CIRM's Self Interest Demands More Openness

Cobbling together a $3 billion research program from scratch is no simple task. No chairs, no phones, no computers, no payroll system but no employees either or, for that matter, an office – that was picture more than five years ago when the California stem cell agency launched its unprecedented enterprise.

Adding to CIRM's teething problems were the state's “sunshine” laws. They require the agency's meetings and its records to be open to the public. On top of that was a newly minted change in the state Constitution, also in 2004, that for the first time in state history guaranteed the public the right to access to the people's business.

Some adamant advocates of sunshine laws seem to believe that compliance with all that openness is an easy matter that has little organizational impact. But even the state Department of Justice, in its guide to open meeting laws, acknowledges that the sunshine requirements place an “unnatural” burden on state endeavors. “Frustrating” and “inefficient” were a couple of other terms applied to the “sunshine” law.

It is much easier to sit down in a quiet, private room – away from the great unwashed – and organize a complex enterprise that, in the case of the stem cell agency, is to this day still trying to work out the kinks.

Nonetheless, a “higher value” exists, according to the Department of Justice. A seat must be reserved at the table for the public.

Which brings us to the “Incident at the Marriott” last month. That's when CIRM barred two academics from a meeting that CIRM said was aimed at gathering information for “critical decisions regarding the direction our funding should take.” Certainly a topic of considerable public interest since CIRM's costs (all cash borrowed by the state) run to $6 billion, including interest.

Since that we wrote that item, the barred academics have sent us a copy of the agenda for the meeting that they were originally seeking to attend. Among the matters to be discussed was the sensitive subject of "reimbursement" of human egg donors.

However, a scientist in attendance at a related workshop that day said we were off base when we deplored CIRM's flouting of state law.

The researcher, who must remain anonymous, said in an email,

"This meeting was about sharing the scientific details of the work of the few researchers who have been able to get SCNT to work in animals. There was a scientific discussion about the feasibility of human SCNT, and about what the scientific community would learn if SCNT were to be successful in humans. The goal was to share information about the science. Since so little is published about this field, the scientists were given a safe environment to frankly discuss their unpublished work and their failures. This was a landmark meeting, and it was all about science. It would have never accomplished its goal of scientific communication if the public had been invited. There will be a public report. If the ethics of egg donation are to be the main topic, then there should be another meeting, because that is an entirely different subject."

We respect that point of view and acknowledge that some scientists could have been reluctant to be forthright. But warnings about the possibility of the withholding of information have been common in the decades that I have been connected with state government issues. The reality is that interested parties usually become quite candid when cash is at stake – especially the potential loss of funding.

The paramount consideration in all this is the public nature of the stem cell research effort. When the supporters of Prop. 71 went to the people asking for the money, they implicitly acknowledged that public concerns come first – not scientific sensibilities. And without the public involvement, there would be no California stem cell agency.

By operating under a cloak of quasi-secrecy, CIRM ill serves its own interests. It lays down a record that will fuel opponents, much to their glee, a few years from now when CIRM has its hand out for more state cash, a move that CIRM Chairman Robert Klein is already discussing.

The law, the state Constitution and agency's self-interest are clear. CIRM should maximize its openness and welcome involvement by the public – not to mention its special constituencies in industry and academia.


(Editor's note: Some readers are interested in directly raising their concerns about the lack of openness at CIRM. They can send an email to mking@cirm.ca.gov and ask that it be distributed to directors. If you wish, you can send a copy to us at djensen@californiastemcellreport.com and we will reprint it. Even if it is on the other side of this matter.)

The Agenda from the Incident at the Marriott

CIRM barred two academics from a meeting last month in what appears to be a violation of the state open meeting laws. Below is the agenda, as provided by the two, for the meeting that they were attempting to attend.

A scientist from New York and one from Australia were on the panel at the meeting, whose topics included the level of reimbursement for human egg donors, a subject that readily moves into cash-for-eggs questions. The agenda provides no clear indication of a need to protect proprietary information, as contended by CIRM.

Tina Stevens of San Francisco State University, one of the two persons barred by CIRM, said of the CIRM meeting agenda,

“Please note that the proposed discussion questions following the agenda items concern, in part, paying women for their eggs for research -- something that California has clearly prohibited. Why does CIRM think it is or should be empowered to consider, make, skirt, or change policies that impact women's health without broad public awareness, input, and debate?”

Here is our original item on the “Incident at the Marriott” and a follow-up item. Here is the agenda from the June meeting.

“Session 6. Procurement of human oocytes:

“What has been the experience to date?

“15 minute talks / 30 minute discussion

“Chair Renee Reijo-Pera, Stanford University

“11:10 am Jeffrey Janus, International Stem Cell Corporation

Procurement of human oocytes in California and Russia: five years experience of International Stem Cell Corporation.

