Sailing Time-Out for Blogger

We are setting sail Saturday morning from Guaymas for Mazatlan and will be at sea for several days. So we will not have any fresh postings until late next week.

We have been on the hard, as the maritime term goes, for far too long, performing unpleasant but necessary boat maintenance chores. It is great to be back on the water.

'Doing It Right,' Cerberus Simpson Says

Both the California stem cell agency and the Interstate Alliance on Stem Cell Research have come in for some praise from Consumer Watchdog's John M. Simpson, who has followed California stem cell issues closely for several years.

Simpson, who was once thrown out of a meeting of the interstate group, lauded it for an early posting an agenda for its meeting April 9-10 in Washington. He also remarked that CIRM has done better recently on posting materials for some of its meetings. He particularly cited Rick Keller, senior officer for Scientific and Medical Research Facilities.

Writing on the Consumer Watchdog's blog, Simpson said,

"Public policy should always be made in public. And the public must have timely advance access to what's being discussed. That's how policy-makers actually build true support for their actions. Perhaps after a few -- sometimes less than gentle -- nudges from folks like me that message is getting across in these two cases."

Bravo on Timely Posting of Lab Grant Documents

The California stem cell agency today posted on its web site the staff analysis and other key documents in its $758 million lab grant construction program, a full week ahead of their scheduled public review.

Congratulations to CIRM and its tiny staff for the timely posting. It well serves the agency, interested parties and the public, providing ample time to review the complex documents and prepare comments, if so desired. Posting and preparing the material is no small task. The documents are large and intricate. And no one wants to make mistakes.

In addition to the staff analysis of the applications, the newly posted material includes lab planner's evaluations and applicant comments. The applications in CIRM's single largest round of grants will be evaluated at a two-day session of the Facilities Working Group in San Francisco, beginning next Friday,

CIRM Seeking IP Lawyer and Presidential Consultant

Attention IP attorneys and anybody – almost – who wants to tell the president of the California stem cell agency what to do.

CIRM is looking for a couple of people to come to its assistance on a temporary basis. The IP gig is part-time for six months for $150,000. The consultant to the president is scheduled for only four months fulltime for $80,000.

The IP position caught our eye for several reasons. One is that it lists an hourly rate of $150, rather low for a 15-year veteran of the biotech/IP field, which is the experience level that CIRM seeks. Another curiosity about the position: An hourly rate of $150 for 20 hours a week for about six months weeks amounts to $78,000, somewhat less than the $150,000 allotted for the job. The RFP also requires the winning bidder for the contract to cover his own "personal and business" expenses within that rate, except for "additional expenses, incurred at CIRM's direction."

The RFP highlights the nature of the legal work and management structure within CIRM, and not just because the agency is treading new ground on IP. The agency has a general counsel, who one might think would oversee the entire legal staff. However, virtually since its inception, CIRM has signed on with Remcho, Johansen & Purcell of San Leandro, Ca., for legal advice at a cost of more than $1 million.

While the reporting lines are not entirely clear, Remcho's James Harrison seems to be directed primarily by Robert Klein, the CIRM chair. On CIRM staff is attorney Scott Tocher, who once appeared to report to the president of the agency but now has been moved under Klein's control. Tamar Pachter, the general counsel, reports to President Alan Trounson via the chief operating officer. The new legal "temp" will report to Trounson and "coordinate" with the general counsel.

We ran the RFP by one observer who is knowledgeable about CIRM and IP work. That person confirmed that the hourly rate was at the low end and also indicated that the RFP was unclear about whether a firm or person was desired. Our observer also said,

"If the contract is not renewed, the attorney has still been paid to become one of the world's leading experts on stem cell IP, funding and commercialization. There is a good chance that this new-found expertise will lead to job opportunities with law firms, companies, non-profits, universities, etc. Even a law firm might be willing to discount its rates heavily to get this work to establish itself as a player in this field."

The RFP for the presidential consultant seeks a scientific professional (Ph.D.) with 15 years experience. In addition to a wide range of advice, the RFP indicates the person will be asked to develop "alternative resource opportunities for increased flexibility and productivity of CIRM research and clinical applications."

