The $500,000 Plan to Spend $3 Billion

CIRM President Zach Hall zeroed in on the critical point. How will the California stem cell agency be judged 10 years from now?

“What people will really care about is whether we spent our money well. Did it yield something to improve the quality of life, not just for Californians, but for everyone?”

In a word, results.

Hall's comment came at a meeting of the Oversight Committee of the stem cell agency last week. Not that he is ignoring the other important stuff, such as the best medical and ethical standards in the world, but that will come along as well if the agency is sharply focused, disciplined and diligent.

Development of the plan is expected to take something like six months and cost $500,000. Reporter Terri Somers of the San Diego Union-Tribune wrote a piece that set the matter in perspective.

She said,

"While much about the strategic plan remains amorphous, this much is certain: It won't be a laundry list of diseases to be cured. It will be a plan that allows the best and latest scientific discoveries to influence where the taxpayer money is invested, Hall said.
"And it will be fluid, because in the 10 years California intends to provide funding, scientists will likely make discoveries that catapult some research ahead of others, Hall said."

Based on Somers' story and Hall's proposal, it appears that the public will have ample opportunity to make its voice heard, if it so desires. The planning process and documents are also expected to be available on CIRM's Web site.

In what may be the only story on the meeting, Somers discussed the tension between some of the factions, if you can call them that, on the board, such the patient advocates who have pushed for rapid development of therapies. One of those is Jeff Sheehy, a patient advocate. Somers quoted Sheehy as saying,

“We tend to think of disease advocates as being tied to a specific disease when, really, it is just a mode of operating and thinking.
“My father has Alzheimer's, my mother was diagnosed with ovarian cancer, and I have HIV and my greatest risk factor right now is cardiovascular. If I had to chart today what I want to cure first, this morning, it would be ovarian cancer. My point is that everyone in California is impacted by chronic life-threatening disease. And I don't so much want to cure my disease as I want to cure something.”

The next steps on the strategic plan? CIRM staff will begin interviews with experts and "stakeholders" in the next few days, along with ICOC members as appropriate. A public meeting is expected sometime in May in San Francisco.

Here is a link to the CIRM press release on last week's meeting.

Zoloth Speaking Monday at UC Santa Cruz

Santa Cruz, California, is not exactly the center of the universe but if you are in the area on Monday, you might want to consider taking in a talk by bioethicist Laurie Zoloth.

We heard Zoloth, a professor of medical ethics, humanities and religion at Northwestern, talk at a stem cell conference last month in San Francisco. She is an apt speaker, downright zingy at times. And she has an ability to penetrate the murk.

Her topic on Monday is "May We Make the World? Bioethics, Stem Cells, and the New Biology," followed by a question-and-answer period. The event will take place from 4 to 6 p.m. at the Stevenson Event Center on the UC Santa Cruz campus.

Alliance for Stem Cell Research Beefs Up Web Site

The Alliance for Stem Cell Research has launched a new and much improved Web site as part of its efforts to promote stem cell research in California and nationally.

Susan DeLaurentis, president of the group, told us in an email:

"We have worked hard to present the technical information in a way that can be widely understood, to address both urgent and ongoing issues related to stem cell research, and to give visitors the opportunity to better understand how stem cell research could affect their lives, and the lives of those around them."

She said that the group has promoted the site using names from its database plus personal contacts. They have also asked related groups to direct their readers to the site.

Like the Center for Genetics and Society, the alliance site carries links to news stories. It also has a rundown of stem cell activity state by state.

The Alliance is the non-profit descendant of the key campaign group behind Prop. 71 and once shared Northern California offices with California stem cell chairman Robert Klein. It is now located in Los Angeles.

Useful Stem Cell Newsletter

The Center for Genetics and Society in Oakland, Ca., produces a useful Web newsletter each month that is of interest to those who follow stem cell issues.

If you haven't seen it already, it is worth checking out. The latest edition from March 29 covers everything from a roundup on Hwang to the $38 million-a-year human-egg trade. In the case of Hwang, it provides a useful summary of where things apparently stand, based on news and other Internet reports.

