Hurricane Rick Plays Hob with Stem Cell Report

A 180-mile-an-hour hurricane in the Pacific Ocean means that we will be focused this week on preparations for the storm and not on items for the California Stem Cell Report.

We are currently in a Mazatlan marina on our sailboat, Hopalong, on which we have lived for the last 11 years. Hurricane Rick is expected to hit the mainland of Mexico Wednesday or Thursday at hurricane force, but down from its current velocity to only 100 miles an hour or so.

Current predictions say the landfall will be north of us, maybe a couple of hundred miles, but the reliability of the forecasts is considerably less than 100 percent.

So we will be stripping the topsides of the boat, removing sails, adding dock lines, putting in supplies, arranging for alternative housing ashore and so forth today, Monday and Tuesday. If all goes well, we may have some fresh CIRM stuff next weekend.

Here is a link to Hurricane Rick's track as of this writing. Mazatlan is located on the mainland due east of the tip of Baja.

CIRM On Track to Hit $1 Billion Mark

The board of directors of the California stem cell agency late this month is expected to approve $210 million for disease team grants and loans, the largest ever research round for the five-year-old enterprise.

The amount will push CIRM's grant total to about $1 billion, the bulk of which has gone to institutions with representatives on its board of directors. The agency has authority to spend another $2 billion, which it generates through California state bonds. When that runs out, the agency will need to find additional funding if it is to continue.

The meeting Oct. 27-28 in Los Angeles will also mark the first ever loans made by the agency, which has plans to build the loan program to $500 million. The purpose of the loans is to assist biotech businesses that could not otherwise receive funding because they are in what as known as a “valley of death” financially. The expectation is that the loans will generate $100 million despite loan failure rates as high as 50 percent. Any profit is expected to be recycled as more loans or grants.

Prior to the board meeting, the directors' Finance Subcommittee is scheduled on Friday to consider some basic matters concerning the loan program. The recommendations of the panel will go before the board at its meeting at the end of the month.

No background information has yet been posted concerning those matters, which range from criteria for certain loans to unspecified changes in loan administration policies.

Also on tap for the full board meeting is a discussion of the yet-to-be released results of a survey of the scientific grant reviewers concerning whether they would be willing to publicly disclose their financial interests. They are members of the Grants Working Group, which makes the de facto decisions on CIRM grants.

The Little Hoover Commission, the state's good government agency, recommended the survey because of the power of the scientific reviewers, who perform their work behind closed doors. Questions have been raised about conflicts on the part of the reviewers, in private by some researchers, but some in public.

It is commonplace for scientists to disclose financial interests in publication of research papers, but some CIRM directors fear that public disclosure of reviewer interests would result in the loss of some reviewers, who would resign rather than be subject to public scrutiny.

Also on the table for the meeting is the update to CIRM's strategic plan, which would officially set CIRM on a course for closer relationships with the biotech industry. The agency is currently engaged in a $100,000 search to fill a newly created vice president of research and development. The post has a salary range that tops out at $332,000 and is aimed at attracting candidates from industry.

CIRM-China Agreement?

The $3 billion California stem cell agency has reached a collaborative research agreement with China, according to a news report on the Internet.

Here is what Richard Daverman of ChinaBio posted this morning,

“In a story postdated to Monday, October 19, 2009, The California Institute for Regenerative Medicine (CIRM) revealed it has signed an agreement to collaborate on stem cell research with China’s Ministry of Science and Technology.

“The announcement was little more than a headline. Details will most likely be released on Monday.

“CIRM was established in 2004 with a $3 billion budget earmarked for funding research on stem cells. CIRM’s charter required that the money would be spent over a ten-year period, and grants would be given only to California-based institutions, both public and private. It is not clear how CIRM will cooperate with MOST, given the second provision.”

As of this writing, we could find no other reports on the subject. We are querying CIRM concerning the item.

CIRM has a number of collaborative agreements in place that include such countries as Spain, Canada and Germany. The arrangements provide for creation of international teams of researchers who bid jointly for grants. CIRM funds only research in California. The other countries put up their own cash.

