CIRM Study Says Stem Cell Spending Will Generate 25,000 jobs by 2014

The California stem cell agency today released a glowing report on its economic impact that was produced by a firm that was charged by CIRM with executing "a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”

The agency's press release on the $300,000, 25-page study said that CIRM's spending will generate 25,000 "job years" and $200 million in new tax revenue by the end of 2014. CIRM has awarded $1.1 billion in grants, although not all of that has yet been distributed. The study projected the future impact of those funds in addition to cash already distributed.

The study was prepared by the LECG group and the Berkeley Research Group under an RFP that said the contract holder must "execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”

CIRM Chairman Robert Klein said in a news release,

“This report demonstrates that we’ve delivered on the economic promise today, even as we continue to see strong positive milestones on the research side progressing rapidly toward therapies.”

The agency's news release said more economic studies will be performed. But it said today's report

"...alone makes it clear that CIRM has provided a net gain to the state’s general fund during its early years. For its first five years, through the end of 2009, the agency paid its own debt service costs directly from its bond proceeds so there was no cost to the general fund during those years. From 2010 through 2012, the current estimate for the cost of debt service on CIRM bonds is $160 million. The state’s share of CIRM generated revenue—just from that first $1.1 billion awarded before July—will be an estimated $148 million.

"The report does not, however, take into account grant awards made later in 2010 and those scheduled for 2011 and 2012, which will generate added tax revenue at a similar rate. With those additions, CIRM’s directly generated tax revenue should exceed its debt payments through some point in 2013 even without considering tax revenue from industry growth in the biotech clusters."

No doubt exists that the stem cell spending has had a beneficial economic impact. But whether it has had a "significant" impact on the California economy is in the eye of the beholder. The state's economy runs to something like $1.7 trillion a year. If California were a nation, it would rank among one of the larger economies in the world. The workforce totals around 18 million, making 25,000 jobs statistically less than a hiccup. Keep in mind as well that CIRM, until 2009,  paid the interest on its borrowing with more borrowed funds, all of which adds to the total cost of the borrowing, which is about $3 billion on top of the $3 billion CIRM is handing out.

We have asked CIRM whether it intends to make the economic data underpinning the report available to the public and outside researchers, who can verify the study's conclusions. The agency's response will be carried when we receive it.

Details Finally Emerge on $200,000 Stem Cell Convention Subsidy Plan

The California stem cell agency last night belatedly gave the public its first glimpse at a $200,000 plan to subsidize attendance at an international stem cell conference in Toronto in June.

A one-sentence version of the proposal has been on the agenda of the directors of the California stem cell agenda for 10 days. However, the cost, number of persons involved and other details were not disclosed until only hours before the directors are scheduled to take it up this morning.

In a memo on the CIRM web site, Chairman Robert Klein estimated the cost at $2,000 per person for travel, hotel and registration expenses at the meeting of the International Society of Stem Cell Research, the world's largest such organization. He proposed sending "80 young California researchers who are actively involved in a CIRM-fund grant (including Bridges to Stem Cell Research, research training grants and other research award programs) and up to 40 California representatives of patient advocacy organizations."

The $24 million Bridges program covers training largely at California state and community colleges.

The memo did not present a justification for the convention travel subsidy. Instead, it said that CIRM paid for the attendance of 98 persons in a similar program for the ISSCR convention last year in San Francisco. It said the program was a "success" but provided no basis for that assertion.

CIRM, through Klein's office, has been trying to improve relations with patient advocate organizations, which will be a key to winning support of a proposed, new $3 billion to $5 billion ballot measure for the stem cell agency.

The program would use part of the $3.5 million that has been donated to CIRM by private individuals and be operated under the auspices of the ISSCR. The organization would be given the $200,000 to set up a "scholarship" program. Klein would run the program through his office, he said, to avoid placing any additional burden on CIRM's scientific staff. It was not clear whether the ISSCR would require reimbursement for its administrative costs in connection with the program.

CIRM Directors Move Forward on Selection of New Chairman

A key committee of the directors of the California stem cell agency tonight moved to take a fresh look at the selection of a new chairman of the $3 billion organization and to conduct a self-evaluation of the board itself.

The proposal now goes to the full board of directors at their meeting in Burlingame tomorrow.

The Governance committee also agreed with a request made one year ago by the state Citizens Financial Accountability Oversight Committee that CIRM post the economic interest statements of its directors and top executives on the CIRM web site, said Don Gibbons, the agency's chief communications officer. The CIRM directors panel also agreed to post expense claims from directors and executives. The oversight committee is charged with examining CIRM's finances.

Gibbons said in an email that the new look at the selection of a new chairman was approved unanimously after a brief discussion. Gibbons said that directors also accepted a suggestion by CIRM Chairman Robert Klein, who says he is leaving in June, that directors be surveyed on whether they "should or should not get involved in financial details."

The proposal to develop a criteria for a chairman plus the self-assessment survey was offered by Claire Pomeroy, dean of the UC Davis School of Medicine and a member of the CIRM board. In an email to directors, she said her recommendations would help to "to ensure an open process free of conflict of interest and personal agendas." She said,

"This is our chance to emphasize the mission over in-fighting and can define what kind of organization CIRM and the board will be."

Sherry Lansing, chair of the Governance committee and former Hollywood film studio chief, asked that the survey be completed in two weeks, according to Gibbons.

He said that the committee also approved a suggestion by Lansing concerning an additional aspect of the selection process. Gibbons said that it would create "a process in which if (a board member) finds someone that looks like an interesting candidate they can call one other member of the (Governance committee) and meet with that individual and report back to the committee in a public meeting on the potential candidate’s qualifications."

State Controller Chiang: Lubin Fills Children's Health Need on CIRM Board

Earlier today, the California Stem Cell Report asked the office of state Controller John Chiang to comment concerning the appointment of Bert Lubin to the CIRM governing board. Here is what Hallye Jordan, Chiang's spokesperson, sent.

"Controller Chiang was thrilled to appoint Dr. Bert Lubin for the position reserved for a California nonprofit academic and research institute because he is supremely qualified.

"Currently, there is no children's health representative on the ICOC(the stem cell agency's governing board), and Dr. Lubin fills this important gap. He has focused his career on health issues in minority communities, and is known for his research into sickle cell anemia.

"From the CHORI (which he founded) website: 'Under Dr. Lubin's leadership, basic, clinical and translational research activities expanded, and he transformed a small research program into a $50 million-a-year enterprise called Children's Hospital Oakland Research Institute. In 2008, CHORI ranked sixth in the nation for National Institutes of Health awards to children's hospitals.

"'CHORI investigators have organized programs in global health, cellular therapy, and personalized medicine. Grant support has increased 100-fold under Dr. Lubin's leadership due to the outstanding investigators he has recruited and supported.'

"Dr. Lubin was the unanimous choice of the Children's Hospital Association, and both Art Torres and Bob Klein were enthusiastic about his potential nomination.

"I've attached a letter of support that cites his 'long-standing interest in stem cells, basic research, clinical applications and technology transfer,' his interest 'in training young investigators interested in stem cell research,' and his worldwide recognition 'for the work he has done establishing the value of sibling stem cell cord blood banking.'"

Jordan additionally said, "Also, at the time we started our search, Salk was represented on the board so we were looking for new institutions."

You can find the letter of support here. It was written last October by Diana Dooley, now a member of California governor Jerry Brown's cabinet as secretary of the $83 billion state Health and Human Services Agency. At the time she wrote the letter, Dooley was president of the Children's Hospital Association.

Correction

The Salk item on Jan. 26, 2011, incorrectly stated that William Brody was being replaced on the CIRM board by Bert Lubin. Lubin actually replaced John Reed.

Salk Loses Seat at California's $3 Billion Stem Cell Table

Bert Lubin, new CIRM board
member

The Salk Institute has lost its seat on the 29-member governing board of the $3 billion California stem cell agency.

