Good to See a Lively Debate

We would like to call your attention, once again, to the comments feature on this Web site, particularly the exchange on the "$100 Million Grant" a few items below. That exchange brings in new information and expands the discussion concerning the California stem cell agency, which is one of the goals of this particular Internet enterprise.

Making a comment is straightforward. Just click on the word "comment" at the end of each item and a form will pop up. You can even make your comments anonymously. Google, which is the site housing the California Stem Cell Report, encrypts the name of the sender so that it is not available to yours truly or others.

CIRM Presidential Search: Bids for Search Firm Perhaps Next Week

Bids could go out in a few days for a presidential search firm to assist in finding a new executive for the California stem cell agency.

The current president, Zach Hall, has the authority to move forward and sign contracts up to $250,000. The search firm contract, which is not likely to exceed that amount, would not have to go to the Oversight Committee, as we presumed in the item below.

Responding to our query, Dale Carlson, spokesman for the institute, also said no documents, other than the presidential criteria, were distributed at Wednesday's presidential search meeting concerning the bid process, timetable or "interim action."

CIRM Presidential Search: Concern Over Leaks, Search Bids Likely

The California stem cell agency is moving to ask for bids from firms to help in the search for a new president of the $3 billion agency.

The Presidential Search Subcommittee Wednesday voted 12-1 to seek the bids, we have been told. Presumably that will require ratification by the full Oversight Committee later this month.

Joan Samuelson, a member of the Oversight Committee, was reportedly the only negative vote, saying she wanted to define the job before hiring the search firm.

Some members of the search committee also were not happy about the disclosure that James Battey, the federal stem cell chief, was approached about the job. Their concern was that other good candidates might be driven off.

However, Battey's name was certain to come up as are the names of others who were considered in 2005. At least the names that became public. The California Stem Cell Report has a strong bias towards openness on the part of public agencies, including CIRM. However, this is one case where confidentiality is important. A job search for president that has all its candidates on public display is a poor way to hire good people. That said, it is difficult to control leaks on a high profile job such as CIRM president.

Confidentiality starts with the Oversight Committee. If they discuss names with outsiders, they can expect leaks. Candidates themselves will also lead to leaks if they discuss the job with others, which is likely to be part of their process of evaluating CIRM.

The Oversight Committee can also expect situations like Battey's. His name apparently emerged because of the way the NIH works. That could happen with other candidates as well.

As for the California Stem Cell Report, we will carry the names of candidates if they emerge in news stories and perhaps under other newsworthy circumstances.

CIRM Presidential Search: Battey Approached

One of the directors of the California stem cell agency has approached federal stem cell chief James Battey to see if he is once again interested in seeking the presidency of the state's $3 billion research effort.

Nature magazine reported today that Battey, chair of the NIH stem cell task force, had been approached. He was a candidate for the position in 2005 but dropped out of consideration.

In a piece by Meredith Wadman, Nature reported that Battey "has been excused from all stem cell related work" at the NIH. He remains as director of the National Institute on Deafness.

Nature, which did not say which CIRM director had approached Battey, wrote:

"The search committee hasn't discussed a shortlist 'with any real seriousness,' member Joan Samuelson, founder of the Parkinson's Action Network, told Nature on 29 January. 'We need to think about what talents and what skill set we need in the new president. And we should be clear about that before we write a job description,' she said."

The magazine continued:

"Battey is highly respected within the NIH as an able administrator who rarely makes trouble, but who will speak frankly when necessary. During the controversy over tightened conflict-of-interest rules at the agency, Battey said bluntly that if it adopted the stringent set of rules thatwas first proposed, he would resign (see Nature 435, 397; 2005). The rules were loosened before they were finalized.

"Battey's absence from his NIH stem-cell duties became publicly apparent at a 19 January Senate committee hearing on human embryonic stem-cell research. There, Story Landis, director of the National Institute of Neurological Disorders and Stroke, testified on behalf of the agency. She is now acting chair of the Stem Cell Task Force. It has also emerged that Battey will not be attending a meeting of stem-cell funding agencies being held in Singapore this week."

When Battey withdrew from consideration for the CIRM presidency in May 2005, he told the California Stem Cell Report that the position at CIRM was "exciting and important" but that his current position at NIH was also an "important opportunity."

We queried Battey to see if he has more to say currently on the subject. He did not.

CIRM Guide to the $100 Million Grant Process

The California stem cell agency has posted on its Web site a useful guide to its plans for handing out more than $100 million in research grants, including timelines and other procedures.

Much of the information has been available before but it was scattered and hard to find. Now it has been compiled in a tidy package. Some of the information is fresh. For example, the memo said:

"In the first week of February, we will release a list of all the SEED Grant applications. That list will include the title of the research proposal, the numeric score (1 to 100) it received from the Grants Working Group, and the Working Group’s recommendation (Recommended for funding, Recommended if funds available, or Not recommended for funding at this time). From our Web site, viewers can click on the application number to open a public abstract of the proposal, a statement of its benefits to California, the applicant’s proposed budget, and a summary of the Working Group’s review."

The memo also reiterated the agency's intention to maintain its secrecy concerning the names of those seeking millions of dollars in government funds – a dubious practice adopted because that it is the way it always been done (at least on the federal level) to protect rejected applicants from embarrassment. We should note that some of the applicants have already disclosed that they have applied, making the attempt at secrecy a bit ineffectual and raising questions about why the applicants disclosed when the granting agency prefers secrecy.

The memo was prepared originally for use by the ink-stained wretches of the media, but it has value for anyone interested in the grants. You can clip it and post it on the outside of your petri dish.

MSU Clears Cibelli of Misconduct

Stem cell scientist Jose Cibelli, a member of one of the working groups of the California stem cell agency, has been cleared of misconduct by Michigan State University but it is not known whether he will return to his advisory work with CIRM.

Cibelli asked for the MSU investigation as a result of his connection with the Korean stem cell scandal. He was the co-author of the fraudulent March 2004 paper that reported the first-ever closed human stem-cell line.

A letter signed by the university intellectual integrity officer was provided by Michigan State University to the California Stem Cell Report. The letter said in part:

"The excerpts below summarize the findings of the IC(investigative committee):

'After considering all the testimony and evidence available to it, the IC finds that the Respondent did not commit Misconduct.'

"The report further states:

'His support for, and participation in, the 2004 manuscript were motivated by his natural enthusiasm for NT cloning and human ES cell research, his hopes that the field will progress and his well-meaning desire to participate appropriately in that overall effort.'"

Dale Carlson, spokesman for CIRM, told the California Stem Cell Report:

"Cibelli was an enthusiastic, valuable member of the group and we'd like very much to see him back."

Carlson added that further information would have to wait until CIRM President Zach Hall returns from a trip to Singapore.

Cibelli voluntarily withdrew from active participation in the standards working group after the Korean scandal erupted.

Below is the full text of the MSU letter concerning Cibelli. We have asked the university for a complete copy of the report that is referred to in the letter.

Text of Cibelli Letter

Here is the complete text of the letter supplied by Michigan State University concerning Jose Cibelli:

January 26, 2007

This letter is to inform you that Michigan State University has just completed its Investigation into the Allegation of Misconduct in Research against Dr. Jose Cibelli, Professor, Department of Animal Science and Physiology, under MSU’s Procedures Regarding Allegations of Misconduct in Research and Creative Activities. The Investigative Committee (IC) found that no Misconduct in Research occurred.

Immediately after learning that the paper he co-authored, “Evidence of a pluripotent human embryonic stem cell line derived from a cloned blastocyst”, Science 303:1669-1674, reported data from fraudulent research, Dr. Cibelli voluntarily went to MSU’s University Intellectual Integrity Officer (UIIO) seeking an evaluation of his contributions to the manuscript. Dr. Cibelli’s review included a Preliminary Assessment by the UIIO, an Inquiry conducted by three colleagues of an Inquiry Panel and a formal Investigation conducted by three colleagues who comprised the IC. Review of Dr. Cibelli’s case took approximately one year.

The excerpts below summarize the findings of the IC:

After considering all the testimony and evidence available to it, the IC finds that the Respondent did not commit Misconduct.

The report further states:

His support for, and participation in, the 2004 manuscript were motivated by his natural enthusiasm for NT cloning and human ES cell research, his hopes that the field will progress and his well-meaning desire to participate appropriately in that overall effort.

Please consider this finding of no misconduct in future interactions with Dr. Cibelli.