Square 1 Wins CIRM Biotech Loan Pilot Project

The California stem cell agency has signed a $250,000 contract with Square 1 bank to perform a financial review of the firms seeking the first-ever CIRM loans in a program that could reach $500 million or so.

In response to a query, Don Gibbons, chief communications officer for CIRM, said today that the fee-for-service arrangement covered only this year's $210 million disease team round, which is budgeted for 12 awards.

Next Friday, the CIRM directors' Finance Subcommittee is scheduled to consider financial review procedures.

Originally CIRM had hoped to have more than one firm available to perform reviews because of the possibility of conflicts of interest. But last month, the agency decided to go with one firm on a pilot project basis.

At a meeting Sept. 15, CIRM Chairman Robert Klein told directors,

“By having a pilot contract, we can learn a great deal, the lender can learn, and we can be in a position in December or early next year of bringing back something that has gone back to the (directors) Finance Committee again and has more experience in it on the implementation side rather than getting ourselves into a large master contract without that case study value on a very limited and controlled basis.”

Klein said the number of possible loans in the disease team round is “very small.”

John Robson, vice president for CIRM operations, said the next possible round of loans(early translation RFA) would not come up until the middle of next year. He said that would allow the staff to develop a more robust proposal that would engage more than one underwriter.

Chris Woolley(see photo), president of the life sciences division of Square 1 in San Diego, offered the original bid on behalf of his firm. Woolley is a past president of the San Diego Venture Group and formerly served on the board of Biocom, an industry group in that area.

Here is a link to Woolley's original proposal earlier this year.

CIRM Tackles $500 Million Biotech Loan Issues

A key panel of directors of the California stem cell agency next week will wrestle with a few fundamental issues concerning its ambitious, $500 million biotech loan program.

Matters such as the process for financial review of loan applications, unspecified changes in the loan administration policy and criteria for eligibility for recourse loans are on the table for a teleconference meeting of the directors' Finance Subcommittee.

Biotech firms interested in participating in the loan program would be well-advised to sit in on the Oct. 23 session at one of eight teleconference locations.

CIRM's lending effort, which will use borrowed funds (bonds) to make the loans, is slated to get underway with this year's $210 million disease team effort, the largest ever research round by CIRM.

CIRM plans to loan money to risky enterprises that otherwise could not secure financing. Loan failure rates of up to 50 percent in the program have been predicted by CIRM. However, CIRM projections estimate that the effort will generate $100 million in profits that can be recycled into additional grants or loans.

So far, no background information has been posted by the agency concerning the issues to be discussed Oct. 23. at next week's meeting.

Interested parties can participate in the session at seven locations in California and one in Waco, Texas, where a CIRM director is expected to located. The locations in California include San Francisco, Irvine, Hillsborough, Menlo Park, Palo Alto, Los Angeles and San Diego.

Specific addresses can be found on the agenda.

CIRM Hires Levin to Help Find New VP

The California stem cell agency has hired the self-styled “boutique” executive search firm of Levin & Company, Inc., to help find a vice president for research, a new position created in the wake of the sudden departure of Marie Csete as chief scientific officer earlier this year.

According to CIRM, Levin has signed a $100,000 contract with the agency. Levin beat out Korn/Ferry International, McCormack & Farrow, Caliber Associates, Russell Reynolds Associates, Spencer Stuart and The A-list.

Csete announced her resignation in June and subsequently told Nature magazine that her advice was not respected.

CIRM President Alan Trounson created the new research and development position with an eye to attracting candidates with more commercial research backgrounds. CIRM's salary range for the position tops out at $332,000.

In its proposal, the firm said,

“While we recognize that CIRM may have limitations on what it can offer (such as a bonus), we have had demonstrated experience in recruiting for clients with similar restrictions, such as early stage companies which are unable to offer bonuses, or international clients which cannot provide an equity package.”

Levin has a long history in the life sciences industry. In its proposal, it said it had completed search assignments for CEOs for the following stem cell-connected firms: Osiris Therapeutics, Cellerant Therapeutics, StemCells, Inc., and ViaCell.

The firm said its CEO, Christos Richards (see photo), would personally lead the search, personally interview each finalist and negotiate the final package.

