Four Firms Competing for $50 Million from California for Stem Cell Trials; Application Review Tomorrow

Reviewers at the $3 billion California stem cell agency tomorrow morning meet behind closed doors to consider applications from four biotech businesses seeking as much as $25 million each in the agency's first-ever clinical trial round.

Geron Corp. of Menlo Park, Ca., and Advanced Cell Technology of Santa Monica, Ca., are likely to be among the applicants, whose names have not been disclosed by CIRM. The agency generally clamps a lid of secrecy on applications until after they are officially approved by its full board, saying that rejected applicants might be embarrassed.

Another possible applicant, iPierian Inc., of South San Francisco, told the California Stem Cell Report that it had not applied for funds in the $50 million round. CIRM says it hopes to award up to $25 million to one or two applicants, although the CIRM board may well change that. The funds are scheduled to come in the form of loans, whose terms were recently changed by CIRM and can be found here and here.

The number of applicants is small (CIRM said only four) because the round is limited to those who "have filed an Investigational New Drug application for the human pluripotent stem cell-derived therapy," according to the RFA. CIRM will accept trials involving both human embryonic stem cells and induced pluripotent stem cells. Both Geron and Advanced Cell Technology have filed the required applications.

Ipierian's former president at one point indicated that the company might apply. However, in response to query last week, a spokesman said the firm had not applied. Geron and Advanced Cell Technology did not respond to questions.

The round is part of a high stakes effort by CIRM to push stem cell therapies into the clinic. More clinical trial rounds are expected in the next year or so. The ballot measure that created CIRM in 2004 appeared to promise speedy development of cures. CIRM is trying to fulfill that promise plus generate voter support in financially troubled California for another $3 billion to $5 billion bond measure. An external review of the agency last fall also called for closer ties to industry to bring therapies to market.

CIRM's clinicial trial round was originally scheduled to begin accepting applications in the spring of last year. The RFA was not posted until August. The agency has never responded to multiple requests for an explanation of the delay. The round has not been without controversy. CIRM hired a former Geron executive, Laurence Elias, as a $50,000 consultant on the round. The agency said no conflict interest was involved.

Geron's clinical trial involving an hESC therapy for spinal injuries is well underway. Stanford and the Santa Clara Valley Medical Center joined the effort last month.

Advanced Cell Technology is working on therapies for macular degeneration and is the only company with two hESC trials. In December, its longtime CEO, William Caldwell, died unexpectedly. Gary Rabin, a member of the firm's board of directors, has stepped in on a temporary basis.

Tomorrow's meeting will be the first review session for CIRM's new vice president of research and development, Ellen Feigal, formerly of Amgen, who started work on Jan. 31. Feigal is expected to be the agency's lead on commercializing stem cell research.

At least one analyst has remarked on both the scientific and financial stakes involved in hESC clinical trials, particularly Geron's. On Jan. 28, the Seeking Alpha web site carried an interview with Catoosa hedge fund manager Robert Lawton in which he described the Geron trial as "a binary event for the science." Lawton said,

"They will likely succeed or fail in a very big way, and advance or set back the science of HESCs forever."

Both Geron and Advanced Cell Technology have generated considerable interest among small investors who follow and discuss them via Yahoo investment groups.

Geron's closing price on Friday was $4.91, down from its 52-week high of $6.44. Advanced Cell, which moved its headquarters to California seeking CIRM funds, closed at nearly 18 cents, down from its 52-week high of about 27 cents.

Applications for CIRM's clinical trial round could be officially approved as early as the May 3 meeting of the CIRM board in Los Angeles with checks going out this summer. No announcements are expected tomorrow following the review session.

The CIRM review group will meet in Millbrae near the San Francisco airport and has scheduled a 30-minute public session beginning at 8:30 a.m. at which any member of the public, including applicants, may appear. The closed session begins at 9 a.m. The specific address for the meeting can be found on the agenda.

Update on Last Week's Hoover and CFAOC Hearings on CIRM

Two California state entities involved with the state's $3 billion stem cell agency examined its progress last week, ranging from its biotech loan program to election of a new chair.

