Stem Cell Grant Competition: Remove CIRM Directors From Appeals?

An individual connected to an institution with a substantial number of CIRM grants sent along a note concerning this Tuesday's examination of the appeal process for grants rejected by scientific reviewers.

The person, who must remain anonymous, said,

“All appeals of grants working group decisions should return to the grants working group. The ICOC (the CIRM board of directors) should NOT be in the business of hearing appeals to scientific reviews. The ICOC is not qualified to render an opinion on such appeals, and the forum is inappropriate for such discussions.”

“In order to legitimize the review process, the scientific review group needs the leading international experts in the field. CIRM should raise the stipend of scientific reviewers in order to attract the participation of the most knowledgeable and respected scientists in stem cell biology and research.”

Complaints about the appeal process for CIRM applications have rumbled around for several years now. Both the board and applicants do not seem pleased with the situation. We should note that rejected applicants would be expected to be unhappy. But for the few applicants who go public with complaints about the process, we hear grumblings from many others. They decline to speak out because of the possibility that they could incur the wrath of an organization that could severely damage their livelihood.

CIRM will never be able to satisfy all parties with the way it handles appeals. That is the nature of such a process. Somebody is going to have to lose out. But most of the affected parties should be able to perceive the process as fair. That means doing more than burying a notice about an examination of the issue in the CIRM Web site. Tuesday's review of the matter was not noticed on the home page of the CIRM Web site. It was not the subject of a press release. Nor was it even brought up as an "announcement."

CIRM has many constituencies, one of which is the research community. It would behoove the organization to listen carefully and AGGRESSIVELY seek out critical analysis of the grant appeal process from scientists -- in both business and academia -- along with constructive suggestions for improvements.

CIRM Takes a Crack at Stem Cell Banking

Stem cell banking is the subject of a day-long CIRM meeting on Wednesday as the stem cell agency wrestles with the costs, distribution and collection of stem cells.

Panels of leading researchers will be taking part in the public session at the Marriot Union Square Hotel in San Francisco. While the workshop will cover a great deal of ground, CIRM singled out one particular area of interest. In a briefing memo, the agency said,

“It would be valuable for the (CIRM) Standards Working Group to give special attention to the segment on privacy, provenance and safety regulation.”

Bee Carries Article on Stem Cell Agency and the State's Financial Crisis

The Sacramento Bee today carried an op-ed piece by yours truly dealing with the California stem cell agency and ballot-box budgeting.

It is a slightly altered version of the item – “Folly of Ballot-Box Budgeting” – that appeared last week on the California Stem Cell Report.

Players in the Negotiations on the CIRM Cap Removal Legislation

Art Torres, co-vice chairman of the California stem cell agency, sent along the following regarding the negotiations on the legislation to remove the 50-person cap on CIRM staff.

Torres, who was a key figure in the process, said,

"Please credit our chief counsel James Harrison and counsel Scott Tocher as our chief negotiators and Duane Roth and Bob Klein, who all played significant roles in our efforts with Senator Alquist and her staff, and Senators Steinberg, Florez and Senator Kehoe and their staffs, who were all very helpful in these negotiations and the input of our president, Alan Trounson, and our scientific staff."

Compromise on Legislation Removing CIRM Staff Cap

Legislation to remove the 50-person cap on staff at the California stem cell agency and ensure affordable access to taxpayer-funded therapies was modified Thursday with the intent of winning the support of the CIRM board of directors.

CIRM Co-Vice Chairman Art Torres and others negotiated the changes in SB1064 by state Sen. Elaine Kontominas Alquist, D-San Jose. Torres is expected to seek the endorsement of the full CIRM board at a special telephonic meeting Tuesday. The measure is expected to come before the Senate Appropriations Committee on Thursday.

CIRM dearly wants the 50-person cap removed. CIRM President Alan Trounson has warned that the quality of CIRM work could suffer if it doesn't have more help. The agency has awarded more than $1 billion in grants and loans to more than 300 researchers. Another $2 billion will be handed out over the next several years. The cap is a bit of redundancy in Prop. 71 since the measure also includes a limit on CIRM's operational budget.

Eliminating the provision, however, is not a trivial legislative matter, also because of Prop. 71. The ballot initiative wrote into law a stipulation that the legislature can only make changes in CIRM with a rare, super, super-majority vote (70 percent) of both houses. As a result, both Alquist and CIRM have compromised on the legislation.

As the legislation now stands, in addition to removing the staff cap, the bill would:

• Write into law provisions aimed at ensuring affordable access to CIRM-financed therapies. Some flexibility for exceptions would be permitted for CIRM under controlled and public processes.
• Assure that potential profits from the taxpayer-funded therapies would go to the state's general fund. Prop. 71 was vague on where such cash would go, raising the possibility it would go to CIRM directly. Any such revenue is far, far down the road given the slow nature of research and federal approval of new therapies.
• Require performance audits of CIRM every three years, beginning in 2010-11, at CIRM's expense
• Permit the expansion of the grant review committee beyond 23 members and 15 scientists
• Require leadership succession planning at the agency. Its first and only chairman, Robert Klein, has said he will be leaving his post in December. Klein has been the dominant and driving force at the agency, even leading the electoral campaign that won approval of Prop. 71 in 2004.
• Require creation of a financial transition plan to address issues that CIRM faces when its current bond funding expires several years from now.

Earlier provisions were removed from the measure that would have changed the selection of chairman and vice chairman of the agency and altered the roles of the chairman and president. The role of the chairman is likely to redefined by the board as it deals with Klein's departure.

Much of the original measure had its origins in the findings of the Little Hoover Commission study of the stem cell agency. The commission recommended a wide range of changes at CIRM, some of which remain in the Alquist bill.

Alquist's bill declared,

“Since its inception, questions and concerns have been raised about the institute's practices, its governing board, and how the state directly and financially benefits through this sizeable investment. These criticisms divert the attention and focus of the institute to drive transformational scientific research and find cures.

“It is the intent of the Legislature to further enhance the ability of the institute to manage this investment made with public funds by addressing public concerns regarding oversight and transparency.”

The bill also said that it was intended to maximize state revenues that might result through CIRM grants.

The public may attend the CIRM board meeting on Tuesday at a number of locations throughout the state. Individuals may also comment on the bill and any action by the board. Specific addresses can be found on the agenda.

New NIH Conflict Rules and Their Impact on CIRM

The NIH today unveiled proposed new conflict-of-interest rules that will reach deep into stem cell research circles in California, touching the state's stem cell agency and affecting 40,000 scientists nationwide.

Francis Collins, director of the NIH, said the rules are aimed at preserving public trust in research ethics and the “integrity of the scientific enterprise.”

According to a report on GenomeWeb News, Collins said,

"As the NIH director, I think I can say with great sincerity that the public trust in what we do is just essential, and we cannot afford to take any chances with the integrity of the research process."

Rob Stein of the Washington Post wrote,

“Among other changes, the new guidelines will reduce from $10,000 to $5,000 the minimum payment that researchers will be required to report and mandate that universities, colleges, research institutes, businesses and other entities that employ researchers who receive NIH funding monitor compliance with the new reporting requirement. Funding information would have to be posted on a publicly accessible Web site. Violators could be subject to losing their funding.”

The rules would require recipient institutions to create a Web site that would display the statements of economic interests filed by their faculty. Some institutions, such as Stanford, already do that. Stanford labels the pages as “industry relationships.”

The NIH announcement focuses new attention on a recommendation last January that CIRM post on the Internet the statements of economic interest filed by members of its board of directors. A sister organization to CIRM, the Citizens Financial Accountability Oversight Committee, said that CIRM should follow the example of California Gov. Arnold Schwarzenegger. He requires his appointees to file their economic interests online along with their monthly expense claims. State Controller John Chiang, the state's top fiscal officer and chairman of the oversight committee, said the postings and other changes were needed to improve transparency and accountability at CIRM.

Last Friday, the California Stem Cell Report asked Don Gibbons, CIRM's chief communications officer,  whether the agency intended to act on the recommendation for online postings. We have received no response.

The NIH requirement is also likely to raise questions about CIRM's policy of secrecy concerning the economic interests of the scientists who make the de facto decisions on CIRM grants. Currently grant reviewers only have to disclose their interests to a select group within CIRM. Applicants (and the public) have no way of knowing the economic or professional interests of scientists who review their applications. However, with the new NIH rule, virtually all of those scientific reviewers, given the likelihood they hold an NIH grant, will have to post their economic interests at their home institutions but not at CIRM.

