California Newspapers Opine on CIRM and Trial Decision

Three major California newspapers have weighed in with editorials in the wake of the court decision upholding the legality of the California stem cell agency. The Los Angeles Times threw more support to CIRM while The Sacramento Bee remained more critical. Also writing was the San Jose Mercury News.

The Times called on the legislature to reject a measure to tighten controls over the California stem cell agency, although the Times says CIRM needs to do more on its conflict-of-interest regulations.

Here are some excerpts:

"It may have taken more protest and rancor than it should have to get the governing committee to make its dealings transparent, ensure that any future treatments are accessible to the state's poor and provide the public with a fair share of profits made from medical discoveries. But in recent months, the agency has addressed these concerns. It also has adopted top-notch standards for research ethics and the protection of potential egg donors.

"That's why another effort to rein in the stem cell agency's work, in the Legislature, should be rejected as well. Senate Bill 401 would put on the ballot a measure to set up various rigid and picayune regulations on the institute. The agency's board already has adopted key elements of these proposed regulations. But by carving the rules into stone now, the measure would take away any flexibility the board might need as this fledgling research unfolds.

"The bill's author, state Sen. Deborah Ortiz (D-Sacramento) has been one of those forces pushing the agency in the right direction, but her measure is at best premature. The stem cell committee could still stand to make some improvements, of course; for instance, it resists making financial conflict-of-interest statements public for the scientists who will review grant applications. But the agency is on the right track. It should be given the chance to work out its rules and begin its important research before the Legislature starts micromanaging every aspect of its work."

The Bee, which has had the most active voice among California newspapers on CIRM, said:

"While we could quibble with a few of Sabraw's conclusions, they will get a full review from a state appeals court if plaintiffs take their concerns to the next level. Regardless, it is far from certain that the stem cell institute, despite the paranoid nature of Proposition 71, is incapable of operating like a normal state agency. Partly because of public pressure, the institute has opened up the deliberations of some of its advisory groups and established intellectual property policies that try to satisfy competing needs.

"Has it settled all outstanding issues? Not by a long shot. For reasons unclear, the institute continues to shield its advisers - prestigious scientists from out-of-state universities who will be making recommendations on multimillion-dollar grants - from disclosing their outside income. Some of that income comes from industries that hope to profit from stem cell research.

"Imagine the outcry if Caltrans set up an advisory group to advise it on building bridges, yet the public was unable to find out if bridge contractors were serving on the panel.

'Stem cell research could be a bridge to the future, and because of this potential, the institute's oversight board should require its advisers to publicly disclose their outside income. Anything less will leave lingering doubts about this freshly certified public agency."

The San Jose Mercury News said:

"The state has already awarded $14 million in grants with money raised from private investors. That may seem like peanuts next to the $300 million that the state will issue annually over the next 10 years. But it will permit California to hire more than 150 scientists to conduct stem cell research. That amount already equals 50 percent of the grants for stem cell research nationwide by the National Institutes of Health.

"Californians must learn to be patient with the progress of stem cell research. The majority of medical breakthroughs have occurred incrementally. The accumulated work of many hands over many years creates an environment in which someone can make an historic advancement."

A Look at a Key CIRM Planning Document

From "educated ignorance" to "transformative thinking," the California stem cell agency has it all in a report aimed at "charting new directions" in its quest to finance $3 billion in stem cell research.

The 98-page document is one of the fundamental references used in CIRM's strategic planning process. It came out of a two-day international stem cell conference last fall that cost CIRM $128,489.

The report is primarily scientific but is worth reading even if you miss some of the scientific nuances. It points to possible CIRM funding directions that top scientists think would be worth pursuing. Some of scientists voiced opinions that CIRM highlighted. They even turned a phrase or two. Here are some excerpts from the report, which can be found on the CIRM Web site.

"With cell replacement therapy, we are 'at the stage of educated ignorance. We know what we don't know.' – Paul Berg(Nobel laureate from Stanford University)."

"The field of stem cell research 'needs more transformative thinking....Think of Eric Lander and the genome project....California is in a position to do something transformative.' – George Daley(head of Harvard University's stem cell effort and who also now serves on the advisory committee for CIRM strategic plan)."

"'If your goal is to advance medical knowledge, you have to push just as hard as you can at the edge … and that includes making chimeras. Pushing at the edge is what CIRM should be about.' – Irving Weissman(of Stanford University, Stem Cells Inc. and Cellerant)."

"'You can't separate basic research from therapy. '"— Nissim Benvenisty( of the Hebrew University of Jerusalem)."

"Bench-to-bedside is a two-way street." – Arlene Chiu(director of scientific activities at CIRM)."

"If preclinical studies represent a bridge between the bench and bedside, then it is important to remember that the bridge runs in both directions. Although clinical trials often fail on the first try, new knowledge from both successful and unsuccessful trials can be brought back to the laboratory and used to design experiments that re-examine and extend basic premises. This process will lead to refined hypotheses and improved protocols for subsequent preclinical and clinical testing. In this way, basic, preclinical, and clinical research form a partnership that facilitates the development of well-designed, successful clinical trials and, ultimately, efficacious treatments for patients."

