Klein, Zeal and CIRM's No-Contact Rule

The chairman of the California stem cell agency, Robert Klein, has apparently violated his agency's bylaws by contacting applicants for $262 million in stem cell lab construction grants scheduled to be approved this week.

CIRM, however, contends Klein did nothing wrong. One non-longtime CIRM observer called the violations "technical." And Klein's actions are not likely to have any significant impact on funding or result in sanctions on him personally.
According to the San Francisco Business Journal(see item below), Klein has been dickering with applicants in an effort to convince them to reduce the size of their grant requests by 10 percent if they receive the money sooner rather than later. CIRM's board of directors is scheduled to take up the grants in Los Angeles tomorrow.

Bylaws for CIRM's Facilities Working Group, of which Klein is a member, forbid him from contacting applicants. Article Seven, section four, states:

"Members of the Facilities Working Group shall not communicate with an applicant about an application to CIRM."

In response to a query about Klein's actions, Don Gibbons, chief communications officer for CIRM, said,

"Chairman Klein was specifically authorized by the Facilities Working Group at its last public meeting to work with the institutions on this project in his capacity as board chair. This supersedes the language you cite."

However, our review of the transcripts and a grant administration policy document from the April meeting showed no such authorization. A possibility exists that the authorization is somewhere in the 418 pages, and we asked Gibbons to provide a citation.

Gibbons said he was too busy with other matters today to provide a citation. He said,

"The Facilities Working Group approved the Facilities Grant Administration Policy with the understanding that Mr. Klein, in his role as chair, would carry out the negotiation."

It is not clear what sanctions, if any, might apply if Klein is found to be in violation of the bylaws. As for the grants themselves, in our view, it is unlikely that any might be affected by Klein's contact with applicants.

We queried John M. Simpson, stem cell project director for Consumer Watchdog, on Klein's actions. Simpson, who was at the Facilities meetings on April 4 and 5, said,

"Given the working group's bylaws it would have been better if Bob Klein hadn't been the one to contact grant applicants about taking less CIRM money if the entire grant were paid up front. I think the idea is a good one and supported it enthusiastically at the working group meeting as a way to avoiding making more cuts. I still do.

"Based on the discussion at the meeting, I understood that Klein was one of those that would be contacting applicants. I thought that as long as all applicants were treated equally and offered the same discount in return for taking the money up front there was no problem.

"Re-reading the the working group's bylaws today, I reluctantly conclude that in his zeal to maximize the impact of CIRM's $262 million, Klein may have technically broken the rules."

The no-contact clause in the bylaw has existed since 2006 and was drafted by James Harrison, outside counsel to CIRM. During the meeting when the language was adopted, Klein said,

"The purpose of having a committee here is that we are able to gather information generally; but once there's an application in, you can't discuss anything with them...there has to be a bright line created here."

CIRM board member David Serrano Sewell also commented in 2006 on what he described as "ex parte discussions." He said,

"It sort of just goes without saying and common sense that an applicant doesn't have a one-on-one conversation about their particular application. Should that discussion happen, a, it's inappropriate, it's unethical, and, c, it's going to have to be disclosed on some level."

However, the 2006 meeting, which we attended, was mainly considering the process prior to facilities group action. No one at that meeting discussed a situation where the chairman of the CIRM would negotiate some terms of a grant privately following the facilities group action, but before the grant came before the full CIRM board, which has final authority on funding.

At this year's April meeting of the facilities group, attorney Harrison presented language that would permit the reduction in the size of grants if applicants agreed to take the lesser amount up front. He did not mention the no-contact rule in the bylaws involving members of the facilities group. It appears, however, that no restriction exists on staff negotiating a hold-back on funding with grant applicants.

One final note on yesterday's item below, which was written before we turned up the no-contact rule. We raised a series of questions about whether Klein had contacted members of the CIRM board who had lab grant applications pending this week. We asked CIRM to respond to those questions. Here is Gibbons' response:

"The discount proposal was discussed at the April 5 public meeting of the Facilities Working Group, at which time Citizens Watchdog's John Simpson said it 'bordered on brilliant,' per the transcript on the CIRM web site.

"All discussions on the proposal subsequent to that time have been conducted in collaboration with CIRM legal counsel in full compliance with all regulations governing CIRM, so the chair did not negotiate with any board members."

