Stem Cell Affordability Legislation Introduced in State Senate

Legislation aimed at ensuring affordable access by Californians to therapies developed as a result of taxpayer-funded stem cell research is once again before California lawmakers.

This year's measure is SB343 by Sen. Elaine Alquist, D-San Jose, and is now before the Senate Health Committee, which she chairs. (Alquist is at left with a friend who is now in the White House.)

A somewhat different version of the bill was vetoed by Gov. Arnold Schwarzenegger last year after it was opposed by the California stem cell agency. However, last year's legislation, SB1565, won approval of both houses by enormous margins, 37-1 in the Senate and 64-7 in the Assembly.

Enormous margins are required to enact any legislation affecting CIRM because Prop. 71 specified that 70 percent approval of both houses is necessary to enact even the tiniest changes in the law, such as removing the requirement that the chair of the agency is responsible for the CIRM annual report. The unprecedented, super, supermajority requirement does not exist for any other California legislation, including enactment of a budget or imposition of taxes.

Alquist's bill has been changed somewhat from SB1565 to permit a waiver of the affordability requirement in some unusual cases. One of CIRM's objections last year was that SB1565 was inflexible.

The CIRM directors' Legislative Subcommittee will consider its position on SB343 at a meeting March 31. Teleconference locations where the public can participate include San Francisco (two sites), Healdsburg, Washington, D.C., Menlo Park, Palo Alto, Calistoga, Elk Grove and La Jolla. Specific addresses can be found on the agenda.

Also up for consideration on March 31 is SB471 by Sen. Gloria Romero, D-East Los Angeles. The measure states that all education policy makers in the state, including those involved with kindergarten through the 12^th grade, should collaborate with CIRM to advance its educational initiatives. Those include an upcoming CIRM program on stem cell science and regenerative medicine.

Alquist's bill has been referred to her Health Committee. Romero's has not yet been assigned to a committee for hearing.

Klein Promoting Stem Cell Issues in Washington

This item has been removed. The Robert Klein involved in it is not connected with the California stem cell agency, we have been told.

Snippets: CIRM Bonds, Clinicial Trials and TV Coverage

California Bond Picture – The state is moving ahead to unfreeze $500 million in funds to keep bond-funded projects on track. The Pooled Money Investment Fund approved the action on Wednesday, helping to restore a partial sense of normality to the Californa bond scene, according to John Myers of KQED. That's a tiny bit of good news for CIRM and its efforts to market bonds privately. Tom Petruno of the Los Angeles Times also reported today about the sale of California tax-exempt bonds next week to individual investors with interest rates of 5 percent or so. That makes them extremely attractive to California residents, who do not have to pay federal or state taxes on the interest. However, CIRM's bonds will be taxable, which will push their rates higher, costing the state more but making them appealing investments to the enterprises that may purchase them. No mom-and-pop sales on the stem cell bonds.

CIRM Board Audiocast – The CIRM board meeting drew 165 listeners last week to its audiocast, with 121 using the web address, the stem cell agency told us. The 45 others used a phone connection. The figure compares to 108 at the highest level at the January board meeting, the first time an audiocast was available. This is a worthwhile effort by CIRM, offering much wider access to its proceedings. Normally a public audience of about one-tenth the size of the audiocast listeners actually attends CIRM board meeting. However, the audiocast did suffer last week from a lack of promotion. The notice of the audiocast needs a mention on CIRM's home page for at least several days proceeding the board meeting. And it wouldn't hurt to get the various constituent groups to let their members and other interested parties know that an audiocast is available.

Secondhand Smoke on CIRM – Robert Klein, chairman of the California stem cell agency, came under heavy fire this week on the Secondhand Smoke blog by Wesley J. Smith, an author and self-professed "trouble maker." Smith said Klein's leadership was "reminiscent of the entire financial mess at the federal level in a microcosm," among other things. Also this week, The Sacramento Bee carried a less vitriolic op-ed article by Smith on stem cell issues.

TV Time – The California stem cell agency scored some significant TV time in San Francisco on Tuesday with a 2 minute and 43 second piece. The ABC station, KGO, aired the story, which was keyed to a CIRM meeting aimed telling the public more about stem research. Carolyn Johnson did the narration. Stanford's Renee Reijo Pera held forth. Unfortunately Johnson reported that research at Stanford is funded "privately" by CIRM. As we all know, CIRM is in a very public funding situation. Nonetheless, TV coverage of CIRM is rare, and the agency should be tickled with the story.

