Prop. 71 Text on the CFAOC

Here is entire text of what Prop. 71 has to say about the the Citizens Financial Accountability Oversight Committee:

"There shall be a Citizen’s Financial Accountability Oversight Committee chaired by the State Controller. This committee shall review the annual financial audit, the State Controller’s report and evaluation of that audit, and the financial practices of the institute. The State Controller, the State Treasurer, the President pro Tempore of the Senate, the Speaker of the Assembly, and the Chairperson of the ICOC shall each appoint a public member of the committee. Committee members shall have medical backgrounds and knowledge of relevant financial matters. The committee shall provide recommendations on the institute’s financial practices and performance. The State Controller shall provide staff support. The committee shall hold a public meeting, with appropriate notice, and with a formal public comment period. The committee shall evaluate public comments and include appropriate summaries in its annual report. The ICOC shall provide funds for the per diem expenses of the committee members and for publication of the annual report."

The Hooha Over ACT: A Case Study in Stem Cell PR

Whatever the scientific merits of Advanced Cell Technology's embryonic stem cell procedure announced last week, critics around the world are flaying the California company.

At the same time, the field of ESC research is taking a hit as opponents use ACT as an example of why science can't be trusted. Parsing the ACT announcement, several press releases, the conduct of Nature magazine and mainstream media reports is a bit convoluted. It is clear, however, that some of the critics do not understand what ACT has done with its experiment.

The episode is a good of example what can happen when the ravening media sees a weakness. The ACT case is not quite a blood feast, but it does have some of the early earmarks. And it is a fine case study for those involved in stem cell public relations, which is just about everybody in the field.

Lesson No. 1 – Idiot proof your press releases. If it can be misinterpreted, it will be. Run those media handouts by several persons who can serve as surrogate reporters. If they can't figure it out, neither can your average ink-stained wretch.

Lesson No. 2 – Clearly delineate the "facts." Separate them from the implications and assume that reporters will have difficulty distinguishing the two.

Lesson No. 3 – Watch the hyperbole.

Lesson No. 4 – Simplify but do not ignore the nuances. Do not assume knowledge. Some science reporters may be able to describe IVF without a crib sheet, but many cannot. As for non-specialized reporters and editors, they need even more help. Give it to them.

Interestingly, the New York Times, the Los Angeles Times, the San Francisco Chronicle and The Sacramento Bee apparently have not yet carried stories on the hooha about the handling of the ACT experiment. Here are some links to other reports: NBC, Wall Street Journal, Washington Post, Philadelphia Inquirer/San Jose Mercury News, BizzyBlog, Bioedge, the Australian, Wired, The Scientist, New Scientist, Ace of Spades and TCSDaily.

The Thinking on the Sole Negative Vote on the Egg Donor Bill

California State Sen. Debra Bowen was the only senator to vote "no" today on legislation to protect women egg donors.

The Democrat from the Los Angeles area (Redondo Beach) defeated the author of the egg bill (SB1260), Sen. Deborah Ortiz, in the June primary in the race for the Democratic nomination for California secretary of state.

We asked Bowen's office for a statement on the negative vote. Here is the verbatim comment from Bowen:

“I am concerned that prohibiting women from being paid for their eggs or for participating in research singles them out from how other medical research subjects are treated. That, in turn, is likely to reduce the number of women who can or will take part in embryonic stem cell research.”

See the item below for more on the bill itself.

Ortiz' Legislation to Protect Egg Donors Goes to Governor

Only a few months are left in the legislative career of state Sen. Deborah Ortiz, and she is wrapping it up with successful passage of legislation to protect women who donate eggs for stem cell research.

Ortiz was an early and influential figure in California stem cell issues. The Sacramento Democrat carried legislation in 2002 that made California the first state in the nation to authorize embryonic stem cell research. She is credited by some with originating the idea of taking a stem cell initiative to the ballot in California, which ultimately was the mechanism that created the California stem cell agency.

Her egg donor bill went to the governor today on a 34-1 vote in the California State Senate when it concurred in Assembly amendments to the measure – SB1260.

Ortiz' office issued a press release that quoted the legislator, who is being termed out, as saying:

“Stem cell research holds great promise for chronic and life-threatening diseases that affect more than 100 million Americans. We all want biomedical research to move forward, but we must ensure that women who provide eggs for research are fully educated about potential reproductive health risks.”

