CIRM's Klein Beefs Up His Staff

Less than one year ago, the directors of the California stem cell agency cut back to three the size of the staff of the chairman, Robert Klein, in an effort to make the job of president of the $3 billion effort more appealing to candidates seeking to fill the post.

Today, CIRM has its new president. And the authorized staff for Klein's office has ballooned to eight, which may not seem large, unless one considers that it amounts to about one-third of CIRM's tiny and overworked contingent.

The new positions were approved with little discussion last month by members of CIRM's Oversight Committee. Interim CIRM President Richard Murphy, who is being replaced by Alan Trounson, presented the positions to the board as part of a staff reorganization supported by Trounson. Murphy indicated Trounson may seek to modify the organization further as he settles in.

CIRM has been bedeviled by a dual executive structure, locked into state law as the result of being codified as part of Proposition 71 and which has played a role in conflicts between Chairman Klein and former President Zach Hall. At one point last year, Murphy, then a member of the Oversight Committee, called the management structure a "dog's breakfast."

Some observers say the structure now in place puts the agency firmly under Klein's control, and they expect Trounson to fill a much different role than Hall performed. They also say that Klein's dominance has played a role in the recent troublesome staff turnover – eight departures since October.

(Klein is a multimillionaire real estate investment banker who does not accept a salary for his position at the state agency. He has testified in court that he does not consider himself a state employee.)

The latest organizational structure calls for a new director of finance, legal and governmental affairs, who will have three staff members – all within the chairman's office. An associate legal counsel has also been shifted away from the president and works outside of the regular purview of CIRM's general counsel. Trounson reports directly to Klein.

No salary is listed on the web site for a director of finance, legal and governmental affairs, and the position is not currently listed as open for applicants. One position that is currently being advertised is for a chief operating officer, who will work under Trounson, and who should free him from much of the tedious work of the agency. No salary is listed for that position as well, but it could be as much as $270,000 annually, which is the top end of the range for the chief scientific officer, a parallel position that is vacant.

Formal organizational structures are sometimes nothing more than wish lists. But some time and effort have obviously been put into this one to deal with both Klein's and Trounson's desires. How it all works will play out during the next year. But management problems are a continuing issue at CIRM. And it is clear that CIRM needs to halt the turnover in employees and hire new staff as quickly as possible.

(An earlier version of this item incorrectly stated that the chief communications officer reports to both the chairman and the president.)

Stem Cell Snippets: Toes, Public Support and Looking Forward

WSJ on Stem Cells – Columnist Robert Lee Hotz wrote today in the Wall Street Journal about non-federal stem cell research efforts and reprogramming of stem cells. He quoted Richard Murphy(see photo), interim president of CIRM, as saying that research on human embryonic stem cells must continue. "We need to sort out the realities," Murphy said. The piece also contained a forward-looking number that is increasingly turning up in articles involving CIRM. That is the figure of $519 million, which is what CIRM expects to have approved for stem cell research by the middle of this year.

Bad Poll Numbers – "Strong support" is declining for human embryonic stem cell research, according to a recent poll by the Virginia Commonwealth University. The survey was taken following the latest news on reprogramming of adult stem cells. According to a piece by A.J. Hostetler of the Richmond Times-Dispatch, "strong support" peaked in 2005 at 27 percent and has now fallen to 21 percent. Overall support remains at 54 percent. It is the first national poll taken on stem cell research since the announcement of the reprogramming studies in November.

Murphy's Toe? – Reporter Ron Leuty of the San Francisco Business Times put together a bit of an overview of CIRM recently. The main focus was on the conflict of interest problems at the agency. He quoted Richard Murphy as saying, "We stubbed our toe. We all didn't realize we had a problem here." Michael Fitzhugh of the East Bay Business Times also looked at the impact of CIRM activities on companies in the eastern area of the San Francisco Bay region. If you have difficulty obtaining full copies of the articles, please send a request to djensen@californiastemcellreport.com, and we will send them to you.

