The Latest on Changes in CIRM's Biotech Loan Program

CIRM today reported another change in what is to be expected concerning alterations in the $500 million biotech loan program at tomorrow's and Thursday's meetings of its board of directors.

In an email, Don Gibbons, CIRM's chief communications officer, said,

“There is a bit of change again in the agenda. We decided that we needed the loan term guidelines for the Early Translational RFA and that the phone meeting of the board could not happen prior to posting that RFA. So the original agenda item has been split in two, the actual amendments to the loan administration policy will occur at a later meeting, but the term guidelines will be up for approval as related to the early translational RFA.”

Advisory

The link in the "Fecundity" item today was faulty. It has now been fixed.

Fecundity, Stem Cells and the Dark Side of Prop. 71

Los Angeles Times columnist Michael Hiltzik has provided a bit of a filip to his look Monday at the California stem cell agency.

It came in the form of an entry in his blog entitled “Of stem cells and administrative arrogance.”

Among other things, he said Prop. 71, which created California's $3 billion research effort, was “too specific about how the program would be managed and how it would spend its money -- embryonic stem cell research was placed front and center at a time when that line of research was so, well, embryonic that no one could tell how fecund it might be.”

Hiltzik also said,

“Prop. 71 is an excellent illustration of how the state's initiative process can lead to doing the wrong thing with the right intentions. Now that many other research vectors are proving more interesting, the California Institute for Regenerative Medicine is at a crossroads, only five years after it was launched. Its latest major round of grants included some that had little to do with embryonic stem cells; it's moving away from basic science grants toward lending to commercial firms; its 10-year sunset deadline is fast approaching, with no one sure whether its lifespan should or can be extended; and real and potential conflicts of interest involving its board members and grant applicants continue to exist.”

“Now,” he said, “even Prop. 71 itself is in the program's way.”

A footnote on the sunset comment: The organization itself does not terminate after 10 years. Rather it loses its ability to issue state bonds.

(Editor's note posted Feb. 8, 2010: Section 3 of Prop. 71 states that the intent of the measure -- and "intent" is the key word -- is to

"Authorize an average of $295 million per year in bonds over a 10-year period to fund stem cell research and dedicated facilities for scientists at California’s universities and other advanced medical research facilities throughout the state."

(The outside attorney for the board says there is no legal time limit on the board's bonding abilities, just the total amount of the bonds, $3 billion. We will soon post an item discussing at more length the misperceptions about CIRM's life span.)

CIRM Delays Action on Clinical Trials, Biotech Loan Changes

The California stem cell agency today said its directors would put off until their March meeting a discussion of a proposed foray into financing of clinical trials.

CIRM also said that directors would not vote this week on changes in its $500 million biotech loan program. Instead they are expected to act later on the proposal during a special telephonic meeting.

Both topics are on the agenda for this week's meeting in San Francisco, which begins on Wednesday and continues on Thursday.

In an email, Don Gibbons, CIRM's chief communications officer, said, “Chill on the (agenda) documents. The clinical RFA discussion is being put off until the March board meeting and the loan program vote will be at a special telephonic board meeting after everyone has had a chance to review the minor changes made by the finance subcommittee. Both these agenda alterations have been in the works for a few days, I just needed to verify them.”

Earlier posts (here and here) on the California Stem Cell Report have noted that CIRM had not posted an explanation of or a justification for the loan changes. CIRM also has not laid out just what is being proposed in the clinical trial venture. All of which makes it quite difficult for researchers, biotech businesses and the public to offer any sort of well-considered comment prior to board action.

The proposed loan guidelines, however, were posted today, but still missing is an explanation of why they are needed or exactly how the changes departed from the original plan.

Also posted today, under the topic of membership of a directors Scientific Issues Subcommittee, was a 12-page report on the prescreening process in use at the agency for some grant rounds. The report included a survey of 117 applicants.

The report said, in part, that “the results suggest that applicants, PreApp (preapplication) reviewers and GWG (the scientific grant review group) reviewers favor this process. The process has created an opportunity for many applicants to compete that have not previously applied to CIRM and a significant number of these have succeeded in acquiring a grant. The process allowed us to consider more proposals within a single review cycle than would have been possible using conventional review.”

