Bean Town Perspective: California Still Waiting for Stem Cell Results

The Boston Globe looked at California this morning and said the $3 billion stem cell research effort in the Golden State is a "lesson" and a "reality check" for Massachusetts.

Reporter Tod Wallack wrote that three years after the creation of CIRM, "Californians are still waiting for some results."

He continued,

"'It's too early,' said Alan Trounson, president of the California Institute for Regenerative Medicine, the agency charged with administering the stem cell funds. 'There are very few substantial developments [in medical science] that have happened in less than 25 years. There have been some, but they tend to be rare.'"

Wallack also noted the conflict of interest problems at CIRM, although he mistakenly reported:

"The stem cell agency rejected several applications for grants because they contained letters of support from advisory board members."

Those letters were written by members of CIRM's board of directors (medical school deans) who are prohibited by CIRM policy from writing such letters. The board is far from an advisory group. It makes the decisions on who receives grants.

The Boston piece downplayed the impact of CIRM's efforts, perhaps a reflection of a parochial East Coast perspective. Pumping money into stem cell research at the rate of $20,000-plus an hour, however, is no small achievement, even though it does not measure up to the perceptions created by the campaign rhetoric surrounding Prop. 71 more than three years ago.

Margolis: Beware the Embryonic Cheerleaders

The Stem Cell Blog run by Stanford's Chris Scott carried an interested commentary the other day from Don Margolis, founder of the adult stem cell company, VesCell, who tackles some of the issues related to reprogramming of adult stem cells.

Among other things, Margolis invokes cancer, criticizes "embryonic cheerleaders" (presumably not unborn pom-pom girls) and attacks "censorship" of those who differ with the heralds of hESC.

Margolis also hails the "refreshing" honesty of such folks as Jamie Thomson, George Daley, Doug Melton and Shinya Yamanaka. You can find the piece here.

Tackling Stem Cell Collaboration

Last week, the Mission Bay conference center at UC San Francisco was the scene of a meeting to discuss issues related to stem cell research. We asked one of those involved in organizing the event, Krishanu Saha, to give us a summary of the session. Here is Saha's report.

"In a successful workshop on Feb. 6 organized by the Berkeley Stem Cell Center and the Berkeley Science, Technology and Society Center, scientists, lawyers, ethicists, academic leaders, and patient advocates across California and the US gathered in San Francisco to discuss collaboration in stem cell research (see the "research roadblocks" item on Feb. 2).

"The morning consisted of three panels that described the problems in three interacting domains - the technical, proprietary, & ethical - of California's stem cell research climate. The need for sharing data on stem cell lines themselves was raised by a panel of practicing scientists, and later echoed by panels of intellectual property experts and ethicists.

"Intellectual property in stem cell tools was debated by both members of academia and industry, especially in regard to CIRM's policy. Legal experts and ethicists detailed the challenges of practicing within a patchwork of regulations across states and with tissue/cell donors.

Patient advocates and industrial leaders stressed their involvement in developing better healthcare during lunch, and in the afternoon, discussion shifted to how institutions could collaborate to deal with the problems laid out earlier. Both within stem cell research and other life sciences, several models of collaboration across states, academic institutions, and hospitals were discussed in an open forum.

"Participants agreed that there was a clear need for collaboration among stem cell research institutions and that California institutions will likely be intensely involved. Creating a database among institutions was seen as a potentially feasible first step, however further conversations will be necessary to determine the membership, costs, incentives, and types of data to include.

More information, including an important policy paper regarding this issue and a summary of the workshop, can be found at http://stsc.berkeley.edu/Events/2008StemCellResearchFeb6.htm.

Arnold Involved in CIRM Legal/PR Strategy?

CIRM documents in the Remcho/Rubenstein PR "laundering" affair suggest that the office of California governor Arnold Schwarzenegger may have been involved at one point – or that somebody connected to either the agency or Rubenstein wanted to engage the governor's aides.

An Oct. 15, 2006, email from Patrick Smith, executive vice president of Rubenstein Associates, to Richard Murphy, interim CIRM president, concerning a conference call about the Monash investigation in Australia contained this sentence:

"Do you (Murphy) want to include someone from the governor's office?"

