Your average reader of Fortune magazine has a household income of $347,500 and a net worth of $2.2 million. Nearly two-thirds of the readers are top management, and one out of three is on a corporate board.
An influential and important group, to say the least. All one million-plus of them were presented with the following in the Aug. 22 issue of the self-styled "world's premier business magazine:"
"THE STEM-CELL WAR -- Fighting for Their Lives --The folks who brought you Silicon Valley want to ignite a biotech boom, and California's Prop. 71, with $3 billion for stem-cell research, was supposed to be the match. They got a political conflagration instead."
Those are the headlines leading into the story by writer Betsy Morris -- a lengthy piece focusing heavily on California but weaving in national and international events as well. It is chockablock with tidbits.
On California stem cell chairman Robert Klein: "Relentless, manic and one of the best salesmen you'll ever meet."
On the selection of the California stem cell HQ: "In the 11th hour of an Olympic-like bidding contest, San Francisco snatched the plum from a dazed San Diego, compensating for an undistinguished second-story office on King Street with $18 million in free rent, conference rooms, and the like."
On the nature of the stem cell industry: Roughly 185 stem-cell companies exist in the world but "venture capital in the field is a mere $470 million."
On the future: Dana Cody, executive director of the Life Legal Defense Foundation, is quoted as saying, "I'd still like to see voters get educated (during the delays caused by litigation) and see some sort of grassroots effort to overturn the initiative."
The Fortune piece is definitely high-impact. But which way it falls – to the benefit of the stem cell agency or to its detriment – is difficult to say. There is enough fodder in it to fuel almost any point of view. But the article makes it clear that the agency has not had an easy course.
Here are a few more excerpts:
"When the stem-cell initiative passed on Election Day last November, the future looked bright. But by May the effort had slammed into a wall of opposition from the religious right and anti-tax groups, which stalled it with lawsuits."
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"Suddenly California became a mecca for biologists the world over. California universities—the same ones that gave birth to Hewlett-Packard, Sun, Google—started jockeying for position. Their best Ph.D.s began dreaming about the possibilities. The same characters who gave us Silicon Valley—the Sand Hill Road venture capital crowd—began mobilizing to deliver the next tech revolution. 'Biology is the next wave of science to make a big difference, and early-development stem cells are the mother lode,' says Richard Mahoney, retired CEO of Monsanto, a leader in agricultural biotech. 'Nobody wants to be left behind.'"
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"What has happened in California shows how unpredictably complex and thorny this issue can be. Despite all the momentum, Prop. 71 has stalled and landed in the courts. Lawsuits have blocked the issuance of bonds that would fund the stem-cell research. Now the initiative's backers must scramble to arrange alternative financing and fight the legal battles as they try to judge grant applications. For the moment an odd but potent little army of pro-lifers and anti-tax groups, represented by the Life Legal Defense Foundation—the same organization that provided legal assistance to Terri Schiavo's parents—has thwarted all the Hollywood stars, the deep-pocketed venture capitalists, the Nobel Prize winners (40 of them), and patient-advocacy groups (70 of them) that endorsed the research. "
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"The International Society for Stem Cell Research annual conference, held at the San Francisco Marriott last month, should have been a triumphant affair. Instead, a siege mentality had set in. 'We are a blue city in a blue state," Mayor Newsom assured the crowd of scientists. The underlying message: You will not be considered pariahs here. In an urgent speech, Bob Klein beseeched them not to give up. 'This is a very small window of opportunity. We must act quickly, or the forces against us will change the tide,' he said."
Online access to the article is limited to Fortune subscribers.
(A footnote on the Fortune demographics: There is a difference between the number of readers and paid circulation, which is 918,739. Readership is substantially larger because of a pass-along rate, but Fortune did not report online its calculation for its readership.)
Tuesday, August 09, 2005
Stem Cell Star Rebuffs the Golden State
All the finest stem cell researchers in the world are booking flights to California, lured by the $3 billion the state plans to spend on behalf of their efforts, right?
That's the conventional wisdom. But in at least one dramatic case, it is definitely wrong.
The story involves 35-year-old Mick Bhatia and the University of California, Davis, a $500,000 salary and an research budget of $2 million.
Bhatia is currently director of the stem cell biology group at the Robarts Research Institute at the University of Western Ontario. He soon will be scientific director of Canada's first stem cell research center, which is under construction at McMaster University.
What he won't be is director of a stem cell research center at UC Davis, which courted him for nine months with blandishments such as a base yearly salary of more than $500,000 along with the annual research budget of $2 million.
The details of the wooing were disclosed by reporter Carolyn Abraham of the The Globe and Mail of Toronto, which circulates nationwide in Canada. "Canadian Stem Cell Star Shuns U.S. Riches" read the headline on the story Tuesday.
The UC Davis offer was so generous, the newspaper reported, that Bhatia said, "I kept thinking they mixed up my name with someone else. It was overwhelming."
Abraham reported, "Three times he flew down to investigate the university and the town, scoping houses and schools for his two young children. His wife, Christina, cruised images on the Internet, being nine months pregnant with their third child and unable to fly.
"Dr. Bhatia even went so far as to sign and seal the offer. 'I put it in the FedEx envelope intending to send it off in the morning,' he said. But after a sleepless night, 'I couldn't do it.'
"He and his wife wanted to stay close to their families, and a pang of patriotism struck after their baby was born shortly after Canada Day. 'I like Canada,' the Toronto-born Dr. Bhatia said. 'I was educated here.'
"He also feared the position in California would force him to be more administrator than scientist. His duties would have included fundraising and providing input on designing the center and how it should operate.
"'If we spend a lot of time thinking about how shiny the hallways are and the square footage, we won't get very far figuring out how these cells work,' he said."
Abraham said that at McMaster Bhatia will have $10 million (Canadian) to start up research at the institute, plus $4 million for equipment and another $3- to $4-million in funding through Canada Research Chair positions.
How big was the Bhatia hire? John Kelton, vice-president of McMaster's health sciences faculty, said, "It's like getting a Wayne Gretzky or a baseball star."
That's the conventional wisdom. But in at least one dramatic case, it is definitely wrong.
The story involves 35-year-old Mick Bhatia and the University of California, Davis, a $500,000 salary and an research budget of $2 million.
Bhatia is currently director of the stem cell biology group at the Robarts Research Institute at the University of Western Ontario. He soon will be scientific director of Canada's first stem cell research center, which is under construction at McMaster University.
What he won't be is director of a stem cell research center at UC Davis, which courted him for nine months with blandishments such as a base yearly salary of more than $500,000 along with the annual research budget of $2 million.
The details of the wooing were disclosed by reporter Carolyn Abraham of the The Globe and Mail of Toronto, which circulates nationwide in Canada. "Canadian Stem Cell Star Shuns U.S. Riches" read the headline on the story Tuesday.
The UC Davis offer was so generous, the newspaper reported, that Bhatia said, "I kept thinking they mixed up my name with someone else. It was overwhelming."
Abraham reported, "Three times he flew down to investigate the university and the town, scoping houses and schools for his two young children. His wife, Christina, cruised images on the Internet, being nine months pregnant with their third child and unable to fly.
"Dr. Bhatia even went so far as to sign and seal the offer. 'I put it in the FedEx envelope intending to send it off in the morning,' he said. But after a sleepless night, 'I couldn't do it.'
"He and his wife wanted to stay close to their families, and a pang of patriotism struck after their baby was born shortly after Canada Day. 'I like Canada,' the Toronto-born Dr. Bhatia said. 'I was educated here.'
"He also feared the position in California would force him to be more administrator than scientist. His duties would have included fundraising and providing input on designing the center and how it should operate.
