Parochial or Global? The California Research Spending Rule and Science

UC Davis stem cell researcher Paul Knoepfler (left) has triggered an interesting discussion on his blog centering on the question: “Does it matter where stem cell research happens.”

This is of considerable interest here in the Golden State, which has a rich, $3 billion stem cell research effort that it is basically limited to California. The reason for that is entirely political. It would have been folly to ask voters to approve the program, as they did in 2004, if the money were going to flow to Harvard, Great Britain and Singapore.

Enforcing and defining the limits on spending are not small issues. The California stem cell agency has written its rules in such a way that companies headquartered elsewhere and also with major operations elsewhere still can receive grants.

One example is the $3.7 million CIRM grant to Maine's Jackson Laboratory. The justification is that the money is largely being spent at the company's Sacramento facility. Out-of-state spending also nearly sank a $5.4 million grant to Evan Snyder at Sanford-Burnham.

However, stem cell research is global. A powerful argument can be made that funding should be global if the science is to avoid pursuing a pinched path of parochialism. Should poor or even average science be funded because it is peculiar to California? Of course, considerable differences do exist on just what is “good” science.

On his blog, Knoepfler cites the case of Advanced Cell Technology of Santa Monica, Ca., which moved its headquarters to California largely because of the passage of Prop. 71. The company, however, apparently has no significant research operations in California. All are in Massachusetts, where it was previously headquartered.

ACT has not received funds from CIRM. Has it sought any? CIRM won't say. The agency cloaks its applicants in secrecy, so it is nearly impossible to tell whether a specific company has applied for taxpayer funds. But one of ACT's researchers complained to the CIRM board about a negative decision on a grant application. The researcher said one of the reviewers had a conflict of interest, which CIRM denied.

Knoepfler and others commenting on his blog wrestle with some of the important issues of geography-based funding, which even extends to choices within California. The main argument, however, for maintenance of the ban on non-California grants is political. Support for CIRM would vanish if it were to send its billions to out-of-state researchers, regardless of the worthiness of their efforts.

(Editor's note: A very early version of this item did not contain the information about the ACT researcher's complaint about a conflict of interest.)

CIRM's Klein Honored by BIO

The largest biotech industry organization in the world this week honored Robert Klein, the first and only chairman of the $3 billion California stem cell agency, as its Biotech Humanitarian of 2010.

Jim Greenwood, president of the Biotechnology Industry Organization (BIO), said of Klein,

“His vision and determination to create alternatives to federal funding for stem cell research helped make the sate of California a global leader in disease research, giving hope and inspiration to millions of patients and families around the world,"

Klein, a Palo Alto real estate investment banker, directed the election campaign that resulted in the passage of Prop. 71 in 2004. The ballot initiative, of which Klein was a key author, created the stem cell agency, an entity which is unprecedented in California history. It also was the first government agency to use borrowed funds (state bonds) to finance scientific research.

Since 2005, CIRM has handed out more than $1 billion in grants and loans to more than 300 recipients.

The BIO award carries a $10,000 prize. Klein donated the funds to Americans for Cures, his personal stem cell lobbying group.

Klein has said he will step down as chairman of the stem cell agency at the end of this year. No names have yet surfaced as a potential successor.

WARF Loses Latest Round on Challenge to hESC Patents

Two watchdog groups said today they have scored a “major victory for unfettered scientific research” in a case involving a WARF patent on human embryonic stem cells.

Consumer Watchdog of Santa Monica, Ca., and the Public Patent Foundation of New York City filed the challenges to the WARF patents on work by Jamie Thomson of the University of Wisconsin.

The groups said in a news release that federal patent regulators have “agreed with the groups that the creation of human embryonic stem cell lines was obvious in the light of work that had been done in other species. In order to obtain a patent, work must be both new and non-obvious.”

WARF, which can appeal the decision, released the following statement.

“WARF has been invited by the Board of Patent Appeals to continue prosecution of this application and plans to do so and vigorously pursue these claims with the patent office. This decision regarding ‘913 does not affect the patent office’s 2008 decision to reaffirm WARF’s two most important base stem cell patents for primate and human embryonic stem cells, ‘780 and ‘806. These reaffirmed patents are not eligible for further appeal in this reexamination process.”

Geron Corp., of Menlo Park, Ca., which holds a license on the patent, said the decision will not “impact” the firm's “dominant human embryonic stem cell patent position.”

