Financially Troubled CIRM Hires $200,000 Federal Lobbyist

The California stem cell agency has hired one of Washington's more influential lobbyists, The Podesta Group, to promote a $10 billion biomedical industry aid package being pushed by CIRM Chairman Robert Klein.

In response to an inquiry, Don Gibbons, CIRM communications chief, today said a contract had been signed with the firm, which was founded by Tony Podesta (see photo) in 1988. Gibbons did not disclose the value of the contract, but Podesta proposed a $200,000, 10-month deal in keeping with the terms of CIRM's request for proposals. Travel and other expenses incurred by Podesta would add to the total cost. The lobbying proposal also does not include travel expenses to Washington, D.C., for Klein, other CIRM directors or staff.

The losing firms were Van Scoyoc Associates and Hogan & Hartson.

Earlier we requested a copy of the 15-page Podesta proposal, which is a public record. Gibbons supplied a heavily censored version. More than five key pages were missing, leaving only their titles: "situation analysis" and "strategic framework."
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Asked for an explanation for removal of the material, Gibbons quoted CIRM legal staff as saying,

"The Public Records Act incorporates, as an exemption, the trade secret privilege found in the Evidence Code.  Each responder was given the opportunity to assert that privilege for any part of the proposal it claims as a trade secret."

Without seeing the five removed pages, it is impossible to evaluate the Podesta proposal or whether it is realistic to expect any sort of result from the expenditure of $200,000 in California taxpayer funds. It is also clear that much of the bowdlerized, analytical material would likely consist of little more than what can be read in newspapers, industry publications and online information sources.

Most of the remaining material amounts to boilerplate descriptions of the firm and its work. However, Podesta did strike a ambitious chord or two, indicating that it would lobby for federal cash directly for the agency and would attempt to make CIRM a major biomedical player in the nation's capital.

Podesta wrote,

"Faced with the prospect of being unable to fund previously approved research and facilities grants, CIRM needs federal support in the form of appropriations, loan guarantees, and /or other measures to finance its research program through the end of calendar year 2010...."

In addition to grabbing some cash right now, Podesta said,

"Our strategy also positions CIRM to play a major role in shaping longer-term federal policies on biomedical research in general and stem cells in particular."

The firm said it is "the longest-tenured Washington representative of the pioneer biotech companies – Genzyme, Genentech and Amgen." It also represents Novartis Vaccines and Diagnostics and Novo Nordisk. Business Week has labelled The Podesta Group as one of seven "Uber-influencers: The Lobbyists Likely to thrive in the New Washington."

The hiring of the lobbyist has drawn fire from at least one critic, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., who has called it an unnecessary, costly diversion from CIRM's stem cell research mission in California.

Simpson raised questions about the federal lobbying plan as early as CIRM's board meeting late last month. He specifically mentioned its $200,000 expense.

By that time the request for lobbying proposals, including its cost, had been on the CIRM website for two days. In response to Simpson, however, Klein said,

"The dollar amount of that is completely unknown at this time. It's in order to attract proposals and see what we have and what resources we need. So we're in an investigation stage of that."

Klein made that statement the morning of Jan. 30, the transcript of the meeting shows. The deadline for the proposals was 5 p.m. later that day with selection of a lobbyist scheduled for as early as two business days later.

We have raised additional questions with CIRM's Gibbons. They include whether CIRM's legal staff agrees that only "trade secrets" were removed from the Podesta proposal, whether all the material was removed at Podesta's request and whether CIRM removed material without a request from Podesta. The questions also include terms of the contract, whether the firm has actually begun work and whether Klein is seeking financial support from grantee institutions to pay for Podesta.

We will carry Gibbons' responses when we receive them.

If you would like copies of all three lobbying proposals, send an email to djensen@californiastemcellreport.com.

CIRM/ISSCR Convention Proposal Reduced to $250,000

CIRM directors balked last year at coughing up $400,000 for the 2010 convention of the International Society for Stem Cell Research, but now the figure has been trimmed to $250,000.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., reported the new figure on his organization's blog. He said that CIRM has agreed to help the group raise the additional $150,000 for the San Francisco meeting.

