The Biotech Industry and the California Stem Cell Agency: An Unhappy Relationship

Late last June, the chairman of the California stem cell agency, Robert Klein, dismissed concerns that biotech firms are not getting a fair shake at the agency's $3 billion in research awards. That's not what he has heard, he told CIRM directors. In fact, Klein said, he had just received an award from a national industry group.

Two months later, leaders of the Northern California biotech industry sat down with Klein at private dinner at a tony San Francisco peninsula restaurant and told him that he was simply wrong.

They showed him the numbers. In the five years that CIRM has been operational, businesses have received only 3 percent of the more than $1 billion awarded so far. If CIRM really wants to produce therapies that can be used, Klein was told, it can only do so by helping to finance enterprises that actually create medical products.

One executive in attendance at the Aug. 25 dinner at the Marche restaurant in Menlo Park had harsh words for the agency. He later told the California Stem Cell Report that CIRM is “completely misaligned and mismanaged.” He said the agency is dominated by the academics on its board, whose institutions have received nearly all of the funding. The executive said the academic institutions are not going to deliver on CIRM's mission of “turning stem cells into cures.”

However, June's message of concern came from an unlikely, non-industry source. John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., called for a major effort by CIRM to deal with the matter. The issues he addressed have been simmering for some time, largely in private because of CIRM's enormous funding clout. No one wants to be on the agency's bad side.

In a statement to CIRM directors, Simpson said,

“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.”

He recommended that CIRM take a number of steps, including a public task force, to remedy the situation.

According to the meeting transcript, Klein replied in part,

“I don't think the biotech industry at large has feelings that are reflected in that statement. As some of you may know, I received a reward from biointernational conference (BIO) this year, their humanitarian award.”

The August meeting, however, that Klein attended included top executives from Geron, iPierian, Vistagen, StemCells, Inc., Cellerant and others. “All the major players,” we were told. The dinner was organized with the support of BayBio, the biotech industry organization in Northern California, and the Orrick law firm of San Francisco, which serves as bond counsel to the state of Californa. From CIRM came – in addition to Klein – Director Ted Love and Patricia Olson, the agency's executive director of scientific activities . Missing was CIRM President Alan Trounson. No reason was given for his absence.

A BayBio briefing paper for the meeting, said,

“CIRM has a perception of not being friendly to industry. Private companies with strong track records of receiving NIH funding are frequently unsuccessful in getting grant funding from CIRM. Conversely, in comparison to CIRM for-profit companies have sporadic success rate at best with CIRM grants. CIRM’s contention on this is that the non-profit applicants that are received they tend to come from well-established and research –intensive institutions, as opposed to the less known and established for-profit companies.”

The paper said,

“CIRM’s current grant review policies and practices do not track with the stated goals of RFAs and favor funding academic applications thus reducing funding opportunities for industry and discouraging future company participation.”

CIRM's leadership, including Klein, also came under criticism for a lack of understanding about what is needed bring a stem cell therapy to the clinic. “Everybody is enamored of Klein,” said the source at the meeting. The deans on the board have no knowledge of product development, he continued.

CIRM directors are not unaware of business concerns, but the situation has remained nearly unchanged over the years. Only on rare occasions has a biotech executive publicly voiced concern. One of the issues that has been raised involves the lack of grant reviewers with business backgrounds, a situation that has existed since CIRM's inception. Directors have discussed the need for improvement. Some  have said there is tilt towards basic science among reviewers that manifests itself in a lack of interest in the relatively more pedestrian research needed to produce a product.

The BayBio paper said,

“Currently there are no scientific experts from industry on the grants review group and only six (out of 89) are alternates.”

The briefing paper made three recommendations:

“BayBio and industry need clarification on CIRM IP and public access requirements to increase private sector comfort with CIRM programs and encourage more companies to participate in the program.
“Changes are needed to the grants application and approval process to increase the success rate of companies applying for CIRM funding.
“There needs to be more transparency all around with respect to the process and final decision making.”

The CIRM officials took notes on the August discussion and said they would get back to the participants.

Next week, the stem cell agency will hold a two-day, closed-door review – with the exception of one hour -- of its strategic plan. The “external review” is the most comprehensive examination ever of CIRM's direction. However, the fair treatment of business grant applications is not one of the specific subjects listed on the agenda for the blue-ribbon, international panel.

California Stem Cell Report Honored as One of The Best Stem Cell Blogs

The California Stem Cell Report has been named one of the top 13 stem cell blogs internationally by Webicina.com, a physician-directed Web site aimed at helping physicians and patients obtain reliable information.

Webicina prepared the list because of the plethora of misleading and inaccurate information on the Web. In addition to this blog, the list of best blogs included the Cancer Stem Cell News, authored by Jim Till from the Cancer Stem Cell Consortium in Canada, CellNEWS, authored by Lars Carlsson, a Swedish researcher, and Stem Cell Awareness of the Stem Cell Cell Awareness Association.

Webicina is directed by Dr. Bertalan Mesko from Hungary, who is also responsible for the ScienceRoll blog, which he reports has had more than 1.6 million views. Mesko has also been quoted by Nature, the New York Times and the British Medical Journal, among others, concerning the impact of the Web on science and medicine.

Candidates Sought for Board of California Stem Cell Agency

Want to join a small brigade of public servants working on the cutting edge of science and public policy? Looking to take part in giving away $2 billion? Here's your chance.

California's top fiscal officer, Controller John Chiang, is seeking nominations for five openings on the 29-member board of directors for the $3 billion California stem cell, which has already awarded $1 billion to a total of more than 300 recipients.

You can nominate yourself or others. But there are some legal requirements. For example, nominees for chairman of the CIRM board should have “a demonstrated history in successful stem cell research advocacy” and “experience with state and federal legislative processes that must include some experience with medical legislative approvals or standards and/or funding.”

In addition to nominating candidates for chairman and vice chairman of CIRM, Chiang is looking for candidates for three other slots on the board. The positions, which have six-year terms, also have special requirements. One, for example, must come from a California life science business. Prop. 71 did not provide for a general representative from the public.

Chiang's Web site also said,

“The controller has been a leader in promoting public and private sector board diversity and is interested in finding qualified nominees and appointments who reflect the diversity of California.”

The jobs are important, require a fair amount of work and do not pay well, except for the chairman and vice chairman positions, which also involve a great deal more work than regular board positions. The chairman and vice chairman positions carry salaries. The others do not, only a modest per diem.

Other statewide officials, including the governor, lieutenant governor and state treasurer, make nominations for positions on the CIRM board. So interested parties have more than one shot. However, none of the other officials has posted a public appeal on their Web sites. We are sure, however, they are open to suggestions from the public.

The deadline for submitting nominations to Chiang is Oct. 15. Successful applicants could begin work in December.

Public and Scientists Left in Lurch on Proposals Affecting $2 Billion in Taxpayer Funds

A key panel of directors of the California stem cell agency met late last month to consider changes in its grant procedures that will affect hundreds if not thousands of scientists in California to the tune of $2 billion.

The Science Subcommittee discussed the proposals at a session on Sept. 29. However, the public and the affected parties had little clue in advance about the specifics of what was to be considered.

The agency withheld the details of the proposals until a mere two days before the meeting, effectively preventing the public from making any thoughtful comment, even if they knew the documents had been posted on the CIRM Web site. CIRM does not make an effort through its Web site to let the public know when important information has been added to meeting agendas. Its general practice is to wait until a day or two before a meeting to post any significant information concerning matters to be considered by its directors.

The proposals before the subcommittee or variations may come up again at another meeting of the panel or possibly the CIRM board of directors.

Here are links to the documents that were posted no earlier than Sept. 27 and Sept. 28. They deal with appeals processes on grant applications, scoring of grants and a triage process on grant proposals prior to their formal legal review.
"Extraordinary Petition Process Option A / Posting Applications"

"Extraordinary Petition Process Option B / Additional Analysis"

"Extraordinary Petition Process Option C / Limited Investigation"

"Discussion of proposal for programmatic scoring of grant applications by Patient Advocate members of Grants Working Group for inclusion in discussions and decisions regarding applications."

 "Discussion of Pre-Application Process, including but not limited to the process generally and scientific feedback to applicants who are not successful in the process."

