Nature Warns of Sunburn; UC Davis Scientist Warns of Hidden Agendas

Amidst the hoopla about the latest research giveaway by the California stem cell agency, a couple of news items popped up that dealt with openness and conflicts of interests.

Last week Nature magazine editorialized that CIRM was amply open. And on Sunday, the agency itself disputed a Sacramento Bee editorial that suggested CIRM is "on thin legal ice" because it does not require its grant reviewers to publicly disclose their financial interests. But first the Nature editorial, which ironically is not accessible to the general public. It says, among other things,

"Calls for yet more openness may be well intentioned, but they threaten to override the element of confidentiality that is inherent to fair peer review, and to undercut the agency’s mission of supporting cutting-edge research from the best Californian scientists. There comes a point at which yet more sunshine leads to sunburn."

Nature also said that requiring identification of those who do not receive grants

"...would be akin to the state of California publicly releasing information on all the job applications it receives, complete with adverse comments made during the hiring process. "

We could not disagree more. Seeking millions of dollars in state funds with no promise of economic return, which is what the research grants are all about, is fundamentally different than applying for a position as a state park ranger.

Stuart Leavenworth, an associate editor at The Sacramento Bee, noted in an email to the California Stem Cell Report that the magazine's position did not surprise him "given that Nature has steadfastly refused to disclose the conflicts of interest of its authors, unlike other journals." He pointed to statements by the Center in the Public Interest and more than 30 scientists that Nature does not "reliably" disclose its authors' financial ties to drug and biotechnology companies.

The Nature editorial also surfaced on the "egghead" blog at UC Davis.
Jonathan Eisen, a professor at the UC Davis Genome Center, said, in part:

"While I can see (Nature's) points, I am not sure they are the most objective place to look for for ideas on this issue. The question to me is not whether too much sunshine MIGHT cause sunburn it is whether just the risk of sunburn is worth keeping things closed. I think in this case I probably agree that the review of these proposals might be changed if it were an open review system. But as someone who has served on many grant review panels, I know that there are ALL sorts of hidden agendas that play out in the review. If review were completely open, at least these hidden agendas would be exposed to the world. Yes, some reviewers might be too timid in their reviews, but this openness would eliminate so many other problems inherent in anonymous review. This is why there are a few journals out there that now have open review of papers — something I think is certainly worth testing out."

Dale Carlson, chief communications officer for CIRM, wrote the op-ed piece that challenged The Bee's position. He said that grants are not in jeopardy and that two courts have upheld the legality of CIRM's actions. Carlson referred to lawsuits that that have unsuccessfully challenged the constitutionality of the agency.

With all due respect, we suggest that the key issue has not been fully litigated. At the time of the trial cited by Carlson, CIRM had only made a small number of grants. A track record simply did not exist on whether the grant reviewers were making de facto decisions. There is no doubt, however, that the Oversight Committee has final authority on making grants.

The fundamental question about public disclosure of the financial interests of the grant reviewers concerns good public policy and openness. Should the public should be allowed to know the financial interests of those who recommend that millions of public dollars be handed out to scientists? Along with that goes the question of whether the public should be allowed to know the names of persons and institutions seeking millions of dollars in research grants.

Our position is that the interests of the science community come after the interests of the public. Unwarranted secrecy in the grant-making process only feeds suspicion and creates the possibility of insider dealings, which are not likely to be healthy for science or stem cell cures. As Eisen notes above, hidden agendas can often come into play.

(Editor's note: If you are interested in the full text of the Nature editorial, please send us a note at djensen@californiastemcellreport.com.)

Zerhouni to Bush: Nation Better Served Without Research Restrictions

The head of the National Institutes of Health, an appointee of President Bush, today defied his boss and said the president's policy on embryonic stem cell research was ill-serving the nation.

The statement came from Elias Zerhouni and was reported by Angela Zimm and Neil Roland on Bloomberg.com. They covered a Senate hearing on funding for the NIH. They wrote that Zerhouni said:

"The current lines will not be sufficient. It's not possible for me to see how we can sustain the momentum of research."

Zerhouni continued:

"It's clear that American science and the nation will be better served if we have access to more cell lines."

According to Bloomberg, this is the context of the remarks.

"Senator Tom Harkin, an Iowa Democrat, asked Zerhouni, whether lifting the restrictions would have an effect on finding new cures.

"'The answer is yes,' Zerhouni said. The exchange came at a hearing of the Senate Appropriations subcommittee on Labor, Health and Human Services and Education."

Zerhouni could have said the same thing several years ago. But Bush is now a clearly a lame duck and on the ropes with the American public. And Zerhouni has his own future to consider. Being a handmaiden to Bush's stem cell policy is not the best position for someone who may be casting about for a new line of work.

Beyond $131 Million: Looking Ahead at CIRM

You could call it the pipeline and presidency issue. Even before the directors of California's stem cell agency approved an unprecedented $75 million in grants, some of them were worrying about what happens next.

Brian Henderson, dean of the USC medical school, told his fellow members on the CIRM Oversight Committee, "We do not want to congratulate ourselves too much."

CIRM, however, does have something to congratulate itself about, as Los Angeles Mayor Antonio Villaraigosa reminded them during a Friday morning news conference. "Put a smile on your face," he said.

CIRM has pumped out $131 million in grants so far this year, making it clearly the largest single source of embryonic stem cell research funding in the world. More millions will come later this year. And before the end of the year, with a little luck, they will see even bigger bucks flowing in through the sale of state bonds that have been delayed because of litigation.

However, the 22-member staff of the agency has been working extraordinarily long hours. "Heroic" was a word that came up often during last week's two-day meetings to describe the work of the staff. One example that was cited was the case of one staffer, who was up until 4 a.m. readying documents for the first day of the meetings. While that may be a tad exceptional, Oversight Committee members for some time have expressed concern about the workload of the agency.

As Michael Friedman, president of the City of Hope, put it last week, the agency has been sprinting, and "we are in for a marathon."

The "challenges" facing CIRM include the loss of President Zach Hall in June, the search for his successor, the void until the new president comes aboard and the need to fill the pipeline with more grants as well as administering the ones already approved.

Several board members said momentum needs to be maintained to provide opportunities for the new scientists that have been arriving in California to tap CIRM's $3 billion research effort. They urged Hall to fill staff positions as rapidly as possible to maintain the workflow. "Please don't scrimp," Friedman said.

CIRM is not likely to have a new president on board by the time Hall leaves, which will accentuate the normal uncertainty that arises with the arrival of new CEOs, especially in small, new organizations. However, something of a model exists for working through that period. Hall will take a vacation this month and has designated two persons to act in his stead, Arlene Chiu, scientific program director, on scientific matters and Lorraine Hoffman, chief financial officer, on other issues. How they fulfill their responsibilities will be a good test for June and later in the summer.

The 29 members of the Oversight Committee hold an important key to CIRM stability and momentum. They should curb their micro-management urges, some of which are possessed in abundance by some members of the board, and focus on filling the presidency as quickly as possible. Twenty-nine busy fingers in the CIRM pie are likely to leave a pretty mess.

Henderson and the others are right to worry about a letdown, which can easily happen during or following periods of intense effort, which has been the story since January 2005. Avoiding a letdown and leaving a healthy organization may be one of Hall's most important tasks in the next few months. But much of the burden will fall on senior CIRM management, the folks who will ride through the transition. After all, they are the ones who will be left to engineer the giveaway of a piddling $2.8 billion or so over the next 10 years.

Telling Tales and Salvation

It has not exactly been the tales of "1,001 Arabian Nights." But last week we did post our 1,001st item on the California Stem Cell Report.

Scheherezade, the narrator of "The Book of One Thousand and One Nights," spun her stories to avoid being executed by the evil Sultan. As she put it, "Is it possible that by telling these tales, one might indeed save one's self."

However, in the case of the 1,001 stories on the California Stem Cell Report, I am more reminded of the saying about the talking dog. So what if he talks, what does he have to say?

That is a matter for all of you -- our much-appreciated readers -- to determine. Cheers to you all.

Grant Coverage Light, Bloomberg Highlights Korean-linked Award

The announcement of nearly $76 million in embryonic stem cell research grants in California generated modest media attention today – less than last month's giveaway that involved much less money. The presence of Gov. Arnold Schwarzenegger, however, helped push the coverage of February's awards to an exceptional level. Plus they were the first awarded by CIRM.

