New Collaborative Agreement Announced Between California Stem Cell Agency and NIH

The California stem cell agency and the NIH today announced a collaborative agreement aimed at accelerating the transformation of basic research into cures.

The agreement came up several times during this morning's discussion of changes in CIRM's strategic plan in the context of leveraging the agency's efforts. Some directors indicated that the agreement could mean that CIRM could spend less on costly translational grant rounds. Here are some excerpts from the agency's press release.

"The memorandum of understanding signed by CIRM President Alan Trounson and Michael Gottesman, Deputy Director for Intramural Research at NIH, is a pilot project of these partnerships in clinical and translational research. This MOU establishes a framework to advance the complementary and synergistic goals of CIRM and the NIH to 'help NIH and CIRM researchers work together to bring their special talents in stem cell and regenerative medicine research to bear upon prevention, diagnosis, and treatment of various diseases.'"

"The NIH, through its trans-NIH Center for Regenerative Medicine (NIH CRM), the NIH Clinical Center, and the newly established NIH Center for Translational Therapeutics (NCTT), will foster these interactions. The NIH Clinical Center is the world’s largest hospital dedicated entirely to clinical research. The Center houses basic, translational and clinical research efforts of the NIH intramural research community, including the recently established NIH CRM funded through the NIH Common Fund."

The press release also mentioned possible opportunities for collaboration. It said,

"One relates to the current round of applications for CIRM’s Disease Team Therapy Development Research awards. During the planning phase of these awards, California teams could develop collaborations with researchers at the NIH Clinical Center on various aspects of a preclinical, Phase I, Phase I/II or Phase II clinical trial. Another option is to enable California researchers with the opportunity to take part in NIH Clinical Center visiting fellowship or clinical investigator training programs. A third is to access unique resources they could apply to use that may not be available at their home institution."

CIRM Directors Break for Lunch; PR Plan Up Next

Directors of the California stem cell agency have concluded their discussion of possible changes in their strategic plans for the next five years and adjourned for lunch and a closed-door personnel session.

They plan to return at about 15 minutes after the hour. The directors plan to take up a new communications/PR plan at that time.

No votes were taken during the discussion of the strategic plan. We will have more on what directors had to say later.

Stem Cell Meeting Resumes

CIRM directors have resumed their meeting today, beginning a discussion of possible changes in the agency's strategic plan as it determines the priorities for its remaining $1.2 billion.

CIRM Directors on Break

Directors of the stem cell agency are currently are on a short break and should be back in session at seven or eight minutes after the hour, if they keep to their schedule. A discussion of the strategic plan moderated by a consultant will begin when directors return.

Stem Cell Directors Discuss Changes in Strategic Plan

California stem cell agency directors are in the midst of a discussion of changes in their strategic planto focus more heavily on driving reseach into treatments.

Ellen Feigal, vice president of research and development, introduced the discussion and noted that the agency does not plan to abandon basic research, a touchy subject for many researchers. She also said the directors should examine the proportion of  expenditures devoted to basic research and translational research.

CIRM Directors Meeting Underway

Directors of the California stem cell agency have begun their meeting today in Irvine. CIRM President Alan Trounson is in the midst of a presentation.

Conflicting Start Times for CIRM Board Meeting

The agenda for today's meeting of the board of the California stem cell agency says that it will start at 9 a.m. PDT. However, the audiocast schedule says 9:30. We have queried CIRM concerning the discrepancy.

If our WiFi connection, provided free by the Panamanian government to the entire country, can hold up, we will bring live coverage of the meeting when it begins. It is struggling mightily right now , and we may move to another location, which will mean a delay in our coverage.

CIRM's Next Six Years: Stem Cell Agency Re-examines Its Priorities

The California stem cell agency is taking a fresh look at its strategic plan as it drives more aggressively to develop therapies that can actually be used in the clinic. The re-examination is likely to have an impact on business and academic researchers alike.