One Hour Public Access at Critical Two-Day Review of $3 Billion State Stem Cell Operation

The California stem cell agency today officially notified the public for the first time about next month's sweeping review of its operations and said the public may attend for one hour at the beginning of two days of meetings.

CIRM's announcement was the first such notice that it has given the public via its Web site about the sessions that begin Oct. 13 at its San Francisco headquarters. The announcement also said for the first time that the public can submit written comments and questions in advance of the meeting.

CIRM's announcement did not make it clear that the public would be barred from the remainder of the sessions. However, a separate agenda for the meeting, also the first to be published by CIRM, specified that public would, in fact, be banned from virtually all of the most comprehensive review ever of the $3 billion operation.

The California Stem Cell Report last week wrote that the agency planned to ban the public entirely from the sessions. It was the first public news of the external review outside the sparsely attended meetings of the CIRM board of directors. Yesterday, we pointed out that the ban is not in the best interests of either the public or the agency and that the secrect testimony would not accomplish the agency's goal of candor from witnesses.

Today's announcement from CIRM implicitly recognizes that the public has a right to attend the hearings. However, barring the public from the remaining 19.5 hours falls far short of being either open or transparent, something CIRM has had problems with for years. One hour could not even be considered paying lip service to the state Constitution's guarantee of a broadly construed right of public access to the doings of state government.

CIRM gave no reason for its marginal change of position. We are querying the agency concerning its reasoning.

Material posted by CIRM also shows a change in one of the panelists. Dropped is Myrtle Potter, former head of Genentech who now runs her own San Jose, Ca., consulting firm. No explanation was given for the removal of Potter. We are querying CIRM about that as well. She is being replaced by
Igor Gonda, CEO of Aradigm Corp. of Hayward, Ca., an inhalation drug product firm.

The agency also posted a 384-page briefing document that has been given to the eight panelists who will be reviewing CIRM's strategic plan.

We will have more later on all this.

Credibility Damaged and Foes Aided: No Upside on CIRM's Ban on the Public

The California stem cell agency's ban on the public during the most sweeping review ever of its operations promises little upside for the $3 billion enterprise and plenty of downside.

That's not to mention the fact that the ban is poor policy and is not likely to achieve its stated purpose – candor from those testifying before the blue-ribbon, international panel that has scheduled three days of hearings in San Francisco beginning Oct. 13.

The “external” review, as CIRM has labelled it, is called for by the agency's strategic plan of 2006. That document recognized the need to revise the plan as conditions changed. It was prepared with substantial comments from the public and a number of open hearings,

CIRM has devoted about 2,000 hours of staff time preparing for the the latest review, which will be critical in determing how the agency will spend its remaining $2 billion. The eight-member panel, which includes a Nobel laureate, is expected to prepare a report that will be considered by the CIRM board in December.

The strategic review comes as CIRM Chairman Robert Klein is publicly discussing presenting to voters a $5 billion bond measure to continue CIRM's activities. A bond measure is necessary because the agency's only real source of funding is cash that the state borrows (bonds). Klein's new bond proposal places the agency's efforts squarely in the context of a political campaign, which could come as early as two years from now.

Last week CIRM told the California Stem Cell Report that members of the public would be barred from attending the agency's external review. CIRM also has made no public effort to solicit comment from California citizenry, which is paying $6 billion, including interest, for the research program. Nor has CIRM notified the public via its Web site that an important evaluation of CIRM will take place.

Don Gibbons, spokesman for CIRM, said the closed-door sessions were necessary so that “reviewers can ask tough questions and receive candid, unfiltered responses” from CIRM staff, biotech executives and some CIRM board members who are scheduled to appear before the review panel.

The reality, however, is much different. CIRM staffers who want to keep their jobs are not going to say anything to reviewers that they haven't already told their superiors. Biotech executives who want to receive grants or loans from CIRM are unlikely to be sharply critical of the agency. And CIRM board members are more than likely to be circumspect, given that they have to make the final judgment on whatever the panel comes up with.

Only a “small number” of the 29 board members have been invited to make comments to the panel. Their identities and topics are yet to be disclosed.

The closed-door proceedings pose a problem for any CIRM board members who might want to sit in on a session or two. Essentially, they must ask permission of the CIRM staff to attend. That's because if too many of them attend, they could run afoul of the state's open meeting law by either constituting a quorum or creating what is known as a “serial meeting.”

Board members have sometimes complained about having to act with too little information. The primary example is appeals on grant applications. The board has repeatedly been asked to overturn negative decisions by grant reviewers, but cannot actually examine the actual applications. In January 2009, the board was caught by surprise when its bond funding was endangered. That particular problem was in evidence to knowledgeable persons well prior to that meeting and could have been disclosed to the board earlier. Limiting directors' attendance at the external review distances the board even more from key aspects of CIRM operations.

Last week we polled CIRM directors about whether they thought that the external review should be open. While we can't say our email reached all directors, we believe most saw it. Four responded. Only one director, Jeff Sheehy, said yes. Others may feel likewise while some are opposed, but at the same time feel constrained about responding via our query.

Director Floyd Bloom, former editor of Science magazine, said he did not see a need for the public to able to attend the review, He said the panel's report will be considered later by CIRM directors, and the public could comment then. (You can read all of the results here of the query including comments from some directors.)

CIRM has yet to provide a legal justification for closing the review. However, little doubt exists that the agency believes the ban on the public is lawful. Presumably CIRM would make a similar argument to one presented last July in connection with another CIRM meeting that barred the public.

However, those arguments fail to take into account a major change in the state Constitution in 2004 that guaranteed the public a broadly construed right to access to governmental affairs. The state's open meeting laws were written before that change and have not yet been amended to reflect its broader constitutional access provisions.

From a political and good government perspective, the ban on the public, coupled with continuing complaints about a lack of transparency at CIRM, unnecessarily provide major ammunition to its foes along with the foes of hESC research across the nation. Closed-door proceedings breed suspicion, even on the part of a public inclined to support stem cell research. They provide a fertile ground for the worst sort of rumors and add evidence that CIRM is an “insiders club,” as others, including Nature magazine, have complained. No doubt exists that Klein's $5 billion bond measure campaign will have to confront severe criticism about the lack of openness at CIRM.

One reader of this report, who is knowledgeable about CIRM affairs but who must remain anonymous, told us,

“The failure to provide any opportunity for public input in the process diminishes its credibility and utility. This is a hand-picked body following a pre-determined agenda that was defined  by CIRM. CIRM (i.e. Klein) decides what's presented and what's considered. The outcome is predictable.”

CIRM carries a special burden in connection with openness and transparency because of its unprecedented nature. As opposed to other state departments, it is not subject to normal oversight by the governor and the legislature. Funds flow to it unaffected by the financial crisis that is damaging public education and medical assistance to the poor in California.

Gov. Arnold Schwarzenegger has been advocate of more openness throughout state government and also a strong supporter of CIRM's operations. He has opened up other state departments' activities, including executives expense accounts, to public scrutiny. He said some time ago,

“Transparency is fundamental to promoting efficiency and effectiveness in government and strengthening the democratic process by giving citizens enough information to reach their own conclusions about how their tax dollars are being spent.”

CIRM should reconsider its position and open the external review to the persons who are actually financing its operations.

Text of CIRM Board Members Responses on Public Ban at External Review

Last week we sent an email to directors of the California stem cell agency and posed the following question.

“Do you think that the October review of CIRM's progress should be open to the public?”

We also told them that we would carry the text of any comments verbatim.

Four directors responded. Here are their comments.

Jeff Sheehy, a communications manager at UC San Francisco and a patient advocate member on the board, gave a one word response.

“Yes.”

Ed Penhoet, co-founder of Chiron and serving on the board as an executive officer of a commercial life science entity , said,

“Sorry, David, but I don't think that CIRM should conduct its board
business through an intermediary.”

David Serrano Sewell, a San Francisco deputy city attorney and a patient advocate member on the board, said,

“Here's my question to you, does this meeting qualify as a public meeting under the applicable state law requiring public meetings? No, it does not. At a minimum you've got to say that, this meeting is not required by state law to be a public meeting. Obviously, you think it should be, but it's not required.”

