Governmental Camels and Stem Cell Swag

Is it good business for a drug company to charge – let's say $47,000 for a 10-month cancer treatment – or will such pricing hurt the industry long term?

But forget the business issue. Is it good public policy to allow a company to charge those fees – labelled egregious by some? Especially if the treatment was partially financed with public funds?

Questions such as those stand close to the center of the debate over the intellectual property that will be produced by $3 billion in research funded by California's stem cell agency. Intellectual property policy is the vehicle because that's where CIRM sets its requirements for royalties and revenue-sharing connected to its research. That is also where it sets its requirements for affordable access to stem cell cures that it helps to finance.

The $47,000 treatment cost is not hypothetical. It involves Genentech and its drug, Avastin, which was developed with the help of some clinical trials that were subsidized by the federal government.

On March 15, the Wall Street Journal examined the case of Avastin in a front page story. Reporter Geeta Anand began her piece like this:

"Two years ago, Steven Harr urged Genentech Inc. to lower the price of a key drug that was helping buoy its stock price. He was an unlikely messenger because of his job: a Wall Street research analyst whose investing clients crave profits.

"In a conference room with 30 senior managers from the biotech company, Dr. Harr said he feared patients wouldn't be able to afford the drug Avastin, which costs about $47,000 for the average 10-month course of treatment for colorectal cancer. He warned that Congress 'will get involved when its constituents can't get drugs.' Genentech later capped Avastin's price, acknowledging the influence of Dr. Harr, among many others."

Harr also pointed out an interesting bit of blowback from oncologists detected during a survey he conducted. According to the WSJ story,

"He says most physicians surveyed weren't prescribing the drug in breast and lung cancer for fear of not being reimbursed. Avastin and Erbitux are given to patients intravenously in doctors' offices. Doctors buy the drug ahead of time, infuse it into patients and then wait to be reimbursed. Any refusal by insurers to reimburse would leave doctors thousands of dollars in debt."

Harr, an analyst with Morgan Stanley, sees high prices as bad for business.

"He says soaring cancer-drug prices, generating fat profit margins, aren't sustainable."

That is a message that is sometimes hard for business executives to accept. They rail at governmental fiddling with their enterprises. They froth at bumbling regulators. But at the same time, many seek government assistance for research, favorable regulation, tax benefits or laws restricting their competitors. Contrary to popular belief, the vast majority of legislative activity nationally and in California does not involve such things as gay marriage or sex offenders or drivers licenses. It involves "filthy lucre" and crass commerce. Most of it is instigated by those advocates of free markets – the top executives of the finest companies in America. It is why business spends tens of millions of dollars and more annually lobbying lawmakers.

Folks such as those at the California Healthcare Institute, which represents the state biomedical industry, want the grants from CIRM. But they don't want to pay the piper that provides the basis for the plenititude. Or they don't want to pay as much as some watchdog groups and legislators would like. But like any other investor, the state wants its slice and does not want to be treated a whole lot differently than, say, the venture capitalists at Kleiner Perkins Caufield & Byers, if they had laid out a $3 billion investment. When you invite governmental camels into your tent, it is sometimes hard to get them to leave.

Biotech, however, has valid points concerning writing what are basically the terms of a business deal into state law and regulation. Both are difficult to change and can impair development of cures if they are riddled with restrictive minutia. Likewise, biotech firms must see a strong likelihood of making money. If they don't, the cures will not be developed unless the government is ready to pay for the whole process, which is not likely to happen in our lifetime.

Obviously, the state of California is not a venture capital firm. Perhaps not so obviously, the stem cell industry is not the most shining example of private markets at work. The finest risk-takers in America(venture capitalists) run for the back exits, for the most part, when they see a stem cell executive come through the front door. The result is that with embryonic stem cell research in California, we have an amalgam of business, government and science. That means that compromises must be made by all the players. If one of the partners gets too greedy, the whole endeavor – the California stem cell experiment -- can fail.

Finally we should note that a group actively engaged with CIRM on IP issues was mentioned in the WSJ article but not by name. That organization is the Foundation for Taxpayer and Consumer Rights of Santa Monica, Ca. Here is what the WSJ wrote about FTCR.

"In the spring of last year, a taxpayer group in California began publicly condemning Genentech for charging too much for Avastin, noting that the federal government's National Institutes of Health had subsidized some clinical trials of the drug. Not long after, Genentech said it was considering capping the price of Avastin."

