New California Stem Cell CEO Begins Work May 15

C. Randal Mills, a man who has spent his entire professional life in the private sector, will take over on May 15 as the new president of the state of California's $3 billion stem cell agency.

Mills, 42, was named last week to succeed Alan Trounson, a longtime academic researcher who is leaving to return to his family in Australia. Mills, former CEO of Osiris Therapeutics of Maryland, is scheduled to begin half-time work in 10 days at the stem cell headquarters in San Francisco. At that point, Trounson will be designated as a senior scientific advisor to the agency. Mills' work will initially be half-time while he works out his move from Maryland.

The news from the agency, which is formally known as the California Institute for Regenerative Medicine (CIRM), came along with more details about Mills' employment agreement, including provisions that deal with outside activities that he might pursue.

Randy Mills (left) and Jonathan Thomas
CIRM photo

The information was contained in an “offer letter” from CIRM Chairman Jonathan Thomas to Mills, dated and signed by both men on April 28, two days before the agency governing board ratified its terms(see here and here). The letter was provided by the agency at the request of the California Stem Cell Report. The full text can be found at the end of this item.

As reported previously, Mills' annual salary will total $550,000, compared to the $490,008 earned by Trounson. Mills' total compensation at Osiris was $554,750 in 2013, according to company filings with the federal government. He left Osiris in December 2013 for “personal reasons.”

The

offer letter provided for $95,000 in relocation and travel costs for house-hunting and moving. Mills is also entitled to reimbursement for meals and temporary housing for 60 days, contingent on approval by the state Personnel Administration Department. That would amount to $40 a day for meals and $178 a day for lodging. That could run up to $13,080 if the full 60 days are used.

Mills' agreement with CIRM allows him to use his “personal time and resources” to engage in outside activities that are compatible with his CIRM duties. Those outside activities include service on boards of for-profit companies, which can be lucrative, as well as service on non-profit boards. The agreement stipulates that such service be disclosed to the chairman of the board and that he confirm that the service is compatible with Mills' role as president.

Mills, who goes by the nickname Randy, is subject to the agency's conflict of interest policy which requires him to divest himself of any investments in companies that devote more than 5 percent of their research budget to stem cell research. In addition to the policy, Mills is required by state law to disclose his economic interests generally and is subject to the agency's “incompatible activities statement”(see below) and the “employee conflict of interest code.”

Mills will serve at the pleasure of the board. However, if the board fires him “without cause” within 36 months, he will be entitled to six months salary.. The agency's offer letter also said,

“You shall not be entitled to any payment if the (governing) board terminates you for cause, including knowing violation of state conflict of interest law and/or CIRM policy, willful or corrupt misconduct or a criminal conviction.”

The offer letter said the effective date of the appointment is June 2. However, Kevin McCormack, senior director of public communications, said last week that stipulation has been modified to reflect the May 15 start. McCormack said Trounson will serve as a scientific advisor to CIRM to June 30 “to help shepherd through a number of projects and commitments he has made.” Presumably that would include the closed-door review of applications in the $80 million Alpha stem cell clinic plan, which is scheduled to be acted on by the CIRM board later this year.

Here is the text of the April 28 offer letter and the agency's incompatible activities statement. 

Offer letter from California stem cell agency to Randy Mills

Incompatible Activities Statement California Stem Cell Agency

San Francisco Chronicle: California Stem Cell Agency 'Hasn't Lived up to Hype'

One of the “problems,” you might say, with things like picking a new president is that it calls attention to one's activities, for better or worse.

A case in point is an editorial this morning in the San Francisco Chronicle, which used the selection of a new president for the California stem cell agency as a springboard to a wider discussion. Its conclusions are not likely to make the agency happy. The newspaper said the $3 billion research effort has compiled a “decidedly mixed” record. The headline declared,

“State stem cell agency hasn't lived up to its hype.”

The editorial, which reflects the institutional stand of the Chronicle, noted that the agency will run out of cash for new research in less than three years. It continued,

“As far as the public is concerned, nagging questions remain: Has the institute been effective enough? How good should California taxpayers feel about the institute's use of their $3 billion? 

“The answer is a decidedly mixed one. 

“Part of the problem is that California taxpayers had outsize expectations when they passed Prop. 71(which created the agency).”

The editorial said,

“Progress on stem cell research has been significant - but it's been the progress of the tortoise rather than the hare. It was irresponsible for the backers of Prop. 71 to convince the California public that cures were just around the corner, and it is unfortunate that so many Californians are disappointed with the institute because they believed this.

“'People were schooled to believe that all of these breakthroughs were right around the corner,' said Marcy Darnovsky, executive director of the Center for Genetics and Society. "You can't schedule scientific breakthroughs.'

“'That's not the institute's fault. Still, it's been a struggle to get the agency to use the best organizational practices. In 2012, a blue-ribbon committee of the National Academy of Sciences released a report after a yearlong review that found conflicts of interest on the CIRM board that threatened to 'undermine respect for its decisions.' It also found significant flaws in the agency's grant-approval process.'

“The institute responded to all of this criticism by dragging its feet about making necessary changes to improve operations and create a board with more independence. Last year, it changed its voting procedures for board members who are members of institutions, to answer the criticism - but the change came awfully late.”

The editorial concluded,

“Prop. 71 was an initiative passed based on the politics of the time. It's difficult to call it a total failure, especially during a time when U.S. public investment in scientific research is so low.

But stem cell research has finally gotten off the ground all over the country, and the institute's operations over the past decade haven't inspired the confidence California voters would need to offer the agency more money. The agency will need to rely on private investment if it's to continue its mission.”

The Chronicle's editorial today stood in sharp opposition to its position Sept. 30, 2004, when it enthusiastically endorsed Proposition 71. Ironically, the 2004 editorial carried some of the hyperbolic adjectives that its editorial today deplored, including such expressions as “bold,” “brimming with potential,” “unquestioned promise,” “significant (economic) windfall” along with the phrase “considerable savings on health care.”

The bottom line – 10 years ago – for the Chronicle on the California stem cell agency?

“As a society, we have a moral and ethical obligation to pursue this potentially life-enhancing science with a sense of mission that is now lacking in the nation's capital. California has long been a leader in biotechnology and other burgeoning research industries. Proposition 71 gives the state an opportunity to fund another crucial area of medical technology. This state is big enough to support such an adventurous and exciting quest -- and it should -- since it offers not just promise, but hope.”

