Rejected Grant Applicant Steps Up its Bid for Approval

The Childrens Hospital Oakland Research Institute has beefed up its effort to overturn the initial rejection of its bid for a multimillion dollar stem cell lab construction grant with a second letter that amounts to a "peer review" of the "peer review" of its plan.

The effort by the institute is believed to be the first such appeal by a rejected applicant, although CIRM refuses to confirm that. It also refused to release the letter, saying such an action would be inappropriate. Earlier today, we filed a formal request for the letter under California's public records law. Later, the letter came to us from a source that asked not to be identified (it was not the Oakland institute).

Both letters were sent Monday to all members of the CIRM Oversight Committee, which meets Wednesday to consider the scientific segment of the lab grant proposals.

Grants not approved on Wednesday and Thursday will be knocked out of the running for the second stage of the grant review, which will focus on the building plan. The current stage focuses on the science that is being proposed.

Last fall the CIRM Grants Working Group conducted a "peer review" of all 17 applications. The review was performed behind closed doors with scientists who did not disclose publicly their financial interests -- standard policy for CIRM. Twelve applicants were recommended for funding. Five were rejected, including Childrens Hospital, the University of California at Riverside and Cedars Sinai.

CIRM has identified the 12, in "violation" of its own policy of confidentiality on the names of applicants. UC Riverside and Cedars Sinai confirmed to the California Stem Cell Report that they were rejected. But they have not responded to questions about whether they are appealing the decisions.

The text of the Childrens letter is below.

Childrens Hospital's Second Letter

Here is the text of the latest appeal letter from Childrens Hospital Oakland Research Institute. The boldface indicates the criticism of the Oakland proposal. CIRM refuses to release the actual report by CIRM reviewers, who performed their review behind closed doors.

January 14, 2008

Dear Members of the ICOC:

The critique of the Grants Working Group indicates clearly that the intent and aims of our proposal were misunderstood. We think that the reviewers might have overlooked that the goal of Proposition 71 was to cure disease by the innovative use of stem cells, not simply to explore the possibility of curing disease with ES-derived cells. The reviewers imply that we have requested a facility that will be used simply to process and store blood stem cells for conventional transplant procedures. This is not the case: we have proposed to explore the use of a new type of blood stem cell, discovered here, that has the potential to transform blood stem cell transplantation and make it available to far larger numbers of patients.

Achievement of this goal will however require rigorous research. The research must be very strongly clinically oriented if our discovery is to be translated into something that can be used to cure disease. We should also note that the cost of our facility is relatively modest, particularly in light of the probable direct and near-term benefit to the citizens of California.

We would like to respond to the principal criticisms of the application:

1. No collaboration with established stem cell lab/groups to help characterize novel cellular populations; absence of hESC studies. The focus of our research and the purpose of the application is to benefit California citizens affected by hemoglobin disorders, which afflict a disproportionate number of citizens as a result of the ethnic diversity in this State, through innovative applications of stem cell therapy. We are committed to accomplishing these aims in the near-term, and more important, to apply our research in the clinic by using the safest and most reliable methods. Currently, there is a great deal of uncertainty surrounding the clinical applicability of hESC, and their clinical safety has not been sufficiently well characterized to support clinical trials with these cells in the near-term. Thus, we have elected to apply other methods of regenerative cellular therapy, in part because the safety, efficacy, and availability of other sources of cells are better developed, and we have considerable experience with conducting these trials.

2. Institutional collaborations were not carefully described, and corporate partnerships to develop the products were not included in the application. While we have established institutional collaborations with UCSF, UC Berkeley, and UC Davis, and share CIRM funding with UC Berkeley to conduct stem cell biology training for our clinical fellows, none of these institutions has developed expertise in characterizing placental stem cell populations, which are the focus of this application. Thus, we are uncertain about how collaboration on this subject outside our group would be practical or useful. It should be evident that we have extensive established collaborations relating to hematopoietic stem cell transplantation and cord blood collection, processing, and storage.

3. Poor interdisciplinary collaboration of pre-clinical and clinical research projects, with a lack of track record by some PIs. This criticism ignores information that was clearly presented in the proposal: in fact we have an extremely well integrated program of research. Our proposals were prepared as a result of ongoing interactions by laboratory-and clinical-based investigative teams to 1) collect stem cell populations from placenta to investigate a new source of stem cells that might augment and expand the applicability of cord blood transplantation; 2) overcome barriers to histocompatibility by using photochemical treatment of donor lymphocytes before hematopoietic cell transplantation with mismatched donors. These projects were initiated, and are undergoing further development, as collaborations between basic and clinical investigators devoted to discovering medical therapies for hemoglobin disorders. The goal of these interactions is to translate these ideas into readily available applications of cellular therapy, something we believe is strengthened by our strong track record of conducting successful stem cell transplantation clinical trials for hemoglobin disorders.

