How Many Hats for Klein?

The Center for Genetics and Society is tackling Robert Klein and his "incompatible" roles as head of a $3 billion, state-of-California stem cell enterprise and his leadership of a private group that attempts to influence politicians and government leaders concerning stem cell research.

The conflicting roles are not new. They have existed since 2004 but have attracted almost no attention in the mainstream media. Klein (see photo) is both chairman of the California Institute for Regenerative Medicine (the state group) and president of Americans for Cures, which is headquartered in the office of his real estate investment business.

Writing on Biopolitical Times, the blog for the center, Jesse Reynolds, who has followed CIRM since its birth, says:

"Imagine the response if the appointed head of California’s Department of Transportation was also the leader of a highway-building advocacy group that issued statements praising the department head, attacked his or her political opponents, raised funds for allies, spread misinformation about the benefits of highways, and compiled arguments against mass transit and bicycling."

Reynold also writes:

"Not only is (Klein) juggling two incompatible roles - stem cell booster and public servant - but under his guidance, his advocacy organization has attacked his political opponents, praised his own work, and spread misleading information. "

Reynolds continues:

"After the ballot measure passed in November 2004, Klein tried to wear both hats, those of booster and of public servant. The initiative campaign transformed into the advocacy group California Research and Cures Coalition, which remained headed by Klein and operated out of his business office in Palo Alto. In response to public criticism, he quickly resigned from the organization.

"But Klein couldn't resist politicking for his cause. In 2006, a new group appeared, Americans for Stem Cell Therapies and Cures, with Klein again at the helm. Its first action was to issue a public letter smearing Sen. Deborah Ortiz (D-Sacramento) on the eve of her primary election for Secretary of State. She had been the most vocal supporter of the stem cell initiative in the state house, but was now backing legislation to reform the agency. As a taxable lobbying group, Klein's outfit raised also raised money for his political allies in the fall 2006 general election.

"Now, Americans for Stem Cell Therapies has assumed the mantle of both the California Research and Cures Coalition and Americans for Stem Cell Therapies and Cures. Two months ago, it issued a press release backing one of Klein's pet projects at the CIRM. What's more, it is extensively downplaying the potential of a new alternative to the use of embryos in stem cell research - an alternative whose ascendance would call into question the relevancy of CIRM and its use of taxpayer dollars during a time of budget crunching."

Learning How to Tell the Stem Cell Story

The private lobbying group of the chairman of the California stem cell agency is holding a two-day session this Saturday and Sunday in San Francisco and promises to help advocates learn more about how to make their voices heard.

The group is the Americans for Cures Foundation, whose president is Robert Klein, who also serves as chair of the $3 billion state of California Institute for Regenerative Medicine. It is unusual for the head of a state agency to also have his own advocacy group in the same field, as we have noted previously.

Klein and Alan Trounson, president of CIRM, are both scheduled to speak along with a number of scientists as well as advocacy experts.

The session is reasonably priced -- $100 for both days, If that is too much, it's a good bet that a call to the group could lead to assistance.

The agenda is heavily loaded towards hands-on advocacy and selling the message. We suspect it would be a good value for those who want to learn more about telling the stem cell story.

We should also note that Klein's group has a redesigned and much improved web site, which is worth checking out.

FDA Worries About Stem Cell Trials

Tomorrow the FDA begins a two-day hearing involving stem cell research and human trials. Monya Baker of Nature magazine's stem cell blog, The Niche, has some insights into the session. Among other things, she writes,

"The FDA is mainly worried that the animal tests used to assess safety problems aren’t good enough and that they won’t know until too late that the transplanted cells are causing harm rather than benefit."

It is a good bet that the California perspective will be heard at the meeting, both from CIRM and at least some of the state's biotech firms.

(Shortly after this item was first posted, we ran across a related posting from Biopolitical Times that carries a report about the problems with human research protection.)

Money Up Front for CIRM Lab Dough?

Looking for more on the Calfornia stem cell agency's lab grant program -- "the largest stem cell infrastructure component in the world?"

Take a look at an item by John M. Simpson of the Consumer Watchdog group, once known as the Foundation for Taxpayer and Consumer Rights.

He quotes Alan Trounson, CIRM president, on the size of the effort, which is now set at about $758 million, including matching funds.

Simpson also provides a list of the scores for each of the 12 applicants, with Stanford (my father and brother's alma mater) at 95 and UCLA (my alma mater) at 73.

Simpson reports that the agency is considering paying an entire grant up front if the recipient agrees to reduce the amount requested. That would be one way to deal with the $48 million shortfall in CIRM funding compared to the amounts requested. (See the "Millions Cut item.) However, it is also one way for grant recipients to play a little loose with the money.

CIRM Executive Salaries Take a Hit

Should the president of the California stem cell agency, with roughly 26 employees, be paid $300,000 more annually than the director of the National Institutes of Health, which has nearly 19,000 staffers?

No, according to the Consumer Watchdog of Santa Monica, Ca. Its stem cell project director, John M. Simpson, says,

"CIRM's salaries are ridiculously out of whack."

Writing on the blog of the Consumer Watchdog, a group once known as the Foundation for Taxpayer and Consumer Rights, Simpson offers as the chief support for his view the following salaries for NIH executives:

"Elias Zerhouni, Director, NIH: $191,300 (increased in January from $186,600)
John Niederhuber, Director, National Cancer Institute: $247,500
Francis Collins, Director, National Human Genome Research Institute: $300,000
Story Landis, Director, National Institute of Neurological Disorders and Strokes: $260,000"

Simpson's figures come via reporter Jim Downing of The Sacramento Bee, who obtained them from the NIH.

Simpson compares them to the $490,000 salary earned by CIRM President Alan Trounson and the $310,000 being paid to Marie Csete, recently hired as CIRM's chief scientific officer.

The salaries have recently come under increased fire because of the state's budget crisis. Salaries of public servants are always lightning rods, even in the best of times. They are far easier for the media and the public to understand than some of the financial inequities created by Prop. 13, the property tax initiative approved years ago and that now, in many ways, cripples local government in California.

The CIRM salaries are also dwarfed by the pay of some physicians within the University of California system, who earn more than $750,000 a year. And they are tiny compared to the wages earned by some of the men at UC who supervise boys running and throwing balls. Their pay can approach $2 million annually.

Nonetheless the salaries at CIRM are a perception problem, at the very least. The agency must develop a stout defense for them, which it does not seem to currently have. Otherwise, CIRM will continue to suffer attacks from critics who find the pay levels extreme.

Millions Cut from CIRM Lab Grant Requests, Millions More Approved

California's unprecedented $758 million stem cell lab construction program completed another chapter this weekend, but fell $48 million short of fulfilling the desires of 12 universities and research institutions.

All of the 12 saw their requests cut by millions as their applications cleared CIRM's Facilities Working Group during a two-day meeting in San Francisco. None was eliminated, however, and none is likely to be eliminated when the grants come up for final action by CIRM directors (the Oversight Committee) May 6 and 7.

CIRM directors have never reversed a recommendation for funding made by their working groups.

The 12 California institutions had sought $336 million from CIRM. The Facilities Working Group approved $289 million, compared to the $262 million budgeted by CIRM. The stem cell lab construction program proposed by applicants totals $832 million, including matching funds. CIRM has proposed funding that would total $758 million, including matching funds.

CIRM said in a news release that the Oversight Committee will address at its May meeting the difference between the $289 million approved this weekend and the $262 million budgeted.

John M. Simpson, stem cell project director for Consumer Watchdog (formerly known as the Foundation for Taxpayer and Consumer Rights), attended the facilities meeting. In an email, he said the main question was how to cut money from the requests.

"At (CIRM President Alan) Trounson's suggestion the FWG (Facilities Working Group) score, which was on a scale of 100, was treated as a percentage, so for example, Stanford with a score of 95 will get 95% percent of its request. Using this method, they cut $47 million.

"Interestingly most of the applicants there seemed to think this could work. Some had been worried that entire programs would be cut."