LA Times on CIRM Plans to Remain 'Relevant'

The changing focus of the California stem cell agency – with its aggressive push towards fast, tangible and marketable results and presumably away from its original emphasis on human embryonic stem cell research – was the focus of a Los Angeles Times article early last month.

The Jan. 10, 2010, piece by Karen Kaplan said,

“Now the institute has a more immediate goal: boosting therapies that are much further along in development and more often rely on less glamorous adult stem cells. It is concentrating its vast financial resources on projects that could cure conditions such as age-related macular degeneration, AIDS, sickle cell disease and various types of cancer.

“In shifting its focus, the agency is moving to fill a void known as the 'valley of death' -- a point at which projects are typically too commercial to vie for federal funds, yet too risky to entice private investors.

“This is how the agency -- with its constitutional mandate to invest $3 billion in stem cell research over 10 years -- plans to stay relevant as the state slashes billions from education, public safety, health and welfare programs to close a gargantuan budget hole.”

Kaplan's piece was more oriented towards the science of stem cells than the column this morning by Michael Hiltzik, also in the Los Angeles Times, which is California's largest newspaper with a readership of roughly of 1 million. Kaplan provided a contrast to Hiltzik, who took a more critical view, focusing on the public policy questions at the agency. Hiltzik's article also was an opinion piece as opposed to Kaplan's article, which was a news feature.

Kaplan, however, also wrote,

“Some scientists who study basic stem cell biology say the new emphasis on clinical trials is premature. They say many fundamental questions about stem cells still need to be answered, and diverting money from basic science means that revolutionary therapies -- still many years away -- will take even longer to materialize.

(CIRM President Alan) Trounson acknowledged that the shift has elicited 'a bit of a reaction from scientists' despite the institute's commitment to continue steering millions of dollars to basic biology. But, he said, the investments will have to produce actual therapies 'if we're going to be relevant to the community.'"

Not said was the need to provide real results that will help CIRM peddle its story in a few years to raise additional cash -- perhaps from the legislature, perhaps from private sources or both – when its 10-year bonding capacity runs out, possibly in 2017.

Also not discussed was the fact that the Prop. 71 campaign was almost entirely based on the need to fund human embryonic stem cell research. It is probably fair to say that the measure that created CIRM would not have passed had not then President Bush already imposed restrictions on the federal funding of hESC research.

Kaplan's article led with an anecdote involving research by Karen Aboody of the City of Hope, who has an $18 million grant from CIRM. Michael Friedman, the CEO of the City Hope, serves on the CIRM board of directors. His institution has received $37 million from CIRM. Also mentioned was Martin Pera of USC, a former colleague of Trounson's in Australia. Pera has received $6.4 million from CIRM. The dean of the USC medical school, Carmen Puliafito, serves on the CIRM board of directors. USC has received $71 million from CIRM.

CIRM directors are barred from voting on grants involving their institutions or even discussing the merits of those applications when they come up for approval. However, they do approve the concepts for all grants and control procedures for grant-making.

Recent Comments

For unknown reasons, our “recent comment” function to the left on this page has ceased to work properly. Consequently, some recent comments have not appeared. We are attempting to fix the problem.

Meanwhile, here are some comments that have been posted in the last few days.

Anonymous has left a new comment on the post "CIRM Proposes $40 Million Stem Cell "Tools" Round;...":

"The 'disease in a dish' proposal combined with funding clinical trials seems like CIRM is trying to be everything to everyone.

"They will have to take care that the 'tools' aren't merely grantsmanship for more years of basic research funding going nowhere fast; a nice new grant stream for the universities, not so nice expenditure for the taxpayers and patients hoping for CIRM to help meet their medical needs. "

Brad has left a new comment on the post "CIRM Proposes $40 Million Stem Cell "Tools" Round;...":

"The meetings are on Wednesday and Thursday not Tuesday and Wednesday like your article states. Great blog and reporting I check things out at least once a week.

"Thanks,
Brad Bixby
www.BioSpherix.com"

The California Stem Cell Report said in response
"Brad -- Thanks for letting us know. We have posted a correction."