4. Clinical research/cores proposed were not innovative and were perceived as currently supported by HRSA/Bill Young stem cell bill. Pre-clinical proposals were nnovative but not sufficiently well developed to proceed to a clinical trial in the near future; perhaps more appropriate in an Element Y application. We propose to construct a facility devoted to novel applications of stem cell transplantation for
hemoglobin disorders, not simply to construct a duplicate facility for housing cord blood collections from California families. This research would involve the collection of placentas for cryopreservation, analysis and mobilization of stem cell populations from placenta, and then processing these cells for use in a clinical transplantation trial that will be initiated in the next 1-2 years. We are currently preparing an IND with the FDA for this purpose. It is important to point out that the placenta-derived hematopoietic stem cells are the first new type of stem cell used in this field since the 1970’s, when cord blood was first used. Federal regulations governing this research have changed dramatically since that time, and are now far more complex. This project is thus truly innovative, and it will serve as a model for other attempts to use stem cells clinically. If proof of principle were provided by this initial clinical trial, the technology then would be applied to existing transplantation efforts, with the goal of expanding and improving outcomes after cord blood transplantation, particularly after unrelated donor transplantation. The proposed research is not supported by HRSA or the C. W. Young bill. The primary purpose of this bill is to establish cord blood banks and develop an inventory of 150,000 units for public use. It is not to perform clinical/translational research like that we have proposed. While a small amount of funds are allocated to support sibling banking ($250,000) by the funded cord blood banks, there are none in California who elected to participate in this sibling effort. It is critical that we have a facility for developing, characterizing, and distributing these cells for clinical transplantation trials. Thus, a GMP/GLP cell processing laboratory and a HLA laboratory are key components in support of the proposed clinical and pre-clinical investigations. This work cannot move forward without a facility.

5. A plan to utilize national networks in order to conduct a clinical trial was not detailed. It should be very clear from Dr. Walters’ track record that he is able to utilize, indeed currently is utilizing, such national networks in a highly productive fashion. The proposed pre-clinical investigations will be transitioned to phase I clinical trials in the very near term, responsive to the Element Z category we employed for this application. By providing proof of principle, this research has the potential to expand current clinical transplantation practice that will utilize HLA – mismatched and unrelated stem cell donors for hemoglobin disorders, a practice that is not routinely available. These will be conducted using multi-center networks that we can access for completing these clinical trials and which were detailed in the application. These include the Center for International Blood and Transplantation Research (IBMTR), the Sickle Cell Disease Clinical Research Network (SCD-CRN), and the Blood and Marrow Transplantation Clinical Trials Network. Our investigative team has leadership positions in these organizations and a successful track record of carrying out similar translational clinical trials in human hematopoietic cell transplantation.

We appreciate the opportunity to present our responses to critiques of our application and hope that the ICOC might look favorably on this and future applications to CIRM that we submit for consideration.

Respectfully,

Bertram H. Lubin, MD
President, Director of Medical Research
5700 Martin Luther King Jr. Way
Oakland, CA 94609

Mark Walters, MD
Director, Blood and Marrow Transplant Program
Children's Hospital & Research Center, Oakland
747 -52nd Street
Oakland, CA 94609

Coming Up

We have been tied up this afternoon with an interview with the new president of the California stem cell agency so we have fallen behind on some interesting events. However, we will post later this afternoon a copy of another letter from Childrens Hospital Oakland Research Institute seeking to reverse an unfavorable recommendation on its bid for a multimillion dollar lab construction grant. The letter is something that CIRM has refused to release. Also upcoming is an item on the 57 letters of intent, including 15 from business, for new cell line grants as well as a post on background information on the biotech loan program hearing tomorrow. For those of you who can't wait, just click on the links in the previous sentence to go straight to the CIRM documents.

Seeking Summaries: The Hunt for How $263 Million Will Be Spent

If you are looking for the public summaries of the applications for $263 million in stem cell lab construction grants scheduled to be considered tomorrow by the California stem cell agency, you will not find them on the meeting's agenda.

Instead they are tucked away under the category of "funding opportunities," although the opportunity to apply has long since passed.

Normally, the agenda for the Oversight Committee contains a link -- at some point prior to the actual meeting -- to the summaries of applications for grants. However, as of this writing, no link was posted on the CIRM website.

When we inquired early today, we were told that they can be found at the "funding opportunities" location. It wasn't clear when the summaries were posted at that location – perhaps Friday, perhaps Monday, we were told by the agency. A spokeswoman for the CIRM said she was going to ask about the reasons for failure to link the summaries to the agenda.

The simplest explanation is that there was a foul-up. Some might conjure up wilder reasons.

Whatever the reason, posting the summaries as late as Monday does not well serve the agency, the public or interested parties. State law requires ample notice in advance of public meetings because some governmental agencies in the past were not notifying the public about matters they were entitled to know. To serve the intent of law well, the agenda must also provide more than cryptic statements. Failure to provide background material well prior to meetings only leads to cynical speculation and creates an atmosphere of distrust.

CIRM had considerable problems in the past posting background material sufficiently in advance of meetings. Even Oversight Committee members complained. The problem seemed to ease a while back. But slippage, including the lab grants matter and also involving the biotech task force, has occurred recently. One would hope the problem will be resolved as the new president, Alan Trounson, settles in.

Zipped Lips and CIRM's $263 Million

A glittering array of 29 scientists and executives rule California's prodigious $3 billion stem cell research effort. In many ways, they constitute some of the finest minds in the business and have even included Nobel Prize winners.

The thinking was that this elite panel of experts could bring their knowledge and wisdom to bear on the world's largest funding effort for human embryonic stem cell research. But this week, many of them will remain mum as $263 million worth of decisions are made.