Of course, the center's voice can be heard in the articles, but links are also provided to the original stories. The newsletter allegedly can be automatically delivered by a free subscription. However, I have to report that my efforts to have it delivered by that means have been totally unsuccessful.

CIRM Garners Greenbacks and Flack From Critics

San Francisco Bay Area venture capitalists and a baseball mogul are among the folks who are making $14 million in bridge loans to the fiscally strapped California stem cell agency.

The names of the lenders were disclosed earlier this week at a meeting in Sacramento that approved the initial round of what is promised to be $50 million in bond anticipation notes for CIRM. Currently it cannot float general obligation California bonds because of lawsuits against it. The notes authorized this week will not be paid back if the state loses its case.

Reporters Terri Somers and Bill Ainsworth of the San Diego Union-Tribune made an extra effort to identify the players behind the charities that are buying the first round of the notes.

Here is what they wrote:

"The Jacobs Family Trust, founded by Qualcomm Chairman Irwin Jacobs and his wife, Joan, has agreed to buy $5 million in bond anticipation notes. The Moores Foundation, founded by San Diego Padres owner John Moores, has agreed to buy $2 million.

"Other investors include Blum Capital Partners ($1 million), headed by Richard Blum, husband of (U.S. Democratic)Sen. Dianne Feinstein (of California); the Beneficus Foundation ($2 million); the William K. Bowes Foundation ($2 million); and the Broad Foundation ($2 million). Beneficus was founded by John Doerr, a partner at the large Bay Area venture capital firm Kleiner Perkins Caufield & Byers, which has invested heavily in biotechnology. William Bowes, whose foundation bears his name, is also a Bay Area venture capitalist."

Moores was a catalyst in the creation of an embryonic stem cell consortium in San Diego that is touted as having the potential for being tops in the world.

Broad donated $25 million to USC earlier this year for stem cell research, among other things. CIRM President Zach Hall was a key figure in initiating the Broad effort when Hall was at USC.

Terms of the CIRM loans call for a variable interest rate capped at 5 percent. First year interest costs are estimated at $600,000. Stem cell chairman Robert Klein said the money will be enough to fund the first year of the grants approved last September by the agency.

The funding is a significant step forward for the agency, which appears to be making headway after a shaky start last year. However, not all the critics are happy. And they have a very good point about the lack of transparency that still troubles CIRM despite Klein's repeated promises to adhere to the highest and best standards of openness and transparency.

In an editorial earlier this week, The Sacramento Bee, which is the flagship of the nation's second largest chain of newspapers, said the bridge loan process was "mired in secrecy."

The Bee continued:

"Among other things, Klein's negotiations with these potential lender-donors set a vexing precedent. Never before has a state official spent so much time negotiating with private financiers to keep a public agency running. While Klein says these bridge loans will be a lifesaver for the institute, they also could plunge it into a deeper legal and political thicket.

"Although the fine print of Prop. 71 mentions 'bond anticipation notes,' it is unclear if state officials can legally issue them until the constitutionality of Prop. 71 has been affirmed. One of the lawsuits filed has asked the court to block the issuance of such notes."

The Foundation for Consumer and Taxpayers Rights of Santa Monica, Ca., warned that CIRM's leadership could be undercutting its credibility. John M. Simpson, stem cell project director for the watchdog group, said:

“At first blush it looks as though there are safeguards in place to ensure that purchasers of the notes don’t hold undue sway over the stem cell institute — they, or an affiliated entity, can’t seek a grant, loan or contract from CIRM.

“But what does it say about the institute and the secretive way it persists in doing business when the terms only became clear as the names of the first buyers were released? The stem cell institute may end up in the right place, but too often the leadership undercuts its own credibility by holding everything too close to the vest.

“A completely open, transparent process would better serve everyone. I truly wish they’d see that.”

For the record, while it still has significant transparency weaknesses, CIRM demonstrated above average openness on development of its rules for stem cell research, welcoming, at least publicly, diverse voices that did not always agree with its proposed standards.

Klein hailed the approval of the notes, saying "we've never (before) seen an aggregation of the major foundations throughout the state coming together ... as champions of research in this way," according to reporter Jim Downing of The Sacramento Bee.