We have queried members of the CIRM Oversight Committee who have applications pending concerning contacts with Klein. We will report on their responses tomorrow, but so far it appears that none had contact.

(The actual discussion of the "hold-back" or "discount" plan begins on page 45 of the transcript of the April 5 meeting.)

$800 Million in New Stem Cell Labs: Haggling Over 10 Percent

The California stem cell agency and some of the nation's top stem cell research institutions are dickering over the final details of perhaps the world's largest-ever wave of new lab construction for human embryonic stem cell research.

Reporter Ron Leuty of the San Francisco Business Journal pulled together pieces of the process in a report Friday. The implications of his article raise fresh questions about the ongoing conflicts of interest among CIRM directors.

Twelve institutions, 10 of which have representatives on the CIRM board, are seeking $336 million from CIRM this week. A CIRM panel has approved $289 million, leaving a shortfall of about $47 million. The agency required applicants to match the grants plus more, pushing the total amount of construction proposed to $832 million. Robert Klein(see photo), chairman of CIRM, offered a "hold-back" plan at a CIRM meeting in April. John M. Simpson of Consumer Watchdog reported on April 7 that CIRM grant reviewers expressed support for asking some institutions to take less if they get their money up front.

Leuty reported fresh details of how this is playing out in the final days before CIRM directors meet Tuesday afternoon in Los Angeles. Leuty said Klein is telling institutions that if they agree to lower their requests by roughly 10 percent, they will get the cash sooner rather than later.

Leuty wrote:

"'CIRM has been very aggressive about putting this idea forward,' said Chris Shay, project manager for the planned $200 million, 200,000-square-foot headquarters for the Stanford Institute for Stem Cell Biology and Regenerative Medicine. 'They don't want to do any more cutting.'"

Leuty said Stanford has already made a counter to the 10 percent offer.

He also wrote:

"'We're the only independent (applicant),' said Ralph O'Rear, vice president of operations for the Buck (Institute), which could receive $20.5 million in CIRM funding for a 65,700-square-foot, $70.1 million facility. 'We don't really have the kind of means and the resources that Stanford or USC have, so (early CIRM cash is) really something more meaningful for them than us.'"

Leuty continued:

"'We're interested in doing it if we can make it pencil out for us,' said Glenn Lucas, executive vice chancellor at UC Santa Barbara, which could land $3.5 million in CIRM funds for a $6.4 million project. 'They're essentially asking us to take less money up front to buy down the risk.'"

Last week Nature magazine warned of "cronyism" at CIRM because of the dual roles of medical school and research institution executives who also serve as directors of CIRM. In the case of the bargaining over the 10 percent discount, some questions arise:

-- Have Klein or others at the agency discussed the discount plan outside of public meetings with CIRM directors whose institutions would be financially affected?

-- Have the institutions' staffs informed their deans/CIRM directors of the negotiations or sought their advice?

-- Have the deans/directors given advice formally or informally to their staffs about negotiating with CIRM or Klein?

We are querying CIRM concerning these matters. We will carry an update on its response Monday afternoon.

We should also note that CIRM directors whose institutions are applying for the grants will be barred from voting on or even discussing them at this week's meeting.

(Editor's note: An earlier version of this item used the expression "10 percent discount" in the third paragraph. That has been changed to "hold-back.")

California Supplier? A Minor Question Involving Stem Cell Millions

California lawmakers are barreling ahead with an effort to tell the state's stem cell agency how to define "California supplier," a move aimed at assisting the Golden State's biotech industry.

The legislation would ensure that California firms that make research tools and life science supplies receive a preference over out-of-state businesses in connection with CIRM-funded research. The potential benefit could run to tens of millions of dollars, if not hundreds of millions.

The measure – AB 2381 -- by Gene Mullin, D-San Mateo, unanimously cleared the Assembly last week (May 1) on a 70-0 vote and is now in the Senate, where its prospects appear good.

At the same time, CIRM directors are scheduled to consider their own action on California suppliers during their meeting Tuesday and Wednesday. However, the agency has not yet posted proposed definitions of the term on its web site.

The topic came before CIRM directors (the Oversight Committee or ICOC) last March. Two lawmakers made an unusual appearance before CIRM directors, urging them to move quickly on the matter.