The bodies are the Little Hoover Commission, the state's good government agency, and the Citizens Financial Accountability Oversight Committee(CFAOC), the only state body specifically charged with the overseeing CIRM's finance.

The CFAOC, chaired by state Controller John Chiang, queried CIRM officials, who included co- Vice Chairman Art Torres, President Alan Trounson and outside counsel James Harrison. Topics included the agency's heavy reliance on outside contracts(particularly in connection with legal and communications activities), the biotech loan program and its returns to the state and conflicts of interest, particularly in connection with closer ties to industry, according to Ruth Holton-Hodson, deputy controller.

We expect to have more on the discussion when the CFAOC posts transcript from the meeting.

The Little Hoover Commission was updated on a new law that lifts the 50-person limit on CIRM staff. Originally the legislation would have implemented many of the commission's reform recommendations from 2009. However, CIRM was successful in eliminating most of those provisions from the bill, which was also a topic at the CFAOC meeting. The Hoover meeting included an update on the election of a new chair at CIRM, according to Stuart Drown, executive director of the commission. He said the commissioners asked the staff to continue to follow CIRM activities and report back on the chair election preparations.

Correction

The "economic interests" item earlier today incorrectly indicated that Salk was currently represented on the CIRM board. In fact, Salk last week lost its seat.

California Stem Cell Agency Already Has Posted Some Statements of Economic Interests

The California stem cell agency was Johnny-on-the-spot last week when its directors approved posting statements of economic interest on the CIRM web site.

Moments after the vote, Don Gibbons, chief communications officer for the agency, emailed the California Stem Cell Report, pointing out that the statements of the top executives were already up. They can found at this location or by searching the CIRM site on the term "form 700," the number of the state form used, or "economic interests."

Statements are available today from the chairman (Robert Klein), the two vice chairs(Art Torres and Duane Roth), president(Alan Trounson), vice president of operations(John Robson), general counsel (Elona Baum), executive director of scientific activities (Patricia Olson) and Gibbons.

Gibbons said the statements from all the 29 directors will be posted soon. Expense claims for directors and executives will be posted beginning in April.

If you would like to see statements of economic interest sooner, you can find them here. They were posted on the Internet by the California Stem Cell Report last summer after CIRM had failed to act on the unanimous recommendation from the Citizens Financial Accountability Oversight Committee that the statements be made available online. The panel is the only state body specifically charged with overseeing CIRM finances. It made its recommendations 12 months ago.

The CIRM form 700s can be found more easily than those of the top aides to Gov. Jerry Brown. Indeed, his web site does not even have a search function. Former Gov. Arnold Schwarzenegger began posting the forms and expense claims for his top staff and appointees following a flap about conflicts of interest and expense claims. It is not clear whether Brown will post the statements. A handful of other state officials are also posting the statements online.

The $3 billion stem cell agency differs significantly from other state agencies and contains built-in conflicts of interests dictated by Prop. 71, which created the agency in 2004. Its directors are employed by institutions that have received nearly all the $1.1 billion in grants that the agency has handed out.

Here is a list of institutions that have or had seats on the board and their grant totals as of last week:  Stanford, $176 million; UCLA, $135 million; UCSF, $111 million; UCSD, $77 million; USC, $72 million; UC Irvine, $72 million; UC Davis, $61 million; City of Hope, $42 million; UC Berkeley, $37 million; Scripps, $37 million; Salk, $37 million; Sanford-Burnham, $31 million; UC Santa Cruz, $19 million; UC Santa Barbara, $13 million; UC Merced, $8 million; UC Riverside, $6 million, Cedars-Sinai, $9 million; Caltech, $2.3 million, and Childrens Hospital Research Institute, $55,000. One CIRM director, Sherry Lansing, a UC regent, accounts for many of the connections to the smaller UC campuses.

Last Thursday, directors awarded more cash to the following institutions with current or former CIRM directors: Stanford, $10.5 million; UC Berkely, $3 million; UCSD, $2.7 million; UCLA, $2.6 million; Salk, $2.3 million, Cedars-Sinai, $1.8 million, and UCSF, $1.8 million.