It was not clear from the 54 pages of documents concerning Rubenstein's business with CIRM what generated that reference. Normally the governor's office does not become engaged in legal or PR strategy sessions of state agencies unless something exceptional is taking place.

It also was not clear from the documents whether gubernatorial aides actually did assist in CIRM's discussions.

We asked Smith what generated the mention of the governor's office in his email and whether the governor's aides became involved. Here is Smith's response verbatim:

"We do not discuss client matters."

We are querying CIRM and the governor's office about the matter.

New Comment

"Anonymous" has spanked yours truly in a fresh comment on the "laundering PR advice" item below. You can read it by clicking on the word "comments" at the end of the item.

Rubenstein Responds to 'Laundering' Charges

We asked Patrick Smith, executive vice president of Rubenstein Associates, for a response on "laundering" charges made below by the Foundation for Consumer and Taxpayers Rights. Following are the questions and his verbatim response.

"Do you think it is appropriate for your firm to 'launder' its advice to governmental agencies through the agency's attorneys? Is this common practice for your firm? Is it a good PR strategy for your client to engage in such surreptitious maneuvers? What is the nature of the contract that CIRM reports it is negotiating with your firm? Does your firm have any links with Rubenstein Public Relations? Please feel free to add any additional information that you think is appropriate."

Smith's response:

"Given the tone of your questions, which assume a negative before you have determined the fact, one wonders if this is a wasted effort. It is not uncommon in situations such as this for law firms to retain p.r. Counsel to ensure that any public statement or action is coordinated with the legal strategy, especially when a confidential investigation is involved."

"Laundering" PR Advice at $3 Billion California State Agency

The California stem cell agency has hired a prestigious New York City PR agency and, according to one watchdog group, has "laundered" its PR advice through lawyers in order to avoid public scrutiny.

The firm is Rubenstein Associates, whose founder, Howard Rubenstein (see photo from the firm) has been described as the "godfather of New York PR." The firm's clients include Super Bowl Champions New York Giants, the New York Yankees, Bloomberg LP and Pfizer.

The Foundation for Taxpayer and Consumers Rights disclosed on Thursday the $10,000 contract with CIRM's outside counsel. The FTCR said that some of the details of Rubenstein's work can be found in 54 pages of CIRM records that the FTCR secured as a result of a public records act request.

The group said,

"The stem cell agency used the tactic (of routing the contract through an attorney) to claim legal 'confidentiality' on public relations strategies...."

The watchdog group said,

"Eight of the 54 pages, which seem to be about specific advice on handling the news media, were redacted because they are 'documents exempt from disclosure on the grounds of attorney-client privilege and attorney work product,' according to Tamar Pachter, general counsel for the stem cell agency."

John M. Simpson, FTCR stem cell director, said,

"'What they've done is launder the public relations advice to a state agency through their outside attorney, Remcho, Johansen & Purcell. Once again the leadership of the California Institute for Regenerative Medicine has shown concern about image, rather than substance, and a continued commitment to secrecy."

Ellen Rose, a spokeswoman for CIRM, said,

"Rubinstein's advice was sought in relation to the news items that appeared in the Australian Herald-Sun about a researcher under investigation for improprieties who worked in the stem cell laboratory run by CIRM's incoming President Dr. Alan Trounson. There was no suggestion that Dr. Trounson was under investigation or involved in any wrongdoing.

"Rubenstein was hired because at the time, CIRM had no communications officer to provide advice and research on the Australian articles and related legal matters. They were hired via our outside attorney because the confidential investigation taking place in Australia may have had legal ramifications for CIRM and knowledge about what was taking place in this area was important for CIRM legal counsel to understand."

The initial, documented overture to Rubenstein came on Oct. 12 last year. However, Bob Klein, chairman of CIRM, has been quoted as saying the Australian investigation was known to CIRM as early as sometime in September or perhaps even August, long before CIRM's former communications director had left.

The practice of using attorneys to cloak certain matters is not entirely uncommon, at least with Rubenstein. Howard Rubenstein told the New York Times in 2006, in connection with celebrity scandals, that if they involve any sort of illegality, he advised "hiring a lawyer who could sit in on meetings, thus giving both star and publicist the benefit of attorney-client confidentiality."