Sincerely,

James M. Pivarnik, Ph.D.
University Intellectual Integrity Officer

FTCR: No to Research and 'Big Name' for Next CIRM President

The California stem cell agency should not hire a "big name" as its new president, and he or she should not be allowed to conduct research on the side, according to one of CIRM's watchdogs.

John M. Simpson, stem cell project director for the Foundation for the Taxpayer and Consumers Rights, sent a letter to CIRM today and issued a press release on the subject, following the ealier item ("Move with Dispatch") below in the California Stem Cell Report. (Also see Simpson's comment on that item in which he quotes an unidentified Oversight Committee.)

In his letter, Simpson said:

"The next president must be an extremely competent hands-on scientific administrator, who can set up and maintain transparent and accountable management systems. He or she must be able to interact with the public, state officials, legislators and the media in a transparent, honest and accountable fashion.

"In the past there has been some suggestion that the president might continue to maintain research laboratory as part of the president's role. This should not be allowed. The presidency of CIRM is more than a full-time job. A person trying to manage CIRM's activities and conduct meaningful research simultaneously would do justice to neither activity.

"Members of the search committee should avoid the temptation of seeking a 'big name' scientists known for his or her discoveries. The emphasis must be on the individual's skill in scientific management and administration."

Simpson's statement came as CIRM posted a seven-page document on its Web site describing proposed criteria for the new president. That document, coming only one day before the meeting of the presidential search subcommittee, will serve as the framework for that panel's discussion. Other background information relating to hiring a search firm, whether that process should be open to bids, timetable for hiring and "interim action" was not available. The lack of that information makes it extremely difficult for the public to comment intelligently and belies CIRM's ostensible commitment to openness and transparency.

Much of what is contained in the presidential criteria document, which presumably emanated from the office of stem cell Chairman Robert Klein, is predictable. A preliminary look, however, raises suspicions about whether it is a first step in shifting the existing balance between the president and the chairman (see the section on management reporting lines of authority). The overlapping, dual leadership at CIRM has been a troubling aspect of the agency since its earliest days, surfacing in public conflicts involving Klein and current President Zach Hall, who is retiring by about mid-year. Prop. 71 codified the dubious executive structure in a state law that is nearly impossible to change without another vote of the people.

The 3 p.m. meeting of the search subcommittee will be in San Francisco, but remote locations are available to the public in Washington, D.C., Los Angeles, UC San Francisco, UC Berkeley, La Jolla, Ca., Carlsbad, Ca., Stanford University and the San Francisco city attorney's office. The agenda does not indicate specific room numbers in some cases. Email CIRM directly, info@cirm.ca.gov, or phone the agency at 415-396-9100 if you would like more details on the locations.

CIRM's Presidential Search: Time to Move with Dispatch

Should the next president of the $6 billion California stem cell agency also conduct research? Should he or she receive a higher or lower salary than the current CEO? Can a suitable successor be on board by June? Can good candidates be found who also can work in the dual leadership environment at CIRM?

Those are some of the questions likely to be addressed as CIRM's presidential search committee convenes on Wednesday with remote sites for the public available from Washington, D.C., to Chico, Ca.

The specific agenda for the meeting is a bit sketchy as of this writing, reminiscent of CIRM meetings of yore in which background material was not available until the day of the meeting, making it difficult for even CIRM Oversight Committee members to comment intelligently much less the public.

On the table are job summary and criteria, the search process and possible competitive bidding for a search firm, the time table and "interim actions." The last item would seem to involve a temporary appointment while the search for a permanent replacement for Zach Hall continues. The 69-year-old Hall has indicated he wants to be off the job no later than June.

The last presidential search in 2005 failed to produce a result until September of that year, three or four months after it had been expected. And that was a man, Zach Hall, already filling the spot on a temporary basis.

The tenuous legal position of CIRM, which then faced the lawsuit now on appeal, was one of the reasons for the apparent difficulty in hiring a president. Another matter of concern among some candidates was whether they could conduct research and whether CIRM would provide facilities. That came up in August 2005 at a meeting of the search subcommittee.

Issues involving the dual leadership at CIRM – a president and chairman with overlapping responsibilities – surfaced early in 2005 with the search subcommittee. It is likely to be a continuing concern although stem cell Chairman Robert Klein has indicated he may give up his post in 2008. But even if he does, another question arises: Who would replace him and can the next president hammer out a new working relationship with the next chair?

California is an expensive place to live, especially the San Francisco Bay Area, where CIRM is headquartered. So compensation becomes especially important for those from out of state. The CIRM salary scale drew protests as excessive in 2005, but it is not likely to be revised downward.

Most involved with CIRM seem to agree that Hall's performance has set a high standard. He laid the difficult groundwork that may have deterred some early candidates. His performance has also clarified for the the Oversight Committee what is needed in a president and creates certain expectations. CIRM is a tiny organization with about 20 employees, substantially fewer than the 29-person Oversight Committee that oversees it. Leadership changes are always difficult for any enterprise. But smaller organizations are more susceptible to disruption than larger ones with substantially more momentum or, for that matter, inertia. CIRM could suffer if too much time passes without a permanent replacement for Zach Hall.

What Will WARF Say This Year?

Today is the last day for saving $500 on registration for the The Stem Cell Meeting in March in San Francisco. Last year, this was the forum that triggered the WARF patent flap. Here is the registration page.

A Look Behind the WARF Patent Announcement

The folks who challenged the WARF stem cell patents and triggered a fresh wave of negative publicity for one of Wisconsin's more sacrosanct institutions deserve credit for this week's surprising announcement concerning more liberal access to the critical keys for ESC research.

That credit is deserved despite WARF's predictable assertion that the organization really has not changed its position. Additionally, part of the backdrop to its announcement seems to involve the abrupt departure last year of WARF's longtime counsel, Beth Donley.

Previously WARF had taken a hardline position on its ESC cell patents, serving notice that it would defend them aggressively. Donley was in the forefront of that position, which is where an attorney should be when her job is to defend an organization's IP. But the ultimate question for WARF really was whether it wanted to appear to be standing in the way of research that could benefit millions of ailing persons all because WARF was grubbing for dollars. We suspect that was a position that made WARF's directors uncomfortable.

Nonetheless, Andrew Cohn, government relations manager for WARF, in response to questions from the California Stem Cell Report, said:

"Our position has not changed. People completely overreacted to comments made (last spring) by a WARF staff person (Donley) in response to a question. They did not report the second sentence of her response which was WARF has no intention of interfering with the CIRM grant process. The policy announced this week was just a clarification on a policy that was misunderstood many people."

Of course, if WARF wanted to clarify its position it could have made its announcement concerning its patents last spring instead of this week.

Following Donley's statement last year, John M. Simpson, stem cell project director of the Foundation for Taxpayer and Consumers Rights in Santa Monica, Ca.; Jeanne Loring, a stem cell scientist with the Burnham Institute in La Jolla, Ca., and the Public Patent Foundation legally challenged the WARF patents, triggering a spate of articles that did not portray WARF as a benign non-profit.

The Simpson alliance is still not satisfied with WARF's position and plans to continue their efforts.

The Sacramento Bee said that Simpson, Loring and the Patent Foundation deserve credit for WARF's "change." It also noted, in an editorial, the benefits of having a friendly critic (Simpson et.al.):

"The California Institute for Regenerative Medicine -- apparently unwilling to pick a fight with WARF -- hasn't joined the patent challenge. Now, ironically, it may benefit from the activism of Simpson and Loring."

In addition to Simpson's coalition, others do not think WARF went far enough. Writing in The Scientist, Alison McCook said,

"Jonathan Auerbach, president of GlobalStem, Inc., agreed that the patents remain a significant 'roadblock' for research. The changes to the licensing terms don't affect in-house industry research, and if GlobalStem receives, for example, an NIH small business grant of $100,000 for human ES cell research, the company would still have to turn over a sizeable proportion -- perhaps in the range of $75,000 -- to WARF in licensing fees, Auerbach noted. Loosening the restrictions 'is progress, but it's not enough,' he told The Scientist. "

Aaron Lorenzo of Bioworld Today additionally reported:

"Some industry sources told BioWorld Today that the new policy doesn't go far enough - WARF said companies still will need a license when they want to conduct internal research, which potentially is debatable given recent Supreme Court rulings on patent law, or develop a product for the market. But those same critics nonetheless feel that the overall bent of the change in attitude represents a positive step."

As for Donley's role in all this, scuttlebutt is floating around in the stem cell world that one of the reasons for her departure from WARF involved a re-examination of the foundation's position on stem cell patents. One report has it that she gave only three days notice.

