Incident at the Marriott: Stem Cell Agency Bars Public From Meeting

The California stem cell agency barred two academics from entering one of its conferences earlier this week in San Francisco.

The action appears to violate the spirit and probably the letter of the California State Constitution and state open meeting laws. Under section three of the constitution, approved by 83 percent of voters in 2004, members of the public have a broadly construed right of access to what their government is doing. That includes meetings at San Francisco hotels.

The incident involves Tina Stevens of San Francisco State University and and Diane Beeson of California State University, Hayward. Stevens is executive director of the Alliance for Humane Biotech. Beeson is on the board of directors – none of which has to do with whether they should have access. The law entitles the lowliest worker an equal right to government access.

Here is the account that Stevens and Beeson sent to the California Stem Cell Report.

“On Monday, June 14 we went to San Francisco's Sutter Street Marriot Hotel to attend the CIRM - Medical Research Council Human SCNT Workshop. Both academics with long-standing interests in women's health and research policy, we were heading for the session on, 'Procurement of Human Oocytes: What has been the Experience to Date?' Despite the fact that there was no public notice of an upcoming workshop on a topic of sustained interest to women's health advocacy groups, we heard about it via the grapevine and decided to attend. But upon arrival, we were barred at the door. The session on egg procurement had been switched to an earlier morning time slot and already had taken place, we were told. Our printed agenda was outdated. Further, we would not be granted entrance to the meeting underway. Why? It was closed to the public because conferees maintain concerns over protecting their intellectual property. Questions remain. What intellectual property concerns could there be over oocyte procurement policy? Why was the agenda switched up? Why wasn't a workshop concerning egg donation posted on the CIRM website in the first place when the topic is known to be of serious concern to the public, especially to women's health advocates?

“Outside the conference room, hotel staff bustled over luncheon preparations: plump rolls, dome-covered serving dishes and stacks of shiny crockery near folded cloth napkins, multiple gleaming beverage urns. California can't muster tax dollars to fund classes for students at public universities but has managed to finance posh buffets for scientists who've prioritized safeguarding their intellectual property over the public's right to know.”

We sent a copy of their account to Don Gibbons, chief communications officer for CIRM. Here is his response:

“All of CIRM's scientific workshops are by invitation only. These workshops are designed to gather information for critical decisions regarding the direction our funding should take. In order to get the latest, most up-to-date information, we have to assure scientists that their proprietary and unpublished information will not be made public. The workshop this week was not on egg donation, it was on nuclear transfer research and whether or not CIRM should continue to consider funding projects in that field or whether other technologies had made the pursuit of this difficult science no longer necessary. As always, we will be publishing a report from the workshop on our web site.

“The women who wrote to you were not told to leave, they were asked to wait until the staff member managing the event could get one of the senior staff to talk to them. They were asked for their names or IDs so she could inform us of who was making the request and they refused to provide any names or identification.

“Our lunch was simple chicken, tofu with carrots and plain steamed rice. We were offered coffee, tea and water. Hardly posh. When you are asking folks to work for you for free and take a very short lunch break it seems reasonable.”

Our take: We have written more than once concerning problems with CIRM's lack of openness. We have commented on the rampant conflict of interest issues at the agency and its lack of accountability, along with its move towards increasing closeness to the biotech industry. All of which go to CIRM's credibility and the public's trust in the agency. This lastest incident appears to be another case that does not reflect well on CIRM.

CIRM says the meeting was aimed at securing “information for critical decisions” about how it is going to spend taxpayers' money. That subject would certainly seem to be a matter of considerable public interest and justify a public need to know. As for asking for identification, that appears to be a clear violation of state law. The state attorney general's guide to California's open meeting law says agencies covered by the act are barred from imposing “ANY CONDITIONS” on attendance at a meeting.

As for the need to protect intellectual property, proprietary or unpublished information, that claim is simply poppycock. CIRM has not disclosed how many persons were in the closed-door meeting, but it is impossible to keep information secret when even more than a handful of persons is present, and most likely not even then.

Prop. 71, approved by 59 percent of voters in 2004, exempted CIRM from some aspects of the state's sunshine laws. It is not clear whether those exemptions apply in this case. But the state Constitution (section three) was also changed by voters in 2004 to guarantee the right of the public to access. That change was approved by a much larger vote (89 percent) than Prop. 71. It is our understanding that if conflicts exist in such cases, the measure with the larger vote takes precedence.

Legalities aside, it is not in CIRM's best interest to bar persons from any of its sessions – not to mention that it is not in the best interests of the people of California. CIRM needs to do more than meet the minimum standards of the state's sunshine laws. To fail to do so will create a record that will surely harm CIRM's public support and hamper its efforts to secure more funding after it runs out of the $2 billion it has left to spend.

Yamanaka Wins Kyoto Award

The Japanese stem cell scientist who pioneered reprogramming of adult stem cells has won the prestigious Kyoto Award, a $550,000 prize from the Inamori Foundation for research in advanced technology.

Shinya Yamanaka, who also has a lab at UCSF's Gladstone Institutes and is working with a CIRM-connected firm, is in San Francisco for the International Society of Stem Cell Research's annual convention.

David Pearlman, science editor of the San Francisco Chronicle, wrote,

“Robert Lanza, chief scientific officer of Advanced Cell Technology and an adjunct professor at Wake Forest University's stem cell research center, said recently that Yamanaka's work 'is likely to be the most important stem cell breakthrough of all time.'”

Jef Akst of The Scientist reported,

“Yamanaka's 2007 Cell paper was one of the most-cited papers last year, according to ISI. Last year, the No. 1 spot in The Scientist's Top 10 Innovations of 2009 went to a group that induced pluripotency in mouse embryonic fibroblast cells using only proteins, including the protein form of Yamanaka's four transcription factors, avoiding genetic modification altogether.”

Yamanaka is director of the Kyoto Universityh's iPS research center, which has an agreement with iPierian, Inc., of South San Francisco, a company backed with $20 million from the Kleiner Perkins venture capital firm of Menlo Park, Ca.