The group is formally known as the Independent Citizens Oversight Committee(ICOC). More commonly, it would be described as a board of directors for the California Institute for Regenerative Medicine(CIRM). On Wednesday and Thursday, the committee will make critical, initial decisions on handing out $263 million for lab construction at the Golden State's finest research institutions. But only about one out of three of the directors will be able to vote on or even discuss some of the key issues in what is the largest round of grants ever made by CIRM.

The reason? They are associated with institutions that are seeking big chunks of the $263 million jackpot. In many cases they have conflicts of interests that CIRM's attorneys say make it illegal for them to vote or even participate in debate.

The impact goes well beyond silencing most of the board on some matters. It could also create a "quartet majority" in which the votes of four persons could be all that is needed to take some actions. Here is how it could happen, based on Prop. 71, which created CIRM, and an explanation last August from Tamar Pachter, CIRM general counsel.

The strange situation stems from the requirement that many of the Oversight Committee members -- by Prop. 71 decree -- must come from institutions that stand to benefit from CIRM's largess. They include deans of medical schools and executives at the University of California and other academic and research institutions. In fact, of the 12 lab grant applicants that CIRM has publicly identified, 11 have one or more members on the ICOC.

Last summer Pachter told board members that when the time comes to allocate the $263 million into various "buckets" – parcelled out, in other words, into such categories of competition such as "CIRM institutes" and "CIRM centers of exellence" – only about 10 members of the ICOC would not have conflicts of interest. She said,

"They are members who work for for-profits, patient advocates who are unaffiliated with institutions who will be applying for funds. That's it."

She did not spell out the ultimate implications. But Prop. 71 uses the number of ICOC members eligible to vote as the basis for a quorum, rather than the total number of persons on the ICOC. Prop. 71 also states that a quorum is 65 percent of those eligible to vote. Action can be taken by a majority of a quorum. So when 10 persons are eligible to vote, the quorum is seven. A majority would be only four – a fact not directly discussed at the August ICOC meeting.

But Oswald Steward(see photo), chairman of the Reeve, Irvine Research Center at UC Irvine, is one ICOC member who was disturbed by impact of what Pachter had to say. He acknowledged the importance of the conflict of interest rules. But he added,

"A lot of us are going to be left out...It's not just the case we can't vote; we also can't even participate in the discussions. And I think that narrows the field of expertise in a way that is unfortunate."

The ICOC ran afoul of this problem in December when it approved adding $35 million to the lab grant program. Only eight persons on the board were permitted to participate in the debate on that proposal.

The "quartet majority" problem also leads to some interesting speculation about whether it could come into play in connection with the attempt by Childrens Hospital Oakland Research Institute to overturn an unfavorable decision by the Grants Working Group on its lab grant application.

Could the Oakland hospital's bid be approved by only four members of the ICOC? One could argue that ICOC members associated with institutions with competing grants could not vote on Oakland's request because it could affect the amount of funding available for their institutions. But before the Oakland bid can come to a vote, a member of the ICOC has to make a motion to approve it. Then Oakland has to line up three other sympathetic board members.

But it certainly is something that folks in Oakland could be thinking about as well as at the University of California at Riverside and Cedars-Sinai in Los Angeles, two other rejected applicants.

FTCR: Rejected Lab Grant Applicants Should Appeal in Public

A CIRM watchdog organization today urged five institutions "rejected" for multimillion dollar state lab construction grants to appear publicly next week and make their case for funding from the California stem cell agency.

John M. Simpson, stem cell project director of the Foundation for Taxpayer and Consumers Rights, said the review process for the $263 million lab grant program "has been flawed and smacks of favoritism that can only be cured by transparency." He said,

"CIRM management decided to reveal (last month) the 12 institutions that will be recommended for an invitation to seek funding so that they could use the information in year-end fundraising efforts. How is that fair to the five who were not anointed in secret by the closed scientific brotherhood?"

The California stem cell agency has declined to say whether any other lab grant applicants – besides Childrens Hospital Oakland Research Institute – are attempting to overturn negative decisions on their grant applications.

Ellen Rose, a spokeswoman for the agency, said,

"Appeals are allowable only if there is demonstrable evidence of a financial or scientific conflict of interest. Differences of scientific opinion among PIs and reviewers are not grounds for appeal. In the past, applicants who have raised questions about their grant applications or sought clarification, which is common in any granting exercise, have been informed of this policy. Thus far we have had no formal appeals to our grant-making process."

Simpson said CIRM's statement was "Orwellian double-speak." He said,

"I strongly urge representatives of all five rejected institutions to show up at next week's ICOC meeting and make their case in public directly to the board. It is, they claim, the decision making authority. What's happened so far were merely "recommendations.'"

By law, the Oversight Committee is the final authority on grant approval. It can accept or reject – for virtually any reason -- decisions by the working groups. That is one reason CIRM says it is not necessary for grant reviewers to publicly disclose their financial interests.

In response to queries from the California Stem Cell Report last month, two other institutions disclosed that their applications have been rejected. They are the University of California at Riverside and Cedars-Sinai in Los Angeles. However, they have not responded to queries on Thursday about whether they are asking Oversight Committee to reconsider the working group action.

The lab grant program is the first in which the names of applicants have been disclosed by CIRM, which previously said the names of all applicants were confidential even when the applicants themselves disclosed their own identity. The decision to assist the applicants with fundraising is important because CIRM will look more favorably during the two-step approval process on applicants with large matching funds.

