Geron hESC Withdrawal 'Real Blow' to California Stem Cell Agency, Says CGS

In a sharp-edged analysis of Geron's abandonment of stem cell research, the Center for Genetics and Society yesterday described the action as a "real blow" to the California stem cell agency.

Written by Pete Shanks, a regular contributor to the Berkeley center's Biopolitical Times, the piece chronicled some of the history and hype involving Geron and hESC research. The center has long taken a skeptical view of the California stem cell agency and Geron. Shanks wrote,

"Geron has been in trouble for a while. Former CEO Thomas Okarma, who left abruptly in February, was the subject of ridicule for his repeated announcements that ESC-based clinical trials would begin "next year" — that is, 2005, 2006, 2007, 2008 — and the trial they eventually came up with was so dubious that Arthur Caplan called it "nuts and hugely risky." Even experts in the field thought that targeting spinal cord injury in the first ESC trial was dubious, though some seem to be more willing to be critical now it has ended.

"And that was on the scientific and perhaps commercial merits. The ethical problems were much worse, since the trial was intended for people who had recently suffered damage to their spinal cords. Bioethicist Laurie Zoloth (who was once on Geron's ethics advisory board, and basically approved of the study), noted at the time of its announcement that:

"'True informed consent in this very vulnerable population, people who have suffered a devastating and life-changing injury a week prior to being asked to enter the first clinical trial for such long-awaited, highly publicized and desperately needed treatment, is hard to obtain and will need to be carefully thought through.'"

Shanks also wrote,

"What of CIRM's role? After Geron's announcement, they issued a remarkably bland press statement, followed by an internal memo that expressed deep disappointment (the California Stem Cell Report has the text). It's a real blow to them: Geron was the first private company to receive funds from CIRM to run a clinical trial using ESCs.

"This was a loan, not a grant, and was only made, as the indefatigable David Jensen (publisher of the California Stem Cell Report) discovered, after a 'major departure from longstanding procedures.' The proposal received a low score (66/100) that was not publicly revealed until Jensen specifically asked for it. And the other applicants who might have competed for those funds rather surprisingly all withdrew.

"The suspicion arises that CIRM, or some people within it, badly wanted the trial to proceed in the hope that it would give them a therapeutic success to boast about. If so, the decision just backfired."

CIRM Chairman on Geron: Agency in for the Long Haul

Commenting on Geron's decision to abandon hESC research, the chairman of the California stem cell agency, Jonathan Thomas, says the agency knew "the road to new therapies would be arduous, and that for each success, there would be setbacks as well."

In a memo Monday to the agency's 29 board members, Thomas reiterated that Geron maintains the decision had nothing to do with safety concerns. He said the company's action underscores the agency's commitment to long-term development of stem cell therapies.

Thomas also said the $3 billion agency will retain the stock warrants it received from Geron, but did not disclose their numbers. We have queried CIRM for more details. CIRM loaned Geron $25 million, which was paid back by Geron on Monday.

A copy of the Thomas memo was provided to the California Stem Cell Report. Here is the full text.

"Dear Board Members:

"Earlier this afternoon, we learned that Geron made a decision to discontinue its stem cell research program, including the CIRM-funded clinical trial involving spinal cord injury. Geron made this decision in order to shift its focus to its oncology program. Geron has assured us that its decision to discontinue the trial had nothing to do with safety concerns; the cells have been well-tolerated and the patients have experienced no adverse effects. Geron will continue to follow all enrolled patients and has committed to accrue data and update the FDA and the medical community regarding the patients’ progress.

"In addition, Geron has returned CIRM’s funds, with accrued interest. CIRM will maintain the warrants it received.

"Of course, we remain committed to funding clinical development of stem cell therapies. We have always recognized that the road to new therapies would be arduous, and that for each success, there would be setbacks as well. We also know that companies make decisions for business reasons, and that it is not unusual for a company to pursue a new strategy, as Geron has done. CIRM, by contrast, is focused on its long-term goal of delivering therapies and cure to patients, and today’s events underscore the importance of CIRM’s long-term commitment to funding therapy development.

"This trial represented the first-ever clinical trial of human embryonic stem cells and we expected that it would be challenging. We share the frustration of all the patients for whom this trial offered great hope. I spoke personally with both Don and Roman Reed to express my commitment to the on-going search for therapies.

"Although we are deeply disappointed by Geron’s decision, we are grateful that Geron has established a regulatory pathway for human embryonic stem cell therapies and we are confident in the potential of stem cells to treat patients suffering from chronic disease and injury.

"Here is a link to CIRM’s press release: http://www.cirm.ca.gov/PressRelease_2011-11-14"

Possible Buyers for Geron's Stem Cell Business: BioTime, Pfizer, Celgene

The mainstream media is climbing all over the Geron story today with more analysis and a  discussion of firms that might snag the San Francisco area firm's orphan stem cell business.

Reporter Peter Loftus of the Wall Street Journal mentioned Pfizer, which is involved an hESC project with researcher Peter Coffey, who was lured from the UK this fall to UC Santa Barbara. Among the incentives was a $4.9 million grant from the California stem cell agency, which also financed Geron to the tune of $25 million.

Matthew Perrone of The Associated Press had this to say about buyers:

"Analysts say Geron's stem cell business could be acquired by Alameda, Calif.-based BioTime, a company founded by former Geron scientists. Other potential acquirers could include larger pharmaceutical companies like Celgene Corp., Pfizer Inc. and Teva Pharmaceuticals, which have dabbled in stem cells without making major investments."

BioTime's shares were up 7 percent today, closing at $4.52. Geron's shares were down as much as 28 percent and hit a five-year low. It closed at $1.71, down 22 percent.

The AP also wrote,

"Joseph Pantginis, an analyst with Roth Capital Partners, said it would have taken five to ten years before Geron's lead stem cell product reached the market.

"'This is still very much a fledgling space and some people would even consider stem cells to be a science experiment, so there's still a long way to go,' said Pantginis.

"University of Wisconsin professor Alta Charo said Geron's move 'may suggest that a different business model is needed, one with a longer timeline for return on investment.'"

Charo had close ties early on with the $3 billion California stem cell agency, which loaned $25 million to Geron just six months ago. The loan was part of an aggressive effort to produce clinical results that will help extend the agency's life beyond 2017, when funds are expected to run out. Currently CIRM is financed through California state bonds, which will need to be approved by voters again if CIRM is to continue.

Here are more excerpts from today's coverage.

Gretchen Vogel of Science magazine wrote,

"Some observers had reservations about the trial from the start, worrying that the animal results were not strong enough to justify a human trial. But many had been pulling for the company nonetheless. 'It's with a sense of loss that I see this news,' says Roger Pedersen of the University of Cambridge in the United Kingdom, who was one of the researchers to receive funding from Geron in the mid-1990s to attempt to derive hES cells. He says the company may be reacting not only to the long timeline to bring cell therapies to the clinic, but also to a possible weakening of its intellectual property portfolio. The development of induced pluripotent stem (iPS) cells, which are adult cells genetically reprogrammed to resemble embryonic ones, means that Geron's exclusive licenses may be worth less. 'Advances in the stem cell field are disruptive innovations that have the potential to supercede earlier innovations, hES cells being one of those. I don't know if Geron looks at it that way, but I do,' Pedersen says."

Ben Hirschler and Kate Kelland of Reuters reported:

"A decision by one of the biggest names in stem cell research to throw in the towel will not stop other pioneering work that could yet produce cures for blindness and help mend broken hearts.

Scientists were shocked by U.S. biotech company Geron Corp's decision on Monday to quit embryonic stem cell research -- a move it blamed on a lack of money and the complexities of getting regulatory approval....

"Robert Lanza, chief scientific officer of ACT, is not giving up hope on the embryonic front but said Geron's exit put more pressure on his firm to succeed.

"'Of course, it's the second mouse that often gets the cheese,' he said."

Sarah Boseley of The Guardian in the UK wrote:

"The dream of Superman actor Christopher Reeve and others of paralysed people being able to walk again after injections of stem cells has receded, following the announcement by biotech company Geron in the US that it is to abandon the first-ever human trial of its kind."

Jef Akst of The Scientist magazine wrote:

"'It’s certainly going to have a very chilling effect,' said Robert Lanza, chief scientific officer at Advanced Cell Technology, the only other company currently engaged in clinical trials involving hESCs. 'There’s a lot of exciting potential here in this field, and it would just be a real shame for this not to move ahead full steam.'...