Few surprises popped up in the papers today. But reporter Rob Waters of Bloomberg.com highlighted the Korean connections of one Los Angeles-based recipient. Waters wrote:

"CHA RMI was awarded a grant of $2.6 million. Along with its sister organization, CHA Stem Cell Institute in Seoul, it's a non-profit unit of CHA Biotech(of Seoul). The Los Angeles unit proposes to use its grant to create stem cell lines using a process known as therapeutic cloning, or somatic cell nuclear transfer.

"The CHA RMI researchers will attempt to create cloned human embryos with the cellular attributes of Lou Gehrig's disease, an incurable neurological disorder. They will try to do this by combining human egg cells whose nucleus has been removed with DNA provided by adults with the disease. The scientists will then isolate and extract stem cells from the embryos.

"'We feel a great responsibility for this project and we will pursue our research with utmost efforts,' Chung Hyung Min, a professor and the director of the project at CHA Stem Cell Institute, said in a telephone interview from Seoul. "It won't be an easy project, but we're striving so that our efforts can contribute to curing Lou Gehrig's disease and many other diseases such as Parkinson's disease."

"CHA Biotech is a for-profit entity set up to coordinate the work of academic researchers and hospital physicians centered on stem cell, gene therapy and regenerative medicine technology, according to its Web site. It's part of CHA Health Systems, also called the CHA Medical Group, which owns or is affiliated with several universities, hospitals and research institutes in Korea and the U.S."

Prop. 71 limits grants to institutions located in California, which CHA RMI appears to be. We are attempting to track down a more detailed definition of the limitation and will post it when it becomes available.

Most reporters focused on the dollars in the grants. But Jim Downing of The Sacramento Bee zeroed in on the researchers and their goals. The first two paragraphs of his story read:

"Mark Zern is trying to figure out how to grow adult human livers, more or less from scratch.

"Alice Tarantal hopes to find a way to regenerate failed kidneys."

Here are links to other stories and press releases issued by recipient institutions. We will carry links to other news releases from recipients as they come to our attention.

Steve Johnson, San Jose Mercury News

Carl Hall, San Francisco Chronicle

Reporter Terri Somers, San Diego Union-Tribune

Mary Engel, Los Angeles Times

Gary Robbins, Orange Country Register

People's Daily Online

UCLA

UC San Diego

UC San Francisco

Burnham Institute

Stanford

Grant Press Release Now on CIRM Web Site

The news release on the CIRM grants is now available on its web site so you don't have fight your way through the formating issues in the item below. Here is the link.

CIRM Press Release on the Latest Grants

The following is the complete press release on the latest grants from CIRM. It should be posted shortly on the CIRM. We are posting it here because of a delay in the posting.

----------

For release: IMMEDIATE Contact: Dale A. Carlson

415/396-9117





$75 MLLION BOOST FOR CALIFORNIA STEM CELL SCIENTISTS



Assembly Speaker says California on the path to cures



State now largest source of funding for embryonic stem cell research



LOS ANGELES, March 16, 2007 – Just a month after approving nearly $45 million for embryonic stem cell research, California’s stem cell agency authorized another $75.7 million in additional funds for established scientists at 12 non-profit and academic institutions.



The 29-member Independent Citizens Oversight Committee (ICOC), governing board of the California Institute for Regenerative Medicine (CIRM), today approved 29 Comprehensive Research Grants for approximately $74.6 million over four years, to accomplished stem cell investigators at academic and non-profit research centers throughout the state. The grants were selected from 70 applications from researchers at 23 institutions, who sought more than $175 million in CIRM funding.

“This time of the year new life and new hope seem to be everywhere you look,” said Fabian Núñez, Speaker of the California State Assembly. “With these new grants, California is continuing on the path of turning the hope and promise of stem cell research into the reality of therapies and cures for millions of Californians and people across the globe. The California spirit – the perseverance, creativity and resourcefulness that has made us a leader on everything from gold mining in the 19th Century to fighting global warming in this one -- is fully present in our stem cell research teams. With today’s grants California shows we are again blazing the trail.”

Speaker Núñez joined Los Angeles Mayor Antonio Villaraigosa and Robert N. Klein, chairman of the ICOC, at a press conference to review the latest research grants.

“As of today, California is the largest and most stable source of funding for human embryonic stem cell research in the world,” Klein said. “The scientific projects proposed for our third set of grants are very strong, and it’s clear that there is an abundance of scientific opportunities for the state’s investments. We are off to an extraordinary start towards fulfilling the mandate of 7 million California voters, and the hopes of patients and families worldwide.”

The Comprehensive Grants approved today will support mature, ongoing studies on human embryonic stem cells (hESCs) by scientists with a record of accomplishment in the field. They were designed for investigators with well-developed expertise in hESC research or in a closely-related field to pursue new directions in hESCs based on their current research.

“These grants provide substantial support to a pool of very distinguished researchers in human embryonic stem cell research,” declared Zach W. Hall, Ph.D., CIRM’s President and Chief Scientific Officer. “These grants are larger than the Leon J. Thal SEED grants approved in February and extend over four years rather than two. Accordingly, our reviewers had higher expectations and more rigorous standards for judging this set of applications.

“The ICOC has approved a very well-balanced portfolio of research proposals, including those aimed at understanding stem cell differentiation and identifying new ways of obtaining hESCs, and many that target specific diseases,” Hall said. “Combined with our training and SEED grants, the CIRM is now funding embryonic stem cell research in more than 100 California laboratories.”

“We focused our initial grants on human embryonic stem cells specifically,” Klein said, “because human embryonic stem cell research receives minimal funding from the federal government, and even those funds are restricted to lines of questionable value. Going forward, we will support a diverse range of stem cell research projects. There are a number of California institutions that have strong programs in adult and other stem cells, for example, that are just beginning to build embryonic stem cell capabilities. Many of these institutions may be prominent names in future grant awards. We need them to be fully engaged in this project, if we’re going to achieve our objectives. Fortunately, we have 10 years and $3 billion to build a strong program encompassing all of California’s research institutions.”

Like the Leon J. Thal SEED grants, the Comprehensive Grants will fund a broad range of projects, including:

* A study of how chemical modification of DNA in hESCs impacts nerve formation and the ability of stem cells to repair brain damage caused by stroke (UCLA)



* Development of new ways of deriving hESCs and investigating the special capabilities of newly-derived human cell lines. (UCSF)



* A proposal to develop neural cellular models of Parkinson’s disease and Lou Gehrig’s disease (ALS) that could be used to screen chemical libraries for novel drugs and to develop preclinical models of human disease (Salk Institute)



* Building tools to better isolate heart and blood cells from differentiated populations of hESCs (Stanford)



* A proposal to optimize the creation of liver cells for transplantation, and be able to monitor their in-vivo fate non-invasively (UC Davis)



* A study of molecular mechanisms regulating hESC survival, focused on a very specific and promising class of growth factors (UC Irvine)



The ICOC approved Comprehensive Research Grants to the following researchers (Note: the dollar amounts shown are the four-year budgets requested by each applicant and are subject to review and revision by CIRM, prior to the issuance of grant awards):



Application #


Principal Investigator


Institution


Title


Amount

RC1-00100-1


Baker, Dr. Julie C


Stanford University


Functional Genomic Analysis of Chemically Defined Human Embryonic Stem Cells


$2,628,635

RC1-00104-1


Bernstein, Dr. Harold S


University of California, San Francisco


Modeling Myocardial Therapy with Human Embryonic Stem Cells


$2,229,140

RC1-00108-1


Crooks, Dr. Gay Miriam


Children's Hospital of Los Angeles


Regulated Expansion of Lympho-hematopoietic Stem and Progenitor Cells from Human Embryonic Stem Cells (hESC)


$2,551,088

RC1-00110-1


Donovan, Professor Peter


University of California, Irvine


Improved hES Cell Growth and Differentiation


$2,509,438

RC1-00111-1


Fan, Dr. Guoping


University of California, Los Angeles


Epigenetic gene regulation during the differentiation of human embryonic stem cells: Impact on neural repair


$2,516,613

RC1-00113-1


Fisher, Dr. Susan J.


University of California, San Francisco


Constructing a fate map of the human embryo


$2,532,388

RC1-00115-1


Gage, Professor Fred H.


The Salk Institute for Biological Studies


Molecular and Cellular Transitions from ES Cells to Mature Functioning Human Neurons


$2,879,210

RC1-00116-1


Goldstein, Professor Lawrence S. B.


