Advocate Reed Says No Need for Independent Look at CIRM

On Sept. 5, 2008, we carried an item dealing with a proposal for an examination of the California Institute for Regenerative Medicine by a bipartisan state department charged with improving government operations.

We said that corporations pay hundreds of thousands of dollars or more for independent assessments of their operations and that CIRM should welcome the opportunity to have a similar study performed for free. The springboard for our comments was an item written by patient advocate Don Reed on his blog, stemcellbattles.com. Reed has responded to our item. Here is what he sent us.

"Several days ago David Jensen printed a thoughtful article inquiring why I was encouraging people to write to Governor Arnold Schwarzenegger ( State Capitol Building, Sacramento, CA 95814), urging him to veto Senate Bill 1565.
 
"The reason is simple. If people like our stem cell program as it is (I do), they should defend it. The Governor will be deciding in the next few days whether to accept SB 1565, or veto it.  This is the only chance we have of preventing SB 1565 from becoming law.
 
"SB 1565 could completely restructure California’s stem cell research program, as well as removing our state’s official preference for embryonic stem cell research.
 
"The article criticized advocates like myself who are allegedly “blind to blemishes… (and who) regard any evaluation or analysis of the effort as destructive.”
 
"I don't see it that way. As someone who attends and participates in most of the meetings of the stem cell program, I see a constant and vigorous process of adjustment and correction.  The CIRM has had (by my count) four in-depth official audits; the California Court system has examined our (California’s) structure.  Evaluation and analysis is ongoing, and the public is involved in every step of the way. That’s good; it’s democratic; it’s necessary.
 
"What I do object to is throwing out something magnificent after the decision has been made.  California fought for our stem cell program, debated over it, and voted.
 
"Why did we have to use the initiative process?
 
"Practicality!
 
"I fought for three years trying to pass the Roman Reed Spinal Cord Injury Research Act—and California ended up with only $1.5 million a year for that program. It is a good program, spending $12 million, but bringing in more than $50 million dollars in matching grants, new money for the economy—but it is so little, compared to the need.
 
"As a grass roots organizer I helped with Senator Deborah Ortiz’s groundbreaking legislation. She did a terrific job, gaining permission for the (then) controversial new medical procedure. To me, she will always be the Mother of California stem cell research. But those bills came with no money. It took a real fight to get a lousy hundred thousand bucks to run a committee, and no research money whatsoever.
 
"I remember a group of advocates meeting with Senator Barbara Boxer, a true friend of research, and she told us: “What you need is billions of dollars, and we can’t get that for you in Sacramento.” 
 
"So Sacramento couldn’t raise the money to fund the research. Washington dropped the ball for political reasons.
 
"But California came through.
 
"Embryonic stem cell research offers hope for cure not only for my paralyzed son, but also for Sarah Palin’s boy who has Down’s Syndrome, and for millions more who suffer with incurable illness or injury.  
 
"SB 1565 would remove California’s official preference for embryonic stem cell research, which was the reason we passed the program in the first place. Unfortunately the new Republican platform calls a complete ban on embryonic stem cell research, both public and private, criminalizing it completely. SB 1565 is co-authored by Senator George Runner, a long-time opponent of embryonic stem cell research, and if that bill passes, it could provide ammunition to the opponents of the research.
 
"And the program itself? The California structure--with decisions made by patient advocates and experts-- was designed specifically to keep the focus on the quest for cure. No one wanted it to become a self-serving bureaucracy, rambling around in search of reasons to justify its existence, making endless speeches and not actually doing a lot.
 
"We wanted intelligent action, and we got it.
 
"So of course we are going to defend it. Can someone point me to a better program, anywhere in the world?
 
"If so, let me know. In the meantime, I think we should protect what we won.
 
"Anybody that cares about stem cell research should write Governor Schwarzenegger today. (tip: on the outside of the envelope, put VETO S.B. 1565, that helps them."

Biotech Loan Proposal: Questions About Affordable Access

The proposal to create a massive biotech lending program – funded by the state of California – came under additional scrutiny at last month's meeting of the board of directors of the state's stem cell agency.

One director and an outside observer raised questions about the strength of the commitment to provide affordable access to any therapies resulting from the program, which could run $500 million or so. That figure and larger ones have been voiced by CIRM Chairman Robert Klein, who originated the loan plan concept. However, directors have yet to determine actual size of the program.. Klein also in August mentioned loans as large as $30 million but again directors have not yet set loan size ranges.

Those issues could likely come up at Saturday's meeting of the CIRM Finance Subcommittee.

In August, CIRM Director Duane Roth, chairman of the Biotech Loan Task Force, reviewed the program for his fellow directors, According to the transcript, he said the loans will target "funding gaps " where "there's virtually no alternative capital available to invest."

Roth, chairman and CEO of Alliance Pharmaceutical Corp., said,

"These are very, very open terms that no bank or no venture capitalist would offer....But that's part of fulfilling our mission, to fund those things that are very difficult and make it easy."

CIRM Director Jeff Sheehy, a communications director at UC San Francisco, raised questions about the strength of the "covenants" in the biotech proposal to provide affordable access to therapies.

He said,

"These are reasonable things to ask from industry if they're going to get our money."

Other directors, including Vice Chairman Ed Penhoet, assured Sheehy the commitment is genuine.

Penhoet, co-founder of Chiron, said the "covenants are real." He added,

"I certainly don't take what's in front of us here in the loan policy as (something) we're soft on."

John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., also raised a cautionary note, based on CIRM letters to the Legislature concerning a measure (SB1565) aimed at ensuring affordable access. He noted that CIRM has repeatedly referred to the need for "flexibility" in requiring affordable access.

He said,

"The plea for flexibility comes across to me as, well, when push comes to shove, we're going to cave and give in to biotech."

Biotech Loan Information

Here are some links to information related to the CIRM biotech loan proposal.

Transcript of the Aug. 13, 2008, meeting of the CIRM board of directors.

Biotech loan policy document for Aug. 13, 2008, directors meeting.

Biotech terms and policy May 6, 2008, version

PriceWaterhouseCoopers report-(three parts)
Benchmarking analysis
Loan financial model
Loan model scenarios

Transcripts of the Biotech Loan Task Force

Transcript of Finance Subcommittee June 19, 2008, which dealt with size of loans and possible conflicts of interest

Agendas of the Biotech Loan Task Force
The agendas have links to additional documents dealing with the plan.

A Theatrical Trounson Appearance in San Francisco

"A sharp and generous comedy, for our times, on roller skates," it's been called. So what does it have to do with the $3 billion California stem cell agency.

The answer: The author of the play is Kylie Trounson(see photo), daughter of Alan Trounson, who presides over the Golden State's research effort.

The play, "The Man with the September Face," will premiere in the United States at the Boxcar Playhouse in San Francisco for one night Friday at 7 p.m. A reception will follow the staged reading.

One Australian writer said this about the play,

"The decadent but vacuous nature of the Eighties aesthetic is a rich platform for investigating our existential artist, Jesse, languishing in a suburban intellectual and political wasteland. In synch with the Berlin Wall, he finally crumbles. "

Kylie Trounson is a playwright, actor and teaches drama and acting.

If I were a CIRM staffer, I would be sure to attend this event. It would be the politic thing to do.

Biotech Loan Plan Up Again on Saturday

Followers of the biotech loan proposal from the California stem cell agency will have a another chance later this week to make suggestions and hear the latest permutations in the $500 million or so effort.

The CIRM directors' Finance Subcommittee canceled last week's hearing and rescheduled it for this Saturday. The agenda remains the same as we discussed earlier. And there is still no further explanation of the cryptic topics on the agenda.

As we mentioned previously, if you have something at stake in biotech loan program, now is the time to weigh in. It is likely to come up later this month at the directors' meeting, but that is a less propitious venue for making an impact. Teleconference locations are available in Northern and Southern California.

Whale Shark Nursery

The California Stem Cell Report is now being produced from Bahia de Los Angeles, a lovely, large bay in Baja California on the Sea of Cortez. The area is remote. It only gained regular electricity last year. Previously the village of perhaps 800 persons received electrical power from a huge, throbbing diesel generator that was shut off every night at 10. The town then went completely dark. Satellite phone and Internet service came in several years ago as a result of a special Mexican government program to help isolated communities. Cellular service does not exist. Currently the only Internet link – a rather slow one -- is via an Internet cafe, which requires a dinghy ride to shore and a one-mile walk in 100 degree heat.