"One thing working in the field’s favor is the fact that Geron helped pave the regulatory way for other stem cell therapies, said Sheng Ding, a stem cell biologist at the Gladstone Institutes and the University of California, San Francisco. 'Geron’s past efforts had cleared out a FDA path for pluripotent stem cells,” he wrote in an email to The Scientist."

The Financial Times of London altered its original story by Andrew Jack without notifying its readers that the story was changed or why. The old version began.

"Geron, the pioneering stem cell therapy company, has dealt a powerful blow to one of the most hyped areas of medicinal research by withdrawing entirely from the field."

The new version, posted at least 12 hours later, begins:

"Geron, the Californian biotech company, is abandoning its pioneering embryonic stem cell work, after concluding that the costs and length of further development were too great."

Matthew Herper of Forbes published a comment from Jamie Thomson of the University of Wisconsin, whose hESC discoveries were financed in part by Geron. Thomson wrote,

"Geron’s decision to discontinue their stem cell work reflects how genuinely difficult it is to build a business around embryonic stem cell-based transplantation therapies. They also chose a particularly challenging target for the first therapeutic application. They are to be commended, however, for blazing a trail that others can follow in getting the first clinical trial approved by the FDA, as such approvals should be easier in the future."

Herper continued,

"Thomson initially shied away from the idea of building businesses around embryonic stem cells or their successors, induced pluripotent stem cells, which don’t involve destroying embryos. (He told me three years ago, 'I really believe personally that the value of these cells is not in transplantation,' and that '90% of the value of these cells will be in things that don’t make the front pages.') When Thomson did decide to become an entrepreneur, it was through a Madison, Wisconsin-based startup called Cellular Dynamics International, which uses the cells to create better ways of testing the safety and effectiveness of experimental drugs. Drug giants including Roche, Pfizer, and AstraZeneca have taken their own steps toward embracing stem-cell-based research. This field is slowly gaining steam just as the one Geron is abandoning its own attempts to heal the lame."

Brian Orelli on the MotleyFool investment web site wrote,

"Geron is giving up on stem cells. That's like Krispy Kreme Doughnuts without glazed treats, or Apple without Macintosh."

Adam Feuerstein on thestreet.com wrote:

"Geron's  decision to shut down its embryonic stem cell research programs is a blow to the controversial research field and a painful reminder that only dreamers and fools invest in embryonic stem cell stocks....But does anyone believe that Geron would jettison stem-cell research if the ongoing clinical trial in spinal cord injury were helping patient recover neurological or motor function?"

Geron Flight from hESC Research is 'Powerful Blow'

The news about Geron's abrupt departure from hESC research is rippling around the world this morning, casting a pall over the entire field.

The Financial Times of London, in a story by Andrew Jack, said,

"Geron, the pioneering stem cell therapy company, has dealt a powerful blow to one of the most hyped areas of medicinal research by withdrawing entirely from the field."

Ron Leuty at the San Francisco Business Times said in an analysis,

"Just why would I want to invest in a space where one of the most promising companies just called it quits."

In a Washington Post article by Rob Stein, a patient advocate expressed bitterness.

"'I’m disgusted. It makes me sick,' said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. 'To get people’s hopes up and then do this for financial reasons is despicable. They’re treating us like lab rats.'"

Geron, based in the San Francisco peninsula city of Menlo Park, cited financial problems when it announced yesterday that it was giving up on its stem cell efforts in favor of its cancer drug program. Geron is laying off 38 percent of its staff and says it will try to find a buyer for the stem cell program. Geron also settled its accounts with the California stem cell agency, which loaned it $25 million last May amidst considerable publicity.

The stem cell agency and other advocates expressed optimism about the long term potential of the field and noted the difficulties of bringing any therapy to production. Geron produced 21,000 pages of material over a years-long period to get FDA permission to begin only the first step in the long clinical trial process.

But the dominant tone of the news stories was negative. Heidi Ledford of Nature said Geron is "walking out on the field." Steve Johnson of the San Jose Mercury News said the decision casts "a cloud over the commercial viability of stem cell treatments."

Here are other excerpts:

San Francisco Business Times:

"What does this mean for companies that the California Institute for Regenerative Medicine, the state’s stem cell research funding agency, is pushing toward clinical trials? Will they only get so far before they, too, exit the business?" 

Fergus Walsh, medical correspondent for the BBC(see here), wrote:

"The decision does seem to be extraordinary given the huge investment of time and resources. When I visited Geron nearly three years ago, the then chief executive claimed the technology had an incredible future. 

"John Martin, professor of cardiovascular medicine at University College London said: 'The Geron trial had no real chance of success because of the design and the disease targeted. It was an intrinsically flawed study. And for that reasons we should not be describing this as a set back. 

"The first trials of stem cell that will give an answer are our own in the heart. The heart is an organ that can give quantitative data of quality.'"

Ryan Flinn of Business Week wrote,

"Geron fell 16 percent to $1.86 in extended trading. The shares have declined 58 percent this year.  

Robert Lanza, chief scientific officer of Advanced Cell Technology Inc.(of Santa Monica, Ca.), the second company to win permission from the U.S. Food and Drug Administration to test human embryonic stem cells in people, said the news wasn’t surprising, given the small patient population affected with spinal cord injuries. 

"'It was a very difficult choice to go in and treat spinal cord injury,' Lanza said in an interview. 'There was considerable concern in the scientific community that that might not have been the ideal first indication."

As first reported by the California Stem Cell Report, Geron's loan application was scored as a 66 on a scale 100 last May by scientific reviewers for the California stem cell agency. The score was not disclosed publicly at the time CIRM directors approved the award as has been the practice for all the other 400-plus awards that the agency has granted. The Geron approval process departed radically from the agency's regular procedures.

The news coverage in California of the Geron decision was marked by the absence of a story in the Los Angeles Times, the state's largest circulation newspaper. The San Francisco Chronicle carried only a brief story buried on page 6 of its business section. The California stem cell agency is based in San Francisco and the Bay Area contains one of the larger and more important biotech business and academic research communities in the world.

Geron Quits Stem Cell Research; Move Deemed Setback to the Field

In a surprise move, Geron today said it was terminating its stem cell business and what was the first-ever clinical trial of an hESC therapy, a potential product backed by a $25 million loan made by the California stem cell agency only six months ago.

Geron's move has "stark implications" for development of stem cell therapies in the United States, The Associated Press said. Andrew Pollack of the New York Times reported,

"The move is expected to be widely seen as a setback for the field, because of Geron’s central role."

The Menlo Park, Ca., company said it will fire 66 employees, 38 percent of its workforce, and will try to find buyers for its stem cell business.

The company's CEO, John Scarlett, cited the need to "focus our resources" given the "current environment of capital scarcity and uncertain economic conditions." The clinical trial of its spinal cord treatment will be closed to further enrollment, although it will continue to follow all four enrolled patients. The company said it now plans to focus on cancer drugs.

The company did not mention CIRM or the $25 million loan in its statement. The stem cell agency issued a press release that said,

"Geron had received $6.42 million of their loan, which the company today repaid in full with accrued interest."

In the news release, CIRM's Ellen Feigal, senior vice president for research and development, did not comment directly on Geron's move. She said CIRM remained optimistic about "many exciting stem cell programs in California." She said moving a therapy into the clinic is a "highly complicated process."

Absent from CIRM's press release were any comments from its new chairman, Jonathan Thomas, and CIRM President Alan Trounson.

Dropping stem cell research will improve Geron's cash situation. The New York Times' Pollack said,

"Geron will be able to last without needing to raise new money until it receives results of clinical trials of its cancer drugs over the next 18 months. By contrast, Dr. Scarlett said, given all the precautions in the stem cell field, he did not think there would be results from the stem cell trial until 2014."

The AP quoted stock analyst Steve Brozak of WBB Securities as saying Geron had encountered difficulty in finding partners for its stem cell program. He said potential partners wanted to see "later stage results." Of the clinical trial, Brozak said,

"It could be outsourced to a place like China very easily. In that case, this would be the de facto abdication of U.S. leadership in biotechnology."

With Geron's departure, Advanced Cell Technology of Santa Monica, Ca., is the only company with a clinical trial involving hESC, one targeting macular degeneration. ACT has never received an award from the California stem cell agency although it relocated its headquarters to California in the wake of the passage of Prop. 71, which created the state's $3 billion research program.

ACT was widely believed to have applied in CIRM's financing round last spring involving Geron.

CIRM directors approved the loan to Geron last May in a meeting that departed radically from its normal awards process.