"'If we spend a lot of time thinking about how shiny the hallways are and the square footage, we won't get very far figuring out how these cells work,' he said."
Abraham said that at McMaster Bhatia will have $10 million (Canadian) to start up research at the institute, plus $4 million for equipment and another $3- to $4-million in funding through Canada Research Chair positions.
How big was the Bhatia hire? John Kelton, vice-president of McMaster's health sciences faculty, said, "It's like getting a Wayne Gretzky or a baseball star."
Sunday, August 07, 2005
The Boodle, The Barristers and a Glass Half-Full
A few days ago we received a note from a gentleman at the State University of New York, Albany, that seemed to reflect a rose-colored view of the current state of affairs at the California stem cell agency.
Or perhaps his message was intended to indicate that we are taking an excessively negative view of the situation. There is no doubt that CIRM is moving forward, albeit in fits and starts. As we have discussed before, creating an operation such as CIRM from scratch is more difficult than most of us understand.
But the agency itself has set high and ambitious goals that it has failed to meet. And it is a long ways from being fully operational.
Two of the major problems – litigation and money -- were discussed recently in the San Diego Union Tribune and the San Jose Mercury News.
Reporter Terri Somers of the San Diego paper wrote about the plan to finance the agency's operations with bond anticipation notes from the state. She noted there were major skeptics, including Harold Johnson of the conservative Pacific Legal Foundation in Sacramento.
"I wouldn't be surprised if there aren't many takers for what the treasurer's peddling. These notes may be to state financial instruments what the Edsel was to cars, or New Coke was to soda," Johnson told her.
"Finding buyers for the notes may be a big hurdle," Somers wrote. "After circulating the bond anticipation notes to institutional investors, the state determined this month that there were no interested buyers. The treasurer's office is now circulating the term sheet to philanthropic investors, such as foundations that support medical research."
The stem cell agency's attorney, James Harrison, said there never was "any expectation that institutional investors would be interested in buying the notes because they are relatively risky and unusual." That, of course, raises the question of why such an effort was even made.
On the litigation front, reporter Steven Johnson of the San Jose Mercury News said that the agency "could be in for a legal fight that cripples its core mission for a year or more."
Johnson wrote: "'Getting the suits (against the agency) resolved legally by the end of this year is 'extremely unlikely,' said (California) Deputy Attorney General Tamar Pachter. Although some experts say resolution of the suits could take up to 18 months, she added, 'your guess is as good as mine.'''
And then comes an item from Stuart Leavenworth, an associate editor of The Sacramento Bee, on Sunday, concerning national stem cell legislation "that would criminalize techniques many scientists - including those here in California - say are essential for developing stem cell therapies. (Republican leader) Frist may ultimately support those restrictions as a way to restore his credibility with religious conservatives. The outcome could be crippling to California's $3 billion Institute of Regenerative Medicine (which already has its own problems)."
As our correspondent from New York suggests, CIRM is clearly a work in progress. All the more reason for the public to pay exceedingly close attention to it. A year from now the fledgling bureaucracy will be a different creature. We can only hope that it fulfills its promises of transparency and disclosure as well as its aspirations to lead the way to therapies and cures that could help millions.
Dogged Coverage and the MIAs
Something must have happened at last week's meeting of the Oversight Committee of the California stem cell agency, but you could hardly tell it by looking at some of California's leading lights of the newspaper business.
Only two newspapers carried stories on the session in San Diego. Missing in action were the San Francisco Chronicle, The Sacramento Bee, the San Jose Mercury News and the Los Angeles Times – notable because they have been among the semi-regulars covering CIRM. The San Diego Union Tribune and the North County Times (San Diego County), however, both carried articles.
Reporter Terri Somers of the Union Tribune focused not on action by CIRM but on yet another lawsuit against the agency that appears to be identical to one filed against the NIH. The litigation dealt with on protection of the alleged civil rights of frozen embryos. Somers reported that the NIH lawsuit has already been dismissed.
Reporter Bradley Fikes of the North County Times briefly mentioned the lawsuit. He wrote, "Committee member Richard A. Murphy, also president of the Salk Institute, said there is a "growing sense of frustration that the situation will continue and funds won't be released as quickly as we had hoped there would be.'"
Fikes' story focused on the committee's opposition to federal Brownback stem cell legislation and support of the Feinstein-Hatch measure. He said the panel "struggled to find a way to communicate the differences between the two."
The lack of coverage of Friday's meeting probably can be chalked up to the dog days of summer, which, in this case, happened to coincide somewhat with some sort of business involving a dog in South Korea. No, it was not the yarn about the man who bit the beagle.
Only two newspapers carried stories on the session in San Diego. Missing in action were the San Francisco Chronicle, The Sacramento Bee, the San Jose Mercury News and the Los Angeles Times – notable because they have been among the semi-regulars covering CIRM. The San Diego Union Tribune and the North County Times (San Diego County), however, both carried articles.
Reporter Terri Somers of the Union Tribune focused not on action by CIRM but on yet another lawsuit against the agency that appears to be identical to one filed against the NIH. The litigation dealt with on protection of the alleged civil rights of frozen embryos. Somers reported that the NIH lawsuit has already been dismissed.
Reporter Bradley Fikes of the North County Times briefly mentioned the lawsuit. He wrote, "Committee member Richard A. Murphy, also president of the Salk Institute, said there is a "growing sense of frustration that the situation will continue and funds won't be released as quickly as we had hoped there would be.'"
Fikes' story focused on the committee's opposition to federal Brownback stem cell legislation and support of the Feinstein-Hatch measure. He said the panel "struggled to find a way to communicate the differences between the two."
The lack of coverage of Friday's meeting probably can be chalked up to the dog days of summer, which, in this case, happened to coincide somewhat with some sort of business involving a dog in South Korea. No, it was not the yarn about the man who bit the beagle.
"Totally Baseless" Redux
Don't ever say that the California Stem Cell Report has lost its institutional memory. We do recall, in fact, that we engaged in a bit of "totally baseless speculation" on July 30.
As we warned our readers, our maunderings might lack merit. And so they did. No action that we know of was taken last week on selection of a permanent president for the agency.
We are still wondering about the current role of Spencer Stuart, the executive search firm that was hired to find the new nabob. Spencer Stuart's contract expired May 31. It is now Day 21 since we asked CIRM whether Spencer Stuart is still on the job. No response yet.
As we warned our readers, our maunderings might lack merit. And so they did. No action that we know of was taken last week on selection of a permanent president for the agency.
We are still wondering about the current role of Spencer Stuart, the executive search firm that was hired to find the new nabob. Spencer Stuart's contract expired May 31. It is now Day 21 since we asked CIRM whether Spencer Stuart is still on the job. No response yet.
Wednesday, August 03, 2005
The Retroactive $378,000 Edelman PR Contract
The California stem cell agency on Friday is likely to approve a $378,000 annual public relations contract with Edelman, the world's largest independent PR firm.
Going rates for help at Edelman range from $450 an hour for Gail Becker, president of the Edelman's western region, to $70 an hour for unidentified interns. Adam Silber, an Edelman vice president who has been listed as a contact on the CIRM website, goes for $240 an hour.
Compare that to the $43 hourly rate for Nicole Pagano, who is a state government employee and the lead contact at CIRM since April. She and Silber appeared on the scene about the same time.
Of course, Pagano's $90,000 annual salary as senior communications specialist does not include the cost of fringe benefits or a profit, both of which are presumably included in Edelman's rates.