Directors with financial ties to applicants are barred from voting on their applications. Directors, however, approve concepts for grant programs and the rules for administering them. A former director tied to the Sanford-Burnham Institute and others ran afoul of conflict rules in 2007. The issue with Sanford-Burnham was disclosed by the California Stem Cell Report. The case resulted in a warning by the state Fair Political Practices Commission. The Sanford-Burnham official acted after he was advised to do so by CIRM Chairman Klein, an attorney who later said his advice was an "inadvertent error."

(Editor's note: An earlier version of this item incorrectly indicated that Salk was currently represented on the CIRM board. In fact, Salk last week lost its seat.)

California Stem Cell Agency Hands Out $41 Million

The California stem cell agency has awarded $32 million to researchers to help them devise technology to overcome obstacles to development of stem cell therapies, part of $41 mllion in spending approved today.

In approving 19 tools and technology grants, CIRM directors rejected four appeals of negative recommendations from reviewers. That included a petition by Stanford researcher Stefan Heller that raised a number of policy questions that went beyond purely scientific issues. A fifth rejected application by Martin G. Martin of UCLA was sent back to the grant review group for additional consideration including new information.

According to CIRM's news release, three businesses and seven institutions were among the recipients. some of which received more than one grant. The businesses are Gamma Medica-Ideas, Inc. of Northridge, Ca., $1.5 million; GMR Epigenetics of Palo Alto, Ca., $1.5 million, and Fluidigm Corp. of South San Francisco, $1.9 million. The biotech industry has complained about receiving short shrift on their applications for CIRM cash.

CIRM directors also created a $6.6 million visiting faculty program. According to the agency,

"The CIRM Visiting Faculty Award will operate through supplemental awards to existing CIRM-funded research grants, all of which have been peer reviewed and approved by the ICOC. The funds will enable a sabbatical researcher (Visiting Scientist) to work on an existing CIRM-funded research project for 6-12 months. The supplemental CIRM funds will cover up to 50% of the Visiting Scientist's salary and fringe benefits costs, with the remainder being paid by the Visiting Scientist’s home institution."

Applications will be submitted by the recipient of an existing research grant – who would be known as the "host scientist." The proposal envisions up to 30 awards with decisions on awards being made by CIRM staff.

Directors also approved a $2 million grant to Fred Gage of the Salk Institute in the early translational round. The application, which deals with Parkinson's Disease, originally totalled nearly $4 million when directors considered it last October. Scientific reviewers initially did not approve the Gage application for funding, but it was set aside by the directors for additional consideration. CIRM staff and a representative of the review group negotiated the scaling back of the grant size.

Additionally approved was a $250,000 program to subsidize attendance for about 80 recipients of CIRM training grants and 40 patient advocates at an international stem cell conference in Toronto in June. The program was originally proposed at $200,000 but was boosted to $250,000 by directors.

CIRM Directors Conclude Meeting

The meeting of the directors of the California stem cell agency concluded about an hour ago. We will have a story coming shortly on action on various grant and spending proposals.

California Stem Cell Directors Chart New Path to Find New Chairman

Directors of the California stem cell agency today embarked on a fresh course for selection of a new chairman of the $3 billion effort, including a self-evaluation of the performance of the agency board itself.

On a unanimous voice vote, the governing board initiated a survey of its 29 directors to determine criteria that they believe is desirable in a new chairman, in addition to the legal requirements. The survey, to be conducted next week, will also ask directors to evaluate the board's role.

The questions will address such concerns was whether the person who will replace Robert Klein should have experience in academia, industry or patient advocacy, among other things, such as time commitment and compensation.

Board members will be queried on whether they have enough information on matters that come before the board, the amount of their preparation and whether they feel comfortable raising dissenting opinions in addition to other matters..

The new procedure was suggested by Director Claire Pomeroy, dean of the UC Davis School of Medicine. It came after Klein's attempt to engineer the selection of his successor floundered in the wake of news reports that reflected less than favorably on CIRM and Klein.

Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, said she expected to hold a meeting of the panel in two weeks to consider the results of the survey. She anticipated another meeting following that session. The criteria could come to the board for its meeting in March in Sacramento.

Klein says he plans to leave his post by June. He was re-elected in December at no pay for six months in December.

The plan to address the chair selection process triggered a short but sharp debate that veered into a discussion of some of the criteria, including whether the chair should also have CEO responsibilities, be a US citizen and the amount of time required.

Klein was paid $150,000 a year for a half-time effort until last month. He told directors that he is putting in considerably more time than that.

The discussion about the citizenship requirement came up because Klein last month said that the person his candidate for the job had to drop out because state law required him to be a US citizen. However, an official opinion of the state attorney general's office has pronounced that provision unconstitutional. Nonetheless, Art Torres, co-vice chair of the CIRM board, said a chairman must be a citizen until an appellate court rules otherwise. Some board members and the board's general counsel took pains to say that the provision did not apply to CIRM President Alan Trounson, who is Australian.

In electing a chairman, the CIRM board is handicapped by Prop. 71, which dictates that it cannot choose anyone it finds qualified. Instead, the ballot measure, written by Klein and others, says the board must choose between candidates nominated by four statewide officeholders: the governor, lieutentant governor, treasurer and controller. Prop. 71 also contains a list of detailed, restrictve legal requirements for the position.

CIRM Board Back in Session

The CIRM board resumed discussions about 1 p.m. PST.

CIRM Directors in Executive Session

CIRM directors have been in an executive session since about 11:18 p.m PST. They are discussing personnel issues and proprietary information concerning the $40 million tools and technology grant round. It is not clear when they will resume their public session.

CIRM Directors to Post Their Statements of Economic Interest Online

Directors of the California stem cell agency today decided to post their statements of economic interest on the CIRM web site along with those of the executives of the $3 billion enterprise. Also to be posted will be the expense claims filed by the same officials.

The action was approved on a unanimous voice vote. It came at the request of Citizens Financial Accountability Oversight Committee (CFAOC) one year ago when it urged more openness and transparency at the agency. The committee is chaired by the state's top fiscal officer, Controller John Chiang. It is a sister to CIRM, created also by Prop. 71 in 2004, and is the only state body specifically charged with overseeing CIRM's finances.

Chiang's office said the controller called the action "good news and a long-overdue step toward
transparency and accountability."
The postings will begin in April, the deadline for the 2010 statements of economic interest. Other state agencies, including the governor's and controller's office, already have been posting their own statements and expense claims. CIRM plans to confer with the CFAOC to be sure to comply properly with its request.

Director Sherry Lansing, chair of the Governance Subcommittee and a former Hollywood studio chief, said that CIRM  "has nothing to hide, and it (the information) is already out there."

CIRM Director David Serrano Sewell, a deputy city attorney in San Francisco, was delegated to work with staff and the CFAOC to implement the postings.

The California Stem Cell Report posted the statements for the directors and staff last August after CIRM balked at complying with the unanimous request from the CFAOC. The postings by the stem cell report were  noted more than once by directors today. Last month we began the process of gathering CIRM expense claims for posting but will suspend that effort.

Our take on today's board action? We applaud the CIRM directors. Today's vote represents a significant step forward in improving the agency's openness and transparency.

Minority Report Filed on Business Application Rejected by Reviewers

Some  CIRM grant reviewers have filed a minority report on a tools-and-technology grant rejected by the agency's grant reviewers.  The application was submitted by a business. The biotech industry has complained about the paucity of CIRM grants to business. The review summary said, 

 "Three elements were cited by the minority group in support of moving the application up to Tier 1: 1) the proposal was submitted by a "for profit" applicant; 2) the project uses bioinformatics approaches; 3) the proposed research expands a global capacity to assess safety of cell therapy products derived from embryonic stem cells that have been expanded in culture. Also, the proposal supports efforts to characterize 10 cell lines that are being derived as part of a previously funded CIRM award."