But Simpson wrote,

"That's a mistake.  CIRM should focus with laser-like precision  on where its getting the money to fund existing grant commitments. This sort fund raising effort -- just like hiring a proposed lobbyist in Washington for roughly $200K --  is an unfortunate and unnecessary distraction."

Online Poll Says Nyet to Biotech Bailout; Results Subject to Instant Change

Does the biotech industry deserve a bailout? No, according to the current results of an online poll being conducted today by Fierce Biotech, which calls itself "The Biotech Industry's Daily Monitor."

At least that was the conclusion at the time of this writing. It was a "finding" that might give minor pause to those pushing the $10 billion assistance package championed by the chairman of the $3 billion California stem cell agency, Robert Klein.

Here is what the poll showed at 3:33 p.m. MST today. Forty-nine percent answered negatively to the bailout question. Forty-three percent said yes. Eight percent were not sure.

We were surprised by the numbers because the Fierce Biotech audience presumably consists of folks inclined to support the industry wholeheartedly. But some poll respondents may have been taken aback by the avaricious clamor to climb aboard the already stressed bailout wagon in Washington.

The poll is totally unscientific. No total numbers are offered. You just go to the site and vote. It is even possible to vote twice, if you are crafty. (We did, once yes and once no, to assure complete balance.) Earlier in the day, something like 53 percent supported a bailout, but that changed as the day wore on, Even that number was surprising, however, given the nature of Fierce's audience.

The poll was also linked to an opinion piece by Daniel Nevrivy of the Nevrivy Patent Law Group in Washington, which argued for a bailout. He wrote,

"At a recent healthcare conference, the notion that the biotech industry receive government help was ridiculed by a well-known financial executive. Doing 'something stupid' over there--a reference to the U.S. auto industry bailout - doesn't mean you should do something stupid over here, remarked the executive. The remark is reflective of the evolving attitudes of Congress and the U.S. taxpayer over industry bailouts. Support for U.S. automakers, who regularly get beat by the foreign competition--even on their home turf--may have poisoned the well for other, more worthy industries like biotech that are now struggling."

Nevrivy argued that it is wrong to equate the two. He said US biotech is stronger than its foreign competitors, although it is suffering from a current cash crunch.

He wrote,

"Economists generally disfavor government support and subsidies; however, we are living in a world where the government is an active player, as well as a referee, and is picking winners and losers. If we have to pick winners and losers, doesn't it make a certain amount of economic sense to favor industries in which we have an advantage? If that is the case, it is wrong to equate support for the U.S. auto and biotech industries as equally bad ideas."

Mulling Industry Ties: CIRM, Charities and Cash

The Wall Street Journal this morning carried a piece about the multimillion dollar linkages between some charities and the biomedical industry. The article offers some food for thought concerning the California stem cell agency and its financial crisis along with changes in the strategic direction of the agency.

Reporter Keith Winstein wrote that charities are "increasingly frustrated with the slow emergence of new disease treatments" and are pumping tens of millions of dollars into industry.

He quoted Robert Beall, the head of the Cystic Fibrosis Foundation, as saying,

"Academics are really not good at taking good understandings of the basic defect and translating it to new therapies. We had to get the drug companies to start to get involved with cystic fibrosis."

Winstein said that "about a dozen disease-based charities recently have started funding early-stage drug research at start-up companies -- usually in exchange for royalties or stock options." They include the cystic fibrosis foundation, the CHDI Foundation and the Juvenile Diabetes Research Foundation, of which CIRM Chairman Robert Klein is a director.

The article said that the investments create "potential conflicts for charities, which are called upon for impartial advice to patients but could end up with financial stakes in high-price treatments."

Winstein reported that Aaron Kesselheim, a physician at Brigham and Women's Hospital in Boston, says the investments can create a "potential minefield." Winstein continued,

"Normally, a patient-advocacy group might be expected to argue for lower prices for pharmaceuticals -- but a group with a royalty stake or equity in a drug maker has the opposite interest as well.

"Disease-focused charities also often give recommendations to doctors, patients and the FDA. The fibrosis foundation runs a pharmacy network to dispense drugs, and accredits treatment centers. The impartiality of such activities might be questioned if a group had a stake in one of several competing drugs, says Dr. Kesselheim.