FTCR on Sacbee and Cha

John M. Simpson, stem cell project director of the Foundation for Taxpayer and Consumers Rights, sent along the following comment on today's Sacramento Bee editorial on CHA RMI.

"What the Foundation for Taxpayer and Consumer Rights has said is that there are enough red flags associated with CHA's leadership and corporate affiliations as to warrant a thorough vetting of an application from its researcher.

"Precisely because we raised our concerns, CIRM's staff is now on the record in public in response as promising a thorough review of all applications -- including this one -- before any checks are issued.

"We did our job. The editorial board of the Sacramento Bee did its job. Now it's up to CIRM to do its job."

See the item below on the Bee editorial.

Sacramento Bee: Fairness and Cha

The Sacramento Bee today said today that the California stem cell agency should "resist calls to rescind or freeze" a $2.6 million grant to CHA RMI, whose founding president is embroiled in an international plagiarism scandal.

The medical director of an allied organization, CHA Fertility, is also under investigation by the state Medical Board in connection with an allegation that he seduced her and lied to her about the number of eggs he extracted from her.

The Bee said in an editorial:

"Both allegations are serious. But the CHA scientist who applied for and received the $2.6 million stem cell grant, Dr. Jang-Won Lee, hasn't been implicated in either incident. Unless someone can demonstrate otherwise, the California Institute for Regenerative Medicine should resist calls to rescind or freeze the $2.6 million grant.

"The issue is a simple one of fairness. Over the years, medical scandals have rocked several university medical centers, including one at UC Irvine that was forced to close its transplant center. These revelations were shocking, but they don't mean that all scientists affiliated with UC Irvine should be disqualified from government research funds. Nor, by itself, should Lee's affiliation with CHA prevent him from receiving a state grant, which he hopes to use in the development of stem cells that can be used to study Amyotrophic Lateral Sclerosis, also known as Lou Gehrig's disease."

For more details on this issue, see: "CHA Example," "Grant Recipient." You can also use the "search blog" function at the upper left hand corner of this page to find all the items on CHA. Use the search term "Cha."

Stem Cell Snippets: Financial Challenges, Kuehl and Presidential Search

CIRM's Governance -- The stem cell institute's governance committee will meet April 5 in San Francisco to consider "CIRM merit and professional development programs," "key financial challenges and opportunities" and travel rules for the Oversight Committee. Public teleconferencing locations are available: Two different sites in Los Angeles, three different locations in San Francisco and separates at Stanford, Sacramento, La Jolla and UC Irvine.

Kuehl and the Mayor – State Sen. Sheila Kuehl, author of legislation to guarantee the state a return on its stem cell investment, is a member of Los Angeles Mayor Antonio Villaraigosa's inner circle, according to the Los Angeles Times. The story by Duke Helfand says the mayor has offered her a job more than once. She says she wants to be on the ride when he goes for governor.

CIRM Presidential Search – A meeting scheduled for today of the CIRM presidential search subcommittee has been cancelled. Do not expect fresh information until the April 10 Oversight Committee meeting in Sacramento.

More Response from CHA RMI

CHA RMI and its California stem cell grant surfaced on the web site of The Scientist magazine with more details about the company's response.

The report by Kirsten Weir contained the following:

"According to a statement released by CHA RMI, the organization was incorporated in California in 2005 and 'has been engaged in adult and embryonic stem cell research at its Los Angeles laboratory...None of the member companies belonging to CHA Health Systems have any ownership interest in CHA RMI and none of the companies have any voting rights on CHA RMI's Board.'

"According to the statement, Jang-Won Lee earned his PhD from the University of Connecticut and has held positions at Wake Forest Institute for Regenerative Medicine and Children's Hospital & Harvard Medical School. Lee could not be reached for comment."

Most of the other information in The Scientist report is familiar to readers of this web site.

Correction:

The SB771 item from last night (3/25/07) incorrectly said that the CIRM Oversight Committee was scheduled to meet April 11 in Sacramento. The meeting is actually scheduled for April 10.

LA Times Piece on CHA RMI Has Response from Researcher

The Los Angeles Times Monday ran its story concerning CHA RMI and its $2.6 million California stem cell grant, including a statement from the main researcher on the project.

The Times story was picked up the KNBC television station in Los Angeles, which did not add any new information to the account.

