Stem Cell Market Fever: A Cooler Perspective

Are stem cell stocks really rising because of Democratic control of the House of Representatives? Probably not.

Are markets truly rational? Are stock analysts always well-informed? Probably not.

The questions come up because of a few articles concerning the sharp run-up in the price of some stem cell companies, including those based in California, in the last two days. The Associated Press (in the San Jose Mercury News and elsewhere) attributed the increase to the improved prospects of House passage of a measure aimed at encouraging federal embryonic stem cell research.

These daily trading stories are usually ripped off by relatively inexperienced reporters who grab the quickest and catchiest explanations for price rises. Some of those come from analysts who may not be well-informed and who do not understand that a presidential veto is likely again on the stem cell bill – a veto that probably will not be overridden. Even if it is, the National Institutes of Health are already hard-pressed financially and are not likely to come up with major increases in ESC reasearch funding, certainly nothing on the level of California's $3 billion giveaway. Beyond that, the markets have already factored in Democratic control of Congress, which is months-old news.

A more likely cause of the upsurge in stem cell stocks is the wave that boosted biotech stocks generally because of good news about Amgen, among other things. Here is what the Wall Street Journal had to say this morning:

"Amgen, (Nasdaq) the second-largest U.S. biotech company by market value, behind Genentech, gained 2.93, or 4.3%, to 71.33. Bear Stearns upgraded Amgen's shares to 'outperform,' saying the stock already reflects potential impacts from Roche's prospective introduction of a competitive anemia drug. If Roche's drug doesn't reach the market, the upside for Amgen's stock could be 'dramatic,' Bear Stearns said."

Stem cell stocks are thinly traded but may be carried along in a burst of buying in the biotech sector. Traders sometimes spread their bets across a sector.

Also not mentioned in the stories is the impact of automated trading programs that trigger purchases as an entire sector moves, in other words, a computerized bandwagon, which may or may not be rational depending on your point of view.

Stem Cell Argonauts To Convene in San Francisco

Since all of you out there are looking at your schedule for the coming spring, be sure to reserve a spot for The Stem Cell Meeting in San Francisco.

Produced by Burrill & Company, the two-day session promises a host of provocative discussions and a broad range of international speakers. Topics range from “Stem Cell Argonauts: Brain Circulation in a Global Economy” to
“The Un-United States: Cell Lines, Border Lines, and the Law.”

According to the preliminary agenda for the March 12-13 event, the keynote speaker will be Ian "Dolly" Wilmut of the University of Edinburgh, whose topic is “Continental Drift: Where Will Stem Cells Take Us?”

So far no speakers from CIRM are on the agenda, but are likely to be there. No speakers from WARF are listed at this point. Beth Donley, then WARF general counsel, served notice at last year's session that CIRM would have to pony up fees to Wisconsin for use of WARF ESC patents.

We caught two days of last year's session. Hundreds of others attended. It was definitely worth taking in.

Early reservations (before Jan. 26) mean a $500 cut in the $1495 registration fee. The conference also offers an academic, government and nonprofit rate of $495. If you want to get more bang for your buck, double up with the CIRM Oversight Committee meeting on March 15 and 16 in Los Angeles. That session is free.

Correction

The item below once carried a reference to an article on biotech investing from the New York Times. The article was actually from 2005 not 2006. We have removed the reference.

Stem Cell Snippets: Advocacy, Public Support and Weissman

ESC Gospel – What is going on with Robert Klein's Americans for Stem Cell Therapies and Cures? One current activity is recruitment of more missionaries to spread the ESC gospel. The group has about 150 speakers across the country. It is looking for 1,000. You can read more about the effort on stemcellbattles.com, the blog of stem cell advocate Don Reed. Klein, as most of you recall, is also chairman of the California stem cell agency in addition to presiding over the lobbying group.

Stem Cell Investing – The tough business of biotech investing was discussed in a piece by Andy Pollack of the New York Times. An excerpt: "The difficulty of taking companies public, especially at values they find attractive, has become a lament of biotech venture capitalists, and it is forcing changes in their strategies. Instead of a way to cash out, the initial offering is now a chance to keep a company going until, hopefully, the venture investors can sell their stock later."