Some of the cuts were rather large. UCLA saw its $30 million request cut by $8 million. The $50 million request from the San Diego stem cell consortium (UC San Diego, Scripps, Burnham and Salk) request was slashed $7 million. UC Irvine lost more than $7 million out of a $37 million request. (A full list of the applicants, the amounts requested, amounts recommended and total project cost can be found here.)

The Oversight Committee decisions on the funding will ultimately be made by only a handful of its 29 members, perhaps as few as eight or less. The reason is that about 18 of the directors have financial ties to institutions seeking the taxpayer funds. Those directors will be barred by law from even discussing the issue.

The CIRM news release touted the economic benefits of the construction program. Marie Csete, the agency's new chief scientific officer, said the grants will help to build "optimal facilities for our scientists and will extend California's leadership in stem cell science."

As far as we can tell, no mainstream news media carried reports on the weekend action. The agency continues to receive little notice from California newspapers and even less from the electronic media.

The Facilities Group met in public session, as it did on a previous round of lab grants. However, scientific reviews of the programs were conducted behind closed doors by scientific reviewers who do not publicly disclose any potential conflicts of interest.

(Editor's note: Our figures differ slightly from CIRM's. The discrepancies appear to be related to rounding.)

CIRM Bill Moves on in California Legislature

Legislation aimed at California's unprecedented $3 billion stem cell research effort this week easily cleared its first hurdle -- as expected.

The measure by Sen. Sheila Kuehl, D-Santa Monica, now moves on the state Senate Judiciary Committee, where it is likely to win approval as well. Kuehl is part of the Senate leadership and chair of the Senate Health Committee, which unanimously approved her bill, SB1565, on an 11-0 vote. Co-author of the bill is Republican George Runner of Antelope Valley, who is part of the GOP Senate leadership.

The legislation is designed to provide affordable access to therapies developed with taxpayer funds and correct problems associated with conflicts of interest at CIRM.

The legislative staff analysis of the bill said that its authors believe

"...that, given CIRM/ICOC's unique formation as a public entity, the level of public investment--$3 billion in bond funds that will amount to a General Fund expenditure of $6 billion (including interest), and the close-knit nature of the scientific community, CIRM and the ICOC should be thoroughly scrutinized by an independent body to ensure the highest level of public trust and confidence."

CIRM has opposed similar legislation in the past, but according to John M. Simpson, stem cell project director for Consumer Watchdog, the group formerly known as the Foundation for Taxpayer and Consumer Rights, CIRM is now taking a more measured stand.

Simpson, who attended the hearing earlier this week, reported:

"CIRM's Interim Director of Legislative Relations Sue North told the Senate Health Committee, 'We have no formal position on the bill and hope to resolve any differences administratively.'"

Simpson opined on the Consumer Watchdog blog that the CIRM position marked an improvement from the days when CIRM Chairman Robert Klein declared that one legislator who was also a longtime supporter of stem cell researcher was an "ongoing threat" to CIRM.

Consumer Watchdog supported the CIRM legislation but said it did not go far enough. Simpson said,

"We need a provision that allows the state attorney general to intervene if drugs or therapies funded by the stem cell agency are priced unreasonably. We've seen too many cases where companies benefit from publicly funded research and then set prices at obscene levels. They act like socialists when seeking research funding but are greedy capitalists when there are profits on the table."

Also supporting the measure were American Federation of State, County and Municipal Employees (AFSCME), the California Alliance for Retired Americans, California Nurses Association, Center for Genetics and Society, Gray Panthers, Greenlining Institute and the Pro-Choice Alliance for Responsible Research

CIRM Seeking Egg Donation Comments

The California stem cell agency has prepared a draft of guidelines for reducing risk in connection with the donation of human eggs for stem cell research and is seeking comments on them from the research community and others.

The draft can be found here. A related document concerning the history of the guidelines and their purpose can be found here.

In addition to general remarks, Geoff Lomax, senior officer for the CIRM Standards Working Group, is asking for comments on the following:

"The utility of the guidelines for reviewing studies proposing to obtain oocytes for research

"The consistency of the guidelines with current clinical protocols and standards of care

"General feasibility considerations with the draft guidelines."

The impact of these guidelines will go well beyond California, which is currently in the global forefront of setting standards for human embryonic stem cell research. Seeking comment at early stage and posting the information on its web site serves CIRM well, opening the door to all who are interested or who have something at stake.

Sailing Time-Out for Blogger

We are setting sail Saturday morning from Guaymas for Mazatlan and will be at sea for several days. So we will not have any fresh postings until late next week.

We have been on the hard, as the maritime term goes, for far too long, performing unpleasant but necessary boat maintenance chores. It is great to be back on the water.

'Doing It Right,' Cerberus Simpson Says

Both the California stem cell agency and the Interstate Alliance on Stem Cell Research have come in for some praise from Consumer Watchdog's John M. Simpson, who has followed California stem cell issues closely for several years.

Simpson, who was once thrown out of a meeting of the interstate group, lauded it for an early posting an agenda for its meeting April 9-10 in Washington. He also remarked that CIRM has done better recently on posting materials for some of its meetings. He particularly cited Rick Keller, senior officer for Scientific and Medical Research Facilities.

Writing on the Consumer Watchdog's blog, Simpson said,

"Public policy should always be made in public. And the public must have timely advance access to what's being discussed. That's how policy-makers actually build true support for their actions. Perhaps after a few -- sometimes less than gentle -- nudges from folks like me that message is getting across in these two cases."

Bravo on Timely Posting of Lab Grant Documents

The California stem cell agency today posted on its web site the staff analysis and other key documents in its $758 million lab grant construction program, a full week ahead of their scheduled public review.

Congratulations to CIRM and its tiny staff for the timely posting. It well serves the agency, interested parties and the public, providing ample time to review the complex documents and prepare comments, if so desired. Posting and preparing the material is no small task. The documents are large and intricate. And no one wants to make mistakes.

In addition to the staff analysis of the applications, the newly posted material includes lab planner's evaluations and applicant comments. The applications in CIRM's single largest round of grants will be evaluated at a two-day session of the Facilities Working Group in San Francisco, beginning next Friday,

CIRM Seeking IP Lawyer and Presidential Consultant

Attention IP attorneys and anybody – almost – who wants to tell the president of the California stem cell agency what to do.

CIRM is looking for a couple of people to come to its assistance on a temporary basis. The IP gig is part-time for six months for $150,000. The consultant to the president is scheduled for only four months fulltime for $80,000.

The IP position caught our eye for several reasons. One is that it lists an hourly rate of $150, rather low for a 15-year veteran of the biotech/IP field, which is the experience level that CIRM seeks. Another curiosity about the position: An hourly rate of $150 for 20 hours a week for about six months weeks amounts to $78,000, somewhat less than the $150,000 allotted for the job. The RFP also requires the winning bidder for the contract to cover his own "personal and business" expenses within that rate, except for "additional expenses, incurred at CIRM's direction."

The RFP highlights the nature of the legal work and management structure within CIRM, and not just because the agency is treading new ground on IP. The agency has a general counsel, who one might think would oversee the entire legal staff. However, virtually since its inception, CIRM has signed on with Remcho, Johansen & Purcell of San Leandro, Ca., for legal advice at a cost of more than $1 million.

While the reporting lines are not entirely clear, Remcho's James Harrison seems to be directed primarily by Robert Klein, the CIRM chair. On CIRM staff is attorney Scott Tocher, who once appeared to report to the president of the agency but now has been moved under Klein's control. Tamar Pachter, the general counsel, reports to President Alan Trounson via the chief operating officer. The new legal "temp" will report to Trounson and "coordinate" with the general counsel.

We ran the RFP by one observer who is knowledgeable about CIRM and IP work. That person confirmed that the hourly rate was at the low end and also indicated that the RFP was unclear about whether a firm or person was desired. Our observer also said,

"If the contract is not renewed, the attorney has still been paid to become one of the world's leading experts on stem cell IP, funding and commercialization. There is a good chance that this new-found expertise will lead to job opportunities with law firms, companies, non-profits, universities, etc. Even a law firm might be willing to discount its rates heavily to get this work to establish itself as a player in this field."