"The session revealed that stem cell research will benefit greatly from the development of critical tools, reagents and techniques. Few individual laboratories or institutions however are able to bear the financial burden of creating these tools alone. One recurrent suggestion is that CIRM could create central facilities or cores where new technology and tools for stem cell research would be developed and/or made available to researchers in California."

"Although stem cells are frequently associated with cell replacement therapies, the first practical uses of stem cells may be in applications such as drug discovery, toxicity testing and the development of diagnostics. Session 6 entitled Stem Cells as Tools for Disease Research and Therapy focused on research in which ESCs serve as novel tools for the molecular dissection of genetic-based diseases and for discovering new therapies, rather than for cellular transplantation. It is these tools which may offer the most significant near term rewards from stem cell research."

Egg Donor Protection Advances in State Senate

As expected, legislation to protect women who donate eggs for stem cell research in California has advanced to the Senate Appropriations Committee.

The bill, SB1260, by State Sen. Deborah Ortiz, D-Sacramento, easily cleared the Senate Health Committee on a 9-0 vote last month, which she chairs. The measure does not affect the rules adopted earlier this year by the California stem cell agency, which only affect research funded by CIRM.

The staff of the Health Committee prepared a detailed analysis of the measure, including comparisons to the CIRM rules and listed no opposition to the legislation.

Readers Write: Commentary on the Legal 'Charade'

The following was offered by L. Stephen Coles, co-founder
Los Angeles Gerontology Research Group.

"After spending two hours, I have now read through all 48 pages of Alameda County Superior Court Judge Bonnie Sabraw's April 21st ruling, and I must confess that it was quite tedious reading, in which each paragraph seemed to represent a jig-saw-puzzle piece for a large, complex puzzle. Yet, each paragraph from the Judge was systematically of the form...'The plaintiffs claim that the ICOC is unconstitutional because of reason 'x', but they did not provide sufficient evidence 'y' to support their reasoning. In fact, the very opposite could be argued by looking at the following case law 'z' from our data-base of legal precedents(s) (z = 'so-and-so' vs. 'what's-his-name'; California, 1942).'where x, y, and z are variables instanciated with appropriate items taken from the original complaint and all of which would be meaningless unless one went to Law School and then passed the Bar.

"The plaintiffs didn't seem to trust that their chief complaint would be sufficient to 'bring home the bacon,' so they decided on a 'shot gun' tactic and hope that even if their primary objection was insufficient, somehow one of the lesser charges might stick, and they would win-the-day using a strategy of assembling a concatenation of some of the most frivolous objections imaginable. In law, I belive that this is referred to as a meretricious filing, which is transparently foolish but takes up the Court's time and energy. For example, one of objections was that the ICOC hired private (expensive) lawyers at tax-payer expense to contest the present lawsuit (that seeks to destroy them) and that this is illegal according to their own Proposition 71 (sic). In other words, only our side is allowed to employ lawyers to eliminate the other side, which is prohibited, in principle, from hiring its own lawyers.

"Curiously, there was no clue in the Judge's ruling that the underlying motivation of at least some of the plaintiffs was religious and not technical, and that their funding came from an out-of-state religious organization (based in Colorado), as though we're not allowed, according to the rules of this particular parlor game, to mention the elephant standing over in the corner of the room. If all you had to go by was the text of this ruling, one could not appreciate why one side would spend hundreds of thousands of dollars to defeat something that they didn't like, forcing their adversaries to do likewise, when their case was so weak to begin with. However, it makes more sense, if you see it as a 'delaying tactic' in which 'the law' is being exploited for an ulterior (surreptitious) motive of crippling or exhausting one's adversaries rather than prevailing on merit.

"The best metaphor for reading this document that I can think of is studying the chess analysis of a game between two Masters by a Grand Master, who not only tells you the moves that were made, but why certain moves were particularly good (or, conversely, were particularly bad) in light of his knowledge of a large archive of historical championship games between other Grand Masters (both of whom may now be dead) in which similar positions emerged and one side crushed his adversary. Occasionally, he may explain why a particular move that intuitively looks good to an amateur was not made by one opponent or another, since, say, it leads to a checkmate in every possible variation past a simple planning horizon of only two-moves ahead. This parenthetical 'going down the garden path,' so to speak, obviously takes up time for the serious reader, but for didactic purposes, it is highly instructive for those willing to slog through to the end to find out whether the loser deserved to lose while the winner deserved to win (and maybe even win a prize for brilliancy in the process!), even though in ordinary games this may not always be the case. For example, even Former World Champion Bobby Fischer once committed an oversight in a real contest (in which he was presumably down on time) by moving a bishop into a position of subsequent suffocation by his enemy's pawn in the next move, which caused him to lose an otherwise won game (Sigh!).

"If it weren't so important, this lawsuit charade could be considered the ludicrous preoccupation of compulsive, self-indulgent minds and could be safely ignored by any reasonable person. On the other hand, this particular lawsuit cannot be safely ignored, and after the expenditure of even more hundreds of thousands of dollars, we shall finally prevail in the California Supreme Court in Sacramento in 2007 (the venue for the next and final anticipated appeal process and then begin the process of selling unencumbered bonds in the bond market, to fund embryonic stem-cell research grants up and down the state of California at universities and institutes, and our state will emerge in a leadership position for the rest of the country and further as a role model for the rest of the world."