A press release by CIRM quoted Eli Broad, founder of The Broad Foundation, as saying:

“California will be America’s leader in stem cell research, which will not only benefit the tremendous need of people suffering from debilitating diseases and conditions but will also help the California economy immeasurably.”

Oddly the press release did not quote any of the other investors.

We cannot provide a direct link to the CIRM press release because it appears that access to CIRM's web site and other California state web sites from this IP address in Mexico is being blocked. Some California web sites, such as the treasurer's, are accessible. We ran into this problem last fall from another location in Mexico. State computer specialists attributed the blockage to security issues and removed the block after we asked them to look into the matter. We have asked them again to make the CIRM site available.

Here are links to The Associated Press and San Francisco Chronicle stories on the bond anticipation notes. The CIRM website is www.cirm.ca.gov. You should be able to find a link on that page to the press release.

Angelides Makes Minor Stem Cell Hay

The latest score on stem cell issues in the Democratic gubernatorial race shows a modest edge for Phil Angelides over his opponent, Steve Westly.

Not that it is a matter of much significance, since both are supporters of the California stem cell agency and embryonic stem cell research. But Westly, California state controller, has launched an Internet advertising campaign on the issue, which means that he figures that there is some gain to be made through exploitation of stem cells.

Angelides, the California state treasurer, however, chalked up plus points as the result of the meeting earlier this week that authorized $14 million in bond anticipation notes for the agency. Angelides was mentioned prominently in most news stories – Westly not at all, although both are members of the committee that approved the notes. In fact, we cannot tell whether Westly attended the meeting, based on the news stories that we have seen.

Of course, Angelides is chairman of the committee, which held its meeting in his offices, making him the natural focus of coverage. Here is a link to Angelides' press release on the subject.

Can Californians Be Cowed?

Last month a stem cell industry executive told the California stem cell agency that it should not expect businesses to come crawling for grants. Another said firms "would not engage" unless the terms of grants fit the requirements of the industry. (See "resists.")

The Foundation for Taxpayer and Consumer Rights of Santa Monica, Ca., has taken umbrage at the comments.

John M. Simpson, stem cell project director for the group, focused on the comments of Stephen Juelsgaard, executive vice president of Genentech, who sounded the non-engagement note. Simpson said:

"Your remarks strike me as a blustering attempt to cow Californians into believing that needed stem cell research won't happen unless the game is played by biotech's rules -- otherwise you'll pick up your Petri dishes and go home."

The jousting highlights the stakes in the debate now underway at the California stem cell agency, which is in the process of formulating intellectual property rules for grants to business.

The foundation's comments notwithstanding, it would be naïve to expect stem cell firms to do anything less than push for the most advantageous position. In some fashion, all businesses have a basic responsibility to society. But their fundamental operating responsibilities are to their investors and to their bottom line, at least that is how they perceive it. That means they want as large a share of the take as possible.

On the other hand, CIRM must set firm rules for the unpredictable world of research and medicine and demonstrate that the people of California are likely to benefit from the $3 billion they authorized for stem cell research. CIRM must protect the the interests of the people of California – not just patients, scientists or other groups. Some at the agency believe generous terms for business mean speedy cures. But that could also translate to what could be huge boondoggles.

Juggling those competing demands and needs will be an important element in public confidence in the agency. The rhetoric will be heated. Accusations of greed and bad faith will fly. Egos will be bruised. It is our guess that Juelsgaard probably has not experienced a public attack such as the one leveled by by the foundation, if he is like most businessmen. He and others will need to develop thick skin. All the parties are likely to become disgruntled during the process, which makes it all the more important that hearings be totally open and transparent with ample advance public notice.

Naming Rights: Selling Out to Biotech?

The proposal by the California stem cell agency to sell naming rights to big donors has triggered a bit of concern from a couple of the watchdog groups.

Their objections were reported in a piece by reporter Paul Elias of The Associated Press. He wrote"

"'If they aren't careful, they are going to be seen as selling out to biotech,' said John (M.) Simpson of the Foundation for Taxpayer and Consumer Rights."

