Joint Legislative Audit Committee.

Ortiz' request, which includes support from three Republican legislators, calls for completion of the audit by Sept. 30. Her office did not issue a press release on her Feb. 1 request letter. We asked for it after discovering the item on the agenda of the Audit Committee.

CIRM also faces an audit of its own that will cost about $50,000 and be performed by the firm of Gilbert Associates of Sacramento. But the one requested by Ortiz is likely to be the most rigorous.

State Controller Steve Westly, who is seeking the Democratic nomination for governor, announced last week he would be reviewing CIRM's financial activities. Westly's campaign is making a special effort, fueled by Google ads, to "get stem cell research back on track now."

As state controller, Westly is also chair of the Financial Accountability and Oversight Committee of CIRM and is required by law to "review" CIRM's own audit annually and issue a public report.

In a little noticed press release last week, Westly described himself as a strong supporter of Prop. 71 and said, “Tough oversight will ensure the public's confidence in our stem cell program. The stakes are too high for the institute to risk its funds or the public's trust.”

Westly's office will review the audit already commissioned by CIRM and discuss it a meeting of the Financial Accountability Committee later this spring.

In addition to himself, Westly announced that following the following persons are on the committee:

"Richard Siegal, member, appointed by the State Controller
"John Hein, appointed by the Assembly Speaker
"Jim Lott, appointed by the Senate President Pro Tem
"Daniel S. Brunner, appointed by the State Treasurer
"Myrtle Potter, member, appointed by the Chair of the Independent Citizen's Oversight Committee"

No further information was provided in Westly's press release about the qualifications of the five persons.

A copy of Ortiz' letter follows below because it was not available online at the time this writing.

Ortiz's Audit Request Letter

Here is a copy of Sen. Ortiz' audit request letter.

February 1, 2006

Assemblymember Nicole Parra
Chair, Joint Legislative Audit Committee
State Capitol, Room 4005
Sacramento, CA 95814

Dear Assemblymember Parra:

We are writing to request that the State Auditor conduct a performance audit of the California Institute for Regenerative Medicine (CIRM) created by Proposition 71, the California Stem Cell Research and Cures Act, in November, 2004, and to report the results of the audit by September 30, 2006.

We believe a performance audit of the CIRM and the Independent Citizen’s Oversight Committee (ICOC) which governs it would be of great value in guiding the implementation of this large new state program and ensuring that taxpayers’ funds in this area are well spent. Among other things, we would recommend that the audit review the strategic policies and plans developed by the CIRM and the ICOC; policies and procedures for issuance of research and facility contracts and grants; policies for hiring and compensation of staff and for procurement of goods and services; policies for managing conflicts of interest for ICOC and working group members; and policies and procedures relating to management of intellectual property rights associated with research funded or commissioned by the CIRM.

As has been widely reported, the initial implementation of this important new program has been hampered by a number of problems. Due to litigation, the CIRM has not been able to issue bonds to commence making research and facility grants. As a result, the program has relied on loans from private individuals and may soon begin issuing bonds that are not backed by a payment guarantee by the state. In addition, a number of CIRMs hiring, compensation, and contracting actions and expenditures have been questioned as being excessive. Finally, many reviewers have questioned the criteria used to select a site for the CIRMs administrative offices.

SB 18 (Ortiz and Runner) of the 2005-06 Session would have required the State Auditor to conduct a performance audit of the CIRM and the ICOC and to provide the audit report to the Legislature on or before June 30, 2006. It would also have required the State Auditor, on or before October 2007, to provide an analysis of the CIRMs implementation of the recommendations contained in the audit report.

In his veto message, the Governor stated he was vetoing the measure due to concerns that these provisions constituted an impermissible legislative amendment of Proposition 71, which provides that its provisions may be amended by the Legislature in furtherance of its purposes no earlier than the third full calendar year following its adoption by 70 percent of the membership of both houses or the Legislature. The veto message urges the Legislature to pursue a performance audit of the CIRM through the Joint Legislative Audit Committee. Accordingly, through this letter we are requesting that JLAC commission a performance audit of CIRM and the ICOC.

Thank you for your attention to this request. If you have any questions regarding the request, please feel free to contact us or our staffs.

Sincerely,



_
SENATOR DEBORAH ORTIZ, SENATOR GEORGE RUNNER, SENATOR LIZ FIGUEROA, SENATOR SHEILA KUEHL, SENATOR ABEL MALDONADO, SENATOR RICHARD ALARCÓN, SENATOR GLORIA ROMERO, SENATOR ROBERT DUTTON, SENATOR JACK SCOTT, ASSEMBLYMEMBER WILMA CHAN, ASSEMBLYMEMBER JACKIE GOLDBERG

Major Stem Cell Conference Scheduled for March 2-4 at UC Berkeley

Another major stem cell conference is scheduled for March in Bay Area. This one is is being held March 2-4 at UC Berkeley's Boalt Hall and is called "California's Stem Cell Initiative: Confronting the Legal and Policy Challenges."