Gala Donor Names to be Disclosed; Mary Poppins Would Approve

The California stem cell agency plans to disclose the names of all donors to the San Francisco gala aimed at raising $1 million for the fiscally strapped institute.

CIRM said it does not plan to give private scientific briefings to large donors at the benefit, which will feature actress Julie Andrews, among others. It also will not accept donations from biotech or pharmaceutical companies.

Disclosure of CIRM's position was made today by the Foundation for Taxpayer and Consumer Rights. John M. Simpson, stem cell project director, said CIRM's position was clarified in a letter from CIRM President Zach Hall. Simpson said the letter was welcome news, although he said the involvement of Hall and the chair and vice chair of the agency as honorary chairs of the gala was still "troublesome."

Hall's letter to Simpson said,

"First, as I stated in my telephone call to you, there has never been at CIRM any discussion of, or knowledge of, 'private scientific briefings that...will involve senior CIRM staff' for top level donors. The first we heard of this was from your letters and press releases. Such private briefings by CIRM staff would be improper and we have not, and would not, consider such an arrangement. We ask that you acknowledge that this charge is incorrect and that you correct inaccurate information on your web site. My understanding from the organizers of the gala is that donors are to be invited to briefings and tours at UCSF and Stanford University."

Simpson responded on the question of the involvement of CIRM staff:

"As I explained, representatives of the black-tie gala told me -- in writing via e-mail, copies of which are attached -- that CIRM scientific staff would provide the briefs to people buying tickets for $5,000 or $10,000."

Hall's letter did not deal with the question of whether donations would be accepted from executives or other employees of biotech or pharmaceutical companies. We have asked CIRM about that practice and are awaiting a response. In political campaigns where corporate contributions are banned, numbers of executives from individual firms sometimes buy tickets to fundraisers. Companies have also formed political action committees to make contributions where direct corporate giving is barred.

Both FTCR and the California Stem Cell Report have called for disclosure of donor names. CIRM's decision to make the names public is a good one and in keeping with its pledges of transparency and openness. It is likely to disourage some persons from purchasing tickets, but CIRM's first responsibility is to maintain its credibility and avoid the appearance of impropriety.

CIRM's decision is one that would meet the standards of the British nanny, Mary Poppins, who was portrayed so famously by Julie Andrews.

Here is a link to Simpson's and Hall's letter.

Leveraging a $3 Billion Stem Cell Giveaway

California stem cell President Zach Hall and his troops Monday formally begin a seven-month slog in search of a plan on how to give away $3 billion.

Along the way, they plan to spend something close to $500,000 with advice from a star-studded committee, including two Nobel laureates. Their goal is come up with a proposal for the Oversight Committee on how to best leverage California's stem cell investment. That panel will hear reports on the progress of the effort several times, making changes, giving direction and revising along the way before it makes the final judgment on the effort in December.

Stem cell chairman Robert Klein earlier summarized some of the issues at stake:

"Do we want to focus...our portfolio into high risk ventures for major breakthroughs? Do we want to focus (on) goldplated research that will help us incrementally in advancing existing therapies? Do we want, in terms of values, to have a diversification with many grants distributed broadly over large areas of disease research? Or do we want a number of blockbuster grants with high collaboration, focusing and drawing most of the money together?"

The strategic planning effort is not without controversy. Oversight Committee members spent hours haggling over the process in December. It triggered a tussle at another meeting in February. More contentiousness is likely.

At the Oversight Committee meeting in April, members probed the justification for the involvement of Pricewaterhousecooper as consultants in the process at a cost that could run as high as $250,000(original estimates from the firm ran as high as $550,000). Hall said the firm's help was needed to provide planning support, personnel and speed.

Oversight Committee member Claire Pomeroy, dean of the UC Davis Medical School, said,

"If you thought about hiring the personnel to do all of this, if you think about the costs of the public meetings, if you think about the urgency that we have to do this, I think my bottom conclusion is that it would be irresponsible not to do this starting today and with excellent facilitation. So remember, this is $500,000 to decide from scratch how we're going to spend $3 billion. and to me that's an appropriate investment."

Hall and Klein promised plenty of public access in the process. Hall said developments would be posted regularly on CIRM's Web site. However, that effort began shakily with a cryptic agenda item for the Monday session that offered meager fodder for those who might be considering testifying at the session or even sending a statement to CIRM. However, if you want to dig into the process of the strategic plan, you can read what Hall and others have to say about it in the transcript from the April Oversight Committee meeting beginning on page 15. Discussion of the Pricewaterhousecooper contract begins on page 78. You can see more about the plan in a report by Hall. Even more can be found in the March transcript of the Governance Subcommittee beginning on page 94. Also retrievable is the report on the agency's scientific conference last fall that will serve as a key reference during planning.

Aside from the roughly $250,000 for Pricewaterhousecooper, much of the rest of the estimated $500,000 for the plan will go for meetings. Hall has noted that Oversight Committee meetings average about $20,000 each. One working group meeting last year cost $55,000.