Floyd Bloom, former editor-in-chief of Science magazine and serving on the board as an executive officer from a California university, said,

“This aspect of the forthcoming review has not been discussed at any meeting at which I have been present, so this view is entirely my own, but I do not see the need for the Panel of Internationally distinguished scientist's review of CIRM's progress and achievements to be a Public Meeting.

“The 2006 Strategic Plan that authorized this outside review specifically calls for the report of the review committee to be made the ICOC:

"'The review will be reported to the ICOC who will consider the recommendations made in the review and, on that basis, approve modifications to the strategic plan.'

“As such the Public will hear what the outside experts have determined about the matters they have been asked to review and at the presentation to the ICOC there will be the standard opportunity for public questions and statements.” 

National Stem Cell Doings: Rat Brains and Legal Wrangling

How is it going to go in the federal case involving hESC stem cell research?

A UC Davis scientist opines – that's one of those media words you see in print but rarely hear anyone utter – that the matter could go 2-1 for funding of research but possibly 2-1 against, given that two of the judges are appointees of young Bush.

You can read more from Paul Knoepfler here on his analysis of today's proceedings along with comments from his readers.

Also on the national stem cell front – sort of – is a column by the Maureen Dowd of the New York Times. On Sunday, she quoted Stanford's Irv Weissman on some monkey business in the US Senate race in Delaware.

He made his comments to Dowd in response to a 2007 statement by the Republican candidate in Delaware, who shall remain nameless. The candidate declared,

“American scientific companies are crossbreeding humans and animals and coming up with mice with fully functioning human brains.”

Weissman, who knows something about rodents, performed the first experiments injecting human brain-forming stem cells into the brains of immune-deficient mice 10 years ago.

Dowd wrote,

“(Weissman) assured me that the mice did not suddenly start acting human. 'There were no requests for coffee from Minnie,' he said. 'The total number of human brain cells in the mouse brain was less than one in a thousand. I don’t think we would get a mouse with a full human brain. And even if the mouse made it to a human mouse it would still have a mouse-brain offspring.'”

Implications of a New Multibillion Dollar Bond Campaign for CIRM

The chairman of the California stem cell agency, Robert Klein, this week raised the possible size of a new bond issue to finance stem cell research to as high as $5 billion.

Klein made the comment in a piece by Ron Leuty in the San Francisco Business Times. Leuty reported that Klein, who directed the 2004 electoral campaign that created CIRM, said the new ballot measure could could come by 2016 and raise $3 billion to $5 billion.

Previously, the publicly reported figure topped out at $4 billion. Katie Worth of the San Francisco Examiner reported that number in August, which appears to the first disclosure in the media of the size of the bond issue. (She is also one of the few reporters that has attended a recent CIRM board meeting and written a story about it.)

Media reports of a new bond issue have significant implications -- political and financial -- for CIRM and how it is perceived by the public. To win voter approval of a bond issue will require a political campaign. The Prop. 71 in 2004 cost about $30 million. Another campaign is not likely to require as much, but the cost will run into millions. Funds will needed to be raised from many sources, some of whom will be making flinty-eyed judgments on the financial value of CIRM's activities on their particular enterprises. Some are likely to expect something in return for their campaign contributions.

The proposed bond issue also places CIRM squarely in a political context. Nearly all of its actions will be judged in the not-so-pleasant light of an electoral campaign. Klein acknowledges the need for politically acceptable results from CIRM. Not coincidentally they can also mean advancing the science and therapies.

Here is part of what Leuty wrote concerning Klein's discussion of another electoral campaign for a multibillion dollar bond issue.

"That may seem like a tough sell in a state smacked upside the head by a recession, but Klein is the ultimate salesman/evangelizer/patient advocate. He pulled together a powerful group of people cutting across political party lines and backgrounds to get Prop. 71 passed when most people had no scientific concept of stem cells."

Leuty continued,

"'Strategically, what we’re focused on is trying to make sure there is enough therapies advanced to Phase I or Phase II efficacy trials (where) voters of California can judge the performance and decide if they should approve another $3 billion to $5 billion,' Klein, the outgoing chairman of the San Francisco-based agency, told me in a phone conversation Tuesday. 'The voters are going to have to see real evidence.'"

Klein said CIRM will not run out of funding until late 2016 or early 2017, although different scenarios exist, depending on quickly CIRM hands out money. Leuty wrote,

"By then, many clinical trials will be well under way. Even if the National Institutes of Health starts funding basic embryonic stem cell research, Klein said, CIRM would be a natural partner for funding the translation of that work into bedside therapies.

"'In five or six years, we will have a very strong showing and evidence that when given stable funding we will have novel ways to reduce suffering,' Klein said."

Stem Cell Agency Bans Public from Critical Review of its Operations

The California stem cell agency said yesterday it will bar the public from three days of the most sweeping hearings ever into how well it is spending $3 billion in taxpayer funds.

The blue-ribbon assessment of the California Institute for Regenerative Medicine will be the first such in the agency's five-year history and will be critical in determining how CIRM will spend its remaining $2 billion. The sessions also represent the most exhaustive review of the agency's past performance. CIRM has already committed more than $1 billion to 364 scientists and institutions.

Although CIRM directors have been told that the review will occur, the public has not been notified via CIRM's Web site or other means that the Oct.13-15 assessment will take place. Nor has the agency publicly solicited from citizens or other interested parties comments or suggestions of issues to be addressed.

CIRM has repeatedly come under fire from state officials for its lack of transparency. An influential state lawmaker said last February that the agency is “essentially accountable to no one.” The ban on the public at the October review also appears to fly in the face of a state constitutional amendment adopted in 2004. By an overwhelming 83 percent, voters altered the constitution to guarantee the public a broadly construed right of access to what state government is doing.

John M. Simpson of Consumer Watchdog of Santa Monica, Ca., a longtime observer of CIRM, said that conducting the "entire process behind closed doors shows an agency with leaders who are completely unaware of their responsibility to the public, or worse, don't care." (The full text of his remarks can be found here.)

Responding to a query, Don Gibbons, chief communications officer for the agency, told the California Stem Cell Report that the closed-door sessions are justified so that “reviewers can ask tough questions and receive candid, unfiltered responses” from CIRM staff and board members, among others.

Gibbons said in an email,

“The reviewers are not public officials and have no governmental authority; they were asked to serve by staff not the CIRM board. They have been asked to give their opinion, not make decisions.”

He said that the reviewers will produce a written report during their closed-door sessions that will be reviewed by the CIRM board of directors in a public meeting. (All of Gibbons' remarks can be read here.)

The “external review,” as it is known, is called for by the agency's strategic plan. CIRM President Alan Trounson told directors in August that preparation for the meetings at CIRM headquarters in San Francisco is taking 2,000 hours of staff time.

The sessions will be conducted beginning Oct. 13 by an eight-member panel. The members are Alan Bernstein, executive director of the Global HIV Vaccine Enterprise of New York, NY; George Daley of Harvard and director of stem cell transplantation at the Children's Hospital and Dana Farber Cancer Institute; Sir Martin Evans, Nobel Laureate and director of the School of Biosciences of Cardiff University of Great Britain; Judy Illes, director of the National Core for Neuroethics at the University of British Columbia; Richard Insel, executive vice president of Research for the Juvenile Diabetes Research Foundation of New York, NY; Richard Klausner, formerly the global health executive director of the Bill and Melinda Gates Foundation's Global Health program and now an independent consultant, Myrtle Potter, now head of her own consulting firm and former president of Genentech, Inc., and Nancy Wexler, Higgins Professor of Neuropsychology in the Departments of Neurology and Psychiatry at Columbia University and president of the Hereditary Disease Foundation. (Full biographies can be found here.)

Two of the panelists have links to CIRM. Daley is a scientific co-founder and co-chair of the scientific advisory board of iPierian, Inc., of South San Francisco, which holds a $1.5 million grant from the agency. Ipierian is expected to apply for an award in CIRM's upcoming, $50 million clinical trials round. Daley is also an ad hoc member of the CIRM grant review committee and serves on a national consortium created by CIRM.

Potter served for six years on a panel that is charged with overseeing CIRM's financial operations, the Citizen's Financial Accountability Oversight Committee.

Insel's organization has longstanding ties with CIRM Chairman Robert Klein, who currently serves on the foundation's board of chancellors.