The identity of the applicant was not disclosed.

Fifth Appeal by Rejected Applicant

A fifth scientist has filed an appeal of a negative decision by CIRM's scientific reviewers on his application for $1.2 million in the $40 million tools and technology round.

The researcher is Alexander Urban of Stanford University, the third scientist from that institution whose application was rejected. Here is the summary of the reviewers findings.

Stem Cell Directors Begin Meeting

Directors of the California stem cell opened their meeting this morning in  Burlingame at 11:17 a.m. PST with introduction of two new members of the 29-member board and a new alternate for a regular member. The first order of business is the $40 million tools and technology round of grants. The board has a quorum but Chairman Klein warned that some directors will have to leave early -- not an uncommon situation for the board. The meeting is scheduled to end at 5 p.m.

Coverage of Today's Stem Cell Board Meeting

The California Stem Cell Report will be providing live coverage of today's meeting of the board of the California stem cell agency from our location in El Salvador. The meeting has not yet begun but it is likely to get underway soon. We will file reports as warranted throughout the day based on the Internet broadcast of the proceedings.

CIRM Study Says Stem Cell Spending Will Generate 25,000 jobs by 2014

The California stem cell agency today released a glowing report on its economic impact that was produced by a firm that was charged by CIRM with executing "a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”

The agency's press release on the $300,000, 25-page study said that CIRM's spending will generate 25,000 "job years" and $200 million in new tax revenue by the end of 2014. CIRM has awarded $1.1 billion in grants, although not all of that has yet been distributed. The study projected the future impact of those funds in addition to cash already distributed.

The study was prepared by the LECG group and the Berkeley Research Group under an RFP that said the contract holder must "execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”

CIRM Chairman Robert Klein said in a news release,

“This report demonstrates that we’ve delivered on the economic promise today, even as we continue to see strong positive milestones on the research side progressing rapidly toward therapies.”

The agency's news release said more economic studies will be performed. But it said today's report

"...alone makes it clear that CIRM has provided a net gain to the state’s general fund during its early years. For its first five years, through the end of 2009, the agency paid its own debt service costs directly from its bond proceeds so there was no cost to the general fund during those years. From 2010 through 2012, the current estimate for the cost of debt service on CIRM bonds is $160 million. The state’s share of CIRM generated revenue—just from that first $1.1 billion awarded before July—will be an estimated $148 million.

"The report does not, however, take into account grant awards made later in 2010 and those scheduled for 2011 and 2012, which will generate added tax revenue at a similar rate. With those additions, CIRM’s directly generated tax revenue should exceed its debt payments through some point in 2013 even without considering tax revenue from industry growth in the biotech clusters."

No doubt exists that the stem cell spending has had a beneficial economic impact. But whether it has had a "significant" impact on the California economy is in the eye of the beholder. The state's economy runs to something like $1.7 trillion a year. If California were a nation, it would rank among one of the larger economies in the world. The workforce totals around 18 million, making 25,000 jobs statistically less than a hiccup. Keep in mind as well that CIRM, until 2009,  paid the interest on its borrowing with more borrowed funds, all of which adds to the total cost of the borrowing, which is about $3 billion on top of the $3 billion CIRM is handing out.

We have asked CIRM whether it intends to make the economic data underpinning the report available to the public and outside researchers, who can verify the study's conclusions. The agency's response will be carried when we receive it.

Details Finally Emerge on $200,000 Stem Cell Convention Subsidy Plan

The California stem cell agency last night belatedly gave the public its first glimpse at a $200,000 plan to subsidize attendance at an international stem cell conference in Toronto in June.

A one-sentence version of the proposal has been on the agenda of the directors of the California stem cell agenda for 10 days. However, the cost, number of persons involved and other details were not disclosed until only hours before the directors are scheduled to take it up this morning.