"'Equity relationships can create substantial unconscious biases in the way that these foundations conduct their business that might lead them away from the ideal public-health strategies,' he says.

"'For example, a generic drug might be really useful for patients with MS, or epilepsy, and because the foundation has these sort of close ties with for-profit companies, then they might have subconscious biases against advocating for those sorts of outcomes that might lower costs.'"

CIRM is currently working on a plan to sell California state bonds to private foundations and perhaps others to help fund the stem cell agency's grants. The proposal could dovetail with the foundations' desires to push therapies into the marketplace along with generating reasonable and safe returns in its investment portfolio.

At the same time, CIRM is emphasizing its connection to industry with a push towards bringing therapies into the marketplace. The agency expects to release a $210 million RFA in the next several days for a disease team project that will be one of its largest grant rounds. The agency expects more than 100 applicants for the grants, which are aimed at pushing stem cell research closer to producing a commercial product. Commercial enterprises are expected to be among those seeking CIRM cash. The disease team round is also likely to see the launch of a $500 million biotech lending program for both industry and nonprofits. Last month, CIRM Chairman Klein told directors that the disease team round is a "very, very important" element in pitching the bonds to foundations.

(Editor's note: The WSJ article may not be accessible without a subscription. If you would like to see the full article, email djensen@californiastemcellreport.com and I will send you a copy.)

San Diego Consortium Pushing Ahead on $115 Million Lab

San Diego's Sanford Stem Cell Consortium, an alliance of UC San Diego, Scripps, Burnham and Salk, says that it remains committed to its $115 million lab construction project and that site preparation is currently underway.

Louis Coffman, vice president of the consortium, made the comment Monday in response to a report in the UC San Diego campus newspaper that the project, funded in part with $43 million from CIRM, had been put on an indefinite hold because of financial reasons. CIRM last month disclosed that it is facing a severe cash flow problem because of its inability to sell state bonds.

Coffman said that site preparation has begun but that actual construction will not start until the consortium concludes "the definitive ground lease" with UC San Diego, a process expected to take three to four weeks. Coffman said,

"And it will take a similar amount of time to nail down definitive financing terms and then likely several weeks after that to consummate financing."

Coffman also told the California Stem Cell Report, "SCRM (the consortium) has not expressed doubt that it will receive the grant funds from CIRM. We are confident that CIRM will pay SCRM the grant funds due to SCRM when due.

"California¹s financial challenges have raised potential lender¹s concerns about CIRM¹s ability to pay the grant funds, but CIRM has the means and is working on a document meant to assuage those concerns.

"True, the tax exempt bond market turmoil has impeded our efforts to raise debt funds. But it is an impediment that we will overcome. The tax exempt bond market is showing signs of stabilizing and we continue to work with several groups who have expressed keen interest to help us raise the necessary funds.

"We are fully committed to this project to realize the promise of the Consortium, to harness the power of stem cells to develop the means to diagnose, treat and one day we hope to cure degenerative and other diseases and injuries."

The consortium has close links to the stem cell agency. Two members of the consortium's board of directors, John Reed of Burnham and Marsha Chandler of Salk, also sit on the CIRM board of directors. Scripps and UC San Diego also have representatives on the CIRM board, Floyd Bloom and David Brenner, respectively.

The CIRM grant to the consortium is conditioned on the organization's ability to raise matching funds and meet a completion deadline of December 2010.

CIRM Finances and Grantee Uneasiness

CIRM's financial difficulties have created a certain amount of unease in the California stem cell community. A good example of the anxiety surfaced during its board meeting that ran late into the evening on Jan. 28.

The session was the first public disclosure of the scope of the problems facing the stem cell agency.

Towards the end of the session, Louis Coffman, vice president of the Sanford stem cell consortium in San Diego, addressed the board about his organization's concerns. CIRM Chairman Robert Klein was quick to assure him that night and the next morning that the stem cell agency had legal, contractual commitments to all of its grantees. Here is what Coffman had to say and what Klein told the board the next morning, according to the transcript. First Coffman.

