California Stem Cell Agency Cited for Improvements in Transparency

IRVINE, Ca. – The $3 billion California stem cell agency was praised this week for making progress in accountability and transparency during the last year.

The comments came from a representative of California state Controlller John Chiang, the state's top fiscal officer and who also chairs the only state entity specifically charged with financial oversight of the stem cell agency and its board.

Ruth Holton-Hodson, deputy state controller, told the blue-ribbon Institute of Medicine panel examining the performance of the stem cell agency that the controller's office "would like to acknowledge the progress the new leadership has made in the last year towards making CIRM a far more transparent and accountable agency than it has been in the past."

CIRM has a new chairman, J.T. Thomas, a Los Angeles financier, who has been in place since the beginning of last July. He succeeded Bob Klein, who was the initial agency chairman and who took office in 2004.

In her testimony at the IOM hearing here on Tuesday, Holton-Hodson discussed previous problems that CIRM had with the transparency of its budget. She said,

"We are very pleased that CIRM’s new leadership recognized this as a problem and quickly adopted a much more transparent budget format which is broken down by function. To make CIRM’s expenditures as transparent as possible, we have also recommended that they post the annual budget on the website. Again, we’re pleased to say that the new leadership has agreed to do this."

She also said,

"At our most recent meeting (of the Citizens Financial Accountability and Oversight Committee), we also recommended that CIRM post all of its private donations and they have agreed to do this."

Holton-Hodson criticized the dual executive arrangement at CIRM that is written into law by Proposition 71. She said,

"It is difficult to uphold the appearance of accountability and objectivity when the board chair has direct line authority over some CIRM staff positions. In essence under the current model, the chair is responsible for evaluating and approving some of the work of the chair.

"While this issue is still outstanding, it is important to acknowledge that the current leadership has made significant progress in more clearly delineating the responsibilities of the chair and the president."

Here is the full text of Holton-Hodson's remarks.Statement from California state controller's office to IOM-CIRM panel April 10, 2012

California Stem Cell Agency Nixes ACT Grant Applications 15 Times

(Editor's note: The assertion in this item that 15 applications by ACT were rejected by the California stem cell agency is incorrect, according to the venture capitalist who made the statement. He retracted it on the afternoon of April 12. His explanation can be found here. )


IRVINE, Ca. --The only firm in the nation conducting an ongoing hESC clinical trial has been rejected 15 times for funding by California's $3 billion stem cell agency.

The figure was reported yesterday at a hearing by the blue-ribbon Institute of Medicine panel looking into the performance of the stem cell agency, which has been sharply criticized in recent years for its paucity of industry funding.

Gregory Bonfiglio, managing partner in Proteus Regenerative Medicine, a stem cell venture capital firm in Portola Valley, Ca., disclosed the grant attempts by Advanced Cell Technology, whose nominal headquarters are in Santa Monica, Ca. Bonfiglio indicated that it was a high profile example of how CIRM is not taking the necessary steps to fulfill its goal of developing therapies that actually reach the clinic.

He noted that ACT received national attention in January when it posted favorable findings for its clinical trial at UCLA dealing with blindness but that the firm was still unable to win a CIRM grant over the last several years.

ACT had moved much of its operations to California in the wake of passage of Proposition 71, the measure that created the state's stem cell research effort in 2004. It has since re-centered its operations in Massachusetts.

The California Stem Cell Report has queried ACT on its grant efforts and will carry its response verbatim when it is received.

Another firm, which cannot be identified, said privately yesterday that it was rejected 14 times.

According to our calculations based on figures this morning on the CIRM web site, businesses have received only $54.3 million in grants and loans during the last seven years, 4 percent of the $1.3 billion awarded. However, the CIRM list slightly understates the industry total. At least two other firms are sharing in two $20 million grants involving academic institutions, but are not noted on the list.

Yesterday's IOM meeting was the second and final California public session for the CIRM inquiry. Most of the day was occupied by a variety of critiques of the organization. The panel has already heard extensively from the agency itself and beneficiaries of its grants. The IOM report is expected in November.

Harold Shapiro, chairman of the panel and former president of Princeton University, described yesterday afternoon's panel involving stem cell business executives as "one of the more interesting" of the day.

One of the speakers was Michael West, CEO of Biotime in Alameda, which has received $4.7 million from CIRM. West, the founder of Geron, was also head of ACT when it moved it to California. He said CIRM had several "blind spots," including misconceptions about how products are made. For example, West said, CIRM's performance indicates that it does not fully understand that development leads directly to cures -- not research.

West said that if the high tech industry had to rely on CIRM-type funding years ago, laptops and iPads would still be in the lab instead of the marketplace.

The business industry representatives said that creation of CIRM has been beneficial for stem cell  research, but cited a number of deficiencies in connection with industry applications.

In some ways, their comments echoed past remarks by several CIRM board members, who have expressed concern about the lack of funding for industry, as well as those of the agency's own external review panel. One issue raised by those CIRM directors has been the lack of grant reviewers with product development and industry expertise.

At yesterday's hearing, Gabriel Nistor, vice president of research and development at California Stem Cell in Irvine, said, it is "exceedingly rare to find academics (grant reviewers) that understand the complexities" involving industry. Nistor said his firm has applied for a "few" CIRM grants. None have been awarded.

Also speaking was Allan Robins, CEO of Viacyte in San Diego, who said his firm has done well with CIRM funding. It has received $26.2 million, nearly all of it in the form of a loan. But he said companies develop products – not academia.

Center for Genetics and Society: 'Wrong' to Ask for More Billions for Stem Cell Agency

IRVINE, Ca. – The Center for Genetics and Society today said it would "wrong" to ask the people of California for more money to continue financing stem cell research at state expense.

Marcy Darnovsky, associate executive director of the Berkeley, Ca., non-profit group, addressed a blue-ribbon Institute of Medicine panel evaluating the performance of the $3 billion California stem cell agency, which is financed by money borrowed by the state. The agency is expected to run out of cash in about five years.

Darnovsky said,

"In structural terms, a key question now is what will happen after CIRM’s public funding is exhausted. According to CIRM’s transition plan, another bond measure for additional public funding 'would be premature at this time,' but is still on the table. In our view, any additional public monies for CIRM would have to be justified in an analysis that emphasized health care priorities and health care disparities. While there is always tension between the allocation of public funds to scientific research and to other public goods, given our state’s economic decline and budgetary crisis, with so many critical social programs being gutted, we believe it would be simply wrong to ask Californians to set aside more money for one avenue of research, however important."

Representatives of the stem cell agency were present at today's hearing on the UC Irvine campus, but did not speak publicly at today's session. CIRM officials, however, have testified before the panel on two other days of public hearings. The agency is paying the IOM $700,000 to conduct the study. Its results and recommendations are expected to be published in November.

Darnovsky and others testifying at the morning session were critical of the agency's lack of accountability, built-in conflicts of interest and immunity from normal government oversight (see here and here).

Darnovsky said, "

The requirement for 70% super-majorities (to change the law regarding CIRM) means that there is still no meaningful oversight of CIRM by elected officials. The ICOC is still tainted by its built-in conflicts of interest. It still includes no representation of the public beyond disease advocates. Members of CIRM’s powerful Working Groups, including the one that reviews grant applications, are still not required to publicly disclose their individual financial interests.

"Given that hundreds of millions of dollars remain to be disbursed, and the widely mooted possibility that CIRM will develop a role that continues beyond the public funding stream that was allocated in 2004, now is the time to clarify and address these issues."

Here is the full text of Darnovsky's comments.
Center for Genetics and Society statement to IOM-CIRM panel, April 10 2012

The Search for Stem Cell Cures: Can California's $3 Billion Agency Move Audaciously?