The Times piece by reporter Mary Engel began by noting that the grant went to a research center whose founding president is "embroiled in an international dispute over authorship of a medical journal article." Then it listed the ethical allegations concerning an associated fertility clinic.

Engel's story also had this from the researcher involved:

"In an e-mail to The Times, the lead scientist for the grant, Jang-Won Lee, said he was not involved in any of the allegations. The research, he said, will undergo thorough scientific and ethical review, and is aimed at developing therapies for a devastating neurodegenerative disease."

She also had this quote from John M. Simpson, stem cell project director for the Foundation for Consumer and Taxpayer Rights, concerning the secrecy involved in the grant review process.

"'Had everyone known that a grant was being discussed to that organization, things would have gone slower and questions would have been raised then.'"

We have a query into CHA for a response on the issues that have been raised and have promised that we will run it verbatim when we receive it.

For previous items on this see: "Grant Recipient," "Little Notice" and "CHA Example."

The SB771 Debate: White Knights vs. Greedy Big Pharma?

"Mom and Apple Pie" – that's one way to look at the latest legislation to step into the affairs of the uniquely independent California stem cell agency.

The bill is crafted in such a way that it is difficult to oppose. In other words, it is virtually a "motherhood" bill. After all, who can be against the state of California receiving a fair share of the perceived bountiful booty from the $3 billion in state-financed research? Oppose that and you can be tarred with the brush of greedy Big Pharma.

We are not talking about the details of SB771. That involves the nitty gritty of intellectual property, a daunting and dense subject for the media, not to mention your average reader. It is easier to cast this as battle between avaricious Big Business and the White Knights who protect the public. Lawmakers do not want to be seen as voting in favor of $100,000-a-year treatments that would not have existed without state-financed research.

Whether or not Sen. Sheila Kuehl, D-Santa Monica, and lead author of the bill will choose to play it that way, some of the other interests involved may do so. We cannot say what Kuehl's strategy is, but all accounts, she is a very smart woman (Harvard grad and former law professor) and politically astute. As chair of the Senate Health Committee and veteran activist and politico, she knows what it takes to succeed with legislation.

Previous legislation involving CIRM was more complex, giving more people more reasons to oppose it. That's not to minimize the complexity of Kuehl's measure, but at its heart it is quite simple – give the people of California a share and help out the ailing poor. Wasn't that the promise in the Prop. 71 campaign?

The opposition is likely to be led by the California Healthcare Institute, which represents the biomedical industry. The industry is not a minor player in the Capitol and can use its resources well. But it will have to step smartly to avoid being tagged as greedy.

The scenario begins to play out in the second week of April with the first hearing on the bill by the Health Committee on April 11, the day after the Oversight Committee of the stem cell institute meets in Sacramento. As part of the day's activities, members of the 29-member panel are expected to visit some legislators to discuss areas of mutual interest.

In a case of adroit timing, California stem cell chairman Robert Klein is scheduled to speak to the Sacramento Press Club on April 9, two days ahead of the April 11 hearing. CIRM has also scheduled its own hearing into IP issues on April 9 in Sacramento. We say adroit because Klein's talk and the hearing will help frame the issues in the media ahead of the Senate hearing, if the events are covered. That is a big if. IP is a boring news topic in the minds of most editors and reporters. CIRM issues are a third tier media matter at best in the Capitol. Witness the extremely light coverage of CIRM this past year with the rare exceptions of occasions when buckets of money were rolled out (grant approvals by the CIRM Oversight Committee). Arnold's contretempts with Rush are much higher on the California news agenda, although nearly meaningless.

With four stem cell events in one week in Sacramento, news editors are likely to cover one and not the rest. The earliest may get the media worm.

With a super, super-majority vote (70 percent) required in both houses, Kuehl's bill likely will find tough sledding. On March 16, in Los Angeles at the Oversight Committee meeting, we asked Assembly Speaker Fabian Nunez about the measure. He was there for a news conference touting CIRM's good works. But he said he knew nothing about Kuehl's bill. To win a 70 percent vote in the Assembly, he will have to know more.

For those of you interested in the real stuff of IP, CIRM has posted some advance material concerning its IP hearing April 9. Among the issues CIRM wants to address are the following:

"Is there a reference or scheme in another body of law that would provide a workable formula to price drugs purchased in California that have been developed with CIRM-funded patented inventions?

"What mechanisms exist that can be used to formulate the price of non-drug therapies provided to Californians?