Consumer Watchdog's Simpson said,

"This evaluation looks to be conducted by insiders, some with clear conflicting ties to CIRM. That is highly improper and inappropriate."

In response to a query, Gibbons outlined the order of business for the review. He said,

“The first day will be presentations by staff about various aspects of our operations and goals, with ample time for discussion during each session.

“The second morning will be presentations by the Chair (Klein) and his staff about governance and bonds, with the afternoon being given over to a series of discussions with small groups: members of the Grants Working Group, biotech execs, CIRM grantees, and patient advocates.

“The third day will begin with a Q&A session with Alan (Trounson) and then the reviewers will begin to outline the draft of their report with only a facilitator present.”

Later, Gibbons added,

“A small group of board members will be interviewed by the group the second afternoon.”

The California stem cell agency has drawn strong criticism for its lack of openness. Last February, state Sen. Elaine Kontaminas Alquist, D-San Jose, chair of the Senate Health Committee, said CIRM is “essentially accountable to no one.” In January, the Citizens Financial Accountability Oversight Committee, chaired by the state's top fiscal office, Controller John Chiang, unanimously recommended more transparency at CIRM. Commenting on the committee's action to CIRM directors last February, Trounson said it was an "irrational attack on the governance of the institute without any real information backing it up."

The Little Hoover Commission, the state's good government oversight group, last year prepared an 88-page report on CIRM. The commission's recommendations included improved transparency, noting that it would help to ease criticism that CIRM amounts to an “insider's club.”

CIRM is not subject to normal state oversight, including that of the governor and the legislature. Under the terms of Prop. 71, which created the agency in 2004, CIRM is immune from the usual budgetary controls imposed on other state departments. Its funds, which come from state bonds, flow to CIRM directly and cannot be touched by the governor or the legislation.

Text of CIRM Comments on October Review of its Operations

Here is the text of what CIRM has told the California Stem Cell Report (CSCR) concerning the California stem cell agency's October review of its operations. All responses were given via email by Don Gibbons, CIRM's chief communications officer, in response to questions, also via email.

CSCR query Sept. 13, 2010

“Please send me the schedule and location for the external review sessions in October.”

CIRM response Sept. 13, 2010

“It will be at CIRM headquarters October 13, 8:00-6:15; October 14, 8:30-7:15; and October 15, 9:00-5:00”

CSCR query Sept. 13, 2010

“Is there a particular agenda or order of business? Will the strategic plan or elements of the plan be examined page by page or section by section or ?”

CIRM response Sept. 20, 2010

“The first day will be presentations by staff about various aspects of our operations and goals, with ample time for discussion during each session.

“The second morning will be presentations by the Chair and his staff about governance and bonds, with the afternoon being given over to a series of discussions with small groups: members of the Grants Working Group, biotech execs, cirm grantees, and patient advocates.

“The third day will begin with a Q&A session with Alan (Trounson) and then the reviewers will begin to outline the draft of their report with only a facilitator present.”

CSCR query Sept. 20, 2010

“I assume that all of these sessions are open to the public, right?”

CIRM response Sept. 22, 2010

“The reviewers will not meet in public. A review of this nature will only be valuable if the reviewers can ask tough questions and receive candid, unfiltered responses.

“The reviewers are not public officials and have no governmental authority; they were asked to serve by staff not the CIRM board. They have been asked to give their opinion, not make decisions. Their opinions will be placed in a public document not edited by CIRM.

“If CIRM board members, as public officials, seek to take any action on the basis of the report, they would do that through public meetings.”

CSCR query Sept. 22, 2010

“Do any board members plan to attend the meeting? Will they be barred from the sessions?”

CIRM response Sept. 22, 2010

“A small group of board members will be interviewed by the group the second afternoon.”

Text of Consumer Watchdog Remarks on Closing of CIRM External Review

Here is the text of the comments from John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., on the closed-door, “external review” that the California stem cell agency has scheduled for October. Simpson made his response as the result of an inquiry from the California Stem Cell Report.

"One might justify a brief executive session during a three-day review of
CIRM, but to hold the entire process behind closed doors shows an agency
with leaders who are completely unaware of their responsibility to the
public, or worse, don't care.

"This evaluation looks to be conducted by insiders, some with clear
conflicting ties to CIRM. That is highly improper and inappropriate. I had
thought CIRM's leaders finally understood that they are public officials.
Clearly they do not."

"Despite what Alan Trounson and Bob Klein may think, CIRM is not a private
club where they may do whatever they wish."

More Details on Jockey Martinez' Bid to Enroll in Geron Clinical Trial

The New York Daily News is reporting more specifics on the case of California jockey Michael Martinez, who was rejected as a candidate for Geron's hESC clinical trial.

Among other things, the article by Christian Red, who has provided the most complete coverage of Martinez' situation, said,

“According to an email that Northwestern's Dr. Richard Fessler sent to Martinez's treating physician at Highland (Hospital in Oakland, Ca.), Martinez failed to qualify for embryonic stem cell treatment. Fessler cited several reasons, including that patients with severed or lacerated spinal cords are automatically eliminated from eligibility. (David) Seftel (Martinz's primary physician) has said that MRI exams on Martinez's thoracic region - where he sustained the spinal cord injury - have proven inconclusive. Fessler also stated that the transfer of Martinez to Northwestern "has to be based on 'medical necessity' unrelated to the study," and that Fessler does not consider Martinez's situation as meeting that criteria.”

Red also wrote,

“Making matters more complicated has been the Martinez family's and Seftel's dealings with Highland. Seftel has said that the family had difficulty securing Michael's medical records in a timely fashion, and that Highland hampered Michael's transfer to another spine center in the San Francisco area when the treating physician, Dr. Federico Castro-Moure, refused to provide a letter to the state Division of Worker's Compensation.

"It is an absolute outrage," said Seftel.”

Competing for Dollars: CIRM Examining Grant Ground Rules

The words are mind-numbingly dull: grant administration, programmatic score, appeals, pre-application. But they go to the lifeblood of scientific research – money.

And they are the topics of concern at a meeting next Wednesday of a key panel of the directors of California's $3 billion stem cell agency.

The directors' Science Subcommittee will then examine a substantial portion of the process in which directors decide which California scientists receive millions of dollars and others receive none. On the agenda are:

• Longstanding concerns about dealing with researcher appeals on applications for stem cell research grants. 
• The pre-application process, which weeds out proposals even before they get to the grant review group.
• And a new concept that would create a “programmatic” grant application score from patient advocates sitting on the grant review panel.

It is not the first time CIRM directors have tackled these sorts of issues. Directors have long been troubled by attempts to reverse negative decisions by reviewers, who examine the requests for cash behind closed doors. The directors have final say on the applications but rarely overturn reviewer decisions.

However, in June, a record nine researchers filed extraordinary petitions to reverse reviewer actions. That amounted to about one-third of the rejected grants. Four of the petitions were successful. The directors were not entirely pleased at having to deal with the renewed pitches from researchers.

Freshly before CIRM directors is the concept of a programmatic score on applications in addition to the scientific score. The new score would be provided by the seven patient advocates on the 23-member grant review group.

CIRM directors sometimes refers to programmatic considerations in approving grants. The term is usually used in connection with the programs that the agency is trying to push. A specific definition of the term may exist on the CIRM Web site, but we have not been able to find it.

In response to a query, Jeff Sheehy, a patient advocate member of the board and chair of the Science Subcommittee, said the programmatic score proposal is only an idea at this point. No details have been worked out, which is the task of the subcommittee and staff. Noting that the concept did not originate with him, he said he did not expect the panel to act on the item at the meeting.

Sheehy, who also serves on the grant review group, said,

“There is no programmatic score right now. Grants receive a numerical scientific score, which is the average of the individual scores of the 15 scientist members of the Grants Working(review) Group.

“During programmatic review, a baseline 'quality' score is established, usually somewhere around 70. Then the group decides whether to move grants up or down based on programmatic considerations, which vary from RFA to RFA--although they are often based on disease representation. For example, zero Alzheimer's applications in the fundable range could lead to a motion to move an Alzheimer application up (usually this happens for application with a near fundable score) into the recommended for funding category.”

We have written more than once on the appeals and pre-application issues and have prepared a reading list for those who really want to dig into them. You can find the list here.