Whatever the reasons for its announcement, WARF is doing the right thing, and it should receive credit for moving in the right direction. So should Simpson and company for lighting the way.

Ebert on WARF and the Patent Challenge

Lawrence Ebert, a patent attorney in New Jersey, has a different take on WARF and the stem cell patent matter. Among other things, he faults The Sacramento Bee and challenges the challenge to the patents:

"Patent claims are not invalidated because earlier researchers paved the way for later researchers. PubPat's anticipation argument for human embryonic stem cells is based on a prior reference which is not enabled as to human embryonic stem cells. To look in a different area, the work of Galileo (and others) may have paved the way for the Wright Brothers, but no one achieved three dimensional flight control before the Wright Brothers, or taught how three dimensional flight control could be achieved. PubPat's obviousness argument is based on the assertion: recipe for mouse embryonic stem cells renders obvious recipe for human embryonic stem cells. If this were true, it probably would not have taken 15 years between mouse and human."

Reading the Economic Entrails of ESC Research

Is embryonic stem cell research a cash cow? Or just another public policy chimera?

The questions have surfaced again in news reports concerning two old studies by economists. One is the much-noted 2004 campaign study by Laurence Baker of Stanford and Bruce Deal, managing partner of the Analysis Group of Menlo Park. The other was prepared in the middle of last year by Richard Gilbert of UC Berkeley. Gilbert's study was relatively pessmistic compared to the Baker study.

Writer Malcolm Maclachlan of the Capitol Weekly in Sacramento tackled both of the studies in a recent piece called "Stem Reality Check." Maclachan wrote:

"Gilbert was careful to note that he is not accusing Baker and Deal of any dishonesty in their study. For instance, Gilbert writes in his report that they were clear with their assumptions and the fact that these numbers were estimates of money that could be made many years in the future. If anyone took these numbers as guarantees, he said, they probably did not do so via a careful reading of Baker and Deal's report.

"'As with anything, people believe what they want to believe,' Gilbert said.

"However, Gilbert does bring up two main issues he has with assumptions made in the report. First, he said they take a 'prospective approach' to their estimates--that is, they try to estimate the number of viable new therapies that will be created. Gilbert said that a 'retrospective' approach would be more appropriate, 'based on actual royalty generation by research funded by universities, hospitals and research institutions.' That approach takes note of the fact that big money makers--for instance, the cancer drug Taxol, which made $67 million for Florida State University in 2000 alone--are exceedingly rare.

"Second, Gilbert takes the authors to task for not fully factoring in a concept called 'the time value of money.' Not only does inflation rob money of its value over time, Gilbert said, but money tied up in stem cell research is also money not available to be invested elsewhere. Though Gilbert writes: 'In their defense, the authors report only projected revenue flows, not the value of those revenues.'

"By combining these two concepts, Gilbert estimated that a better real money value of the returns California could see would be reduced to between $31 million to $62 million.

"'I don't think this is terribly surprising to a lot of people,' Gilbert said. 'Basic research is rarely a cash cow.'

"Baker took the critique in stride. He noted that circumstances have changed greatly since he wrote the report, especially in terms of an improving political situation for stem cell research in Washington.

"'It's a complicated area that's evolving all the time,' Baker said. 'I don't know if there's a right way to do the estimates.'"

The Capitol Weekly also wrote:

"So why should people be paying attention to a 7-month-old critique of a 28-month-old report? Because other states are starting to propose big money for stem cell research--and at least one of the same players from Prop. 71 is involved in other states initiatives, said Jesse Reynolds, project director on biotechnology accountability with the Oakland-based Center for Genetics and Society.

"For instance, Deal wrote a report used to promote a stem cell initiative in Missouri which estimated that the state could save up to $3.8 billion in healthcare costs over 20 years from stem cell research. Amendment 2 merely protects stem cell research in the state; it did not put forth any money. It passed in November with a bare 51.2 percent of the vote. Deal did not return a call seeking comment for this story.

"This coming November, New York voters will decide on a $1 billion bond for stem cell research. In neighboring New Jersey, they'll vote on $500 million. Both of these dwarf the previous number 2 state stem cell effort, Reynolds said, the $100 million over 10 years approved by the Connecticut General Assembly in June, 2005."

Here's what really lies at the bottom of ESC petri dish: If there were sure money to be made in ESC research, venture capitalists would be pumping gazillions into it. And there would be no need for efforts like the California stem cell agency.

CIRM on WARF

The California stem cell agency, until now, has been nearly deathly silent on the WARF patent flap.

But the agency released the following statement in the wake of WARF's change of heart.

"The announcement today by the Wisconsin Alumni Research Foundation (WARF) appears to be a major step forward in facilitating the sharing and accessibility of materials that will move stem cell research closer to therapies and cures. We are interested to hear more details and to review the new licensing policies."

The Perils of Microsoft

Courtesy of Windows, the California Stem Cell Report has become Internet-challenged. The XP operating system on our laptop took a dive about 24 hours ago, and we are in the processing of rebuilding. Look for fresh postings sometime on Wednesday.

WARF Softens Stem Cell Patent Position, Critics Not Satisfied

In a surprising move, WARF says it is making changes in its embryonic stem cell patent program that should have a "positive" impact on the California stem cell research effort and others as well.

WARF previously had taken an aggressively combative position in relation to California and challenges to its ESC patents. Its move, however, did not satisfy opponents, who said the changes do not go far enough.

WARF said:

"Industry-sponsored stem cell research will be facilitated by a new WARF policy that will enable companies to sponsor research at an academic or non-profit institution without a license, regardless of location and regardless of intellectual property rights passing from the research institution to the company. This will enable companies to get started with stem cell research in a low-cost, visible manner and increase funding of stem cell research by for-profit companies. Companies will still need a license when they want to bring the research into their company laboratories or when they want to develop a product for the market."

WARF continued:

"Second, while ensuring provisions related to informed consent for embryo donations are communicated and honored, WARF is changing the cell transfer provisions in its academic and commercial licensing. The new policy will allow easier and simpler, cost-free cell transfers among researchers. This will facilitate collaborations within the human embryonic stem cell research community and thus advance the field."

WARF added:

"WARF is also clarifying its position with regards to the California Institute for Regenerative Medicine (CIRM). As a not-for-profit, grant-making organization, CIRM does not require any license or agreement from WARF to pursue its grant making policies. Further, WARF does not expect CIRM to remit to WARF or WiCell any portion of payment that CIRM receives from its grantees. WARF has been and will continue to be supportive of CIRM’s efforts to fund human embryonic stem cell research and move the technology forward."

John M. Simpson, stem cell project director for the Foundation of Taxpayer and Consumers Rights of Santa Monica, Ca., which is challenging WARF´s patents, said:

"WARF’s action demonstrates that their previous stance was indeed detrimental to stem cell research in the United States. While I welcome this step forward, the best thing would be for WARF to abandon its claims to these over-reaching patents that are recognized nowhere else in the world."

Jeanne Loring, a stem cell scientist at the Burnham Institute in La Jolla, Ca., said,

"This change in policy is a step in the right direction and academic scientists will be pleased that they can collaborate with other scientists without interference from WARF. But a change in licensing policy of the human ES cell patents doesn't solve the fundamental problem that the patents should not have been issued in the first place."

CIRM did not have an immediate reaction to the news from WARF but the California Stem Cell Report has queried the agency.

Replacing Zach: A Chance to Weigh in on the Next President

If you want to lobby the California stem cell agency concerning its search for a new president, you can do it this month from locations ranging from Washington, D.C., to Chico in Northern California.

Those are two of the locations listed for remote, telephone access to the meeting of the CIRM presidential subcommittee on Jan. 31. The group plans to discuss criteria for selection of the replacement for Zach Hall, as well as the time table and the likely hiring of a presidential search firm.

The most interesting stuff, however, is likely to be discussed during an executive session following the committee's public musings.

Other remote locations are in Berkeley, La Jolla, San Francisco and Los Angeles. The exact addresses are available on the agenda.

CIRM Surfaces in Lobbying Article

The California stem cell agency popped up in a recent piece in the Harvard Political Review discussing lobbying in Washington, D.C., particularly that of Big Pharma.

The article noted that as of 2004 the pharmaceutical industry employed nearly 1,300 lobbyists in Washington, D.C., about twice the number of elected officials in the House and Senate. Of course, those lobbyists are vastly outnumbered by regulators. The piece also noted that Pharma spent $128 million in 2004 to push for tax breaks. That was about four times the amount spent that year on behalf of Prop. 71, which created the stem cell agency in California.