"Is the term 'public funds' sufficiently precise to capture the universe of purchasers intended in the scope of regulation 100406?

"What comparables would be used by which the “access plans” referenced in regulations 100406 and 100408 be assessed?

Written comments may be submitted directly to CIRM if you are unable to attend the hearing.

Here are links to additional background on the legislation. "Tall Hurdle," "Open Kimono," "CIRM IP Legislation."

(Editor's note: An earlier version of this item said the Oversight Committee meeting was April 11. It is scheduled for April 10.)

CIRM Grant Oversight Question

Lawrence Ebert has posted the following question:

"Of the procedure on grants given by CIRM, I was wondering "who" has the authority to conduct oversight. Directly, this comes up as to "who" might have been responsible for vetting the Cha proposal. Down the road, "who" would conduct any investigation of alleged research impropriety. In a different research area, this issue is currently looming large. See
http://ipbiz.blogspot.com/2007/03/more-about-congress-reviewing-purdue.html

"Separately, how much of the CIRM grants are going directly to the conduct of research, and how much are going to overhead of the respective institutions?"

Here is what we know. Re the questions of oversight of grants given by CIRM, it is CIRM itself that has oversight and the agency vets the proposal and monitors its execution. It is unclear who might conduct an investigation of research impropriety beyond CIRM, although the state Department of Justice has wide authority to investigate and prosecute violations of state law. CIRM's research regulations have the force of law.

We can't tell you the split on overhead vs. actual research, but we learned at the March 15 meeting of the Oversight Committee that comparing size of NIH grants and CIRMs for the same project is not accurate. CIRM grants apparently include funds that are not usually included in the announced figures for equivalent NIH grants.

Fresh Comment.1

Lawrence Ebert is onboard with a comment on the correction below and is a little puzzled. We have posted an comment/explanation that should clarify the matter. John Simpson has a comment on the "CHA Example" item. An anonymous comment has been posted on the "Plagiarism, prayer" item.

Fresh Comments

Jonathan Eisen has posted a new comment on the "CHA Example" item below in which he proposes a Journal of Rejected Grant Proposals. We suspect his suggestion is a bit tongue in cheek, but he makes some interesting points. Also new is an anonymous comment on the "Plagiarism, Prayer" item that involves a patent matter and Cha.

Correction

On Friday March 23, we incorrectly reported that the California Stem Cell Report was the first to pull together the plagiarism allegations and other ethical concerns involving CHA RMI and its allied organizations and link it to the CIRM grant. In fact, the Bodyhack blog on Wired.com carried much of the same information on March 17. We simply missed their earlier report. Our apologies to the folks at Bodyhack, particularly Steve Edwards, who wrote the March 17 item.

Fresh Comments

Jonathan Eisen has posted a comment on the "CHA Example" item below. We have posted a response to his comment. Click on the word "comments" at the end of the item to see the little pearls.

The WSJ, Bile and the Wind

Christopher Thomas Scott, the executive director of the Program on Stem Cells in Society at Stanford, sent the following along. He wrote it in the form of a letter to the editor after reading an op-ed piece on embryonic stem cell research in the Wall Street Journal last week.

"Dear Editors:

"It was familiar a twist in the gut. Robert George and Thomas Berg's "Six Stem Cell Facts" (March 14 Wall Street Journal) provoked the usual response: Should I write 1) a trenchant rejoinder (Six Stem Cell Lies) 2) a carefully crafted counter argument, or 3) lie in wait and pounce in the pages of another newspaper?

"I was up Thursday before dawn. I poured myself a cold, frothy tumbler of bile, and sat down to write.

"Nothing happened.

"I was mystified--George and Berg's essay was an easy target, trotting out old moral and religious tropes.

"It took me a few days to figure it out, but now I understand this odd ennui. Supporters of embryonic stem cell research, including those of us who battle in journals and newspapers, have moved on. Embryonic stem cell research has left the barn, as the saying goes, and now we're getting on with the important stuff--the business of discovery, treatments and cures--what America does better than any other.

"This leaves commentators like George, Berg, and Krauthammer all alone, caterwauling and swinging roundhouses into thin air. The ringside seats are nearly empty. The images of dismemberment (as if an itoa of cells has arms and legs) or Krauthammer's lovely description in sanctioned government reports of "fetuses hanging on meathooks" has become a rhetorical sideshow, better suited for circus barkers. Will they join us at the edge of medicine's most promising frontier, where new, nuanced debates about stem cell therapies are taking shape? Or will they remain behind, shouting into the wind?"