The 2006 challenge to the WARF patents was supported by Alan Trounson, then connected to Monash University but now president of the California stem cell agency, Douglas Melton and Chad Cowan of Harvard and Jeanne Loring, director of the Center for Regenerative Medicine at Scripps.

Loring said,

“This is great news for medical research. Human embryonic stem cells hold great promise for advancing human health, and no one has the ethical right to own them.”

The challenge involved three patents. Federal officials originally ruled unfavorably.

The Consumer Watchdog news release said,

“Under current patent law only one of the three (earfier) patent rulings could be appealed by the two groups.  That was the patent rejected by the Board of Appeals and Interferences. However, said the groups, the latest ruling by the Board of Appeals is a strong decision that could set a precedent leading to the revocation of the other two patents as well.

“The two public interest groups noted that the original three patent challenges  had already improved the situation for stem cell researchers; shortly after the PTO launched its initial re-examinations in 2006 at the groups’ request,  WARF announced a substantial easing of its licensing requirements.

“'WARF executives were acting like arrogant bullies blinded by dollar signs,' said (John M.)  Simpson (of Consumer Watchdog). 'Our challenges prompted a more co-operative stance towards the stem cell research community on their part.'”

“Both Consumer Watchdog and the Public Patent Foundation stressed that while University of Wisconsin researcher James Thomson deserved acclaim for his research that isolated human stem cells, important scientific accomplishments are not necessarily patentable.  They said one of the main reasons he was able to derive a human stem cell line was because he had access to human embryos and financial support that other researchers did not have.”

Geron issued a news release on the decision. The company said,

"'This is not a final rejection of the patent claims,' noted David J. Earp, J.D., Ph.D., Geron's chief patent counsel and senior vice president of business development. 'We are confident that WARF will make a strong case in support of the patentability of these claims in continued examination.'"

More Info on Palo Alto Institute Grant

Stanford University shed some light on a basic biology grant approved earlier this week for a researcher linked to the Palo Institute for Research and Education.

Here is what Stanford said in a news release about grants involving the school:

“A fourth Stanford researcher also received funds from CIRM, but the funds will flow through a different organization. Tony Wyss-Coray(at right), PhD, associate professor of neurology and neurological sciences, will receive about $1.52 million to study molecular and environmental factors in the adult brain that support the differentiation of neural stem cells. Understanding how old brains may generate new neurons may help researchers devise ways to combat age-related neurodegenerative diseases. Wyss-Coray has a joint appointment with the Veterans Affairs Palo Alto Health Care System, and will conduct the research as part of the Palo Alto Institute for Research and Education. “

Modest Coverage of Wechsler-Reya Recruitment

The San Diego Union-Tribune has picked up on the story that a Duke cancer stem cell researcher is being recruited to its fair city with the help of a nearly $6 million grant from the California stem cell agency.

Gary Robbins had a brief item yesterday on Robert Wechsler-Reya being courted by the Sanford-Burnham Institute, which is actually in La Jolla, just north of San Diego but totally contiguous. Wechsler-Reya was also mentioned in a piece by Heather Chambers in the San Diego Business Journal, which dealt with grants received earlier this week by local scientists.

The recruitment of the Duke scientist with taxpayer funds was first reported by the California Stem Cell Report last Tuesday.

A Google search turned up no further articles on the subject, although some parties in North Carolina are looking at the story.

Stem Cell Agency Seeking Legislative Removal of 50-person Staff Cap

Directors of the California stem cell agency yesterday decided to work with a state legislator on a proposal that would give CIRM much needed relief from an ill-considered limit that caps the agency's staff at 50.

Previously CIRM was moving towards an effort to kill the legislation, at least for the next year or so, because of other provisions it found less than agreeable.

The cap on CIRM staff was written into law by Prop. 71, which created the $3 billion stem cell research effort in 2004. The limit was an obvious attempt to defuse opposition arguments that the ballot initiative would create another large state bureaucracy. However, in a bit of redundancy, the measure also contained a spending limit on administrative expenses.

The personnel limit left CIRM with a staff about the size of that of a 24/7 Burger King to monitor currently more than 300 researchers and more than $1 billion in grants. Another $2 billion will be going out the door over the next four years or so.

Several months ago, CIRM President Alan Trounson warned directors that the quality of the agency's work could suffer as a result. State Sen. Elaine Kontaminas Alquist, D-San Jose, subsequently introduced legislation aimed at reforming CIRM and ensuring affordable access to taxpayer-financed therapies. The bill, SB1064, also would eliminate the 50 person cap.