As reported by the California Stem Cell Report in August,

"The Geron application was not given a public scientific score, standard practice for all the other 433 applications that the agency has approved over the last six years. The usual summary of grant reviewer comments was not provided to the public or the board. The three other applicants in the $50 million round all withdrew prior to presentation to the CIRM board – another first in CIRM's grant program. And no public explanation was provided at the time for the departures from long-established procedures." 

$127 Million in 'Good News' for San Diego Stem Cell Researchers

Earlier today, an anonymous reader posted a comment on the California Stem Cell Report wondering where the "good news" was about the stem cell agency. We are not sure whether the reader was wondering about the content of this site or the mainstream media or both.

Sanford Consortium lab from live Webcam shot this weekend
on the Sanford web site. 

But the comment came less than 24 hours after a San Diego area newspaper published a glowing piece about the opening of a new stem cell research building under the auspices of five powerful research organizations – Salk, Scripps, Sanford Burnham, UC San Diego and the La Jolla Institute for Allergy and Immunology, a recent addition to the consortium.

Bradley Fikes of the North County Times wrote the story. He may be the last reporter in California to regularly, albeit infrequently, cover California stem cell issues for a mainstream newspaper.

Fikes' story heralded the $127 million structure. (The cost includes equipment.) He wrote,

"San Diego County's bid for supremacy in the fast-growing field of stem cell research will gain an iconic new image Nov. 29, when a gleaming headquarters for some of San Diego County's top stem cell researchers officially opens.

"The 132,000 square-foot building off in La Jolla will become the headquarters of the Sanford Consortium for Regenerative Medicine...."

The consortium was formed in the wake of voter approval of Prop. 71, which created California's $3 billion stem cell program and provided hundreds of millions of dollars for new labs. Edward Holmes, formerly vice chancellor at UC San Diego, is president and CEO of the consortium. Holmes is also chairman of the National Medical Research Council in Singapore. (For Holmes perspective on the consortium, see this 2010 interview.)

The building was financed with $43 million from the California stem cell agency, $65 million in bonds guaranteed by the University of California and $19 million from T. Denny Sanford, a South Dakota billionaire banker.

After CIRM approved funding for the building in May 2008, the consortium struggled with finding cash beyond what CIRM provided. The roadblocks delayed work on the facility, which was supposed to be completed by May 2010 at a cost of $155 million, according to the stem cell agency.

Like the other new labs assisted by $271 million in stem cell agency construction funds, the San Diego building is touted as conducive to bringing scientists together. Indeed, it has been dubbed a "collaboratory."

Fikes wrote,

"Even the staircases have been designed in keeping with the goal of making as much space as possible serve collaboration. The Sanford Consortium's staircases are wide, open and airy. They connect multiple 'laboratory neighborhoods' on different levels, so that scientists from different labs and floors will inevitably pass each other on their way to work."

Fikes said that at each level the staircases include areas with tables and chairs for quick chats. He quoted Louis Coffman, chief operating officer of the consortium, as saying,

"It's a lively interlude between floors. It creates an interesting space. More than that, it connects the physical locations of two different floors. So whereas people on different floors, who would otherwise be as disconnected as they would be in different buildings, hopefully they're going to make connections."

Searching for Facts About Cash: CIRM to Treasurer to Finance

"Even if your mother says it is true, check it out," an old saying goes. So we did.

The case in point was the new financial arrangement for the $3 billion California stem cell agency.

CIRM Chairman Jonathan Thomas laid out the plan last month for the California Stem Cell Report in the wake of a state bond issue that provided only $51 million for the agency, which fell far short of its needs over the next year or so. He said, however, a new arrangement was in place that amounted to a win-win for the state and the stem cell agency. The plan minimizes the amount of state bond borrowing immediately needed and instead provides, if necessary, short-term commercial paper, also backed by the state, but at less interest cost.

Thomas said both the state treasurer and the Brown Administration, through its state Department of Finance, were on board.

But -- keeping the admonition about mothers in mind -- we routinely asked the Finance Department and the state treasurer's office about the arrangement. What happened then provides some insight into how difficult it is sometimes to verify even what appear to be simple facts. It also tells a story about the responsiveness of state agencies and their dedication to openness and transparency.

Let's start with CIRM and Thomas. After we raised questions by email following the state bond sale Oct. 19, he offered a telephone interview about the situation and persisted despite dropped cellular signals and several callbacks from our post here in the bay off Panama City.

After we filed our item on the interview, we queried on Oct. 24 the other two agencies involved. The state treasurer's office responded quickly. The state Department of Finance, on the other hand, has remained silent on the subject to this day, despite three emailed queries.

Unfortunately, the state treasurer office's initial response was off the mark. "We haven’t seen any agreement.  We were not aware of the reported agreement until we read about it in your blog.  So, we have no comment about the reported agreement," the treasurer's office said initially.

That raised eyebrows a bit. So we renewed our queries to the Finance Department, even suggesting that a failure to respond could be construed as an indication that the Brown Administration is not fully behind CIRM.

Ten days after our initial query to the two agencies, we sent an email to Thomas briefly describing what we had planned to write and asking him if he would like to comment. He did not respond. But the next day, Steve Cooney, chief deputy state treasurer, said in an email that the earlier comment from the treasurer's office was incorrect. Cooney said,

"Our office DOES (Cooney's capitalization) and DID know that CIRM and the Department of Finance reached an understanding about future funding.

"The Treasurer’s Office has been aware since before last month’s sale of GO (general obligation) bonds that the Department of Finance and CIRM are in general agreement that the state will take necessary action to ensure that CIRM has adequate funds to meet its operational, grant funding and reserve needs, including the use of the state’s commercial paper line in the event the state cannot timely access the bond market.  It is neither necessary nor usual for our office to be informed of the specifics, if any, of any future commitment made by the Administration to any other state agency, including CIRM, and this case is no exception."

Cooney additionally re-affirmed the commercial paper arrangements for CIRM as laid out in the initial response from the treasurer's office.

The response said,

"The issuance of commercial paper has always been a part of our bond financing program.  The size of the CP line is about $1.5 billion, and it is available for use by all infrastructure programs, including stem cell research.  When we issue commercial paper to finance infrastructure projects, including CIRM, the paper is repaid with bond-sale proceeds.  So, if CIRM received funds from the issuance of commercial paper, the 'loan' would be retired not by CIRM, but by the proceeds of a subsequent bond sale."

Cooney also said,

"If you still need further clarification on the issue of future CIRM funding beyond the proceeds of the recent bond sale, the best place to get that information continues to be the Department of Finance."

Silence, however, has only been heard from the state Department of Finance.

Trounson, Parthenotes and International Stem Cell

The president of the California stem cell agency, Alan Trounson, popped up in a recent article in Scientific American dealing with a method for creating pluripotent stem cells from unfertilized human eggs.

The piece by Julia Galef said that "many investigators remain frustrated" that the method "remains offlimits" for federal funding, a barrier that does not apply to financing from the $3 billion California stem cell agency.

Galef wrote that one California firm, International Stem Cell Corp., of Carlsbad, is using the method to develop products. She said the firm's work involves "a process called parthenogenesis, in which researchers use chemicals to induce the egg to begin developing as if it had been fertilized. The egg—called a parthenote—behaves just like an embryo in the early stages of division. Because it contains no genetic material from a father, however, it cannot develop into a viable fetus."

Trounson was quoted as saying, nonetheless, that "proving that unfertilized eggs will produce stable tissues in humans remains an obstacle." He said other labs need to replicate the work.

International Stem Cell has applied unsuccessfully several times for research funding from the California stem cell agency.

The Scientific American article said,

"International Stem Cell scientists have converted them into liver cells and plan to convert them into neurons for treating Parkinson’s disease, pancreatic cells for diabetes, and other tissues. Meanwhile teams at the Massachusetts-based Bedford Stem Cell Research Foundation are working to improve the efficiency of methods of deriving stem cells from parthenotes."

As researcher interest in parthenotes gains attention, the NIH is being urged to change its negative position. Late last year, Teresa Woodruff, founder and director of the Institute for Women's Health Research at Northwestern University Feinberg School of Medicine, and others called for a lifting of the NIH ban on funding for parthenotes.

California is not constrained by NIH limitations. One of the key reasons, if not the only reason, that voters approved in 2004 the ballot initiative that created the $3 billion stem cell agency was to fund research that the federal government did not. At the time, the focus was on the Bush ban on financing hESC research.

Ken Aldrich, co-chairman of International Stem Cell, circulated the Scientific American article, touting its significance.

