Somewhat Differing Views On ACT

Murky and optimistic – two terms applied to the prospects of Advanced Cell Technology, the only island-based stem cell company in California.

Reporter Steve Johnson of the San Jose Mercury News prepared a piece on the business of ACT late last week. He quoted on William Caldwell, CEO of ACT, as being "very optimistic" on his enterprise. Johnson wrote:

"Advanced Cell Technology disclosed that it expects to get $13.5 million in funding from investors. Moreover, the company next year plans to seek federal approval to begin studies in people of its proposed stem-cell treatment for macular degeneration, an eye disease."

Johnson continued:

"The firm has consistently lost money since its inception and last year reported a net loss of $9.4 million. Its revenue from licensing fees and royalties totaled $395,007.

"Consequently, it has resorted to unusual tactics to save
cash.

"When it public last year, for example, it didn't use the usual method of doing an initial public offering. Instead, it chose the cheaper route of taking over an existing public company, acquiring Two Moons Kachinas, which sold kachina dolls used in American Indian ceremonies. Advanced Cell Technology then changed Kachina's stock symbol and is traded on the over-the-counter bulletin board as ACTC.OB.

"Despite a huge jump in its stock price after Wednesday's announcement, the company's stock has fallen from a high of $2.95 a share on Oct. 17 last year to 96 cents at the close of trading Friday. Its future remains murky."

(As for that island business in the first paragraph of this item, it is not widely known that the city of Alameda is on an island in San Francisco Bay. We report that as part of our effort to educate the public about important geographic issues. We are also fond of interesting minutia.)

Vatican to ACT: No Way

How often does the Vatican take on a humble business based on a tiny island in California?

Maybe once.

And that one time came on Saturday when Monsignor Elio Sgreccia, No. 1 in the Vatican on bioethical questions, gave a thumbs down to Advanced Cell Technology's latest development on extraction of embryonic stem cells.

ACT should capture the good monsignor's pronouncement and emblazon it on the walls of their headquarters in Alameda, Ca., which is a city on an island in San Francisco Bay.

Stem Cell Snippets: Interviews to IP

News, press releases and other interesting items related to stem cells in California.

Salary—Earlier, we indicated we would bring you the salary of the new chief communications officer at CIRM. The range for the position is $130,000 to $195,000. He is receiving $180,000.

Strategic Plan – Interviews conducted during the stem cell plan process now stand at 69 and appear to be nearly complete. Here is the list. Here is a rundown on the events and number of persons involved.

IP – The Wellcome Trust, a nearly $20 billion charity in Great Britain funding biomedical research, will be on the agenda next Tuesday at CIRM's latest IP meeting, including its revenue sharing and funding agreements. Also added to the agenda is consideration of "pertinent public comment" on nonprofit IP policy.

Conflicts – Jesse Reynolds of the Center for Genetics and Society criticizes the Connecticut stem cell effort for conflicts of interest, pointing to California as an example not to be emulated.

What About WARF?

The announcement that Advanced Cell Technology has developed a new method for extracting embryonic stem cells has raised questions about its impact on WARF – the Wisconsin Alumni Research Foundation.

Reporter Jim Downing of The Sacramento Bee quoted Stanford law professor Hank Greely as saying:

"The mere fact … of having a new way to make embryonic stem cells weakens the WARF patents, which I think is a good thing."

Downing continued:

"Greely said that the main complaint with the Wisconsin patents is how the foundation has chosen to enforce them.

"'Stanford and UCSF have the seminal genetic engineering patent, and they … quite cleverly, had very lenient license terms for non-universities -- a relatively small cash amount and a small royalty,' Greely said. 'And the result was, the technology went everywhere and those two universities made a lot of money.'

"By contrast, he said, 'WARF is making enemies.'"

Downing reported that WARF did not respond to two requests for comment. However, the Wisconsin Technology Network did have a general reaction from WARF in a piece by Joe Vanden Plas.

"Andrew Cohn, a spokesman for WARF, said the new method of deriving stem cells should not hurt Wisconsin's standing as a leader in stem-cell research. He also said WiCell, the nation's first stem-cell bank and a subsidiary of WARF, would be interested in helping distribute stem cell lines derived from this method.

"He also said it's too early to tell how the new method would impact WARF's stem cell patents. 'We don't even know what they claim in their patents, but that's the last thing we're concerned about,' Cohn said. 'We need time to dissect and digest its full impact.'"

After the Lights Go Out at CIRM

What happens when the California stem cell party is over? That's one of the questions posed to the agency as it maps a strategy to give away $3 billion. The question is not insignificant. CIRM has only about eight more years left on its clock. The measure that created CIRM gave it a 10-year life, nearly 20 percent of which has expired.

Martin McGlynn, president of StemCells, Inc., of Palo Alto, gave this response:

"I would ask CIRM to clearly define success. Publish a road map to achieve those successes. I would offer two thoughts as to what you might deem success. I look to the notion of what happens when the party is over....:

"There would be Centers of Excellence in the state with a critical mass of world-class talent and a proven track record or diversity at each center in its chosen field of endeavor.

"You would have created a vibrant, sustainable for-profit sector that focuses on applied research and the translation of discoveries into use for the benefit of mankind. Those entities by then should be fundable by more traditional sources of funds.

"The cycle time for the work that needs to be done is twice what VCs wants to see, so get out of blocks quickly, leverage your dollars, and make sure you are the first money to accomplish your mission."

McGlynn was among a number of private sector folks who discussed strategic planning issues last month with CIRM. Their comments are summarized in a 40-page document now available on the Web. The summary adds considerable meat to the skimpy bones of their Power Point presentations.

Here are a few more excerpts.

Bruce Cohen, president and chief executive officer, Cellerant Therapeutics of San Carlos, Ca., on CIRM's goals:

"The taxpayer needs to see a return on this investment. You need to find a way for them to see company and job creation, which will come sooner than cures for some of the debilitating disease we are trying to address. So we need to encourage capital to come in to accelerate new businesses and let existing businesses get bigger.

"You also need to get therapies into the clinic so voters will see a potential change in their lives. You need to accelerate the process by which adult and embryonic stem cells therapies find their way to people. Even if it's an inconclusive Phase I trial, you'll be happy someone with state funding is trying to accelerate the process.

"It's those two things that will make people who voted for this appreciate what’s been done on their behalf."

Sumit K. Chanda, group leader,, Division of Cellular Genomics, Genomics Institute of the Novartis Research Foundation, on core facilities:

"We have started to get into a little bit of stem cell screening. These are the major challenges and possibilities that we have seen using high-throughput screens using stem cells:

"One of the possible solutions that I am proposing is a core facility for screening where everyone in California who is interested in running high-throughput stem cell screens can go. This would be parallel to the NIH roadmap project where they had the MLSCN [Molecular Libraries Screening Centers Network] centers located in different areas in the States.

"The only exception I would make to this is that the NIH had the centers run by academic groups. It is really the private sector that has been making advances in screening in the last 20 years or so, so it might make more sense to have the private sector spearhead a screening facility."

Chanda continued on the subject of cultural roadblocks.

"We have found that there are culture roadblocks between the academic and biotech sectors, even though we have pretty good relationships with various academic groups. We find that the collaborations are very fruitful, but most of our knowledge of what is going on from academic groups comes from publications, which usually do not give you enough information and often occur a couple of years later than the initial discovery."

Ann F. Hanham, managing director, Burrill & Company of San Francisco on "concerns:"

"How much more basic research is going to need to be done? Many of the companies that pitch to our firm are not ready for VC funding yet. They have not worked up their business metrics or their technology or their idea or how much time/resources they need to get to a final product.

"Patents are a huge issue for VCs. We need to protect our investment. If we are going to put capital in, we need to ensure protection of that asset. The University of Wisconsin patents have raised issues about whether we can invest in this field.

"We also need to see a commercialization strategy. Right now, stem cell science is much more on the research side than the development side of the R&D process.
"There are issues to be addressed around manufacturing and the scalability and reproducibility of manufacturing.

"There are questions to be answered such as: Can you pool stem cells? What is the right commercialization strategy? Wow do you become a company and earn back that money that was put in?"

Thomas B. Okarma, president and chief executive officer, Geron Corp. of Menlo Park, Ca.

"My message is going to be straight forward. Because of the depths of your pockets and lack of competition at the state and federal level, we have an opportunity to shape the way the field is developed.

"My take home message to you today is the 'D' word - development. My advice to you is to subordinate research to support development. Don't eliminate the research in R&D, but do the research as necessary to support the 'D.'"