Yesterday's action by directors marks the first time that CIRM has moved from adamant and successful opposition to any legislation that would change Prop. 71. The agency has had a sometimes stormy relationship with some lawmakers (see here, here and here) but has gradually moved away from abrasive tactics.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., praised CIRM's new position. In an email, he said,

"Instead of the usual stiff arm extended toward the Legislature from within circled wagons, Art Torres is drawing on his political skills to negotiate a deal that satisfies everyone. It's about time.”

CIRM Vice Chairman Torres, former head of the state Democratic Party and a longtime legislator, told directors that he and others were negotiating with Alquist to come up with legislation that would be acceptable to CIRM and remove the personnel cap. Torres said that he was working to add a provision for compensation for CIRM board members who are patient advocates and who serve on various CIRM working groups. The provision would provide pay for days attending the meetings as well as days preparing for them.

The patient advocate directors, seven in all not counting Torres and Klein, are critical to CIRM's operations because many of the other directors have conflicts of interest that prevent them voting on some matters. Some of the patient advocates, such as UC Regent Sherry Lansing, also have significant conflicts, leaving only about four of five relatively free to vote on almost any matter. The patient advocates, however, can lose salary from their jobs when they take time off for CIRM affairs. Such is not the case with other directors, such as medical school deans and executives, who also have staff that they can use to assist on CIRM matters.

Enactment of a bill is not a foregone conclusion. The CIRM legislation requires a 70 percent vote of both houses of the legislature, an unusual and exceedingly difficult hurdle to clear. It effectively ensures minority control over any changes and was written into Prop. 71 by CIRM Chairman Robert Klein, who plans to step down from his post in December.

It is unclear at this point what other provisions will remain in the bill. Torres said he hopes to conclude negotiations in about three weeks.

Simpson noted Torres' legislative effectiveness and deep contacts in Sacramento. “Kudos to the politically savvy vice chairman,” Simpson said. At the directors meeting yesterday, Torres was careful to note that other directors were involved in lobbying legislators including co-Vice Chair Duane Roth, who has Republican contacts; Lansing, a well-connected former head of a Hollywood studio; Michael Goldberg, a venture capitalist, and Leeza Gibbons, an Alzheimers patient advocate and Hollywood celebrity.

Simpson indirectly noted that salaries at CIRM, among the highest in state government, could provide a public relations problem in the State Capitol, where lawmakers have already made draconian budget cuts. In a reference to Torres' salary, Simpson said, “At $225K a year given the state's financial crisis, they're still paying him too much.”

Our take? We disagree with Simpson about Torres' salary but do think that CIRM salaries, whose range tops out at $508,750 for the CIRM president, pose a perception problem that needs to be carefully handled by CIRM.

Scanty Coverage of CIRM's $28 Million in Grants

The announcement yesterday that the California stem cell agency had given away $28 million for research attracted extremely modest attention in the mainstream media.

Our automated searches turned up only two brief items today: one in the San Francisco Business Times and one on the Orange County Register Internet site. Both focused primarily on the grants in their local areas.

The light coverage was to be expected. CIRM is receiving little media attention, a situation that is likely to continue short of a scandal or major research breakthrough.

$22 Million for Biology: CIRM Directors OK Two Reviewer-rejected Grants

California stem cell directors today approved more than $22 million in basic biology grants, overturning negative decisions by reviewers on two applications.

The directors ratified all 14 grants supported by reviewers, plus applications from researchers at UC Davis and the Sanford-Burnham Institute in La Jolla. The total was well under the $30 million that CIRM budgeted for the biology grant round.

The Davis grant was the subject of an “extraordinary petition” by its top researchers, Eric Kurzrock and Jan Nolta. They said in their petition that reviewers “simply overlooked important details” and committed “factual errors.” The petition was initially rejected by CIRM staff but the board decided to approve the grant for “programmatic” reasons.

Nolta appeared before the board along with patient advocates, including a tearful mother with an ailing child. Nolta is one of the few researchers who regularly attend CIRM board meetings. Patient advocates also sometimes attend board meetings and speak on behalf of specific grants.

The Nolta grant was approved on an 11-9 vote, but the board cut the amount of the grant by one-third. CIRM listed the grant at nearly $1 million in its news release.