We found this posting on the Stem Cell Pioneers web site in which Aldrich said,

“We at International Stem Cell Corporation (ISCO.OB) are finding it increasingly gratifying that mainstream and highly respected publications like Scientific American are now beginning to take notice of the fact that our parthenogenetic stem cells may well turn out to be a viable alternative to the embryonic stem cells that have dominated research and headlines for the last 10 years.

"Like embryonic stem cells, our parthenogenetic stem cells can be converted into almost any kind of cell that might ever be needed for therapy, but can also provide a solution to the two biggest issues that have surrounded embryonic stem cell research: 1) the ethics of destroying a fertilized embryo, which our process never does, and 2) the problem of immune rejection by the patient. We hope you enjoy the attached article." 

Stem Cell Agency's Lobbyist Now Ranked No. 1 in California

The $3 billion California stem cell agency likes to align itself with the very best science. And as of today it is also hooked up with the best lobbyist in California – at least based on earnings.

CIRM hires many firms to perform work, given its unusual needs, rather than building a large and relatively permanent staff. The tasks of the outside contractors range from publishing the annual report to grant review matters. Today Laurel Rosenhall of The Sacramento Bee reported that one of the firms that CIRM has hired now ranks as the No. 1 lobbyist in California, based on its earnings.

The firm of Nielsen, Merksamer, Parrinello, Gross & Leoni pulled down nearly $5 million during the first three quarters of this year. The firm knocked KP Public Affairs out of the top spot, which it had held for at least the last 10 years.

Nielsen has had a contract with CIRM since its earliest days in 2005, but it doesn't amount to much in the scope of Nielsen's business. According to the latest CIRM report on outside contracting, Nielsen was paid $79,984 during the fiscal year 2010-2011 for services that also extended into the current fiscal year. The report did not list payments for earlier years, but it is our recollection that Nielsen was paid about $50,000 every year since 2005. It is not known whether the firm continues to hold a contract for the current fiscal year.

One of Nielsen's partners, Gene Erbin, was one of the drafters of Prop. 71, the ballot initiative that created the California stem cell agency in 2004. Merck and Pfizer, in addition to CIRM, are among the firm's clients.

IOM and California Stem Cell Agency: Study Lacks Key Perspective

The prestigious Institute of Medicine earlier this month kicked off its $700,000 study of the California stem cell agency minus an important perspective – the view directly from California.

None of the persons on the 13-member panel evaluating the performance of the $3 billion enterprise comes from California. The reasons for that are not clear. The IOM is all but mum on the matter.

One could argue that it is not necessary to be geographically located in California to determine whether CIRM is working at peak performance. However, some conditions do exist in California that are difficult for many others to grasp. They include its state budget crisis that has now placed the once Golden State at the bottom of the heap in terms of its credit. Some even liken it to Greece. Obviously that situation can be understood in the abstract by reading The Sacramento Bee and the Los Angeles Times. But the intensity and emotion surrounding that issue and others are difficult to comprehend for many folks living in more blessed states.

Count among the other volatile issues the cutbacks in the state's once vaunted higher education system, including the University of California, which showed its back to students by increasing tuition by nearly 18 percent this fall. Couple that with a visceral antipathy -- and that is putting it mildly -- among some Californians to what they regard as execessive state salaries, including those at the stem cell agency.

What does all this have to with financing stem cell research through an agency that was supposed to have a guaranteed stream of income isolated from mischief that could be wreaked by the governor or legislature. It turns out that CIRM's cash flow is not as guaranteed as its backers believed. Instead of issuing bonds, the state is going to finance the agency over the next 18 months with commercial paper, if necessary. That's because Gov. Jerry Brown wants to reduce the interest costs on state borrowing, which have risen sharply and now consume 8 percent of the state budget along with funds that could otherwise go to educate California's children, among other things.

Brown's parsimony is famous. During his first term in office, he denied pay raises to state college professors, saying they are amply rewarded through "psychic income." More recently, he objected to out-of-state travel by CIRM staff. Too much "lollygagging in London on the taxpayer's dime," a Brown spokesman said. CIRM Chairman Jonathan Thomas promptly cut travel in the chairman's office by 50 percent and asked CIRM President Alan Trounson to do the same for the rest of the staff.

It is an environment that can be difficult to navigate under the best of circumstances. It places limitations on the stem cell agency and tends to focus its operations and funding in different directions than might be the case if California's economic climate were rosier.

The IOM has no real response to the question of why no Californian is on the panel. The California Stem Cell Report last week asked the institute whether an overt decision had been made to exclude persons from California. The IOM did not answer directly. Instead it referred to a generic description of how panel members are selected. The institute's unwillingness to address the specific question does not speak well for the openness and transparency of the IOM examination of CIRM.

Currently the IOM does have a comment period available on the selection of the panel members, who will not become official for another three days. Interested parties can make their views known to the IOM by using this link.

A Californian or two on the IOM panel would help to bring a valuable, broader perspective to this important study, which is sure to affect the future of the state's stem cell research and voter approval of another possible multibillion dollar bond issue in the next few years.

Deadline Next Week for Comments on IOM Panelists Examining California Stem Cell Agency

If you have any comments on or objections to the members of the Institute of Medicine panel examining the $3 billion California stem cell agency, only six days remain to file them with the IOM.

The panel has just begun its review of CIRM's performance, which is being paid for by the agency itself in a $700.000 contract. The study is expected to be completed in November of next year and is expected contain recommendations for changes at CIRM.

In a posting on its web site, the IOM said,

"No appointment shall be considered final until we have evaluated relevant information bearing on the committee's composition and balance. This information will include the confidential written disclosures to The National Academies by each member-designate concerning potential sources of bias and conflict of interest pertaining to his or her service on the committee; information from discussion of the committee's composition and balance that is conducted in closed session at its first meeting and again whenever its membership changes; and any public comments that we have received on the membership during the 20-calendar day formal public comment period."

The procedure for filing comments on the members of the panel can be found at the bottom of the page found here.



http://www8.nationalacademies.org/cp/CommitteeView.aspx?key=49397

California Stem Cell Agency Approves $68 Million in New Funding

In a matter of a few minutes this afternoon, directors of the California stem cell agency approved $68 million in new financing rounds, including a $30 million business-friendly effort to speed development of clinical therapies.

The proposals received almost no discussion as four board members scurried for flights or to return home. Their departure left the 29-member board without the 19-member quorum needed to act legally. The board was already short of a full contingent of members.

In addition to the business loan program, the board approved a $35 million basic biology round and a $3 million program to provide internships for high school students at research labs. The funding goes to the labs, which then pick the students.

Action on the items came swiftly after CIRM Chairman Jonathan Thomas told directors they had only 20 minutes to approve them before the quorum was lost.

Here is the CIRM press release on the plans.

CIRM Directors Adjourn

Directors of the California stem cell agency adjourned their meeting early this afternoon after hastily acting on a number of multimillion dollar items.

Four members of the board left to catch planes or return home, leaving the 29-member board without sufficient members to act legally. The board has a super-majority requirement written into state law, courtesy of Prop. 71, the measure that created CIRM. Loss of quorums has been a problem for CIRM since its inception.

The board had been scheduled to meet until 5 p.m. PDT today. The board adjourned at 2:39 p.m.

Board member Bert Lubin, president of Childrens Hospital of Oakland, told remaining board members that all board members should stay for the entire scheduled meeting. He suggested to CIRM Chairman Jonathan Thomas that he write a letter to the board to that effect.

The hasty departure of the board members followed a lengthy discussion earlier in the day about CIRM's shaky public image and ways to improve it.

Two minor items were put off until December. We will have more on board actions in the next couple of hours.

Stem Cell Board Racing Through Agenda

California stem cell agency directors are hurrying through their agenda in Irvine this afternoon as four directors will be leaving to catch planes.

That will leave the board shy of its super-majority quorum requirement. The 29-member board needs 19 members present to legally act. Maintaining a quorum has been a problem since day one of the organization. The quorum requirement was written into state law by Prop. 71.

Stem Cell Directors OK New PR Push to Improve CIRM Image

Directors of the $3 billion California stem cell agency today approved a new PR/communications initiative aimed at bolstering the image of the research effort and moving it closer to winning voter approval of additional billions of dollars within the next few years.

Without additional funding, the seven-year-old agency will not be able make additional grants beyond about 2017. It has only $1.2 billion left for research spending, an amount that does not go far when some grant rounds are topping $200 million.

CIRM directors approved the plan on a unanimous voice vote following a brief discussion. Chairman Jonathan Thomas described the plan as ambitious. It will be administered by a new director of communications who is expected to be hired soon. CIRM already has three persons working in communications. A fourth is likely to be added under the plan.