Attorney John Valencia of Wilke, Fleury, Hoffelt, Gould & Birney of Sacramento, representing the stem cell firm Invitrogen, also reminded directors that the issue has been lingering for more than year. In January of this year, Valencia wrote a letter to the agency that led to the matter being placed before directors.

The issue centers on language in Prop. 71 that says:

"The ICOC (CIRM's board of directors) shall establish standards to ensure that grantees purchase goods and services from California suppliers to the extent reasonably possible, in a good faith effort to achieve a goal of more than 50 percent of such purchases from California suppliers."

However, the term California suppliers is not defined.

Mullin's bill, which is backed by at least one biotech industry group, would define supplier in this manner:

"any sole proprietorship, partnership, joint venture, corporation, or other business entity, the owners or policymaking officers of which are domiciled in California and whose permanent, principal office or place of business from which the supplier's trade is directed or managed is located in California."

CIRM directors appeared to make it clear at their March meeting that they wanted to move forward separately on defining California supplier. But Mullin's bill holds their feet to the fire.

If his bill passes and is signed by the governor, it would be the first legislation enacted that would affect CIRM, which enjoys special protection from legislative or gubernatorial tinkering. Prop. 71 requires a unique and unprecedented super, super-majority vote of both houses (70 percent) to enact an law dealing with the stem cell agency.

Presumably CIRM would go some extremes to prevent passage of the bill and avoid a precedent that would make it easier to pass more sweeping legislation involving the agency.

Stem Cell Snippets: Surfing the Big Wave to Practicing PR

Trounson's Longings – CIRM President Alan Trounson says he "absolutely" misses being in the laboratory. Trounson (photo at right) made the comment in an interview late last month on Australian radio. He told interviewer Monica Attard on ABC radio that "I still wake up at night thinking I’m in the laboratory." Trounson also talked about how grant money was luring Australian researchers away from their country. "It’s like surfing in the big surf and unless you can catch the wave you’re never going to get the thrill of it. If you are sitting there and waiting for the wave to come and ... you might get on it, you might not because there’s really not much funding...." He went on to say that "a lot of really good scientists have relocated (from various places) to California because of the money and because of the opportunity."

Liberals Criticize Grant to California Stem Cell Firm – The state is New Jersey. The firm is StemCyte of Covina, Ca. The money relatively small – only $589,000. But a New Jersey state grant in that amount inveigled the company to open a New Jersey facility, creating 12 jobs. Questionable financial decision for the state, said the New Jersey Policy Perspective group, while higher education and transportation budgets are being cut in that state.

CIRM PR Contract – The California stem cell agency is looking for some public relations assistance, specifically a communications special projects manager. Under the terms of the RFP, compensation would amount to $90,000 under a 13-month "all inclusive contract including all administrative expenses and travel." The consultant would be required to work no more than 30 hours a week on an as-needed basis. Deadline for applications is May 19 with the award date scheduled for May 26 and possibly earlier. The agency has also posted job openings for a communications manager, IP attorney, scientific officer and two administrative coordinators (one senior).

Sunshine and $66 Million in Stem Cell Training Grants

The California stem cell agency is proposing a new, $66 million round of training grants that will reach into the undergraduate level as well as honing the skills of more advanced students and scientists.

The proposals also offer an fine opportunity for CIRM to break out of its usual, closed-door grant review procedures and open the process to overdue public scrutiny.

The training plans will come up next week for conceptual approval at CIRM's Oversight Committee meeting. The proposals include a three-year, $48 million offering aimed at pre-doctoral, postdoctoral and clinical fellow levels. The second, $18 million training plan targets lower academic levels and could involve as many as 100 students over a possible three-year period.

The latest proposals are a continuation of an effort begun in September 2005, when CIRM approved its first-ever grants, $39 million for training 170 scientists over three years. Those grants were reviewed behind closed doors by scientists whose financial interests are not publicly disclosed, an arrangement that has persisted to this day.

Closed door reviews are a long-standing custom in the scientific community. Changing that process is uncomfortable for many. CIRM has argued that the private process is necessary to encourage candid comments from reviewers and to avoid embarrassing rejected applicants. Unspoken is the possibility that disappointed applicants might later vent their displeasure on the CIRM grant reviewers, perhaps by acting negatively on the reviewers' own grant applications before the NIH or other institutions or taking some other professional retaliatory action.