As for those whale sharks, during this time of year, juvenile whale sharks swim slowly on the surface of the water in the southern part of the bay, feeding on creatures that they filter through their huge mouths. About 25-feet long, they are oblivious to people and boats and have no known natural enemies. As the water cools, the youngsters leave the bay and migrate to parts unknown where they reportedly grow to 50 feet or more.

Doing the Public's Business in Public

Consumer Watchdog's John Simpson usually spends his days tracking events at the California stem cell agency, but recently he attended a meeting of the Interstate Alliance on Stem Cell Research.

That group is even less well known than CIRM, which sometimes worries that its name does not tell the full story of a $3 billion California human embryonic stem cell research effort.(see item below)

The IASCR, as the alliance is known, indirectly grew out of Prop. 71, the ballot measure that created CIRM in 2004. The research effort in California spawned similar ones by other states, raising concerns about scientific and bureaucratic chaos in research standards.

Thinkers at the National Academy of Sciences and elsewhere decided that something must be done to keep everybody on sort of the same track. Otherwise research would be impaired. Thus the IASCR came about.

Earlier this week, Simpson participated in two days of meetings by the IASCR in Baltimore and reports that the meeting seemed to be a success. The group decided to develop a model form for states to use in helping to certify that stem cells have been ethically derived.

Simpson writes on his organization's blog that it was a good decision, one that was debated and decided in public. That is significant since Simpson a couple of years ago was kicked out of a meeting of the group in Irvine, Ca., despite an earlier invitation to attend.

The current openness of the IASCR is healthy, Simpson writes, and adds credibility to the organization and the entire stem cell research effort. We agree.

The CIRM Name Game; USC Goes First

The University of Southern California has become the first California institution to break ground on a stem cell research facility that is partially financed with some of the state's $3 billion in stem cell research funds.

Rattling around in the background is an extremely low profile discussion of naming protocols for structures financed by CIRM, including a comment from one CIRM director that she hates the term CIRM.

In case you missed the USC event, it occurred Sept. 4 with considerable institutional ballyhoo, but also some media coverage. The Los Angeles Times, which rarely writes about CIRM affairs despite being the largest newspaper in the state, recorded the ceremonies along with some television coverage, based on what can be found at the USC web site.

CIRM Chairman Robert Klein and CIRM President Alan Trounson were on hand (see USC photo above with Klein in tan suit and Trounson on far right) to heft two finely polished shovels. But the man of the hour was Eli Broad (the white-haired man next to the woman), whose foundation popped for $30 million for the facility, which will cost a total of $80 million. California taxpayers, via CIRM, added $27 million. USC said the remainder will come from other individuals and foundations.

The 80,000-square-foot structure will be formally called the Eli and Edythe Broad CIRM Center for Regenerative Medicine and Stem Cell Research, but it is impossible to tell right now how it will be referred to on a regular basis by its users.

CIRM has more than a casual interest in the naming of buildings it helps to finance. The stem cell agency requires that institutions secure the agency's approval. Don Gibbons, chief communications officer, told CIRM directors that the USC name will not be official until the directors approve it at their meeting later this month. The naming protocol is also of substantial interest to the institutions that want to recognize individuals or foundations that make hefty contributions, including ones that exceed CIRM funding.

Last month, Gibbons discussed the phrasing used by USC and also language proposed by UC Davis. UCD plans to use "California Institute for Regenerative Medicine" as a subscript on the name of its stem cell research lab.

On a straw vote last month, directors indicated that they favored both methods, but not before a brief discussion of whether CIRM is a "very good brand" or whether the "California Institute for Regenerative Medicine" is better. The question seemed to revolve around whether the public would understand that both names indicated that cash came from the California stem cell agency.

CIRM Director Joan Samuelson said the CIRM abbreviation had bothered her for a long time.She said,

"I hate the brand CIRM...It sounds like sperm."

She said CIRM "means absolutely nothing to the public," which is financing the stem cell effort.

"CIRM just doesn't mean anything," Samuelson said, suggesting it would be "lovely" to name buildings after people who are suffering.

Our take: The public does not know what CIRM is, nor does it know what the California Institute for Regenerative Medicine is. High profile public recognition is not likely to occur short of a huge scandal or an incredible research breakthrough. The difficulty with both expressions is that neither says stem cell research. That is the main reason we initially refer in our items to the California stem cell agency. No confusion there.

Neptune's Follies

The California Stem Cell Report will be dark for a week or so as we begin another multi-day ocean passage in the Sea of Cortez. However, rather than sailing/motoring for 78 consecutive hours as we did previously, we will be dropping the hook overnight at remote anchorages along the eastern shore of Baja California. We have been requested by one reader to post a photo of our current location, which is in the mining town of Santa Rosalia. The image is of the 9-boat marina, which has seen better days. The docks feel like trampolines. Cockroaches play in the marina shower, scampering across your feet. The temperature is 100 degrees, and no air conditioning exists in our sailboat, which is located in the foreground with two black masts. The small outboard boats, also in the foreground, are used by workers at night to fish for squid, which they sell to a processing plant owned by the Moonies of South Korea.

CIRM Announces $60 Million Translational Grant Round

The California stem cell agency this week posted its request for applications for a $60 million grant round dubbed the Early Translational Research Awards.

CIRM is proposing to split $60 million among 10 recipients, who are required to make a three-year effort.

CIRM said the awards, which are open to both business and nonprofits, "are designed to move promising basic research in stem cell science toward the clinic."

It said,

"These awards will support two categories of projects including research that:  1) results in a development candidate that meets an unmet medical need; or 2) addresses a significant bottleneck in the translation of stem cell biology that hinders advancement of effective, novel cell therapies to the clinic."

Letters of intent are required by Oct. 15, applications Nov. 20. Funding may come in the summer of 2009.

Fresh Comment

Larry Ebert has posted a comment on the "Outside Look" item.

A Partial Case for a Deep Outside Look at CIRM

California patient advocate Don Reed has embarked on a letter-writing campaign to have the governor of the state veto legislation aimed at ensuring affordable access to taxpayer-financed stem cell therapies.

Of course, Reed, a longtime and effective advocate for stem cell research, does not see the legislation that way. In an appeal on his blog to the patient advocate community, he warns that SB1565 "intends to restructure" the board of directors of the $3 billion California stem cell research effort. With all due respect to Reed, he has overstated the case in a way that does not necessarily well-serve the best interests of the California Institute for Regenerative Medicine.

His assertion is based on the measure's request for a study of CIRM by the state's bipartisan Little Hoover Commission. Even if the commission performs the study and recommends structural changes, their enactment is remote. They would have surmount a huge barrier, including possible alterations in the state Constitution. That would require a two-thirds vote in both house of the legislature and a vote of the people.

Reed's latest outpouring against the legislation embodies in some ways the deep-seated concerns among some stem cell advocates that somehow CIRM could be thwarted. Many supporters of the state research effort are wary of any public scrutiny of the agency. They are blind to blemishes. They regard any evaluation or analysis of the effort as destructive. The true believers also sometimes seem to be bent on funding hESC research regardless of whether the state of California benefits significantly from the expenditure of $6 billion in public funds, including interest.

Prop. 71 created the California Institute for Regenerative Medicine. The ballot measure was not hammered out in a public process. It was written behind closed doors with no public input. It was put before the people because someone ponied up $1 million-plus to gather the necessary signatures to place it on the ballot. The initiative placed representatives of the beneficiaries of the $3 billion in grants in control of the rules for giving away the money, a built-in conflict-of-interest that naturally raises concerns. Prop. 71 also created difficulties that have repeatedly hampered CIRM's operations, including an unusual quorum arrangement that forced directors last month to fill out their panel by picking a member from the audience. All of which is legal under Prop. 71. And then there is the dual executive arrangement that helped to create unhealthy management tension early on.

All public agencies need and deserve outside scrutiny. It is one of the basic principles of American government and is embodied in the concept of checks and balances amid the three branches of government. CIRM operates largely without those checks. For all practical purposes, it is free from fiddling by the executive or legislative branches of California government.