The bill also lays the groundwork for regulation of embryonic stem cell research in California – outside of that funded by the California stem cell agency, which operates under a unique initiative measure that does not permit the legislature or the governor to fiddle with its procedures or funding.

Ortiz' measure also was drafted to be consistent with the existing regulations of the stem cell agency. Implementation of the measure is through the Department of Health Services. Currently an advisory committee is in the process of drafting proposed regulations. Its next meeting is Sept. 20 in Berkeley.

Here is a link to the latest legislative staff analysis of the bill. Here is a link to the bill.

(For those of you unfamiliar with American political terminology, "termed out" means that she is leaving office as the result of a law that limits the number of terms that a person can serve in a particular position.)

"Pay the Ladies, Please," Say Two From Academe

Legislation to protect egg donors and regulate embryonic stem cell research in California – outside of CIRM-funded efforts -- is now on the state Senate floor where it appears certain to be approved and go to the governor's desk.

However, the measure (SB1260) by Sen. Deborah Ortiz, D-Sacramento, has drawn fire from two UCLA law professors who argue that it "threatens the future of stem cell research" in California because it would bar payment for eggs.

Russell Korobkin and Judith Daar criticized the bill as "shortsighted" in an op-ed piece in the Los Angeles Times.

Here are some excerpts:

"The primary justification offered for banning compensation to egg donors is that financial incentives will unduly induce women, particularly those of lower socioeconomic status, to undergo egg extraction without fully considering the significant risks and inconveniences associated with the weeks-long process, which requires hormone injections and minor surgery. Money, it is argued, will enable overzealous scientists to coerce women to become egg providers.

"This argument relies on an unusual and indefensible view of what constitutes coercion. In a free-market economy, financial inducements are ubiquitous, especially when socially valuable activities entail some degree of risk or inconvenience. Coal mining is dirty and dangerous work, but we don't claim that paying miners is coercive and expect altruists to do the job for free. Certainly there is no movement afoot to ban payments to soldiers or peace officers in the name of protecting them against placing themselves in harm's way for profit. In fact, just the opposite. We sometimes provide extra hazard pay to public servants who take on the greatest risks in recognition of their valuable contributions.

"If anything, ethics requires the affirmative compensation of individuals who sacrifice so that the rest of us can reap the benefits of biomedical research. Medical research subjects commonly are paid a fee for their participation. There is no justification for ushering women of reproductive age into a separate and wholly unequal category — ineligible for compensation solely because of the nature of their research participation."

Whatever the strength of their argument, it comes much too late to have an impact on the measure. It is also not likely to be cited during debate on the Senate floor. Paying egg donors is not a political third rail, but few, if any legislators are likely to support such a move.

Here is a link to the analysis of SB1260 prepared for use in the Senate floor debate on the bill.

CIRM IP Group Changes Research Usage Exemption

The California stem cell agency's Task Force on Intellectual Property has revised requirements for sharing inventions developed as the result of grants to nonprofit research organizations.

California biomedical firms objected to the previous language. The latest version was hammered out a meeting of the Task Force following comments from its members and others.

The new language, which will be posted on the CIRM website as part of the administrative rules procedures, stipulates that grantees make CIRM-funded patented inventions "readily accessible on reasonable terms to other grantee organizations."

Some members of the Oversight Committee, in addition to the business groups, were concerned that the previous language (known as the Research Use Exemption - RUE) would remove incentives to market and distribute useful research tools.

Janet Lambert, director of government relations for Invitrogen of Carlsbad, Ca., flew out from Washington, D.C., to present her company's point of view. She and others, including John M. Simpson, stem cell director of the Foundation for Taxpayer and Consumer Rights, worked out the compromise language in the rear of the room as the Task Force dealt with other issues.

Part of the backdrop for discussion for the language was "The WARF Problem." Repeatedly speakers said they did not want to emulate the example of the Wisconsin Alumni Research Foundation, which holds key patents to embryonic stem cells. The foundation has been the subject of sharp criticism for failing to allow use of the patents more widely and less expensively.

CIRM President Zach Hall argued for wider distribution of CIRM-funded research. He said he did not want to see a situation where "we can't communicate with our (scientific) neighbors."