Applications for the CIRM training grants, however, will come from institutions – not individuals. It is very difficult – although probably not impossible – to embarrass, for example, UC Berkeley, especially during a review of an application for a training program.

Some have argued that CIRM should not diverge from NIH closed-door review practices. However, CIRM and the NIH are much different animals. The NIH is subject to control by the president and Congress. CIRM is all but immune from fiddling by the governor and the legislature because it is enshrined in the state Constitution and given special protection under the terms of Prop. 71.

CIRM officials have said that the agency's review process does not need to be changed because no problems have come up. However, an ounce of prevention can help to avoid unexpected scandal. No one last year would have predicted the mess that resulted when one CIRM director intervened with CIRM staff in an attempt to secure a grant to his institution. No one would have predicted that the director's action would come as the result of advice from the chairman of CIRM, who is an attorney intimately familiar with CIRM law and rules.

While its scientific reviews are closed, the stem cell agency has conducted public hearings on the construction phase of applications for $262 million to build stem cell labs. John M. Simpson, stem cell project director for Consumer Watchdog, participated in those open sessions.

In response to a query, he said they worked out well. He added,

"The Facilities Working Group review of applications for funding laboratories was public and everyone benefited. The scientific review was secret, implying that it's perfectly OK to embarrass an institution because it can't build a building, but that it's wrong to suggest publicly it can't do decent science.

"It's time to open the closed scientific brotherhood to scrutiny and conduct the scientific reviews of the training programs in public. What do scientists have to hide?"

Earlier this week, Nature magazine warned of "cronyism" at CIRM and called for "strong governance" of the stem cell agency. However, the political realities in California are such that the built-in conflicts of interest on the Oversight Committee are not going to disappear any time soon.

Letting a little sunshine in on this round of training grants would be salutary for CIRM and well serve both its own interests and the interests of the people of California.

More Details Being Posted for CIRM Meeting Next Week

Background material is popping up on the web site for the meeting next week of the directors of the California stem cell agency.

Fresh documents involving the following areas are now up: New scientific reviewers, concept plans for training grants and the grants administration policy for businesses. Also posted were links to recommendations on the applications for $262 million in lab grants. Those were available previously under a different agenda.

Still to come for the meeting, which begins late Tuesday afternoon (roughly three business days from the time of this posting), is background information on the administration policy for the lab grants, the proposal for fast-tracking "urgent" research opportunities, the definition of "California supplier" for CIRM purposes, documents pertaining to equipment funding for the lab grants and recommendations regarding the definition of "principal investigator" and his/her responsibilities.

To find documents and watch for additional postings, just click on the agenda here.

In a related matter, the Pleasanton teleconference location for the Biotech Loan Task Force meeting on Tuesday has been scrubbed.

Correction

In the "Nature Assesses" item below, we incorrectly reported that the CIRM Oversight Committee has never turned down a recommendation for funding by its scientific reviewers. In fact, committee rejected, on a 4-20 vote, a recommended training grant proposal (T3-00005) in its first round of grants Sept. 9, 2005. The grant was given a 70 score out of 100 by reviewers. However, some CIRM Oversight members said they were concerned about the lack of appropriate faculty at the unidentified institution and "under developed" lab space. The actual vote tally on the grant was not announced during the meeting nor in the minutes from the session. Our 4-20 vote count was arrived at by going through the 323-page transcript.

Advisory

In the "Nature Assesses" item we reported that the Oversight Committee has never overturned a positive funding decision by its scientific reviewers. A reader (not a CIRM official) recalls that, in fact, one was overturned in the first round of grants in September 2005. We are attempting to verify that.

Niche Comments on CIRM Conflicts

The Niche stem cell blog today picked up on the the Nature coverage of the California stem cell agency and briefly discussed the conflict of issues that are built -- by law -- into the $3 billion government program.

Monya Baker, whose blog is part of Nature Reports Stem Cells, wrote:

"What does seem unique to CIRM are the multiple sources of 'two-masters' tension: it must support basic science and clinical applications ( see my interview with Marie Csete) ; it must succor biotech companies but make sure that patients and other scientists can access their technology (see my article on CIRM grants to businesses ). Even its organizational structure is split. (See my article on CIRM’s search for a president .)