“11:25 am Scott Noggle, NYSCF

“11:40 am Bernie Tuch, Sydney, Australia

“11:55 am Aaron Hsueh, Stanford University

“12:10 pm Discussion

“Questions to consider for presenters and for discussion

“What levels of donor reimbursement are necessary to support research? (Is it feasible for CIRM to support SCNT research without allowing reimbursement)

“Are there reasons for donors to prefer research donation over reproductive use of oocytes?

“What is the experience of research donors with regard to OHSS or other adverse outcomes?

“Are research donation programs being evaluated for donor satisfaction?”

Comment on Lewis' $250,000 Contract

An anonymous comment was filed this morning on the “$250,000 Lewis” item. We are publishing it here instead of the usual posting as a “comment.” The reason being that, as filed, the post contained a personal remark about Alan Trounson, one that could be considered potentially libelous. We encourage all those posting comments to avoid personal remarks about all individuals. Comments about how individuals perform their jobs are acceptable and may be extremely forceful.

Here is the comment as edited. We substituted “wildly” for the originally phrase in the comment.

“Interesting..first the budget fiasco and now the stealth hiring of Lewis with a contract number just below one requiring governing board scrutiny. Methinks Trounson believes he is a law unto himself and that he need not seek approval for any activity or spending. While state workers get minimum wage, Trounson spends (wildly).”

$250,000, Six-Month Contract for CIRM's Lewis

The new interim vice president for research and development at the California stem cell agency holds a $250,000, six-month contract that calls for him to push hard to develop clinical applications that CIRM hopes will demonstrate the success of its $3 billion effort.

The hiring -- as a consultant -- of Alan Lewis (at right), onetime head of ViaCyte, Inc. of San Diego (formerly Novocell) and the Juvenile Diabetes Research Foundation,  brings at least a temporary halt to the search to fill the new VP post that was created after Marie Csete resigned suddenly as chief scientific officer. The CIRM Web site no longer lists the VP position as available.

CIRM President Alan Trounson sought unsuccessfully for a nearly a year to fill the job. This spring he appeared to have run afoul of resistance to his plans for compensation for the post, which would normally top out at $332,000 annually if the position were filled by a regular CIRM employee.

Under the terms of Lewis' contract, he is expected to work about 24 hours a week and meet with CIRM officials at least once a week at the agency's San Francisco headquarters. (CIRM provided an unsigned copy of the contract, which is a public document, at the request of the California Stem Cell Report.)

Lewis is the third top executive of CIRM to be working on a part-time, paid basis. The others are CIRM Chairman Robert Klein, who receives $150,000 for half-time work, and co-Vice Chairman Art Torres, who is paid $225,000 for four days a week. By way of contrast, CIRM President Alan Trounson receives $490,008 annually for fulltime work.

Lewis' agreement runs from June 21 through the end of this year at a rate of $2,500 a day, “with pro-ration (sic) for less than four hours.” The contract is capped at $250,000 not including travel expenses.

On June 23, Trounson told the CIRM governing board that Lewis would be serving as a consultant two or three days a week "to help us with the clinical, preclinical programs." Trounson did not mention that Lewis would carry the title of interim vice president for research and development nor did he mention the size of the contract. If it had been above $250,000, it would have required director approval.   

Lewis is expected to travel widely and possibly internationally. Trips from his home in Solana Beach near San Diego in Southern California to CIRM's headquarters will be paid for by CIRM.

Lewis has had a long business career, which raises questions about possible conflicts of interest. In addition to Novocell, he worked for Signal Pharmaceuticals and Celgene in the San Diego area. He left Novocell in 2008 to work for the diabetes group. The CIRM contract said Lewis affirmed that “there exists no actual or potential conflict between the consultant's family, business or financial interest and the services provided under this agreement.”

ViaCyte is the recipient of more than $26 million in awards from CIRM.

Lewis must file a statement of economic interests that is required of most state officials. We have asked CIRM for a copy of that document.

Here is how the contract describes Lewis' responsibilities:

“• Consult Senior Management on biotechnology, pharmaceutical and investment sectors to enable and enhance the development of clinical applications in CIRM’s scientific portfolio.
“• Consult on the preclinical and clinical development phases of CIRM’s programs and projects involving not-for-profit and for-profit teams, including assembling and working closely with CIRM advisory committees to provide oversight of these programs and make go/no go recommendations to the President for continuation of CIRM support.
“• Work in close collaboration with the Executive Director of Scientific Activities.
“• Integrate basic discoveries where possible into the translational and preclinical pipeline and identifies gaps in CIRM’s scientific program for delivery of cell therapies and related products.
“• Develop and implements strategies to aid clinical applications such as in the critical areas of manufacturing, drug and cell product safety and efficacy.
“• Consult Senior Management regarding interface approaches with national and international regulatory organizations”

The contract differs somewhat from the CIRM news release on Lewis. It said that he would “take direction” from the executive director of scientific affairs – not work in collaboration. This is of significance because their duties overlap and could be a source of friction if not carefully managed.