The RFP for the presidential consultant seeks a scientific professional (Ph.D.) with 15 years experience. In addition to a wide range of advice, the RFP indicates the person will be asked to develop "alternative resource opportunities for increased flexibility and productivity of CIRM research and clinical applications."

Both positions were posted just last week under "CIRM RFPs" instead of the job listings on the CIRM site. The deadline for applications is April 1 with work beginning shortly thereafter. Given the short time frame, it is likely that CIRM has candidates in mind for both positions.

CIRM is also seeking to fill the IP position permanently through its job listings. Other open positions include finance officer, scientific officer, senior administrative coordinator and communications manager.

Fresh Comment

In a new comment on the "CIRM Legislation" item below, Don Reed discusses his role as vice president of public policy for the Americans for Cures Foundation and his comments on CIRM matters.

Rabble, International Meetings and CIRM

The Consumer Watchdog group says the real problem with the International Stem Cell Forum last month did not necessarily involve CIRM's reluctance to provide cost estimates.

Instead, it involves keeping the rabble out of the meeting at a luxury San Francisco hotel.

The remark comes from John M. Simpson, who was writing on the new blog of Consumer Watchdog, which was formerly known as the Foundation for Taxpayer and Consumer Rights.

Commenting on our item below, Simpson, stem cell director of the group, says,

"What really is of major concern, though, is the fact that these meetings were closed. Supposedly the reason for that is that the ISCF is administered by the UK's Medical Research Council. The ISCF chairman is Sir Leszek Borysiewicz, chief executive of the Medical Research Council (UK). Apparently the scientists on the other side of the Pond just assume the rabble ought not be let in behind the closed doors of their scientific clubs when meeting.

"CIRM did call a late afternoon telephonic news conference -- about the worst time for any working reporter on a deadline -- only to delay the announced start by half an hour. Then when reporters called in at the newly appointed time, they were kept on hold for at least 20 more minutes."

Simpson says the amount spent does not seem unreasonable, a judgment with which we concur.

CIRM Releases Cost on International Stem Cell Forum

The California stem cell agency hosted the International Stem Cell Forum in San Francisco last month, which involved representatives of the leading stem cell research organizations in the world.

CIRM ballyhooed the event with a news release, and prior to the meeting, we asked for an estimate of the cost to CIRM. The agency declined to provide an advance estimate and said that the costs would include "paying for the meeting room at the hotel where the meeting is taking place as well as the audio visual set up and possibly some things like copies. We are also paying for 2 dinners (but not alcohol)."

In response to our queries, Don Gibbons, chief communications officer for CIRM, this afternoon reported that the cost totalled $25,912.

Tribulation for Love and Harrison

Last week did not bring the best news for two California stem cell personages – CIRM Oversight Committee member Ted Love and the agency's outside counsel, James Harrison.

According to The Associated Press, Love, who is CEO of Nuvelo of San Carlos, Ca., had the unpleasant task of cutting 40 positions out of his workforce, which is 14 more than the total at CIRM. The reason? The biotech firm is dropping "its troubled blood-thinner alfimeprase after it failed another study," The AP said. The move will cost the company about $3 million during the first quarter.

Attorney Harrison lost a big one with California's official state political watchdog, the Fair Political Practices Commission.

According to reporter Aurelio Rojas of The Sacramento Bee, one of Harrison's clients, Sen. Carole Migden, D-San Francisco, agreed to pay a record $350,000 fine for "personal use of campaign funds and inaccurate disclosure of cash payments and receipts between 2003 and 2007.

Harrison, who told us that Migden is a longtime client of his firm, attributed the violations to inadequate record keeping by her former campaign officials.

The Bee also said:

"During the FPPC's months-long investigation, the agency determined Migden illegally transferred approximately $1 million of surplus campaign funds and had already spent hundreds of thousands of dollars.
"The senator was told to stop using the money but instead sued the FPPC (in federal court) in an effort to gain access to $647,000 of the money she had not spent."

That suit is scheduled for a federal court hearing April 1.

Fresh Comment

"Anonymous" has left a new comment on the item below.

CIRM Legislation Hearing Scheduled for Early April

The latest legislation to target the California stem cell agency is set for its first hearing April 2 in Sacramento before the Senate Health Committee.

The bill is aimed at ensuring affordable access to stem cell therapies financed by public funds in California. It would also require a study of the agency with an eye to correcting some of the difficulties it has had with such problems as conflicts of interest.

The lead author on the measure, SB1565, is Sen. Sheila Kuehl, D-Santa Monica, who is chair of the Health Committee. She is not expected to have difficulty in winning approval of her bill and sending it to the Judiciary Committee.

CIRM has not taken a position on the measure, but has opposed similar efforts in the past. Last month, one stem cell activist, Don Reed, opposed the measure, calling it "another distraction, another delay." Reed also said that CIRM is "squeaky clean" although one of its directors. John Reed (no relation to Don Reed), is under investigation by the state for violating CIRM's conflict-of-interest rules. Five other directors also violated conflict policies last year by writing letters on behalf of grant applicants.

Don Reed is vice president for public policy for Americans for Cures Foundation, which is the private, nonprofit stem cell lobbying group run by CIRM Chairman Robert Klein. It was Klein, an attorney, who advised John Reed to lobby CIRM staff on behalf of a grant to his institution.

Fresh Comment

"Anonymous" has posted a new comment on the "egg shortage" item below.

Fresh Comment

Jesse Reynolds of the Center for Genetics and Society has posted a comment on the "eggs" item below. It says in part, "Some believe that stem cell lines could be derived from embryos that are specifically created for research through cloning, or somatic cell nuclear transfer. This process requires fresh human eggs. Only perhaps a dozen labs worldwide are trying, and only three or four CIRM grants have been awarded for this purpose (to my knowledge). This line of work raises concerns beyond the moral status of the embryo." To read his entire remarks, click on the word "comments" at the end of the item.

An Egg Shortage: Is More Cash the Answer?

The California stem cell agency has embarked on a sweeping review of the human egg market and the needs of researchers, some of whom are complaining that they do not have enough raw material.

The study was set in motion after Harvard scientist Kevin Eggan (see photo on left) told the CIRM Standards Working Group last month that he and his colleagues had spent $100,000 recently advertising for donors and "pursued every option" for collecting eggs with little success.

CIRM President Alan Trounson, a renown Australian stem cell scientist, said "accessing those eggs is no trivial matter." He said scientists are seeking grants from CIRM for research that may not be feasible because of the lack of human eggs.

One answer to the question of scarcity posed during last month's session is increasing the money for women who provide eggs. However, that could be considered the politically fatal "third rail" for hESC cell research. Prop. 71, which created the California stem cell agency in 2004, was approved by voters in a campaign that appeared to promise that women would not be paid for eggs. But the language of the measure is artfully ambiguous. The initiative says that it is up to CIRM directors to set

"standards prohibiting compensation to research donors or participants, while permitting reimbursement of expenses."

Currently CIRM regulations do not allow for compensation other than reimbursement of direct expenses. One suggestion that arose during the meeting of the CIRM Standards Working Group on Feb. 28 was some sort of reimbursement of expenses for women involved in IVF treatments. However, paying for IVF treatments could be construed as cash for eggs.

Not all members of the group were comfortable with the concept of paying women for eggs.

Here is an exchange from the transcript of the Feb. 28 meeting between CIRM Oversight Committee member Jeff Sheehy and CIRM Chairman Robert Klein, who led the campaign for Prop. 71 and claims responsibility for writing it:

Sheehy:

"(Prop. 71) was approved by the voters because the voters thought there wasn't going to be compensation for egg donors when they voted for it, and they didn't know we were going to go back and change it. And so in that context I think this is an issue that would be appropriate for us to study."

Klein:

"Well, I'm in a reasonably good position, Jeff, to discuss the issue of what was presented to the voters. and --

Sheehy:

"I was your average voter, Bob. I was not one of these people that was waving the stem cell flag. I can tell you that if we were going to go out and spend $3 billion buying eggs from women, I wouldn't have voted for it."

Klein:

"Certainly I wouldn't have voted for it either, so we agree. But the key here is medical reimbursement was clearly contemplated. I have gone to James Harrison (outside counsel to CIRM and who wrote portions of Prop. 71) and discussed this issue with him...."