Elias continued:

"Jesse Reynolds, a longtime agency critic at the Center for Genetics and Society in Oakland, said even a grants ban wouldn't completely guard against conflicts. He said big donors could still influence how grants are awarded, perhaps pressuring research directed at diseases afflicting family members.

"'The potential for conflicts is there,' Reynolds said.

We should note that the naming proposal was first reported by the California Stem Cell Report – another reason to check into this site regularly.

We should also note that Elias' story carries a correction re the previous assertion by stem cell chairman Robert Klein that he had $50 million in commitments to purchase bond anticipation notes. The correction says that the figure is $45 million and that another $5 million is being negotiated.

The Oversight Committee is scheduled to take up the naming proposal Thursday at its meeting in Los Angeles.

Back to Romantic Old Mexico

The California Stem Cell Report will be posting items less frequently in the coming months, but we encourage all our readers to comment on the issues and send us messages keeping us up-to-date. The reason for the slower pace? We are returning to our sailboat-home in Romantic Old Mexico. Internet availability is a bit more difficult from a boat, particularly in locations where there are no marinas, than in the cities of California. Cheers to all of you and thanks for reading the California Stem Cell Report.

Stem Cell Industry Resists Strings on CIRM Grants

The California stem cell agency received two distinct messages Wednesday at its first meeting on rules for intellectual property for business.

No blank check for biotech was one admonition (see "ownership") from a watchdog group. The other came from industry, which said don't expect us to come crawling to you for money.

Reporter Lee Romney of the Los Angeles Times covered Wednesday's hearing. Here are some excerpts:

"Representatives of private biotech companies made it clear to institute board members Wednesday that major companies with the ability to bring cures to market are unlikely to seek state money if too many strings are attached to those dollars.

"'I don't think you're sitting in a position where all these companies will come on their knees to visit you,'" Brad Margus, chief executive of Mountain View, Calif.-based Perlegen Sciences Inc., warned the institute's intellectual property subcommittee.

"'He said that only second-rate companies would be interested. 'You need to have first-draft picks, not companies who are desperate,' he said.

"Industry's key concerns, Genentech Executive Vice President Stephen Juelsgard told the committee, are that the state will dictate how much companies can charge for new treatments; maintain the right to patent technology, if companies fail to do so; and require companies to share developments they consider proprietary. Major companies 'simply wouldn't engage,' Juelsgard said. 'It's not a risk worth taking.'"

The Times story continued:

"Zach Hall, the institute's president, said he is confident a compromise can be found. 'There is a heightened sense that this is a public project. As part of that there is an expectation that there will be a very tangible return,' Hall said. 'Yet we know that if we are going to have therapies that are widely available … the private sector will have to be involved in a very fundamental way. The trick is to satisfy both of those needs. We don't expect that everybody will be happy."

The Times appears to be the only newspaper this morning with a story on Wednesday's meeting.

Democratic Candidates to Vote on CIRM Funding

So far California's political junkies have been able to just say "no" to matters surrounding the California stem cell agency.

For the most part, CIRM issues have been off the political radar with the exception of an Internet advertising campaign by state Controller Steve Westly.

But next Tuesday that could change a tad. Westly and his rival for the Democratic nomination for governor, state Treasurer Phil Angelides, will share the same platform at a meeting of the CIRM Finance Committee, which is scheduled to considered funding of the agency. Both sit on the committee as the results of the terms of Prop. 71.

One never knows what can happen at a joint appearance of political rivals, so we may see some different sorts of media types and the politically curious attending the session .

There is certain to some political scheming this week by the candidates in connection with the meeting, both to maximize the beneficial electoral impact but also to minimize any possible damage from the rival candidate.

Angelides would seem to be in the most favorable position, given that he is chair of the committee, which is also meeting in his offices.

If you want to see the Democratic duo, you find all the details of the meeting here.

CIRM's Coffers Not Looking So Bare

It is not exactly a case of wheelbarrows of cash rolling in the doors of the California stem cell agency agency.

But next week, the creaky processes of California's governmental bureaucracy will start moving to put money in a pipeline to CIRM.