CIRM is an extraordinary experiment, unprecedented in California history. Some believe it could serve as a model for successfully tackling other difficult social problems. It is important that it be successful, fulfilling its mission efficiently and in a manner that recognizes its first responsibility is to the public – not the scientific community, not patient advocates and not industry. They are all exceedingly important constituencies, but CIRM is first a public endeavor. If CIRM is perceived to be under the control of those groups, its credibility will be damaged. Public trust can be mercurial. It can easily vanish overnight, and the whole field of hESC research can become besmirched.

Corporations regularly pay hundreds of thousands of dollars – if not millions – to outside consultants to analyze and critique their operations as they strive to remain efficient and competitive. The Little Hoover Commission will basically do the same job for free for the California Institute for Regenerative Medicine. CIRM should welcome the commission and use the opportunity to build support for making some of the difficult changes that could make it more successful in its mission.

Big Money Issues Come Up Next Week at CIRM

A key panel of directors of the California stem cell agency next week will tackle three hefty financial topics, ranging from its proposed $500 million biotech loan program to the amount of money available for grants and loans.

No details of what is to be considered are yet available on the CIRM website for the Sept. 12 meeting of the Finance Subcommittee. But here is the text of the three items to be considered: "Consideration of portfolio policies for CIRM Loan Program," "Consideration of business review processes for CIRM Loan Program" and "Informational presentation on CIRM program budget and funds available for research grants and loans."

The meeting will take place at CIRM headquarters in San Francisco with teleconference locations in Menlo Park, La Jolla, Irvine and Berkeley.

If you have any interest in the biotech loan program, this is a meeting that you should attend at any of the locations(addresses on the agenda). Comments and suggestions can be made at the teleconference locations. If you have specific recommendations, send a letter as soon as possible to CIRM, explaining them and their rationale in detail.

The latest discussion of the biotech loan program can be found in the transcript of the August directors meeting.

California Lawmakers Make Stem Cell History

Another first has been scored in the brief history of California's unique and unprecedented, $3 billion stem cell research effort.

For the first time, California lawmakers have passed legislation that would affect the California Institute of Regenerative Medicine, a tiny state agency that functions largely outside of the control of both the governor and the state Legislature. CIRM was deliberately created that way through an initiative measure passed by voters in 2004. No lawmakers or other elected officials had a say in its contents.

The complex proposal, Prop. 71, set an extremely high bar against tinkering in its operations by the legislature. The ballot measure required a 70 percent vote of both houses to pass legislation that would affect CIRM – a super, supermajority vote that does not exist for any other bill. Even the state budget requires only a two-thirds vote. That hurdle has been so difficult to clear that California is now deadlocked in a record-setting, two-month long budget crisis.

Nonetheless, lawmakers last week sent to Gov. Arnold Schwarzenegger a bill – SB1565 – by Sens. Sheila Kuehl(see photo), D-Santa Monica, and George Runner, R-Antelope Valley, designed to ensure affordable access to stem cell therapies developed as a result of state funding. The bill was opposed by CIRM, industry and some patient advocates. They complained about its lack of flexibility, economic impediments and a change that would make it easier to fund research that was not based on human embryonic stem cells.

Kuehl said the bill is needed because Prop. 71 "lacks any provisions" to ensure that poor and uninsured Californians will be able to receive state-funded therapies at "the best available prices." She is joined by a raft of supporters included health access groups, retired persons, nurses and others.

The governor has until Sept. 30 to act on the bill. Otherwise it will go into effect without his signature. He could veto it. An override of the veto would seem remote even though the bill passed overwhelmingly. No negative votes were recorded until the measure hit the Assembly and then only a handful. It finally went to the governor after the Senate on Aug. 29 concurred, 37-1, in Assembly amendments.

Schwarzenegger has been a good friend of the stem cell agency and has garnered considerable favorable publicity touting it as a model for a way to get things done. Our bet is that he will veto the bill, but we could be wrong.

(Editor's note: The governor has pledged to veto any bill that comes his way until the budget crisis is resolved. However, he has breached that promise several times already. But his pledge could be good political cover for a veto if he chooses to use it. That also assumes no budget will be in place by Sept. 30.)

The Hunt for Stem Cell Gold

The California stem cell agency next week will provide tips to scientists and others prospecting for some of the $3 billion in research funding that the state is handing out.

Two days of briefings are planned – one in San Francisco on Sept. 11 and the other in San Diego on Sept. 12.

The sessions are targeted at private businesses but are likely to be useful for academicians as well. CIRM says it will "discuss ways to increase chances of successfully submitting a grant to CIRM." It will also discuss the agency's intellectual property regulations and explain them for private sector attorneys, executives and scientists.

These are must-attend meetings if you want to be serious about securing a CIRM grant.

Fresh Comment

Alice Wexler has posted a comment on the "CIRM Hopes" item.

Hook Down

Well not exactly. The anchor is still in its roller, but we have come to rest in a rickety marina about midway up the Sea of Cortez in a community called Santa Rosalia. The town has some fame as the site of an iron church reportedly designed by Gustave Eiffel of Eiffel Tower fame. It was constructed for an exposition in France in the 1880s and then dismantled and ultimately shipped to Baja California, where a French company was conducting copper mining operations. Some skeptics contend that the church may not have been designed by Eiffel, but those folks dare not show their face here.

We will be posting some fresh stuff on California stem cell matters after we work our way through nearly 150 emails and other related news.

Hoisting Anchor

As many of you know, the California Stem Cell Report is produced from a sailboat that cruises the west coast of Mexico. Sometimes, such as today, we actually get to sail. We are departing Mazatlan for a multi-day passage north into the Sea of Cortez. Until we reach our next port, we will not have any further posts. Look for some fresh stuff in about a week or so. We would like to be more definite, but sailing is a pursuit that depends on many conditions totally out of our control.

Fallout From Disclosure of the CIRM 18

Alan Trounson, president of the California stem cell agency, has sent a letter concerning disclosure of the names of 18 companies who expressed an interest in applying for grants from the $3 billion research program.

Trounson wrote the letter to the companies after Consumer Watchdog revealed the names that CIRM had attempted to keep confidential as part of its pseudo policy of secrecy. Pseudo because CIRM chooses to keep some names secret and reveal others. And many of its public grant review summaries contain enough information that any reasonably well-informed person can determine the identity of the applicant should he or she want to make the effort.

In his letter, Trounson expressed regret about the disclosure and said that CIRM has issued a "reminder" concerning its confidentiality policies.

John M. Simpson, stem cell project director for Consumer Watchdog, published a copy of Trounson's letter on Tuesday. Simpson commented:

"From what I've heard, representatives of companies on the list are talking with each other about why it was only one of the 18 companies, Novocell, received an award. They're comparing notes about the grant review process and how they feel it was biased against for-profit entities.

"There's a good chance they will work together as a group and take their concerns to the stem cell oversight committee, possibly as early as its September meeting.

"See what happens when a little light shines in?"

SB1565: CIRM Hopes Now Rest with Arnold

The California stem cell agency will be looking to Gov. Arnold Schwarzenegger to gallop to its rescue and veto legislation aimed at ensuring affordable access to state-financed stem cell therapies.

The bill cleared the Assembly on Monday, 64-7, and now is only one step away from hitting the governor's desk. It will only take Senate concurrence in Assembly amendments to send the measure, SB1565 by Sens. Sheila Kuehl, D-Santa Monica, and George Runner, R-Antelope Valley, to the governor.

So far the governor has not taken a position on the legislation, although he has been a friend indeed to the stem cell research program. A couple of years ago when CIRM was in financial straits, he loaned it $150 million, which has since been repaid with the state bond funds that finance CIRM's efforts. On more than one occasion, he has cited CIRM as evidence of doing good, both economically and scientifically.

CIRM and industry groups object to Kuehl's bill because it would lock into state law requirements that the agency contends would hamstring it in connection with negotiations with biotech companies. CIRM also objects to a provision that would lower a barrier to the funding of non-embryonic stem cell research.

Reporter Ron Leuty of the San Francisco Business Times wrote about the provision last month, noting that it was inserted at the request of the conservative Runner, who opposes to human embryonic stem cell research.