Gilly Newman has left a new comment on the post "CIRM Disagrees with Many Recommendations for More ...":

"Hi,
"I've been following up on your site quite regularly. My son plans to go for stem cell therapy early next year. I am worried that can CIRM's outburst have an effect on the therapy as a whole."

We ecourage comments and would like more.

LA Times Columnist Targets CIRM; Structural Changes Needed

The California stem cell agency, which has “self-righteously” opposed better public oversight of its activities, should be altered to create a research program that “exemplifies not only good science, but good government,” a Pulitzer Prize-winning columnist said today in the Los Angeles Times.

While noting that the agency has funded “important work,” Michael Hiltzik said,

“...(I)t's ridiculous for CIRM to maintain that increased legislative oversight and a more compact and objective board are inimical to its purpose of fostering stem cell research in California.”

Hiltzik, whose piece was the 10th most viewed article on the Times Web site early this morning, first wrote about the agency during the political campaign that created it in 2004. His latest article came after he attended last week's session of a key state panel that unanimously called for more openness and accountability from CIRM. The panel, the Citizens Financial Accountability Oversight Committee, is chaired by state Controller John Chiang, who is the state's top fiscal officer.

Hiltzik said that the $3 billion agency came under withering fire at the meeting of the committee, which is part of Prop. 71, the same measure that created the stem cell agency.

Hiltzik focused on comments by committee member Loren Lipson, a physician and research scientist at USC. (The dean of the USC medical school sits on the CIRM board of directors. USC has received $71 millions from CIRM.)

Hiltzik wrote,

“Lipson objected to CIRM's practice of keeping the identities of grant applicants secret until and unless they win a grant. He thinks that without full transparency, it's impossible to know whether the scientific peer reviewers or the board have shown undue favoritism to the victors.

“That's especially a problem, Lipson believes, because the stem cell research community is small and so much of the board is, by design, self-interested. 'To me it looks like an old-boys club,' he told me after the meeting. 'When I look at that board I get a bad feeling of impropriety.'

“CIRM officials assured him that conflicts of interest aren't a problem on the board or among its scientific peer review teams, but he remains unimpressed. 'They never really answered my questions,' he says.”

Hiltzik, the author of three nonfiction books and winner of one of the top prizes in financial journalism, also discussed CIRM's new-found desire to change one provision of Prop. 71: the 50-person cap on the size of its staff.

He wrote,

“The good news for taxpayers is that the program's request for more staff could open the door for our elected representatives to finally insist on some jurisdiction over the spending of our $3 billion -- $6 billion including interest on the state bonds with which the money is raised. The key questions are these: Is it being spent appropriately, and is it being spent without conflicts of interest? On both issues, there's reason for doubt. Unfortunately, the program has managed to fend off every effort by elected officials to weigh in.

“The 50-employee limit was trumpeted by Proposition 71's supporters as proof that the program would be lean and mean, with almost all the money going to science. You might think they must have known from the start that managing a $3-billion scientific research program would require a larger staff, but then that would make them look cynical, and who wants to do that?”

Hiltzik continued,

“There's no question that CIRM has funded important work and bolstered the state's research profile. And there's no reason to doubt that CIRM needs more staff scientists to make sure grant recipients are spending our money properly, especially since the program is about to start doling out loans to commercial companies, not just grants to academics.

“But it's ridiculous for CIRM to maintain that increased legislative oversight and a more compact and objective board are inimical to its purpose of fostering stem cell research in California. CIRM mouthpieces love to claim that the 'voters' intent' should be honored by keeping the program rigorously free of political oversight -- but then the voters' intent was also to give it 50 staff members, and not a soul more.

“Nothing requires the Legislature to crack open the door on Proposition 71 only as far as CIRM wishes. The Legislature should let the program have the additional staff, but on its own terms. These should include a change in CIRM's board structure and imposition of the sort of oversight the program should have had in the first place -- including a reduction in the requirement for legislative amendments from 70% to a bare majority and giving Chiang the broader authority he requested. That's the way to create a public stem cell research program that exemplifies not only good science, but good government.”

CIRM Clinical Trial and Biotech Industry Loan Plans Remain Veiled

With only two days remaining before this week's meeting of the board of directors of the California stem cell agency, still missing publicly are any details on proposals that appear to involve hundreds of millions of dollars in taxpayer funds.

