Klein, Ortiz Agree on SCA 13 Changes, But Differences Remain

Stem cell chairman Robert Klein and Sen. Deborah Ortiz have reached "conceptual agreement" on modifications to her legislation to tighten oversight on the California stem cell agency.

Differences remain on important points, however. The full significance of the agreement could not be determined. As this item is being written, the proposed constitutional amendment, SCA 13, is being heard by the Senate Appropriations Committee. We are also seeking comment from the stem cell agency.

Here is a rundown on changes, as provided by her office.

Oversight Committee members, chair and vice chair, and institute president would be required to disclose their economic interests in the manner set forth in the Political Reform Act. They would be required to divest or place in blind trust any financial or real property interest in any organization that applies for funding or that has substantial interests in stem cell therapy, defined as greater than 5 percent of its research budget.

Working group members would be required to disclose their economic interests in manner set forth in political reform act with disclosure to the Oversight Committee. Disclosure would be to the committee and not to the general public.

The committee would provide the state auditor with the disclosure statements. The state auditor would be required to annually review disclosure statements as well as decisions or recommendations of each working group member and report findings to the legislature regarding whether working group members have complied with requirements.

SCA 13 would adopt the NIH requirement that members must recuse themselves from deliberation on any proposal if they or a close relative or professional associate has a financial interest in the proposal, including a direct benefit of any type deriving from the proposal itself, or a financial benefit of any type from an applicant institution of over $5,000 per year, including honoraria, fees, stock, or other benefits.
Meetings of the Oversight Committee and the agency would be subject to open meeting laws.

Working groups would be allowed to conduct closed sessions to conduct peer review and to consider matters involving intellectual property, proprietary information, and prepublication scientific information.
Working groups would be required to produce a written summary of their reasons for funding or not funding any project as well as how each project recommended for funding will benefit California residents and to conduct an open public meeting to solicit public comments before submitting the recommendation to the Oversight Committee.

Unchanged would be provisions requiring that the grants and contracts ensure that the state receives a return on its investment in the form of access to low cost treatments, recoupment of legal and administrative costs, and a share of the royalties. Ortiz is continuing to look at language to address concerns that these provisions may impede the issuance of bonds, "a relatively technical fix," and that they may jeopardize
the tax exempt status of any bonds issued, according to her office.

Both Klein and Ortiz agree that the "state should receive some type of return on its investment in research and part of that return should be ensuring that stem cell therapies and treatments resulting from research funded by the state are affordable and accessible."

But they disagree, said her office, about the mechanism. Ortiz "wants to adopt the model used by the International AIDS Vaccine Initiative, which requires entities receiving funding to commit to make vaccines available at reasonable prices and in sufficient supplies. Mr. Klein believes the state could direct a portion of the royalty payments negotiated by the ICOC into programs or initiatives to promote access to low cost therapies. They agreed to conduct further research and seek legal opinions about the viability of each approach."

We hope to bring more details and information on this issue later in the day.

SCA 13: A Yeah and a Compromise

The big dog of California newspapers, the Los Angeles Times, has endorsed legislation that would tighten oversight of the California stem cell agency. Meanwhile, the politically influential Sacramento Bee has offered up a possible compromise on the measure, which is vehemently opposed by the agency.

Lives will be lost is the position of CIRM if the proposal by Sen. Deborah Ortiz, D-Sacramento, is passed. Ortiz supported creation of the agency and supports stem cell research. But she believes that the agency should be held to standards that generally apply to other state bureaucracies.

The Times, the largest circulation (900,000) newspaper in California, said that "leaders of the (stem cell agency) are engaging in inexcusable rhetoric. If enacted, said the institute's acting chief, the (Ortiz) amendment would 'cripple our efforts.' A board member said it would lead to 'extra suffering and death.'"

The Times continued, "It's understandable that companies and scientists would be unwilling in an open forum to discuss their or others' work related to possible contracts or disclose their patent applications. But SCA 13 makes broad allowances for such discussions to be private."
"From a purely pragmatic standpoint," the newspaper said, "(stem cell chairman Robert) Klein should welcome the constitutional amendment because it could insulate the institute from lawsuits alleging that the lack of public oversight had rendered the stem cell bonds unconstitutional."After all, this isn't Klein's or his board's $3 billion — it's the public's. And public oversight is one of the best ways to guard against public money going astray."

(We should note that the editor of the Times editorial page, Michael Kinsley, has Parkinson's, which many believe could be treated with future cures from stem cell research. It is unknown whether the Times' position on SCA 13 reflects his own.)