Some influential groups have taken positions indicating the proposed NIH rules are not strict enough. Jocelyn Kaiser of Science magazine wrote,

“Although these are big changes, they fall short of advice from an Institute of Medicine panel and the Association of American Medical Colleges (AAMC). Both think that researchers should report all potential financial conflicts to their institutions, with no minimum dollar threshold.”

IOM Study of California Stem Cell Agency Proposed

A directors subcommittee of the California stem cell agency next week will consider commissioning a blue-ribbon, outside study of its work, ranging from its organizational structure to its scientific performance.

The study would be conducted by the prestigious Institute of Medicine and be paid for by CIRM. The proposal comes as legislation is being considered in Sacramento that would require peformance audits of CIRM. The agency has also scheduled a three-day review in October of its strategic plan by a panel of outside experts.

The new Science Subcommittee of CIRM directors will take up the IOM proposal at its meeting on Tuesday. The agenda contains no detailed justification for the proposal. It simply says,

“Consideration of commissioning IOM study regarding CIRM, including organizational structure, financial structure, conflicts policies, operations, scientific performance, and best practices, to enhance operations and scientific performance and identify critical scientific opportunities in the near term.”

Jeff Sheehy, chairman of the subcommittee, supports the proposal. In an email, he said,

“If you look at what the IOM does (and I have seen a couple of IOM reports--they were spectacular in their rigor and thoroughness, along with being absolutely objective), and what we should be providing in the way of a progress report to the people of California, it makes a lot of sense to have the gold standard IOM look at us.”

The institute is extremely well-regarded in science circles and regularly studies scientific issues. More than 600 reports are listed on its Web site, mostly dealing with scientific as opposed to public policy matters, although there is considerable overlap on those concerns when public financing is involved.

One longtime observer of the California stem cell scene, who must remain anonymous, said,

“What is probably true is that the IOM would not be so concerned about closed reviews and public disclosure of financial information from reviewers, but will focus on whether the money has been given out in a fair way and what has resulted from it.”

The IOM did produce a report in 2009 on conflicts of interest in medical research and educational institutions. In the case of CIRM, Prop. 71 built into the agency a wide range of conflicts of interest. The IOM study did not examine CIRM or the NIH, but it said,

“(T)here is growing concern among lawmakers, government agencies, and the public that extensive con­flicts of interest in medicine require stronger measures. Responsible and reasonable conflict of interest policies and procedures will reduce the risk of bias and the loss of trust while avoiding undue burdens or harms and without damaging constructive collaborations with industry.”

An IOM study would not be the first involving CIRM. It asked the group to put together a one-day workshop in 2006 on the risks of human egg donation. CIRM approved a $124,185 contract with the IOM. The report from the workshop is now being sold on the Internet by the IOM for $26.78.

Another IOM study would be expensive and could take possibly as much as a year to complete, one source told us. The performance audits proposed in the state legislation are estimated to run about $400,000 each.

The IOM proposal is not being offered as alternative to the audits and was being discussed prior to the legislation, we understand. However, the possibility of such an evaluation could become part of the ongoing negotiations on SB1064 by state Sen. Elaine Kontominas, D-San Jose. A special telephonic meeting of the full CIRM board is also scheduled for next Tuesday if an agreement is reached on the measure, which includes removal of the 50-person cap on CIRM staff. CIRM is eager to see that limit revoked.

Earlier CIRM scheduled and then cancelled a meeting on the Alquist legislation. The one next week could also be cancelled if negotiations are not successful.

Members of the public can sit in on both the full board meeting and the Science Subcommittee session at a variety of locations around the state. Specific addresses can be found on the agendas.

CIRM Legislation Noted on HealthyCal

Legislation to remove the 50-person cap on the number of employees at the California stem cell agency drew a smidgen of notice on HealthyCal.org, a relatively new Web site that deals extensively with health policy issues.

Dan Weintraub, former columnist for The Sacramento Bee, posted a brief item linking to our piece last week on the measure. Among other things, he said,

“A lot of people have forgotten about California’s stem cell research agency, which is spending billions of public dollars with little scrutiny. But blogger David Jensen is one person who is keeping a close eye on the place.”

Competing for California Stem Cell Cash: Rules of the Game Coming Under Scrutiny

Every California stem cell scientist and researcher looking to join the field – be they from academia or business – should pay very close attention to a meeting next week of a key group of directors of the $3 billion California stem cell agency.

They plan to discuss possible changes in how scientists compete for stem cell cash, which is no small matter since CIRM has another $2 billion to hand out over the next several years.

On the table Tuesday May 25 at the first meeting of the directors' Science Subcommittee will be such matters as:

Appeals of unfavorable decisions by scientific reviewers. Some applicants have appeared personally before the board and turned around a negative decision but some CIRM directors are quite uncomfortable with that process.

The relatively new pre-application process that weeds out what CIRM staff and some outside reviewers consider dubious proposals. Only those who pass muster are invited to continue with their bids for cash.

Staff scrutiny of grant proposals prior to funding. At least two approved grants have publicly run afoul of CIRM rules during that process.

Progress reports from scientists on their research. Three scientists have lost funding during those reviews.

Scaling back funding on some applications prior to presentation to the CIRM board for approval.

Some of these issues have troubled directors for several years. They came up again at last month's directors meeting, leading one, Jeff Sheehy, a communications manager at UC San Francisco, to push for an airing of the matters with an eye to finding solutions. Others expressed concerns, including Vice Chairman Duane Roth, a San Diego area businessman. He warned about creating a "slippery slope" of public appeals. Publicly debating appeals could create a situation, he said,  in which directors could “expect everyone show up, and I don't think that is what we want to do.”

The directors seem primarily focused on smoothing out and rationalizing the appeal process, which currently consists of two entirely different procedures.

No final action is expected on the issues, but some changes are likely to be suggested for approval in the coming months. Most of the directors are open to hearing from researchers about their views. Now would be a good time to make comments, preferably in writing as well as in person.

If you are interested in participating in the telephonic meeting, seven locations are currently scheduled around the state. They include San Francisco(2), Irvine(2), Duarte, Healdsburg and Stanford. More may be added. The specific addresses can be found on the agenda, but some are missing room numbers or other necessary detail. Interested parties can contact CIRM for the information.

A list of Science Subcommittee members has not yet been posted on the CIRM Web site. We will carry a short item when it becomes available.

The Folly of Ballot Box Budgeting and Stem Cell Research

California Gov. Arnold Schwarzenegger last week inadvertently highlighted one of the fundamental flaws in the nature of the state's $3 billion stem cell agency.

The action came when the governor released his revised budget for the state of California, which is floundering in a years-long budget crisis. The Golden State is at least $19 billion in the hole, and prospects for clambering out of that financial pit are bleak. Meanwhile, California's debt is climbing, requiring the state to allocate more cash for interest costs. California has the lowest credit rating of any state in the nation and is sometimes compared to Greece.

To deal with crisis, Schwarzenegger wants to eliminate the state's main welfare program for families, making it the only state in the country without one. Nearly one million children would lose state support as a result. State employees would continue see their salaries reduced by 15 percent. In-home health care for the elderly and disabled would be slashed by $750 million. Childcare would end for 142,000 youngsters. All to take care of a deficit so large that it exceeds California's combined spending on prisons and its four-year universities, as Daniel Weintraub of HealthyCal.org pointed out.

Contrast that to California's $3 billion stem cell agency, which is providing whopping, multi-million dollar grants to many already comfortable researchers (more than 300 in all). Hundreds of millions of dollars more will be handed out over the next 18 months, regardless of the state's money woes. And CIRM salaries, among the highest for state employees, will continue to top $500,000. More debt to do all this will be piled on California, which has seen its interest costs soar in the last few years.

However, that does not mean that CIRM's stem cell research is not worthwhile. And it does not mean that the spending by CIRM does not have something of a beneficial economic impact. What the disparity illustrates is the folly of ballot-box budgeting and locking minutia into state law, which is precisely what Prop. 71 did when it was approved in 2004, creating the California stem cell agency.

One can support the goals of the California Institute for Regenerative Medicine, as we do, and still deplore the process by which it was created along with the less than salubrious results of Prop. 71, which in some ways is one of CIRM's worst enemies.