The board's action followed presentation of a $20,000 study of its PR efforts by the political and PR consulting firm of Townsend Raimundo Besler and Usher of Sacramento. The firm said CIRM's PR efforts have produced "less than satisfactory results," damaged its own public image, failed to stay abreast of the need to communicate with many different audiences and led to organizational "dysfunction."

Townsend recommended "rebranding" the California Institute for Regenerative Medicine, the official name of the agency, as the "Stem Cell Institute." Townsend's report said the agency's formal name "has proven not particularly effective in helping the public" understand its work.

Townsend recommended centralizing communications management, reorganizing existing communcations staff, creating an annual communications/PR plan and developing a set of messages that will generate public support. Also recommended were polling and focus groups to help formulate needed strategies along with specific ways of measuring the success of CIRM's communications plans. 

New Collaborative Agreement Announced Between California Stem Cell Agency and NIH

The California stem cell agency and the NIH today announced a collaborative agreement aimed at accelerating the transformation of basic research into cures.

The agreement came up several times during this morning's discussion of changes in CIRM's strategic plan in the context of leveraging the agency's efforts. Some directors indicated that the agreement could mean that CIRM could spend less on costly translational grant rounds. Here are some excerpts from the agency's press release.

"The memorandum of understanding signed by CIRM President Alan Trounson and Michael Gottesman, Deputy Director for Intramural Research at NIH, is a pilot project of these partnerships in clinical and translational research. This MOU establishes a framework to advance the complementary and synergistic goals of CIRM and the NIH to 'help NIH and CIRM researchers work together to bring their special talents in stem cell and regenerative medicine research to bear upon prevention, diagnosis, and treatment of various diseases.'"

"The NIH, through its trans-NIH Center for Regenerative Medicine (NIH CRM), the NIH Clinical Center, and the newly established NIH Center for Translational Therapeutics (NCTT), will foster these interactions. The NIH Clinical Center is the world’s largest hospital dedicated entirely to clinical research. The Center houses basic, translational and clinical research efforts of the NIH intramural research community, including the recently established NIH CRM funded through the NIH Common Fund."

The press release also mentioned possible opportunities for collaboration. It said,

"One relates to the current round of applications for CIRM’s Disease Team Therapy Development Research awards. During the planning phase of these awards, California teams could develop collaborations with researchers at the NIH Clinical Center on various aspects of a preclinical, Phase I, Phase I/II or Phase II clinical trial. Another option is to enable California researchers with the opportunity to take part in NIH Clinical Center visiting fellowship or clinical investigator training programs. A third is to access unique resources they could apply to use that may not be available at their home institution."

CIRM Directors Break for Lunch; PR Plan Up Next

Directors of the California stem cell agency have concluded their discussion of possible changes in their strategic plans for the next five years and adjourned for lunch and a closed-door personnel session.

They plan to return at about 15 minutes after the hour. The directors plan to take up a new communications/PR plan at that time.

No votes were taken during the discussion of the strategic plan. We will have more on what directors had to say later.

Stem Cell Meeting Resumes

CIRM directors have resumed their meeting today, beginning a discussion of possible changes in the agency's strategic plan as it determines the priorities for its remaining $1.2 billion.

CIRM Directors on Break

Directors of the stem cell agency are currently are on a short break and should be back in session at seven or eight minutes after the hour, if they keep to their schedule. A discussion of the strategic plan moderated by a consultant will begin when directors return.

Stem Cell Directors Discuss Changes in Strategic Plan

California stem cell agency directors are in the midst of a discussion of changes in their strategic planto focus more heavily on driving reseach into treatments.

Ellen Feigal, vice president of research and development, introduced the discussion and noted that the agency does not plan to abandon basic research, a touchy subject for many researchers. She also said the directors should examine the proportion of  expenditures devoted to basic research and translational research.

CIRM Directors Meeting Underway

Directors of the California stem cell agency have begun their meeting today in Irvine. CIRM President Alan Trounson is in the midst of a presentation.

Conflicting Start Times for CIRM Board Meeting

The agenda for today's meeting of the board of the California stem cell agency says that it will start at 9 a.m. PDT. However, the audiocast schedule says 9:30. We have queried CIRM concerning the discrepancy.

If our WiFi connection, provided free by the Panamanian government to the entire country, can hold up, we will bring live coverage of the meeting when it begins. It is struggling mightily right now , and we may move to another location, which will mean a delay in our coverage.

CIRM's Next Six Years: Stem Cell Agency Re-examines Its Priorities

The California stem cell agency is taking a fresh look at its strategic plan as it drives more aggressively to develop therapies that can actually be used in the clinic. The re-examination is likely to have an impact on business and academic researchers alike.

The first public session is in Los Angeles today. Tomorrow the 29 members of the CIRM board of directors tackle the subject in Irvine. On Halloween, another session is scheduled for the public in San Francisco.

Little fresh information is being provided for the Los Angeles and San Francisco meetings. But directors will have a document prepared by Ellen Feigal, CIRM's vice president for research and development.

One goal of tomorrow's discussion is to deal with priorities for the six next years, which may well be the agency's last. CIRM is scheduled to run out of funds in 2017 unless it receives more bond funding from the state or cash from other sources. Also on the table are possible changes in CIRM operations, ranging from grant review criteria to RFA content.

Feigal's document, the best we have seen on the strategic plan since the first version in 2006, asks the question: "What would success look like?" The purpose is to trigger responses from the CIRM board members.

Feigal writes that "stem cell-based therapies are the core of CIRM's mission."

"Getting treatments in clinical trials that evolved from stem cell research, we plan to do this in the following ways:
"Show great strides getting game-changing, innovative therapies into clinical trials that would not have happened without CIRM
"Transform public thought about science and medicine so the public better understands the dynamic connection between basic research and clinical development"

Feigal proposes that CIRM work to establish California as the "Stem Cell State" and stimulate its biotech industry.

She identifies some weaknesses at CIRM including relations with industry and communications. She suggests that scientific reviewers need to have a broader view of the agency's work. And she cites the need for prioritizing activities. She said CIRM needs to be "cautious about the 'let a thousand flowers bloom' approach.

The last round on strategic planning triggered a sharp discussion involving fears that CIRM would give short shrift to basic science. This latest proposal is likely stir that pot again as basic researchers become concerned that less grant money will flow to their projects.

Feigal's document came late to the public and was posted only last Friday, three business days before the CIRM board meeting tomorrow. It was one of two major subjects before directors that lacked background until very recently. The other is the communications proposal that dovetails with the strategic plan.

CIRM's timetable for completing the latest revision of the strategic plan calls for final approval by the CIRM board of directors in March 2012.

Live Coverage of CIRM Board Meeting

The California Stem Cell Report will provide live coverage tomorrow of CIRM's board meeting at UC Irvine in California. We will be listening to the Internet audiocast from our post aboard our sailboat-home anchored off Panama City in the Republic of Panama. For those who wish to follow along, directions for the audiocast can be found on the meeting agenda, which also contains the addresses of three remote locations in California. Those locations provide the ability to make comments and actually participate in the proceedings. The meeting is scheduled to begin at 9 a.m. PDT.

Stem Cell Agency PR/Communications Not Up to Snuff, CIRM-funded Report Says

The communications/public relations efforts of the $3 billion California stem cell agency have fallen short, damaged its own public image and led to organizational "dysfunction," according to a CIRM-commissioned study.

The report by the Sacramento firm of Townsend Raimundo Besler and Usher cited "less than satisfactory results" and CIRM's failure to keep pace with the need to communicate with many different audiences. The political consulting and PR firm wrote,

"(A) lack of coordination and systematic organization has led at times to dysfunction, and, while the Institute may be respected and well-known in the scientific world, it is far less of either among other critical audiences."

(Disclosure note: The author of this item on the California Stem Cell Report and Jeff Raimundo, one of the principals of the Townsend firm, worked together at The Sacramento Bee two decades ago.)

The report, to be acted on tomorrow night and on Wednesday by CIRM directors, cited some measureable PR successes. But it said CIRM "lives in two worlds – the high-level domain of advanced scientific research and the secular world of politics and public opinion."

The Townsend firm recommended a number of changes to improve matters, including "rebranding" the California Institute for Regenerative Medicine, the official name of the agency, as the "Stem Cell Institute." Townsend said the agency's formal name "has proven not particularly effective in helping the public" understand its work.

Townsend also recommended centralizing communications management, reorganizing existing communcations staff, creating an annual communications/PR plan and developing a set of messages that will generate public support. Also recommended were polling and focus groups to help formulate needed strategies along with specific ways of measuring the success of CIRM's communications plans.