"I bring you a letter from my boss and one of your former members, Dr. Ed Holmes. He's been monitoring this via my e-mail all night long. He said,

"'Mr. Chairman, we appreciate what you, President (Alan) Trounson, and others are doing to realize the vision of CIRM for stem cell research in California and the nation. These are difficult economic times, and your creativity and innovation is appreciated and needed. However, we feel it is important for CIRM to meet its existing commitments in full and on schedule before taking on additional commitments.

"'To not meet the terms of prior NGA's will negatively impact the credibility of cirm as a funding agency. How will future grant awardees have confidence that funds will be there for their programs if existing commitments are not fulfilled?

"'We at SCRM (the consortium) and other entities like us have made warrants, commitments to institutions and individuals based on the NGA we received for our facilities project. We have made commitments to the (UC) regents, to our developers. We have made commitments to generous philanthropists. We've spent his money based upon this NGA, and our consortia members have committed to existing and newly recruited scientists and faculty based on this NGA.

"'We plead with the ICOC(the CIRM board) to honor these existing commitments and request that the adoption of new programs not come at the expense of those that have already been awarded.'"

The next morning Klein brought up consortium's concerns again, saying,

"I was on the phone with Ed Holmes at 10:30 last night going through the constitutional protections for existing commitments and discussing the work that (attorney) James (Harrison) has been doing at my request for the last five weeks on developing something for the banks so they could understand that they could rely upon constitutional protections and the funding authorization we have in place on existing contracts."

CIRM Eyes Three Firms for $200,000 Lobbying Job

The California stem cell agency has not yet made a decision on which of three firms to hire as a $200,000 lobbyist to promote a $10 billion aid package for the biomedical industry.

Don Gibbons, chief communications officer for CIRM, said proposals have been submitted by Van Scoyoc Associates, Hogan & Hartson and The Podesta Group.

The stem cell agency was on a fast track to hire a lobbyist, perhaps as early as last Friday, but Gibbons said that no decision had been made as of Monday.

Van Scoyoc is a Washington, D.C., firm whose web site says,

"We have been a central player in the multi-year effort to double funding for the National Institutes of Health, the National Science Foundation and the Centers for Disease Control and Prevention."

Wikipedia says the firm is 'the largest and most prestigious independent government affairs firm in Washington."

Hogan & Hartson is an international law firm with 1,100 lawyers and offices in both San Francisco and Washington. According to Wikipedia, it is "recognized for excellence in its life sciences and technology practice."

The Podesta Group's clients include Amgen and Genentech. Its principal, Tony Podesta, is "ranked as the the third most influential lobbyist in Washington," according to Wikipedia.

Torres Makes Pitch for Vice Chair's Job at CIRM

State Democratic Party Chairman Art Torres has made the case for his election as vice chairman of California's $3 billion stem cell research agency in a letter to Consumer Watchdog's John M.Simpson.

Simpson wrote late Friday about the statement and the race on his organization's blog.

Torres has a three-part agenda: Dealing with the CIRM funding crisis, enhancing community education/PR and consensus building, including creation of some sort of executive committee for the CIRM board of directors.

Torres said an executive committee could "increase the productivity of meetings." CIRM is currently overseen by a 29-member board of directors that has been hobbled by absenteeism. The absenteeism itself is not so bad, but it makes it difficult to maintain the required superquorum of two-thirds of the board's members necessary to do official business. And because of the size of the board, it is much more of a legislative and debating group than a sharply focused decision-making panel. For example, if each member of the board were to spend three minutes each addressing a single matter, it would take nearly 90 minutes to hear them all.

An executive committee for the board would seem to be desirable, if it can improve the board's efficiency and continue to conduct the people's business in public. But the task of creating one faces several obstacles. One is Prop. 71 itself, whose 10,000 words lock all sort of minutia into the state Constitution and state law and which may make it difficult, if not impossible to create such a panel. Another barrier could come from resistance from some board members who may feel that their voices would not be well heard by an executive panel. And still another is that formation of an executive committee could run into resistance from CIRM Chairman Robert Klein. It could dilute his hold over the board, whose size and diversity of opinion can muddle its focus on some matters. An executive committee could hobble Klein's independence and perhaps call a halt to some of his forays into areas that the panel does not consider high priority.

Running against Torres is Duane Roth, already a member of the CIRM board and a biomedical industry-connected executive. Simpson earlier received a statement from Roth and has written about it.