The California stem cell agency could and does make much the same argument today for continued financial support.

(Editor's note: The National Academy of Sciences report mentioned in the editorial was prepared by a committee of the Institute of Medicine, which is the health arm of the academy.)

CIRM 2.0 and Randy Mills: Crystallizing a 'Tidal Shift' at the California Stem Cell Agency?

Two California stem cell bloggers, one a UC Davis researcher and another a veteran patient advocate, are hailing the appointment of a biotech industry veteran as the head of the $3 billion stem cell agency.

Scientist Paul Knoepfler, who also considers himself a patient advocate, said yesterday,

“Biotech leader (Randy) Mills (formerly of Osiris) serving as the new CIRM president ushers in a fundamentally new era for CIRM, and so it immediately kicks off CIRM 2.0.”

Knoepfler said that CIRM was originally all about pluripotent stem cells but that has changed.

“The notion of a leader with a primarily for-profit mesenchymal stem cell-centered focus at the helm of CIRM would have seemed impossible even just a few years ago. However, a tidal shift just happened. Okay, so it didn’t happen all at once overnight and observers of CIRM could see this trend begin a few years ago, but the appointment of Mills as the new CIRM prez crystallizes this change.”

Knoepfler continued,

“The CIRM of today and the future is primarily going to be about focused stem cell clinical product development (the main goal of Prop. 71) and raising capital to support that development beyond 2017.”

Patient advocate Don Reed, a longtime follower and supporter of the stem cell agency, said on the Daily Kos,

“My impression? Overwhelmingly positive.”

Reed noted that Mills “worked his way through college in the emergency room, so he has a strong sense of urgency for the work at hand. About himself, he stressed that he was 'patient centered... We are going to work relentlessly for the benefit of the patients and the people of the state of California.'”

Last year, Knoepfler posted a four-part series on mesenchymal stem cells, the stuff Mills developed as CEO of Osiris. The series was based on an interview with Arnold Caplan of Case Western University, the father of mesenchymal stem cells. The four items deal with the science but also touch on FDA regulation and medical tourism. The series begins here.

In Knoepfler's book, "Stem Cells: An Insider's Guide," he said Caplan coined the name mesenchymal stem cells(MSC). Knoepfler said in the book,

"MSCs can be isolated from fat, bone marrow, or placenta. MSCs are the hottest type of adult stem cell today with 306 clinical trials."

'As Soon as Mills Sat Down' -- CIRM Chairman on the Stem Cell Agency's New CEO

Officials at the California stem cell agency were extraordinarily taciturn during April as its governing board worked its way through selection of a new president.

Kevin McCormack, the senior director for public communications, would not even disclose the number of candidates being considered in the semi-final or final round, seemingly innocuous figures. On Wednesday, at least one reason for his reticence became apparent.

The 29-member governing board had only one candidate to consider at their final, closed-door meeting in Burlingame, CIRM Chairman Jonathan Thomas said. Their Presidential Search Subcommittee had, earlier this month, screened seven semi-finalists and eliminated all but C. Randal Mills, more commonly known as Randy Mills.

As Thomas commented today on the stem cell agency's blog,

“As soon as Randy Mills sat down we knew we had the person we were looking for.” 

Thomas cited Mills experience, “his sharp intellect and keen analytical mind” and told an emotional story about a 14-year-old leukemia patient involved in clinical trials for Prochymal, a stem cell treatment developed by Mills' then firm, Osiris Therapeutics.

Thomas went on to say,

“Ours is a complex organization. Not only do we fund ground-breaking scientific research, but we are also a state agency. Our mission is to find therapies and cures for chronic disease and injury as quickly as we can and, as a public agency, we operate in a fishbowl. The position of president requires a rather unique set of skills to be able to handle all aspects of the job. 

“We are also at a challenging point in our life. It is now almost ten years since the passage of Proposition 71, the voter-approved initiative that created us. In that time we have made extraordinary progress, helped fund 10 projects that are in clinical trials and have several more starting clinical trials this year. But our work is far from done. We have many other research projects that are making great progress and we want a new president who will help ensure that we are able to move those, as quickly as possible, from the lab and into clinical trials in people. 

“Randy is that person. He has the scientific knowledge, the organizational skills, the business acumen and the personal qualities that this position needs.”

For a very brief look at Mills' views on change and accomplishment, see here.

The New California Stem Cell CEO on Change and Accomplishments

In June 2009, Randy Mills, the new CEO of the California stem cell agency, wrote a brief, first-person reflection on his career and motivations for Pharmaceutical Executive. At the time, he was five years into his service as the top executive at Osiris Therapeutics.

Among other things, he said he worked his way “through college in the emergency room. It taught me a lot about life, death, and human suffering.”

He continued,

“When I accepted the position of CEO at Osiris, I was only 32. The company had been around for 12 years, but was really struggling. I needed to change the culture, and fast. Unfortunately, that meant changing many of the people who had been involved with the company for a long time. It was very hard, but five years later the transformation is dramatic, and the lumps are now fond lessons.”

He also said,

“At Osiris, we've built a culture where patients come first, and we've accomplished much over the last year: We formed the largest stem-cell partnership ($1.4 billion) to date with Genzyme Corporation; we created and sold our first commercial stem-cell product line for $85 million in cash; and we won a $227 million Department of Defense contract. But I think my most significant accomplishment is receiving the first-ever FDA expanded-access approval for a stem-cell therapy, providing life-saving treatment to children who would likely otherwise die.”

Media Coverage of California's New Stem Cell CEO: Mills, Prochymal and Fresh Eyes

Randy Mills (pink tie) and three CIRM directors following today's meeting. Left to
 right, Francisco Prieto, a Sacramento physician. Mills, Jeff Sheehy, a communications
manager at UC San Francisco, and Ken Burtis, a genetics professor at UC Davis
California Stem Cell Report photo

The appointment of Randy Mills, former CEO of a Maryland stem cell firm, attracted quick attention today from the mainstream media as well as the scientific press.

Here is a sample of the coverage as of early evening Wednesday California time.

