Reviewing Today's Coverage of the Stem Cell Agency

The San Francisco and San Diego newspapers carried stories this morning on actions involving the California stem cell agency, dealing with intellectual property and lawsuits against CIRM.

Missing were reports from the Los Angeles Times and the New York Times, both of which covered the stem cell meeting Tuesday in Duarte. However, we would expect to see pieces from them, perhaps on Thursday.

The Oversight Committee meeting ended late in the day, making it difficult to file a story for the next day's papers. The reporters involved may well be working on a different type of piece than the usual daily report on what was relatively routine action – at least in terms of conventional news values.

Which brings us to one of the reasons for the existence of the blog. Conventional news values put a severe limit on the amount and depth of information available in newspapers concerning the agency. Newspapers emphasize high profile events and conflicts. When matters are relatively routine, attention wanes. They have little interest in the type of details that are important to those with a deep interest in a subject. The rather sparse coverage of intellectual property issues, over the last few months, involving the stem agency is one example. IP is technical, complex and marginally understood by editors, many of whom view their own intellectual product (the daily newspaper) as having little lasting value. Once it is a day old, it is fish wrap material.

One of our goals is to carry more information and analysis on issues of concern to the California stem cell community than is available through the mainstream media, to use an expression which has already become an Internet cliché. Much of it has little conventional news value so you are not likely to find it in the press. If you would like to weigh in our performance or have suggestions for additional coverage, just click on the "comments" link at the end of this posting. You can even do it anonymously.

But back to today's coverage. Reporter Terri Somers of the San Diego Union Tribune wrote a piece on the IP action by the agency. Her story began:

"Scientists who make a patentable discovery with grant money from California's fledgling stem cell institute will be able to retain ownership of that discovery under an interim policy approved yesterday by the committee overseeing the institute."

Reporter Carl Hall of the San Francisco Chronicle focused on developments in the lawsuit against CIRM.

He wrote that foes of the agency "face tight deadlines for gathering evidence, which may include depositions from the 29 members of the stem cell institute's governing board, known as the Independent Citizens Oversight Committee, as well as outside participants in advisory working groups."

"'Our goal is to win,' said Dana Cody, executive director of the Life Legal Defense Foundation in Sacramento, one of the attorneys working on the case.
"She and her allies clearly have no plans to drop the litigation even if they lose at trial. Barring some 'glaring factual discovery,' Cody said, 'we will be going on to the appeals court and then to the Supreme Court if we have to,'" according to Hall's story.

We should note that the stem cell agency is a bigger story for San Francisco and San Diego than other areas. San Francisco is the home to the agency and has the largest concentration of biotech firms in the state. San Diego comes in a close second. Both cities have substantial stem cell research communities as well.

Coming Up

On Wednesday morning, we will carry a rundown of coverage of the meeting of the Oversight Committee of the California stem cell agency. The panel met at the City of Hope in Duarte Tuesday with reporters from the New York Times, the Los Angeles Times, the San Diego Union Tribune and possibly others in attendance. We will also have more of our own coverage from the stem cell meeting.

For those of you far removed from Southern California, Duarte is a bit of hard-scrabble community east of downtown Los Angeles. The City of Hope, with its beautiful gardens, is not too far from such establishments as "Miss Kitty's Topless Gentlemen's Club."

Foxes, Chickens and Stem Cells

The California stem cell agency moved forward today with interim principles for intellectual property for its training grant program despite concerns that the concepts did not protect the taxpayers' investment in stem cell research.

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights of Santa Monica, targeted a proposal that would give nonprofit institutions ownership rights on discoveries.

"Asking the grantees to do the right thing after giving away the farm is like asking the fox to cough up the chickens after giving him the key to the hen house," Simpson told the Oversight Committee. (The full statement from the Foundation can be found here.

Jesse Reynolds of the Center for Genetics and Society also asked the board to ensure that stem therapies would be truly available to all Californians.

The panel approved the interim rules after modifying them slightly from the draft version (see "Not Like to Satisfy."). Inserted was a preference for non-exclusive licensing. Removed was a reference to a "tax" on royalties that might be imposed by the state. Instead the language was changed to indicate that the state might want to share in royalties in the future.