The iPierian Web site says,

“iPierian is the first company to focus the power of iPS technology to revolutionize the drug discovery process by producing iPS cells derived from patients to create truly disease-relevant model systems. These systems can be used for the discovery of new drugs and ultimately for treating diseases more safely and effectively.”

Ipierian has a $1.5 million grant from the California stem cell agency seeking to identify small molecules that promote the reprogramming of human somatic cells to the pluripotent state. Berta Strulovici is the principal investigator on that grant. The firm says it plans to seek more during a clinical trial grant offering from CIRM in the next month or so.

Four principals in the Kleiner firm contributed nearly $6 million to Prop. 71, which created the California stem cell agency in 2004. The amount was 25 percent of all funds raised for the campaign.

Six Scientists Appeal Rejection of Grants; Read Their Letters to CIRM

Six researchers this week are publicly appealing negative decisions on their requests for millions of dollars from the $3 billion California stem cell agency.

The “extraordinary petitions,” which are available online, were filed in connection with a $30 million round of stem cell immunology grants that the CIRM board is scheduled to vote on at a meeting in San Diego beginning next Tuesday.

The petitions generally focus on reviewer comments concerning the science of the proposals. Some discuss value judgments made by reviewers. Some cite what the applicant considers are errors. One researcher notes that she is a Latina leader in bringing minorities into science(one of CIRM's aims is to increase diversity in the field). Another said that “certain key points of our proposal that may not have been fully appreciated by the review panel, perhaps due to lack of clarity on our part.” Another took issue with a reviewer's comment that the principal investigator did not have a “sufficiently strong CV.” Another pointed out that the application received a score of 67, which is two points below the cutoff line. CIRM board members have noted in the past that such minor numerical differences are virtually meaningless.

Here are the names of the scientists filing the petitions: Genhong Cheng of UCLA, Elaine Reed also of UCLA, Jeanne Loring of Scripps, Olivia Martinez of Stanford,  and Defu Zeng  of the City of Hope and Chih-Pin Liu, also of the City of Hope. The CIRM board includes members from all those institutions. However, they are not allowed to take part in deliberations or vote on applications of their institutions.

Click on names of the researchers to read their letters. Summaries of reviewer comments on all 44 applications can be found via this item.

Reviewers made positive decisions on 15 proposals. The board, however, can do anything it wants with the applications, although it rarely acts favorably on petitions. A number of board members are uncomfortable with the process, which is slated for a major public review in August.

Some of the scientists filing petitions are also likely to appear before the CIRM board meeting next week to make an additional pitch for their applications.

Interested persons can hear a discussion of the grants and the petitions during the meeting via an Internet audiocast. Directions for listening to the audiocast can be found on the board agenda.

Here is a link to additional reading on the appeal process at CIRM, including agency documents.

(Editor's note: An earlier version of this item incorrectly said that 44 applications were received and 16 approved.)

Fresh Info, and Plenty of It, From CIRM for Big Meeting Next Tuesday

The California stem cell agency today presented to the public an impressive array of information on its operations and plans, ranging from the nitty gritty of the budget of its chairman's office to a scenario that would see its operations extending into 2023.

All of the topics are scheduled for discussion or action at the CIRM board's two-day meeting that begins next Tuesday in San Diego.

We have been critical of CIRM's failure to provide the public with adequate and timely information concerning its activities. Today's postings represent a dramatic improvement. The agency and its staff are to be commended.

CIRM offered plenty of grist – more than we can do justice to in a quick summary. But here are a few highlights.

One of the more interesting matters to be considered by the 29 CIRM directors next week involves a long-range look at its expenditures and its strategic goals.

The staff's 12-page analysis had the following to say about a plan that would have the agency running through its $3 billion by 2019.

“This scenario raises the concern that CIRM may be pushing its programs forward too fast to meet its mission. Stem cell science is a rapidly progressing, fast moving field. However, it is still a young discipline. The next big advances to come out of basic research can only be imagined but it is not unreasonable to expect additional paradigm-shifting results in the next couple of years that will rival the initial development of iPS technologies. CIRM may well be in position to contribute to those breakthroughs but will it have enough money and time remaining to push them into the clinic? Currently, there are programs in the pipeline with potential for significant clinical benefits but, given the early stage of stem cell research and the well-documented studies of success rates in drug development, it is difficult to predict how many, if any, of them will fulfill that promise. However, as the field matures there will surely be many more therapeutic candidates and it is reasonable to predict that some of the later ones will have a greater chance of success because they will be able to take advantage of more advanced technologies.”

The staff also took a crack at the issues on a scenario into 2023.

The budget information, which has been the subject of some attention recently on the California Stem Cell Report, is vastly improved over last year. Detail is heaped on detail. Legitimate year-to-year comparisons are made. Expenses can be viewed by “cost centers,” meaning the office of the chairman, the president and so forth.

The proposed budget for the fiscal year that begins in two weeks totals $15.7 million, compared to the $9.7 million spent through May. Last year, directors approved a $13 million budget for the agency. CIRM ran significantly under budget on its payroll costs, the largest item in the budget, and external contracts, the second largest.

For next year, CIRM projects that salaries and benefits will increase by $1 million beyond last year's approved budget. However, the proposed figure of $8.5 million is well above the $6.3 million spent through May. CIRM has 45 employees currently and hopes to hit 50. It may exceed that if legislation passes removing the 50 person staff cap. Even without hiring beyond 50, benefit costs will rise by $400,000 because of state-mandated retirement benefits for some employees.

Other significant increases include $633,000 for grant working group meetings, $1.1 million compared to $574,000 approved for this year but even higher when compared to actual spending of $337,000 through May. External contracts will rise $506,000, hitting $2.8 million compared to last year's approved figure of $2.3 million. But the jump is much greater when compared to actual expenses through May of $1.4 million. Information technology, which appears to mainly involve continuing work on CIRM's critical grant management system, will jump $431,000, from $818,000 approved last year to $1.2 million. Actual spending through May is only $610,000.