Stem cell research, the article said, has "arguably caused the greatest controversy." That where the article's authors, Alex Lavoie and Richard Kelley, brought in CIRM.

"Dale Carleson (sic), chief communications officer for the California Institute of Regenerative Medicine, said in an interview with that HPR that “a change in federal policy severely limits stem cell research,” giving scientists a strong incentive to try to influence the policy-making process. Carleson’s California Institute of Regenerative Medicine is the state government agency responsible for managing the three billion dollar investment in stem cell research, a result of Proposition 71, passed by the California Legislature in 2004 after heavy lobbying from interest groups. Government funding is, according to Carleson, “essential, especially to basic and preclinical research. Between the government and private foundations, most of them devoted to a specific disease, that’s the life blood of stem cell research.” Without funding from the government, stem cell research would suffer greatly, and without information and encouragement from lobbyists, the government might never support research in the first place."

The article went on to point out the cost of lobbying is prohibitively expensive for many groups, meaning a tilt towards those who can pay to be heard. At the same time, the piece said, that it is hard for lawmakers to separate the national interest from constituent interest from industry interest, which, we should note, can overlap significantly. "Unbiased advice is hard to come by," the article said.

CIRM has not yet really felt the impact of lobbying. At our last check, no lobbyists had been registered in Sacramento as attempting to influence the agency. A few firms and associations have spoken out on some issues, particularly IP. But that is likely to change as the coffers open wider at the stem cell agency.

(Editor's note: As most of you know, the Harvard item erred when it said the California agency was created by the legislature. It was created by a ballot measure that carried language that virtually immunized the agency from legislative influence.)

The Search for a New Zach Hall

Preliminary work has already begun to find a replacement for Zach Hall as president of the California stem cell agency, one of the key decisions that must be made this year by CIRM's directors.

The presidential search subcommittee is expected to hold its first meeting on the matter Jan. 31 at CIRM headquarters in San Francisco. The full Oversight Committee is likely to address the issue at its two days of meeting in February.

Hall, 69, plans to leave his post in June, if not earlier.

The Sacramento Bee editorialized today on Hall's tenure and the task facing the Oversight Committee, which seemed to have some difficulty finding a president in 2005, when CIRM was less settled.

The Bee wrote:

"The institute's next president will face many of the challenges Hall confronted: implementing strong ethical standards for stem cell research; overcoming funding restrictions imposed by lawsuits filed against the agency; and hiring the best staff. More art than science will be the challenge of responding to an oversized, 29-member oversight board that is rife with internal conflicts and strong personalities, including the board's often-imperious chairman, Robert Klein II.

We've had some occasional differences with Hall, but he clearly deserves credit for many of the agency's recent successes. He's hired some excellent assistants, implemented a thoughtful strategic plan and tried to move the institute from a highly politicized agency to one that focuses on science and seeks to command respectability. At times, Hall could have done more to solicit opinions and respond to the agency's critics, but given his background -- he came from the insular National Institute of Health -- he's gone further than many would have expected."

The editorial continued:

"The talent search should be easier now that the institute has received a $150 million loan from the state and won its first round of court challenges. Even so, fissures will be likely. Some board members will want to hire a star scientist; others will want a seasoned administrator.

"Whatever the outcome of the debate, the board must make certain qualifications priorities. The next president must be a leader of integrity, with experience in running a public agency and a commitment to transparency. At his best, Hall provided this leadership. He gives the board something to build on."

Surfing the Wave of Good Stem Cell Vibrations

The House vote on federal embryonic stem cell research has created a fresh wave of good feeling for the stem cell industry, and at least one California firm is moving quickly to capture its momentum.

Advanced Cell Technology of Alameda issued two news releases this week, specifically citing the current political climate. One announced a national conference call Friday for investors during which ACT executives will promote their company and point of view.

The company also announced that it had received a "momentous" $204,439 NIH research grant in conjunction with a project involving one of the company's academic partners, the Burnham Institute in the San Diego area.

The news release quoted William M. Caldwell, chairman and CEO of ACT, as saying:

"This grant is momentous in part because it reflects the changing political climate and the federal government’s move toward considerably greater support for research into embryonic stem cell science. Increases in federal funding can trigger very significant growth in our industry, and grants such as these help companies like Advanced Cell deliver stem cell-based therapies to the bedside."

The release also quoted Mark Mercola, professor in stem cells and regeneration at Burnham, as saying:

"There are considerable opportunities in the field of regenerative medicine to use embryonic stem cells to develop therapeutic products to treat diseases where healthy cells may be used to replace those lost to injury or disease. This grant will allow us to build on our collaboration with Advanced Cell to use phage display as a tool to discover novel molecules for directing stem cells to form useful cell types and tissues."

It is fair to say that the releases are as much – if not more – about creating a "good story" for investors about ACT than the science. Nothing wrong with that. That's the way business works. The maneuver is not much different than what the governor of California did last summer when he announced his $150 million CIRM bailout in the wake of the president's veto. It certainly behooves the industry to piggyback on the positive vibrations out of Washington, even if the federal government's position on ESC research remains unchanged.

Oral Appellate Arguments Set for February in California Stem Cell Lawsuit

Don't expect a stem cell love feast on Valentine's Day in the Court of Appeals in California.

That is when foes of the California stem cell agency will go toe-to-toe with state attorneys during oral arguments as the opponents seek to put CIRM out of business. The foes lost during a superior court trial last year and are now appealing that verdict.

An appellate decision could come in a matter of a few weeks following the Feb. 14 hearing, but given the nature of the legal beast, it probably will be later. Then there is likely to be an appeal to the State Supreme Court, where the case is almost certain to terminate, probably before the end of the year.

Oral arguments will begin at 9 a.m. in the First Appellate Court at 350 McAllister St. in San Francisco.

The BioBay Stem Cell Outlook: Congress to IP

The president of the leading biotech industry organization in the San Francisco Bay Area has a good-news, bad-news position on stem cell research.

The bad news is that the "potential" is more than a decade distant. The good news is that some companies have technology that may bear fruit sooner than the efforts of the California stem cell agency.

Matt Gardner, head of BioBay, discussed the biotech outlook with David Morrill, business writer for the Oakland Tribune, in a question-and-answer interview.

Here is what Gardner had to say on stem cell research:

"Q: One of the industry's hotbeds is stem cell research. Given the ethical and political hurdles, will the potential of this area ever be realized?

"A: Yes, but I think we are still a decade or more away from seeing what that potential looks like. Here again, I think California is in such a leadership position, being able to hopefully realize the promise of the stem cell institute (the California Institute for Regenerative Medicine) and that a tremendous amount of work needs to be done at the basic end of the research. And yet, even with that said, there are companies operating today in stem cell sciences that have technologies that may come to fruition much sooner. There are some early signs from a small number of companies that there is strong potential here. So we can only expect to see that grow as the science around stem cells is understood."

Gardner on intellectual property, a major issue facing the California stem cell agency:

"That's a huge issue for this industry. And the biggest thing to focus on there is that the U.S. Congress is going to visit this issue in 2007. What needs to be kept in mind here is that this industry is built on certainty in intellectual property. Anything that any of our public sector partners do to try and draw that into question will be harmful to this industry, no matter what it looks like.

"Most of these companies, when they are initially funded, are done so on a very clear picture of their intellectual property. Because it may be 15 years before you have product revenue based on the amount of time it takes to develop a product, run clinical trials and get the product approved, everything until then is a value based on intangible assets. Until you have your first product approved in this business, you are valued in the potential of the things you are developing. And the potential value of those intangible assets is all wrapped up in whether you own your intellectual property and how clearly you own it."

Gardner on Congress:

"In the next couple of years I think some issues will be brought up to a new level of discussion. One of the great opportunities is that Nancy Pelosi has a tremendous familiarity with the industry. And so in a new way, the industry has a profile with this speaker that it did not have before. To deal with someone in a leadership position that is committed to these solutions is a huge opportunity for us."

Economic Disclosure from the California Stem Cell Report

Here is the annual economic disclosure statement from the California Stem Cell Report. We are filing it because of normal questions that might arise concerning our economic interest in stem cell research.

We, meaning my wife and I, have no investments in biotech firms or any other organizations that could benefit from stem cell research, except through mutual funds, which, of course, we have no control over. We do not hold any mutual funds that are industry specific to biotech.

Beyond that, we are not employed nor do we receive funds from any organization involved in biotech or stem cell activities. Nor is any member of our immediate family (meaning wife and adult children) involved in such a fashion. As far as we know, no distant relatives are involved in biotech or have investments in that area.