Levin projected a timetable of four to six months from the beginning of the search (Aug. 24) to the start date of the vice president. It said the period could be shorter but said “a search taking longer than six months leaves the potential for a dissatsified client.”

Levin, which has its corporate office in Boston, also has offices in San Francisco, Los Angeles and Pennsylvania.

Klein Honored for Leadership on Stem Cells

Research America, a national group that promotes medical and health research, has given its Gordon and Llura Gund annual leadership award to Robert Klein, chairman of the $3 billion California stem cell agency.

Klein has headed the California Institute for Regenerative Medicine since its inception and, in 2004, led the ballot campaign to create CIRM, which is headquartered in San Francisco. It was created to fund research into human embryonic stem cells, which former President Bush famously stymied during much of his eight years in office.

Klein's agency is on track to approve $1 billion in grants by the end of this year and is the world's largest source of funding for hESC research.

Klein, a Palo Alto, Ca., real estate investment banker, took no salary for his work until late last year. His personality, style and zeal have left an immutable stamp on CIRM.

He will be honored at a dinner in Washington, D.C., March 16.

Our congratulations to Bob.

Twitter Tops on Klein

The other day we read an article about how email is soon to go the way of letter-writing – done in by such things as Twitter and Facebook.

Indeed, the changes reach far beyond that. A case in point is the news that CIRM Chairman Robert Klein is being honored for his leadership in stem cell research.

When we Googled the terms “klein research america,” a reference to the award from “Research America” came up in the No. 5 position. But it linked to an item from Twitter (known as a Tweet) – not the announcements from Research America or CIRM. Neither showed up on the first four pages of the Google search results.

We first learned of the award this week when Klein's face popped up on the CIRM home page in a position that rotates images of various CIRM items. You can find him there every 16 seconds or so, or you can read the release from CIRM. Here is a link to the Research America announcement.

CIRM Directors Take Up Revised Research Standards Oct. 27

The Standards Working Group of the California stem cell agency today gave the nod to changes in its standards aimed at achieving consistency with national rules for human embryonic stem cell research.

The proposed regulations now go to the CIRM board of directors at its meeting in Los Angeles Oct. 27-28.

For more on the rules, see the “Research Standards” item on Oct. 11, 2009.

Correction

The “Research Standards” item Oct. 11, 2009, incorrectly said the regulations will be considered Oct. 16 by the CIRM board. The regulations will come before the board Oct. 27-28.

CIRM Stem Cell Education Bill Signed into Law

California Gov. Arnold Schwarzenegger has signed legislation aimed at promoting stem cell science and training in the state's schools.

The legislation was backed by the California stem cell agency and requires, among other things, that the state Department of Education post a CIRM model curriculum on department's web site.

The measure (SB471) by Sen. Gloria Romero, D-Los Angeles, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, originally would have required the state Board of Education “to incorporate stem cell science curriculum content and the science curriculum framework, evaluation, and instructional materials at its next curriculum revision and adoption and requested the U.C. Regents to consult with various entities in developing a curriculum for the California State Summer School for Mathematics and Science. “

The bill goes into effect next year. You can find the latest legislative staff analysis here and the text here.

Congressional Bill on hESC Research

A Colorado congresswoman is planning to introduce legislation to codify the president's executive order permitting federal funds to be used for human embryonic stem cell research and to require periodic review of NIH research guidelines.

The Washington Post reported during the weekend:

“Usually, couples who go to in vitro fertilization clinics create more embryos than will be implanted. The remainder are either destroyed or frozen. The NIH regulations and the bill would allow couples to donate their embryos for research as long as they are fully informed of their choices and they are not compensated for the embryos. The guidelines give donors the ability to change their minds 'until the embryos were actually used.'"

The newspaper continued:

“Congress already prohibits federal funding for collecting stem cell lines from human embryos, which are destroyed in the process. But the NIH rules make it clear that taxpayer money will not be used on lines from embryos created solely for research.”

Rep. Diana DeGette, D-Colo., plans to introduce the measure soon, according to the Post. The CIRM Standards Working Group meets this morning to consider revising California regulations to achieve consistency with federal rules.