Alta Charo(see photo on right), professor of law and bioethics at the University of Wisconsin and a member of the CIRM standards group, noted the political sensitivity of the issue of cash for eggs. She said changing the CIRM standards worked out in 2005 could be "inviting really quite draconian responses" from unspecified parties, but presumably hostile lawmakers and regulators.

What went unsaid during the Feb. 28 meeting was the fact that some have long regarded the supply of human eggs as insufficient for human embryonic stem cell research. But now that hESC research is enjoying a resurgence, the scarcity is becoming more acutely felt.

The session also did not include a direct discussion of another reality: If eggs are scarce and demand is high, somebody is going to make a business of it. It will be an unregulated business somewhere else in the world. It goes almost without saying that embryonic stem cell research is a global endeavor, a point that Klein made on Feb. 28.

The CIRM Standards meeting ended with a move to investigate the entire subject further. Bernie Lo of the University of California, San Francisco and chairman of the group, indicated the review would include availability of eggs and their numbers, researchers' perceptions of the problem, possible reimbursement of IVF treatment, use of eggs by CIRM researchers from other areas where compensation restrictions are not so tight and the grandfathering of cell lines that were derived before CIRM regulations were adopted.

The standards group will consider the staff review of the matter at some later date. We have asked CIRM when that is likely to occur.

Needless to say, this subject is complex. We have only briefly touched on a handful of issues discussed during the Feb. 28 meeting. We recommend a close read of the transcript. Most of the pertinent discussion begins on page 91.

Below are some excerpts from the transcript.

Snippets From the CIRM Egg Debate

Here are some excerpts from the transcript of the Feb. 28 meeting of the CIRM Standards Working Group concerning human egg availability.

CIRM President Alan Trounson:

"Accessing those number of eggs is no trivial matter, no matter what the opportunities are. In that circumstance the demand for the oocytes may be way beyond what we can possibly deliver in an outcome. And it may take us five years to do that. If we gave a three-year grant, that would be nonsense because the chance of deriving a cell line might be extremely low.

"That's why we've come because we have these applications sitting in our portfolio which we're questioning about how do we move forward on this, or do we sort of take them off the table and let the other ones proceed. I think it's important for you to understand that it's real-time now. We have to actually know exactly what is appropriate to do."

CIRM Chairman Robert Klein:

"From a legal point of view, I'm very concerned with the use of words here. I don't know anyone that's suggesting you make a $10,000 payment to somebody. If somebody has real cost, and they can document those costs, and they can get reimbursed for part of those costs. What's being addressed here is reimbursement for part of the cost, not a $20,000 payment to someone."

CIRM Oversight committee member Jeff Sheehy:

"If they did not think that they could get the eggs, they should not have submitted the applications. They have submitted applications, so they must believe that they can get the eggs."

Alta Charo, a member of the Standards Working Group and University of Wisconsin professor:

"Prop 71, which itself had this written in to some extent as a political matter, drove the National Academy guidelines which felt like they were already basically having to follow the California lead on the altruistic model here."

Trounson:

"I don't think it drives it forward. That's the problem."

Charo:

"Now we're in a situation, I think, where it's particularly touchy to try and revisit the compromise, putting aside whether or not it's even legally possible given the language of Prop. 71."

Kevin Eggan, Harvard stem cell researcher and member of the CIRM Standards Working Group:

"I have spent countless hours stomping around to different disease advocacy groups, tea circles, knitting circles, trying to find anyone and everyone who would donate their oocytes for our experiments, even out of the goodness of their heart because they had someone that they cared about who was affected by these diseases that we might in the very long term provide hope for.

"We spent more than $100,000 in advertising in the Boston Globe, in the Boston Herald, in the Boston area papers, in the suburbs of Boston. We have literally pursued every option. We've pursued trying to recruit donors from other parts of the United States to come to Boston to donate their oocytes for research. This will not work. In a country where women know that they can be compensated for doing the exact same thing, they simply will not, and in the face of the difficulties, I should add, it's not like they're not doing it solely because of the money, they're doing it because of the money and because it's a very difficult thing to do oocyte donation. And those two things collaborate together to create an environment in which women will not do this in a meaningful way which will allow the research to go forward.

"It was a very reasonable compromise to say we need to give up compensation because we can't afford to be assailed both from the right and the left on this position, but now we know that that compromise position is a failure. So what do we do about that? I think the fact of the matter is that it might as well be against the law if we can't do it. That's one sort of null hypothesis for years. So how to proceed in the face of that? I agree it's risky; but if we don't take the risk, then the outcome will be the same as if we take the risk ..."

CIRM Cerberus Has New 'Kennel'

John M. Simpson, the ubiquitous critic, observer and participant in California stem cell controversies, has a new employer – sort of. The nonprofit outfit he works for has changed its name. No longer will it be called the Foundation for Taxpayer and Consumer Rights. Instead it is Consumer Watchdog. You can find more about the change here.

Fresh Comments

Larry Ebert has posted a comment on the "corrections" item from March 17. We have posted a response to that item. "Anonymous" raises some interesting questions regarding the "back story" on why CIRM failed to issue a press release on the letters of intent on round two of the faculty awards(see the "$41 million" item on March 18). We have responded to that as well. You can read all of this by clicking on the word "comments" at the end of each item in question. You can also post comments yourself by clicking on that word.

Pricewaterhouse Report on Biotech Loans Available Online

The Foundation for Taxpayer and Consumers Rights has posted the $50,000 PricewaterhouseCoopers report made to the CIRM Biotech Loan Task Force last week(see item below). The numbering of the pages seems to indicate that there is more to come from Pricewaterhouse. The report is not yet available on the CIRM website.

Biotech Loan Program Eyes Matching Funds

The California stem cell agency last Wednesday considered a proposal to create a biotech loan program of up to $750 million and is expected to possibly enact it by June. Here is a report from John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights, who attended the meeting of the CIRM Biotech Loan Task Force in Sacramento.

"CIRM Biotech Loan Task Force members didn't learn much last week from a $50,000 consultant's report about other states' loan programs, except that nobody really seems to be doing what the stem cell agency envisions.

"Loan programs in other states aren't really comparable to California's plan members of CIRM's Biotech Loan Task force were told by Christopher Wasden of PricewaterhouseCoopers.

"The consulting firm checked out about 30 loan programs and then narrowed the list to consider 12 of them in detail. The criteria for the short-list were that the program be state funded, focused on life sciences or technology companies, primarily offered loans and had a meaningful size. The final criterion was that the program was responsive, Wasden said.

"Noting that most of the loans offered by the other states were in the $200,000 to $400,000 range, Wasden described the proposed California program as 'more ambitious by a factor of at least two.'

"In fact, ICOC Chairman Robert Klein raised the possibility of making loans as large as $50 million. Task Force Chairman Duane Roth mentioned loans aimed at pre-clinical trials of $3 million to $5 million.

"Wasden reported that the 'amount of experience with the programs is low. There have been no liquidity events and no write-offs -- yet.'

"After Wasden's report task force members discussed more details of how California's program may emerge. Roth suggested that a four-part business evaluation would be the first step. That would include:

"-- A background evaluation of the company's principals.
"-- A credit evaluation, a Dun and Bradstreet or similar report.
"-- A litigation assessment. This would not include an assessment of the company's intellectual property (IP) portfolio, but rather a check for any suits pending against the firm or its principals.
"-- An assessment of the business plan and financial feasibility.

"Klein suggested, as he has at all task force meetings, that this check could be performed by 'delegated underwriters.'

"Task force member Michael Goldberg suggested that 'higher standards of verification would be required for larger loans.'

"If the applicant met the business criteria in the first step, then the plans would be peer-reviewed by the scientific panel for scientific merit as the second step.

"During his report Wasden said that a number of the state loan programs required matching funds as a way to 'have a third party validate the management team.'

"Klein emphasized the need for matching funds if CIRM makes large loans. 'There would be a lot of other people's money at stake in the big ones,' he said.