The Oversight Committee is scheduled to take up the grants next Wednesday during the scientific portion of the approval process. Only those approved next week will move on to the next step.

Time for Business to Weigh in on CIRM Biotech Loan Plan

The California stem cell agency will hear next week from lenders and investors concerning its ambitious biotech loan progam, which is aimed at plugging a funding gap that has blocked development of stem cell therapies.

The Biotech Task Force is scheduled to meet on Wednesday in Burlingame, Ca., with a remote teleconference site at BIOCOM in San Diego. On tap is testimony from "capital providers and other experts." The task force has indicated it also plans to schedule a session with business and other potential applicants, which could include nonprofit research institutions.

According to California stem cell Chairman Robert Klein, the program could offer up as much as $750 million in loans to enterprises that cannot normally find funding from the usual providers. The program could get underway as early as this year, although the schedule is up for discussion next week.

Last month, Alex Philippidis, editor of the BioRegion News, interviewed Duane Roth, chairman of the task force, concerning the program. Here are some excerpts from the BioRegion piece. Roth told Philippidis,

"Think of the loan program — at least that’s the way I’m thinking about it, and the way our task force is thinking about it — as an evergreen fund. That means we can provide early-stage funding that is not available or has very limited availability from other sources [in order to] allow these products to move forward. Eventually those companies or those institutions that are sponsoring would repay the loans with interest, which would allow us to fund somebody else six, seven, eight years down the road."

Roth continued,

"If the program existed today, we’d be — and this is my opinion, and one I think is shared by the committee — that right now, the biggest gap in the funding is at the preclinical level, when somebody’s getting ready to say, ‘OK, I have preclinical evidence that this works. Now I have to do the toxicology and all the requirements for an investigational new drug application to the [US Food and Drug Administration].’ That is the toughest money to get. And that would be, if we put out [request for awards applications] today, that is likely what we would target."

More from Roth:

"But we don’t know where in the future the funding gaps are going to be, where the venture capitalists, or the angels, or Wall Street is not funding. And what we’re going to try to do is identify those gaps, and then put programs together to fill those gaps with funding from CIRM."

"It really would be a misnomer to only think that these loans would go to, quote, biotech companies. They may well go to other institutions that are also interested in advancing what we broadly categorize as products in this area."

"With this type of technology, it’s probable that there’s going to be a lot more interaction between the research institutes and what we classically think of as the companies that move these therapies forward. Some of them, at least, will be [stem] cell-based, so it’s not unlikely that many of the research institutes will get involved through pre-clinical, clinical, early clinical trials."

It is hard to overestimate how important it is for interested companies and institutions to weigh in early and often on this program. Sometimes industry seems to be missing from key CIRM proceedings. We recently discussed this issue with a representative of a company that pays more attention to CIRM than most. She said many of the companies in the stem cell business are tiny, very busy and cash-strapped. Thus it is difficult for them to monitor CIRM and offer comments, even though CIRM proceedings could be critical to their futures. Nonetheless, California stem cell companies should be monitoring CIRM more closely. Otherwise rules and regulations that may not be in their best interests could be promulgated.

The same advice goes for groups purporting to represent the "public." If they want to have an impact, they should be at the meetings and offer specific, constructive written recommendations on matters of interest. Only one organization, the Foundation for Taxpayer and Consumers Rights, seems to filling that role regularly at this point.

For more on the biotech loan program, search this blog using the search term "biotech loans." Or click on the label "biotech loans" just below this item.

Stem Cell PR, John Scully and Stanford

What a difference Arnold makes.

Stanford announced on Wednesday that investment banker John Scully was giving it $20 million for stem cell research, among other things. News coverage was modest, especially compared to the outpouring that resulted from an identical donation from Eli Broad to UCLA last year.

At that time, a Google search on the term "UCLA stem cell million broad" generated 244,000 hits by the afternoon following the announcement. In comparison a search at noon today on "Stanford stem cell million Scully" generated 11,500 hits.

The biggest single difference in terms of the coverage was the appearance of Gov. Arnold Schwarzenegger at an event at UCLA announcing the gift from Broad. It generated a wide range of stories including TV spots from the stem cell labs on the Westwood campus.

As we pointed out at the time, huge donations offer an opportunity to not only tout the institution and recognize the donor, but also to promote the field of human embryonic stem cell research.

When 55 percent of the public nationally says it has little or no knowledge of stem cell research, the field still needs major help. Donations provide a chance to tell a positive story – one that does not involve warnings of expensive therapies, dubious results or even research fraud much less conflicts of interest.

We should also note that the donation will probably give a boost to Stanford's bid for a multimillion dollar CIRM lab construction grant. One of the important criteria for the grants is a big fund match from the applicants.

Here is a link toe the Stanford news release on Scully (see photo) and a story in the San Jose Mercury News. The San Francisco Chronicle does not appear to have carried a story.

(An earlier version of this item incorrectly identified Scully as the former CEO of Apple.)

FTCR: Is CIRM 'Missing the Laboratory for the Test Tubes?'

The California stem cell agency is wrestling currently with a host of touchy issues in addition to the biggest round of grants in its history. Some of those matters surfaced last month and will surface again next week when the Oversight Committee also decides which institutions move on to the next round in the $263 million lab grant offering.

John M. Simpson, stem cell project director at the Foundation for Taxpayer and Consumers Rights, offers this commentary on some of those issues and how CIRM is approaching them.