University of California, San Diego


USING HUMAN EMBRYONIC STEM CELLS TO UNDERSTAND AND TO DEVELOP NEW THERAPIES FOR ALZHEIMER'S DISEASE


$2,512,664

RC1-00119-1


Heller, Professor Stefan


Stanford University


Generation of inner ear sensory cells from human ES cells toward a cure for deafness


$2,469,373

RC1-00123-1


Lee, Dr. Jang-Won


CHA Regenerative Medicine Institute


Establishment Of Stem Cell Lines From Somatic Cell Nuclear Transfer-Embryos in Humans


$2,556,066

RC1-00124-1


Lee, Dr. Randall James


University of California, San Francisco


Embryonic Stem Cell-Derived Therapies Targeting Cardiac Ischemic Disease


$2,524,617

RC1-00125-1


Lipton, Dr. Stuart A.


Burnham Institute for Medical Research


MEF2C-Directed Neurogenesis From Human Embryonic Stem Cells


$3,035,996

RC1-00131-1


Marsala, Dr. Martin


University of California, San Diego


Spinal ischemic paraplegia: modulation by human embryonic stem cell implant.


$2,445,716

RC1-00132-1


Mercola, Dr. Mark


Burnham Institute for Medical Research


Chemical Genetic Approach to Production of hESC-derived Cardiomyocytes


$3,036,002

RC1-00133-1


Nusse, Dr. Roel


Stanford University


Guiding the developmental program of human embryonic stem cells by isolated Wnt factors


$2,354,820

RC1-00134-1


Palmer, Professor Theo D


Stanford University


Immunology of neural stem cell fate and function


$2,501,125

RC1-00135-1


Pleasure, Dr. Samuel J.


University of California, San Francisco


Human stem cell derived oligodendrocytes for treatment of stroke and MS


$2,566,701

RC1-00137-1


Reijo Pera, Dr. Renee A.


University of California, San Francisco


Human oocyte development for genetic, pharmacological and reprogramming applications


$2,469,104

RC1-00142-1


Srivastava, Dr. Deepak


The J. David Gladstone Institutes


microRNA Regulation of Cardiomyocyte Differentiation from Human Embryonic Stem Cells


$3,164,000

RC1-00144-1


Tarantal, Professor Alice F.


University of California, Davis


Preclinical Model for Labeling, Transplant, and In Vivo Imaging of Differentiated Human Embryonic Stem Cells


$2,257,040

RC1-00148-1


Xu, Yang


University of California, San Diego


Mechanisms to maintain the self-renewal and genetic stability of human embryonic stem cells


$2,570,000

RC1-00149-1


Zack, Dr. Jerome A


University of California, Los Angeles


Human Embryonic Stem Cell Therapeutic Strategies to Target HIV Disease


$2,516,831

RC1-00151-1


Zarins, Dr. Christopher K.


Stanford University


Engineering a Cardiovascular Tissue Graft from Human Embryonic Stem Cells


$2,618,704

RC1-00345-1


Keirstead, Dr. Hans S.


University of California, Irvine


hESC-Derived Motor Neurons For the Treatment of Cervical Spinal Cord Injury


$2,396,932

RC1-00346-1


Kriegstein, Dr. Arnold R.


University of California, San Francisco


Derivation of Inhibitory Nerve Cells from Human Embryonic Stem Cells


$2,507,223

RC1-00347-1


Leavitt, Dr. Andrew D.


University of California, San Francisco


Understanding hESC-based Hematopoiesis for Therapeutic Benefit


$2,566,702

RC1-00353-1


Wallace, Professor Douglas C.


University of California, Irvine


The Dangers of Mitochondrial DNA Heteroplasmy in Stem Cells Created by Therapeutic Cloning


$2,530,000

RC1-00354-1


Weissman, Dr. Irving L


Stanford University


Prospective isolation of hESC-derived hematopoietic and cardiomyocyte stem cells


$2,636,900

RC1-00359-1


Zern, Professor Mark Allen


University of California, Davis


An in vitro and in vivo comparison among three different human hepatic stem cell populations.


$2,504,614





Total $74,587,642



Totals for each institution are listed below:



Institution


Comp Grants


Amount

UC San Francisco


7


$17,395,875

Stanford University


6


$15,209,557

UC San Diego


3


$7,528,380

UC Irvine


3


$7,436,370

Burnham Institute for Medical Research


2


$6,071,998

UCLA


2


$5,033,444

UC Davis


2


$4,761,654

The J. David Gladstone Institutes


1


$3,164,000

Salk Institute for Biological Studies


1


$2,879,210

CHA Regenerative Medicine Institute


1


$2,556,066

Children’s Hospital of Los Angeles


1


$2,551,088

Total


29


$74,587,642





The ICOC also completed its review of the Leon J. Thal SEED Grant applications. Nearly $45 million was approved in February, to 72 scientists at 20 institutions. Today the ICOC approved two additional grants to the following researchers (Note: the dollar amounts shown are the two-year budgets requested by each applicant and are subject to review and revision by CIRM, prior to the issuance of grant awards):



Application #


Principal Investigator


Institution


Title


Amount

RS1-00308-1


Stainier, Dr. Didier Y.R.


University of California, San Francisco


Endodermal differentiation of human ES cells


$635,242

RS1-00247-1


LaFerla, Dr. Frank M.


University of California, Irvine


Development of human ES cell lines as a model system for Alzheimer disease drug discovery


$492,750



Total $1,127,992

The first scientific grants approved under the Stem Cell Research and Cures Act totaled $37.5 million, and were awarded in April 2006, to train 169 pre-doctoral, post-doctoral, and clinical fellows at 16 non-profit and academic research institutions. With today’s decision, the ICOC has now approved more than $158 million for research grants at 23 California institutions:









Institution


Training Grants


SEED Grants


Comp Grants


Grants


Funds (Requested & Awarded)

Stanford University


1


12


6


19


$26,519,988

UC San Francisco


1


9


7


17


$25,796,219

UC San Diego


1


6


3


10


$14,821,287

Burnham Institute

for Medical Research


1


8


2


11


$13,381,881

UC Irvine


1


7


3


11


$13,581,435

UC Los Angeles


1


7


2


10


$12,907,906

UC Davis


1


2


2


5


$8,286,877

The J. Gladstone Institutes


1


3


1


5


$7,920,705

The Salk Institute

for Biological Studies


1


3


1


5


$6,605,126

Children's Hospital of Los Angeles


1


1


1


3


$5,578,107

University of Southern California


1


4





5


$5,405,461

UC Berkeley


1


2





3


$3,446,378

CHA Institute of Regenerative Medicine








1


1


$2,556,066

UC Santa Cruz


1


2





3


$2,132,200

California Institute of Technology


1








1


$2,071,823

The Scripps Research Institute


1


1





2


$1,836,280

UC Santa Barbara


1








1


$1,218,242

UC Riverside





2





2


$1,139,456

Buck Institute for Age Research





1





1


$734,202

Human BioMolecular Research Institute





1





1


$714,654

Ludwig Institute for Cancer Research





1





1


$691,489

UC Merced





1





1


$363,707

City of Hope, National Medical Center





1





1


$357,978

Totals


16


74


29


119


$158,067,467





About CIRM

Governed by the ICOC, CIRM was established in 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Initiative. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was approved by California voters, and called for the establishment of an entity to make grants and provide loans for stem cell research, research facilities, and other vital research opportunities. For more information, please visit www.cirm.ca.gov.







###

Two SEED Grants Approved

The California stem cell agency Friday approved two SEED grants left over from last month's session. They were were numbers 308 and 247, by Didier Stanier from UC San Francisco and from Frank LaFerla of UC Irvine.

CIRM has prepared a press release on the awards that should be posted shortly on its web site, www.cirm.ca.gov.

Correction

In the item below, we incorrectly reported that 24 grants were approved. In fact, the number is 29.

CIRM Hands Out Nearly $75 Million in Stem Cell Grants

The California stem cell agency Thursday night approved $74.6 million in embryonic stem cell research grants that could have an impact on medical problems ranging from Alzheimer's to deafness.

The 29 grants that were approved were contained in the first tier of those recommended by CIRM's review committee. The funding requests were approved by the Oversight Committee in a single block on a single vote.

Robert Klein, chair of the institute, said that the funding, combined with other grants, ranks California at the top of sources for embryonic stem cell research funding in the world. By the middle of this year, the institute expects to have given away something on the order of $200 million or more to beef up ESC research.

CIRM has called a news conference for Friday morning to announce the grants, bolstered by the presence of the mayor of Los Angeles and the state's top legislative leader.

(Editor's note: An earlier version of this item said 24 grants were approved. The correct number is 29.)