The first public session is in Los Angeles today. Tomorrow the 29 members of the CIRM board of directors tackle the subject in Irvine. On Halloween, another session is scheduled for the public in San Francisco.

Little fresh information is being provided for the Los Angeles and San Francisco meetings. But directors will have a document prepared by Ellen Feigal, CIRM's vice president for research and development.

One goal of tomorrow's discussion is to deal with priorities for the six next years, which may well be the agency's last. CIRM is scheduled to run out of funds in 2017 unless it receives more bond funding from the state or cash from other sources. Also on the table are possible changes in CIRM operations, ranging from grant review criteria to RFA content.

Feigal's document, the best we have seen on the strategic plan since the first version in 2006, asks the question: "What would success look like?" The purpose is to trigger responses from the CIRM board members.

Feigal writes that "stem cell-based therapies are the core of CIRM's mission."

"Getting treatments in clinical trials that evolved from stem cell research, we plan to do this in the following ways:
"Show great strides getting game-changing, innovative therapies into clinical trials that would not have happened without CIRM
"Transform public thought about science and medicine so the public better understands the dynamic connection between basic research and clinical development"

Feigal proposes that CIRM work to establish California as the "Stem Cell State" and stimulate its biotech industry.

She identifies some weaknesses at CIRM including relations with industry and communications. She suggests that scientific reviewers need to have a broader view of the agency's work. And she cites the need for prioritizing activities. She said CIRM needs to be "cautious about the 'let a thousand flowers bloom' approach.

The last round on strategic planning triggered a sharp discussion involving fears that CIRM would give short shrift to basic science. This latest proposal is likely stir that pot again as basic researchers become concerned that less grant money will flow to their projects.

Feigal's document came late to the public and was posted only last Friday, three business days before the CIRM board meeting tomorrow. It was one of two major subjects before directors that lacked background until very recently. The other is the communications proposal that dovetails with the strategic plan.

CIRM's timetable for completing the latest revision of the strategic plan calls for final approval by the CIRM board of directors in March 2012.

Live Coverage of CIRM Board Meeting

The California Stem Cell Report will provide live coverage tomorrow of CIRM's board meeting at UC Irvine in California. We will be listening to the Internet audiocast from our post aboard our sailboat-home anchored off Panama City in the Republic of Panama. For those who wish to follow along, directions for the audiocast can be found on the meeting agenda, which also contains the addresses of three remote locations in California. Those locations provide the ability to make comments and actually participate in the proceedings. The meeting is scheduled to begin at 9 a.m. PDT.

Stem Cell Agency PR/Communications Not Up to Snuff, CIRM-funded Report Says

The communications/public relations efforts of the $3 billion California stem cell agency have fallen short, damaged its own public image and led to organizational "dysfunction," according to a CIRM-commissioned study.

The report by the Sacramento firm of Townsend Raimundo Besler and Usher cited "less than satisfactory results" and CIRM's failure to keep pace with the need to communicate with many different audiences. The political consulting and PR firm wrote,

"(A) lack of coordination and systematic organization has led at times to dysfunction, and, while the Institute may be respected and well-known in the scientific world, it is far less of either among other critical audiences."

(Disclosure note: The author of this item on the California Stem Cell Report and Jeff Raimundo, one of the principals of the Townsend firm, worked together at The Sacramento Bee two decades ago.)

The report, to be acted on tomorrow night and on Wednesday by CIRM directors, cited some measureable PR successes. But it said CIRM "lives in two worlds – the high-level domain of advanced scientific research and the secular world of politics and public opinion."

The Townsend firm recommended a number of changes to improve matters, including "rebranding" the California Institute for Regenerative Medicine, the official name of the agency, as the "Stem Cell Institute." Townsend said the agency's formal name "has proven not particularly effective in helping the public" understand its work.

Townsend also recommended centralizing communications management, reorganizing existing communcations staff, creating an annual communications/PR plan and developing a set of messages that will generate public support. Also recommended were polling and focus groups to help formulate needed strategies along with specific ways of measuring the success of CIRM's communications plans.