CIRM on Clinical Trials – A 20-page summary of last month's clinical trials workshop conducted by CIRM is now available online. Readers would want to couple it with the transcripts from the session of the Standards Working Group at which it was discussed. They can be found here and here. The use of somatic cells and reporting requirements for oocyte donation were also part of the meeting.

Torres-Roth Election: An Adroit Move for CIRM

Without so much as lifting a finger, Art Torres has already had a salubrious financial impact on the California stem cell agency.

Last week, Torres(at left), the leader of the state Democratic Party and a former, longtime state legislator, was elected co-vice chair of the agency. As a result, CIRM has dropped its efforts to hire an in-house legislative relations staffer. That position has a salary range that tops out at $138,800. Torres is being paid $75,000 for halftime work.

On Tuesday, we noticed that the job opening was missing from the CIRM web site. We queried Don Gibbons, chief communications officer, whether the position was filled. He responded,

"We are saving money. The position is not needed with Art here."

Dropping the recruitment effort is modestly beneficial financially now and for the foreseeable future, given the agency's financial plight. But CIRM is chronically understaffed – capped at 50 persons by a nearly immutable state law. The agency relies heavily on outside contractors for its work – a situation fraught with well-documented financial and managerial peril at any level of government.

As for the election of Torres and Duane Roth as dual vice chairs, we think it was an adroit move, one that will benefit CIRM, certainly in the short term. A potential political problem was avoided. Much-needed internal heft was added to CIRM's governmental relations efforts along with its relations with the biotech industry. Torres will also bring a long-needed, experienced voice in governmental affairs to the highest levels of CIRM.

But as in all things, the devil is in the details of execution. If Roth and Torres butt heads significantly, either sooner or later, it could be a serious diversion from CIRM's main objectives. That is not to mention whether CIRM Chairman Robert Klein, who controls what the men do, can delegate responsibility and authority effectively without micromanaging their work. That goal for Klein should be high on the evaluation priorities by the CIRM directors' Governance Subcommittee.

Earlier this week, The Sacramento Bee editorialized that the dual vice chair situation is a poor idea because it makes it harder to check Klein's broad powers. A single vice chair would be more powerful, The Bee argued. There is a certain logic to that argument. However, the vice chairs are largely Klein's creatures. He is the one who is charged with setting their agendas, although the board of directors has a role as well. Should Klein feel that either Roth or Torres are impinging on his prerogatives, we have no doubt that he will move to freeze them out.

On the other hand, Torres is a veteran political operator and will soon develop his own constituencies and alliances both within the board as well as with outside organizations and lawmakers, both in Washington and Sacramento. Roth also already has his own constituencies within the biomedical industry and on the board.

One final note on Torres and his salubrious impact: Any savings resulting from leaving vacant the governmental affairs position will be minimized by Torres' travel and other expenses, which we assume will be relatively high and involve multiple trips to the nation's capital.

Fresh Comment

Lawrence Ebert has filed a comment on the "Sharing the Weath" item. Among other things, he says,

"An issue with the 'paying for things twice' viewpoint is that the costs of 'making the invention' (the research and patenting costs) are generally DWARFED by the development/marketing costs. If someone can't get return on THOSE costs, they won't invest."

Fresh Comment

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., has filed a comment on the "AIG Share-The-Weath." Among other things, he invokes the late Adm. Hyman Rickover in support of requiring recipients of federal research grants to share any profits that might result. And he cites Jennifer Washburn's book, "University Inc.: The Corporate Corruption of Higher Education." Simpson also wrote on the blog on his organization's web site that a change away from the old, business-first political mood "is necessary if we're to restore economic equality in this country."

Faster Posting of Comments Enabled on This Web Site

In order to encourage a dialog on this web site, we have removed the comment moderation feature from the California Stem Cell Report. Your comments will now be posted directly and automatically to the site. You can post them anonymously, but we encourage all to post using your own names.