FTCR on Appreciation

Following the appearance of an opinion piece Thursday in the San Jose Mercury News, John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights, sent the following letter to Richard Murphy and Alan Trounson, respectively the interim president and new president of CIRM:

"I enjoyed reading your joint article in today's San Jose Mercury News. It did an excellent job of highlighting the positive things the stem cell agency has done -- and is doing -- for the state.

"As you know, I've had differences with CIRM on occasion and, I am sure, will again in the future. I've always tried to offer constructive criticism that is intended to improve the agency and make it more responsive and accountable to those who fund it -- the people of California.

"You were correct when you wrote that there is much about the California Institute for Regenerative Medicine for which Californians should be proud. Funding promising young scientists is but a part.

"From my perspective, as I've served as a watchdog over the agency for the past two years, one of the things that has consistently left me with good feelings -- perhaps even a sense of pride -- is the dedication, commitment and devotion demonstrated by CIRM's hardworking staff. Too often they are under appreciated or at least taken for granted.

"So as we start a New Year, I wanted to make a point of lauding their contributions.

"I look forward to working with you in the year ahead. I'll continue to speak out when you're off track; I hope I'll be just as quick to praise what's right.

Fresh Comment

"Anonymous" has posted a new comment on the "withholds routine information" item below, suggesting that this writer has been at sea too long.

CIRM Moves to Refocus Public Debate

The outgoing and incoming presidents of the California stem cell agency published a piece in the San Jose Mercury News today defending the agency, declaring that the state's taxpayers should be proud of CIRM's efforts.

The op-ed article was written by Richard Murphy, interim president of CIRM, and Alan Trounson, who is the new permanent president.

In it, they point to the recent $54 million in grants to scientists as a sign that the CIRM is doing well. Little is new in the piece, but it represents an effort by CIRM to refocus public discussion of the agency in a more positive light following weeks of more negative news coverage.

Fresh Comments

"Anonymous" has posted a comment on the "withholding routine information" item below raising questions about the point of the item. We have posted a response suggesting there are three billion reasons underlying the post.

Business Joins CIRM Competition; Stanford Moves Craftily

Ten companies have submitted the first-ever letters-of-intent from the private sector for grants from the $3 billion California stem cell agency, and their chances may be better than those of some of California's finest universities.

The reason? CIRM is eager to develop interest and participation in its programs from stem cell companies. The general idea is that business would be faster at bringing therapies into the market place.

The number of letters of intent for the $1 million in disease team planning grants was disclosed today by CIRM. In addition to the 10 letters from business, the institute said that 56 letters were received from "non-profit institutions." The agency did not break down that number between educational institutions and research nonprofits.

CIRM next June plans to approve about 20 grants of up to $55,000 each. The grants would be an important stepping stone to the much larger, $122 million disease team grants.

The Stanford University School of Medicine, meanwhile, is not waiting for CIRM grants. It announced seven days ago that it was funding four disease team planning grants at $50,000 each beginning virtually immediately. Stanford apparently believes the early move will give it a leg up for the larger grants. Those being funded and pictured above are Irv Weissman(with microscope), Judith Shizuru(upper left), Gary Steinberg(in lab coat) and Beverly Mitchell(upper right).

The four grants are in addition to the four that will be submitted to CIRM, which has limited the number of applications to four from each institution.

Stanford, whose medical school dean, Philip Pizzo, is a CIRM director, has swept up $41 million in CIRM grants, more than any other institution. It might behoove others to look to their own grant-winning strategies in light of Stanford's move on the disease team planning grants.

Letters of intent were received eight days ago by CIRM, which chose to withhold the numbers until today for reasons that are not clear.

Another note: CIRM religiously refuses to release the names of grant applicants, claiming that they would be embarrassed if they lost. Stanford, like a number of others, seems to disagree about the possibility of embarrassment given that it has now disclosed that it is seeking at least four planning grants from CIRM. Of course, the hypocrisy of CIRM's secrecy policy on the names of applicants became evident earlier this month when it chose to identify 12 applicants for $263 million in lab construction grants a full month in advance of the date they are scheduled to be approved.