The La Jolla, Ca., research enterprise had held a position on the board since its inception in 2004. Most recently, William Brody, president of Salk, which has received $37 million in CIRM grants, filled the slot. Brody was appointed in August of 2009.

Brody was was replaced by Kristiina Vuori, president of the Sanford-Burnham Research Institute, also of La Jolla. At the same time, her boss, John Reed, CEO of Sanford was replaced on the CIRM board when state Controller John Chiang appointed  Bert Lubin, president and CEO of Children’s Hospital and Research Center Oakland. Lubin made news three years ago when he became the first grant applicant to publicly appeal a negative decision on his application by CIRM's scientific reviewers. Lubin lost his bid during a heated debate among directors. At the time, directors expressed considerable discomfort with having to deal with a public appeal. Since then, the problem of appeals has continued to dog the board, although its Scientific Subcommittee is attempting to deal with the issue.

Kristiina Vuori, new
 CIRM  board member

Childrens Hospital Oakland currently holds a single $55,000 grant from CIRM.

Chiang's office had no immediate comment on the reasons behind Lubin's nomination. We are also querying Lubin and Brody for comment.(The controller's office later said Lubin would serve as an advocate for children's health.)

Vuori was appointed by former Lt. Gov. Abel Maldonado before he left office earlier this month. Sanford-Burnham has received $31 million from CIRM.

It is common for CIRM grants to go to institutions linked to its board. Many members of the board are employed by institutions that have received tens of millions of dollars from CIRM. The following institutions have seats on the board: Stanford, $176 million in grants; UCLA, $135 million; UCSF, $111 million; UCSD, $77 million; USC, $72 million; UC Irvine, $72 million; UC Davis, $61 million; City of Hope, $42 million; UC Berkeley, $37 million; Scripps, $37 million; UC Santa Cruz, $19 million; UC Santa Barbara, $13 million; UC Merced, $8 million; UC Riverside, $6 million, Cedars-Sinai, $9 million. One CIRM director, Sherry Lansing, a UC regent, accounts for many of the connections to the smaller UC campuses.

Directors with financial ties to applicants are barred from voting on their applications. Directors, however, approve concepts for grant programs and the rules for administering them. Reed and others ran afoul of conflict rules in 2007. The issue with Sanford's Reed was disclosed by the California Stem Cell Report. Reed was later warned by the state Fair Political Practices Commission. Reed acted after he was advised to do so by CIRM Chairman Robert Klein, an attorney who later said his advice was an "inadvertent error."

The structure of the board was dictated by Prop. 71, whose authors, including Klein, were interested in giving a seat at the financial table to the institutions who ultimately benefited from the largess.

The new appointees have six-year terms. They receive $114 a day while working on CIRM matters.

The appointments were disclosed this afternoon in a news release from CIRM. The statement said there were no changes in the other members of the board. Nine were reappointed. Others have eight-year terms.

(An earlier version of this item incorrectly said that Brody was replaced by Lubin.)

Two State Agencies Looking Into CIRM Tomorrow and Friday

This is a busy week for the California stem cell agency, but not all the action is in Burlingame where CIRM board convenes tonight for a preliminary round, followed by the main event tomorrow.

Two other state bodies will be looking at CIRM at meetings in Los Angeles and Sacramento. One of the panels is the only entity specifically charged with oversight of the $3 billion agency's finances. That is the Citizens Financial Accountability Oversight Committee(CFAOC), which convenes in Los Angeles on Friday. The second group is the state's good government agency, the Little Hoover Commission, which recommended in 2009 a number of changes at CIRM to improve its operations and transparency.

On tap for the CFAOC is a look at implementation of the first-ever law passed dealing with the Golden State's unprecedented $3 billion research effort. The measure, SB1064, removes a 50-person cap on the agency's staff, allows for compensation of up to $15,000 a year for some patient advocates serving on the CIRM board and requires the agency to commission the first-ever performance audit of its program.

The CFAOC is chaired by the state's top fiscal officer, Controller John Chiang. An early version of SB1064 contained a provision, supported by Chiang, that would have had the CFAOC commission the performance audit. But CIRM successfully lobbied to take the audit out of the hands of the CFAOC. You can expect questions to be raised during the Friday meeting about the progress of CIRM on setting up its audit.

Also likely to come up is the subject of staffing, particularly in connection with sweeping recommendations by CIRM's external review that would seem to require substantial additional staff.

A new member of the CFAOC, Jim Kovach, former head of the Buck Institute, is expected to be sworn in. Kovach was appointed by CIRM Chairman Robert Klein, whose last appointee to the panel attended one meeting last January and then quit. Kovach is a physician, a lawyer and former professional football player with the San Francisco 49ers and the New Orleans Saints.

You can find a host of budget and other financial documents related to the meeting on the CFAOC website.

The agenda for the Little Hoover Commission says only that a "scoping memo" involving CIRM will be presented to the full commission tomorrow afternoon in Sacramento. The commission staff has not elaborated on just exactly what that means although it comes under the subject of "schedule/project selection."

As for tonight's meeting of the CIRM directors' Governance Subcommittee, you can read about that here. The full board meeting that begins tomorrow morning was subject as well of a number of earlier piecesl on the California Stem Cell Report. (See here, here, here, here and here.) For those of you following those items, the agency still has not posted any information about the cost or scope of its proposal to pay for the attendance of perhaps hundreds of persons at an international stem cell conference in Toronto in June.

Live Coverage of CIRM Directors Meeting

The California Stem Cell Report will provide live coverage tomorrow of the meeting of the governing board of the $3 billion California stem cell agency. For those who want to listen in as well, you can find instructions for the Internet broadcast of the directors' session on the meeting agenda. The session is scheduled to begin at 9 a.m. PST, but usually starts late.

Late Info Posted for Stem Cell Agency Directors Meeting

The California stem cell agency today posted additional material for its directors meeting Thursday dealing with loan payback changes in its biotech loan program along with an update on its operational budget.

You can find a memo summarizing the loan changes here and the proposed regulations here. Obviously these come much too late – less than two days before the meeting – to expect thoughtful comment from most industry executives. The summary also did not provide an explanation of the reasons for the changes.

The budget figures can be found here.

IOM Study of California Stem Cell Agency Still Pending

Back in August, directors of the California stem cell agency authorized a $615,000 study of their $3 billion enterprise by the prestigious Institute of Medicine at the National Academies of Science.

As of last week, a contract for the work had not been signed, although the two-year study was originally scheduled to be completed by September 2012 -- in time for a ballot measure campaign for an additional $3 billion-$5 billion in bond funding for CIRM.

According to the agency's press release on the study, the IOM study would be aimed at demonstrating "public accountability" and would provide "an independent evaluation of the performance and standards" at CIRM. Some CIRM directors have also expressed hope that the findings would help generate support for the ballot measure for more cash.

In response to a question about the status of the effort, Don Gibbons, chief communications officer for CIRM, said the contract is still being negotiated but provided no further details.

Last summer, CIRM directors approved the project on a voice vote with only one dissent. The study would cover virtually all of CIRM's activities, including areas that were examined closely last fall by CIRM's external review committee. When directors approved the IOM study, they also specified that IOM examine the "output of awarded grants, including their economic impact."

The IOM effort would be the third in a series of recent reports on CIRM. This year, the agency is also required, under a new state law, to commission the first-ever performance audit of its activities.

Duane Roth, co- vice chairman of CIRM and a San Diego businessman, cast the lone no vote. He raised questions about the staff time needed for the report (the external review took at least 2,000 hours). Roth also told directors,

"I would just caution that the outcome on something like this can cut both ways. And to go in just sort of blind trust that they're going reach the conclusion you want them to reach, I don't think is a foregone conclusion. So you at least ought to think about the downside of a rather critical one."