Edelman's responsibilities seem fairly routine, but CIRM seems to be still struggling with making its PR work routine, even with Edelman's help during the last four months. A well-run organization performs most of its work in a routine fashion. If there are major hoohas over regular tasks, an organization is going to be hard-pressed to deal with more difficult issues.
The scope of Edelman's work includes preparing media kits, maintaining contact lists, prepping CIRM officials on media interviews, writing stem cell research backgrounders, dealing with the web site and so forth.
Oddly, Edelman's work does not seem to involve much specifically with radio and TV, which is where most of the public gets its news. In fact, the words "radio" and "television" or "TV" are not even mentioned in the Edelman "scope" document although letters to the editor and editorials are specifically cited. Attention to TV and radio is even more important, given the relative novelty of stem cell issues to the bulk of the public. Some polls show favorable opinion concerning stem cell research, but you can bet most persons would have difficulty describing a stem cell or potential benefits of research. The next few years offer a prime opportunity to shape public opinion when it is most malleable -- when an issue is relatively new and beliefs have not been locked down.
The Edelman contract does not include any Web site construction expenses, although it is the project manager for the site redesign, nor does it include major printing costs. Media kits, FAQs, etc., will have to be printed at additional cost in addition to posting on the CIRM web site.
Approval of the contract by the Oversight Committee will formalize a relationship with Edelman that began in April following an unannounced selection process for PR firms. Losing out in the process were Weber Shandwick Worldwide and Burston-Marsteller.
Earlier Jeff Sheehy, a communications specialist at UC San Francisco who serves on the oversight board, said the size of the Edelman contract was "appalling." He questioned whether the institute was getting anything for its money.
CIRM is requiring weekly reports from Edelman on its accomplishments. But filing paper work is no substitute for diligent oversight and direction. It remains to be seen whether Edelman can produce a record that is better than its first four months as the stem cell agency's PR firm.
Going rates for help at Edelman range from $450 an hour for Gail Becker, president of the Edelman's western region, to $70 an hour for unidentified interns. Adam Silber, an Edelman vice president who has been listed as a contact on the CIRM website, goes for $240 an hour.
Compare that to the $43 hourly rate for Nicole Pagano, who is a state government employee and the lead contact at CIRM since April. She and Silber appeared on the scene about the same time.
Of course, Pagano's $90,000 annual salary as senior communications specialist does not include the cost of fringe benefits or a profit, both of which are presumably included in Edelman's rates.
Edelman's responsibilities seem fairly routine, but CIRM seems to be still struggling with making its PR work routine, even with Edelman's help during the last four months. A well-run organization performs most of its work in a routine fashion. If there are major hoohas over regular tasks, an organization is going to be hard-pressed to deal with more difficult issues.
The scope of Edelman's work includes preparing media kits, maintaining contact lists, prepping CIRM officials on media interviews, writing stem cell research backgrounders, dealing with the web site and so forth.
Oddly, Edelman's work does not seem to involve much specifically with radio and TV, which is where most of the public gets its news. In fact, the words "radio" and "television" or "TV" are not even mentioned in the Edelman "scope" document although letters to the editor and editorials are specifically cited. Attention to TV and radio is even more important, given the relative novelty of stem cell issues to the bulk of the public. Some polls show favorable opinion concerning stem cell research, but you can bet most persons would have difficulty describing a stem cell or potential benefits of research. The next few years offer a prime opportunity to shape public opinion when it is most malleable -- when an issue is relatively new and beliefs have not been locked down.
The Edelman contract does not include any Web site construction expenses, although it is the project manager for the site redesign, nor does it include major printing costs. Media kits, FAQs, etc., will have to be printed at additional cost in addition to posting on the CIRM web site.
Approval of the contract by the Oversight Committee will formalize a relationship with Edelman that began in April following an unannounced selection process for PR firms. Losing out in the process were Weber Shandwick Worldwide and Burston-Marsteller.
Earlier Jeff Sheehy, a communications specialist at UC San Francisco who serves on the oversight board, said the size of the Edelman contract was "appalling." He questioned whether the institute was getting anything for its money.
CIRM is requiring weekly reports from Edelman on its accomplishments. But filing paper work is no substitute for diligent oversight and direction. It remains to be seen whether Edelman can produce a record that is better than its first four months as the stem cell agency's PR firm.
Saturday, July 30, 2005
Talent, Mumbo-Jumbo and $536,000 Salaries
Salaries are once again a subject of interest at the California stem cell agency, which is trying to put together a rational pay structure for its employees from scientists to clerks.
This is no management mumbo-jumbo matter. If the agency is to attract the talent it needs, it must be willing to put together compensation packages that are at least somewhat comparable to the private sector. Otherwise it could find itself burdened with mediocrities who will linger for years before they ultimately leave, if ever.
The current salary range under consideration runs from $40,000 to $536,000, based on work performed by Alexandra Campe Degg and Dee DiPrieto. Degg works for UC San Francisco in human services but CIRM contracted with the campus for her as its interim human resources officer. DiPrieto is a consultant recommended by Spencer Stuart, the executive search firm hired by CIRM to find a permanent president.
Degg produced a proposal with 10 salary levels. Under it, the chief human resources officer would have a salary range of $78,100 to $140,600. The general counsel would range from $152,500 to $274,500.
DiPrieto performed an initial salary survey with the promise of more information to come in August for the agency's Governance Committee. The survey deals only with salaries and not total compensation or compensation costs, which are significantly larger than salaries.
Depending on their provisions, fringe benefits and related matters can add 33 percent or more to the cost of an employee – beyond his or her salary.
Total compensation is also another matter. Earlier this year, the agency cited salaries at the University of California as a guideline for CIRM. UC is ostensibly a reasonable organization that does not engage in Enron-like compensation deals.
However, when one looks deeper, the UC salary levels cited by CIRM can be misleading. Actual compensation for some positions can run substantially higher than nominal salaries. For example, some years back the highest-earning UC employee had about a $1 million annual paycheck. He was the football coach at UCLA. Last fall, the Wall Street Journal mentioned the $1.2 million salary and bonuses of an ophthalmologist in 1997, also at UCLA. He left the next year to earn more on his own.
When Zach Hall was appointed as interim president of CIRM earlier this year, some critics objected to his $389,000 salary as well as to proposals to pay other top employees in a similar fashion.
We are not critical of Hall's salary or the pay scales developed by Degg or, for that matter, the compensation of the football coach and ophthalmologist. Talent costs money, and the stem cell agency needs as much talent as possible. One can argue about whether any football coach should be paid more than a kindergarten teacher, but that is a subject for another blog.
The stem cell agency will have to live with its salary scale for many years. They are devils to change, once in place. The agency should be forthright about its compensation rationale and information as well as bonus or incentive plans. If side deals are being cut, they should be on the public table, even if they are not strictly CIRM funded.
Salaries are fat targets for critics. Making it all public and accessible is not only good public policy but one way to avoid accusations of back room deals.
This is no management mumbo-jumbo matter. If the agency is to attract the talent it needs, it must be willing to put together compensation packages that are at least somewhat comparable to the private sector. Otherwise it could find itself burdened with mediocrities who will linger for years before they ultimately leave, if ever.
The current salary range under consideration runs from $40,000 to $536,000, based on work performed by Alexandra Campe Degg and Dee DiPrieto. Degg works for UC San Francisco in human services but CIRM contracted with the campus for her as its interim human resources officer. DiPrieto is a consultant recommended by Spencer Stuart, the executive search firm hired by CIRM to find a permanent president.
Degg produced a proposal with 10 salary levels. Under it, the chief human resources officer would have a salary range of $78,100 to $140,600. The general counsel would range from $152,500 to $274,500.