(Photo from San Diego Union-Tribune)

(Editor's note: An earlier version of this item incorrectly said that Lewis' contract was not mentioned by Trounson at the June CIRM board meeting.)

Alan Lewis Joins CIRM as VP for Research and Development

The California stem cell agency today confirmed that that Alan Lewis, formerly of head of Novocell and the Juvenile Diabetes Research Foundation, will be joining its small band in in San Francisco.

Lewis was named interim vice president for research and development. He will be working two to three days a week and focus on  “identifying strategic opportunities and developing action plans to fulfill the mission of the Institute.”

In the CIRM news release, Patricia Olson, executive director of scientific activities for CIRM, said,

“His many years of experience in developing therapies for patient benefit in both for-profit and non-profit organizations will be valuable to CIRM as we expand our program to include clinical projects.”

The announcement from CIRM said Lewis will take direction from President Alan Trounson and Olson.

Trounson, who has been seeking to fill the VP slot for about a year, was not quoted in the release nor was CIRM Chairman Robert Klein.

CIRM did not immediately disclose Lewis' compensation. The VP position has a salary range that tops at $332,000. The news release did not say whether Lewis would be an employee or an outside contractor. However, a CIRM insider told us he would be a contractor. The agency is heavily reliant on outside contractors because it is limited by law to 50 staffers. Currently it has about 45 employees.

Lewis' old firm, now known as ViaCyte, has $26.3 million in awards from CIRM.

The California Stem Cell Report first reported Lewis' link-up with CIRM on Monday.

Escape Therapeutics: The Latest Business to Win a CIRM Grant

A firm founded by a part-time, but award-winning poet was the only company to receive a grant in last week's round from the $3 billion California stem cell agency.

The firm is Escape Therapeutics of Palo Alto, Ca. The principal investigator on the $1.5 million CIRM grant is Basil Hantash(see photo), founder of the firm and an Illinois native who held a biodesign fellowship in 2006-07 at Stanford.

Only one other company filed an application in the $25 million immunology round, originally budgeted for $30 million. That firm's name was withheld by CIRM, which is their general policy concerning unsuccessful applicants.

CIRM reviewers gave Hantash's application a 72 score. The review summary cited some weakneses in the application, but said it was “worthwhile and achievable.”  In the words of the reviewers, the research was “well designed, logical and an interesting approach to pursue.”

Founded in 2006, Escape does not have a Web site. But, according to a company document provided by Hantash, Escape is an early stage, privately held biotech firm “focused on accelerating the commercial availability of allogeneic stem cell therapies by solving the key translational hurdle preventing their clinical utility – immune mismatch and subsequent donor rejection.”

The information continued,

"Invented by Escape’s founder Dr. Hantash while at Stanford University, the company’s platform technology represents a significant potential breakthrough that can revolutionize the treatment of blood-borne disorders such as leukemia, type I diabetes, and autoimmune diseases. Escape’s innovative technology allows for the creation of the world’s first allogeneic, 'off-the-shelf' therapy capable of being used in any patient irrespective of their HLA profile."

In addition to the last week's grant, searches on the Web showed that Escape has other ties to CIRM. It is one of four internship sites for a CIRM training program run by San Jose State University. Asked for comment, Hantash said,

"Escape focuses the training process on translational stem cell research skills, rather than pure academic basic science research. Our interns were the first to publish out of all the interns in the program, so we feel they gain commercialization experience while retaining the rigor of academics. This is a marriage of a Stanford-like focus on entrepreneurship and an industry eye on developing life-saving products to alleviate patient suffering."

Hantash was a partner from 2007 to 2009 at Proteus Venture Partners, a San Francisco Bay Area investment and advisory firm focusing on regenerative medicine. Proteus was heavily involved in CIRM proceedings concerning the agency's $500 million biotech loan effort. Hantash said his responsibilities included fund-raising and deal sourcing and evaluation.

A number of references on the Internet refer to Hantash as an award-winning poet. We asked him to provide a sample of his work. It can be found here.

(Photo of Hantash from Proteus web site)

"Seduction" -- A Poem by a Stem Cell Scientist

At the request of the California Stem Cell Report, Basil Hantash, CEO of Escape Therapeutics, Inc., of Palo Alto, Ca., sent us this sample of the poetry he writes while not working on stem cell research.

(On Aug. 11, 2010, Hantash emailed us, asking us that the poem in this item be removed from the Web site. He said tended "to agree with the anonymous comment that it may not be an appropriate venue."
As a courtesy to him, we have removed the poem.

(We heartedly disagree with the anonymous comment. A narrow-minded focus hampers all of us -- not only scientist and policy wonks.)

Former Novocell/JDRF Chief Hooking Up With CIRM

Alan Lewis, the fomer head of Novocell (now ViaCyte, Inc.) and the Juvenile Diabetes Research Foundation, will be joining the $3 billion California stem cell agency shortly, the California Stem Cell Report has learned.