Also up for consideration at the board meeting is a $45 million grant round for research into basic biology. The three-year awards will be available to both business and academic researchers.

CIRM also reported for the first time a partial accounting of some of the benefits it is receiving from the City of San Francisco's package to win placement of the agency's headquarters in Baghdad-by-the-Bay. For the current fiscal year, they included:

“• Rent – valued by auditors at $1 million
“• Overhead on office space - $650,000 (approximate)
“• Free internet line - $15,000
“• Use of Moscone Center for ISSCR annual meeting - $100,000
“• Use of City Hall Rotunda (2 receptions) - $10,000 each”

CIRM should compile an overview of the entire package in the not-too-distant future.

Also available as of this evening are five "extraordinary petitions" by researchers seeking to overturn negative decisions on their applications for immunology grants. They are Genhong Cheng of UCLA, Jeanne Loring of Scripps, Olivia Martinez of Stanford, Elaine Reed of UCLA and Defu Zeng of the City of Hope.

The postings of the petitions also came earlier than those for previous meetings of the CIRM board.

Campaign Contributions, Kleiner Perkins, iPierian and CIRM Grant

A biotech company heavily backed by venture capitalists who contributed nearly $6 million to the election campaign that created the California stem cell agency was awarded a $1.5 million grant this spring from the very same agency.

The firm, iPierian, Inc., of South San Francisco, reportedly plans to seek many more millions from the California Institute for Regenerative Medicine in the near future.

The venture capitalists are principals in Kleiner Perkins Caufield & Byers of Menlo Park, Ca. They include John Doerr and his wife, Ann, who contributed nearly $4 million to the Prop. 71 ballot initiative, according to state records. Doerr is well-known in company start-up circles and was involved in the early funding of Google and Amazon.

Other Kleiner contributors to the campaign included Vinod Kholsa, $500,000; Joseph Lacob, $750,017, and Brooks Byers, $480,000.

The Kleiner-related contributions amounted to 25 percent of the $24 million contributed in 2004 to create the stem cell agency.

During the 2004 campaign, some critics said that Prop. 71 amounted to little more than seed money for the venture capital community. The state voter guide's argument against the proposition said, “...(P)harmaceutical company executives and venture capitalists contributed $2.6 million (to gather signatures) to put this measure on the ballot. By getting taxpayers to fund their corporate research, they stand to make billions with little risk.”

In 2008, Kleiner launched its investment into what is now iPierian with $20 million. Kleiner is its single largest financial backer. One of Kleiner's partners has a seat on the five-member iPierian board.

In response to a query, James Harrison, outside counsel to CIRM, strongly defended the agency. He said its conflict of interest code exceeds the requirements of state law. The full text of Harrison's comments can be read here, but he said in part,

“In order to advance CIRM's mission, it is critical that venture firms like KPC&B (Kleiner) invest in stem cell companies so that these start-up companies have the funds necessary to bring therapies to the market.”

Kleiner did not respond to a request yesterday for comment.

The grant to iPierian was approved with the vote of the man who was the head of the Prop. 71 campaign, Robert Klein, a real estate investment banker in Palo Alto, Ca. He is now also chairman of the $3 billion California stem cell agency. Klein sits on the grant review group that makes the de facto decisions on grants. He participated in the closed-door session during which the iPierian grant (see review summary here) was approved and the full board meeting at which the decision was ratified. Harrison said no conflict of interest existed for Klein.

Harrison said,

“California conflict of interest law does not require recusal under
these circumstances. Indeed, the connection is so attenuated, it is difficult even to understand how this could ever rise to the level of a conflict.”

Harrison said Klein had no knowledge of the involvement of the Kleiner campaign contributors with iPierian. Harrison also said that Klein has pledged to “refrain from holding any financial interests in biotech companies as long as he is chairman.”

Another member of the grant review group had a direct connection to iPierian and was recused. She is Amy Wagers, a Harvard scientist who sits on both the iPierian scientific board and the CIRM grant review group. Wagers did not respond to a request for comment.

The stem cell company has other ties to CIRM. George Daley of Harvard, co-chair of the iPierian's scientific advisory board, is on the blue-ribbon scientific panel that is slated to assess CIRM's progress next fall. In addition to Wagers, two other members (Kevin Eggan and Chad Cowan)of the iPierian advisory board serve on CIRM groups that make decisions on grants and recommend research policies to the CIRM board. John Walker, the president of iPierian, and Ted Love, a CIRM board member, both serve on the 9-member board of directors of Affymax, Inc., of Palo Alto, Ca.

Daley and iPierian did not respond to a request for comments.

Ipierian has said it is interested in applying for more cash from CIRM. According to Ron Leuty of the San Francisco Business Times, the firm plans to seek an award in CIRM's new, $50 million clinical trial round. It is expected to be one of only three companies applying in that round.

We will carry the full text of remarks from Kleiner, iPierian or individuals mentioned in this item if we receive them.

Text of CIRM Response on iPierian Grant and Campaign Contribution

Here is the text of an email June 15, 2010, from James Harrison, outside counsel to the California stem cell agency, concerning the iPierian grant.

David,

Thanks for speaking with me this morning. CIRM's Governing Board has
set conflict of interest standards that exceed the requirements of state
law, and Mr. Klein has exceeded even these standards by refraining from
holding any financial interest in biotech companies during his tenure.
I understand that your story will suggest that Bob Klein should have
recused himself from the Board's consideration of an application
submitted by iPierian for a Basic Biology II Award because iPierian is
backed by Kleiner Perkins Caufield & Byers, one of whose principals is
John Doerr who, along with his wife, contributed money to the Prop. 71
campaign. I strongly disagree with your suggestion that Mr. Klein's
participation in the Board's consideration of the iPierian application
creates a conflict. Here are the facts:

1. The Board awarded a Basic Biology II grant ($1.48 million) to
iPierian in April 2010.

2. KPC&B invested $20 million in iZumi in July 2008.

3. iZumi merged with Pierian to form iPierian in July 2009.