Simpson's piece drew comment from CIRM board member David Serrano Sewell, concerning objections that Torres, a former state legislator, would "politicize" the board. He noted that CIRM itself was created through a powerful political process, a $30 million ballot initiative in 2004.

He continued:

"Second, most (not all) of the people appointed to the ICOC got on by way of politics, that is to say their name was submitted to a Constitutional Officer, and a third party (usually someone with some heft) advocated for that person.  Some people call that 'lobbying' and there is nothing wrong with that at all."

Sewell continued,

"'Politics' is not a dirty word.  Exhibit A - President Obama, he secured the nomination and won the election by executing some sophisticated political moves and I am glad he did, our country is better off as a result!"

Election of a vice chairman by the board is not expected any sooner than the CIRM's board meeting in March.

CIRM Launches Public Forums With Cast of Stem Cell Headliners

The California stem cell agency will conduct six public meetings in the next three months aimed at promoting the cause of stem cell research and airing proposed changes in its strategic direction.

A gaggle of stem cell research stars will be featured at three Town Hall meetings March 18 in San Francisco, March 31 in San Diego and April 22 in Los Angeles. Their challenge will be to pass the "Taxicab Talk Test," a communications effectiveness measure that originated in La Jolla, Ca.

Two other meetings will focus on the CIRM strategic plan March 5 at the City of Hope in Duarte in the Los Angeles area and March 11 in San Francisco. The purpose is to gather public comment about the proposed changes in CIRM's strategic plan. Another session focused on the business community is scheduled for Feb. 20 at Invitrogen in Carlsbad, Ca.

Nearly all public meetings of the state's $3 billion stem cell agency generate meager audiences, 20 or less in most cases. Whether the latest sessions can generate bigger numbers will be one measure of their success.

We asked Don Gibbons, chief communications officer for CIRM, about the Town Hall forums and outreach efforts to build attendance. He replied,

"These town forums are about educating anyone in the public that we can convince to attend, and, yes, they are strictly science, an update on the progress with their tax dollars. The one in SF is on Market Street after work so that we can get members of the business community. We are printing posters for the Muni/Bart tunnels along Market Street and doing outreach through the email lists of our grantee institutions and patient groups."

Part of CIRM's mission is to educate the public and promote human embryonic stem cell science. While polls show support for the research, the public has only a vague understanding of what is involved and the likelihood of success. That makes public support vulnerable to sudden changes should bad news surface.

PR and communications efforts such as CIRM's have several objectives. One is shore up support from those already in favor hESC research. Another is to reach out and rope in new advocates. Still another is or should be to gather names and email addresses of attendees to build databases for further communications efforts.

One measure of CIRM's success is the Taxicab Talk Test, a concept that we heard first from researcher Jeanne Loring of Scripps in La Jolla, but that we have now reconfigured as a "communications effectiveness measure." She said all researchers should be able to lay out the case for hESC for a taxi driver during a five-minute ride. That means speaking with clarity, brevity and persuasiveness. By the end of the ride, the driver should be nodding in agreement. But, of course, he or she is also motivated by the possibility of a handsome tip.

As far as we know, CIRM is not offering "tips" to attendees at its meetings. But it should circulate feedback forms in the audience to test the effectiveness of the speakers and the general presentation. Something similar should be done at the meetings on the strategic plan to seek written comment from those who may not have a chance or desire to speak publicly.

In addition to Loring, here are the speakers scheduled to appear at the three Town Hall meetings: Renee Reijo Pera of Stanford, Tamara Alliston of UC San Francisco, Bruce Conklin of UC San Francisco, Mahendra Rao of Invitrogen, Stuart Lipton of the Burnham Institute, Hanna Mikkola of UCLA, Donald Kohn of Childrens Hospital Los Angeles and Leslie Thompson of UC Irvine.

CIRM and the Stem Cell Industry: A Lobbying Question

The state of the stem cell/biotech biz drew some attention late last week in Business Week along with a piece on Stockpickr.com dealing with Geron.