DiPrieto performed an initial salary survey with the promise of more information to come in August for the agency's Governance Committee. The survey deals only with salaries and not total compensation or compensation costs, which are significantly larger than salaries.
Depending on their provisions, fringe benefits and related matters can add 33 percent or more to the cost of an employee – beyond his or her salary.
Total compensation is also another matter. Earlier this year, the agency cited salaries at the University of California as a guideline for CIRM. UC is ostensibly a reasonable organization that does not engage in Enron-like compensation deals.
However, when one looks deeper, the UC salary levels cited by CIRM can be misleading. Actual compensation for some positions can run substantially higher than nominal salaries. For example, some years back the highest-earning UC employee had about a $1 million annual paycheck. He was the football coach at UCLA. Last fall, the Wall Street Journal mentioned the $1.2 million salary and bonuses of an ophthalmologist in 1997, also at UCLA. He left the next year to earn more on his own.
When Zach Hall was appointed as interim president of CIRM earlier this year, some critics objected to his $389,000 salary as well as to proposals to pay other top employees in a similar fashion.
We are not critical of Hall's salary or the pay scales developed by Degg or, for that matter, the compensation of the football coach and ophthalmologist. Talent costs money, and the stem cell agency needs as much talent as possible. One can argue about whether any football coach should be paid more than a kindergarten teacher, but that is a subject for another blog.
The stem cell agency will have to live with its salary scale for many years. They are devils to change, once in place. The agency should be forthright about its compensation rationale and information as well as bonus or incentive plans. If side deals are being cut, they should be on the public table, even if they are not strictly CIRM funded.
Salaries are fat targets for critics. Making it all public and accessible is not only good public policy but one way to avoid accusations of back room deals.
Totally Baseless Speculation
We still have not heard from the California stem cell agency about whether Spencer Stuart, the executive search firm whose contract expired two months ago, is still looking for a permanent president for CIRM.
Our request for this routine bit of information is now 13 days old. But there is other news on the presidential front, whose office was expected to be filled by June ("Looking for a New CEO" July 20).
The CIRM search committee has scheduled a meeting for Monday. The public agenda, as usual, gives no indication of whether anything important is likely to occur. However, the meeting comes just a few days before the full Oversight Committee session scheduled for Friday.
Totally baseless speculation could lead one to wonder whether the timing is coincidental. Could a CEO announcement be made next week? But, as we said, that is totally baseless speculation.
Our request for this routine bit of information is now 13 days old. But there is other news on the presidential front, whose office was expected to be filled by June ("Looking for a New CEO" July 20).
The CIRM search committee has scheduled a meeting for Monday. The public agenda, as usual, gives no indication of whether anything important is likely to occur. However, the meeting comes just a few days before the full Oversight Committee session scheduled for Friday.
Totally baseless speculation could lead one to wonder whether the timing is coincidental. Could a CEO announcement be made next week? But, as we said, that is totally baseless speculation.
Lomax to Sambrano to Sanchez
Three new names have been added to employee rolls at the California stem cell agency, bringing the total of official employees to 17.
The latest CIRM staffers are:
Geoffrey Lomax, senior officer for medical and ethical standards, scheduled to start Aug. 4, salary $120,000.
Gilberto Sambrano, scientific review officer, scheduled to start Aug. 15 , salary $105,000.
Jorge Sanchez, senior executive assistant to the president, started July 12, salary $82,000.
The agency has not yet released information on their professional backgrounds, but we have a query in.
You can see a complete list of all CIRM employees by clicking here. The agency is continuing to hire. Click here for a list of positions available at this date.
The latest CIRM staffers are:
Geoffrey Lomax, senior officer for medical and ethical standards, scheduled to start Aug. 4, salary $120,000.
Gilberto Sambrano, scientific review officer, scheduled to start Aug. 15 , salary $105,000.
Jorge Sanchez, senior executive assistant to the president, started July 12, salary $82,000.
The agency has not yet released information on their professional backgrounds, but we have a query in.
You can see a complete list of all CIRM employees by clicking here. The agency is continuing to hire. Click here for a list of positions available at this date.
Wednesday, July 20, 2005
Looking for a New CEO
Back in February (see Feb. 25 item on this blog), the California stem cell agency was talking about having a permanent president by June. It is now close to the end of July, and the contract with the executive search firm expired at the end of May.
We have asked the agency about the status of the contract with Spencer Stuart and the presidential search, but have received no reply.
Obviously, there could be a number of reasons for not finding a new president. However, the agency is also seeking to hire a host of important top management executives, ranging from general counsel to communications director. Any new CEO would want to make those decisions and not inherit the baggage of whomever actually makes the decision.
However if the hirings are delayed substantially while the presidential search continues, it just takes that much longer for the agency to get itself firmly settled.
If CIRM chooses to speak to the search issue, we will let you know.
We have asked the agency about the status of the contract with Spencer Stuart and the presidential search, but have received no reply.
Obviously, there could be a number of reasons for not finding a new president. However, the agency is also seeking to hire a host of important top management executives, ranging from general counsel to communications director. Any new CEO would want to make those decisions and not inherit the baggage of whomever actually makes the decision.
However if the hirings are delayed substantially while the presidential search continues, it just takes that much longer for the agency to get itself firmly settled.
If CIRM chooses to speak to the search issue, we will let you know.
At Sea Again: Intermittent Postings Likely
We are putting out to sea once more in the Gulf of California, also known as the Sea of Cortez. Internet contact will be lost for the most part so we are likely to file items only intermittently, if that, for a short while.
Tuesday, July 19, 2005
Setting The Record Straight: Less Than Bleak Climate
On July 16, we posted an item, "Greed, Fear and Stem Cells," quoting Ken Haas of Abingworth Management, a venture capital firm specializing in life science biomedical companies.
We received the following response from Haas, who wanted to clarify inaccuracies that he said were in the Wired News article that we quoted. In addition to setting the record straight, he provides insights into the nature of the stem cell industry and investment climate, which he says can hardly be seen as bleak. Here are his remarks:
"While I very much enjoyed browsing your site, the Wired News article referenced in your posting about a talk I gave recently contained numerous inaccuracies that are unfortunately repeated in the California Stem Cell Report piece.
"For starters, I did not speak at the International Society for Stem Cell research annual meeting but rather at a luncheon sponsored by the British Consulate in San Francisco, to which certain annual meeting attendees were invited.
"I was asked to present a realistic view of the current state of venture capital investment in stem cell research and began with an assessment of the general venture capital climate. Among other things: the biotech industry is maturing and investors are beginning to expect the kind of performance that is normally associated with such maturity (e.g., capital efficiency, commercial focus, profitability); Big Pharma, biotech's ultimate customer,is increasingly reluctant to invest in 'pure research'; and venture capital has, in response, moved more toward "later stage" investing.
"In this context, stem cell ventures are 'early'-- the science still has quite a bit to prove, for example, that it can move successfully from in vitro to in vivo, and that reintroduction procedures associated with cell therapies will be safe and effective. There are also significant questions as to what successful business models will look like in this space.
"Nevertheless, I pointed out in my remarks that the principal issue with respect to stem cell investing is timing-- when, not if. On the positive side, there are significant academic initiatives underway in the U.S. (e.g., Stanford), Europe (e.g., Edinburgh) and Asia (e.g., Korea) and major governmental support in places like the U.K. and California (e.g.Proposition 71). As a consequence, venture capital is now closely monitoring stem cell developments and is poised to jump in, though still cautious.
"Specific 'mature' applications (e.g., analogous to bone marrow transplantation) could lead investment activity. Ultimately, the floodgates could well open based on just a few groundbreaking successes, for example, in tissue reengineering, cell therapy, human disease models for testing and target definition, cancer or degenerative diseases, etc.