Both positions were posted just last week under "CIRM RFPs" instead of the job listings on the CIRM site. The deadline for applications is April 1 with work beginning shortly thereafter. Given the short time frame, it is likely that CIRM has candidates in mind for both positions.

CIRM is also seeking to fill the IP position permanently through its job listings. Other open positions include finance officer, scientific officer, senior administrative coordinator and communications manager.

Fresh Comment

In a new comment on the "CIRM Legislation" item below, Don Reed discusses his role as vice president of public policy for the Americans for Cures Foundation and his comments on CIRM matters.

Rabble, International Meetings and CIRM

The Consumer Watchdog group says the real problem with the International Stem Cell Forum last month did not necessarily involve CIRM's reluctance to provide cost estimates.

Instead, it involves keeping the rabble out of the meeting at a luxury San Francisco hotel.

The remark comes from John M. Simpson, who was writing on the new blog of Consumer Watchdog, which was formerly known as the Foundation for Taxpayer and Consumer Rights.

Commenting on our item below, Simpson, stem cell director of the group, says,

"What really is of major concern, though, is the fact that these meetings were closed. Supposedly the reason for that is that the ISCF is administered by the UK's Medical Research Council. The ISCF chairman is Sir Leszek Borysiewicz, chief executive of the Medical Research Council (UK). Apparently the scientists on the other side of the Pond just assume the rabble ought not be let in behind the closed doors of their scientific clubs when meeting.

"CIRM did call a late afternoon telephonic news conference -- about the worst time for any working reporter on a deadline -- only to delay the announced start by half an hour. Then when reporters called in at the newly appointed time, they were kept on hold for at least 20 more minutes."

Simpson says the amount spent does not seem unreasonable, a judgment with which we concur.

CIRM Releases Cost on International Stem Cell Forum

The California stem cell agency hosted the International Stem Cell Forum in San Francisco last month, which involved representatives of the leading stem cell research organizations in the world.

CIRM ballyhooed the event with a news release, and prior to the meeting, we asked for an estimate of the cost to CIRM. The agency declined to provide an advance estimate and said that the costs would include "paying for the meeting room at the hotel where the meeting is taking place as well as the audio visual set up and possibly some things like copies. We are also paying for 2 dinners (but not alcohol)."

In response to our queries, Don Gibbons, chief communications officer for CIRM, this afternoon reported that the cost totalled $25,912.

Tribulation for Love and Harrison

Last week did not bring the best news for two California stem cell personages – CIRM Oversight Committee member Ted Love and the agency's outside counsel, James Harrison.

According to The Associated Press, Love, who is CEO of Nuvelo of San Carlos, Ca., had the unpleasant task of cutting 40 positions out of his workforce, which is 14 more than the total at CIRM. The reason? The biotech firm is dropping "its troubled blood-thinner alfimeprase after it failed another study," The AP said. The move will cost the company about $3 million during the first quarter.

Attorney Harrison lost a big one with California's official state political watchdog, the Fair Political Practices Commission.

According to reporter Aurelio Rojas of The Sacramento Bee, one of Harrison's clients, Sen. Carole Migden, D-San Francisco, agreed to pay a record $350,000 fine for "personal use of campaign funds and inaccurate disclosure of cash payments and receipts between 2003 and 2007.

Harrison, who told us that Migden is a longtime client of his firm, attributed the violations to inadequate record keeping by her former campaign officials.

The Bee also said:

"During the FPPC's months-long investigation, the agency determined Migden illegally transferred approximately $1 million of surplus campaign funds and had already spent hundreds of thousands of dollars.
"The senator was told to stop using the money but instead sued the FPPC (in federal court) in an effort to gain access to $647,000 of the money she had not spent."

That suit is scheduled for a federal court hearing April 1.

Fresh Comment

"Anonymous" has left a new comment on the item below.

CIRM Legislation Hearing Scheduled for Early April

The latest legislation to target the California stem cell agency is set for its first hearing April 2 in Sacramento before the Senate Health Committee.

