Legislation to step up accountability and oversight of the California stem cell agency cleared its second hurdle today and now moves on to the Senate Appropriations Committee.
The proposed constitutional amendment (SCA13) by Sen. Deborah Ortiz, D-Sacramento, was approved 5-0 by the Elections, Reapportionment and Constitution Amendments Committee. It will be heard next Monday in Appropriations.
Ortiz is pushing hard to place the measure on the November ballot (see item below).
Wednesday, May 18, 2005
Tuesday, May 17, 2005
Push for Ballot Review of Stem Cell Agency
California's most influential legislator on stem cell issues is pushing hard to place on the November ballot her bipartisan measure to tighten oversight and accountability of the stem cell agency.
The proposed constitutional amendment by Sen. Deborah Ortiz, D-Sacramento, is scheduled to come before the Senate Election, Reapportionment and Constitutional Amendment Committee Wednesday(5-18).
Approval is not assured, but it is important for the proposal (SCA13) to clear the committee early because of deadlines for measures for the special election that the governor is expected to call for November.
Ortiz' measure, which requires 2/3 approval of both houses, would tighten conflict of interest standards for the agency and ensure that the agency and its working groups would be subject to state open meeting and open record laws.
An analysis of the bill by the committee staff said that it would go beyond CIRM's recently adopted conflict-of-interest standards. The measure would impose on the chair, vice chair and members of the ICOC (the Oversight Committee), the president of the institute, and members of Prop. 71 working groups standards identical to those of the NIH that have triggered the resignations of some NIH scientists who felt they were being penalized financially.
The legislation is also aimed at establishing "clearer and more protective standards for handling of patents and intellectual property resulting from research paid for with state funds," according to the analysis, which notes that Prop. 71 supporters have estimated that the state could receive more than $1 billion in royalties as the result of CIRM research. The measure additionally seeks to assure that lower income persons will have access to medical treatments that are developed as a result of CIRM-funded research.
No opposition is listed to Ortiz measure on the analysis, dated April 27. But it did note that the California Healthcare Institute had "concerns" about the "the timing of SCA 13 and certain provisions that will interfere with the CIRM's progress and pose obstacles to funding the best stem cell research. CHI states that working group meetings at which grant requests are reviewed and debated should be confidential; in addition, confidentiality is required to protect proprietary information contained in grant applications.
"CHI further states that applying NIH conflict of interest requirements to persons associated with the CIRM, as opposed to employed by the CIRM, is unnecessary.
"Regarding SCA 13's provisions dealing with intellectual property and licensing agreements, CHI states that the issue is being studied by the California Council on Science and Technology and the ICOC is consulting with the University of California and other research institutions on this complex issue and that requiring the state to recoup the full amount of administrative costs associated with patenting and licensing activities is premature."
In related action, the Ortiz measure (SB18) to require state audits of the agency and to protect egg donors was temporarily and routinely put aside by the Senate Appropriations Committee along with other spending measures. They will be taken up later after budget legislation is hashed over.
For more on Ortiz' proposals, see "Will California Vote Again on Stem Cell Research," April 15, on this blog.
The proposed constitutional amendment by Sen. Deborah Ortiz, D-Sacramento, is scheduled to come before the Senate Election, Reapportionment and Constitutional Amendment Committee Wednesday(5-18).
Approval is not assured, but it is important for the proposal (SCA13) to clear the committee early because of deadlines for measures for the special election that the governor is expected to call for November.
Ortiz' measure, which requires 2/3 approval of both houses, would tighten conflict of interest standards for the agency and ensure that the agency and its working groups would be subject to state open meeting and open record laws.
An analysis of the bill by the committee staff said that it would go beyond CIRM's recently adopted conflict-of-interest standards. The measure would impose on the chair, vice chair and members of the ICOC (the Oversight Committee), the president of the institute, and members of Prop. 71 working groups standards identical to those of the NIH that have triggered the resignations of some NIH scientists who felt they were being penalized financially.
The legislation is also aimed at establishing "clearer and more protective standards for handling of patents and intellectual property resulting from research paid for with state funds," according to the analysis, which notes that Prop. 71 supporters have estimated that the state could receive more than $1 billion in royalties as the result of CIRM research. The measure additionally seeks to assure that lower income persons will have access to medical treatments that are developed as a result of CIRM-funded research.
No opposition is listed to Ortiz measure on the analysis, dated April 27. But it did note that the California Healthcare Institute had "concerns" about the "the timing of SCA 13 and certain provisions that will interfere with the CIRM's progress and pose obstacles to funding the best stem cell research. CHI states that working group meetings at which grant requests are reviewed and debated should be confidential; in addition, confidentiality is required to protect proprietary information contained in grant applications.
"CHI further states that applying NIH conflict of interest requirements to persons associated with the CIRM, as opposed to employed by the CIRM, is unnecessary.
"Regarding SCA 13's provisions dealing with intellectual property and licensing agreements, CHI states that the issue is being studied by the California Council on Science and Technology and the ICOC is consulting with the University of California and other research institutions on this complex issue and that requiring the state to recoup the full amount of administrative costs associated with patenting and licensing activities is premature."
In related action, the Ortiz measure (SB18) to require state audits of the agency and to protect egg donors was temporarily and routinely put aside by the Senate Appropriations Committee along with other spending measures. They will be taken up later after budget legislation is hashed over.
For more on Ortiz' proposals, see "Will California Vote Again on Stem Cell Research," April 15, on this blog.
Monday, May 16, 2005
Robert Klein, Rube Mayors and Arrogrance
Los Angeles Times business columnist Michael Hiltzik began his piece on the California stem cell agency by saying it was the "offspring of perhaps the most misleading initiative campaign of 2004.
That was just the warm-up. The agency has "behaved not like the state agency it is, but with the arrogance of a private corporation that happens to be playing with the taxpayers' cash," he wrote.