Members of the Task Force. Including Jeff Sheehy, also raised questions about how the previous language was arrived at and the process of involving "stakeholders" in discussions. Sheehy said he was "very uncomfortable" about a discussion process that would seem to favor some stakeholders over others.

Once the new language is officially published, that will trigger another 15-day comment period. You can see details of the administrative rules process here.

Correction

On Aug. 29, we carried an item (see below) on CIRM principles for grants to businesses that incorrectly said, “If the grantee chooses to develop a product themselves, the state would receive some sort of multiple of CIRM funding after the 'success' of the product. Discussion seemed to favor a multiple in the 3 to 5 percent range, leaning strongly to the lower end.”

The item should have said that the multiple being considered was a multiple of total CIRM funding. For example, if the CIRM funding is $1 million, the return could be $3 million to $5 million.

Our thanks to the CIRM staff for pointing out the error.

CIRM IP Policy and Business: New Principles Approved

(The following post contained an error that is corrected at the end of item)

Attention California stem cell businesses. Here's the deal. Or at least almost the deal.

But if you want cash from the California stem cell agency, you better listen up. And if you want to shape the rules for sharing the swag, now the time is to make your voice heard. It could be a done deal by this time next month.

On Tuesday afternoon, beneath replicas of a couple of twin-engine aircraft, the CIRM Task Force on Intellectual Property approved principles for handling IP generated as a result of CIRM grants to business. Hundreds of millions of dollars could be handed out to California stem cell businesses over the next few years, but oddly few were represented at the hearing at the aviation museum at San Francisco International Airport. A number have testified in the past, however.

Two key areas involved payments by grantee businesses to the state and creation of plans to help uninsured Californians and provide low cost access to CIRM-funded stem cell therapies.

The Task Force approved requiring a business that chooses to license a CIRM-funded invention to a third party to abide by the same requirements as for nonprofits except for the size of the share of any returns. Instead of the 25 percent sharing requirement (after $500,000) for nonprofits, the task force chose 17 percent. The Task Force initially called for the 17 percent to be shared out of "revenues" from the invention. However, questions were raised concerning the definition of revenues, and its meaning will be considered again later.

If the grantee chooses to develop a product themselves, the state would receive some sort of multiple of CIRM funding after the "success" of the product. Discussion seemed to favor a multiple in the 3 to 5 percent range, leaning strongly to the lower end.

The Task Force also approved a requirement that some businesses develop plans to provide access to CIRM-funded therapies to the uninsured and to provide them to public agencies at the federal Medicaid price. The plan requirement would be triggered when CIRM funding represents more than a yet-to-be determined percent of the invention.

Other principles approved include:
Ownership of the IP by the grantee.
Onetime "blockbuster" payments by the grantee after revenues exceed a yet-to-be-determined level.
Sharing of "publication-related," CIRM-funded biomedical material as in the nonprofit policy.

IP Task Force member Duane Roth told the group that it needs to set clear rules on IP. Businesses need certainty, he said. They need a "real clear matrix, that this is the deal."

The "deal" will come up again, possibly in September, preceding CIRM's Oversight Committee meeting in October. CIRM staff will craft IP policy rules based on Tuesday's discussion and bring them back to the Task Force. Ed Penhoet, chair of the Task Force, said he wants to present an IP policy for businesses to the Oversight Committee for action next month.

We will have more on the IP meeting in the next few days. And, by the way, the Task Force held its meeting in the aviation museum because it was free space provided as a result of San Francisco's bid to obtain the CIRM headquarters.

(Correction on the above item: The 5th paragragh contains an incorrect figure. It should have said that the multiple being considered was a multiple of total CIRM funding. For example, if the CIRM funding is $1 million, the return could be $3 million to $5 million. We incorrectly reported that the multiple being considered was in the 3 to 5 percent range.

(Our thanks to the CIRM staff for pointing out the error.)

Coming Up

We are planning on covering the "riveting" events expected this afternoon at the meeting of the CIRM Intellectual Property Task Force. Look for fresh information on the outcome tonight and tomorrow on the California Stem Cell Report.

A 'Good Citizen" Research Exemption

Ken Taymor, who is with the San Francisco law firm of MBV Law LLP, has offered the following on one of the issues confronting the CIRM Intellectual Property Task Force this afternoon. We welcome additional comments and contributions on all subjects related to the California stem agency.