We also have no financial connections with organizations that support or oppose CIRM.

All of the above is unchanged from last year.

One would hope that reporters, observers or others trying to influence CIRM (which is not the same as reporters) would be willing to make the same sort of economic disclosure as above. By that we mean specific dollar amounts, from $1 (one dollar) and up – not those wimpy disclosures required under state law or by CIRM.

Beyond the economics, the California Stem Cell Report supports embryonic stem cell research. We believe that CIRM is pursuing a worthwhile endeavor. We also believe that openness, transparency and disclosure are fundamental to good government. That means providing background agenda material well ahead of meeting dates, among other things. Otherwise, meetings can amount to nothing more than sneak-through business, plenty of which can be seen in Congress and the California Legislature.

We also believe in maximum disclosure -- when it doubt lay it out. Specifically all persons with signficant responsibility within CIRM, including members of CIRM working groups, should publicly disclose their economic interests in more detail than required by state law. Outside contractors should disclose their interests as well.

If you have questions or comments on this, you can post them by clicking the word "comment" below or by sending them directly to djensen@californiastemcellreport.blogspot.com. It is possible to comment anonymously by using the "comments" function.

Two Years Before the Stem Cell Mast

Two years ago this month, the California Stem Cell Report began its journey into the multibillion dollar world of embryonic stem cell research.

Since then, we have published more than 900 items on California's extraordinary and unique effort to pump up one of science's more controversial areas of research. Readers have paged through the website tens of thousands of times. They came from throughout the nation and the world, seeking more information about what the small band at CIRM is doing on King Street in San Francisco. (Editor's note: More recent and additional information can be found in an Sept. 17, 2007, article on Wired.com)

The reception has been generally favorable. "The ultimate source for all things California" is how Jim Fossett, director of health and Medicaid studies at the Rockefeller Institute, described the Report on the blog of the American Journal of Bioethics. "Comprehensive," "first thing I read in the morning," "enormously valuable" are some of the comments from other readers, whose numbers include law firms, newspapers and biotech companies. Studies of the California stem cell agency have cited the California Stem Cell Report (CSCR) as a source. University instructors use it as part of their curriculum.

Yahoo nows ranks the site No. 1 and Google No. 4 when using the search term "california stem cell." The rankings are up from near invisibility on the search engines when we began this endeavor in January 2005, less than a month after the first meeting of CIRM's Oversight Committee.

We started this website largely because we were interested in the subject and wanted to learn more. Given our professional background as a newspaper editor (now retired), former state Capitol reporter and gubernatorial press aide, we figured we might as well write about the subject and share the information with others.

It is not often that one can explore an area that stands on the cutting edge of science and medicine, that combines big business, academia, politics and government in a way never seen before in California, perhaps in the country. Not to mention the heated and sensitive religious, ethical and moral issues surrounding embryonic stem cell research, along with the hopes for cures for millions afflicted with diseases ranging from diabetes to cancer. CIRM is an agency – created directly by the people of the state, not the legislature or governor – that plans to give away $3 billion in public funds, basically unsupervised by the normal processes of state oversight. And its directors – voters decided – come from some of the universities and institutions that would benefit directly from its research and building grants.

We surmised that others would also be interested in CIRM but simply would not be able to find all they wanted to know, given the media's practice of covering only the most high profile news. That has proven to be the case. CIRM is virtually invisible to the public and much of the scientific and business community, if they rely on the mainstream media. It is even something of a low profile matter for the scientific media, and even lower in the business press.

Nonetheless the California Institute for Regenerative Medicine has become a benchmark worldwide and nationally for a number of issues including treatment of egg donors and intellectual property rights. CIRM has pioneered new and higher standards in both areas.

We have attended numerous CIRM meetings and visited CIRM headquarters several times. On one occasion, we covered the CIRM lawsuit trial live, filing items directly from our laptop in the courtroom in Hayward. Our reporting largely relies, however, on the Internet, sifting through government documents, news stories and email from a variety of contacts.

Since we travel regularly, gaining access to the Internet is always a challenge. We have used wireless connections in public libraries in San Mateo, San Diego and Santa Barbara and while at anchor on a sailboat in bays in Mexico. At other times, we filed via satellite uplinks, Internet cafes and hotel Web services and used a datacard for Mexican cellular service.

All of that would have been impossible 10 years ago, prior to today's advances in computer and Internet technology.

We hope the California Stem Cell Report has provided information that cannot be found elsewhere as well as serving as a guide and source of analysis and commentary on the Golden State's ambitious effort. We also hope that it has become something of a repository for the full text of California stem cell information that does not have a good home elsewhere, whether it is the statements of California stem cell chairman Robert Klein, acting in a non-governmental role, or documents from critics of the agency.

We are planning improvements and changes in the Report for 2007 and welcome suggestions from our readers. We are particularly interested in bringing in more voices from the stem cell community. Please let us know what you think. What do you want to see more of? What do you want to see less of? Do you have questions that need answers? You can send them and your suggestions to djensen@californiastemcellreport. Or you can post them directly on the blog by clicking on the word "comment" below. If you wish, Google, the hosting service for the blog, provides for anonymous "comment" postings, whose authorship is totally encrypted.

Stem Cells and 'Things that Go Bump in the Night'

What's going on with those CIRM scholars, those folks whose education is being assisted by the California stem cell agency?

Reporter Bradley J. Fikes of the North County Times in San Diego County wrote about 32 of them, including some from fields such as bioengineering, bioinformatics and chemistry. Among other things, Fikes said that ethical training occupies one-third of the curriculum in this particular program.

Fikes quoted Larry Goldstein, director of UC San Diego's stem cell program, as telling the scholars that they have an obligation to become missionaries – not Goldstein's word – for ESC research. Goldstein said:

"Some of you have been studying fish and flies and things that go bump in the night. It's not always obvious to the public how this relates to humans. For better or worse, the world is watching us, not just in San Diego, but in California."

Stem Cell Humbuggery and Its Implications for California

Citizens of California and the American public overwhelmingly support embryonic stem cell research? Balderdash!

California stem cell Chairman Robert Klein and a host of others cite public opinion polls to support their mission, denouncing critics as opposing the will of the people. That position, however, is a bit of humbuggery – dangerous if uncritically believed by supporters of ESC research.

We have argued that support for embryonic stem cell research is quite soft and that the science is poorly understood by the public. Now comes additional evidence for that contention, including an analysis from a devout supporter.

We will discuss the major implications for CIRM a bit later, but first let's consider the thorough-going discussion of the polling data by Matthew Nisbet, a scholar at American University who has studied the subject for some time. In a piece on the website of the Committee for Skeptical Inquiry, he wrote:

"...(O)verwhelming public support is by no means a 'slam dunk' conclusion. In fact the best available polling data shows that while support for research has increased since 2001, support among American adults lingers at only slight majority levels. "

Nisbet continued:

"We are now going on year six of the stem cell debate, and despite major news attention to the issue, and tens of millions of dollars spent on advertising and communication campaigns across the country, the public still scores relatively low in both knowledge of the science and the politics involved."

Nisbet discussed how the wording of the polling questions shapes their results. He also examined how supporters and opponents frame the stem cell issue. While Nisbet did not discuss in detail the 2004 election that created the California stem cell agency, it was a masterpiece of framing. Prop. 71 became a matter of aiding the sick, including members of each voter's family, and boosting the California economy – short-circuiting the feeble efforts of opponents, who largely relied on faith-based moral arguments.
But Nisbet added:

"In recent years, opponents have also evolved in their message strategy, realizing that they can potentially impact the ambivalent citizen on the issue by pairing the moral interpretation with a 'public accountability' frame that defines funding as only benefiting 'special interest' biotechnology companies. The emphasis on the 'commodification of life' by 'corporate science' may resonate with segments of the public that might otherwise reject religiously-based appeals."

Rachael Laser of The Third Way, a "progressive" pro-stem cell think tank, wrote about the public "ambivalence" on ESC research on the group's blog, in addition to preparing a 9-page paper on the subject (which cited this blog as one of its sources).

She wrote:

"The real story is that the majority of Americans are concerned that our fast-paced scientific progress brings with it significant moral hazards. If you are a Third Way groupie (and really, who isn’t?), you will not be surprised that we call the folks in the middle of this debate the 'stem cell grays.'

"By contrast, the 'stem cell polars' are on the extremes: some think that stem cell research raises absolutely no moral concerns; others beleive that it is so morally offensive that they would not support it even in if they knew it could cure a family member of a dreaded disease.