Chiropractors, CIRM and Its Legislative Posture

The 120 men and women who sit in the California Legislature generally tend to think they have prime responsibility for writing the laws that govern the state. And they often get edgy when state agencies, even ones that have special constitutional status, seem to be straying from the governmental straight and narrow.

Such was the case recently with the California's chiropractic board, which is enshrined in the State Constitution. Gov. Arnold Schwarzenegger's appointees to the board became carried away in what a deputy attorney general described as a fit of "lawlessness." Now the board faces a serious legislative investigation that could include elimination of its $3 million budget.

While this is something of a minor tempest – although not for chiropractors -- the chiropractic board shares several things in common with California's much heftier, $3 billion stem cell agency. Both are written into the State Constitution. Both were created by initiative. Both have issues involving conflicts of interest. And both function in near obscurity except when they hand out buckets of money – in the case of the stem cell agency – or when a scandal erupts, as in the case of chiropractic board.

Obviously major differences exist between the two boards, including the quality of the appointees. But the case of the chiropractors illustrates how quickly matters can go awry in an insular agency and how quickly the legislature may move to step in. The case will also probably show how quickly the governor can put distance between himself and what The Sacramento Bee called a "laughingstock."

Last Sunday we discussed the sometimes acrimonious relationship between CIRM and the California legislature, particularly in the light of bipartisan legislation by the chair of the Senate Health Committee, Sen. Sheila Kuehl, D-Santa Monica. Her measure would inject the legislature into the difficult and touchy matter of how the stem cell agency decides to share the potentially enormous wealth from cures developed with state-funded research. After a shaky start with lawmakers, CIRM has moved to improve its legislative relations and keep lawmakers well informed.

Our piece, which appeared as an op-ed in The Sacramento Bee, was necessarily limited because of space. But we wanted to share more that we heard from CIRM and two longtime observers of the agency, who also have been critical of its performance from time to time and sometimes even more often. What follows are virtually verbatim comments.

First, from Dale Carlson, chief communications officer for the stem cell agency:

"We have an active government affairs program underway in Sacramento focused on legislators and statewide office holders, as well as their respective staff members. We want to keep them apprised of our efforts and progress, the status of key regulatory and funding initiatives, and the challenges we are confronting in pursuit of our mandate and obligations.

"The objective is to ensure that key decision-makers have current, accurate, and reliable information about CIRM's activities, the field of stem cell research, and related issues. We seem to receive reports of new scientific developments every week, and with more states committing funding to the field each year, it's likely that pace will accelerate. It's a challenge for us to stay abreast of the science, federal policy, and other states' emerging policies, all of which have an effect on our scientific project.

"We're very proud of the work we're doing, the processes we follow to engage the public in the development of policies and regulations that are required by the law, and the willingness we've demonstrated to adopt and apply good ideas from variety of sources. We want to be recognized as a credible source of information on all things stem cell, regardless of whether the question is directly related to CIRM's activities.

"Our legislative affairs program includes one-on-one meetings and group briefings. (Early in February), for example, ICOC Vice Chair Ed Penhoet and several CIRM staff held a session with staff from the Speaker's office and the Senate Health Committee and others, to review our IP policies for non-profits and for-profits. Both have been the subject of great interest and discussion in Sacramento (as well as throughout the state and in Washington, D.C.), with legislators offering many suggestions for how those policies might be crafted and strengthened. Our presentation described the progress we've made to date - emphasizing that the regulatory process is still moving forward and unlikely to be completed for several months - as well as a review of the issues we're struggling to address. "(Later in February), (CIRM President) Zach Hall, Arlene Chiu, and Mary Maxon (Chiu and Maxon are CIRM staff) conducted a broader briefing on the basics of stem cells, the progress we've made in our first two years, including on the IP policies, and the grants approved by the ICOC.

"Kirk Kleinschmidt, our Director of Legislation and Research Policy, has day-to-day responsibility for the effort. In addition to arranging these group sessions, he's regularly in the capital meeting with individual members. Gene Erbin from Nielsen Merksamer is on retainer to support the effort. Per the provisions of Proposition 71, (Stem Cell Chairman) Bob Klein oversees the legislative affairs program in consultation with the Legislative Subcommittee and the ICOC. He's in regular contact with federal and the statewide office holders as well as the legislative
leadership."

Carlson also said that Klein, Penhoet, Kleinschmidt and Patricia Olson, who led development of the CIRM strategic plan, had a 90-minute meeting with Kuehl last Wednesday.

Carlson said it was a "detailed discussion of our IP policies, the drug/therapy development process and the extensive public process we've followed."

"This is the kind of relationship we want with the legislature. Respectful and substantive. We want them to be assured that we're going about our responsiblities thoughtfully and carefully, and that we welcome good ideas and the opportunity to discuss our efforts."

Carlson said the CIRM board will meet in Sacramento April 10 and expects to finish its meeting in time for board members to visit with legislators in the afternoon.

Jesse Reynolds, project director on biotechnology accountability for the Center for Genetics and Society in Oakland, has followed CIRM closely during the last two years as well as the Prop. 71 campaign.

Here is what he had to say in response to our query:

"Prop. 71 is a deeply flawed set of laws, with numerous exemptions to the norms of transparency, oversight and accountability....

"Hopefully, the leadership of the CIRM won't be as hostile to much-needed reform as it was during previous attempts. Then, the state's 'stem cell czar,' Robert Klein took the unprecedented step of hiring a lobbyist with taxpayer funds. What's more, while serving as chair of the CIRM's governing board, he simultaneously headed up a private lobbying organization, which advocates for more funding and less oversight of stem cell research. These actions are not appropriate for the head of a state agency.

"Klein's statements that 'the Legislature is not needed' and that then-Senator Ortiz was 'an ongoing threat' are not only wrong, but highlight his cavalier attitude in his role as a public servant. As the people's elected representatives, the Legislature certainly has a critical role in overseeing a multi-billion dollar program. As a senator, Ortiz did more for stem cell research and Proposition 71 than any other elected official."

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights in Santa Monica, Ca., is another longtime follower of CIRM matters. He said,

"Key to any IP policy are provisions that ensure affordable access for all Californians to any cures or treatments resulting from stem cell research they funded. The ICOC originally envisioned meeting that goal by requiring treatments purchased with public funds to be sold at the federal Medicaid price and that there be a plan in place that would provide access to the treatments for uninsured people.

"In drawing up the actual regulatory language to implement those policies, the ICOC has softened those proposals.....

"I think Kuehl's bill would increase payback to the state, but doesn't do enough to ensure affordable access for all Californians. There should be a provision that if there are unreasonable prices the attorney general can intervene. I cite Genentech's Avastin as an example of what cannot be allowed. The drug was developed with $44.6 million in public funds from the National Cancer Institute yet Genentech charges $100,000 a year for it.

"I'd also like to see action on governance and accountability issues. I don't know what Sen. Kuehl's plans are in this regard. Members of the various working groups should be required to file public disclosures of their interests. All applicants and their institutions should be identified, not just recipients. Finally the ICOC is too large. It should be trimmed from the 29 members who now have seats.

"Another thought: ICOC members themselves have expressed concerns about some provisions of Prop 71. It might be useful for both CIRM and the legislature to attempt to identify such areas and agree on making those changes."

CIRM Lending Plan Resurfaces, State Pension Funds Eyed

California stem cell Chairman Robert Klein Tuesday said $3 billion for stem cell research is not enough and touted a loan plan to leverage the state's investment.

Klein proposed lending a portion of CIRM's funds, which, when they were paid back with interest, could either be loaned once more or used as grants. He also suggested that the mammoth California state employee and teachers pension funds could be tapped for additional investments in stem cell companies and research.

Declaring that CIRM's goal is to develop cures, Klein said, "Three billion dollars is not going to get us there."

Some time ago, a CIRM committee briefly addressed the issue of making loans but put off any additional discussion to deal with more pressing matters.

Klein addressed the loan issue in the context of providing financial assistance for clinical trials, which can be very expensive. He said loans allow money to be "recycled" and increased through collection of interest. He suggested that they would be issued in the form of subordinated debentures to make them more palatable to the businesses involved.

Klein appeared at the Burrill & Company stem cell conference on a panel discussion that was entitled "The CIRM Strategic Plan: Corporate Perspectives."

The panel was chaired by David Gollaher, president of the biomedical industry group, the California Healthcare Institute. The group has expressed displeasure with CIRM's efforts concerning intellectual property, declaring that they threaten commercialization of stem cell therapies.