The advisory committee on the planning process includes David Baltimore and Paul Berg, both Nobel laureates; George Daley, who heads Harvard's stem cell effort; William Rastetter, retired CEO of Biogen Idec, a Massachusetts biotech firm with research facilities in San Diego, Steve Forman of the City of Hope and Oversight Committee members Jeff Sheehy, Sherry Lansing, Ed Penhoet and Klein. Hall is chair of the group, which expects to meet every three to four weeks in public sessions.

Monday's meeting will be in the CIRM headquarters in San Francisco. Remote access is not available.

Wisconsin Pushing Hard on Stem Cell Research

The cheeseheads are working quietly out in Wisconsin and have "built a critical mass of scientists" that amounts to a "tight-knit (stem cell) research hub unlike any other institution in the world."

So say Susanne Rust and Kathleen Gallagher in a three-part series in the Milwaukee Journal Sentinel. The articles name players and companies involved in the effort, which is partly funded by WARF, the group that holds the key patents on embryonic stem cells.

WARF recently said it wants the California stem cell agency to cough up cash when its research uses Wisconsin science. No reciprocal state-to-state courtesy here, just plain old business.

The Gallagher-Rust pieces provide good overview of the more stem cell recent stem cell efforts in Wisconsin, including involvement of a host of disciplines.

For those mystified by the word "cheesehead," it refers to residents of Wisconsin, once the nation's top cheese-producing state. But that title now belongs to California, as I recall. Nonetheless cheese ripples through the veins of Wisconsin residents. Evidence is available on national television each fall when fans of the Green Bay Packers wear hats shaped like wedges of cheese. One final note and official disclosure from yours truly at the California Stem Cell Report: My mother was born in Milwaukee, but the finest legal experts say that poses only a minor conflict of interest when I write about the Badger State.

San Diego Session On Sharing Stem Cell Swag

After hearing some cold economic realities last month, officials of the California stem cell move to San Diego Thursday to advance their attempts to formulate an intellectual property policy for businesses that receive CIRM funding.

The agenda posted on the Web by the IP Task Force is vague with no indication of who is going to testify or exactly what is expected to be accomplished. But the group is still digging into the basics and is not likely to come up with recommendations until next fall. At least one more meeting is in the works, this one probably in Sacramento.

It's an appropriate location, given that lawmakers are considering legislation to require as much as 50 percent royalties from businesses, under certain circumstances. By contrast, testimony at last month's hearing indicated that such a requirement is a non-starter for most businesses.

The March IP session triggered as many questions as answers. It led to requests to hear directly from stem cell companies and venture capitalists, none of whom appeared in March. Task force members wanted to know more about policies in other states and Singapore. And they wanted to hear from Big Pharma and the California Healthcare Institute, which represents the biomedical industry.

Ed Penhoet, chair of the task force, said last month's hearing raised some fundamental questions.

"What are we really attempting to do? Are we trying to drive therapies as rapidly as possible? Are we trying to stimulate business in California? Do we want to grow small companies? There (is) a whole set of potentially conflicting aims," Penhoet said.

The message from business is not likely to change much during this week's session.

One executive from Genentech, which has only a peripheral stem cell interest, told the task force that it takes something like $1 billion to push a product to market. He said that for every dollar in research, another $5 is need for development. And the odds of developing a successful product once it starts clinical testing on humans range from one in three to one in five.

According to the transcript of the session, Stephen Juelsgaard, executive vice president of Genentech(who noted that he was not speaking on behalf of his company), said,

"Biology is hard, and it's getting harder. I think we've got most of the easy biology out of the way. and so the new problems that we're dealing with are ones that really require a fair amount of effort and just a lot of hard work. And so the idea that there are going to be quick, easy fixes that come out of this, I hope people understand (is) not likely to be true.

"There are going to be a lot of failures along the way. There are going to be some very long times involved in bringing new therapies to the marketplace, and it's going to be a very expensive proposition....The amount of support that this organization might provide along the way is probably going to be, as I put it, the proverbial drop in the bucket, compared to all the costs that have to be identified, to really be successful."

His point has a certain validity. If it takes $1 billion to create a product, CIRM could fund only three if it cannot leverage its investments. Of course, it has never considered completely funding a product to market. And one of the points of the IP hearings is to find ways to build CIRM funding leverage.

Brad Margus, CEO of Perlegen Sciences of Mountain View, Ca., told the task force that if CIRM wants to be an agent that produces the next big thing in stem cells, it needs to minimize nonfinancial restrictions and heavy royalties.

"When you ask what is the primary purpose of this shot in the arm of the $3 billion," he said, "other than what it does for California and all that, I would hope that it's to make something happen that otherwise wouldn't happen....(Y)ou want to encourage the best-in-class participators to participate, not just the needy ones. When it comes to your own kids, it's perfectly fine if the one kid isn't quite that sharp; you want to help him out, equalize things, that's fine. But when we're talking about this life or death matter and really making a difference, I think you should only go with the companies that can make it happen the fastest.....