We have written more than once about problems that have been created by inartful language in Prop. 71 and dubious mandates. One requires a rare, super, super-majority legislative vote (70 percent) to make any changes in laws affecting CIRM. Currently, the agency is bedeviled by a foolish, 50-person cap on the number of its employees, a provision in the 10,000-word measure. The cap is redundant; another also exists on its operational budget. The agency has constant problems gathering enough of its 29 directors so that they can take legal action. That's the result of another super-majority requirement – this one for quorums of its governing board. The board itself is ungainly. The size, which impedes CIRM's work, was dictated by Prop. 71 authors to give all stakeholders a seat at the money table and thus win their political support in the 2004 election. The list can go on and on.

In a perfect world or even a not-so-perfect world, lawmakers would examine all state spending and weigh the immediate benefits of feeding hungry children, not to mention schooling them, against the desire to find cures for horrendous diseases, a process that can take decades or more. But Prop. 71 froze out the governor and the legislature. The folks in the Capitol cannot touch CIRM's cash, a situation that weakens thoughtful state budgeting. If such restrictions were limited to CIRM, the situation would not be so dire. But other cases of ballot-box budgeting have also hampered the elected representatives who are supposed to keep California's 37 million residents out of this sort of sorry financial mess.

So far, CIRM's cushy cash position and largess have not drawn public attention or even come under serious, visible scrutiny in the Capitol. But they could become a liability – one that could damage CIRM's public support – should an unfortunate event surface or an unfriendly, publicity-savy lawmaker seize on the situation.

All that can be done short-term is to work with legislators on the measure (SB1064) that would remove the 50-person cap and make other needed changes. At the same time, CIRM should carefully manage expectations and avoid the hyberbole that marked the 2004 campaign and that still surfaces from time to time from some of the agency's leadership.

Over the long-term, changes are also overdue in the ballot initiative process. But that is battle for another time and place.

Longtime CIRM Watchdog Expanding Beyond Stem Cells

Zach Hall, the first president of the California stem cell agency, once called John M. Simpson a “constructive critic” of the state's $3 billion stem cell research effort.

Today Simpson still monitors CIRM but he has other responsibilities that have put him on the front page of the business section of the Washington Post. One week ago the newspaper described him as a “thorn” in the side of a $162 billion corporation called Google.

Simpson's prickly Google performances have surfaced in other media outlets as well. They are all part of an effort by Consumer Watchdog of Santa Monica, Ca., (Simpson's employer) to hold Google to its promise “to do no evil.”


In addition to Simpson's forays, Consumer Watchdog has mounted a major Internet push on an investigatory Web site it calls “Inside Google.” It includes articles ranging from antitrust concerns to privacy to Google's search performance.

Last Sunday's lengthy piece on Simpson(pictured) and Google, written by Cecilia Kang, garnered 98 comments and 140 Tweets. She wrote that Simpson's “singular focus is turning up the regulatory heat on Google.”

Kang reported,

“With its brand appeal, (Simpson) says Google is an ideal target. He's turned the tables, digging up data on the giant that tracks every move its users make and collects information without their knowledge. Also, he said, the company unfairly uses its size to barrel into new businesses.”

One might think Simpson has wandered far afield from CIRM. Not entirely so. Google has a $100,000 connection to CIRM. Sergey Brin, Google's co-founder made a loan in that amount to the Prop. 71 campaign, which was directed by Robert Klein, who is now chairman of CIRM, which was created by the proposition.

Brin's wife,  Anne Wojcicki, has a strong interest in biotech. She co-founded 23andMe, a genetic testing firm that was initially backed by Mohr Davidow Ventures of Menlo Park, Ca., one of whose partners, Michael Goldberg, is a member of the CIRM board. Mohr has since sold its interest in 23andMe and invested in a rival, Navigenics of Foster City, Ca.

Google's new venture capital arm has also started to make investments in biotech companies and has expressed an interest in regenerative medicine. It could only be a matter of time before a Google-backed company applies to CIRM for some of CIRM's billions.

Irvine Opens New Home for 60 Stem Cell Researchers

The stem cell folks at UC Irvine on Friday officially unveiled their new research facility, which was pushed along by a $27.2 million grant from the California stem cell agency.

The structure cost $80 million in all. An additional $10 million came from Bill and Sue Gross, with the remainder from the UC system and private funding. Gross co-founded PIMCO, a well-regarded bond fund management company.

Joseph Serna wrote about the facility for the Los Angeles Times, which rarely covers CIRM activities, noting that UCLA and USC also received support from CIRM, $19.9 million and $27 million respectively. Irvine's building will house more than 60 researchers in a dozen labs. Peter Donovan, late of John Hopkins, is head of the UC Irvine stem cell program.

Robert Klein, chairman of CIRM, said,

"With this, it's not just California speaking. This is tangible evidence that the science is at a world-class level. California is now the world leader in stem cell research and biomedical research."

The event did not trigger much in the way of media coverage, but an earlier Irvine announcement led to a number of stories including this on May 8 by China's Xinhua news agency:

“The first major stem cell research center in California will open next week as the state steps up its efforts to promote stem cell research, it was announced on Saturday.

“The center, run by the University of California in Irvine (UCI) near Los Angeles, is the first major stem cell research facility in the region, the UCI said in a statement.”

Obviously, that language could lead to a serious misunderstanding elsewhere in the world about the scope of stem cell research in California.

CIRM Staff Cap/Reform Legislation Hanging Fire

With less than two weeks remaining before a key deadline, directors of the California stem cell agency have cancelled a meeting on legislation to remove the 50-person cap on its staff, and no additional sessions have yet been scheduled.

In response to a query, CIRM Vice Chairman Art Torres told the California
Stem Cell Report that a final agreement had not yet been reached on the terms of the legislation by state Sen. Elaine Kontominas Alquist, D-San Jose. He hopes to reach a compromise that CIRM directors could support.

The bill, SB1064, must clear the Senate by May 27 if it is to be enacted this year. CIRM is eager to remove the staff cap and has warned that the quality of its work is likely to suffer without more employees. The agency has approved more than $1 billion in grants and loans to more than 300 researchers. Another $2 billion or more is scheduled to handed out over the next four years or so.

As Alquist's bill now stands, it contains provisions that the agency has vigorously opposed. The legislation is aimed at ensuring that taxpayer-financed therapies are affordable and accessible. It would also reform management and accountability provisions at CIRM with the intention of creating more transparency and openness.

CIRM Cancels Board Meeting on Compromise Reform Legislation

The California stem cell agency has postponed the meeting next Tuesday of its board to consider a position on legislation that would remove the 50-person cap on its staff.

No reason was given immediately for the cancellation of the session. But previously CIRM Vice Chairman Art Torres indicated that it might be delayed if progress was not made on negotiations on SB1064 by state Sen. Elaine Kontominas Alquist, D-San Jose. We are checking with Torres for further information.

As it stands now, in addition to removing the cap, the bill would also seek to ensure affordability of taxpayer-financed therapies and enact reforms aimed at increasing transparency and accountability at CIRM. However, Torres is engaged in negotiations that could lead to significant changes in the measure.

Negotiations Underway on CIRM Reform Legislation; Staff Cap Removal Included

Legislation to remove the 50-person cap on staff at the $3 billion California stem cell agency comes before the organization's directors next Tuesday morning as negotiations on the bill appear to be reaching a critical stage.

The proposal must clear the state Senate by May 27, or CIRM will have to wait a year to make another attempt. That would pose difficulties for the agency, which is trying to administer more than $1 billion in grants to more than 300 recipients. CIRM President Alan Trounson warned earlier this year that the quality of CIRM work will suffer without the ability to hire more staff.

Removal of the cap is part of a bill, SB1064 by Sen. Elaine Kontaminas Alquist, D-San Jose, chair of the Senate Health Committee. While CIRM would like to see the cap removed, other provisions in the current measure are not viewed with pleasure by the agency. They include an effort to guarantee affordability of taxpayer-financed stem cell therapies and proposals to improve transparency and management at the five-year-old organization, which is unprecedented in state history.

In the case of the staff cap, CIRM is hoist on a petard of its own making. The cap was written into law by CIRM Chairman Robert Klein and others in an effort to defuse potential arguments against Prop. 71 that it would create a huge new state bureaucracy. Also written into law by Prop. 71 was a unusual requirement that makes it nearly impossible to change such things as the staff cap. Such alterations require a rare, super, super-majority vote of 70 percent of both houses and the signature of the governor. That means that CIRM will have to do some horse-trading to get what it wants.