"I’ve asked CIRM officials about this before. I’m told that such strains are indeed difficult to balance, but done right they are a source of strength. I’ve asked non-CIRM experts about it too. They tell me it’s easy to make bad investments in hot new fields, but good ideas often wither early because they can’t prove their worth. And I've asked everyone whether CIRM’s funds are a good use of money, and they say what journalists hate to hear: time will tell."

CIRM's Biotech Loan Terms and Policy To Be Aired

The California stem cell agency is edging closer to creation of a roughly $500 million biotech loan program that promises to help stem cell firms survive the financial "valley of death" and prolong CIRM's life.

The Biotech Loan Task Force will meet next Tuesday in Los Angeles to hammer out loan terms and policy, aided by a $50,000 study from PricewaterhouseCoopers(here and here). The task force is scheduled to report to CIRM directors at their meeting, also next week.

The biotech loan proposal is aimed at helping enterprises bridge a funding gap known as the "valley of death" -- so called because it is a time in a company's life when conventional funding is extremely difficult to find because of the financial risk involved.

Results from the PricewaterhouseCoopers sketch out more details of the possible scope of the program, which is the brainchild of CIRM Chairman Robert Klein, a multimillionaire real estate investment banker who understands the power of leveraging cash.

The document seems to indicate that the size of the program has been scaled down to $500 million from the $750 million figure that Klein gave us months ago. It also appears to project a "profit" of about $162 million, although it is not clear whether that figure is before or after expenses for running the loan program are accounted for.

The additional funds could provide for a longer life for CIRM, which was sold to voters in 2004 as a 10-year program. However, following the election, it became clear that the program has no sunset date. It is only limited by its 10-year bond authorization.

The PricewaterhouseCoopers report projects default rates in the loan program ranging from 20 percent on certain types of loans to as high as 50 percent on loans involving preclinical programs. A footnote says that based on comments by venture capitalists and venture capitalist lenders, those default rates seem "reasonable."

The size of loans would range from $1 to $5 million and have an interest rate based on the prime interest rate plus two to four percent. Twenty to 25 loans would be funded annually for a total each year of about $70 million. Awards would be based on the project's "contribution to medicine" as determined by the closed-door CIRM grant review process. Both businesses and nonprofits would eligible, according to previous task force discussions.

The PricewaterhouseCoopers study also mentioned objections from some of the businesses surveyed. They include proposed loan sizes (too small) and problems with aggressive repayment triggers("highly contested").

Not discussed in the study was just exactly how CIRM would run the program. The agency has no expertise in such an endeavor, aside from possibly Klein, whose professional resume includes real estate investment but not much in biotech venture capital endeavors. He has suggested much of the program could be outsourced.

A March draft policy for the program says that the loan applications would evaluated by CIRM staff (presumably new hires under Klein's direction), "supported by appropriate outside consultants."

However in January, former interim CIRM President Richard Murphy told the task force,

"I think the notion that all of this would be evaluated by CIRM staff is really overshooting. As you know, we're limited to 50 people in the organization. We would need to have real partnerships somewhere to be able to do this in a way that these guys would buy into as partners. I suspect that cannot be done in-house, at least with our present structure."

Hiring outside consultants also raises questions involving their compensation, selection and conflicts of interests. Currently CIRM rules do not necessarily require public disclosure of the financial interests of consultants.

A caveat to our readers: The PricewaterhouseCoopers study is fairly technical and opaque to readers not versed in business finance. It would have served the agency well to have provided an analysis or more context to provide greater accessibility.

In addition to the Los Angeles meeting location, you can participate in the meeting at teleconference locations in Menlo Park and Pleasanton. The addresses are on the agenda.

Trounson Speaks Tonight in San Francisco

Alan Trounson, the president of the California stem cell agency, will speak tonight in San Francisco as part of a panel on the "Chances and Challenges" of stem cell research sponsored by the German-American Business Association. The program begins at 7 p.m. at Morrison & Foerster, 425 Market Street, 34th floor, San Francisco. It includes a question and answer session. Admission is $50.00 and includes refreshments.