"The above views on stem cell investment should hardly be seen as "bleak" and are widely held within both the venture and scientific communities. For instance, an article in the July issue of Nature Biotechnology (published after my talk) led with the comment that: 'Biotech companies with business models as diverse as the products they are developing are laboring to move cell-based therapies into the clinic. Without commercial success, however,investors will remain on the sidelines.'"
I concluded my remarks at the luncheon by advising those in the audience who might be seeking to start stem cell ventures to maximize their fundraising chances by coming to us, insofar as possible, with plans that embody mature
science, a credible business model, capital efficiency, commercial focus and a clear regulatory path. In short, stem cell investing, while a bit premature, will surely be an exciting part of our commercial biotech future."
We received the following response from Haas, who wanted to clarify inaccuracies that he said were in the Wired News article that we quoted. In addition to setting the record straight, he provides insights into the nature of the stem cell industry and investment climate, which he says can hardly be seen as bleak. Here are his remarks:
"While I very much enjoyed browsing your site, the Wired News article referenced in your posting about a talk I gave recently contained numerous inaccuracies that are unfortunately repeated in the California Stem Cell Report piece.
"For starters, I did not speak at the International Society for Stem Cell research annual meeting but rather at a luncheon sponsored by the British Consulate in San Francisco, to which certain annual meeting attendees were invited.
"I was asked to present a realistic view of the current state of venture capital investment in stem cell research and began with an assessment of the general venture capital climate. Among other things: the biotech industry is maturing and investors are beginning to expect the kind of performance that is normally associated with such maturity (e.g., capital efficiency, commercial focus, profitability); Big Pharma, biotech's ultimate customer,is increasingly reluctant to invest in 'pure research'; and venture capital has, in response, moved more toward "later stage" investing.
"In this context, stem cell ventures are 'early'-- the science still has quite a bit to prove, for example, that it can move successfully from in vitro to in vivo, and that reintroduction procedures associated with cell therapies will be safe and effective. There are also significant questions as to what successful business models will look like in this space.
"Nevertheless, I pointed out in my remarks that the principal issue with respect to stem cell investing is timing-- when, not if. On the positive side, there are significant academic initiatives underway in the U.S. (e.g., Stanford), Europe (e.g., Edinburgh) and Asia (e.g., Korea) and major governmental support in places like the U.K. and California (e.g.Proposition 71). As a consequence, venture capital is now closely monitoring stem cell developments and is poised to jump in, though still cautious.
"Specific 'mature' applications (e.g., analogous to bone marrow transplantation) could lead investment activity. Ultimately, the floodgates could well open based on just a few groundbreaking successes, for example, in tissue reengineering, cell therapy, human disease models for testing and target definition, cancer or degenerative diseases, etc.
"The above views on stem cell investment should hardly be seen as "bleak" and are widely held within both the venture and scientific communities. For instance, an article in the July issue of Nature Biotechnology (published after my talk) led with the comment that: 'Biotech companies with business models as diverse as the products they are developing are laboring to move cell-based therapies into the clinic. Without commercial success, however,investors will remain on the sidelines.'"
I concluded my remarks at the luncheon by advising those in the audience who might be seeking to start stem cell ventures to maximize their fundraising chances by coming to us, insofar as possible, with plans that embody mature
science, a credible business model, capital efficiency, commercial focus and a clear regulatory path. In short, stem cell investing, while a bit premature, will surely be an exciting part of our commercial biotech future."
Monday, July 18, 2005
Roger's Reality Check: Polarization, Backlashes and Mistakes
Don't expect research organizations to change the way they do business because California is giving away $300 million a year for stem cell research.
Get used to the outcry from opponents of stem cell research even if they have no likelihood of success. They are going to be with us for a long time.
Don't expect CIRM to create a host of friends with its billion-dollar beneficence. A backlash could easily surface.
Just a few of the thoughts from Roger Noll, a public policy professor at Stanford University who also teaches in the business and economics departments.
Noll, co-author of "The Technology Pork Barrel," wrote a 44-page paper in June on "The Politics and Economics of Implementing State-Sponsored Embryonic Stem-Cell Research" for the Stanford Institute for Economic Policy Research.
The paper provides a good overview of the sticky intellectual property rights issues involving stem cell research generally, as we wrote about July 17. Noll also spoke directly to events in this state. Here are some highlights from his paper.
"As the California experience reveals, setting up a functioning research program is not easy. Establishing an effective state program requires overcoming substantial political and organizational problems. While spending a great deal of money is easy, spending money effectively without causing a political backlash is difficult. Moreover, opponents of (stem cell) research do not go quietly in the night once legislation establishes a program. Instead, they continue to use all means at their disposal – litigation, political participation, and public demonstrations – to stymie implementation of the program."
"Moreover, when programs are thrust upon a state through a ballot initiative, as occurred in California in 2004, unprepared state officials are likely to find themselves tasked to deal with these problems on a fast time schedule, further increasing the probability of a serious mistake in program implementation."
One unusual feature of stem cell policy is its politics, which is characterized by "intense polarization." Noll wrote that on one side "a relatively large number of people...place high priority on all forms of research that (hold) promise of creating effective new treatments." They wind up "pitted against a smaller but still large number of people who accord equally high salience to adopting policies that would prohibit this research."
"Intense polarization of this form means that battles are never won because losers will not accept defeat."
Noll predicted that political polarization "is likely to create significant uncertainty and delay, and thereby vastly increase the implementation costs of the program."
The economist also wrote, "Politics will tend to favor...commercially interesting projects at the expense of more fundamental, long-term projects with much larger expected future payoffs."
And he said, "The licensing income derived from stem-cell research is likely to be a small fraction – less than five percent – of the costs of that research, and is likely not to be substantial for many years."
Finally, Noll pointed out that "Stanford University receives as much revenues in a year as CIRM is likely to spend on external grants over a decade. The lesson here is that CIRM can not expect to have much leverage over either Stanford or the entities that support it. Any attempt to change the way that research organizations do business with an annual expenditure of $300 million is doomed to failure."
Get used to the outcry from opponents of stem cell research even if they have no likelihood of success. They are going to be with us for a long time.
Don't expect CIRM to create a host of friends with its billion-dollar beneficence. A backlash could easily surface.
Just a few of the thoughts from Roger Noll, a public policy professor at Stanford University who also teaches in the business and economics departments.
Noll, co-author of "The Technology Pork Barrel," wrote a 44-page paper in June on "The Politics and Economics of Implementing State-Sponsored Embryonic Stem-Cell Research" for the Stanford Institute for Economic Policy Research.
The paper provides a good overview of the sticky intellectual property rights issues involving stem cell research generally, as we wrote about July 17. Noll also spoke directly to events in this state. Here are some highlights from his paper.
"As the California experience reveals, setting up a functioning research program is not easy. Establishing an effective state program requires overcoming substantial political and organizational problems. While spending a great deal of money is easy, spending money effectively without causing a political backlash is difficult. Moreover, opponents of (stem cell) research do not go quietly in the night once legislation establishes a program. Instead, they continue to use all means at their disposal – litigation, political participation, and public demonstrations – to stymie implementation of the program."
"Moreover, when programs are thrust upon a state through a ballot initiative, as occurred in California in 2004, unprepared state officials are likely to find themselves tasked to deal with these problems on a fast time schedule, further increasing the probability of a serious mistake in program implementation."