Persons interested in commenting on the proposals can email their comments to CIRM at info@cirm.ca.gov. Or they can listen in and comment live during the meeting at seven locations throughout California, including San Francisco, Palo Alto, Healdsburg, Pleasanton, Duarte and two in Irvine. You can find the specific locations on the meeting agenda.
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CSCR Reading List: Grant Appeals at the California Stem Cell Agency

Here is a list of articles from the California Stem Cell Report and CIRM documents dealing with the grant appeal process at the California stem cell agency. The list was prepared on Sept. 20, 2010. To read the entire articles, click on the links.

Articles from the California Stem Cell Report

Aug. 10, 2010
Emotionalism and Potential Favoritism Cited as Need for Changes in CIRM Grant Appeals
Passion and favoritism, democracy and gamesmanship – all are part of the ongoing discussion among directors of the $3 billion California stem cell agency as they try to fix what some of them call a “broken” grant appeal process.

July 19, 2010
UC Davis Scientist Praises CIRM Appeals Change
A stem cell researcher at UC Davis today said a change in the CIRM grant appeals procedure makes “a lot of sense.” Writing on his blog in regard to "extraordinary petitions," Paul Knoepfler said, “I think the proposed change makes a lot of sense and would greatly improve the process. Sometimes the reasons in the petitions are clearly not meritorious and as it now stands, they end up wasting CIRM's time. The last time CIRM received 9 petitions as well, which represented a remarkably large fraction of the total applications. A stricter process would discourage the submission of large numbers of petitions, an important issue given that the number of petitions received by CIRM continues to grow.”

CIRM Finally Discloses Grant Appeal Proposals
The California stem cell agency early today belatedly posted a two-page memo on proposed changes in how it will deal with appeals by scientists whose grant applications have been rejected by reviewers.

July 18, 2010
Sticky, Troubling Appeals by Rejected Researchers Targeted by Stem Cell Agency
A key step in the process for awarding billions of dollars in research grants is “broken,” according to many directors of the California stem cell agency, and major changes are looming that will affect hundreds of scientists.

June 22, 2010
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.

June 19, 2010
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.

May 18, 2010
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.

CIRM documents

Pre-application review – 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 July 20, 2010, meeting of CIRM directors Science Subcommittee. Discussion of petitions begins on page 40.

Transcript of the June 22, 2010, CIRM directors meeting. Discussions of extraordinary petitions begin on pages 24 and 67.

Transcript of 5/25/10 Science Subcommittee meeting dealing with appeals issue. Discussion begins on page 99.

Northwestern Is Lead Site for Geron hESC Trial

Northwestern this afternoon confirmed that it is the first site to be ready to accept candidates for hESC clinical trials with Geron, Inc., of Menlo Park, Ca. The Illinois organization is also the lead site for the unprecedented trial.

Northwestern's role surfaced during the weekend in a case involving a severely injured California jockey. See here and here.

Here is Northwestern's press release, which is not yet on its Web site. (The item subsequently was posted here.)

NORTHWESTERN FIRST SITE OPEN FOR SPINAL CORD STEM CELL TRIAL

Northwestern Medicine and RIC ready to enroll first subject in spinal cord injury study

CHICAGO --- Northwestern Medicine is the first site open for enrollment in a national clinical research trial of a human embryonic stem cell-based therapy for participants with a subacute thoracic spinal cord injury. Following the procedure, participants will receive rehabilitation treatment at The Rehabilitation Institute of Chicago (RIC).

Northwestern also is the lead site of the trial, sponsored by Geron Corporation (Nasdaq: GERN). The trial eventually will include up to six other sites and enroll up to 10 participants nationally.

“We are very pleased to be the first participating center in the world’s first human embryonic stem cell clinical trial for spinal cord injury,” said lead national investigator Richard Fessler, M.D., professor of neurological surgery at Northwestern University Feinberg School of Medicine and a surgeon at Northwestern Memorial Hospital.

“Injection of oligodendrocyte progenitor cells directly into the spinal cord lesion is a rational way to attempt to arrest or reverse the structural damage in the spinal cord caused by severe trauma,” Fessler said. “We are eager to begin evaluating the effects of these cells in subjects with severe spinal cord injuries.”

“RIC is a vital member of the research team for this novel stem cell clinical trial,” said David Chen, M.D., medical director of the RIC Spinal Cord Injury Rehabilitation Program. “RIC’s team of spinal cord injury rehabilitation specialists is responsible for customizing the rehabilitation care plan and therapeutic intervention for each participant, which may include robotic walking therapy and other procedures to facilitate the participant’s neurologic repair and recovery. At RIC, restoring the participant’s ability is our objective and the scientific application of embryonic stem cells offers new hope for recovery.”

The primary objective of the phase I trial is to assess the safety and tolerability of special cells called human embryonic stem cell-derived oligodendrocyte progenitor cells when they are injected into the spinal cord injury of paralyzed subjects. The injuries have to have occurred within two weeks for someone to be eligible for the procedure.

In addition to evaluating safety, the secondary aim of the trial is to see if the stem cells improve neuromuscular control or sensation in the trunk or lower extremities.

In previous animal studies, these stem cells have demonstrated the ability to remyelinate or recoat damaged nerve cells that have lost their ability to conduct electrical impulses down the axon. The stem cells also have shown nerve-growth stimulating properties leading to restoration of function in animal models of acute spinal cord injury.

“The trial is supported by positive animal research,” Fessler said. He noted the trial is using the lowest dose possible for a human based on the animal studies.

Subjects eligible for the Phase I trial will have documented evidence of functionally complete (ASIA Impairment Scale grade A) spinal cord injury with a neurological level of T3 to T10 spinal segments and agree to have GRNOPC1 injected into the lesion sites between 7 and 14 days after injury.  For more information, go to information pages of Geron’s website at www.geron.com.

Clinical Trial Challenges: The Matter of Michael Martinez

The complexities of finding candidates for clinical trials as ground-breaking as the hESC effort by Geron were touched upon indirectly in news coverage of the case of jockey Michael Martinez.

This morning the San Francisco Chronicle noted that the state workers' compensation department played a negative role in the matter. Earlier, the Daily Racing Form reported that Highland Hospital in Oakland, Ca., initially refused to release Martinez' records because he could not give consent.

Here is what reporter Larry Stumes wrote this morning:

"The decision by Dr. Richard Fessler of Northwestern University came late Monday after a tumultuous day in which Martinez was to be transferred from Highland Hospital in Oakland to UCSF for a high-resolution MRI exam. The transfer was canceled when the state Division of Workers' Compensation refused to authorize it.

"'The doctors at Highland weren't entirely in favor of the transfer and in an e-mail to Dr. Fessler they indicated that they thought that Michael was doubtful as a candidate for the embryonic stem-cell treatments,' said Golden Gate Fields physician Dr. David Seftel, who is advising Martinez's family on his care. 'The family is devastated, but we're regrouping. I don't give up; Michael doesn't give up.'

"Seftel has contacted Dr. Jorge Paz Rodriguez, the medical director of the Stem Cell Institute of Panama - Martinez's native country - regarding adult stem-cell therapy.

"'The benefits of adult stem-cell treatments have been relatively modest, confined to improvement in sensation, bladder control and bowel control,' Seftel said. 'But because it is so soon after the injury, it is possible Michael could get some of his motor control back. The sooner we get him to Panama, the better.'"

Here is what Chuck Dybdal of the Racing Form wrote.

"After initially refusing to release Martinez’s records so that Northwestern University’s physicians could review them, Highland Hospital agreed late Friday to release them. Highland had cited laws that prohibit the release of the records to anyone but Martinez, who has been rendered incapable of responding to specific requests because of the nature of his injuries."

Embryonic Stem Cell Treatment Ruled Out for California Jockey

California jockey Michael Martinez, whose spine was severely damaged earlier this month, will not be enrolled in Geron's clincal trials for hESC treatment, the only such in the nation.

Reporter Matt Hegarty of the Daily Racing Form wrote this afternoon,

“Specialists at Northwestern University near Chicago have decided that the rider Michael Martinez is not a candidate for a clinical trial using embryonic stem cells to treat spinal-cord injuries, according to the track physician at Golden Gate Fields, where Martinez was severely injured in a fall on Sept. 12.