Townsend cited the need to go beyond traditional scientific as well as mainstream media. The report said that the while public has traditionally "gotten their information from mainstream news media, that is no longer true. Much of the flow of information to the public is through interactive and electronic media today, particularly blogs and websites."

The report indirectly referred to former Chairman Robert Klein, who stepped down in June. Townsend said,

"Virtually since its inception and until recently, the Institute has been led by a high-profile, articulate and charismatic individual who assumed much of the responsibility for communicating with many if not most of CIRM's audiences. Although that situation helped keep messages simple and focused, it did not keep pace with the demands of the Institute to communicate at many different levels and with many different audiences."

CIRM commissioned the study following the June election of Jonathan Thomas, a Los Angeles bond financier, to replace Klein, who is a Palo Alto real estate investment banker.

At the time of Thomas' election, he told directors that the agency is in a "communications war." He said the world is focused on "internal issues" at CIRM instead of "the grand, big picture. "  He also discussed CIRM's financial situation. Its bond funding will run out in roughly 2017. And prior to his departure, Klein expressed the need to seek another multibillion dollar bond measure sometime in the next few years. Such a ballot measure would seem certain to be rejected today, given the state's current financial crisis and the lack of the cures that were touted in the 2004 election campaign that created CIRM and that was headed by Klein.

Earlier this year, directors approved an organizational change that created a senior level director of public communications in the office of the CIRM chairman to market the stem cell agency to the public. The agency is currently in the process of hiring that person. However, the three-person communications staff remains within the president's office.

Accompanying the Townsend report was a document from CIRM President Alan Trounson detailing responsibilities for the new hire and declaring that he "fully supports" the new communications effort. Under Trounson's structure, the PR chief would report to Art Torres, the co-vice chairman of CIRM, and Ellen Feigal, vice president for research and development. Trounson's statement does not specifically delineate who reports to the new PR person but places responsibility for virtually all of the agency's communications efforts in the hands of that person.

The Townsend study also says that CIRM is understaffed for its communications tasks although it did not specifically recommend new hires.

The Townsend report was posted on the CIRM website sometime during the weekend, only two business days before it is to be considered, making it nearly impossible for the public or interested parties to prepare thoughtful comments.

The California Stem Cell Report asked CIRM earlier for the cost of the Townsend report as well as a copy of the contract, both of which are a public record. Neither piece of information has been forthcoming.

Stem Cell Agency Strikes New Financial Deal with State of California

The $3 billion California stem cell agency has worked out a creative, new financial arrangement with the Brown Administration and the state treasurer that assures the agency of cash at least until 2013.

CIRM was on track to run out of funds late next spring because of the earlier suspension of the sale of state bonds, the agency's only real source of money. When the sales resumed last week, it received only $50.8 million, which is well short of meeting CIRM's obligations to grant and loan recipients.

But new CIRM Chairman Jonathan Thomas said late Friday that CIRM now has what amounts to a $225 million line of credit with the state and assurances of a loan should additional cash be needed. In a telephone interview with the California Stem Cell Report, he said,

"We are in really good shape."

The arrangement appears to eliminate the likelihood that CIRM could run out of funds if the financially troubled state of California suspends bond sales again early next year. The state's current budget is built on optimistic revenue projections, which are not being met. If those fall short, severe, automatic budget cuts will be triggered in January. Under less dire conditions last year, the state suspended bond sales. Gov. Jerry Brown, who last week touted the $50.7 million in stem cell borrowing, has also deplored the state's debt load. Bond interest costs have risen from 3.4 percent of the state budget in 2003-04 to nearly 8 percent this year. That amounts to $2,542 per person, compared with the national median of $1,066, according to The Sacramento Bee.

CIRM's new deal with the state minimizes interest costs through the possible use of commercial paper, which is a form of very short term borrowing with low interest rates.

Here is how the new arrangement works, according to Thomas, who is a Los Angeles bond financier. Currently CIRM has $190 million on hand. The addition of the $50.8 million will carry it through June, which is the end of the current fiscal year. If CIRM has additional financial needs, the treasurer's office will provide up to $75 million through the use of commercial paper, which CIRM would ultimately have to repay.

If the state sells more bonds in the first part of 2012, CIRM will receive an additional allotment that will carry it into the 2012-13 fiscal year. If no bond sales occur, the treasurer's office will provide an additional $150 million via commercial paper over a six-month period. Should CIRM need cash beyond that, the state would provide a loan in much the same way that former Gov. Arnold Schwarzenegger did during CIRM's early days. The chief advantage to the state is that the arrangement helps to avoid the issuance of more bonds this year with their ongoing interest costs. The financial arrangement is subject to a review every six months.

Thomas, who was nominated for his post by both Brown and state Treasurer Bill Lockyer, said the arrangement makes it clear that the California stem cell agency is one of the state's priorities. He said,

"We got everything we want."

We asked Thomas who came up with the idea for the use of commercial paper. He said he could not remember specifically but said it popped up during discussions with the state Department of Finance staff, himself and CIRM co-vice chair Art Torres, a former state legislator and former head of the state Democratic Party. Ultimately the plan was approved in a meeting with Thomas, Torres, CIRM's outside counsel James Harrison and state Finance Director Ana Matosantos.

CIRM's cash needs are increasing as it more aggressively pursues development of clinical therapies. Next spring it is slated to mount a $240 million grant round. The agency has roughly $1.4 billion left, but a good chunk of that will go for operational costs, which are currently $18.5 million a year and are likely to increase. CIRM has projected that it will run out of its bond funding in about 2017.

Gov. Jerry Brown on Borrowing to Finance Stem Cell Research

Here is what California Gov. Jerry Brown had to say yesterday about the $50.8 million in taxable bond proceeds that are going to the $3 billion California stem cell agency. It was a part of a press release touting the virtues of the financially troubled state's most recent borrowing.

Much of the language in Brown's statement appears to have originated with the stem cell agency, which campaigned with the Brown administration for a share of the bond proceeds.

The stem cell agency has not yet responded to our inquiries concerning the amount of money that was provided.

Brown's statement follows:

"CIRM’s approximately $190 million in existing proceeds, plus the additional $50 million, will be used to fund the following program activities:

"• The first Food and Drug Administration-approved clinical trial for a human embryonic stem cell therapy (for spinal cord injury). CIRM’s $25 million commitment to this project has been matched by a $29 million commitment of private funds.
"• 14 Disease Research Teams that are proceeding towards clinical trials of therapies to treat diseases ranging from HIV/AIDS to dry macular degeneration (a common cause of blindness) to neurological diseases such as ALS. One of these awards is a $20 million loan which has generated approximately $20 million in additional funds by the company receiving the CIRM award.
"• Training and internship awards to fund the training of almost 900 promising new scientists and technical staff at the University of California, California State University, California Community Colleges and other institutions in California.
"• CIRM-funded research and related matching funds are expected to create or retain approximately 5,000 jobs per year and more than $60 million in new state and local tax revenues.
"• The current portfolio of stem cell research at CIRM, including the grant programs scheduled through June 2012, have resulted in over 100 scientists and 1,000 other highly-trained researchers being recruited to the state. The Stanford Stem Cell Institute estimates that each of these researchers will bring an average of $1.5 million in research funding to California, for a total of $150 million of additional research funding and associated jobs."

Stem Cell Agency To Receive $50.8 Million in Additional Funding

The California stem cell agency, which was slated to run out of cash next June, will receive $50.8 million from yesterday's sale of state bonds, the state treasurer's office said today.

Under normal circumstances, the agency could be entitled to as much as $350 million annually in bond proceeds. We have queried CIRM concerning its perspective on the impact of this week's funding.

The state of California is in the midst of a severe budget crunch. In January, California is likely to be hit by a wave of automatic, severe budget cuts. They will be triggered if the revenue projections for the current fiscal year (2011-12) are not met. Currently the state is falling short of the projections.

The state is not scheduling any further bond sales this calendar year. It is unclear whether bond sales will resume in 2012. At the beginning of 2011, the state suspended bond sales because of budgetary concerns.

More on CIRM's Restriction of Info on Biotech Applicants

The California stem cell agency says its brief statement this week on restriction of information involving biotech companies was generated in an effort to offer a public explanation of its policy.

In response to a query about what led to the statement, Maria Bonneville, executive director of the CIRM board, said,

"In light of CIRM's efforts to work with companies to develop new therapies, we felt it was important to offer a public explanation regarding CIRM's efforts to balance its obligation to provide information to the public with the need to protect the proprietary information of applicants for therapy development projects."