The bill is aimed at ensuring affordable access to stem cell therapies financed by public funds in California. It would also require a study of the agency with an eye to correcting some of the difficulties it has had with such problems as conflicts of interest.

The lead author on the measure, SB1565, is Sen. Sheila Kuehl, D-Santa Monica, who is chair of the Health Committee. She is not expected to have difficulty in winning approval of her bill and sending it to the Judiciary Committee.

CIRM has not taken a position on the measure, but has opposed similar efforts in the past. Last month, one stem cell activist, Don Reed, opposed the measure, calling it "another distraction, another delay." Reed also said that CIRM is "squeaky clean" although one of its directors. John Reed (no relation to Don Reed), is under investigation by the state for violating CIRM's conflict-of-interest rules. Five other directors also violated conflict policies last year by writing letters on behalf of grant applicants.

Don Reed is vice president for public policy for Americans for Cures Foundation, which is the private, nonprofit stem cell lobbying group run by CIRM Chairman Robert Klein. It was Klein, an attorney, who advised John Reed to lobby CIRM staff on behalf of a grant to his institution.

Fresh Comment

"Anonymous" has posted a new comment on the "egg shortage" item below.

Fresh Comment

Jesse Reynolds of the Center for Genetics and Society has posted a comment on the "eggs" item below. It says in part, "Some believe that stem cell lines could be derived from embryos that are specifically created for research through cloning, or somatic cell nuclear transfer. This process requires fresh human eggs. Only perhaps a dozen labs worldwide are trying, and only three or four CIRM grants have been awarded for this purpose (to my knowledge). This line of work raises concerns beyond the moral status of the embryo." To read his entire remarks, click on the word "comments" at the end of the item.

An Egg Shortage: Is More Cash the Answer?

The California stem cell agency has embarked on a sweeping review of the human egg market and the needs of researchers, some of whom are complaining that they do not have enough raw material.

The study was set in motion after Harvard scientist Kevin Eggan (see photo on left) told the CIRM Standards Working Group last month that he and his colleagues had spent $100,000 recently advertising for donors and "pursued every option" for collecting eggs with little success.

CIRM President Alan Trounson, a renown Australian stem cell scientist, said "accessing those eggs is no trivial matter." He said scientists are seeking grants from CIRM for research that may not be feasible because of the lack of human eggs.

One answer to the question of scarcity posed during last month's session is increasing the money for women who provide eggs. However, that could be considered the politically fatal "third rail" for hESC cell research. Prop. 71, which created the California stem cell agency in 2004, was approved by voters in a campaign that appeared to promise that women would not be paid for eggs. But the language of the measure is artfully ambiguous. The initiative says that it is up to CIRM directors to set

"standards prohibiting compensation to research donors or participants, while permitting reimbursement of expenses."

Currently CIRM regulations do not allow for compensation other than reimbursement of direct expenses. One suggestion that arose during the meeting of the CIRM Standards Working Group on Feb. 28 was some sort of reimbursement of expenses for women involved in IVF treatments. However, paying for IVF treatments could be construed as cash for eggs.

Not all members of the group were comfortable with the concept of paying women for eggs.

Here is an exchange from the transcript of the Feb. 28 meeting between CIRM Oversight Committee member Jeff Sheehy and CIRM Chairman Robert Klein, who led the campaign for Prop. 71 and claims responsibility for writing it:

Sheehy:

"(Prop. 71) was approved by the voters because the voters thought there wasn't going to be compensation for egg donors when they voted for it, and they didn't know we were going to go back and change it. And so in that context I think this is an issue that would be appropriate for us to study."

Klein:

"Well, I'm in a reasonably good position, Jeff, to discuss the issue of what was presented to the voters. and --

Sheehy:

"I was your average voter, Bob. I was not one of these people that was waving the stem cell flag. I can tell you that if we were going to go out and spend $3 billion buying eggs from women, I wouldn't have voted for it."

Klein:

"Certainly I wouldn't have voted for it either, so we agree. But the key here is medical reimbursement was clearly contemplated. I have gone to James Harrison (outside counsel to CIRM and who wrote portions of Prop. 71) and discussed this issue with him...."