A research use exemption (RUE) allows researchers to use patented
inventions without obtaining licenses and paying license fees, royalties
and other payments to the inventor. Courts have recently concluded that
contrary to widely held belief, there is no automatic research use
exemption under U.S. patent law. Many universities and non-profit
institutions, however, frequently allow other academic researchers to
use patented inventions for non-commercial research without paying the
university or institution any fees. This has not been the case with
human embryonic stem cell (hESC) research. The holder of the very broad
patents over human embryonic stem cells and the core process for
creating them, the Wisconsin Alumni Research Foundation (WARF), insisted that all academic and non-profit researchers pay substantial license
fees for the right to experiment with hESC or to create new hESC lines.

CIRM initially adopted an RUE as one of its core Intellectual Property principles. CIRM stated that it sought to "ensure broad access for
California research institutions to patented inventions made under CIRM
funding for research purposes through a research exemption." CIRM
stated in its original discussion of its IP Rules that a research
exemption would "promote the advancement of research and medical
therapies through broad use of patented inventions developed under CIRM
funding . . . . This policy will allow researchers to experiment
with state-of-the-art technology generated as a consequence of CIRM
funding without constraints which might otherwise apply under patent
law."

CIRM unexpectedly dropped the RUE after several industry representatives
objected to it. This move has surprised and concerned a number of
independent observers in light of the strong arguments CIRM advanced in
favor of the RUE up to the point of eliminating it. By not guaranteeing
that CIRM funded non-profit grantees will allow free use of CIRM funded
inventions for non-commercial research, CIRM opens the door for a repeat
of the problems WARF created in its licensing policies. Under CIRM's
latest proposal, scientists at a California university could receive a
large CIRM grant and make a path-breaking invention, such as
"reprogramming" adult cells to behave like stem cells (currently done
through cloning in animals), and then require that each academic or
non-profit researcher in California who wishes to make or use such
"reprogrammed" cells pay the university $10,000 (or more) annually for
the right to do so. This is why proponents of the RUE have complained
that CIRM's new position can require CIRM, and the California taxpayers,
to pay twice (or multiple times) for the research discoveries made under
CIRM grants. Of course, what is worse, is that under this scenario many
researchers would be unable or unwilling to pay the licensing fees and
stem cell scientific advances (and resulting therapies) would be further
delayed.

A RUE that would address many of industry concerns, and in fact reflect
the "good citizen" practices of many universities today (practices
incidentally that industry readily accepts) would simply provide that
"CIRM Grantee organizations shall allow Non-Profit Organizations,
without payment, to practice CIRM-funded patented inventions in
California for any non-profit purpose."

Text of Nonprofit IP Comments Now Available

Here is a link to the comments on the nonprofit intellectual property regulations that are to be discussed at tomorrow's IP task force at San Francisco International Airport. The comments were not available on the CIRM web site at the time of the posting of the "California Biomed" item below.

Another remote location has been added for the meeting, this one in Elk Grove, Ca., south of Sacramento.

ACT, CIRM and the Test of Time

Christopher Thomas Scott, executive director of the Stem Cells in Society program at Stanford University, has offered the following commentary. Scott is also the author of "Stem Cell Now."

Will ACT save embryonic stem cell research? No way.

Advanced Cell Technology's announcement in Nature last week wound up the rhetoric—yet again—surrounding embryonic stem cell research. The Alameda, California, company claims an embryonic stem cell line can be made without harming a human embryo. The ACT technique is modeled after an in vitro fertilization (IVF) diagnostic test called PGD. The test plucks one cell out of a two day-old embryo containing eight cells or so. The cell’s DNA is screened for dozens of deadly diseases. If the test is positive, the embryo is discarded. If no disease genes are detected, the embryo—which quickly makes a new cell to replace the missing one—is implanted. The procedure seems safe: more than a thousand children have been born since the test was unveiled in the early 1990’s.

From a scientific perspective, the ACT paper is interesting, but not groundbreaking. The researchers repeated a method they perfected earlier in mice using human cells; that’s no mean feat. They claim the type of cell they used—called a blastomere—produced an embryonic stem cell line. If other labs can repeat the result and if the lines can make different, functional cell types, that's pretty cool.