Some Oversight Committee members objected to language giving preference to therapies for underserved groups. Joan Samuelson, a committee member and president of the Parkinson's Action Network, said it could delay development of therapies for other groups.

But Marcy Feit, president of ValleyCare Health Systems, said removal of the language would "kill funding" for the stem cell agency.

Stem Cell Trial Date Set, Legal Coffers Replenished

The California stem cell agency goes on trial Feb. 27 in California's "Apricot City."

Judge Bonnie Lewman Sabraw set the date today, according to stem cell agency officials, fulfilling her promise to expedite proceedings in the lawsuits that have blocked funding of $3 billion in stem research grants, approved by California voters 13 months ago.

The lawsuits were filed by anti-tax groups and another group that was a key player in the Schiavo case. The stem cell foes contend the agency is unconstitutional although it was created by voters in a constitutional procedure. (See "Showdown in Apricot City.")

The judge told lawyers to return Dec. 13 with plans for discovery of evidence. Completion of discovery was scheduled for Jan. 3.

At a meeting of the CIRM Oversight Committee in Duarte, stem cell chairman Robert Klein expressed pleasure with the legal schedule. He has been trying to sell bond anticipation notes to provide interim financing for the agency. A quick trial and decision will help eliminate investor uncertainty about the financial instruments.

Following announcement of the news at today's meeting of the CIRM Oversight Committee, the panel approved an additional $252,000 for outside legal help, most of which will go for contesting the challenge to the existence of the agency.

Claire Pomeroy, an Oversight Committee member and dean of the UC Davis School of Medicine, said the lawsuit has forced the agency to divert funds from possible research, indicating that voters would be irate at impact of the tactics of the stem cell foes.

Nonetheless, we suspect the agency's opponents are delighted that they are stalling the agency and preventing it from spending money on research. After all, one earlier version of the litigation, filed by David Llewellyn, a Citrus Heights, Ca., attorney, alleged that loopholes exist in the Prop. 71 that would permit the funding of "test tube babies, or even adult human beings, for body parts, companionship or a permanent worker class of subhuman beings (a la Aldous Huxley's Brave New World)” despite the measure's ban on human reproductive cloning. The ludicrous assertion was clearly aimed at stirring up irrational fears among the constituencies that support the foes of CIRM. (see the Feb. 23 item called "Illegal" on this blog.)

A quick and favorable trial decision certainly will help the agency to peddle its notes, but the case is expected to be appealed by whichever side loses. One estimate predicts that the legal matters will not be completely settled until 2007.

The official name of the Apricot City, by the way, is Hayward, which is an Alameda County community once better known for its fine fruit than stem cell shenanigans.

IP Proposals Not Likely to Satisfy

The California stem cell agency is beginning to leave sharper clues concerning its direction on intellectual property policies – the rules that will determine what kind of return the state receives on its $6 billion research investment.

At its meeting Tuesday in Duarte, the agency is scheduled to consider basic, interim IP regulations for its training grant programs, which are aimed at training more stem cell researchers and are not expected to result in discoveries that need IP protection. But just in case, the Oversight Committee is moving forward with some regulations.

On the agenda is a simple document about "concepts" for IP policies on training grants. Here it is in its entirety.

"Ownership: CIRM grantees will own CIRM-funded discoveries.

"Data/Biomedical Materials Sharing: CIRM strongly supports a broad sharing policy. CIRM will expect grantees to share data and biomedical materials widely, and beyond current practices. CIRM will 'push the envelope of current practice toward much more open' sharing.

"Research Exemption: CIRM will create a research exemption to allow the use of patented CIRM-funded discoveries for research purposes.

"Licensing: CIRM will encourage the commercialization of CIRM-funded discoveries. In licensing activities, CIRM will require that preference be given to companies with plans for access to resultant therapies for underserved patient populations. It is anticipated that any resultant royalties from CIRM-funded discoveries may be subject to a 'tax' to benefit the state of California.