However, this a matter involving a public agency, public dollars and public trust – not some troubled Hollywood personality. The amount is picayune compared to CIRM's overall spending; it gave out grants last year at a rate exceeding $20,000 an hour. But concealing relatively innocuous PR advice can only lead to speculation about what other, more important matters are being hidden because of CIRM's unnecessary desire for secrecy.

Also an issue for concern is the FTCR disclosure that CIRM is currently negotiating another PR contract with Rubenstein. Rose says, however, that it would be with CIRM directly. But given the dubious nature of the Remcho/Rubenstein arrangement, any further dealings with the New York firm would seem to require special scrutiny.

We have queried Rubenstein concerning their views on concealing PR advice to government agencies behind a legal veil. We will carry their comments when we receive them.

You can read reporter Steve Johnson's story in the San Jose Mercury News on the contract here.

Correction

In the "research roadblocks" item on Feb. 2, we incorrectly described one of the sponsoring groups as the UC Berkeley Stem Cell Center. It is correctly called the Berkeley Stem Cell Center, which is a collaboration of UC Berkeley, Lawrence Berkeley National Laboratory and Children's Hospital Oakland Research Institute. Thanks to Lily Mirels for pointing this out.

Klein's Role in Raising Matching Lab Grant Funds

Attention lab grant applicants: Bob Klein wants to give you a hand in raising matching funds to help you secure millions of dollars for your project. Just give him a call.

Klein, as most of you know, is chairman of the agency that this spring will be giving away $262 million for new stem cell lab construction. He is also one of the 29 members of the CIRM Oversight Committee that will ultimately decide which of the lab grant applicants will receive cash to build their projects.

One of the criteria for receiving a multimillion dollar grant from CIRM is a requirement for matching funds – the more dough you can bring to the table, the more competitive will be your application.

Last month we asked Klein about scuttlebutt that he was assisting some applicants in raising matching funds. Basically he said yes, but noted that he is not dealing with any of the specifics of the applications – just helping to raise funds.

He said that one of his roles as chairman of CIRM is to raise funds for stem cell research. He said that if potential donors for a lab grant project call him concerning matters of public record, he has been willing to speak with them. Of course, he noted he is prohibited from discussing the application itself.

We asked him if all applicants knew that he was available to help in raising matching funds. He pointed to the transcript of the Facilities Working Group in November in which he indicated he was willing to assist. He said all applicants have been told to read the transcripts of the facilities group.

Klein said his goal is to raise as much money as possible so that all the applications can be approved. He also said that some applicants with large amounts of resources may be asked to reduce the amount of money they are seeking so that all applicants can be funded.

Obviously, Klein's assistance raises questions about fairness. Are all applicants aware that he is available to assist? He said he may notify them. Is it appropriate for a member of the Oversight Committee to be so directly involved with applicants that he must later sit in judgment on? Klein said his overriding concern is to raise funds for stem cell research and help develop cures for millions.

Here is the text of the November transcript that Klein cited. It came during an exchange with a CIRM attorney, who affirmed that Klein's comments below were correct.

"I previously talked to various members of this, chairman and vice chairman, I think, and/or other members, to make sure that we were considering the fact that there may be donations from donors who come to us. And those donors who are related to some applicant who has publicly on file an application, while we can't talk to the donor about the application, the donor can ask us to see the history, which is a public record, of what grants have been approved for that institution or other historical information related to that institution.

"So the point is we can't talk to the institutions about their applications, but it's my understanding that doesn't mean we can't answer questions as to publicly available information of donors who want to know about the particular institution where we have a public history of making grants that we can point them to."

Biotech Loans: Industry Reaction, 30-40 Percent Failures, IP Qualms

The California stem cell agency's ambitious program to loan as much as $750 million to stem cell companies is the subject of a lengthy feature today by Terri Somers in the San Diego Union-Tribune.

The story is new to her readers so she covered a lot of ground familiar to readers of this blog, but she reported some additional details and comments from several biotech executives. Her story also carried some caveats from one watchdog and a member of the CIRM Oversight Committee.