The plans concernCIRM's fledgling $500 million biotech loan program and participaton in funding of clinical trials, which can cost hundreds of millions of dollars. The agenda for the CIRM board meeting, which begins Wednesday afternoon, contained only 46 words this morning on the proposals.

CIRM's latest lack of transparency comes only six days after a key state panel unanimously urged CIRM to be more open and accountable.

Correction

The "board meeting" item on Jan. 30, 2010, incorrectly said the CIRM directors will meet on Tuesday and Wednesday of this week. They meet on Wednesday and Thursday.

CIRM Proposes $40 Million Stem Cell "Tools" Round; Board Meeting Accessible in LA

For those of you in Southern California who would like to participate in next week's CIRM board meeting, you will be able to do so via a teleconference call from the offices of the Sherry Lansing Foundation in Los Angeles.

Additional background information on matters to be acted on at the meeting that begins Wednesday was posted on the CIRM Web site late yesterday and early today. Still not available to the public is any significant information on the proposed changes in CIRM's $500 million biotech loan program and a proposal for CIRM to get into the clinical trial business. Clinical trials can run into hundreds of millions of dollars, but CIRM is probably going to offer to pay only a portion of the cost of a trial.

On the table with background information are regulations to “authorize the use of embryos donated by IVF patients where the gamete donors received compensation for reproductive purposes.” The regulations include authorization of “the use of somatic cells for which donors have received IRB-approved compensation for inconvenience, provided that CIRM funds have not been used.”

Also available is information on a $40 million grant concept proposal dealing with “tools and technology.” CIRM said 20 grants could be awarded to “support the inception, early stage development and evaluation for stem cell research applications of innovative tools and technologies that will overcome current roadblocks in translational stem cell research.” The round would include funding for “disease-in-a-dish” models. The grants will be open to both business and academic researchers.

Early today, an additional item was added to next week's agenda – the nomination of two scientists as alternate members of the CIRM panel that makes the de facto decisions on grant applications. They are Laurie Jackson-Grusby of Harvard and Maria Grazia Roncarolo of the San Raffaele Scientific Institute in Milan.

Next week's meeting will can be heard on an Internet broadcast. However, the broadcast does not allow participation by listeners. The Wednesday broadcast begins at 4:30 p.m. PST. Listeners should go this Website http://65.197.1.15/att/confcast and use conference ID# 141973. The broadcast Thursday begins at 8:30 a.m. PST. Use http://65.197.1.15/att/confcast and conference ID# 141977.

The Thursday broadcast includes a presentation by a three Stanford scientists on genetic skin disease . The trio – Alfred Lane, Anthony Oro and Marius Wernig – received a $12 million disease team grant last fall. The CIRM board meeting begins following their presentation.

The address of the Lansing Foundation, where listeners can also make comments to the board, can be found on the meeting agenda.

The California Stem Cell Report will be covering the sessions live both days and will file stories as warranted.

(Editor's note: An earlier version of this item incorrectly said the board meetings are on Tuesday and Wednesday.)

CIRM Disagrees with Many Recommendations for More Openness

The California stem cell agency has responded to recommendations from a key state panel for more openness, accountability and transparency on the part of CIRM, indicating disagreement with many of the suggestions.

The Citizens Financial Oversight Accountability Committee on Tuesday urged CIRM to operate in a manner that would enhance its credibility and accountability. State Controller John Chiang, the state's top fiscal officer and chairman of the committee, said,

“To ensure that taxpayer dollars are spent lawfully, wisely and successfully, the stem cell program must pursue the highest standards of transparency to be fully accountable to the public.”

On the same day that the committee made its unanimous recommendations, the California Stem Cell Report asked Don Gibbons, CIRM's chief communications officer, for a reaction to the committee's move for more openness. Gibbons did not respond to that query until today. His email followed the posting of the “Stem Cell Plans Shrouded” item on this Web site.

Gibbons' email today alluded to a “statement” posted Wednesday on the CIRM Web site. The statement was not circulated as part of CIRM's email alerts and could not be found via the agency's search engine. We found it under “announcements.”

In the announcement, CIRM, among other things, challenged the CFAOC's authority to conduct performance audits. CIRM's statement said,

“Proposition 71 made a very specific and limited assignment to the CFAOC, which is comprised of individuals with financial expertise and some medical background.”