Kelly Servick of the journal Science wrote,

“Under Mills’ leadership, Columbia, Maryland-based Osiris became the first company to receive regulatory approval for a stem cell drug. Canadian regulators in 2012 approved Prochymal to treat complications from bone marrow transplants. 'We need something like that to happen with some of our projects,' says (Jeff) Sheehy (a member of the CIRM governing board). 

“The board’s choice 'reflects an evolution of CIRM and how they look at themselves,' says Michael May, CEO of the Centre for Commercialization and Regenerative Medicine in Toronto, who in 2012 served on an Institute of Medicine panel tasked with reviewing CIRM’s structure and policies. 'The message is [one of] being more business-like.' Mills is viewed as a pioneer in the stem cell industry, May adds, and may help cultivate partnerships that support CIRM as it looks for new potential funding sources.”

Bradley Fikes of the San Diego U-T reported,

“Biotech reporter Adam Feuerstein dinged Mills last May for claiming Prochymal was the most widely used stem cell drug in the world, when it actually had no sales.

"'Mills has a different definition of 'widely used' than most investors,' Feuerstein wrote.

"Osiris sold Prochymal and the rest of its stem cell business in October to Australia-based Mesoblast for up to $100 million; $50 million in cash and stock and up to an additional $50 million in milestone payments.”

Monte Morin and Eryn Brown of the Los Angeles Times quoted CIRM Chairman Jonathan Thomas as saying Mills will “bring a fresh set of eyes and will help work with our staff on our directions going forward.”

Natalie Sherman of the Baltimore Sun and Erin Allday of the San Francisco Chronicle noted that Mills was part of the large panel of scientists who make the virtually all the decisions on funding grant applications. Chris Rauber of the San Francisco Business Times also had a story.

The agency's press release can be found here.

The California Stem Cell Report will carry an item tomorrow on additional coverage that is likely to surface. 

Former Osiris President Chosen as New CEO at California's Stem Cell Agency

BURLINGAME, Ca. – Directors of the California stem cell agency today selected Randy Mills, the former CEO of Osiris Therapeutics, Inc., of Maryland, to replace Alan Trounson as president of the $3 billion research enterprise.  

The governing board of the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, unanimously chose Mills, who will be the third CEO in the agency's history.

His strong private sector background will become increasingly important at the agency, given its aggressive push to commercialize stem cell research and bring it into the clinic.

Mills' appointment came as the agency faces its possible financial demise. Its funding for new awards is scheduled to end in less than three years. It has only $600 million left in uncommitted funds. CIRM is exploring new ways to raise cash, including some sort of public-private partnership. The new president will play an important role in finding the money.

Mills raised $160 million to support Osiris, said CIRM Chairman Jonathan Thomas. Mills told reporters later that his focus is 100 percent on bringing cures to patients.

Mills will be paid $550,000 annually and will receive $95,000 in moving and relocation expenses. Trounson, who is returning to Australia to spend more time with his family, was paid $490,008 annually, a figure that remained unchanged from 2008, when he joined the agency. CIRM said Mills' compensation was less than for similar jobs at universities and nonprofits. 

Thomas said that Mills will be examining the agency's operations to determine what it is doing well and what it can do better. No cures or therapies have been developed through research funded the agency. Nonetheless, Thomas recently said that the agency has a record that the state can be proud of. He said that CIRM currently has "10 projects that are in or have been in clinical trials – including therapies for heart failure and HIV/AIDS – and we anticipate several more in cancer, diabetes, sickle cell disease and blindness going into clinical trials this year.”

But even some of its directors have noted the difficult and lengthy task of turning research into cures. Stephen Juelsgaard, former executive vice president of the biotech firm Genentech, in recent months has cited figures that show only 10 percent of potential therapies entering clinical trials are approved for use.

Part of Mills' new job will be retention of the agency's highly skilled 56-person staff, which includes 29 persons holding Ph.D. or M.D. degrees. Some of those staffers may start looking for new positions if they believe the agency is not going to secure new funding In some business situations, that could be done with retention bonuses that would encourage key employees to stay on. However, the agency is limited by law to an operational budget of 6 percent of its research awards, which its directors generally agree is very tight.

Also, in 2015, CIRM is scheduled to lose its free office space in San Francisco, a benefit received as a result of San Francisco's successful bid for the headquarters. It has yet to locate new space in the city, which is experiencing skyrocketing rates for office leases. Several years ago, the agency's outside auditor estimated it would cost CIRM $1 million annually to replace the space. That figure would be much higher today because of the rising leasing costs in San Francisco.

Osiris CEO Moving to California Stem Cell Agency

BURLINGAME, Ca. -- The new president of the California stem cell agency is Randy Mills, the former CEO of Osiris Therapeutics, Inc., of Maryland. Directors chose Mills during a closed-door meeting at the Hyatt Regency hotel. More details upcoming.

Editor's note: An earlier version of this item incorrectly reported that Mills was still CEO of Osiris.

California Stem Cell CEO Decision Still Up in the Air

BURLINGAME, Ca. -- Directors of the California stem cell agency are still huddling behind closed doors as they try to decide today on a new president for the $3 billion research effort. The governing board worked through lunch after interviewing candidates, who were not visibly on the scene here at the Hyatt Regency hotel.

Today's meeting is scheduled to end at 5 p.m. PDT.

$40 Million Stem Cell Genomics Award: Details Still Being Worked Out

BURLINGAME, Ca. – The California stem cell agency and a Stanford-Salk consortium have yet to come to terms on a final agreement on a $40 million stem cell genomics award.

The governing board of the agency approved the proposal in late January during a process that was marked by controversy, including complaints about irregularities,unfairness, score manipulation and the role of its president, AlanTrounson.

All awards are subject to review by the agency's staff, which works out final details and assures that all terms are met.

Asked about the status of the award, Kevin McCormack, senior director of public communications for CIRM, said this morning that the agency was still talking with the consortium. He did not go into details about what issues are involved.

Closed-Door Session Begins for Selection of New CEO for California Stem Cell Agency

BURLINGAME, Ca. -- The governing board of the $3 billion stem cell agency is meeting behind closed doors this morning to pick a new president to lead the organization.

The session began at 9:13 a.m. PDT at the Hyatt Regency here. CIRM Chairman Jonathan Thomas said prior to the meeting that he expected the session to go smoothly. The session is not scheduled to adjourn until 5 p.m. PDT.