"March-in rights: CIRM will retain march-in rights in the event of: Failure to develop CIRM-funded discoveries, public health and safety reasons"

The agenda contained no draft of proposed rules or any discussion of the pros and cons of the concepts outlined above. But they do suggest that the agency may push to make discoveries available widely as well as to often ignored groups of patients.

It is not likely that these concepts will go far to satisfy those who want major changes in the current economic models for IP and taxpayer-funded stem cell research.

Tight Budget, Hiring Freeze for CIRM

The California stem cell agency is preparing a budget for the next seven months that includes a hiring freeze and no funds for the already approved multimillion dollar training grant program.

The $5.4 million spending plan, prepared by CIRM staff, is up for consideration this coming week by the Governance Subcommittee and by the full Oversight Committee.

The proposed budget is for 2005-2006 and compares to $3.9 million in spending for 2004-2005, which actually only covered about seven months while CIRM was just coming into existence.

The proposal calls for a cap on the existing staff level at 19 persons. Salaries and benefits are the single biggest item at $2.4 million. Contracts with outside agencies or businesses consume $1.3 million. Meetings and conferences are budgeted at $626,000($260,000 for working groups, $196,000 for the Oversight Committee and subcommittees and $170,000 for CIRM-sponsored scientific meetings and conferences).

The budget documents (see them here and here) contain no information on the status of efforts to sell bond anticipation notes to finance the $38 million training grant program.

The documents can only be found on the agenda for Oversight Committee meeting Tuesday. Although the Governance Subcommittee is scheduled consider them a day earlier, they were not available on the Web at the time this item was posted.

CIRM Contracts Hit $1.8 Million

The California stem cell agency has run up $1.8 million in contracts with outside firms, ranging from legal assistance to shredding.

The agency also is likely to boost payments to the law firm of Remcho, Johansen & Purcell of San Leandro by $252,200, bringing the total for the firm to $772,200. The amount could increase as the cost of litigation against CIRM rises.

Remcho has the biggest contract with CIRM. The Edelman PR firm is No. 2 with a $378,000, 12-month contract that began last April. Only $152,068 had been paid to Edelman as of Oct. 31, the latest date for contract information from CIRM. Edelman is also performing PR work for the Alliance for Stem Cell Research of Santa Monica, an organization that morphed out of the California Research and Cures Coalition, a group formerly chaired by Robert Klein, now chairman of CIRM. The value of Edelman's contract with Alliance is not known.

At the other end of the scale, Shred Works, Inc. had a $960 contract for "confidential destruction."

The latest figures for the contracts were posted on the CIRM Web site as part of the agenda for next Tuesday's meeting in Duarte. Also on the agenda is the agency's budget, formation of a strategic planning subcommittee and a report from the task force on intellectual property.

While the meeting is less than two working days away, no background information for the meeting was available to the public on either the agency's budget or intellectual property as of the time of this posting.

The Voices of the Stem Cell Barristers

If you want to hear interviews with the key attorneys in the California stem cell case, check this report on California Politics Today.

Reporter Marc Strassman also offers more details on what the lawyers have to say about discovery in the case. Both sides predict a spring trial.

Another Year for Legal Squabbling

The New York Times carried a report this morning on the lawsuit against the California stem cell agency, but story contained little that was new to California readers.

However, reporter Andrew Pollack quoted stem cell chairman Robert Klein on his estimate of the length of the legal proceedings. Another year is what he said. The full story is here.

Conflicts and Records Targeted by CIRM Foes

Foes of the California stem cell agency are going to dig deeply into the doings of CIRM as they push their effort to exterminate the $6 billion program.

Reporter Carl Hall of the San Francisco Chronicle offered up a few more details this morning of the anti-CIRM strategy in the wake of Tuesday's court ruling to proceed with a trial on the challenge to the agency.

He quoted Dana Cody of the Life Legal Defense Foundation in Sacramento, one of the opposing attorney, as saying she and her colleagues intend "to amass extensive evidence during the discovery phase leading up to a trial."

"One of her allies, David Llewellyn, who represents the bioethics group, said he looked forward to documenting 'very clear' financial conflicts among those charged with distributing Prop. 71 grants.