The main event is a meeting of the Finance Committee of CIRM. It is scheduled to convene next Tuesday afternoon in Sacramento to consider issuing notes to fund CIRM. Stem cell chairman Robert Klein has already said he has commitments for $50 million in what he calls bridge financing. It comes in the form of state bond anticipation notes that will not be repaid if the state loses the lawsuit against the agency. Klein has targeted philanthropic organizations as purchasers of the notes.

Also next Thursday, the Oversight Committee is expected to approve a new policy that will give donors naming rights if their gifts are "substantial." Klein has indicated that he has found a significant interest in donations if naming rights accompany them.

Here are some key features of the proposed policy as it will be heard Thursday before the Governance Subcommittee of CIRM.

"No naming will be considered without a gift of substantial value to CIRM and its programs.

"A gift that requires an initial and/or on-going expenditure will not be considered if the total estimated expenditures will likely equal or exceed the value of the gift.

"No gift will be accepted from an institution, entity, or individual that has applied for CIRM funding or that intends to apply for CIRM funding, except for gifts of the use of government or nonprofit-owned facilities for ICOC, working group, or scientific meetings.

"No gift will be accepted from a biotechnology company that devotes five percent or more of its annual budget to stem cell research."

An Examination of CIRM's Autonomy

California Politics Today is not letting the issue of the independence of CIRM rest.

The question was at the heart of the California stem cell trial during which CIRM foes argued that the agency was unconstitutional because it is not under the exclusive control of the state.

Reporter Marc Strassman's piece includes some history of the agency and Prop. 71 and a feeble response from the governor's office on the matter.

Watchdog Group: No Invention Ownership for Businesses

One of the organizations monitoring the California stem cell agency says the state should own any inventions that businesses create with state-funded research, a proposal that is certain to be resisted by the biotech industry.

"No blank check for biotech" is the anthem of the Foundation for Taxpayer and Consumer Rights in Santa Monica.

John M. Simpson, stem cell project director for the group, said in a letter to CIRM's Intellectual Property Tax Force.

"With biotech firms already lining up to share in the Prop 71 funds, it's disconcerting to hear venture capitalists like Steve Burrill refer to the stem cell institute's grants as 'almost like free money.' Clearly defined IP rules, governing such things as price and accessibility for underserved populations, will ensure that businesses receiving CIRM money will meet fair obligations to the public when they take taxpayer dollars. As you and the task force write IP rules for businesses you should remember that although Californians overwhelmingly approved Prop. 71, they never intended a black check for biotech."

Simpson also wrote:

“If Prop. 71 money funds research, perhaps a clinical trial … California should receive a fair commission when it is finally available on the market. If a patentable discovery results from Prop. 71-funded research by a business, the state should own it and place it in a patent pool so that the research can be as broadly shared as possible.”

CIRM has already adopted IP rules for non-profit institutions that give them ownership of any inventions funded by CIRM, a position the Santa Monica group opposes for businesses.

The IP Task Force is hearing IP recommendations from various groups at a hearing today.

Formulating a Plan to Give Away $3 Billion

Strategic planning can be one of those "yawner" endeavors – a meaningless process that is ignored by all parties hardly before the ink dries on the plan document.

But at CIRM it has been a matter of considerable concern, pitting different interests on the Oversight Committee against each other.(See "clashing interests"). The lack of a coherent plan has also played a role in some of administrative and other problems that have troubled the new agency.

At one point late last year the start-up difficulties prompted Paul Berg, a Nobel laureate from Stanford who fills in on the Oversight Committee, to say, "I liken it to the Iraq thinking - we won the war and didn't know what to do afterward." (See "beleaguered.")

With that backdrop, the latest run at planning the strategic plan kicks off Thursday at a meeting in San Francisco of the governance subcommittee of the Oversight group.

The item in question is a $250,000-plus contract with PriceWaterhouseCoopers to support efforts to develop a strategic plan. The agenda mentions an attached document which is not yet available on the Web, but presumably will tell us more about the latest approach.

One key matter to watch for is the approach to the interests of the patient advocates, who are pressing for speedy development of therapies and seem to be quite concerned about any slower strategy.

Also on the agenda is a policy for peddling naming rights to CIRM programs or property in connection with the receipt of gifts. (See "naming.")