If you run into any difficulties using the comment function or do not see your comment posted after 10 minutes or so, please let me know via email at djensen@californiastemcellreport.com. You can also send comments for posting to that email address. I will be glad to put them up. Or if you want to excoriate me privately or provide information, you can use that same email address.

Timing Right for Sharing the Wealth on Federal Stem Cell Research

How are those folks over at 70 Pine Street in New York City helping those at 1750 Ocean Park Boulevard in Santa Monica, Ca.?

Unknowingly, they are creating a ripe opportunity in the nation's capital to extract a piece of the stem cell action from the recipients of government largess.

The players at 70 Pine are the executives at AIG, fast supplanting Enron as the most reviled company in modern American history. The Santa Monica address houses the offices of Consumer Watchdog, a nonprofit organization that has called for sharing the profits from any federally funded stem cell or other research.

A year ago, such a pitch would have died aborning. Today, given the scandals concerning AIG and other corporate failures, the political mood has changed and will change more – all in the direction that no one in the business community will like.

Trust in American business may be at its lowest point in history among the "informed public," according to one poll. Only 38 percent say they trust business to do the right thing, down 20 percent from last year. Presumably the figure would be even lower among the general public.

In a letter to President Obama, last week, Consumer Watchdog cited the California stem cell agency as an example for the feds to emulate in terms of sharing the wealth from any therapies that result from government-funded research. Under certain circumstances, CIRM grant recipients must pony up some cash if they bring a product to market profitably. No such requirement exists for the tens of billions of dollars handed out by the NIH.

The bailout brouhaha creates a golden opportunity for Consumer Watchdog and like-minded organizations to enact share-the-wealth requirements for federal research grants. The logic is compelling. Venture capitalists demand their share of the booty when they fund individuals or businesses. Why shouldn't the government, especially in these difficult financial times.

Consumer Watchdog and its allies could even make the case for attaching such requirements to the $10 billion biotech stimulus package being pushed by CIRM Chairman Robert Klein and the powerful Podesta lobbying group.

CIRM Director Sewell Criticizes Bee Editorial

CIRM Director David Serrano Sewell today posted a comment on The Sacramento Bee web site defending the election of Art Torres as a co-chair of the agency's board.

Sewell, who last week described Torres as a personal mentor, also challenged the newspaper editorial's comments on the power wielded by CIRM Chairman Robert Klein. Sewell wrote in part,

"When will your obsession with Klein end? While it's a source of amusement for many, it's getting old. Frankly, it borders on stalking."

Sewell also said,

"Torres has spent his entire career speaking the truth to power, and that won't change. Who better to serve as a check, a career public servant or a big pharma executive? I wonder what the public thinks."

If the other comments on The Bee's editorial today are to be taken as representative of the public – and they are not – they do not think much of Torres, CIRM or the governor.

(Editor's note: An earlier version of this item carried a photo of Sewell. We have removed it as his request.)

The Bee: Dual Vice Chairs at CIRM Enhance Klein's Power

The Sacramento Bee today said the election of two vice chairs on the board of the California stem cell agency gives its chairman, Robert Klein, "more power than ever."

The Bee made the comment in an editorial that also said that the CIRM board of directors – formally and fancifully known as Independent Citizens Oversight Committee -- is far from independent.

The editorial said splitting the vice chair position between Art Torres and Duane Roth meant that it would be difficult for the vice chair to serve as a check on Klein's broad authority and power. The Bee noted,

"If the stem cell institute had a normal structure, with a strong president handling administrative duties, the selection of the institute vice chair would be less consequential."

The Bee concluded,

"It's a further demonstration that the Independent Citizens Oversight Committee is neither independent, nor a group of citizens, nor much of an overseer of $3 billion in public monies."

Early this morning, only one Bee reader had commented on the editorial. The anonymous reader said,

"What are we to expect? It is only government money and does not belong to anyone, so why not use it to feather the nest of termed out favorites of the ruling class? "

The reader appeared to be referring to a running flap in California over the appointment by the governor and others of termed-out legislators to paid positions on various state boards.

For the record, the print version of The Bee, the only daily newspaper in the state Capitol, has not carried a story on the election of Roth and Torres. A brief mention did appear on one of The Bee's blogs.