Under Prop. 71, which altered the state Constitution and state law, CIRM effectively operates outside of the normal control of nearly all normal state oversight bodies, including the governor and the legislature, which cannot touch the agency's budget, even in the current state budget crisis. Changes in the law concerning CIRM can only be made with a rare, super super majority vote of 70 percent. Changes in constititutional provisions affecting CIRM would require a statewide vote.

CIRM's carefully worded announcement said the agency “welcomes” CFAOC input. CIRM said the “broader issues are important.” It defended its processes and rejected some of the recommendations, including the identification of all applicants for public money.

CIRM also said it is engaged in a review of its “core scientific programs” by outside scientists, who will examine “the research portfolio and policies and procedures for managing that portfolio.” CIRM said,

“The review by the outside panel will be made public.”

Presumably that would include extended public sessions of the panel, but the CIRM statement stopped short of explicitly saying that.

CIRM also said its Legislative Subcommittee also will discuss transition issues related to the expected departure of Chairman Robert Klein this December. The subcommittee will hold public meetings later this year.

Big Buck Stem Cell Plans Shrouded by CIRM Transparency Failure

With only three business days remaining before directors of the California stem cell agency act on proposals that appear to involve hundreds of millions of dollars in taxpayer funds, CIRM is keeping researchers, biotech firms and the public in the dark about the details and rationale behind the plans.

Ironically, the failure in openness comes only shortly after a key state financial oversight committee unanimously urged CIRM to be more transparent and accountable.

CIRM's lack of transparency concerning its directors meetings is a perennial problem for the $3 billion organization. It also flies in the face of rhetoric from CIRM chairman, Robert Klein, who repeatedly avows that CIRM adheres to the highest standards of openness and transparency.

While the organization posts a bare bones notice well in advance of directors meetings, the agendas consist of little more than cryptic phrases that provide little information about the proposals or their justification. (See here, here and here and here for a related transparency issue.) Sometimes some of the needed information is posted on the CIRM Web site a day or two before a meeting. But sometimes the needed material is never posted at all in advance of a meeting. Even CIRM board members have grumbled at times about the tardiness.

CIRM's secrecy runs counter to its efforts to involve the public, researchers and the biotech industry. Business particularly needs time to analyze proposals, develop a well-thought out response and make plans to attend CIRM board meetings, which are scattered around the state. It is not realistic or reasonable to expect biotech executives to drop all their activities to respond to CIRM on a one-day or two-day notice or less, either to attend a board meeting or formulate a written comment to be delivered to CIRM.

On Tuesday, the Citizens Financial Accountability Oversight Committee unanimously urged CIRM to beef up its transparency and openness. The committee is no outside group, but something of a sibling to CIRM. The committee was created by Prop. 71, the same measure that created the stem cell agency, and generally has been friendly to the organization. (CIRM has not yet responded to a request for comment on the committee's action.)

In December, directors created a subcommittee to improve communications with the public and the media. The action implicitly recognized that CIRM needs to do a better job of selling itself to the public and decision makers in Sacramento if it is to receive continued funding after its $3 billion runs out ($1 billion is already committed). Ironically details and justification for the stepped-up communications effort were not posted on the CIRM Web site until the day of the CIRM board meeting.

To CIRM's credit, it does provide significant access to some aspects of its business. Among other things, it broadcasts its directors meetings on the Internet and provides transcripts online a couple of weeks after the meetings. But those are after the fact. The public must be informed ahead of action in order to comment intelligently.

That also should include a notification on the CIRM home page of an upcoming directors meeting with some clue to the issues being considered – something that has not happened for a year or more. The directors' meetings are the most important public actions at CIRM. They deserve to be highlighted by the agency.

The issues involving CIRM's transparency and openness go beyond good management and speak directly to the California's constitutional guarantee of a “broadly construed” right of public access to “the people's business.” But importantly for CIRM, improved openness would not only enhance its communications with the public, but would also improve relations with its scientific and business constituents – not to mention legislators.

CIRM can do better, and California taxpayers deserve more.