CIRM Replies Re Public Disclosure by Grant Reviewers

Dale A. Carlson, the new chief communications officer for the California stem cell agency, is differing with an earlier item "CIRM, disclosure and conflicts" on the California Stem Cell Report.

Here are his comments verbatim:

"On Tuesday, August 22, you wrote: 'Putting the public universities aside, we suspect that nearly all California agencies require public disclosure of financial interests as opposed to 'secret' disclosure, which is what CIRM does with its reviewers. We base on that on several decades of experience watching California public agencies, but we could be wrong.'

"You are wrong. California public officials are indeed required to disclose their financial interests – only their financial interests – and to make those disclosures public, as specified by the Political Reform Act (PRA). CIRM staff and members of the ICOC are subject to and complying with those requirements.

"Members of CIRM’s working groups are not public officials. They are advisors, not decision-makers. The distinction is clear and well-defined by the PRA, by the Fair Political Practices Commission and by the courts. Like members of advisory bodies and committees at other state agencies, they are therefore not subject to the requirements of the Political Reform Act. Indeed, as a matter of law, advisors to state agencies – including CIRM – are not required to disclose any information about their personal, professional, or financial interests, to the agency or to the public.

"CIRM working group members are, however, subject to disclosure requirements adopted by the ICOC, pursuant to the mandate of Proposition 71.

"The ICOC requires CIRM advisors to disclose financial interests as well as personal and professional ties to grant applicants. We have a more complete picture of the potential conflicts of interests facing our advisors than the public has of any California official subject to the PRA.

"Our advisors’ disclosure statements are available to state auditors. If we find violations of our policies, the discovery will be reported to the legislature, along with corrective actions to ensure they are not repeated.

"Our conflict of interest policies, including our disclosure requirements for advisors, go beyond the requirements of the law, and beyond the practices of other state agencies, including the universities. If there are stronger policies in force, they’ve yet to be identified.

"The success of the CIRM research program and its ability to maintain the confidence of the people of California depends critically upon the agency’s ability to fund the highest quality research proposals, chosen without bias. We want to attract the best people we can find to help evaluate research proposals, and to ensure that the ICOC has sufficient information to make the best decisions possible.

"Our conflict of interest policies strike an appropriate balance, between the public’s confidence in the integrity of our decision-making and the public value of having the country’s best experts involved in the review of grant proposals."

Carlson raises a number of interesting issues, but he does not convince us that CIRM's disclosure rules for grant reviewers "go beyond the rules of other state agencies." Much more can and will be said concerning CIRM and disclosure, but CIRM and the California Stem Cell Report differ fundamentally on one central issue. We consider the grant reviewers de facto decision makers. Yes, legally they are advisors and make only "recommendations." But given the nature of such governmental agencies as CIRM, it is unlikely that reviewer recommendations will be overturned by the Oversight Committee in any significant number of cases. If only because the Oversight Committee will soon have no reviewers if it consistently rejects their recommendations.

We do believe that CIRM's disclosure rules go beyond the usual requirements elsewhere in the nation, as do a number of its other policies. Indeed, CIRM has become a benchmark for other states as well as other nations on stem cell policies.

Stem Cell Stocks Jump on ACT News

This is the kind of news that really captures the attention of those timid souls known as venture capitalists, who have shied away from stem cell enterprises.

On the day Advanced Cell Technology of Alameda, Ca., announced its new method of extracting stem cells from embryos, its stock more than quadrupled. Of course, it did not have far to go. The stock climbed from 42 cents to 1.83. Today the stock closed at $1.60.

The Wall Street Journal reported this afternoon that the ACT news also "pushed up shares of the four largest publicly-traded stem-cell researchers. StemCells advanced six cents, or 2.7%, to 2.31; Aastrom Biosciences added one cent to 1.20; Geron rose 31 cents, or 4.9%, to 6.67; and ViaCell jumped 19 cents, or 5%, to 4."

The 52-week low for ACT's stock price is 26 cents and its 52-week high is $2.95.

Earlier today, reporter David Hamilton wrote in the WSJ:

"Larger pharmaceutical and biotechnology companies have mostly steered clear of the field, in part because of the ethical controversy and the lack of federal research support. Advanced Cell Chief Executive William Caldwell, however, said he believes an embryo-safe method of deriving stem cells may help spark large-company interest in the area.

"'I think this is going to help address the problem and the issues they have' with stem-cell derivation, Mr. Caldwell said. Advanced Cell, which is currently raising new funds in a private offering to bolster its meager cash reserves, hopes to sign a development partnership with a larger company by the end of the year."

At mid-afternoon Thursday, the story on ACT in the WSJ did not make the paper's top 10 lists in either the most viewed or most e-mailed categories. But among Web readers of the New York Times, the story was the No. 5 most blogged and No. 6 most e-mailed. At the Los Angeles Times, it was the No. 8 most e-mailed stories but not in the top 10 of most viewed. At the Washington Post, it was the No. 12 most e-mailed story.

Rules for the $100 Million Stem Cell Giveaway

The river of money is beginning to flow, so it is time for some of you to dip your scoop in.

The California stem cell agency has posted detailed information on how to snag a chunk of more than $100 million for research involving embryonic stem cells. The deadlines are coming up quickly.

For those of you who do not work in the Golden State, you are mostly out of luck unless you can finesse the rules that limit the grants to academic and non-profit research institutions in California.

While this round does not include grants to businesses, it would behoove them to examine the current process, which is likely to set a pattern for future grants. CIRM said grants for businesses will not be awarded until intellectual property policies are developed (a hearing on that is scheduled for next Tuesday).

The agency is looking for innovation. One two-year, 30-grant program is called SEED, short for Scientific Excellence through Exploration and Development, and is funded at $24 million. The other program contains more cash -- $80 million over four years –for "comprehensive research grants." That 25-grant program will support "mature, ongoing studies" by scientists with a "record of accomplishment."

The deadline for letters of intent to apply for both programs is Sept. 15 with applications due Oct. 13 for SEED and Nov. 13 for the other grants. In addition to the usual scientific information, applicants are asked to provide a "public abstract" intended to explain the research to the lay public. A statement concerning how the research will benefit California is also required. The letters of intent for both SEED and comprehensive grants ask about sources of stem cells and the names of researchers, collaborators and subcontractors.

The application for comprehensive grants seeks "strong preliminary data." "Particular emphasis will be placed on impact and significance and quality of the research plan," the application says.

The lucky winners are expected to be determined at the CIRM Oversight Committee meetings either in February (SEED) or April (comprehensive grants).

Here are links on the grant program: CIRM press release, SEED letter of intent, SEED application information, comprehensive letter of intent, comprehensive application, discussion of the grant program by the Oversight Committee earlier this month (starts on page 149 of the transcript).

The Scientist Magazine: CIRM, Disclosure and Conflicts

The topic of conflicts of interests and stem cell research is surfacing again in the scientific media. The latest article can be found in The Scientist magazine.

Writer Andrew Holtz reported on the hooha out here in California – although hooha is probably too strong a word, given that the issue is nearly totally ignored by the mainstream media.

Holtz quoted Zach Hall, president of CIRM, as saying its disclosure rules for grant reviewers "go beyond the rules of other state agencies in California and in fact they go beyond the national standards." While we don't like to quibble with the good doctor, we are not sure he is really on target concerning California disclosure rules. Putting the public universities aside, we suspect that nearly all California agencies require public disclosure of financial interests as opposed to "secret" disclosure, which is what CIRM does with its reviewers. We base on that on several decades of experience watching California public agencies, but we could be wrong.

In the case of CIRM, it requires grant reviewers to disclose basically only to the agency itself.

The article quoted John M. Simpson of the Foundation for Taxpayer and Consumer Rights as calling for more disclosure because of the multimillion dollar impact of actions by the reviewers.

Holtz also interviewed some of the reviewers concerning their sentiments on public disclosure of their financial information.

"One reviewer, Rainer Storb, from the Fred Hutchinson Cancer Research Center in Seattle, Washington, told The Scientist he isn't bothered by the idea of public disclosure of his financial statements. 'The burden is that you have to fill out these forms all the time. That's a bit of a nuisance. But I'm perfectly fine with things being made public,' Storb said.

"Other members of the Grants Review Working Group were either unavailable or said they didn't know enough about the debate to comment. Arlene Chiu,director of scientific activities at CIRM, said many reviewers she had spoken with oppose public disclosure.

"The Director of the Oregon Stem Cell Center, Markus Grompe, who said he was contacted about becoming a reviewer, said his financial ties are already public. 'If they bar you from being involved with biotech to be a reviewer, then that will scare off a majority actually; but if it's just about disclosing it, we disclose all the time,' Grompe said.