The lack of coverage probably had something to do with the paper's shrinking staff. Ten days ago, The Bee laid off 128 employees, 11 percent of its staff. Like other newspapers in both the McClatchy chain and around the country, this was only the latest. Since June, The Bee has eliminated positions for 301 men and women, 26 percent of its staff. Sixty-five jobs have been lost in the newsroom, which now numbers 190 persons.

Stanford Reports on CIRM Finances

Stanford carried a bit of a news piece today on the California stem cell agency and its financial woes.

The headline was "State stem cell institute slows its pace of funding."

Written for the Stanford News Service by Krista Conger, the article said CIRM is deferring funding on 15 training grants, including one to Stanford. Conger reported,

"The delay will give the institute the breathing room necessary to do a private placement of bonds in an effort to shore up its financial situation."

She continued,

"'It's disappointing to hear that our funding will be delayed,' said Michael Longaker, MD, deputy director of Stanford's Stem Cell Biology and Regenerative Medicine Institute and principal investigator of the CIRM-approved grant. 'However, we certainly understand that these are difficult economic times.'"

The article also touched on another round of training grants that was approved and briefly described the current financial plight of the stem cell agency.

The article seemed a bit unusual to us. Normally, in-house enterprises such as the Stanford News Service are oriented towards PR, touting the winning of grants – not their absence. However, the piece could be an outgrowth of the hard times in the traditional media, which is virtually ignoring the stem cell agency. We may see PR practitioners stepping into that information void -- one that stretches well beyond stem cell news -- to fill the gap left by the decline of newspapers. Certainly the Stanford community cannot rely on the mainstream media to report all the news that could have an impact on that university.

California Bond Funding: An Easing of Constraints

California state Treasurer Bill Lockyer released another bit of good news today for California enterprises beleaguered by a lack of bond funding, although the announcement would seem to have little direct impact on the state's stem cell agency.

Tom Dresslar, a spokesman for Lockyer, said the treasurer will recommend that the state's Pooled Money Investment Board approve up to $500 million in funding for various bond-funded projects whose funds have been frozen.

The move is contingent on successful completion of the $4 billion state bond sale next week.

CIRM is not likely to be in line for that money. It has been told it is likely to be well down the list of state bond-funded enterprises. While CIRM does not benefit directly from Lockyer's move, anything that helps to create what appears to be a normal financial climate in California will help CIRM's efforts to sell state bonds privately.

Lockyer said the pooled money investment fund has $6 billion in outstanding infrastructure loans that are unreimbursed. The fund is a mechanism that provides loans for projects until bonds are sold, then the bonds are used to repay the fund.

Lockyer's announcement was contained in a widely emailed statement.

CIRM Watching Upcoming Bond Sales

The folks at the California stem cell agency will be keeping a weather eye on the bond market during the next couple of weeks as both the Golden State and Wisconsin move forward with their bids to sell more than $5 billion in bonds.

The agency depends on California state bonds for its operations and grants. And California has not sold any bonds since last June. That means that CIRM will run out of cash next fall unless it is successful in marketing about $200 million in bonds this year.

On Friday, California announced its plan to offer up $4 billion next week, the largest long term muni bond sale since October 2007, according to Bond Buyer. Fearing an overcrowded market, Wisconsin bumped up its $1.5 billion sale to this week.

CIRM Chairman Robert Klein, who came up with the plan for CIRM to privately market the bonds, will be watching both the Wisconsin and California sales for their interest rates and for the tenor of the market. Wisconsin has a better credit rating than California, which is the lowest of any state in the nation.

Placing state bonds privately is unusual, which creates uncertainty. Smooth sales this week and next would be a good sign for Klein.

He needs to move with some dispatch. More bad economic and state budget news surfaced on Friday with a forecast from the state Legislative Analyst that state revenues will fall $8 billion short of the assumptions in the budget passed last month in California.

One of those assumption is that a package of budget measures will be approved in May by voters. Initial polling shows considerable voter dissatisfaction with the state budget deal (55 percent negative). The respected Field Poll shows initial support for the measures but large numbers of undecided voters. Without passage of the measures, the state's revenue picture will turn decidedly bleak.

