From Salary to Leadership: Results on CIRM Survey on Criteria for New Chair

The California stem cell agency has unveiled the results of a survey of its directors concerning their own performance and desired criteria for a new chair of the $3 billion research effort.

James Harrison of Remcho, Johansen and Purcell of San Leandro, outside counsel to the board, said in a memo to the board,

"The survey reveals that members have a wide range of views, especially in connection with the allocation of responsibilities between the chair and vice chairs, the board, and the president, and the appropriate time commitment and salary for the new chair. The survey also suggests, however, that members are more aligned with respect to the desired attributes and skills for the chair. For example, ten members identified the ability to collaborate as the most important attribute for chair. In addition, ten members concluded that advocacy skills are critical for a new chair, while 12 members indicated that leadership skills are also important. "

Only 20 members of the 29-members of the board and/or alternates responded to the survey last week. CIRM did not specify the number of alternates who participated. The results were posted yesterday, just two days before tomorrow's meeting of the directors' Governance Subcommittee. The panel is in the process of determining criteria for a new chair to present to the full board, probably in March. Results of the survey can be found here and here.

Some of the questions and responses spoke to the problem of overlapping responsibilities of the chair and the president, which are locked into law by Prop. 71. In the past, those ticklish issues have sometimes surfaced in public.

Based on the survey, board members seem to prefer more delegation and less operational activity on the part of the chair.

One board member, who was not identified, wrote,

"CIRM has 'grown up' enough that we can now clearly define responsibilities. The chair should oversee and guide, and empower the president to be the true CEO of CIRM. Judicious interventions will be more effective than micro-management."

On the question of how much time is needed to peform the chair's job, responses varied from 20 percent to fulltime. One unidentified board member wrote,

"While the designated effort is 50 percent, the role of the chair has been expanded so that the actual time probably exceeds 100 percent. This makes for confusion between the chair, president and others. The board chair's role should be to oversee the governing board, not manage CIRM. This percent effort should not exceed 50 percent."

Salary suggestions ranged from $50,000 to $550,000, depending on the time commitment.

Salaries are a hot button with the public, and the top scales at CIRM have triggered concern from various parties in the past.

Harrison's summary of the survey said,

"One member cautioned that, given the state's current economic circumstances, the chair's salary should be kept at a minimum level, while another member expressed the view that the board must be prepared to compensate the chair appropriately if it wishes to attract a great leader. One member added that limiting the compensation paid to the chair would enhance public trust and another member stressed that the board should look for candidates who do not require a high salary."

The survey identified "advocacy" as the most desired "skill" in a new chair. "Leadership/vision" ranked third with scientific expertise third. In the "attributes" category, the top, desired attribute was "collaborative/consensus builder" with "leadership/vision" and "knowledgeable/intellectually curious" coming up two and three.

As for the board's self-assessment, 90 percent agreed that that "CIRM lives up to its mission." (The survey had a choice of yes, sometimes or no on the statements.) A significant percentage of respondents indicated some areas of concern. Fifty percent agreed that the board is "too influenced by the views of the president and/or other management staff." Only 25 percent said "yes" to the statement "board members have appropriate input into the preparation of the agendas. While 65 percent said they "feel comfortable raising and discussing dissenting or contrary opinions," 35 percent said they agreed only sometimes with that statement.

Still missing from the Governance's meeting agenda for tomorrow are proposed changes in CIRM's governance policies, which could include issues related to the chair.

The public will have a chance to participate in tomorrow's sessions at locations in Sacramento, San Francisco, Los Angeles, La Jolla, Irvine and Calistoga. Specific addresses can be found on the agenda.

Public, Researchers, Industry Left in Dark on CIRM Chair Selection Criteria

The California stem cell agency was admonished in December by the state's top fiscal officer concerning its performance in attempting to elect a new chair to head the $3 billion enterprise.

More transparency and openness are needed, said State Controller John Chiang, chair of the only state panel specifically charged with overseeing CIRM finances.

That advice is going unheeded this week. With only two days left before a key meeting concerning selection of a new chair, left in the dark is the California public – not to mention biotech companies, researchers, patient advocates and state policy makers, and all of the stakeholders in stem cell research.