CIRM Withholds Routine Information on Interest in Disease Team Grants

The California stem cell agency Friday declined to disclose the numbers that would provide some indication of how businesses are responding to the agency's first-ever attempt to solicit grant applications from the private sector.

Thursday was the deadline for letters of intent to apply for $1 million in grants to plan a disease team effort. The planning grant program is a key entry point for those who want to participate in a later, $122 million disease grant round.

Ellen Rose, interim spokeswoman for CIRM, on Friday said the institute was not providing any count of the letters of intent or breakdown because it was "busy." She said CIRM intends to "address the level of interest" in the disease team program "sometime after the holiday."

Up until recently, the agency routinely and quickly released the numbers of letters of intent and applications for grants. However, the number of applications for the lab construction grants was delayed for days this fall. At the time, Interim President Richard Murphy said he preferred not to release any count.

However, the number of applications and letters of intent is a routine matter and legally public information. Refusing to release it in a timely fashion does not meet CIRM's claim to adhere to the highest standards of openness.

Often when public agencies delay the release of information, it means the information is negative and reflects poorly on the bureaucracy in question. Other times, it can mean that the agency is trying to figure out how to spin the information. We suspect the latter is what is occurring in this case.

Businesses Give Mixed Response to CIRM Overtures

The San Jose Mercury News has taken a brief look at the reception that business is giving plans by the California stem cell agency to provide millions of dollars for research in the private sector.

Based on a small sampling, the response is mixed. StemLifeLine of San Carlos says it is not planning to apply because of requirements that the state receive a payback on any revenues that may result, according to reporter Steve Johnson.

Advanced Cell Technology of Los Angeles, on the other hand, is interested. It moved its headquarters to California last year because of the possibility of securing funding from CIRM.

Geron of Menlo Park says it is not applying because its technology has advanced beyond the levels funded by the institute.

WaferGen Bio-systems of Fremont is considering applying but is concerned about the revenue sharing.

StemCyte of Arcadia said that it has filed a letter of intent to apply for a disease-team planning grant. The deadline for those letters came Thursday. CIRM , however, that it is not sure that it will be able to supply figures today on the number of applications, including those from business.

CIRM Chairman Robert Klein said,

"We will try to work with industry to find how we can further the interests of California patients and the biotech sector."

Anointment and The 92 Percent Routine at CIRM

Directors of the California stem cell agency last week virtually rubber-stamped the actions of its scientific grant reviewers, going along with them on 92 percent of the applications for $54 million.

The Oversight Committee discussed only nine of the grants, the ones reviewers said were recommended for funding if money was available. Five of those were approved by the committee. It ratified decisions on another 39 with zero debate. None of the committee's actions reversed a decision by the reviewers to deny or approve outright a grant application.

This pattern lies at the heart of whether the scientific grant reviewers, who make the critical decisions on requests for hundreds of millions of dollars in public funds, should be required to disclose publicly their financial interests. After spending months examining CIRM earlier this year, Elaine Howle(see photo), California's state auditor, recommended that the agency seek an attorney general's opinion about whether reviewers should publicly disclose their economic interests.

The agency rejected the suggestion. Interim CIRM President Richard Murphy last summer wrote the auditor that she was raising a "hypothetical" point. He said,

"...(T)he recommendations of the CIRM working groups have never been routinely and/or regularly adopted by the ICOC...."

CIRM has not published its analysis of the grant approval patterns, but our experience indicates that it is close to last week's 92 percent rate.

The power and importance of the grant reviewers were further reinforced last Friday when CIRM disclosed for the first time the identities of 12 applicants for $263 million in lab construction grants. The unusual release of information came more than a month before the grants are scheduled to be approved by the Oversight Committee. CIRM said the 12 were "recommended" for funding by the scientific grant reviewers. The agency said it was releasing their names because it would assist in end-of-the-year fund-raising for matching monies that are critical to the grant application.