"I mentioned in passing the other day that I think the ICOC folks sometimes miss the forest for the trees. (Maybe I should use a different metaphor, perhaps miss the laboratory for the test tubes?)

"Here's what I mean: Apparently everyone was worried at the last Governance Committee meeting about the bad image they might get if they use the word 'limousine' in the travel policy. But when a major restructuring of the institute's management structure is presented, it just sails through with nary a thought or comment.

"When Zach Hall was president he had seven direct reports. The new organizational chart shows Alan Trounson with only two, plus an administrative assistant. That is a substantial change in management philosophy and substance.

"I also expect the two managers reporting to him, the chief science officer and the chief operating office will command substantial salaries as both are to be either Ph.Ds or MDs. I tried to get at some of this in the December Governance Meeting when I ask on Page 30 of the transcript what their salaries and the salary of the director of finance and legal affairs will be.

"Re-reading Rich Murphy's response to my concern that the agency will be top heavy (Page 31), I have serious questions about Trounson's role. Here's what Murphy said:

"'I also want to be sure Alan has the guidance around him for him to be able not only to lead the institute, but for him to be the visionary leader of the institute. So he is going to have to keep his eyes on the field, he's going to have to be out on the road participating in meetings learning about new directions of the field. And when he comes back, one of the things he's going to have to do is to bounce off his ideas with high level leaders who are of his quality scientifically...'

"Just what is Trounson going to do day-to-day? Is he going to run the institute or is going to be spending more time on the road going from one conference to another around the world while the CSO and COO -- both with big salaries -- manage things?

"I'm not saying the new management structure is necessarily the wrong approach. My point is that it's a substantial departure from past practice and I'd have thought oversight committee members would have wanted to discuss it in detail in public.

"I would think the ICOC should be having a serious conversation about how this is going to work. I don't think anybody has focused on it, and it's much more important than whether someone takes an airport limo rather than a taxi."

Monkey Business, BioTime and the Search for Science

WARF and BioTime --California's BioTime Inc. has hooked up with WARF and signed a licensing agreement to use some of its patents on human embryonic stem cell research. The Emeryville firm said the WARF patents will allow it to manufacture and commercialize human embryonic stem cell-derived cell types and related products for scientists to use in research and in drug discovery. As part of that effort, the company plans to develop and commercialize a collection of research tools for stem cell research. Here is a link to a Wisconsin story on the subject, and here is a link to the company press release.

Monkeys and the American Psyche -- Scientific American says the reprogramming of adult rhesus monkey (see photo) stem cells into embryonic stem cells is one of the top 25 scientific stories of 2007, but that doesn't mean much to the public. The overwhelming majority of Americans has never heard of the research. So says the first poll taken since the announcement of the research results in November. According to the survey by the Virginia Commonwealth University, only 38 percent of those polled had heard of the reprogramming results. The implications for stem cell advocates? They have a long way to go before this stuff is entrenched in the American psyche.

Finding The Worthy – The topic of stem cell research grants to businesses came up recently in the Biopolitical Times, a blog produced by the Center for Genetics and Society. Jesse Reynolds wrote that the California stem cell agency should resist efforts by businesses to lower revenue-sharing requirements that might be linked to grants to the private sector. He also wrote:

"Although there is likely not enough current stem cell research capacity in California to warrant $300 million in grants per year, there's no effective mechanism to prevent as much money going out the door as possible, regardless of the research's quality. The CIRM's governing board is dominated by representatives of grant recipients - from the public, nonprofit, and corporate sectors alike."

Nearly three years, one anonymous writer from the world of academic science in California expressed a similar reservation about whether there is enough good stem cell science worthy of funding in California. More recently some on the Oversight Committee have expressed concern about maintaining the quality of the research that is being funded. However, this is not a subject likely to be discussed freely in public by folks at CIRM. To do so could appear to be casting doubts on the agency's mission.

NIH to ACT: Nyet!

A California-based firm, Advanced Cell Technology, says it has created human embryonic stem cells without harming the embryos from which they were derived.

The company said the results "have the potential to end the ethical debate surrounding the use of embryos to derive stem cells."

The NIH, however, says that isn't good enough. According to Rick Weiss in the Washington Post, the head of the NIH stem cell task force, Story Landis, said,

"(T)he only way to prove that the technique does not harm embryos would be to transfer many of them to women's wombs and see if the resulting babies were normal. But it would be unethical to do that experiment, she said, so the question cannot be answered."

That doesn't make Robert Lanza(see photo), the chief scientific officer at ACT, happy, Weiss wrote,

"That standard has Lanza fuming. By all scientifically recognized measures, he said, the embryos -- currently frozen in suspended animation because they were donated for research and not to make babies -- are normal, he said.

FTCR on Childrens Hospital Appeal: Fairness v. Secrecy

John M. Simpson, stem cell project director of the Foundation for Tazpayer and Consumers Rights, offered the following comment on the item below dealing with Childrens Hospital Oakland appeal of what amounts to a grant denial.

"CIRM management's now inconsistent penchant for secrecy coupled with news of the Children's Hospital letter of appeal once again demonstrates the importance of complete transparency.

"When institutions ask for public money they should be publicly identified. When they are rejected -- even if it's by members of a closed scientific brotherhood -- they should be identified and the reasons for the rejection should be spelled out.