"But to the stem cell grays, America is sort of like the crazy scientist in the lab – he might well be a genius, but he also might blow his lab sky-hight. This concern is also borne out in a series of Virginia Commonwealth University polls that reveal that 56% of Americans believe that science does not pay enough attention to moral values, and 51% also believe that “scientific research has created as many problems for society as solutions.”

"Until stem cell advocates address these types of concerns head-on, they will continue to battle risky margins or Pyrrhic victories."

Nesbit reinforced Laser's point:

"Given the multitude of competing issues in the world, and given limited time, motivation, and ability, it is in fact quite reasonable for the public to rely on heuristics such as partisanship or religious belief to make up their minds about a complicated issue such as stem cell research. This fact might not fit with democratic ideals or with the preferences of scientists, but it is human nature.

"Political strategists understand this, and it’s why they carefully frame their messages around simplistic interpretations of either 'stem cell research leads to cures,' or 'stem cell research is morally wrong,' pairing these messages with celebrity or religious spokespeople. However, for science advocates who care about winning the short term political battle to overturn Bush’s misguided stem cell policy, there is a delicate balance to be struck. As I have argued elsewhere, narrowly focusing on educating the public about the science or the 'facts' involved in the debate will not move public opinion nor be persuasive.

"In the stem cell debate, science advocates need to make sure that they are honest about the uncertainties in research, while simultaneously communicating the hope for important therapies and treatments. As I have argued in this column, accuracy in communication also means being honest about where public opinion stands.

"The opposition is watching, and when inevitable scandals in science erupt such as the Korean cloning affair, stem cell opponents are going to shower communication channels with claims that scientists are willing to go to any extreme to promote their self-interests, and that embryonic stem cell research is 'junk science.' In our sound bite culture, and especially when research opponents don’t play by the same rules, effectively engaging the public on stem cell research is a major challenge. Yet wisdom and precision is needed. At risk is public trust."

What does all this mean for CIRM? The agency faces a greater burden in maintaining public trust than most other state agencies because of its built-in conflicts of interests and its extraordinary independence from normal state oversight. Consequently its procedures must be perceived to be transparent and blemish-free. Perception is the hallmark here. Otherwise the institute can be easily besmirched as a giveaway program for biotech. A substantial public education effort concerning ESC research is needed to generate deeper and more sophisticated support for the science and medicine. Outreach, outreach and more outreach are the watchwords. That includes a much improved website and establishment of CIRM as the key resource for national and state media to consult on ESC matters. And a regular, strong effort in the state Capitol is necessary to maintain a friendly or at least a neutral environment.

Stem Cell Stocks: Buying a Will-o'-The-Wisp?

To slightly paraphrase one analyst, anybody buying stem cell stocks solely based on the House vote on ESC research should be prepared for a long, hard ride.

In the wake of the Congressional action, Aaron Smith of CNN prepared a more nuanced report on stem cell stocks than we saw in news reports last week.

Smith wrote:

"In anticipation of today's vote, investor interest in biotech stocks has been whipped up, though biotechs probably wouldn't benefit directly from the funding, even if it's eventually approved.

"'This is a step in the right direction, but if anyone is buying StemCells Inc. based on this one vote, they need to rethink their priorities,' said Steve Brozak, analyst at the investment and research firm WBB, referring to one of the biotechs involved in stem cell research."

The CNN report continued:

"Although StemCells Inc. (down $0.08 to $3.35) stock fell about 2 percent Thursday, the stock's climbed more than 25 percent so far this year. It's the most recognizable name in the industry, analysts say, even though it doesn't stand to benefit directly from the vote.

"'The stock [StemCells] is probably most tied to political movement, just because of the ticker," said Jose Haresco, analyst for Merriman Curhan Ford & Co., an investment research firm, referring to the company's stock symbol of STEM. "It's almost a perfect barometer."

"The stock of Aastrom Biosciences (down $0.08 to $1.46) slumped about 5 percent Thursday, but overall gained about 20 percent this year. Haresco said that StemCells and Aastrom specialize in the use of adult stem cells however, not the ones derived from human embryos, which are the subject of the bill.

"The stock price for Osiris Therapeutics (down $1.37 to $26.77, another biotech specializing in adult stem cells, also gained this year, though it slumped about 5 percent in Thursday trading.

Geron Corp., (up $0.20 to $8.90) a biotech developing stem cell technology which is based on human embryos, has been volatile this year and only pulled into the plus column Thursday, when the stock rallied about 2 percent. The stocks, save for Geron, had run up after news of the possible House vote first surfaced last week.

"'Geron is clearly at the top of the pack," said Brozak of WBB, who rates the company a "strong buy," noting that it is the most advanced in the development of embryonic stem cell technology.

"Geron's most recent stem cell study involved rats, not people, though a spokesman for the company said early-stage human trials will begin in 2007."

Fuel Your Stem Cell Edifice Complex

Looking for some bucks to renovate your aging stem cell lab?

The California stem cell agency is seeking a few good institutions to share $48.5 million that could start filling their coffers by this summer.

Those of you outside of California are out of luck unless you can concoct a California presence very quickly. CIRM announced today that it wants letters of intent for shared facilities grants by Feb. 2.

The agency's press release said:

"The grants will provide funds for the design and renovation of laboratory space, equipment for the new research facilities, and operating expenses for three years. Some grants will include additional funds to train scientists and technical staff in the growth and maintenance of hESCs."

CIRM continued:

"'The ICOC funded grants to train 169 stem cell scientists last year and will award more than $100 million in research grants this February and March,' said Richard Keller, the Institute’s Senior Officer for Scientific and Medical Research Facilities. 'Shared Research Laboratory Grants will ensure that scientists have the physical facilities they need to cultivate new lines of embryonic stem cells, without running afoul of federal restrictions and without endangering federal funding for other research activities.'

"CIRM expects applicant institutions to provide at least a 20 percent match of the total cost for renovation and equipment. They may request up to $2 million for laboratory space development and an additional $500,000 if they plan to offer a stem cell techniques training course. The RFA is open to all academic and non-profit research institutions in California.

"The Request for Applications (RFA) for shared facilities grants is available at http://www.cirm.ca.gov/rfa/pdf/RFASharedResearchLaboratoriesfinal.pdf. Potential applicants must submit letters of intent to CIRM by February 2, 2007. Full applications will be submitted in two parts. The first part will describe the scientific mission of the proposed facility and is due February 23rd; the second part will detail renovation and/or development of the laboratory space (including fixed equipment costs), and is due on March 16th."

The Riddle of the Stem Cell Trinity

Can science, business and government work together in a win-win combination in a unique endeavor involving arguably the most controversial research in the world and billions of dollars in funding?

That is the key question ultimately for the California stem cell agency. Now we have some help in seeking answers to at least two-thirds of the riddle.

The aid comes from an analysis by Harvard business professor Gary Pisano in his new book: "Science Business: The Promise the Reality and the Future of Biotech." Pisano examines the sometimes difficult mix of business and science and their conflicting cultures. He omits the hefty government component represented by an agency such as CIRM, which has deeper hooks into science and business than the NIH.

Pisano, who has a Ph.D. from UC Berkeley, has studied the biotech business for years and has served as a consultant to some biotech companies.

We ran across his book as the result of a review in the Wall Street Journal by Andy Kessler, author of "The End of Medicine." Kessler wrote:

"Can science and business mix? ...The problem, according to the Harvard Business School professor, is that today's corporate structures are allergic to the uncertainty and risk inherent in science."

Kessler noted:

"Cumulative profits for the entire biotech industry are meager. The whole lot of them probably drip red ink if you take out Amgen, a 26-year-old company with $14 billion in annual sales and -- like Genentech and just a handful of others -- real profits."

Kessler continued:

"Mr. Pisano notes that 'drug R&D is a highly complex process; it is expensive, time consuming, and fraught with risk. In these respects, drug R&D is not too different from, say, the development of a new airliner, a new microprocessor, or even an epic movie.' The key word is risk. While an Airbus plane, Intel's Core Duo or 'Apocalypto' may have market risk, their development is undertaken with confidence that the products will at least make it to market; drug companies begin work on a new product with no idea whether it will even make it out of the lab, much less progress through clinical trials and onto drugstore shelves. A new drug might have the potential to be a blockbuster, but, then again, only one drug out of 6,000 newly developed compounds actually goes on sale. 'Productivity' is not a word used often in the drug business.