Gollaher did not specifically cite the CIRM rules or related legislation (SB771 by Sen. Sheila Kuehl, D-Santa Monica) but he warned against placing barriers to development of products. Klein said it was important to provide economic incentives. He said that "preferential pricing has to be modulated and balanced against the primary mission" of the agency, which is to develop cures.

Bruce Cohen, president of Cellerant Technologies, said CIRM's royalty rules are "painful but we can live them." He described them as "measurable and capped." But he said rules dealing with pricing make businesses "very, very frightened." He said they could have a "chilling effect" on a decision whether to take CIRM funds. Cohen noted that many medical firms already have plans to provide access to their products by low income persons.

Uniform ESC Research Standards, More Federal Funding? Lower Your Expectations

The "bizarre patchwork" of embryonic stem cell regulation across the country is not going to disappear regardless of what happens in the presidential election in 2008, several speakers said today at a stem cell conference in San Francisco.

It was not a message that the audience of 500 persons from throughout the world necessarily wanted to hear. Their preference would be for unified standards with ample predictability, ideally at the federal if not global level.

But Nancy Forbes, an attorney with Ropes & Gray of Boston and San Francisco, said "The genie is not going to go back in the bottle." She said she has never seen a governmental body roll back its jurisdiction.

It was a theme echoed by others on the panel discussing "The Un-United States: Cell Lines Border Lines and The Law" at The Stem Cell Meeting, sponsored by Burrill & Company.

Ken Taymor, an attorney with MBV Law of San Francisco and who has followed California stem cell issues closely, also noted that there is little likelihood of a flood of federal ESC research funding following the 2008 election.

He said the NIH, in fact, may look at all the state and private research efforts underway and decide that it does not need to spend its limited funds in the area, an ironic negative effect of state activity aimed at beefing up stem cell research funding.

Russell Korobkin, a UCLA law professor, tackled what he called the "most problematic" aspect of the the stem cell laws across the nation – the bar against compensating women who donate their eggs. He said that compensation is permitted for donation of eggs for in vitro fertilization, which is identical to the process for donating eggs for research.

Korobkin dissected the argument for the compensation ban. He said it does not prevent coercion of women; rather it is actually coercive by limiting what women may do. The argument also assumes that "women cannot make the best decision" concerning egg donation and need to be protected by the state. If the process is too risky, he said, it should be banned regardless of payment or lack of payment. And it is not clear that the ban protects society as a whole, Korobkin argued.

Underlying the argument for compensation prohibitions seems to be "a wish that there were no women so poor that they would be motivated by their eggs," the law professor said.

Korobkin, however, did not deal with the politically touchy nature of repealing the ban on compensation. The subject is freighted with emotions that are fueled by the nightmarish visions of some of egg factories in poverty-stricken corners of the country or the world. Few lawmakers are inclined to support the repeal of compensation lest they get tarred with a brush from that very same vision.

Not Coming Up

Earlier I advised that more would be coming today on relations involving CIRM and the California legislature. However, other matters have intervened. Look for the stuff on Wednesday.

Do Stem Cells, Go to Jail

A Stanford law professor Monday told a group of stem cell scientists and businessmen and women in California that some of them would be subject to hard time in prison if they were sitting in South Dakota.

Henry Greely used the example to illustrate the "bizarre patchwork" of stem cell regulation in the United States, which varies widely from state to state. Greely said that some of the stem cell activities that some members of his audience are engaged in would be illegal in South Dakota.

Greely, who heads a California advisory panel on stem cell regulations, pointed out that regulations and patent law vary widely also from country to country, posing possibilities for confusion and "offshore production" of stem cell products.

Speaking to The Stem Cell Meeting in San Francisco sponsored by Burrill & Company, Greely indicated that a Stanford researcher collaborating with a British scientist could possibly be breaching Stanford research rules -- if the British scientist did not have the same set of research standards. Failure to abide by Stanford's rules could result in professional discipline at the university.

Hope for standardized regulations is dim in the short term, he indicated. Even if a new president in 2009 liberalizes federal stem cell research rules, variations will continue to exist from state to state unless Congress passes a strong new law regulating the science.

Greely said the best hope for something like universal acceptance of embryonic stem cell research would be a well-publicized cure. Then, he said, "political and moral objections will evaporate like the morning mist."

Meanwhile, Greely advised his audience to consult their attorneys, pay careful attention to details and pool information about stem cell research.

The Multibillion Dollar Stem Cell Market and Its Challenges

Today's market for stem cell therapies in the United States currently runs around $100 million but is expected shoot up to $710 million in three years, venture capitalist Steve Burrill said Monday.

By 2016, the market could hit $8.5 billion, he told about 500 persons attending The Stem Cell Meeting at the UC San Francisco Mission Bay complex.

The event, sponsored by Burrill & Company and which drew attendees from throughout the world, focused on both the science and business of stem cells.

Access to capital for fledgling stem firms was the topic of one panel Monday morning. Speakers from stem cell company indicated that funds are still tight, but that some loosening seemed to be occurring that was related to the more favorable political climate in Washington, D.C.

Burrill said a "reasonable amount of money" is available around the world, but different investors have different appetites, depending on the perspective from their countries.

He asked a panel of stem cell business executives about the biggest challenges for the stem cell business. One replied that predictable manufacturing processes were needed. Another said bigger companies with larger resources were necessary. William Caldwell, head of Advanced Cell Technology of Alameda, Ca., said the key was "curing the first patient."

Zach Hall, president of the California stem cell agency, echoed Caldwell during his overview of the status of the state's $3 billion research effort. To do that, Hall said CIRM expected ultimately to partner with the private sector.

Hall said the agency will have awarded about $190 million in grants to nonprofit agencies by sometime this summer with research being financed in about 100 labs throughout the state. Hall said CIRM hopes to build a "very strong pipeline" for research. That's because of the high disappointment rate involved in research. Hall noted that only one out of every eight to 10 clinical trials results in a viable product. And those trials occur at an advanced stage in the development of a therapy or cure.

We will have continuing coverage of the Burrill stem cell conference today and Tuesday.

Two Days of Stem Cells: Founder Flight to Hyperventilation

Christopher Thomas Scott, executive director of Stanford's Program on Stem Cells in Society, is scheduled to set the scene Monday for a two-day international conference on stem cells in San Francisco.

"The business issues are profound," he says, "including access to patients, fragmented intellectual property and a new calculus of investment risk that includes whether the research is illegal and how to mitigate against 'founder flight' as entrepreneurs seek permissive jurisdictions to launch their businesses."

We asked Scott, who is co-chair of the conference sponsored by Burrill & Company, for a preview of his remarks. Here is what he supplied.

"No one can deny the promise of regenerative medicine. But the field has its shaky spots: an astonishingly young science, polarized politics, and fraught with ethical worry. Yet stem cell biology has been on a tear lately. In just a handful of years, the science has moved from hunting stem cells to the arcane secrets of signal transduction. The hyperventilation about which stem cells--embryonic or adult--will be clinically useful is largely lost on scientists. The questions facing them are more elemental: can stem cells be chemically reprogrammed to earlier, more powerful versions of themselves? On which branch of the family tree does a new stem cell rest? What gene signals cause a stem cell to make more stem cells, or change into the next cell type down the line? The last question is on every researcher’s mind, because signal pathways are critical to understand how a certain type of cell can be made from an embryonic stem cell line, or how millions of adult stem cells can be made from a just a few to treat disease.

"2006 was a watershed year in other ways. Most Americans support embryonic stem cell research, and so does Congress. Despite a vote in the House and Senate that would overturn a restrictive presidential mandate, it wasn't enough to override George Bush's first-ever veto. California pushed through a thicket of lawsuits to shake loose billions of dollars for regenerative medicine. Now, finally, there is light at the end of that tunnel. Legislation in other states is moving so quickly it's difficult to keep track: just last week, Illinois, Iowa, Minnesota signed laws to permit all types of stem cell research. As political winds fanned the flames stateside, stem cells went international, creating a different kind of global warming. In a mighty push, Australia overturned a ban on nuclear transfer. The world's researchers had a banner year, with Japan, Germany, Norway and others announcing major discoveries. Not all the offshore news was good, however. The heat created a conflagration with the biggest scientific fraud in memory, the South Korean scandal.