4. In 2003 and 2004, John and Ann Doerr contributed to the Prop. 71
campaign.

5. Chairman Klein had no knowledge that: (a) KPC&B had invested in
iZumi; (b) iZumi had merged with Pierian to form iPierian; (c) KPC&B
became an investor in the new company as a result of the merger; or (d)
that George Daley was associated with iPierian (although had he known,
it may have increased his respect for the company).

6. Chairman Klein has no financial interests in biotech companies and
has pledged to refrain from holding any financial interests in biotech
companies as long as he is Chairman.

7. California conflict of interest law does not require recusal under
these circumstances. Indeed, the connection is so attenuated, it is
difficult even to understand how this could ever rise to the level of a
conflict.

8. In order to advance CIRM's mission, it is critical that venture
firms like KPC&B invest in stem cell companies so that these start-up
companies have the funds necessary to bring therapies to the market.

Bob also asked me to relay to you that he has great respect for John and
Ann Doerr, who contributed to the Prop. 71 campaign and to other
research institutions to support their efforts to find a cure for cancer
and other major diseases.

Thanks for your consideration of these points.
__________________________
James C. Harrison
Remcho, Johansen & Purcell, LLP
201 Dolores Ave.
San Leandro, CA 94577

CIRM Releases Budget Info

For those of you eager to dig into CIRM's proposed budget for next year, the agency yesterday afternoon posted a raft of documents dealing with the spending plan. At first blush, it appears to be a 21 percent increase over the budget that was approved for this fiscal year, which concludes at the end of the month. However, the spending for this year is running under budget, which would mean that the increase is actually higher. We will have more details on the budget later.

Read Reviewer Remarks on 45 Applications for California Stem Cell Grants

To its credit, the California stem cell agency yesterday posted a timely link to summaries of the scientific reviews of applications for funding to the tune of roughly $30 million.

The reviews include positive decisions by reviewers on 16 grants dealing with stem cell immunology, which are certain to be ratified by directors at their meeting next Tuesday in San Diego.

We have been critical of CIRM's failure to provide background information on important matters to be considered at its public meetings. In this case, the material came five days in advance of date when it is to be discussed and acted on.

Look for more information concerning the rejected grants later this week or early next. It is likely that some researchers will file “extraordinary petitions” seeking to overturn negative findings by the CIRM grant review group. Those petitions can filed up to five days before the board meeting. CIRM President Alan Trounson and his staff then make a decision on whether the appeal has merit.

Grant applicants are not identified until after the CIRM board takes action, and then only on winning researchers. Information contained in the reviews, however, includes the scientific score of approved grants and summaries of reviewer remarks, such as this on a rejected grant:

“Given the team's lack of progress on basic questions related to the T59 approach over the past several years, there is concern regarding the team's ability to provide new and important information with the proposed experiments in this application.”

Or this on a grant with the top score(87 out of 100):

“The reviewers considered the principal investigator (PI) to be exceedingly well qualified to direct the proposed research. The juxtaposition of his/her hematology and immunology expertise with the co-investigator's knowledge and experience in stem cell biology was viewed as a unique and noteworthy asset that significantly enhances the potential for success.”

Any researcher seeking cash from CIRM would do well to read all 45 reviews in order to understand better what is likely to gain approval.

CIRM's board meeting begins in four business days. But still missing from the agenda is a host of additional necessary background information. That includes the proposed spending plan for CIRM for the next fiscal year, which begins at the end of this month. The budget documents were delivered to CIRM Chairman Robert Klein, who controls the board agenda, on June 7 but were apparently not up to snuff.

In response to a query about the delay in posting, CIRM spokesman Don Gibbons said the budget is being revised. Also missing is information dealing with the agency's “strategic financial projections.”

For those who want to listen in on the meeting, the agenda now contains instructions on how to do that on the Internet.

The Latest on Calimmune and California Cash

The story of Calimmune and a $20 million CIRM grant has a brief, new chapter this week – an installment that includes the word “mysterious.”

For those of you who may have forgotten, Calimmune, which is based in Tucson, is involved with UCLA in some CIRM-funded research. The young firm has connections to Johnson & Johnson, Australia and former CIRM director David Baltimore, a Nobel laureate. We carried an item with more details last November.

Yesterday, Paul Knoepfler, a stem cell scientist at UC Davis, carried an item dealing with Calimmune on his blog. The piece was part of an ongoing discussion about CIRM funding to businesses. CIRM is barred from funding research out-of-state, be it conducted by business or academia.

He wrote,

“David Jensen reported that Calimmune has lab space in Pasadena. The only reference to that that I can find is here, where it is mentioned as a company in the "Pasadena Biosciences Group", a group of tech companies sharing a building in Pasadena.

“Being somewhat puzzled, I inquired with CIRM about Calimmune and they responded that they have verified that Calimmune has a California facility.  So as far as I can tell, all companies with CIRM funding have ongoing science in California.

“Calimmune still seems mysterious to me. Perhaps the most unusual things about Calimmune is it has no website and there is nearly zero information on it on the Internet. No apparent publications. No press releases. No industry analysis. It has been referred to as 'tightly held'...I guess so!”

When we originally reported about Calimmune, Louis Breton, the president of the firm promised more details around the beginning of this year. Nothing was forthcoming at that time, and he failed to respond to an email we sent to him on March 9.

State of Stem Cell Research Examined This Morning

Two prominent California stem cell researchers are featured this morning on radio station KQED's “Forum” call-in show to discuss the state of stem cell research.

Guests on the program, which can be heard on many public radio stations and Sirius radio, are Arnold Kriegstein, director of the UCSF Institute for Regeneration Medicine, and David Rowitch, professor of pediatrics and neurological surgery and chief of neonatology at UCSF. CIRM does not have a guest listed for the program, but UC San Francisco has received $105 million from CIRM.

The broadcast is keyed to the annual convention of the International Society of Stem Cell Research, which begins later this week in San Francisco.