Squishy Public Support -- Jesse Reynolds of the Center for Genetics and Society discusses the nature of public support for ESC research and the most recent public opinion polls. Supporters of ESC research find constant hope in the polls. On the basis of decades of watching polls on politics as well as other subjects, the California Stem Cell Report believes that embryonic stem cell research is poorly understood by most Americans and is still a new subject to most persons. That means potentially mercurial support that can be easily undermined by changing events or skillful marketing.

Weissman – Stem "cellist" Irv Weissman speaks on "What Stem Cells Mean to Science, Medicine and California" Jan. 9 at a meeting of Silicom (cq) Ventures in Mountain View. Weissman is director of the Institute for Cancer and Stem Cell Biology at Stanford and helped found three stem cell companies (Cellerant, SyStemix and Stem Cells, Inc.). Tickets are $150 for nonmembers of the venture capital group.

Holiday Hiatus

The Christmas elves carried off your humble correspondent. But take heart. Postings will resume shortly.

San Jose Merc: 'It's Working.'

The California stem cell agency is continuing to bask in the light of several recent pieces in the mainstream media that portray CIRM in a generally favorable light.

The most recent came as an editorial today in the San Jose Mercury News, which said:

"Two years into the great California stem-cell adventure, here's everything curious taxpayers need to know about their $3 billion investment:

"It's working.

"Prominent researchers continue to flock to California. Confidence in the endeavor is so high that grants and gifts from private sources to California researchers have totaled more than $200 million so far. The feeble lawsuit challenging the program's legality should be history before June. And regulations are in place to govern the state agency in charge of distributing the $3 billion in grants, the first of which should be awarded in a matter of weeks.

"Given the nature of scientific research, it will take well over a decade to fully evaluate the state's stem-cell experiment. But it's already clear that, thanks to California voters, the United States is poised to become a world leader in one of the most promising areas of medical research today. That was not the case before Proposition 71 was passed in November 2004."

One CIRM staffer, who pointed with some pride to the editorial, noted that the agency's situation is a far cry from last year at this time. And he is right.

But the editorial also noted that the agency should revisit its "policy on transparency to shore up public trust. At a minimum, members of its working groups evaluating grant applications should be required to publicly disclose any conflicts of interests."

The Private Touch in ESC Research

The Washington Post today caught up with some of the doings at the California stem cell agency, reporting that private, "almost unprecedented contributions" have saved the day at CIRM.

The story by Sonya Geis said the loans have also helped fuel other giving for embryonic stem cell research in California, echoing a point made in the San Diego Union-Tribune series, "The Stem Cell Wars."

"Private money is also building new stem cell labs on university campuses across the state. Los Angeles philanthropist Eli Broad gave $25 million to the University of Southern California for a stem cell institute, sound-technology pioneer Ray Dolby gave $16 million to the University of California at San Francisco, and local donors are contributing to a $75 million expansion at the University of California at Davis.

"'I was amazed by the number of wealthy Californians who have stepped up and decided to support a public agency,' said Owen Witte, director of the new Institute for Stem Cell Biology and Medicine at the University of California at Los Angeles. 'I've never heard of anything like this.'"

Geis erred on one point, however. She said "affluent Californians gave $31 million" to CIRM. The money was actually loaned to the agency and is to be repaid with interest. However, if CIRM loses the lawsuit against it, the lenders will not be repaid.

The Stem Cell Race: How California is Like the Cobbler's Children...Sort Of

California's stem cell effort, still yet to dispense a single research dollar, has served as lever globally to boost funding for the field in locations ranging from New Jersey to Australia.

That's one of the conclusions of the third article in a three-part series in the San Diego Union-Tribune called "The Stem Cell Race."

Written by reporter Terri Somers, the piece examines California's $3 billion effort, which has been hampered by a legal tussle over its legitimacy. Somers wrote:

"While San Diego's large stem cell research community has been waiting to tap the state funding, the Harvard University area – supported largely by philanthropists – has become the U.S. science cluster best known internationally for embryonic stem cell research.