Another extraordinary petition was rejected by the board. It was filed by Edward De Robertis of UCLA, who is also a Howard Hughes Medical Investigator. He appeared personally before the board last night. De Robertis has not been a regular at board meetings. Nor did patient advocates speak on behalf of his research.

CIRM directors also approved a $1.6 million application by Huei-sheng Chen of Sanford-Burnham that reviwers had nixed.

Fourteen of the 16 grants went to institutions that have representatives on the CIRM board. That is in keeping with the pattern over the last five years. More than $900 million out of the $1 billion in grants so far have gone to institutions with links to board members. CIRM directors with conflicts of interest are not allowed to vote on or take part in the discussion about the applications affecting their enterprises.

Of the non-board-connected recipients, one $1.5 million grant went to a business, iPierian, Inc. a South San Francisco biopharmaceutical company, and researcher Barta Strulovici. Another $1.5 million grant went to Tony Wyss-Soray at the Palo Institute for Research and Education, a nonprofit involved with the Veterans Administration system.

CIRM received 154 pre-applications  in this round that were screened by staff and a few outside reviwers. Fifty-seven pre-applicants were invited to make full applications. Fifty-two applications were received and reviewed. Reviewers made positive decisions on 14, which they sent to the board. CIRM did not announce the number of applications received from businesses.

Duke Researcher Wins $6 million Grant From California -- With a Condition

California will give a Duke University cancer stem cell research nearly $6 million if he comes to work in the Golden State at the Sanford-Burnham Institute in La Jolla.

Directors of California's $3 billion stem cell agency, as expected, today approved the research grant for Robert Wechsler-Reya. The grant is the first installment in a $44 million program aimed at luring eight stellar researchers from their posts elsewhere in the country.

Wechsler-Reya's name was not mentioned during the brief discussion of the grant by CIRM directors at their meeting in Los Angeles. But the California Stem Cell Report identified him on Tuesday. CIRM issued a news release today that confirmed our report.

CIRM Chairman Robert Klein indicated that negotiations between Burnham and Wechsler-Reya need to be concluded by the end of June, a stipulation that Burnham has apparently agreed to. Klein said approval of the grant “would be helpful in concluding the relationship.” Burnham is additionally courting Wechsler-Reya's spouse, Tannishtha Reya, another Duke researcher.

CIRM expects to review another round of applications in its recruitment program in July. The agency needs to know whether it has eight or seven grants left to make.

CIRM President Alan Trounson said it was also important to have some diversity in expertise among the scientists who are recruited. In other words, CIRM does not necessarily want to lure only cancer stem cell scientists to the state.

At one point on Tuesday, CIRM's outside counsel, James Harrison, said the grant was being taken off the directors' agenda. His statement followed our item that said Wechsler-Reya had not made a decision about leaving Duke. Later in the day, Harrison said that he made a mistake about the matter.

Burnham will not be eligible for another recruitment grant if the Wechsler-Reya goes through. Each institution is limited to one.

CIRM Directors Meeting Underway

Directors of the California stem cell agency have begun their meeting today. They are currently discussing applications for basic biology grants. Reviewers recommended funding 14 for a total of $19.6 million. Last night directors discussed scores on grants that were not recommended for funding, raising the possibility that some might be funded.

CIRM Receives Another $112 Million

Alan Trounson, president of the California stem cell agency, last night outlined his priorities, provided more details on a key strategic review of its program and sketched out upcoming CIRM events.
Directors were also told that the agency received an additional $112 million as the result of recent California state bond sales. That should ensure CIRM has enough cash to operate until the end of 2011. Bonds are virtually the only source of cash for the agency, but they flow directly to CIRM untouched by the governor or legislature.

CIRM has posted Trounson's slide presentations on its Web site. Also included are biographies of scientists who will participate in the strategic review. You can find Trounson's presentation here, budget information here and the biographies here.

California Stem Cell Directors End Public Session Tonight

Directors of the California stem cell agency just concluded their public session tonight without approving any grant applications or taking other significant action. Their session will resume tomorrow morning at the City of Hope in the Los Angeles area. We will have coverage again then.

$5.9 Million Grant to Duke Scientist Moving Forward Again

Directors of the California stem cell agency began a discussion tonight of a $5.9 million grant to help lure a Duke University scientist to California despite a statement earlier today that the matter would not be brought up.

James Harrison, outside counsel to CIRM, this afternoon said in an email that the matter would not be considered. Asked about the change this evening, Harrison replied in an email, “I was wrong! Chalk it up to miscommunication while everyone was in transit.”