It dangled "a theme park project (the stem cell HQ) in front of a bunch of rube mayors." And the agency's reaction to lawsuits is "overwrought."
Hiltzik attributes much of the "mess" to Robert Klein, chairman of the agency.
"The agency's attitude reflects the personality of its chairman, the Bay Area real estate developer Robert Klein II, who supervised the drafting of Proposition 71 and spearheaded the electoral campaign. Klein often seems to assume that anyone who criticizes himself or his agency must be fanatically hostile to embryonic stem cell research, or worse.
"Here's how he characterized the lawsuits during a board meeting last month: 'It is very clear that the people filing the litigation do not respect the democratic process and the mandate of 7 million voters. It is important, if they won't respect the democratic process, that they at least respect the suffering of over half of all California families who have a member' who might benefit from stem cell research.
"He's talking about litigants who, following all legal niceties, presented a legitimate petition to the California Supreme Court. Evidently judicial review has no place in Klein's world: The actions of voters, even if they might be based on misinformation and contradict the state Constitution, trump the principle of checks and balances. Who's really disrespecting the democratic process here, Mr. Klein?"
Hiltzik said he intended to put this question directly to Klein, "but at the last minute he canceled our scheduled interview."
While this blog can't say it concurs with everything Hiltzik has to say, it was a mistake for Klein not to talk to him. The Los Angeles Times has more than 900,000 subscribers. Typically newspapers have about two readers or so for each subscriber, making a total readership of something like 1.8 million. Most do not read the business page but let's say about 35 percent do, which is probably low. That means roughly 500,000 business page readers, who are the demographic cream, did not hear Klein's rebuttal to Hiltzik.
That was just the warm-up. The agency has "behaved not like the state agency it is, but with the arrogance of a private corporation that happens to be playing with the taxpayers' cash," he wrote.
It dangled "a theme park project (the stem cell HQ) in front of a bunch of rube mayors." And the agency's reaction to lawsuits is "overwrought."
Hiltzik attributes much of the "mess" to Robert Klein, chairman of the agency.
"The agency's attitude reflects the personality of its chairman, the Bay Area real estate developer Robert Klein II, who supervised the drafting of Proposition 71 and spearheaded the electoral campaign. Klein often seems to assume that anyone who criticizes himself or his agency must be fanatically hostile to embryonic stem cell research, or worse.
"Here's how he characterized the lawsuits during a board meeting last month: 'It is very clear that the people filing the litigation do not respect the democratic process and the mandate of 7 million voters. It is important, if they won't respect the democratic process, that they at least respect the suffering of over half of all California families who have a member' who might benefit from stem cell research.
"He's talking about litigants who, following all legal niceties, presented a legitimate petition to the California Supreme Court. Evidently judicial review has no place in Klein's world: The actions of voters, even if they might be based on misinformation and contradict the state Constitution, trump the principle of checks and balances. Who's really disrespecting the democratic process here, Mr. Klein?"
Hiltzik said he intended to put this question directly to Klein, "but at the last minute he canceled our scheduled interview."
While this blog can't say it concurs with everything Hiltzik has to say, it was a mistake for Klein not to talk to him. The Los Angeles Times has more than 900,000 subscribers. Typically newspapers have about two readers or so for each subscriber, making a total readership of something like 1.8 million. Most do not read the business page but let's say about 35 percent do, which is probably low. That means roughly 500,000 business page readers, who are the demographic cream, did not hear Klein's rebuttal to Hiltzik.
Sunday, May 15, 2005
The Worst of Beasts or The Best of Beasts?
Picture the California stem cell agency as an elephantine chimera. Then picture the blind men groping our elephant to come up with pronouncements about the nature of the beast.
That was a bit what it was like in two op-ed pieces in the San Francisco Chronicle. The persons making the pronouncements were State Treasurer Phil Angelides and Jesse Reynolds, program director for the Center for Genetics and Society. Both certainly have their eyes wide open but one could hardly tell they were talking about the same government bureaucracy.
To Reynolds, our elephant "best resembles a publicly funded, privately managed venture capital firm."
He said, "Prospecting for high-risk investments is appropriate in the private venture-capital model, but it is no way to lead a public agency. The institute would be giving out grants with one hand and asking for loans with the other. Too many likely "philanthropic sources" would have an interest in where the grants go, and could expect favors in return for a risky loan. The potential for conflict is just too great.
"Unfortunately, this is part of a pattern by the institute's leadership. Its excessive haste and reluctance to act like a public agency have led to decisions that are inappropriate and put the institute at risk. The "independent citizens" board is neither -- it is dominated by individuals who have a stake in the research. Many have major investments in the biotechnology industry. The top leaders of the California Institute for Regenerative Medicine continue to resist applying California's open-meetings laws, the Public Records Act and effective conflict-of-interest provisions to its powerful advisory groups, from which they were exempted by Prop. 71."
To Angelides, the agency is the source of funding for "groundbreaking stem-cell research, which scientists believe holds the key to curing and treating debilitating and life-threatening diseases and injuries that affect nearly every California family."
The folks who have sued the agency, he said, are "(hurting)the millions of people in our state who every day live with AIDS, Parkinson's, diabetes, Alzheimer's, heart disease and spinal-cord injuries. It threatens the hope of so many families who look forward to the day when a scientific breakthrough will ease the pain of their loved ones."
Further, Angelides holds the litigants in mighty low regard. "The legal firm of record in the lawsuit -- the Life Legal Defense Foundation -- has a clear ideological agenda that includes outlawing a woman's right to choose. The organization is committed to pursuing its agenda at any expense -- even if it means that their lawsuit threatens to prolong the suffering of more than 8 million Californians with heart disease, more than 500,000 with Alzheimer's disease, more than 30,000 afflicted with spinal- cord injuries, and countless more. Sadly, these tactics are emblematic of the kind of ideological warfare that Californians rejected when they spoke out so clearly against President Bush's efforts to block stem-cell research."