"'Drug development is a gamble in itself simply because of the hit-or-miss nature of the science -- or the 'profound and persistent uncertainty,' as Mr. Pisano calls it, 'rooted in our current limited knowledge of human biological systems.' But it becomes a staggeringly expensive gamble -- like playing blackjack at a table with a billion-dollar minimum -- because of the facilities required and the legions of experts in chemistry, biology, genomics and other fields who pour their time and energy into research. The 'nature of this process is integral,' Mr. Pisano points out. 'It cannot be broken neatly into different pieces.'"

Kessler's review prompted us to purchase the book, which appears to be very much worth reading. You can find a lengthy excerpt here or purchase it by clicking on one of the Amazon ads at the top of this blog.

Beware the White Coat Crowd

Health industry gadfly Merrill Goozner is taking a jaundiced view of the stem cell arms race in states across the country.

Citing New York's latest proposal and California among other states, Goozner wrote on The Huffington Post:

"Stem cell research is promising, and it shouldn't be impeded by a bunch of anti-science right-to-lifers with God and the president on their side. But like any strain of research, the likelihood of a major medical breakthrough coming from stem cells is probably not that much greater than gene therapy, the human genome project, the war on cancer or any of the multi-billion-dollar medical research programs that came before it. A lot of knowledge and a few good things will come out of stem cell research, but will it make those with severed spines stand up and walk? Call me irreligious, but I'm skeptical."

He continued:

"Of course, there will be some new jobs created for university researchers, their underpaid foreign graduate students, and the white coat crowd in the biotech industrial parks subsidized by the taxpayers. But is this really the best use of government subsidies, especially at a time when the health care sector -- 16 percent of GDP and still growing -- is sapping the vitality of the rest of the economy? Has anyone given any thought to how much some of these breakthrough stem cell technologies might cost, and how the rest of the economy might pay for them?"

Goozner is directs the Integrity in Science Project at the Washington-based Center for Science in the Public Interest.

CIRM and Its Embarrassing Secrecy

The California stem cell agency rather foolishly conceals the identity of applicants for its multibillion dollar grant program, contending that unsuccessful scientists and their employers would be embarrassed if the public were to know that they failed to receive funds.

We say foolish because CIRM's rules are a nonsensical exercise as well as poor policy(see the "more disclosure" item below). The institutions themselves are free to release the information that they have applied, and they do. The most recent example is USC. Last fall, UC Irvine did so.

One can only speculate about why the schools release the information, although the process of applying for grants in other areas is often very much a public process. Some cynics have surmised that the release of the information by the schools could be an attempt to serve notice on CIRM and its Oversight Committee that these mighty institutions should not be overlooked when the checks are handed out. Both USC and UC Irvine have representatives on the Oversight Committee, which makes the final decision on who shares in the largess, although those committee members are barred from voting on their own school's grant applications. Of course, more benign reasons exist for universities to tell the public they are seeking grants. But CIRM's secrecy only fuels the fire of conspiracy theories.

USC's item said the school submitted 29 applications for the round of applications reviewed last fall and for the round being reviewed this week.

"'The competition for this funding will be tough, but USC scientists have put together some very exciting proposals,'" said Martin Pera, director of USC's Center for Stem Cell and Regenerative Medicine (CSCRM) and a professor of cell and neurobiology."

The item continued:

"Pera said that researchers from CSCRM and its Stem Cell Core Laboratory 'were pleased to lend our expertise in support of these grant efforts in this first round of CIRM grants.'

"The exercise 'brought together many groups throughout USC, Childrens Hospital Los Angeles and the California Institute of Technology for the first time,' he added. 'As a consequence, a number of new interdisciplinary collaborations have emerged with the potential to develop into world class research programs in stem cell biology and therapeutics.'"

Given the dearth of ESC research funding, any California institution making an effort in the area can be expected to seek grants. Likewise, institutions with stem cell aspirations. But their names and the names of the scientists as well as the general nature of the application should be part of the public record.

Why CIRM persists in concealing the identities of applicants is hard to understand. If it truly wanted to maintain secrecy, it could disqualify an institution whose application became public knowledge, for whatever reason. Then nobody would be embarrassed.

CIRM's Lansing to Receive Oscar

Former Hollywood film executive Sherry Lansing will receive an Oscar this year for, among other things, her role at the California stem cell agency.

Lansing sits on the Oversight Committee of the California Institute for Regenerative Medicine, a position she has held since the agency's inception.

Last summer, she was cited specifically by California stem cell Chairman Robert Klein for making a "critical call" to Arnold Schwarzenegger to nail down the $150 million loan to CIRM that is allowing it pump out the cash this year.

Lansing is engaged in several other endeavors that were cited in the announcement that she will receive the Jean Hersholt Humanitarian Award at the Academy Awards in February. She serves on the board of Stop Cancer and the American Red Cross' Advisory Committee. She is also a regent of the University of California and a trustee of the Carter Center human-rights organization

Comments Sought by Your Mexico Correspondent

Mazatlan is nicely warm this time of year, much more pleasant than cold, cold California was during the holidays. And that's where the California Stem Cell Report is currently moored – Mazatlan, the Pearl of the Pacific.

We have stripped off our jackets and shoes, replacing them with shorts and sandals.

We are ensconced in Marina Mazatlan, which has clean showers and wireless Internet access from the boat. However, like stem cell research, the full potential of the wireless access is yet to be realized.

The link to the Internet has been sporadic. As best as we can determine, the DSL line provided by TelMex, one of the most egregious monopolies in Mexico, needs some sort of new electronic card. It has been ordered from Hermosillo, we are told. When reliable service will return is yet to be determined.

Meantime, we will schlep our hefty laptop in its hefty black Pelican case to the nearest Internet cafe (access cost 90 cents or so American an hour) via bus (40 to 80 cents American one-way). In Mexico, buses are often more convenient and faster than taxis. Both can be quite exciting. Oddly, the bus costs more than a three-mile bus ride in Santa Monica to the CIRM meeting at UCLA last October. That was only 25 cents, an extraordinarily low fare.

We also are working on improvements and changes in this website. Please let us know if there are features or information that you would like to see added. And please let us know about matters that you are not fond of. Send your comments directly to djensen@californiastemcellreport.blogspot.com and or just post them as a comment on this item. You can post your comment – anonymously if so desired – by clicking on the word "comment" below.

More Disclosure in Billion Dollar Giveaway Is In CIRM's Best Interest

California's $3 billion stem cell giveaway program began another important step today – one that is cloaked in nearly total secrecy despite the fact that it involves public funds.

Scientists in San Francisco are reviewing applications for $80 million in major grants. CIRM says their actions are only recommendations. However, the reality is that they are defacto decisions that are unlikely to be overturned by the agency's Oversight Committee.

A certain amount of confidentiality is to be expected, but the agency has gone overboard to protect the tender sensitivities of those seek the funds. It is a practice that will serve the agency poorly should questions arise – as they are certain to do over the next decade – about the propriety of its grant-making process.

We have written repeatedly about failings in transparency and disclosure at the agency. It is also a topic of concern to a number of newspapers and watchdog groups. John M. Simpson, stem cell project director of the Foundation for Taxpayer and Consumer Rights in Santa Monica, Ca., authored an op-ed piece that appeared today in the Oakland Tribune and other California newspapers.

He wrote:

"Everyone concerned claims they want a transparent process to ensure that awards are based on scientific merit, not favoritism and cronyism. Despite mouthing high-minded slogans, the institute's leaders too frequently miss the mark whenever there is a clear opportunity to build faith in its processes by being completely open.

"In California we don't know who applied for the grants or their affiliations. Our stem cell institute need only look to Connecticut where applicants' names and pertinent details are public record for a model of how to conduct the public's business.

"Fortunately at least one California scientist understands the importance of a completely transparent process when dealing with public funds. Connecticut's stem cell peer review committee — the equivalent of California's grants working group — is chaired by Dr. Leslie P. Weiner, professor of neurology at the University of Southern California's Keck School of Medicine.

"The California stem cell institute won't identify the 70 researchers from 23 unidentified institutions vying for 25 grants under the Comprehensive Research Grants program.

"In my personal life, I don't give money to people unless I know who they are, why they want it and what they plan to do with it. It shouldn't be any different with the taxpayers' $3 billion. Another opportunity for transparency and to build public faith in the institute's procedures is being squandered."

So wrote Mr. Simpson, who has followed CIRM's activities for more than a year and is a supporter of ESC research.