It is not clear what his responsibilities will include or whether he will be serving as a consultant or on staff. The agency has been seeking a vice president for research and development for nearly a year.

CIRM President Alan Trounson created the vice president's position after Marie Csete resigned abruptly as CIRM's chief scientific officer about 12 months ago. Trounson said he would not fill the post of chief scientific officer. Instead, Trounson came up with the new VP position and said he would seek someone with industry experience. He seemed to have a candidate ready this spring. The CIRM board convened closed-door meetings to discuss compensation for the post, but the sessions ended with no announcement.

Lewis, however, could be filling another position either on staff or as an outside consultant. Lewis resigned as head of JDRF in May for personal reasons. He said he would be returning to Southern California to be with his family.

He joined JDRF in January 2010. He served as president of Novocell from 2006 until he left for the foundation. CIRM Chairman Robert Klein has also been involved in juvenile diabetes issues and was recognized in 2006 as “public service leader of the year” by JDRF. After Lewis left Novocell, it received a $20 million loan from the agency. ViaCyte/Novocell has received four awards from CIRM for a total of $26.3 million.

We queried CIRM concerning Lewis. The agency was noncommital. Lewis could not be reached for comment.

Top 10 Tips for Snagging Cash from CIRM

For businesses seeking clues about how to win cash from the $3 billion California stem cell agency, a UC Davis researcher is offering 10 free tips.

We took a look today at the advice offered up by Paul Knoepfler on his blog. It all makes good sense to us. But what do know? We have never received a grant from CIRM. Knoepfler has.

Here are a couple of his suggestions.

No. 3 –

“Read the RFA very carefully. Perhaps even read it 5 times. It may seem straightforward, but think about the key words being emphasized by the funding agency.”

No. 6 –

“Hire professional grant writers with experience in industry and academia. This is an investment well-spent.”

We also have a couple of our own.

Attend meetings of the CIRM board of directors, particularly those dealing with grant approval. Nothing else will inform you as well concerning the board's thinking on grants. You will also have to a chance to meet some of the very sharp people who control the purse strings.

Read all of the extraordinary petitions filed by rejected grant applicants. Read at least 50 or more of the summaries of reviewers' comments on applications, splitting the material between top-ranked grants and ones that did not make the grade.

Good luck!
 

Stem Cell Information Resource

A Silicon Valley firm has compiled a fine list of sources dealing with stem cell issues and regenerative medicine, ranging from investment info to links to reports on stem cell research in China and Singapore.

The list of resources was put up by Proteus Venture Partners. Many of the sources are familiar but the list is long and comprehensive. Sad to say, it does not include the California Stem Cell Report.

You can find the information roundup here.

NIH and Exculpation

For those of you not fully informed of the tricky byways of stem cell science, the Boston Globe carried a nuanced editorial today that laid out the significance of an arcane “exculpatory” matter last week

Arcane, that is, to folks who do not fiddle with human embryonic stem cells.

The case involved possible use in federally funded research of embryos donated some years back. The feds said no because they were given under conditions that do not meet today's ethical tests, although the donations met the standards of the day, which actually was only a decade or two ago. The Globe called the NIH action a “major blow.”

You can read all about it here.

Biopolitical Times Says More Openness Needed at CIRM

The Biopolitical Times says the public has a right to attend the meetings of advisory groups to the $3 billion California stem cell agency.

On June 23, the online publication of the Center for Genetics and Society of Berkeley, Ca., commented on our report about how CIRM barred two academics from one of its meetings. We said that the action certainly violated the spirit of a relatively new provision of state Constitution that gave the public a broadly construed right to access to government activities, and likely violated the letter of the law as well.

Jesse Reynolds, project director on biotechnology accountability at the center, agreed. He wrote that “CIRM is a public agency, and the public has a right to attend such influential deliberations.”

One of our readers, Justine Durrell, asked this week how CIRM could begin to address its problems with openness. One of the first things it could do is to be sure that such meetings are open to the public and be sure that interested parties are notified in a timely fashion in advance of the meetings.

Tracking CIRM Grants: "Thin Ice" Lurking?

Directors of the California stem cell agency today approved a $15.7 million operating budget for next fiscal year – 28 percent higher than this year's spending – and requested a report from its staff concerning its critical grants management system.

The report was sought after CIRM Director Michael Friedman, CEO of the City of Hope, said he wanted to “express in the strongest possible terms my discomfort” with the decision by CIRM staff to build a custom grants management system.

He said that “unless you are prepared to spend enormous amounts of money, you are stepping on some very thin ice.”

“Everybody has seen horrible examples of custom-designed system that go bad.”

Friedman asked if any subcommittee of directors had approved the decision to go forward with a custom system. The answer was no, but that the decision had been carefully considered by CIRM staff.