"Also pushing ahead have been the governments of Singapore, China, Japan and several European nations, which have supported their embryonic stem cell scientists with money and favorable policies.

"'Proposition 71 is supposed to help the economy by creating jobs first, then new tools and treatments, but until it really gets moving it's just an old Jag in the garage," said Tom Okarma, chief executive of Geron, a Menlo Park stem cell research company."

Somers continued:

"New York Gov.-elect Eliot Spitzer plans to push a $1 billion 10-year stem cell initiative that mirror's California's. On Friday, New Jersey's legislature approved borrowing $270 million to fund stem cell research. And Connecticut has floated a $100 million 10-year initiative. Part of the states' impetus was the fear of losing top researchers to California and abroad."

The San Diego article also reported:

"Scientists and government officials from 15 nations have visited the stem cell institute over the past year, said Zach Hall, the institute's president. Delegations from India, Israel, the United Kingdom and China were eager to forge relationships and take home ideas and the possibility of collaborations."

Nonetheless, Somers reported that 30 "notable" scientists have come to California in the last two years because of the state effort. An informational graphic with the story showed that private and federal funds totalling $234 million have poured into the state, boosting research efforts. And she noted that CIRM now has $181 million in hand, ready to dispense on research.

"'With these loans California's funding is now six times the nation's funding through the (National Institutes of Health) and California is squarely in the global leadership of this breakthrough field of medical research,' said Robert Klein, chairman of the California Institute for Regenerative Medicine."

Correction

A Nov. 21 item, "Nearly Awash," contained incorrect figures on some of the individual purchases of CIRM bond anticipation notes. Those figures have been corrected in that item. CIRM has also corrected the figures on its website.

The Stem Cell Race: Singapore's $370 Million Biopolis

In Singapore, embryonic stem cell research is spelled Biopolis. It is a simple way of saying, We focus intensely on people and laboratories, fast action and strong collaboration.

On Monday, reporter Terri Somers of the San Diego Union-Tribune examined Singapore's embryonic stem cell effort in the second of her three-part series, "The Stem Cell Race."

Here is how Somers described the life of one scientist at Biopolis:

"When she needs a new supply of embryonic stem cells, she phones in an order and walks across the campus of the science center her government has built to pick them up. Although her work is highly regulated, authorities have made obtaining human embryonic stem cells only slightly more difficult than snagging a box of pens from a supply cabinet."

Life seems good in the $370-million, 2.4 million-square-foot biotech research hub. Somers wrote:

"On what used to be grassland, a seven-building cluster of modern, glass-walled structures sprouted in 18 months. Enclosed glass walkways shelter workers from the unrelenting heat and downpours of the tropics, giving the complex the look of giant Habitrail for humans.

"Two more buildings opened in November, creating more space for the nine research institutes and consortiums that fill Biopolis, along with several research and development outposts of biotechnology and pharmaceutical companies.

"There's a storage facility for tens of thousands of mice for use in experiments, a tissue bank and a bioprocessing facility that is making the culture medium in which stem cells will be grown. Eventually it will produce millions of stem cells.

"The government accommodates the workers' long hours with a child-care center, supermarket, hair salon, dry cleaners, bars and even a 7-Eleven convenience store.

"On a typical workday, members of this multinational scientific community can be seen outside enjoying the cooling mist of a fountain, the shade of lush foliage or the convenience of a cafe, as they share ideas over lunch or lattes. They seem oblivious to the Miami-in-August temperatures and humidity."

The Singapore effort has paid off by attracting a host of first-rate scientists as well. Somers reviews the cast that now stars in the Biopolis "theater," ranging from UC San Diego's former medical school dean, Edward Holmes, and his wife, Judith Swain, a cellular cardiologist, to Neal Copeland and Nancy Jenkins, top ESC researchers from the NIH.

Somers' article also indirectly emphasized how tiny and interconnected the ESC research world is. For example, Singapore's efforts are hooked into the California stem cell agency. Somers reported,

"The advisory board to Singapore's Biomedical Research Council reads like a who's who of medical research, including David Baltimore of Caltech and La Jolla-based scientists John Reed of the Burnham Institute for Medical Research, Sydney Brenner of the Salk Institute for Biological Studies and Richard Lerner of The Scripps Research Institute."