Business Week reporter Ben Levisohn painted a depressing picture for most "middling" companies. He wrote that Big Pharma is buying Big Biotech – not the smaller companies. He said,

"That's bad news for small biotech companies, who are already facing a spate of problems. A recent study estimated that 50% of the roughly 380 publicly traded biotechs have less than one year of cash remaining. In the past, they would have raised new capital by selling shares, merging, or partnering with a larger outfit. But for publicly traded companies, equity deals are out—none has been brought to market in the last year, and few are expected to see the light of day in 2009. And even if a deal could be brought to market, with the smallest 10% of stocks in the Nasdaq Biotechnology Index trading down 84% from their 52-week high, vs. 21% for the largest 10%, an equity deal wouldn't make financial sense for many companies."

Over on Stockpickr.com, they had this to say,

"Over the last three months, shares of biotechnology firms Geron (GERN) and StemCells (STEM) are up roughly 200%, compared with a decline in the S&P 500 of almost 5% and a decline in the Nasdaq Biotechnology Index of about 3%.

"So why have both names massively outperformed the boarder market?"

Stockpickr laid out Geron's upcoming clinical trial and surrounding hoopla, but concluded:

"There are still several unknown variables that could take the short-term momentum out of both names."

The Business Week and the Stockpickr pieces could be construed as arguments for the $10 billion biotech aid package promoted by CIRM Chairman Robert Klein. However, the question for the stem cell agency is whether it should be in the business of lobbying the federal government on behalf of the industry. Klein would probably put the question another way: Should CIRM support assistance to the biotech biz so that therapies will result and suffering eased?

Waiting for Obama -- The Stem Cell Delay

Wondering what Obama is wating for? When will he revoke George Bush's rules on human embryonic stem cell research?

It might be in a few weeks or perhaps even much longer, based on a story in the Philadelphia Inquirer.

Reporter Marie McCullough wrote earlier this week,

"Rep. Mike Castle (R., Del.), a congressional champion of the research, said that last week, he explicitly asked White House officials about it.

"'I believe there will be an executive order lifting the funding ban,' Castle said. 'My speculation is that it will happen in a few weeks. . . . They've had a lot of things to deal with. I see no bump in the road.'"

She continued,

"Not until four days before the inauguration, during a CNN interview, did Obama say he would 'prefer' that Congress pass legislation removing Bush's restrictions, 'because those are the people's representatives.'

"That comment prompted some patients' groups to gripe that Obama was backpedaling on his campaign promise.

"But leading scientists also believe that research policy is better set by a comprehensive law than by a revocable directive.

"'I would agree with that,' said John Gearhart, a stem-cell-research pioneer who was wooed last year from Johns Hopkins University to the University of Pennsylvania. 'As researchers, we need a stable base.'"

Legislation can require many months, if not longer, to work its way through Congress, depending on other competing priorities, of which there are many, in Washington.

Fresh Comment

"Anonymous" has left a comment on the $200,000 lobbyist item, asking the question, why can't the biomedical industry do its own lobbying?

Nature's Niche Discusses CIRM Finances

The Niche -- Nature magazine's blog on stem cell issues -- carried a summary this week of CIRM financial matters.

Monya Baker linked to a number of stories, including those on this blog, and commented on the national picture as well. She said,

"The irony about President Obama’s election is that even if the financial crisis is stemmed, scientists studying pluripotent stem cells (both reprogrammed and embryonic) may soon feel like they have less money rather than more. If the NIH budget does not increase, but interest in stem cells continues to, expect more scientists to be chasing the same amount of money and the already low, low funding rate to go down. Meanwhile, the ability and incentives for donors to put up funds for stem-cell research will decrease."

CIRM Board Member Pizzo Writes About Stem Cell Budget Woes

Stanford medical school dean Philip Pizzo, a member of the board of the California stem cell agency, this week offered his assessment of the current state of CIRM's financial affairs.

Writing Tuesday in a newsletter to the medical school staff, Pizzo described the the situation as "ironic" for CIRM, which was designed to be impervious to the vagaries of the state's budget wars.

He said that over the past few years, the NIH has struggled with funding while CIRM "filled a vital and important niche." Pizzo wrote,

"How ironic then to witness a very serious potential setback to CIRM's efforts."