CIRM Vice Chairman Art Torres, a former state legislator and head of the state Democratic Party, is leading the closed-door negotiations on a possible compromise on the bill. On Tuesday, he hopes to be able to recommend that the CIRM board support a revised bill. In response to a query on Monday, he told the California Stem Cell Report via email that no final agreement had been reached on the legislation. Torres said that the negotiators were awaiting specific language. He said it is possible that no agreement will have been reached by next Tuesday. Another source said, “We're hopeful to have something soon.”

The legislation is now before the Senate Appropriations Committee. If the bill clears that committee, it will go to the Senate floor.

The staff of the committee this week released its analysis of the bill. Among other things, the analysis by committee consultant Katie Johnson said the bill would create additional costs ranging from $400,000 to possibly millions. The $400,000 would be for each of new performance audits of CIRM and its board of directors. The audits would be required every six years, beginning this year. The millions would come into play for additional staff salaries, although that would not affect the state's general fund. The cost would be borne by CIRM, which is financed directly by state bonds(money borrowed by the state).

Johnson wrote,

“Although CIRM is currently under the (staff) cap with 43 employees, it is reasonable that as they make more grants and further develop the loan program, more staff would be needed. CIRM's administrative expenses, including salaries, are capped at 6 percent of bond funds: 3 percent for research and research facilities, including the development, administration, and oversight of the grant making process and the operations of the working groups and an additional 3 percent for the costs of CIRM general administration. CIRM is within their administrative cap, and while paying salaries for new employees would put expenses closer to the cap, it is unlikely to exceed it.”

Members of the public who would like to tell the CIRM board what they think of the legislation will have that opportunity at a host of locations around the state. The specific sites, which range from Healdsburg to Irvine, can be found on the agenda. If you plan to attend, it would be advisable to tell CIRM in advance so there are no glitches in gaining entrance. All of the locations are open to the public by law, but some are in businesses or other locations that may not be accustomed to admitting the general public. The list of locations currently on the agenda is short and more are likely to be added in the next few days, including sites in Sacramento and San Diego.

Keeping the Cash in California: CIRM's Rules

The California Stem Cell Report aims to please. In a comment on the “parochial” item, a reader who identifies himself as Arno has asked for the specific language concerning geographic funding restrictions on research supported by the $3 billion California stem cell agenda.

We have pulled some language from the “Tools and Technologies Awards II” RFA, which is the most recent on the CIRM Web site. Similar, if not identical language, can be found in other RFAs.

The text below is from the “institutional eligibility” section of the RFA.

"All CIRM-supported research must be conducted in California. Principal Investigators may apply from non-profit and for-profit research organizations that are, at the time the Preliminary Application (PreApp) is submitted, conducting research at a site in California.

“'Non-profit organization' means: (1) a governmental entity of the state of California; or (2) a legal entity that is tax exempt under Internal Revenue Code section 501(c)(3) and California Revenue and Taxation Code section 23701d.

“'For-profit organization' means: a sole-proprietorship, partnership, limited liability company, corporation, or other legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners. Such organizations also are referred to as 'commercial organizations.'”

Here is related text from the PI eligibility section.

“The PI must have an M.D., Ph.D. or equivalent degree, and must be authorized by the applicant institution to conduct the proposed research in California.”

Here is related text from the budget section.

“Salaries for Key Personnel may include the Principal Investigator, Co-Investigators,  esearch Associates, and technical support staff (all of whom must work in California) based on percent of full time effort commensurate with the established salary structure of the applicant institution.”

Here is related text from the research design section.

“For applications from CIRM/CFP(collaborative funding partner) teams, the proposed work should be presented as an integrated project. However, applicants must clearly delineate the  research that will be performed in California and funded by CIRM from the research that will be funded by the CFP.”

(The CFP on this application is Germany.)

Parochial or Global? The California Research Spending Rule and Science

UC Davis stem cell researcher Paul Knoepfler (left) has triggered an interesting discussion on his blog centering on the question: “Does it matter where stem cell research happens.”

This is of considerable interest here in the Golden State, which has a rich, $3 billion stem cell research effort that it is basically limited to California. The reason for that is entirely political. It would have been folly to ask voters to approve the program, as they did in 2004, if the money were going to flow to Harvard, Great Britain and Singapore.

Enforcing and defining the limits on spending are not small issues. The California stem cell agency has written its rules in such a way that companies headquartered elsewhere and also with major operations elsewhere still can receive grants.

One example is the $3.7 million CIRM grant to Maine's Jackson Laboratory. The justification is that the money is largely being spent at the company's Sacramento facility. Out-of-state spending also nearly sank a $5.4 million grant to Evan Snyder at Sanford-Burnham.

However, stem cell research is global. A powerful argument can be made that funding should be global if the science is to avoid pursuing a pinched path of parochialism. Should poor or even average science be funded because it is peculiar to California? Of course, considerable differences do exist on just what is “good” science.

On his blog, Knoepfler cites the case of Advanced Cell Technology of Santa Monica, Ca., which moved its headquarters to California largely because of the passage of Prop. 71. The company, however, apparently has no significant research operations in California. All are in Massachusetts, where it was previously headquartered.

ACT has not received funds from CIRM. Has it sought any? CIRM won't say. The agency cloaks its applicants in secrecy, so it is nearly impossible to tell whether a specific company has applied for taxpayer funds. But one of ACT's researchers complained to the CIRM board about a negative decision on a grant application. The researcher said one of the reviewers had a conflict of interest, which CIRM denied.

Knoepfler and others commenting on his blog wrestle with some of the important issues of geography-based funding, which even extends to choices within California. The main argument, however, for maintenance of the ban on non-California grants is political. Support for CIRM would vanish if it were to send its billions to out-of-state researchers, regardless of the worthiness of their efforts.

(Editor's note: A very early version of this item did not contain the information about the ACT researcher's complaint about a conflict of interest.)

CIRM's Klein Honored by BIO

The largest biotech industry organization in the world this week honored Robert Klein, the first and only chairman of the $3 billion California stem cell agency, as its Biotech Humanitarian of 2010.

Jim Greenwood, president of the Biotechnology Industry Organization (BIO), said of Klein,

“His vision and determination to create alternatives to federal funding for stem cell research helped make the sate of California a global leader in disease research, giving hope and inspiration to millions of patients and families around the world,"

Klein, a Palo Alto real estate investment banker, directed the election campaign that resulted in the passage of Prop. 71 in 2004. The ballot initiative, of which Klein was a key author, created the stem cell agency, an entity which is unprecedented in California history. It also was the first government agency to use borrowed funds (state bonds) to finance scientific research.

Since 2005, CIRM has handed out more than $1 billion in grants and loans to more than 300 recipients.

The BIO award carries a $10,000 prize. Klein donated the funds to Americans for Cures, his personal stem cell lobbying group.

Klein has said he will step down as chairman of the stem cell agency at the end of this year. No names have yet surfaced as a potential successor.

WARF Loses Latest Round on Challenge to hESC Patents

Two watchdog groups said today they have scored a “major victory for unfettered scientific research” in a case involving a WARF patent on human embryonic stem cells.

Consumer Watchdog of Santa Monica, Ca., and the Public Patent Foundation of New York City filed the challenges to the WARF patents on work by Jamie Thomson of the University of Wisconsin.

The groups said in a news release that federal patent regulators have “agreed with the groups that the creation of human embryonic stem cell lines was obvious in the light of work that had been done in other species. In order to obtain a patent, work must be both new and non-obvious.”

WARF, which can appeal the decision, released the following statement.

“WARF has been invited by the Board of Patent Appeals to continue prosecution of this application and plans to do so and vigorously pursue these claims with the patent office. This decision regarding ‘913 does not affect the patent office’s 2008 decision to reaffirm WARF’s two most important base stem cell patents for primate and human embryonic stem cells, ‘780 and ‘806. These reaffirmed patents are not eligible for further appeal in this reexamination process.”

Geron Corp., of Menlo Park, Ca., which holds a license on the patent, said the decision will not “impact” the firm's “dominant human embryonic stem cell patent position.”

The 2006 challenge to the WARF patents was supported by Alan Trounson, then connected to Monash University but now president of the California stem cell agency, Douglas Melton and Chad Cowan of Harvard and Jeanne Loring, director of the Center for Regenerative Medicine at Scripps.

Loring said,

“This is great news for medical research. Human embryonic stem cells hold great promise for advancing human health, and no one has the ethical right to own them.”

The challenge involved three patents. Federal officials originally ruled unfavorably.

The Consumer Watchdog news release said,

“Under current patent law only one of the three (earfier) patent rulings could be appealed by the two groups.  That was the patent rejected by the Board of Appeals and Interferences. However, said the groups, the latest ruling by the Board of Appeals is a strong decision that could set a precedent leading to the revocation of the other two patents as well.