CIRM Oversight Panel Recommends More Accountability, Transparency at Agency

The California state panel charged with overseeing financial practices at the state's $3 billion stem cell research agency today urged it to improve its accountability and make its performance more open to the public.

State Controller John Chiang, the state's top fiscal officer and chairman of the panel, said,

“Californians overwhelmingly voted in 2004 to provide billions of public dollars to find cures for chronic, debilitating and deadly diseases that affect millions of Americans each year. To ensure that taxpayer dollars are spent lawfully, wisely and successfully, the stem cell program must pursue the highest standards of transparency to be fully accountable to the public.”

CIRM had no immediate comment on today's action.

In a news release, the controller's office said the Citizens Financial Accountability Oversight Committee voted unanimously to endorse recommendations last year by the Little Hoover Commission, the state's good government agency, to make CIRM's practices more open to the public.

Specifically, the committee cited recommendations “to improve efficiency and transparency in the way grants and loans are distributed, make future business practices more open, and use the authority of the CIRM governing board and the CFAOC to enhance oversight of the stem cell program.”

Asked for elaboration, Hallye Jordan, deputy controller, said in an email that the committee

“...formally advised CIRM to implement those proposed recommendations that need no legislative authority and support legislation where statutory changes are required. Here are the three:

“The Legislature and CIRM should improve efficiency and transparency for distributing grant and loan funds,

“The CFAOC and the CIRM governing board should use their authority to enhance oversight, and

“The CIRM governing board should begin planning for CIRM's future through an open process.”

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., said,

“The Little Hoover Commission’s recommendations were made after thoughtful study. Now another oversight panel has endorsed that work. CIRM would do well to listen.”

The financial accountability committee, created by Prop. 71, also voted to post its members' statements of economic interest and travel expenses on both the controller's and CIRM's Web site. The committee urged CIRM to post the same information for its directors and staff.

Both the controller and the governor post that information on their Web sites. (Here is the controller's office info and here is the governor's.)

The vote on the Little Hoover recommendations was unanimous, with Chiang, Daniel Hollander, Loren Lipson, Gurbinder Sadana and Jim Lott in favor. Daniel Brunner was absent.

The vote on posting statements of economic interests was 4-1 with Hollander, a recent appointee to the panel by CIRM Chairman Robert Klein, dissenting.

We have asked CIRM for comment on the actions. We will carry it when we receive it.

Adelson-Weinberg CIRM Study

If you are having any difficulty viewing the full text of the Adelson-Weinberg article about the California stem cell agency, a copy can be sent to you via email. If you would like to have it delivered via email, please send a request to djensen@californiastemcellreport.com.

Bad Link Fixed

The “CIRM Finances” item Jan.22, 2010, contained a bad link to the agenda of the meeting. The link is now fixed.

CIRM Adheres to Core Mission but Future is Challenge

The California stem cell agency has "overcome startup challenges," drawn scientists to the Golden State, and its actions will have a "significant" impact on commercial and academic biotech research in the United States, according to an article in the American Journal of Public Health.

Nonetheless, the report by Joel Adelson and Joanna Weinberg (see photos) of UC San Francisco, said,

"Measuring the CIRM’s success by its highly ambitious goals for research and cures is a challenge for the future."

Robert Klein, chairman of the stem cell agency and head of the Prop. 71 political campaign, publicly hailed the article. On Jan. 15, he also told CIRM directors in an email,

"This group (the report's two authors) started out 4 years ago as complete disbelievers in the ability of this agency to fulfill its mission. Our performance has clearly convinced them we will have (and already have had) an effect on the future of biomedical research and its funding structures."

CIRM issued a release that said the article demonstrated that "CIRM has been successful in carrying out its core mission of accelerating research, creating jobs and fostering economic growth in California."

The CIRM announcement quoted Klein as saying, “The NSF (National Science Foundation) study provided strong validation of the major research jobs and medical leadership future of California, driven by Proposition 71 funding,"

The study's authors are associated with the Institute for Health and Aging at UC San Francisco. Adelson is chief of the Integrating Medicine and Public Health Program. Weinberg is associate adjunct professor, Institute for Health and Aging and adjunct professor and director, Law, Science and Health Policy Coordinator, Hastings College of Law. Their article was funded by the NSF and published in the January 2010 edition of the American Journal of Public Health. UC San Francisco has received $103 million from CIRM. A footnote on the article noted that UCSF has received CIRM cash. It also said Adelson and Weinberg received no funds from the stem cell agency.