A proposal for a compensation plan at CIRM is up for consideration along with the latest on outside contracts with CIRM. The contracts include $75,000 with Spiegel, Liao and Kagay and $25,000 with Orrick, Herrington & Sutcliffe, both of San Francisco, for work on the California stem cell trial and expected appeal.

The meeting to consider all this will take place in San Francisco at 3:30 p.m. Thursday. Remote locations are available in San Diego, Stanford, Sacramento, Irvine and three different sites in Los Angeles. Details are available on the agenda.

Color the News Stem Cell Green

Sometimes it seems that the California stem cell business is more about deriving dollars rather than therapies from the research. On the other hand, perhaps it actually is.

The news this morning has a strong focus on the monetary matters. And later this week, the California stem cell agency will kick off its hearings into dividing up the booty from any inventions developed by businesses that receive CIRM grants.

Here is quick look at the highlights of the fresh fodder from the mainstream media.

Writing an op-ed piece in the San Francisco Chronicle, John M. Simpson, the stem-cell project director for the Foundation for Taxpayer and Consumer Rights, said:

"The biotech industry is lining up to take Prop. 71 money and wants as few strings as possible attached. Speaking to biotech executives at a conference his firm organized in San Francisco, Steve Burrill, chairman of the venture capital and merchant banking firm Burrill & Co., described the capital funding being provided by taxpayers in California and a few other states as 'almost like free money' compared to commercial venture capital. That phrase is a tipoff to the lack of any sense of obligation. Clearly defined IP rules, governing such things as price and accessibility by underserved populations, will ensure that businesses meet fair obligations to the public when they take the public's 'free money.'"

Reporter Steve Johnson of the San Jose Mercury News wrote:

"Even with California's stem-cell research institute mired in legal challenges that block most of its financing, businesses in the Bay Area and elsewhere are betting their bottom lines that stem cells one day will yield staggering new medical cures and profits.

"About 100 companies in the United States and an equal number in other countries are trying to develop stem cell-based therapies and other products, according to venture capitalist G. Steven Burrill, who hosted a stem-cell conference in San Francisco last week.

"Coaxing commercial blockbusters from stem cells is costly and could take years. Even so, many of the executives and others drawn to the event sounded optimistic, given the progress they and others say is being made."

And reporter Daniel Levine of the San Francisco Business Times has a follow on our earlier report that Wisconsin wants California to cough up royalties for any CIRM-funded research into embryonic stem cell research.

Reporter Marc Strassman of California Politics Today also has three items: One links to a UC San Diego campus newspaper item about conflict of interest involving a member of the stem cell Oversight Committee; a second quotes Phil Angelides on Prop. 71 bonds two days after the measure passed and a third involves a statement from California State Sen. Deborah Ortiz on proceedings in the California stem cell trial.

WARF Under Assault For Excessive Royalties

The latest criticism of Wisconsin's control of patents on embryonic stem cells is well-covered in a piece in the Wisconsin State Journal that comes as California is facing new claims from WARF for a piece of the action in the Golden State.

Earlier this month, WARF's chief counsel told a stem cell conference that she expects to see California pay royalties to her agency. That's because CIRM-approved rules give the state roughly 25 percent royalties on inventions developed by CIRM-funded research at non-profit institutions. CIRM is scheduled to consider IP rules for grants to commercial firms next week.

Reporter Ron Seely of the Wisconsin newspaper wrote the article about patent complaints by Jeanne F. Loring, a stem-cell researcher with the Burnham Institute in San Diego,, and Cathryn Campbell, a patent attorney with McDermott, Will & Emery, a Washington, D.C., law firm.

Their charges were contained in an article in Science magazine that said WARF patents are "a more daunting barrier to progress in the field" than President Bush's restrictions on embryonic stem cell research.

Seely wrote:

"But the authors of the Science article also take issue with how WARF distributes the cells and the fees it charges for their use.

"Initially, WARF charged academic investigators $5,000 for the cells. After an agreement with the National Institutes of Health, which made WARF the main distribution center for the cells, that fee was reduced to $500.