"Goldberg asked if the length of the loans should be tied to the life span of the stem cell agency. Klein responded that at some point he expects the Legislature will 'look at CIRM and see if it performed and whether more money should be put in.'

"David J. Earp, Geron Corp.'s chief patent counsel and senior vice president, told the task force that a requirement for co-funding would serve as 'a sanity check.' Asked what he thought a Phase 2 clinical trial would cost for a stem cell therapy, he said, 'Many tens of millions, certainly larger than $5 to $10 million' that had been cited earlier in the meeting.

"Roth told the task force that he and Klein had been meeting with state legislators in an attempt to keep them apprised of the plan. He said he hoped to have a loan program policy ready to discuss at the stem cell Oversight Committee's June meeting."

Our comment: Keeping California lawmakers well-informed on this program is well-advised, particularly if Klein plans to ask them for continued funding for CIRM in a few years.

Strong Interest in $41 Million CIRM Faculty Award Program

The California stem cell agency's effort to boost "young" researchers with grants of up to $2 million has attracted 55 letters of intent, nearly as many as the first round of program last year.

The faculty awards are designed to develop relatively young and promising researchers and particularly physician-scientists at a critical stage in their careers – providing them with salary and research funding for three to five years.

The $41 million grant program comes on top of a similar program last year that drew 59 letters of intent. Ultimately, the agency gave away only $54 million to 22 researchers out of the $85 million allotted in 2007. The grants were curtailed because five CIRM directors violated the agency's conflict-of-interest policies by writing letters on behalf of applicants from their institutions.

CIRM said the letters resulted from an "innocent misunderstanding." CIRM disqualified the 10 applications involved. The directors involved suffered no CIRM penalty, although some reportedly took steps to ease the economic or professional pain of applicants who were affected.

In December, CIRM directors ordered up a second round of faculty awards in order to give another chance to applicants disqualified last year because of their deans' conflict violations.

The names of the institutions and researchers submitting letters of intent this month were not disclosed by CIRM, which keeps them secret. Only the winning applicants names are released and then only after they are approved for funding.

In response to a query, Don Gibbons, chief communications officer for CIRM, released the number of intent letters and said 31 institutions were represented. He did not provide a breakdown for numbers from academic institutions and nonprofit research organizations.

CIRM has directed applicants in the second round not to disclose whether they competed in the first. Disclosing such information in this round could mean disqualification of the applicant.

Grant reviewers, however, are not likely to have too much trouble identifying applicants who are making their second run – unless their latest applications are totally different than the first or the reviewers' memories are faulty.

Fourteen grants are expected to be approved this summer following a closed-door review of the applications by the same CIRM panel that reviewed the first round of the grants. Scientists on that panel do not have to publicly disclose their financial or professional interests. Instead their disclosures are made privately to CIRM.

The application deadline is April 3, although no one can apply unless a letter of intent has already been sent.

California's Huge Lab Construction Program Set for Public Airing

The schedule for the next step in California's $758 million(including matching funds) stem cell lab grant construction program went up today on the CIRM web site and offers a rare opportunity for the public to comment on grant applications prior to final action.

Applying for the state cash are virtually all the major players in stem cell research in California. The names of the 12 were disclosed in December in an unusual move by the agency that was aimed at helping them to raise the matching funds needed to win the CIRM cash. Over the past three years, nearly all applicants for California stem cell research funds have been shrouded in secrecy until after the grants are approved, preventing the public from making any sort of meaningful comment.

The construction grant programs are exceptions, offering public sessions during review by the facilities group.

However, CIRM meetings are in fact rarely attended by more than a handful of persons, especially those from the general public. Applicants will be out in force, however, if only to be available to answer questions and possibly plan strategy in case questions arise that might hobble final action.

The agenda for the Facilities Working Group covers two days – April 4 and 5 – at the Westin San Francisco Airport Hotel in Millbrae. The Friday session is scheduled to begin at 2:30 p.m. and run to 9 p.m. The Saturday session runs 9 a.m. to 3 p.m.

Final approval by CIRM directors is slated for early May.

Corrections

Based on incorrect information from the Chico Enterprise Record, we reported incorrectly on March 4 that Janet Wright was leaving California last month to take a new job and would no longer be serving on the Oversight Committee of the California stem cell agency. CIRM reports that Wright is leaving to take a new job, but cannot say when. Wright did not respond to emails requesting the correct information.

We also reported incorrectly on Feb. 29 that the bond anticipation notes purchased by the Gordon Moore Foundation and Taylor Crandall were not repaid by CIRM. That information, provided by the state treasurer's office, is incorrect. The notes have been repaid.

Our policy is to correct mistakes as promptly as possible, both separately in a correction and in the original item, including a note that the item was corrected. If you see information that you believe is factually incorrect, please send an email to djensen@californiastemcellreport.com.

The ICOC Plays The Crest

The board of directors of the California stem cell agency met earlier this week in a restored movie house (see photo) in downtown Sacramento. The location was a bit unusual for a CIRM meeting, but the affair triggered the imaginations of some board members. Here is a report from John M. Simpson of the Foundation for Taxpaper and Consumer Rights, who attended the meeting.

ICOC members took note of their unusual surroundings as they took to the stage of the Crest Theater in Sacramento this week, a venue that has seen performances ranging from Cab Calloway to Kurt Cobain.

These days the Crest often shows classic movies like "Gone With The Wind." Calling the meeting to order, Chairman Robert Klein noted the entertainment industry backgrounds of board members Sherry Lansing and Leeza Gibbons and declared the Crest "an adequate stage for our tremendous talent."

Lansing objected that she was only a "bit player."

Introducing new President Alan Trounson, Klein suggested that the Crest's marquee should have billed the meeting as "Starring Dr. Alan Trounson, straight from Australia."

Trounson began his president's report by confessing to snapping a few photos of the Crest "because they won't believe me at home."

In fact, to the bemusement of several passersby who didn't seem to know what to make of it, the huge letters on the marquee spelled out:

Wed March 12
CA Institute For Regenerative Medicine
8:15 AM Spotlight on Deafness
9:00 AM ICOC Meeting
Open to The Public

For the most part the unusual message didn't draw a larger or different crowd than usual when the meeting is held in a hotel or academic setting.

Not usual for an ICOC meeting, however, Assemblyman Martin Garrick, R-Carlsbad, and Sen. Mark Weyland, R-Escondido, showed up to speak for adoption of a regulation that would define a "California supplier" that was presented by John Valencia, attorney for Invitrogen. You can be sure that had nothing to do with the marquee.

The ICOC ended up at the Crest this way: The date and general location of the meeting were set before a venue was booked. It turned out when Klein's aide Jena Pryne tried to nail down a site, virtually everything in Sacramento was booked for conventions and activities relating to the legislative session. She sought advice from Scott Tocher, interim associate legal counsel to the vice chair, who grew up in Sacramento.

Tocher, who remembered the Crest hosting graduations and citizenship ceremonies, thought it could work. Pryne booked it and the ICOC's name was, if not up in lights, on the marquee.

Appropriately during the board's closed executive session when members decided to hire Dr. Marie Csete as Chief Scientific Officer at a salary of $310,000, Melissa King, CIRM executive director, passed out free popcorn to those waiting for the board to return and make the action official in public.

The seats were the most comfortable I've been in at any ICOC meeting. Let's play the Crest again next year.

Fresh Comment

"Anonymous" has a fairly detailed comment on the "warf" item below about the "true overcome" of the latest action in the stem cell patent dispute.

WARF Scores in Patent Struggle

WARF has chalked up a victory in the latest round in the stem cell patent wars, but challengers are vowing to continue the legal battle.

Here is a link to the story on Science Now. John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, also sent along this response to the anonymous comment on the role of his organization.

"Anonymous is wrong. So far the challenge has narrowed the patent claims,
but more importantly prompted a substantial change in WARF's behavior. In January 2007 facing the patent re-examinations and surrounding publicity WARF substantially eased licensing requirements and became much more cooperative with the stem research community. They also 'clarified' that they would not seek a license from CIRM although the then general counsel, Elizabeth Donnelly, told The Stem Cell meeting sponsored by Steve Burrill & Co the previous spring that was the intention."