"Lisa A. Bero, from the Institute for Health Policy Studies at University of California San Francisco, who has studied conflict of interest issues in medical research, said people have difficulty judging their conflicts of interest. She said the specific CIRM disclosure rules improve upon policies that ask general questions about 'relevant' financial ties, but public
disclosure would still help detect cases where disclosure is less than complete."

For more on this subject, see "immune feelings" and "second tier."

FTCR: CIRM May be Moving Too Hastily

While the California stem cell agency is moving quickly forward with plans for its first research grants, a watchdog group continues to raise questions about whether the results will be affordable and available to Californians.

The Foundation for Taxpayer and Consumer Rights said today that it is "concerned that the pressure to show results from a program that was approved by voters in 2004 and stalled by legal challenges could lead to hastily made and poorly considered grants that waste public money."

The news release continued:

"FTCR also said that the stem cell institute must have policies in place that ensure any treatments and cures developed with taxpayer money are accessible and affordable for all Californians."

The trigger for the foundation's comments is posting of the timelines for application for the research grants. The foundation said that "the letters of intent to apply for CIRM SEED Grants and CIRM Comprehensive Grants will be due Sept. 15. Full applications are due Oct. 13 and Nov. 13 respectively. CIRM envisions awarding the SEED grants in March 2007. The Comprehensive Grants would be awarded in March or April."

Here is a link to the foundation's full statement.

IP Principles for Business Coming Up Next Week

Dividing up the stem cell spoils comes up again next Tuesday as the CIRM Task Force on Intellectual Property looks at "principles" for IP involving for-profit enterprises.

No details have been posted yet for the session, which will also consider comments from the Oversight Committee on IP for non-profits.

The actual meeting will take place at the San Francisco International Airport, but remote sites are available at UC Irvine, Los Angeles and Stanford. Here is a link to the full agenda.

More State Oversight of CIRM Not Likely

Events last week in Sacramento re-arranged the stem cell stage in California.

The California stem cell agency skated past the latest attempt to bring more stringent oversight to its unique, $6 billion effort to turn stem cells into cures. That means that critics of the agency are not likely to be successful at bringing CIRM under more state direction for the foreseeable future.

A hefty scandal is about all that would create a climate conducive to major changes at the agency. At the same time, the door has opened for a state politician or two to seize the stem cell issue.

The quiet demise of the stem cell oversight bill by state Sen. Deborah Ortiz, D-Sacramento, signalled the new arrangements. Ortiz is chair of the Senate Health Committee and a pioneer on California stem cell issues. But term limits are forcing her from office at the end of the year and have reduced her legislative clout.

Assemblywoman Judy Chu, D-Monterey Park, chair of the Assembly Appropriations Committee, Thursday dispatched Ortiz' measure (SB401) to legislative oblivion. No vote was taken as Chu ordered the bill held in committee. Chu indicated, among other reasons, that she did not want to move forward with another stem cell ballot measure, which Ortiz' bill would have been.

Ortiz had a different view. She said the bill would have improved the performance of the agency and ensured access to affordable cures.

"The measure was extensively debated and refined during two years of public informational and legislative committee hearings. It had bipartisan support in both houses of the Legislature, and was supported by public interest groups.

"The bill was steadfastly opposed by the CIRM and the ICOC, the two entities the bill would have opened to increased public scrutiny. This is nothing but an example of a special interest group killing legislation to avoid being held accountable to those it serves."

Normally state departments, of which CIRM is one, are subject to regulation by the state legislature, which approves their budgets and can change their scope or eliminate them entirely. CIRM is radically different. It is a creature of the ballot. Voters altered the state constitution and state law to create the agency. Changes in the agency can only be made by another ballot initiative or by approval of 70 percent both houses of the state legislature and the governor. And that legislative action can only happen three full years after adoption of Prop. 71, which would be in November 2007. The extraordinary, "super-super" vote requirement makes it virtually impossible to tinker with CIRM. It would only 13 state senators to block any changes affecting the agency.

Nonetheless, political hay can be made involving embryonic stem cell research – on all sides of the issue. Gov. Schwarzenegger, who is facing a re-election challenge, made that clear a few weeks ago when he ponied up $150 million to ease the financial strains at CIRM. The impending departure of Ortiz leaves a void in the legislature on stem cell issues. Just who may fill it is unclear. Assemblyman Dave Jones, D-Sacramento, has been mentioned as one possibility. Ortiz was a friendly critic of the agency, although some at the agency did not regard her in that fashion. An unfriendly legislative critic can create considerable mischief, even if he or she cannot effectively make changes legislatively.

If the concept of political hay mixing with stem cell research is troubling, consider the host of continuing public policy issues involving CIRM and the nature of the research, ranging from treatment of egg donors to conflicts of interest. The fact is that politics and stem cell research are inextricably linked. It behooves the agency to keep a close eye on the state Capitol.

California newspapers paid scant attention to the demise of Ortiz bill. Most, if they carried any article at all, relied on a brief from The Associated Press. Reporter Judy Lin of The Sacramento Bee had a somewhat longer piece.

On to the Deadly Vizcaino Plain

We are going to have one of those periodic pauses in postings on the California Stem Cell Report. This time because of air and land – as opposed to sea – travel. On Thursday Aug. 17, we will wing our way from Guaymas on the Mexican mainland to Loreto in Baja California in one of Aero Guerrero's finest tiny planes. (Guaymas is, by the way, where Charlie Chaplin married his first child bride. En route to the US by train from Mexico City with the prospective mother-in-law also in tow, he decided to do the honorable thing. They honeymooned in the port city for several days.)

From Loreto, we will leap into a 1986 VW Vanagon and forge north into the deadly heat of the Vizcaino Plain, average annual rainfall less than two inches a year. With luck, we will arrive in the Old Country (the U.S.) in a few days and resume postings as we re-enter the dirt life(life on land) for a short while.

CIRM Hires Senior Communications Executive

The California stem cell agency has found a communications director, a man with considerable business experience who has also wrestled in the public policy arena in the San Francisco Bay Area and elsewhere.

Dale Carlson officially begins work next Monday. As communications director, his responsibilities will include developing a "clear and consistent message about the new frontier of stem cell research in California" and promoting "a deeper and more sophisticated public awareness of stem cell research and therapy." His duties go beyond dealing with the ink-stained wretches of the fourth estate and include developing communications programs with the public, the patient advocacy community, the legislature and the scientific community.

Carlson was vice president for corporate affairs with the Pacific (stock) Exchange in San Francisco from 1987 to 2005. He dealt with the media, business, public and handled a wide range of responsibilities, including dealing with Web content. Carlson also served in a variety of volunteer positions with civic and nonprofit agencies in the Bay Area, including tours of duty as chair of the San Francisco library foundation and the Treasure Island Development Authority.

Carlson, who has a masters degree in health services administration from the University of Michigan, surfaced in February of this year as an "interim senior communications officer" at CIRM, working on a parttime, volunteer basis.

CIRM has had difficulties since its inception with its communications/PR programs, resorting to hiring Edelman PR for $378,000 for a 16-month contract that expires at the end of this month. One problem was the lack of a senior CIRM official with specific PR responsibilities, which Carlson's appointment seems to solve.

In the interests of full transparency, we must disclose that Carlson is a sailor, as are we. He describes himself as a "competitive" sailor. We are just your average sea dog.

The salary range for Carlson's position is from $130,000 to $195,000. We expect to have the specific figure soon.

Forbes on Private Stem Cell Giving

For more on private stem cell philanthropy and the California stem cell agency, see this Forbes piece. It popped up today after the Wall Street Journal carried its page one story. The timing has all the earmarks of a publication being a tad pressured to push its story into public view after a competitor got the jump on it. Of course, we could be wrong.

CIRM to Examine 'Outline' of $3 Billion Giveaway

The Strategic Planning Advisory Committee of the California stem cell agency has a meeting planned for Aug. 24 to discuss the outline of a plan to give away $3 billion.

Details of the outline are not yet available and may not be available by the time of the meeting, given the way the agency works. Nonetheless the San Francisco meeting is open to the public. See the agenda here but don't expect illumination.

Wrapping up the Private Giving to CIRM

One of the things that the Wall Street Journal is very good at is following the money. Reporter David Hamilton did just that this morning in a page one piece involving the California stem cell agency.

The article wrapped up the private giving and help that has come CIRM's way. It also quoted the critics on the propriety of CIRM's ties to private benefactors.