In a summary attached to the article, "The California Stem Cell Initiative: Persuasion, Politics and Public Science," the authors said,

“The initiative has been highly controversial among stakeholders and watchdog groups concerned with organizational transparency, accountability, and the ethics of stem cell research....We found that the CIRM has overcome start-up challenges, been selectively influenced by criticism, and adhered to its core mission.”

The article said,

"It is difficult to find anything quite like the California stem cell endeavor—the rationale for its origin, its enabling ballot initiative, the extent of state funding for research, and the public’s vigorous engagement with the process are all unprecedented. We found that the CIRM, after a difficult beginning, and despite institutional turbulence, economic uncertainty, and constant public scrutiny, has become well-established and has both maintained and strengthened its core mission, partially aided by the pressures and criticism."

Adelson and Weinberg wrote,

"Since the initiative passed, continuous criticism and scrutiny has come from sources opposed not to stem cell research itself but rather to other aspects of the endeavor. Some critics raised concerns about the protection of egg donors (for somatic cell nuclear transfer), others about limited attention to donors’ physical health and potential exploitation because of their economic status. Strong objections have been raised to the manipulation and commercialization of human genes."

The article continued,

"Perhaps the closest attention to the conduct of the CIRM’s affairs has been paid by individuals and groups concerned about the CIRM’s potential conflicts of interest and lack of transparency. Watchdogs and consumer advocates have kept steady pressure on the CIRM to maintain transparency in spending taxpayers’ funds, including awarding of research grants, and to be publicly accountable for adherence to ethical and other standards. The CIRM, which may only fund research to be conducted in California, also had to address several potential conflicts of interest in funding decisions. The relatively narrow composition and size of the ICOC(the CIRM board of directors), and the limited number of institutions qualified to conduct CIRM-funded research, guarantee a large overlap among those seeking and those awarding funds. Many potential grantee institutions have representatives on the ICOC, because the initiative requires the appointment of representatives from 5 University of California campuses and from other California research institutions."

Adelson and Weinberg said,

"In its short history, the CIRM has taken on a vigorous life of its own. It is apparent that the shift of a major focus for stem cell research to California will have a significant effect into the future on the geographic distribution of biological science and biotechnology infrastructure in the United States; on the location of university, biotechnology, and pharmaceutical research and start-up firms; and on the investment of venture capital. Evidence for this is the $300 million the CIRM has invested in stem cell facilities, already leveraged to more than $1 billion in linked donations. The CIRM has also directly stimulated the formation of a consortium of otherwise separate institutions to meld resources and facilities in San Diego, and has begun to develop international collaborative partners. California is host to a steadily growing cadre of world-class scientists, dedicated state-of-the-art facilities, training programs, and support programs, such as a large-animal facility for the testing and development of drugs to facilitate the translational pathway leading from basic stem cell research findings in the laboratory to treatments and cures."

CIRM Moving to Fund Clinical Trials

Directors of the California stem cell agency meet in San Francisco Feb. 3-4 to take up a proposal to begin funding enormously expensive clinical trials in some form or another.

No details are available yet on just what is being proposed, but clinical trials can run into hundreds of millions of dollars. And there is no assurance that a viable product will result. Only one out of five drugs that enter human testing make it to market, according to one estimate.

CIRM has already approved $1 billion in grants and loans, leaving $2 billion until its funding capacity runs out.

The agenda item for the clinical trials is terse and says only,

“Consideration of concept proposal for clinical trial funding and/or concept proposal for program funding to facilitate reaching clinical trial approvals within 12 months.”

CIRM's strategic plan, approved last fall, says that the agency will develop proposals

“...to support clinical trials that would be expected to include partnerships with biotechnology and pharmaceutical companies, private investment, and other sources of financial support that are appropriate. This is an area of developmental responsibility for the vice president of R&D(yet to be hired). CIRM expects that its contributions would be proportionally smaller than other contributions from companies and other financial institutions but would remain meaningful and would ensure reasonable patient access to the new therapeutics that are developed."