"The price is steeper for private laboratories. WARF charges an upfront fee of up to $125,000 to private commercial labs for the cells, plus an annual maintenance fee of up to $40,000 to retain the license."

Seely quoted Carl Gulbrandsen, executive director of WARF, as saying,

"I'm not embarrassed at all to say that I hope the University of Wisconsin will make a whole lot of money from these patents."

Seely also carried a more detailed defense by Gulbrandsen of his position.

Loring has leveled charges at WARF previously. Nature magazine reported in May 2005 that she said her startup firm collapsed because she could not get access to embryonic stem cells at a reasonable price from WARF. That matter was discussed briefly in an article by Merrill Goozner in February in PLoS Medicine that explored the problem of patent thickets and stem cell research, particularly in California.

(Goozner's article is available without charge, but the piece by Loring in Science and the article in Nature require paid subscriptions. We should also note that Loring is a key figure in creation of the nation's first public embryo bank, which she said will make embryos available to qualified researchers at no cost.)

Seely's piece on Loring's most recent allegations appears to be the most comprehensive one available today. Most of the country and California saw this Associated Press piece.

One interesting sidelight on the patent dispute comes from Kathleen Gallagher of the Milwauke Journal in an article she wrote in 2004. She said,

"Significant discoveries involving stem cells may be 10 years away. Then it could take another five to eight years to get therapies through the U.S. Food and Drug Administration, said Carl R. Clark, director of marketing and licensing for the Medical College of Wisconsin Research Foundation. That means WARF's initial patents could expire before any royalties are generated.

"One of the companies best-positioned to bring stem cell therapies to market is Geron Corp. of Menlo Park, Calif.

"Geron funded much of the early research at the University of Wisconsin-Madison leading to James Thomson's first-ever isolation of human embryonic stem cells in 1998.

"The company has certain rights to develop therapeutic and diagnostic products involving certain stem cells. Geron has said it hopes to be in clinical trials by the end of 2005 or early in 2006 for therapies for spinal cord injuries.

"That makes Geron a fan of WARF's patent.

"'If 50 new companies are spawned in California in the next five years, those are licensing royalties to Madison and Menlo Park,' said Thomas B. Okarma, Geron's president and chief executive officer."

Can WARF Collect Stem Cell Royalties From California?

Earlier this month, we reported on a call by the Wisconsin Alumni Research Foundation for royalties from California-funded stem cell inventions.

The issue was addressed today in IPBIZ, a blog by patent lawyer Lawrence Ebert. He raises questions about WARF's position and includes a number of legal citations. Here are a few excerpts from the item:

"First of all, the information in the (California Stem Cell Report) post is worth consideration by people in California, and in New Jersey, Maryland, Connecticut, and Illinois, about state-financed funding of stem cell research."

He continues:

"My second point is, notwithstanding the significance of WARF's expressed position on March 14, it does not really constitute a threat to the other states. [There may be other things that do constitute a threat, but that's another story.]"

Ebert also says:

"Moreover, there's another reason the folks at WARF ought to be careful. CIRM is a state agency. Accusations of patent infringement against states play out a bit differently than the garden variety suit against a garden variety defendant."

ACT's Caldwell Responds to 'Unease' Item on State Funding of Stem Cell Research

Last week we wrote about how some in the biotech industry preferred federal funding of embryonic stem cell research as opposed to state-funded efforts. We puzzled over the situation and invited those quoted in the item to respond. We promised to carry their responses verbatim. Here is the response from William M. Caldwell, chief executive officer of Advanced Cell Technology, Inc., of Alameda, Ca.

"I appreciate your allowing me to comment on your recent blog of March 16, 2006, "The Big Uneasy." I believe you misrepresented my stand on state funding for stem cell research and welcome the opportunity to correct the impression I believe you gave your readers.

"You are correct that I believe we should see national funding via the National Institutes of Health, especially in my arena of embryonic stem cell research. But I do not regard the state's $3 billion stem cell agency "with unease," as you put it.

"The real issue here is bringing treatments, therapies and cures to the bedside. In an environment where our national government has failed in providing us with the best possible path to this objective, and in fact blocking the ability of science to move forward, California has stepped up and led the nation.