The CIRM directors are scheduled to interview an undisclosed number of finalists, all of whom who are believed to come from the private sector. Warren Ross of the Korn/Ferry search firm, which was hired to assist in recruitment, told the California Stem Cell Report that roughly 20 persons applied originally. He said eight to 10 were given serious consideration, and he had high, general praise for their qualifications.

The new president will replace Alan Trounson, who is leaving to rejoin his family in Australia.  

California Stem Cell Agency Fires Up New Print/Online Endeavor

California's $3 billion stem cell research program this month launched the “Proceedings of the California Stem Cell Agency” in partnership with a scientific journal that it spawned in 2011.

The journal is Stem Cells Translational Medicine, which was initiated at the behest of the Golden State's stem cell agency. The California Institute for Regenerative Medicine or CIRM, as the agency is known, subsidized the new journal for three years with $600,000 paid to AlphaMed of Durham, N.C. (See here, here, here and here.)

The move by the state agency came as reliance on traditional scientific journals for publication of research findings has encountered heavy criticism in recent years for wasting billions of dollars and costing lives.

Ellen Feigal, CIRM photo

Ellen Feigal, senior vice president for research and development for the California agency, and Natalie DeWitt, CIRM's special projects officer, wrote in the latest edition of the journal that the “Proceedings” would consist of a “monthly series (in the journal) of commentaries, articles, interviews, webinars, forums, and concise reviews on a wide range of topics in regenerative medicine.”

The agency executives said,

“Under our direction as series co-editors, the Proceedings will create a dynamic forum for the broad international community of scientists, policymakers, and stakeholders engaged in stem cell research.”

Natalie DeWitt, CIRM photo

The kickoff article dealt with the sharing of clinical trial data, which, Feigal and DeWitt wrote, is “a thorny issue that continues to spur worldwide debate and one for which the regenerative medicine community can shape the discussion at an early stage.”

They said,

“Forthcoming Proceedings will include articles such as policy and scientific considerations surrounding the creation of induced pluripotent stem cell (iPSC) banks; the global regulatory environment for developing stem cell-based therapies; and reports from various focused workshops, such as on bottlenecks in research on Parkinson's disease and ocular disorders, as well as progress in research to generate blood and liver tissues.”

The Proceedings' first offering was authored by Feigal and DeWitt along with CIRM staffers Geoff Lomax and Maria Millan. It said that more information sharing would speed research among scientists but that sharing would need to be “de-risked” by developing standards that protect proprietary information.

The article also discussed, in two dense paragraphs, a need to provide some provide some sort of cash incentive for sharing data. The authors wrote,

“Consideration should be given to mechanisms for rewarding the deposit of data. For example, performance metrics for monetizing the deposit of high-quality data should be considered. Like an investigator's publication record, such a system could be weighted in peer review and progress reporting. Monetization should also be evaluated from the perspective of system quality and sustainability. If quality data can serve to reduce sponsor costs, then reasonable fees or royalties may be appropriate.

“Contract research organizations have ex tensive experience and expertise in data generation, analysis, and management, but funding constraints may not allow them to participate in data sharing. Again, reimbursement mechanisms may bridge this gap.”

The journal provides free online access to individuals but institutional subscriptions can exceed $1,000 a year.

Picking a New Prez: Finalists for California Stem Cell Agency Post Coming from Private Sector

The Sacramento Bee today carried a piece on the upcoming selection of a new president for the $3 billion California stem cell agency.

The article was authored by yours truly and briefly spelled out some of the issues that will be facing the new president. The California Stem Cell Report has also been told that the remaining candidates, who are scheduled to be interviewed by the agency's governing board on Wednesday, are all from the private sector. Asked repeatedly whether, in fact, the finalists for the job are all from the private sector, the agency has remained firmly tight-lipped. Here is the piece from The Bee, which is the only daily newspaper in California's Capital. 

State stem cell agency’s at a crossroads

By David Jensen
Special to The Bee

Published: Sunday, Apr. 27, 2014 - 12:00 am

Last Modified: Sunday, Apr. 27, 2014 - 7:38 am

In a few days, the $3 billion California stem cell agency is slated to pick a new president who will oversee what could be the last years of its life.

The governing board of the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, is scheduled to make the decision Wednesday on the new CEO and his or her pay, which may top $500,000 annually and predictably stir public outrage.

It is a watershed moment for the nearly 10-year-old agency. Not only does it need a new president, it needs more cash, along with results that will resonate widely with the public and potential funding sources. Money for new research awards is scheduled to run out in 2017. To help build support and attract cash, CIRM has begun an aggressive push to commercialize stem cell research. The hope is to fulfill the promises of cures that were made during the ballot initiative campaign that created the program in 2004.

Overall, the agency, which has 56 employees, has handed out about $1.7 billion since it was created by California voters when they approved Proposition 71. The measure funded the agency directly from state borrowing (bonds), with no intervention by the governor or Legislature. No cures have yet resulted from CIRM’s spending.

The agency’s new chief will replace scientist Alan Trounson, who said last fall that he was resigning to rejoin his family in Australia. Trounson was hired in 2008 at an annual salary of $490,008, where it remains today.

Late last year, the agency pointedly specified that the new CEO did not have to be a scientist. Hiring someone from the private sector, however, could mean offering a salary higher than Trounson’s.

The new president and the agency face other issues, particularly developing what the agency calls a “sustainability” plan that would finance it beyond 2017. CIRM Chairman Jonathan Thomas is examining the possibility of a public-private partnership and is pitching the agency’s achievements to possible funding sources.

Asked last week to summarize CIRM’s accomplishments, Thomas said in an email, “In just a few short years – we didn’t start funding research in earnest until 2007 – we have helped make California the world leader in stem cell research and advanced the science much faster than anyone imagined would happen. Just 10 years after the passage of Proposition 71, 10 projects (that) we have funded are in or have been in clinical trials – including therapies for heart failureand HIV/AIDS – and we anticipate several more in cancer, diabetes, sickle cell disease and blindness going into clinical trials this year. It’s a record the people of California can be proud of.”

CIRM’s message, however, did not resonate at a meeting in January of the only state body charged with oversight of the enterprise – the Citizens Financial Accountability Oversight Committee, which is chaired by state Controller John Chiang.