Directors specified that "donor funds" be used to pay for the study as opposed to "taxpayer funds," meaning cash from state bond sales, which is the only major funding available to CIRM. Some private donors have contributed money (now roughly $3.5 million) to CIRM. Once the money is in the hands of CIRM, however, it all belongs to the taxpayers, although the donor funds may be used for purposes that are barred for bond funds. Spending the donor cash on a study also means that the funds will not be available for research or some other purpose.

The IOM has proposed that a panel of 14 persons prepare the report. It would meet four times. Two public workshops would be held in California. The report would be subject to a peer review process and "appropriate institutional review procedures." The final report would be delivered to CIRM after 12 to 13 months and at least 10 days prior to its public release.

You can read what was proposed in August below.
Proposed IOM study of California stem cell agency Aug. 2010

CIRM Stingy with Info on Matters Before Directors This Week

With less than three business days left before Thursday's meeting of the directors of the $3 billion stem cell agency, CIRM has not yet produced details for the public on three significant matters that are to be considered.

The agency's failure to provide the information for the biotech industry, researchers, patient advocates, policy makers and the public via the directors' agenda is not a onetime event. It is part of a pattern -- a de facto policy -- that reflects poorly on CIRM. Withholding information about board matters effectively stifles participation by the public and discourages coverage by the media.  It also fails to meet the pledge of CIRM Chairman Robert Klein to adhere to the highest standards of openness and transparency.

However, more information on two items is now available. One involves a $6.6 million, visiting faculty program. Another deals with selection of grant reviewers, something of a sorepoint within the biotech industry.

The CIRM faculty plan states:

"The CIRM Visiting Faculty Award will operate through supplemental awards to existing CIRM-funded research grants, all of which have been peer reviewed and approved by the ICOC. The funds will enable a sabbatical researcher (Visiting Scientist) to work on an existing CIRM-funded research project for 6-12 months. The supplemental CIRM funds will cover up to 50% of the Visiting Scientist's salary and fringe benefits costs, with the remainder being paid by the Visiting Scientist’s home institution."

Applications would be submitted by the recipient of an existing research grant – who would be known as the "host scientist." The proposal envisions up to 30 awards with decisions on awards being made by CIRM staff.

Also before directors are eight proposed new alternate scientific members of the grants review group. None appear to have significant biotech industry experience. The agency has drawn fire from industry for its lack of grant reviewers who have a business background. CIRM's own external review panel said last fall,

"The majority of granting processes are designed on academic models. These processes do not necessarily fit the needs or timelines of industry and/or the realities of managing industry projects. Granting processes and funding criteria could be clarified and streamlined from an industry perspective and timelines for decision-making could be aligned with industry norms."

Regarding the review's sweeping recommendations themselves, CIRM President Alan Trounson said in early December that he would report on how they should be implemented. His report is not on the board's agenda for this month. The next CIRM board meeting is scheduled for March 9-10.

As for the previously mentioned three agenda items lacking information, one is a proposal to subsidize trips to Toronto in June for perhaps hundreds of persons to attend an international stem cell conference. The proposal contains no cost estimate nor does it indicate how many persons would be involved. We calculated a very rough estimate of $3,000 a person, depending on a number of variables. This may be worthwhile effort. We are inclined to think there is considerable value for scientists at such meetings. But so far CIRM has failed to do even a poor job of making the case for the subsidy program.

Another item needs much more explanation about why it is being considered this week. Only 22 words are devoted to it on the agenda although it is an unusual exception to the normal grant approval process. The item concerns an application for $4 million by Fred Gage of the Salk Institute in the early translational round. Decisions on that round were made last October by CIRM directors. Scientific reviewers did not approve the Gage application for funding, but it was set aside by the directors for additional consideration.

This week's agenda provides no hint concerning that background and no clue about why the application is still around. Its history can be unearthed from CIRM documents, although virtually all ordinary users of the CIRM web site would find the task daunting if not impossible. Here is a brief synopsis of the story:

At the Oct. 21, 2010, CIRM board meeting, CIRM Director Joan Samuelson, a patient advocate for Parkinson's and who also is living with the disease, moved to have directors override the negative decision by reviewers. During the discussion at the October meeting, CIRM Director Jeff Sheehy, also a patient advocate and member of the grants review committee, said in support,

"One of the key factors that was very motivating was the stature of the scientist and paucity of people working in Parkinson's in California. Eminent neurologists within the room said we campaigned (in 2004 for Prop. 71) -- we had Michael J. Fox on TV -- we talked about Parkinson's as a target. But one of the problems in our ability to fund this in California is that there's a lack of a sufficient number of outstanding Parkinson's (researchers) -- other diseases are more or better represented, at least this is what is stated, and the opportunity to get this particular eminent scientist into this arena was a value in and of itself."

The discussion at the October board meeting went beyond the specific grant and into procedures of the board and the grant review process, including discussion how of exceptions are made.

Ultimately the board asked CIRM President Trounson to look into the grant and report back on his views.

Researchers, patient advocates and others interested in CIRM funding would be well-advised to read the discussion, which covers about 17 pages of the transcript beginning on p. 144. Also of interest at the Thursday meeting concerning funding is an appeal by a Stanford researcher, Stefan Heller, in the tools and technology round that is before directors.

The third matter that is shy of information involves changes in the agency's biotech loan program and its payback provisions. We wrote earlier about what those might involve. Our take can be found here.

CIRM Beefs Up Technology: More Info and Better Service for Applicants, Grantees Promised

The California stem cell agency is reporting technology improvements that they will hope will aid researchers and the public as well.

Amy Adams, CIRM communications manager and who deals with the agency's web site, wrote last Friday on the CIRM research blog:

"As of our most recently posted RFA (Disease Team Therapy Development Awards) we’re all electronic. Grantees fill out an application online. If their application gets funded, the grantee can manage that grant online. Progress reports? Well, they still have to pull together the data, but it can be submitted online. Publications? Report them online. New applications? They go into your user account and you can manage all those grants from the same place. Time to submit a new form? No problem, CIRM makes sure there’s a notice in your account. Less time battling forms means more time doing research, which is good news for all people eager for new stem cell therapies.

"I’m not a grantee, so these miracles are all a bit abstract. However, I do know people inside CIRM are looking forward to not taking angry calls from grantees who are frustrated with our forms. And they are looking forward to having that data automatically in our database rather than needing to import it from PDF.

"The public will start seeing the benefit of these electronic developments over the next few months. Information that’s in our database can also be displayed on our website. I’m excited to start posting progress information and publications as part of our grant summaries. Stay tuned."

On the Science of Being Wrong

A tidbit that caught my eye from an article by David Brooks in the Jan. 17, 2011, issue of the New Yorker.

"Human beings are overconfidence machines. Paul J. H. Schoemaker and J. Edward Russo gave questionnaires to more than two thousand executives in order to measure how much they knew about their industries. Managers in the advertising industry gave answers that they were ninety-per-cent confident were correct. In fact, their answers were wrong sixty-one per cent of the time. People in the computer industry gave answers they thought had a ninety-five per cent chance of being right; in fact, eighty per cent of them were wrong. Ninety-nine per cent of the respondents overestimated their success."

Four Researchers Appeal Grant Reviewer Decisions; Stanford Scientist Cites Broader Concerns

Four scientists from UCLA and Stanford are seeking next week to overturn negative decisions by CIRM's scientific grant reviewers on their bids for close to $2 million each. One Stanford researcher is raising important policy questions that go well beyond the scientific merit of the proposed research.

The appeals to the full board of the California stem cell agency come in the $40 millon tools and technology round, which is aimed at addressing "technical bottlenecks and (enabling) novel translational approaches." The awards are scheduled to be given out by the agency's directors Thursday in Burlingame.