But the thing that has tongues wagging is what happens to the embryo. Until now, embryos must be killed in order to make an embryonic stem cell line, a process opponents equate to murder. Here, finally, seems to be a way around the moral morass. Removing one cell to make a cell line causes no ill effects, embryo-wise. Robert Lanza, who led the ACT group, said, "This will make it far more difficult to oppose this research.”

Problem solved? Not by a long shot. Scientists are already picking apart the ACT results. It isn't clear what stage of embryo was used, and the embryos didn’t survive because Lanza’s method removed all the blastomeres, rather than just one. Most of the cells failed to do anything at all, hinting that some are better than others at generating a line. Finally, the embryos used represent a narrow genetic range: most couples who frequent IVF clinics are Caucasian and infertile.

The ethical ‘solution’ is pretty much a non-starter. Religious conservatives who believe that an eight-cell corpuscle is a human being with rights, object to anything that treads on those rights, especially a technique that sucks out one-eighth of its biological material. Hard-line Catholics argue that the blastomere itself is a person simply because it has the potential to become one. Imagine a cell kicking and screaming on the way to a Petri dish, and you get the idea.

A reporter asked me what this means for California stem cell research. The moral hairsplitting and rickety nature of frontier science are just two of many reasons why the California Institute of Regenerative Medicine mustn’t lose focus on proven methods used to derive embryonic cell lines. The ACT result must stand the test of time and be compared to other technologies and new discoveries. Who knows which will work the best for therapies? We need hundreds of laboratories, thousands of lines, and millions of dollars to find out.

What About WARF: Chapter Two

Is The Bee really a turkey?

So says patent lawyer Lawrence B. Ebert (sort of), who takes serious exception to a piece in the Sacramento newspaper about WARF and the ACT techniques widely reported last week.

In language that we will not repeat here, Ebert declared that The Bee and those it quoted are wrong about how the ACT technique might affect WARF patents.

California Biomed Still Concerned About CIRM IP

The California biomedical industry wants changes in the state's stem cell agency's plans to divide up the spoils from inventions created by nonprofit research funded by CIRM.

The California Healthcare Institute, BIOCOM, five different California-linked biomed firms and a national group, BIO, all filed objections last week to various aspects of the proposed intellectual policy regulations, which are up for discussion on Tuesday.

Arrayed against them virtually alone was the Foundation for Taxpayer and Consumer Rights of Santa Monica, Ca., which said:

"In essence, taxpayers ought not to pay for the same research twice, and research institutions that they fund should not be prevented from non-commercial access to publicly funded research."

The foundation referred to the controversy over an IP provision that would allow California research institutions to use CIRM funded inventions at no cost. But the California Healthcare Institute, which represents the state's biomedical industry, also objected to attempts to provide CIRM-funded therapies at low cost and to provisions for the state to receive roughly 25 percent royalties on CIRM-funded inventions.

David Gollaher, president of the institute, said aspects of the proposed regulations "present unnecessary, improper or overly burdensome requirements likely to undermine the commericail collaboration necessary for the development of new products."

Lila Feisee, managing director of BIO, wrote that "damaging provisions" in the IP rules place CIRM in the position of "standing in the way of the goals it seeks to achieve."

A key item for the businesses is a change in language involving what is known as the research use exemption. In July, the businesses said, the CIRM IP Task Force removed language that would have would have required grant recipients to allow California research institutions use CIRM-financed inventions for research purposes at no cost."

The IP group deleted the provision after business groups objected that it would remove incentives to develop commercial research tools. Somehow similar language has crept back into the proposed rules, in a move that "appears to contradict the public record," according to a letter signed by Applied Biosystems, BIOCOM, Invitrogen Corp., Isis Pharmaceuticals, Sangamo Biosciences and Target Discovery.

Joydeep Goswami, vice president of stem cells and regenerative medicine for Invitrogen, warned that taxpayers should not have to pay "four times" for use of CIRM research.

"If licensing is made unattractive by overbroad...patent protection carve outs, taxpayers will pay four ways: First, they will fund the development of the invention; second, they will have to pay for the development and distribution of the IP; third, they will pay for the royalty revenues lost to the state because the IP has not been commercialized, and finally, they will suffer the costs of not getting research tools and therapeutics to researchers an patients as rapidly and effectively as possible."