RHA RMI Issues Receive Little Notice in Media

The flap over the $2.6 million California stem cell grant to a Los Angeles enterprise linked to ethical lapses involving a Korean scientist received scant attention today in California newspapers.

Only one story appeared in a newspaper, and one online. Neither contained much new information. Reporter Carl Hall of the San Francisco Chronicle did carry a comment from CHA Health Systems, the parent company for CHA Regenerative Medicine Institute, which was approved for the grant last week by the CIRM Oversight Committee. Hall wrote:

"Jason Booth, a spokesman in Los Angeles for CHA Health Systems, said the research unit is a bona fide California nonprofit whose status was not at issue, and that its 'grant was based on a thorough scientific review that speaks for itself.'"

Rob Waters of Bloomberg.com, who was the first to point out the connection between CHA Health Systems and CHA RMI, also reported on the calls for an investigation. He said a representative of CHA in Korea said the company would respond later.

The Californa stem cell agency said it was in the process of conducting a routine review of all the grants approved last week, which will include an examination of whether each recipient is eligible for the award. Waters quoted the agency as saying that the review could take six weeks.

The Bodyhack blog on Wired.com was the first (on March 17) to pull together the plagiarism allegations involving the head of CHA Health Systems along with other ethical concerns involving CHA and point out that a CHA subsidiary had been approved for the $2.6 million state grant. The California Stem Cell Report on the matter appeared Wednesday night and led to the calls for the investigation.

We have emailed CHA several times seeking a comment on the matter, including a promise to run their comments verbatim. We will do so when we receive a response.

(Editor's note: An earlier version of this story incorrectly said that the California Stem Cell Report was the first to link the CIRM grant and the ethical concerns involving CHA.)

Fresh Comment Update

Jonathan Eisen has added more commentary on the openness of the CIRM grant system. See "comments" on "Sunburn" below. Lawrence Ebert has more on the issue of "hidden economic interests" in New Jersey research. See "Fresh Comments" below.

As a point of information, we have started these comments advisories in an effort to bring more attention to the contributions of those who take the time to add to this dialogue. These manual comment updates are a bit clunky but we are looking for a sleek, hotsy-totsy way of providing them automatically in a separate space on this page. If you have any suggestions for finding a nifty HTML tool that will do that, send it along. Meanwhile, as general guidance, it would be better to post comments on the items dealing with the subject matter as opposed to posting them on these advisories on comments being posted.

Keep the stuff coming. Thanks to all.

Advisory

The press release by the Center for Genetics and Society concerning the CHA grant has now been posted on its web site. Here is the location.

The CHA Example: How CIRM Decides Who Gets the Big Bucks

The $2.6 million California stem cell grant involving the CHA Regenerative Medicine Institute received a score of 77 from a panel of grant reviewers, although they commented that it "can be easily qualified as overly ambitious."

Approval of the application last week by the Oversight Committee of the California Institute for Regenerative Medicine has resulted in calls for an investigation into CHA RMI's nonprofit status and its links to a Korean scientist involved in an international plagiarism case, among other things.

The CHA application first came up for a review last January by a CIRM working group, chaired by Stuart Orkin of the Dana Farber Cancer Institute. Fourteen other scientists held seats on the group. Seven members of the Oversight Committee sat on the panel. Only one is from Los Angeles, where CHA RMI has its office. It is not known whether she was in attendance when the CHA application was discussed. All of the scientists are from out-of-state.

Meeting privately, the reviewers recommended the CHA application and others for funding. The CHA application was placed in the first tier of grants that were sent on to the Oversight Committee. The scores of the first tier grants ranged from 95 to 66. The reviewers received detailed information on the proposal, including the names of the principal researcher as well as its methodology. Only one reviewer was recused from considering the grant. He was Jeffrey Rothstein of John Hopkins, who works in ALS research, a field that was also targeted by the grant.

Prior to action by the Oversight Committee, the names of all CIRM grant applicants and their institutions are secret except during the private meetings of reviewers, according to CIRM policies. The Oversight Committee is also not told their names during the votes on the reviewers' recommendations. The names of the winning applicants are only disclosed after the vote. The names of the losers will never be disclosed by CIRM.