The researchers who appealing directly to the CIRM board are Guoping Fan and Martin G. Martin, both of UCLA, who are seeking $1.8 million each, and Craig Levin and Stefan Heller, both of Stanford, who are seeking $1.9 million each.

Most of the appeals to the CIRM board focused heavily on science issues, but the letter by Heller addressed additional, broader issues.

Stefan Heller
Stanford Photo

Heller, who has financial ties to a San Diego firm dealing with hearing disorders, already holds a $2.5 million grant from CIRM that was awarded in 2007. Heller used the funds for research dealing with potential cures for deafness through human embryonic stem cells. Both he and CIRM reviewers say he is one of the few scientists working in that area, although some 3.5 million Californians suffer from debilitating hearing problems.

Heller's pitch to the CIRM board defended his science but also implicitly raised questions about the quality of CIRM's grant oversight. And he said that without additional funding, CIRM's initial $2.5 million investment could well be damaged. Heller wrote,

"Now is the time to build on this asset and not to stop the funding and to disperse the researchers."

He argued that hearing losses are a widespread affliction and deserve more attention. He said his research could create jobs in California, an economic argument that CIRM has been touting widely as justification for its efforts.

According to the CIRM review summary, Heller's application was denied "due to strong concerns regarding feasibility of developing an adequate hESC-derived otic cell model, especially because little progress was reported despite an ongoing CIRM-funded effort in this laboratory, reviewers were doubtful that technical hurdles would be overcome." Heller rejected the contention that he had made "little progress." CIRM monitors the progress of its grantees and has pulled grants from three recipients.

Heller said,

"We believe that the reviewers were not appropriately calibrated with respect to the state of the science in our field, which consists of only a few laboratories – compared to larger fields with many well-funded laboratories. On the other hand, successful development of novel therapies for hearing loss and balance disorders would affect the lives of millions of patients. Therefore, research activity in our field clearly remains disproportionate to the major medical need."

He continued,

"The Heller lab is CIRM funded for 3 1/2 years and we have had several publications arising from CIRM funding including a major recent one in the journal Cell on mouse ESC guidance. The main results of our human ESC study are unpublished, we agree with this critique, but this does not mean that we have not made progress....Our ongoing CIRM comprehensive research grant has been funded based on a specific time plan and our current progress is very much in line with the original time plan."

Heller wrote,

"We are one of less than five laboratories working on stem cell related approaches to find treatments for hearing loss. We strongly believe that our science has to be exemplary as one of the few representative laboratories of the field."

Heller said,

"Our research group is an asset for CIRM in a small and specialized field with a high medical need. We have established a working and productive CIRM-funded group of people that joined us from outside the inner ear field that now, after 3 years, has reached a level of competence and productivity that comes close to groups working in much larger fields with more depth in basic science, as well as a much larger pool of personnel that readily joins these laboratories. Without the investment from CIRM, this group would not exist! Now is the time to build on this asset and not to stop the funding and to disperse the researchers. There are few laboratories in our field and progress is carried by a much smaller group of people than some of the larger fields that are well-supported by CIRM. Yet, a larger field much easier absorbs a major individual funding gap, whereas lack of sufficient funds will most certainly substantially hamper any progress in the hearing loss treatment field because we will lose the best and brightest coworkers of our laboratory. Our inner ear hESC group at Stanford would be in danger of dissolving, and research on the topic would have to start all over again, possibly severely slowing down the translation of hESC technology into the hearing loss field, thereby affecting millions of patients."

In his job creation argument, Heller said his application

"...directly deals with removing the only existing bottleneck preventing the development of the first high-throughput drug discovery screens in the hearing space. We have been extensively talking with potential investors as well as with multiple big pharmaceutical corporations about feasibility of our approach particularly with respect of using the assay as asset for a new biotech firm. We have been meeting with high-throughput screening experts from two out of the top ten big pharmaceutical companies and have discussed our planned hESC-based screening assays with them. Removal of the existing bottleneck, the main topic of our grant application, will directly expedite the founding of a new drug-discovery company in the hearing field locally in the SF Bay area."

Stanford's web site shows that Heller has financial links with Otonomy, Inc., a San Diego company "developing novel drug therapies for disorders of the inner and middle ear." According to Otonomy's web site,

"This field represents a large opportunity as there are no approved drug treatments for the nearly 30 million Americans facing debilitating hearing and balance disorders such as Ménière's disease, sudden sensorineural hearing loss, noise-induced hearing loss, age-related hearing impairment, and tinnitus."

Heller reported that he receives more than $5,000 in consulting fees from the company and has more than $5,000 in equity in the firm. He also serves on the company's advisory board.

Here are links to the other appeal petitions and review summaries.

Fan appeal, review summary; Levin appeal, review summary; Martin appeal, review summary.

Minimal Coverage of New VP Appointment at CIRM

The San Francisco Business Times and a blog by Nature magazine appear to be the only media to run stories on the appointment of a new vice president of research and development, Ellen Feigal, at the California stem cell agency.

The stories were routine, but Ron Leuty of the Times reported,

"CIRM interviewed at least 14 candidates, but some pulled out after considering the cost of housing in the Bay Area, the post’s salary and the public nature of CIRM’s work."

Here is a link to the Nature piece by Erika Check Hayden.

CIRM Clarifies Directors' Pay Proposal

Directors of the California stem cell agency next week are expected to approve a plan to compensate some members of its board up to $15,000 a year, but confusion about the pay rate has arisen because of a footnote in the proposal.

The plan would affect six patient advocate members of the 29-member CIRM governing board. The proposal posted on the CIRM web site for the board's Jan. 27 meeting in Burlingame states:

"A regular Patient Advocate member of the Grants Working Group would be eligible to receive 75% of the daily compensation paid to a regular Scientific member of the Grants Working Group and the Patient Advocate Vice Chairs would be eligible to receive 75% of the daily compensation paid to the Review Chair."

The compensation for a scientific member of the group is $750 a day. Seventy-five percent of that is $562.50.

However, CIRM says the formula in the footnote does not exactly represent what is being proposed.

James Harrison, outside counsel to the board, said in an email,

"First, the footnote has understandably caused confusion -- we plan to delete it and repost.

"Second, under the policy, the rate of the stipend would be the same for the regular Patient Advocate members and for the Patient Advocate Vice Chairs -- $562.50 per day. The variable is the number of days required for preparation and participation in a particular review session.

"If the Board were to adopt the policy, the Chair of the Board would consult with the Scientific Staff regarding the volume and complexity of applications for a particular review session and their expectation regarding the number of days required for the scientific members of the Working Group for that session. The Chair would then determine the number of days required for the regular Patient Advocate members and for the Patient Advocate Vice Chairs. The Chair could determine that the Vice Chairs will require additional preparation time, so the total amount paid to the Vice Chairs could be different than the total amount paid to the regular Patient Advocate members for a particular review session."

Regarding the deletion, we would recommend that CIRM note on the document that it has been altered since its first public posting. Given that it is an official government document and part of the public record, it is important that an accurate record of its history be maintained.

For additional background on the plan, see this item.

Feigal Salary

In response to a query, CIRM said this afternoon that the new vice president of research and development, Ellen Feigal, would be paid $332,000. You can find the full story on her appointment here, with the updated salary information.  

Amgen Exec Named to New VP Post at California Stem Cell Agency

The California stem cell agency today named Ellen Feigal, an executive at Amgen, Inc., to the new position of vice president for research and development.

Feigal(left) with Claire Pomeroy, dean of
 the  UC Davis School of Medicine in 2007
 at an awards ceremony involving Feigal.
 Pomeroy is also a member of the
CIRM board of directors.

She will begin work at the $3 billion research enterprise Jan. 31, leaving her current post as executive medical director for global development at Amgen, which is based in Thousand Oaks, Ca., north of Los Angeles.