“Dr. David Seftel, the physician, said that the neurosurgeons conducting the trial had concluded from Martinez’s medical records that the jockey’s spinal cord had been too severely damaged to consider Martinez for the trial. Seftel and Martinez’s family had hoped that the treatments, which have shown some promise in studies on rats, would be able to mend the rider’s severed spinal cord. Martinez is paralyzed from the waist down.

“The family received the news that Martinez would not be admitted to the trial on the same day that Martinez’s fiancé, Charlotte, went into labor and was admitted to Highland General Hospital(in Oakland, Ca.), where Martinez is currently receiving treatment. The baby was expected to be delivered later on Tuesday, Seftel said.

"'It’s a day of extremely mixed emotions,' Seftel said."

The New York Daily News on Sunday carried a lengthy story on the accident, in which an 1,100-pound horse running at 35 miles an hour fell on Martinez. The story by Christian Red discussed Geron's involvement.

He wrote,

“The Menlo Park, Calif.-based biotechnology company Geron, which has been approved to conduct clinical trials of stem cell treatment on humans, after the Food and Drug Administration lifted the hold on the company's Investigational New Drug application July 30, would possibly conduct the treatment.” 

Red continued,

“But Martinez is in a race against time, even if he is eligible to get the treatment. According to Dr. Ed Wirth, the medical director of regenerative medicine at Geron, 'stem cells need to be injected between seven and 14 days after the spinal cord injury because that's the time window in which we've seen the best chance of benefit in the animal studies.'

“Geron plans to have seven facilities around the country opened to carry out these trials, and although the company has not made a public announcement, Seftel said that one of the facilities at Northwestern Universityin Evanston, Ill., is currently set up to receive applications for candidates.”

The Racing Form's story this afternoon said,

“Martinez is expected to be transferred late on Wednesday to Santa Clara Valley Medical Center, which runs a rehabilitation clinic that specializes in spinal-cord injuries. Seftel and Martinez’s cousin, the rider Alex Solis, are also exploring experimental treatments with adult stem cells, though, in studies, those treatments have not shown to be as promising as the embryonic stem-cell treatments, Seftel said.”

More Info on hESC Treatment of Jockey with Severed Spinal Cord

Benoit & Associates

Jockey Michael Martinez (left), with cousin Alex Solis.

More details are emerging on the possible use of experimental hESC treatments within the next two weeks on a California jockey with a severed spinal cord.

According to an article yesterday by Chuck Dybdal in the Daily Racing Form, which appears to have carried the first account of the possible treatment, it involves neurological specialists at Northwestern University, presumably at the Acute Spinal Cord Injury Center at Northwest Memorial Hospital.

(Subsequently, it appears that the first story may have been in the New York Daily News on Sunday.)

The center is a nationally recognized leader in spinal cord injury treatment, one of only 14 model systems in the country for spinal cord injury treatment. The center's Web site says it is involved in using stem cells to repair damaged spinal cord and is aggressive in placing patients in innovative rehabilitation programs.

Richard Fessler, a professor of neurological surgery at Northwestern, is evaluating the jockey's MRIs, which are being taken at UC San Francisco, according to a story on page B6 of the sports section of the San Francisco Chronicle.

Neither the story in the Racing Form or in the Chronicle mentions whether treatment involves Geron, Inc., of Menlo Park, Ca., which is conducting the only hESC clinical trial in the country.

In response to a query, Anna Krassowska, a spokeswoman for Geron, told the California Stem Cell Report,

“As you know, there is no other hESC-based therapy cleared for clinical
trials. However, I can't shed any light on this story.”

We also have queried Northwestern and Fessler concerning the possible treatment of the jockey.

The Racing Form story said,

“(Jockey Michael) Martinez suffered a severed spinal cord in a Sept. 12 racing accident at Golden Gate Fields. He needs the MRI to determine if there is enough white matter – a component of the central nervous system that carries messages to and from the brain – for the stem cells to have a chance to work in the experimental treatments, according to Golden Gate Fields track physician Dr. David Seftel.”

Dybdal also wrote,

“After initially refusing to release Martinez’s records so that Northwestern University’s physicians could review them, Highland Hospital agreed late Friday to release them. Highland had cited laws that prohibit the release of the records to anyone but Martinez, who has been rendered incapable of responding to specific requests because of the nature of his injuries.

“A hearing was to be conducted Monday in an Alameda County court as Martinez’s parents, who have come to the United States from Panama, seek to become their son’s temporary conservators for health-related issues. If they are named conservators, Martinez’s parents could approve the experimental stem-cell treatments for their son.

“Martinez has shown continued progress from his injuries, Seftel said. He is able to eat soft foods and drink. All IVs except one have been removed.

“'He’s looking better and shows continual neurological improvement,' said Seftel.

“Seftel said the improvement in his condition would allow Martinez to be flown to Chicago on a private jet with a doctor and nurse in attendance, but that he would not need a specially equipped Medi-Vac flight.”

Chronicle Reports Possible hESC Treatment of Severed Spinal Cord

The sports section of the San Francisco Chronicle carried an intriguing but brief story this morning dealing with use of embryonic stem cells to “repair” the severed spinal cord of an injured jockey.

The story by Larry Stumes said Michael Martinez is in the UCSF medical center for an MRI exam to determine whether he will be flown to Chicago this week to determine whether he is a candidate for the experimental treatment.

A number of unanswered questions are implicit in the story. We are contacting various parties to find some answers.

CIRM Leads National Effort to Forge 'Pathways' with FDA

California's $3 billion stem cell agency has created a broad-based, 43-member, interstate consortium of researchers and businesses to work with the FDA to develop “well-defined regulatory pathways for stem cell therapies.”

CIRM President Alan Trounson is high on the effort, which will be making another quasi-public appearance in just a few days. Last spring, Trounson told CIRM directors that he is “thrilled” with the initiative, which is spearheaded by CIRM General Counsel Elona Baum.

The next consortium program comes up on Sept. 28 – a “webinar” on preclinical considerations for stem cell therapies. The session, which requires advance registration, will feature Mercedes Serabian, chief of a key pharmacology/toxicology branch in the FDA; Robert Deans, senior vice president of Athersys, Inc., of Cleveland, Ohio, and Melissa Carpenter, a stem cell industry consultant and formerly with Geron of Menlo Park, Ca., StemCells, Inc.,of Palo Alto, Ca., and Novocell(now ViaCyte) of San Diego.

Baum has already conducted one webinar on issues on product characterization, which is now available for viewing on the CIRM Web site along with additional materials. Trounson said Baum “has been fantastic in getting the FDA along.”  Trounson told CIRM directors in April,

“If you were able to take the time to listen to these webinars, they're terrific. The information that's coming from the FDA and from the scientists is very, very helpful. And it's a learning process that's going both ways.”

The 43 members of the consortium include George Daley of Harvard, Irv Weissman of Stanford, Owen Witte of UCLA, Tom Okarma, CEO of Geron; Ed Field, president of Aldagen, Inc., of Durham, NC; John West, president of ViaCyte, Inc., of San Diego; William Caldwell of Advanced Cell Technology of Santa Monica, Ca.; Randy Mills, president of Osiris Therapeutics, Inc.,of Columbia, Md., and executives from Pfizer, Johnson & Johnson, iPierian of South San Francisco, Ca.; Genzyme of Cambridge, Mass., and the WiCell Research Institute of Madison, Wi., among others.

On its CIRM-based Web site, the consortium said that the stem cell field will move “faster when interested parties share best practices and resources.” The consortium said,

“This group provides a forum for members to discuss amongst themselves or with the FDA issues of importance to the industry. The RMC's mission also includes serving as a technical resource during development of guidelines and standards.”

The consortium Internet site contains a wide range of links to FDA, ISSCR and other materials. In addition to the Sept. 28 webinar, the consortium has a link to a Nov. 2 FDA workshop on cell and gene therapy trials.

CIRM Salaries: More Than You Want to Know

Salaries at the California stem cell agency tend to be generous when compared to most other state agencies and have triggered comments from some that they are, in fact, “outrageous.”