The 2 ½-day conference has a host of speakers ranging from Ed Penhoet, vice chair of the California stem cell agency, to California state Sen. Deborah Ortiz, who is carrying legislation to step up oversight of the agency. Scientists, academicians, economists and more are scheduled to appear.

You can register at this link. The cost ranges from a $350 corporate level to $25 for students. You can access a fine bibliography of articles by speakers at the conference by clicking here. The other March conference is sponsored by Burrill and Company, a San Francisco life sciences merchant bank. Registration fees are $1495 for that meeting. You can read our earlier item on it here.

Clashing Interests on the Stem Cell Oversight Committee

It happened so quickly that only a keen-eyed parliamentarian might have noticed.

One minute the Oversight Committee of the California stem cell agency had a quorum. The next minute it didn't. It was late in the day last Friday. Some members had already left. Then two more members left the room, after expressing displeasure about procedures to create a long overdue strategic plan on how to spend $3 billion. That stymied a vote on the proposal.

"I am extraordinarily disappointed," said Oversight Committee member Claire Pomeroy, dean of the UC Davis Medical School, "that we are not going to have a quorum. We have not carried through on our responsibilities." Her comments came well after the departure of the two other committee members.

On the surface, the matter seems minor – planning a plan, what could be more picayune? But the real stakes – broadly speaking – pit the priorities of the patient advocates against the academic contingent on the board The patient advocates – 10 out of 29 persons on the committee -- represent groups of persons who have diseases that could benefit from stem cell therapies. Generally, the advocates emphasize great speed in bringing cures to the marketplace. The academicians on the board stress thorough science and warn that it is a slow process.

Serving as backdrop to their issues is the Korean stem cell scandal. Some say the focus on speed was one of the causes leading to the fraud.

On Friday, the plan for the strategic plan was carefully laid out by CIRM President Zach Hall. He said it would be a $500,000 effort, conducted by CIRM staff and brought to the board for approval and changes in the summer of 2006. Hall said Price Waterhouse Coopers would be chosen to assist in devising the plan. Overseeing the effort would be a relatively small subcommittee of Oversight members, selected by Hall.

It was the nature of subcommittee that triggered the objections of the two board members, David Serrano-Sewell and Jeff Sheehy, who walked out of the meeting. Serrano-Sewell said he said he was uncomfortable with the subcommittee and not knowing who would be on it. Sheehy echoed his concern. Their objections were relatively brief compared to the hours-long discussion of the planning process at December's Oversight meeting.

One of the issues complicating the process of coming up with a plan is a state law that requires the public to be notified well in advance of meetings by public bodies.

Hall's plan would avoid much of the time-consuming process by minimizing the number of required public meetings. It would also make it easier to call meetings of the public subcommittee. A smaller group means fewer schedule conflicts when setting up sessions. Hall did indicate that he did not want to short-change the public in terms of its opportunity to make its voices heard.

Representatives from academic institutions praised Hall's plan at Friday's meeting, noting that it was similar to the way their organizations operated. In other words, charging the staff to develop the proposal and bring to it the full board for changes and approval.

But Joan Samuelson, a patient advocate, said the strategic plan was very important and that the board was going to have to "own" it. She later told us that the patient advocates wanted to be very involved in planning and said that others seemed more worried about complying with open meeting laws than the stem cell research.

The discussion of the issue at Friday's meeting was relatively brief. To catch a better flavor of the positions here are a few excerpts from December's Oversight Committee meeting, which unveiled many concerns.

Jonathan Shestack, founder and president of Cure Autism Now:

"The motion that you have before you is a recipe for no board involvement in the strategic planning. Yes, it is. It makes that possibility very real. it makes all input be at will of staff except for presentation at the ICOC meetings. These are large, fairly unwieldy meetings....I don't mean to be negative about the staff because they are expert and fantastic, and we depend on them, but there is right now no real mechanism on the strategic decisions for the various communities to participate, particularly advocacy and particularly industry. And I think that just giving the full duty to staff and saying present it to us once in a while, and we'll tell you what we think is not to get into the detail that some people would want."

David Serrano-Sewell, representing the
Amyotrophic Lateral Sclerosis Association and National Multiple Sclerosis Society

"Commitments from the office of the (CIRM)president...just putting it in one individual -- for me, right now --is not enough. (During) my conversations with my appointing officer (the person who appointed Sewell to the CIRM board), there was a real commitment that we do a good job to represent our constituencies. and for me that's MS and ALS".

Shestack

"I also think there is a danger when all the positions -- academic, advocacy, industry -- are not talking to each other, talking only to a central person who then filters their needs."