Both Reed and Baltimore also serve as directors of CIRM.

Somers' second piece on Tuesday also reinforced the "small world" portrait of ESC research. She profiled Philip Yeo, chairman of the Agency for Science, Technology and Research, or A*Star, the long title of the man who is the mastermind of Biopolis. Somers wrote:

"Yeo called his friend Stuart Weissman, a pioneer in embryonic stem cell research at Stanford, seeking advice on what type of work could be done at Biopolis that would complement efforts in the United States.

"Yeo (then) set about trying to lure – he would say borrow – top researchers to Singapore. Governments jilted by researchers who have found his offers too good to refuse refer to him as a 'serial kidnapper.'"

On Tuesday, Somers will examine California's $3 billion stem cell research effort.

The Stem Cell Race: Underdogs, Singapore's Biopolis, China and the UK

The San Diego Union-Tribune Sunday began a three-part series on embryonic stem cell research globally, reporting that the United States is "getting a taste of being the underdog."

Reporter Terri Somers, who has followed the industry and the California stem cell agency from San Diego's biotech hotbed, also wrote a Sunday piece looking that the business side of the research.

Both Sunday articles are as comprehensive on their subjects as one is likely to see in the mainstream media. Included is a downloadable world map with country-by-country snapshots.

Here are some excerpts from the front page series called "The Stem Cell Race:"

"'For the first time, we have a lot of competition ... . I don't think we've had as much concern for another country besting us in science since the race to the moon,' said Dr. Evan Snyder, who runs the embryonic stem cell research program at the Burnham Institute in La Jolla.

"It is a competition with crucial consequences for San Diego County and California, home to leading stem cell researchers and 50 percent of the world's biotechnology research."

Somers continued:

"China reportedly is doubling its investment in stem cell research. But an air of mystery and skepticism surrounds China's work, because the country's regulatory guidelines differ from those in the West and because research from Chinese scientists has not been widely published.

"The United Kingdom already has invested about $198 million in stem cell research at 90 laboratories, of which 11 are licensed to conduct human embryonic stem cell research.

"Singapore, with just 4 million citizens, is investing $25 million to $29 million annually in research, excluding overhead costs and infrastructure.

"That investment may seem wimpy compared with the $609 million the United States government spent on stem cell research last year. But because of federal funding restrictions on human embryonic stem cell research, only $20 million to $40 million a year – about 6 percent at best – has been directed to that field.

"Money is not the sole catalyst of success. Scientists say supportive government policies that free them to concentrate on their work, national commitment and contagious scientific enthusiasm are just as important.

"'Here we are again, sitting on the beginning of another revolution, a possible way to provide cures rather than treatments," said Chris Mason, a stem cell researcher at University College London. 'The U.K., Singapore and other countries realize what might be within their grasp if they spend the money on the front end, and they don't want to miss it.'

"The United States, long the world leader in biomedical research and commercialization, is getting a taste of being the underdog."

Somers' piece on the business of stem cells said:

"Worldwide, only about a dozen companies are building a business based on human embryonic stem cells, and only three of those are publicly traded: Geron in Menlo Park, Advanced Cell Technology in Alameda and Stem Cell Sciences in Edinburgh, Scotland.

"Executives at several of the companies say the key to tapping funds at such an early stage is either finding someone with deep pockets and a personal passion for curing disease or possessing a unique technology to address a potentially huge market.

"Given the current business climate and the political and moral debate surrounding human embryonic stem cells in the United States, people in the business don't expect more competition to pop up soon."

On Monday, Somers will look at Singapore and its "Biopolis."

'Fair Cures,' Lab Construction and CIRM

The Greenlining Institute, a longtime activist community group in California, has come up with a series of recommendations on stem cell research in California, including suggestions that biotech companies receiving state grants set goals for directing some of the money to minority and women-owned businesses.