Feigal will fill a position that has been vacant since the summer of 2009, basically the No. 2 spot at CIRM. CIRM President Alan Trounson created the post in the wake of the departure of Marie Csete as chief scientific officer. The VP position replaces the chief scientific officer position.

The vice president's position has a salary range that runs from $286,000 to $529,100. It is the same range as for chairman or president of CIRM. In response to a query, Don Gibbons, the agency's chief of communications, said Feigal would be paid $332.000.

CIRM's press release said,

"Feigal will report to Trounson and will work closely with other CIRM executives to build and manage the pre-clinical and clinical programs, both within California and with CIRM’s international collaborators, as well as interactions with the NIH, FDA and other regulatory bodies. She will also manage the assembly and oversight of CIRM’s clinical advisory committee that will assess project progress, milestones and go/no-go decisions. A key aspect of her portfolio will be working with the biotechnology, pharmaceutical and investment sectors as well as academia to enable and enhance development of clinical applications from CIRM’s science portfolio."

Trounson said,

“As CIRM matured and moved more of its resources into translational and clinical science, we saw the need to formalize a role for a vice president for research and development, and Ellen’s career trajectory and experience fill our vision for that role perfectly."

The CIRM press release said,

"Feigal distinguished herself in many positions in academia, the federal government, non-profit research organizations, small pharma and large biotech companies. She has focused on assessing novel therapies, training young investigators in how to assess novel therapies, and in building partnerships and coalitions to enhance translational research. In her position at Amgen she also led the scientific/clinical interface with patient advocacy organizations and formalized the company’s policy on expanded access to therapies for those with limited or no treatment options."

The news release continued,

"In addition to her work at Amgen, Feigal currently serves as Adjunct Professor and Director of the American Course on Drug Development and Regulatory Sciences at the University of California, San Francisco. The course, developed under her leadership in collaboration with the FDA, UCSF’s Department of Bioengineering and Therapeutic Sciences, its Center for Drug Development Sciences and the European Center of Pharmaceutical Medicine at the University of Basel, was launched in 2007. It is taught over two years, with six sessions, each four days in length in Washington, D.C. and a separate parallel course in San Francisco. Feigal will step down as course director and adjunct professor as she takes on this new position at CIRM."

In 2007, Feigal received UC Davis Health System's first-ever "Transformational Leadership Award," which honors someone who has “enhanced the profession, improved the welfare of the general public, provided for personal distinction and brought honor to our university.”

UC Davis said,

"Her collaborative work with organizations such as the Food and Drug Administration, National Cancer Institute, Translational Genomics Institute and Critical Path Institute are helping to cut through red tape and bring life-saving drugs to patients as quickly and safely as possible."

CIRM Directors to Consider Plan to Pay Some Board Members up to $15,000 Annually

The California stem cell agency has released more information on issues coming before its directors next week, including a plan to pay some of the patient advocate members on its board up to $15,000 a year for their work.

Ten patient advocate members sit on the 29-member CIRM board of directors. The proposal would apply to six, those who serve on the Grants Working Group and the vice chair and co-chair of the Facilities and Standards Working groups. Barred from the compensation plan would be the chairman and statutory vice chairman of the agency, Robert Klein and Art Torres respectively, who are also patient advocate members. They already are paid for their work.

The new pay plan -- to be considered next Thursday in Burlingame -- would establish a daily rate of $562.50 for patient advocates who sit on the groups as regular members. Patient advocates serving as vice chair or co-chair would be entitled  to that rate plus an additional, unspecified amount.  A cap of $15,000 would be placed on the pay.

The rate is 75 percent of what CIRM pays its outside scientific reviewers, whose expenses are also covered by CIRM. The patient advocate compensation would be in addition to their expenses as well.

The chairman of the CIRM board would determine the total compensation for each advocate based on the number of days required for "preparation and participation" in grant reviews as well as for meetings of the facilities and standards groups. (Our comment: The plan would give the chairman additional leverage on some board members. It may be more appropriate to require that the compensation decision be made by the chairman and the two vice chairmen of the board.)

Currently members of the board receive per diem of $114 per day and $14 an hour for attendance at meetings and preparation time, plus expenses.

The CIRM information about the plan did not contain an estimate on the total cost of the compensation. It also does not fully explain the justification for the pay. However, patient advocate members sometimes lose salary from their regular jobs when they take time off to participate in CIRM activities. Their attendance is also more critical because other board members often have legal conflicts of interest that prevent them voting on some matters. CIRM directors who are not patient advocates and who hold top executive positions may not lose salary, depending on the polices of their employers. Such members additionally can often use the staff of their institutions to perform work in connection with CIRM activities.

Some of the patient advocate members may decline the new compensation. Here is a list of those who would be affected, based on information posted on the CIRM web site but not on the agenda: Sherry Lansing, former Hollywood studio chief, co-chair of the standards group and member of the grants group; Jeff Sheehy, a communications manager at UC San Francisco, a member of the standards, facilities and grants groups; Jonathan Shestack, a Hollywood film producer, member of the standards group and grants group; Marcy Feit, CEO of ValleyCare Health System, member of the standards, grants and facilities group; Joan Samuelson, founder of the Parkinson's Action Network, vice chair of the grants group, member of the standards and facilities groups, and David Serrano Sewell, a San Francisco deputy city attorney, vice chair of the facilities group, member of grants group.

Other information posted by CIRM on its web site for the directors meeting includes the grant reviewers' summaries of the 56 applications submitted for the $40 million tools and technology round. In response to a question, Gibbons said seven businesses applied for grants. However, CIRM refused to provide a breakdown between non-profit research institutions and academic applicants because, Gibbons said, the non-profits "have always had an academic component." Five of the 56 applicants have German collaborators, who will receive their funding from non-CIRM sources.

The top ranked grant was given a scientific score of 90. The lowest ranked grant approved by reviewers was scored at 62. Fourteen grants that appear to be ranked above 62 were rejected by reviewers. The summary of the reviewer comments indicated that a portion of the grant was recommended for funding because of "programmatic" reasons. That portion of the review said,

"The proposed materials may offer some advantages over competing materials in the current marketplace for soft tissue reconstruction. Reviewers discussed the emergence of clinical data for utility of hASC and agreed that there might be potential for nearer term translation of formulations as proposed in Aim 1."

So far we have not seen any appeals from researchers whose grants were rejected by CIRM reviewers.

The directors agenda also now has links to information concerning the determination of the criteria for the person who is elected in June to succeed CIRM Chairman Klein, who has said he will step down then.

(Editor's note: An earlier version of this item incorrectly characterized the amount of compensation for the co-chairs and vice chairs, based on inaccurate information provided by CIRM. For more details on the error, see this item.)

CIRM Directors to Hand Out $40 Million Next Week; Meeting Details Not Available to Public

Directors of the California stem cell agency meet one week from tomorrow to give away $40 million and move forward on electing a new chairman of the $3 billion enterprise come next June.

With six business days left before the meeting, however, few details of what is to be considered are available to the public via the directors' agenda on the CIRM web site. That is in keeping with the agency's practice of not making such material accessible until very shortly before its board meetings. The de facto policy effectively suppresses public involvement in CIRM affairs.

Some information on the matters before directors on Jan. 27 is available elsewhere on the agency's web site, although it may have changed and be out-of-date. Less than avid users of the web site would have considerable difficulty in locating the information on their own. Nonetheless, the California Stem Cell Report has ferreted out some background on what is likely to be discussed next week by CIRM directors.

Item 8 before directors is only described as "consideration of recommendations from Grants Working Group regarding applications submitted in response to RFA 10-02: CIRM Tools and Technology Awards II." What that means is that directors are virtually certain to give away $40 million to 20 lucky scientists. The board almost always ratifies all the recommendations of its grant reviewers when the reviewers approve funding for applications. Summaries of the reviewers' recommendations were not available at the time of this writing.