Gerald Levey, dean of the UCLA Medical School

"I would hope that the board is not so balkanized that we think about who we represent and how we got here. i think now that we're a board, we're supposed to be thinking like we all have the same goal, the same purpose. and I would hope that the goal is to further stem cell research in the state of California -- not whether academia is being served better in the process or industry or what have you. So i hope that we don't get into a situation where we have us against them on the board."

"The matter of the plan concluded at Friday's meeting with discussion of another plan to hold a conference-call meeting in the next few weeks of the Oversight Committee to vote on Hall's plan for the plan

."

One final note: Nineteen members of the 29-member Oversight Committee are required for a quorum. Otherwise, the board cannot take legal action.

Human Tidbits Amid Stem Cell Policy

The California Stem Cell Report spends most of its time blathering about policy issues involving the California stem cell agency. Good grits for wonks. But there is another view. I just took a quick look at Don Reed's blog, stemcellbattles.com, and his report on last Friday's meeting of the Oversight Committee meeting. He focused on the "spotlight" on diabetes prior to the actual meeting. Nice, human touches and tidbits about the people and players you won't read elsewhere.

Valentine's Day Editorials on CIRM

Two California newspapers came out with editorials today praising actions last week by the California stem cell agency. It is only coincidental that the pieces appeared on Valentine's Day. The critics still want more.

The Sacramento Bee, one of the stronger critics of CIRM, said.

"On Friday, Klein and the oversight committee took a big step toward reversing past mistakes and demonstrating they can operate as an open, responsive public body. After listening to public interest groups, ethicists and legislators, the 29-member committee approved policies on medical standards and commercial licensing of stem cell therapies that, while not perfect, are a vast improvement over where the institute was heading just a few months ago."

But it also wrote,

"For the last several months, the institute has refused to make public the economic disclosure forms filed by out-of-state scientists who will recommend millions of dollars in research grants. The public deserves to know if these advisers have ties to companies and researchers applying for public monies. Since scientists regularly disclose their potential conflicts when publishing or presenting their work, there is no reason they cannot do so while making key decisions on taxpayer-funded grants."

The San Jose Mercury News also praised the egg and royalty sharing policies adopted last week by CIRM.

The Foundation for Taxpayer and Consumer Rights hitched a bit of a ride too on the Valentine Day bandwagon, lauding the actions as moving in the right direction.

But it urged more royalty money for the state, tougher enforcement mechanisms to assure low prices on therapies and creation of a stem cell patent pool to share information on CIRM-funded inventions.

"Certainly companies should make a fair profit on drugs they develop based on Proposition 71-funded research. But they must not be allowed to benefit unreasonably at the public's expense. The Attorney General should have the right to intervene -- 'march-in rights' -- in the event of unreasonable pricing," said John M. Simpson, stem cell project director for the foundation in a letter to CIRM Chairman Robert Klein.

We should also note the piece by Marisa Lagos of the San Francisco Examiner on last Friday's meeting. It pointed out that the CIRM regulations could become a model for the nation.

Reader's Write

The following email came in from John M. Simpson, stem cell project director of the Foundation for Taxpayer and Consumer Rights, regarding our "What's in a Name?" item.

"I liked your astute analysis of the naming rights issue.

"I agree that in a perfect world it wouldn’t happen, but given CIRM’s circumstances the institute probably needs the money.

"The ICOC will have to screen potential donors to make sure there are no outrageous or inappropriate contributions. That’s why the board is there.

"All the transactions must be completely transparent and organizations like the Foundation for Taxpayer and Consumer Rights will continue to monitor ICOC activities to ensure no abuses occur."

We encourage comments, favorable or unfavorable, or even insightful and enlightening. You can post them directly or anonymously by clicking on the word "comment" below each item. Or you can send them to djensen@californiastemcellreport.com.

Egg Irony

LifeNews.com is a Web site adamantly opposed to embryonic stem cell research. It is describes itself as an enterprise that reaches 150,000 pro-life advocates each week through various means.

So it comes as a bit of a shock to see ads on at least one of its Web pages soliciting egg donors. One of the ad sites, Loving Donation, says it pays its egg donors a minimum of $3,000 with high demand donors commanding higher fees. The ads are placed on LifeNews.com pages automatically by Google so LifeNews.com has no direct control over them. It is also unclear whether any of the fertility clinics that advertise also supply excess eggs for research purposes.

The Google ads change regularly on Web pages so there is no guarantee that you will find them there in just the same way. But here is the link to the page where we saw them.

What's in a Name? Ten Million Dollars or More

California is not likely to see something called the Pfizer/CIRM Research Scholars Program, but the stem cell agency is on its way to peddling naming rights in the world's largest stem cell research effort.