One unusual feature of stem cell policy is its politics, which is characterized by "intense polarization." Noll wrote that on one side "a relatively large number of people...place high priority on all forms of research that (hold) promise of creating effective new treatments." They wind up "pitted against a smaller but still large number of people who accord equally high salience to adopting policies that would prohibit this research."
"Intense polarization of this form means that battles are never won because losers will not accept defeat."
Noll predicted that political polarization "is likely to create significant uncertainty and delay, and thereby vastly increase the implementation costs of the program."
The economist also wrote, "Politics will tend to favor...commercially interesting projects at the expense of more fundamental, long-term projects with much larger expected future payoffs."
And he said, "The licensing income derived from stem-cell research is likely to be a small fraction – less than five percent – of the costs of that research, and is likely not to be substantial for many years."
Finally, Noll pointed out that "Stanford University receives as much revenues in a year as CIRM is likely to spend on external grants over a decade. The lesson here is that CIRM can not expect to have much leverage over either Stanford or the entities that support it. Any attempt to change the way that research organizations do business with an annual expenditure of $300 million is doomed to failure."
Sunday, July 17, 2005
Following the Stem Cell Money Trail
Don't expect the health industry to share huge bags of swag with California for its investment in stem cell research.
At least that was one opinion in a piece by reporter Terri Somers of the San Diego Union Tribune Sunday.
She noted that the arguments for Prop. 71 had predicted a big economic bonus for the state, but added that "money is unlikely to materialize, at least any time soon, according to those now charged with the task of creating policy for the institute."
"The idea that any new research today could result in rewards that provide an immediate benefit to California is misguided," Somers quoted Ginger Graham, chief executive of Amylin Pharmaceuticals in San Diego as saying.
"Graham is a member of a task force with the California Council for Science and Technology, a group of academics, business executives and lawyers that the state Legislature has asked to make recommendations for handling the rights to any discoveries that result from research funded through Prop. 71."
Somers also quoted Roger Noll, a Stanford economist on the task force. He "pointed to a paper he wrote about California's intellectual property issues as an example of the challenge the state faces. In 2000, the University of California system spent almost $2 billion on research but received only $74 million in licensing, Noll found.
"'These facts should give pause to state officials who see a potential financial bonanza in the (intellectual property) arising from state-sponsored (embryonic stem cell) research," Noll wrote in the paper.
"'The best advice . . . is not to try to be very innovative in creating agencies and policies to make grants and oversee intellectual property rights,'" he said. "'These programs will not succeed if they ask grant recipients to behave a great deal differently than they are required to behave from other, much larger sources of funds.'"
At least that was one opinion in a piece by reporter Terri Somers of the San Diego Union Tribune Sunday.
She noted that the arguments for Prop. 71 had predicted a big economic bonus for the state, but added that "money is unlikely to materialize, at least any time soon, according to those now charged with the task of creating policy for the institute."
"The idea that any new research today could result in rewards that provide an immediate benefit to California is misguided," Somers quoted Ginger Graham, chief executive of Amylin Pharmaceuticals in San Diego as saying.
"Graham is a member of a task force with the California Council for Science and Technology, a group of academics, business executives and lawyers that the state Legislature has asked to make recommendations for handling the rights to any discoveries that result from research funded through Prop. 71."
Somers also quoted Roger Noll, a Stanford economist on the task force. He "pointed to a paper he wrote about California's intellectual property issues as an example of the challenge the state faces. In 2000, the University of California system spent almost $2 billion on research but received only $74 million in licensing, Noll found.
"'These facts should give pause to state officials who see a potential financial bonanza in the (intellectual property) arising from state-sponsored (embryonic stem cell) research," Noll wrote in the paper.
"'The best advice . . . is not to try to be very innovative in creating agencies and policies to make grants and oversee intellectual property rights,'" he said. "'These programs will not succeed if they ask grant recipients to behave a great deal differently than they are required to behave from other, much larger sources of funds.'"
The Bee: Fire Edelman
The Sacramento Bee weighed in Sunday morning with more on the flap about the California stem cell agency and its public relations contract.
It said in an editorial that the agency should fire the Edelman firm and "deal with the issues that are causing (it) the most grief. Chief among these is (Robert) Klein himself, who continues to act like a micromanaging political campaigner instead of the chairman of a prestigious research institute."
Edelman could be replaced by two state government flacks, The Bee wrote.
The editorial also had this snippet, unreported elsewhere, from last week's meeting:
"Jeff Sheehy, a communications specialist at UC San Francisco who serves on the oversight board, said spending $27,550 a month on public relations was 'appalling,' and questioned if the institute was getting anything for its money.
'Klein replied that without Edelman, the institute wouldn't be able to respond to major news events.
"'The public did not give us bonds to respond to major news events,' Sheehy shot back. 'It gave (them) to us to do research.'"
It said in an editorial that the agency should fire the Edelman firm and "deal with the issues that are causing (it) the most grief. Chief among these is (Robert) Klein himself, who continues to act like a micromanaging political campaigner instead of the chairman of a prestigious research institute."
Edelman could be replaced by two state government flacks, The Bee wrote.
The editorial also had this snippet, unreported elsewhere, from last week's meeting:
"Jeff Sheehy, a communications specialist at UC San Francisco who serves on the oversight board, said spending $27,550 a month on public relations was 'appalling,' and questioned if the institute was getting anything for its money.
'Klein replied that without Edelman, the institute wouldn't be able to respond to major news events.
"'The public did not give us bonds to respond to major news events,' Sheehy shot back. 'It gave (them) to us to do research.'"
Saturday, July 16, 2005
Greed, fear and stem cells
Have you heard about California's stem cell gold rush?
Some venture capitalists have and they are not necessarily ecstatic – not that their public statements mean much. On the other hand, one stem cell company is publicly quivering with excitement.
Here is its testimony from a piece in Wired News by Kristen Philipkoski.
"'With the passage of Prop. 71 there's been an influx of interest in stem cells,' said Robert Lanza, vice president of medical and scientific development at Advanced Cell Technology in Worcester, Mass.
'We're in a whole new world. We're flush with cash, and just months ago we were struggling as a private company to even make payroll and to keep the phones on.'"
On the other hand, Philipkoski wrote:
"'Some of this stuff still looks like science experiments,' said Ken Haas of Abingworth Management, a venture capital firm specializing in life science biomedical companies.
"Haas gave a bleak outlook for stem-cell companies hopes for venture funding at the International Society for Stem Cell Research annual meeting last month in San Francisco.
"Big pharmaceutical companies aren't funding early research, he said. And VCs have higher expectations in general from biotech firms because they perceive the industry as having graduated from its freshman status. The investment necessary to bring a company public has doubled, Haas said, and the returns have diminished.
"All of these factors combined create a chilly climate for embryonic stem-cell companies, Haas said."
Haas' comments recall a point made to me by a venture capitalist some years ago. He said that VCs make an investment when their greed overwhelms their fear.
Then there is this from a Geron, which raised $40 million in the weeks following the passage of
Prop. 71, is better positioned than many stem-cell firms that don't have deep pockets or profitable partnerships with large pharmaceutical companies. More typical is Burlingame-based VistaGen Therapeutics, a 10-person research firm founded in 1998. CEO Ralph Snodgrass says that the company is using stem cells as a research tool to develop a treatment for a variety of illnesses rather than as the basis for a specific medicine or therapeutic.
"'We want to expand our research efforts, but we are a small firm,' he says. 'We have been contacted by bigger companies, but what is holding us back is our size. We will ramp up as Prop. 71 money becomes available. The effects of these funds across the industry should be dramatic.'"
Some venture capitalists have and they are not necessarily ecstatic – not that their public statements mean much. On the other hand, one stem cell company is publicly quivering with excitement.