Legal Action in Multimillion Dollar CIRM HQ Promises

The California stem cell agency is embroiled in a $425,000 flap with its landlord as part of the City of San Francisco's deal to pick up millions of dollars in agency's expenses as part of the city's successful bid to land the CIRM headquarters.

Reporter Sabin Russell of the San Francisco Chronicle today wrote that the agency's directors have authorized legal action against Stockbridge Capital Partners, owner of the building housing CIRM.

Russell wrote:

"At issue is approximately $425,000 in annual operating costs for items as diverse as electricity, janitors, parking privileges and fees similar to those paid by condominium owners.

"Part of the deal, according to stem cell board Chairman Robert Klein, was that the state-funded institute would not have to pay those costs. 'A couple of months ago, we had a meeting with Stockbridge, and at that time they assured us they would pay all expenses. They have not lived up to the representations made to the mayor or ourselves,' he said.

"Adam Alberti, spokesman for Stockbridge, said Wednesday that the company remains committed to keeping the institute headquarters in San Francisco. 'We are in year two of a 10-year rent-free deal,' he said. 'We will continue to meet that obligation.'

"Alberti said that so far the firm also has covered about $1 million of operating expenses - costs that were to be covered by 'private fundraisers and other parties' who have yet to come through with the money. 'We are working with the city and other folks involved to find ways to cover this,' he said. 'Ultimately, the guarantor of the deal is Stockbridge.'"

The dispute raises questions about whether other promises made in San Francisco's multimilllion dollar bid are being fulfilled. As far as we know, no public accounting has ever been made.

CIRM Salary Ranges Top Those at NIH

The Sacramento Bee today reported that the salary pay ranges approved by directors of the California stem cell agency amount to a 23 percent hike for top executive positions and easily surpass those at the much larger National Institutes of Health.

Reporter Jim Downing wrote that the new pay ranges provide for a possible $508,750 top salary for the positions of chairman and president, up from $412,500. A top range of $332,000 was approved for executives at the next level, up from $270,000, with CIRM's top two attorneys at $277,500, up from $225,000.

The action, taken with little debate by the Oversight Committee does not immediately increase the salary of any employee, however, just the ranges of possible pay.

Downing also reported,

"Directors of federal medical research agencies such as the National Institutes of Health make considerably lower base salaries, according to NIH spokesman Don Ralbovsky, who said he could not immediately provide exact salary information."

Fresh Comment

"Anonymous" has posted a comment on "salaries" item below concerning Wednesday's WARF patent decision. We will have an item on the patent matter later today.

CIRM Salaries Approved Along with Action on 'California Suppliers'

Here some of the highlights from today's meeting of the directors of the California stem cell agency, in addition to the appointment of Marie Csete as chief scientific officer.

They were provided by John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, at our request. Simpson attended the session. Here is what he wrote.

"Despite (CIRM General Counsel) Tamar Pachter's recommendation, the board approved the proposed definition of a California supplier after John Valencia, an attorney for Invitrogen, made it clear that this would merely start a 45-day public comment process and the proposed regulation would be subject to change after that period taking comment into account. I was among those speaking in favor of passage.

"After lengthy discussion they adopted the Proposed Tools and Technical RFA with one substantial modification: Companies will be allowed to submit four applications like universities and research institutes. The staff recommendation would have limited companies to two applications.

"The Board also approved revised salary ranges as submitted. Top ranges were trimmed from what had been proposed at governance meeting.

"During public comment I noted that neither (CIRM Chairman Robert) Klein nor (Vice Chairman Ed) Penhoet take a salary and asked if approval of ranges for those positions indicates they intend to take a salary. He responded that after five years not doing so he may have to assess the situation and that it would be up to the board but that he 'knows of no such plans at this time.'"

We are querying Don Gibbons, chief communications officer for CIRM, specifically what salary ranges were approved.

Simpson also reported that there was little discussion of the biotech loan program and that a policy may be presented in June.

Emory Scientist Named to Key Post at California Stem Cell Agency

Emory University scientist Marie Csete today was named as the new chief scientific officer at California's $3 billion stem cell agency.

Csete (see photo) is only the second person to fill the key position, which has been vacant since last fall. Arlene Chiu resigned at that time after filling the position since 2005.

Alan O. Trounson, president of CIRM, said in a news release:

"Her training and experience as both a basic researcher and clinician is critical to our strategy of advancing discoveries into the translational pipeline. In addition, her expertise in the field of transplantation and understanding of immunology issues will be highly relevant to advancing new discoveries in the stem cell field toward therapies and cures."

CIRM also quoted Harvard's Stuart H. Orkin, who is also chair of the group at CIRM that performs scientific reviews of grants, as saying,

"I am very pleased that Dr. Marie Csete will assume the Chief Scientific Officer position at CIRM. She was an active and insightful member of the Scientific Working Group. Her leadership will ensure that CIRM meets its potential for the state of California."

CIRM's news release, which is not yet available on its website, also said,

"Prior to joining the CIRM, Dr. Csete was John E. Steinhaus Professor of Anesthesiology at Emory University, with adjunct appointment in Cell Biology, and program faculty appointments in Biochemistry, Cell and Developmental Biology, Neurosciences, and the Emory/Georgia Tech Biomedical Engineering Program. She was also the director of Liver Transplant Anesthesiology at the Emory University Hospital in Atlanta and director of the Emory/Georgia Tech Human Embryonic Stem Cell Core, and co-Director of the Emory MD/PhD Program.

"Dr. Csete graduated from Princeton University with a degree in Music and received her M.D. from Columbia University’s College of Physicians & Surgeons. After residency and fellowship training at the Massachusetts General Hospital and St. Elizabeth’s Hospital in Boston, Massachusetts, she was Assistant Professor in Residence at the University of California, San Francisco where she directed the liver transplant anesthesiology team."

Brief comments from Csete appeared on this website last October in defense of secrecy of the names of applicants for stem cell lab construction grants. The agency refused to release the names at that time, but in December decided that they should be public so that they could raise matching funds for their grant applications.

She will earn $310,000 a year at CIRM and will receive $20,000 in moving expenses.

Biopolitical Times: CIRM Eyeing Ways to Pay Women for Eggs

The Biopolitical Times is reporting that CIRM President Alan Trounson dropped a "bombshell" recently, declaring that "he wanted to open the door to paying women for their eggs for CIRM-funded research, a clear end-run around California law."


On Monday, Susan Fogel of Pro-Choice Alliance for Responsible Research, who is of the few who follow California stem cell matters closely, reported on the Feb. 28 meeting of the CIRM Standards Working Group. She said,

"Alan Trounson stepped up to the podium, and certainly surprised nearly everyone in the room with a proposal that the SWG support paying women for their eggs by offering them compensation in the way of discounts on their fertility treatments - 'egg-sharing' - if they agree to give up some of their eggs before they have achieved their own reproductive success. Never mind that Proposition 71 itself prohibits compensation for egg providers in CIRM funded research; the CIRM regulations, adopted after a deliberative and public process, prohibit compensation; California statute passed and signed into law in 2006 (SB 1260) prohibits compensation in non-CIRM funded research, and the National Academies guidelines prohibit compensation. The only permissible payment is for reimbursement of incurred expenses. Trounson made several assertions: (1) researchers cannot use spare embryos (this is incorrect - there is no California law that prevents people from donating embryos to research), (2) it is highly unlikely that women would give extra eggs when they go through fertility treatments (no evidence here), and (3) it is extremely difficult in California to get human eggs (others pointed out that there is no such evidence; however, SWG member Kevin Eggan stated that he hasn't been able to recruit egg donors in Massachusetts)."

We asked CIRM for comment on Fogel's article. Don Gibbons, chief communications officer, said, "her piece is largely accurate, just make clear this is about DISCUSSING the topic, NOT PLANS TO CHANGE POLICY.(his capitals)" Following that response, we asked him specifically about whether CIRM believed the statement that Trounson "wanted to open the door" to compensation was "largely accurate." Gibbons responded,

"No, he wanted to open a discussion on the options."