Scientists from Germany are collaborating on some of the applications, but their funding will not come from CIRM. The purpose of the grant round is to "develop such tools and techniques that address technical bottlenecks and enable novel translational approaches." Some information on the program can be found here.

CIRM directors are also scheduled to deal with the criteria for a new chair to replace Robert Klein, whose latest retirement date comes in June. The evening before the directors meet, their Governance Subcommittee will discuss the matter and make recommendations to the full board. In contrast to the meeting of the full board, the committee posted all the relevant material well in advance of its meeting. However, that information cannot be found via the agenda for the directors' meeting. But you can find it here and via an item on the California Stem Cell Report.

The CIRM board will also be asked to subsidize trips in June to Toronto for perhaps hundreds of persons for the annual convention of the International Society for Stem Cell Research, the largest such organization in the world. The agenda says subsidies would go to "patient advocates, CIRM Bridges Scholars and other CIRM funded early career scientists." No information was provided via the agenda on the number of persons involved or the total cost of the effort. We could not find such details elsewhere on the CIRM web site.

Information on the ISSCR web site, however, shows that non-member registration for the convention can run as high as $1095 for the four-day session. Then there are hotel, eating and travel expenses. Discounted rooms for single and double occupancy are going for $227 US at the convention hotel, the Fairmount Royal York, which, at 28 stories, once was the tallest building in the British Commonwealth and featured a 50-ton pipe organ. Round trip air fares for June from San Francisco to Toronto were running about $500 to $700 if booked today. No one from CIRM is on the program when we checked. Our ballpark calculations show a very rough cost of $3,000 per person, depending on such variables as the actual cost of registration and flight reservations.

Biotech firms should have considerable interest in a proposal involving the CIRM loan program and "proposed regulatory language/process for multiple payback alternative to warrant coverage for loans." The agency provided no further clue to the specifics although the item probably refers to this Nov. 29 proposal, which could be out-of-date.

In all, CIRM directors have nine matters of considerable importance before them next week. But the public, scientists, the biotech industry, policy makers and others are left in the dark by CIRM if they depend on the agenda that the agency posts.

The directors meetings are the most important public events involving the agency, which is consuming $6 billion(including interest) in taxpayer funds. Giving stakeholders and the public easy access to matters before the  board is a simple and straight-forward task. It would seem to be very much in CIRM's best interests to keep all the interested parties well-informed about its activities.

Oversight Panel to Review CIRM Finances Later This Month

The only state panel specifically charged with financial oversight of California $3 billion stem cell research effort meets later this month to examine its budget and review last fall's external review of CIRM's operations.

The Citizens Financial Accountability Oversight Committee is scheduled to convene in Los Angeles on Jan. 28, two days after a key panel of CIRM directors is expected to take up part of the committee's 12-month-old request to improve openness and transparency at CIRM.

The financial committee was created as part of Prop. 71, the ballot initiative that also created the stem cell research program. It is chaired by the state's top fiscal office, Controller John Chiang. CIRM is exempt by provisions of Prop. 71 from the normal oversight of the governor and the legislature.

While the committee is a sister to CIRM, the agency has distanced itself from the panel. CIRM successfully lobbied last year to remove from legislation a Chiang-supported provision that would have required the panel to commission a performance audit of the agency. Last February, shortly after the committee unanimously recommended more openness, CIRM President Alan Trounson described the committee's discussion of CIRM as a “strange critique” and “irrational attack.”  (See page 132 of the transcript of the board of directors meeting.)

Among the financial committee's recommendations was a proposal that CIRM post on its web site the statements of economic interests of its directors along with expense claims from directors and top staff. The proposal is to be taken up by the CIRM directors' Governance Subcommittee on Jan. 26 in Burlingame.

Also tap for the Jan. 28 financial committee meeting is discussion of a new law that removed the 50-person cap on CIRM staff. The change was made after Trounson said the quality of its work will suffer without more help. Currently CIRM has more than $1 billion committed to nearly 400 recipients. It has nearly another $2 billion go hand out.

Fresh Approach Urged on CIRM Chair Selection, Self-evaluation of CIRM Board Included

Directors of the California stem cell agency are being asked to make a "clean start" in their effort to elect a new chair of the $3 billion enterprise – an effort that would also include a self-assessment of the board itself.

The appeal is being made by Claire Pomeroy, a CIRM director and dean of the UC Davis School of Medicine and is scheduled to be considered at a Jan. 26 meeting of the CIRM directors' Governance Subcommittee. The full board will take up the panel's recommendations the next day.

In an email to Sherry Lansing, chair of the Governance panel, Pomeroy said,

"In the spirit of a clean start and an open process, I would suggest that the Governance Committee consider proactively attaining input from all the board members in two areas:
"1. Self-assessment of board performance/function to date
"2. Desired attributes of board chair"

In her email, Pomeroy noted an article last month in Science magazine, headlined "CIRM: The Good, the Bad And the Ugly." Pomeroy said her recommendations would help to "to ensure an open process free of conflict of interest and personal agendas." She said,

"This is our chance to emphasize the mission over in-fighting and can define what kind of organization CIRM and the board will be."

Asked for a comment., John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said that Pomeroy's suggestions sound "like exactly the right approach."

Pomeroy's proposal and other important background material were posted on the CIRM web site on Saturday, 11 days in advance of the meeting. CIRM has had considerable difficulty in posting such material in a timely fashion. But the postings for the Jan. 26 session represent a substantial improvement and offer the public and interested parties an opportunity to make thoughtful comments in time for the meeting or to make plans to attend.

Pomeroy said she borrowed the self-assessment plan from another organization on whose board she serves. The plan would involve a series of questions for all 29 board members with "Yes/Sometimes/No answers" and a section for free-form comments.

Some of the questions proposed by Pomeroy:

• "Board focuses on the appropriate strategic, fiduciary, and generative issues that guide the work of the organization
• "Board attends to policy related activities that guide the work of management staff
• "Board is composed of a diverse group of individuals with a variety of skills to consider the interests of the organization's broad constituencies
• "Board avoids getting into administrative/management details
• "Board members offer a diversity of opinions and addresses issues in a respectful manner
• "Board is too influenced by the views of the president and/or other management staff

Another section would deal with individual board members. Some proposed questions:

• "I understand my responsibilities as a board member
• "I come to the board meetings fully prepared to participate
• "I receive adequate information, presented in a concise and focused manner, on matters that come to the board in a timely manner
• "At board meetings, I feel comfortable raising and discussing dissenting or contrary opinions
• "I think about the work of the organization (CIRM) between board calls and meetings
• "I understand the issue of conflict of interest and have no conflicts other than those disclosed in writing
• "I receive personal satisfaction from my role as board member."/li>
  

On the subject of desired attributes of a new chair, Pomeroy said,

"It seems to me that we don't always hear from all the board members about their thoughts on this issue and as a committee we should know the ideas of all the (board) members."

She proposed a survey of all board members asking such things as:

• "Desired attributes of a chair (e.g. collaborative, etc)- list top 3
• "Desired skill sets of a chair (e.g. advocacy, financial, etc)- list top 3
• "Desired background/experience of a chair (e.g. academics, patient advocate, industry experience, etc)- list top 3
• "Recommended time commitment of chair (e.g. full time, 1 day a week, attendance at meetings and availability by phone in between, etc)
• "Recommended financial compensation for chair (e.g. salary range)"

Included on the agenda for the Governance meeting in Burlingame is a memo on the legal criteria for the CIRM chair.

 Another issue dealing with openness and transparency is also on the committee's agenda. It consists of a request from the Citizens Financial Accountability Oversight Committee that CIRM post on its web site the statements of economic interests and travel expense claims by the CIRM board and executive staff. The committee, which reviews the financial operations of CIRM, made the request nearly a year ago.