The plan continues,

“The program of clinical trials will be developed in partnership with other funding sources as a special interest of the VP R&D. The program will be focused on the delivery of research arising from the work in California on stem cells and related technologies and ensures the continuation and delivery of discoveries in basic stem cell biology into the clinic.”

Also on tap are unspecified, proposed changes in CIRM's $500 million biotech loan program, which anticipates default rates as high as 50 percent.

Normally biotech firms, with a handful of exceptions, are notable for their absence at CIRM board meetings. However, it would behoove any firms interested in either clinical trials or loans to be in attendance. They can comment on the proposals and learn more about the cash that is likely to be available.

CIRM Finances On Table Next Tuesday

The financial affairs of the $3 billion California stem cell agency will come under scrutiny next Tuesday at a meeting in Los Angeles headed by California's chief fiscal officer.

The occasion is a session of the Citizens Financial Accountability Oversight Committee, which was created by Prop. 71. By law, the six-member board is chaired by the state controller, John Chiang.

On the agenda next week are the recommendations of the Little Hoover Commission for a restructuring of the CIRM board and other actions to improve the agency's performance. Also up for discussion is CIRM's financial performance, an update on grant awards and the grant process along with discussion of “risk analysis” involving CIRM, which has embarked on an unprecedented $500 million loan program for biotech businesses. The agency projects a $100 million “profit” on the loans despite projected default rates as high as 50 percent.

Changes Looming in California's Biotech Loan Program

Proposed changes in the $500 million biotech loan program offered by California's stem cell research agency will come before its directors at a meeting early tomorrow morning.

Interested parties can listen in and comment at a variety of locations in California and one at the Charles Hotel in Cambridge, Mass., a state that has a robust biotech community.

CIRM has posted the proposed changes on its website, but the material does not offer an explanation or justification for the revisions. They seem to have grown out of meeting in December of the Loan Task Force and are coming before the directors' Finance Subcommittee at 7:30 a.m.(10:30 a.m. in Massachusetts). The 102-page transcript of the task force meeting can be found here.

In addition to the Charles Hotel, the public can take part in the teleconference session at locations in Palo Alto, Irvine, Menlo Park, San Diego, Pleasanton, Hillsborough, Berkeley and San Francisco. Specific addresses can be found on the agenda.

As for the location within the Charles Hotel, interested parties should call CIRM at 415 396-9117. Presumably one of the directors is staying at the hotel.

California Stem Cell Lab Construction Not Entirely Up to Snuff

The California stem cell agency is reporting that one out of three grants is behind schedule in its $1 billion-plus stem cell lab construction program.

Nonetheless, CIRM produced an upbeat press release, declaring that “all were moving forward.” CIRM Chairman Robert Klein was quoted as saying the effort provided “extremely valuable contributions to the California economy.”

The timetable on the 12 projects is important by CIRM's own measure. Two years ago, CIRM ballyhooed the lab construction program because of its requirement for expedited construction with completion of the labs by May of this year. Applications for funding were also scored highly for their “urgency,” with 20 out of 100 points being possibly awarded in that category.

That said, few foresaw the unusual economic events of the last 18 months. However, most of additional needed financing should have been secured by the time economy nosedived.

Programs not up to snuff are located at UC campuses at Santa Cruz and Merced. Also behind is the $163 million Sanford Consortium facility involving UC San Diego, Salk, Scripps and Burnham. The fourth troubled effort is at the Buck Institute in Novato in Northern California. One could argue that others are behind schedule as well since they will not be completed by May, but instead one or two months later.

CIRM's press release on subject was a bit unusual. Normally the agency does not beat the drum about meetings of its working groups, where the official status report was discussed. But in this case, the lab construction program is one of CIRM's signature efforts.

The press release drew little attention. We found only two stories in a Google search: one about Buck by Ron Leuty in the San Francisco Business Times and the other about Sanford by Heather Chambers in the San Diego Business Journal.

One old rule in business holds that if you succeed 80 percent of the time, that is as good as you can expect. By that measure, CIRM's facilities program holds up reasonably well. But one of CIRM's foibles involves excessive rhetoric, such as bald statements that the facilities would be finished in two years.

Observers of the California stem cell scene would be well-advised to watch what CIRM actually does – along with what it promises to do.