Townsend cited the need to go beyond traditional scientific as well as mainstream media. The report said that the while public has traditionally "gotten their information from mainstream news media, that is no longer true. Much of the flow of information to the public is through interactive and electronic media today, particularly blogs and websites."

The report indirectly referred to former Chairman Robert Klein, who stepped down in June. Townsend said,

"Virtually since its inception and until recently, the Institute has been led by a high-profile, articulate and charismatic individual who assumed much of the responsibility for communicating with many if not most of CIRM's audiences. Although that situation helped keep messages simple and focused, it did not keep pace with the demands of the Institute to communicate at many different levels and with many different audiences."

CIRM commissioned the study following the June election of Jonathan Thomas, a Los Angeles bond financier, to replace Klein, who is a Palo Alto real estate investment banker.

At the time of Thomas' election, he told directors that the agency is in a "communications war." He said the world is focused on "internal issues" at CIRM instead of "the grand, big picture. "  He also discussed CIRM's financial situation. Its bond funding will run out in roughly 2017. And prior to his departure, Klein expressed the need to seek another multibillion dollar bond measure sometime in the next few years. Such a ballot measure would seem certain to be rejected today, given the state's current financial crisis and the lack of the cures that were touted in the 2004 election campaign that created CIRM and that was headed by Klein.

Earlier this year, directors approved an organizational change that created a senior level director of public communications in the office of the CIRM chairman to market the stem cell agency to the public. The agency is currently in the process of hiring that person. However, the three-person communications staff remains within the president's office.

Accompanying the Townsend report was a document from CIRM President Alan Trounson detailing responsibilities for the new hire and declaring that he "fully supports" the new communications effort. Under Trounson's structure, the PR chief would report to Art Torres, the co-vice chairman of CIRM, and Ellen Feigal, vice president for research and development. Trounson's statement does not specifically delineate who reports to the new PR person but places responsibility for virtually all of the agency's communications efforts in the hands of that person.

The Townsend study also says that CIRM is understaffed for its communications tasks although it did not specifically recommend new hires.

The Townsend report was posted on the CIRM website sometime during the weekend, only two business days before it is to be considered, making it nearly impossible for the public or interested parties to prepare thoughtful comments.

The California Stem Cell Report asked CIRM earlier for the cost of the Townsend report as well as a copy of the contract, both of which are a public record. Neither piece of information has been forthcoming.

Stem Cell Agency Strikes New Financial Deal with State of California

The $3 billion California stem cell agency has worked out a creative, new financial arrangement with the Brown Administration and the state treasurer that assures the agency of cash at least until 2013.

CIRM was on track to run out of funds late next spring because of the earlier suspension of the sale of state bonds, the agency's only real source of money. When the sales resumed last week, it received only $50.8 million, which is well short of meeting CIRM's obligations to grant and loan recipients.

But new CIRM Chairman Jonathan Thomas said late Friday that CIRM now has what amounts to a $225 million line of credit with the state and assurances of a loan should additional cash be needed. In a telephone interview with the California Stem Cell Report, he said,

"We are in really good shape."

The arrangement appears to eliminate the likelihood that CIRM could run out of funds if the financially troubled state of California suspends bond sales again early next year. The state's current budget is built on optimistic revenue projections, which are not being met. If those fall short, severe, automatic budget cuts will be triggered in January. Under less dire conditions last year, the state suspended bond sales. Gov. Jerry Brown, who last week touted the $50.7 million in stem cell borrowing, has also deplored the state's debt load. Bond interest costs have risen from 3.4 percent of the state budget in 2003-04 to nearly 8 percent this year. That amounts to $2,542 per person, compared with the national median of $1,066, according to The Sacramento Bee.

CIRM's new deal with the state minimizes interest costs through the possible use of commercial paper, which is a form of very short term borrowing with low interest rates.