California Chief Justice Rips State's Initiative Process

First it was Bill Gross, and then came Ronald George.

Neither name is a household word, but they do have a cachet in certain circles.

Gross is head of a $178 billion bond fund (Pimco Total Return) based in Southern California. George(see photo) is chief justice of the California State Supreme Court.

What they have in common this month is their public scorn for the state's ballot initiative process, the method used to create CIRM and which lies at the root of the some of the problems that regularly trouble the California stem cell research agency.

George's remarks surfaced during the weekend in both the New York Times, Los Angeles Times and The Sacramento Bee, among other news outlets. His comments followed an earlier blast by Gross that the government of the Golden State has been “perverted” with many of its financial difficulties stemming from ballot initiatives.

In the case of Ronald George, Jennifer Steinhauer of the New York Times described his comments as a “rare public rebuke of state government and policies delivered by a sitting judge.” She said George “scathingly criticized” the initiative process, declaring that it has “rendered our state government dysfunctional.”

George noted that ballot initiatives not only foul up California's budget but tinker with how barnyard creatures are managed. Steinhauer wrote:

“The state is unusual, he said, because it prohibits its Legislature from amending or repealing many types of laws without voter approval, essentially hamstringing that body — and the executive branch.”

The chief justice could have added that CIRM has fallen prey to the same problem. Prop. 71, the ballot initiative that created the agency in 2004, has handcuffed the $3 billion California stem cell agency in dealing with the problems created by its ill-conceived, super-majority quorum requirements as well a redundant limitation on the size of CIRM staff.

Legally, the number of CIRM employees cannot exceed 50, probably about the number of persons needed to run a 24-7 Burger King. That amounts to one CIRM employee to deal with every $20 million in grants expected to be approved by the end of this year. That doesn't count another $2 billion to be awarded in the next five to 10 years.

George noted that ballot measures – originally intended to empower the people – have become tools of special interests. Last year, the Center for Governmental Studies in Los Angeles, documented the range of problems in a 402-page study calling for changes in ballot initiatives. It said that Prop. 71, which established CIRM, is an example of an initiative sponsored by “wealthy elites.”

The timing of George's speech and its handling by his representatives seems interesting as well. The speech was delivered Saturday in Cambridge, Mass., to the American Academy of Arts and Sciences. But advance copies were placed in the hands of reporters at the Los Angeles and New York Times and The Bee in sufficient time for stories to be written and published before it was actually delivered.

It is undoubtedly no coincidence that the placement occurred just before hundreds of persons convene this week in Sacramento for a conference on state constitutional reform, which is what it will take to correct the abuses in the ballot initiative process.

CIRM Acts on Revised Research Standards This Week

The California stem cell agency Monday takes up changes in its research standards aimed at achieving consistency with national rules for human embryonic stem cell research.

The changes appear to be non-controversial although researchers and other interested parties would be well-advised to listen in on the audiocast proceedings of the 10 a.m. meeting of the Standards Working Group. Its discussions often shed light on questions that may pop up later when the standards are to be applied.

If you can't tune in, CIRM has posted the regulations along with additional details and the Powerpoint briefing slides to be used at the meeting. The documents are also necessary if one wants to follow the audiocast.

The rules being considered by CIRM apply only to research that is funded by the agency. Stem cell research in California that is not funded by CIRM is regulated by the state Department of Health.

From day one, CIRM has banned the use of stem cell lines if they are derived in a process that provides compensation – “valuable consideration” – for eggs or embryos. One of the proposed changes that caught our attention involves an exception to the ban on “valuable consideration” in the case of embryos created in reproductive IVF. The proposed rule states:

“For embryos originally created using in vitro fertilization for reproductive purposes and were no longer needed for this purpose 'valuable consideration' does not include payments to original gamete donors in excess of 'permissible expenses.'”

Having watched laws and regulations formulated for several decades as a journalist, creation of exceptions piques my interest. In this case, I wondered whether money could be made by using the proposed exception. What happens if human eggs have real economic value at some point in the future in terms of research i.e. a high demand and a supply shortage? Is it possible that crafty entrepreneurs could use the cover of IVF to generate eggs to meet that demand?