However, Hamilton did not cite an earlier WSJ piece about how even small financial favors can create a feeling of indebtedness that is not fully comprehended by the recipients of the largesse.

Most of the details of Hamilton's piece are familiar to our readers. But we should note that because of the prestige and wide national readership of the WSJ, his article is likely to have more impact than if it had appeared in a smaller, regional paper. Play prominence -- meaning the front page display -- also counts.

Hamilton's piece additionally looked at the impact of private funding outside of CIRM. He wrote:

"USC has a new building that could become the state's largest stem-cell research center on the drawing board. It also recently hired Martin Pera, a prominent researcher from Australia, to run its new stem-cell research program. That step is notable in part because the federal restrictions sparked fears that U.S. scientists would leave the country to pursue their work.

"UCSF is using private money to renovate an entire floor of a building so that its stem-cell researchers will be able to work in a central location. One team deriving new stem-cell lines currently works in a laboratory at Menlo Park, Calif.-based biotechnology company Geron Corp., while another labors at an off-site leased facility in San Francisco.

"The university also is proposing an entirely new research building at the cost of as much as $100 million. Much of that must be raised privately, although Arnold Kriegstein, director of the university's stem-cell program, hopes CIRM might also be able to kick in some funding. 'Fund-raising is one of the bottlenecks to getting moving as quickly as possible,' says Dr. Kriegstein."

Gritty, Gritty Details on CIRM's Planning Process

For those thirsting for more details on the latest in strategic planning by the California stem cell agency, here is an update on some of the material recently available online. The information included below is being added unannounced to the CIRM site in some sort of willy nilly fashion and can be easily overlooked by the casual browser. But if you are a casual browser of the CIRM Web site, you are probably are not interested in the following. Nonetheless, here it is.

The agency has nearly completed its interviews for the planning process. As of late last month, 59 persons were interviewed with a target of perhaps 70. The list ranges from Bruce Alberts, former president of the National Academy of Sciences, to Leonard Zon of the Harvard Medical School. Also included were a number of the agency's staunch critics.

Last month, the agency held a conference on "Industry and Stem Sells in California: Fostering Research and Development." The presenters came from a blue ribbon array of stem cell-connected companies ranging from Geron to Burrill. Here are links to their Power Point presentations.

Sumit K. Chanda, Ph.D., Group Leader, Division of Cellular Genomics, Genomics Institute of the Novartis Research Foundation

Bruce Cohen, President and CEO, Cellerant Therapeutics

Ann F. Hanham, Ph.D., Managing Director, Burrill & Company

Martin McGlynn, President and CEO, StemCells, Inc.

Thomas B. Okarma, Ph.D., M.D., President and CEO, Geron Corporation

Alan K. Smith, Ph.D., President and Chief Operating Officer, Cognate BioServices

Michael D. West, Ph.D., Chairman of the Board, President and Chief Scientific Officer , Advanced Cell Technology, Inc

E. Edward Baetge, Ph.D., Chief Scientific Officer, Novocell, Inc.

Another conference last month dealt with “The Scientific Challenge: From Basic Research to the Clinic.” The speakers and their Power Point presentations:

Stuart Orkin, M.D., Harvard Medical School, Chair, CIRM Scientific and Medical Research Funding Working Group, “Stem Cells: Looking Back and Ahead”

Jill Heemskerk, Ph.D., National Institute of Neurological Disorders and Stroke, “The SMA Project: A New Approach to Therapy Development at NIH”

Allen M. Spiegel, M.D., Albert Einstein College of Medicine, “Delivering on the Promise of Stem Cell Research: What Will it Take?”

Stephen A. Sherwin, M.D., Cell Genesys, Inc., “The Development of Novel Cellular Therapeutics: Some Lessons from the Private Sector”

Calling the Tune on ESC Research: Therapies or Tools?

As the California stem cell agency wrestles with how to give away $3 billion – otherwise known as strategic planning – along comes a related article in the nation's most prestigious newspaper, the New York Times.

In Monday's edition, reporter Nicholas Wade discussed the split between those who want to see development of stem cell therapies versus those who see embryonic stem cells as a research tool to study mechanisms of disease.

That discussion has rumbled through CIRM for most of its existence, with patient advocates making impassioned pleas for quick results, declaring the longer it takes the more people die – an argument Wade does not explore. Since patient advocates hold 10 seats on the 29-member CIRM panel that ultimately decides who gets the cash, their views are not to be sniffed at. The issue is also near the center of the strategic planning process, which is scheduled to end in December. (See "clashing interests" for a look at the splinter within CIRM.)

Wade wrote:

"Many (scientists) no longer see cell therapy as the first goal of the research, parting company with those whose near-term expectations for cell therapy remain high.

"Instead, these researchers envisage a longer-term program in which human embryonic cells would be a research tool to study the mechanisms of disease. From this, they say, many therapeutic benefits may emerge, like new drugs, which would probably be available at least as soon as any cell therapy treatment."

Wade said there is a "gap between scientists’ views and those of the public and of people for whom the overriding purpose of research with human embryonic stem cells is to generate cells that can restore damaged tissues."

Wade continued:

"Thomas M. Jessell, a neurobiologist at Columbia University Medical Center in New York, said that he hoped to see the research generate new drugs for neurodegenerative diseases within the next five years but that it could be a long time before rational cell-based therapies are effective.
"'Many of us feel that for the next few years the most rational way forward is not to try to push cell therapies,' Dr. Jessell said. Scientists have spent the last five years mostly in learning how to grow human embryonic stem cells in the laboratory and how to make them differentiate, meaning to turn into the body’s various types of mature cells.'"

Wade said:

"Researchers have not, however, abandoned cell therapy, in which cells themselves would be used to regenerate tissue. In Parkinson’s disease, for example, dopamine-producing cells from aborted fetuses, when injected into the brains of Parkinson’s patients, do have an effect, suggesting that a better source of cell could have therapeutic value. 'So it’s the perfect place to go in,' said Dr. Asa Abeliovich of Columbia University Medical Center. Dr. Abeliovich said that with Alzheimer’s disease, in contrast, 'We don’t know how or what to replace.'"

While scientists have preferences on the direction of stem cell research, no research is done without funding. Given the amount of money that CIRM can bring to bear on the subject (10 times the annual spending of the NIH on ESC research), the views of scientists oriented towards use of ESCs as research tools may not be the key factor in determining the main direction of new stem cell research in the United States.

Does Disclosure Mean Only the Second Tier Will Play?

A former president of the National Academy of Sciences has ridden to the support of the "trust us" disclosure and conflict-of-interest policies of the California stem cell agency.

Bruce Alberts, professor of biochemistry at UC San Francisco as well as president of the NAS from 1993 to 2005, said that scientists who make de facto decisions on requests for millions of dollars should not be required to disclose their financial holdings.

Writing in the San Jose Mercury News, he said CIRM has taken "strong measures" to avoid conflicts of interest. Alberts declared:

"Scientists view serving on (grant) review committees as a public service, and many of the best will decline to participate in institute reviews if their private financial information is to be made available for everyone in the world to see. California then runs the risk of wasting critical resources by not making the very best decisions on how to make these important investments for the public good."

Alberts does not address the issue of whether there is a significant conflict of interest problem involving medical researchers generally. But we all know of the continuing string of stories about researchers whose ethics are suspect. More recently, the Wall Street Journal wrote about just how favoritism creeps in and how researchers seem "immune" to feelings of conflicts of interest. The Journal said,

"Studies of psychiatric drugs by researchers with a financial conflict of interest -- receiving speaking fees, owning stock, or being employed by the manufacturer -- are nearly five times as likely to find benefits in taking the drugs as studies by researchers who don't receive money from the industry, according to a review of 162 studies published last year in the American Journal of Psychiatry."

We acknowledge that some scientists may beg off service on the CIRM grant review committees simply for privacy or philosophical reasons. But does that mean only the second tier will serve? Perhaps that is a question to be asked of the 29 persons who oversee the $3 billion California stem cell agency, all of whom must publicly disclose their financial information. One of those persons is the vice chancellor for medical affairs at UC San Francisco. He is also Alberts' boss.

Patient Advocates: More Collaboration Needed, Risky Ventures Okay

Patient advocates from throughout California say they would like the agency over the next 10 years to do everything from curing "many of the diseases that plague society" to improving collaboration and communication among scientists.

Their sentiments were voiced at a focus group called by CIRM last month as part of its strategic planning process. Their mostly anonymous comments can be read in a 17-page summary available on the CIRM web site.