The Sacramento Bee, with 300,000 circulation in the Capitol, said:
"California's Legislature and the state's $3 billion stem cell research institute are engaged in a dangerous game of political chicken. No one will win if both keep careening toward the ballot box."

The compromise suggestion The Bee proferred dealt with whether the working group meetings of the agency should be public and whether assurances should be enacted to guarantee that stem cell cures would be available to low income persons.

The Bee said that "there is no reason these (working group) meetings need to be completely closed. Peer reviewers could easily hold open discussions on whether proposed research projects meet the institute's goals and criteria. Then they could move into private sessions to discuss the reputations and qualifications of applicants, consider patent issues and conduct the final scoring. This type of hybrid would help inform taxpayers (and the oversight board) about the projects they are financing, without discouraging candid discussions."

It also said, "A current draft of (Ortiz') measure requires that therapies be made available at cost 'to California residents who are eligible to receive assistance through state and county health care and preventive health programs.' Ortiz's intent is admirable, but this provision is premature. Scientists are still years away from full and final testing of embryonic stem cell therapies, and the institute's oversight board is many months away from discussing their eventual licensing. Lawmakers could easily wait two years before delving into this issue. At that point, they will have legal standing under Proposition 71 to amend the law without a constitutional amendment."

Dodging the Two-Thirds Bullet

You might call it the stem cell work-around. It is a way to fast track a tough stem cell oversight proposal onto the November ballot.

The tactic would avoid Sen. Deborah Ortiz' nasty problem of securing a two-thirds vote in both houses of the California legislature for her proposed constitutional amendment on the California stem cell agency.

That is a difficult task under the best of circumstances. Two-thirds approval means that members of both parties have to vote for a proposal. The requirement has been one of the main reasons for the yearly budget gridlock in Sacramento. While Ortiz' measure (SCA13) has bipartisan support, it is unclear whether that is sufficient to deliver all the votes she needs. Her task is even trickier given the timetable for placing a measure on the ballot. Normally the proposal would have to clear both houses by the end of June.

Now comes a little noticed comment in one legislative analysis of SCA13 from the Elections, Reapportionment and Constitutional Amendments Committee, which approved the measure earlier.

The analysis suggested that "the author and committee may wish to consider whether it would be more appropriate to, instead of asking the voters to place into the Constitution language aimed at providing more specificity to a statutory initiative, ask the voters to amend the initiative itself."

That would require a simple majority vote in both houses, the analysis said. But it would also require the governor's signature while a constitutional amendment does not.

There is no indication whether Ortiz is considering making such a change in her legislation.

Ortiz has scheduled a news conference call for noon Thursday (May 26). SCA13 comes up in the Senate Appropriations Committee later that afternoon. Ortiz also met with Robert Klein Wednesday to exchange views about the proposal, which the stem cell Oversight Committee unanimously opposed on Monday.

For the record, the committee analysis listed only one other formal opponent to the proposal, Stanford University. Caltech, USC and the California Healthcare Institute have expressed "concerns." In support are Californians Aware, Calpirg and California Common Cause.

Stem Cell Agency Lambastes Ortiz

If the senator from Sacramento is trying to get the attention of the California stem cell agency, she did in big way on Monday.

"How dare she!" said one Oversight Committee member, Jeff Sheehy. "How dare she steal hope from the people of California."

His remarks came during discussion of the proposed constitutional amendment by Sen. Deborah Ortiz, D-Sacramento, that 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.

The Oversight Committee unanimously voted to oppose the proposal, SCA13, which requires a 2/3 vote of both houses of the Legislature and voter approval before it would become law. The committee moved its June meeting to Sacramento so it could lobby lawmakers against the proposal.

Also likely to be flooding lawmakers with their opposition are large national patient groups, some of which are represented on the Oversight Committee.

Interestingly, perhaps significantly, the opposition statement by the stem cell agency did not mention Ortiz' companion measure, SB18. Whether the agency is in support of that measure, neutral or opposed is not clear at this point. Also not clear is whether the absence of mention of SB18 is part of a bargaining ploy.

Both SCA13 and SB18, which have bipartisan support, are in the Senate Appropriations Committee and are scheduled for a hearing on Thursday. If they are approved by the committee, they then move to the Senate floor.

Ortiz has a meeting scheduled with stem cell chairman Robert Klein on Wednesday and other Oversight Committee members during the week.