He continued,

"Given the problems in the current bond sale efforts, CIRM and the ICOC (the CIRM board) will pursue an alternative through 'private placement.' This is an ambitious task with lots of challenges -- but it is worth a serious effort. The basic mantra of the ICOC is that we have faced adversity before (which I can affirm is absolutely true) and that we have found ways to overcome major external challenges. We are committed to doing that again."

Pizzo also summarized the discussion last week on CIRM's financial woes with particular emphasis on what CIRM has meant to Stanfod (more than $100 million).

The Stanford Medical School also produced a piece by Krista Conger that discussed CIRM's funding issues.

Pizzo's piece was timely with a positive spin that did not ignore the magnitude of the problem. Other CIRM board members would do well to emulate his effort and distribute their perspectives widely to their staffs and associates.

Audience Numbers for First CIRM Audio-cast

Here is the count from the California stem cell agency on the audience last week for its first-ever audio Webcast of its board meeting.

CIRM spokesman Don Gibbons reported that on Thursday there were 21 users on the phone line and 27 online. On Friday, 23 listened in via the phone line and 85 online. He said there was "no way to know" if those were separate users or "folks coming in and out."

While the numbers appear to be small, they are significantly larger than the typical on-site public audience at board meetings. We have attended a number of board meetings where there are less than 15 persons from the public in the audience, substantially less than the combined total for the 29-member board and CIRM staff in attendance.

Last week's meeting was handicapped by short advance notice of the audiocast. Plus the both board sessions were lengthy, particularly the Thursday afternoon session which stretched past 9 p.m.

Look for higher numbers in March and April as more people become familiar with the service.

Kudos for CIRM Audio Webcast

Jeanne Loring, director of the Center for Regenerative Medicine at the Scripps Research Institute in La Jolla, Ca., is a big fan of the new audio Webcasts of the meetings of the board of the California stem cell agency.

Here is an unsolicited comment from her today:

"I love it! I attend the meetings when I can- but I do have another job, so I'm delighted that I can be there without getting on a plane. I think the broadcasts will go a long way toward helping the public understand why this work is so important, and allow the people who voted for Prop. 71 to know what great things are being done on their behalf."

We agree with her and applaud CIRM for mounting the effort last week. It is not without some problems, but it is a good step towards fulfilling the CIRM promise to adhere to the highest standards of openness and transparency.

We invite other readers to respond as well. You can comment either directly by clicking on the word "comment" below, which permits anonymous comments. Or you can comment by sending an email to djensen@californiastemcellreport.com or to CIRM at info@cirm.ca.gov.

CIRM's $200,000 Lobbyist Could Be at Work by Friday

The California stem cell agency is on a fast track to hire a $200,000 lobbyist to secure passage of a $10 billion biomedical industry aid package being promoted by CIRM Chairman Robert Klein.

If all goes according to plan, the lobbyist's firm will be on board by the end of this week. CIRM posted the RFP only last Wednesday with a deadline of today for proposals. The skimpy advance notice indicates that Kiein probably has a particular firm ready to come aboard.

The $10 billion proposal ballyhooed by Klein was on last week's CIRM board agenda. Klein told directors then that heavy duty lobbying is needed in Washington to help provide funds to the biomedical industry in California.

But he put off more detailed discussion of the matter until March. Klein's supporting material for the industry aid package presented to directors did not mention that he plans to hire the $20,000-a-month lobbyist for 10 months. Another RFP is also promised after that period.

The proposal to hire the lobbyist, which CIRM calls a "federal government relations consultant," seeks a high-powered firm with a track record of achievement, a "strong presence" in Washington as well as a San Francisco Bay Area representative to advise Klein and other CIRM leaders on short notice.

To provide some perspective on the CIRM lobbying proposal, the state of California currently has a lobbyist, Linda Ulrich, in Washington, who is financed through the governor's office. She is a state employee with a salary of $138,276. according to a Sacramento Bee database. The Washington lobbying office obviously has additional but unknown expenses beyond Ulrich's salary, such as benefits which could run close to 50 percent of her pay.

Any CIRM lobbying effort would be substantially bolstered by the election of the politically well-connected leader of the state Democratic Party, Art Torres, as vice chairman of the CIRM board. Indeed, a lobbyist might not be necessary with Torres working for CIRM. All he would require is some staff support. But with the lobbyist and Torres together, CIRM would have considerably more clout.