Comments from industry were generally favorable. William Adams, chief financial officer of International Stem Cells in Oceanside, said,

"From our perspective, if we can pick up a loan for $2 million to $5 million, that helps us get a product into (clinical trials) and helps push us along to commercialization."

Also quoted were Samuel Woods, president of Stemagen in La Jolla, Alan Lewis, chief executive of Novocell, a San Diego-based embryonic stem cell company, and William Caldwell, chief executive of Advanced Cell Technology, now headquartered in Los Angeles.

John M. Simpson of the Foundation for Taxpayer and Consumers Rights, however, was critical of initial suggestions that loans would not carry the same affordability and access requirements as grants.

He said,

"This is an end run around that carefully deliberated policy and that is outrageous."

Jeff Sheehy, a member of the CIRM Oversight Committee, said he was concerned about the ability of the 26-person CIRM staff to administer a loan program.

"I don't think we have the capacity to evaluate and manage these kinds of things."

The loan program is the brainchild of Robert Klein, chairman of the agency. He downplayed concerns about administering the program.

"So we could do the scientific review, but have a delegated underwriter who essentially can, in fact, be in a risk sharing position. Under a risk sharing agreement, for example, that delegated underwriter might get a part of the upside on the repayment of the loan, including a part of the interest revenues."

Somers' report on the Internet carried one skeptical comment from a reader, "Gary63," who wondered about predicted loan failure rates of 30 to 40 percent. He said,

"Stay glued to this story...and follow the taxpayers' money."

More on Wednesday's session on Stem Cell Research

If you are interested in attending the session noted below on stem cell research issues, the organizers are asking you to preregister. You can do that by emailing Joe Tayag at jtayag@berkeley.edu.

Exploring Research Roadblocks and Cooperation

Intellectual property bottlenecks, data withholding and regulatory complexity involving embryonic stem cell research – all are part of a daylong meeting next Wednesday at the Mission Bay Conference Center of UC San Francisco.

Speakers include Bob Klein, chairman of the California stem cell agency, and its new president, Alan Trounson. Others include Jeanne Loring, director of the Center for Regenerative Medicine at the Scripps Institute; Jonathan Auerbach(see photo), president of GlobalStem in Maryland, and Michael West, CEO of Biotime in California, plus a host of academics.

The session is aimed at exploring a collaboration among various institutions to improve research sharing and cooperation.

Here is an an excerpt from a paper prepared in advance of the meeting. The authors are Krishanu Saha, Gregory Graff and David Winickoff, all of UC Berkeley.

"The technical, proprietary, and regulatory conditions currently giving shape to stem cell R&D are far from ideal: closed information, congested entitlements, and regulatory uncertainty present formidable challenges for the conduct of research and its translation into practical applications. Such an environment is likely to slow the pace of innovation, skew the distribution of health benefits towards the wealthy, and force ethical decision-making that lacks public accountability.

"Here we propose an institutional mechanism to coordinate the conduct and governance of human stem cell R&D: a collaboration among academic institutions to collect and make available information detailing the technical, proprietary, and ethical characteristics of cell lines and research tools developed at participating institutions. Centralization would help promote more efficient transfer and use of available and ethically preferential technologies. The coalition could also leverage the collected information to assemble and disseminate complex enabling research tools under common material transfer agreements or patent pools in those cases where multiple patents are necessary but are fractionated across multiple owners."

The session, which is sponsored by the UC Berkeley Stem Cell Center and the Science, Technology and Society Center, also at UC Berkeley, appears to be open to the public with no admission charge.

'California Has Changed Everything'

Christine Vestal at Stateline.org has prepared an excellent and timely overview of funding for human embryonic stem cell research, which was obviously in the works prior to the president's speech earlier this week.

California receives a fair amount of attention, but she provides a good update on efforts in other states and at the national level as well.

Here is an excerpt dealing with the Golden State:

"'California changed everything,' said Bernard Siegel, founder of the Genetics Policy Institute, a non-profit stem cell advocacy group. 'No state wanted to see their best scientists pick up and move to California,' he said. As Gov. Arnold Schwarzenegger (R) predicted when California voters approved their landmark 2004 ballot measure authorizing the stem-cell investment, the message has gone out to 'the world’s scientific elite and aspiring students that, in California, you will find the resources and the freedom to expand the frontiers of science.'