Peddling probably is not the most generous way to describe the effort, which seems to be an essential ingredient in assuring funding of programs this year. A more euphemistic way to say it would be: Providing an incentive to make a $10 million gift to CIRM.

The Oversight Committee moved forward with the program last week after stem cell chairman Robert Klein said it would apply only to grants of $10 million or more. Naming rights would not be available to purchasers of bond anticipation notes.

Initial screening of the naming candidates would be done by the executive committee of CIRM in private. The names of candidates would then come before the Oversight Committee in a public session for approval or rejection.

Generally board members last week favored the program, declaring it was a good example of public/private partnerships. Klein said that universities have naming programs for lectureships, fellowships and buildings. Oversight Committee member Jeff Sheehy noted the NIH has a naming program for one of its grant efforts.

During his discussion of the plan, Klein implied that he has a potential donor who is very interested in a naming opportunity.

The naming proposal was discussed publicly as early as August during a Governance Subcommittee meeting (see page 66 of the transcript). It came up again late in the day at an Oversight Committee meeting September. It was then that it encountered its only serious opposition(see page 315 of the transcript).

Gayle Wilson, who is no longer a member of the Oversight Committee, said she did not know of other state agencies with similar programs outside of academic institutions. The wife of former Gov. Pete Wilson said, "I don't think it's a good idea. I think we'll be blasted for it."

Tina Nova, another Oversight Committee member and president of Genoptix, a San Diego biotech and lab firm, said,

"I can see a lot of downside because, as we all know, people are constantly trying to figure out what are the motivations, what are the hidden agendas. At the end of the day, people who are trying to support this initiative in a pure sense ought to be doing it for the benefit of seeing the research advance and not for the benefit of seeing their name associated with fellows who are trained. So I think I'm probably more cautious because I do wonder if at the end of the day we could create more challenges and if it really does help us that much."

Nova did not express opposition to the plan on Friday, but she may have left the meeting by the time it came up late in the session. (It is difficult to keep track of the comings and goings of the 29 committee members, particularly late in the meetings.)

Jesse Reynolds of the Center for Genetics and Society voiced the only public opposition to the plan. He said it could "open the door to real or perceived conflicts of interest." For example, he said it would be inappropriate to grant naming rights to Geron, a California stem cell firm. Klein said he was in "heated agreement" on that position.

Our judgment: In a perfect world, CIRM should not do this. But it needs the money and this is relatively benign, although experience tells us that bigtime donors generally expect a quid pro quo. Sometimes they are innocuous (say front row seats at the exciting Oversight Committee meetings). Other times, CIRM officials may have to vigorously resist inappropriate overtures from the $10 million donors. But that is part of the public responsibilities of CIRM executives and board members. Failure to do so will ultimately surface (there are no secrets in government) and embarrass the agency and the officials personally.

Still Coming Up

We have not forgotten our promise for more exciting items from Friday's meeting, particularly the item about naming rights and the strategic plan flap. We still are planning on those and much, much more. So stay in your seats, folks. However, this time we are not going to promise a specific time frame. But certainly sooner than Bob Klein comes up with his $50 million(see item down one from here.)

CIRM-UK Stem Cell Conference Later This Year

The California stem cell agency plans to co-host a joint conference with the United Kingdom's Medical Research Council and CIRM later this year in Great Britain.

Zach Hall, president of CIRM, announced the plans at Friday's Oversight Committee meeting. He said 16 US scientists and 16 UK scientists would convene to discuss stem cell self-renewal and differentiation.

Hall noted that Council is the equivalent to the National Institutes of Health in the United States and that it is unusual for a state organization and a foreign national council to co-host such a conference. The arrangement carries particular weight because the UK is an international leader in stem cell research.

"California has become sort of a surrogate for the U.S. effort on stem cell research," Hall said. The CIRM president credited Stephen Lynn of the British consulate in California with helping to put together the conference.

Lynn is one of the regular attendees at CIRM meetings and keeps close track of its affairs. We also should add that we know of at least several readers of the California Stem Cell Report with UK connections.

Hall said that his agency still must raise funds to uphold its end of the conference.

Klein Confirms $40 Million Commitment

Stem cell chairman Robert Klein says he is not expecting to be ready to have $50 million to hand over to the stem cell agency at its next scheduled meeting in April, but he says he is close.

During a brief interview following Friday's Oversight Committee meeting, we asked him for more details on his efforts to sell bond anticipation notes to fund the activities of the agency. He said he has more than $40 million in commitments but wants $50 million. Then, Klein said, the state treasurer's office will have to take five to six weeks to complete the paperwork, but he declined to go into more detail.

The notes are expected to be sold to philanthropic organizations. If CIRM loses the lawsuits against it, the notes will not be repaid.

The agency will run out of money in June under its present budget plan.