'Nature' Assesses CIRM, Warns of Conflicts of Interest

Nature magazine took a run at the California stem cell agency today, producing a fine overview and an editorial that warned of "cronyism" on its board of directors.

The occasion for the coverage is the upcoming approval next week of $262 million in funding for stem cell lab construction, an event that is likely to trigger a number of articles about CIRM in the California media and perhaps nationally.

The article by Erika Check Hayden recapped the history of tiny organization (staff about 26) and said,

"If $3 billion seemed like a dream four years ago, it is now a reality that is changing not only the way science is done in California, but is resonating across the US biomedical landscape."

Nature highlighted some of the conflict of interest problems on the Oversight Committee, as CIRM's board of directors is known. Its editorial said,

"Several episodes over the past year have highlighted an inherent problem with the CIRM's structure: the board that distributes its funding is stacked with representatives from the universities that benefit most from those disbursements. The CIRM has enacted rules to try to limit the conflicts of interest posed by this arrangement. They don't go far enough. At one meeting in January, for instance, CIRM board members from institutions that had applied for a facilities grant voted to deny one of these grants to an institution that has no representatives on the CIRM board."

The editorial continued,

"For the agency to succeed, patient advocates and other public representatives must fight the tendency of the academic institutions on the board to hoard dollars. As the patient advocates grow into their roles as full partners, and with help from well-intentioned lawmakers such as (State Sen. Sheila)Kuehl, the CIRM must be coaxed into serving its most important constituency — the taxpayers of California. The roles themselves are not unusual in the world of governance, but here the stakes are exceptionally high."

Hayden's overview said,

"...(E)ven as the agency is changing California's scientific outlook, it is also facing pressure to prove its worth to voters — and to show that it can deliver the medical and economic benefits it promised in order to convince taxpayers to fund it in the first place. Which raises the biggest question about the CIRM: will scientists be able to deliver the results it promised? This is an urgent concern for the leaders of the CIRM, because it won the hearts of California voters by saying it would produce cures for a number of debilitating diseases."

Hayden discussed legislation by Kuehl, D-Santa Monica, as one of the responses to the questions about delivering on Prop. 71 campaign promises.

Hayden also wrote about the recent complaints that CIRM overstated its funding role in UCSD research that has led to clinical trials and about the conflict-of-interest flap involving CIRM director John Reed. Both cases were first reported by the California Stem Cell Report, a fact that Nature did not mention, but media coverage of CIRM was incidental to the article.

Hayden continued:

"...CIRM's structure has, at times, seemed to hamper its own mission. That was painfully evident at a meeting in January, when one doctor found himself begging for funding from 13 board members who were competing directly against him for money."

As we reported in January, Bert Lubin(see photo), head of the Children's Hospital Oakland Research Institute, unsuccessfully appealed a negative recommendation by scientific reviewers to the full Oversight Committee, which has final say on grants. (The committee has reversed a positive recommendation for funding once (Sept. 9,2005) and never reversed, as far as we can recall, a do-not-fund decision by scientific reviewers.)

Lubin told Nature,

"We're not in the 'in' crowd. So a project that was really going to go into patients was essentially triaged."

The Nature article said,

"The episode is only one in a series of incidents that have raised questions about the wisdom of putting the institutions that benefit from the CIRM in charge of governing it."

(Editor's note: An earlier version of this item incorrectly said the Oversight Committee has never reversed a positive recommendation for funding. In fact, committee rejected, on a 4-20 vote, a recommended training grant proposal (T3-00005) in its first round of grants Sept. 9, 2005. The grant was given a 70 score out of 100 by reviewers. However, some CIRM Oversight members said they were concerned about the lack of appropriate faculty at the unidentified institution and "under developed" lab space. The actual vote tally on the grant was not announced during the meeting nor in the minutes from the session. Our 4-20 vote count was arrived at by going through the 323-page transcript).

Coming Up

Our promised look at the latest details of CIRM's biotech bank proposal has been delayed because of technical problems, but will be forthcoming later today. Also upcoming is a look at Nature magazine pieces about CIRM, including an editorial warning about "cronyism."

CIRM Unveils More Details on Biotech Loan Program

For those of you interested in the ambitious and unusual biotech loan program being proposed by the California stem cell agency, the topic comes up again on next Tuesday.