The two men's views are not entirely incompatible but the real question may be whether CIRM will be successful in its efforts to become more than some sort of government/political/venture capital chimera that is viewed with distaste by even some of its supporters.
(For more on chimeras, see the item on this blog, "The Yuck Factor" April 12.)
That was a bit what it was like in two op-ed pieces in the San Francisco Chronicle. The persons making the pronouncements were State Treasurer Phil Angelides and Jesse Reynolds, program director for the Center for Genetics and Society. Both certainly have their eyes wide open but one could hardly tell they were talking about the same government bureaucracy.
To Reynolds, our elephant "best resembles a publicly funded, privately managed venture capital firm."
He said, "Prospecting for high-risk investments is appropriate in the private venture-capital model, but it is no way to lead a public agency. The institute would be giving out grants with one hand and asking for loans with the other. Too many likely "philanthropic sources" would have an interest in where the grants go, and could expect favors in return for a risky loan. The potential for conflict is just too great.
"Unfortunately, this is part of a pattern by the institute's leadership. Its excessive haste and reluctance to act like a public agency have led to decisions that are inappropriate and put the institute at risk. The "independent citizens" board is neither -- it is dominated by individuals who have a stake in the research. Many have major investments in the biotechnology industry. The top leaders of the California Institute for Regenerative Medicine continue to resist applying California's open-meetings laws, the Public Records Act and effective conflict-of-interest provisions to its powerful advisory groups, from which they were exempted by Prop. 71."
To Angelides, the agency is the source of funding for "groundbreaking stem-cell research, which scientists believe holds the key to curing and treating debilitating and life-threatening diseases and injuries that affect nearly every California family."
The folks who have sued the agency, he said, are "(hurting)the millions of people in our state who every day live with AIDS, Parkinson's, diabetes, Alzheimer's, heart disease and spinal-cord injuries. It threatens the hope of so many families who look forward to the day when a scientific breakthrough will ease the pain of their loved ones."
Further, Angelides holds the litigants in mighty low regard. "The legal firm of record in the lawsuit -- the Life Legal Defense Foundation -- has a clear ideological agenda that includes outlawing a woman's right to choose. The organization is committed to pursuing its agenda at any expense -- even if it means that their lawsuit threatens to prolong the suffering of more than 8 million Californians with heart disease, more than 500,000 with Alzheimer's disease, more than 30,000 afflicted with spinal- cord injuries, and countless more. Sadly, these tactics are emblematic of the kind of ideological warfare that Californians rejected when they spoke out so clearly against President Bush's efforts to block stem-cell research."
The two men's views are not entirely incompatible but the real question may be whether CIRM will be successful in its efforts to become more than some sort of government/political/venture capital chimera that is viewed with distaste by even some of its supporters.
(For more on chimeras, see the item on this blog, "The Yuck Factor" April 12.)
Saturday, May 14, 2005
Battey To Stay at NIH
The NIH stem cell chief has confirmed that he has withdrawn his name from consideration as the new president of the California stem cell agency.
In response to a query from this blog, James Battey said in an email: "I believe serving as President, CIRM, is an exciting and important way to further the progress of regenerative medicine. However, I plan to continue as Director, National Institute on Deafness and Other Communication Disorders, which is also an important opportunity to further the progress of biomedical research in the normal and disordered processes of hearing,balance, smell, taste, voice, speech, and language."
In response to a query from this blog, James Battey said in an email: "I believe serving as President, CIRM, is an exciting and important way to further the progress of regenerative medicine. However, I plan to continue as Director, National Institute on Deafness and Other Communication Disorders, which is also an important opportunity to further the progress of biomedical research in the normal and disordered processes of hearing,balance, smell, taste, voice, speech, and language."
Friday, May 13, 2005
Battey Withdraws
NIH stem cell chief Jim Battey has withdrawn from consideration as the new president of the California stem cell agency, according to a usually reliable source.
Battey earlier disclosed his retirement in September from NIH and the plans to seek the CIRM position. He said he was leaving the NIH because of new conflict of interest standards at the federal body. He said, "I manage a family trust...which supports the education of my father's seven grandchildren, and it contains assets I'm told I'd have to divest. That would cost a lot of money, and I can't do that to my family.”
We have sent an e-mail to Battey asking him for comment on the report that he has withdrawn.
For more on Battey, see "Conundrums of Conflict" April 11 on this blog.
Battey earlier disclosed his retirement in September from NIH and the plans to seek the CIRM position. He said he was leaving the NIH because of new conflict of interest standards at the federal body. He said, "I manage a family trust...which supports the education of my father's seven grandchildren, and it contains assets I'm told I'd have to divest. That would cost a lot of money, and I can't do that to my family.”
We have sent an e-mail to Battey asking him for comment on the report that he has withdrawn.
For more on Battey, see "Conundrums of Conflict" April 11 on this blog.
More on CIRM Presidential Candidates
The Johnson & Johnson scientist being considered for the presidency of the California stem agency apparently is Per Petersen – not Per Pedersen.
Petersen is chairman of research and development of the J&J Pharmaceuticals Group in New Jersey, according to normally reliable sources. He was formerly with Scripps in San Diego.
Earlier reports spelled the man's last name as Pedersen. The latest information on him is not backed by the full and credit of the U.S. Government but it does appear to be relatively sound.
Petersen is chairman of research and development of the J&J Pharmaceuticals Group in New Jersey, according to normally reliable sources. He was formerly with Scripps in San Diego.
Earlier reports spelled the man's last name as Pedersen. The latest information on him is not backed by the full and credit of the U.S. Government but it does appear to be relatively sound.