Also in the running for vice chair's job is Duane Roth, a current member of the CIRM board. Current scuttlebutt has it that the election will occur at the CIRM board in March in Sacramento. (Search on items labelled "vice chair" for more background on the contest.)

At last week's meeting, John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., questioned the advisability of hiring a $200,000 lobbyist given CIRM's financial difficulties.

In response, Klein indicated no figure had been set for the contract.

Here is the language from the RFP:

"Expected Range for this Award is approximately $20,000 per month for the 10 months of the Agreement."

Simpson commented again on Monday about the lobbyist plan, Writing on his blog, he said,

"CIRM needs to ratchet back all discretionary spending.  Right now there is a request seeking proposals for a contract for a Washington lobbyist for up to $20,000 a month for 10 months. That's $200K.  And then there is still the proposal  to fund the International Stem Cell Research Committee meeting in San Francisco to the tune of $400K.

"My point is this: $100K here and $100K there and soon you're talking real money. CIRM simply doesn't have it, doesn't know where it's coming from and needs to stop spending on anything other than existing commitments until there is a clear way out of this crisis. Anything else runs the grave risk of simply digging the hole deeper."

Simpson On The CIRM Private Placement Plan

Consumer Watchdog's John M. Simpson, who sat in on the board meetings last week of the California stem cell agency, today offered his take on CIRM's financial troubles.

Simpson, stem cell project director for the Santa Monica, Ca., organization, noted that the discussions touched on the sale of the bond anticipation notes two years ago, when CIRM also faced fiscal difficulties. Those sales raised $44 million.

Simpson wrote,

"However, former ICOC Vice Chairman Ed Penhoet , who played a key role in selling many of the BANS, notes that most of the purchasers acted for philanthropic reasons and were prepared to lose the money if the courts ruled against CIRM.

"Those BANs were sold when the economy was booming, riding high on the housing bubble.  Today those sorts of investors are feeling the pinch like all the rest of us -- perhaps in some cases even more so.  It is by no means clear that a significant amount can be raised for CIRM by selling bonds privately."

CIRM Vice Chair Story Surfaces in LA Times

The Los Angeles Times, which rarely writes about the state's $3 billion stem cell research effort, has produced an article on the race for the vice chairmanship of the CIRM board.

Written by Eric Bailey, the story casts the contest between Art Torres, chairman of the state Democratic Party, and Duane Roth, a biomedical industry-connected executive and current member of the CIRM board, almost entirely in partisan political terms.

Torres is being support by "Democratic heavyweights" and Roth is the nominee of the Republican governor of California.

One matter that the Times did not mention was the $10 billion federal aid proposal by CIRM Chairman Robert Klein on behalf of the biomedical industry. Torres' presence on the CIRM board would give it extra clout in Washington and perhaps make it unnecessary to hire a $200,000 lobbyist to carry CIRM water in the nation's capitol.

It is not known when the board will actually choose between the two men.

CIRM Strategic Plan Hearings Begin Tomorrow

The California stem cell agency begins hearings into revisions of its strategic plan with a session Tuesday (Feb. 3, 2009) in San Francisco and another in Carlsbad near San Diego on Feb. 20.

The meetings will be heavily focused on industry concerns. Here are some of the questions being addressed tomorrow:

"What are the biggest challenges faced by commercial participants in this sector?

"What should the basic/translational/clinical balance of CIRM’s portfolio be today in order to reach the goals set out in Prop. 71? 18 months from now? Three/five years from now?

"What form should CIRM funding to companies take? Should there be company specific RFAs? Should there be something like SBIRs? Is there a preference between loans (recourse and non-recourse) and grants?

"Do reimbursement uncertainties impact your evaluation of financial opportunities presented by this sector? Should CIRM take a significant role in the discussion around placing a reimbursement value on 'cures?'

"Given that many of CIRM’s policies and regulations are locked in by law, are there any of them that are causing significant blocks to our strategic goals and are there ways to make adjustments to those policies and stay within the framework of the Prop 71 statute."

If you are unable to attend the meetings, you can submit written testimony to info@cirm.ca.gov.

You can find specific locations here and the agenda here.