"Now that grant money is flowing, the California Institute of Regenerative Medicine (CIRM) reports it has wooed more than two dozen of the world’s top stem-cell scientists, including Japanese scientist Shinya Yamanaka, who lead the most recent skin-cell discoveries at the University of Kyoto. Yamanaka accepted a state grant in August 2007 and began working part-time in San Francisco to avoid stem-cell restrictions in Japan."

Snippets: Stem Cell Lending to Pizzo Profile

Biotech Loan Program – Coming up Feb. 19 is another CIRM hearing on its ambitious plans for a biotech loan program. This session will be in La Jolla with a teleconference link to San Francisco. If you want to take part in developing the criteria for the effort, which is the brainchild of California stem cell chairman Robert Klein, you should plan on attending or at least sending comments to CIRM. The program could total as much as $750 million, according to Klein, and is aimed at financing development of stem cell therapies in cases where conventional financing is not available. The schedule also calls for a presentation on the plan to the Oversight Committee at its March meeting.

Bush v. CIRM -- The California stem cell agency's statement concerning President Bush and his comments this week regarding stem cell research stirred a mini-debate on a bioethics blog run by Los Angeles physician Maurice Bernstein. You can find the exchange here.

Pizzo Profile – The Fordham alumni magazine carried a nice profile of Philip Pizzo written by Carl Hall, who has covered stem cell issues for the San Francisco Chronicle. Pizzo (see photo from Stanford) serves on the CIRM Oversight Committee and is dean of the Stanford School of Medicine. Among other things, the piece says:

"Even some of the most persistent critics of the California stem cell enterprise credit the value of Pizzo’s steady ethical compass during debate over public oversight and financial standards. While other members of the stem cell governing board filed lengthy financial disclosures, including a fair share of monetary ties to biomedical concerns, Pizzo’s declaration was essentially a blank slate: He steers well clear of any entangling investments, a pattern that can be traced back to his days at the National Institutes of Health (NIH), where he was head of the infectious disease section of the National Cancer Institute from 1980 to 1996."

The piece appeared in the summer issue but we ran across it only recently.

A View from the East

For another perspective on the California Stem Cell Report and whether it follows the party line of the California stem cell agency, curious readers can take a look at the Ipbiz blog produced by Larry Ebert in New Jersey.

On Tuesday, Ebert described this report as a "fantasyland." Today he suggested the report was something of a tool of California's stem cell agency.

California patient advocate Don Reed also weighed in. His comments are contained at the end of the Tuesday item.

Investors to Bush: We Like hESC

While the current president is reiterating his opposition to human embryonic stem cell research, investors are beginning to look to the future.

We have reported previously that the prospect of a favorable presidential change has eased some of the fears of stem cell investors. One further sign is the announcement today that UBS Investment Research upgraded Geron Corp. of Menlo Park, Ca., from neutral to a buy recommendation on its stock.

Thomson Financial reported the move and said,

"'We think Geron could be an attractive U.S. presidential election year play, given that any change in the current administration is likely to create a more favorable environment overall for stem cell research efforts and funding,' said analyst Graig Suvannavejh.

"Suvannavejh also pointed to positive near-term catalysts such the filing of an investigational new drug application for Geron's stem cell therapy for spinal cord injury and an update on the company's partnership with Merck for telomerase-based vaccines."

Geron hit a 52-week high of $9.85 last May and a low of $4.40 last week. At the time of this writing, it was trading at $5.16.

Hawgood Joins CIRM Directors

The California stem cell agency has its second Aussie on board, Sam Hawgood, who joined CIRM's Oversight Committee at its meeting in Burlingame earlier this month.

Hawgood (see photo) replaces David Kessler, the former dean of medicine at UC San Francisco, on the Oversight Committee. Kessler was fired as dean in December and could no longer serve on the Oversight Committee. California law states that the Hawgood/Kessler position must be filled by an executive officer from a UC campus with a medical school. The appointment is made by the chancellor at UC San Francisco.