CIRM firmly believes that will not happen under its proposed rules. Their intent is clear plus CIRM also reviews its grantees' research protocols and audits the institutions, the agency says.

We also asked Hank Greely, a Stanford law professor familiar with stem cell issues, about the matter. Greely, who is not involved with the CIRM regulations, offered this quick and informal response that basically supports the CIRM regulation.

“I think that's a defensible interpretation. She is being paid to 'donate' ('paid to donate' is odd wording, in itself) her eggs for reproductive purposes. She cannot be told, in advance, that not all of her eggs will be used to make embryos for reproductive purposes, because no one knows, in advance, how many eggs she will provide, how many embryos will thrive, and how many the recipient will need for reproductive purposes. She doesn't get any money because of the research use and she doesn't 'donate the eggs for research use' - the woman/couple who pay her for her eggs ultimately donate the embryos made from those eggs for research use. The egg donor gets the same amount of money whether the recipient ends up using all of the embryos created with the donated eggs for reproductive use or none. No more or less money changes hands depending on whether all the eggs are used for reproduction or some of the eggs are used for research.

“Assume I pay you $3 for a six pack of Coke Zero and I tell you I plan to drink as many as I need, which may or may not be all of them. I end up giving one of the cans to my wife. Have you received 'valuable consideration' for donating the can to my wife?”

For an earlier discussion of the regulations, you can see the transcript of the standards group meeting on Sept. 18.

Directions for hearing the audiocast can be found on the standards group agenda.

(Editor's note: An earlier version of this item incorrectly said that the proposed regulations will be considered by the CIRM board Friday. They will be heard by the board at its meeting in Los Angeles Oct. 27-28.)

California Treasurer Says Stem Cell Agency to Receive $118.5 Million

The California State Treasurer's office this afternoon confirmed that the California stem cell agency will receive $118.5 million in fresh cash from the state's latest bond sale.

It was good news for CIRM, which faced the prospect of running out of money by the end of next year, and a change from what was expected earlier this week.

Tom Dresslar, spokesman for the treasurer, verified the figure in a phone interview. He also confirmed the accuracy of an Oct. 7 item, “No New Stem Cell Cash,” on the California Stem Cell Report, in which he was reported as saying that no additional funds were expected.

Dresslar said his comments were reported accurately at the time, but the treasurer's office subsequently decided to allocate the cash to CIRM.

For comments from CIRM on the results of the bond sale, see the “recent comments” column to the left of this item.

CIRM Says It Is Receiving More Cash From Bond Sale

We would like to call attention to a comment posted this afternoon by CIRM on this site declaring that the information contained in our item, “No New Stem Cell Cash,” is incorrect. Our piece reported that the state treasurer's office said that CIRM would receive no new cash from the latest California bond sale. CIRM disputes that information. We are checking with the treasurer's office concerning the item and the comment by CIRM's Don Gibbons, the stem cell agency's chief communication officer. You can read his comment by clicking on it at the left of this posting. Or you can find it by clicking on the word “comments” at the end of the original item.

No New Stem Cell Cash in Latest California Bond Sale

California's sale of $4.5 billion in bonds this week will not mean fresh cash for the California stem cell agency.

In response to a query, Tom Dresslar, spokesman for the state treasurer's office, said some of the proceeds will go to refinance earlier debt taken on to support the state research operation. But he said no additional funds will go to CIRM.

The agency currently has enough cash to operate roughly through the end of next year. Its sole source of any significant revenue is California state bonds.

The agency experienced a cash crunch earlier this year and raised the possibility of marketing state bonds privately. CIRM, however, received a $505 million infusion in April as the result of a $7 billion California bond sale.

Presumably the agency will be in line for some additional bond funding between now and December 2010.

CIRM Panel Approves $300,000 Economic Study; Public Access to Data Still a Question

A subcommittee of the directors of the California stem cell agency today unanimously approved a $300,000 economic impact study of the agency's work by a firm that is expected to “execute a vibrant and aggressive strategy” supporting CIRM.