The agenda for Thursday's meeting of the directors' Governance Subcommittee contains little more than hints at what it is to be considered. The lack of information makes it difficult – to put it mildly – for interested parties who have other business on their plates besides CIRM to come up with thoughtful and constructive comments.

The subcommittee is scheduled to consider a survey of directors' preferences on recommended criteria for the person who is to replace outgoing chairman Robert Klein next June. It is also scheduled to consider changes in the agency's internal governance policies. That's all the information available this morning to the public on the CIRM web site, although the agenda does not even actually mention the survey. No results of the survey, no recommended criteria, no proposed course of action, no language on on the changes in governance -- much less a justification -- are available to the taxpayers of California, who are paying for CIRM's operations.

Unfortunately, CIRM's performance this week on this matter is no exception. The agency has a dismal record when it comes to providing the public with access to information on what its directors are to consider. It comes late or not at all. Often no justification is presented for proposed actions. The issues are not minor. They involve the agency's most important actions and determine its current and future direction.

In six years, CIRM has never offered an explanation for what is a de facto of policy of secrecy. But the agency has laid down a record on openness and transparency that is nearly impossible to defend when CIRM goes to the people again and asks for another $3 billion.

Has CIRM Funded Stem Cell Research that Bush Would Have Banned?

When California voters approved creation of an unprecedented, $3 billion stem cell research program more than six years ago, they were told the money would go to finance research that then-President George Bush had banned.

Has that actually happened? Yes, but mainly no, according to a research paper published in Nature Biotechnology in December 2010.

In the first-ever such analysis of CIRM grants, Aaron Levine, assistant professor in the School of Public Policy at Georgia Tech, reported that through 2009 only 18 percent of California's dollars went for grants that were "clearly" not eligible for federal funding.

Levine's finding has implications for another, multibillion-dollar bond ballot measure that CIRM Chairman Robert Klein has proposed. The campaign for such a measure would have to address the question of whether the promises of the 2004 ballot initiative that created CIRM have been fulfilled.

CIRM does not offer on its web site figures that can be compared to Levine's calculations. The agency does present some statistics about the amount of funding for embryonic stem cell research, but makes no effort to break out the percentage of grants that would not have received funding during the Bush years.

Levine's numbers on California were part of a broader look at state funding of stem cell research in recent years. He reported that by the end of 2009, six states had awarded nearly 750 grants totalling $1.25 billion. California accounted for $1 billion of the total. Per capita funding amounted to about $1 in Illinois and nearly $28 in California.

In all of the states, percentages were low for research that was clearly ineligible for federal cash under the Bush standards. Levine wrote,

"Most state hESC funding appears to have supported research also eligible for federal funding during the Bush Administration. This finding is surprising, given the explicit intent of several state programs to preferentially support science not eligible for federal funding, but likely reflects the nature of the grant proposals state agencies received, particularly given the number of grants states awarded to scientists relatively new to the field of hESC research.

Levine continued,

"Several factors could explain the relatively small share of grants that went toward clearly ineligible research. Some scientists who wished to pursue this research may have been unable to access the raw materials or acquire the intellectual property rights required to do so. Alternatively, these findings could simply reflect scientific interest. The discovery of induced pluripotent stem cells may, for instance, have reduced scientific interest in the derivation of new hESC lines. Finally, these findings may reflect a preference on the part of scientists to use well-established and well-studied hESC lines. This last explanation may be particularly relevant for new scientists entering the field of hESC research, as using recognized cell lines may give their initial research efforts greater credibility."

In California, another factor enters into funding for Bush-banned research, particularly given the 2004 campaign promises. CIRM makes overt decisions about what to fund. Its RFAs spell out what is acceptable and non-acceptable. The agency could have specified that it would not fund any research that would be eligible for federal funding. But whether that would have been "good science" is another question. CIRM also spent nearly $271 million on new labs at many of its directors' research institutions, diluting the percentage that would be construed as financing Bush-banned research.

We are querying CIRM concerning Levine's statistics.