Leuty quoted Jeff Sheehy, a member of the CIRM board of directors, as saying,

"We may be handing a political victory to people opposed to human embryonic stem cell research that hasn’t been earned and that isn’t supported by the science."

The issue, however, is of little notice in the Capitol, where lawmakers and the governor are embroiled in a nearly two-month stalemate that has become the California budget crisis. The governor has ordered the layoff of 10,000 state employees and seeks to cut the pay of 200,000 state employees to the federal minimum hourly wage of $6.55 until a budget is passed. The spending measure is being blocked by Republicans, who can do so because it requires a two-thirds vote.

One could speculate that the CIRM legislation could get caught in that battle. Schwarzenegger needs some Republican votes for a budget. Perhaps he could generate a couple by signing the legislation, arguing that he is acting to support stem cell research that does not destroy human life.

The possibility may be remote but stranger things have been done under the dome. And lawmakers and the governor are desperate to find a solution to the budget crisis.

Fresh Comment

"Anonymous" has posted a comment on the "CIRM Bans California Stem Cell Report" item.

Consumer Watchdog: Some CIRM Directors Missing Work and Should Resign

Five directors of the $3 billion California stem cell agency have missed 60 percent or more of its board meetings this year, the Consumer Watchdog group reported today, declaring that there is "no excuse for flagrant absenteeism."

John M. Simpson, stem cell project director for the Santa Monica, Ca., group, said directors who cannot attend meetings should resign.

Simpson disclosed the attendance performance in a news release after doing an analysis of meeting records since 2006 of the board of directors, which is known as the ICOC.

Here is key paragraph on this year's attendance, which includes names, affiliation and designated slot occupied on the board.

"The worst attendance records for the five meetings this year, according to ICOC minutes, are: Marsha Chandler, executive vice president and chief operating officer, Salk Institute, an executive from a California Research Institute (20 percent); Jonathan Shestack, founder & vice president, Cure Autism Now, patient advocate mental health (20 percent); Tina S. Nova, president and CEO of Genoptix, executive officer of a commercial life science entity (40 percent) and Marcy Feit, president and CEO Valley Care Health Systems, patient advocate Type II Diabetes, (40 percent)."

Also absent from 100 percent of meetings this year is John Reed of the Burnham Institute, who has recused himself during a state investigation into conflict of interest violations involving Reed's attempt to influence CIRM staff on a grant application.

CIRM has been plagued since its inception by attendance and quorum problems, making it difficult to complete its official business. Part of the problem exists because of Prop. 71 language that requires a two-thirds quorum instead a simple majority of the 29-member board. Simpson said his analysis understates the attendance problem because a member is marked present if he or she attends only part of a session. On occasion, some directors seem to be fleeing for the exits in the waning hours of two-day meetings as they try catch planes, we have observed. Simpson wrote:

"At this month’s ICOC meeting Chairman Bob Klein was urging members to act quickly because the board would lose a quorum in 25 minutes. That’s no way to make substantive decisions affecting a $6 billion (including interest) program."

Simpson said,

"Patients hoping for stem cell cures rightly expect 100 percent commitment by board members.  If they can’t do that, the fair thing for everyone is to step aside."

Here is Simpson's complete attendance tally by member or alternate beginning in 2006:

"Ricardo Azziz — 14 of 14 — 100 percent
"David Baltimore — 10 of 10 — 100 percent
"Robert Birgeneau — 16 of 18 — 89 percent
"Keith L. Black — 2 of 2 — 100 percent
"Floyd Bloom — 6  of 6 — 100 percent
"David Brenner — 11 of 11 — 100 percent
"Susan Bryant — 17 of 18 — 94 percent
"Marsha Chandler — 3 of 7 — 43 percent
"Marcy Feit — 12 of 18 — 67 percent
"Michael Friedman — 15 of 18 — 83 percent
"Leeza Gibbons — 5 of 6 — 83 percent
"Michael Goldberg — 13 of 18 — 72 percent
"Brian E. Henderson — 14 of 15 — 93 percent
"Edward Holmes — 4 of 6 — 67 percent
"David Kessler — 10 of 13 — 77 percent
"Robert Klein — 18 of 18 — 100 percent
"Sherry Lansing — 16 of 18 — 89 percent
"Gerald Levey — 11 of 18 — 61 percent
"Ted Love — 15 of 18 — 83 percent
"Richard Murphy — 5 of 10 — 50 percent
"Tina Nova — 10 of 18 — 56 percent
"Ed Penhoet — 16 of 18 — 89 percent

"Philip Pizzo — 17 of 18 --- 94 percent
"Claire Pomeroy — 17 of 18 — 94 percent
"Francisco Prieto — 15 of 18 — 83 percent
"John Reed — 9 of 18 — 50 percent (Recused himself during ethics probe)
"Duane Roth — 16 of 16 — 100 percent
"Joan Samuelson — 12 of 18 — 67 percent
"David Serrano Sewell — 15 of 18 — 83 percent
"Jeff Sheehy — 15 of 18 — 83 percent
"Jonathan Shestack — 5 of 18 — 28 percent
"Oswald Steward — 16 of 18 — 89 percent
"Leon Thal — 6 of 6 — 100 percent
"Janet Wright — 15 of 15 — 100 percent."

CIRM's Secret 18 Disclosed

The Consumer Watchdog group today pulled away a bit of the veil of pseudo-secrecy that surrounds much of the grant process at California's $3 billion stem cell agency.

CIRM – most of the time – refuses to disclose the names of enterprises or individuals seeking its taxpayer-financed largess, unless they have actually won some CIRM cash. However, the agency chooses to identify applicants when it is convenient for CIRM purposes, as was the case in the mammoth lab grant program earlier this year.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., has long contended that good government practices demand the release of the names of those who seek funding from the state of California.

Today on his blog, he disclosed the names of 18 companies that were looking for grants from CIRM. Only one, Novocell, eventually received a grant, despite oft-expressed desires by some CIRM directors that California companies should receive the benefit of state financing.

Simpson noted that some rejected business applicants have complained about CIRM's review process, contending that it "is skewed towards academic science." Some CIRM directors have also questioned the approach of its scientific reviewers, saying that they may overlook worthwhile efforts that are heavily focused on bringing cures into the hospital. Simpson suggested that the companies he identified might want to get together and talk.

Simpson said the names were drawn from a document "used for internal CIRM vetting processes" involving letters of intent, which are required in order to apply for a grant. Simpson wrote:

"Here's the list of firms which filed an LOI (letters of intent) to apply for the Disease Team Planning Grant:  Advanced Cell Technology, Alameda; BioCardia Inc., South San Francisco; DNAmicroarray Inc., San Diego; Genomics Institue of Novartis Research Foundation, San Diego; International Stem Cell Corp., Oceanside, Novocell, San Diego; Panorama Research Inc., Mountain View; RegeneMed Inc., San Diego; StemCyte Inc., Covina; and Stemedica Cell Technologies, San Diego.

"Here are the companies that filed an LOI to apply for New Cell Lines Grant:  Advanced Cell Technology, Alameda; BioTime, Inc., Emeryville; California Institute of Molecular Medicine, Ventura; Cascade Life Sciences Inc, San Diego; DNAmicroarray Inc., San Diego; Gene Security Network, Portola Valley; International Stem Cell Corp., Oceanside, Raven Biotechnologies Inc., South San Francisco; RegeneMed Inc., San Diego; Supercentenarian Research Foundation, Inglewood; VistaGen Therapeutics Inc., South San Francisco and WaferGen Biosystems, Fremont."

A 'Booster Rocket' For Research in the 'Big Tomato'

The headline talks about the "dark side" of stem cells, but the piece was a bit of good news for the University of California, Davis, and particularly one man there who just won $2.2 million from the California stem cell agency.

Reporter Carrie Peyton Dahlberg of The Sacramento Bee reported this week about Paul Knoepfler(pictured), a scientist who recently received a faculty award grant from CIRM that he calls a "booster rocket" that will nearly double the budget of his lab.

Dahlberg wrote:

"His target is a gene that causes tumors – and that can transform adult skin cells into versatile stem cells similar to those in embryos."

She said his hope is to make potential stem cell therapies safer. Knoepfler was quoted as saying,

"I'm very optimistic. I don't think the hurdles we're facing are insurmountable."