Here is how the new arrangement works, according to Thomas, who is a Los Angeles bond financier. Currently CIRM has $190 million on hand. The addition of the $50.8 million will carry it through June, which is the end of the current fiscal year. If CIRM has additional financial needs, the treasurer's office will provide up to $75 million through the use of commercial paper, which CIRM would ultimately have to repay.

If the state sells more bonds in the first part of 2012, CIRM will receive an additional allotment that will carry it into the 2012-13 fiscal year. If no bond sales occur, the treasurer's office will provide an additional $150 million via commercial paper over a six-month period. Should CIRM need cash beyond that, the state would provide a loan in much the same way that former Gov. Arnold Schwarzenegger did during CIRM's early days. The chief advantage to the state is that the arrangement helps to avoid the issuance of more bonds this year with their ongoing interest costs. The financial arrangement is subject to a review every six months.

Thomas, who was nominated for his post by both Brown and state Treasurer Bill Lockyer, said the arrangement makes it clear that the California stem cell agency is one of the state's priorities. He said,

"We got everything we want."

We asked Thomas who came up with the idea for the use of commercial paper. He said he could not remember specifically but said it popped up during discussions with the state Department of Finance staff, himself and CIRM co-vice chair Art Torres, a former state legislator and former head of the state Democratic Party. Ultimately the plan was approved in a meeting with Thomas, Torres, CIRM's outside counsel James Harrison and state Finance Director Ana Matosantos.

CIRM's cash needs are increasing as it more aggressively pursues development of clinical therapies. Next spring it is slated to mount a $240 million grant round. The agency has roughly $1.4 billion left, but a good chunk of that will go for operational costs, which are currently $18.5 million a year and are likely to increase. CIRM has projected that it will run out of its bond funding in about 2017.

Gov. Jerry Brown on Borrowing to Finance Stem Cell Research

Here is what California Gov. Jerry Brown had to say yesterday about the $50.8 million in taxable bond proceeds that are going to the $3 billion California stem cell agency. It was a part of a press release touting the virtues of the financially troubled state's most recent borrowing.

Much of the language in Brown's statement appears to have originated with the stem cell agency, which campaigned with the Brown administration for a share of the bond proceeds.

The stem cell agency has not yet responded to our inquiries concerning the amount of money that was provided.

Brown's statement follows:

"CIRM’s approximately $190 million in existing proceeds, plus the additional $50 million, will be used to fund the following program activities:

"• The first Food and Drug Administration-approved clinical trial for a human embryonic stem cell therapy (for spinal cord injury). CIRM’s $25 million commitment to this project has been matched by a $29 million commitment of private funds.
"• 14 Disease Research Teams that are proceeding towards clinical trials of therapies to treat diseases ranging from HIV/AIDS to dry macular degeneration (a common cause of blindness) to neurological diseases such as ALS. One of these awards is a $20 million loan which has generated approximately $20 million in additional funds by the company receiving the CIRM award.
"• Training and internship awards to fund the training of almost 900 promising new scientists and technical staff at the University of California, California State University, California Community Colleges and other institutions in California.
"• CIRM-funded research and related matching funds are expected to create or retain approximately 5,000 jobs per year and more than $60 million in new state and local tax revenues.
"• The current portfolio of stem cell research at CIRM, including the grant programs scheduled through June 2012, have resulted in over 100 scientists and 1,000 other highly-trained researchers being recruited to the state. The Stanford Stem Cell Institute estimates that each of these researchers will bring an average of $1.5 million in research funding to California, for a total of $150 million of additional research funding and associated jobs."

Stem Cell Agency To Receive $50.8 Million in Additional Funding

The California stem cell agency, which was slated to run out of cash next June, will receive $50.8 million from yesterday's sale of state bonds, the state treasurer's office said today.

Under normal circumstances, the agency could be entitled to as much as $350 million annually in bond proceeds. We have queried CIRM concerning its perspective on the impact of this week's funding.

The state of California is in the midst of a severe budget crunch. In January, California is likely to be hit by a wave of automatic, severe budget cuts. They will be triggered if the revenue projections for the current fiscal year (2011-12) are not met. Currently the state is falling short of the projections.