IRVINE, Ca.-- California's unprecedented stem cell research effort faces a tight timetable for making major progress in fulfilling promises to voters seven years ago, complicated by potential conflicts of interest, a blue-ribbon panel was told this morning.

David Jensen, editor of the California Stem Cell Report, made the comments to the Institute of Medicine panel looking into the performance of the $3 billion California Institute of Regenerative Medicine.

The panel's inquiry comes as the agency is re-evaluating its strategies as it faces loss of funding in about 2017.

Here is the full text of Jensen's statement.
Statement to IOM-CIRM Panel by California Stem Cell Report April 9, 2012


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Consumer Watchdog Says 'Serious Consideration' Needed on Continued Cash for State Stem Cell Agency

IRVINE, Ca. – The Consumer Watchdog organization says that serious consideration should be given to whether the state should halt borrowing money to finance the $3 billion California stem cell agency.

The statement was prepared for delivery tomorrow here to a blue-ribbon Institute of Medicine panel evaluating the performance of the research effort, which was created by a ballot initiative in 2004. The agency's only real source of cash is bonds issued by the state, which means the agency will cost $6 billion including interest by end of its grant-making life in about 2017.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said that the political and scientific environment has changed substantially since 2004. The Bush Administration had restricted federal funding of hESC research then, causing an uproar in the scientific community. Funding has since been restored.

Simpson said the stem cell measure "made sense" seven years ago. He said the stem cell agency and its governing board "must recognize that the political, scientific and economic environment have dramatically altered since the passage of Proposition 71."

His statement continued,

"It is also appropriate to consider seriously whether issuing all $3 billion in authorized bonds is the correct policy in light of the new environment and economic realties facing the state."

Simpson was invited make his statement to the IOM panel, which is midway through its public process of looking into CIRM's operations. It is doing so at the behest of CIRM, which is paying the prestigious organization $700,000 to perform the work.

Simpson also made a number of recommendations for changes at CIRM, many of which would require a change in state law or passage of another ballot measure. Proposition 71, which created CIRM and altered the state Constitution, requires a super, super-majority vote (70 percent) by the legislature to make changes at CIRM.

The Consumer Watchdog proposals (full text below) include reducing the size of the 29-member board to 15, including public members on the board, reducing the super-majority requirement on board quorums to a majority, eliminating the controversial dual executive arrangement at CIRM, conducting grant reviews in public and publicly disclosing the financial interests of reviewers.Consumer Watchdog Statement to IOM-CIRM Panel April 9, 2012

IOM Performance Review of California Stem Cell Agency Expands Its Reach

A blue-ribbon Institute of Medicine panel is broadening its reach in its examination of the performance of the $3 billion California stem cell agency.

The group will hold a one-day public hearing next Tuesday at UC Irvine that will include independent perspectives along with comments from biotech firms, some of which have been unhappy with the paucity of CIRM funding for industry. The IOM has additionally expanded its efforts to generate responses to its questionnaires to include rejected applicants and the general public.

The hearing is the last public session scheduled in California and will be audiocast on the Internet. The IOM's fourth and final public session is scheduled for some time later this year with release of the full report in November. The stem cell agency is paying the IOM $700,000 to conduct the study. The public sessions so far have been taken up with testimony from recipients of CIRM largesse or from employees or directors of the agency.

The list of independent witnesses next week includes Stuart Drown, executive director of the state's good government agency, the Little Hoover Commission, which conducted a lengthy study of the stem cell agency. Also on tap are others including:

• Ruth Holton-Hodson, California deputy state controller, and who deals with CIRM issues for the state controller, who chairs the only state body officially charged with overseeing the agency.
• Marcy Darnovsky, associate executive director of the Center for Genetics and Society in Berkeley, an organization that has been critical of CIRM
• David Jensen, publisher of the California Stem Cell Report, which has posted more than 3,000 items on the agency since 2004 in addition to a number of freelance articles. 

The IOM has widened its efforts to secure comments from persons who cannot appear at its hearings. At the IOM's request, CIRM sent emails about the questionnaires to the 4,039 persons who have asked the agency to be notified about its RFAs. Recipients were asked by CIRM to complete the IOM surveys.

The online forms are due by April 23. Here are links in the various categories:  general public, CIRM investigators,CIRM industry partners, leadership from CIRM-funded institutions, technology transfer professionals,CIRM's international collaborators, members of the Independent Citizens' Oversight Committee (the CIRM governing board), and investigators not funded by CIRM.

The IOM said access to the Internet audiocast of the meeting can be gained on April 10 through this web page.

Engineering Stem Cells on the Ballot: Chuck Winner and the California Stem Cell Agency

Chuck Winner is a name that doesn't surface often in connection with California's $3 billion stem cell research effort.

Chuck Winner (left) at USC in 2006
USC Photo

In fact, he rarely appears in the news. Winner's name, however, did surface yesterday when Gov. Jerry Brown appointed him to the state's horse racing board. Most of the stories about the appointment were in horse racing publications. But none, including The Sacramento Bee's, mentioned the Prop. 71 campaign managed by his firm, Winner & Mandabach Campaigns of Santa Monica, Ca.

Nonetheless, he and his firm were the key to winning approval of the 2004 ballot measure that created the California Institute of Regenerative Medicine, an enterprise that is unprecedented in state or national history.

The firm's $35 million campaign for Prop. 71 attracted 59 percent of the vote. That same year, the firm also successfully managed four other ballot measures in the Golden State. Its lifetime average is remarkable. The firm's web site says it has won 90 percent of the 150 ballot measure campaigns it has run throughout the country.

Winner-Mandabach has this to say about how it pulled off the Prop. 71 campaign:

"Surveys (in 2003-04) showed that most voters supported the basic concept of expanding stem cell research. However, because of the state’s serious budget and debt problems, it was also clear that passing such a huge bond measure for any purpose would be a major challenge.

"The campaign overseen by Winner & Mandabach to overcome those odds involved a year-long coalition building effort that ultimately recruited over 40 Nobel Prize winning scientists and more than 100 patient groups, disease foundations and business groups – the largest, most diverse coalition of its kind ever formed to support a state ballot measure. The supporting groups helped mount an intense grassroots outreach and activation effort to their members, who numbered in the millions."

Winner-Mandabach continued,

"The TV advertising developed by the firm featured award-winning scientists, patients and their families, and highly-respected patient advocates like Michael J. Fox and the late Christopher Reeve. The ads focused on the potential for cures that could save millions of lives. Details of the initiative and economic issues were addressed through in-depth mail pieces and earned media efforts that included the release of an economic study showing that stem cell cures would help reduce the state’s skyrocketing health care costs. Prior to the implementation of the paid media campaign in late-September, polling showed Proposition 71 below the 50% threshold. But after an intense 6-week advertising, earned media and grassroots campaign, Prop. 71 steadily gained support, even in the face of final attacks by conservative groups and activists like Mel Gibson, and attacks from the left by some anti-biotech groups. Because of its precedent-setting nature, the Prop. 71 campaign became the most watched ballot measure campaign in the nation and generated worldwide press attention. On election day, it was approved overwhelmingly by a vote of 59% to 41%."

The key to success on any ballot measure is a firm like Winner-Mandabach, although high profile individuals – in the case of Prop. 71, Robert Klein, who became the first chairman of the stem cell agency – are often given complete credit. Top notch campaign firms have a keen understanding of voters, appropriate political timing and effective PR and TV advertising campaigns. Without Winner-Mandabach – or a firm with the same skillset – the California stem cell agency would not exist.

Chuck Winner, however, does not have an uncritical view of the ballot initiative process, which has resulted in much expensive mischief in California. He told a USC audience in 2006,

"It’s abused time and again. My opinion is that when you circumvent the legislative process or representative democracy to solve a problem, you can take it to an extreme and that extreme becomes, in some ways, worse than the problem you were trying to solve in the first place. Single-issue up or down initiative votes are very often not the best way to govern."