Levine also reported that the state stem cell research efforts appear to have drawn new scientists into the field, with the largest impact occuring in California. He wrote that 42 percent of those funded in this state appeared to be fresh to the field.

In addition to the Nature Biotechnology piece, Levine has created an online database of state grants that he plans to update regularly. In an email to the California Stem Cell Report, he said,

"While CIRM already makes this information readily accessible, some of the other state programs do not and I hope this database will facilitate comparisons among the various programs and prove to be a useful tool for people interested in state stem cell programs. "

Stem Cell Directors Meet Next Thursday to Deal With Klein Replacement

A key group of directors of the $3 billion California stem cell agency meets in just four business days to consider one of the more important matters facing the unique research enterprise.

The Governance Subcommittee will take up the criteria that directors would like to see in the next chair of the agency – the person who would replace Robert Klein, the longstanding (since 2003 or so) presence behind CIRM. Klein has announced that he will retire as chair in June.

The directors' subcommittee is scheduled to convene next Thursday to act on a survey of board members concerning their preferences for a new chairman, preferences that would be in addition to the legal requirements. Directors are hamstrung by law in their choice of a new chair. They must pick from candidates nominated by four statewide officials: governor, treasurer, controller and lieutenant governor. That requirement is part of Prop. 71, which created the stem cell agency and which was written by Klein and a handful of his associates.

So far, the public is in the dark about the results of the survey of directors and other details that the subcommittee is scheduled to consider. The agenda says only that "criteria and parameters for chair of CIRM’s governing board and process and timeline for consideration of nominees for chair of CIRM’s governing board" are on the table. Also on the agenda is what may be a related matter, but its significance is masked by its cryptic language, which consists of only seven words: "Consideration of amendments to Internal Governance Policy."

CIRM directors are taking a fresh look at selection of a new chair in the wake of the unseemly affair last December that resulted in a spate of negative news stories when Klein attempted to hand pick his own successor.

At the time, state Controller John Chiang, head of the only state entity specifically charged with overseeing CIRM finances, said in a letter to the board that the chair selection process was "fundamentally flawed" and should be restarted in a way that is open to the public.

He wrote,

"The ICOC has a responsibility to the taxpayers of California to conduct its business in an open and transparent manner."

Next week's meeting of the subcommittee will be held at public sites in the following cities: Los Angeles, Sacramento, San Francisco, Irvine and Calistoga. The specific addresses can be found on the agenda. Of course, written comments can be submitted to the board in advance of the meeting.

The "Challenges" in a New Multibillion Dollar Stem Cell Bond Election

The California stem cell agency recently trotted out a rosy report that it commissioned about the beneficial impact of its $1.1 billion in spending so far.

CIRM's spin, however, is somewhat different than the perspective from the Pacific Research Institute.

K. Lloyd Billingsley, editorial director of the San Francisco "free market" organization, said the CIRM report is "a confession that CIRM is a bust at its original mission."

In an op-ed piece Wednesday in the San Francisco Examiner, Billingsley wrote,

"CIRM is an insiders’ club essentially accountable to no one, and its job and revenue claims remain dubious. The federal government now funds embryonic stem cell research, calling into question CIRM’s reason for existence. Adult stem cell research also continues at many institutions, delivering cures and therapies CIRM has failed to produce and remains unlikely to deliver."

Folks like Billingsley are unlikely to be ever persuaded that CIRM will produce results that justify its existence. Few of them are speaking out now, but they will surface in a major way once a ballot campaign for a $3 billion to $5 billion CIRM bond measure is underway.

It's a "challenge," as they say, for the agency. Billingsley and his sympathizers will be not back off even if the results of a proposed Institute of Medicine study and a performance audit handily endorse CIRM. Both will be commissioned by CIRM. That means their independence will always be questioned.

To be successful with a bond issue, given California's parlous financial condition, the stem cell agency will have to generate over the next year or so a drumbeat in the news that is both largely favorable and credible. That will be no mean task.

Okarma's Departure, Pfizer and More

Looking for a roundup on stem cell firms and their activities? You can find a brief one on the blog of a stem cell scientist at UC Davis.