Hawgood emigrated from Australia in 1982. Another Australian, Alan Trounson, was named last year as president of CIRM. Here is part of what UCSF had to say about Hawgood at the time Kessler was fired.

"Hawgood was named chair of pediatrics in 2004 and physician in chief of UCSF Children’s Hospital, one of the nation’s top children’s hospitals. He also has been instrumental in laying plans for construction of a new children’s hospital at UCSF Mission Bay. He is currently president of the UCSF Medical Group, which represents more than 900 physicians at UCSF."

Neither CIRM nor UCSF issued a news release on Hawgood's appointment nor does the CIRM website yet contain any biographical material on Hawgood.

CIRM To Bush: Harmful and Wrong

The California stem cell agency is accusing President Bush of distorting facts and performing a disservice to millions of Americans who suffer from chronic diseases and injuries.

The agency said Bush intends to "further limit" research into human embryonic stem cells.

The CIRM statement is contained in a press release on its web site that concerned Bush's speech Tuesday night. Interestingly, the CIRM statement is not attributed to either Bob Klein, chairman of the agency, or its new president, Australian stem cell researcher Alan Trounson. In the past, statements such as this have been linked to either the president or chairman.

Here are excerpts from the release followed by the two paragraphs from the president's speech.

"President Bush distorted the scientific facts on stem cell research and did a disservice to the millions of patients suffering from chronic disease and injury for whom stem cell research holds great promise for future therapies and cures."

"The President’s proposals to further limit medical research in this area fail to take into account the intricate realities of the state of stem cell research. Indeed, the recent advances in which skin cells were induced to become pluripotent would not have been possible without research involving human embryonic stem cells."

"Therefore it is critical that all avenues of stem cell research be aggressively advanced. To do otherwise would increase the already devastating restrictions that have burdened Federal support of stem cell research and patients who are depending upon it. This Administration’s position on stem cell research has already cost years in lost research productivity. Further restrictions would result in more lost time in developing stem cell based therapies and cures that hold great promise to alleviate suffering for the most destructive and costly diseases such as spinal injury, loss of sight, heart muscle injury, Parkinson’s Disease, ALS and diabetes."

Bush's comments:

"On matters of life and science, we must trust in the innovative spirit of medical researchers and empower them to discover new treatments while respecting moral boundaries. In November, we witnessed a landmark achievement when scientists discovered a way to reprogram adult skin cells to act like embryonic stem cells. This breakthrough has the potential to move us beyond the divisive debates of the past by extending the frontiers of medicine without the destruction of human life.

"So we're expanding funding for this type of ethical medical research. And as we explore promising avenues of research, we must also ensure that all life is treated with the dignity it deserves. And so I call on Congress to pass legislation that bans unethical practices such as the buying, selling, patenting, or cloning of human life."

Coming Up

After a brief hiatus traveling through Arizona and New Mexico, we are back in Romantic Old Mexico where we are performing romantic boat chores (fiberglass work, installing 400 pounds of batteries and repairing a diesel engine). All of which is preparation for dropping the boat back in the water(currently she is on jackstands in a boatyard, which has four huge, red silos of fish oil as its centerpiece). Later today we will be posting some fresh items on this site. We hope all of you can withstand the suspense.

Coverage of the Cloning of the Cells of Sam Wood

While CIRM was advancing its $262 million lab grant program this week in Burlingame, about 490 miles to the south in La Jolla, a tiny firm called Stemagen was making international headlines with its news about cloning human embryos.

Terri Somers of the San Diego Union-Tribune had one of the first stories on the matter. The paper also had a piece by Sandi Dolbee on the ethics of the issue. The blog of the American Journal of Bioethics has a roundup of links to coverage elsewhere.

The Center for Genetics and Society in Oakland also raised questions about the propriety of the research, which involved the cells (see Stemagen photo on right) of Stemagen's president, Samuel Wood (see Stemagen photo on left) and an anonymous investor in the firm.

Whatever your take on this, along with all the other news on stem cell research in the last few months, it will generate substantially more attention on the field from investors, scientists, supporters and foes.