The questions posed to the focus group ranged from how does CIRM measure success 10 years out to balancing high-risk research with the go-safe-but-slow approach.

In terms of 10-year goals, one sentiment jumped out, at least to us. That was the need for more collaboration, sharing and transparency. A variation of that feeling also surfaced during a segment involving public education.

Sometimes one is given the impression that collaboration and sharing go without saying in today's world of instantaneous communications. But apparently not, in the view of a number of patient advocates.

Some of the proposed 10-year measurements of success were more specific, such as this one:

"Success would be that stem cells or their derivatives would have cured many of the diseases that plague society."

Another patient advocate suggested a 10-year goal of one approved therapeutic intervention and three advanced clinical trials.

On the subject of risk, participants endorsed using portions of CIRM's $3 billion for riskier projects, although the proposed percentage varied.

CIRM President Zach Hall commented:

"At the time of the Human Genome Project, there were two proposed approaches to sequencing the genome. Someone who advocated the approach that ultimately wasn't chosen left the NIH to set up a competing project. That was Craig Ventner. The competitive pressure he exerted caused the NIH to change its strategy and accomplish things much faster. Some say they wouldn't have done that without competition from Craig Ventner. It's true the NIH study sections put a big priority on feasibility and likelihood of return. I don't know that we look to you for an answer but we do listen for whether it's more important to have tangible progress or are we willing to risk some of the money on a gamble that may fail."

Hall also indicated that a focus group will also address the question of public education.

Stem Cell Conferences: Eggs, Biocapital and Fair Cures

Get out your calendars, stem cell fans. Coming up are a three hefty conferences in the San Francisco Bay area on stem cell issues.

On Sept. 28, at the request of CIRM, the Institute of Medicine and the National Research Council will hold a conference near the San Francisco airport on the medical risks of egg donation. This is the conference that CIRM has talked about for months. A high-powered group from throughout the country is scheduled to speak.

On Sept. 28-29, "Ethical Worlds of Stem Cell Medicine" is the topic at UC Berkeley. "Academic Industry Alliances" and "Procurement and the Integrity of the Human Subject" are among the topics. The conference overview notes that today's stem cell medical environment has generated a "surfeit of promissory biocapital." The session is sponsored by the Science, Technology and Society Center at UC Berkeley.

On Oct. 14, "Toward Fair Cures: Integrating the Benefits of Diversity in California's Stem Cell Research Program" will be held at the Children's Hospital in Oakland. The conference is sponsored by the hospital, the Greenlining Coalition and the UC Berkeley Project on Stem Cells. CIRM President Zach Hall is scheduled to appear along with Evelynn Hammonds of Harvard. We do not have a Web site for this yet, but you can contact Joe Tayag of Greenlining at joseft@greenlining.org.

Finding Stem Cell Moolah on the Web

Connecticut has set an example for California to follow in raising funds for its embryonic stem cell research efforts – go directly to the people.

The East Coast effort is modest and not exactly ballyhooed. But nonetheless it is on the home page of its stem cell program. Right there with a big dollar sign, it commands: "Make a Donation."

Given the perceived widespread support for stem cell research in the Golden State, it would seem appropriate to make it easy for anybody to make a donation whenever the whim struck. Connecticut can only take checks and is looking into credit cards, but that is hardly an obstacle.

In California, it should be able to be done with a minimum of effort without waiting for the redesign of the CIRM website. At least one state agency, the Department of Motor Vehicles, already takes credit cards, so little would seem to be in the way.

Let the money roll in!

Money Talks in Connecticut Too

California's unprecedented stem cell research effort has drawn attention from throughout the nation and the world. The latest evidence comes from Connecticut, which has a $100 million, 10-year program underway.

As in California, money is an issue. Some in Connecticut seem particularly impressed with CIRM's prodigious fundraising efforts in the private sector. Connecticut's stem cell research advisory committee wanted to know more about it, according to the transcript from a July 18 meeting. All the persons mentioned below are members of that committee, including Ann Keissling, who serves on a CIRM working group.

Myron Genel, professor emeritus Yale School of Medicine:

"I think that Bob, you’re right, that it’s difficult to raise those funds, but I think that Ann earlier and that you Charles were indicating that it’s happening someplace. It’s happening in California. So that -- and I think it was Bob, you talked about you need to have the right strategy. To me a first step would be to confer with California. See what’s making -- allowing them to be successful."

Ann Kiessling, member of the CIRM Standards Working Group and faculty member at Harvard Medical School:

"One of the most straight forward things that they did I think as their overall working group is they sort of looked at the income of people in California and asked most of those people to sit on one of their boards. So they went to the very top income producing people."

Commissioner Robert Galvin, Connecticut state commissioner of public health:

"Wealthiest individuals."

Kiessling:

"The wealthiest individuals in California and they asked them if they would like to, you know, sit on one of the committees. So a lot of those -- "

Galvin:

"And to contribute?"

Kiessling:

" -- well, not necessarily contribute, but you know, that’s a group of people that talk to each other and for instance the co-chair of the Standards Working
Group in California, which is a group similar to this, it’s an advisory group as to how you’re supposed to go about what kind of ethical issues and how the money should be disbursed. The co-chair of that is Sherry Lansing (phonetic), who was CEO of Paramount Pictures for many years. You know, Sherry knows probably almost everybody in California. And the other person who was a very prominent member of that committee was Bob (Klein), who is the one who almost single handedly got the tax, you know, bond measure passed in California. So they really involved the people who could actually contact a lot of people in their committee work."

Galvin:

"That’s a very good point Ann because you’ve got to get to the decision makers."

Given the nature of Keissling's comments, we asked her if she had more to say. Here is her response verbatim:

"One of the most noteworthy aspects of the CIRM committees is enthusiasm and dedication to the task at hand. It has been a monumental task, moved forward with incredible determination and regard for public opinion.

"I think it is a good example of how opening the doors to the public generally has more positive than negative impact on new biomedical technologies, in contrast to the views of some that public involvement may impeed progress.

"My comments about who to involve on committees was meant to reference fund-raising ability -- individuals who both know who might be able to contribute and also have the enthusiasm and dedication to seek the funds. I did NOT mean to imply that especially wealthy individuals were specifically selected for committee assignments, as the quote below seems to suggest, that is not my impression.

"But having one third of the committees be 'lay persons' advocating for a specific disease provided a sense of urgency and dedication that truly supported the enthusiasm of scientists for getting the work done as quickly as doing a good job would allow. One disease advocate that comes to mind is Jonathan Shestack, a movie producer-advocate for autism ('Cure Autism Now') -- a member of the Standards Working Group -- thoughtful, erudite, energetic and driven -- a huge asset to getting the work done timely and as perfectly as possible.

"I've always been a supporter of public involvement in high tech issues, and my California committee experience has strengthened this view."

The exchange involving the committee begins on p. 85 of the transcript.

CIRM Oversight Legislation Set for Thursday Hearing

The legislation to tighten oversight of the California stem cell agency, mentioned in the item below, is now scheduled to be heard next Thursday by the Assembly Appropriations Committee. No time was given but the committee usually is scheduled to begin work about 9 a.m. Ortiz' amendments still have not caught up with the version of SB401 available on the Web.

Proposal to Tighten CIRM Oversight Coming Up Next Week

Sweeping legislation to tighten oversight of the California stem cell agency is likely to come up before the state Assembly Appropriations Committee in the middle of next week, its last stop before it would reach the Assembly floor.

To be enacted, the bill (SB401) by Sen. Deborah Ortiz, D-Sacramento, must be approved by the committee, pass the Assembly and then the Senate, before going on to the governor for his action. If he signs the measure or allows it to become enacted without his signature, it would then be placed on a statewide ballot – not this fall – for voter approval.

Given the governor's $150 million bailout of CIRM, it seems more likely that he would veto Ortiz' legislation. But speculating on what may happen while he is running for re-election is fraught with pitfalls.

The bill is opposed by CIRM and some in the biotech business, although most of the opposition was registered prior to the latest amendments, one of which removed a provision to place the measure on the fall ballot. Other amendments basically conformed the measure's IP policy to what CIRM has already approved.

CIRM Chairman Robert Klein was not apparently satisfied with the position of his agency on the measure last spring. He wrote a harshly worded letter circulated nationally concerning the bill. Klein described Ortiz, a longtime supporter of stem cell research including Prop. 71, as an "ongoing threat" to that entire field of science. CIRM refused to comment on the letter, which Klein wrote as head of Americans for Stem Cell Therapies and Cures, a political advocacy group headquartered in his Palo Alto office.