In a piece called "stem cell biotech updates," Paul Knoepfler mentions the surprise departure of Tom Okarma as president of Geron Corp. of Menlo Park, Ca., declaring that it means a "fundamental change" at the firm.

On the same subject elsewhere, Rob Waters and Elizabeth Lopatto of Bloomberg News quoted one stock analyst, Ren Benjamin of Rodman & Renshaw about the move.

"'Clearly there was a difference of opinion as to how the company should move forward,' between Okarma and the board, Benjamin said in a telephone interview today. 'The board wants to take a more strategic focus on partnerships with a keen eye on the cash spend and position.'"

Knoepfler also brings up an article involving Pfizer's plunge into stem cells. The piece on Motley Fool said, among other things,

"Insiders see Pfizer's change of heart as a tipping point that will lead to many industry partnerships with holders of stem cell patents."

Feeding the Well-fed: Will It Produce the Results CIRM Wants?

Knoepfler Lab Graphic

It's pretty easy to tell where the sweet stuff is going when it comes to the California stem cell agency.

Take a quick look at CIRM's list of grants and their recipients. Stanford, UCLA and UC San Francisco top the list with $437 million out of the $1.2 billion the agency has handed out so far.

The agency has not blessed its fans yet with a list of individual scientists and their totals, but it would be a fair guess to say that the already shining stars of stem cell research are taking home most of the cash. Of course, there are notable exceptions to the magnetic attraction of the big guys and their academic homes.

The question arises, however: Is this really the best way to produce cures and develop breakthrough science? It is also a question that can be raised in connection with the NIH and other sources of funding for scientific research.

Feeding the already well-fed can mean starvation or least malnourishment of challengers who have fresh ideas that may not fit with the prejudices of the mainstream. And some of those challengers are likely to crack difficult issues and find solutions that have eluded those who may appear to be frontrunners.

This subject – sometimes called a positive feedback loop, otherwise known as "Them That Has Gets" – popped up in an item yesterday on the blog of UC Davis stem cell researcher Paul Knoepfler, a beneficiary of CIRM largess. The title of his item is "Stem cell monopoly: do not pass go, do not collect $200,000."

Without mentioning names of funding agencies, he dissects the general grant-making process and comes up with a recommendation for a change to create more bang for the taxpayer dollar, whether it comes from California or the NIH. Knoepfler wrote that the current system

"...is inherently biased to reward scientists who already have funding with more funding. It also rewards institutions that already have a lot of funding with even more funding.

"Any given grant application as a whole is viewed through the filter of who the applicant scientist is and where they are doing the research. This bias tends to concentrate research funding, giving certain people and places a disproportionate share of funding. 

"So one might ask 'if these scientists and institutions are the best, doesn’t it make sense that they should get more funding?'  The simple answer might be 'yes,' but if you dig deeper you realize that for the stem cell research field as a whole, the answer is 'no.'"

Knoepfler continued,

"Someone once said 'there is no monopoly on good ideas.' This is certainly true in the stem cell field and there is no monopoly on good science either. Well-funded people and places may have the best grantsmanship, but do not necessarily have the best ideas and are not necessarily the best equipped to do the science. Even so, funding agencies create an environment where certain institutions are rewarded with so much funding that virtual monopolies are created. In so doing the funding agencies end up with less diverse portfolios and lower their impact on the field."

Knoepfler argued that the first dollars make the biggest impact and that their effect drops sharply as a grant moves into its later years, a position that one scientist agreed with in a comment on the blog using himself as a case in point.

Knoepfler suggested a funding philosophy that would tilt towards greater "funding impact" as opposed to continuing to stuff the coffers of the already well-off.

Knoepfler's piece drew some interesting reaction on his blog. One person said Harvard and Stanford receive all the cash because they "are simply better and deserve more funding. Period." One reader, "WTF," went to the CIRM list that shows Stanford, UCLA and UC San Francisco at the top. But WTF went further and noted the next 11 institutions altogether have not received as much funding as the top three.