“The two public interest groups noted that the original three patent challenges  had already improved the situation for stem cell researchers; shortly after the PTO launched its initial re-examinations in 2006 at the groups’ request,  WARF announced a substantial easing of its licensing requirements.

“'WARF executives were acting like arrogant bullies blinded by dollar signs,' said (John M.)  Simpson (of Consumer Watchdog). 'Our challenges prompted a more co-operative stance towards the stem cell research community on their part.'”

“Both Consumer Watchdog and the Public Patent Foundation stressed that while University of Wisconsin researcher James Thomson deserved acclaim for his research that isolated human stem cells, important scientific accomplishments are not necessarily patentable.  They said one of the main reasons he was able to derive a human stem cell line was because he had access to human embryos and financial support that other researchers did not have.”

Geron issued a news release on the decision. The company said,

"'This is not a final rejection of the patent claims,' noted David J. Earp, J.D., Ph.D., Geron's chief patent counsel and senior vice president of business development. 'We are confident that WARF will make a strong case in support of the patentability of these claims in continued examination.'"

More Info on Palo Alto Institute Grant

Stanford University shed some light on a basic biology grant approved earlier this week for a researcher linked to the Palo Institute for Research and Education.

Here is what Stanford said in a news release about grants involving the school:

“A fourth Stanford researcher also received funds from CIRM, but the funds will flow through a different organization. Tony Wyss-Coray(at right), PhD, associate professor of neurology and neurological sciences, will receive about $1.52 million to study molecular and environmental factors in the adult brain that support the differentiation of neural stem cells. Understanding how old brains may generate new neurons may help researchers devise ways to combat age-related neurodegenerative diseases. Wyss-Coray has a joint appointment with the Veterans Affairs Palo Alto Health Care System, and will conduct the research as part of the Palo Alto Institute for Research and Education. “

Modest Coverage of Wechsler-Reya Recruitment

The San Diego Union-Tribune has picked up on the story that a Duke cancer stem cell researcher is being recruited to its fair city with the help of a nearly $6 million grant from the California stem cell agency.

Gary Robbins had a brief item yesterday on Robert Wechsler-Reya being courted by the Sanford-Burnham Institute, which is actually in La Jolla, just north of San Diego but totally contiguous. Wechsler-Reya was also mentioned in a piece by Heather Chambers in the San Diego Business Journal, which dealt with grants received earlier this week by local scientists.

The recruitment of the Duke scientist with taxpayer funds was first reported by the California Stem Cell Report last Tuesday.

A Google search turned up no further articles on the subject, although some parties in North Carolina are looking at the story.

Stem Cell Agency Seeking Legislative Removal of 50-person Staff Cap

Directors of the California stem cell agency yesterday decided to work with a state legislator on a proposal that would give CIRM much needed relief from an ill-considered limit that caps the agency's staff at 50.

Previously CIRM was moving towards an effort to kill the legislation, at least for the next year or so, because of other provisions it found less than agreeable.

The cap on CIRM staff was written into law by Prop. 71, which created the $3 billion stem cell research effort in 2004. The limit was an obvious attempt to defuse opposition arguments that the ballot initiative would create another large state bureaucracy. However, in a bit of redundancy, the measure also contained a spending limit on administrative expenses.

The personnel limit left CIRM with a staff about the size of that of a 24/7 Burger King to monitor currently more than 300 researchers and more than $1 billion in grants. Another $2 billion will be going out the door over the next four years or so.

Several months ago, CIRM President Alan Trounson warned directors that the quality of the agency's work could suffer as a result. State Sen. Elaine Kontaminas Alquist, D-San Jose, subsequently introduced legislation aimed at reforming CIRM and ensuring affordable access to taxpayer-financed therapies. The bill, SB1064, also would eliminate the 50 person cap.

Yesterday's action by directors marks the first time that CIRM has moved from adamant and successful opposition to any legislation that would change Prop. 71. The agency has had a sometimes stormy relationship with some lawmakers (see here, here and here) but has gradually moved away from abrasive tactics.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., praised CIRM's new position. In an email, he said,

"Instead of the usual stiff arm extended toward the Legislature from within circled wagons, Art Torres is drawing on his political skills to negotiate a deal that satisfies everyone. It's about time.”

CIRM Vice Chairman Torres, former head of the state Democratic Party and a longtime legislator, told directors that he and others were negotiating with Alquist to come up with legislation that would be acceptable to CIRM and remove the personnel cap. Torres said that he was working to add a provision for compensation for CIRM board members who are patient advocates and who serve on various CIRM working groups. The provision would provide pay for days attending the meetings as well as days preparing for them.

The patient advocate directors, seven in all not counting Torres and Klein, are critical to CIRM's operations because many of the other directors have conflicts of interest that prevent them voting on some matters. Some of the patient advocates, such as UC Regent Sherry Lansing, also have significant conflicts, leaving only about four of five relatively free to vote on almost any matter. The patient advocates, however, can lose salary from their jobs when they take time off for CIRM affairs. Such is not the case with other directors, such as medical school deans and executives, who also have staff that they can use to assist on CIRM matters.

Enactment of a bill is not a foregone conclusion. The CIRM legislation requires a 70 percent vote of both houses of the legislature, an unusual and exceedingly difficult hurdle to clear. It effectively ensures minority control over any changes and was written into Prop. 71 by CIRM Chairman Robert Klein, who plans to step down from his post in December.

It is unclear at this point what other provisions will remain in the bill. Torres said he hopes to conclude negotiations in about three weeks.

Simpson noted Torres' legislative effectiveness and deep contacts in Sacramento. “Kudos to the politically savvy vice chairman,” Simpson said. At the directors meeting yesterday, Torres was careful to note that other directors were involved in lobbying legislators including co-Vice Chair Duane Roth, who has Republican contacts; Lansing, a well-connected former head of a Hollywood studio; Michael Goldberg, a venture capitalist, and Leeza Gibbons, an Alzheimers patient advocate and Hollywood celebrity.

Simpson indirectly noted that salaries at CIRM, among the highest in state government, could provide a public relations problem in the State Capitol, where lawmakers have already made draconian budget cuts. In a reference to Torres' salary, Simpson said, “At $225K a year given the state's financial crisis, they're still paying him too much.”

Our take? We disagree with Simpson about Torres' salary but do think that CIRM salaries, whose range tops out at $508,750 for the CIRM president, pose a perception problem that needs to be carefully handled by CIRM.

Scanty Coverage of CIRM's $28 Million in Grants

The announcement yesterday that the California stem cell agency had given away $28 million for research attracted extremely modest attention in the mainstream media.

Our automated searches turned up only two brief items today: one in the San Francisco Business Times and one on the Orange County Register Internet site. Both focused primarily on the grants in their local areas.

The light coverage was to be expected. CIRM is receiving little media attention, a situation that is likely to continue short of a scandal or major research breakthrough.

$22 Million for Biology: CIRM Directors OK Two Reviewer-rejected Grants

California stem cell directors today approved more than $22 million in basic biology grants, overturning negative decisions by reviewers on two applications.

The directors ratified all 14 grants supported by reviewers, plus applications from researchers at UC Davis and the Sanford-Burnham Institute in La Jolla. The total was well under the $30 million that CIRM budgeted for the biology grant round.

The Davis grant was the subject of an “extraordinary petition” by its top researchers, Eric Kurzrock and Jan Nolta. They said in their petition that reviewers “simply overlooked important details” and committed “factual errors.” The petition was initially rejected by CIRM staff but the board decided to approve the grant for “programmatic” reasons.

Nolta appeared before the board along with patient advocates, including a tearful mother with an ailing child. Nolta is one of the few researchers who regularly attend CIRM board meetings. Patient advocates also sometimes attend board meetings and speak on behalf of specific grants.

The Nolta grant was approved on an 11-9 vote, but the board cut the amount of the grant by one-third. CIRM listed the grant at nearly $1 million in its news release.

Another extraordinary petition was rejected by the board. It was filed by Edward De Robertis of UCLA, who is also a Howard Hughes Medical Investigator. He appeared personally before the board last night. De Robertis has not been a regular at board meetings. Nor did patient advocates speak on behalf of his research.

CIRM directors also approved a $1.6 million application by Huei-sheng Chen of Sanford-Burnham that reviwers had nixed.