"He said the plaintiffs also would show that voters had been misled during the 2004 campaign about the real cost of embryonic stem cell research -- interest expenses on the $3 billion in grants, for instance, are estimated to total as much as $3.7 billion over the long run -- and the likelihood of a payoff for taxpayers anytime soon.

"Litigation hasn't yet been filed to block the expected $50 million financing plan, but Llewellyn said that might happen once state officials moved toward selling special 'bond anticipation notes' to investors who would be repaid only if the lawsuits were resolved and the Prop. 71 bonds were sold," Hall wrote.

Meanwhile, the San Jose Mercury News editorially called on
the judge in the case to dismiss the whole matter on Tuesday. Don't thwart the will of the people was the newspaper's position. It also said:

"It's true that Prop. 71 left inevitable gaps in areas of ethics and accountability. No proposition of this magnitude will ever dot every 'i' and cross every 't.' But the Legislature, led by Sen. Deborah Ortiz, D-Sacramento, is working hard to close those gaps and made significant progress in the last legislative session."

Judge Sets High Hurdle for Stem Cell Foes

The courtroom tussle over the existence of the California stem cell agency will resume briefly next Tuesday with all parties optimistic that they will prevail.

The judge said she will set a trial date at that point, which means that the matter will continue on well into the next year. Regardless of her ultimate ruling, it is expected to be appealed.

However, she did state that foes of CIRM had failed to prove that Prop. 71 was unconstitutional. Meanwhile stem cell chairman Robert Klein said the agency can make do financially until the middle of next year.

Reporter Megan Garvey of the Los Angeles Times wrote:

"'The Supreme Court has stated that it is the court's solemn duty to uphold an initiative, resolving all doubts in its favor, unless its unconstitutionality' is unmistakably clear, Alameda County Superior Court Judge Bonnie Lewman Sabraw wrote in a 24-page decision on pretrial motions in the cases.

"Sabraw said the plaintiffs — People's Advocate, the National Tax Limitation Foundation and the California Family Bioethics Council — had 'not satisfied" that 'substantial test.'"

Klein released a statement today that said:

"Her explanation for denying these claims provides CIRM with a strong basis for moving forward successfully in this case. On the question of the constitutionality of Prop. 71, the plaintiffs have a high bar to clear in the hearing. They must introduce evidence that they have failed to introduce over the past year. We remain encouraged by this ruling and look forward to hearing what the court will permit on an expedited basis on December 6th."

Reporter Steve Johnson of the San Jose Mercury News quoted Dana Cody , who represents agency foes, as saying that she was not at all disappointed and is pleased with a prospect of a trial.

The story that most folks across the country were likely to see was written by Paul Elias of The Associated Press. He wrote that the decision meant Cody and her clients will have to "clear high legal hurdles to win the case."

Here is a link to the text to the judge's decision. Klein's statement follows in a separate item since it is not yet available on the CIRM web site.

Text of Klein Statement

STATEMENT BY ROBERT KLEIN, CHAIR OF THE INDEPENDENT CITIZENS' OVERSIGHT COMMITTEE, REGARDING JUDGE SABRAW'S RULING

"On behalf of the California Institute for Regenerative Medicine (CIRM), our governing board and the patient, medical and academic organizations who signed an amicus brief in support of stem cell research, we are very pleased the court has denied many of plaintiffs' challenges to Proposition 71, and we have great confidence in the judicial process.

We appreciate the time and care that Judge Bonnie Sabraw took in writing this decision-we are grateful for the depth of her opinion, the numerous citations and her extensive narrative supporting the conclusion that Proposition 71 is constitutional. She states that it is the 'Court's solemn duty to uphold an initiative, resolving all doubts in its favor, unless its unconstitutionality clearly, positively and unmistakably appear.' Judge Sabraw repeats this theme later in the decision, stating that 'all presumptions and intendments favor the validity of an Act,' and then goes on to rule that the California Family Bioethics Council has not met its burden of demonstrating that Proposition 71 is unconstitutional on 'any of the five grounds asserted.'

Her explanation for denying these claims provides CIRM with a strong basis for moving forward successfully in this case. On the question of the constitutionality of Proposition 71, the plaintiffs have a high bar to clear in the hearing. They must introduce evidence that they have failed to introduce over the past year. We remain encouraged by this ruling and look forward to hearing what the court will permit on an expedited basis on December 6th.