Dalhberg also quoted Meri Firpo of the University of Minnesota and Joseph Wu of Stanford, commenting favorable on Knoepfler's work.

The Bee piece triggered one reader remark on its website that expressed appreciation for an objective report. The anonymous commentator said it was one of the few articles that have addressed the cancer risk involved in stem cell therapies.

UC Davis has received $38 million from CIRM during the last three years. The dean of its medical school, Claire Pomeroy, is listed as one of the 100 most powerful persons in Sacramento (along with Gov. Schwarzenegger) by Sacramento magazine. Pomeroy is also one of the 29 directors of the state stem cell agency.

Interestingly, she is not quoted either in The Bee article or the press release from UC Davis on Knoepfler. We assume that is the result of her own choice. Probably a good position to take considering the conflict of interest issues surrounding all the many academic and research executives who sit on the CIRM board and whose employers have benefited to the tune of hundreds of millions of dollars handed out by CIRM.

(Editor's note: For those of you unfamiliar with California geography, Davis is just west of Sacramento, where the UC Davis medical school is actually located. Sacramento is sometimes known as the Big Tomato because of the vast amounts of tomatoes that are grown in the area. In years past, the Sacramento River would run red in the summer from tomato waste from processing plants.)

Stemcellbattles.com Is Offline; Webmaster Hospitalized

We received the following from patient advocate Don Reed of Hayward, Ca.

"Karen Miner’s and my weblog, www.stemcellbattles.com, is down.

"Webmaster Karen(pictured) is in hospital, recovering from bladder augmentation surgery. The operation was done in hopes of freeing her from many problems of a personal nature, related to her spinal cord injury of fourteen years.

"We are in hopes she will recover fully, but for the foreseeable future, our small column, www.stemcellbattles.com, will not go forward. Karen was the webmaster; now her health will not permit her to carry on this unpaid chore.

"Selfishly, I am devastated.

"Not only did Karen’s webmastery give me a voice, but she and I have worked closely together for more than ten years. She is a part of everything I have done in research advocacy. Co-chair of Californians for Cures, Karen worked hard on the Roman Reed Spinal Cord Injury Research Act, Senator Deborah Ortiz’s stem cell laws, Bob Klein’s magnificent and unparalleled Proposition 71, and the four years continual defense of it afterward, in the unending attacks the California Institute for Regenerative Medicine has endured; always, Karen was there.

"Paralyzed in body but never in spirit, Karen Miner is a constant source of inspiration to me and all who have the blessing of knowing her.

"Anyone wishing to send Karen a get-well-soon email may send it me at: diverdonreed@pacbell.net. I will print them out and take them to her in the hospital.

"Don’t send anything electronically complicated or fancy, no e-cards, please. I don’t know how to work that stuff. Thanks.

"Don C. Reed
"Co-chair, Californians for Cures"

Changes in the California Stem Cell Report

We have made a few changes on this page that we hope will be useful to readers. For those of you hunting for a site feed (formerly at the very bottom of this web page), it can now be found at the top just to the left. We have moved the "Links" listings to place them above the archives of recent headlines. And we have added a "related content" gizmo at the end of each item. It is a device that will take you automatically to content that its creators think is connected to the subject of the posting on this report. It seems moderately useful although like most automated search engines it turns up irrelevant information as well. Your comments are welcome along with suggestions for additional changes and improvements. You post them by clicking on "comments" or you can send them to me directly: djensen@californiastemcellreport.com.

Fresh Comment

"Jim" has posted a comment on the "blog ban comment" item. Jim's item links to a Vadlo cartoon involving stem cell research and "Science" magazine.

Minimal News Coverage on CIRM Faculty Grants

News coverage of this week's $59 million in grants from the California stem cell agency was light today.

Most of the stories were heavily focused on the local impact of the grants. All appeared to have been written from the CIRM news release as opposed to actual coverage of the directors meeting.

Here is a listing of the stories we turned up.

Sacramento Bee

San Diego Union-Tribune, story by Terri Somers

San Francisco Chronicle, story by David Perlman

San Jose Business Journal

The Associated Press


Here is a listing of the news releases from recipient institutions.

Stanford

UC Irvine

University of California, statewide

UC San Diego

UC San Francisco

UCLA put out a news release that has not surfaced on its stem cell web site. You may be able to find it in the next day or two by going to the UCLA stem cell home home page.

Correction

The correct number of applications for the most recent round of CIRM faculty award grants is 54. The initial CIRM news release on the subject incorrectly the number as 55, which is actually the number of letters of intent. CIRM has corrected the figure in its news release.

The Perils of Prop. 71: CIRM's Search for a Vote

Crafty. Ingenious. Resourceful. And dubious.

All of which describe the events Tuesday night at the meeting of the directors of the California stem cell agency.

As John M. Simpson of Consumer Watchdog of Santa Monica, Ca., put it, the board "essentially drafted a member from the audience" in order to achieve a quorum and to be able to act officially.

Simpson, a regular and longtime observer of CIRM, wrote on his organization's blog,

"Assembling a quorum for the 29-member ICOC is never easy. It's comprised largely of high-powered academic and industry representatives. Moreover, Prop. 71 requires a super-majority. A quorum is 19 members."

Tuesday night, board officials had expected the necessary number but for a variety of reasons, the panel was short.

Simpson continued,

"Then as the board broke for dinner, Jacob E. Levin, Director of Research Development at UC Irvine, who was in the audience, asked Board Executive Director Melissa King what was necessary to serve as an alternate member.

"His boss, board member Dr. Susan Bryant, was one of those who was unable to attend. Under the ICOC's rules, board members from universities and research institutions may appoint alternates if they can't make it. The designate must be an executive of the university or institution.

"The lawyers determined Levin met the requirements, staff caught up with Dr. Bryant by phone, who agreed Levin could be her designate and after dinner the board got down to business. Chairman Bob Klein noted that Levin had been present for all the agenda items that had been discussed."

In years of covering hundreds, perhaps thousands, of California governmental hearings, I have never seen anything quite like this. State lawmakers have occasionally been locked in their legislative chambers until their leadership gets a desired vote. Some lawmakers have been dragooned from their homes to come in for a vote. But nothing quite like the CIRM maneuver on Tuesday.

It is one more example of the pitfalls of Prop. 71 and the perils of writing laws by initiative. The board of directors of CIRM is too large to run efficiently and the quorum requirements too high. Other problems exist as well, including a dual executive situation and built-in conflicts of interest. All of which are virtually impossible to change. That's because Prop. 71 altered the California State Constitution to require a 70 percent vote of the Legislature and the signature of the governor to amend the measure. The super, super-majority vote requirement is unprecedented and unique. It makes CIRM nearly immune from tinkering by lawmakers. But it also prevents changes that would enhance CIRM's mission and fix problems that arise when laws are put together in private by special interests.

$59 Million Bonanza For California Stem Cell Researchers

Twenty-three California scientists hit it big today when the California stem cell agency awarded them grants that totaled as much as $3.2 million each.

In all, directors of the agency gave away $59 million in its second round of Faculty Awards, which are designed to support "young" researchers and develop more talent in the area of human embryonic stem cell research,.

The grants will support the recipients for as long as five years. They come at a time when competition for grants at the federal level is increasingly competitive. In a news release, CIRM Chairman Robert Klein noted that the average age of a researcher receiving his first grant from the National Institutes of Health is 43. Presumably, today's CIRM recipients are younger, but the agency did not specify their average age in its news release, which contains the names of the recipients and their institutions.

Grant reviewers decided 20 grants were unequivocally worth funding. Directors added three more from the second tier of applications, which reviewers say are worth approving if funds are available. Nine more grants remain in that category and will be considered at next month's directors meeting. A final vote will also be held then on the 22 applications not recommended for funding by reviewers. Fifty-four applications were received.

Today's grants come on top of a similar round approved last December. CIRM gave away $54 million then to 22 scientists. However, that round was tainted by conflict of interest violations by some CIRM directors, that caused the agency to reject 10 applications. Directors then decided to go ahead with another round of Faculty Award grants.

Initially CIRM budgeted $41 million for 14 recipients in the latest round of Faculty Awards. CIRM did not explain the rationale for increasing the program in its news release today.