As for the horse racing business, Winner, a Beverly Hills resident, has been involved in horse racing since 1986. His partner, Paul Mandabach, is also involved in the sport of kings. Their firm has not disclosed their record at the track.

(Click here to see two powerful ads developed for the 2004 campaign, including the famous Christopher Reeve spot.)

CIRM Budget Moves Forward Despite Objections About Legal Costs

SAN FRANCISCO – A proposed $17.9 million operational budget for the California stem cell agency has cleared a key hurdle despite objections concerning the addition of another attorney to its $2.4 million annual legal effort.

The spending plan was approved yesterday by the CIRM directors' Finance Subcommittee on an 8-0 vote. The proposal is 7.2 percent higher than spending for the current fiscal year, which ends in June. The agency by law operates with a stringent budget cap of 6 percent of its bond funding.

Most of the budget goes for salaries at the agency, which has slightly more than 50 employees. The agency spends $8.4 million annually administering its 400-plus grants and developing new grant programs.

The proposal to add another lawyer to its staff drew fire from CIRM Co-vice chairman Art Torres. He asked why the agency wanted to spend more money for "a lawyer we don't need."

CIRM President Alan Trounson and CIRM General Counsel Elona Baum defended the plan, saying another lawyer was needed to deal with intellectual property and research commercialization issues. They said that grantee institutions and businesses are not dealing with the legal ramifications in a satisfactory manner.

Trounson said the agency would be "at risk" if it did not have control of the legal issues.

Torres brought up a memo on the subject, which he said did not justify the addition of a lawyer. Other directors said they had not seen the memo and asked for copies. The California Stem Cell Report has also asked for a copy.

Michael Goldberg, a venture capitalist and chair of the Finance Subcommittee, asked CIRM staff and a handful of directors to resolve the matter between now and the end of May, when the budget is expected to be approved by the full board.

Currently CIRM has five attorneys on staff, not including directors who are lawyers. The budget for the internal legal operation is $1.3 million annually. The rest of the $2.4 million goes for contracted services, including the firm of Remcho, Johansen & Purcell of San Leandro, Ca., a highly regarded political and governmentally oriented law firm that is budgeted for as much as $650,000 for the coming year, down from $695,000 this year. Another attorney is also on contract for $250,000, down from $325,000 this year.

CIRM budget documents projected savings in $190,000 in legal costs from the current year that could be used to help hire another attorney. The total legal costs for next year are budgeted at $2.44 million, compared to $2.39 million for the current year.

Front Page Coverage of CIRM-backed Research

SAN FRANCISCO -- The California stem cell agency scored during the weekend in a front page story in the San Francisco Chronicle that heralded a possible cancer treatment involving a "don't-eat-me-molecule."

The piece by Victoria Colliver said,

"In a potential breakthrough for cancer research, Stanford immunologists discovered they can shrink or even get rid of a wide range of human cancers by treating them with a single antibody."

The story was played prominently on the Chronicle front page on Saturday. However, the stem cell agency and its funding role was not mentioned until the last paragraph of the story. Nonetheless, on Saturday night, the Chronicle website reported that it was the most read and most emailed story on its site at that time.

When we looked at the story that evening, the article had 84 comments from readers, including several which praised the agency for its work. One reader noted, however, that other funding agencies were involved besides the California stem cell agency. The reader quoted from the Stanford press release, which said,

"This work was supported by the Joseph & Laurie Lacob Gynecologic/Ovarian Cancer Fund, the Jim & Carolyn Pride Fund, the Virginia & D.K. Ludwig Fund for Cancer Research, the Weston Havens Foundation, the National Cancer Institute, the Department of Defense, the California Institute for Regenerative Medicine and anonymous donors."

Stanford's news release said,

"It is the first antibody treatment shown to be broadly effective against a variety of human solid tumors, and the dramatic response — including some overt cures in the laboratory animals — has the investigators eager to begin phase-1 and –2 human clinical trials within the next two years."

The Los Angeles Times also carried a story last week on the research, but did not mention CIRM. The agency itself wrote about the research on its blog.

CIRM Chairman J.T. Thomas and other CIRM directors have been concerned about the lack of coverage in the mainstream media – particularly favorable coverage – of the agency's work. When this writer was at a meeting yesterday afternoon at CIRM headquarters in San Francisco, Thomas pointedly presented a copy of the Chronicle front page, suggesting the article was worthy of note. Thomas is correct; the piece can certainly be counted as a favorable mention of the $3 billion research effort. Now it is up to CIRM and its new communications director, Kevin McCormack, who began work on Monday, to multiply the Chronicle piece many times over.

Trounson on Cancellation of Vatican Appearance: 'I Am Disappointed'

The California stem cell agency has issued a statement from its president, Alan Trounson, concerning the cancellation of a Vatican stem cell conference at which Trounson was scheduled to speak.

According to the Catholic News Agency, the meeting was terminated because of the scheduled appearances of researchers such as Trounson, who support hESC research. The Catholic church opposes such research.

The news agency last week quoted one Vatican insider as saying the conference had generated a scandal within the higher echelons of the church. However, the Vatican later claimed it was cancelling the meeting because of "organizational, logistical and economic factors."

Trounson's statement said,

"I am disappointed that the decision was made to cancel the conference because it offered the opportunity for a constructive dialogue on all types of stem cell research.

"Open dialogue can enhance the field as a whole and accelerate our efforts to provide new therapies for patients in need."

Stem Cell Agency Budget Up for Review on Monday: 7 Percent Increase Proposed

The proposed $17.8 million operational budget for the California stem cell agency will receive more public scrutiny at a meeting next week in San Francisco, with additional public participation sites ranging from Boston to La Jolla.

The spending plan for 2012-13 is 7.2 percent higher than the estimated expenditures for the current year. By law, CIRM's budget is not subject to cuts by the legislature or the governor, who are trying to find solutions to the state's ongoing financial crisis.

Next week's hearing will be the last before approval of the budget in late May by the directors of the $3 billion research program. No significant changes are expected from the document to be presented on Monday.

Public sites where the public can participate in the CIRM directors' Finance Subcommittee meeting include South San Francisco, Stanford, Berkeley and Boston. You can find more information about the specific locations on the meeting agenda, but if you are interested in attending you need even more details from CIRM prior to the actual meeting. Email a request to info@cirm.ca.gov.

Correction

The budget item on March 20, 2012, incorrectly stated that the stem cell agency's rent costs would rise to $1 million beginning in 2016. In fact, the increase will begin in November 2015. CIRM has revised the start date.

'Scandal' in Vatican Over Stem Cell Conference: Appearances by Trounson and Others Cancelled

The Vatican has cancelled a controversial scientific conference that would have featured scientists, including the president of the California stem cell agency, who support human embryonic stem cell research.

The conference reportedly created a "scandal" in the Vatican, according to a report by David Kerr of the Catholic News Agency. Kerr wrote,

"'I am infinitely relieved that the Church has avoided a major blunder which would have confused the faithful for decades to come,'” said one member of the Pontifical Academy who asked for anonymity in commenting to (the Catholic News Agency)."

The Catholic church opposes hESC research because of its belief that it destroys human life.

The conference would have taken place at the Vatican April 25-28 and included an audience with the pope. In addition to an appearance by CIRM's Alan Trounson, the key lecture was scheduled to have been given by George Daley of Harvard.

Kerr quoted the member of the Vactican's Pontifical Academy for Life as saying,

"The Holy Spirit has certainly shown to be present through those faithful members who drew attention to the ambiguity of the choice of speakers. I hope and pray that a review will be affected of the basis on which these congresses are planned."

Kerr also quoted another anonymous member of the academy as saying that the presence of speakers such as Trounson and Daley was "a betrayal of the mission of the academy and a public scandal."