The proposals stem from a Greenlining conference earlier this year on stem cell issues. They have been compiled in a report, called "Fair Cures," prepared by Joe Araya Tayag, health program manager for Greenlining. The group has been around for decades and has litigated and agitated successfully on a wide range of issues involving minorities. The organization's name stems from its position opposed to the practice of redlining.

Currently CIRM is preparing a proposal to fund $47.5 million million in lab facilities. The grants are expected to be awarded in June. The agency has generally indicated support for diversity efforts, but it is not clear how that might be reflected in its grants for labs.

Here are excerpts from Greenlining report. It can be found on the website from the conference, which includes video of the presentations:

"...(R)esearchers and firms that obtain patents on health care technology, such as stem cell advancements, have virtually no incentive or authorization to ensure fair access to innovations in medical treatment. Without an adjustment in patent law, the cost of patent licenses in the stem cell industry will impact costs of any potential products. Because researchers have to recoup the costs of licenses, prices are driven up, with the greatest burden ultimately falling on disadvantaged communities of color. The CIRM currently includes provisions for affordability in their intellectual property policies that may be used as models for future state-funded research programs."

"Conference participants also voiced their concerns over how the tens of thousands of employment opportunities to be created with the state’s investment into stem cell research will be distributed fairly among all Californians. These jobs take the form of research positions, CIRM career staff, and supplier contracts. In his presentation, Joe Tayag from the Greenlining Institute showed that there were over 60 different types of supplier services used by a large biotech company. These jobs range from advertising, to catering, to furniture manufacturing. Audience members such as Ernie Baker from the Covenant on Health in San Francisco stressed that these jobs may empower economically underserved communities if employment rates reflect the diversity of the state. Conference participants agreed that these jobs need to be recognized as essential to stem cell research and should be accounted for in any discussion of the fair implementation of stem cell research."

CIRM Scholar Produces Mouse Brain Finding

There it was – in the 4th paragraph of the press release – a CIRM scholar produces a newsworthy finding as the result of "some of the first research funded by the California stem cell agency," according to one reporter.

Rebecca Vesely of the Contra Costa Times highlighted the CIRM connection in her story about the research at UC San Francisco that suggests "stem cells in the brain have a surprising capacity to repair damaged tissue." She said that researchers indicated that "the findings could help in the quest for treatments of brain trauma such as stroke."

Chay Kuo, a postdoctoral fellow at UCSF, led the study. The press release from UC San Francisco said:

"Kuo is one of 16 UCSF CIRM Stem Cell Scholars – up and coming young scientists funded by the California Institute for Regeneration (sic) Medicine, established by California voters in 2004 to allocate $3 billion over 10 years to support stem cell research."

Vesely noted that funding also came from the National Institutes of Health. She also wrote:

"Kuo said he received a $45,000 stipend, plus funds for medical benefits and a $10,000 allowance for research costs.

"'It allows trainees independence,' he said. 'It's given me incredible freedom to do my research.'"

Obviously the research is of considerable interest, but what adds to it is the CIRM-funding connection. One of the abiding concerns at the agency is producing results that fulfill the promise of Prop. 71. This is the first such event the agency can point to, albeit only as a modest funding effort.

Kuo's research, to be published in Cell magazine, also received news coverage internationally, but there was little mention of the CIRM connection. Other California newspapers also do not seem to have picked up on the CIRM relationship. The agency itself has not posted anything on Kuo at the time of this writing.

Major News Series on Stem Cells Coming Up in San Diego

A three-day series dubbed the "Stem Cell Race" begins Sunday in the San Diego Union-Tribune. Written by Terri Somers, the lengthy effort will cover the issue from Singapore to California.

Sunday will examine which country is leading the stem cell race. Monday will attempt to answer the question: "Why is Singapore spending millions in research?" And Tuesday addresses the issue of whether California can lead the U.S. in stem cell research.

Somers has closely followed stem cell issues and the California stem cell agency, and has written more on the subject in the last year than any other reporter in the state.

Stem Cell Snippets: Donley, Lomax and Reed

Items of some interest involving California stem cell matters.