John M. Simpson, stem cell director of the taxpayer foundation, told the California Stem Cell Report:

"While we might like to think that universities are benevolent and act in the broad public interest, you just need to look at the way the Wisconsin Alumni Research Foundation is asserting its stem cell patents to understand this isn't so.

"I think administrators at California institutions are just as likely to be blinded by dollar signs in their eyes as those in Wisconsin.

"We need a research use exemption. It's possible to craft one that meets biotech's concerns and fulfills the vital public interest of keeping all publicly funded research available to other researchers."

Simpson also spoke to the issue of IP for businesses:

"For-profit IP regulations are going to be much more difficult to craft because there is a greater possibility of abuse.

"Funds will almost certainly be given for projects that are much closer to developing products for commercialization and clinical use than is the case with grants to universities and nonprofit institutions.

"That means it's imperative that provisions in the for-profit IP regulations guarantee access and affordability for all Californians to any drugs and cures that are developed as a result of Prop 71 funding to companies. There must be a provision that prevents unfair, egregious profiteering."

On Tuesday, the IP Task Force is scheduled to meet in San Francisco, with remote sites in Los Angeles, Stanford and Irvine, to discuss both non-profit and for-profit regulations. Here is the Task Force Agenda.

Somewhat Differing Views On ACT

Murky and optimistic – two terms applied to the prospects of Advanced Cell Technology, the only island-based stem cell company in California.

Reporter Steve Johnson of the San Jose Mercury News prepared a piece on the business of ACT late last week. He quoted on William Caldwell, CEO of ACT, as being "very optimistic" on his enterprise. Johnson wrote:

"Advanced Cell Technology disclosed that it expects to get $13.5 million in funding from investors. Moreover, the company next year plans to seek federal approval to begin studies in people of its proposed stem-cell treatment for macular degeneration, an eye disease."

Johnson continued:

"The firm has consistently lost money since its inception and last year reported a net loss of $9.4 million. Its revenue from licensing fees and royalties totaled $395,007.

"Consequently, it has resorted to unusual tactics to save
cash.

"When it public last year, for example, it didn't use the usual method of doing an initial public offering. Instead, it chose the cheaper route of taking over an existing public company, acquiring Two Moons Kachinas, which sold kachina dolls used in American Indian ceremonies. Advanced Cell Technology then changed Kachina's stock symbol and is traded on the over-the-counter bulletin board as ACTC.OB.

"Despite a huge jump in its stock price after Wednesday's announcement, the company's stock has fallen from a high of $2.95 a share on Oct. 17 last year to 96 cents at the close of trading Friday. Its future remains murky."

(As for that island business in the first paragraph of this item, it is not widely known that the city of Alameda is on an island in San Francisco Bay. We report that as part of our effort to educate the public about important geographic issues. We are also fond of interesting minutia.)

Vatican to ACT: No Way

How often does the Vatican take on a humble business based on a tiny island in California?

Maybe once.

And that one time came on Saturday when Monsignor Elio Sgreccia, No. 1 in the Vatican on bioethical questions, gave a thumbs down to Advanced Cell Technology's latest development on extraction of embryonic stem cells.

ACT should capture the good monsignor's pronouncement and emblazon it on the walls of their headquarters in Alameda, Ca., which is a city on an island in San Francisco Bay.

Stem Cell Snippets: Interviews to IP

News, press releases and other interesting items related to stem cells in California.

Salary—Earlier, we indicated we would bring you the salary of the new chief communications officer at CIRM. The range for the position is $130,000 to $195,000. He is receiving $180,000.

Strategic Plan – Interviews conducted during the stem cell plan process now stand at 69 and appear to be nearly complete. Here is the list. Here is a rundown on the events and number of persons involved.

IP – The Wellcome Trust, a nearly $20 billion charity in Great Britain funding biomedical research, will be on the agenda next Tuesday at CIRM's latest IP meeting, including its revenue sharing and funding agreements. Also added to the agenda is consideration of "pertinent public comment" on nonprofit IP policy.

Conflicts – Jesse Reynolds of the Center for Genetics and Society criticizes the Connecticut stem cell effort for conflicts of interest, pointing to California as an example not to be emulated.

What About WARF?

The announcement that Advanced Cell Technology has developed a new method for extracting embryonic stem cells has raised questions about its impact on WARF – the Wisconsin Alumni Research Foundation.