CIRM Directors Mulling Changes in Funding Direction

The California Stem Cell Report is concluding its coverage today of the meeting of the governing board of the directors meeting of the California stem cell agency.

No decisions were made on the general direction of future funding -- basic research and training vs development of therapies. Some of the directors differed sharply on the issues, however. We will have more on this subject later.

Here are slides from the presentation on the progress report on the agency's $230 million disease team round. One $19 million grant was cancelled.
Progress Report: Disease Team Grants by California Stem Cell Agency

Stem Cell Scientist Impressed by CIRM Oversight Over Huge Grants

A California stem cell researcher, who must remain anonymous, made the following emailed comment today on the progress report on the $230 million in disease team grants from the California stem cell agency and termination of a $19 million grant.

"I'm impressed that CIRM is following through on monitoring the huge disease team grants and has actually curtailed the funding of one that didn't meet a key milestone. I hope that makes the other grant holders nervous! Too many scientists (in my humble opinion) forget that they need to do what they said they'd do- or - if the first plan fails, have the expertise and desire to adapt and find another way to reach the goals."

More Discussion Upcoming of CIRM Spending Plans

TThe board of the California stem cell agency is now at lunch and will resume its meeting at about 1 p.m. PDT with more discussion of its spending plans and priorities for the next five years.

Future Spending Plans of California Stem Cell Agency Coming Up

The governing board of the $3 billion California stem cell agency is expected momentarily to discuss its plans for spending its remaining $800 million.

Key issues involve shifting funds away from basic research to research more oriented towards more directly producing therapies.

The meeting can be heard on the Internet by following the directions on the agenda.

CIRM Hires New PR Chief

The $3 billion California stem cell agency announced today that it has hired Kevin McCormack, currently media relations manager at California Pacific Medical Center in San Francisco, as its new director of communications.

CIRM Chairman Jonathan Thomas told the agency's directors at their meeting this morning in Sacramento that the appointment comes "not a moment too soon." Thomas told directors last June that the agency was engaged in a "communications war." Directors have been concerned about the lack of media coverage of the agency, which is largely below the radar of the mainstream media.

Thomas said that McCormack has "lots of experience" in media crisis management and "pressure cooker situations."

McCormack also served as media relations manager, Division of Research at Kaiser Permanente, and was a health/medical producer at KRON-TV in San Francisco.

The agency did not immediately release McCormack's salary. He will begin work April 2.

California Stem Cell Agency Pulls $19 Million Grant

The California stem cell agency has terminated a $19 million grant to a UC San Francisco researcher involved in the agency's ambitious attempts to push stem cell therapies into clinics.

The agency said the research effort led by Mitchel Berger, chairman of the department of neurological surgery at UCSF, "did not meet a go/no-go milestone" stipulated in the grant. His research was funded in 2010 to treat brain tumors with genetically modified neural brain cells. No further explanation for the termination was provided by CIRM in a report prepared for tomorrow's meeting of the CIRM governing board. The agency estimated the cancellation would save $13 million.

The California Stem Cell Report has asked Berger and his co-PIs for comment on the CIRM action. The other researchers are Evan Snyder of Sanford-Burnham and Webster Cavanee of the Ludwig Cancer Institute. Their remarks will be carried verbatim when they are received.

The CIRM action was disclosed in the progress report on the $230 million disease team effort launched by the agency in 2009. The amount climbed to more than $250 million with contributions from partnering countries. Three of the 14 funded applicants – Irv Weissman and Gary Steinberg, both of Stanford, and Karen Aboody of the City of Hope – were approved only after they appealed to the CIRM board to overturn rejections by grant reviewers. (See  here , here and here for their written appeals. See here and here for coverage of the 2009 board action.)

One other disease team grant was modified to limit its scope and revise its funding. No savings were announced by CIRM. The PI on the $20 million project is Dennis Carson of UC San Diego. Co-PIs are Catriona Jamieson, also of UC San Diego, and John Dick of the University Health Network of Canada. The research is aimed at leukemia.

The actions on the disease team grants were not entirely unexpected. From their inception, CIRM directors have been told not to expect all the grants to finish successfully.

Ellen Feigal, senior vice president for research and development at CIRM, prepared the 19-page update on the disease team efforts. The grants are aimed at generating an investigational new drug application with the FDA within the four-year term of the grant.

She said that the funding decisions were made following evaluation of the projects by panels of clinical development advisors. Their recommendations were then considered by CIRM staff.

Feigal's report laid out accomplishments of the research so far and discussed changes in direction.

She said two companies have been formed since the grants were awarded to commercialize the hoped-for products. She said that in June 2011 Aboody founded TheraBiologics Inc., Newport Beach, Ca., of which she is chief scientific officer and director. Another company, Regenerative Patch Technologies, Glendale, Ca., was created by the team working on an hESC treatment for age-related macular degeneration. That $16 million grant involves Mark Humayan and David Hinton of USC, Dennis Clegg of UC Santa Barbara and Peter Coffey, formerly with University College, London, but now at UC Santa Barbara. The effort has generated seven patent filings.

The Feigal update also discussed the efforts of companies involved in other disease team grants. The lack of CIRM funding for biotech firms has been a bone of contention with industry and troublesome for some CIRM directors.

CIRM indicated the projects involving the firms were moving on schedule with no major difficulties reported. The companies involved are ViaCyte of San Diego, Calimmune of Tucson, Az., and Sangamo Inc. of Richmond, Ca.

Stem Cell Agency Proposes 7 Percent Budget Hike, Seeks $50 Million in Private Funds

The California stem cell agency is proposing an operational budget of $17.8 million for the coming fiscal year, an increase of 7.2 percent over estimated spending for the current year ending June 30.

Financial documents (proposed budget and finance report) prepared for tomorrow's CIRM governing board meeting also showed that CIRM hopes to snag "$50 million in new, outside financial commitment for CIRM programs." This would represent the first major effort in recent years by CIRM to solicit private funds. The "draft goal" is in keeping with the agency's move to build a base of non-governmental funding.

Currently it is financed with cash that the state, which is mired in a financial crisis, must borrow. While CIRM's budget is increasing, the general fund budget for the entire state has plummeted from $103 billion in 2007-2008 to $87 billion this year.

The proposed CIRM budget also disclosed the agency will be facing substantial new costs – $1 million annually – for rent beginning in November 2015. CIRM has been operating rent-free since 2005 because of an $18 million recruitment package put together by the city of San Francisco.

The largest item in the proposed budget is salaries and benefits at $11 million, up from a projected $9.3 million for this year. The agency, which is administering $1.3 billion in grants involving hundreds of researchers, projects an increase in staff to 59. The agency currently has 51 employees, according to the finance report.

Outside contracts are the second largest expense at $3.4 million ($3 million this year) with grant reviews, meetings and workshops at $2.2 million(no comparable figure for this year).

By law, the stem cell agency operates under a budget cap of 6 percent of bond proceeds under the terms of Proposition 71, the ballot initiative that created CIRM.

In addition to tomorrow's review, the budget will be examined by the directors Finance Subcommittee April 2 before coming back for final approval in late May.

(Editor's note: An earlier version of this item incorrectly stated that the rent costs would rise to $1 million beginning in 2016. In fact, the increase will begin in November 2015. CIRM has revised the start date.)

Correction

The "coverage" item yesterday incorrectly said the CIRM governing board meeting would be today. In fact, the session is tomorrow in Sacramento.

The AP on the California Stem Cell Agency: No Cures, Hazy Future

The Associated Press news service, whose reports circulate worldwide, has taken the measure of the $3 billion California stem cell agency, declaring that it has produced no cures and that it "faces an uncertain future."