In a memo on the CIRM web site, Chairman Robert Klein estimated the cost at $2,000 per person for travel, hotel and registration expenses at the meeting of the International Society of Stem Cell Research, the world's largest such organization. He proposed sending "80 young California researchers who are actively involved in a CIRM-fund grant (including Bridges to Stem Cell Research, research training grants and other research award programs) and up to 40 California representatives of patient advocacy organizations."

The $24 million Bridges program covers training largely at California state and community colleges.

The memo did not present a justification for the convention travel subsidy. Instead, it said that CIRM paid for the attendance of 98 persons in a similar program for the ISSCR convention last year in San Francisco. It said the program was a "success" but provided no basis for that assertion.

CIRM, through Klein's office, has been trying to improve relations with patient advocate organizations, which will be a key to winning support of a proposed, new $3 billion to $5 billion ballot measure for the stem cell agency.

The program would use part of the $3.5 million that has been donated to CIRM by private individuals and be operated under the auspices of the ISSCR. The organization would be given the $200,000 to set up a "scholarship" program. Klein would run the program through his office, he said, to avoid placing any additional burden on CIRM's scientific staff. It was not clear whether the ISSCR would require reimbursement for its administrative costs in connection with the program.

CIRM Directors Move Forward on Selection of New Chairman

A key committee of the directors of the California stem cell agency tonight moved to take a fresh look at the selection of a new chairman of the $3 billion organization and to conduct a self-evaluation of the board itself.

The proposal now goes to the full board of directors at their meeting in Burlingame tomorrow.

The Governance committee also agreed with a request made one year ago by the state Citizens Financial Accountability Oversight Committee that CIRM post the economic interest statements of its directors and top executives on the CIRM web site, said Don Gibbons, the agency's chief communications officer. The CIRM directors panel also agreed to post expense claims from directors and executives. The oversight committee is charged with examining CIRM's finances.

Gibbons said in an email that the new look at the selection of a new chairman was approved unanimously after a brief discussion. Gibbons said that directors also accepted a suggestion by CIRM Chairman Robert Klein, who says he is leaving in June, that directors be surveyed on whether they "should or should not get involved in financial details."

The proposal to develop a criteria for a chairman plus the self-assessment survey was offered by Claire Pomeroy, dean of the UC Davis School of Medicine and a member of the CIRM board. In an email to directors, she said her recommendations would help to "to ensure an open process free of conflict of interest and personal agendas." She said,

"This is our chance to emphasize the mission over in-fighting and can define what kind of organization CIRM and the board will be."

Sherry Lansing, chair of the Governance committee and former Hollywood film studio chief, asked that the survey be completed in two weeks, according to Gibbons.

He said that the committee also approved a suggestion by Lansing concerning an additional aspect of the selection process. Gibbons said that it would create "a process in which if (a board member) finds someone that looks like an interesting candidate they can call one other member of the (Governance committee) and meet with that individual and report back to the committee in a public meeting on the potential candidate’s qualifications."

State Controller Chiang: Lubin Fills Children's Health Need on CIRM Board

Earlier today, the California Stem Cell Report asked the office of state Controller John Chiang to comment concerning the appointment of Bert Lubin to the CIRM governing board. Here is what Hallye Jordan, Chiang's spokesperson, sent.

"Controller Chiang was thrilled to appoint Dr. Bert Lubin for the position reserved for a California nonprofit academic and research institute because he is supremely qualified.

"Currently, there is no children's health representative on the ICOC(the stem cell agency's governing board), and Dr. Lubin fills this important gap. He has focused his career on health issues in minority communities, and is known for his research into sickle cell anemia.

"From the CHORI (which he founded) website: 'Under Dr. Lubin's leadership, basic, clinical and translational research activities expanded, and he transformed a small research program into a $50 million-a-year enterprise called Children's Hospital Oakland Research Institute. In 2008, CHORI ranked sixth in the nation for National Institutes of Health awards to children's hospitals.

"'CHORI investigators have organized programs in global health, cellular therapy, and personalized medicine. Grant support has increased 100-fold under Dr. Lubin's leadership due to the outstanding investigators he has recruited and supported.'