CIRM Chairman Robert Klein initiated a staff presentation on the application. Directors discussed it briefly and will discuss it again tomorrow in public after it comes up in an executive session tonight.

The grant is expected to go to Robert Wechsler-Reya to help recruit him to the Sanford-Burnham Institute.

John Reed, CEO of the institute, is a member of the CIRM board of directors. His alternate, who is filling in for him tonight, will not be allowed to participate in the discussion or vote on the grant.

CIRM Directors with Conflicts of Interests on Biology Grants

Here is the list of the CIRM board members scheduled to be recused from voting on or discussing grant applications this evening on which they have conflicts of interest. You can find the review summaries of the grants here. The list was prepared by CIRM legal staff.
CIRM Basic Biology Award II
Application # Members in Conflict
RB2-01494 Feit,Hawgood,Lansing,Sheehy
RB2-01496 Lansing,Levin,Steward
RB2-01497 Brody,Goldberg,Pizzo
RB2-01498 Brody,Goldberg,Pizzo
RB2-01499 Azziz
RB2-01500 Lansing,Penhoet,Price
RB2-01502 Azziz,Lansing,Levey
RB2-01504 Gill,Lansing
RB2-01507 Brody,Goldberg,Pizzo,Pomeroy
RB2-01512 Fontana
RB2-01514 Gill,Lansing
RB2-01523 Azziz,Lansing,Levey
RB2-01526 Feit,Hawgood,Lansing,Sheehy
RB2-01527 Pomeroy
RB2-01530 Brody
RB2-01534 Lansing,Levin,Steward
RB2-01540 Feit,Hawgood,Lansing,Sheehy
RB2-01542 Bloom,Fontana
RB2-01547 Bloom,Gill,Lansing
RB2-01549 Feit,Hawgood,Lansing,Sheehy
RB2-01550 Lansing,Levin,Steward
RB2-01553 Brody,Goldberg,Pizzo
RB2-01562 Azziz,Lansing,Levey
RB2-01566 Brody,Goldberg,Pizzo
RB2-01567 Feit,Lansing,Pomeroy,Prieto
RB2-01571 Azziz,Lansing,Levey
RB2-01577 Lansing,Levin,Steward
RB2-01580 Brody,Feit,Goldberg,Hawgood,Lansing,Pizzo,Sheehy
RB2-01581 Brody,Goldberg,Pizzo
RB2-01585 Gill,Lansing
RB2-01588 Azziz,Lansing,Levey
RB2-01592 Brody,Goldberg,Pizzo
RB2-01597 Feit,Hawgood,Lansing,Sheehy
RB2-01598 Fontana
RB2-01600 Brody,Goldberg,Lansing,Pizzo
RB2-01602 Feit,Hawgood,Lansing,Sheehy
RB2-01603 Lansing
RB2-01608 Feit,Gill,Hawgood,Lansing,Sheehy
RB2-01609 Azziz,Lansing,Levey
RB2-01616 Brody,Goldberg,Pizzo
RB2-01622 Brody
RB2-01627 Lansing,Levin,Steward
RB2-01628 Pomeroy
RB2-01629 Lansing,Levin,Steward
RB2-01630 Brody,Goldberg,Pizzo,Pomeroy
RB2-01637 Brody,Goldberg,Pizzo
RB2-01640 Brody,Goldberg,Pizzo
RB2-01645 Brody,Gill,Lansing
RB2-01646 Bloom,Gill,Lansing

Live Coverage of Today's CIRM Directors Meeting

We will have live coverage and stories as warranted from today and tomorrow's meeting of the CIRM board of directors. We will be listening via the Internet from our post here on the water in El Salvador. The agenda includes $30 million in grants, perhaps reasons for the delay on the Wechsler-Reya grant, changes in outside contracting policies and a vote to stifle legislation that would reform CIRM and ensure the affordability of any taxpayer-financed therapies. The meeting begins at 4 p.m. PDT.

Action Stalled on $5.9 Million CIRM Grant to Recruit Duke Scientist

The California stem cell agency today called an abrupt halt to scheduled approval of a $5.9 million grant to lure a Duke University cancer stem cell researcher to the Sanford-Burnham Institute in La Jolla, Ca.

No reason was immediately offered for the removal of the grant application from the agenda today of the CIRM directors. James Harrison, outside counsel for CIRM, said in an email,

“This item will not be considered at this meeting.”