Significantly, the names on the five applications rejected by the reviewers were not disclosed. CIRM says it does not disclose the names of the institutions for fear of embarrassing them. But the anointment of the 12 and the release of their names makes it virtually impossible for the non-anointed to make a renewed effort for funding, although by CIRM's official lights, the game is far from over. But how can the supposedly "semi-rejected" possibly muster the critical matching funds minus CIRM's endorsement on Friday? How can they go public with complaints about the fairness of the process? One does not want to antagonize a $3 billion gorilla that controls the lifeblood of research. One can only imagine the frustration at those institutions about how this has been handled.

Under Prop. 71, the Oversight Committee has final legal authority to approve or reject grants. We have long contended that reviewers are making de facto decisions on the grants as they did in last week's case of the $54 million in faculty awards. All of which is not unusual. That is why an agency such as CIRM has expert reviewers. They should know the science best.

The Oversight Committee is also hobbled if it wants to act independently of the reviewer decisions. The panel not only cannot see the entire application for the grant, it does not know the names of the institutions or the researchers involved. The committee is given only summaries that do not identify even whether the researcher is male or female. (However, a knowledgeable person can often determine the names of the institutions and sometimes the researcher by a careful reading of the summaries.)

Currently the reviewers disclose their economic and professional interests to CIRM, which says it will review them be sure no breaches of ethics or law occur. But neither the public nor applicants have any way to ascertain for themselves whether conflicts do in fact occur, other than trusting the tiny CIRM staff to diligently examine the secret documents.

CIRM contends it will lose reviewers if they are compelled to disclose publicly. We concede that a few may leave, but as new CIRM President Alan Trounson has noted, California is hottest spot in the world for stem cell research. A researcher who gives up an inside seat at that table would be giving up a lot.

The scientific reviewers are in fact making the overwhelming majority of decisions on grants being handed out here in California by what is the world's largest source of funding for human embryonic stem cell research. Given CIRM's on-going issues with conflicts-of-interest, it is past time for the agency to publicly disclose the economic interests of its reviewers.

FDA Calls April Meeting for Stem Cell Testing Advice

Clinical trials for therapies using human embryonic stem cells seem to be creeping closer with the latest news coming from the US Food and Drug Administration.

The FDA Tuesday announced a meeting April 10 to seek advice concerning "scientific considerations for safety testing" of such therapies. Two California firms, Geron and Advanced Cell Technologies, say they plan to send representatives to the meeting. Both have also indicated they hope to begin clinical trials next year.

Luke Timmerman and Rob Waters of Bloomberg News reported that Reni Benjamin, an analyst with Rodman and Renshaw in New York, said the FDA meeting is unusual because "the agency typical seeks advice on whether to approve a tested drug, not on how to proceed."

According to the two reporters:

"Geron has communicated extensively with FDA reviewers over the design of the first human trial using embryonic stem cells, partly to convince the agency that putting the cells into people won’t result in the growth of abnormal cell clusters called teratomas, Thomas Okarma, Geron’s chief executive officer, said in interviews with Bloomberg."

Bloomberg said that ACT plans to submit a clinical trials application in the first half of 2008 for a treatment using retinal cells.

Major Staff Turnover at California Stem Cell Institute

More than 25 percent of the staff of California's $3 billion stem cell agency has left since October or is leaving -- a turnover rate that is troubling as new president Alan Trounson prepares to take over.

The departures total seven persons, including top level executives, out of a staff of 26. At least one other top level person is reported to be considering leaving. Publicly, the announced reasons seem benign, as they usually do in such cases, but the turnover is cause for concern. Moreover, some are leaving after only working for CIRM for relatively short periods.

CIRM has always had a small staff and is limited to 50 by law. Long hours have been the rule, not the exception. Oversight Committee members repeatedly have expressed concern about burnout and the staff's ability to accomplish the growing number of tasks that the agency is attempting.

Hiring new employees is time-consuming and expensive. New staffers always have a learning curve to climb, plus institutional memory is lost as the employees depart.

Four departures were announced at last week's Oversight Committee meeting by interim President Richard Murphy, who also announced the hiring of four new persons. The four leaving are Lori Hoffman, chief finance and administrative officer; Rosemary Chengson, finance officer; Dennis Butler, technology officer, and Mario Garcia, grants management specialist. Arlene Chiu, chief scientific officer, and Dale Carlson, chief communications officer, left in October. Kumar Hari, a scientific officer, said this week he is leaving to return to private industry.