California Stem Cell Legislation Amended
California State Sen. Deborah Ortiz has modified her legislation to tighten controls on the stem cell agency and protect egg donors.
According to the office of the Sacramento Democrat, the measure, SB18, has been amended to:
"Reduce the scope of the audit required by the bill by deleting 2 of the 5 requested items and limiting the review of contracts to a sample of contracts, and defer the deadline for the initial audit by three months.
"Extend the timeline for follow-up audits, if further review by the auditor finds they are needed.
"Clarify that the informed consent procedures contained in the bill for physicians who administer assisted oocyte production (AOP) for purposes of facilitating donation of eggs for medical research supplant and do not replace existing informed consent requirements."
As amended the bill does the following:
"Requires the (State) Auditor to conduct an initial audit of the Institute and ICOC by June 30, 2006.
"Requires the audit to include a review of the strategic policies and plans developed by the Institute and ICOC and policies and procedures for issuing contracts and for protection of intellectual property rights associated with research funded by the Institute and ICOC.
"Expresses intent that further audits be commissioned if the auditor's analysis of the implementation of recommendations from the initial audit indicates that further audits are necessary.
"Requires physicians who administer assisted oocyte production, as defined, to women for purposes of donating eggs for medical research to provide a standard written summary of health and consumer issues associated with AOP and to obtain written informed consent.
"Places limits on the sale or transfer of human oocytes or embryos and limits compensation to women to encourage them to produce human oocytes for the purposes of medical research.
"Expresses intent that the ICOC commission further research concerning the risks and benefits of ovarian stimulation drugs used in AOP."
The bill is up for consideration Monday in the Senate Appropriations Committee. A companion measure, SCA13, is before the Senate Elections, Reapportionment and Constitutional Amendments Committee. No hearing is yet scheduled on that measure.
For more on the Ortiz legislation, see http://californiastemcellreport.blogspot.com/2005/05/state-legislative-hearing-may-16-on.html
According to the office of the Sacramento Democrat, the measure, SB18, has been amended to:
"Reduce the scope of the audit required by the bill by deleting 2 of the 5 requested items and limiting the review of contracts to a sample of contracts, and defer the deadline for the initial audit by three months.
"Extend the timeline for follow-up audits, if further review by the auditor finds they are needed.
"Clarify that the informed consent procedures contained in the bill for physicians who administer assisted oocyte production (AOP) for purposes of facilitating donation of eggs for medical research supplant and do not replace existing informed consent requirements."
As amended the bill does the following:
"Requires the (State) Auditor to conduct an initial audit of the Institute and ICOC by June 30, 2006.
"Requires the audit to include a review of the strategic policies and plans developed by the Institute and ICOC and policies and procedures for issuing contracts and for protection of intellectual property rights associated with research funded by the Institute and ICOC.
"Expresses intent that further audits be commissioned if the auditor's analysis of the implementation of recommendations from the initial audit indicates that further audits are necessary.
"Requires physicians who administer assisted oocyte production, as defined, to women for purposes of donating eggs for medical research to provide a standard written summary of health and consumer issues associated with AOP and to obtain written informed consent.
"Places limits on the sale or transfer of human oocytes or embryos and limits compensation to women to encourage them to produce human oocytes for the purposes of medical research.
"Expresses intent that the ICOC commission further research concerning the risks and benefits of ovarian stimulation drugs used in AOP."
The bill is up for consideration Monday in the Senate Appropriations Committee. A companion measure, SCA13, is before the Senate Elections, Reapportionment and Constitutional Amendments Committee. No hearing is yet scheduled on that measure.
For more on the Ortiz legislation, see http://californiastemcellreport.blogspot.com/2005/05/state-legislative-hearing-may-16-on.html
Wednesday, May 11, 2005
The Small World of Stem Cells
A scientist who works for the firm that describes itself as the “world's most comprehensive and broadly based manufacturer of health care products” is reportedly being considered for the presidency of the California stem cell agency.
The firm is Johnson & Johnson, which has 111,000 employees worldwide. The man is Per Pedersen, who San Francisco Chronicle reporter Carl Hall identified as a candidate for the CIRM presidency.
Johnson & Johnson also has stem cell investments in California. Reporter Antonio Regalado of The Wall Street Journal has reported that “Johnson & Johnson says it recently made an equity investment in Novocell Inc., a Carlsbad, Calif., company that controls several of the stem-cell supplies endorsed for funding by the White House. Novocell is trying to turn stem cells into insulin-making cells that could be transplanted into people with Type-1 diabetes, replacing tissue damaged by that disease.”
The linkage involving Pederson, Johnson and Novocell is interesting. Whether it is a serious conflict is difficult to tell. But it does illustrate the small world of stem cells. It is probably impossible to find a president for CIRM who doesn't have some sort of ties that could be construed as a conflict of interest.
A couple of footnotes to all this. Novocell, whose web site is under construction, may have moved recently since most reports place it in Irvine, which is near Carlsbad. Johnson & Johnson in Sweden reports that it has no employee by the name of Per Pedersen. And we are told that the person in question is not Roger Pedersen, a noted stem cell scientist.
We are checking further with Johnson & Johnson on Pedersen.
The firm is Johnson & Johnson, which has 111,000 employees worldwide. The man is Per Pedersen, who San Francisco Chronicle reporter Carl Hall identified as a candidate for the CIRM presidency.
Johnson & Johnson also has stem cell investments in California. Reporter Antonio Regalado of The Wall Street Journal has reported that “Johnson & Johnson says it recently made an equity investment in Novocell Inc., a Carlsbad, Calif., company that controls several of the stem-cell supplies endorsed for funding by the White House. Novocell is trying to turn stem cells into insulin-making cells that could be transplanted into people with Type-1 diabetes, replacing tissue damaged by that disease.”