At that point in the meeting, we lost the Internet connection to the CIRM audiocast. By the time it was restored , the budget discussion had concluded with approval of the spending plan. Don Gibbons, chief communicastions officer for CIRM, told us by email that the report had been requested. (We will revisit the budget discussion after the agency posts a transcript of the meeting.)

On Monday, when we reported some of the details of the budget, we noted that spending on information technology is scheduled to jump 53 percent from $817,000 to $1.2 million, an increase of about $433,000. Most of that goes for the grant system.

CIRM is trying to oversee more than $1 billion in grants to more than 300 recipients and, at the same time, hand out many hundreds of millions more in the next year or so. It is building custom programs for entire process, from applications to oversight. Currently, CIRM has a $125,000 RFP out for “systems analysis and software development services” and hopes to have a company on board next month.

The board also discussed the strategic financing report(see here and here), which will be wrapped into an external review of CIRM's strategic plan next fall. There appeared to be no clear consensus at this point whether the agency should make grants as speedily as possible or husband its resources to deal with unexpected opportunities in the fast-moving stem cell field. Related to that was a discussion of the CIRM grant portfolio. No action was needed on either item.

Comments by John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., were discussed briefly after they were read into the record. Simpson said he was “troubled” by what appears to be a lack of a level playing field for grant applicants from business and the dominance of academic institutions, who constitute a plurality on  the board.

CIRM Chairman Robert Klein said he did not think that the biotech industry agreed with Simpson's concerns about whether business grant applications were being treated fairly. Klein noted that BIO, a national biotech industry group, recently recognized him with a national award, indicating that the group valued CIRM's contributions. But Klein said more progress was needed.

Vice Chairman Art Torres indicated that he took Simpson's concerns about the seriously but said the public does not understand just how stringent are the conflict of interest standards at the agency.

Directors also approved the a concept proposal for a $45 million round of grants for basic biology research.

You can find slides from the report by CIRM President Alan Trounson here. He discussed recent stem cell research, a proposal for a CIRM online journal and upcoming CIRM workshops. The slides also include those used for the budget presentation.

Fresh Joy from Cyberspace

We have a new connection to the CIRM audiocast. Directors are taking up the strategic financing report now. CIRM VP John Robson is speaking.

Joys of Cyberspace

We have lost the audiocast connection to the CIRM board meeting so reports may be limited. The broadcast disappeared entirely, resumed with one side of someone's phone conversation and then provided a steady electronic hiss.

'Troubling' Trend: Is CIRM Playing Field Level for Business?

A longtime observer of California stem cell matters today said he is troubled by a trend at CIRM that appears to give short shrift to research at biotech businesses in the Golden State.

John M. Simpson has been watching the California stem cell agency since late 2005, along with participating in its affairs, most notably development of its IP policies.

Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., prepared this statement to be read at today's CIRM board meeting in San Diego. Simpson is on the East Coast on other business and may not be able to reach the Washington, D.C., teleconference location to deliver his remarks personally. Here is the full text.

“I apologize that that I was unable to attend today's ICOC meeting. I
appreciate this statement being read into the record on my behalf.

“When Consumer Watchdog began its Stem Cell Project almost five years ago, I
naïvely expressed concerns that the program would be hijacked by the biotech
industry. That has -- at least so far -- not happened; rather, it has been
dominated by academic research institutions, whose representatives hold the
largest number of seats on the board.

“I believe the trend is troubling enough to ask whether the playing field is
level for all applicants. I believe there are grounds for concern.

“Here are some suggestions to improve the situation:

“-- A task force should be convened to consider why companies have fared so
poorly and what should be done. All sessions must be public.

“-- A workshop should be scheduled with interested companies to discuss ways
to improve their applications. It must be opened to the public.

“-- An effort should be made to recruit scientific reviewers with substantial
experience in research programs conducted by businesses.

“-- CIRM meetings that currently include only grantees should be expanded to
include all legitimately interested parties. Currently you have an annual
conference for all grantees. This must be opened to include all grant and
loan applicants, even if they were unsuccessful. If there is a concern
about expenses, unsuccessful applicants could be charged a modest fee. What
better venue to learn what makes a successful application than a conference
that includes CIRM's awardees? It would also create opportunities for
developing collaborations. Currently CIRM continues to suffer from the image
that it is a closed club. Opening conferences to all applicants -- and even
other interested parties -- would help correct that.

“Thank you for your consideration.

“John M. Simpson”

Mystery Item No. 16 Revealed

Here is a link to Mystery Item No. 16. It involves an overview of CIRM's current grant portfolio and is designed to "facilitate programmatic decision-making." Pat Olson, executive director of scientific activities, is presenting the assessment as we write. Her Power Point presentation appears to have been posted by CIRM yesterday afternoon. We reported incorrectly earlier today that the material was not available this morning.

CIRM Directors Discuss Strategic Financing Plans

Directors of the California stem cell this morning began their meeting with a discussion of strategic financing plans. The scenarios being examined would mean different end dates for funding more research. Under one possibility, no grants would be approved after 2014. Another would see funding end in 2017. Both scenarios do not envision funding beyond the remaining $2 billion that CIRM has.