The piece by science writer Alicia Chang asked whether the agency is "still relevant" nearly eight years after it was created by California voters and whether it will exist after the money for new grants runs out in about five years.

She wrote,

"Midway through its mission, with several high-tech labs constructed, but little to show on the medicine front beyond basic research, the California Institute for Regenerative Medicine faces an uncertain future."

Chang's piece carries more weight than those in most publications. The AP is the backbone of news coverage in the United States. Its news feeds appear automatically on hundreds, perhaps thousands of web sites in this country. Her article will also serve as a baseline in the future as other reporters examine the stem cell agency.

Here are excerpts from the piece:

"So what have Californians received for their money so far?

"The most visible investment is the opening of sleek buildings and gleaming labs at a dozen private and public universities built with matching funds. Two years ago, Stanford University unveiled the nation's largest space dedicated to stem cell research - 200,000 square feet that can hold 550 researchers.

"There are no cures yet in the pipeline and CIRM has shifted focus, channeling money to projects with the most promise of yielding near-term results."

Chang wrote,

"Several camps that support stem cell research think taxpayers should not pay another cent given the state's budget woes.

"'It would be so wrong to ask Californians to pony up more money,' said Marcy Darnovsky of the Center for Genetics and Society, a pro-stem cell research group that opposed Proposition 71, the state ballot initiative that formed CIRM."

The article quoted UC Davis stem cell researcher Paul Knoepfler as favoring another bond measure to keep CIRM afloat, although he said he recognizes the average Californian may disagree.

Roger Noll, professor emeritus of economics at Stanford, was quoted as saying that "CIRM's legacy has yet to be written."

"'CIRM spent a lot of money and there's a lot of stuff going on, but it's too early to know whether it was worth it,' Noll said."

Chang concluded with these four paragraphs:

"David Jensen, who runs the blog California Stem Cell Report, said Californians have benefited, but whether it will be worth the $6 billion the state has to pay back remains unclear.

"'The agency's responsibility is now to get the biggest bang for the buck, which is no easy task given the tentative nature of much of the science involved,'" he said in an email.

"Some think CIRM has left a mark whether or not it will exist in the future.

Its 'legacy will be felt in part by the stimulus that it has had on stem cell' research in California, said Fred Gage of the Salk Institute for Biological Studies."

Coverage of Wednesday's Stem Cell Board Meeting

The California Stem Cell Report has found its cyberspace connection again on Isla Taboga about 10 miles offshore of Panama City. We expect to bring you live coverage via an Internet audiocast of Wednesday's meeting of the board of the California stem cell agency. The directors are scheduled to discuss a progress report on the agency's ambitious, $250 million disease team program and the termination of one grant. Directors are also expected to consider the agency's proposed budget for the coming year, its plans for its next few years of life and its plans to give away $3 million for stem cell programs for high school students. The meeting begins at 9 a.m. PDT.






http://www.cirm.ca.gov/summaries-review-applications-rfa-11-04-cirm-creativity-awards

Researcher Alert: California Stem Cell Agency To Alter How It Administers Grants

Stem cell researchers and institutions throughout the state are likely to be affected by proposed changes – to be discussed online publicly Tuesday – dealing with how the California stem cell agency will handle its $3 billion in grants.

An important online session – open to all interested parties – comes up then, but advance registration is required.

The proposals are wide-ranging and detailed. The nearly 500 recipients of CIRM grants should examine them closely in addition to any persons seriously interested in California stem cell affairs. The changes deal with such subjects as milestones for research grants, indirect costs, travel costs, withholding payments for failure to file a progress report and much, much more.

Here is a link to the main page for all this, which has instructions on how to register for the online session along with links to the changes and their rationale.

(Editor's note: This item was filed from the Rio Sabana in the Darien in Panama when we found a weak Internet cellular link. We are still underway so postings are unlikely between now and later this month.)

CSCR On Hold Until March 20 or Thereabouts

The California Stem Cell Report will go dark until late this month. This blogger will be off sailing the Perlas Islands south of Panama and the Congo River in the Darien.

Conflict of Interest: California Stem Cell Agency Releases More Documents in Sladek Violation

The California stem cell agency today released its letter to leaders of the California legislature concerning the conflict of interest violation by the scientist who was then chairman of the panel that makes the de facto decisions on hundreds of millions of dollars in research grants.

The agency also posted the review summary of the application involved in the conflict of interest, which had been missing from its web site.

The incident occurred last April, but was not publicly disclosed by the $3 billion research enterprise until questions were raised this month by the California Stem Cell Report. The case involved John Sladek of the University of Colorado in Denver, then chairman of the CIRM grant review group, which makes decisions on the hundreds of grant applications. The CIRM board of directors has final approval but it almost never overturns a favorable recommendation from the grant panel.

Sladek resigned from the review group after CIRM staff discovered the conflict following the March 17 review session. CIRM called it a "technical violation."

The information provided today by CIRM added some details to the matter, including Sladek's statement that the conflict was inadvertent on his part.

The June 15 letter to the speaker of the state Assembly and the leader of the state Senate was labelled "confidential disclosure." Signed by then CIRM Chairman Robert Klein, it said,

"While preparing the public summary for Basic Biology III Awards Application No. RB3-02119, CIRM staff discovered that Dr. Sladek had co-authored two papers in the last three years with a researcher on the application. Although the researcher’s name was included on the CIRM conflict of interest form, Dr. Sladek did not disclose these publications to CIRM."

As reported earlier, Sladek's participation did not affect the outcome on the application, which was not recommended for funding.

As is CIRM's practice, the review summary of the grant application did not identify the scientist seeking funding. The summary listed one reviewer with an unspecified conflict, Ali Brivanlou of Rockefeller University.

The letter was provided by CIRM at the request of the California Stem Cell Report, which also asked for the review summary of the grant application after discovering it was missing. James Harrison, outside counsel to the agency, said in an email that the summary was not posted because of a "programming error."

The summary can be found here. Here is the letter.Sladek/CIRM Conflict of Interest Letter to California Legislative Leadership

Conflict of Interest: Chair of California Stem Cell Agency Grant Review Group Resigns

A conflict of interest on a grant application before the $3 billion California stem cell agency last year led to the resignation of the grant review committee's longstanding chairman, John Sladek of the University of Colorado.

The incident occurred last April but was not publicly disclosed by CIRM until the California Stem Cell Report (CSCR) raised a question earlier this month.

Sladek is professor of neurology, pediatrics and neuroscience at the University of Colorado in Denver and a former president of Cal Lutheran University in the Los Angeles area. He had served on the stem cell agency's grant review group since 2005 and as its chairman from 2009 until April of last year.

Responding to an email from CSCR, James Harrison of Remcho, Johansen and Purcell of San Leandro, Ca., outside counsel to the stem cell agency, said that CIRM's staff uncovered the conflict in April after the grant review session was concluded on March 17. Harrison described it as a "technical violation."

He said,

"While preparing the public summary for Basic Biology III (grant round)applications, CIRM staff discovered that Dr. John Sladek was one of several co-authors on scientific publications with a researcher who was listed as a consultant on a CIRM grant application."

Harrison said,

"This is a technical violation of CIRM's conflict of interest rules, which prohibit a member of the Grants Working Group ("GWG") from participating in the review of an application if the member has co-authored papers with a salaried investigator listed on a CIRM application within a three year window."

Harrison said Sladek's conflict did not violate the state's political reform act nor did he have a financial interest in the application.

Harrison continued,

"Nonetheless, in the spirit of setting an example of strict compliance, Dr. Sladek tendered his resignation from the GWG."

Asked for comment, Sladek said that Harrison's account was accurate and that he had nothing to add. (Both Harrison's and Sladek's verbatim comments can be found here.)

In December, the CIRM board of directors approved, on a unanimous voice vote of the 21 directors present out of 29, a resolution commending Sladek for serving in "exemplary fashion."