The state is not scheduling any further bond sales this calendar year. It is unclear whether bond sales will resume in 2012. At the beginning of 2011, the state suspended bond sales because of budgetary concerns.

More on CIRM's Restriction of Info on Biotech Applicants

The California stem cell agency says its brief statement this week on restriction of information involving biotech companies was generated in an effort to offer a public explanation of its policy.

In response to a query about what led to the statement, Maria Bonneville, executive director of the CIRM board, said,

"In light of CIRM's efforts to work with companies to develop new therapies, we felt it was important to offer a public explanation regarding CIRM's efforts to balance its obligation to provide information to the public with the need to protect the proprietary information of applicants for therapy development projects."

The California Stem Cell Report will have more on this subject in the next week, including a discussion of how it relates to the state's constitution, which states that the public has as "broadly construed" right to information about state government activities.

California Stem Cell Agency on its Need to Advance Biotech Industry and Restrict Information

The California stem cell agency yesterday posted a 245-word statement justifying its efforts to protect what it calls the "confidential" information of business applicants seeking some of the state's $3 billion in research funds.

The statement appeared on the agenda for next Wednesday's CIRM board meeting under a section dealing with material to be presented by President Alan Trounson. The agency posted no explanation about what led to creation of the document or why it was needed. We have queried CIRM concerning the circumstances surrounding the statement.

In the document, CIRM said its aggressive push into therapy development and closer ties to the biotech industry presents "special challenges." The agency said it must "protect the companies’ proprietary information and their ability to obtain follow-on financing." CIRM also justified its position based on CIRM's need to "advance the biotech industry in California to world leadership."

Earlier this year, CIRM embarked on its first-ever involvement in a clinical trial – Geron's historic trial of an hESC therapy. The $25 million loan was handled in a unique and unusual manner that deviated sharply from other grant rounds. CIRM failed to provide a scientific score on Geron's application, which has been standard practice on more than 1,000 other applications, including other businesses. CIRM failed to provide the usual summary of grant reviewer comments that were also provided on all previous business and academic applicants. The three other applicants in the $50 million round all withdrew prior to presentation to the CIRM board – another first in CIRM's grant program. And no public explanation was provided at the time for the departures from long-established procedures used for more than 400 other approved grants and loans.

The California Stem Cell Report subsequently reported the score – 66 out of a possible 100 – which is a public record. The CSCR also wrote in August about the unusual procedures and the 16-1 vote for Geron funding.

CIRM director Joan Samuelson, a patient advocate who has pressed hard for development of therapies, cast the lone vote in May against the Geron application. She said the trial was not ready, and CIRM was not ready. According to the transcript of the meeting, Samuelson said,

"There were lots of -- this is based on the peer review and the comments by the scientist members of the Grants Working Group. There were many concerns that many of the scientist members felt should be satisfied before embarking on a clinical trial and they weren't."

In August, James Harrison, outside counsel to the CIRM board, also invoked the need to protect business information in the case of the Geron application. In many ways, the most recent statement appears to be a summary of Harrison's earlier remarks to the California Stem Cell Report.

Here is the full text of yesterday's statement from CIRM.

"CIRM has historically balanced its obligation to provide information to the public with its responsibility to protect the proprietary information of applicants. With applications for basic research, for example, CIRM has provided detailed information regarding the applications and the recommendation of the Grants Working Group. Applications for awards involving therapy development, however, present special challenges. In order to succeed in its mission to provide therapies and cures for the millions of patients who suffer from chronic disease and injury and to 'advance the biotech industry in California to world leadership, as an economic engine for California’s future,' it is critical that CIRM work closely with the biotech and pharmaceutical sectors.