"I'd like California to try to do it differently ....and think a little smarter. If there really is a company out there that has the next thing that you need in stem cell research to happen, and your objective scientific advisors say this is what we want, you should be really, really aggressive in getting it. And I'm concerned that some of these things that we're throwing out there, like revenue sharing or the capping what a company (can earn), will only defeat that purpose."

The California stem cell agency is in a difficult place on IP issues, which really boil down to who gets the money. But the money is not there yet. No one knows how much will be there, if any, and how soon. The agency needs to make reasonable efforts to satisfy its public interest constituencies, such as the legislature and watchdog groups. If not, they can make considerable mischief for CIRM and stem cell research in general. At the same time, to be successful in bringing therapies to patients, CIRM must assist in finding alluring opportunities for businesses and research. CIRM is aided by the paucity of funding for embryonic stem cell research, but its munificence can carry it only so far.

At this stage, the main actor in this juggling act is Ed Penhoet, businessman, academician and philanthropist. The role will require all of his considerable skills.
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Thursday's session can be heard remotely at locations in Chico, Irvine, Los Angeles and San Carlos. See the agenda for details.

Greed, Giveaways and the Public

An exchange at CIRM' s Intellectual Property Task Force meeting last month illustrated some of the conundrums facing the agency as it tries to deal with public perceptions and the marketplace.

The following question was posed by Jeannie Fontana, who serves as alternate member of the stem cell Oversight Committee. It was directed to and answered by Brad Margus, CEO of Perlegen Sciences of Mountain View, Ca.

Fontana: "As a patient advocate, you appeal to my sense of urgency and efficiency by which you try to come up with therapies. I'm curious, though, as you talk about what CIRM should be concerned about, appealing to companies' greed, trying to pull in the No. 1 draft choice, how do you think CIRM should handle the public's perception of taxpayer dollars going to a for-profit company that may be the most efficient way of developing a therapy, but for some reason that's perceived as giving away money, hard-earned taxpayer dollars away to the greedy pharmaceutical industry. How would you suggest we approach that?"

Margus: "Perception is really tough because people can construe it and twist it to sound like another Big Pharma is going to get rich off of the discovery. If tomorrow we had something ready for clinic -- I make that as an important milestone because that's when the dollars really go up and you really need a lot of expertise that isn't usually done in academic settings -- if tomorrow we had a stem cell treatment ready for the clinic, there are two roads you can go if you're CIRM. One would be to somehow have the infrastructure at CIRM to use CRO's and bid them out and have the CRO's do it. I think you want a party involved to partner with CIRM that's going to take it forward that knows how to do this in their sleep and can get it there.
"I think I could convey that to the public that, again, if it's been credible all along that your objective here is to move as quickly as possible, if the selection of that partner to take the research forward, in whatever company it was, was a very objective process with clear criteria, I don't think you would be castigated that much."

Fontana: "I wish that were the case. It doesn't seem to be that way."

Click here to go to the full transcript of the hearing.

Stem Cell Advocate Apologizes

California stem cell advocate Don C. Reed has apologized for his Web column criticizing a member of the Oversight Committee of the California stem cell agency for a poor performance before unfriendly legislators.

We wrote last week about Reed's column. He offered an eyewitness view of the proceedings, which were not covered by any media.

Reed used the pseudonym "Sam" when he referred to the Oversight Committee member, who is Jeff Sheehy. In his apology, Reed said he was frustrated by the legislative action on the bill to tighten controls on the stem cell agency.

Reed is a plain-spoken fellow. His columns are forthright – no verbal sleight-of-hand, no sophistry. But he provides interesting observations and insights on the stem cell scene.

Speaking of observations, our item last week on Reed's column probably confused some readers. We described him as a "competent reporter," leading some to think he performed the same sort of tasks as reporters for the Los Angeles Times or Sacramento Bee. He does not. He is unabashed activist. A better choice of words would have been "competent observer."

And his latest column observes quite accurately that nothing he or Sheehy could say would have changed the outcome on SB401 last week.

California vs. Wisconsin: Dangerous Monopoly?

An op-ed piece recently in the Los Angeles Times ripped into the hold that the Wisconsin Alumni Research Organization has on stem cell patents, saying that the organization"may exert a dangerous monopoly."

The article by Jennifer Washburn, author of "University , Inc.: The Corporate Corruption of Higher Education, says the patents pose a "new and potentially even more worrisome challenge" to the California stem cell agency than its difficulties since January of last year.

WARF has already served notice that it wants cash from California. This blog was the first medium to publish that news March 14.

Washburn's predictions, however, have been challenged by Lawrence Ebert, an intellectual property attorney in New Jersey. "There may be a visceral reaction to lash out against patents perceived to be overbroad," Ebert wrote, but he said negotiation and a "research safe harbor" in federal law could protect California from being ravaged by WARF.

Sailing and Blogging

For those of you interested in the mechanics of such things, this blog is now being filed via Internet cafes in Mexico. We can plug in our laptop to an ethernet DSL connection and peck away happily. But it is a 40-mile roundtrip to the Internet cafes, so we log on only a couple of times a week. The blockage issue that we reported earlier seems to have vanished. We are experimenting with a link to a wireless hub that is tied to a satellite. It is located at a closer, tiny beach community that consists largely of gringo-owned palapas. The community, however, does not have electricity; their power comes only from generators, solar panels and batteries, so the link is not always up. Palapas are open-air, palm covered structures often tied to a trailer or a small, concrete block structure.