Patient advocate Don Reed of Hayward, Ca., earlier this year began a letter-writing effort against the measure. However, at the moment it does not seem at the top of his agenda, based on a look at this web site, Stemcellbattles.com.

Ortiz' amendments have not yet caught up with the official version of the bill on the Web, but are likely to do so before it comes up either next Wednesday or Thursday.

Here are links to the Klein letter, a discussion of its "facts," and a background statement from Klein's group.

Stem Cell Alliance Shutting Down

The Alliance for Stem Cell Research, a spinoff of the successful campaign for Prop. 71 in California, is closing its doors.

The group said in a press release:

"Recent legislative efforts have demonstrated that perhaps the most effective way for us to achieve our goals is to play a larger role in ongoing efforts to change the political landscape. In particular, we must take action to end policies that currently impose significant restrictions on the progress of stem cell research.

"As a 501(c)3 public charity, the AFSCR is limited in its
ability to lobby and directly influence legislation and election outcomes. Therefore, the Board of Directors of AFSCR has made the difficult decision to dissolve AFSCR and realign its efforts to campaign for stronger support for stem cell research on both the federal and state level."

The alliance grew out of Cures for California, the campaign organization for the 2004 stem cell initiative.

In response to a query about her plans, Susan DeLaurentis, president of the alliance, said, "I plan to work as a volunteer to get candidates elected who support stem cell research. I will personally stay involved in this issue - there is
much to be done!"

The Immune Feeling of Researchers to Conflicts of Interest

Critics of the California stem cell agency have fresh scientific evidence to bolster their contention that the institute should require additional financial disclosure from members of its working groups.

The latest support comes via an Aug. 4 article in the Wall Street Journal by reporter Shirley S. Wang. She asks the question: "Why do many researchers feel they're immune to conflicts of interest?"

Answer:

"Just as we fool ourselves into thinking we're more ethical, kind and generous than we are, so scientists can be blind to the very real possibility that their work is inappropriately influenced by financial ties. These psychological processes usually operate so subtly that people aren't aware that such ties can bias their judgment.

"Receiving gifts and money creates the desire, often unconscious, to give something back, says Max Bazerman of Harvard Business School. Even small gifts can have an influence. Charities that send out free address labels, for example, get more in donations than those that don't. Customers who are given a 50-cent key chain at a pharmacy spend substantially more in the store.

"Conflicts can be hard to recognize, because 'cognitive bias' comes into play. 'The mind has an enormous ability to see the world as we want,' says Dr. Bazerman."

Wang continues:

"Studies of psychiatric drugs by researchers with a financial conflict of interest -- receiving speaking fees, owning stock, or being employed by the manufacturer -- are nearly five times as likely to find benefits in taking the drugs as studies by researchers who don't receive money from the industry, according to a review of 162 studies published last year in the American Journal of Psychiatry. Studies that the industry funded, but in which the researchers had no other financial ties, didn't have significantly different results than nonindustry-funded studies.

"Studies can be designed in ways that boost the likelihood that results will come out a certain way, says Lisa Bero of the University of California, San Francisco. A new treatment can be compared with a placebo, instead of with a treatment already in use, making finding a significant statistical difference between the two more likely. Dosage and timing of medications, which make a big difference in their effectiveness and side effects, can also be manipulated, she says."

Wang's article attracted attention on the blog of the editors of the American Journal of Bioethics, which described it as "excellent." That site also linked to another related piece by Catherine DeAngelis, editor of the Journal of the American Medical Association, in which she discusses "the sometimes unethical influence of money on medical science, a very serious issue, which has become more evident over the past year or so."

Would more CIRM disclosure from scientists and physicians eliminate conflicts of interest? Certainly not, but it would tell the public when potential conflicts exist. Public disclosure would also allow other interested parties and the public to understand the financial webs surrounding often highly vaunted research. And as we know, from time to time, the early raves for therapies do not stand up to scrutiny for a host of unsavory reasons.
.

Clinical Stem Cell Research: Financing and Academic Medical Centers

The California stem cell agency has identified some sticky issues involving clinical research for stem cell therapies, including a "dramatic" shift away from academic medical centers.

The 10-page overview of the clinical research process was prepared as a background document for CIRM's strategic planning process. The paper covers drug development timelines, clinical networks and difficulties in financing clinical research in addition to issues involving academic medical centers.

On the subject of the centers (AMCs), here are a few excerpts:

"We have heard anecdotally of the increasing difficulty that academic researchers face in obtaining funding for investigator-initiated research, which is due to a number of reasons:
"a. Decreased clinical margins at AMCs resulting in less discretionary funding available for research.
"b. The shrinking of the NIH budget.
"c. The general unwillingness of the pharm/biotech industries and the venture capital community to fund research that does not have direct, obvious commercial applications.

"In addition, while academics may sometimes believe that clinical research depends on the AMC, non-academics believe that clinical research, to truly thrive, needs to be present in multiple venues of care. The pharmaceutical industry is seeking more non-academic providers to conduct clinical research, which is creating enormous opportunities for hospitals, physicians and outpatient providers such as the for-profit contract-research organizations (CROs) and site-management organizations (SROs) to fulfill some of the functions traditionally carried out by AMCs. For example, at the beginning of the decade of the 90's, 80% of industry-sponsored clinical trials were placed in AMCs; by 1999 the number was down to 40%. One reason given for this shift is the amount of time it takes to gain protocol approval in academic settings: the initial approval process prior to initiation can take from two to six months in an AMC, compared with one to two months in a private hospital or less than one month in a physician’s practice.

"In an industry where speed is paramount, and where for each day’s delay in gaining FDA approval of a drug the manufacturer loses and average of $1.3 million, such delays are problematic, at best. There has also been a trend in recent years for US pharmaceutical companies to conduct clinical trials outside the US. For example, the number of American sites where clinical trials were underway declined from about 51,000 in 2001 to 48,000 in 2003. During that same period, the number of FDA-approved investigational drug studies in all phases of research rose from about 3,900 to 4,500, but with less research being done at U.S. sites."

The background paper also reported:

"Given the newness, uncertainties, and challenges associated with cell-based licensing by the pharmaceutical industry or investment by the venture capital community) is unlikely to be available for such therapies until there is proof of clinical concept; until methods to consistently produce cells are developed; and until the related business models becomes more accepted. This will likely limit the ability of smaller companies to move promising therapeutic approaches into clinical trials and eventually to patients without additional sources of funding."

Reflections on Stem Cells: Year Five

There are anniversaries and then there ARE anniversaries. In this case, Wednesday is the fifth year anniversary of George Bush's stem cell edict.

Stanford University is marking the occasion with reflections from its cadre of stem cell whizzes, including Irving Weissman, Philip Pizzo, Stefan Heller and David Magnus.

Here are some excerpts.

On the question of what would have been different if the president had remained silent:

"David Magnus, PhD, director of the Stanford Center for Biomedical Ethics: We would have had national standards and guidelines much sooner, and we would not have been distracted by debates over the status of embryos and embryo-like constructs. We would have had to work much faster to figure out how to handle informed consent and other practical ethical challenges."

On the most significant thing learned in the past five years:

"Stefan Heller, PhD, associate professor of otolaryngology, who is investigating the use of stem cells to repair hearing damage: The past five years were key in redefining possible new approaches to find a cure for hearing loss, and stem cells played a big role in this process. We experienced the advent of stem cell-based regenerative approaches for the inner ear."

"Philip Pizzo, MD, dean of the Stanford School of Medicine and a member of the Independent Citizens' Oversight Committee for the state's stem cell institute: One of the important transitions in the past five years has been the increasing proportion of Americans who have become supportive of embryonic stem cell research. Their voice reflects a gap between the Bush administration's tenacious fixation on religious ideology and America's common-sense perspective about the value of medical research in improving the lives of adults and children. This is coupled with an increasing number of American citizens who have stepped forward to support embryonic stem cell research through philanthropy along with a rising choir of bipartisan support from the Congress. In addition, a number of states have demonstrated their support for stem cell research through either state-funded research programs or legislative activities."

The most important thing to learn in the next five years:

Irving Weissman, director of the Stanford Institute for Stem Cell Biology and Regenerative Medicine. "We will continue pushing forward on four stem cell fronts: 1) Learning how to regenerate diseased tissues using adult tissue stem cells; 2) Finding new and useful embryonic stem cell lines and the tissue stem cells they make, such as the heart and lung; 3) Finding safe, ethical ways of making stem cell lines from patients with genetic diseases that help us understand and treat those diseases; 4) Finding new therapies based on our cancer stem cell research and using our discoveries to treat Stanford cancer patients."