Alta Charo(see photo on right), professor of law and bioethics at the University of Wisconsin and a member of the CIRM standards group, noted the political sensitivity of the issue of cash for eggs. She said changing the CIRM standards worked out in 2005 could be "inviting really quite draconian responses" from unspecified parties, but presumably hostile lawmakers and regulators.

What went unsaid during the Feb. 28 meeting was the fact that some have long regarded the supply of human eggs as insufficient for human embryonic stem cell research. But now that hESC research is enjoying a resurgence, the scarcity is becoming more acutely felt.

The session also did not include a direct discussion of another reality: If eggs are scarce and demand is high, somebody is going to make a business of it. It will be an unregulated business somewhere else in the world. It goes almost without saying that embryonic stem cell research is a global endeavor, a point that Klein made on Feb. 28.

The CIRM Standards meeting ended with a move to investigate the entire subject further. Bernie Lo of the University of California, San Francisco and chairman of the group, indicated the review would include availability of eggs and their numbers, researchers' perceptions of the problem, possible reimbursement of IVF treatment, use of eggs by CIRM researchers from other areas where compensation restrictions are not so tight and the grandfathering of cell lines that were derived before CIRM regulations were adopted.

The standards group will consider the staff review of the matter at some later date. We have asked CIRM when that is likely to occur.

Needless to say, this subject is complex. We have only briefly touched on a handful of issues discussed during the Feb. 28 meeting. We recommend a close read of the transcript. Most of the pertinent discussion begins on page 91.

Below are some excerpts from the transcript.

Snippets From the CIRM Egg Debate

Here are some excerpts from the transcript of the Feb. 28 meeting of the CIRM Standards Working Group concerning human egg availability.

CIRM President Alan Trounson:

"Accessing those number of eggs is no trivial matter, no matter what the opportunities are. In that circumstance the demand for the oocytes may be way beyond what we can possibly deliver in an outcome. And it may take us five years to do that. If we gave a three-year grant, that would be nonsense because the chance of deriving a cell line might be extremely low.

"That's why we've come because we have these applications sitting in our portfolio which we're questioning about how do we move forward on this, or do we sort of take them off the table and let the other ones proceed. I think it's important for you to understand that it's real-time now. We have to actually know exactly what is appropriate to do."

CIRM Chairman Robert Klein:

"From a legal point of view, I'm very concerned with the use of words here. I don't know anyone that's suggesting you make a $10,000 payment to somebody. If somebody has real cost, and they can document those costs, and they can get reimbursed for part of those costs. What's being addressed here is reimbursement for part of the cost, not a $20,000 payment to someone."

CIRM Oversight committee member Jeff Sheehy:

"If they did not think that they could get the eggs, they should not have submitted the applications. They have submitted applications, so they must believe that they can get the eggs."

Alta Charo, a member of the Standards Working Group and University of Wisconsin professor:

"Prop 71, which itself had this written in to some extent as a political matter, drove the National Academy guidelines which felt like they were already basically having to follow the California lead on the altruistic model here."

Trounson:

"I don't think it drives it forward. That's the problem."

Charo:

"Now we're in a situation, I think, where it's particularly touchy to try and revisit the compromise, putting aside whether or not it's even legally possible given the language of Prop. 71."

Kevin Eggan, Harvard stem cell researcher and member of the CIRM Standards Working Group:

"I have spent countless hours stomping around to different disease advocacy groups, tea circles, knitting circles, trying to find anyone and everyone who would donate their oocytes for our experiments, even out of the goodness of their heart because they had someone that they cared about who was affected by these diseases that we might in the very long term provide hope for.

"We spent more than $100,000 in advertising in the Boston Globe, in the Boston Herald, in the Boston area papers, in the suburbs of Boston. We have literally pursued every option. We've pursued trying to recruit donors from other parts of the United States to come to Boston to donate their oocytes for research. This will not work. In a country where women know that they can be compensated for doing the exact same thing, they simply will not, and in the face of the difficulties, I should add, it's not like they're not doing it solely because of the money, they're doing it because of the money and because it's a very difficult thing to do oocyte donation. And those two things collaborate together to create an environment in which women will not do this in a meaningful way which will allow the research to go forward.