The stem cell agency disclosed specifics of the conflict of interest violation after the California Stem Cell Report discovered a vague reference to it in the transcript of the January meeting of the Citizens Financial Oversight and Accountability Committee, the only state entity specifically charged with oversight of the agency and its directors.

Members of the committee had raised questions about conflicts of interests at CIRM. At one point, Harrison said,

"We have also had occasion where we have had a conflict of a very technical nature on the grants working group which we addressed pursuant to our procedure and reported to the legislature."

It was that remark that triggered the request for more details.

Asked about the report to the legislature, Harrison said CIRM wrote a letter to the legislative leadership about the incident. We have asked for a copy of the letter, which we will carry when we receive it.

As of this writing, the review summary for the grant application (RB3-02119) in question was not available on the CIRM web. Normally all the summaries are posted. We have queried the agency concerning its absence.

Harrison also said that in the seven-year history of CIRM no other instances exist of grant review committee members having been determined to be in a conflict of interest after participation in a review.

Our comment: CIRM is to be commended for taking care of this situation quickly last April. Sladek correctly resigned promptly. However, failure to disclose the incident at the time does not reflect well on the California stem cell agency nor does it inspire confidence in the agency's now improving openness and transparency.

CIRM is an enterprise that has substantial built-in conflicts of interests – all legal courtesy of Prop. 71, the ballot initiative that created CIRM. Institutions linked to CIRM directors have received $1.1 billion of the $1.2 billion the agency has given away. A display of reticence in this conflict-of-interest case does little to quell the suspicions of those who have criticized the agency for "cronyism," including the journal Nature and some in the biotech business community and elsewhere. As for the description of the incident as a "very technical" violation, that amounts to a bit of PR. Either it is a violation or it isn't.

Sladek's violation is the sort of thing not well understood by the public. Most public attention is focused on financial conflicts of interest in science. However, professional conflicts of interest involving scientists are among the most invidious. The California Stem Cell Report regularly hears complaints and suspicions about such dealings at CIRM: Big-name scientists receiving favored treatment, academic researchers unfairly evaluating applications from business researchers, younger researchers being shunted to background and more. All this as a billion dollars worth of applications have been evaluated behind closed doors with no public disclosure of the economic or professional interests of the reviewers. The stem cell agency would do well to improve its openness and transparency, particularly as it moves into ticklish and expensive relationships with industry. The first step would be to post on its web site the disclosure forms filed by its grant reviewers but withheld from the public by CIRM.

Conflict of Interest: Text of CIRM and Sladek Comments

Here are the verbatim statements from James Harrison, outside counsel to the California stem cell agency, and John Sladek concerning Sladek's conflict of interest and resignation as chair of the agency's grant review group.

Harrison made these initial remarks first and provided a few other details later.

"While preparing the public summary for Basic Biology III (grant round)applications, CIRM staff discovered that Dr. John Sladek was one of several co-authors on scientific publications with a researcher who was listed as a consultant on a CIRM grant application.
"This is a technical violation of CIRM's conflict of interest rules, which prohibit a member of the Grants Working Group ("GWG") from participating in the review of an application if the member has co-authored papers with a salaried investigator listed on a CIRM application within a three year window.

"It should be noted, however, that Dr. Sladek's participation in the review of the application would not have constituted a conflict of interest under the Political Reform Act's conflict of interest standards because Dr. Sladek did not have a financial interest in the application. In addition, the amount of funding involved - approximately $3,000 of salary per year for three years, less than one percent of the total award - was not material, and Dr. Sladek did not stand to receive any financial benefit from the application. Finally, Dr. Sladek's participation in the review did not affect the outcome because the application was not recommended, or approved, for funding.

"Nonetheless, in the spirit of setting an example of strict compliance, Dr. Sladek tendered his resignation from the GWG."

Sladek's response to a question for comment:

"Mr. Harrison’s account  is accurate and there really isn’t anything to add other than I was pleased to serve CIRM and California  for several years and wish them well as they pursue such an important mission with respect to the potential for therapeutic applications to human disease and disorders. Thank you for your inquiry."

Trounson Talks Stem Cells in Qatar

Qatar Conference Center

If our readers in the Middle East are looking for a first-hand assessment of the state of stem cell research, they might want to take in the four-day conference this week in Qatar, which features the president of the $3 billion California stem cell agency.

Alan Trounson is one of a number of international stem cell notables at the session at the new Qatar Conference Center in the tiny nation in the Persian Gulf. The country is putting on the conference as a means of developing its own stem cell research capabilities.

Qatar had a gross national product of $129 billion in 2010, with a per capita income of $138,000, according to the U.S. State Department. The population is about 1.7 million, more than 75 percent of whom are foreigners with temporary residence status.

In addition to Trounson, other California and CIRM-connected researchers are speaking at the conference in the Qatar center, which just opened in December.  They include David Baltimore, Nobel Laureate and a former director of the stem cell agency. A company Baltimore co-founded, Calimmune, of Tucson, Az., is sharing in a $20 million CIRM grant. Other CIRM grant recipients or representatives of recipient companies appearing at the conference are Irv Weissman of Stanford; Deepak Srivastava of the Gladstone Institute, and Ann Tsukamoto Weissman of Stem Cells Inc. of Newark, Ca.

Social activities at the conference include sand dune "bashing" in off-road vehicles, camel tracking along with a look at their "robot jockeys" and a visit to the original Arabic Oryx farm.

California Stem Cell Agency Waiting Until April for More Cash

The state of California plans to sell $2 billion in bonds next Thursday, but the California stem cell agency, which is entirely dependent on state borrowing, will have to wait until later this spring to see more cash.

J.T. Thomas, chairman of the stem cell agency, said he expected to see CIRM benefit from the next bond sale in April. The agency currently has sufficient funds to operate until about June, plus an arrangement with the state for continued funding if a timely bond sale is not completed.

The $3 billion stem cell agency was created in 2004 through a ballot initiative that authorized its funding through the sale of state bonds over a 10-year period. The interest on the bonds raises the total cost of the agency to taxpayers to about $6 billion. Likewise, the cost of a $20 million grant is actually more like $40 million.

Financially beleaguered California's interest costs have sharply increased in recent years as the state has borrowed $53.8 billion from 2007 to 2010. This year, interest costs will come to about $5.4 billion, nearly 6 percent of the state budget. Nine years ago, it was $2.1 billion or 2.9 percent, according a piece by Randall Jensen (no relation to this writer) of the Bond Buyer newspaper.

The expense of borrowing shrinks the amount of state money available for public schools, helping the medically indigent and other state purposes.

Next Thursday's bond sale will go to refinance debt at lower rates. This year, Gov. Jerry Brown and state Treasurer Bill Lockyer plan to sell only $5.2 billion in general obligation bonds, roughly one-fourth of what the state issued in 2009.

The Afterlife of the California Stem Cell Agency: Venture Philanthropy and Big Pharma

The $3 billion California stem cell agency, which is facing its possible demise in five years, is exploring an afterlife that dips into "venture philanthropy" on a national level as well as investment ties with Big Pharma.

The Golden State's unprecedented research program laid out those possibilities in a "transition plan" sent this week to Gov. Jerry Brown and the state legislature. The plan was required under a law passed two years ago. The agency's future direction was also aired at a meeting last month in Los Angeles.

The California Institute for Regenerative Medicine(CIRM) will run out of funds for new grants in 2017. Its only real source of funding is cash that the state borrows (bonds). CIRM says that only $864 million remains for new research awards, and some of its recent grant rounds exceed $200 million. The current position of the agency is that it is "premature" to consider asking voters in financially strapped California to approve another multi-billion dollar bond measure.