Anchors Aweigh Again

The California Stem Cell Report is hoisting anchor once more. We will be offline while we make a passage across the Sea of Cortez to the mainland of Mexico from Baja California. Look for fresh reports in a few days.

Heifer Blitzes Stem Cell Coverage

The day following approval of an unprecedented $152 million embryonic stem cell research program in California, the Los Angeles Times, the state's most prestigious and largest newspaper, carried not one word on the subject – at least in its online version.

But it did have room for a story with the following headline: "Heifer Escapes at Fair, Knocks Down Pursuer."

While there is no doubt there is plenty of room for lightness in today's ponderous press, it does seem there is something a bit askew in this case in the news priorities at the Times.

The Times, however, had some company. The Sacramento Bee and the San Francisco Chronicle also failed to publish stories on the grant program. Again, this is based on a look at their Web sites. There is a possibility that stories appeared in the print version of the paper but did not make it onto the Internet. The case of the Chronicle is particularly interesting since CIRM is basically a hometown story. Its headquarters are located in the city and yesterday's Oversight Committee meeting was held in San Francisco.

We found coverage of Wednesday's CIRM Oversight Committee meeting in the San Jose Mercury News, the Oakland Tribune and the San Diego Union Tribune. The stories contained few surprises, however. Such is the case on a story with a lot of meat and all of it coming from one source – in this case, CIRM.

Here are links to the stories: Steve Johnson, San Jose; Rebecca Vesely, Oakland, Terri Somers, San Diego.

Here are links to background documents from CIRM on the grants program: Purpose and structure, Power Point presentation by CIRM President Zach Hall.

(Late breaking development: Following posting of this item, sources confirmed that the LA Times, Chronicle and The Bee did not carry stories on the grant program in their print editions.)

CIRM Approves $150 Million Grant Program

Feeding off the $150 million promised by Gov. Arnold Schwarzenegger, the California stem cell agency today authorized an ambitious program of grants aimed at "turning stem cells into cures."

The grants will back innovative ideas as well as funding laboratory facilities and equipment.

Stem Cell Chairman Robert Klein said the four-year program will "address the critical funding gap created by the paralysis of federal policy." CIRM President Zach Hall said, "We can now advance the goal set by California voters—funding the best science that leads toward therapies."

The agency issued a press release that said the program approved today will cover the following areas:

"Comprehensive Research Grants—four-year grants to investigators with a record of accomplishment in human embryonic stem cell research or closely-related field that relate to a long-term therapeutic goal;

"Seed Grants—two-year grants to fund innovative ideas by scientific investigators who are new to the field;

"CIRM Shared Research Laboratory Grants—grants for dedicated laboratories for culturing human embryonic stem cells including core equipment and trained personnel. Additional grants in this category will be made for a course to teach culturing methods."

The agency said topics to be considered in the new requests for grant applications include:

"Self-renewal and differentiation of human embryonic stem cells;

"Derivation of new human embryonic stem cell lines, including disease-specific lines;

"Assessment of tumorigenicity of human embryonic stem cells and derived cells;

"Reprogramming of adult human somatic nuclei;

"Studies related to identification, storage, maintenance, stability and storage of human embryonic stem cells."

The preliminary grant budget approved by the agency calls for $69.5 million in the first year of the effort, declining to $20 million in the fourth year. The governor's loan is expected to cover the first two years with general obligation bonds the next two, assuming the agency prevails in court.

The agency also wrestled with its strategic plan and mission statement. It approved a "slogan" for its program: "Turning stem cells into cures."

The board apparently rejected suggestions to require more disclosure from scientists who review the applications for grants and make what are likely to be de facto decisions on most of them. The agency's press release said the committee approved conflict of interest regulations and made no mention of any changes from the draft presented to the panel.

Below is the full press release since it is not yet up on the CIRM web site.

CIRM Press Release on Grant Program

Here is the press release from CIRM on its new grant program.

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Contact: Kirk Kleinschmidt, (415) 396-9100, kkleinschmidt@cirm.ca.gov

OVERSIGHT BOARD APPROVES PROPOSAL FOR NEW HUMAN EMBRYONIC STEM CELL RESEARCH PROGRAM

Governor Schwarzenegger-Authorized Loan Allows Science to Move Forward

San Francisco, August 2, 2006—Twelve days after Governor Arnold Schwarzenegger’s announcement of a $150 million loan to the California Institute for Regenerative Medicine (CIRM), its oversight board responded with a new proposal funding human embryonic stem cell research at California’s non-profit research institutions.

The Independent Citizens’ Oversight Committee (ICOC) approved a proposal for three Requests for Application (RFAs):

Comprehensive Research Grants—four-year grants to investigators with a record of accomplishment in human embryonic stem cell research or closely-related field that relate to a long-term therapeutic goal;
Seed Grants—two-year grants to fund innovative ideas by scientific investigators who are new to the field;
CIRM Shared Research Laboratory Grants—grants for dedicated laboratories for culturing human embryonic stem cells including core equipment and trained personnel. Additional grants in this category will be made for a course to teach culturing methods.
All grants will be made on a competitive basis to ensure that the best scientific proposals are funded. The ICOC will approve all funding decisions following scientific peer review and recommendations by the Scientific and Medical Research Funding Working Group and the Facilities Working Group, as appropriate.

“The Governor’s commitment to this science has electrified the field and given hope to millions that the promise of stem cell research will move forward in California,” said ICOC Chairman Robert Klein. “The board’s decision to focus on human embryonic stem cell research will address the critical funding gap created by the paralysis of federal policy.”

Topics to be considered in the new RFA will include but are not limited to:

Self-renewal and differentiation of human embryonic stem cells;
Derivation of new human embryonic stem cell lines, including disease-specific lines;
Assessment of tumorigenicity of human embryonic stem cells and derived cells;
Reprogramming of adult human somatic nuclei;
Studies related to identification, storage, maintenance, stability and storage of human embryonic stem cells.
“The board’s decision will allow CIRM to jump-start human embryonic stem cell research in California,” said CIRM President Zach Hall. “We have the infrastructure and policies in place to manage this exciting program in a responsible way for the people of California. We can now advance the goal set by California voters—funding the best science that leads toward therapies.”

Human Embryonic Stem Cell Research Program
Preliminary Budget
Year 1
$69.5 million
Year 2
$37 million
Year 3
$25 million
Year 4
$20 million
Total
$151.5 million

The first two years of the Human Embryonic Stem Cell Research Program is intended to be funded from the loan from the State of California initiated by the Governor. The anticipated general obligation bonds will fund years three and four of the program. An additional RFA, also to be funded by the State loan, is expected later this year to address adult, cord blood and other critical stem cell research.

The ICOC wrote a mission statement, guiding values and strategic principles for the scientific strategic plan, which is scheduled to be presented for formal approval at the next board meeting in October. The board created a slogan for the program: “Turning stem cells into cures.”

The board also approved final regulations for Medical and Ethical Standards to guide CIRM-funded research and conflict of interest regulations for advisory working group members. They will have the force and effect of California law pending final review and publication by the California Office of Administrative Law.

From Dollar Signs to Stem Cells: Diverging Views on WARF Patents

The matter is no mere piffle in Wisconsin. Just something in the neighborhood of $200 million a year from California alone, according to a story in the Milwaukee Sentinel Journal.

But out in California the issue is even greater.

"What's ultimately at stake is control of a potential billion-dollar industry that could make therapies to treat some of the world's most devastating diseases," wrote reporter Terri Somers of the San Diego Union Tribune on July 30.

What she and reporter Kathleen Gallagher of the Milwaukee paper referred to was the patent rights of the Wisconsin Alumni Research Foundation on embryonic stem cells. The two reporters raised the level of public attention to the dispute over the WARF patents with their lengthy pieces on a subject that is rarely reported by the mainstream media. Both articles were triggered by challenges to WARF by the Foundation for Taxpayer and Consumers Rights in California and the Public Patent Foundation in New York.

The stories covered some familiar ground to the readers of this blog. But we found it interesting that the Milwaukee paper cited the example of the patenting of recombinant DNA to support the WARF position while the San Diego paper cited the same patents as supporting the anti-WARF position.

Gallagher wrote on July 23:

"Stanford University also required upfront licensing fees on its recombinant DNA patents granted in 1980. Those fees were detailed in a paper that Maryann Feldman of the University of Toronto and two others published in November."

Gallagher continued:

"Stanford's recombinant DNA patents are just as broad as WARF's.