CIRM says its secrecy is justified for a number of reasons. The agency says it is the traditional way grant applications are handled in the scientific community. It is professionally damaging, CIRM also says, for scientists to be publicly identified as not being able to win grants. It is also damaging to be criticized in public. Maintaining secrecy means that scientists are more likely to propose more ambitious and riskier research than would otherwise be the case. The results of science will be better in the aggregate, thus benefitting the public more than would identifying the applicants and their institutions, CIRM says.

During last week's Oversight Committee meetings when the grants were approved, the 29 members of that panel were not told the names of the applicants or the institutions. They were given a summary that is also available to the public. Individual members were given a list of the grants by number on which they could not vote or participate in the debate. Those lists were withheld from the public at the meeting. Just prior to voting on or discussing an individual grant, a list was read of the committee members who could not participate in the debate. At that point, well-informed members of the audience and probably many members of the committee could identify the actual institutions involved and often the individual researchers. The persons who could not are ones who are not as well informed on stem cell research.

The Oversight Committee voted on the first tier of grants as a block. At that point, no list of recused members was read to the public. Rather each member announced that they were voting in favor of the block with exception of grants where they had a conflict. CIRM's outside counsel recommended the procedure.

Following the vote, CIRM posted a list on the Internet of Oversight Committee members recused from voting on the CHA grant. They are Ricardo Azziz, chair of Department of Obstetrics and Gynecology at Cedars-Sinai in Los Angeles, Jeanne Fontana, a surrogate for John Reed, head of the Burnham Institute in La Jolla, and Richard Murphy, president of the Salk Institute, also in the La Jolla area. Reasons for their recusal were not posted.

(The California Stem Cell Report has argued often against much of the secrecy in the grant-making process for a variety of reasons. We will write more about the issue later.)

In response to a query, Dale Carlson, chief communications officer for CIRM, supplied the following:

"The CIRM grant review and administration process does not end with the ICOC's vote on deciding which applications to approve or not approve for funding. To that point, the review process by the Grants Working Group is focused on scientific merit. After that, there is an internal administrative review by Institute staff to ensure that each approved application is from an institution and principal investigator that meet the eligibility requirements of the specific Request for Applications (RFA); of the requested budget and proposed facilities for the proposed project; and of the institution's mechanisms for complying with our grants administration policy and medical and ethical standards.

"The administrative review process can take several weeks (we are still working on the SEED grants approved in mid-February, for example) and only after it's completed to our satisfaction do Notice of Grant Awards (NGAs) go out to recipient institutions and researchers. Checks follow NGAs.

"The NIH grants review process is similar."

The principal investigator on the CHI RMI grant is Jang-Won Lee. Little information is available about him on the CIRM web site. Carlson said the score of 77 on his grant is an average of each score by each reviewer. Here are the rankings of the grants.

Below is the text of the strengths and weaknesses of his application based on the CIRM reviewers assessment. More information on the grant can be found at this location.

"STRENGTHS: The proposal is well-written and includes preliminary data in pigs and novel methods. The research plan is nicely developed and the PI has the appropriate expertise, at least in animal cloning (less with hESCs), to be successful in this endeavor. Success of the PI in the porcine model adds strength to the plan. A large collection of letters of support provides evidence of enthusiastic collaboration with the PI that will add critically needed expertise to the project. The plan to differentiate and transplant hESC-derived neural cells in a well-established mouse model with experts in the field strengthens the lack of experience with hESC culture (but not derivation) by the rest of the group.

"WEAKNESSES: This is a proposal that can be easily qualified as overly ambitious. The author provides a shopping list of all the experiments that will happen after the ALS SCNT embryos have successfully been established and characterized. This seems premature. The proposal would be successful if the derivation is first done accurately and convincingly to generate a handful of lines that will be available for the community. Preliminary data on enucleation, SCNT and hESC derivation in an animal model should be done before proposing these studies. Specifically, SCNT on frozen oocytes in an animal model should be done before using completely viable, clinically useful human oocytes. The use of frozen oocytes for SCNT has not been established, and is likely to be a significant technical problem for enucleation and whole cell injection. There is no indication of a plan to enucleate the oocytes in the proposal and a clear rationale for using one or both of the methods used previously by the collaborator who developed the method is required. A plan for the derivation of hESCs is also needed along with a rationale for the use of ALS cells for tranplantation studies, rather than normal cells. It also appears that no one on this project has experience with this hESC derivation, or the derivation of any ESC lines.