The agency has done a good job of posting in timely fashion background material -- a $50,000 study performed by PricewaterhouseCoopers.

We will have some of the highlights tomorrow, but if you can't wait, you can find the material and the agenda for the CIRM Biotech Loan Task Force here.

If you are considering borrowing from the agency or just have concerns, now is the time to weigh in, either at the meeting or in writing to CIRM.

More Than $262 Million On CIRM Table Next Week

In eight days, the California stem cell agency will give away $262 million for stem cell lab construction at 12 institutions from Sacramento to La Jolla.

But the CIRM Oversight Committee will have other important matters to deal with as well on May 6 and 7. According to its recently posted agenda, they include:

-- Fast-tracking urgent or opportune research opportunities

-- Appointment of new scientific grant reviewers

-- Proposals for grant programs for scientific and technical training

-- The biotech loan program

-- Rules for grants to businesses

-- Changes to rules for the lab grants

-- Equipment funding for the labs (this is separate from the building grants)

-- And defining "principal investigator" and his/her responsibilities re CIRM grants.

Also on the agenda is the definition of "California supplier." This came up at the March ICOC meeting and is the subject of a proposed law -- AB2381 by Assemblyman Gene Mullin, D-San Mateo (see photo) -- in the California legislature.

The bill would define California supplier for CIRM purposes as "any sole proprietorship, partnership, joint venture, corporation, or other business entity, the owners or policymaking officers of which are domiciled in California and whose permanent, principal office or place of business from which the supplier's trade is directed or managed is located in California."

The measure is sponsored by Invitrogen and backed by the California biotech industry group, BIOCOM. A legislative staff analysis said no groups had announced their opposition. The measure is now on the Assembly floor. If it passes, it will go to the Senate.

But back to the Oversight Committee meeting. The agency has not yet posted any background documents for the session, which is par for the course. We will probably see some of them on the CIRM web site late this week or early next. But as we have remarked in the past, without adequate information well ahead of the meeting, it is impossible for the public or interested parties to comment properly or even decide whether to attend the meeting.

This week, the agency does have some justification for failing to post the documents in a timely fashion. Preparation for consideration of the lab grant awards is undoubtedly consuming virtually all the efforts of CIRM's tiny staff.

The Oversight Committee will meet at the posh Luxe Hotel near Bel-Air in Los Angeles. The hotel is five minutes away from UCLA, where the committee has held sessions as well. The panel has met previously several times at the Luxe, whose web site declares, "There's Luxury, Then There's the Luxe."

Fresh Comment

Larry Ebert of the IPBiz blog has posted a comment on the item below. We have posted a response.

Were Some Scientists' Concerns about CIRM's Claims Worthy of Note?

If the California stem cell agency had its druthers, no one would know that there is a dissenting view about its role in the San Diego research that led to clinical trials on a treatment for a blood disorder.

The $3 billion agency has stoutly defended its claim and bolstered its statement with additional evidence, following questions by the California Stem Cell Report.

However, the agency would have preferred that no complaints were publicly raised and nothing written about them if they were.

We first reported the matter on April 15. We are writing today not to rehash the substance of the complaints, but to share with our readers some of the reasoning behind our decision to report the story and to discuss a few of the nuances of how the media work.

CIRM's position is that our item concerning CIRM's original statement relied on a single, anonymous source and would not have been carried by most newspapers. They are partially correct on that point. We did use one anonymous source – "at least one well-regarded, California stem cell researcher" was the phrasing. We had two, but the other one did not go into the details of the issue. We did not want to characterize both as having identical positions. The item also referred to "concerns among some stem cell scientists." But because of the use of a single, anonymous source, many newspapers would not have carried the story as matter of policy.

Anonymous sources usually have an agenda, sometimes one that is hard to detect. Anonymity protects the source from having to take public responsibility for his or her words. We weighed the possibility of not writing about the concerns of these scientists, but decided to proceed.

The scientists' position was supported by evidence; it was not just one person's opinion. If these two were concerned, undoubtedly many others were as well. There is an axiom in business that for every one complaining customer, nine more exist who are unhappy but who are silent. That axiom seems to apply in this case. Finally, California researchers are loath to publicly criticize CIRM. Who wants to offend the three-billion-pound gorilla and risk losing its financial support?