Since we live on a sailboat, we move about from time to time. That means we will have to forage anew for an Internet link when we hoist anchor and sail off to a another port.

Social Justice Stem Cell Conference at UC San Diego

The University of California, San Diego, is sponsoring a conference on May 13 called Social Justice and Stem Cell Research. Scheduled speakers are Larry Goldstein, UCSD professor of cellular and molecular medicine; Wesley Smith, a senior fellow with the Discovery Institute in Seattle; John Evans, UCSD associate professor of sociology and Alta Charo, professor of law and bioethics at the University of Wisconsin. Advance registration is required for the session, which is free but has limited seating. See http://ethicscenter.net.

CIRM Fends Off Legal Challenge; Round Two Coming Up

As expected, the California stem cell agency won the first round in its legal battle against fundamentalist and conservative foes who claim it is unconstitutional.

The decision attracted news coverage internationally and is likely to enhance efforts by CIRM to sell unprecedented state notes to finance its activities. The legal action against the agency has blocked its financing until the appeals are concluded, perhaps in 12 months or so.

CIRM has scratched hard to keep going without its voter-authorized funding, including a plans for a controversial $1 million gala fundraiser.

Coverage of the decision was straight-forward with few surprises. Here is how the largest circulation paper in the state, the Los Angeles Times, reported the decision in a piece by Lee Romney:

"(Judge Bonnie) Sabraw forcefully rejected the challengers' key contention: that the Stem Cell Research and Cures Act violated the state Constitution by creating a publicly funded entity that was not "under the exclusive management and control" of the state.

"'Plaintiffs did not present any evidence that the state is appropriating funds for any purpose or benefit other than a public purpose — the public purpose declared in Prop. 71 of fighting disease and promoting the general economy of the state," she wrote.

"She also concluded that the institute and its oversight board 'are operating in the same fashion as other state agencies,' with adequate state oversight.

"Sabraw also systematically rejected all other claims by the plaintiffs — People's Advocate, the National Tax Limitation Foundation and the California Family Bioethics Council. Among those: that the stem cell institute's board is plagued by conflicts of interest and that voters were misled.

"Hank Greely, a law professor and chairman of the Stanford Center for Biomedical Ethics, called the opinion 'long and careful' but not surprising. 'I thought the cases were very weak to begin with. I think the judge's opinion bears that out,' he said.

"Greely added that the ruling could give more confidence to investors whom (stem cell chairman Robert) Klein is soliciting to purchase bond-anticipation notes to help fund the institute and its work during the litigation. Buyers of the never-before-issued state bonds would be repaid only if the litigation is resolved in the state's favor and general obligation bonds are issued."

Klein said in a press release:

"CIRM’s first grants equaled 50 percent of the entire national funding of the NIH for embryonic stem cell research for last year. Stem cell research in California has officially begun. We will win in this fight against a small and politically motivated minority, step by step. They will not keep medical research from improving the lives of millions of people. We owe it to the voters, we owe it to patients, we owe it to the families of California."

Here are links to other stories on the decision: The Associated Press (the New York Times carried the AP story, which was also distributed worldwide), The Sacramento Bee, San Francisco Chronicle, San Diego Union-Tribune, San Jose Mercury News, Oakland Tribune, Bloomberg, Contra Costa Times and Reuters.

Here are links to various press releases reacting to the decision: Foundation for Taxpayer and Consumer Rights, Alliance for Stem Cell Research and Stanford University.

If you would like a complete copy of the decision, please email djensen@californiastemcellreport.com. It will take several days to respond because of the nature of Internet availability here in Mexico.

Klein's Exercise in Stem Cell Sophistry

California stem cell Chairman Robert Klein says he has no control over the $1 million gala to raise funds for the California Institute of Regenerative Medicine.

Balderdash. If Klein gave the word, the fundraiser would be called off tomorrow. The sponsoring agency, the San Francisco Foundation, would not make this effort without the full support of CIRM.

Klein's sophistry does not serve CIRM well. The agency is strapped. It needs money to perform its legitimate activities. It is legal for it to participate in fundraising efforts such as the gala. So why not say so from the start and offer to disclose the names of all the donors.

California voters approved the creation of CIRM, an unprecedented agency with built-in conflicts of interest outside of the usual control of either the legislative or executive branches of government. Its budget, for example, is untouchable by either the governor or the legislature. No other state department enjoys that position.

Like it or not, California must live with the reality of its stem cell creation. Sure there are ethical questions about raising funds from potential beneficiaries of CIRM grants, but state government is riddled with such conflicts to a greater or lesser degree. The chief example is campaign fundraising by officeholders from the governor down. Other than trusting the good judgment of the governor, senators and others, the only way to be sure the public interest is protected is let the sun shine on governmental affairs, particularly those of CIRM. In a word, disclosure.

Klein wrote about the fundraiser in a letter to the Foundation for Taxpayer and Consumer Rights of Santa Monica, Ca., which is mightily disturbed by the gala and which protested the involvement of Klein and two other CIRM officials as honorary chairmen of the fundraiser.