"In this case CIRM management touted the 'successful' applicants and remained mum about what may, in fact, be excellent programs.

"Anything less than full disclosure leaves CIRM management justifiably open to charges of favoritism. In the long run that inevitably undercuts public faith in an agency whose dedicated staff in fact is attempting to serve the public interest by fostering important scientific research."

Rejected CIRM Grant Applicant Seeks Reversal of Action

One of the rejected applicants for CIRM's $263 million in lab construction grants has asked the agency's directors to reverse the decision and fund an effort that has an "immediate and broad application" in the treatment of sickle cell anemia.

Bertram Lubin, president of the Children's Hospital Oakland Research Institute, wrote members of the CIRM Oversight Committee on Dec. 28 seeking to overturn the negative recommendation by the CIRM Grants Working Group.

Lubin's letter follows CIRM's unusual reversal last month of its longstanding policy of secrecy concerning the names of grant applicants. In the case of the lab grants, CIRM identified 12 applicants that its Grants Working Group decided were worthy of funding by the Oversight Committee. The agency said public disclosure of the names would help the 12 institutions raise matching funds for the grant proposals. Grants with larger amounts of matching funds will have an edge in the competition for the CIRM money. However, the agency has refused to disclose the names of rejected applicants, a policy that has met objections from the Foundation for Taxpayer and Consumers Rights and the California Stem Cell Report.

Lubin (see photo) said his organization's proposal would expand a program "focused on clinical and preclinical research into the use of stem cells to cure inherited disorders of hemoglobin (sickle cell anemia and thalassemia), which affect a disproportionate number of children in California."

Lubin wrote:

"In contrast to some approved proposals that may have only distant and uncertain prospects of actually curing disease, our proposed facility would support the development of curative therapy with a new type of stem cell, with immediate and broad application to very large numbers of individuals."

He said the research involves umbilical cord blood stem cells and "will have a "direct and near-term impact on clinical practice."

Lubin continued,

"The cost of medical care for sickle cell disease averages over $50,000/year over a life expectancy of 30-50 years. In the course of our research, individuals with inherited blood diseases will receive transplants, and our extensive experience indicates these will be curative in the large majority of cases. The enhanced and extended lives of these individuals will represent a direct benefit; the savings to the health care system as a consequence of their cure is less direct but will benefit all California citizens. The knowledge gained from this research will enable improved treatment worldwide, with consequent saving of lives and resources."

Lubin also cited language in Prop.71 that states that CIRM should address the medical needs of the ethnically diverse population in California. Sickle cell anemia mainly affects African Americans in the United States.

The appeal from the Children's Hospital is the first such to surface publicly at the agency in any of its grant programs. We are querying CIRM about whether other applicants have appealed in this round or in the past.

The Oversight Committee will meet publicly next week to consider the decisions of the working group. Only grants that receive the go-ahead next week will go on to the next stage of the competition, which is the largest round of grants in CIRM history.

A copy of Lubin's letter was made available to the California Stem Cell Report by a source that asked not to be identified. The copy did not come from Children's Hospital. The full text of the letter is carried below.

Text of Lab Grant Appeal Letter

Here is the text of the grant appeal letter from the Childrens Hospital Oakland Research Institute.

December 28, 2007

Dear Members of the ICOC,

We are requesting that the ICOC reverse the decision of the Grants Working Group and recommend CHORI’s application for a Major Facilities Grant. We think it is very much in the interest of the citizens of California, and of CIRM itself, that this proposal be funded. We have proposed a facility that will expand and further develop a program focused on clinical and preclinical research into the use of stem cells to cure inherited disorders of hemoglobin (sickle cell anemia and thalassemia), which affect a disproportionate number of children in California. These disorders cause severe anemia with onset in infancy, but also widespread damage to vital organs such as brain, lung, liver and kidney. Our track record in this work is, we are confident, world-class.

Our request to the ICOC rests on the following points:

Our program has pioneered use of umbilical cord blood stem cells to cure genetic and malignant diseases in children; of particular significance is our demonstration that cord blood stem cells can be used to cure sickle cell disease.

CHORI laboratories have identified a new type of blood stem cell present in the placenta. These cells promise to provide a rich source of stem cells that will make curative therapy available to individuals who currently need it but do not have suitable stem cells available. Fulfillment of this promise will however require a program of rigorous preclinical and clinical research. The facility we have proposed is designed to house this research program. Our track record in curative stem cell therapy, and our discovery of these cells, make us the most suitable center to carry out the research.

The RFA for the Major Facilities Grant did not restrict the work to human ES cells and their derivatives. In fact, our application seems to fit precisely with the Program Objectives listed in the RFA. It is unusual only because we are proposing to carry out research that will have direct and near-term impact on clinical practice.

In framing our proposal, we had in mind the goals of Proposition 71 and of CIRM to serve the diverse population of California by encouraging ethnic diversity and participation in clinical trials focused upon the applicability of stem cell therapy. We have pioneered, and continue to develop, curative stem cell-based therapies for sickle cell anemia and thalassemia, which affect individuals from underserved minority populations in California.