The linkage involving Pederson, Johnson and Novocell is interesting. Whether it is a serious conflict is difficult to tell. But it does illustrate the small world of stem cells. It is probably impossible to find a president for CIRM who doesn't have some sort of ties that could be construed as a conflict of interest.
A couple of footnotes to all this. Novocell, whose web site is under construction, may have moved recently since most reports place it in Irvine, which is near Carlsbad. Johnson & Johnson in Sweden reports that it has no employee by the name of Per Pedersen. And we are told that the person in question is not Roger Pedersen, a noted stem cell scientist.
We are checking further with Johnson & Johnson on Pedersen.
A Clubhouse For Cash
San Francisco blogger and political columnist Chris Nolan had little to say about the stem cell HQ affair. She explains that it was pretty much a done deal for San Francisco.
Now she says that not only will the HQ be in the Bay Area but nearly all the $3 billion as well.
“CIRM is going to usher in – with $3 billion to spend, it can hardly help itself – a new round of spending and investment up and down the state. But most of the money will stay up here,” the stand-alone journalist writes.
“The (silicon) valley's movers and shakers, its venture capitalists, don't like to travel. A plane ride to San Diego is barely acceptable. A drive up to the city is better. And two, they will keep much of their money here in the Bay area. Why? Many of these venture capitalist – particularly Kleiner Perkins Caufield and Byers which produced many of the greatest hits of the Internet, are tight with the research institutes that ring the Bay Area: University of California San Francisco and Berkeley and Stanford have been pumping out engineers for years. Biologists, too. And the biologists of the future are going to be computer geeks, if they're not already. No one has any reason to leave town; they've got the money, the resources and, now, the clubhouse.”
Now she says that not only will the HQ be in the Bay Area but nearly all the $3 billion as well.
“CIRM is going to usher in – with $3 billion to spend, it can hardly help itself – a new round of spending and investment up and down the state. But most of the money will stay up here,” the stand-alone journalist writes.
“The (silicon) valley's movers and shakers, its venture capitalists, don't like to travel. A plane ride to San Diego is barely acceptable. A drive up to the city is better. And two, they will keep much of their money here in the Bay area. Why? Many of these venture capitalist – particularly Kleiner Perkins Caufield and Byers which produced many of the greatest hits of the Internet, are tight with the research institutes that ring the Bay Area: University of California San Francisco and Berkeley and Stanford have been pumping out engineers for years. Biologists, too. And the biologists of the future are going to be computer geeks, if they're not already. No one has any reason to leave town; they've got the money, the resources and, now, the clubhouse.”
Tuesday, May 10, 2005
The Bridge to Three Billion Dollars
A web site in India the other day carried an item on the California stem cell agency. The motto of the web site is “It's All About Money, Honey.”
The stem cell agency itself has three billion reasons why that should be its motto as well.
With its bonds ($3 billion worth) under a financial cloud because of litigation, the agency is now facing substantial increased costs because of its bridge financing proposal.
During a packed meeting Monday in which opponents were critical of the agency's financing plans, the California Stem Cell Research and Cures Finance Committee approved the $200 million plan to issue short-term bond anticipation notes, according to reporter Carl Hall of the San Francisco Chronicle.
They “would fill the financing gap at least for a while, allowing the program to move forward until the lawsuit is resolved,” Hall wrote.
“If the lawsuit can't be resolved, the bond anticipation notes would become worthless, in effect putting purchasers of the notes in the position of making a grant to the state stem cell program.
“Officials envision charitable organizations stepping forward to pick up the notes, knowing full well they may never be repaid. No such organizations have been identified as yet, but Robert Klein, chairman of the stem cell program and a member of the finance panel, said he had no doubt some can be found.
“The use of bond anticipation notes is one of several options being investigated to prevent the California Institute for Regenerative Medicine, created by Prop. 71, from shutting for lack of funds before making its first grant.”
Hall said that “Anne Sheehan, representing state Department of Finance Director Tom Campbell, abstained from the 5-0 vote authorizing the short-term notes, suggesting that it's unclear whether the notes would be the best way to structure an interim finance scheme.”
State Treasurer Phil Angelides, who has responsible for issuing the state bonds, chaired the meeting. In a joint statement with California Attorney General Bill Lockyer, Angelides said, “We are concerned that a few, narrow anti-choice interests are attempting to thwart the will of California’s voters, who voted decisively to make funding available for this important research. With today’s decision by the Stem Cell Research and Cures Finance Committee, we will do everything possible to implement the voters’ desire to fund research that will help people suffering from debilitating diseases.”
Angelides indicated he would hold more hearings within a month or so to consider the bond anticipation notes and their interest costs.
Charles Halpern, a Berkeley attorney and former law school dean, told this blog following the meeting, “Klein had said that he intended to discuss his alternative financing plan at today’s meeting. Angelides steered the discussion away from this because of the Bagley-Keene (public notice) problem.
“It was unclear whether Klein has in mind passing the hat for charitable contributions, or trying to actually sell bond anticipation notes —BANs— in the commercial bond market with a high interest rate to reflect the extra risk that investors will be shouldering. Very confusing and Tom Campbell’s surrogate abstained on the vote about BANs because it seemed premature.”
“Jesse Reynolds of the Center for Genetics and Society in Oakland told committee members that conflicts of interest may arise if Klein or other leaders of the California Institute for Regenerative Medicine solicit contributions from organizations with a stake in future stem cell research grants,” Hall wrote.
Klein said in a statement he is working with other state officials to “look at alternative structures for bridge financing by charitable donors or other funding methods and to come to a consensus decision on the best way to ensure funding for the Institute while access to the critical research funding approved by California voters is temporarily blocked by groundless lawsuits.”