Klein said,

"I would like to clarify that Dr. Hall, Dr. Penhoet, nor I have any fiscal responsibility, control or decision-making authority over the gala event."

The response did not satisfy John M. Simpson, stem cell project director for the foundation. He replied to Klein,

"You have placed yourselves in an unseemly position that undermines CIRM's integriy and troubles all of us who believe in stem cell research and good government.
"The three of you shold resign from the gala committee. There should be no 'private scientific briefings.' The names of the donors and amounts of donations must be released publicly before CIRM accepts money from the gala. In addition, fundraising activities need to be fully discussed in public at ICOC meetings when they are proposed. You will find that a number of ICOC members share my concern about this fundraising event."

Simpson asks a great deal. But that is his job. Now it is CIRM's job to do something to remove the taint on the event and the public agency itself.

Here is the link to Klein's letter and the Foundation's.
 

Stem Cell Hard Ball Under the Dome

Working the halls of the California Capitol can be bruising. Just how bruising is illustrated in an article concerning the appearance by Jeff Sheehy, a member of the Oversight Committee of the California stem cell agency, before a legislative group.

Written by Laura Mecoy, the piece deals with the Assembly Health Committee hearing on SB401, which is aimed at tightening oversight of the stem cell agency. Sheehy, who testified against the measure, owes his position on the Oversight Committee to an appointment by a former leader of the state Senate, now out of office.

Mecoy quotes Sheehy as saying saying Senate staffers tried to intimidate him into not testifying. He says he feels his position on the Oversight Committee is "at risk," although there is apparently no way for the Senate to remove him.

"They said, 'Don't come. We're going to shove this down your throat,'" Sheehy was quoted as saying.

Sen. Deborah Ortiz said she did not ask the particular staffer in question to speak to Sheehy, but she did say that she that she asked another staffer to speak to him concerning "inappropriate" behavior following the hearing.

Sheehy said that after the hearing he threatened to campaign against her in San Francisco in her bid for the Democratic nomination for secretary of state.
Mecoy wrote:

"'He has the right to oppose me for whatever reason,' (Ortiz) said. 'But you do not make the connection between a piece of legislation and an election.'

"Sheehy said he wouldn't normally have made such a connection. But he said he believes Ortiz is pursuing the Senate bill to help her secretary of state campaign."

More Disclosure Needed in $1 Million CIRM Gala

One good rule in life is to avoid unnecessary pain.

Sometimes CIRM has difficulty with that. The latest example is the $1 million fundraiser next month to benefit the agency.

It is a unique effort for a unique agency. But it has kicked up a bit of a ruckus. Fundraisers are commonly used by politicians to attract campaign funds from donors who seek to influence or gain access. In this case, financially strapped CIRM is involved in an enterprise that could see biotech businesses – ultimate beneficiaries of CIRM's program – giving tens of thousands of dollars to the agency that they later may approach for million dollar grants.

All of this is going on presumably without the disclosure of the names of the donors as is required for political campaigns.

Already the gala fundraiser, which showcases Julie Andrews, has generated sharp criticism from The Sacramento Bee, which said the situation is "analogous to what might happen if Caltrans started seeking private donations to build a new San Francisco Bay Bridge.

"Funding for the bridge is stymied, so 'Friends of Caltrans' hold a gala fundraiser. Out of self interest, bridge contractors rush to buy tickets. Those contributing hope they will get special status when bridge contracts are awarded, and possibly they will."

The Foundation for Taxpayer and Consumer Rights said the event puts CIRM "up for sale." It would not be surprising to see more criticism and pain for CIRM as the visibility of the event increases.

Some of this pain could have been avoided if CIRM itself had announced that it was participating in the fundraiser. If this is an event that CIRM is proud of, it should have been the first to disclose it. Instead news of the event oozed out, creating a less than savory impression. The way the announcement was handled raises questions about the role of the Edelman PR firm, which has a hefty contract with CIRM. Edelman should have known about the fundraiser and should have advised CIRM about how to avoid some of the negative publicity. If Edelman did not know about the event, it is either not doing its job or information is being withheld by CIRM from Edelman.

As for the propriety of the event, Robert M. Stern, president of the Center for Governmental Studies in Los Angeles, told us,

"My primary concern is the lack of disclosure. I am not as upset as some of those who are quoted about the actual fundraising itself."

He noted that the University of Californa and the state college system accept contributions. He added that the Fair Political Practices Commission, also a financially troubled agency, has the authority to do similar fundraising but never has as far he knows.

We believe disclosure of the names of all the donors to the fundraiser would be a good first step for CIRM in complying with its pledges to adhere to the highest standards of openness and transparency.

We recognize CIRM's financial realities and the unique nature of its private-public bureaucractic DNA, so to speak. To deal with those realities, perhaps CIRM should consider another type of fundraising that would leverage its base of support. CIRM officials repeatedly point to the 59 percent approval of Prop. 71 as justifying many of their actions. Why not tap that base for mom-and-pop size contributions as political campaigns did so successfully in 2004? Thousands or tens of thousands of grassroots contributions, ranging from $10 and up, do not carry the onus of hefty sums from the biotech industry. Such a mechanism could easily be built into CIRM's website, which is currently being redesigned by Zoomedia of San Francisco – a gratis contribution by Zoomedia as part of San Francisco's successful bid for the CIRM headquarters.