The panel is chaired by the state's top fiscal officer, Controller John Chiang, one of four state officials who makes nominations for the CIRM chair. Chiang's office posts the economic interest statements and expense claims of its top staff on its web site, as did former Gov. Arnold Schwarznegger. It is unclear whether Gov. Jerry Brown will follow the practice.

(Editor's note: An earlier version of this story did not mention that the Governance Subcommittee's recommendations will be taken up by the full board of directors on Jan. 27.)

Correction

The "Nature Medicine" item on Jan. 14, 2011, incorrectly said that Alan Bernstein, according to Nature Medicine, was not necessarily off the table as a candidate for president of CIRM. The article should have said he was not off the table as a candidate for chairman of CIRM.

Nature Medicine on CIRM Chair Election

The botched bid by Robert Klein, chairman of the California stem cell agency, to hand pick his successor was revisited in the January issue of Nature Medicine.

The article is a briefer version of what Elie Dolgin filed last month on the Internet. The headline on the magazine article reads, "Nomination bungle leaves CIRM leadership in limbo."

Dolgin again reported that the Alan Bernstein, executive director of Global HIV Vaccine Enterprise, is "not necessarily off the table" as a candidate for chairman.

Bernstein withdrew from consideration following a flap over Klein's attempt to have him chosen as the new chairman of CIRM.

Klein's first term expired last month, but on Dec. 15 the board re-elected him for six months at no pay.

The CIRM directors also opened the door to a broader and more publicly accessible process for setting the criteria for electing a new chair. That process is scheduled to be completed by about Feb. 15, but the directors have made no announcements about how they specifically intend to proceed. We are querying Sherry Lansing, chair of the directors' Governance Subcommittee, concerning the process.

The Nature Medicine article is behind a subscription barrier. If you would like a copy of it, please send an email to djensen@californiastemcellreport.com.

(Editor's note: An earlier version of this item incorrectly said Bernstein was not off the table for president as opposed to chairman.)

Three Bidders Seek California State Funds for Online Stem Cell Journal

The California stem cell agency is about ready to jump into the publishing business.

The $3 billion, taxpayer-financed enterprise on Monday received three responses to its proposal to spend $600,000 over the next three years to start a new, online stem cell research journal. The enterprises seeking the seed money are AlphaMed Press of Durham, N.C., the International Society for Stem Cell Research (ISSCR) of Deerfield, Ill., and the information conglomerate Elsevier, which is based in Amsterdam.

CIRM wants to kick off a new peer-reviewed, open-access journal to accelerate “the entire field as knowledge is aggregated and shared more readily” and encourage collaboration between stem cell biologists, clinicians and engineers, according to CIRM's plan. (See the RFP below and CIRM President Alan Trounson's proposal here.)

The journal would focus on translational aspects of stem cell science, stem cell-based regenerative medicine and tissue engineering, stem cell-based predictive toxicology and cancer stem cell investigation. The journal would be independent of CIRM but the agency would, “with agreement from the editors,” provide “periodic short articles on translational stem cell research.”

The CIRM seed money would amount to $200,000 a year for three years with the journal becoming self-sustaining at the end of the period. Preference will go to publishers "committed to California-based editorial offices." The award date is scheduled for Jan. 24.

Of the three bidders, the ISSCR seems to have the least publishing experience. It is an international organization of stem cell scientists. The ISSCR web site does not list any publications other than the organization's newsletter. CIRM sponsored its convention last year in San Francisco. Trounson served on its board of directors in 2008.

AlphaMed publishes Stem Cells, which it says “is the oldest journal in the fast-paced area of stem cells and regenerative medicine." The organization added, "Not only is it the first journal to be devoted to this promising research, it remains at the top tier of peer-reviewed monthly journals for this discipline.” Trounson sits on Stem Cells' editorial board.

Elsevier touts “a global community of 7,000 journal editors, 70,000 editorial board members, 300,000 reviewers and 600,000 authors.” It has a publishing tradition that stretches back to 1580 and has been embroiled in the controversy concerning the debate over open access to the research in its publications.

Elsevier publishes Cell Stem Cell and Stem Cell Research, whose editorial board also includes Trounson.

The Public Library of Science, whose international headquarters are within walking distance of CIRM in San Francisco, did not submit a bid. The organization is “a nonprofit organization of scientists and physicians committed to making the world's scientific and medical literature a public resource.” It has a roster of publications ranging from biology to neglected tropical diseases.

We have asked CIRM for copies of the bids submitted by the three groups. We will bring them to you when we receive them.

Here is the CIRM RFP.CIRM RFP for Online Stem Cell Journal

California Stem Cell Agency Says It Unaffected by Suspension of State Bond Sales

Suspension of California bond sales because of the state's budget crisis will not have an “immediate impact” on the state's stem cell agency, whose only real source of cash is state bonds.

James Harrison, outside counsel for the CIRM board, said that the agency “has cash reserves to cover its current needs and it does not need to issue bonds in the spring.” As recently as December, other CIRM staff members had also said that the agency had funding to cover its programs to about June 2012.

However, on Dec. 14, CIRM Chairman Robert Klein told agency directors that the reliability of the agency's funding needed “immediate attention” because of a notice that his office had “just” received from the state treasurer. Klein also said that “our collaborative funding partner nations” early this year will require “assurances of our future performance.” His warning came on the eve of his successful bid for re-election as chair and was much different than a rosy assessment he offered 12 days earlier. .

Here is the text of Harrison's response to our query to Don Gibbons, CIRM's communications chief, concerning the impact of the bond sale delay on CIRM. In his comment, Harrison refers to earlier items on the California Stem Cell Report about Klein's changing positions on the state of CIRM's bond financing. Some of those items can be found here, here and here.

Harrison's statement:

“As we have stated in the past, we disagree with your characterization of Chairman Klein's comments to the Board.  At the time of the Treasurer's request, CIRM had no authority for the Treasurer to issue bonds on CIRM's behalf.  The Chairman therefore considered it a priority to respond to the Treasurer's request in light of CIRM's projected need for additional bond funding for the 2011/2012 fiscal year.  You are confusing the Chairman’s desire to get a required authorization approved (before he left the agency) that could cover any bonds sold in 2011 or 2012.  As the Chairman previously reported, the agency has cash reserves to cover its current needs and it does not need to issue bonds in the spring. CIRM therefore did not request bond funding as part of a Spring 2011 bond sale, and as a result, the Treasurer's decision not to go to the market in Spring 2011 does not have an immediate impact on CIRM.”

For those interested in more details about CIRM's borrowing, as of last November, the state owed about $2 billion on stem cell bonds, including $1 billion in principal and about the same amount in interest, according to the state treasurer's office. Payments on the interest come out of the state budget each year and affect the amount of cash available for other state expenses, ranging from education to health services for the poor.

Prop. 71, which created CIRM in 2004, authorized $3 billion in bonds that flow directly to CIRM and cannot be touched by the governor or the legislature. The borrowing is expected to cost another $3 billion to $4 billion over the lifetime of the bonds.

A special, six-person committee, the California Stem Cell Research and Cures Finance Committee, is charged with determining by majority vote whether it is “necessary or desirable” to issue bonds for stem cell research. Three members of the CIRM board of directors, including Klein, sit on the committee. The other three members are the state treasurer(who is the chairman), the state controller and the state finance director.

California Suspends Bond Sales: Potential Impact on Stem Cell Agency

The state of California, dogged by a mammoth financial crisis, is postponing the sale of state bonds this year, raising questions about the move's impact on the state's stem cell research effort, which is funded solely through the borrowed money.

State Treasurer Bill Lockyer said yesterday the delay in selling state bonds until later this year would save the state $248 million. It would be the first time that the state has not sold bonds in the first half of the year since 1988, according to Bloomberg News. Lockyer's action came as part of the stringent state budget proposed yesterday by Gov. Jerry Brown.