The CIRM governing board was expected to approve the funding for Robert Wechsler-Reya at their two-day meeting in the Los Angeles area. It would have been the first grant in a $44 million, two-year program to assist California institutions in recruiting top scientists.
Wechsler-Reya and his spouse, Tannishtha Reya, also a Duke stem cell scientist, are both being courted by the Sanford-Burnham.

We are seeking more explanation from CIRM and comment from Wechsler-Reya.

Wechsler-Reya Still Mulling Move to California's Burnham

Cancer stem cell researcher Robert Wechsler-Reya says he has not yet made a decision to leave Duke University and come to California, where he would be the recipient of CIRM's first Research Leadership Award.

Directors of the California stem cell agency today or tomorrow are scheduled to approve a $5.9 million grant for Wechsler-Reya to help lure him and his wife, stem cell scientist Tannishtha Reya, to the Sanford-Burnham Institute in La Jolla, Ca.

The California Stem Cell Report yesterday queried Wechsler-Reya concerning the award. Here is the verbatim text of his response:

“Thanks for your interest in the Leadership award.  I just recently received the news, and am very honored to have been chosen by the CIRM committee as the first recipient of this Award.  The prospect of interacting with the vibrant stem cell community at Sanford-Burnham, and in the broader San Diego area, would be truly unique, and we are really excited about this opportunity. However, as you can imagine, this would be a major move for me and my family, and therefore we plan to take some time to think about it before making a decision.

“In that vein, a couple of suggested corrections to your blog:

“- Since I have not yet decided to leave, I wouldn't say that I'm leaving Duke. ('He is considering leaving Duke' would be more accurate)

“- I'm not sure the first round drew only one applicant; there may have been more applicants, but the committee made only one award

“If you have any other questions, please feel free to contact me.  (I'm giving a talk tomorrow, and out of town until Thursday, so it may take me some time to get back to you).”

CIRM Millions To Help Snag Duke star Wechsler-Reya for Burnham

The recipient of CIRM's first Research Leadership Award, with $5.9 million in funding, is Robert Wechsler-Reya (at left) of Duke University, a reliable source said today.

He told the California Stem Cell Report he is considering leaving Duke and joining the Sanford Burnham Institute in La Jolla, Ca., where the CIRM-funded research is expected to be performed. Sanford Burnham is providing “an extremely generous commitment of laboratory space, matching funds for equipment, additional support for relocation and research, and access to excellent core facilities,” CIRM grant reviewers said.

(An earlier version of this item said Wechsler-Reya had decided to leave Duke. After it was published, he said in an email that he had not yet made a decision. CIRM, however, does not fund work performed outside of California.)

The reviewers also said that Sanford Burnham “has committed to recruiting the candidate's spouse(Tannishtha Reya, also at Duke, photo at right), who is an independent stem cell scientist; this represents a particularly beneficial leveraging of award funds.”­

The leadership award program, budgeted for a total of $44 million over two years, is aimed at recruiting top talent to California by means of assisting institutions with financing. The effort's goal is to attract perhaps eight scientists, although the first round this year drew only one applicant.

The stem cell agency has not identified Wechsler-Reya in keeping with its secrecy policy concerning the names of applicants. Directors are expected to approve the grant either tomorrow or Thursday. Then the agency will confirm the name.

John Reed, chief executive of Sanford Burnham, is also a member of the CIRM board of directors. He or his alternate is expected to be recused from both the discussion and voting on the grant for Wechsler-Reya. Reviewers have already approved the grant. CIRM directors almost never overturn positive decisions by reviewers, who conduct their work behind closed doors.

We have queried both researchers concerning the grant and their plans. We will carry their responses verbatim when we receive them. (See the "Still Mulling" item.)

CIRM's Nearly $6 Million Carrot

The California stem cell agency this week is expected to pony up $5.9 million to help lure an unidentified but “emerging leader” in cancer stem cell research to the Golden State.

The multi-year grant is the first in CIRM's fledgling program to assist California institutions with recruiting top talent from elsewhere in the country.

In keeping with its policy of secrecy concerning the names of applicants, the agency did not disclose either the name of the individual or the institution involved. But you can read a summary of reviewer comments here in which they gave the application a score of 83 out of 100.

No other applications were listed in the first round of what CIRM calls its Research Leadership Awards Program. The $44 million, two-year effort is aimed at recruiting top talent – “the most productive and promising early-to-mid career scientists in stem cell biology and regenerative medicine.”