One member of the committee, Jim Lott, a hospital industry executive in the Los Angeles area and backer of Proposition 71, was sharply critical of a presentation by Thomas and Ellen Feigal, CIRM’s senior vice president for research and development. According to the transcript of the meeting, Lott said, “What can you tell me that we’ve done that’s going to get my (13-year-old) daughter out of her wheelchair sooner (rather) than later after all this money has been spent?”

Not satisfied with Thomas and Feigal’s response, Lott told Thomas that the agency had a serious “marketing problem.” Lott said, “I’m telling you, pal, I would have a hard time voting for (Proposition 71) again.”

• Read more articles by David Jensen

Read more here: http://www.sacbee.com/2014/04/27/6355379/state-stem-cell-agencys-at-a-crossroads.html#storylink=cpy

Post-Mortem on NIH and its Stem Cell Center Action

An interesting discussion is underway in comments on this blog concerning the shuttering of the NIH Center for Regenerative Medicine and the departure of its leader, Mahendra Roa.

It involves priorities, strategy and funding, which one anonymous commentator says was inadequate. Researcher Jeanne Loring of Scripps has also weighed in with her thoughts. Among other things, she said that Rao did tremendous work and that the California stem cell agency should "embrace his ideas." Another scientist says some of the problems stemmed from failure to negotiate the bureaucratic byways of the NIH with the necessary skill. All the remarks can be found in a comment string on the NIH item. 

Genetic Anthropologist is New Honcho for California Stem Cell Agency Web Site

The California stem cell agency has hired a “Ph.D.-trained genetic anthropologist” and science writer as its new social media manager.

Anne Holden
Linked In photo

She is Anne Holden, formerly of the Gladstone Institute in San Francisco. Her title at the stem cell agency is Web content and social media manager. The agency's Web site is its main contact point for the public and carries a vast array of information, both in text and video.

Her responsibilities include “website content development and ongoing management, developing innovative digital communications tools and strategies, online media relations, and publication management.” Holden has already written several items for the agency's blog.

She received her Ph.D. in biological anthropology from the University of Cambridge, where she specialized in human evolutionary genetics. She replaces Amy Adams, who left to return to communications work at Stanford University. Holden's Linked In profile included the genetic anthropologist description. 

California Stem Cell Directors Nearing Decision on New CEO and Salary

In less than 10 days, the $3 billion California stem cell agency could well have a new president to oversee what could be the last years of its life.

Directors of the unprecedented state enterprise have scheduled a full-day meeting April 30 in Burlingame to make a decision on a candidate and decide what he or she is worth. As usual, compensation will be touchy, at least in terms of how it is perceived by the public.

Most of the governing board's session will be behind closed doors. However, the actual vote on the president and the compensation package will occur in open session. The public will have a chance to comment on both matters.

The current president of the California Institute for Regenerative Medicine(CIRM) , Alan Trounson, has a salary of $490,008. He has not had a pay raise since 2008, when he began work. Salaries of the public officials, however, are one of  those visceral issues with large numbers of the public, which is incensed by anything that they perceive as excessive. Predictably, Trounson's salary and others at CIRM triggered outrage. (See here, here and here.) The salary of the new president is also likely to be greeted with less than enthusiasm, regardless of how the agency dresses it up.

The task of the new CIRM CEO will be far different than his or her predecessors. In 2005, the first year of the agency's operation, the president faced legal and organizational challenges and had to devise a plan for spending $3 billion in a nascent field. Today, the agency is down to its last $600 million and is scheduled to run out of funds for new awards in less than three years. It has embarked on a “sustainability” effort focusing on the possibility of some sort of public-private financing. That effort so far has failed to generate any public result.

The agency currently subsists on cash from state bonds, money borrowed by the state. The possibility of asking California voters for more state borrowing is still on the table. However, California political realities suggest that it would be difficult, to say the least, to mount another successful bond election to provide more billions for the agency.   

NIH Action on Stem Cells: More Than 'Bureaucratic Bungling'

A national stem cell advocacy group this week ripped the National Institutes of Health (NIH) for “dismantling” its Center for Regenerative Medicine, describing the move as a "setback" for the entire field.

Bernard Siegel
GPI photo

The Genetics Policy Institute (GPI) said the action was a “huge disappointment” in an email sent out internationally by Bernard Siegel, executive director of the group, which stages the heavily attended World Stem Cell Summit.

The NIH move also has implications for the California Institute for Regenerative Medicine(CIRM), whose $3 billion program is down to its last $600 million.

The GPI was reacting to news in the journal Nature that the NIH said its center “will not continue in its present form.” The head of the NIH program, Mahendra Rao, took a job this month with the New York Stem Cell Foundation. James Anderson, director of the NIH’s Division of Program Coordination, Planning, and Strategic Initiatives, told Nature that the $52 million NIH effort was going to be rethought following a workshop in May.

Siegel said,

“The dismantling of the program appears to be a retreat by the United States from the translational imperative and a setback for the field at large. The patient community will be looking to Dr. Collins(head of the NIH) and others in NIH leadership to fulfill their commitment to stem cell development as a singular priority. Other countries are pouring in resources and moving full steam ahead. The NIH’s failure to continue the program represents more than just a case bureaucratic bungling. What we see here is a lack of vision and a public relations blunder. Years of valuable work and planning just tossed away. The scientific community and the public rightfully believes regenerative medicine will one day provide innovative treatments and cures to chronic diseases. The decision to tear down the Center for Regenerative Medicine, without first providing an alternative plan, undermines the credibility of NIH. A huge disappointment."

Asked for a response this week by the California Stem Cell Report, Amanda Fine, a public affairs specialist at the NIH, said in an email,

“The NIH Intramural Center for Regenerative Medicine has not closed.  This is a fast evolving area of science and NIH decided to step back and reassess what the field needs in 2014 and beyond and where NIH can have the greatest impact. NIH is holding a workshop tentatively scheduled for May 5 that will convene a group of experts in the field to address current obstacles to translation of cell therapies and will help prioritize a number of requirements that the larger community has articulated through white papers over the past two years.  NIH will consider the feedback from the workshop and establish a set of goals for the CRM.

Initially, Fine asked that the NIH statement not be attributed to a specific individual but later

said it could be attributed to James Anderson, who also made the statements to Nature.