Reporter Jim Downing of The Sacramento Bee quoted Stanford law professor Hank Greely as saying:

"The mere fact … of having a new way to make embryonic stem cells weakens the WARF patents, which I think is a good thing."

Downing continued:

"Greely said that the main complaint with the Wisconsin patents is how the foundation has chosen to enforce them.

"'Stanford and UCSF have the seminal genetic engineering patent, and they … quite cleverly, had very lenient license terms for non-universities -- a relatively small cash amount and a small royalty,' Greely said. 'And the result was, the technology went everywhere and those two universities made a lot of money.'

"By contrast, he said, 'WARF is making enemies.'"

Downing reported that WARF did not respond to two requests for comment. However, the Wisconsin Technology Network did have a general reaction from WARF in a piece by Joe Vanden Plas.

"Andrew Cohn, a spokesman for WARF, said the new method of deriving stem cells should not hurt Wisconsin's standing as a leader in stem-cell research. He also said WiCell, the nation's first stem-cell bank and a subsidiary of WARF, would be interested in helping distribute stem cell lines derived from this method.

"He also said it's too early to tell how the new method would impact WARF's stem cell patents. 'We don't even know what they claim in their patents, but that's the last thing we're concerned about,' Cohn said. 'We need time to dissect and digest its full impact.'"

After the Lights Go Out at CIRM

What happens when the California stem cell party is over? That's one of the questions posed to the agency as it maps a strategy to give away $3 billion. The question is not insignificant. CIRM has only about eight more years left on its clock. The measure that created CIRM gave it a 10-year life, nearly 20 percent of which has expired.

Martin McGlynn, president of StemCells, Inc., of Palo Alto, gave this response:

"I would ask CIRM to clearly define success. Publish a road map to achieve those successes. I would offer two thoughts as to what you might deem success. I look to the notion of what happens when the party is over....:

"There would be Centers of Excellence in the state with a critical mass of world-class talent and a proven track record or diversity at each center in its chosen field of endeavor.

"You would have created a vibrant, sustainable for-profit sector that focuses on applied research and the translation of discoveries into use for the benefit of mankind. Those entities by then should be fundable by more traditional sources of funds.

"The cycle time for the work that needs to be done is twice what VCs wants to see, so get out of blocks quickly, leverage your dollars, and make sure you are the first money to accomplish your mission."

McGlynn was among a number of private sector folks who discussed strategic planning issues last month with CIRM. Their comments are summarized in a 40-page document now available on the Web. The summary adds considerable meat to the skimpy bones of their Power Point presentations.

Here are a few more excerpts.

Bruce Cohen, president and chief executive officer, Cellerant Therapeutics of San Carlos, Ca., on CIRM's goals:

"The taxpayer needs to see a return on this investment. You need to find a way for them to see company and job creation, which will come sooner than cures for some of the debilitating disease we are trying to address. So we need to encourage capital to come in to accelerate new businesses and let existing businesses get bigger.

"You also need to get therapies into the clinic so voters will see a potential change in their lives. You need to accelerate the process by which adult and embryonic stem cells therapies find their way to people. Even if it's an inconclusive Phase I trial, you'll be happy someone with state funding is trying to accelerate the process.

"It's those two things that will make people who voted for this appreciate what’s been done on their behalf."

Sumit K. Chanda, group leader,, Division of Cellular Genomics, Genomics Institute of the Novartis Research Foundation, on core facilities:

"We have started to get into a little bit of stem cell screening. These are the major challenges and possibilities that we have seen using high-throughput screens using stem cells:

"One of the possible solutions that I am proposing is a core facility for screening where everyone in California who is interested in running high-throughput stem cell screens can go. This would be parallel to the NIH roadmap project where they had the MLSCN [Molecular Libraries Screening Centers Network] centers located in different areas in the States.

"The only exception I would make to this is that the NIH had the centers run by academic groups. It is really the private sector that has been making advances in screening in the last 20 years or so, so it might make more sense to have the private sector spearhead a screening facility."

Chanda continued on the subject of cultural roadblocks.

"We have found that there are culture roadblocks between the academic and biotech sectors, even though we have pretty good relationships with various academic groups. We find that the collaborations are very fruitful, but most of our knowledge of what is going on from academic groups comes from publications, which usually do not give you enough information and often occur a couple of years later than the initial discovery."