"Stanford pulled in $254 million of revenue on the patents, which it licensed to 468 companies, including Amgen and Genentech, that developed therapeutic products such as human insulin, human growth hormone and interferons based on the technology, according to the Feldman paper."

Somers in San Diego wrote:

"The WARF patents are much more expensive to use than some of the pioneering patents that have come before it – including at least one that was essential in the creation of the world's biotechnology industry.

"In 1980, Stanford University and the University of California system patented recombinant DNA, the process of splicing genes from one cell into another. It was one of two pivotal patents that gave birth to biotech.

"The Cohen/Boyer patents were broad in their scope, but Stanford and the UC system made a decision to license widely and cheaply to early biotech companies and to make the technology available without charge to universities and nonprofit institutes.

"Biotechnology companies grumbled at the time about having to pay $10,000 for the science, but it was much cheaper to buy the license than to fight it in court, ong>(John) Wetherell (an intellectual property attorney with Pillsbury, Winthrop, Shaw and Pittman in San Diego) said.

"The result was that more than 350 companies took licenses, the universities made $255 million and the public got the benefit of the products that were developed, (Cathryn) Campbell (an intellectual property lawyer with Needle and Rosenberg in San Diego) said."

Another interesting divergence emerged concerning reach-through royalties.

Somers quoted Joydeep Goswami, Invitrogen vice president for stem cells and regenerative medicine, on the subject.

"WARF has what he called 'a reach-through royalty clause, where they say anything you've invented remotely by using human embryonic stem cells will now have a royalty obligation back to WARF.'

"For example, if Invitrogen uses embryonic stem cells early in the development of a tool for drug discovery but the production of the tool doesn't involve stem cells, WARF would still want royalties on the tool, he said.

"WARF also wants companies with licenses to pay royalties on products they sell in foreign markets that don't honor the patents, Goswami said. That would give an advantage to companies overseas, which can develop the same tools without owing money to WARF.

"(Elizabeth) Donley (WARF general counsel) denied that WARF charges the reach-through royalties, although many scientists, business executives and intellectual property experts cite them.

"The bottom line, Donley said, is that the incentive for receiving a WARF license is the ability to do business in the United States, the world's largest drug market.

"'They are building a program using our patent. You can't build a program on our patents and pay us nothing,' Donley said. 'Who has dollar signs in their eyes now?'"

Gallagher's story also noted the broader impact of the patent issue, declaring that it "signaled increasing awareness among scientists and companies that the Wisconsin Alumni Research Foundation's patents make this state the biggest interchange through which all stem cell commercialization must travel."

She reported that WARF says it has provided licenses and cells to 324 research groups at no charge" and "provided licenses and cells to 12 commercial users. Those users pay fees ranging from $75,000 to more than $250,000, plus annual royalties."

The estimate of $200 million potential revenues from California came from Gallagher's story. She attributed the figure to Peter Balbus, managing director at Pragmaxis LLC, a company in Glen Ellyn, Ill., that helps commercialize technology.

By the way, the Wisconsin State Journal in an editorial basically dismisses the WARF patent debate as a "load of bunk."

NY Times: Stem Cell Research Funding 'Fairly Robust'...Or Is It?

The blind men and the elephant are doing their dance again. One of the participants in the latest tango is the New York Times. Others include a venture capitalist and stem cell businessmen.

Here is what the Times carried in a July 25 piece by reporter Jodi Rudoren:

"Even with the limitations on federal financing, the overall financing available for stem cell research could be described as fairly robust, given that the research is still at a basic stage and that in addition to state money, philanthropies like the Howard Hughes Medical Institute have made contributions. Moreover, in the private sector, biotech companies like Geron, Advanced Cell Technology and Athersys conduct research on embryonic or adult stem cells."

No attribution was given for that statement.

A somewhat different view was expressed in California the same day the Times published its piece, according to reporter Steve Johnson of the San Jose Mercury News, who wrote about a hearing held by the California stem cell agency. Here are some excerpts:

"'This is a risky business,' said Martin McGlynn, chief executive officer of StemCells of Palo Alto, which hopes to soon begin testing fetal stem cells to help children with Batten disease, a fatal degenerative ailment.

"That risk also makes it harder for biotech companies to get funding from venture capital firms that are skittish, said Ann Hanham, managing director of Burrill & Company in San Francisco, which finances biotech companies. She said venture capitalists generally prefer to see a return on their investment in five to seven years, which is unrealistic for most stem-cell entrepreneurs.

"Bruce Cohen, chief executive of Cellerant Therapeutics of San Carlos, was one of several executives at the meeting who applauded Proposition 71.

"But given the enormous amount of work that needs to be done to turn stem cells into treatments for such ailments as diabetes and Parkinson's disease, he said, 'even with $3 billion, that's not enough.'

"Cohen urged the stem-cell institute's board to pair its taxpayer financing with money from private companies, adding, 'Prop. 71 can make a huge difference in the world if it's seen as a way to leverage private capital.'"

Of course, there are those who will never be satisfied by any amount of funding. And given the influence that the Times has, its "robust" statement could color the thinking of decision makers nationally about the adequacy of financial support for embryonic stem cell research.

Rebecca Vesely of the Oakland Tribune also covered the CIRM hearing. Here is a link to her story.

San Jose Merc: Full Disclosure Needed from CIRM

The stakes are large and the temptations are great. The evidence also shows that some scientists and physicians cannot resist – perhaps only a tiny handful, but nonetheless a significant number.

What we are talking about is the linkage between corporate interests and medical research. Reporter Paul Jacobs of the San Jose Mercury News is only one of the latest to report the bountiful ties binding the two in his recent look at Stanford University.

The newspaper editorialized on the subject and the California stem cell agency on Monday before today's meeting of its Oversight Committee.

Here is an excerpt:

"California's great stem-cell experiment faces a moment of truth this week.

"Wednesday, in San Francisco, the state's stem-cell institute must make a pivotal decision on whether members of its working groups should be required to publicly disclose any conflicts of interest before they review grant applications and make recommendations to the agency's governing board for final approval.

"The agency should make an investment in public oversight and public confidence and overturn its staff's recommendation opposing full public disclosure.

"The arguments opposing full disclosure have merit. There is concern about whether top-level scientists will be willing to participate in the process if they have to make complete financial disclosures of any potential conflicts. The working groups are strictly voluntary and will require a substantial time investment by out-of-state scientists who must be experts in their field. The disclosure provision could discourage some from participating. So the agency wants to settle for internal disclosure of potential conflicts that could then be reviewed, but not publicly disclosed, by the Legislature or an independent auditor.

"But as Mercury News Staff Writer Paul Jacobs pointed out in a recent series, the relationship between medical companies and premier research universities is growing increasingly cozy, and many professors now have second jobs working for medical firms.

"Public confidence in California's $3 billion investment outweighs the importance of attracting the highest level of scientists to review applications. The scrutiny over who receives the stem-cell research grants is certain to be intense over the course of the next decade. The last thing the state agency needs is a lawsuit or scandal over how it is spending taxpayer dollars. Anything less than full disclosure is bound to invite skepticism about the agency's integrity."

Stem Cell Snippets: Brits, Maryland and Defining the Debate

Links to interesting stories and other items connected to California stem cell issues.

Blair Hobnobs – The visit of Great Britain's PM to California highlighted linkages with the state's stem cell community. Participants in the meetings included Zach Hall, president of CIRM. Brits say they are spending $186 million for stem cell research in the next two years, substantially less than what California is supposed to be doing. It is not clear whether the British funding is for ESC research only or all stem cell research. The stories do not mention that the British consulate in SF has a man assigned to tracking developments at CIRM. You can find the San Francisco Chronicle story here and the San Jose Mercury News story here.

Chirping from Chesapeake – From Maryland comes word that it intends to outstrip California in giving grants for stem cell research, despite having only $15 million to play with. Linda Powers, biotech venture capitalist(Toucan Capital) and chair of the Maryland stem cell commission, stated that goal in a piece in the Washington Business Journal.

Classifying Stem Cell News – What type of news is a report about a stem cell matter – science, medicine, business, politics, governmental? Kaiser Permanente, the mammoth healthcare enterprise, says it is women's health news. That's where they put a summary of stem cell related opinion pieces. Not important, you say. Perhaps to some. But if stem cell research is, for example, considered mainly religious news, a reader might come to a different conclusion than if he or she thought it was a health subject. Defining the debate is still critical to building support for embryonic stem cell research. As for Kaiser's classification, it is entirely appropriate to describe stem cell news as a women's issue, but it is obviously more as well.