The venture philanthropy effort involves creation of a nonprofit organization. CIRM Chairman Jonathan Thomas said in January that he is "test-driving (the proposal) with some high net worth donors we know to be interested in the stem cell space." Thomas was addressing the Citizens Financial Accountability and Oversight Committee, the only state entity specified charged with overseeing the agency and its directors. He said,

"We're busily putting together in conjunction with a national organization called the Alliance for Regenerative Medicine the plans for a nonprofit venture philanthropy fund."

He said it would "would accept applications for awards from researchers and companies all over the country, not just those funded by CIRM, but those funded by NIH or the New York Stem Cell Foundation or the state of Maryland or whatever."

The Alliance for Regenerative Medicine is an industry-dominated lobbying group, based in Washington, D.C.  The group's executive director and co-founder is Michael Werner, a longtime pharma and health industry lobbyist, who is also a partner in the influential Washington law firm of Holland and Knight.

The "biopharma investment fund" proposed by CIRM is less well developed. CIRM said it plans to explore opportunities with companies to fund stem cell research in California. The transition document uses as an example an $85 million deal between Pfizer and UC San Francisco, which gives the company special access to biomedical research.

The transition plan also touches on other issues such as winding down grants after its new grant money runs out, along with protecting intellectual property.

The plan could be considered a marketing tool for the agency's afterlife efforts. The document devotes a good portion of its nine pages to recounting the history of CIRM and touting its accomplishments.

Thomas used the occasion of the submission of the plan as a springboard for a piece yesterday on the CIRM research blog.He concluded his item by quoting from the plan itself. CIRM's achievements during the past seven years, he wrote, "will allow California to continue world (stem cell) leadership in the coming decades."

IOM's Lagging Effort for Comments on the $3 Billion California Stem Cell Agency

With the $700,000 Institute of Medicine inquiry into the performance of the California stem cell agency half complete – at least publicly – the blue-ribbon panel seems to be coming up short on comments from outside of the agency itself.

The major public effort by the IOM to secure comments is the passive posting of forms to be filled out on the IOM web site.

How many responses has the IOM received on those forms? The IOM has not disclosed that information despite two inquiries earlier this month by the California Stem Cell Report.

The prestigious institute is undertaking the study of $3 billion agency under contract with CIRM, which is paying the IOM $700,000. Some CIRM directors have expressed hope that the IOM findings will help build support for another multi-billion dollar state bond measure to renew financing for CIRM. It is scheduled to run out of money for new grants in five years.

So far, the IOM panel has held two public meetings, one in Washington, D.C., and one in the San Francisco area. The final California hearing is scheduled for April 10 in Irvine with the last public meetings scheduled for later this year in Washington.

So far, the panel has heard only from CIRM employees or directors as well as researchers who have received tens of millions of dollars in CIRM grants. The IOM has not heard publicly from a single independent witness.

The IOM has posted on its web site forms seeking comments from the public, grant recipients, beneficiary institutions and businesses. However, passive postings of forms are unlikely to generate more than a relative handful of responses. To produce significant numbers requires aggressive and targeted follow-up.

It is also unclear exactly what the IOM is doing to seek information from biotech businesses and unsuccessful grant applicants. Some businesses have complained publicly about the tiny share of funding that industry has received. And some CIRM directors have expressed concern for several years about the inadequacies of business funding.

On Feb. 12, the California Stem Cell Report queried the IOM about its efforts at outreach, asking for specifics on what is being done. Christine Stencel, a spokeswoman for the IOM, replied,

"The IOM has been obtaining and compiling lists of organizations and people to circulate the questionnaires as widely as possible among target groups. For example, IOM has sent a notice to some 300 stakeholder groups encouraging participation."

Other specifics were not forthcoming. (The full text of the questions and responses can be found here.)

On Feb. 15, the California Stem Cell Report followed up with these additional questions,

"Regarding the 300 stakeholder groups, how are those defined? Please give me a few examples.

"Based on your response, is it correct to say that the IOM is not sending out questionnaires directly to all CIRM grant applicants, including those who were rejected?

"Is it correct to say that no special effort -- other than that described in your response -- is being made to seek responses from stem cell businesses?

"The failure to provide numbers on the responses so far would indicate that the numbers are so small that the IOM is choosing not to disclose them. If that is not the case, please email me the numbers."

As of this writing, the IOM has not responded to those questions. We will carry its response verbatim when we receive it.

Text of IOM Statement on Efforts at Soliciting Comment on CIRM

Here is the text of the questions submitted Feb. 12 by the California Stem Cell Report to the Institute of Medicine concerning its attempts to secure comments on the operation of the $3 billion California stem cell agency along with the IOM response.

The response from Christine Stencel, a spokeswoman for the IOM, follows these questions from the California Stem Cell Report.

"I will be writing a piece on Wednesday dealing with the online surveys that IOM has posted. For that piece, please tell me very, very  specifically what the IOM is doing to generate responses. For example, is the IOM buying ads in newspapers or online, asking the public to fill out the forms? Is it hiring a polling firm to call households for responses?  Also please tell me exactly what is being done to generate responses on all the other surveys that have been posted.

"Additionally, please tell me how many responses that the IOM has received so far in each category on the survey forms for CIRM grantees, industry partners and leadership. Thank you."

The IOM response on Feb. 15:

"The IOM has been obtaining and compiling lists of organizations and people to circulate the questionnaires as widely as possible among target groups. For example, IOM has sent a notice to some 300 stakeholder groups encouraging participation. We do not have the resources to hire a polling firm or place ads.

"The purpose of these questionnaires is to extend the committee's information gathering beyond in-person meetings and the standard listing of an email address or phone number for the study on the project website. Not all people who might have useful experiences or perspectives on CIRM may be able to attend the in-person meetings and not all may visit the project website and find the study contact information. This is a proactive effort to reach more people.

"Anyone who knows of individuals or organizations with information on CIRM that would be useful for the committee's knowledge can share the links to the questionnaires with them. This will help spread the word and get the committee insights they need.

"I don't have information on the number of responses so far. Ultimately, as noted at the top of each survey, the responses will be aggregated and de-identified and placed in the public access file in addition to being shared with the committee.

"I trust this will be useful for your readers."

The California Stem Cell Report then asked the following questions on Feb. 15.

"Thank you for your response. A few follow-up questions:
Regarding the 300 stakeholder groups, how are those defined? Please give me a few examples.

"Based on your response, is it correct to say that the IOM is not sending out questionnaires directly to all CIRM grant applicants, including those who were rejected?

"Is it correct to say that no special effort -- other than that described in your response -- is being made to seek responses from stem cell businesses?

"The failure to provide numbers on the responses so far would indicate that the numbers are so small that the IOM is choosing not to disclose them. If that is not the case, please email me the numbers. Thank you."

The IOM had not responded to the follow-up questions as of this writing on Feb. 21.

ACT's Top Scientist Sells $1.5 Million in Company Stock

The mainstream media waxed enthusiastic last month when a California hESC clinical trial reported positive results dealing with blindness.

The report was first published account of a human trial of embryonic stem cell based therapy and involved Advanced Cell Technology, which is headquartered in Santa Monica, Ca. Despite a glowing reception of the trial's results, the firm is years away from being able to market the therapy at a profit – if it ever can do so.

The firm's chief scientific officer, Robert Lanza, moved quickly, however, to capture some monetary gain from the news, which was announced in a press release Jan. 23 by ACT.

On Jan. 23 and 24, Lanza sold 7.7 million shares in ACT for $1.5 million, according to SEC documents. He sold the stock at 18 and 19 cents a share. That compares to an ACT price of about 8 cents at the end of 2011. Lanza still holds 26 million shares in the firm. The acquisition price of the stocks is unknown.

There is nothing to suggest anything untoward about Lanza's sale. But it is a reminder that creating a successful stem cell therapy is about making money. Without a profit, there will be no therapy, as Geron reminded everyone last November when it dropped its longstanding hESC trial.