Fourteen of the 16 grants went to institutions that have representatives on the CIRM board. That is in keeping with the pattern over the last five years. More than $900 million out of the $1 billion in grants so far have gone to institutions with links to board members. CIRM directors with conflicts of interest are not allowed to vote on or take part in the discussion about the applications affecting their enterprises.

Of the non-board-connected recipients, one $1.5 million grant went to a business, iPierian, Inc. a South San Francisco biopharmaceutical company, and researcher Barta Strulovici. Another $1.5 million grant went to Tony Wyss-Soray at the Palo Institute for Research and Education, a nonprofit involved with the Veterans Administration system.

CIRM received 154 pre-applications  in this round that were screened by staff and a few outside reviwers. Fifty-seven pre-applicants were invited to make full applications. Fifty-two applications were received and reviewed. Reviewers made positive decisions on 14, which they sent to the board. CIRM did not announce the number of applications received from businesses.

Duke Researcher Wins $6 million Grant From California -- With a Condition

California will give a Duke University cancer stem cell research nearly $6 million if he comes to work in the Golden State at the Sanford-Burnham Institute in La Jolla.

Directors of California's $3 billion stem cell agency, as expected, today approved the research grant for Robert Wechsler-Reya. The grant is the first installment in a $44 million program aimed at luring eight stellar researchers from their posts elsewhere in the country.

Wechsler-Reya's name was not mentioned during the brief discussion of the grant by CIRM directors at their meeting in Los Angeles. But the California Stem Cell Report identified him on Tuesday. CIRM issued a news release today that confirmed our report.

CIRM Chairman Robert Klein indicated that negotiations between Burnham and Wechsler-Reya need to be concluded by the end of June, a stipulation that Burnham has apparently agreed to. Klein said approval of the grant “would be helpful in concluding the relationship.” Burnham is additionally courting Wechsler-Reya's spouse, Tannishtha Reya, another Duke researcher.

CIRM expects to review another round of applications in its recruitment program in July. The agency needs to know whether it has eight or seven grants left to make.

CIRM President Alan Trounson said it was also important to have some diversity in expertise among the scientists who are recruited. In other words, CIRM does not necessarily want to lure only cancer stem cell scientists to the state.

At one point on Tuesday, CIRM's outside counsel, James Harrison, said the grant was being taken off the directors' agenda. His statement followed our item that said Wechsler-Reya had not made a decision about leaving Duke. Later in the day, Harrison said that he made a mistake about the matter.

Burnham will not be eligible for another recruitment grant if the Wechsler-Reya goes through. Each institution is limited to one.

CIRM Directors Meeting Underway

Directors of the California stem cell agency have begun their meeting today. They are currently discussing applications for basic biology grants. Reviewers recommended funding 14 for a total of $19.6 million. Last night directors discussed scores on grants that were not recommended for funding, raising the possibility that some might be funded.

CIRM Receives Another $112 Million

Alan Trounson, president of the California stem cell agency, last night outlined his priorities, provided more details on a key strategic review of its program and sketched out upcoming CIRM events.
Directors were also told that the agency received an additional $112 million as the result of recent California state bond sales. That should ensure CIRM has enough cash to operate until the end of 2011. Bonds are virtually the only source of cash for the agency, but they flow directly to CIRM untouched by the governor or legislature.

CIRM has posted Trounson's slide presentations on its Web site. Also included are biographies of scientists who will participate in the strategic review. You can find Trounson's presentation here, budget information here and the biographies here.

California Stem Cell Directors End Public Session Tonight

Directors of the California stem cell agency just concluded their public session tonight without approving any grant applications or taking other significant action. Their session will resume tomorrow morning at the City of Hope in the Los Angeles area. We will have coverage again then.

$5.9 Million Grant to Duke Scientist Moving Forward Again

Directors of the California stem cell agency began a discussion tonight of a $5.9 million grant to help lure a Duke University scientist to California despite a statement earlier today that the matter would not be brought up.

James Harrison, outside counsel to CIRM, this afternoon said in an email that the matter would not be considered. Asked about the change this evening, Harrison replied in an email, “I was wrong! Chalk it up to miscommunication while everyone was in transit.”

CIRM Chairman Robert Klein initiated a staff presentation on the application. Directors discussed it briefly and will discuss it again tomorrow in public after it comes up in an executive session tonight.

The grant is expected to go to Robert Wechsler-Reya to help recruit him to the Sanford-Burnham Institute.

John Reed, CEO of the institute, is a member of the CIRM board of directors. His alternate, who is filling in for him tonight, will not be allowed to participate in the discussion or vote on the grant.

CIRM Directors with Conflicts of Interests on Biology Grants

Here is the list of the CIRM board members scheduled to be recused from voting on or discussing grant applications this evening on which they have conflicts of interest. You can find the review summaries of the grants here. The list was prepared by CIRM legal staff.
CIRM Basic Biology Award II
Application # Members in Conflict
RB2-01494 Feit,Hawgood,Lansing,Sheehy
RB2-01496 Lansing,Levin,Steward
RB2-01497 Brody,Goldberg,Pizzo
RB2-01498 Brody,Goldberg,Pizzo
RB2-01499 Azziz
RB2-01500 Lansing,Penhoet,Price
RB2-01502 Azziz,Lansing,Levey
RB2-01504 Gill,Lansing
RB2-01507 Brody,Goldberg,Pizzo,Pomeroy
RB2-01512 Fontana
RB2-01514 Gill,Lansing
RB2-01523 Azziz,Lansing,Levey
RB2-01526 Feit,Hawgood,Lansing,Sheehy
RB2-01527 Pomeroy
RB2-01530 Brody
RB2-01534 Lansing,Levin,Steward
RB2-01540 Feit,Hawgood,Lansing,Sheehy
RB2-01542 Bloom,Fontana
RB2-01547 Bloom,Gill,Lansing
RB2-01549 Feit,Hawgood,Lansing,Sheehy
RB2-01550 Lansing,Levin,Steward
RB2-01553 Brody,Goldberg,Pizzo
RB2-01562 Azziz,Lansing,Levey
RB2-01566 Brody,Goldberg,Pizzo
RB2-01567 Feit,Lansing,Pomeroy,Prieto
RB2-01571 Azziz,Lansing,Levey
RB2-01577 Lansing,Levin,Steward
RB2-01580 Brody,Feit,Goldberg,Hawgood,Lansing,Pizzo,Sheehy
RB2-01581 Brody,Goldberg,Pizzo
RB2-01585 Gill,Lansing
RB2-01588 Azziz,Lansing,Levey
RB2-01592 Brody,Goldberg,Pizzo
RB2-01597 Feit,Hawgood,Lansing,Sheehy
RB2-01598 Fontana
RB2-01600 Brody,Goldberg,Lansing,Pizzo
RB2-01602 Feit,Hawgood,Lansing,Sheehy
RB2-01603 Lansing
RB2-01608 Feit,Gill,Hawgood,Lansing,Sheehy
RB2-01609 Azziz,Lansing,Levey
RB2-01616 Brody,Goldberg,Pizzo
RB2-01622 Brody
RB2-01627 Lansing,Levin,Steward
RB2-01628 Pomeroy
RB2-01629 Lansing,Levin,Steward
RB2-01630 Brody,Goldberg,Pizzo,Pomeroy
RB2-01637 Brody,Goldberg,Pizzo
RB2-01640 Brody,Goldberg,Pizzo
RB2-01645 Brody,Gill,Lansing
RB2-01646 Bloom,Gill,Lansing

Live Coverage of Today's CIRM Directors Meeting

We will have live coverage and stories as warranted from today and tomorrow's meeting of the CIRM board of directors. We will be listening via the Internet from our post here on the water in El Salvador. The agenda includes $30 million in grants, perhaps reasons for the delay on the Wechsler-Reya grant, changes in outside contracting policies and a vote to stifle legislation that would reform CIRM and ensure the affordability of any taxpayer-financed therapies. The meeting begins at 4 p.m. PDT.

Action Stalled on $5.9 Million CIRM Grant to Recruit Duke Scientist

The California stem cell agency today called an abrupt halt to scheduled approval of a $5.9 million grant to lure a Duke University cancer stem cell researcher to the Sanford-Burnham Institute in La Jolla, Ca.

No reason was immediately offered for the removal of the grant application from the agenda today of the CIRM directors. James Harrison, outside counsel for CIRM, said in an email,

“This item will not be considered at this meeting.”

The CIRM governing board was expected to approve the funding for Robert Wechsler-Reya at their two-day meeting in the Los Angeles area. It would have been the first grant in a $44 million, two-year program to assist California institutions in recruiting top scientists.
Wechsler-Reya and his spouse, Tannishtha Reya, also a Duke stem cell scientist, are both being courted by the Sanford-Burnham.