"Engaging industry requires that CIRM assure the companies with which it works of CIRM’s capacity to protect the companies’ proprietary information and their ability to obtain follow-on financing. This is particularly true for companies involved in clinical research. At this stage of commercial product development, many things are proprietary (e.g., FDA communications, data, clinical plans, etc.); therefore, CIRM has a significant challenge and responsibility to protect the confidentiality of the companies’ submissions as any violation could have adverse consequences for the companies, including a material disclosure, particularly for those companies that are publicly traded. Consistent with this responsibility and its over-arching mission, CIRM has taken what we think are reasonable and rational steps to protect confidential information while providing the public with critical information regarding therapy development projects and the Grant Working Group’s recommendation."

California Stem Cell Agency Blogs on European Ban on hESC Patents

The California stem cell agency today posted a blog item on the European court decision outlawing patents on products created from human embryonic stem cells that basically painted a bleak picture for the field.

The item, written by Geoff Lomax, senior officer for CIRM's Standards Working Group, quoted James Lawford-Davies, a British lawyer, as saying the decision is regarded as "victory by those opposed to the use of embryos for research in the EU."

CIRM did not release a statement on the decision, but pointed to the Lomax item when asked for comment.

New Scientist magazine reported that the decision was based on section of law that banned patents "contrary to public order and morality." The magazine quoted British researcher Peter Coffey, who is moving to UC Santa Barbara assisted by a $4.9 million recruiting grant from CIRM.

Reporter Andy Coghlan wrote,

"'This is a devastating decision which will stop stem cell therapies used in medicine,' said Pete Coffey of University College London.

"Coffey said that the ruling would not jeopardise or delay planned trials of a tiny eye patch to prevent age-related macular degeneration that he helped develop using stem cells. But he said the ruling could jeopardise other treatments. 'This decision will be a major barrier to patients actually receiving these [types of] treatments,' he said. 'I've just won an international prize from the New York Stem Cell Foundation for translating stem-cell research into clinical practice, yet I now find that Europe, the continent in which I'm doing this research, is basically calling me immoral.'

"In a letter to Nature in April protesting at an earlier prior opinion from the court's advocate general, Yves Bot, Coffey and other researchers warned that a ban would drive research outside Europe and obstruct the development of treatments."

CIRM's blog item triggered two comments from readers, who discussed the impact on Advanced Cell Technology of Santa Monica, Ca., which has a technique that does not destroy embryos.

CIRM Improves Openness, Provides More Timely, Significant Information for Directors Meeting

For the second time in a row, the California stem cell agency is providing the public -- in a timely fashion -- with substantial background information on matters to be decided at an upcoming meeting of its board of directors.

The latest session comes next week (Oct. 26). Among other things, directors are scheduled to approve a $30 million, business-friendly financing program and two new grant rounds totalling $37 million.

For several years, CIRM has failed to provide the public and interested parties ample notice on major and minor proposed programs, effectively barring them from making thoughtful comments or suggestions. Directors also received information late and have sometimes complained in public. The latest agenda represents a marked improvement although information is currently lacking on what appear to be two significant items dealing with CIRM's strategic plan and beefed up PR efforts.

Next week's meeting also shows fewer major items on the agenda than those prepared by former Chairman Robert Klein, which allows more time for discussion of often far-reaching proposals. Additionally, the scaled-down agenda helps to avoid unseemly, late-meeting scrambling to maintain the super-quorum requirements needed for board action. In the past, directors have sometimes left hastily towards the end of meetings in order to catch flights home.

Jonathan Thomas, who was elected chairman in June, prepared a similar agenda for his first board meeting in August. At the end of the meeting, CIRM directors expressed delight at the way the proceedings were handled.

Director Claire Pomeroy, dean of the UC Davis medical school, said,

"I just wanted to congratulate and thank Jon Thomas for a great meeting. It was well organized. It was mission-critical, mission-focused and an impressive debut. So we're awfully glad you're here."

"I second that," said director Sherry Lansing, who is chair of the University of California regents and former head of a Hollywood studio, to applause from other directors.