More Live Coverage Today: CIRM Budget and Financial Projections

The California stem cell agency begins its board meeting at 10:30 a.m. PDT this morning, and we will be filing stories as warranted.

Today's matters include the proposed $15.7 million operational budget for the fiscal year that begins one week from tomorrow. The spending plan is a 28 percent increase over its current expenditures. Also on tap are strategic financial projections and a discussion of whether the agency should spend its remaining $2 billion more quickly or more slowly. CIRM expects to continue its work for at least another nine years, even if it does not receive additional funding after its money runs out.

CIRM President Alan Trounson will review the latest stem cell research and highlight his priorities. He also normally goes over upcoming CIRM workshops that may be of interest. He is likely to give a post-mortem on the international stem cell conference last week in San Francisco. CIRM paid $200,000 to be a co-sponsor. Through its arrangements with the city of San Francisco, it also wangled $100,000 in free space at Moscone Center. CIRM additionally paid for an unspecified number of non-CIRM employees to attend the conference.

(Editor's note: An earlier version of this said that information on agenda item 16 had not been posted by June 23. The presentation was apparently posted on the CIRM Web site the afternoon JUne 22.)

Immunology Grants: CIRM Gives $25 Million to 19 Researchers

Directors of the California stem cell agency today approved $25 million for immunology research, overturning four negative decisions by its grant reviewers.

Directors faced a record nine public petitions to reverse its reviewers. After some grumbling, the directors, who see only a summary of the application and reviewer comments, okayed the four.

Successful petitioners included Jeanne Loring of Scripps, Husein Hadeiba of the Palo Alto Institute for Research Education and Judith Shizuru of Stanford University. A fourth grant that failed to pass muster by reviewers was also approved by the board, but without a petition. That went to Yang Xu of UC San Diego.

Forty-four applications were reviewed by the CIRM Grants Working Group, which approved 15, all of which were ratified  by the full board in addition to the four reviewer-rejected proposals. 

The board almost never overturns a positive decision by reviewers and only occasionally approves an application that has been rejected.

The CIRM directors have not been happy with their appeal/petition process for several years. A review of the procedures is scheduled for later this summer. Some changes are certain to be enacted and will affect the outcome of future applications.

Today one CIRM director again expressed exasperation. He was not clearly identified during the Internet audiocast of the board meeting, but he described himself as a scientist. Noting that the directors had limited information about the applications, he said,

“I don't think we have the ability to add value to the process.”

He also said,

“What do we think we are doing... Are we going to fund bad science?”

He said CIRM is “getting more and more applications on the margin.”

CIRM Chairman Robert Klein said the stem cell agency would only fund good science.

Loring was the lone researcher to appear before the CIRM directors at their meeting in San Diego. She said she was only there to answer questions. Elaine Reed of UCLA addressed the board via a teleconference location at the City of Hope in Duarte. However, she was not successful. Any person is entitled to speak to the board under state law.

Director Jeff Sheehy, who serves on the grants review group, said the round may be the first time that stem cell scientists have teamed with transplant immunologists to focus on issues of rejection of stem cells.

CIRM staff told the board that initially only 10 out of 44 applications qualified for approval, based on reviewer scores. Five more were added for “programmatic” reasons, which appears to mean that they are worth pursuing because they fit CIRM's goals.

Summaries of all the reviews of the grants can be found here. Click on the number of the grant to go to the review. Here is a link to the CIRM press release that identifies all the winners by name along with the number of their grant. Names of the rejected applicants are withheld by CIRM with the exception of those who file public appeals. Names of reviewers on specific grants are also withheld along with their statements of their financial and professional interests.

CIRM Board Moves to Closed Door Session

Directors of the California stem cell agency have moved into an executive session to consider confidential items in applications for $30 million in funding for immunology research. It is unclear when the public session will resume, but our guess in an hour or so.

Correction

We incorrectly reported in three earlier items that 45 applications for immunology items were received by CIRM and 16 approved. Actually, 44 were received and 15 approved.

CIRM Board Begins Consideration of Immunology Grants

The board of the Californiai stem cell agency has begun its open session with consideration of $30 million in grants for immunology research. Nine rejected candidates are seeking reconsideration of their applications.

Following consideration of the grants, Chairman Robert Klein said the board would the report by President Alan Trounson.

CIRM Board in Executive Session

The board of the California stem cell agency this morning promptly went into executive session but may begins its open meeting by about 1:30 p.m. or 2 p.m. PDT.

We plan to resume monitoring the meeting again at that point. If you are attempting to listen to the Internet audiocast, you should be hearing music but no voices. The executive sessions are usually in a different room, and the audiocast will resume when the board members return.

Don Gibbons, chief communications officer for CIRM, provided the time estimate. However, the board could take longer or return earlier.