However, in 2009 the salary of CIRM President Alan Trounson was only $490,182.97, well below the $2.3 million for the head football coach, Jeff Tedford, at the Berkeley campus of the University of California. Tedford earned the most of any of California's public servants that year. No. 2 was another UC coach. No. 3 was an academic with $1.9 million. He is Timothy H. McCalmont, a professor of clinical pathology and dermatology at UC San Francisco.

Nonetheless, Trounson, Tedford and McCalmont all share one common characteristic. Their salaries are of a magnitude that makes California voters gasp and shudder. They have a visceral, negative reaction to what they regard as excessive wages for government employees – a reaction that is not necessarily perfectly rational.

The governor, who makes $212,179, and state lawmakers, who make $116,208, effectively can do nothing to change CIRM salaries. Prop. 71, which created the stem cell agency, walled it off from mischievous fingers that might want to meddle.

Currently CIRM's executive salaries are below the radar of both public and news media. But CIRM is considering proposing, as soon as two years from now, another multibillion dollar ballot measure to extend the existence of the stem cell research effort. That could raise significantly the attention level of the salaries.

Interestingly, the agency partly justifies its salaries on the basis that the agency could go out of business as soon as 2015 when it may run out of its original $3 billion. However, an additional $4 billion bond measure could prolong its life for another 10 years or more.

We have written from time to time about salary issues at CIRM. The agency itself has a number of pertinent documents. But dredging up all the relevant material can be laborious. To help readers navigate the salary information, we have prepared a reading list of stem cell agency documents, a state salary database and selected articles from the California Stem Cell Report. More items can be found on this web site by searching on the term “salaries.”

We will be preparing more reading lists on California stem cell topics. If you would like to see a reading list on a particular subject, please send a note along to djensen@californiastemcellreport.com. Or you can simply make a request via the “comment” function at the end of this item. Just click on the word “comment.”

The salaries reading list can be found here and here.

CSCR Reading List: Salaries at the California Stem Cell Agency

Here are links to articles and California stem cell agency documents dealing with CIRM salaries, which are high compared to many state agencies and which have come under fire from time to time.

CIRM salary ranges

Searchable Sacramento Bee database on salaries of all state employees, including the University of California and the California state university system

CIRM compensation policy

CIRM compensation philosophy
This document attempts to make the case for the high salaries that exist at CIRM at some levels. Among other things, the agency says,

“CIRM employees must be intelligent, entrepreneurial, motivated, flexible, confident in their own abilities, and committed to stem cell science. To retain this special level of employee, CIRM’s employment policy must reflect and reward the uniqueness of a CIRM employee.”

It also says,

“CIRM’s anticipated life-span is 10-14 years, which rules out the possibility of a long-term career track that is available for many civil service positions in the UC system.”

Here are California Stem Cell Report articles dealing with compensation. Others have been published and can be found by searching on the term “salaries” on this web site.

A Matter for CIRM to Ponder: California's Visceral Reaction to High Salaries for Public Servants, July 25, 2010

Science vs. Salaries: What Do People Talk About? Dec. 14, 2009

Stem Cell PR, Salaries and Mixed Messages, Dec. 10, 2009

New CIRM Figures Show 25 Percent Budget Increase, June 17, 2009

“The largest component of the budget goes for salaries and benefits, which are projected at $7.4 million for 47 employees. That is $1.9 million more than this year's estimated figure of $5.5 million. Personnel costs next year amount to an average of roughly $150,000 in salaries and benefits for each CIRM employee.”

CIRM Executive Salaries Take a Hit, April 9, 2008

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

Legal Wheels Turn: Ban on hESC Funding Temporarily Removed

The nation's stem cell scientists received a reprieve today, courtesy of a federal appellate court that put a hold on an earlier order to halt federal funding of hESC research.

Gardiner Harris of the New York Times wrote:

"The appeals court ruling could save research mice from being euthanized, cells in petri dishes from starving and scores of scientists from facing a suspension of paychecks, according to arguments the Obama administration made in the case. It could also allow the National Institutes of Health to provide $78 million to 44 scientists whose research the agency had previously agreed to finance."

Rob Stein and Spencer S. Hsu of the Washington Post wrote:

"(T)he appeals court made it clear it was not making a final decision about the case, which means the reprieve could be short-lived and the fate of the funding could continue to be whiplashed by seesawing court rulings."

The next court action is not expected to come until sometime after Sept. 20, the deadline for filing additional arguments in the case.

The legal brouhaha makes clear several facts concerning research funding. If you are a scientist, your research is not secure unless you are paying for it yourself. NIH funding is subject to the vagaries of the courts and Congress. Private funding comes with its own set of strings, which generally are not revealed to the public, but they are there. And despite the assurances of the California stem cell agency, its funding can be threatened under some circumstances, as we saw in 2009. CIRM's resources are clearly subject to the state's ability or desire to borrow money and issue the state bonds that are the agency's only real source of cash.

Time to Let Lawmakers Know What They Need to Do

A UC Davis stem cell researcher has joined in the campaign to change the law that resulted in the court order temporarily halting federal funding for human embryonic stem cell research. He is looking for more than a few good supporters.

Paul Knoepfler has posted on his blog a tool that makes it easy for others to join him and write their Washington representatives seeking immediate repeal of the law. It allows readers in any state to look up their elected officials and let them know what needs to be done.

Knoepfler and Don Reed, a longtime patient advocate in California, should get together. Reed also has a blog in which he seeks to create a stem-cell friendly environment nationally and in California. Reed has not yet posted a similar pitch but may well do so.

Reed has been lobbying elected officials for years. His efforts were key to passage in California of a 1990 measure that funded research linked to Geron's spinal cord clinical trials.

That law, however, is in danger of fading from the books. The law is named after his son, Roman, who was paralyzed some years ago in a football accident. Roman also has lobbied for stem cell support and came up with the slogan of the California stem cell agency – “Turning stem cells into cures.”

On his blog, the elder Reed is appealing for folks to write the governor supporting the legislation, which is now on his desk.

Reed writes,

"This law paid for the first state-funded embryonic stem cell research in America, re-insulating damaged spinal nerves. Laboratory rats so badly paralyzed they could only drag themselves are scampering now; that study goes to human trials with Geron. The same research may help cure spinal muscular atrophy, (SMA, a vicious condition which kills children, often before the age of two), multiple sclerosis (MS), and other disorders.

"'Roman’s Law' has helped train new scientists with fellowship grants, and assisted veterans to develop new approaches, from a variation of the petri dish to pioneering new methods of rehabilitation and repair. In addition to 175 published scientific papers, two patents pending which may advance the biomedical industry, and several major scientific breakthroughs, our research brought new money to California."

CIRM Moves Ahead on $50 Million Clinical Trial Round

The California stem cell agency has posted its much-delayed RFA for its first foray into clinical trials – a $50 million loan/grant round that is predicted to have only three applicants.

Firms mentioned publicly as likely to seek the CIRM funds include Geron of Menlo Park, Ca.; Ipierian of South San Francisco, and Advanced Cell Technology of Santa Monica, Ca. The RFA calls for companies to receive loans of up to $25 million each if their applications are approved. Nonprofits would receive grants. CIRM said it only expects to make one or two awards, although the CIRM board could change that.

The RFA, which went up on the CIRM Web site on Aug. 24, originally was scheduled to be posted in April or May. CIRM, which touts its openness and transparency, has not responded to multiple inquiries over several months about the reasons for the delay.

The RFA calls for a successful applicant to have an approved IND, but not necessarily at the time of the review of the applications. CIRM could have delayed the RFA to give potential applicants to time to have one in the pipeline. The RFA said,

"The award recipient must have an IND that is in effect (i.e. not subject to clinical hold) for the novel cell therapy proposed for CIRM funding before issuance of notice of award.” That notice is provided by staff well after approval of an award by the board and could also possibly be delayed pending a go-ahead on an IND."

CIRM does not expect to fully fund a clinical trial, only take part in the financing. It also cannot, by law, fund activities outside of California.

The clinical trial round is part of CIRM's aggressive push to produce results that will encourage voters to approve another multibillion dollar bond measure to continue financing stem cell research with money that the state borrows.

The clinical trial RFA gives CIRM President Alan Trounson special authority to “permit exceptions to requirements specified in this section V.(eligibility) of the RFA (except for the requirement for a cell therapy derived from human pluripotent stem cells) if the president determines, in his sole discretion, that the applicant has demonstrated that the exception would preserve an important research opportunity or make a critical contribution to one of CIRM’s mission objectives.”