The California Stem Cell Report will have more on this subject in the next week, including a discussion of how it relates to the state's constitution, which states that the public has as "broadly construed" right to information about state government activities.

California Stem Cell Agency on its Need to Advance Biotech Industry and Restrict Information

The California stem cell agency yesterday posted a 245-word statement justifying its efforts to protect what it calls the "confidential" information of business applicants seeking some of the state's $3 billion in research funds.

The statement appeared on the agenda for next Wednesday's CIRM board meeting under a section dealing with material to be presented by President Alan Trounson. The agency posted no explanation about what led to creation of the document or why it was needed. We have queried CIRM concerning the circumstances surrounding the statement.

In the document, CIRM said its aggressive push into therapy development and closer ties to the biotech industry presents "special challenges." The agency said it must "protect the companies’ proprietary information and their ability to obtain follow-on financing." CIRM also justified its position based on CIRM's need to "advance the biotech industry in California to world leadership."

Earlier this year, CIRM embarked on its first-ever involvement in a clinical trial – Geron's historic trial of an hESC therapy. The $25 million loan was handled in a unique and unusual manner that deviated sharply from other grant rounds. CIRM failed to provide a scientific score on Geron's application, which has been standard practice on more than 1,000 other applications, including other businesses. CIRM failed to provide the usual summary of grant reviewer comments that were also provided on all previous business and academic applicants. The three other applicants in the $50 million round all withdrew prior to presentation to the CIRM board – another first in CIRM's grant program. And no public explanation was provided at the time for the departures from long-established procedures used for more than 400 other approved grants and loans.

The California Stem Cell Report subsequently reported the score – 66 out of a possible 100 – which is a public record. The CSCR also wrote in August about the unusual procedures and the 16-1 vote for Geron funding.

CIRM director Joan Samuelson, a patient advocate who has pressed hard for development of therapies, cast the lone vote in May against the Geron application. She said the trial was not ready, and CIRM was not ready. According to the transcript of the meeting, Samuelson said,

"There were lots of -- this is based on the peer review and the comments by the scientist members of the Grants Working Group. There were many concerns that many of the scientist members felt should be satisfied before embarking on a clinical trial and they weren't."

In August, James Harrison, outside counsel to the CIRM board, also invoked the need to protect business information in the case of the Geron application. In many ways, the most recent statement appears to be a summary of Harrison's earlier remarks to the California Stem Cell Report.

Here is the full text of yesterday's statement from CIRM.

"CIRM has historically balanced its obligation to provide information to the public with its responsibility to protect the proprietary information of applicants. With applications for basic research, for example, CIRM has provided detailed information regarding the applications and the recommendation of the Grants Working Group. Applications for awards involving therapy development, however, present special challenges. In order to succeed in its mission to provide therapies and cures for the millions of patients who suffer from chronic disease and injury and to 'advance the biotech industry in California to world leadership, as an economic engine for California’s future,' it is critical that CIRM work closely with the biotech and pharmaceutical sectors.

"Engaging industry requires that CIRM assure the companies with which it works of CIRM’s capacity to protect the companies’ proprietary information and their ability to obtain follow-on financing. This is particularly true for companies involved in clinical research. At this stage of commercial product development, many things are proprietary (e.g., FDA communications, data, clinical plans, etc.); therefore, CIRM has a significant challenge and responsibility to protect the confidentiality of the companies’ submissions as any violation could have adverse consequences for the companies, including a material disclosure, particularly for those companies that are publicly traded. Consistent with this responsibility and its over-arching mission, CIRM has taken what we think are reasonable and rational steps to protect confidential information while providing the public with critical information regarding therapy development projects and the Grant Working Group’s recommendation."

California Stem Cell Agency Blogs on European Ban on hESC Patents

The California stem cell agency today posted a blog item on the European court decision outlawing patents on products created from human embryonic stem cells that basically painted a bleak picture for the field.

The item, written by Geoff Lomax, senior officer for CIRM's Standards Working Group, quoted James Lawford-Davies, a British lawyer, as saying the decision is regarded as "victory by those opposed to the use of embryos for research in the EU."

CIRM did not release a statement on the decision, but pointed to the Lomax item when asked for comment.

New Scientist magazine reported that the decision was based on section of law that banned patents "contrary to public order and morality." The magazine quoted British researcher Peter Coffey, who is moving to UC Santa Barbara assisted by a $4.9 million recruiting grant from CIRM.

Reporter Andy Coghlan wrote,

"'This is a devastating decision which will stop stem cell therapies used in medicine,' said Pete Coffey of University College London.

"Coffey said that the ruling would not jeopardise or delay planned trials of a tiny eye patch to prevent age-related macular degeneration that he helped develop using stem cells. But he said the ruling could jeopardise other treatments. 'This decision will be a major barrier to patients actually receiving these [types of] treatments,' he said. 'I've just won an international prize from the New York Stem Cell Foundation for translating stem-cell research into clinical practice, yet I now find that Europe, the continent in which I'm doing this research, is basically calling me immoral.'

"In a letter to Nature in April protesting at an earlier prior opinion from the court's advocate general, Yves Bot, Coffey and other researchers warned that a ban would drive research outside Europe and obstruct the development of treatments."

CIRM's blog item triggered two comments from readers, who discussed the impact on Advanced Cell Technology of Santa Monica, Ca., which has a technique that does not destroy embryos.

CIRM Improves Openness, Provides More Timely, Significant Information for Directors Meeting

For the second time in a row, the California stem cell agency is providing the public -- in a timely fashion -- with substantial background information on matters to be decided at an upcoming meeting of its board of directors.

The latest session comes next week (Oct. 26). Among other things, directors are scheduled to approve a $30 million, business-friendly financing program and two new grant rounds totalling $37 million.

For several years, CIRM has failed to provide the public and interested parties ample notice on major and minor proposed programs, effectively barring them from making thoughtful comments or suggestions. Directors also received information late and have sometimes complained in public. The latest agenda represents a marked improvement although information is currently lacking on what appear to be two significant items dealing with CIRM's strategic plan and beefed up PR efforts.

Next week's meeting also shows fewer major items on the agenda than those prepared by former Chairman Robert Klein, which allows more time for discussion of often far-reaching proposals. Additionally, the scaled-down agenda helps to avoid unseemly, late-meeting scrambling to maintain the super-quorum requirements needed for board action. In the past, directors have sometimes left hastily towards the end of meetings in order to catch flights home.

Jonathan Thomas, who was elected chairman in June, prepared a similar agenda for his first board meeting in August. At the end of the meeting, CIRM directors expressed delight at the way the proceedings were handled.

Director Claire Pomeroy, dean of the UC Davis medical school, said,

"I just wanted to congratulate and thank Jon Thomas for a great meeting. It was well organized. It was mission-critical, mission-focused and an impressive debut. So we're awfully glad you're here."

"I second that," said director Sherry Lansing, who is chair of the University of California regents and former head of a Hollywood studio, to applause from other directors.

At the meeting next week, directors will be asked to approve a $35 million proposal for another basic biology grant round. The proposal is aimed at fostering "cutting-edge research tackling significant, unresolved issues in human stem cell biology."

A CIRM staff document said,

"Studies should focus on elucidating basic molecular and cellular mechanisms and should utilize pluripotent stem cells, adult stem cells, and/or their differentiated derivatives."

A separate  $2.2 million "creativity awards" program would fund up to 10 high school students for three years for internships in stem cell research labs. The funding would go to institutions to operate the programs.

The $30 million business-oriented program is a response to findings last year by CIRM's external review panel that the organization needed to be more responsive to industry needs. The biotech industry has been less than happy for some time with its 7 percent share of the $1.3 billion that the agency has handed out so far.

Also coming before directors is a new communications plan, which is not yet available on the CIRM web site. The agency is in the process of hiring a public relations person to work in the chairman's office at a salary of up to $200,000. It has also hired the Sacramento political consulting and PR firm of Townsend Raimundo Besler and Usher to analyze its PR needs and to make recommendations.

Thomas told directors earlier this year that the agency was in a "communications war." In an interview a few weeks ago with the California Stem Cell Report, Thomas said one of his main goals is to generate more favorable media coverage of the agency, which is largely invisible to the public.

Some of the agency's PR expenses can be found on a list of outside contracts that is being presented to directors next week. The list is for the past fiscal year (ending June 30). At a total of $3.3 million, the contracts are the second largest item in CIRM's operational budget, following only salaries and benefits.

The communications plan and changes in the job description of the new PR person will also come before the directors' communications subcommittee one week from today.