In another personnel matter, Murphy announced early in last week's Oversight Committee meeting that he hoped to have a new chief scientific officer on board following approval of the person during an executive session of the Oversight group. However, no name was announced following the executive session.

Murphy did announce the name of a new chief communications officer, who will begin work in mid-February, Don Gibbons, currently associate dean for public affairs(see item below) at Harvard Medical School.

The other three new employees are scientific officers:

Elizabeth Ashe Nigh, a neuroscientist from Harvard Medical School, Uta Grieshammer, a developmental biologist from UCSF, and Mike Yaffe, currently a full professor at UCSD interested in the biology and genetics of mitochondria.

CIRM Hires Communications Chief from Harvard

The California Institute for Regenerative Medicine has hired a new chief communications officer, Don Gibbons, currently the associate dean for public affairs at Harvard Medical School and once the director of communications for the Stanford Medical Center.

Gibbons (see photo) is expected to be at the agency fulltime in mid February. Gibbons has been at Harvard since 1996. He worked at Stanford from 1992 to 1996. Prior to that, he was editor-in-chief at Medical World News, where he worked in various capacities from 1982 to 1991.

Gibbons has a bachelor's degree in biology with an emphasis in journalism from Indiana University. He will be paid $190,000 or $195,000 annually depending on the size of his relocation package.

Communications responsibilities at CIRM are currently being handled on contract on an interim basis by Ellen Rose, formerly with Alza, a drug delivery subsidiary of Johnson and Johnson. She is working half-time. CIRM on Monday posted an RFP for a $60,000 contract for more temporary PR help.

Fresh Comments

"CIRM" has left a comment on the "Shame, Shame, Shame" item below. " We have also posted a response to it. "Anonymous" has left a comment on the "Lesson" item from Dec. 15.

Sham Arguments Harm CIRM's Credibility

The release of the names of 12 institutions seeking $263 million in public money from the California stem cell agency doesn't measure up to the agency's self-professed goal of meeting the highest standards of openness and transparency.

Yes, it is a good first step, whatever its motivation. Yes, it seems to surpass the openness of the NIH. But as we have noted before CIRM is subject to far less oversight than the NIH and seems to have far greater conflicts of interests among its directors. But if the intention is to provide the basis for thoughtful comment from either the public or CIRM's important constituencies, the release of the information falls short.

All that is publicly available are names. The public, which is financing this effort, does not know how much money is being sought nor even rudimentary details of how the applicants propose to use the cash.

CIRM's position is that to release the information at this point could mean that losing institutions would be embarrassed. However, by releasing the names last week, CIRM has conceded that its position is nothing more than a sham. Presumably some of those named on Friday will lose out and be "embarrassed."

CIRM apparently decided that embarrassment was overshadowed by the need to help applicants raise matching funds for the grants before the end of the year.

It is time for CIRM to release not only the names of the institutions, but also the amounts they are seeking as well as the applications from the institutions(confidential information could be deleted).

The agency is still wrestling with the fallout from controversy about its conflicts-of-interest, which have possibly cost 10 researchers about $31 million. It is an issue that will be with CIRM for its entire existence because the conflicts are built into the agency, ironically, by law. More than a majority of the CIRM's directors have links to institutions that could benefit by this latest round of grants for lab construction. They have already set the rules and criteria for giving away the money. All of which naturally raises concerns about self-dealing or worse.

That situation is not likely to change. The only reasonable way to assure public credibility and allay suspicions is for CIRM to lay all the stem cell cards on the table. Especially since it has conceded that releasing the names is not really that embarrassing after all.

Shame, Shame, Shame

If you accept CIRM's arguments for withholding grant applicant information, the San Diego Stem Cell Consortium has taken an enormous risk that it could shame itself in public.

The consortium says it is seeking $50 million from CIRM for new lab construction, according to a report by Terri Somers of the San Diego Union-Tribune. The new building would give 110 scientists a place to work. It would be built on UC San Diego property with construction beginning in 2009. The San Diego Supercomputer Center and Craig Venter, the biologist who was a primary driver of the Human Genome Project, also plan to contribute to the project.