"The section on clinical grade ESCs is not necessary for the proposal and should be removed. These ESCs are not stable lines that have been shown to be maintained in vitro. In fact, they appear by the literature and preliminary data to be a mixture of hESCs and hESC-derived differentiated populations. The plans to differentiate hESCs for transplantation do not require this intermediate step. It is unfortunate, because the application of novel SCNT techniques is a reasonable way to move the field of SCNT and hESC biology forward. If the rest of the proposal was as well-designed as the pig studies, the score would be very high."

CGS: CIRM Grant Recipient Has 'Shadowed' History

The Center for Genetics and Society today said "troubling questions" have arisen in connection with California's $2.6 million stem cell research grant to CHA RMI, adding another voice to the call for an investigation.

Marcy Darnovsky, associate director of the Oakland-based center, said in a press release:

"The leadership of CHA Health Systems (a Korean firm) has a shadowed recent history, including a lawsuit that alleges the director of its fertility center lied in order to obtain a woman’s eggs, The CIRM needs to live up to its oft-stated commitments to transparency and responsibility by freezing this multi-million dollar award while a thorough investigation is undertaken. If questions cannot be satisfactorily answered, the grant should be rescinded.”

Jesse Reynolds, a policy analyst at CGS and who has attended many CIRM meetings, said:

"Did CHA Health Systems establish this subsidiary in order to pursue California public funding, at a time when South Korea government funds were unavailable because of the Hwang Woo Suk cloning scandal? Given the recent record of unethical conduct in this field, the CIRM should have known to exercise greater scrutiny."

The press release continued:

"The medical director of the CHA Fertility Center is the subject of a lawsuit filed by a woman who says that he lied about the number of eggs that had been collected from her, causing her to continue seeking treatment from him. The CHA Fertility Center and the CHA Regenerative Medicine Institute are located in the same Los Angeles office building.

"'The lawsuit suggests that CHA’s leadership placed a woman at unnecessary risk by misleading her into undergoing repeated cycles of egg retrieval,' Darnovsky said. 'Women’s health advocates have warned about the health risks of egg retrieval, as well as about likely conflicts of interest between fertility doctors conducting egg retrieval and researchers who want the eggs for their experiments.'"

Asked for a comment, Dale Carlson, chief communications officer for CIRM, said CGS' comments were "another uninformed reaction." He used similar language concerning statements by the Foundation for Taxpayer and Consumers Rights.

We have asked CHA for comment on these matters and will carry them when we receive them.

The center's press release was not posted on the Internet at the time of this writing. We will carry an advisory when it is posted.

FTCR Calls for Investigation Into California Stem Cell Grant

A California watchdog group has asked the state's stem cell research agency to investigate a Korean-linked organization that the agency approved last week for a $2.6 million grant.

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights, said in a press release that CIRM's "secretive awards process let a questionable $2.6 million grant slip by the Oversight Committee without adequate scrutiny."

His comment came today following a report Wednesday on the California Stem Cell Report concerning the recipient of the grant, CHA RMI, and Kwang-Yul Cha, chief executive of the parent company of CHA RMI.

In a letter to the CIRM, Simpson said:

"It is not clear what (CHA RMI's) affiliation is with its corporate parents CHA Medical, CHA Biotech and other corporate for-profit entities. Kwang-Yul Cha is the chief executive of CHA Health Systems, chairman of Hollywood Presbyterian Medical Center and director of CHA Regenerative Medicine Institute. Is CHA RMI truly a non-profit institution eligible for funding in this round of grants?"

Simpson also said "serious questions" have been raised about Cha in connection with plagiarism allegations along with a state inquiry into whether he was violating the law by using MD after his name when he is not licensed to practice medicine in California.

Simpson said in the press release:

"We’ve argued that the process should be open and the applicants identified as they do in Connecticut. The stem cell institute refused to let the sun shine in and they got burned as a result."

In response to our query, Dale Carlson, chief communications officer for CIRM, said,

"Simpson appears to be uninformed about the grant review process, here and at other agencies."

We have asked Cha for a comment and will carry it when we receive it.

Simpson also said,

"I'm grateful the California Stem Cell Report first linked the CHA Regenerative Medicine Institute to the problems in its affiliates. Without David Jensen's digging this would likely have slipped by us all."