Public details of the NIH program and its problems are murky. But the NIH action has implications for the California stem cell agency, which is scheduled to run out of cash for new awards in 2017. The agency is attempting to raise funds to continue beyond that point.

The agency could use the news to argue that now, more than ever, it is necessary to support stem cell research efforts in California because of weak federal support, which ebbs and flows depending on political vagaries. On the other hand, some might interpret the NIH rollback as a sign that those well-informed in the field have judged it to be less-than-ready for prime time, an argument that could be extended to California's efforts.

What the NIH action clearly does is create more uncertainty concerning progress in stem cell research. Uncertainty is an anathema to businesses that may be considering where to invest hundreds of millions of dollars.

California Stem Cell CEO Search: Three to Four Candidates Remain, Fewer Tomorrow

A key panel of the directors of the $3 billion California stem cell agency today is expected to whittle down its list of candidates to become the new CEO of the organization, which is facing financial extinction in 2017.

Currently there are three or four candidates, all from the private sector, the California Stem Cell Report understands. The agency, however, did not comment on the number or nature of the candidates.

Kevin McCormack, senior director of public communications, only said this morning in an email,

“The full board is meeting to interview the short-listed candidates on April 30 at which point we hope they will be able to agree on the top candidate. If that candidate then agrees to take the job the announcement will be made at the May (29) board meeting(in San Diego).”

 

Today will mark the conclusion of two days of closed-door meetings of the directors' Presidential Search Subcommittee. The focus on industry candidates reflects the agency's push to drive stem cell research into commercialization. The effort is aimed at fulfilling the promises of the 2004 election that created the agency as well as making it more likely to find future sources of funding for the agency, which now subsists on money borrowed by the state. The agency has only $600 million left. Cash for new awards is scheduled to run out in about three years, and no therapies have been produced.

Agency President Alan Trounson announced last fall that he was leaving his $490,008-a-year post to return to Australia. He has continued to fill in on an interim basis.

$124 Million Deal for Keirstead's California Stem Cell, Inc.

California Stem Cell, Inc., founded by the UC Irvine researcher made famous eight years ago by showing a once paralyzed rat apparently walking on national television, was sold this week in a deal reportedly worth at least $124 million in stock and cash.

NeoStem, a New York city-based firm, announced the acquisition yesterday in a move that sent its stock to $6.64 this morning, up roughly 6 percent from last Friday. Its 52-week high is $9.00 and low $5.00.

Gen News reported that the deal “will add a late-stage technology to the acquiring company’s pipeline. Through the deal, NeoStem will take over development of CSC’s Melapuldencel-T, an autologous melanoma initiating (stem) cell immune-based therapy intended to eliminate the tumor cells capable of causing disease recurrence, beginning with the launch of a pivotal Phase III trial.”

Hans Keirstead
UC Irvine photo

The president of the privately held California Stem Cell, Inc., is Hans Keirstead, who was a key figure in the 60 Minutes news show on Feb. 23, 2006. CBS reported that “if paralyzed people are ever going to walk again, it might be because of the scientist (Keirstead) in this story.” 

The piece said he had injected the rats with embryonic stem cells. Keirstead, however, has not taken that research into a clinical trial for human beings.

NeoStem's interest in the Irvine firm did not appear to involve a possible spinal therapy.

While the company's stock price jumped as a result of the acquisition, one view of the future of the NeoStem was not optimistic. The Street Web site is recommending a “sell” on the firm's stock. It said yesterday. The Street said,

“This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and poor profit margins.”

UC Davis stem cell scientist and blogger Paul Knoepfler, however, called the deal good news for the stem cell field.

Strangling Science: Antiquated System Wastes Billions, Costs Lives

The scientific community in California and the nation is fraught with worry about declining financial support for academic research. At the same time, however, as scientists wring their hands about the lack of funding, they are going along with the waste of more than $10 billion that could be used to help relieve the cash shortage.

What this is all about is the “stranglehold” that scientific journals have on publishing the results of the research paid for almost entirely by taxpayers. That research is the foundation of the journal industry, which is both highly profitable and a powerful lobby in Washington as it seeks to maintain its franchise. The industry is also based on a 400-hundred-year-old system that not only wastes money but costs lives because of its tediously slow mechanisms.

“Tragically insane” and unnecessary is how respected UC Berkeley researcher Michael Eisen describes the whole business, which is nearly invisible to the general public. That is, until one of its members starts to seek publicly financed information that is buried behind expensive paywalls.

Michael Eisen
UCB Alumni Association photo

Scientists are the unpaid workers for journals, submitting their articles for what they hope will be professional prestige and advancement. They do so, Eisen said, “while they acknowledge that their business practices are bad for science and the world.”

Last year, Eisen spoke to the Commonwealth Club in San Francisco about the subject. His speech was carried in a somewhat truncated form in this past winter's issue of the UC Berkeley alumni magazine. One of the headlines on the article asked,

“In the age of the Internet, why is so much research inaccessible?”

What Eisen had to say is worthy of careful thought as the $3 billion California stem cell agency faces financial extinction and the NIH sees its budget under increasing pressure. It seems a dubious proposition for scientists to give away the fruits of their labor and then have to pay for critically necessary access. Here is how Eisen described the situation along with additional excerpts from his speech.

“Every year universities, governments and other organizations spend in excess of $10 billion dollars to buy back access to papers their researchers gave to journals for free, while most teachers, students, health care providers and members of the public are left out in the cold. 

“Even worse, the stranglehold existing journals have on academic publishing has stifled efforts to improve the ways scholars communicate with each other and the public. In an era when anyone can share anything with the entire world at the click of a button, the fact that it takes a typical paper nine months to be published should be a scandal. These delays matter – they slow down progress and in many cases literally cost lives.”

Eisen continued,

“Tonight, I will describe how we got to this ridiculous place. How twenty years of avarice from publishers, conservatism from researchers, fecklessness from universities and funders, and a basic lack of common sense from everyone has made the research community and public miss the manifest opportunities created by the Internet to transform how scholars communicate their ideas and discoveries.”

Eisen decscribed the role of the scientific publications.

“I want you to note just how little the journal actually does here. 