(Editor's note: This item originally contained a sentence noting that CIRM's original press release said there were 55 applications although internally the numbers totalled 54. We queried CIRM about the matter. CIRM said that 55 was a mistake and that only 54 applications were received.)

A Tardy CIRM Posting on New Grant Reconsideration Policies

Only hours before its directors meet today, the California stem cell agency has posted its proposed policy for handling requests for reconsideration of negative recommendations from reviewers on grant applications.

The proposal is an attempt to deal with a problem that has dogged CIRM since last January when an unhappy applicant asked the board to approve its grant despite a negative decision by reviewers.

The board was clearly uncomfortable with the attempt, both in terms of fairness to other applicants and because of the disruption of its normal procedures. The issue surfaced once again in June, leading to more extended public discussion of the appeal or reconsideration process. CIRM allows "appeals" only in the case of conflicts of interest on the part of reviewers. However, reviewers do not have to publicly disclose their economic or professional interests.

The proposed procedure requires the applicant to file a request for reconsideration five days prior to a directors meeting. CIRM's president will then evaluate it and make a finding on whether it has merit. The proposal is unclear on whether it means calendar days or business days.

The reconsideration requests, which CIRM calls "extraordinary petitions," will be posted on the CIRM website. Presumably the president's findings will be as well, although that is not specified.

The policy does not appear to eliminate an applicant's ability to appear publicly before the board to seek reconsideration. However, with a negative decision from reviewers and a "no merit" finding from the president, a disgruntled applicant is not likely to find a receptive audience.

It is unfortunate, to say the least, that this important proposal, which affects hundreds of scientists in California, has been posted at the very last minute. It deals with an issue that affects CIRM's credibility and the credibility of its reviewers. It is virtually impossible for those affected by this plan to comment intelligently to the board in a timely fashion.

Presumably, they could send an email with their comments at this late hour – if they are aware of the details of the proposal. It is our sense, however, that few scientists spend much time scouring the depths of the CIRM website, which does not even put a notice of its directors meetings on its home page.

For a look at previous items on this issue, search on the label "reconsideration" or "grant appeals."

CIRM Should Say No to Mullin Tresspass Bill

Directors of the California stem cell agency this week are scheduled to discuss legislation aimed at dealing somewhat with the recent upsurge in attacks on California researchers, including at least one of its grantees.

On the agenda for either tomorrow or Wednesday is AB2296 by Assemblyman Gene Mullin, D-San Mateo. It has already passed the Assembly and is now in the Senate Public Safety Committee in a heavily amended form.

It now states in part:

"Any person who enters the residential real property of an academic researcher for the purpose of chilling or interfering with the researcher's academic freedom is guilty of trespass, a misdemeanor."

The bill totals about 600 words. The legislative staff analysis is about 5,600 words, reflecting the complexities of the issues involved. (CIRM has linked on its agenda to an earlier analysis.)

While we are adamantly opposed to the domestic terrorism that has targeted researchers in this country, we cannot support the Mullin bill. Nor should CIRM.

The legislation is vague and raises major constitutional issues regarding freedom of speech. Existing law already provides a wide array of tools dealing with trespass, as the legislative analysis points out. The measure is certain to be challenged by such enterprises as the ACLU. Who knows what "chilling" a researcher's academic freedom means? And one wonders exactly why persons engaged in labor union activities are specifically exempted from the terms of the proposed law.

Instead of endorsing the bill, CIRM directors should add $50,000 to the reward in the firebombing case at UC Santa Cruz, which occurred at the home of CIRM-funded research David Feldheim. That would bring the total to $100,000. CIRM should also issue a strong condemnation of the terrorist actions and make it clear that there is no tolerance for those misguided souls who think they protect mice by endangering children and adults.

CIRM To Define PI and Their Grant Time Commitments

If you are interested in winning a grant from the California stem cell agency, you may want to pay special attention to proposed policies that define the eligibility of a principal investigator and spell out the amount of time he or she must commit.

The proposal, which also deals with limits on the number of applications, will come before the directors of the agency tomorrow or Wednesday. The actual text of the recommendations was not available on the CIRM website until today.

The document does not make it explicitly clear what the purpose of the plan is. However, CIRM has sometimes been flooded with grant applications, creating an extraordinary burden on its staff and reviewers. The document also attempts to deal with the question of co-principal investigators, which seems to be an issue involving a grant that includes multiple institutions. You can find a discussion of this in the transcripts from the June directors meeting (v. 1) and their March session.

Two important paragraphs from the PI document read:

"CIRM, in contrast to the NIH, has a limited lifespan in which to accomplish its mission. Funding is commensurate with a sense of urgency to accomplish the mission that should be matched by a commensurate effort by key personnel, especially the PI and Co-PIs.

"Therefore CIRM, mindful of the urgency of its mission, will require a minimum percent effort of the PI (and Co-PIs), typically 10%, where it deems such minimum effort is necessary to ensure PI (Co-PI) oversight and timely accomplishment of the proposed research. Extraordinary circumstances may be applied by CIRM, at the discretion of the President, to allow senior research scientists to have reduced percent effort commitment in the interests of obtaining the best outcomes for a research project. CIRM and the Task Force agree that no changes will be made to the GAP in order to maintain flexibility."

The recommendations were developed without public hearings by an "ICOC RFA Task Force" that appears to consist of Stanford Medical School Dean Philip Pizzo, who is also a CIRM director, and one other person. It is not clear whether other institutions that are likely to submit grant applications were consulted in the process.

Fresh Comment

"Anonymous" has filed a comment on the "firebombing" item.

CIRM Releases Biotech Loan Policy

The California stem cell agency has posted its latest proposed policy for its incipient $500 million biotech loan program, which will be discussed at this week's meeting of its directors.

The policy statement is reasonably clear, but it does not deal with the risk involved. Nor does it explain exactly what CIRM might do with the warrants it takes in the companies it lends to. Will it hold them, trade them or eventually wind up owning stock in a number of biotech firms? If it owns stock, how will it be voted and under what conditions will it be sold? Who makes those decisions – CIRM directors, the CIRM president or chair?

Here is one excerpt from the policy document, laying out the purpose of the proposal.

"The goal of a loan program is to fund the translation of research into research tools, medical diagnostics and devices, and therapeutic products. These loans will be targeted at the funding gaps in product development that will serve to leverage participation by follow-on investors, such as venture capital and other capital markets, and result in more products that enter the market."

Below in a separate item is a piece on the loan proposal, written last week by yours truly for BioWorld Perspective, a free, weekly newsletter from BioWorld, which has 13,000 readers in the biotech industry.

Text of BioWorld Article on CIRM Loan Program

Here is the text of a piece on the CIRM biotech loan proposal that ran Aug. 7, 2008, in BioWorld Perspectives.

Red Flags Remain in Plan to Help Biotechs

By David Jensen
BioWorld Perspectives Contributing Writer

Editor's note: David Jensen is the publisher of the California Stem Cell Report and has written more than 1,700 items involving CIRM since 2005.

California wants to help biotech enterprises navigate through the industry's famed financial "valley of death" with a $500 million loan program.

It comes at a good time for the bio biz. Money is tight, but in the Golden State, one agency has $3 billion to spread around for research and clinical trials. The cash comes from the California Institute for Regenerative Medicine (CIRM), the state's unprecedented stem cell research funding organization.

It was created less than four years ago under Proposition 71, a California ballot initiative that surfaced in reaction to President George W. Bush's restrictions on human embryonic stem cell research. Using funds from California state bonds, CIRM has already handed out more than $554 million in grants. Today, the agency is the largest source in the world for funding for human embryonic stem cell research.

Biotech Loans and Controversy

But CIRM is not without controversy. Recently some disgruntled grant applicants have complained of unfairness in reviews. Some in the biotech industry object to CIRM's rules for sharing the wealth from any state-financed therapies. And there is at least one catch to CIRM's plans to loan $500 million to biotech firms. Recipients of the state's bounty are going to need a California connection — probably a fairly strong one — since state law says CIRM's cash must be spent generally in California. But it probably wouldn't be too hard for an enterprising business to accommodate those needs if it wants, let's say, a $25 million loan.

Policies for the biotech loan program are likely to get the go-ahead next week from CIRM's board of directors. The main reason for its expected approval is CIRM Chairman Robert Klein, a multimillionaire real estate investment banker who has served in his state stem cell role without pay since 2004. His real estate background has taught him the value of financial leverage, which is exactly what the loan program is about.