Inside a Grant Review Session – Longtime patient advocate Don Reed, on his blog stemcellbattles.com, has a heartfelt look inside a session that reviewed grant applications for spinal research. Reed sits on the review committee. Reed also writes in opposition to more public disclosure in the CIRM grant process.

Whither Donley? -- Beth Donley, the longtime counsel for WARF, has resurfaced in a stem cell start-up. Donley, who served notice last spring that California would have to pay its stem cell dues to WARF, is the CEO of Stemina Biomarker Discovery Inc., which aims to use stem cells to develop tests for diseases. Reporter David Wahlberg of the Wisconsin State Journal has more here.

Nonproliferation -- The California stem cell agency received some attention at a chemical and biological weapons nonproliferation program in Monterey. Geoffrey Lomax, senior officer for medical and ethical standards at CIRM, spoke at the program, and the Monterey Herald covered the talk. The report by Kevin Howe can be found here. Lomax did not blow the dome off the Capitol, so to speak.

A New Feature: Labels

We have added a new feature to items on the California Stem Cell Report -- "labels" that can be found at the end of the most recently postings. The labels act as keywords. By clicking on them, you can find all the items that have labels on them. At this point, they do not include any items earlier than this week, but we are looking into placing labels on some earlier items. If there are particular subjects on this blog that you would like to see labelled, please send me an email at djensen@californiastemcellreport.com.

Murder Mysteries and Stem Cells

A couple of California novelists have dipped into politics and stem cells and come up with a thriller involving the death of a hard-nosed female state legislator.

The authors are Jonathan and Faye Kellerman. Their book, "Capital Crimes," consists of two novellas. Here are a couple of commentaries on the effort. First from Bookgasm and then Amazon(Publishers Weekly).

"The first, longest and best of the two procedurals is the inappropriately titled 'My Sister’s Keeper,' in which a feisty, dedicated female California state rep is found dead in her office, practically decapitated by a shotgun blast. The detectives who investigate wonder if her politics — whether public (she was a proponent of stem-cell research) or private (she was a lesbian) – have anything to do with the young woman’s demise. Following a trail whose clues include an STD and more than one right-wing nutjob, they have their answer. And then, just when we think it’s all said and done, the Kellermans throw in an extra delicious twist."

"The second collaboration by bestsellers Jonathan and Faye Kellerman (after Double Homicide) offers two thin novellas that dedicated fans will most appreciate. In the first, My Sister's Keeper, Faye Kellerman's LAPD detective Peter Decker makes an extended cameo role in an inquiry into the murder of an activist lesbian California state representative, Davida Grayson. Grayson, who was the focus of threats from politicians and members of the radical right opposed to her support for stem-cell research, is found shot to death in her Berkeley office; an uninspired pair of local police find that the dead woman's personal relationships, rather than her politics, may have motivated the killer."

CIRM Hires Top Facilities Exec

Only hours after we wrote that the impending departure of Zach Hall would make it more difficult to hire senior management at the California stem cell agency, CIRM said it has filled a key position involving its grant efforts to build scientific facilities.

Rick Keller, currently assistant vice chancellor for capital resource management at the University of California, Davis, will become CIRM's senior officer for scientific and medical research facilities as of Jan. 2. Keller has held his position at Davis for 19 years.

Keller has worked with the California legislature and the California State Department of Finance. He also was chairman of Mercy Healthcare, a subsidiary of Catholic Healthcare West, one of the nation's largest nonprofit hospital systems.

CIRM President Zach Hall said, "His experience with more than $2 billion in complex building projects will be enormously helpful to us, as we move forward with our shared and major facilities grants."

Keller's salary at CIRM was not immediately available. We will report it as soon as we obtain it.

Correction

In an earlier version of the item below, we incorrectly attributed a quote to Zach Hall. It was Bob Klein who said that he and Hall "mentally challenged each other."

Wanted: CEO For Promising $3 Billion Giveaway Program

One year ago this month the situation at the California stem cell agency was likened to the war in Iraq by a Nobel Prize winning scientist from Stanford.

Today the situation is much improved. So what better time for CIRM's president, Zach Hall, to announce that he is leaving.