"In August 2001, when President Bush announced a ban on federal funding of all but a limited number of stem cell lines, the states began stepping into this breach by setting out to establish their own stem cell research programs. Bush's restrictive federal policy on this research has given the states a remarkable opportunity, but it also has left them to battle with complex economic, ethical, policy, and moral issues. States are now facing important political and organizational challenges in designing and implementing effective state-financed stem cell programs -- all of which have been institutionalized over decades at the NIH.

"As the CEO of Advanced Cell Technology, a leading biotechnology company focused on developing and commercializing human stem cell technology, I believe our recent moving of the company's headquarters from Massachusetts to California as a direct result of the passage of Prop. 71, is a clear indication that I am a supporter of the California Institute of Regenerative Medicine (CIRM). However, as I said at The Stem Cell Meeting last week, state funding of this research is not the best approach. Embryonic stem cell research should be funded by the National Institutes of Health, the major source of research funding for the life sciences in the United States, not each individual state.

"Having states independently fund and regulate embryonic stem cell research will, I believe, create a disjointed morass of dissimilar bureaucratic procedures, oversight, rules and regulations.

"Because of uniform federal standards and guidelines, the funding recipient has consistency in protocols, processes and applications wherever the research is done in this country. States having different agendas, for whatever reason, will potentially impose immense challenges for the scientific community, which typically will conduct collaborations in diverse geographic areas of this country.

"The lack of federal funding in this field has driven some individual scientists to move abroad to countries that are soliciting expertise in this area and are willing to fund this research. Some universities and other research enterprises have opened up facilities abroad to take advantage of a better regulatory climate. Just look at Singapore and which universities have developed a presence there in the past decade. This is completely unsatisfactory from an American perspective.

"I stand by my statement that State-funded stem cell programs are not the ideal solution, but from a scientist's perspective, in a world where our federal government has turned a blind eye to this promising research, it is the only U.S. alternative available."

CGS On Money, Eggs and Women

Women should not be paid for their eggs, and here is why, according to Jesse Reynolds, Project Director, Biotechnology Accountability, at the Center for Genetics and Society in Oakland, Ca.

Reynolds sent his comment in connection with the "cash larded" item earlier today. If others would like to comment on this matter, you may use the comment function at the end of this item (click on the word comment) or send an email to me at djensen@californiastemcellreport.blogspot.com. Here is Reynolds' full comment.

"I'd like to make two clarifications, and an assertion.

"First, you state that 'One of the working assumptions of stem cell researchers is that IVF will provide a lot of eggs that could be used for science.' However, the assumption has generally been about a surplus of embryos - not eggs - created but not used for IVF. There are negligible surplus eggs in IVF. Because they are difficult to extract and do not store well, eggs are typically the limiting factor in IVF. (There is, however, some recent advances with freezing eggs.) Thus, any eggs for research generally must be designated as such from the start. In the US, there is little discussion of 'mixed donation' - providing eggs for both purposes in one extraction - although the UK is considering this. Egg extraction in the US is generally done as in an 'either/or' context.

"Your post could be interpreted as implying that eggs are needed for stem cell research. But the distinction between typical embryonic stem cell research and that using cloning techniques is often blurred. Almost all human embryonic stem cell research is done with surplus embryos from IVF. Only a tiny fraction of researchers are attempting to make clonal embryos for stem cell lines. This is what requires eggs. Stem cell lines are yet to be successfully derived from clonal embryos. Moreover, some observers and scientists are beginning to question to need for SCNT (a.k.a. research or therapeutic cloning) and thus the need for eggs. For example, see 'Beyond Fraud - Stem-Cell Research Continues' by Evan Snyder and Jeanne Loring and the lead story in our most recent newsletter.

"The Center for Genetics and Society believes that that women should not be paid for their eggs. It is true everyone else in the process gets paid, but they are doing their jobs. As a society, we've generally concluded that people should not risk their health for research in order to make income. That's why we are not allowed to sell organs, such as kidneys. The logic that 'everyone else is paid' would imply that kidney donors should be paid by the highest bidder.

"We conclude that economically vulnerable women should not be financially induced to put their health at risk for research that at this point is speculative and, all too often, hyped."