In the next few months, directors of the California stem cell agency will take up suggestions from the agency's external review panel that called for greater risk-taking and movement away from the traditional funding models. The issues raised by Knoepfler – who certainly reflects the thinking of many others in the field – deserve some careful examination during that process.

Four Firms Competing for $50 Million from California for Stem Cell Trials; Application Review Tomorrow

Reviewers at the $3 billion California stem cell agency tomorrow morning meet behind closed doors to consider applications from four biotech businesses seeking as much as $25 million each in the agency's first-ever clinical trial round.

Geron Corp. of Menlo Park, Ca., and Advanced Cell Technology of Santa Monica, Ca., are likely to be among the applicants, whose names have not been disclosed by CIRM. The agency generally clamps a lid of secrecy on applications until after they are officially approved by its full board, saying that rejected applicants might be embarrassed.

Another possible applicant, iPierian Inc., of South San Francisco, told the California Stem Cell Report that it had not applied for funds in the $50 million round. CIRM says it hopes to award up to $25 million to one or two applicants, although the CIRM board may well change that. The funds are scheduled to come in the form of loans, whose terms were recently changed by CIRM and can be found here and here.

The number of applicants is small (CIRM said only four) because the round is limited to those who "have filed an Investigational New Drug application for the human pluripotent stem cell-derived therapy," according to the RFA. CIRM will accept trials involving both human embryonic stem cells and induced pluripotent stem cells. Both Geron and Advanced Cell Technology have filed the required applications.

Ipierian's former president at one point indicated that the company might apply. However, in response to query last week, a spokesman said the firm had not applied. Geron and Advanced Cell Technology did not respond to questions.

The round is part of a high stakes effort by CIRM to push stem cell therapies into the clinic. More clinical trial rounds are expected in the next year or so. The ballot measure that created CIRM in 2004 appeared to promise speedy development of cures. CIRM is trying to fulfill that promise plus generate voter support in financially troubled California for another $3 billion to $5 billion bond measure. An external review of the agency last fall also called for closer ties to industry to bring therapies to market.

CIRM's clinicial trial round was originally scheduled to begin accepting applications in the spring of last year. The RFA was not posted until August. The agency has never responded to multiple requests for an explanation of the delay. The round has not been without controversy. CIRM hired a former Geron executive, Laurence Elias, as a $50,000 consultant on the round. The agency said no conflict interest was involved.

Geron's clinical trial involving an hESC therapy for spinal injuries is well underway. Stanford and the Santa Clara Valley Medical Center joined the effort last month.

Advanced Cell Technology is working on therapies for macular degeneration and is the only company with two hESC trials. In December, its longtime CEO, William Caldwell, died unexpectedly. Gary Rabin, a member of the firm's board of directors, has stepped in on a temporary basis.

Tomorrow's meeting will be the first review session for CIRM's new vice president of research and development, Ellen Feigal, formerly of Amgen, who started work on Jan. 31. Feigal is expected to be the agency's lead on commercializing stem cell research.

At least one analyst has remarked on both the scientific and financial stakes involved in hESC clinical trials, particularly Geron's. On Jan. 28, the Seeking Alpha web site carried an interview with Catoosa hedge fund manager Robert Lawton in which he described the Geron trial as "a binary event for the science." Lawton said,

"They will likely succeed or fail in a very big way, and advance or set back the science of HESCs forever."

Both Geron and Advanced Cell Technology have generated considerable interest among small investors who follow and discuss them via Yahoo investment groups.

Geron's closing price on Friday was $4.91, down from its 52-week high of $6.44. Advanced Cell, which moved its headquarters to California seeking CIRM funds, closed at nearly 18 cents, down from its 52-week high of about 27 cents.

Applications for CIRM's clinical trial round could be officially approved as early as the May 3 meeting of the CIRM board in Los Angeles with checks going out this summer. No announcements are expected tomorrow following the review session.

The CIRM review group will meet in Millbrae near the San Francisco airport and has scheduled a 30-minute public session beginning at 8:30 a.m. at which any member of the public, including applicants, may appear. The closed session begins at 9 a.m. The specific address for the meeting can be found on the agenda.