Which is what he did last week. The move prompted comments that clashes with CIRM Chairman Robert Klein may have been involved, but Hall is 69 and has made it clear from the start that he did not want to hold the post over a long period of time.

Hall and Klein have butted heads. Klein told reporter Terri Somers of the San Diego Union-Tribune, "We mentally challenged each other to excel." But Hall also said said his plan to leave within six months is almost entirely personal. His wife retired earlier this year. They have a place in Wyoming. They love the outdoors. He doesn't need the money. And who needs the aggravation and long hours that came with the president's job.

Hall's work has set the stage for approval of the first round of research grants. And he oversaw preparation of the agency's now approved plan for giving away $3 billion for embryonic stem cell research. It is a far cry from last December when New York Times reporter Andrew Pollack quoted Paul Berg, the Stanford Nobel laureate, as likening the situation at CIRM to the Iraq war.

"We won the war and didn't know what to do afterward," Berg said.

Last week Hall summed up life at CIRM for the agency's directors:

“The institute has money in the bank now. There is infrastructure in place. And some of our initial organizational problems seem to be working out positively, so I think this is a good time for you to look for a new president.”

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights and a longtime observer of CIRM affairs, had this comment:

"Seems to me that by the time Zach leaves the following will be accomplished:

"Major training, research and joint research facilities grants will have been awarded.

"Major polices on IP, medical and ethical standards, and grant administration will be in place.

"A realistic scientific strategic plan will be in place that emphasizes science rather than hype.

"The role of the president and chief executive of CIRM will have been defined by Zach's commitment and high standards in a way that minimizes the possibility of excessive meddling by the ICOC chairman in the day-to-day operation of the institute.

"In sum, he'll have done a heck of lot to get the fledgling state agency off the ground and functioning in a productive way. Not at all a bad time to pass the torch to a younger leader."

Jesse Reynolds of the Center for Genetics and Society, another regular observer of the agency, said,

"I was surprised when he took the longer-term job in the first place, so I am not really surprised now. His can't be an easy job."

CIRM seemed to have difficulty in finding a president back in 2005 which is one reason that Hall agreed to serve longer as president. Now the agency has the task of starting a new search, although it presumably could go back to the list it had worked on then. The job is likely to seem less risky, but the agency has structural problems involving the president's job that cannot be changed short of another vote of the people. Those involve overlapping responsibilities with the chairman.

Klein, however, indicated to reporter Somers that he may be leaving in 2008, setting the stage for a different sort of relationship between a new president and new chairman. Somers wrote that Klein, who works without a salary, said "he planned to stay probably another year so he could contribute his real estate and facilities expertise when the institute is expected to award large grants for the construction of new research facilities."

The Oversight Committee took no action last week on setting up a search for a new president since the matter was not placed on the agenda in advance as required by state law. The next meeting of the group is not scheduled until February, but presumably the old presidential search subcommittee could reconvene quickly. It also seems reasonable to assume that some work is already underway to prepare for a new search, either on Klein's part or other folks at the agency.

Hall's departure overshadowed the announcement of the resignation of Mary Maxon, deputy vice chair of the agency. She has been instrumental in putting together CIRM's proposals on the critical intellectual property policies. Maxon has been with CIRM since the beginning. She noted arduous nature of work at CIRM. "It's been like three jobs in one," she told Somers.

Hall's announcement does raise the level of uncertainty at the tiny agency (roughly 20 staffers) at a time when stability seemed to be increasing. It is likely to make it more difficult to recruit other top level people, such as the chief legal officer and senior facilities officer, which are among four positions that agency hopes to fill soon.

Hall brought a steady hand, good humor, common sense and good science to a young and struggling organization in its formative years. All qualities whose absence can be sorely missed.

(Here are links to other stories on Hall: Rebecca Vesely, Oakland Tribune; Mary Engel, Los Angeles Times; Carl Hall, San Francisco Chronicle, and The Associated Press.

(Editor's Note: An earlier version of this item incorrectly attributed the "we mentally challenged each other" quote to Zach Hall. It came from Bob Klein.)