Here are links to other stories on Monday's meeting: Alexa Bluth, The Sacramento Bee; Sandy Kleffman, Contra Costa Times; Paul Elias, The Associated Press; Andrew Pollack, New York Times.
The stem cell agency itself has three billion reasons why that should be its motto as well.
With its bonds ($3 billion worth) under a financial cloud because of litigation, the agency is now facing substantial increased costs because of its bridge financing proposal.
During a packed meeting Monday in which opponents were critical of the agency's financing plans, the California Stem Cell Research and Cures Finance Committee approved the $200 million plan to issue short-term bond anticipation notes, according to reporter Carl Hall of the San Francisco Chronicle.
They “would fill the financing gap at least for a while, allowing the program to move forward until the lawsuit is resolved,” Hall wrote.
“If the lawsuit can't be resolved, the bond anticipation notes would become worthless, in effect putting purchasers of the notes in the position of making a grant to the state stem cell program.
“Officials envision charitable organizations stepping forward to pick up the notes, knowing full well they may never be repaid. No such organizations have been identified as yet, but Robert Klein, chairman of the stem cell program and a member of the finance panel, said he had no doubt some can be found.
“The use of bond anticipation notes is one of several options being investigated to prevent the California Institute for Regenerative Medicine, created by Prop. 71, from shutting for lack of funds before making its first grant.”
Hall said that “Anne Sheehan, representing state Department of Finance Director Tom Campbell, abstained from the 5-0 vote authorizing the short-term notes, suggesting that it's unclear whether the notes would be the best way to structure an interim finance scheme.”
State Treasurer Phil Angelides, who has responsible for issuing the state bonds, chaired the meeting. In a joint statement with California Attorney General Bill Lockyer, Angelides said, “We are concerned that a few, narrow anti-choice interests are attempting to thwart the will of California’s voters, who voted decisively to make funding available for this important research. With today’s decision by the Stem Cell Research and Cures Finance Committee, we will do everything possible to implement the voters’ desire to fund research that will help people suffering from debilitating diseases.”
Angelides indicated he would hold more hearings within a month or so to consider the bond anticipation notes and their interest costs.
Charles Halpern, a Berkeley attorney and former law school dean, told this blog following the meeting, “Klein had said that he intended to discuss his alternative financing plan at today’s meeting. Angelides steered the discussion away from this because of the Bagley-Keene (public notice) problem.
“It was unclear whether Klein has in mind passing the hat for charitable contributions, or trying to actually sell bond anticipation notes —BANs— in the commercial bond market with a high interest rate to reflect the extra risk that investors will be shouldering. Very confusing and Tom Campbell’s surrogate abstained on the vote about BANs because it seemed premature.”
“Jesse Reynolds of the Center for Genetics and Society in Oakland told committee members that conflicts of interest may arise if Klein or other leaders of the California Institute for Regenerative Medicine solicit contributions from organizations with a stake in future stem cell research grants,” Hall wrote.
Klein said in a statement he is working with other state officials to “look at alternative structures for bridge financing by charitable donors or other funding methods and to come to a consensus decision on the best way to ensure funding for the Institute while access to the critical research funding approved by California voters is temporarily blocked by groundless lawsuits.”
Here are links to other stories on Monday's meeting: Alexa Bluth, The Sacramento Bee; Sandy Kleffman, Contra Costa Times; Paul Elias, The Associated Press; Andrew Pollack, New York Times.
State Legislative Hearing May 16 on Stem Cell Measure
Legislation to tighten controls on the California stem cell agency is scheduled for a hearing May 16 in the state Senate Appropriations Committee, where it is expected to be approved.
The measure would then go to the Senate floor for a vote before moving on to the Assembly.
The bill, SB18, has bipartisan support. The chair and co-chair of the Senate Health Committee – Deborah Ortiz, D-Sacramento, and George Runner, R-Antelope Valley -- are co-authors.
For more on the measure, see the earlier items on this blog: “Vote Again (4-15)”, “Looking For Analysis (4-19)” and “Ho-hum (4-21).
The measure would then go to the Senate floor for a vote before moving on to the Assembly.
The bill, SB18, has bipartisan support. The chair and co-chair of the Senate Health Committee – Deborah Ortiz, D-Sacramento, and George Runner, R-Antelope Valley -- are co-authors.
For more on the measure, see the earlier items on this blog: “Vote Again (4-15)”, “Looking For Analysis (4-19)” and “Ho-hum (4-21).
Sunday, May 08, 2005
Rich and Rounded....That's the Way It Is
Charles Halpern is not a man pleased by much about the California stem cell agency. But, according to reporter Carl Hall of the San Francisco Chronicle, Halpern, a former law school dean and longtime agency critic, sounded happy that the agency settled on San Francisco for its permanent headquarters.
“He said the Bay Area's penchant for political activism will ensure 'a rich and rounded discussion' of every move the institute makes,” Hall wrote.
"'There's a whole network of civil society institutions around here that care about this stuff,' Halpern said. 'So it's a good thing the (institute) will be located in the hub of that kind of intellectual and critical discussion. That's a very positive thing. Only through a well-informed public dialog will this program be able to succeed.'"
Hall's piece also warned that folks should lower their expectations about cashing in on an immediate stem cell gold rush.
“Stem cell research is too early-stage to qualify as the next pillar of the regional economy, UCSF Chancellor J. Michael Bishop said during an interview Saturday. 'There's not much of an industry around stem cells yet,' he said. 'We haven't even figured out how to make the stem cells do what we need them to do to be useful clinically. Until that is done, it's a pretty shaky base for startups.
"'I'd like be more rah-rah, but that's the way it is.'"
“He said the Bay Area's penchant for political activism will ensure 'a rich and rounded discussion' of every move the institute makes,” Hall wrote.