Update on Last Week's Hoover and CFAOC Hearings on CIRM

Two California state entities involved with the state's $3 billion stem cell agency examined its progress last week, ranging from its biotech loan program to election of a new chair.

The bodies are the Little Hoover Commission, the state's good government agency, and the Citizens Financial Accountability Oversight Committee(CFAOC), the only state body specifically charged with the overseeing CIRM's finance.

The CFAOC, chaired by state Controller John Chiang, queried CIRM officials, who included co- Vice Chairman Art Torres, President Alan Trounson and outside counsel James Harrison. Topics included the agency's heavy reliance on outside contracts(particularly in connection with legal and communications activities), the biotech loan program and its returns to the state and conflicts of interest, particularly in connection with closer ties to industry, according to Ruth Holton-Hodson, deputy controller.

We expect to have more on the discussion when the CFAOC posts transcript from the meeting.

The Little Hoover Commission was updated on a new law that lifts the 50-person limit on CIRM staff. Originally the legislation would have implemented many of the commission's reform recommendations from 2009. However, CIRM was successful in eliminating most of those provisions from the bill, which was also a topic at the CFAOC meeting. The Hoover meeting included an update on the election of a new chair at CIRM, according to Stuart Drown, executive director of the commission. He said the commissioners asked the staff to continue to follow CIRM activities and report back on the chair election preparations.

Correction

The "economic interests" item earlier today incorrectly indicated that Salk was currently represented on the CIRM board. In fact, Salk last week lost its seat.

California Stem Cell Agency Already Has Posted Some Statements of Economic Interests

The California stem cell agency was Johnny-on-the-spot last week when its directors approved posting statements of economic interest on the CIRM web site.

Moments after the vote, Don Gibbons, chief communications officer for the agency, emailed the California Stem Cell Report, pointing out that the statements of the top executives were already up. They can found at this location or by searching the CIRM site on the term "form 700," the number of the state form used, or "economic interests."

Statements are available today from the chairman (Robert Klein), the two vice chairs(Art Torres and Duane Roth), president(Alan Trounson), vice president of operations(John Robson), general counsel (Elona Baum), executive director of scientific activities (Patricia Olson) and Gibbons.

Gibbons said the statements from all the 29 directors will be posted soon. Expense claims for directors and executives will be posted beginning in April.

If you would like to see statements of economic interest sooner, you can find them here. They were posted on the Internet by the California Stem Cell Report last summer after CIRM had failed to act on the unanimous recommendation from the Citizens Financial Accountability Oversight Committee that the statements be made available online. The panel is the only state body specifically charged with overseeing CIRM finances. It made its recommendations 12 months ago.

The CIRM form 700s can be found more easily than those of the top aides to Gov. Jerry Brown. Indeed, his web site does not even have a search function. Former Gov. Arnold Schwarzenegger began posting the forms and expense claims for his top staff and appointees following a flap about conflicts of interest and expense claims. It is not clear whether Brown will post the statements. A handful of other state officials are also posting the statements online.

The $3 billion stem cell agency differs significantly from other state agencies and contains built-in conflicts of interests dictated by Prop. 71, which created the agency in 2004. Its directors are employed by institutions that have received nearly all the $1.1 billion in grants that the agency has handed out.

Here is a list of institutions that have or had seats on the board and their grant totals as of last week:  Stanford, $176 million; 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; Salk, $37 million; Sanford-Burnham, $31 million; UC Santa Cruz, $19 million; UC Santa Barbara, $13 million; UC Merced, $8 million; UC Riverside, $6 million, Cedars-Sinai, $9 million; Caltech, $2.3 million, and Childrens Hospital Research Institute, $55,000. One CIRM director, Sherry Lansing, a UC regent, accounts for many of the connections to the smaller UC campuses.

Last Thursday, directors awarded more cash to the following institutions with current or former CIRM directors: Stanford, $10.5 million; UC Berkely, $3 million; UCSD, $2.7 million; UCLA, $2.6 million; Salk, $2.3 million, Cedars-Sinai, $1.8 million, and UCSF, $1.8 million.