Still up in the air is whether CIRM will allow other researchers and interested parties access to the basic data that will be gathered for the study at taxpayer expense. Much of the information will come from recipients of CIRM grants.

In response to an email query, Don Gibbons, spokesman for CIRM, said the Governance Subcommittee approved the study to be conducted by LECG of Emeryville, Ca. Gibbons did not respond directly to questions about whether the data would be available to other, non-CIRM researchers, who could make an independent assessment about the financial impact of spending $3 billion for research.

Gibbons looked askance at an earlier item on the California Stem Cell Report that discussed the issue of public availability of the information.

He said in an email that the article was “grabbing at straws.” The item was based on a brief response from Gibbons to two questions from the California Stem Cell Report. Gibbons said that he was “in a hurry” when he looked at our emailed questions and misread them as a request for a copy of a contract. (Our two sentence request can be found here.)

Gibbons added that at the Governance meeting, CIRM Chairman Robert Klein “pledged that the (economic analysis) model created will be made public,” a statement that raised another question from us.

We asked Gibbons,

“To double-check, your message....omits any reference to making the basic data public. The 'model' is different than the data used in it.

“Will the basic data be available to the public and will it be available in a non-proprietary format? Thanks.“

Gibbons' verbatim response:

“The bulk of their work will be on the model. The only case that will be worked through with full data will be the test case on Polycythemia Vera. There will be some data that will be protected by patient privacy laws. We have not worked out where that line will be drawn.”

CIRM's position falls far short of ensuring public and researcher access to the basic data, which is being generated with taxpayer funds. Bringing up patient privacy laws only confuses the issue. In virtually all major studies of this sort, individual names and personal information are not important to the analysis. The data are aggregated in an anonymous fashion.

The important point is to build a database from the very start that is publicly usable and that does not co-mingle confidential and public information in such a way that harms its public accessibility. If the two categories are interwoven inappropriately, it could make the data nearly impossible to unwind.

To fail to ensure public access to the basic information only damages CIRM's credibility, especially when the agency goes to Sacramento seeking additional funding. Klein has promised to adhere to the highest standards of openness. It is time for him to fulfill that promise.

As for the independence of the winning firm, CIRM's request for bids specifically stated that a successful bidder must “execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”

More Locations for Economic Impact Meeting

If you are eager to participate in this morning's CIRM meeting involving a $300,000 economic impact study, the stem cell agency has added several new teleconference locations, including Des Moines.

Here is the latest list of locations for the 11 a.m. PDT session in addition to Des Moines: San Francisco (2), Palo Alto, Los Angeles (2), UC Davis and Irvine,

Specific addresses can be found on the agenda. Some of the locations do not have room numbers. CIRM should be able to provide them at 415-396-9100.

Will CIRM Withhold Economic Data?

The California stem cell agency today left open the possibility that the basic data gathered during a proposed $300,000 economic impact study will be withheld from the public and outside researchers.

The question of whether CIRM considers the information a public record arose in connection with the proposed contract with LECG of Emeryville, Ca., which comes before the CIRM directors' Governance Subcommittee during a teleconference meeting Tuesday.

Earlier today, we pointed out that none of the CIRM documents currently available on the proposed study provide assurances that the basic information, which will be gathered at taxpayer expense, will be considered open to the public and made available in a non-proprietary format.

We asked CIRM in an email,

“Will the data gathered under the economic impact study proposal to be considered tomorrow be public record? Will it be available in a non-proprietary format?”

Here is the verbatim response from Don Gibbons, CIRM's chief communications officer.

“We don’t quite have a final contract yet.”

CIRM's best interests would be well served in being very explicit that the data are public. The agency holds an unprecedented position in state history and is engaged in activities that reach deep into the scientific community, academia and the biotech industry. To draw a curtain over information that would allow truly independent study of CIRM's impact would be a disservice to California taxpayers and to those who would study CIRM in the future.

Just as scientists test the results of research by attempting to replicate published results, it is only appropriate to apply the same standard in the case of the CIRM economic study. That means that the basic data must be available to all researchers or interested parties, not just those consultants hired by CIRM.