Our proposal addresses another key goal of Proposition 71, which is to improve the California health care system and reduce the long-term health care cost burden on California through the development of therapies that treat disease and injuries with the ultimate goal to cure them. The cost of medical care for sickle cell disease averages over $50,000/year over a life expectancy of 30-50 years. In the course of our research, individuals with inherited blood diseases will receive transplants, and our extensive experience indicates these will be curative in the large majority of cases. The enhanced and extended lives of these individuals will represent a direct benefit; the savings to the health care system as a consequence of their cure is less direct but will benefit all California citizens. The knowledge gained from this research will enable improved treatment worldwide, with consequent saving of lives and resources.

In contrast to some approved proposals that may have only distant and uncertain prospects of actually curing disease, our proposed facility would support the development of curative therapy with a new type of stem cell, with immediate and broad application to very large numbers of individuals.

No resources to support construction of this facility are likely to be provided by the federal or state governments in the foreseeable future. We and our colleagues would welcome the opportunity to discuss this matter with you in detail.

Respectfully,
Bertram H. Lubin, MD
President, Director of Medical Research


Mark Walters, MD
Director, Blood and Marrow Transplant Program
Children's Hospital & Research Center, Oakland

No Stem Cell Sinecure at CIRM

The California stem cell agency is planning to make some pay changes for its staff and seems to be setting the stage with an interesting document that is now up on its web site.

In some ways, the three-page statement of "compensation philosophy" could be considered a list of the reasons not to work for CIRM. On the other hand, it is a realistic portrayal of work-life at the agency. The staff is tiny – now only 26 and limited to 50 by state law. The work is intense and demanding.

CIRM directors have repeatedly expressed concern about burnout. Seven persons, including some high level officials, have left since October.

Nonetheless CIRM offers some extraordinary opportunities to work at the cutting edge of science, government and business. It is doing pioneering work and is watched globally. It currently has a "wow" factor that has even enticed its new President, Alan Trounson, away from Australia.

Here is the segment of the compensation philosophy that might give pause to some who may be looking for a sinecure:

"CIRM recognizes recruiting and retention challenges that are unique to CIRM and that reduce the pool of talent available to the Institute. These include:

CIRM’s inability to offer tenured positions to any of its employees. All CIRM staff are at-will employees and can be terminated at the discretion of the President, which is a strength of the Institute but a liability for individual employees.

CIRM’s anticipated life-span is 10-14 years, which rules out the possibility of a longterm career track that is available for many civil service positions in the UC system.

"Due to CIRM’s projected limited life span, the Defined Benefit Plan (a traditional pension plan) is not perceived to be of significant value by staff members who will presumably have left the organization by the time they reach retirement age.

"The Defined Benefit Plan dictates a five-year vesting schedule, which is unattractive if the employee is with CIRM for a limited time period.

"CIRM has a defined contribution plan (e.g. 401K & 457) not supplemented with employer contributions.

"CIRM’s Conflict of Interest policy limits an employee’s ability to engage in outside opportunities to earn additional income through consulting and/or holding investments in organizations that can benefit from CIRM’s programs, including a requirement that employees divest themselves of any investment in a company that devotes more than 5% of its research budget to stem cell research.

"CIRM, unlike many of CIRM’s academic competitors, does not offer housing allowances, which is a significant challenge when relocating prospective staff to the Bay Area with its high cost of real estate and living.

"CIRM does not provide a long-term career path or advancement for staff within CIRM due to the limited number of positions defined by law to be within CIRM’s structure. Promotion can come only when existing staff members leave.

"Given our statutory inability to recruit a large number of new staff, CIRM employees need to be flexible and willing to transfer skills to support CIRM’s overall operating goals, which may go beyond bench-marked job descriptors gained from larger established institutions.

"Staff members need to be willing to be cross-trained as CIRM’s needs develop.

"As part of their job descriptions, CIRM employees need to be able to work “out of the box” in that they are to interact with institutions arround the world to ensure positive international relations."

The proposed changes in pay come up at next week's Oversight Committee meeting. No information on the specifics is yet available on the CIRM web site.

Correction

The "CIRM Perspective" item below incorrectly stated that the increase in the staff in the chairman's office was from four to 12 positions. The correct increase is from four to eight positions.

Limos, Red Flags and Perception

The California stem cell agency is excising the word "limousine" from its new travel and expenses policy after one director warned that it was a "red flag."

The action came at a meeting Monday of the Governance Subcommittee of the directors of the $3 billion research effort.

The subcommittee was reviewing a new travel policy aimed at dealing with some of the concerns of the California state auditor, who last year questioned lunches that cost $36, dinners that cost $65, pricey air travel and chauffeured limos, which the auditor said that CIRM preferred to describe as "large-sized vehicles" with hired drivers.

As prepared for the Governance Subcommittee, the new policy, which applies to directors, staff, out-of-state members of CIRM working groups and job candidates, permitted the use of limousines from airports and railroad stations.

Sherry Lansing(see photo), former head of a Hollywood film studio and chair of the Governance Subcommittee, said, "Limousines should be used only in extreme conditions because you can almost always get a cab." Claire Pomeroy, another member of the subcommittee and dean of the UC Davis medical school, said that the use of large rented cars with drivers "raises lots of red flags."

James Harrison, outside counsel to CIRM, said the policy would be revised to remove the word limousine when it comes before the full Oversight Committee next week. However, it appears that use of rental cars with drivers will be permitted under some circumstances. Robert Klein, CIRM chairman, suggested that "sedan service" be permitted when there is a necessity for speed or bad weather conditions exist.