Here is its testimony from a piece in Wired News by Kristen Philipkoski.
"'With the passage of Prop. 71 there's been an influx of interest in stem cells,' said Robert Lanza, vice president of medical and scientific development at Advanced Cell Technology in Worcester, Mass.
'We're in a whole new world. We're flush with cash, and just months ago we were struggling as a private company to even make payroll and to keep the phones on.'"
On the other hand, Philipkoski wrote:
"'Some of this stuff still looks like science experiments,' said Ken Haas of Abingworth Management, a venture capital firm specializing in life science biomedical companies.
"Haas gave a bleak outlook for stem-cell companies hopes for venture funding at the International Society for Stem Cell Research annual meeting last month in San Francisco.
"Big pharmaceutical companies aren't funding early research, he said. And VCs have higher expectations in general from biotech firms because they perceive the industry as having graduated from its freshman status. The investment necessary to bring a company public has doubled, Haas said, and the returns have diminished.
"All of these factors combined create a chilly climate for embryonic stem-cell companies, Haas said."
Haas' comments recall a point made to me by a venture capitalist some years ago. He said that VCs make an investment when their greed overwhelms their fear.
Then there is this from a Geron, which raised $40 million in the weeks following the passage of
Prop. 71, is better positioned than many stem-cell firms that don't have deep pockets or profitable partnerships with large pharmaceutical companies. More typical is Burlingame-based VistaGen Therapeutics, a 10-person research firm founded in 1998. CEO Ralph Snodgrass says that the company is using stem cells as a research tool to develop a treatment for a variety of illnesses rather than as the basis for a specific medicine or therapeutic.
"'We want to expand our research efforts, but we are a small firm,' he says. 'We have been contacted by bigger companies, but what is holding us back is our size. We will ramp up as Prop. 71 money becomes available. The effects of these funds across the industry should be dramatic.'"
Friday, July 15, 2005
The $30,000-a-month PR contract: What's it Worth?
Public relations is the business that boondoggle aficionados love to excoriate. It seems -- well -- so useless. And for all their vaunted skills, flacks often seem incapable of defending themselves well.
So perhaps it was no surprise that the California stem cell agency's PR and the huge Edelman PR agency came under fire this week. But there is a tad more to the story than what has surfaced so far.
But first, let's look at what happened at the Oversight Committee meeting on Tuesday.
"Several oversight committee members seemed surprised to learn yesterday that the institute is being billed $27,700 a month for public relations services it receives from Edelman, a national firm. The institute is receiving the bills and services on a monthly basis and isn't paying them until a longer-term contract can be negotiated with Edelman," wrote reporter Terri Somers of the San Diego Union Tribune.
"Committee member Jeff Sheehy, deputy communications director at the University of California San Francisco's AIDS Research Institute, said he was 'shocked' to learn that the institute has been billed for these services since April because he 'just hasn't seen the product.'
"But oversight committee chairman Robert Klein said the institute's one staff member dealing with communications cannot handle the high volume of media calls, public speaking requests and other public relations work."
Reporter Laura Mecoy of The Sacramento Bee also noted that Sheehy was a "little appalled" at the PR situation.
The stem cell agency's PR certainly can stand some improvement. But as a former California governmental and political flack and the recipient of enormous amounts of PR attention over decades of newspaper work, I have a sense that there may be internal issues that could explain some of the lack of product. That said, agency should be doing a better job at this stage of the game.
Some of it is basic stuff, such as assuring that the web site's "what's new" feature actually shows what is new. But where the PR really fell down was losing the positive spin the agency had coming out of the election because of maladroit management and allowing critics to set the terms of the debate. As readers may recall, the agency's first meeting in December ran afoul of questions about its legality, turning what should have have been a celebration into a PR debacle. Since then, the headlines about the agency have been dominated by controversy about its conduct.
Given that background, we can ask whether the nearly $30,000 a month is excessive, ? Probably not. Let's look at some numbers. The agency probably needs at least two PR types and a secretary/administrative assistant. Figure the salary for the head flack at about $100,000, No. 2 at about $90,000 and the assistant at about $40,000. Add one-third or more to that for fringe benefits and you are looking at a total in salaries and benefits of something in the neighborhood of $25,000 and $30,000 a month, which doesn't include the profit that a private firm would need. And the $100,000 salary for the chief spokesperson may be too low to hire the talent needed. Additional PR costs would include printing, phones, work on the Web site and more. We should also note that Edelman's bill does not include the salary of the agency's current spokeswoman, a state employee who has only been on the scene for a few months.
Some times these types of figures come as a shock to newspaper reporters and government PR types. Their salaries are generally lower that what top flight, private sector PR people earn, which is not to say that there are not many top flight PR people in government.
So what does the agency receive for nearly $30,000 a month? The terms of Edelman's working agreement are secret because stem cell chairman Robert Klein says its contract is under negotiation, another PR mistake by the agency and by Edelman. But we can learn something about the scope of the needed PR work by looking at the contract with Red Gate Communications, which resigned from stem cell service earlier this year.
The Red Gate agreement shows that its responsibilities went far beyond fielding reporter calls, emails and writing a handful of press releases. (We should note that some of the agency press releases show nonprofessional earmarks that probably can be traced to others at the agency.)
Here is a partial rundown from the Red Gate contract: develop identity and logo for CIRM, serve as spokesperson for CIRM for all media and editorial boards, manage editorial briefings and interviews, staff all public hearings, prepare op-ed pieces and write editorials, write speeches, prepare the 29 members of the Oversight Committee for media interviews, create CIRM brochures, fact sheets, FAQs, media information kits, newsletters, quarterly reports and Power Point presentations and work on the web site. Public outreach and education, which is sorely needed, also comes under the PR rubric.
To be effective, the top PR person would have to sit in on tens of hours of private CIRM meetings each week in order to be well-informed and speak authoritatively. That person should also be the lead on developing an informational strategy that helps to keep CIRM out of the kind of a corner it has found itself in so much of the year.
Many of the PR chores facing CIRM are routine or would be routine if the agency were not a new and strange entity. Creating a PR program entirely from scratch in an understaffed, fledgling agency is, to say the least, difficult.
Whether Edelman is worth the cost depends on what we see from them and the agency over the next few months.
----------------------
If you would like a copy of the Red Gate contract, please send a request to djensen@californiastemcellreport.com. But do it quickly. We are going to sea again soon and will be only intermittently online. For a few more details on the Edelman contract, click here. For a list of all the contracts with CIRM, click here.
So perhaps it was no surprise that the California stem cell agency's PR and the huge Edelman PR agency came under fire this week. But there is a tad more to the story than what has surfaced so far.
But first, let's look at what happened at the Oversight Committee meeting on Tuesday.
"Several oversight committee members seemed surprised to learn yesterday that the institute is being billed $27,700 a month for public relations services it receives from Edelman, a national firm. The institute is receiving the bills and services on a monthly basis and isn't paying them until a longer-term contract can be negotiated with Edelman," wrote reporter Terri Somers of the San Diego Union Tribune.
"Committee member Jeff Sheehy, deputy communications director at the University of California San Francisco's AIDS Research Institute, said he was 'shocked' to learn that the institute has been billed for these services since April because he 'just hasn't seen the product.'
"But oversight committee chairman Robert Klein said the institute's one staff member dealing with communications cannot handle the high volume of media calls, public speaking requests and other public relations work."
Reporter Laura Mecoy of The Sacramento Bee also noted that Sheehy was a "little appalled" at the PR situation.