The question appeared significant as a part of the culture of science. It dealt with the credibility of the agency. CIRM's role was regarded as so important that it merited enthusiastic comment from Gov. Arnold Schwarzenegger -- a move presumably promoted by CIRM. The issue also went to the more general question of hype involving embryonic stem cell research. The agency itself, stem cell research advocates and opponents all have warned repeatedly about dangers of exaggeration and promising too much in this highly charged field.

Since the story has appeared, we have learned of more scientists who agree with the essential points made by our sources.

One said,

"The problem with the original CIRM (statement) is that it referred to the SEED grant, which was funded only weeks before the paper was submitted and dealt with an entirely different disease and... was specified by the RFA to be specifically for human embryonic stem cells which are not at all involved in the UCSD experiments....

"They (CIRM) did overstate it and ... it is embarrassing that the Governor's office picked this up as a first example of CIRM's success. It would have been much better to say that CIRM is proud to be associated with such an outstanding success and to feature something about the trainee."

Another said,

"It does all of us a disservice to pretend that CIRM was responsible for the initiation of a clinical trial when every scientist and biotech manager knows that it is simply untrue."

As mentioned earlier, many newspapers would not have carried the story because of policies regarding the use of anonymous sources. Over decades of experience as a newspaper editor and reporter, we have seen those policies, along with others, paralyze newspapers. They know a story is factually accurate, but because people are afraid to speak up and the subjects of stories stonewall and delay, the stories never run. As a result, the public debate suffers. In the case of the CIRM statement, however, the story would not have reached that level. The subject would not have been pursued by mainstream newspapers because it would have have been deemed too arcane and picayune for the general public. However, the issues raised by our sources are important to our tiny, but deeply involved band of readers, who range from Korea to the United Kingdom.

The California Stem Cell Report is a blog and fundamentally a matter of the opinion of yours truly. Many blogs are nothing more than opinion. Over the years, however, we have taken to reporting stem cell news in a more traditional fashion because of the lack of hard information in the media about CIRM affairs. We have also engaged in analysis and commented negatively and positively about how CIRM is spending $3 billion of public money, virtually free from normal governmental oversight. It is a unique endeavor that has had a far-reaching and positive impact on the national and international stem cell scene.

We think California's unprecedented program is worthy of considerable attention. We will continue to offer a home to those who are willing to make thoughtful comments on its performance – even anonymously.

(We provided an advance copy of this commentary to CIRM and told the agency that we would carry its comments verbatim, if it chooses to offer any. Providing advance copies of articles and offering opportunities for verbatim responses are virtually unheard in the mainstream media.)

Fresh Links

We have added The Niche and Nature Reports Stem Cells to the links on this Web site, a long overdue addition. They are very much worth reading. We have also updated the link to Consumer Watchdog(formerly known as the Foundation for Taxpayer and Consumer Rights).

Please let us know if you know of Web sites that you would like to see added as links.

Growing an Arm, a Leg and an Ear

Some of you may have wondered about the "Veterans for Cures" effort by Robert Klein's private advocacy group mentioned in the item below.

Here is what it is likely linked to – a $250 million military effort to grow body parts or at least the thinking behind it.

U.S. Army Surgeon General Lt. Gen. Eric Schoomaker (see Defense Department photo above) earlier this month told reporters about how researchers are growing a new ear for a Marine, using stem cells from his own body. Reporter Lisa Burgess of Stars and Stripes reported that the Schoomaker said,

"It's like baking a cake."

So far none of the military cash is slated to go to California, but that could change as researchers here see the potential for grant funding.

Here is another piece on the Defense Department program on a blog by a Belgium consulting firm, Pantopicon.

Fresh Comment

Marcy Darnovsky of the Center for Genetics and Society has left a new comment on the Flamm item below. Among other things, she says there were a number of concerns with the Cha grant that were not mentioned in the item about Flamm. She is absolutely correct. We also did not mention that CIRM's scientific reviewers had no idea of the controversy surrounding Cha when they approved the grant. The scientific reviewers knew the name of the applying organization at the time of the review but it was kept secret from CIRM directors when they later ratified the reviewers' decision in public session. That secrecy is part of the official CIRM process. One CIRM official told us later that the Cha grant would not have been approved by the scientific panel if they had been informed of the controversy.