The RFA said the exeception requests must be filed by Sept. 29. Letters of intent are also due Sept. 29 with board approval of awards sometime next summer.

Legislation to Give CIRM More Employees Goes to Governor

Legislation to remove the 50 person cap on the size of the staff of the California stem cell agency won final legislative approval yesterday.

The measure, SB 1064 by Sen. Elaine Kontaminas Alquist, D-San Jose, is now on its way to the governor's desk where it is expected to be signed. The bill would go into effect at the beginning of the year.

The limit on the number of employees was written into law by the ballot initiative, Prop. 71, that created the $3 billion research effort. The cap was redundant since the agency has a legal limit on operational expenses. The restriction ultimately hampered the agency's ability to perform its work.

In addition to removing the staffing cap, the compromise bill would require performance audits, albeit limited, of CIRM beginning next year at the agency's expense, according to the latest state Senate analysis of the measure. It also allows the agency to pay the patient advocates who serve on its board up to $15,000 a year. The CIRM board has already acted to do so.

CIRM backed the bill after it was significantly watered down. Gone are many reforms recommended by the Little Hoover Commission, the state's good government agency, along with provisions sought by the state's top fiscal officer, Controller John Chiang.

They include elimination of a performance audit by a special, Prop. 71-created, financial oversight committee chaired by Chiang. Instead CIRM itself would pay ($400,000 plus) for the audit and control its scope. CIRM already has written into the bill a stipulation that the audit does not have to include “a review of scientific performance.”

The staff analysis of the bill that was presented yesterday when it cleared the Senate floor on a 35-0 vote said,

“The author's office states that, while stem cell research is an important and laudable goal, concerns about transparency, accountability and oversight raised by the public, the independent Citizen's Financial Accountability Oversight Committee, the Little Hoover Commission, and the state controller detract from CIRM's ability to provide grants and loans in the most efficient way.

“These concerns divert resources and attention from CIRM's ability to maximize voter's investment in stem cell sciences. In 2009 alone, CIRM spent $1.5 million in external contracts for legal services, lobbying, public relations and communications costs to improve its public image, which is a duplication of existing internal resources. Given that the debt from the bonds is serviced from the (state's) general fund, concern about CIRM's lack of transparency and accountability gains greater significance during these challenging fiscal times. By addressing many of these public concerns, this bill enhances CIRM's ability to make grants and loans, and the removal of such barriers frees up resources that were previously diverted from the grant and loan programs.”

According to the analysis, the CIRM performance audits would cover “programs, functions, operations, management systems, and policies and procedures to assess whether it is achieving economy, efficiency, and effectiveness in the employment of available resources.”

The analysis also said it would be at least 10 years before CIRM is likely to generate revenue for the state through the results of the research it finances. The analysis said,

“Due to the time it takes research to be done and a product to be commercialized, the general fund is unlikely to see significant revenue until about 2020. The amount of revenues is unknown and depends on the number and types of drugs and technologies that are commercialized as well as their commercial success.”

CIRM's Sheehy Says CIRM to Pay Off in Cures and Economic Development

On Sunday, we carried an item dealing with the political environment in California surrounding a possible additional $4 billion bond measure to continue financing the California stem cell agency.

CIRM Director Jeff Sheehy, chairman of the board's Scientific Subcommittee, longtime patient advocate and communications manager at UC San Francisco, sent along the following response. It was received before the federal court ruling on hESC research, which Sheehy could have added as a reason for CIRM support.

“I think, David, you are looking at this as a game of 'zero sum' economics in which you assume every dollar spent on stem cell research is a dollar lost to some other worthy state budget item.

“The reason states issue general obligation bonds is that economists recognize that certain investments (historically in physical infrastructure like roads, bridges, ports, and school and university buildings for instance) create value that returns more than to the cost of the investment back to the state. Not only does building a bridge or road hire and pay companies and workers who then pay state income taxes and sales taxes, but there is a multiplier effect by which their personal spending of their wages, etc., on other items circulates through the economy creating additional spending. Further, the new bridge or road speeds other Californians to work faster and more efficiently saving hours of productive time that would have been spent in traffic, creating additional value. Ambulances or fire trucks get to emergencies faster saving lives or property. Given that some investments produce more money for the state in the long run than the money initially invested, states routinely issue government obligation bonds rather than try to budget this funding out of annual general fund dollars. The revenue from the increased economic activity deriving from the investment more than covers the bond repayments that come out of the general funds.

“The more salient question for CIRM is whether it is actually building a platform for the creation of future wealth or building a 'bridge to nowhere' that does little to increase the productive capacity of California. And the Institute of Medicine report, if it is to have any value, must answer that very question. Are the investments in the dozen new facilities for stem cell research, the training of new scientists and technicians from the undergraduate level through the post-doc level, and stem cell research from the basic, laboratory level on through to the clinic creating a platform by which additional wealth for California will be created far beyond the repayment costs of the bonds?

“And while I need a solid IOM report to definitively answer the question, I do believe that overall (minus a lot of superfluous contracts and overly high salaries and a cavalier attitude towards ensuring value for the taxpayers by many CIRM staffers) the investments in intellectual infrastructure made through Prop. 71 will pay off hugely for California as it leads the world in developing and deploying regenerative medicine.

“If CIRM does nothing else but functionally cure HIV infection as the LA Times article suggests is possible, the savings for the state will be huge in lowered medical costs and in income for the state from profits and the growth of Sangamo, based in Richmond CA. This approach targeting HIV may not work, but I feel strongly that eventually some cure for some disease or condition will come out of this spending.

“I also think companies will form and grow just like Intel, Apple, Google and eBay did from the investments made in research at California universities and institutes. Genentech and Gilead are both biotech giants that emerged from research done at California institutions that are generating substantial dollars in economic activity and creating jobs and tax revenue for the state. iPerian, forming and locating here thanks to CIRM and mentioned by you in an earlier column, might be a wealth generator like those mentioned above or it could be one or more of the many small biotech firms working in regenerative medicine up and down the state.

“So David, while I always greatly appreciate your commentary and your reporting, I think to put CIRM funding in the same barrel as annual general fund financing for schools is off the mark. With a five-year-old in public school in San Francisco, I am as frustrated with Sacramento¹s inability to adequately and consistently provide funding on an ongoing basis to educate our children as anyone could be. But pitting annual school funding against capital investments for our future will not stimulate the types of debate that will lead to answers for the respective, relevant questions.”

California Radio Talk Show on hESC Ruling

Art Torres, co-vice chairman of the California stem cell agency, will be one of the guests on a radio talk show tomorrow at 9 a.m. PDT on station KQED in San Francisco dealing with this week's hESC ruling. You can listen to the program live on the Internet.

The station said,

“National Institutes of Health director Francis Collins said Tuesday that the recent court ruling blocking federally funded research on human embryonic stem cells won't affect grant payments that have already been paid out this year. But the institute will freeze its reviews of new grants of this type. Although California's $3 billion stem cell initiative is not affected, we talk about the ruling and its potential impact on Bay Area biotech. Guests include, Dr. David Stevens, chief executive officer of Christian Medical and Dental Associations; Dr. Helen Blau, professor and director of Baxter Laboratory for Stem Cell Biology at Stanford University; Tom Abate, staff writer covering economics for San Francisco Chronicle; and Art Torres, former chairman of the California Democratic Party and vice chair for the board at California Institute for Regenerative Medicine.”

The Latest from the NIH re the hESC Ruling

UC Davis stem cell research Paul Knoepfler this afternoon reported on the latest from the NIH on the federal court ruling on hESC research.

Writing on his blog, he quoted the text of the statement and then offered a comment.

“Pursuant to a court order issued August 23, 2010, NIH is not accepting submissions of information about human embryonic stem cell lines for NIH review. All review of human embryonic stem cell lines under the NIH Guidelines is suspended. The February 23, 2010, proposal to revise the Guidelines is also suspended.

“My interpretation of this is that basically all the changes to embryonic stem cell policy under the Obama administration and all the federally funded use of ES cell lines approved under the new guidelines during this administration is suspended. No one should bother submitting new lines for approval and those that were under review are not going to be reviewed any more. All of that is frozen.”