Also not available on the CIRM web site are unspecified, proposed changes in CIRM's strategic plan, which could be linked to its push for tangible results that will aid in securing voter approval of more multibillion bond funding of the agency.

Next week's meeting will be at UC Irvine with remote locations where the public can participate in Pleasanton, Sacramento and La Jolla. The meeting will be audiocast on the Internet, but that service will not allow for public participation. More details on the audiocast and addresses of the remote locations can be found on the agenda.

Stem Cell Agency Slated for Share of California Bond Sale This Week

The California stem cell agency, which faces a cash crunch next spring, is scheduled to receive additional funding as the result of a $2 billion state bond sale this week.

The exact amount is not yet set. Tom Dresslar, a spokesman for state Treasurer Bill Lockyer, said,

"The amount will not be known until after the sale is completed on Wednesday."

The stem cell funds will come from the taxable bond portion of the sale, which totals $200 million. Individual investors can still participate in the bond sales today(see here).

Earlier this year, the state suspended bond sales, which are the only significant source of CIRM funding, because of the state's financial crisis. California has the lowest credit rating of any state in the nation. CIRM earlier said it had sufficient funds to operate until June of next year.

It is not clear whether the state will continue bond sales after the beginning of the year, when it will face more financial difficulties. Massive, automatic cuts are expected since the state is not meeting its current revenue projections.

As originally conceived by backers, Prop. 71, approved by voters in 2004, was to have ensured steady funding for stem cell research through the use of bonds, which flow directly to the agency – skipping the normal state budget process.

Reliance on bond funding, however, is expensive, effectively doubling the cost of CIRM research because of interest costs on the borrowed money.

IOM Update: Trounson's Absence Tomorrow Due to Prior Speaking Engagement

The president of the $3 billion California stem cell agency, Alan Trounson, is skipping the opening meeting tomorrow of a sweeping, blue-ribbon review of the research effort because of a prior speaking engagement.

In response to a question, Maria Bonneville, executive director of the CIRM board, said,

"Alan had already committed to speak at the Cerebal Palsy Prevention and
Cure Summit on October 19th when we learned of the first (Institute of Medicine) meeting date. However, the IOM plans to hold two meetings in California, so we expect that Alan will have another opportunity to meet with the IOM committee."

Three other CIRM executives will address the IOM review panel tomorrow in the first public meeting of its inquiry. CIRM is paying the IOM $700,000 to examine its operations to determine whether it is functioning at "peak performance."

IOM Begins 'Peak Performance' Review of California Stem Cell Agency

The $700,000, Institute of Medicine study of the California stem cell agency kicks off Wednesday with a two-day public meeting in Washington, D.C., but the IOM will deal with its conflict of interest concerns behind closed doors.

The blue-ribbon review is expected to play a key role in public perceptions of the $3 billion agency and whether California voters are likely to approve another multibillion bond measure for the unprecedented state effort.

According to the IOM,

"The principal objective of this review is to ensure that all aspects of CIRM's operations are functioning at peak performance."

Harold Shapiro, chairman of IOM
review panel -- Princeton photo

The study, which is funded by CIRM, will be conducted by a 13-member committee chaired by Harold Shapiro, a professor of economics and former president of Princeton University, that is supported by IOM staff. None of the members of the committee are from California.

The session on Wednesday will be devoted to briefings by three top CIRM officials and former CIRM chairman Robert Klein. He will provide a one-hour overview including the agency's funding model and management systems. Jonathan Thomas, the new chairman of CIRM, will provide a 15-minute "charge" to the committee.

Also briefing the panel will be Ellen Feigal, CIRM's senior vice president for research and development, and Elona Baum, general counsel and vice president for business development. Absent from the IOM meeting will be Alan Trounson, president of CIRM. The IOM said the CIRM witnesses were selected by the agency. We have queried CIRM about Trounson's absence.

No time has been allotted specifically on the IOM agenda for public comment.

The IOM report is expected to be released in November 2012 as major financing issues face CIRM. The agency is expected to run out of funds in about 2017, although it will have to scale back its multi-year grant programs sooner if it does not have a guaranteed stream of cash.

On Oct. 3, the California Stem Cell Report queried Adrienne Stith Butler, senior program officer for the study, concerning the meeting. She replied,

"As is typical for a first committee meeting, the committee will meet in closed session for its orientation and the bias and conflict of interest discussion. The sponsor will deliver the charge to the committee in open session. The open session agenda will be posted 10 days in advance of the meeting and a closed session summary (general topics discussed) will be posted within 10 days after the meeting."

We asked Stith Butler why bias and conflict of interest matters are being discussed privately and commented,

"One would think that openness and transparency are paramount in such issues."

She replied by citing a document that spelled out the IOM conflict of interest policy but which did not provide a justification for it. The policy says, in part,

"Access to such information within the institution will be limited to those offices whose proper business requires access to such information."

Our take? It is indeed the "proper business" of the people of California to be informed about bias and conflicts in connection with an investigation of an enterprise that is costing them $6 billion(including interest). Much of the conflict and bias discussion could easily be conducted in public without infringing on the privacy of panel members. Doing so would help to remove questions that are certain to be raised, particularly in the context of an electoral campaign.

It would behoove the panel to move to conduct its initial conflict and bias discussion in public and then go into a private session, if one is actually necessary. A lack of transparency will damage the study group's credibility, particularly in the context of a statewide electoral campaign for continued funding of CIRM's efforts.

In addition to Shapiro, the other members of the IOM committee are Terry Magnuson, vice dean of the medical school at the University of North Carolina; Richard Berhringer, professor at the University of Texas cancer center; Rebecca Eisenberg, professor of law at the University of Michigan; Insoo Hyun, associate professor of bioethics at Case Western Reserve medical school; Gary Koretzky, vice chair for research at the University of Pennsylvania department of medicine; Cato Laurencin, a professor at the University of Connecticut and CEO of the school's Institute for Clinical and Translational Science; Aaron Levine, assistant professor of public policy at Georgia Tech; Michael May, CEO of the Centre for Commercialization of Regenerative Medicine, hosted by the University of Toronto; Cheryl Moore, executive vice president of the Howard Hughes Medical Institute; David Scadden, co-director of the Harvard Stem Cells Institute, Allen Spiegel, dean of the college of medicine at Yeshiva University, and Sharon Terry, CEO of Genetic Alliance, a nonprofit health advocacy organization.

Coming Soon: Fresh Reports from the Stem Cell World

The California Stem Cell Report will be back online with more exciting installments in the next few days.

We have been occupied in the last week or so with air travel to Panama from the Old Country and making repairs to our sailboat/home here in the waters off the isthmus. Electrical power has been restored since we have installed a new voltage regulator and alternator.

Look for more thrilling stem cell tales soon.

Correction

The stem cell summit item earlier today incorrectly identified the writer of the Pasadena newspaper story. The reporter was actually Beige Luciano-Adams.

Stem Cell Confab Attracts Modest Media Attention

The World Stem Cell Summit generated light news coverage on the first day of its meeting in Pasadena, Ca., while the California stem cell agency posted on the Internet six videos filmed during the three-day conference.

Our search turned up only three news stories this morning on the meeting: One in the Pasadena Star News, one on the Chinese news agency Xinhua and one on radio station KPCC. The first two focused largely on efforts to turn research into cures.

Beige Luciano-Adams of the Pasadena paper wrote,

"Hundreds of pioneers and leaders in stem cell research are in Pasadena this week for the World Stem Cell Summit. They're discussing stem cell breakthroughs – and roadblocks."

She quoted Andy Grove, former CEO of Intel and now a patient advocate, as saying,

"'Today patents are used to keep products off the market. This is lethal. This is not what the founders of the (U.S.) patent office envisioned."

Xinhua wrote,

"How do you take the phenomenal scientific research going on in labs and translate it into medical treatments?' said Bernie Siegel, the founder and co-chair of the summit and executive director of the Genetic Policy Institute, which organized the event."

CIRM's communications manager, Amy Adams, posted six videos of interviews with attendees at the conference. One 2-minute, 30-second spot featured Jonathan Thomas, chairman of the California stem cell agency.

He said the single thing he hoped attendees would take away from the conference was the "grand scale of things we currently have in the pipeline." He said the agency has funded research on 26 different diseases. Overall, CIRM has given away $1.3 billion to 453 recipients since 2005.

More videos are likely to be posted in the next two days by CIRM, which has a booth at the meeting and provided $175,000 to support the conference, including funding to send as many 125 persons to the affair.

(Editor's note: An earlier version of this item carried an incorrect identification of the Pasadena Star News reporter.)