The loan effort is Klein's brainchild, conceived as a way to not only help biotech enterprises (both for-profit and nonprofit), but also to extend the life of the state's stem cell effort. It is limited by law to only 10 years of state bond funding and currently has no other source of income.

According to a PricewaterhouseCoopers report commissioned by the agency, Klein's plan could generate at least a $100 million profit, although state government delicately avoids the use of the word "profit." The earnings then could be channeled back into more grants and loans. With expectations that default rates could soar as high as 50 percent in some cases, that seems to be almost too good to be true. There are skeptics, but not many public ones.

Firms Found in the 'Valley of Death'

The reason for high defaults? The loan program would target firms that otherwise could not find financing because they are wallowing in the "valley of death," a loose term that describes the financially difficult period between grant and "angel" financing and funding from venture capitalists.

PricewaterhouseCoopers performed an analysis of the proposal based on assumptions provided by the agency. They included a $500 million portfolio, disbursed over a seven-year period, loans up to $5 million, interest rates ranging from prime plus 2 percent to 4 percent with possible warrant coverage from 10 percent to 100 percent. Pricewaterhouse concluded, "Total assets of the program could increase from $500 million to between $600 million and $1 billion over 10 years."

Klein, however, has indicated that changes are likely in those assumptions. During a May meeting of CIRM's Finance Subcommittee, he indicated larger loans should be given and other changes be made to improve the proposal.

"It may take a very significantly sized loan, even on a matching fund basis, for companies to get through the preclinical, Phase I, and Phase II and Phase IIb stage before private capital would be prepared to step in," he said.

Klein said he plans to bring in Ed Penhoet, vice chairman of CIRM, co-founder of Chiron Corp. and currently a venture capitalist, to beef up his call for hefty loans.

Reception of the loan program by industry has generally been favorable. But some have raised questions. Menlo Park, Calif.-based Geron Corp., for example, said the loan sizes initially assumed in the Pricewaterhouse analysis were too small.

Red Flags in an Innovative Plan

Other hurdles remain as well. The Consumer Watchdog group of Santa Monica, Calif., has expressed concern about potential conflicts of interest. The nonprofit advocacy organization cited the possible use of delegated underwriting. CIRM Director Duane Roth, as well, has raised a flag about potential conflicts involving underwriters. Klein had suggested the use of underwriters because of the small size of the CIRM staff (between 30 and 40 persons) and its lack of lending expertise.

At one point, Klein cited Fannie Mae as an example of how underwriting could be used with biotech loans. But given the recent financial news about the Federal National Mortgage Association, it seems unlikely he will mention that enterprise again.

CIRM's biotech loan plan seems innovative, filling an important need in the biotech industry. The plan, however, does involve a substantial risk of public funds that has not been fully explained in a straightforward manner. Given today's difficult economic times and unease about aggressive lending practices, a clear explanation is certainly in order. The public, California lawmakers and industry should understand how it is possible that CIRM can turn a profit with default rates as high as 50 percent and the risks involved.

CIRM is a young government department and should move with caution in order to maintain public trust. Major failures in a biotech loan program could damage CIRM's credibility and cast a pall over its other important activities, including grants, ethical research standards and intellectual property policies.

Notes:
Here are links to more information about the biotech proposal.
The California Stem Cell Report (search on the label "biotech loans"):
http://californiastemcellreport.blogspot.com
The California Institute for Regenerative Medicine:
www.cirm.ca.gov
PricewaterhouseCoopers report (in three parts):
Phase I (loan financial model): www.cirm.ca.gov/meetings/pdf/2008/050608_item_3a.pdf
Phase II – Gap Analysis, Capital Provider Feedback and Financial Model: www.cirm.ca.gov/meetings/pdf/2008/050608_item_3b.pdf
Phase III – Loan model scenarios: www.cirm.ca.gov/meetings/pdf/2008/050608_item_3c.pdf
Transcripts of the Biotech Loan Task Force: www.cirm.ca.gov/transcripts/default.asp
Agendas of the Biotech Loan Task Force: www.cirm.ca.gov/meetings/2008/default.asp
The agendas have links to multiple documents dealing with the plan.

CIRM-Funded Researcher Firebombed; CIRM Should Beef Up Reward

The scientist at UC Santa Cruz whose home was firebombed earlier this month is a CIRM-funded researcher, holding a $500,000 grant to study differentiation of stem cells into motor neurons.

David Feldheim(center of photo), a molecular biologist, won the grant in 2007, one of the first scientists whose research was supported by California's $3 billion agency.

Feldheim was the target Aug. 2 of animal rights activists, part of a recent upsurge in assaults on researchers. Authorities say the crime is being investigated as an attempted murder. The Los Angeles Times reported today that academics in the UC system are "angered and worried," but vow not to be intimidated.

Last week, UC Santa Cruz faculty members and others rallied to support Feldheim and protest violence against researchers. Feldheim spoke to the crowd, along with the UC Santa Cruz Chancellor and the mayor of Santa Cruz, according to the San Francisco Bay Area Independent Media Center, which published a number of photos and comment on the event. (The Feldheim photo is from that report.)

A $50,000 reward is being offered in connection with the firebombing with funds from the FBI, UC Santa Cruz, private citizens, the City of Santa Cruz, the federal government and the Humane Society, according to San Francisco Chronicle reporter John Cote.

J.M. Brown of the Santa Cruz Sentinel reported that the attack came at 5:45 a.m., burning the front door. Brown wrote:

"Feldheim, his wife and two young children fled from a second-floor fire escape. Feldheim's feet were bruised during the escape.

"Minutes later, outside a campus residence less than a mile away, a fire ripped through a station wagon belonging to a colleague. No one was injured in that incident. A third scientist received a threatening phone message at home about the same time."

Last week, Richard C. Paddock and Maria L. LaGanga of the Los Angeles Times quoted UCSC Chancellor George Blumenthal as calling the attack "domestic terrorism." Their story also carried statistics from the Foundation for Biomedical Research:

"In 2000 there were 10 such episodes against biomedical research facilities alone, and in 2006 that figure had grown to 77, according to the group's website. In addition, the type of attacks has changed in recent years.

"'Prior to that, the vast majority of actions taken were against institutions -- break into the lab, steal the animals, trash the facility,' said foundation President Frankie Trull. 'More recently, however . . . they've become much more personal, attacking the researchers at their homes. California seems to be the focus of this activity right now, but not the only focus.'"

The animal rights terrorism issue is not new to this writer. While at The Sacramento Bee, I was the primary editor on Deborah Blum's 1992 Pulitzer Prize-winning series, "The Monkey Wars," which explored the violence against research involving primates.

What was abundantly clear then and even more now is the need for the public – not just academics – to speak out against this terrorism. The community needs to understand that the firebombers explicitly place animal life above human life. The perpetrators should find no shelter from misguided souls who think this is minor mischief.

The California stem cell agency has not yet spoken out on Feldheim bombing, but it has given preliminary support to state legislation aimed at helping to deal with the problem. A strong statement from CIRM is called for, along with a substantial addition to the reward for apprehension of the perpetrators, something along the lines of about $50,000. CIRM Chairman Robert Klein should also direct his private lobbying group, Americans for Cures, to add another $25,000 or so.

Fresh Comment on CIRM's Blog Ban

We have received an email from an anonymous individual on the "blog ban reaction" item last week. The person began by commenting on a description of the matter as "fascinating." Here is the full comment.

"Astonishing seems more apt.
 
"Your blog is the definitive source of information for all-things CIRM.  It is widely read by researchers – here in California and around the world – by other government officials and staff, and by journalists.  What you write shapes the perceptions and coverage of others.  At a time when CIRM is receiving so little press attention, your voice is even more influential.  The CIRM board is ill-served by its staff’s banning the California Stem Cell Report from the daily clippings.  I doubt that most board members have (or make) the time to read your posts regularly.  Perhaps CIRM is counting on that to keep criticism (particularly of its chairman’s ongoing behavior problems) hidden from the board.
 
"Hopefully a few board members will ask that your blog be restored to CIRM’s press clipping reports.  They all should.
 