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. A former director tied to the Sanford-Burnham Institute and others ran afoul of conflict rules in 2007. The issue with Sanford-Burnham was disclosed by the California Stem Cell Report. The case resulted in a warning by the state Fair Political Practices Commission. The Sanford-Burnham official acted after he was advised to do so by CIRM Chairman Klein, an attorney who later said his advice was an "inadvertent error."

(Editor's note: An earlier version of this item incorrectly indicated that Salk was currently represented on the CIRM board. In fact, Salk last week lost its seat.)

California Stem Cell Agency Hands Out $41 Million

The California stem cell agency has awarded $32 million to researchers to help them devise technology to overcome obstacles to development of stem cell therapies, part of $41 mllion in spending approved today.

In approving 19 tools and technology grants, CIRM directors rejected four appeals of negative recommendations from reviewers. That included a petition by Stanford researcher Stefan Heller that raised a number of policy questions that went beyond purely scientific issues. A fifth rejected application by Martin G. Martin of UCLA was sent back to the grant review group for additional consideration including new information.

According to CIRM's news release, three businesses and seven institutions were among the recipients. some of which received more than one grant. The businesses are Gamma Medica-Ideas, Inc. of Northridge, Ca., $1.5 million; GMR Epigenetics of Palo Alto, Ca., $1.5 million, and Fluidigm Corp. of South San Francisco, $1.9 million. The biotech industry has complained about receiving short shrift on their applications for CIRM cash.

CIRM directors also created a $6.6 million visiting faculty program. According to the agency,

"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 will 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.

Directors also approved a $2 million grant to Fred Gage of the Salk Institute in the early translational round. The application, which deals with Parkinson's Disease, originally totalled nearly $4 million when directors considered it last October. Scientific reviewers initially did not approve the Gage application for funding, but it was set aside by the directors for additional consideration. CIRM staff and a representative of the review group negotiated the scaling back of the grant size.

Additionally approved was a $250,000 program to subsidize attendance for about 80 recipients of CIRM training grants and 40 patient advocates at an international stem cell conference in Toronto in June. The program was originally proposed at $200,000 but was boosted to $250,000 by directors.

CIRM Directors Conclude Meeting

The meeting of the directors of the California stem cell agency concluded about an hour ago. We will have a story coming shortly on action on various grant and spending proposals.

California Stem Cell Directors Chart New Path to Find New Chairman

Directors of the California stem cell agency today embarked on a fresh course for selection of a new chairman of the $3 billion effort, including a self-evaluation of the performance of the agency board itself.

On a unanimous voice vote, the governing board initiated a survey of its 29 directors to determine criteria that they believe is desirable in a new chairman, in addition to the legal requirements. The survey, to be conducted next week, will also ask directors to evaluate the board's role.

The questions will address such concerns was whether the person who will replace Robert Klein should have experience in academia, industry or patient advocacy, among other things, such as time commitment and compensation.

Board members will be queried on whether they have enough information on matters that come before the board, the amount of their preparation and whether they feel comfortable raising dissenting opinions in addition to other matters..

The new procedure was suggested by Director Claire Pomeroy, dean of the UC Davis School of Medicine. It came after Klein's attempt to engineer the selection of his successor floundered in the wake of news reports that reflected less than favorably on CIRM and Klein.

Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, said she expected to hold a meeting of the panel in two weeks to consider the results of the survey. She anticipated another meeting following that session. The criteria could come to the board for its meeting in March in Sacramento.

Klein says he plans to leave his post by June. He was re-elected in December at no pay for six months in December.

The plan to address the chair selection process triggered a short but sharp debate that veered into a discussion of some of the criteria, including whether the chair should also have CEO responsibilities, be a US citizen and the amount of time required.

Klein was paid $150,000 a year for a half-time effort until last month. He told directors that he is putting in considerably more time than that.

The discussion about the citizenship requirement came up because Klein last month said that the person his candidate for the job had to drop out because state law required him to be a US citizen. However, an official opinion of the state attorney general's office has pronounced that provision unconstitutional. Nonetheless, Art Torres, co-vice chair of the CIRM board, said a chairman must be a citizen until an appellate court rules otherwise. Some board members and the board's general counsel took pains to say that the provision did not apply to CIRM President Alan Trounson, who is Australian.