Comments and questions can emailed via the Forum Web site for consideration for use during the show, which begins at 10 a.m. PDT.  The show will be archived for later listening.

California Stem Cell Directors to Give Away $30 Million Next Week and Tackle Budget

One day after a one-hour meeting to consider its budget for the coming fiscal year, directors of the California stem cell agency are scheduled next week to approve the $13 million-plus spending plan.

The budget, which will go into effect at the beginning of July, was the subject of a recent kerfuffle involving the failure of the agency to post publicly its expenditure plans. The budget is among the matters to be approved by directors of the $3 billion research effort June 22-23 at a meeting in San Diego. The directors are also expected to give away $30 million in about 20 grants that are likely to involve researchers in Australia and Germany.

The grants are for stem cell transplantation immunology research, a matter of special interest to CIRM President Alan Trounson. He has said immumnology issues need to be resolved before therapies can be fully developed. Plus, the international applicants could well include some of his former colleagues in the state of Victoria in Australia. Foreign collaborators, however, must find funding elsewhere. CIRM is barred from financing research outside of California.

As usual, no details or other background information is available on the matters to be considered by the full board nor for the one-hour, budget meeting of the Finance Subcommittee. Last year, however, directors approved a $13 million budget. Presumably that figure will rise somewhat for the coming fiscal year. Maybe more, if it includes spending for hiring substantially more staff, which would be permitted under legislation pending in Sacramento.

Other matters to be decided by the board include the concept behind a new round of grants for basic biology research, appointment of new member to the Standards and Grants Working Groups and a “technical” change in the CIRM compensation program.

Also on the agency is discussion of strategic financial projections. While it is widely believed that CIRM has a 10-year life that began in 2004, no such legal limit exists. CIRM Chairman Robert Klein has discussed a timetable that extends CIRM's life to 2017. It could continue beyond that if the agency can secure additional funding after its existing $3 billion in state bonds run out.

Another discussion topic for directors is something called “development candidate portfolio review.” CIRM's agenda offered no clue to what that matter covered.

The San Diego meeting is unusually long -- scheduled for two full days. Normally the board begins late in the afternoon and then continues into the evening on the first day of a two-day meeting. It has been finishing up on the second day in mid-afternoon. Next week's meeting begins at 10 a.m. on the first day and runs to 8 p.m. The second day is scheduled for 9:30 a.m. to 4:30 p.m.

The board's Evaluation Subcommittee is in the process of conducting the first-ever evaluation of Klein's performance. It held one closed-door session last week and has another scheduled this week. A personnel session is included in the full board meeting next week. If the board takes some action on Klein, it might be announced following that executive session.

The Finance Subcommittee will hold its teleconference meeting on the budget with public access available in San Francisco, Los Angeles, La Jolla, Irvine and San Diego. Specific locations can be found on the agenda. The public will have an opportunity to participate at those locations.

The meeting of the full board is likely to be available on an audiocast on the Internet, but public participation is not available by that means. Directions for the audiocast are expected to be posted later.

Budget Contretemps: CIRM Takes Another Run at Spending Plan

The California stem cell agency has rescheduled for June 21 consideration of its budget for the fiscal year that begins in July.

CIRM cancelled an earlier meeting scheduled for Thursday after it failed to post publicly the budget documents on its web site, a perennial problem with important information needed for CIRM meetings. The Thursday meeting was scrubbed after the California Stem Cell Report on Tuesday published an item headlined, “CIRM Stiffs Public on Spending Plan.” Documents were also not available for the June 21 meeting at the time of this writing.

In a comment filed yesterday with the California Stem Cell Report, Don Gibbons, CIRM's chief communications officer, said the budget documents were submitted to CIRM Chairman Robert Klein five days ago. It was not clear whether those documents were being revised. We queried Gibbons this morning concerning the missing information for the public.

A CIRM insider said that it is “a bit alarming” that CIRM failed to provide the budget information to both the public and directors for the Thursday budget meeting of the Finance Subcommittee. The source said that the same problem occurred last year, and the staff promised to distribute the information in a timely fashion. The insider said the issue reflected poorly on the stem cell agency. (The full text of the source's remarks can be found here.)

California's state Constitution provides the public with a broadly construed right to state government information.

CIRM's Gibbons has not responded to our request Wednesday for an explanation for cancellation of Thursday's budget meeting.

CIRM's Budget Preparation Problems a 'Bit Alarming'

The California stem cell agency called off its budget review meeting this week apparently because of its inability to provide the spending plan information in a timely fashion.

According to a source who can be identified only as a CIRM insider, the situation is “a bit alarming.”

The source said,

“Frankly, the budget documents were not provided in time for anyone, either board members or the public, to digest and understand them in order to conduct a meaningful decision-making process. What is surprising and a bit alarming is that the same problem occurred last year and staff committed then to timely dissemination of the budget for this year. The cavalier 'aw shucks' attitude towards preparing and disseminating on a timely basis the budget, which one knows a year in advance will be due, reflects either incompetence or an intentional effort to avoid meaningful oversight by the directors."

Another reader, who also must remain anonymous and who works elsewhere in state government, said that the problems indicate that CIRM needs help and organizational changes. He said his own agency has been successfully putting its budget together for months now with the assistance of the state Department of General Services and Department of Finance.

CIRM has not responded to our request earlier this week for explanation of why it cancelled yesterday's meeting of the directors' Finance Subcommittee. The cancellation came after we published on Tuesday an item headlined, “CIRM Stiffs Public on Spending Plan.”

Our comment: It is clear that this is a matter that reaches the highest levels of the stem cell agency. Failure of an orgtanization to perform routine tasks – which is what budget preparation is – in a routine fashion is a strong indicator of pervasive management problems.

Stem Cell Agency Calls Off Budget Session: No Public Info Available

The California stem cell agency today cancelled its Thursday review of its proposed budget for the next fiscal year after it failed to supply any information to the public on the spending plan.

The agency did not offer any explanation for the postponement of the meeting of the directors' Finance Subcommittee. Don Gibbons, CIRM's chief communications officer, also did not respond to a query early today from the California Stem Cell Report concerning the reasons for cancellation of the session.