We are seeking more explanation from CIRM and comment from Wechsler-Reya.

Wechsler-Reya Still Mulling Move to California's Burnham

Cancer stem cell researcher Robert Wechsler-Reya says he has not yet made a decision to leave Duke University and come to California, where he would be the recipient of CIRM's first Research Leadership Award.

Directors of the California stem cell agency today or tomorrow are scheduled to approve a $5.9 million grant for Wechsler-Reya to help lure him and his wife, stem cell scientist Tannishtha Reya, to the Sanford-Burnham Institute in La Jolla, Ca.

The California Stem Cell Report yesterday queried Wechsler-Reya concerning the award. Here is the verbatim text of his response:

“Thanks for your interest in the Leadership award.  I just recently received the news, and am very honored to have been chosen by the CIRM committee as the first recipient of this Award.  The prospect of interacting with the vibrant stem cell community at Sanford-Burnham, and in the broader San Diego area, would be truly unique, and we are really excited about this opportunity. However, as you can imagine, this would be a major move for me and my family, and therefore we plan to take some time to think about it before making a decision.

“In that vein, a couple of suggested corrections to your blog:

“- Since I have not yet decided to leave, I wouldn't say that I'm leaving Duke. ('He is considering leaving Duke' would be more accurate)

“- I'm not sure the first round drew only one applicant; there may have been more applicants, but the committee made only one award

“If you have any other questions, please feel free to contact me.  (I'm giving a talk tomorrow, and out of town until Thursday, so it may take me some time to get back to you).”

CIRM Millions To Help Snag Duke star Wechsler-Reya for Burnham

The recipient of CIRM's first Research Leadership Award, with $5.9 million in funding, is Robert Wechsler-Reya (at left) of Duke University, a reliable source said today.

He told the California Stem Cell Report he is considering leaving Duke and joining the Sanford Burnham Institute in La Jolla, Ca., where the CIRM-funded research is expected to be performed. Sanford Burnham is providing “an extremely generous commitment of laboratory space, matching funds for equipment, additional support for relocation and research, and access to excellent core facilities,” CIRM grant reviewers said.

(An earlier version of this item said Wechsler-Reya had decided to leave Duke. After it was published, he said in an email that he had not yet made a decision. CIRM, however, does not fund work performed outside of California.)

The reviewers also said that Sanford Burnham “has committed to recruiting the candidate's spouse(Tannishtha Reya, also at Duke, photo at right), who is an independent stem cell scientist; this represents a particularly beneficial leveraging of award funds.”­

The leadership award program, budgeted for a total of $44 million over two years, is aimed at recruiting top talent to California by means of assisting institutions with financing. The effort's goal is to attract perhaps eight scientists, although the first round this year drew only one applicant.

The stem cell agency has not identified Wechsler-Reya in keeping with its secrecy policy concerning the names of applicants. Directors are expected to approve the grant either tomorrow or Thursday. Then the agency will confirm the name.

John Reed, chief executive of Sanford Burnham, is also a member of the CIRM board of directors. He or his alternate is expected to be recused from both the discussion and voting on the grant for Wechsler-Reya. Reviewers have already approved the grant. CIRM directors almost never overturn positive decisions by reviewers, who conduct their work behind closed doors.

We have queried both researchers concerning the grant and their plans. We will carry their responses verbatim when we receive them. (See the "Still Mulling" item.)

CIRM's Nearly $6 Million Carrot

The California stem cell agency this week is expected to pony up $5.9 million to help lure an unidentified but “emerging leader” in cancer stem cell research to the Golden State.

The multi-year grant is the first in CIRM's fledgling program to assist California institutions with recruiting top talent from elsewhere in the country.

In keeping with its policy of secrecy concerning the names of applicants, the agency did not disclose either the name of the individual or the institution involved. But you can read a summary of reviewer comments here in which they gave the application a score of 83 out of 100.

No other applications were listed in the first round of what CIRM calls its Research Leadership Awards Program. The $44 million, two-year effort is aimed at recruiting top talent – “the most productive and promising early-to-mid career scientists in stem cell biology and regenerative medicine.”

The program stands to benefit some of 14 or so institutions that have representatives (some have more than one) on the 29-member CIRM governing board, which will vote on the application from the researcher Wednesday or Thursday at its meeting in the Los Angeles area. CIRM staff does not reveal the names of the applicant or institution to directors.  If a director has a conflict on an agenda item, he or she is not permitted to vote on the matter or even take part in the discussion. Following the vote, CIRM will disclose the winner in a press release.

The initial response to the recruitment assistance program seems modest, but CIRM is aiming to attract perhaps only eight researchers. And that depends on whether institutions such as the University of California, Salk, Scripps and others can offer up suitable candidates. At one point Kevin Eggan and Amy Wagers, both of Harvard, were identified in stem cell scuttlebutt as possible targets of the recruitment effort. But it is unclear whether they are still in play.

The awards are likely to draw more attention as institutions and potential candidates begin to focus on the largess to be approved later this week.

Remcho Up for 30 Percent Hike at CIRM; Contracting Changes Also on Table

Directors of the California stem cell agency are being asked this week to approve a 30 percent, $150,000 annual increase in payments to its longtime outside legal counsel, who gives advice on everything from the performance evaluation of the CIRM chairman to pregnancy leave.

The contract with Remcho, Johansen & Purcell of San Leandro, Ca., comes before CIRM directors Wednesday and Thursday at their meeting in the Los Angeles area.

Also on the agenda are revisions in the agency's policies for the outside contractors that are absolutely essential to CIRM's operation. Contracts with outside enterprises total roughly $3 million. Their expenses are the second largest item in CIRM's operational budget.

Documents detailing the Remcho and contract policy moves were posted on the CIRM Web site on Friday, only two business days before the CIRM board meeting.

In the case of Remcho, its man at CIRM is James Harrison, who worked with CIRM Chairman Robert Klein during the Prop. 71 campaign that created CIRM in 2004. Klein, Harrison and a few others wrote the ballot initiative.

Remcho was hired in a no-bid contract after the election. Klein has said that arrangement was approved by the state attorney general because of the specialized nature of Prop. 71.

Remcho currently has a two-year, $1 million contract with CIRM that ends this June. Directors are being asked to add $150,000 this year to the contract and approve a new one for 2010-2011 for $475,000.

CIRM staff prepared a three-page memo detailing the scope of Remcho's work, which includes virtually every piece of the CIRM pie: its finances, $500 million loan biotech industry loan program, contract negotiations, performance evaluation of the chairman and president, preparation of RFAs, contracting policies, legislation and even creation of a pregnancy leave policy.

The memo, however, did not state a reason for the $150,000 increase this year for Remcho nor did it say whether the hike was for work already performed.

Remcho bills CIRM at a rate of $350 an hour for work by its partners and $265 for associates, which CIRM says is significantly discounted. The contract would amount to about 3,100 hours for one partner, roughly a year-and-a-half of fulltime work, assuming a 40-hour week and two weeks vacation.

Directors are additionally being asked to alter their existing contracting policies in a manner that would remove some contracts from their normal oversight. Under the proposed changes, Remcho's contract and others below $600,000 for any single year would not have to be approved by the CIRM board.

New policy language would state:

“When a contract has a duration greater than 12 months, the approval threshold shall be based on the contract amount authorized for the initial year and separately for each subsequent year.”

No justification for the addition of the language was presented by CIRM staff, but it would clarify some ambiguities. It would also give the staff far greater leeway in executing contracts and avoid coming to the board with matters that could be controversial.

Board approval would be required only when the amount of the contract “is expected” to be more than $600,000, instead of the current $500,000. Approval of the directors' Governance Subcommittee would be required when the contract is likely to be more than $300,000 instead of $250,000.

Our take? Harrison performs admirably for CIRM. He is more than competent and nearly unflappable. But the arrangements that led to Remcho's close ties to CIRM, totally acceptable in the world of business, raise persistent concerns involving fairness to other law firms that might bridle at suggestions that they could not perform the lucrative work as well as Remcho. It may be impossible, for all practical purposes, to open the work to others, but directors should recognize the perception problems the contract presents.

As for the changes that would remove some contracts from the directors' approval, they should be rejected. CIRM's unusual dependency on outside help in a business and academic world of competitive secrets plus its need to monitor more than $1 billion in research requires careful and regular oversight by directors.