While Klein will be beating the bushes for bond buyers, state Treasurer Bill Lockyer has final say on sale of state bonds. Tom Dresslar, spokesman for Lockyer, told us in an email on Thursday,

"As far as I know, no final decision has been made on whether to sell the next stem cell bonds through a private placement or public offering. We may still opt for the latter. But, given the still-precarious condition of capital markets, and the CIRM's financial condition, it's nice maximize your financing options."

Late last month, we discussed the general framework of the CIRM bond sales with Dresslar. Here is what he told us,

"The Treasurer's Office will determine the structure, amount and timing of any sale. In making that determination, the office will consult with CIRM and set a course of action that best meshes the interests of CIRM and taxpayers. We have told CIRM we'll consider the private placement route, as long as they can find suitable investors.

"CIRM has the same ability to obtain loans from the Pooled Money Investment Account as any other GO (general obligation) bond program. The PMIA's governing board will meet soon to make decisions on when and to what extent it will thaw the freeze on PMIA loans imposed last Dec. 17. Assuming the freeze is lifted, CIRM could apply for loans along with all other GO bond programs."

Bernie Siegel Appearances in California

The peripatetic head of the Genetics Policy Institute in Florida , Bernard Siegel, will be visiting and speaking in San Francisco on Wednesday on the "stem cell consumer movement in the Obama era" at the Commonwealth Club.

In addition to his noon talk, Siegel will also be speaking in Palo Alto at the Smart Life Forum on Thursday at 7 p.m.

Siegel's comments are increasingly popping up in the media on stem cell issues nationally. Specific locations and more details can be found by clicking on the names of the organizations.

A Diversion: Rosemary, Garlic and Sourdough

Consider this a shameless, family, promotion posting.

If any of you folks are on the Gulf Coast of Mississippi, check out the Serious Bread at a little spot in Bay St. Louis.

Megan Jordan of the Velveteen Mind web site recently wrote that "the Serious Bread company, housed in the back of the Mockingbird Cafe, makes a mean rosemary garlic sourdough."

Serious Bread is an enterprise started by my brother, Alan Jensen, after Hurricane Katrina scored a direct hit on Bay St. Louis, a tiny community right on the beach, where he has lived for years.

You can find on the Mockingbird site a little essay by him on bread making and how a former oceanographer is now digging into poolish and biga.

Consumer Watchdog: New Role Needed for CIRM

In an article that was eclipsed last week by the vice chair and other affairs at the CIRM board meeting, one longtime observer of the California stem cell scene says the agency needs to step back, hand over the reins to the federal government and redefine its role.

John M. SimpsonI(see photo), stem cell project director for Consumer Watchdog of Santa Monica, Ca., made the comments in an op-ed piece March 12 in The Sacramento Bee.

He wrote,

"The California program has yet to produce cures; I believe it ultimately will.

"But the new active federal role demands a new CIRM approach to maximize the scientific benefits of its grants. What's needed is a close partnership with the federal National Institutes of Health, in which the state's institute is the junior partner. And CIRM needs to emphasize science, not hype. For its part, the NIH must acknowledge CIRM's contributions while the federal agency was largely out of the picture."

Simpson continued,

"Even if a few large egos are bruised, the challenge facing the state's institute is to relinquish leadership to the feds and figure out how to augment and complement the NIH efforts. There needs to be close collaboration between each organization's scientists.

"NIH emphasizes basic research. CIRM could emphasize funding later-stage translational, preclinical or even early-stage clinical trials. Federal law still prohibits using federal funds to derive new stem cell lines from embryos, though experiments can be funded once the cells lines are established. That is another opportunity for CIRM. The point is that the agency must determine where it adds the most value and concentrate efforts there."

Not all the readers of the Simpson piece agreed. One anonymous reader commented on The Bee website,

"This article is just more hype to try and divert state money from schools, hospitals, etc. and pour it into a 'rat hole' that has failed to produce anything of value."

The reader also wrote,

"Why doesn't the Bee report on the financial problems facing CIRM and it's failure to be able to fund grants they have already 'awarded.'. Where are the stories about CIRM's pending funding shortfall's The taxpayers need the facts in order to judge this mess. The best CIRM can deliver is paying its own executives and Washington lobbyists! "

The Alan and Arnold Show

CIRM President Alan Trounson sat in for California Gov. Arnold Schwarzenegger on Saturday. The occasion was the governor's weekly radio show.