The CIRM looks forward to working with the Attorney General and Remcho, Johansen & Purcell, which serves as special counsel to the CIRM, as well as Munger, Tolles, and Olson, which represents nearly thirty national and statewide advocacy organizations, university and research hospitals and research institutions who have signed an amicus brief in support of Proposition 71, as the case moves forward (http://www.cirm.ca.gov/pressreleases/2005/10/10-12-05.asp).

This opinion should be extremely helpful in providing broad support for the Bond Anticipation Note program of the CIRM. We believe it is critically important to demonstrate that democratically mandated scientific and medical research funding programs for chronic disease cannot be tied up in court by a small group that is politically opposed to stem cell research. For California patients suffering from chronic diseases and injuries, every day counts in advancing our understanding of disease and our search to improve therapies to alleviate human suffering. We look forward to the institute funding stem cell research during the course of the litigation."
###

Hwang Denies Patent Demand Report

South Korean stem cell superstar Hwang Woo-suk says the University of Pittsburgh scientist whose actions precipitated disclosure of the eggs-for-cash scandal did not ask for a share of a patent.

Here are the first and last paragraphs from a report on english.chosun.com:

"Prof. Gerald Schatten of the University of Pittsburgh demanded to share a patent for stem cell cloning technology developed by geneticist Hwang Woo-suk and his team, press reports said Monday. Hwang and his team deny the report. Schatten recently ended his collaboration with Hwang citing ethical flaws in occyte procurement for an earlier project."

"The most likely interpretation is that Schatten did informally ask for a share of the patent but Hwang did not officially discuss the issue with his team and the government. Schatten has not commented on the allegation."

CIRM Survives Initial Court Test

The California stem cell agency has turned back a good portion of the challenges to its very existence, but there is little doubt that the legal struggle will continue.

According to a report by Carl Hall in the San Francisco Chronicle, Alameda County Superior Court Judge Bonnie Sabraw "denied essentially every legal argument brought by the plaintiffs in litigation alleging that Prop. 71 violated the state Constitution because it would allow taxpayer-backed bond revenues to be distributed without direct legislative control."

Sabraw was appointed to the bench by Gov. Wilson, a fact that should not be an encouragement to foes of CIRM.

Hall continued:

"In a 24-page decision issued late Tuesday, Sabraw said the plaintiffs had failed to overcome a fundamental presumption that voter mandates must be honored unless they were shown to be "clearly, positively and unmistakably unconstitutional."
"She denied five separate motions seeking summary judgment, any one of which might have been enough to put the closely watched California stem cell enterprise on ice for a very long time, if not out of business.
"Arguments turned aside by the judge included claims that the initiative deals with more than one subject, allows financial conflicts of interest in awarding stem cell research grants and would "alter the basic governmental framework."
"The judge did not throw out the lawsuits entirely. Instead, she set a hearing for Tuesday for lawyers to work out a plan for the next critical proceedings in court.
"But because Sabraw turned back virtually all of the plaintiffs' arguments, it appears they will have to be extraordinarily creative if they hope to keep the lawsuits moving forward -- and the stem cell institute standing still."
Hall continued: "She denied everything the plaintiffs asked," Klein said. "I would go into any hearing with this on our side."

Hall also reported that Dana Cody, executive director of the anti-abortion Life Legal Defense Foundation in Sacramento, one of the lawyers seeking to overturn Prop. 71, didn't return telephone calls late Tuesday. Other lawyers on the plaintiffs' side couldn't be reached for comment, according to Hall.

A Sad Tale of Stem Cell Conflicts?

By now we all know about the Korean egg flap, but Bloomberg News offers a special insight about previously unreported possible conflicts of interest involving the scientist whose actions precipitated the disclosure of the Korean matter.