On Dec. 14, Robert Klein, chairman of the $3 billion California stem cell agency, told its directors that the reliability of the agency's funding needed “immediate attention” because of a notice that his office had “just” received from the state treasurer. Klein declared,

“Recent applications for clinical trial rounds and the acceleration of our funding commitments on our other programs require an immediate focus on this issue, given there may not be another opportunity until late 2011 to authorize additional bond funding.”

Klein also said that early this year “our collaborative funding partner nations” will require “assurances of our future performance.”

Klein's warning came on the eve of his successful bid to be re-elected as chairman of the agency. The notice from the treasurer did not carry the urgency that Klein indicated and was nearly two weeks old by the time he told directors about it. It also arrived in Klein's office the day before he gave a rosy financial assessment to the directors' Finance Subcommittee and said no problems existed with its bond financing.

We have queried CIRM concerning its view of the impact of the suspension of state bond sales. In the past, CIRM officials have said it has enough cash on hand to operate and award grants to about June 2012.

According to the Bloomberg article by Michael Marois and Alison Vekshin, California has about $69 billion in securities outstanding as of the end of June. Another $100 billion in debt has been authorized by voters but has not been issued.

The article said that debt service, including the interest on stem cell bonds, will cost the state nearly $5 billion in the next fiscal year, even after the moratorium.

Science Magazine Assesses CIRM: 'The Good, Bad and Ugly'

Science magazine examined California's $3 billion stem cell research effort in a piece published during the holidays, and the third paragraph of the story began with this quote,

“It's the usual CIRM circus.”

Whether one thinks the comment was well-deserved or not, it falls far short of the type of publicity that the agency needs, especially as it considers mounting a bid to secure an additional $5 billion from California voters.

Overall, the two-page article was pretty much a straight-forward overview of where CIRM stands at the beginning of 2011. The story began, however, with a look at the shenanigans of CIRM Chairman Robert Klein as he tried unsuccessfully last year to hand pick his successor. And that was what triggered the “CIRM circus” comment from Marie Csete, former chief scientific officer for CIRM.

The piece by Greg Miller was entitled, “CIRM: The Good, the Bad And the Ugly” – another less-than-felicitous phrase concerning the public agency. The article covered the basics: dollars handed out, labs built, concerns about high salaries and conflicts of interest and the recent external review report. It noted that many scientists view CIRM as a “tremendous success.” But it also reported that patient advocates “are tired of waiting for stem cell cures.” Miller's article continued,

“...(E)ven CIRM supporters say the institute has to improve its relationships with industry if it hopes to fulfill its mandate: generating stem cell therapies that help people suffering from conditions like diabetes and Parkinson’s disease. A recent report by a panel of external scientists convened by the CIRM board said translating basic science into therapies should be a major priority going forward.”

Miller wrote,

“Not surprisingly, CIRM grantees are not complaining. 'I just moved into a spectacular new building,' says Arnold Kriegstein, the director of the new Eli and Edythe Broad Center of Regeneration Medicine and Stem Cell Research at the University of California, San Francisco (UCSF). CIRM kicked in $35 million for the new facility, about a third of its cost.”

(Editor's note: UCSF has received $111 million in grants. The dean of its medical school sits on the CIRM board of directors, as do several other medical school deans whose institutions have received hundreds of million dollars.)

The article continued,

“Several California biotech leaders say they have been frustrated by their interactions with CIRM. 'In the past, there’s been a lack of recognition that it takes a company to actually take a treatment forward from the bench top into the clinic,' says Chris Airriess, chief operating officer of California Stem Cell Inc. in Irvine. Airriess says his company has twice applied, unsuccessfully, for CIRM money. He and others place much of the blame on the review process, which he says is structured too much like the NIH review process for academic research grants. CIRM reviewers criticized his company’s applications for the lack of new science, but Airriess says that misses the point. 'Companies are trying to stabilize a technology and commercialize it rather than push the bleeding edge,' he says.

“Even companies that have succeeded say it hasn’t been easy. Earlier this year, San Francisco–based iPierian won a $6 million early translation award and a $1.5 million basic biology award. 'We put a ton of effort into understanding what was being asked for,' says CEO Michael Venuti.”

Science magazine concluded,

“CIRM President Alan Trounson says he is sensitive to these (industry) concerns but doesn’t think the review process is problematic: 'Companies that have put in well-formed proposals have done very well.' But he acknowledges that CIRM has had difficulty attracting proposals, particularly from larger companies. He’d like to set up an industry advisory board to help improve industry relations.

“In the coming months, he and others will be waiting anxiously to see who succeeds Klein as chair. Patient advocates want an advocate at the helm. Scientists would prefer a scientist. Trounson, who may have to work most closely with the new boss, says he’s hoping for someone with expertise in the delivery stage of therapeutic development. 'The basic science, as long as we look after it, will take care of itself,' he says. The real challenge for CIRM, he says, is getting the science into the clinic. 'We need more help on how to make it all happen.'”

In terms of the negative information in the piece, one thing helpful to CIRM is that the article is tucked away behind a subscription barrier, so it is not likely to be available to mainstream journalists (whose employers are notoriously cheap) as they do research on the agency. Nonetheless, the article is likely to be checked by most scientists interested in CIRM affairs and quite possibly by any potential, major contributors to an election campaign for more billions for the agency.

But the real problem is not with the publicity or the slant of the article – it is with the actions of Klein and the agency. There would have been little dubious to write about concerning the choice of a new chair if Klein had not tried to engineer the selection of his successor in a closed-door process that raised charges of conflict of interest. And as far as issues with the biotech industry go, those have been apparent for several years, but little has been done to deal with them.

(If you are interested in receiving the entire article, please email a request to djensen@californiastemcellreport.com, and I will send it to you.)

Klein Ballyhoos Stem Cell Effort as 'Forever Changing the Future of Human Suffering'

The chairman of the California stem cell ageny, Robert Klein, recently wrote an op-ed piece for the San Jose Business Journal replete with superlatives about the significance of the state's $3 billion research effort.

It represented the type of publicity that the agency will need to convince California voters to approve the roughly $5 billion, new bond issue that Klein is touting.

Klein is a man who loves effusive prose, and plenty was in evidence in his piece. “Far-reaching,” “huge difference,” “stem cell revolution” and a promise that the work of the California stem cell researchers “will begin to mature (in five to seven years), forever changing the future of human suffering” – all were part of the op-ed article.

Klein also trotted out some economic statistics that he has used before, but again with no source for the data. They may have come from a $300,000 economic impact study commissioned in 2009 by CIRM with orders that it “execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.” (See here and here and here..) The final report was originally scheduled for April 2010, but has never been released publicly. Don Gibbons, chief communications officer for CIRM, said yesterday that the agency is now “shooting for later this month.”

The contract is held by LECG of Devon, Pa. As of last August (the most recent information available), the firm had been paid $75,000 on its contract, which was scheduled to terminate last Oct. 6.

Klein also cited a clinical trial involving UC San Diego with the clear implication that it was the result of CIRM-funded research.

Here is what John M. Simpson of Consumer Watchdog said about the claim in 2008.

“California’s stem cell agency overstated and hyped the importance of its funding in enabling clinical trials for a drug to treat a severe blood disorder...seriously undercutting the agency’s credibility and alienating those who support publicly funded stem cell research.”

His report followed our item on the research that quoted a scientist as saying that CIRM wrongly took credit for the research.

The field of stem cell science has been criticized for the hyperbole the surrounds it, much of which was evident in the 2004 election campaign that created the California stem cell agency. While some license is expected in any campaign, dubious claims can blow back on those who utter them as voters detect the flim-flam.

Did Klein go too far in his piece last week? Is CIRM creating a record of rhetorical excesses that will backfire?  Time will tell, but the agency can rest assured that those to want to block stem cell research will be parsing the agency's PR with considerable diligence.