The stem cell agency's PR certainly can stand some improvement. But as a former California governmental and political flack and the recipient of enormous amounts of PR attention over decades of newspaper work, I have a sense that there may be internal issues that could explain some of the lack of product. That said, agency should be doing a better job at this stage of the game.
Some of it is basic stuff, such as assuring that the web site's "what's new" feature actually shows what is new. But where the PR really fell down was losing the positive spin the agency had coming out of the election because of maladroit management and allowing critics to set the terms of the debate. As readers may recall, the agency's first meeting in December ran afoul of questions about its legality, turning what should have have been a celebration into a PR debacle. Since then, the headlines about the agency have been dominated by controversy about its conduct.
Given that background, we can ask whether the nearly $30,000 a month is excessive, ? Probably not. Let's look at some numbers. The agency probably needs at least two PR types and a secretary/administrative assistant. Figure the salary for the head flack at about $100,000, No. 2 at about $90,000 and the assistant at about $40,000. Add one-third or more to that for fringe benefits and you are looking at a total in salaries and benefits of something in the neighborhood of $25,000 and $30,000 a month, which doesn't include the profit that a private firm would need. And the $100,000 salary for the chief spokesperson may be too low to hire the talent needed. Additional PR costs would include printing, phones, work on the Web site and more. We should also note that Edelman's bill does not include the salary of the agency's current spokeswoman, a state employee who has only been on the scene for a few months.
Some times these types of figures come as a shock to newspaper reporters and government PR types. Their salaries are generally lower that what top flight, private sector PR people earn, which is not to say that there are not many top flight PR people in government.
So what does the agency receive for nearly $30,000 a month? The terms of Edelman's working agreement are secret because stem cell chairman Robert Klein says its contract is under negotiation, another PR mistake by the agency and by Edelman. But we can learn something about the scope of the needed PR work by looking at the contract with Red Gate Communications, which resigned from stem cell service earlier this year.
The Red Gate agreement shows that its responsibilities went far beyond fielding reporter calls, emails and writing a handful of press releases. (We should note that some of the agency press releases show nonprofessional earmarks that probably can be traced to others at the agency.)
Here is a partial rundown from the Red Gate contract: develop identity and logo for CIRM, serve as spokesperson for CIRM for all media and editorial boards, manage editorial briefings and interviews, staff all public hearings, prepare op-ed pieces and write editorials, write speeches, prepare the 29 members of the Oversight Committee for media interviews, create CIRM brochures, fact sheets, FAQs, media information kits, newsletters, quarterly reports and Power Point presentations and work on the web site. Public outreach and education, which is sorely needed, also comes under the PR rubric.
To be effective, the top PR person would have to sit in on tens of hours of private CIRM meetings each week in order to be well-informed and speak authoritatively. That person should also be the lead on developing an informational strategy that helps to keep CIRM out of the kind of a corner it has found itself in so much of the year.
Many of the PR chores facing CIRM are routine or would be routine if the agency were not a new and strange entity. Creating a PR program entirely from scratch in an understaffed, fledgling agency is, to say the least, difficult.
Whether Edelman is worth the cost depends on what we see from them and the agency over the next few months.
----------------------
If you would like a copy of the Red Gate contract, please send a request to djensen@californiastemcellreport.com. But do it quickly. We are going to sea again soon and will be only intermittently online. For a few more details on the Edelman contract, click here. For a list of all the contracts with CIRM, click here.
Stem Cells and Behind the Scenes Decision Making
Smoke-filled rooms are now passe for public policy making, with the exception of Gov. Arnold's cigar tent in California's Capitol. But at UC Berkeley one bioethicist remains concerned about back rooms, decision making and the recipients of public largess.
The issue is the California stem cell agency and how it does business. The man concerned is David Winickoff, an assistant professor of bioethics and society in UC Berkeley's Department of Environmental Science, Policy, and Management.
Prior to last fall's election, he wrote a piece about Prop. 71, arguing that the agency would be anything but independent, while having the power to set policies for human cloning technology and human-subject research, as well as allocate patents to the private sector.
The subject was revisited recently in an internal piece from the UC Berkeley NewsCenter by Bonnie Azab Powell.
She wrote that Winickoff is bothered "a lot" by what he views as the lack of independence of the stem cell agency.
She quoted Winickoff as saying, "Important decisions are being made in the back rooms of university and industry labs that will have huge effects on people and shape their environments and lives. They aren't open for public scrutiny because they're technical, and it's difficult for people to engage substantively in these issues."
One of his issues involves finding "ways that will facilitate democratic control and decision making, rather than just simply giving technocratic control without accountability."
Powell provided this case from Winickoff as an example of a problem involving private individuals providing something that leads to a commercial product.
"A patient with a rare form of leukemia was treated at UCLA's medical center by a doctor who collected many blood, semen, and hair samples from the patient that were unnecessary for his treatment. Five years later, the patient learned that the doctor had collaborated with a biotech company to derive a potentially lucrative cell line from the patient's diseased spleen cells. The patient, understandably, wondered why the doctor and not the patient was profiting from his biological property. The biotech industry and others filed many "friend of the court" briefs with the California Supreme Court, arguing that according property rights to the patient would bring research to a standstill. The court largely sided with the biotech industry, saying that the plaintiff's property rights did not apply to his spleen cells, although he did have a valid (but much less damaging) claim based on the doctor's failure to obtain informed consent."
Winickoff said, "I'm trying to find that sweet spot where we have more accountability and control over important policy decisions, where we can allow a certain amount of politics in without undermining the ability to make policy at all."
The issue is the California stem cell agency and how it does business. The man concerned is David Winickoff, an assistant professor of bioethics and society in UC Berkeley's Department of Environmental Science, Policy, and Management.
Prior to last fall's election, he wrote a piece about Prop. 71, arguing that the agency would be anything but independent, while having the power to set policies for human cloning technology and human-subject research, as well as allocate patents to the private sector.
The subject was revisited recently in an internal piece from the UC Berkeley NewsCenter by Bonnie Azab Powell.
She wrote that Winickoff is bothered "a lot" by what he views as the lack of independence of the stem cell agency.
She quoted Winickoff as saying, "Important decisions are being made in the back rooms of university and industry labs that will have huge effects on people and shape their environments and lives. They aren't open for public scrutiny because they're technical, and it's difficult for people to engage substantively in these issues."
One of his issues involves finding "ways that will facilitate democratic control and decision making, rather than just simply giving technocratic control without accountability."
Powell provided this case from Winickoff as an example of a problem involving private individuals providing something that leads to a commercial product.
"A patient with a rare form of leukemia was treated at UCLA's medical center by a doctor who collected many blood, semen, and hair samples from the patient that were unnecessary for his treatment. Five years later, the patient learned that the doctor had collaborated with a biotech company to derive a potentially lucrative cell line from the patient's diseased spleen cells. The patient, understandably, wondered why the doctor and not the patient was profiting from his biological property. The biotech industry and others filed many "friend of the court" briefs with the California Supreme Court, arguing that according property rights to the patient would bring research to a standstill. The court largely sided with the biotech industry, saying that the plaintiff's property rights did not apply to his spleen cells, although he did have a valid (but much less damaging) claim based on the doctor's failure to obtain informed consent."
Winickoff said, "I'm trying to find that sweet spot where we have more accountability and control over important policy decisions, where we can allow a certain amount of politics in without undermining the ability to make policy at all."
Coming Up
A little later today we will have a look at the $30,000 or so monthly PR bill for the California stem cell agency. Is it too high?
Correction
In the "Nature" item July 14, we incorrectly reported the source as of the information as Nature magazine. The correct publication is Nature Biotechnology. The URL is www.nature.com/naturebiotechnology.
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