Ann F. Hanham, managing director, Burrill & Company of San Francisco on "concerns:"

"How much more basic research is going to need to be done? Many of the companies that pitch to our firm are not ready for VC funding yet. They have not worked up their business metrics or their technology or their idea or how much time/resources they need to get to a final product.

"Patents are a huge issue for VCs. We need to protect our investment. If we are going to put capital in, we need to ensure protection of that asset. The University of Wisconsin patents have raised issues about whether we can invest in this field.

"We also need to see a commercialization strategy. Right now, stem cell science is much more on the research side than the development side of the R&D process.
"There are issues to be addressed around manufacturing and the scalability and reproducibility of manufacturing.

"There are questions to be answered such as: Can you pool stem cells? What is the right commercialization strategy? Wow do you become a company and earn back that money that was put in?"

Thomas B. Okarma, president and chief executive officer, Geron Corp. of Menlo Park, Ca.

"My message is going to be straight forward. Because of the depths of your pockets and lack of competition at the state and federal level, we have an opportunity to shape the way the field is developed.

"My take home message to you today is the 'D' word - development. My advice to you is to subordinate research to support development. Don't eliminate the research in R&D, but do the research as necessary to support the 'D.'"

CIRM Replies Re Public Disclosure by Grant Reviewers

Dale A. Carlson, the new chief communications officer for the California stem cell agency, is differing with an earlier item "CIRM, disclosure and conflicts" on the California Stem Cell Report.

Here are his comments verbatim:

"On Tuesday, August 22, you wrote: 'Putting the public universities aside, we suspect that nearly all California agencies require public disclosure of financial interests as opposed to 'secret' disclosure, which is what CIRM does with its reviewers. We base on that on several decades of experience watching California public agencies, but we could be wrong.'

"You are wrong. California public officials are indeed required to disclose their financial interests – only their financial interests – and to make those disclosures public, as specified by the Political Reform Act (PRA). CIRM staff and members of the ICOC are subject to and complying with those requirements.

"Members of CIRM’s working groups are not public officials. They are advisors, not decision-makers. The distinction is clear and well-defined by the PRA, by the Fair Political Practices Commission and by the courts. Like members of advisory bodies and committees at other state agencies, they are therefore not subject to the requirements of the Political Reform Act. Indeed, as a matter of law, advisors to state agencies – including CIRM – are not required to disclose any information about their personal, professional, or financial interests, to the agency or to the public.

"CIRM working group members are, however, subject to disclosure requirements adopted by the ICOC, pursuant to the mandate of Proposition 71.

"The ICOC requires CIRM advisors to disclose financial interests as well as personal and professional ties to grant applicants. We have a more complete picture of the potential conflicts of interests facing our advisors than the public has of any California official subject to the PRA.

"Our advisors’ disclosure statements are available to state auditors. If we find violations of our policies, the discovery will be reported to the legislature, along with corrective actions to ensure they are not repeated.

"Our conflict of interest policies, including our disclosure requirements for advisors, go beyond the requirements of the law, and beyond the practices of other state agencies, including the universities. If there are stronger policies in force, they’ve yet to be identified.

"The success of the CIRM research program and its ability to maintain the confidence of the people of California depends critically upon the agency’s ability to fund the highest quality research proposals, chosen without bias. We want to attract the best people we can find to help evaluate research proposals, and to ensure that the ICOC has sufficient information to make the best decisions possible.

"Our conflict of interest policies strike an appropriate balance, between the public’s confidence in the integrity of our decision-making and the public value of having the country’s best experts involved in the review of grant proposals."

Carlson raises a number of interesting issues, but he does not convince us that CIRM's disclosure rules for grant reviewers "go beyond the rules of other state agencies." Much more can and will be said concerning CIRM and disclosure, but CIRM and the California Stem Cell Report differ fundamentally on one central issue. We consider the grant reviewers de facto decision makers. Yes, legally they are advisors and make only "recommendations." But given the nature of such governmental agencies as CIRM, it is unlikely that reviewer recommendations will be overturned by the Oversight Committee in any significant number of cases. If only because the Oversight Committee will soon have no reviewers if it consistently rejects their recommendations.

We do believe that CIRM's disclosure rules go beyond the usual requirements elsewhere in the nation, as do a number of its other policies. Indeed, CIRM has become a benchmark for other states as well as other nations on stem cell policies.