"One thing is certain--international politics and the legal landscape has altered the way we do biomedical research. Thomas Friedman's "global flattening" doesn't apply here. A mosaic of legislation and national policy means uneven terrain for funding, infrastructure and accessibility to embryos and lines. The business issues are profound, including access to patients, fragmented intellectual property and a new calculus of investment risk that includes whether the research is illegal and how to mitigate against "founder flight" as entrepreneurs seek permissive jurisdictions to launch their businesses. The vacuum in Washington has shattered the state legislative landscape. In one state, a scientist can go to jail for doing embryonic stem cell research. In another, embryos can't be used for research, but it is fine to ship them in across the border. And who would have predicted this in 2001, the year of Bush's pronouncement: once funding from California, Wisconsin, New Jersey, Connecticut, Illinois, Maryland, Massachusetts, and other states is fully unleashed, it will surpass by a wide margin any dedicated federal dollars, restricted or otherwise.

"With all the moving parts, it made sense to assemble a group of experts and scholars from many disciplines to address issues at the interface of science, business, economics, law, and policy. I was delighted when Burrill & Company asked me to develop an agenda that would explore these connections. As a rule, stem cell conferences tend to be monolithic, in part because the reach of regenerative medicine is too broad to be addressed in two or three days. But to my knowledge, no conference tackles these questions from an international perspective. I'm excited to learn what this stellar group has to say, and how the glimmering edge of biology's most promising frontier will look in 2007 and beyond."

We will attending the conference both days. Watch for continuing coverage of the event.

Klein on Clinical Trial Problems with ESC Research

California stem cell Chairman Robert Klein is concerned about "tragedies" during clinical trials of cures developed with funding by the state of California.

He made the comment in a question-and-answer interview with reporter Steve Johnson of the San Jose Mercury News.

Klein was asked about his main concerning clinical trials funded by CIRM.

He replied:

"We need to work with the patient advocacy groups and the public so they understand that as we start trials there will be great victories, there also will be tragedies. They need to understand this is part of the process we need to go through. Because if the public is not broadly informed, there could be a reaction that could shut down the trial."

However, any clinical trials are years away. CIRM also may not be involved in their direct funding, although the cures may be based on state-funded research.

CIRM IP Legislation Faces Tall Hurdle

The following – written by yours truly -- appeared today in The Sacramento Bee as an op-ed piece. We will bring you more details of CIRM's current legislative efforts on Monday.

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Nearly three years ago, California voters created a unique and nearly autonomous agency that set the state on a $3 billion foray into embryonic stem cell research. Under the terms of Proposition 71, voters told the new California Institute for Regenerative Medicine to hand out $300 million annually in hopes that the grants would lead to cures for everything from diabetes to cancer.

Voters also told legislators not to mess with the institute at least for three years. Now that time is nearly up. And two powerful legislators are mounting the first effort -- under the terms of Proposition 71 -- to intervene in the institute's affairs.

The stakes are enormous and involve potentially billions of dollars of profits from stem cell therapies and cures.

The legislation was introduced last month by the chair of the Senate Health Committee, Sheila Kuehl, D-Santa Monica, and the Republican caucus leader in the Senate, George Runner of Antelope Valley. Their Senate Bill 771 is aimed at ensuring that California receives a healthy return on its investment and that state-funded cures are affordable and accessible.

But the senators face an extraordinary obstacle. Under Proposition 71, their legislation requires not just a majority vote to pass -- not just a supermajority vote (two-thirds) -- but a super, supermajority vote of 70 percent. That means 13 senators can kill the bill.

California's biotech industry and the institute are probably already compiling a list of their 13 best friends in the Senate. The state's leading biomedical organization, the California Healthcare Institute, is unhappy with the stem cell institute's intellectual property rules for sharing the wealth, declaring that they provide "a substantial disincentive" for creating commercial cures.

The rules determine who owns the results of the state-funded research, in other words, the intellectual property. They also determine how the intellectual property may be used and who, including the state, will receive royalties and under what conditions.

The California Healthcare Institute has not taken a position on Kuehl's bill but has indicated that it does not want to be hamstrung.

Runner and Kuehl, however, have an unlikely source of support. That's the legacy of the less-than-adroit legislative maneuvers by California stem cell Chairman Robert Klein. Much as President Bush's decision to limit funding for stem cell research spawned Proposition 71, Klein's actions ironically have fostered an environment conducive to the Kuehl bill's success.

Klein not only irritated some lawmakers, but some members of the stem cell institute's Oversight Committee as well. They were not pleased by his broadsides, such as denouncing the former chair of the Senate Health Committee, Deborah Ortiz, D-Sacramento, as an "ongoing threat." That message was delivered last year in a widely disseminated e-mail to patient groups via Klein's nonprofit advocacy group, Americans for Stem Cell Therapies and Cures.

The stem cell institute has attempted to strengthen its legislative ties. It took the unusual step, for a state agency, of hiring a private lobbyist, the well-connected Nielsen, Merksamer, Parrinello, Mueller & Naylor for $4,100 a month. More recently, the institute reached out to lawmakers and legislative staff, sending delegations to Sacramento twice last month, including Zach Hall, the institute's president, and Ed Penhoet, vice chair of the Oversight Committee and head of its intellectual property task force.

Kuehl has a tall hurdle to clear -- the 70 percent vote, not to mention the governor. She is stepping into a complex arena -- intellectual property -- where little unanimity exists, as the institute has discovered. But even if the bill fails, it will help to provide broader input on policies about intellectual property, developed during sparsely attended hearings. The measure additionally will serve as an important test of the institute's openness and political savvy.

While the agency is uniquely independent, California lawmakers are capable of creating much mischief when they feel their constituencies have been slighted. And that is mischief that the institute should avoid, so it can focus on its primary mission, as the institute proclaims, "turning stem cells into cures."

Robert Klein's Unseemly Position

The PR drums are beginning to sound for next Friday's $80 million stem cell giveaway in Los Angeles.

This time the flashbulbs and lights will be for a Democrat – not a Republican. He is Assembly Speaker Fabian Nunez of Los Angeles. As you may recall, California's Republican governor appeared last month for the hoopla when the California stem cell agency awarded its first-ever research grants.

Interestingly, announcement of the "CIRM press event" came not from the California Institute for Regenerative Medicine but on stemcellbattles.com, the blog of patient advocate Don Reed.
The announcement also carried the name of Amy Daly, executive director of Americans for Stem Cell Therapies and Cures, which is the private lobbying organization headed by Robert Klein. Klein is also chair of the state stem cell agency, which is giving away the money next week – part of $3 billion in state funds that intends to hand out over 10 years.

No mention of the "CIRM press event" could be found Saturday on the CIRM web site. Of course, anyone can call a news conference. But it is in the same location as the meeting for the agency, the Harvey Morse Conference Center at Cedars-Sinai Medical Center in Los Angeles, and would require the permission of that institution.

What does all this mean? It means continuing confusion about Klein and his role. Is he a lobbyist and private advocate for embryonic stem cell research? How does that fit with his role as a state employee and chair of the CIRM Oversight Committee? Can he separate those functions?

Last year, as head of the Americans group he denounced the leading voice for embryonic stem cell research in the state legislature as an "ongoing threat" to CIRM. The state agency, however, declined to comment on Klein's statement, saying he prepared it on his own time.

Klein has testified in court that he does not consider himself a state employee. In 2005, he refused to appear before the legislature for a hearing into issues involving CIRM. A millionaire businessman, he does not accept a salary as chair of the Oversight Committee.

Normally announcement of a news conference is aimed at notifying the news media for possible coverage. In the case of the announcement from Klein's lobbying group, it was aimed more at generating attendance by those would benefit from possible cures developed as the result of state-funded research. Their attendance provides better visuals and interviews for TV, radio and print reporters than the talking heads of state officials.

Building support for ESC research and generating news coverage for CIRM's work seems a worthwhile endeavor. But unseemly is a better word for Klein's current position astride both a state agency and the lobbying effort.

Better Than a Jet Plane

Larry Lokey, the former editor of the Stanford Daily who gave $33 million to Stanford University for stem cell research, says that giving away the money is more exciting than owning a jet plane.

His gift is also part of the growing momentum for private giving for stem cell research. CIRM's requirement for hefty matching on its building grants is likely to stimulate the giving even more.

Reporter Lia Hardin of the Stanford Daily reported Lokey's comments on jet planes, noting that he is also going to help fund a new building for the campus paper. Here is Stanford's press release on the gift.

Sewell Comments on CIRM Executive Changes

One of the Oversight Committee members for the California stem agency – David Serrano Sewell – has commented on the "Worst Enemy" item below. He also serves on the Governance Subcommittee and was present for the meeting discussed in that item.