On Tuesday, in an item headlined, “CIRM Stiffs the Public on Spending Plan," we reported that the $3 billion agency had “extended its practice of withholding important information from the public – this time in connection with its proposed budget for 2010-11.”

The item also said,

“At last year's budget meeting of the Finance Subcommitte, five CIRM directors publicly expressed displeasure at the lack of material made available to them concerning the budget. The situation was not much better at the full directors meeting later last June. The budget documents were woefully inadequate and were not responsive to questions raised earlier at the Finance Subcommittee meeting.

“The budget failed to make meaningful year-to-year comparisons and came late to both directors and the public. And then CIRM Chairman Robert Klein – in a bit of financial flim-flam – described the spending plan as a three percent decrease, when it actually was a 25 percent increase. CIRM compounded that misrepresentation by enshrining it -- albeit with qualifiers -- in a press release.”

We also queried Gibbons concerning an earlier version of the Finance Subcommittee agenda which said it would consider “funding sources to cover budget requirements.” That language was dropped from later versions of the agenda.

On Tuesday, Gibbons said,

“That wording was a cut-and-paste carryover from a prior meeting and in light of our current funding situation, it is no longer relevant.”

His comment apparently referred to the fact that CIRM now has bond funding that will carry it through the end of 2011.

Automated Info from CIRM

For those of you who want information directly from the California stem cell agency, here is a link to a list of the RSS feeds that CIRM provides.

Using the RSS process will send press releases, announcements and meeting agendas automatically to your computer. Announcements are often newsworthy, but CIRM does not consider them news releases.

CIRM and Aussie Hopes

Earlier today we carried an item about the hope of some Australian stem cell researchers that California would come to their financial aid.

We queried CIRM concerning the news report. Don Gibbons, CIRM's chief communications officer, replied,

“We are in discussion with the the Australian MRC regarding a potential
agreement like the one we have already for the state of Victoria. It would
be bound by the same stipulations as all our other international agreements,
which means California money would only fund Californians. I think the folks
there hope the opportunity to leverage both their monetary and intellectual
capital with ours might encourage more government support there.”

Gibbons also said the reporter on the Australian story, Andrew Trounson, was not related to Alan Trounson, the president of CIRM and former Australian stem cell researcher.

CIRM Stiffs Public on Spending Plan

The California stem cell agency this week extended its practice of withholding important information from the public – this time in connection with its proposed budget for 2010-11.

In just two days, the directors' Finance Subcommittee will consider the agency's operational spending plans, but not one word is available to the public or other interested parties.

The move is in keeping with CIRM's de facto policy of withholding background information on the subjects of many of its meetings until just prior to the actual sessions. Sometimes the material is not posted until after the sessions and is not available to directors at the meetings.

At last year's budget meeting of the Finance Subcommitte, five CIRM directors publicly expressed displeasure at the lack of material made available to them concerning the budget. The situation was not much better at the full directors meeting later last June. The budget documents were woefully inadequate and were not responsive to questions raised earlier at the Finance Subcommittee meeting.

The budget failed to make meaningful year-to-year comparisons and came late to both directors and the public. And then CIRM Chairman Robert Klein – in a bit of financial flim-flam – described the spending plan as a three percent decrease, when it actually was a 25 percent increase. CIRM compounded that misrepresentation by enshrining it -- albeit with qualifiers -- in a press release.

An early version of Thursday's Finance Subcommittee agenda included consideration of “funding sources to cover budget requirements.” That topic has been removed from the budget with no explanation. We are querying CIRM concerning the matter.

Aussie Stem Cell Scientists Looking for Help From California

Life is not so good for Australian stem cell researchers, and they are hoping that the $3 billion California stem cell agency can make things better.

At least so says a news report from Down Under. According to The Australian newspaper, proposed government funding for stem cell research will be slashed by 50 percent next year.

However, the article said,

“The scientists are hoping negotiations for a potential joint funding deal between the National Health and Medical Research Council and the $3 billion California Institute for Regenerative Medicine will deliver extra cash.

“The California institute, run by Australian stem cell pioneer Alan Trounson, has a joint deal with the Victorian government.

“Speaking from San Francisco, Professor Trounson told The Australian he was hopeful an agreement could be reached.

"'We can fund research together or we can do it independently, but if you do it independently you have to resource these teams adequately,' he said.”

Trounson was director of the Monash Immunology and Stem Cell Laboratories at Monash University prior to joining CIRM in 2008.

It is not clear how California could legally provide meaningfiul financial assistance to Australian stem cell researchers. CIRM is barred from spending research funds out-of-state, which Trounson apparently refers to in his comment about “independently” funding research.

We are querying CIRM regarding The Australian article, including whether the writer, Andrew Trounson, is related to Alan Trounson.

A Commentary on Cobbling Together CIRM Numbers

An anonymous reader has left a cogent comment on the “$210,000 PR help” item. The reader says, in part,

“No one should have to 'cobble' together numbers in order to engage a public entity in thoughtful debate about the work of, for, and funded by, the citizens of the State of California.”

You can read the full comment by clicking on the word “comment” at the end of the PR item, which will take you as well to other related comments, including one from CIRM.

Move to Allow Stem Cell Agency More Staff Advances in Legislature

The magic number now for CIRM in the California state legislature is 56.

That's the number of votes required in the 80-member state Assembly for passage of legislation that would remove the 50-person cap on the size of the staff at the $3 billion agency.

The bill, SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose, cleared the Senate on a 33-0 vote on Thursday. The vote was pretty much a foregone conclusion, given that the bill has the support of Senate leadership. It now goes to the Assembly where it faces two committee hearings before reaching the floor. Approval is likely in the committees, but it is a bit trickier on the Assembly floor.