Scripps' Loring on CIRM Grant Petitions

Jeanne Loring, director of the Center for Regenerative Medicine at the Scripps Research Institute, filed a comment today that shed some additional light on the nine petitions that are seeking to overturn negative decisions on their grant applications.

Loring, who has served on grant review committees with the NIH, said,

“I don't think the intention of any of the petitioners was to subvert the review system. Grant applicants who are used to the NIH system expect to have a chance to revise and resubmit their applications in response to the reviewers' critiques.”

Loring, one of the nine petitioners, was reacting to an anonymous comment that the appeals were “undermining the review process and challenging the authority of the reviewers.”

You can read her full comment at the end of the “CIRM Challenged” item.

Live Coverage of CIRM Board Meeting

Stick with the California Stem Cell Report if you want to track the events in San Diego tomorrow and Wednesday at the meeting of the board of California stem cell agency. Whether it is the nine efforts to overturn negative actions on grant applications or the future path of the agency, we will try to bring it all to you in a timely and straightforward manner. We will be monitoring the session via the Internet from a mooring on an estuary in El Salvador and will be filing stories as warranted.

At some point we even hope to be able to tell you what a “Development Candidate Portfolio Review" is. That's item 16 on the agenda. No further explanation of the subject has been offered to the public with only about 12 hours remaining before the meeting begins.

CIRM Challenged by Nine Scientists on Negative Grant Decisions

A ninth researcher has filed a petition to overturn a negative decision on a grant application scheduled to be considered at a meeting tomorrow of the board of the $3 billion California stem cell agency.

The scientist is Judith Shizuru, the third applicant from Stanford to seek reconsideration of an application in the $30 million immunology round. Forty-four applications were filed. Fifteen were approved by the CIRM Grants Working Group. Nearly one-third of those rejected have now appealed the actions.

Regardless of the decisions by the grant review group, the CIRM board can do as it pleases with applications. However, it has been loath to overturn reviewer decisions. A number of board members are uncomfortable with the entire appeal process, including public appeals by scientists at its meetings. Nonetheless, some researchers have been successful.

In addition to Shizuru, here are the the names of the others who have submitted what CIRM calls “extraordinary petitions:” Olivia Martinez and Joseph Wu, both of Stanford; Defu Zeng and Chih-Pin Liu, both of the City of Hope; Genhong Chen and Elaine Reed, both of UCLA;  Jeanne Loring of Scripps, and Husein Hadeiba of the Palo Alto Institute for Research and Education, Inc.

With the exception of Hadeiba, all the institutions of the scientists have members on the 29-person CIRM board. However, they are barred from taking part in discussion of or voting on the grants in question.

An anonymous comment filed on one of our earlier items on the petitions said the "situation is out of control." The comment also declared that the researchers "are undermining the review process and challenging the authority of the reviewers."

Links to all the petitions letters can be found on the agenda for the CIRM board meeting. The summaries of the reviewers' comments can be found here. Click on the number of the grant to read the summary.

Here are two earlier items we wrote on the petitions: "Yamanaka Invoked" and "Six Scientists."

(Editor's note: An earlier version of this item incorrectly said the applications totalled 45 and that 16 were approved.)

Kleiner Piece Listed in 'Best of Web'

Our article last week on the Kleiner-CIRM connection rated a “Best of the Web” listing on the widely read Gooznews Web site.

The article shared the distinction with stories from the Wall St. Journal and New York Times, among others.

Gooznews is published by Merrill Goozner, a longtime journalist and author of “The $800 Million Pill.”

For those of you who may have missed the Kleiner piece, here is the first paragraph:

"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 piece was also mentioned on healthycal.org, a solid government policy Web site published  by Dan Weintraub, the former Sacramento political columnist. 

Stem Cell Agency Budget Soars 28 Percent

The California stem cell agency plans to spend $15.7 million next year for its day-to-day operations, up 28 percent from this year's estimated spending of $12.3 million.

The $3.4 million increase is for the fiscal year that begins in 10 days. The hefty hike in spending comes at a time when the rest of state government is mired in a financial crisis that shows no signs of ending. CIRM's funds are provided, however, from state bonds – money borrowed by the state – and cannot be touched by the governor or the legislature under the terms of Prop. 71, which created the agency.

Because CIRM's budget consists of borrowed cash, the ultimate cost of its operations will be substantially higher than the nominal figures provided by the agency. CIRM has access to $3 billion in bonds. With interest, that translates to roughly a $6 billion bill for the state of California. In other words, the agency's operations will really cost nearly $32 million – not $15.7 million. And the $490,008 salary of CIRM President Alan Trounson will actually cost the people of California something a hair shy of $1 million.

But even at $32 million, CIRM's budget can easily be eclipsed by one or two of the beefy rounds of grants that the agency awards for stem cell research.