The California Stem Cell Report has asked Lanza if he has any comments about the sale of the stock. We will carry his remarks verbatim when we receive them.

The Seeking Alpha web site appears to have been the first to report the sale. Here is their complete item.

"Advanced Cell Technology, Inc. (ACTC.OB): ACTC is a development-stage biotech focused on the development and commercialization of human embryonic and adult stem cell technology in the field of regenerative medicine. On Wednesday, Chief Science Officer Robert Lanza filed SEC Form 4 indicating that he sold 7.7 million shares for $1.5 million, ending with 26.0 million shares after that sale. ACTC shares have rallied strongly since the beginning of the year, up from 8.2 cents at the end of last year to currently in 14-15c range after rising above 20c just earlier this week."

CIRM Contracting: $1.3 Million for IT, $887,282 for Legal

The California stem cell agency this week performed its semi-annual public disclosure of its contracts with outside firms, the second largest item in its operational budget of $18.5 million.

The contracts are scheduled to run about $3.3 million this fiscal year, according to the budget approved last May. That figure is up about 18 percent from the previous year.

According to the contract information posted this week, the two largest contracting expenditures this year are for information technology work, including the ongoing struggles with the grants management system – $1.3 million – and legal help – $887,282. The figures were compiled by the California Stem Cell Report. CIRM did not provide totals.

Outside contracts are second to the cost of salaries and benefits at the agency. One reason for the size of the contracting expense is the small size of the CIRM staff, which is now about 50.

The contracting information will be presented to the CIRM directors' Governance Subcommittee next Friday. The committee is being asked to approve an increase in the contract with Kutir Corp., from $250,000 to $470,000. By the end of 2011, CIRM had already paid out $219,680 to Kutir. The firm provides software development services.

Infonetica, which provides technology advice, would also see an increase from $236,060 to $300,000, under the staff proposal.

A staff memo to the board said,

"(Kutir's) services are key as CIRM continues to progress in automating its grants management systems to meet the requirements of both new RFAs as well as ongoing reporting obligations.""

The public can participate in the Governance meeting at locations in San Francisco, Sacramento, Irvine, Los Angeles, South San Francisco and La Jolla. Specific addresses can be found on the agenda.

Stem Cell Agency on Bee Article and Voter Expectations

The California stem cell agency today said the seven-year-old "audacious vision" of voters when they created the $3 billion research effort "is still possible."

The comment was made in an item on the agency's blog by Amy Adams, the agency's communications manager.

Her entry point was an opinion piece in The Sacramento Bee on Sunday exploring some of the ins and outs of the agency. Among other things, CIRM President Alan Trounson was quoted by writer David Lesher as "optimistically" predicting successful California stem cell treatments in five years.

Adams wrote,

"Lesher makes clear that there are many challenges ahead in bringing new therapies to patients: he said of the voters who created CIRM, 'It was pretty audacious of them in 2004 to try to create another economic driver like Silicon Valley and save lives at the same time.'

"And while the vote was audacious, we agree with his conclusion that despite risks and challenges that vision is still possible." 

Blue-Ribbon Panel Seeks Public Comment on California Stem Cell Agency

The California public is being given a chance to weigh in with anonymous comments about what they think of the performance of the $3 billion California stem cell agency.

Their opinions are being sought by a blue-ribbon, Institute of Medicine panel. The IOM is being paid $700,000 by the agency to examine its operations.

The questions include the importance of stem cell research and CIRM's role, its openness and transparency, an assessment of its grant programs and how it should share information with the public, suggestions for improvements and more.

The online form was posted recently on the IOM web site and can be found here. The deadline for submissions is March 19.

The IOM also has survey forms for academic and non-profit CIRM grant recipients, CIRM grant recipients that are businesses(which the IOM calls "industry partners") and "leadership of CIRM-funded institutions." The deadline for those is March 19 as well.

Trounson Predicts -- 'Optimistically' -- Successful California Stem Cell Treatments in Five Years

Alan Trounson, president of the $3 billion California stem cell agency, says he is "optimistic" that some stem cell treatments developed in California will prove successful in humans in the next five years.

Trounson was quoted in The Sacramento Bee today in an opinion piece written by David Lesher, government affairs director of the Public Policy Institute of California. Lesher provided something of an overview of the agency, including pluses and minuses. He wrote,

"Those who speculate say that the most advanced stem cell treatments are still probably a decade away from becoming available to patients. And the cost to get them there will far exceed California's $3 billion investment."

But Lesher, a former political writer for the Los Angeles Times, also wrote,

"...(T)he president of the state's stem cell agency said he is 'optimistic' that at least a few California treatments will prove successful in humans in the next five years."

Lesher said,

"That may mean a genetically modified stem cell treatment to cure AIDS, (Trounson) said; it may mean a treatment that eliminates the need for some diabetics to monitor or inject insulin; there might be a treatment to restore eyesight to those suffering from a major cause of blindness.

"'These are the kind of things we need to get through,' he said. 'I hope that we have a number of them showing proof by 2015 or 2016. I'm optimistic. The caveat is that nothing is guaranteed.'"

The stem cell agency will run out of cash for new grants in 2017 and will go out of business shortly thereafter unless voters approve another multibillion dollar bond measure or it manages to secure private financing.

Lesher discussed the difficult financial environment for private financing of stem cell therapies and how it has changed since the the stem cell agency was created by voters seven years ago.

"The hope was that California's bond (financing for CIRM) would jump-start a biotech industry by building the laboratories and seeding early research to a point where private support would take over.

"But that point of commercial viability is a moving target as private investors have grown more risk averse and the regulatory path for such radical new therapies is unpredictable. So the biggest question today in the stem cell field is not whether the science will work someday. The big questions are how will we pay for it, how will regulators know when it's ready and when will it happen?"

Lesher said,

"The problem is that even the most advanced experiments in (CIRM's) translational portfolio are still a couple of years away from the same point in the regulatory pipeline where high cost and uncertainty forced Geron out of the field. And there is still no clear answer about how to resolve those same challenges, although the cost-benefit calculation will be different for other treatments."

Lesher concluded,

"Unlike high-speed rail, which continues to have strong support from the governor, the stakes surrounding California's stem cell investment have been largely invisible. That's too bad, because stem cell science is a much smaller investment for taxpayers with a greater possible return."

Our comment? In what CIRM Chairman Jonathan Thomas has declared as a "war" for public support, today's piece in The Bee was a bit of a victory. Although the article did mention difficult issues, it was generally upbeat about CIRM. The piece focused on the wonders of the science and bypassed many of the negatives about CIRM, including its built-in conflicts of interests and its reluctance to correct long-identified problems. Also absent was a discussion of how CIRM signed a $25 million loan agreement with Geron only three months before the company abandoned its clinical trial. That omission could be considered a PR plus for the agency. Overall, the folks at CIRM should be pleased by the article.

California Stem Cell Agency Seeking More Help on Push for Cures

The California stem cell agency has decided to put more manpower behind its push to drive therapies into the clinic.

The agency this week posted an opening for a senior development officer, who would be paid up to $226,108 annually.

The new hire would have a strong background in industry and an advanced degree. The job posting calls for a minimum of 10 years experience and expertise in "in developing, designing and assessing preclinical and early clinical safety and efficacy, within regulatory framework."

The position reports directly to Ellen Feigal, CIRM's VP for research and development. The job description says the person would "directly interact with investigators on CIRM’s clinically applicable research programs to help provide product development guidance from preclinical, manufacturing, and first in human to early phase clinical regulatory perspectives."

The $3 billion agency, which has yet to produce the cures promised to voters in 2004, is re-examining its strategies, particularly with an eye to backing a product that would actually be used on patients.