Here is what the report by John Lauerman and Heejin Koo says:

"The public furor arose after former colleague Gerald Schatten, a University of Pittsburgh stem cell researcher, ended his 20-month collaboration with Hwang. Schatten said he had learned there might be truth to charges Hwang had used egg cells that were unethically obtained.
"Schatten asked Hwang for a half share in the patent for patient-specific stem cell cloning six weeks before his withdrawal from the project, South Korea's JoongAng Ilbo newspaper reported yesterday. Hwang's World Stem Cell Hub spokesman Sung Myung Whun declined to confirm or deny the report.
"'We feel that it is inappropriate to comment on the report at this time,' Sung said at a press conference held at the institute in Seoul today."

The article continued, "Michele Baum, a University of Pittsburgh spokeswoman, said she didn't have any information about the patent issue. Schatten wasn't immediately available for comment."

This is a sad business. We assume all involved are well-meaning individuals, but perhaps they are not. Nonetheless, it reflects poorly on stem cell research wherever it occurs.

What it means for the California stem cell agency is disclosure, disclosure, disclosure and more disclosure. If that is uncomfortable for some in the scientific community, so what? CIRM is the single largest source of stem cell funding research funding in the world. If the activities of some researchers can't stand the light of day, they should move on. The California stem cell agency does not have to play the good-old-boy game.

Eggs and Ethics: CIRM's Proposed Rules

Given the circumspection of our bureaucratic friends, the Korean egg affair may not even be mentioned at a key CIRM meeting on Thursday.

But the matter will still be lingering in the air, a little distasteful but impossible to ignore.

It is just the sort of issue that the panel -- the Scientific and Medical Standards Accountability Working Group – should confront explicitly and directly. In fact, it amounts to a case study for CIRM, albeit one that is a tad fuzzy. But the reality is that such matters are usually less than clear cut. Facts are elusive; memories become weak.

The accountability group consists of five patient advocate members of the Oversight Committee, nine scientists and clinicians "nationally recognized in the field of stem cell research," four medical ethicists and Robert Klein, chairman of the California stem cell agency.

At the meeting in San Francisco, the group is scheduled to consider rules that would prohibit any cash-for-egg programs involving CIRM. The proposed language states:

"No payments, cash or in-kind, have been provided for donating oocytes, gametes, blastocysts, or eggs. Individuals may be reimbursed for expenses incurred as a result of a clinical procedure, as determined by (a review group). Individuals who consent to donate stored gamets, blastocysts or eggs may not be reimbursed for the cost of storage prior to the decision to donate."

Missing from the agenda material posted on the Web is anything other than the technical language of the draft regulations, which are rather intimidatingly labelled "do not cite or quote." But never fear. If you discuss them, you are probably not going to be called before a grand jury a la the Karl Rove case.

Also up for consideration is a report from the task force on intellectual property, another complex and important issue. But there is no clue on CIRM's website concerning the contents of that report.

If CIRM truly desires to fulfill its promise of being responsive, it is going to have to do much better at providing background that is accessible to the public. It should examine the type of work done by the state legislative analyst as well as analyses prepared by legislative staffers in Sacramento. All of which is prepared in a timely fashion and generally available online.

The accountability group is co-chaired by Sherry Lansing, a former Hollywood movie executive and now a cancer patient advocate, and Bernard Lo of UC San Francisco, whose expertise is listed by CIRM as "biomedical ethics related to oocyte, embryo and stem cell research." You can see all of the members the group at this link.

The Korean Lesson: More Sunshine Needed in California

"I am very sorry that I have to tell the public words that are too shameful and horrible." -- Hwang Woo-Suk

"It won't be the first time that a scientist has lied to journalists...." -- Chris Shaw, professor of Neurology at Kings College London

"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants." -- Louis Brandeis

Can the California stem cell agency learn something from the South Korean cash-for-eggs affair?

The answer is a resounding yes. A few days ago, The Sacamento Bee noted that the whole egg extraction business is a dicey waypoint in the "minefield" of stem cell research. The Bee commended the agency's plans to look more deeply into the issue.

But the story about the Korean researcher and the milieu in which he operates has additional implications. Some involve different cultures – not only Korean and US but those of other societies. The case also involves jingoistic ambitions – here and elsewhere – and economic aspirations.