The agency issued a statement following Monday's meeting that said "as currently drafted" Ortiz' constitutional amendment will" make it extremely difficult, if not impossible, for scientists to do their jobs, and it will delay critically needed medical therapies."

Klein said, "We cannot understand this rush to judgment to try and get SCA13 on this fall’s ballot.”

"We need to send a shot over the bow of the Legislature," Caltech President David Baltimore, a member of the Oversight Committee, was quoted as saying by reporter Rone Tempest of the Los Angeles Times.

Ortiz told reporter Steve Johnson of the San Jose Mercury News, "Rather than joining me and trying to find a way to put sound accountability measures into the law, they have simply attempted to create the fear that accountability is equal to opposition.''

"There is no sinister plot here," Ortiz told Terri Somers of the San Diego Union Tribune, adding that the measure would not delay any possible therapies or treatments. "This legislation does not prevent them from moving forward and issuing grants."

One critical element of opposition to SCA13 is the board's apparent belief that few scientists would be willing to present their research proposals during partially open working group sessions of the agency despite the lure of the $3 billion research grant pool. Committee members noted that the usual grant procedures elsewhere call for private sessions. However, Ortiz' measure would allow for private sessions involving intellectual property, proprietary information and matters involving prepublication confidential scientific information.

Here are links to other stories on the subject this morning: Carl Hall, San Francisco Chronicle; Sandy Kleffman, Contra Costa Times.

Correction

We had a bad link on the "Political Interference, Venture Capitalists" item May 23. Here is the correct link to the article in question.

"Can't Get The Money Out"

Reporter Megan Garvey of the Los Angeles Times has pulled together an overview of the California stem cell agency amidst the latest news from South Korea. "Stuck in Neutral" is headline.

She wrote, "With no relaxation of restrictions on the federal horizon, hurdles facing the state's funding efforts have taken on a new sense of urgency, said Bob Klein, chairman of the stem cell agency's board and author of Prop. 71, the ballot measure that created the agency.

"'It makes it terribly frustrating,' said Klein, a real estate lawyer whose son, Jordan, now a teenager, was diagnosed with insulin-dependent diabetes several years ago. 'It means all the tools we expected to be out there are on the table today. They're not possibilities. They're real, and we can't get money out.'"

Political Interference, Venture Capitalists and a Personal Plea

Three members of the Oversight Committee of the California stem agency have put together a compelling defense of the agency, pleading for rejection of efforts to tighten oversight of the institute.

The authors are Joan Samuelson, David Serrano Sewell and Jeff Sheehy. All are patient advocate representatives on the board and personally live with afflictions that might be helped by future therapies developed with stem cell research.

The article, which appeared in the San Francisco Chronicle last week, argues that the agency should be left to its own devices. Anything less could cost lives. Delays mean "someone who could have been benefited from new stem-cell based therapies -- perhaps one of us -- could die waiting."

"We beg, we plead: Let us get on with our work," they wrote, making an exceedingly personal argument that is difficult to oppose without appearing callous or worse.

Their article began, "A strange mix of religious ideologues, good-government activists and well-meaning Sacramento legislators have taken aim at the newly established California Institute for Regenerative Medicine, the stem-cell research center established by Prop. 71. Some want to kill it outright in the courts, some may impair its effectiveness by overburdening it with needless regulation and others could bring it to a screeching halt with legislation drafted in haste."

They went on, "Two lawmakers in Sacramento have proposed an amendment that would reopen Prop. 71, sending parts of it back to Californians for another vote. This action, supported by some ideological opponents of stem-cell research, is neither warranted nor sound policy, but creates a delay that means someone who could have been benefited from new stem-cell based therapies -- perhaps one of us -- could die waiting."

The three stem cell directors concluded, "Continue to scrutinize our every move, hold us to the highest standards, but allow us to move urgently toward the cures that are so tantalizingly close. Lives are at stake."

Regardless of the emotional appeal by the three, the agency cannot escape its heritage. It was created in the crucible of politics and electoral government. That was the method chosen by its sponsors, including Robert Klein, its chairman. The agency now must live with the facts of its life. It is a public agency, albeit an unusual one. That means it is subject to review, both formally and informally, by the people of California and their elected representatives. And if the agency does not meet with their approval, it is subject to change by the same methods that created it.