“They didn’t come up with the idea. They didn’t provide the grant. They didn’t do the research. They didn’t write the paper. They didn’t review it. All they did was provide the infrastructure for peer review, oversee the process, and prepare the paper for publication. This is a tangible, albeit minor, contribution, that pales in comparison to the labors of the scientists involved and the support from the funders and sponsors of the research. 

“And yet, for this modest at best role in producing the finished work, publishers are rewarded with ownership of – in the form of copyright – and complete control over the finished, published work, which they turn around and lease back to the same institutions and agencies that sponsored the research in the first place. Thus not only has the scientific community provided all the meaningful intellectual effort and labor to the endeavor, they’re also fully funding the process. 

“Universities are, in essence, giving an incredibly valuable product  – the end result of an investment of more than a hundred billion dollars of public funds every year – to publishers for free, and then they are paying them an additional ten billion dollars a year to lock these papers away where almost nobody can access them.
“It would be funny if it weren’t so tragically insane.”

How does it affect the public, particularly persons with serious diseases? Eisen answered,

“This is most obviously a problem for people facing important medical decisions who have no access to the most up-to-date research on their conditions – research their tax dollars paid for. In a world where patients are increasingly involved in health care decisions, and where all sorts of sketchy medical information is available online, it is criminal that they do not have access to high quality research on whatever ails them and potential ways to treat it. 

“Astonishingly, many physicians and health care providers also lack access to basic medical research. Journal subscriptions in medicine are very expensive, and most doctors have access to only a handful of journals in their specialty. 

“But this lack of access is not just important in the doctor’s office. Scores of talented scientists across the world are blind to the latest advances that could affect their research. And in this country students and teachers at high schools and small colleges are denied access to the latest work in the fields they are studying – driving them to learn from textbooks or Wikipedia rather than the primary research literature. Technology startups often can not afford to access to the basic research they are trying to translate into useful products.”

Supporters of the journal industry argue that it is necessary because it provides for peer review of research results, thus ensuring the integrity of the science. Eisen said, however, that current peer review “poisons science.”

“Peer review is the closest thing science has to a religious doctrine. Scientists believe that peer review is essential to maintaining the integrity of the scientific literature, that it is the only way to filter through millions of papers to identify those one should read, and that we need peer reviewed journals to evaluate the contribution of individual scientists for hiring, funding and promotion.

“Attempts to upend, reform or even tinker with peer review are regarded as apostasies. But the truth is that peer review as practiced in the 21st century poisons science. It is conservative, cumbersome, capricious and intrusive. It encourages group think, slows down the communication of new ideas and discoveries, and has ceded undue power to a handful of journals who stand as gatekeepers to success in the field.

“Each round of reviews takes a month or more, and it is rare for papers to be accepted without demanding additional experiments, analyses and rewrites, which take months or sometimes years to accomplish.

“And this time matters. The scientific enterprise is all about building on the results of others – but this can’t be done if the results of others are languishing in peer review. There can be little doubt that this delay slows down scientific progress and often costs lives.”

Eisen continued,

“So, while it is a nice idea to imagine peer review as defender of scientific integrity – it isn’t. Flaws in a paper are far more often uncovered after the paper is published than in peer review. And yet, because we have a system that places so much emphasis on where a paper is published, we have no effective way to annotate previously published papers that turn out to be wrong.”

Flawed stem cell research has made international headlines in recent months. They came in the case of a peer-reviewed paper published in the world's most prestigious journal, Nature. Hundreds, if not thousands, of other examples exist that are chronicled on a Web site called Retraction Watch.

Rao Joins New York Stem Cell Foundation

The New York Stem Cell Foundation announced today that Mahendra Rao, former head of the NIH Center for Regenerative Medicine, has been hired as its vice president for regenerative medicine, a new position at the organization.

Rao left the NIH March 28, apparently unhappy with its lack of funding to advance stem cell clinical trials. At one point, Rao was also being discussed as a potential successor to Alan Trounson as head of the California stem cell agency.

The agency says it is on schedule to name a new president late next month.

California Stem Cell CEO Search: Rao Out, Closed-Door Meeting Next Week

Mahendra Rao
NIH photo

Speculation surfaced this week but was quickly squelched that Mahendra Rao, until recently the head of the federal Center for Regenerative Medicine, is a candidate to become the new president of the $3 billion California stem cell agency.

Rao's departure from the NIH's $52 million stem cell effort took many by surprise yesterday when it surfaced in an online story from Nature. The piece by Sara Reardon said that Rao left the NIH on March 28 and that the move has left NIH researchers “in the dark.”

She wrote,

“Relations seem to have soured last month owing to an NIH decision to award funding to only one project aiming to move iPS cells into a clinical trial. Rao says he resigned after this became clear. He says that he had hoped that five trials would be funded, especially because the centre had already sorted out complex issues relating to tissue sources, patents and informed consent.”

In the wake of the story, the California Stem Cell Report learned that Rao is not a current candidate for the California stem cell agency position. He is also not expected to take a fulltime research position in California. Rao did not respond to an email inquiry about the matter. (The New York Stem Cell Foundation announced later that it has hired Rao as vice president for regenerative medicine.)

Rao's departure from the NIH was reported as early as March 3 in a little-noticed press release from Cesca Therapeutics of Rancho Cordova, Ca.. The Sacramento-area firm was formerly known as Thermogenesis. The company said that Rao was joining its board of directors April 1 following his “planned departure” in March from the NIH.

Yesterday, Stemedica Cell Technologies of San Diego announced that Rao was joining its scientific advisory board. Stemedica was mentioned in a New York Times story last September involving international medical tourism. The company's Web site says it “is currently supporting clinical trials in Kazakhstan and Mexico and anticipates supporting similar initiatives in several other countries in 2013.”

Meanwhile, the agency is still on schedule to hire a new CEO by the end of May, according to Kevin McCormack, senior director of public communications. The current president, Alan Trounson, announced last fall that he was leaving to return to his family in Australia.

The agency's presidential search committee has scheduled a two-day, closed-door meeting for next Tuesday and Wednesday to screen candidates. According to the agency's timetable, the teleconference session is intended to produce the finalists for the job, who will undergo additional interviews either late this month or early next month. A vote by the agency's 29-member governing board is expected at its meeting in San Diego May 29.

Next week's meeting does provide for comment from members of the public, who can attend the public portion of the meeting. The main location is in Los Angeles, The address can be found on the meeting agenda.