But we are going to focus on another aspect of the affair – the need for maximum disclosure and transparency on the part of the California stem cell agency. Its unique structure contains built-in conflicts of interest with little direct oversight from any other California governmental entity. "Trust us" says CIRM.

The South Korean stem cell story, however, makes clear what we all know; temptations are great on the cutting edge of science. Prestige, honors and potentially billions of dollars are at stake. Even the high priests of science are not immune from infection.

CIRM's own peculiar governmental DNA is likely to make it more susceptible to abuse. The best vaccine, as Justice Brandeis suggests, is a good dose of sunshine. Open the doors more widely. Do a better job of making records available on the Internet. Be more straightforward about financial affairs. Require more disclosure of financial interests on the part of scientists, contractors and others associated with the agency.

Obviously, transparency is not going to prevent all wrong-doing. The truly crooked are less likely to be deterred. Then there are the well-intentioned, presumably such as the South Koreans who paid cash for human eggs. They will find excuses for what they are doing.

Hwang is the global superstar of stem cells. He will survive this scandal. But the California stem cell agency would be hard-pressed to come through a similar affair.

CIRM should resist its natural, insular tendencies. If its dealings are truly open and transparent, those who are tempted by money or ambition will find it more difficult to operate. The public will have an opportunity to examine the agency's affairs. And when the inevitable scandal – small or large – surfaces, CIRM can say it has done all it could to prevent wrongdoing.

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The quotes from Hwang and Shaw at the beginning of this post are from an article by Stephen Pincock in The Scientist.

Wandering The Seas

We are putting to sea once again. That means that postings will be intermittent on the California Stem Report until we arrive at a location a little later this month that has Internet access. Meantime, feel free to post comments on any subject. Just click on the comments link at the end of each item.

Chopped Mitochondria?

State Treasurer Phil Angelides says tax-exempt financing of stem cell research "may not always offer the lowest-cost choice" for the California stem cell agency, according to the web site, California Politics Today.

Reporter Marc Strassman disclosed the treasurer's position, quoting from an Oct. 26 letter by Angelides to the stem cell agency.

"It is more likely that the Institute will want to pursue a strategy that involves a mix of taxable and tax-exempt financing, as the state will do with the recent housing bond approved by the voters," Angelides wrote to CIRM.

Strassman said Angelides, who is seeking the Democratic nomination for governor, "distanced" himself from other proponents of the Prop. 71 in the October document.

In the letter, Angelides said his staff estimated that if the state were to use taxable bonds to fund the agency, the increased interest costs would be $423 million. Other estimates have placed it as high as $700 million.

Strassman said that under Angelides' scenario, the state would spend $6.5 billion for stem cell research with a net return of $1.1 billion. Strassman continued:

"How many of the venture capitalists clustered on Sand Hill Road in Menlo Park up in the hills behind Stanford, whose investments in existing and future bio-tech start-ups could see triple-digit increases in value as a result of Prop. 71-funded grants, would accept a deal like that....?

"Would Treasurer Angelides be willing to make, or be allowed to stay in office after making, any other investment on these terms with the billions of dollars of taxpayer money under his control as the State's chief financial officer? Would any CFO?

"Why then should the voters and taxpayers of California accept such terms either? What do the folks in and around the Stanford bio-tech venture capital community think the rest of us are, anyway, chopped mitochondria?"

Strassman carried another item that recounted a history of Angelides' statements concerning tax-exempt financing of the agency and expectations of significant returns for the state. Also included was a similar history for state Controller Steve Westly, who is also seeking the Democratic gubernatorial nomination. Look for the material towards the end of the article which leads with the state's bond counsel refusing further comment about conversations with Angelides.

Klein Speaks at Stanford Conference

The Stanford Graduate School of Business is hosting a conference this Saturday that will feature California stem cell chairman Robert Klein and address the "entrepreneurial challenges" that the agency has faced.

The session will also include Philip A. Pizzo, dean of the Stanford School of Medicine; Hank Greely, Stanford law professor, and Amy DuRoss, chief of staff for the stem cell agency.

The session will be at 11:50 a.m. at the Graduate School of Busines, 518 Memorial Drive, at Stanford University. The full agenda can be found here.