"Dr. Lubin was the unanimous choice of the Children's Hospital Association, and both Art Torres and Bob Klein were enthusiastic about his potential nomination.

"I've attached a letter of support that cites his 'long-standing interest in stem cells, basic research, clinical applications and technology transfer,' his interest 'in training young investigators interested in stem cell research,' and his worldwide recognition 'for the work he has done establishing the value of sibling stem cell cord blood banking.'"

Jordan additionally said, "Also, at the time we started our search, Salk was represented on the board so we were looking for new institutions."

You can find the letter of support here. It was written last October by Diana Dooley, now a member of California governor Jerry Brown's cabinet as secretary of the $83 billion state Health and Human Services Agency. At the time she wrote the letter, Dooley was president of the Children's Hospital Association.

Correction

The Salk item on Jan. 26, 2011, incorrectly stated that William Brody was being replaced on the CIRM board by Bert Lubin. Lubin actually replaced John Reed.

Salk Loses Seat at California's $3 Billion Stem Cell Table

Bert Lubin, new CIRM board
member

The Salk Institute has lost its seat on the 29-member governing board of the $3 billion California stem cell agency.

The La Jolla, Ca., research enterprise had held a position on the board since its inception in 2004. Most recently, William Brody, president of Salk, which has received $37 million in CIRM grants, filled the slot. Brody was appointed in August of 2009.

Brody was was replaced by Kristiina Vuori, president of the Sanford-Burnham Research Institute, also of La Jolla. At the same time, her boss, John Reed, CEO of Sanford was replaced on the CIRM board when state Controller John Chiang appointed  Bert Lubin, president and CEO of Children’s Hospital and Research Center Oakland. Lubin made news three years ago when he became the first grant applicant to publicly appeal a negative decision on his application by CIRM's scientific reviewers. Lubin lost his bid during a heated debate among directors. At the time, directors expressed considerable discomfort with having to deal with a public appeal. Since then, the problem of appeals has continued to dog the board, although its Scientific Subcommittee is attempting to deal with the issue.

Kristiina Vuori, new
 CIRM  board member

Childrens Hospital Oakland currently holds a single $55,000 grant from CIRM.

Chiang's office had no immediate comment on the reasons behind Lubin's nomination. We are also querying Lubin and Brody for comment.(The controller's office later said Lubin would serve as an advocate for children's health.)

Vuori was appointed by former Lt. Gov. Abel Maldonado before he left office earlier this month. Sanford-Burnham has received $31 million from CIRM.

It is common for CIRM grants to go to institutions linked to its board. Many members of the board are employed by institutions that have received tens of millions of dollars from CIRM. The following institutions have seats on the board: Stanford, $176 million in grants; UCLA, $135 million; UCSF, $111 million; UCSD, $77 million; USC, $72 million; UC Irvine, $72 million; UC Davis, $61 million; City of Hope, $42 million; UC Berkeley, $37 million; Scripps, $37 million; UC Santa Cruz, $19 million; UC Santa Barbara, $13 million; UC Merced, $8 million; UC Riverside, $6 million, Cedars-Sinai, $9 million. One CIRM director, Sherry Lansing, a UC regent, accounts for many of the connections to the smaller UC campuses.

Directors with financial ties to applicants are barred from voting on their applications. Directors, however, approve concepts for grant programs and the rules for administering them. Reed and others ran afoul of conflict rules in 2007. The issue with Sanford's Reed was disclosed by the California Stem Cell Report. Reed was later warned by the state Fair Political Practices Commission. Reed acted after he was advised to do so by CIRM Chairman Robert Klein, an attorney who later said his advice was an "inadvertent error."

The structure of the board was dictated by Prop. 71, whose authors, including Klein, were interested in giving a seat at the financial table to the institutions who ultimately benefited from the largess.

The new appointees have six-year terms. They receive $114 a day while working on CIRM matters.

The appointments were disclosed this afternoon in a news release from CIRM. The statement said there were no changes in the other members of the board. Nine were reappointed. Others have eight-year terms.

(An earlier version of this item incorrectly said that Brody was replaced by Lubin.)