Some subcommittee members noted that sedan service can be less expensive than cabs in some situations.

Lansing and Pomeroy are correct, however. The use of limousines at taxpayer expense is not something that sits well with the general public. Especially when the governor has just announced he will propose a budget that will hurt many groups, including AIDS patients, the poor and the elderly and slap a tax on renters, homeowners and business owners who buy property insurance.

No matter that the amounts for rental of "sedans" are relatively trivial. No matter that the money would not make even a dimple in the state budget crunch, even if the governor could lay his hands on the money, which he can't, thanks to Prop. 71. It's all about symbolism and perception and maintaining CIRM's reputation.

CIRM's Perspective on Staffing in Klein's Office

Robert Klein, the chairman of the $3 billion California stem cell agency, has taken issue with our piece on Friday entitled "CIRM's Klein Beefs Up Staff."

Ellen Rose, interim chief communications officer for the agency, sent along the following perspective today from agency after we discussed last Friday's item with both her and Klein on Monday.

"As you know, the board approved a new organizational chart in December that includes an increase from 4 to 8 people in the Office of the Chair and Vice-chair. We realized that it is not feasible to accomplish all of the responsibilities of the Office as outlined in Prop. 71 with just 3-4 people.

"During the next 1 to 2 years, CIRM will undertake two major, first-of -their kind funding programs - the Biotech Loan Program and the tax exemption status for the bonds - that involve up to $2 billion in value. Clearly, these are hugely complex and important funding programs and having the appropriate staffing and expertise in the Office of the Chair, which is tasked with their management, is necessary for successful development and execution of these programs. In addition, the Office of the Chair is responsible for intellectual property negotiation in the contracts for the Biotech Loan Program.

"The other increase in headcount is because Government Affairs has been transitioned back into the Office of the Chair. Prop. 71 calls for this function to reside there as part of the Chair's overall responsibility around interaction and education with government (CA Legislature, US Congress, and others), healthcare providers, the public, disease advocacy groups, and other key constituencies.

"Finally, as I mentioned yesterday, we will also increase the administrative help in the Office of the Chair because we want to facilitate more timely dissemination of materials to the public."

For those interested in reading more on this subject, here are some pertinent links:

Our item last year on the cutbacks in the chairman's office.

The old management structure presented to the Oversight Committee last March, which stipulated no more than four staffers in the office of the chair, which includes the vice chair.

The new management structure approved last month, which raised the number of staff from four to eight.
The organizational chart approved last month.

(An earlier version of this item incorrectly stated that the increase in the staff in the chairman's office was from four to 12 persons.)

Correction

On Jan. 4, in an item called "Klein Beefs Up Staff," we incorrectly reported that CIRM's chief communications officer reports to both the president and chairman of CIRM. Under the organizational chart approved last month, the communications position reports directly to the chief operating officer with dotted-line links called "access" by CIRM to the president and chairman.

Limos, Meals and More at CIRM

Ten months ago, the California state auditor took the California stem cell agency to task for sloppy bookkeeping and excessive travel and meal expenses.

The auditor found fault with lunches that cost $36, dinners that cost $65, pricey air travel and chauffeured limos, which the auditor said that CIRM preferred to describe as "large-sized vehicles" with hired drivers.

CIRM moved quickly to clean up its procedures for its staff. But the problems identified by the auditor involving CIRM directors remain uncorrected. Today, however, the director's subcommittee on governance will take a crack at a new travel policy for both directors (members of the Oversight Committee) and staff.

In at least one regard, the proposed new policies appear to roll back one of the changes backed by the auditor: elimination of the use of chauffeured cars. Whether the policies meet the auditor's standards in other areas is difficult to tell, but the complex documents contain ample flexibility, which some might call loopholes.

Normal limits on per diem expenses could be waived for foreign travel in the case of "a special event or function, e.g., a national or international sports event." First class air travel could be possibly permitted in the case of "unduly long layovers" or in the case of undefined "medical needs." And the use of limos would be permitted to and from an airport or railroad station.

The proposed travel policies to be considered this afternoon were not posted until late Friday on the CIRM web site. Missing were two important documents that should have been created in formulating the new rules. One would show how the new policy meets the problems detected in the audit last year. Another would show how the proposed CIRM policy diverges from the University of California travel policy on which it is based(another issue in the audit). A possible third document would show how the new policy is changed from the existing policy and how the proposed staff and director policies diverge from each other.

The state auditor did not wait until her report was published in February of last year to tell CIRM about some of the problems she had detected. Former CIRM President Zach Hall dealt early on with many of the issues involving staff. But as for the travel policies for CIRM directors, the audit stated, "According to the institute president, institute staff did not presume to suggest a policy for the committee." Dealing with those is the responsibility of Chairman Robert Klein.

In terms of raw dollars, the amounts involved in CIRM travel and expenses are piddling compared to its whopping multimillion dollar grants, probably not more than a few hundred thousand dollars although details cannot be found in the latest CIRM budget documents. But talk of chauffeured limos and $65 dinners does not sit well with the public or the media. Few persons can understand what $1 billion means. It is much easier for your average Californian, who is paying $4 a gallon for gas in some locations, to grasp a vision of limos and luxury lunches – an image that does not serve CIRM well.

(Editor's note: Some of the rules for expenses are linked to a "business meeting expenditure policy" that is yet to be approved or posted on the CIRM web site.)