"It was a very reasonable compromise to say we need to give up compensation because we can't afford to be assailed both from the right and the left on this position, but now we know that that compromise position is a failure. So what do we do about that? I think the fact of the matter is that it might as well be against the law if we can't do it. That's one sort of null hypothesis for years. So how to proceed in the face of that? I agree it's risky; but if we don't take the risk, then the outcome will be the same as if we take the risk ..."

CIRM Cerberus Has New 'Kennel'

John M. Simpson, the ubiquitous critic, observer and participant in California stem cell controversies, has a new employer – sort of. The nonprofit outfit he works for has changed its name. No longer will it be called the Foundation for Taxpayer and Consumer Rights. Instead it is Consumer Watchdog. You can find more about the change here.

Fresh Comments

Larry Ebert has posted a comment on the "corrections" item from March 17. We have posted a response to that item. "Anonymous" raises some interesting questions regarding the "back story" on why CIRM failed to issue a press release on the letters of intent on round two of the faculty awards(see the "$41 million" item on March 18). We have responded to that as well. You can read all of this by clicking on the word "comments" at the end of each item in question. You can also post comments yourself by clicking on that word.

Pricewaterhouse Report on Biotech Loans Available Online

The Foundation for Taxpayer and Consumers Rights has posted the $50,000 PricewaterhouseCoopers report made to the CIRM Biotech Loan Task Force last week(see item below). The numbering of the pages seems to indicate that there is more to come from Pricewaterhouse. The report is not yet available on the CIRM website.

Biotech Loan Program Eyes Matching Funds

The California stem cell agency last Wednesday considered a proposal to create a biotech loan program of up to $750 million and is expected to possibly enact it by June. Here is a report from John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights, who attended the meeting of the CIRM Biotech Loan Task Force in Sacramento.

"CIRM Biotech Loan Task Force members didn't learn much last week from a $50,000 consultant's report about other states' loan programs, except that nobody really seems to be doing what the stem cell agency envisions.

"Loan programs in other states aren't really comparable to California's plan members of CIRM's Biotech Loan Task force were told by Christopher Wasden of PricewaterhouseCoopers.

"The consulting firm checked out about 30 loan programs and then narrowed the list to consider 12 of them in detail. The criteria for the short-list were that the program be state funded, focused on life sciences or technology companies, primarily offered loans and had a meaningful size. The final criterion was that the program was responsive, Wasden said.

"Noting that most of the loans offered by the other states were in the $200,000 to $400,000 range, Wasden described the proposed California program as 'more ambitious by a factor of at least two.'

"In fact, ICOC Chairman Robert Klein raised the possibility of making loans as large as $50 million. Task Force Chairman Duane Roth mentioned loans aimed at pre-clinical trials of $3 million to $5 million.

"Wasden reported that the 'amount of experience with the programs is low. There have been no liquidity events and no write-offs -- yet.'

"After Wasden's report task force members discussed more details of how California's program may emerge. Roth suggested that a four-part business evaluation would be the first step. That would include:

"-- A background evaluation of the company's principals.
"-- A credit evaluation, a Dun and Bradstreet or similar report.
"-- A litigation assessment. This would not include an assessment of the company's intellectual property (IP) portfolio, but rather a check for any suits pending against the firm or its principals.
"-- An assessment of the business plan and financial feasibility.

"Klein suggested, as he has at all task force meetings, that this check could be performed by 'delegated underwriters.'

"Task force member Michael Goldberg suggested that 'higher standards of verification would be required for larger loans.'

"If the applicant met the business criteria in the first step, then the plans would be peer-reviewed by the scientific panel for scientific merit as the second step.

"During his report Wasden said that a number of the state loan programs required matching funds as a way to 'have a third party validate the management team.'

"Klein emphasized the need for matching funds if CIRM makes large loans. 'There would be a lot of other people's money at stake in the big ones,' he said.