"Keep up the good work."

Major Information Remains Missing From CIRM Directors Agenda

With two business days remaining before next week's meeting of the directors of the California stem cell agency, still missing from its website is important information needed for intelligent public participation in major issues facing CIRM.

Missing background material includes a current draft of the proposed loan policy for a novel and risky $500 million biotech lending effort and the proposed procedures on how to deal with the sticky question of reconsideration of negative grant recommendations from CIRM reviewers. Also missing is some sort of discussion of what is meant by "recommendations on RFA applicant policies."

The directors are scheduled to give away $41 million in research grants, but no link is posted from the agenda to the public summaries of the reviews. However, those went up on Thursday and can be found here.

Hundreds of California researchers will be affected by the proposal for reconsideration of grant reviews. But for all practical purposes, none of them will have a say in the mysterious plan because there is not enough time for them to analyze the proposal – if it is ever posted – and to make travel plans to Stanford for the meeting that begins on Tuesday.

Dilatory posting of important background information is an ongoing problem at CIRM. The situation improved at one point in the past but has now slipped badly. It makes a mockery of CIRM promises for meaningful public participation in discussions of issues facing the $3 billion public agency.

The WSJ Looks at CIRM and Its 'Sugar Daddy'

The Californa stem cell agency has scored big PR-wise in the Friday edition of the Wall Street Journal.

The influential newspaper, which has more than 1 million paid subscribers on its website, is carrying a laudatory piece about CIRM, focusing on its president, Alan Trounson. The headline? "Stem Cells' New Sugar Daddy."

Science columnist Robert Lee Hotz described daily struggles with ethical and political challenges and an "air of urgency" at CIRM as well as a "second medical revolution" for Trounson. His first involved IVF.

Hotz said the California's "speculative venture" may be "the world's most ambitious experiment in public funding for science."

One might quibble with some of the details of the WSJ story, but it is a coup for CIRM. The WSJ has an influential audience with important links to business. The piece will help set the tone for future mainstream coverage of CIRM and expose it to many key industry and public opinion leaders who otherwise would never take notice.

The story is also linked to an online discussion of whether it is okay to pay women for their eggs.

Here is a link to the story, which may be on the limited public version of the WSJ web site. If not, send me an email requesting a copy, and I will forward it to you. Here is my email address: djensen@californiastemcellreport.com.

CIRM Blog Ban: Reaction From The Agency and Readers

The Monday item about CIRM banning this blog from the news clippings it sends to its directors and staff triggered a modest reaction this week, including a sharply negative one from the agency itself as well as warm endorsements of this website's endeavors.

Some of the reaction was posted directly as a comment on the item itself. Other comments were sent directly to this writer, including two from Don Gibbons, chief communications officer for the $3 billion state program. He is the person who claimed responsibility for excising the California Stem Cell Report from the agency's official clips.

On Monday, Gibbons volunteered the following,

"Using the term 'officially banned' is utter b----s---. We just chose to not use state money to distribute what is freely available on the Web. You should read the Chronicle’s Op/Ed piece this morning on the responsibilities of advocacy 'almost-journalists.'"

On Tuesday, as part of a response to a query on a different subject, Gibbons said,

"I want to reiterate that I think using 'officially banned' is incorrect, and scandalously misleading. It suggests folks here are instructed not to read your blog."

Obviously, CIRM can do whatever it wants regarding the clippings it sends around, but its decisions are officially government action. And the blog is indisputably banned from the clips.

As for Gibbons' assertion that CIRM does not distribute "what is freely available on the Web," nearly all of what CIRM circulates as clippings is freely available on the Web – not just this blog – at least based on the last version of the clips we saw.

The "banned" item also attracted minor attention from other web sites, including Capitol Alert, a news tip service aimed at state Capitol denizens.

Other reaction:

"You must be doing something right"(email from writer who cannot be named).

"If I had to guess, the 'ban' likely has increased your readership dramatically.  When will those bureaucrats ever learn?" (From another person who cannot be identified).

"Your website is vitally important to California taxpayers; I find it to be a balanced and compelling commentary and timely examination of CIRM's operations and the underlying business of the science CIRM was created to pursue." (From an anonymous comment directly on the item.)

Only one negative comment about the blog was received. That was posted directly to the item and agreed with the CIRM ban because the blog is not about "science." As we responded, the blog has never been about primarily about "science," but primarily about public policy. We rarely deal directly with the science of an issue, but rather about the interplay between science and government, not to mention business, academia, politics and public opinion.

Lying at the heart of CIRM is its public nature and public relationships. In many ways it is the quintessential public and political creature. It was created in that most political and public process – an election – through a mechanism (the ballot initiative) that was designed to give the great, unwashed masses the ability to wrest control away from their designated leaders. CIRM is an extraordinary and unique governmental experiment that has had a truly vast impact nationally and beyond. Some see it as a model for possible future endeavors seeking to solve some the intractable problems that plague our society.

California's stem cell research program is worthy of considerable attention, far more than the mainstream media can or will provide. And that is part of the function of this blog. We try to generate more information than can be found in the media or on the CIRM website. We also comment on CIRM and analyze it in a way not possible at most major news outlets, which are hamstrung by standards that are useful but also allow them to be easily manipulated by governmental entities from the White House on down.

Should the CIRM directors and staff be provided the California Stem Cell Report as part of their daily information diet? We think so. However, the spoon-feeding of boards of directors is not an uncommon practice in the world of business. It is also a poor practice that has backfired on more than one major enterprise.

One final note: The San Francisco Chronicle piece cited by Gibbons was written by Dan Gillmor, a former California newspaper columnist and author of the book "We The Media." An advocate of grass-roots journalism, Gillmor wrote in his book,

"We can’t afford, as a society, to limit our choices. We can’t even afford it financially, because Wall Street’s demands on Big Media are dumbing down the product itself."

We asked Gillmor if he had any comment on the CIRM ban. "Fascinating" was his one word response.

New Issues Added to CIRM Directors Meeting Next Week

The California stem cell agency has altered its agenda for next Tuesday's meeting at Stanford, adding an element to its proposed human egg policy rules and an item dealing with eligibility on a new "translational" grant round.

The agency also posted its latest version of how it would like to define California supplier, which is the key to giving preferences worth hundreds of million dollars to state businesses seeking to sell to CIRM grantees.

The definition can be found here and seems to include almost any conceivable potential vendor in the state, but we could be wrong. At the same time, the California legislature is considering its own definition of California supplier in AB2381 by Assemblyman Gene Mullin, D-San Mateo.

That measure is now on the floor of the state Senate.

(In another CIRM legislative matter, the Assembly floor analysis of SB1565, the bill designed to ensure affordable access to CIRM-funded therapies is now available.)

The item with eggs now says that directors will be asked to authorize "a procedure for petitioning the ICOC to designate stem cell lines derived before November 2006 as acceptably derived for use in CIRM-funded research, and to govern use of embryos created for reproductive purposes before August 13, 2008." Added was the language having to do with the Aug. 13 date.

Also added to the next week's agenda is an item which states only: "Consideration of eligibility criteria in concept plan for Translational 1 RFA."

Twenty-one items are scheduled to be considered at the CIRM directors meeting that begins in only three business days. Background information is now available on only six of those items.

CIRM Contracts with Fleishman PR Firm

The Fleishman-Hillard public relations firm has won a $115,000 contract from the California stem cell agency, according to odwyerpr.com.

The website said Fleishman bested five other firms: Burson-Marsteller, Weber Shandwick, Feinstein Kean, GCI Group and Wundermarx.

Odwyer reported that Ruby Barcklay, a senior vice president in Fleishman's San Francisco office, will be in charge of the account.

The contract includes "media monitoring, leadership media training, opinion leader research in the biotech and business communities, and high-level targeted media placement around the organization's leadership position in the field of stem-cell research funding," according to the report.

The odwyer site specializes in "inside PR news" and is partly free and partly paid.

Fresh Comment

"Anonymous" has posted a comment on the "CIRM Bans" item, stating that this blog is "a balanced and compelling commentary and timely examination of CIRM's operations," among other things. I have no idea who posted it, but, no, I did not pay the person. Re the Larry Ebert comment on the Remcho item, Ebert's comment is now available. I failed to moderate it in a timely fashion.