CIRM Directors to Hand Out $30 Million and Wrestle with Contracting Policies

Directors of the California stem cell agency meet next Wednesday and Thursday in the Los Angeles area to give away more than $30 million and to make undisclosed changes in its policies for outside contracting, which now run roughly $3 million annually.

CIRM, which is limited by law to only 50 employees, is heavily dependent on outside contractors for everything from public relations to legal advice to federal lobbying. Outside contracts are the second largest item in CIRM's operational budget, behind only its salaries and benefits.

The outside work includes such sensitive matters as computer systems and programs involving proprietary information from grant applicants and recipients and oversight of their performance.

The agenda for next week's meeting contains no information on exactly what contracting changes are being proposed. That is in keeping with CIRM's de facto policy of withholding such details from the public until it is too late for interested parties to comment in a timely fashion. With only three business days remaining before the meeting, CIRM Chairman Robert Klein has released only six words on the proposed changes: “consideration of amendments to contract policy.”

In a related matter, the board will consider the agency's contract with Remcho, Johansen and Purcell of San Leandro, which has served as its primary legal adviser since 2005. Currently it has a two-year, $1 million contract that is scheduled to expire at the end of June. CIRM also withheld information on the Remcho agenda item.

As far as grants go, the board is scheduled to hand out a budgeted $30 million for “basic biology” research and another undisclosed amount for CIRM “research leadership awards.” The latter program is new and is budgeted for $44 million over two years with grants as high as $4.5 million each. The purpose of the program is to assist institutions in luring “paradigm-shifting” scientists to California.

The basic biology round is aimed at both business and nonprofit applicants, including proposals with Japanese collaborators.

Here is a link to scores on all the biology grants to be considered next week along with summaries of reviewer comments, although the directors' agenda does not provide a link to the information. (Review summaries could not be found on the CIRM Web site for the researcher recruitment grants.)

Reviewers approved 14 biology grants, including a $1.4 million application with a score of 66. That grant was slotted for approval despite having a lower score than two other grants that scored ahead of it with 71 and 69.

The directors have final legal authority on approval but almost never overturn a favorable decision by scientific reviewers, who operate behind closed doors and do not have to disclose publicly their economic and professional interests.

Concerning the grant with the 66 score, the CIRM review summary said,

“The reviewers acknowledged that the PI is a strong leader in his/her field with an outstanding publication record in high impact journals. They did note, however, a limited experience with hESC or iPSC. While they appreciated the complementary expertise of the collaborators, the reviewers were puzzled by what they perceived to be a lack of engagement with the local community of stem cell scientists at the applicant's institution. The research environment and facilities were considered excellent.”

Under the “programmatic review” section of the summary, CIRM indicated the rationale for approval. CIRM said,

“A reviewer reasoned that this proposal fills a programmatic need in the area of hematopoiesis for CIRM. Though the application was judged risky, the proposal was felt to represent a scientific direction with great potential. The review panel discerned that the benefits of studying RUNX1 in humans warranted the risks and outweighed the concerns over feasibility.”

One scientific reviewer did not participate in the decision because of a publicly undisclosed conflict of interest. He is Ali Brivanlou of the Rockefeller University. The grant review group includes members of the CIRM board who also may vote during the group's review process.

Significantly not on the agenda is an item dealing with compensation for a new vice president of research and development, whom the agency has been seeking since last summer. The matter has been on the table for several past meetings. The absence this time could mean that no further discussion of the matter is required since a person has been hired. If so, look for an announcement next week.

CIRM directors are also expected to seek to stifle the latest legislative attempts to reform CIRM operations, improve its transparency and ensure affordable access to taxpayer-financed therapies. Their strategy is to have the measure, SB1064, sent to interim study, which would shunt the effort aside for a year or so.

The board meeting will be available via the Internet(audio only). The Wednesday meeting will take place in Monrovia at the Doubletree Hotel and Thursday at the City of Hope in Duarte. Instructions for logging into the audiocast can be found on the agenda. If you want to follow the discussion, you may want to have a copy of the agenda and any background material handy for reference.

CIRM Reform Legislation Advances in Senate

Despite industry opposition, legislation aimed at improving transparency and accountability at the $3 billion California stem cell agency easily cleared its first legislative hurdle this month.

The bill, also aimed at ensuring affordability of taxpayer-financed stem cell therapies, was sent to the state Senate Appropriations Committee on a 6-0 vote in the Senate Health Committee, which is chaired by the bill's author, Sen. Elaine Kontominas Alquist, D-San Jose.

The California Healthcare Institute opposed the bill, SB1064. The biomedical industry group said the measure's requirements for affordability would create a “disincentive” to commercialization of therapies and give CIRM less flexibility.

The board of the stem cell agency is expected next week to formally ask that the bill be sent to interim study, which would effectively kill the measure for the next year or so. However, the legislation contains a rather large carrot for the stem cell agency, which is struggling with a legal cap that limits it to only 50 employees to monitor the $1 billion in grants CIRM now has out – not to mention another $2 billion that it intends to give away. The legislation would remove the staff limit, which CIRM President Alan Trounson has said is endangering the quality of CIRM work. A spending limit on administrative expenses would remain in place.

CIRM Chairman Robert Klein and a handful of his associates in 2004 wrote the staff cap into the 10,000-word ballot measure, Prop. 71, that created the agency. It was an obvious ploy to defuse potential opposition arguments that CIRM would become another large government bureaucracy. Klein led the political campaign on behalf of Prop. 71.

Earlier this year, Alquist said that she was introducing the legislation because CIRM is essentially accountable to no one. Her action followed a call by a sister organization to CIRM that urged greater accountability and transparency on the part of the agency, whose 29-member board is packed with representatives of institutions that have received the bulk of the $1 billion given by CIRM.

The sister organization is the Citizens Financial Accountability Oversight Committee and is chaired by state Controller John Chiang, the state's top fiscal officer. Chiang endorsed Alquist's legislation as did the Little Hoover Commission, a state good government agency that studied the stem cell agency. Much of the Alquist legislation is based on the findings of the Hoover Commission.

Among other things, Alquist's bill would eliminate overlapping responsibilities between the CIRM chairman and president, which have been the source of turmoil in the past. It would change the selection process for the chairman and require performance audits of CIRM and its directors. Currently, CIRM operates with unprecedented autonomy in state government. Its finances and budget cannot be touched by the governor or the legislature. Cash flows from state bonds directly to CIRM in an unfettered stream, regardless of the state's financial crisis and severe cut backs elsewhere.

According to the Health Committee staff analysis by Lisa Chan-Sawin, Alquist states that

“while stem cell research is an important and laudable goal, concerns about transparency, accountability and oversight raised by the public, the independent Citizen's Financial Accountability Oversight Committee, the Little Hoover Commission, and the State Controller detract from CIRM's ability to provide grants and loans in the most efficient way. These concerns divert resources and attention from CIRM's ability to maximize voter's investment in stem cell sciences.”

Exciting(?) California Stem Cell News Upcoming

Look for fresh items beginning tomorrow on the California Stem Cell Report. We have finished our obeisance to King Neptune with a four-night, nonstop, sleep-deprived passage from Mexico to El Salvador. We are now ensconced in a rustic marina at the mouth of the Estero de Jaltepeque after surfing over the bar this morning in our 39-foot home, the sailing vessel Hopalong.

Off to El Salvador

The California Stem Cell Report, which has been quiet for the past week or so, will also be quiet until late next week. We leave tomorrow morning on a passage to El Salvador from Hualtuco in southern Mexico, roughly a four or five night sailing voyage. We will bring you all the California stem cell news that is fit to print after we drop anchor in Bahia del Sol and catch up on our sleep(sailing 24 hours a day also means standing watch night and day with only two persons aboard).

Knoepfler Blog Added to Links

We are in the midst of cleaning up the aging links that we have posted on the California Stem Cell Report. But first we want to call your attention to a new addition – the Knoepfler Lab Stem Cell Blog.

It is a researcher-oriented blog written by UC Davis Assistant Professor Paul Knoepfler and the folks at his lab. Knoepfler is interested in developing an exchange of information and discussion of issues among researchers, focusing on the science of stem cells. Some of the blog's recent headlines include: "Stem Cell Myths -Part 2- Teratoma are Good," "Stem Cell Banking--how far should we go?" and "What will be the next big news/paper on iPS cells?"

If you have a suggestion for a link to an Internet site dealing with stem cell issues, particularly those related to California, please send your suggestions to djensen@californiastemcellreport.com.