Here are his verbatim comments emailed to the California Stem Cell Report:

"You make some interesting points concerning the adoption of the Internal Governance Policy, which is basically a MOU for Bob (Klein) and Zach (Hall). The ICOC tasked Ed (Penhoet) with the assignment of drafting this policy, and he did a great job. It's not perfect, but it works for now. This document is a reflection of the working relationship between Bob and Zach. I'm not passing judgment on that relationship, but we had to deal with it.

"I don't agree with Zach's comments. We're not in a situation where we're going to get as our next President either Bartelby The Scrivener or Dr. Dynamic because of the policy. Again, it's in place for Bob and Zach. Once we get further along the process in selecting our next president, the policy will likely change. Others may disagree, but that's how I view the situation.

"As for Prop. 71 itself. People wanted an active board, and that's what they got. We're engaged and listening to the public. Most of our operating structure is embodied in 71, including making any changes (which require the approval of the legislature and governor). If people don't know that, especially ICOC members, they ought to read 71."

CIRM's Worst Enemy? Maybe Prop. 71

The talk was of a "dog's breakfast," personal chemistry, schizophrenia and micro-management. The overseers of California's $3 billion stem cell agency covered it all last month as they attempted to produce a new management structure and enhance their ability to recruit a new president for CIRM.

The occasion was consideration of changes that will now come before the institute's Oversight Committee next week. The group is seeking to create more of a non-executive chair for the agency and shift more authority and responsibility to the president.

Sitting in on the meeting Feb. 21 of the institute's Governance Subcommittee were the two men filling the positions most directly affected – CIRM Chair Robert Klein and outgoing President Zach Hall.

The discussion did more than lead to approval of the restructuring. It focused a bright light on failings of the initiative process that created the agency, including micro-management language in Prop. 71 that now hampers the flexibility of agency. That is not to mention the difficulties of running any organization with two chief executives.

Prop. 71 stands at the heart of the issue. The ballot measure enshrined -- in state law and the State Constitution -- management minutia that has no place in legal codes, such as specifying that chair of CIRM's Oversight Committee must supervise preparation of its annual report. That requirement – or any other element of Prop. 71 -- can only be changed by another vote of the people of California or by an extraordinary, super-majority vote (70 percent) of both houses of the legislature and approval of the governor.

One member of the Governance Subcommittee, Brian Henderson, dean of the USC Keck School of Medicine, seemed astonished when he learned last month of the difficulty in making what should be routine changes. "Wow," was his comment.

The "dog's breakfast" comment came from Richard Murphy, CEO of the Salk Institute, during a discussion about why three executive committees are needed for CIRM when it has something over 20 employees. Not mentioned was the large size of its Oversight Committee, which has 29 members.

Here is how it went:

Hall: "Well, as Ed (Penhoet) said, I think it's working. I think on paper it looks like a mess."

Murphy: "It looks like a dog's breakfast, yeah."

Hall: "What I'm trying to say is that if I were looking at this, say wait a minute. I'm going to be over 25 people. and, my God, we've got two executive committees and a senior management committee."

Henderson: "It's ridiculous."

At one point, Hall added,

"If it were a traditional organization, it would be crazy to have the board sitting here trying to tell the president or the CEO how they should organize the internal workings of the organization."

Hall's comments at various points during the meeting best summarized many of the underlying problems with the dual executive structure at CIRM. He noted that he did not have "a horse in this race" referring to changes which largely would affect his successor. They are changes that are subject to revision if the presidential search committee finds a candidate who wants them modified again.

Hall said Prop. 71 does not give a "very high degree" of authority to the president. As an example, he cited the activities of the Governance Subcommittee as he was speaking to them. Hall noted that the president does not sit on the CIRM oversight board, as is customary in many organizations. He has no say in grant funding and no mechanism exists for the president or the CIRM staff to make suggestions regarding which grants to fund.

"The institute has a very powerful board that makes all funding decisions and keeps the president and staff on a pretty short string."

Hall continued,

"One could make a perfectly good case that CIRM would be best served by someone who's a good manager, a good administrator, a member of the staff -- the president is often referred to as staff in this context -- whose function is not to be a source of ideas along with the board, but to implement the ideas that the board generates. I think it's a perfectly good model, and I think it's one that might work very well....(T)here needs to be congruence between the kind of person you want and the responsibilities that this person is expected to fulfill within the organization.

"If you hire a manager and have a structure that calls for a leader, I think you're in trouble. Correspondingly, if you have a structure that calls for a manager and require someone who is a leader, I think you're also going to be in trouble."

Later Hall said,

"The point that we're left with, which is a very, very difficult one, is that within a very small organization, there are two leaders. And I think that is a problem....(I)nsofar as the president is a strong person who wants to do things their own way and has ideas and wants to feel they have some authority and control, I think it is going to be a problem to fit that person into this structure. I certainly have had problems, and I think of myself as in that category. I may be different from others like that, but I think it's generic."

Hall continued:

"...(Y)ou can say very frankly there's a kind of schizophrenia here. There's a very powerful board and there is an institute which sometimes is treated like the staff...(but occasionally)is the important organization with a board that has oversight. There's a real tension between those two structures and those two visions....

"I think the solution that's in this (restructuring) document, while admirable in many ways, looks very complicated to me...(F)or example...the job descriptions of the chair and vice chair...emphasizes that in this small group the president is No. 3 in the organization, and I have to say that's not a very attractive proposition."

Philip Pizzo, dean of the Stanford University School of Medicine, brought up the personal dynamics issue.

"If the chemistry works, then that can oftentimes overcome organizational imperfections. If the chemistry doesn't work, it doesn't overcome almost any kind of organizational imperfection."

Klein voted for the changes to make his position more of a non-executive post. He retains substantial authority over financing – public and private – as well as litigation, and supervision of CIRM's financial plan along with authority to set the board's agenda. Klein described the changes as "reoptimizing" CIRM for a new president to give him or her "the kind of structure and mix that works optimally to serve their needs."

Sherry Lansing, chair of the Governance Subcommittee, said the plan, presented by Oversight Committee Vice Chair Penhoet, was "excellent," and she pushed hard for its adoption without significant changes. Lansing is a former top Hollywood film executive and has undoubtedly experienced more than her share of touchy management issues.

Despite its "dualing executive" – our words, not Lansing's – she noted that CIRM pumped out $45 million in grants last month and will pump out $80 million more next week, a record not to be sniffed at.

CIRM's performance, after a particularly difficult start-up year, has improved greatly. That is the result of sharply focused, hard work and long days from a tiny staff. Whether that pace can be maintained is doubtful. CIRM needs to perform its routine work routinely. That will leave it ready for the truly exceptional tasks that inevitably pop up. The new president, the new structure and Robert Klein are the keys to that effort.

As for more permanent restructuring eliminating overlapping responsibilities, the Oversight Committee does have the option of going to the Legislature and asking for changes in Prop. 71. But in addition to the difficulty of hurdling the 70 percent barrier, such a move would open the door to possible changes that might not be palatable to the institute.

(Editor's note: The quotations are all drawn from the transcript of the Feb. 21 meeting, which can be found at www.cirm.ca.gov.)

The $80 Million Stem Cell Grant Proposals

The public summaries and scores of the applications for $80 million in embryonic stem cell research grants are now available on the web site of the California Institute for Regenerative Medicine.

You can find them directly by using this URL: http://www.cirm.ca.gov/publicsummaries/RFA_06-02/PublicList.html.

The grant recipients will formally be approved next Friday at the meeting of the CIRM Oversight Committee in Los Angeles.

Leon Thal: 'Meticulous, Unflappable, Creative'

Hundreds of persons memorialized scientist Leon Thal, a member of CIRM's Oversight Committee and an internationally acclaimed expert on Alzheimer's disease, at UC San Diego on Monday.

Reporter Cheryl Clark of the San Diego Union-Tribune wrote:

"As a scientist, Thal was a meticulous, humble, creative, diplomatic and unflappable mensch who helped design and conduct clinical trials to determine whether certain substances might stop progression of the disease, the speakers said during a memorial service at UCSD."

Clark continued:

"'I really believe he was the world's leading investigator in the testing of new therapies,' said Neil Buckholtz, who leads the dementias of aging branch for the National Institute on Aging in Bethesda, Md. "He gave hope for millions of people . . . because of his ability to forge consensus and his commitment to the principles of science.'"

Speakers also addressed other aspects of Thal's life: gardening, travel and flying cross-country in his small plane. They spoke of how he continued to drive his 1985 Toyota to work because "it still ran."

"Donna Thal fought back tears as she described some of her husband's idiosyncrasies. For example, he picked up trash while jogging and 'mended his socks even with holes as big as a half dollar,' she said."