Eyewitness Legislative View from Stem Cell Advocate

Stem cell advocate Don Reed attended the hearing Tuesday on legislation to tighten up oversight of the California stem cell agency and posted an account of the proceedings.

Reed is firm supporter of CIRM, as you will see from his account on his blog. But he is also a competent reporter who provides information that you will not find elsewhere.

Following the presentation by Sen. Deborah Ortiz, Reed wrote that:

"We now had our two opportunities to respond. A member of the ICOC spoke first. Let’s call him Sam. He is a great guy, and on the ICOC board he is an effective speaker because he has essentially no time limits, and can take as long as he wants to gather his thoughts. But this was a different situation, far more structured."

On Ortiz' presentation, Reed wrote in part:

"Naturally, every point was slanted to her benefit, but if you did not know what was going on, she was absolutely convincing. This is an old pro at the height of her powers, a genuinely great advocate for her cause—I just wish we were on the same side.

"She framed the lawsuits issue completely out of whack: as if our side implied she was responsible for the current lawsuits! 'Frankly, I think they would have sued, no matter what,' she said with a smile and a tilt of her head. (This was, of course, not the issue at all; rather the additional lawsuits which her new law would make likely.)"

One thing about "Sam," in all fairness, it is tough to compete on unfriendly turf, something some critics of CIRM have learned when they appear before that agency.

There is more interesting commentary from Reed. Check it out.

Effort Advances to Beef Up Royalties and Oversight of CIRM

Legislation to tighten oversight of California's $6 billion stem cell research program moved forward Tuesday despite opposition from the state's stem cell agency.

The measure by Sen. Deborah Ortiz, D-Sacramento, cleared the Assembly Health Committee on a 9-2 vote. It now goes to the Assembly Appropriations Committee.

As we reported last week, Ortiz' wide-ranging proposal, SB401, would require more openness in meetings of the California stem cell agency, require divestiture of investments by Oversight Committee members in some cases and increase the state's share of royalties.

The action was not covered by any newspapers as far as we can tell. The legislative staff analysis said the only opposition to the bill, at the time the analysis was written, came from CIRM and the California Healthcare Institute, an industry group. The analysis said,

"The California Healthcare Institute (CHI) maintains that this bill limits the effectiveness of CIRM. In addition, CHI states that while this bill seeks to apply licensing and other conditions to its grants and loans that are in the best interest of the state, its provisions may discourage industry participation and points out that the state's share of financial return should be proportionate to its contribution, not a fixed percentage of total revenues similar to the percentages contained in this bill."

Ortiz' office released background information on the bill that said:

"As editorial boards across the state have noted, while the promise of stem cell research is great, Prop. 71 omits several important protections to ensure public accountability and transparency of funding decisions. For example, the initiative exempts its working groups, which make important recommendations on what projects to fund, from state open meeting and public records requirements. It similarly omits requirements for working group members to disclose interests they have in entities engaged in stem cell research. Finally, the initiative is unclear on the question of how the state is to achieve an economic return on its investment in stem cell research."

The measure was amended in committee to ensure that it would be placed on the November statewide ballot.

Stem Cell Firms Not Bargaining on IP From Strong Position

Venture capitalists are like cloned sheep. That is one basic reason that embryonic stem cell research is not being funded.

Or so it seems, based on an article by Terri Somers in the San Diego Union-Tribune. Her piece illustrated the weakness of the position of businesses now trying to influence the formulation of intellectual property policies by the California stem cell agency.

Last month, some executives told the agency that it should not expect businesses to come crawling for grants unless the royalty provisions were appropriate – meaning generous. That position belies the reality that venture capitalists and other funding sources, including the federal government, are shying away from stem cell enterprises.

Somers pointed out that out of $5.9 billion invested by venture capital firms in biotech and medical devices last year, only $120 million went to stem cell research, according to Fred Schwartzer, managing director of venture capital firm Charter Life Sciences in Palo Alto, Ca. The federal government provides only about $30 million annually for stem cell research.

Compare that to the $300 million a year that is expected to be pumped out by CIRM. That would make the agency the single largest source of stem cell research funding in the world, unless something changes in the next year or two.

If California stem cell firms take their petri dishes and go home (to borrow a phrase), shunning CIRM's beneficience, they are only likely to damage themselves. And, compared to the meddlesome and harsh demands of some VC firms, CIRM could appear to be a kindly, generous old uncle.

It may be some time before the private investment climate changes for stem cell research, according to Schwartzer. Somers said,

"Once there are some 'big IPOs and big acquisitions' of companies based on stem cell research, (Schwartzer) believes the private investment climate will change.

"'VC are like cloned sheep . . . they will follow,' he said."

Somers' article was based on discussions at the annual BIO convention in Chicago. She also quoted executives with Invitrogen, Stem Cell Sciences and Stem Cell Therapeutics. The piece is worth reading to gain a fuller view of investor thinking about the stem cell business.