The topic was "células madres embrionarias" or human embryonic stem cells. Not that the man from down under spoke in Spanish. The governor's office translated the 2-minute, 49-second talk into a 3-minute, 29-second version that can be found on his web site.. The change in length does not mean the content changed. A rule of thumb in print is that Spanish takes roughly 10 percent more space than an English version of an article.

Both a print and audio version of the talk can be found on the governor's web site. Trounson did not attempt the Spanish version. His English already carries an Australian accent. Rather the talk began with a few words from Trounson in English followed by a Spanish audio version voiced by an unnamed translator.

In his talk, Trounson used President Obama's announcement last Monday to expound on the benefits of stem cell reasearch. He said,

"Nunca más reprimiremos a nuestros científicos y empresarios."

In other words,

"We will no longer hold back our scientists and entrepreneurs."

Or, in our Spanish to English translation,

"Never more will we stifle our scientists and entrepreneurs."

But no matter. Bien dicho, profe Trounson.

CIRM Director Sheehy Decries Unfortunate Lack of Information

CIRM Director Jeff Sheehy, a patient advocate representative on the stem cell agency's board and a communications officer at UC San Francisco, sent along this note regarding our posting of the funding priorities presentation used at Thursday's board meeting.

"Thank you for posting this doc. I'm glad you have it up so the public can see it. I still don't have a copy, though I requested one at the meeting. And, I cannot understand why this doc was not provided to ICOC members and the public prior to the meeting since the Chair had a copy of the Power Point slides that he alone used to follow the presentation.

"In this troubling budget environment, it is extremely unfortunate that information is either withheld from the Board or provided in such a way that the Board is in a position of having to make decisions without all of the information or without adequate time to digest and consider the information presented."

Bad Link Advisory

We fixed a couple of bad links on the "CIRM PR" item and this "comment" notice. If you missed them the first time, you can find them now.

Torres-Roth Election Attracts Media Attention

The board of the California stem cell agency today received more than its usual amount of news coverage as the result of the election of Art Torres and Duane Roth as vice chairs of the board of directors.

The reason for the attention is Art Torres. He is well known to the news media because of his lifelong career in politics. If the vice chair race had involved Duane Roth and Marcy Feit(another CIRM director), the election of a vice chair would have been barely noticed.

Most of the stories focused almost entirely on Torres and Roth. A notable and important exception was the piece on one of the websites of the influential magazine Nature.

Erika Check Hayden reported on the election and much more from the meeting. Her story began:

"The California Institute for Regenerative Medicine has sharpened the agency’s focus on translating stem cell-based treatments into treatments, in the wake of President Barack Obama’s decision to loosen restrictions on federal funding for human embryonic stem cell research."

She touched on the funding crisis at the agency and its priorities, along with the struggle between basic science and translational research. She also had material from another CIRM meeting on March 11,

"'This push of getting out there to the clinic has some risks,' warned Arnold Kriegstein of the University of California San Francisco at the meeting. 'There’s a risk that little will be learned at great cost' if patients are harmed in poorly designed early clinical trials, Kriegstein said.

"And Warner Greene of UCSF’s Gladstone Institute of Virology and Immunology cautioned against 'turning over the reins' of basic science to the NIH: 'It’s foolish to expect now that the disease teams will succeed,' he said."

Terri Somers of the San Diego Union-Tribune wrote about the vice chair election. (Duane Roth is from the San Diego area.) Somers called the election "job sharing." She had this quote from CIRM director Francisco Prieto, a Sacramento physician, who spoke about compensation for the vice chairs,

"I believe that everyone should be compensated appropriately and fairly for the work they are going to do.In the context of the board and a state agency, to demand something like that excludes participation from anyone who isn't independently wealthy or cannot depend on outside income, which is a substantial portion of the population that needs to be represented here and everywhere else."

Torres was provided a $75,000 salary for halftime work. Roth has declined a salary.

The Los Angeles Times rarely covers the California stem cell agency, but again the draw was Torres in a story by Eric Bailey.

Other stories and writers included: Ron Leuty, San Francisco Business Times; Shane Goldmacher, Sacramento Bee's Capitol Alert; Juha-Pekka Tikka, Xconomy.com, and The Associated Press.