CIRM has named the first-ever research grants awarded by the institute after Thal. UC San Diego has announced creation of a training fund for promising neuroscientists. The university said:

"Donations to this fund can be made online at http://neurosciences.ucsd.edu/neurocentral/memorial.htm, or checks may be made payable to UC San Diego Foundation, referencing Fund #4467, Thal Educational Scholarship (on memo line of check) and sent to: UCSD Neurosciences Development, c/o Leon J. Thal Educational Scholarship Fund; 9500 Gilman Drive, Mail Code 0853; La Jolla, CA 92093-0853."

Thal, 62, died last month in the crash of his plane in the Southern California desert.

CIRM CEO Search: The Pace and Talk of Candidates from Business and the Oversight Committee

How quickly will the California stem cell agency move to fill the spot of departing President Zach Hall?

Based on the track record of the 2005 presidential search, the CIRM Oversight Committee may not move with stunning dispatch. The search that year took about nine months. They had hoped to complete it in six.

But some pressure exists for relatively quick action. We found that sentiment in the first meeting of the CIRM Presidential Search Subcommittee along with a desire for more candidates from business and a disclosure that some members of the CIRM Oversight Committee themselves are interested in the position.

At least two members of the search subcommittee are on the record supporting quicker action, speed that we noted previously is certainly warranted.

During the subcommittee's meeting, Michael Goldberg, a member of the committee and a venture capitalist who directs life science investments for Mohr Davidow Ventures of Menlo Park, Ca., also warned against complacency. He said,

"There's a whole organization there that's been charged with an enormous responsibility of administering the research apparatus of the CIRM, and it's leaderless. I don't like working for an organization that's leaderless. I say leaderless, I don't mean that in the sense it doesn't have a chair engaged and vice chair engaged and Zach's engagement, but it's not the same as an organization that's moving forward.

"There's entropy in my experience at this stage of an organization's life with a leader who's announced his departure....That should give us actually an increased sense of urgency, if anything. so I'd like to do everything we can to fast track the process without sacrificing any of the transparency and engagement with stakeholders that i think we're all committed to."

Joan Samuelson, a patient advocate member of the search committee, said she concurred with Goldberg.

Earlier in the meeting, some members indicated displeasure with the 2005 selection process. However, the context of the search then was much different. CIRM had just been created but not within any existing state department. At first, the institute did not have an office, phones or even a way to make payroll. Those were relatively easy obstacles to overcome compared to the more complex tasks the organization faced later that year without a permanent president.

Brian Henderson, dean of the USC Keck School of Medicine and a member of the committee, said,

"I don't want to see a search go like the last time where getting to the end was more important than the process."

Philip Pizzo, dean of the Stanford medical school, agreed. He came back to the subject later in the meeting.

"I think last time we were under such a rush, that perhaps we didn't have the time to do that kind of due diligence, but we should be able to do it this time."

It was a sentiment echoed by Jeff Sheehy, a patient advocate member, said,

"I think we can be more deliberate this time, and we don't quite have the same sort of pressure upon us."

Sheehy additionally expressed hope that the committee would see more candidates from the business community. A business candidate presumably would be more oriented towards pushing stem cell products out the door as opposed to the sometimes more cautious views expressed by those more oriented towards science.

Also briefly mentioned during the meeting was the fact that some members of the Oversight Committee themselves have expressed an interest in the president's position, pointing up the importance of using a search firm to assist in filling the spot.

Obviously the Oversight Committee includes many capable people, but picking a president from the Oversight Committee would smack of an inside deal, although such practices occur in the business world. Perhaps such candidates should consider resigning from the Oversight Committee immediately if they want to be seriously considered.

Of course that might telegraph that they are candidates. The search committee is already distressed by the publicity surrounding an approach made to James Battey, the NIH's top stem cell executive. Perhaps candidates from the Oversight Committee have already been quietly discouraged by the search committee if it has a consensus on the matter. This is one of those situations where people mention "horns" and "dilemmas."

The full transcript of the Jan. 31 search committee meeting can be found at cirm.ca.gov.

Storing Stem Cells and Cash

Sometimes you could say that the California stem cell agency is in the business of hope.

That's a core engine behind the drive for embryonic stem cell research. Another is profit.

But hope propels other research and business as well.

Reporter Melissa Healy of the Los Angeles Times wrote today about private tissue banks, including the case of one man who expects to pay $6,000 to harvest his own stem cells and pay a Southern California firm $400 a year to store them. She wrote,

"NeoStem, the company that he has chosen to store his stem cells, has launched a $2.5-million plan to expand its services across the country in the next year. It joins a private tissue-banking industry that already includes more than two dozen companies storing the stem cell-rich blood of the umbilical cord harvested at the time of a baby's birth, one other bank storing stem cells from circulating blood, and an 8-month-old bank that draws and stores stem cells from the soft pulp of children's baby teeth."

Ebert Comments: Scientists Shy From Criticism, Controversy

Patent attorney and blogger Larry Ebert has posted a comment on the scientists and "humiliation" item below in "Stem Cell Snippets." Among other things, he says, "Most scientists avoid controversy like the plague. In a world where a competitor is apt to be the next reviewer of your grant or referee of your paper, you can't go around humiliating those in your field." Even public criticism, something different than humiliation, is not the norm, says Ebert.

A cozy world, indeed, if what Ebert says is 100 percent correct. Undoubtedly even cozier in the relatively tiny world of stem cell research. All more the reason for more public disclosure regarding the interests of those who review the applications for stem cell research grants.

Which brings up a sentiment from Lord Acton, the British historian. He said, "Everything secret degenerates...nothing is safe that does not show how it can bear discussion and publicity."

Regarding the quote, our thanks to Peter Singer, a bioethicist at Princeton University, who used it in an essay in New Scientist in October 2006, where we found it.

New Structure for a New CIRM President

The California stem cell agency is cleaning up its troublesome, dual executive issues and shifting power to the presidency of the $3 billion institute and away from the chairman's office.

The move is linked to the search for a new president for the California Institute for Regenerative Medicine. The current CEO, Zach Hall, plans to leave around June. Overlapping responsibilities and the resulting differences between Hall and CIRM Chairman Robert Klein have surfaced publicly in the past. (See "Dualing Execs: Touchy Issues.") Clearer lines of authority and creation of a non-executive chairman's office should enhance recruitment of top-flight candidates for the job, so the reasoning goes.

One patient advocate, who has watched CIRM closely since its inception, worried, however, that the new structure would turn the chairman and the Oversight Committee into "powerless figureheads."

In his Feb. 26 posting on stemcellbattles.com, Don Reed wrote:

"Bob Klein is the one man who understands the whole thing. Removing him from power is like taking Walt Disney away from Walt Disney enterprises."

Reed was commenting on restructuring of CIRM management that was approved, with an aye vote from Klein, Feb. 21 by the CIRM Governance Subcommittee. The changes now must be approved by the Oversight Committee at its meeting later this month. Months ago, Klein indicated he would step down from his position in 2008.

Among other things, the changes would:

-- Limit to four instead of 10 the number of employees in the office of the chair, including one for the vice chair. (CIRM has only 22 employees.)

-- Place the "Policy Office" under the president instead of the chair. That office implements Oversight Committee directives "through outreach" to the state legislature, Congress and other constituents. The president also would implement legislative policies of the Oversight Committee.

-- Require the concurrence of the chair in only the hiring of the chief legal officer, instead both the legal officer and the chief communications officer.

-- Clarify that all CIRM employees, except for the chair and vice chair, report to the president and remove language that stipulated the president and the chair "work out" office assignments.

-- Restructure CIRM's executive committee, giving the president more explicit control of its composition.

John M. Simpson, stem cell project director for the Foundation for Taxpaper and Consumers Rights, said the changes were a "step in the right direction." He said that the new policy was drawn up by CIRM Vice Chair "Ed Penhoet with consultation from Tina Nova, Richard Murphy and Phil Pizzo (all Oversight Committee members) after interviews with all CIRM employees."

As we have reported, CIRM's management structure, dictated in many ways by Prop. 71, has led to unnecessary difficulties. The changes would seem to create cleaner lines of authority and help to avoid ambiguities that generate confusion and conflict. But organizational charts are still only so much paper. They require persons of great skill, good will and energy to make them work.

The old and new "internal governance" policies can be found at www.cirm.ca.gov in links on the agenda for the Feb. 21 governance subcommittee meeting. We are told that only minor word changes were made then in the proposed new policy.