As for us at the California Stem Cell Report, if we were one of the scientists making decisions on the grants, we would want to have the maximum amount of openness, including disclosure of the financial interests of our fellow reviewers. Without transparency, it is all too easy for enemies of embryonic stem cell research to impugn the integrity of reviewers and to insuinate – as they most certainly will do -- that something other than good science is playing a role in handing out hundreds of millions of dollars in California taxpayer funds.

Embryonic stem cell research generates more than enough controversy. It is past time for the California stem cell agency to take steps to protect itself and its grant reviewers -- all of whom come the tiny circle of stem cell scientists around the world -- from the inevitable charges of self-dealing, cronyism and favoritism.

The California Poster Child, Stem Cell Wars and Proverbial Church Picnics

Are states running amok with embryonic stem cell research? Should or can the federal government reassert its control? Can workable compromises be found?

Richard Hayes, executive director of the Center for Genetics and Society in Oakland, Ca., addresses these issues in a piece on Bioethics Forum, which is sponsored by the Hastings Center Report.

Hayes writes about the "sorry" state of the stem cell debate:

"This polarized politics has given us the worst of all possible worlds: a policy stalemate at the federal level accompanied by a plethora of state-level stem cell funding programs lacking the sort of planning, ethical oversight, and regulation that biomedical research of such consequence requires. California's $3 billion stem cell program is the poster child of this predicament. Since its inception in 2004 it has been under fire for conflicts of interest, inadequate concern for the health and safety of women who provide eggs for stem cell research, unrepresentative policy-making bodies, and misplaced research priorities.

"These flawed state programs are setting the stage for even greater problems to come. Technologies now under development, including pre-implantation genetic diagnosis for both medical conditions and cosmetic traits, somatic genetic enhancement, and inheritable genetic modification, promise to make the stem cell wars look like the proverbial church picnic.

"If these technologies are embraced by the largely unaccountable infrastructure now being established to support stem cell research, they will be difficult to constrain. Once developed and made commercially available, they would be used disproportionately by the most privileged, and become new and powerful drivers of inequality and exclusion.

"The tragedy of this situation is that public opinion surveys consistently show that a strong majority of Americans support a morally serious middle ground regarding the new human genetic technologies. Americans are not irrevocably opposed to research involving the destruction of human embryos, but they want to make sure it is done only after alternatives have been exhausted, and with effective structures of public oversight in place. Americans want cures for diseases, but few are willing to turn the genetic future of the human species over to dismissively arrogant scientists and profit-hungry biotech boosters. Unfortunately, no organized constituencies with influence comparable to that of the religious conservatives or the research/patient/bioindustrial community exist to represent this majoritarian position in the political arena."

Hayes finds some hope in the approach detailed in "Beyond Bioethics: A Proposal for Modernizing the Regulation of Human Biotechnologies," by Francis Fukuyama and Franco Furger. Hayes said the book "could serve as a rallying point for those desiring an end to the current counterproductive policy stalemate."

Hayes called the book "the most comprehensive analysis of human biotech regulatory policy yet published in the United States. With the 2008 congressional and presidential campaigns now moving into high gear, the report comes at an opportune time. "Beyond Bioethics" should be studied carefully by everyone interested in working towards human biotech policies that can be supported by the great majority of Americans."

Gov. Arnie on Stem Cell Research

Former thespian Arnold Schwarzenegger was inaugurated today as governor of California. He had an enthusiastic but overstated line in his inaugural address about stem cell research. Here it is:

"Because we were leaders in stem cell research, California’s bio-tech industry has boomed, offering new cures for spinal cord injuries, Alzheimer’s, Parkinson’s and other diseases."

His speech is available live today beginning at 11 a.m. PST. (7 p.m. Greenwich Mean Time)

Stem Cell Market Fever: A Cooler Perspective

Are stem cell stocks really rising because of Democratic control of the House of Representatives? Probably not.

Are markets truly rational? Are stock analysts always well-informed? Probably not.

The questions come up because of a few articles concerning the sharp run-up in the price of some stem cell companies, including those based in California, in the last two days. The Associated Press (in the San Jose Mercury News and elsewhere) attributed the increase to the improved prospects of House passage of a measure aimed at encouraging federal embryonic stem cell research.

These daily trading stories are usually ripped off by relatively inexperienced reporters who grab the quickest and catchiest explanations for price rises. Some of those come from analysts who may not be well-informed and who do not understand that a presidential veto is likely again on the stem cell bill – a veto that probably will not be overridden. Even if it is, the National Institutes of Health are already hard-pressed financially and are not likely to come up with major increases in ESC reasearch funding, certainly nothing on the level of California's $3 billion giveaway. Beyond that, the markets have already factored in Democratic control of Congress, which is months-old news.

A more likely cause of the upsurge in stem cell stocks is the wave that boosted biotech stocks generally because of good news about Amgen, among other things. Here is what the Wall Street Journal had to say this morning:

"Amgen, (Nasdaq) the second-largest U.S. biotech company by market value, behind Genentech, gained 2.93, or 4.3%, to 71.33. Bear Stearns upgraded Amgen's shares to 'outperform,' saying the stock already reflects potential impacts from Roche's prospective introduction of a competitive anemia drug. If Roche's drug doesn't reach the market, the upside for Amgen's stock could be 'dramatic,' Bear Stearns said."

Stem cell stocks are thinly traded but may be carried along in a burst of buying in the biotech sector. Traders sometimes spread their bets across a sector.

Also not mentioned in the stories is the impact of automated trading programs that trigger purchases as an entire sector moves, in other words, a computerized bandwagon, which may or may not be rational depending on your point of view.

Stem Cell Argonauts To Convene in San Francisco

Since all of you out there are looking at your schedule for the coming spring, be sure to reserve a spot for The Stem Cell Meeting in San Francisco.

Produced by Burrill & Company, the two-day session promises a host of provocative discussions and a broad range of international speakers. Topics range from “Stem Cell Argonauts: Brain Circulation in a Global Economy” to
“The Un-United States: Cell Lines, Border Lines, and the Law.”

According to the preliminary agenda for the March 12-13 event, the keynote speaker will be Ian "Dolly" Wilmut of the University of Edinburgh, whose topic is “Continental Drift: Where Will Stem Cells Take Us?”

So far no speakers from CIRM are on the agenda, but are likely to be there. No speakers from WARF are listed at this point. Beth Donley, then WARF general counsel, served notice at last year's session that CIRM would have to pony up fees to Wisconsin for use of WARF ESC patents.

We caught two days of last year's session. Hundreds of others attended. It was definitely worth taking in.

Early reservations (before Jan. 26) mean a $500 cut in the $1495 registration fee. The conference also offers an academic, government and nonprofit rate of $495. If you want to get more bang for your buck, double up with the CIRM Oversight Committee meeting on March 15 and 16 in Los Angeles. That session is free.

Correction

The item below once carried a reference to an article on biotech investing from the New York Times. The article was actually from 2005 not 2006. We have removed the reference.

Stem Cell Snippets: Advocacy, Public Support and Weissman

ESC Gospel – What is going on with Robert Klein's Americans for Stem Cell Therapies and Cures? One current activity is recruitment of more missionaries to spread the ESC gospel. The group has about 150 speakers across the country. It is looking for 1,000. You can read more about the effort on stemcellbattles.com, the blog of stem cell advocate Don Reed. Klein, as most of you recall, is also chairman of the California stem cell agency in addition to presiding over the lobbying group.

Stem Cell Investing – The tough business of biotech investing was discussed in a piece by Andy Pollack of the New York Times. An excerpt: "The difficulty of taking companies public, especially at values they find attractive, has become a lament of biotech venture capitalists, and it is forcing changes in their strategies. Instead of a way to cash out, the initial offering is now a chance to keep a company going until, hopefully, the venture investors can sell their stock later."

Squishy Public Support -- Jesse Reynolds of the Center for Genetics and Society discusses the nature of public support for ESC research and the most recent public opinion polls. Supporters of ESC research find constant hope in the polls. On the basis of decades of watching polls on politics as well as other subjects, the California Stem Cell Report believes that embryonic stem cell research is poorly understood by most Americans and is still a new subject to most persons. That means potentially mercurial support that can be easily undermined by changing events or skillful marketing.

Weissman – Stem "cellist" Irv Weissman speaks on "What Stem Cells Mean to Science, Medicine and California" Jan. 9 at a meeting of Silicom (cq) Ventures in Mountain View. Weissman is director of the Institute for Cancer and Stem Cell Biology at Stanford and helped found three stem cell companies (Cellerant, SyStemix and Stem Cells, Inc.). Tickets are $150 for nonmembers of the venture capital group.