In electing a chairman, the CIRM board is handicapped by Prop. 71, which dictates that it cannot choose anyone it finds qualified. Instead, the ballot measure, written by Klein and others, says the board must choose between candidates nominated by four statewide officeholders: the governor, lieutentant governor, treasurer and controller. Prop. 71 also contains a list of detailed, restrictve legal requirements for the position.

CIRM Board Back in Session

The CIRM board resumed discussions about 1 p.m. PST.

CIRM Directors in Executive Session

CIRM directors have been in an executive session since about 11:18 p.m PST. They are discussing personnel issues and proprietary information concerning the $40 million tools and technology grant round. It is not clear when they will resume their public session.

CIRM Directors to Post Their Statements of Economic Interest Online

Directors of the California stem cell agency today decided to post their statements of economic interest on the CIRM web site along with those of the executives of the $3 billion enterprise. Also to be posted will be the expense claims filed by the same officials.

The action was approved on a unanimous voice vote. It came at the request of Citizens Financial Accountability Oversight Committee (CFAOC) one year ago when it urged more openness and transparency at the agency. The committee is chaired by the state's top fiscal officer, Controller John Chiang. It is a sister to CIRM, created also by Prop. 71 in 2004, and is the only state body specifically charged with overseeing CIRM's finances.

Chiang's office said the controller called the action "good news and a long-overdue step toward
transparency and accountability."
The postings will begin in April, the deadline for the 2010 statements of economic interest. Other state agencies, including the governor's and controller's office, already have been posting their own statements and expense claims. CIRM plans to confer with the CFAOC to be sure to comply properly with its request.

Director Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, said that CIRM  "has nothing to hide, and it (the information) is already out there."

CIRM Director David Serrano Sewell, a deputy city attorney in San Francisco, was delegated to work with staff and the CFAOC to implement the postings.

The California Stem Cell Report posted the statements for the directors and staff last August after CIRM balked at complying with the unanimous request from the CFAOC. The postings by the stem cell report were  noted more than once by directors today. Last month we began the process of gathering CIRM expense claims for posting but will suspend that effort.

Our take on today's board action? We applaud the CIRM directors. Today's vote represents a significant step forward in improving the agency's openness and transparency.

Minority Report Filed on Business Application Rejected by Reviewers

Some  CIRM grant reviewers have filed a minority report on a tools-and-technology grant rejected by the agency's grant reviewers.  The application was submitted by a business. The biotech industry has complained about the paucity of CIRM grants to business. The review summary said, 

 "Three elements were cited by the minority group in support of moving the application up to Tier 1: 1) the proposal was submitted by a "for profit" applicant; 2) the project uses bioinformatics approaches; 3) the proposed research expands a global capacity to assess safety of cell therapy products derived from embryonic stem cells that have been expanded in culture. Also, the proposal supports efforts to characterize 10 cell lines that are being derived as part of a previously funded CIRM award."

The identity of the applicant was not disclosed.

Fifth Appeal by Rejected Applicant

A fifth scientist has filed an appeal of a negative decision by CIRM's scientific reviewers on his application for $1.2 million in the $40 million tools and technology round.

The researcher is Alexander Urban of Stanford University, the third scientist from that institution whose application was rejected. Here is the summary of the reviewers findings.

Stem Cell Directors Begin Meeting

Directors of the California stem cell opened their meeting this morning in  Burlingame at 11:17 a.m. PST with introduction of two new members of the 29-member board and a new alternate for a regular member. The first order of business is the $40 million tools and technology round of grants. The board has a quorum but Chairman Klein warned that some directors will have to leave early -- not an uncommon situation for the board. The meeting is scheduled to end at 5 p.m.

Coverage of Today's Stem Cell Board Meeting

The California Stem Cell Report will be providing live coverage of today's meeting of the board of the California stem cell agency from our location in El Salvador. The meeting has not yet begun but it is likely to get underway soon. We will file reports as warranted throughout the day based on the Internet broadcast of the proceedings.

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.