California's $40 Million Stem Cell Genomics Award Still Hanging Fire

The California stem cell agency's $40 million award to a Stanford-Salk group for stem cell genomics research is not yet a done deal.

The award was approved more than two months ago by the agency's board. However, the proposal is now caught up in a staff review of the nitty-gritty of its details.

 Agency employees, as a routine matter, go through all board-approved applications to be sure all matters are in order, ranging from commitments on matching funds to overall considerations concerning the recipient's research budget.

Sometimes changes are made as the result of the staff review. In rare cases, the recipient declines the award. (See here and here for two stories about recipient rejection of the California agency's cash.)

The California Stem Cell Report earlier today inquired about the status of the stem cell genomics award.

Kevin McCormack, senior director of public communications for the agency, said it had not cleared the staff review. Asked whether there were particular issues, McCormack replied,

“No. Some things just take time.”

The stem cell genomics round was marked by complaints about irregularities, unfairness, score manipulation and the role of its president, Alan Trounson.

In the wake of the award, which was approved on a 6-1 vote by the 29-member board, the agency initiated an examination of the grant review process in the genomics round.

Board member voting on the award was limited because of widespread conflicts of interest among the agency's governing board.

The Long Odds Story of Stem Cell Research

It was the sort of story that Californians did not see during the ballot campaign 10 years ago that created the state's $3 billion stem cell agency.

The story line then was of hope and the imminent prospect of cures for a host of diseases that afflicted half of California's population.

Today in the San Francisco Chronicle, Stephanie Lee wrote of biotech companies that go for more than two decades without ever developing a commercial product. Lee's poster child was Geron Corp., which abandoned stem cell research in 2011 along with a $25 million loan from the stem cell agency.

Lee wrote,

“A company that goes 24 years without ever selling a product may sound unusual. But in biotechnology, it's not that uncommon. 

“Take Geron Corp. in Menlo Park, which has struggled to develop a therapy - any therapy - since its founding in 1990.”

Lee noted that Geron has an accumulated deficit of $893 million in debt since its founding and is now facing a number of lawsuits from unhappy investors.

“Faced with 10- to 15-year timelines and uncertain regulatory outcomes, companies and investors might plow hundreds of millions of dollars into therapies that will never see the light of day.”

Besides Geron, Lee also mentioned Isis Pharmaceuticals and Dendreon Corp. as examples of biotech firms with a lengthy development history.

She wrote,

“Overall, the odds of getting a drug to market aren't much better than gambling in Las Vegas. Only 1 in 5,000 to 10,000 compounds discovered in the lab gains FDA approval.”

Those odds, we should note, do not reflect development of stem cell therapies, but rather simpler substances. The expectation is that odds will go higher for stem cell therapies.

All of which is not the best news for the stem cell agency, although the information is not all that new. It was out there during the 2004 stem cell campaign, but the stem cell community did not want to talk about it, and the mainstream media largely did not report it.

The figures remained unchanged today, although a more positive aura surrounds biotech than has existed for several years. Nonetheless, the story of long odds and fruitless research is one that bedevils the stem cell agency. It will run out of funds for new awards in 2017 and is looking for ways to avoid its financial demise. Creating a new narrative, one with a brighter future, is the agency's task as it tries to develop new funding.

Blog on Break

The California Stem Cell Report will go dark for about a week or so while its producer makes an ocean passage from Zihuatanejo to Puerto Vallarta. Prepare for more stem cell excitement later this month.

Sunlight, Stem Cells and Feathers

California stem cell researcher​/blogger Paul Knoepfler is reporting that he has ruffled some elite feathers in the stem cell community.

In a post last week, the UC Davis scientist said that his heavy coverage of the STAP stem cell flap appears to have offended some. He wrote,

“It seems (the) concept of not talking about bad news is well-entrenched in the stem cell field.... I’ve been informed that I’ve ruffled the feathers of a couple elite VIPs of the stem cell world by covering the STAP stem cell story on my blog and doing the stem cell crowdsourcing experiment. 

“Would they really prefer that we all just skip along merrily singing kumbaya? 

“The reality is that the STAP stem cell situation is a serious threat to the stem cell field. As someone who is a big fan of stem cells and advocates actively for stem cell research, I wasn’t going to turn a blind eye.”

Earlier, Knoepfler also defended his blogging on the subject after stem cell scientist George Daley of Harvard expressed “concern” about the use of social media to discuss the subject. I wrote about that situation on March 7, noting the value of social media as a communications tool.

To get another perspective on the subject, I asked Deborah Blum, the Helen Firstbrook Franklin Professor in the School of Journalism and Mass Communication at the University of Wisconsin, Pulitzer Prize winner and author of five books, for her thoughts. She replied,

“I like social media as a tool for transparency, Dave. It gets criticized for being overwrought, or witch-hunting in nature. But I didn't see that in Paul's post. This may explain, though, why he contacted me on Twitter about a post I wrote a while back called "The Trouble With Scientists" that is a defense of bloggers and smart scientist bloggers. Think of Rosie Redfield's blog post on the so-called arsenic-based life report that helped show the flaws. Or the blog Retraction Watch, by Ivan Oransky, who's both an MD and a journalist. The kind of thoughtful online discussion that I think you saw in Paul's piece adds to efforts to make research more open and more accessible. And acknowledging its flaws is just as important in the process as praising its successes. 

“And I do NOT believe a scientist should be punished for writing responsibly about issues in research. I think it's praiseworthy.”

Knoepfler has added this note to his ruffled feathers item,

“It’s important to point out here that I don’t think this STAP situation, even if it gets even worse, can derail the positive momentum of our field overall, but it can slow things down. Also, the stem cell field needs public trust. When I am out there communicating with the public about stem cells and answering their questions, sadly they often spontaneously mention 'scandals' and 'controversy.' Many folks seem to associate these with the stem cell field already.”

Our take: Trying to bury dubious matters and hide questionable activities has led to the downfall of many organizations and individuals. If the stem cell field is to prosper, especially in age of lightning communications, its leaders should be forthright, open and transparent, whether the matter involves replication of research or conflicts of interest. As the late U.S. Supreme Court Justice Louis Brandeis has been famously quoted, 

“Sunlight is said to be the best of disinfectants."