Fogel's item also said,

"It soon became clear that at least one person in the room knew this was coming. (CIRM Chairman Robert) Klein and Trounson had clearly been conspiring on turning California law on its head. Klein jumped in to make the argument that since it is permissible to reimburse women for medical care they might need for health consequences of providing eggs, he had a legal opinion from James Harrison(outside counsel to CIRM), of the Remcho firm, with a twisted definition of 'medical' to include IVF treatment, and arguing that paying women for a portion of their IVF would be 'reimbursement' not 'compensation.'"

The Biopolitical Times article is likely to raise a something of a stir, perhaps as early as Wednesday when the Oversight Committee meets in Sacramento and makes the rounds in the Capitol to see legislators. The piece prompted an email to us from one knowledgeable and longtime CIRM observer, who said,

"Once again, the advice of Klein leads another soul over the precipice."

The reference was apparently to advice that Klein, who is an attorney and claims credit for writing Prop. 71, gave to a CIRM director last year. He told the man to lobby CIRM staff on behalf of a grant to his own institution, a move that currently is under investigation by state officials as a violation of state conflict-of-interest rules.

As for the current CIRM rules on donor expenses, they were carefully crafted following months of hearings and approved in 2006 with virtually no dissent by CIRM directors.

Obviously we have two different perceptions of what occurred at the Feb. 28 meeting, which was not covered by any media. Perhaps it will become clearer when the transcript is posted, which should happen in the next week or so.

,

The Bee Calls for Tougher Legislation on CIRM

On the eve of the Sacramento meeting of directors of the California stem cell agency, The Sacramento Bee today editorialized for major changes in the way the agency operates.

The Bee said "questions about its internal conflicts and finances remain as urgent as ever."

The Bee continued:

"Given that the state faces a multibillion-dollar budget deficit – and that $3 billion in bonds could be put to better use than lavish executive pay salaries – one might think that lawmakers would be ready for a full revamp of the stem cell agency."

The Bee said recently introduced legislation by Sen. Sheila Kuehl, D-Santa Monica and chair of the Senate Health Committee, "doesn't go far enough in ensuring an equitable outcome."

The Bee said,

"What's needed is clear legal authority for future attorneys general to regulate the pricing of stem cell therapies when companies are making excessive profits after benefitting from the state's investment.

"Kuehl's bill doesn't do this. Neither would it eliminate the potential conflicts, and excessive number of board members, that have long kept the institute's oversight committee from operating effectively and credibly. All her bill would require is a study of the institute's governance by the Little Hoover Commission by 2009. Too little, too late.

"Although SB 1565 is better than nothing, it is a far cry from what California taxpayers and patients deserve for the $3 billion – $6 billion, including interest – they have agreed to invest in this field of science."

Biotech Loan Plan Now Available to Public

The California stem cell agency today posted its draft policy for its biotech loan program, which could total as much as $750 million, a little more than 24 hours before it is scheduled to receive its first public hearing.

The document, which we are still reviewing, can be found here. The proposal will be discussed Tuesday at a 4 p.m. meeting of the Biotech Loan Task Force in Sacramento with remote locations in San Carlos in the San Francisco Bay Area and Pleasanton.

The policy will go to the full CIRM board of directors on Wednesday morning.

We have written repeatedly about CIRM's failure to keep the public informed in a timely fashion about its proposed policies and initiatives. This latest example is one of the most egregious, given the far-reaching nature of the plan. One would think that someone on the board of directors would point out this level of performance is not acceptable in either the public or private sector.

It is a management failure, one that rests with Robert Klein, chairman of CIRM, and Alan Trounson, president of CIRM.

That said, we have to give the agency some credit for posting many of the documents for the Wednesday meeting with something close to sufficient notice. But posting and preparing these documents should be routine tasks. When an organization struggles with routine tasks, it means it does not have time or capability to respond well to exception events or crises.

Part Two of Lab Grant Applications Now Available

The latest versions (part two) of the applications in CIRM's lab grant construction program have now been posted. They can be found here.

The Primrose Path of Stem Cell Research in California

Campaign rhetoric and reality: No, this isn't about this year's presidential election campaign, but about the California stem cell agency, its seductive origins and the sweet promises to voters in 2004.

Those matters have surfaced as part of this week's meeting of the directors of the $3 billion institute, which was born nearly four years ago in what is one of the ultimate political acts – an initiative campaign in which voters thrust aside lawmakers, seize control of the reins of government, write legal code themselves and raise and allocate billions of dollars.

All fueled by campaign promises – in the case of Prop. 71 – that not only will sick people will be cured but California residents, businesses and researchers will receive special treatment.

Well, not exactly, CIRM now says, particularly in the case of California businesses.

The stem cell agency delivered the bad news as the result of a request by Sacramento attorney, John R. Valencia of the firm of Wilke, Fleury, Hoffelt, Gould & Birney, on behalf of an unnamed California-headquartered life sciences corporation. Valencia also represents, among others, the California Healthcare Institute, which, in turn, represents California's biomedical industry. That organization has members on its board of directors who also serve as directors of CIRM.

Valencia made a seemingly simple request of CIRM: define "California supplier." The term is found in Prop. 71, which states:

"The ICOC (CIRM's board of directors) shall establish standards to ensure that grantees purchase goods and services from California suppliers to the extent reasonably possible, in a good faith effort to achieve a goal of more than 50 percent of such purchases from California suppliers."

Unfortunately, the two words in question are not otherwise spelled out in the initiative. And it is clear now that CIRM wants few restrictions on where it goes for outside, private contracting. Valencia, however, argues that CIRM can find virtually everything it needs in California, which is not called the Golden State for nothing.

It is not a trivial matter. In his letter to CIRM, which comes before its directors on Wednesday, Valencia points out that it could ultimately run to $300 million.

Valencia says it is "vitally necessary" to define California supplier. He says the definition is virtually required by Prop. 71 whose overall objective is to advance California economic interests. He wrote:

"Why send hundreds of millions of California taxpayer dollars outside the state, where it does nothing to create California jobs, economic growth or tax revenue?"

Tamar Pachter, general counsel to CIRM, has an answer, which boils down to this: CIRM is not legally required to give preference to California suppliers beyond what is stated in Prop. 71 as well as existing law. It's a "goal" not a "mandate," she writes in response to Valencia's request. Weasel words in Prop. 71 -- she explains, although that is not her terminology -- provide plenty of wiggle room. Those terms include "reasonably possible," "good faith effort" and "goal."

We can chalk up that verbiage to CIRM Chairman Robert Klein, who led the initiative campaign and claims responsibility for writing Prop. 71, although other attorneys were involved as well.

More than one issue underlies this matter. One is the question of campaign promises. Some say that CIRM should be measured against the promises of the campaign, however overstated they may have been. Others say that no one should be so naïve as to believe that the sweet talk of a campaign has any connection to the ultimate reality.

Another matter involves the practical realities of running an enterprise involving stem cell research, clearly a global endeavor. Parochial requirements concerning California preferences make CIRM's task more difficult – not easier.

Nonetheless, the stem cell institute must recognize its obligation to California voters in clear and unmistakable ways – perhaps not necessarily in this particular case. But it had its way with voters in 2004. Failing to be responsive could have unfortunate consequences. Hell hath no fury like a voter scorned.

Dissecting the Legislative Strategy Behind the Latest California Stem Cell Bill

Think motherhood when you think about new state legislation aimed at California's $3 billion stem cell agency.

That's the strategy on the latest bill that targets the world's largest source of funding for human embryonic stem cell research, all of which comes at the expense of California taxpayers.

Think of those millions of taxpayers as investors. Who can say they should not receive a tidy return on their $6 billion (including interest) commitment? Who can oppose a nonpartisan, thorough-going review of the agency, which has stumbled more than once and which is riddled with built-in conflicts of interest? Especially when that agency lives in a constitutionally protected, ivory-tower world, far from the bloody financial fray now underway beneath the Capitol dome.

While motherhood is not as popular as it once was, these are motherhood questions for lawmakers and hard to oppose.

The current political climate may now be as receptive for passage of the bill, SB1565, as at any time. Legislative demonstrations of fiscal prudence are the order of the day in the Capitol. Stifling government profligacy is the paramount virtue.