"Goldberg asked if the length of the loans should be tied to the life span of the stem cell agency. Klein responded that at some point he expects the Legislature will 'look at CIRM and see if it performed and whether more money should be put in.'

"David J. Earp, Geron Corp.'s chief patent counsel and senior vice president, told the task force that a requirement for co-funding would serve as 'a sanity check.' Asked what he thought a Phase 2 clinical trial would cost for a stem cell therapy, he said, 'Many tens of millions, certainly larger than $5 to $10 million' that had been cited earlier in the meeting.

"Roth told the task force that he and Klein had been meeting with state legislators in an attempt to keep them apprised of the plan. He said he hoped to have a loan program policy ready to discuss at the stem cell Oversight Committee's June meeting."

Our comment: Keeping California lawmakers well-informed on this program is well-advised, particularly if Klein plans to ask them for continued funding for CIRM in a few years.

Strong Interest in $41 Million CIRM Faculty Award Program

The California stem cell agency's effort to boost "young" researchers with grants of up to $2 million has attracted 55 letters of intent, nearly as many as the first round of program last year.

The faculty awards are designed to develop relatively young and promising researchers and particularly physician-scientists at a critical stage in their careers – providing them with salary and research funding for three to five years.

The $41 million grant program comes on top of a similar program last year that drew 59 letters of intent. Ultimately, the agency gave away only $54 million to 22 researchers out of the $85 million allotted in 2007. The grants were curtailed because five CIRM directors violated the agency's conflict-of-interest policies by writing letters on behalf of applicants from their institutions.

CIRM said the letters resulted from an "innocent misunderstanding." CIRM disqualified the 10 applications involved. The directors involved suffered no CIRM penalty, although some reportedly took steps to ease the economic or professional pain of applicants who were affected.

In December, CIRM directors ordered up a second round of faculty awards in order to give another chance to applicants disqualified last year because of their deans' conflict violations.

The names of the institutions and researchers submitting letters of intent this month were not disclosed by CIRM, which keeps them secret. Only the winning applicants names are released and then only after they are approved for funding.

In response to a query, Don Gibbons, chief communications officer for CIRM, released the number of intent letters and said 31 institutions were represented. He did not provide a breakdown for numbers from academic institutions and nonprofit research organizations.

CIRM has directed applicants in the second round not to disclose whether they competed in the first. Disclosing such information in this round could mean disqualification of the applicant.

Grant reviewers, however, are not likely to have too much trouble identifying applicants who are making their second run – unless their latest applications are totally different than the first or the reviewers' memories are faulty.

Fourteen grants are expected to be approved this summer following a closed-door review of the applications by the same CIRM panel that reviewed the first round of the grants. Scientists on that panel do not have to publicly disclose their financial or professional interests. Instead their disclosures are made privately to CIRM.

The application deadline is April 3, although no one can apply unless a letter of intent has already been sent.

California's Huge Lab Construction Program Set for Public Airing

The schedule for the next step in California's $758 million(including matching funds) stem cell lab grant construction program went up today on the CIRM web site and offers a rare opportunity for the public to comment on grant applications prior to final action.

Applying for the state cash are virtually all the major players in stem cell research in California. The names of the 12 were disclosed in December in an unusual move by the agency that was aimed at helping them to raise the matching funds needed to win the CIRM cash. Over the past three years, nearly all applicants for California stem cell research funds have been shrouded in secrecy until after the grants are approved, preventing the public from making any sort of meaningful comment.

The construction grant programs are exceptions, offering public sessions during review by the facilities group.

However, CIRM meetings are in fact rarely attended by more than a handful of persons, especially those from the general public. Applicants will be out in force, however, if only to be available to answer questions and possibly plan strategy in case questions arise that might hobble final action.

The agenda for the Facilities Working Group covers two days – April 4 and 5 – at the Westin San Francisco Airport Hotel in Millbrae. The Friday session is scheduled to begin at 2:30 p.m. and run to 9 p.m. The Saturday session runs 9 a.m. to 3 p.m.

Final approval by CIRM directors is slated for early May.