It only takes 15 lawmakers, either not voting or voting no on the measure, to block the bill. That's because Prop. 71, which created CIRM, enshrined in state law a requirement for a 70 percent vote to change the law concerning the stem cell agency. The rare and ill-considered super, super-majority provision gives a handful of persons extraordinary control over the fate of the bill. It would take only a couple of loopy lawmakers to reject the legislation, given the customary voting patterns in the Assembly.

CIRM dearly wants the employee cap removed. CIRM President Alan Trounson has warned that the quality of the agency's work will suffer without its removal. The limit was written into the 10,000-word initiative by CIRM Chairman Robert Klein.

Klein and 29-member CIRM board of directors have endorsed the Alquist bill, the first time they have given the nod to legislation that would affect the agency.

Here is a link to the analysis provided to lawmakers for the vote on the Senate floor.

CIRM Directors Judge Klein's Performance This Week

Directors of the California stem cell agency on Thursday will formally evaluate the performance of its chairman, Robert Klein, for the first time in five years.

Klein has headed the $3 billion agency since its inception, on a vote of its 29-member board of directors in December 2004. Initially, Klein, a wealthy Palo Alto real estate investment banker, took no salary and testified in court that he did not consider himself a state employee. However, he asked for compensation in 2008. The board agreed to give him $150,000 annually for what it defined as a half-time job.

Earlier this year, the directors' Evaluation Subcommittee held its first meeting to come up with procedures for evaluating Klein, the two vice chairmen,(Art Torres and Duane Roth) and CIRM President Alan Trounson. The transcript of that session can be found here.

While Klein has not had a formal evaluation during his tenure, directors discussed his performance  during the closed-door session in which they set his salary. Publicly, directors are generally effusive in their praise of Klein. Privately, some are not entirely happy. But it is clear that Klein has been the dominant force – which is probably an understatement – at CIRM since 2004.

Thursday's two-hour Evaluation teleconference meeting will begin with a public session, but is expected to promptly go into a closed-door session to deal with personnel matters(Klein's evaluation), a normal procedure permitted under state law. Following the executive session, the subcommittee is expected to reconvene and report any action that may have been taken.

Klein is a member of the Evaluation Subcommittee but is expected to recused from deliberations involving him.

CIRM Seeking $210,000 in PR Help

If you are looking for a job in PR involving a cutting edge enterprise immersed in academia, science, business and government/politics, there is a possibility at the $3 billion California stem cell agency.

The agency has posted an RFP for a “communications outreach coordinator” along with an RFP for a “public communications services” contract.

The contracts are part of a communications effort at CIRM that runs in the neighborhood of $1 million a year.


The new coordinator position is for 11 months at $85,000. The job calls for the individual to promote “a deeper and more sophisticated public awareness of stem cell research and therapy and new funding paradigms for medical research.”

The $125,000-a-year services contract calls for the winning firm to work with CIRM PR staff to “build a foundation of support for the future by creating and cementing relationships with thought leaders and patient advocates, providing proof of the value of CIRM to the state, developing creative ways to demonstrate progress in a field while also setting realistic expectations.”

The contract has been held by Fleishman-Hilliard. CIRM communications chief Don Gibbons said in an email,

“It was always the plan to rebid this every two years. I have encouraged FH to apply for this round. I hope to receive a robust and interesting set of applications.”

Deadline for applications is June 14.

IOM Study of CIRM to Come Before Stem Cell Directors in August

Directors of the California stem cell agency are moving forward with a proposal to commission a blue-ribbon study of their $3 billion effort by the Institute of Medicine.

The directors' new Science Subcommittee on Tuesday voted to bring the proposal, which is now connected to legislation to remove the CIRM staff cap, to the full board in August, said a spokesman for CIRM.

In response to an email query, Don Gibbons, chief communications officer for CIRM, said the panel directed the staff to “work with the leadership of the committee to develop the full scope of work for any IOM(Institute of Medicine)study.”

Gibbons also said that CIRM is seeking to verify that “this scope of work could qualify for the audit required” by SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose. The bill is now on the Senate floor, clearing the Appropriations Committee Thursday on a 10-0 vote.

CIRM and Alquist negotiated a compromise on the legislation that has won the approval of the CIRM board, the first time it has endorsed legislation that would alter the agency's activities. CIRM needs passage of the bill to remove the 50-person cap on CIRM staff.

During the negotiations, proposals for independent performance audits were stripped from the bill – ones that would be conducted under the auspices of the Citizens Financial Accountability Committee, a sister panel to CIRM. As it now stands, a performance audit would be required, but it would be commissioned and paid for by the agency itself. CIRM has made it clear that it is not interested in addressing the accountability concerns raised by the citizens committee.

The bill specifies that use of the state auditor would be acceptable. However, that agency might have difficulty with evaluating the science side of CIRM's performance. The state auditor could presumably hire a consultant to assist in that area. Instead of the state auditor, the stem cell agency could contract with a private firm, which is more likely to be susceptible to suggestions from CIRM about the conduct of the performance audit.

The Institute of Medicine may well tilt to the science side of CIRM's activities with a lesser focus on whether the people of California are getting a good return on their $6 billion (including interest) investment. The institute may also be less interested in CIRM's accountability and openness than would be the case with an audit done for the Citizens Financial Accountability Oversight Committee.

Still to be determined is the cost of the performance audit and timetable. Costs in the neighborhood of $400,000 have been mentioned for a performance audit. An IOM study could run more. To be useful, an audit should be done as quickly as possible. However, it is certain to take many months or more to complete.

CIRM Grant Appeal Rules to Receive More Scrutiny

Directors of the California stem cell agency plan to continue their review of key portions of the grant approval process, including the appeals that have been something of a bugaboo for both applicants and directors.

Don Gibbons, chief communications officer for CIRM, said in an email that the directors' Science Subcommittee on Tuesday concluded that “they need to devote a large chunk of a future committee meeting to just this issue.”

No further details were immediately known although a transcript of the meeting should be available in about 10 days. We will carry a fresh article on the subject at that point.

This is a matter that all California stem cell scientists should pay special attention to. It could have a significant impact on their livelihood.

For more details on the scope of the directors' concern, see this rundown on related documents.