All of that is considered confidential information by California's stem cell agency, which plans to give away $263 million in public money next year for new lab construction. CIRM considers the information so sensitive that the release of it would severely embarrass the consortium if its request for funds is turned down.

Balderdash, is what we say.

Gritty Stuff in Trounson Story

For those of you still wondering who Alan Trounson is – or for those who want to known more – reporter Deborah Smith has produced an interesting profile with some gritty details.

Writing in the Sydney Morning Herald, she described Trounson at one point while he was on a flight from Singapore as a "slightly crumpled, middle-aged traveler." She wrote that years ago someone painted "Trounson is a mass murderer" on the walls of his home. And she reported that private detectives have "trawled" through his financial dealings and quizzed his former wife.

Trounson's comment, "That was very strange. They were tough times."

Trounson begins work in the next couple of weeks as president of California's $3 billion stem cell agency agency, the world's largest source of funding for human embryonic stem cell research.

Fresh Comments

"Ron" has posted a new comment on the first Kessler firing item below. John Simpson has posted a comment on the Kessler lesson item just below.

A Lesson for CIRM From Dr. Kessler

The coverage of the firing of David Kessler as the dean of the medical school at UC San Francisco provides an example of mishandled PR that has some application to the California stem cell agency.

The missteps in the release of the information had little to do with the skills of those in the UCSF communications department, but probably a great deal to do with miscalculations at the top – at least from our perspective.

Kessler, on the other hand, skillfully drove the media coverage. The result was news stories across the country, including the New York Times, the Washington Post, the San Francisco Chronicle and ours below, that were dominated by Kessler's version of the affair. The chancellor's perspective came late and lamely.

How does all this apply to CIRM? It has do with perception, fast public reaction and top executives who listen carefully to knowledgeable communications professionals who also have access at the very top on a regular basis. At this point, CIRM seems to be headed in a somewhat different different direction, relegating its top communications person to the third tier in an organization structure that only has five layers.

Here is what happened in the Kessler case.

On Thursday the chancellor at UC San Francisco fired Kessler. It was obviously an event that the chancellor had anticipated well in advance – not a spur-of-the-moment decision. Kessler had already refused to resign, according the media reports. It was clear he was not likely to leave quietly.

On Friday morning, he sent out an email to colleagues at UC San Francisco that said he was being dismissed because of his efforts to uncover financial irregularities. That email quickly went out across the country and to the news media.

Meanwhile, UC San Francisco did not have anything to say. Friday afternoon, after the first news surfaced, an innocuous statement was put out by the chancellor. It did not address the issues raised by Kessler. Late Friday afternoon, the chancellor put out a stronger statement, declaring that Kessler's allegations had been investigated earlier and had no merit.

But that response came too late to change the focus of the coverage, which was heavily tilted towards Kessler's view of the world.

How could it have been handled differently by the chancellor? We are assuming that he did not consult his PR folks in advance. Instead, he could have anticipated the obvious attention his decision would receive. With that in mind, he could have issued an already prepared statement promptly after the dismissal, perhaps as early as Thursday. He could have anticipated the move by Kessler and had a response ready to roll out immediately instead of hours later. But that would have required the early input of the PR folks at UC San Francisco – PRIOR to the actual firing.

Keep in mind that we are not talking about the merits of Kessler's firing or the allegations – only the public perception and news coverage. From UCSF's institutional perspective, it has been tarred unfairly by Kessler. From Kessler's perspective, he has turned a negative event into something that reflects considerably more positive on him.

Given the controversial nature of the research funded by CIRM and its built-in conflicts of interest, bad news is always a good possibility. It behooves the organization to think carefully about how it plans to deal with that eventuality.

Fresh Link to More on Lab Grants

Here is a link to the news release by the Foundation for Taxpayer and Consumer Rights on today's disclosure of the identities of 12 of the institutions seeking $262 million from CIRM.

We must renege on our earlier promise to publish more on this subject today. Other responsibilities have risen to a higher level.