The program stands to benefit some of 14 or so institutions that have representatives (some have more than one) on the 29-member CIRM governing board, which will vote on the application from the researcher Wednesday or Thursday at its meeting in the Los Angeles area. CIRM staff does not reveal the names of the applicant or institution to directors.  If a director has a conflict on an agenda item, he or she is not permitted to vote on the matter or even take part in the discussion. Following the vote, CIRM will disclose the winner in a press release.

The initial response to the recruitment assistance program seems modest, but CIRM is aiming to attract perhaps only eight researchers. And that depends on whether institutions such as the University of California, Salk, Scripps and others can offer up suitable candidates. At one point Kevin Eggan and Amy Wagers, both of Harvard, were identified in stem cell scuttlebutt as possible targets of the recruitment effort. But it is unclear whether they are still in play.

The awards are likely to draw more attention as institutions and potential candidates begin to focus on the largess to be approved later this week.

Remcho Up for 30 Percent Hike at CIRM; Contracting Changes Also on Table

Directors of the California stem cell agency are being asked this week to approve a 30 percent, $150,000 annual increase in payments to its longtime outside legal counsel, who gives advice on everything from the performance evaluation of the CIRM chairman to pregnancy leave.

The contract with Remcho, Johansen & Purcell of San Leandro, Ca., comes before CIRM directors Wednesday and Thursday at their meeting in the Los Angeles area.

Also on the agenda are revisions in the agency's policies for the outside contractors that are absolutely essential to CIRM's operation. Contracts with outside enterprises total roughly $3 million. Their expenses are the second largest item in CIRM's operational budget.

Documents detailing the Remcho and contract policy moves were posted on the CIRM Web site on Friday, only two business days before the CIRM board meeting.

In the case of Remcho, its man at CIRM is James Harrison, who worked with CIRM Chairman Robert Klein during the Prop. 71 campaign that created CIRM in 2004. Klein, Harrison and a few others wrote the ballot initiative.

Remcho was hired in a no-bid contract after the election. Klein has said that arrangement was approved by the state attorney general because of the specialized nature of Prop. 71.

Remcho currently has a two-year, $1 million contract with CIRM that ends this June. Directors are being asked to add $150,000 this year to the contract and approve a new one for 2010-2011 for $475,000.

CIRM staff prepared a three-page memo detailing the scope of Remcho's work, which includes virtually every piece of the CIRM pie: its finances, $500 million loan biotech industry loan program, contract negotiations, performance evaluation of the chairman and president, preparation of RFAs, contracting policies, legislation and even creation of a pregnancy leave policy.

The memo, however, did not state a reason for the $150,000 increase this year for Remcho nor did it say whether the hike was for work already performed.

Remcho bills CIRM at a rate of $350 an hour for work by its partners and $265 for associates, which CIRM says is significantly discounted. The contract would amount to about 3,100 hours for one partner, roughly a year-and-a-half of fulltime work, assuming a 40-hour week and two weeks vacation.

Directors are additionally being asked to alter their existing contracting policies in a manner that would remove some contracts from their normal oversight. Under the proposed changes, Remcho's contract and others below $600,000 for any single year would not have to be approved by the CIRM board.

New policy language would state:

“When a contract has a duration greater than 12 months, the approval threshold shall be based on the contract amount authorized for the initial year and separately for each subsequent year.”

No justification for the addition of the language was presented by CIRM staff, but it would clarify some ambiguities. It would also give the staff far greater leeway in executing contracts and avoid coming to the board with matters that could be controversial.

Board approval would be required only when the amount of the contract “is expected” to be more than $600,000, instead of the current $500,000. Approval of the directors' Governance Subcommittee would be required when the contract is likely to be more than $300,000 instead of $250,000.

Our take? Harrison performs admirably for CIRM. He is more than competent and nearly unflappable. But the arrangements that led to Remcho's close ties to CIRM, totally acceptable in the world of business, raise persistent concerns involving fairness to other law firms that might bridle at suggestions that they could not perform the lucrative work as well as Remcho. It may be impossible, for all practical purposes, to open the work to others, but directors should recognize the perception problems the contract presents.

As for the changes that would remove some contracts from the directors' approval, they should be rejected. CIRM's unusual dependency on outside help in a business and academic world of competitive secrets plus its need to monitor more than $1 billion in research requires careful and regular oversight by directors.