Reading List on CIRM Grant Appeals

Here are links to items related to the CIRM grant appeal process and other pertinent issues. They include CIRM documents and items from the California Stem Cell Report.  


This list was revised and updated July 19, 2010.

Competing for California Stem Cell Cash: Rules of the Game Coming Under Scrutiny 5/18/2010

Stem Cell Grant Competition: Remove CIRM Directors From Appeals? 5/23/10

Sticky, Troubling Appeals by Rejected Researchers Targeted by Stem Cell Agency 7/18/10

CIRM Finally Discloses Grant Appeals Change Proposals 7/19/10

Pre-application review – Most recent CIRM report (Jan. 2010) on the process

Extraordinary petition policy – Version as of 5/25/10

Appeal policy – Version as of 5/25/2010

Transcript of 5/25/10 Science Subcommittee meeting dealing with appeals issue

CIRM Directors Okay Compromise Legislation

Directors of the California stem cell agency today endorsed legislation that would remove the 50-person cap on its staff and which is also aimed at ensuring affordable access to stem cell therapies financed by taxpayers.

In response to a question from the California Stem Cell Report, Don Gibbons, chief communications officer for CIRM, said the vote was unanimous. No further details were disclosed.

It is the first time that CIRM directors have endorsed legislation that would modify the agency's operations.

The legislation, SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose, is now set for approval on Thursday by the Senate Appropriations Committee. Then it will go to the Senate floor.

Here is a link to an earlier item on the bill with more details on its current provisions.

CIRM Comments on New NIH Disclosure Rules

Don Gibbons, chief communications officer for the California stem cell agency, filed this comment today on our post, “Disclosure Proposal Likely to Affect CIRM.”

“Casual readers of your posts will take away the notion that NIH is now requiring scientist peer reviewers to post their financial conflicts on the web. That is not true. Existing NIH policy, which is mirrored by CIRM policy, as well as the revised NIH policy, pertains to recipients of NIH grants, not reviewers. Therefore, why does your headline assert the NIH policy change is "likely to affect CIRM." Yes, most of our grant reviewers have NIH grants and will need to post their financial forms on their home institution web sites, but that does not impact CIRM.”

Our point is that CIRM, whose chairman has repeatedly vowed to adhere to the highest standards of openness and transparency, cannot ignore a new standard for disclosure of industry ties by researchers. Currently CIRM scientific reviewers do not have to disclose publicly their financial interests. Under the new NIH rules, those reviewers will be disclosing their industry ties on their home institution Web sites. If CIRM does not disclose the same industry ties of its reviewers on its Web site, the agency will effectively be flouting what will be THE national standard for disclosure by researchers(albeit a weak one, based on what the Institute of Medicine has to say).

The financial interests of CIRM reviewers do have a potential impact on their grant application decisions, which CIRM acknowledges. As Francis Collins, director of the NIH, said, the rules are needed to preserve the “integrity of the scientific enterprise.”

IOM Proposal Not So Good, Says One CIRM Director

One director of the California stem cell agency is less than enamored of a proposal for a study of the agency by the prestigious Institute of Medicine.

Jonathan Shestack, co-founder of Cure Autism Now and a Hollywood producer, said in an email,

“We may have complaints about CIRM, but they are not of the sort we expect IOM, its cultural and ideological doppelganger, to point out.

“Unless there is a glaring problem, having CIRM pay for an IOM report with its own money is the height of folly and a parody of good government.”

The director's Science Subcommittee is scheduled to take up the proposal at a meeting tomorrow(Tuesday).

State's Top Fiscal Officer Lauds Disclosure Proposal Likely to Affect CIRM

State Controller John Chiang, chairman of a key panel overseeing the California stem cell agency, today praised proposed NIH financial disclosure rules that are almost certain to have an impact on CIRM, one that the agency has avoided so far.

Chiang, the state's top fiscal officer, is head of the Citizens Financial Accountability Oversight Committee(CFAOC), a sister group to CIRM and one that was also created by Prop. 71.

Chiang was commenting on the NIH's new, proposed regulations that are likely to lead to the public disclosure of the financial interests of the reviewers who make de facto decisions on $3 billion in CIRM grants. The stem cell agency has adamantly refused to release the conflict-of-interest information.

In remarks made in response to a query from the California Stem Cell Report, Chiang said,

"I applaud the NIH's proposal to improve transparency and accountability by publicly posting financial disclosure reports of scientists and researchers who receive NIH funding. In January, the Citizens Financial Accountability Oversight Committee, which I chair, voted to post our members' statements of economic interest on our website, and to urge CIRM's governing board members and staff to post the same information on the CIRM website.

"As I said at the time, Californians voted to provide billions of public dollars to find cures for chronic, debilitating and deadly diseases that affect millions of Americans each year. To ensure that taxpayer dollars are spent lawfully, wisely and successfully - and to maintain the public's confidence in their investment - CIRM must pursue the highest standards of transparency."

Although the CFAOC is a creature of the legal draftsmanship of CIRM Chairman Robert Klein and others, the agency has moved away from the panel after facing its questions. In recent legislative negotiations, CIRM representatives were successful in removing a provision that would require the Chiang panel to conduct the first-ever performance audit of the CIRM and its board of directors. Now, the bill, SB1064 by Sen. Elaine Kontominas Alquist, D-San Jose, instead contains a provision for a performance audit that would be commissioned by CIRM itself rather than by an outside group.

The CFOAC recommendations for more accountability and transparency at CIRM triggered a smattering of negative newspaper articles. Michael Hiltzik, a business columnist for the Los Angeles Times, the state's largest newspaper, said CIRM should exemplify not only good science, but good government. A scathing San Diego Union-Tribune editorial carried the headline, “Stem-cell shenanigans / Lawmakers should force state institute to shape up.”

Both Chiang and Gov. Arnold Schwarzenegger post online the statements of their top officials along with their expense claims. Chiang's listing of the material is much more user friendly than the governor's, which are harder to find and harder to navigate.

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.