"'There's a whole network of civil society institutions around here that care about this stuff,' Halpern said. 'So it's a good thing the (institute) will be located in the hub of that kind of intellectual and critical discussion. That's a very positive thing. Only through a well-informed public dialog will this program be able to succeed.'"
Hall's piece also warned that folks should lower their expectations about cashing in on an immediate stem cell gold rush.
“Stem cell research is too early-stage to qualify as the next pillar of the regional economy, UCSF Chancellor J. Michael Bishop said during an interview Saturday. 'There's not much of an industry around stem cells yet,' he said. 'We haven't even figured out how to make the stem cells do what we need them to do to be useful clinically. Until that is done, it's a pretty shaky base for startups.
"'I'd like be more rah-rah, but that's the way it is.'"
Readers Write
We welcome comments and will publish them. You can respond directly by clicking on the word "comments" following each item. Or you can send them to djensen@californiastemcellreport.com. The following is from Tom Hall, a retired history professor from Berkeley:
"I've been visiting your blog site for the past week or so and very impressed with what I am finding on it. The Halpern letter was a real service. Not only does he raise some important points (the $10 million construction issue for instance) but he does a nice job of raising general issues -- does Klein have some secret agenda or is he just flying by the seats of his pants? It seems to me that politically, Klein's greatest strength is the apparent fact that no one wants to mount an initiative that would either repeal the stem cell enterprise or place it firmly under public control."
"I've been visiting your blog site for the past week or so and very impressed with what I am finding on it. The Halpern letter was a real service. Not only does he raise some important points (the $10 million construction issue for instance) but he does a nice job of raising general issues -- does Klein have some secret agenda or is he just flying by the seats of his pants? It seems to me that politically, Klein's greatest strength is the apparent fact that no one wants to mount an initiative that would either repeal the stem cell enterprise or place it firmly under public control."
Behind the Stem Cell Scene
Columnists Matier and Ross of the San Francisco Chronicle popped up with a tidbit this morning on the stem cell HQ affair and the scientist and rag merchant who played background roles. Here is what the writers had to say:
“All the money and lofty arguments aside, San Francisco's landing of California's prestigious new stem cell research institute may have hinged on one very practical consideration.
“Zach Hall, the center's interim chief executive officer, lives in San Francisco -- and had privately made it clear to anyone who would listen that he was in no mood to move to San Diego.
“As a matter of fact, friends say his desire to be closer to home in the city -- where his wife has a full-time job at the Symphony -- was one reason he quit his last job commuting three times a week to the USC medical school and took the interim stem cell post.
“By the way, much of the credit for San Francisco's stem cell victory is being given to Gap founder Don Fisher, who -- just as things were looking a bit grim -- rallied local developers to provide rent-free space for the headquarters.
“UCSF Vice Chancellor Bruce Spaulding, who was part of the informal team that worked on the bid, said the developers needed to be convinced of the long- term financial benefits of landing the project.
“'For all the mayor did, Spaulding said, 'the guy who made the argument most eloquently and powerfully was Don Fisher.'”
“All the money and lofty arguments aside, San Francisco's landing of California's prestigious new stem cell research institute may have hinged on one very practical consideration.
“Zach Hall, the center's interim chief executive officer, lives in San Francisco -- and had privately made it clear to anyone who would listen that he was in no mood to move to San Diego.
“As a matter of fact, friends say his desire to be closer to home in the city -- where his wife has a full-time job at the Symphony -- was one reason he quit his last job commuting three times a week to the USC medical school and took the interim stem cell post.
“By the way, much of the credit for San Francisco's stem cell victory is being given to Gap founder Don Fisher, who -- just as things were looking a bit grim -- rallied local developers to provide rent-free space for the headquarters.
“UCSF Vice Chancellor Bruce Spaulding, who was part of the informal team that worked on the bid, said the developers needed to be convinced of the long- term financial benefits of landing the project.
“'For all the mayor did, Spaulding said, 'the guy who made the argument most eloquently and powerfully was Don Fisher.'”
Saturday, May 07, 2005
The "Murkier" $100 Million Workaround
Questions are already being raised about the plan to fund the California stem cell agency with $100 million in philanthropic contributions.
Stem cell chairman Robert Klein sketched out the plan on Friday as a way to work around lawsuits that place a cloud over bonds that might be issued on behalf of the California Institute for Regenerative Medicine. (See our May 5 item "Looking for a $100 Million Helping Hand.")
Reporter Laura Mecoy of The Sacramento Bee did the most complete job of reporting on the subject in reports in the major California newspapers. But look for more in the next day or two in other newspapers.
Mecoy said that the most influential California legislator on stem cell matters, Sen. Deborah Ortiz, D-Sacramento, took a dim view of the $100 million plan.
"It would just make a murky issue even murkier," said Ortiz. "It is not the kind of openness you expect in government."
Mecoy said Klein characterized the $100 million as a bridge loan to, in his words, "make certain this momentum to develop new research and medical therapies is not slowed down."
“He refused to name the potential contributors,” Mecoy wrote, “but said they would only be repaid if the bonds sell. If the bonds aren't sold, he said the loans would become contributions.
“Klein said he plans to pursue this proposal on Monday when the stem cell agency's finance committee meets for the first time.
“(Jesse) Reynolds, program director at the Center for Genetics and the Society, called the contribution proposal 'risky,' and said it creates a 'strange relationship between a public agency and private lenders.' He also said Klein opens himself to possible conflict of interests by seeking contributions from foundations that also fund research and could be seeking state stem cell money as part of their future studies.
"'I don't think the head of a state agency responsible for giving out grants should be involved in fundraising,'" Reynolds said.
“Klein said the stem cell board's process for reviewing grants protects against conflicts of interest.
“He also said Proposition 71, the initiative that created the stem cell program, provided for contributions to be used to help fund grants and loans.
“During the election, though, such contributions were presented as matching funds that would be solicited by researchers seeking grants and loans from the state.