Put in another context, if venture capitalists, some of whom are deeply involved in the agency, had put up $3 billion to finance a biotech start-up, they would certainly expect to have something to say about how it conducts its business. Entrepreneuers who find themselves tied financially to VCs often don't like the subsequent VC meddling. But the VCs provide the money, and they want to call at least some of the tunes.

If the sponsors of Prop. 71 wanted to keep government out of the stem cell business, they shouldn't have asked for government money. It is much too late to stuff that cat back in the bag.

The Bee Roasts Robert Klein as "Rogue Operator"

In some past years, The Sacramento Bee's editorials were often a tad bland. "On one hand," they said, but "on the other...."

Sunday's piece on the stem cell agency was far from that. The editorial likened stem cell chairman Robert Klein to the crazed officer in the Vietnam War movie "Apocalypse Now" and described him as a "rogue operator" and "czar."

The rhetorical heat was generally over Klein's conduct over the last six months, but more specifically about legislation to tighten controls over the agency.

The Bee said Klein, "has gradually been consolidating power. In recent weeks, Klein has installed his cohorts as state employees, hired and fired consultants without consulting his fellow board members, and basked in the adulation of patient activists who see him as their savior."

The editorial continued: "At a Senate committee hearing on Tuesday, a lobbyist named Eugene Erbin showed up and proceeded to criticize aspects of (Sen. Deborah) Ortiz's bill, saying he was representing the institute.

"Erbin's lobbying raised eyebrows for two reasons.

"One, the institute's oversight board hasn't yet discussed hiring its own contract lobbyist, much less Erbin, who works for the Sacramento firm of Nielsen, Merksamer, Parrinello, Mueller and Naylor, which represents several biomedical firms. That hiring - at $50,000 for five months -makes the institute one of the few state agencies with its own private lobbyist.

"Moreover, the oversight board hasn't yet publicly discussed its position on Ortiz's bill. Klein claims the board is holding open deliberations on all key policy. His actions in this situation suggest otherwise."

We should note that this blog first reported hiring of the lobbyist and the nature of the firm's contract May 5 in "The $10,000-a-month Stem Cell Lobbyist."

Preciado Resigns from Stem Cell Agency

The Oversight Committee for the stem cell agency is losing its first member – Dr. Phyllis Preciado of Fresno.

She is resigning from the agency beginning in June to take an unspecified position in Oregon.

“My decision to accept a position in Oregon was based on the needs of my family, but that did not make it an easy one,” said Preciado in a statement released by the agency.

Stem cell chairman Robert Klein said she has "been a passionate voice on the ICOC for patient advocacy and the people of California’s Central Valley."

According to an article earlier this year in the Fresno Bee, she "worked 15 years as a registered nurse before attending medical school at the University of California at Irvine in her 30s. She still is paying off $100,000 in student loans and laughingly says: 'I think I'm the only one who is poor on the committee.'

"She was a faculty research fellow for UC San Francisco's Fresno Latino Center for Medical Education, but left the position (in January) and is pursuing other career opportunities."

The Fresno Bee also reported that she "designed, developed and started a community-based diabetes program at a Fresno clinic and produced a diabetes education video for Hispanic teenagers.

"She is the diabetes action plan co-chair for the California Medical Association Foundation Network of Ethnic Physicians Organization, and a member of the joint task force for the California Diabetes Prevention and Control Program-Diabetes Coalition of California."

Her position on the board is that of patient advocate for Type II diabetes. Lt. Gov. Cruz Bustamante will have 30 days to fill the position.

Stem Cell Snippets: Solace and Legislation

A 'TOUCHING" PICTURE: Check out this editorial cartoon in The Sacramento Bee by Rex Babin. It is likely there have been others but this is the first we have seen this year. It portrays Robert Klein and the agency in a reaching out position.

ENDORSING THE "ESSENCE:" We missed this editorial in the Los Angeles Times earlier, but with the paper's 900,000 circulation, we should call attention to it. It says, "Klein and his colleagues should incorporate the essence of Ortiz's public disclosure rules into their bylaws, whether or not the legislation reaches the governor's desk. He should also embrace the detailed set of stem cell research guidelines that the National Academy of Sciences just fast-tracked into print, six months ahead of schedule, in hope of influencing Klein's agency."

MAKING LEMONADE: Some of the also rans in the HQ race are finding solace. Reporter Clint Swett of The Sacramento Bee writes about how The Big Tomato is making lemonade out of its HQ lemons.

Stem Cell Ballot Measure Moves Ahead

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).

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.

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.

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.)

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."

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.

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.

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

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.

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.”