CIRM gave supporters of the legislation more leverage when the agency offered an ill-timed plan to boost the maximum pay ranges of CIRM's top executives by 50 percent, or $200,000 annually in some cases. The CIRM pay plan received a public and negative airing on the same day that a $16 billion state budget deficit was announced. A subcommittee of CIRM directors balked at the executive pay proposal, but it will surface again next Wednesday. Introduction of the CIRM legislation came only a few days after that subcommittee hearing, probably not coincidentally.

The lead author on the CIRM bill is Sen. Sheila Kuehl, D-Santa Monica, who is chair of Senate Health Committee. Republican Sen. George Runner of Antelope Valley, who is part of the GOP leadership, is co-author.

Their position is that CIRM has offered an inadequate return to California investors/taxpayers. Kuehl and Runner instead propose to guarantee in state law that California residents have affordable access to therapies developed with state cash, an issue which affects CIRM's intellectual property rules. The lawmakers also want to mandate a study of CIRM with recommendations for changes. Kuehl said that one reason for her latest legislation involves breaches of the agency's conflict-of-interest policy by a number of its directors.

The bill needs 70 percent approval of both houses of the Legislature –- a super, supermajority requirement created by Prop. 71. The unique and unprecedented requirement is intended to protect the agency, but lawmakers may now regard it as a challenge to their authority.

CIRM has opposed similar legislation in the past, but it has not taken an official position on SB1565, which is the embodiment of simplicity in some ways. It could be easily severed to put the requirement for a study on CIRM operations in a separate measure, which could help its chances.

CIRM is likely to oppose the study, however, because it could generate public hearings and open the door to greater changes in CIRM procedures. At the very least, the hearings could lead to critical news coverage and possibly threaten CIRM's credibility and clout.

Next Wednesday some CIRM directors and executives will be visiting with lawmakers following the agency's Oversight Committee meeting. Kuehl's legislation is likely to come up during those sessions along with the pay proposal. CIRM supporters should be prepared with some good answers.

Background Documents Now Available for CIRM Meeting, More to Come

The California stem cell agency has begun posting background information for its Oversight Committee meeting next Wednesday in Sacramento. Agenda topics with background documents include: a proposal for a $20 million "tools and technology" program, policies for administering lab grants, bios on new scientific grant reviewers, a plan to delegate authority to the president on both relocation expenses and requests for regulations as well as the previously posted documents on the 50 percent pay range hike.

Still to be posted is information on the IP item, amendments to the interim lab grant administration policy and the draft biotech loan policy, which is also not on the March 11 agenda of the biotech loan task force.

All the documents can be found via this location.

Wright's Departure From CIRM Illustrates Agency's Voting Practices

The 29-member board of directors for the California stem cell agency has a new vacancy, caused by the impending impending departure of Janet Wright, a Chico cardiologist, for a new job in Washington, D.C.

Ordinarily, the loss of one of 29 members would be insignificant. But Wright's departure affects actions involving CIRM's mammoth $758 million stem cell lab construction program.

It also illustrates what some may consider the board's bizarre voting structure and its built-in conflicts of interest.

The impact of Wright's departure could be felt as early as next week's meeting of the board, which is known as the Oversight Committee or ICOC. One of the matters on the agenda involves the lab grant program. Only board members whose institutions are not affected can vote on the matter. Those affected cannot even take part in the discussion.

Earlier this year we wrote about what amounts to a floating ICOC quorum with a "quartet majority," and how it can reduce many of the board members to silent sphinxes on some issues. To recap how it works, Prop. 71 uses the number of ICOC members eligible to vote as the basis for a quorum, rather than the total number of persons on the ICOC. Prop. 71 also states that a quorum is 65 percent of those eligible to vote. Action can be taken by a majority of a quorum. So when 10 persons are eligible to vote, the quorum is seven . A majority would be only four.

In January, only 10 members of the board, including Wright, were allowed legally to participate in the discussion of lab grant matters. She filled a patient advocate position on the board and rarely, if ever, was disqualified from participating or voting. Six of the 10 persons in the lab grant case are patient advocates. The others mostly represent industry, which sometimes has strong backing from patient advocates who want to see cures on the market quickly.

In theory, with absences, a quorum on lab grant issues could be as low as three, or so it appears. That would mean only two persons are needed to take action on some far-reaching and important issues. However, the possibility of that actually happening seems remote.

As for Wright's replacement, that is up to state Treasurer Bill Lockyer. According to state law, he must pick a patient advocate to fill the position. Lockyer's spokesman, Tom Dresslar, told the California Stem Cell Report,

"It's our intent to move with due diligence and as expeditiously as possible. Treasurer Lockyer's objective is to find a qualified person with impeccable credentials who demonstrates a strong commitment to helping ensure CIRM provides Californians what they voted for when they passed Prop. 71."

If you are interesting in serving on the board or want to recommend someone, you can write the treasurer at this Internet location.

Wright's new job was first reported in the Chico Enterprise-Record Feb. 26, which said she has become vice president for science and quality with the American College of Cardiology. She had worked in Chico for 23 years.

(An earlier version of this item incorrectly stated that the Wright had left for her new job last month. That information, reported by the Chico Enterprise-Record, was incorrect. As of March 17, CIRM could not say when she would no longer be on the board. Wright did not respond to email queries.)

Kurt Cobain, CIRM and Green Footprints

Next week the directors of the California stem cell agency are meeting in the Crest Theater in Sacramento, an unusual and colorful location for a meeting of a state agency. Normally it is a venue for classic movies, such as a fully restored version of "Gone With The Wind," as well as musical performances. However, hundreds of new citizens have been sworn in there as well, including the mother of the late Sacramento Mayor Joe Serna.

We have just received an additional tidbit about the Crest from Jerry Schroeder, the architect responsible during its restoration and who has a keen eye for truly important historical matters. Here is what he had to say.

"In the basement, in the green room, there are green footprints walking up the wall put there by an unknown-at-the-time musician called Kurt Cobain. He got into a can of paint while waiting to go on stage. The footprints have been preserved as part of the restoration project."

See the item below for specifics about what CIRM is likely to do as it sits above Cobain's footprints.

CIRM's Fifty Percent Pay Range Hikes Back Again

Directors of the California stem cell agency next week will take up once more a proposal to increase the top pay range of the key executives of the agency by 50 percent or as much as $200,000 annually in some cases.

The proposal stalled last month when a subcommittee of the directors balked, citing both the state's budget crisis and what they considered the dubious justification for some of the higher increases.

California is currently facing a $16 billion budget deficit, and the political heat around it is scalding. The pay proposal, however, would have no impact on the state budget because Prop. 71 was crafted to constitutionally protect the CIRM budget from cuts by lawmakers and the governor. Nonetheless, the pay proposal represents to some lawmakers and the public an example of profligate government spending.

One would suspect that the backers of the proposal, CIRM Chairman Robert Klein and President Alan Trounson, would have a plan to ease concerns of skeptical CIRM directors. However, that is not evident from the public documents now available. The March 12 agenda for the directors (the Oversight Committee) contains only a one-sentence reference to the matter. (The meeting location is pictured above. More details on that at the end of this item.)

When they were first proposed, the pay range hikes contained no detailed, written analysis supporting the increase. That analysis is still lacking.

The Sacramento meeting will also take up a draft biotech loan loan policy, which has moved through a series of hearings and is the subject of a $50,000 study to examine its economic underpinnings. The loan proposal could total as much as $750 million, according to Klein, and could be available to both the private sector and nonprofit groups. The biotech loan task force will hold another meeting March 11. The draft policy is not yet available from CIRM.

Also on the agenda for next week are proposed changes to intellectual property regulations and changes in the grant administration policy for the $758 million (including matching funds) lab construction program.

Incidentally, this is the first time that the ICOC has met in a venue where the Cab Calloway once performed. The Sacramento's meeting will be at the Crest Theater(see photo), a venue that hosts both film and live performances. It is located on the K Street mall, virtually in the shadow of the Capitol, and was restored some years ago under the direction of an architect friend, Jerry Schroeder. The March 12 agenda did not indicate whether popcorn would be served.