As we noted last week, the stem cell agency provided a much more detailed look this year at its spending plans, a vast improvement over the information that was offered a year ago. However, CIRM did not calculate percentage increases from this year's actual spending compared to what is proposed for next year. Both the percentage increases reported in this piece, along with the actual dollar increases, are the work of the California Stem Cell Report. They are drawn primarily from numbers on CIRM's “projected expenses” document.

The biggest increase in the budget is for salaries and benefits – a 22 percent ($1.5 million) increase from about $7 million to $8.5 million. The agency, which now has 45 employees, plans to hire five more persons in the coming year. The budget documents do not discuss hiring scenarios if legislation passes that would remove the 50 person cap at CIRM. Increases in state-mandated benefits amount to $400,000. Assuming an average of 47.5 employees for the year, salaries and benefits will consume $178,589 for each staffer.

The second largest item in CIRM's operational budget is for outside contracts. The agency relies heavily on non-state help because of the personnel cap. The figure for the coming year is $2.8 million, up 21 percent from $2.3 million this year.

The cost of meetings for the grant working group, which judges grant applications, will soar 151 percent from $452,000 this year to $1.1 million, a jump of $683,000. The budget documents available online do not explain the increase. But they do report that the figure would cover 12 meetings. The grant group archives show that it held only four meetings during the current fiscal year.

Another big jump will be seen in spending for information technology, particularly for the grant management system, which CIRM has been doggedly wrestling with for several years. Spending in that area will rise 53 percent, from $817,000 to $1.2 million, an increase of about $433,000.

The grant management system is a critical tool for the agency. CIRM is trying to oversee more than $1 billion in grants to more than 300 recipients and, at the same time, hand out many hundreds of millions more in the next year or so. It is building custom programs for entire process, from applications to oversight. Currently, CIRM has a $125,000 RFP out for “systems analysis and software development services” and hopes to have a company on board next month.

CIRM's spending plans (see here for all the budget documents) will be considered today by the directors' Finance Subcommittee in a scheduled one-hour teleconference meeting that has public locations in Cornelius, N.C, San Francisco(2), Los Angeles, San Diego, Stanford, Irvine and La Jolla.

At a San Diego meeting beginning on Tuesday, the full board is expected to approve the budget with no major changes. Teleconference locations for the public are available in Washington, D.C., and the City of Hope in Duarte, Ca.

Out-of-state locations are provided for directors who cannot attend the meetings in person, but the sites are public by law.

The full board meeting can also be heard on the Internet. Instructions for dialing in can be found on the agenda. Addresses of teleconference locations are also on the agenda, but some are so vague that you should call CIRM in advance for additional directions.

More Grant Appeals Filed: Yamanaka Invoked

The California stem cell agency has set another benchmark, although this is one that it may not want to trot out at international stem cell gatherings.

Eight scientists whose applications were rejected for funding by the CIRM grants working group and scientific reviewers are seeking to overturn those decisions at the agency's board meeting in San Diego on Tuesday.

It is the largest number of “extraordinary petitions” ever filed and amounts to more than one out of every four applications that were turned down. The total number of applications received was 44. Fifteen were approved. Some of the researchers are likely to appear at the board meeting and make a personal pitch.

The CIRM board has budgeted $30 million for this round of grants. Regardless of the actions by the grant review group, the board can do whatever it wants with the applications, including rejecting all 44.

The board, however, almost never rejects a positive decision by reviewers and rarely overturns the judgment of the scientific reviewers who evaluate the applications during closed-door sessions.

Yesterday we carried an item on the six scientists who had filed petitions at that point. Today CIRM posted two more petitions. They are from Husein Hadeiba of the Palo Alto Institute for Research and Education, Inc.(see petition here) and Joseph Wu of Stanford(see petition here). Both focused on scientific criticism offered in the review summaries. (All the summaries can be found here. Individual reviews can be found by clicking on the number of the grant.)

In support of his appeal, Wu cited remarks this week in San Francisco by Shinya Yamanaka, winner of the prestigious Kyoto Award, also this week. Referring to criticism of his application as having an “unclear rationale,” Wu wrote,

“We believe the 'unclear rationale' is actually a 'clear rationale' and is being adopted by iPS cell pioneers such as Shinya Yamanaka and his whole team in Japan.”

We also should note that the agency seems to be moving more quickly to post these petitions, a definite improvement over past efforts.

(Editor's note: An earlier version of this item incorrectly said the applications totalled 45 and that 16 were approved.) 

Tracking the Wild CIRM

Looking for more on the history of the California stem cell agency?

Here are two Internet sites – other than our particular collection here on the California Stem Cell Report -- that collect stories on California stem cell events that have occurred since Prop. 71 was passed in 2004

The first is on Sfgate.com and includes a variety of stories and video.

The second is healthvote.org. It carries a great deal of material, including TV ads from the campaign. Its news watch feature is useful but not up to date and not complete. Here is the "check up" segment that includes an article that addresses the question of “what has happened since the election?”

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.