"'The problem here is we can't afford to lose eight or 10 months while this process (of litigation) moves forward,' Klein said.”
Stem cell chairman Robert Klein sketched out the plan on Friday as a way to work around lawsuits that place a cloud over bonds that might be issued on behalf of the California Institute for Regenerative Medicine. (See our May 5 item "Looking for a $100 Million Helping Hand.")
Reporter Laura Mecoy of The Sacramento Bee did the most complete job of reporting on the subject in reports in the major California newspapers. But look for more in the next day or two in other newspapers.
Mecoy said that the most influential California legislator on stem cell matters, Sen. Deborah Ortiz, D-Sacramento, took a dim view of the $100 million plan.
"It would just make a murky issue even murkier," said Ortiz. "It is not the kind of openness you expect in government."
Mecoy said Klein characterized the $100 million as a bridge loan to, in his words, "make certain this momentum to develop new research and medical therapies is not slowed down."
“He refused to name the potential contributors,” Mecoy wrote, “but said they would only be repaid if the bonds sell. If the bonds aren't sold, he said the loans would become contributions.
“Klein said he plans to pursue this proposal on Monday when the stem cell agency's finance committee meets for the first time.
“(Jesse) Reynolds, program director at the Center for Genetics and the Society, called the contribution proposal 'risky,' and said it creates a 'strange relationship between a public agency and private lenders.' He also said Klein opens himself to possible conflict of interests by seeking contributions from foundations that also fund research and could be seeking state stem cell money as part of their future studies.
"'I don't think the head of a state agency responsible for giving out grants should be involved in fundraising,'" Reynolds said.
“Klein said the stem cell board's process for reviewing grants protects against conflicts of interest.
“He also said Proposition 71, the initiative that created the stem cell program, provided for contributions to be used to help fund grants and loans.
“During the election, though, such contributions were presented as matching funds that would be solicited by researchers seeking grants and loans from the state.
"'The problem here is we can't afford to lose eight or 10 months while this process (of litigation) moves forward,' Klein said.”
HQ: The Final Dissection(Maybe)
The post-mortems this morning on the stem cell HQ affair did not offer any extraordinary insights beyond what has already been reported. They did note that the San Francisco area, site of the new HQ, is an expensive place to live. Just how expensive? A 2003 study showed that family of four with two working parents needs to earn more than $70,000 a year to sustain its basic needs in that area.
You can find the study here.
Here are links to news stories on the HQ decision: Carl Hall, San Francisco Chronicle; Laura Mecoy, The Sacramento Bee; Terri Somers, San Diego Union Tribune; Steve Johnson, San Jose Mercury News; Paul Elias, The AP ; Louis Sahagun, Los Angeles Times; Marni Leff Kottle, Bloomberg.com
You can find the study here.
Here are links to news stories on the HQ decision: Carl Hall, San Francisco Chronicle; Laura Mecoy, The Sacramento Bee; Terri Somers, San Diego Union Tribune; Steve Johnson, San Jose Mercury News; Paul Elias, The AP ; Louis Sahagun, Los Angeles Times; Marni Leff Kottle, Bloomberg.com
Friday, May 06, 2005
Flash!!! San Francisco Wins
San Francisco wins the stem cell HQ. Sacramento runs distant third. The vote was 16 for Baghdad-by-the-Bay and 11 for San Diego. Read Reporter Daniel Levine's story here in the San Francisco Business Times, filed at 4:01 PDT.
Looking for a $100 Million Helping Hand
The California stem cell agency may borrow $100 million from philanthropic organizations to start its research program.
The plan was announced after litigation raised financial clouds over the issuance of bonds by the California Institute for Regenerative Medicine.
Reporter Daniel Levine of the San Francisco Business Times quoted stem cell chairman Robert Klein as saying today, "We are looking at the potential to put together $100 million from various financial donors, to move forward and hire staff and make certain this movement to develop new research and advance medical therapies is not slowed down. As Nancy Reagan said, we cannot afford to lose any more time."
Levine also reported that “Klein said if for some reason the institute is unable to issue the bonds, the loans would be converted to grants. As such, he said the bridge financing would create no liability for the state.”
The plan was announced after litigation raised financial clouds over the issuance of bonds by the California Institute for Regenerative Medicine.
Reporter Daniel Levine of the San Francisco Business Times quoted stem cell chairman Robert Klein as saying today, "We are looking at the potential to put together $100 million from various financial donors, to move forward and hire staff and make certain this movement to develop new research and advance medical therapies is not slowed down. As Nancy Reagan said, we cannot afford to lose any more time."
Levine also reported that “Klein said if for some reason the institute is unable to issue the bonds, the loans would be converted to grants. As such, he said the bridge financing would create no liability for the state.”
The (Almost) Final HQ Media Morsels
"It's cachet, it's reputation, and at this point it's become a sport,'' said stem cell institute vice chairman Ed Penhoet.
Today the last dog will be hung in the Affaire HQ. Here are links to morsels at the final pre-hanging media meal. Of course, we will dine again, journalistically speaking, at a post-mortem tomorrow.
Reporters Rachael Gordon, Carl T. Hall, Ilene Leichuk, San Francisco Chronicle; Paul Elias, The AP; Terri Somers, San Diego Union Tribune; Bradley Fikes, North County Times, Judy Silber, Contra Costa Times.
Today the last dog will be hung in the Affaire HQ. Here are links to morsels at the final pre-hanging media meal. Of course, we will dine again, journalistically speaking, at a post-mortem tomorrow.
Reporters Rachael Gordon, Carl T. Hall, Ilene Leichuk, San Francisco Chronicle; Paul Elias, The AP; Terri Somers, San Diego Union Tribune; Bradley Fikes, North County Times, Judy Silber, Contra Costa Times.
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