At the meeting next week, directors will be asked to approve a $35 million proposal for another basic biology grant round. The proposal is aimed at fostering "cutting-edge research tackling significant, unresolved issues in human stem cell biology."

A CIRM staff document said,

"Studies should focus on elucidating basic molecular and cellular mechanisms and should utilize pluripotent stem cells, adult stem cells, and/or their differentiated derivatives."

A separate  $2.2 million "creativity awards" program would fund up to 10 high school students for three years for internships in stem cell research labs. The funding would go to institutions to operate the programs.

The $30 million business-oriented program is a response to findings last year by CIRM's external review panel that the organization needed to be more responsive to industry needs. The biotech industry has been less than happy for some time with its 7 percent share of the $1.3 billion that the agency has handed out so far.

Also coming before directors is a new communications plan, which is not yet available on the CIRM web site. The agency is in the process of hiring a public relations person to work in the chairman's office at a salary of up to $200,000. It has also hired the Sacramento political consulting and PR firm of Townsend Raimundo Besler and Usher to analyze its PR needs and to make recommendations.

Thomas told directors earlier this year that the agency was in a "communications war." In an interview a few weeks ago with the California Stem Cell Report, Thomas said one of his main goals is to generate more favorable media coverage of the agency, which is largely invisible to the public.

Some of the agency's PR expenses can be found on a list of outside contracts that is being presented to directors next week. The list is for the past fiscal year (ending June 30). At a total of $3.3 million, the contracts are the second largest item in CIRM's operational budget, following only salaries and benefits.

The communications plan and changes in the job description of the new PR person will also come before the directors' communications subcommittee one week from today.

Also not available on the CIRM web site are unspecified, proposed changes in CIRM's strategic plan, which could be linked to its push for tangible results that will aid in securing voter approval of more multibillion bond funding of the agency.

Next week's meeting will be at UC Irvine with remote locations where the public can participate in Pleasanton, Sacramento and La Jolla. The meeting will be audiocast on the Internet, but that service will not allow for public participation. More details on the audiocast and addresses of the remote locations can be found on the agenda.

Stem Cell Agency Slated for Share of California Bond Sale This Week

The California stem cell agency, which faces a cash crunch next spring, is scheduled to receive additional funding as the result of a $2 billion state bond sale this week.

The exact amount is not yet set. Tom Dresslar, a spokesman for state Treasurer Bill Lockyer, said,

"The amount will not be known until after the sale is completed on Wednesday."

The stem cell funds will come from the taxable bond portion of the sale, which totals $200 million. Individual investors can still participate in the bond sales today(see here).

Earlier this year, the state suspended bond sales, which are the only significant source of CIRM funding, because of the state's financial crisis. California has the lowest credit rating of any state in the nation. CIRM earlier said it had sufficient funds to operate until June of next year.

It is not clear whether the state will continue bond sales after the beginning of the year, when it will face more financial difficulties. Massive, automatic cuts are expected since the state is not meeting its current revenue projections.

As originally conceived by backers, Prop. 71, approved by voters in 2004, was to have ensured steady funding for stem cell research through the use of bonds, which flow directly to the agency – skipping the normal state budget process.

Reliance on bond funding, however, is expensive, effectively doubling the cost of CIRM research because of interest costs on the borrowed money.

IOM Update: Trounson's Absence Tomorrow Due to Prior Speaking Engagement

The president of the $3 billion California stem cell agency, Alan Trounson, is skipping the opening meeting tomorrow of a sweeping, blue-ribbon review of the research effort because of a prior speaking engagement.

In response to a question, Maria Bonneville, executive director of the CIRM board, said,

"Alan had already committed to speak at the Cerebal Palsy Prevention and
Cure Summit on October 19th when we learned of the first (Institute of Medicine) meeting date. However, the IOM plans to hold two meetings in California, so we expect that Alan will have another opportunity to meet with the IOM committee."

Three other CIRM executives will address the IOM review panel tomorrow in the first public meeting of its inquiry. CIRM is paying the IOM $700,000 to examine its operations to determine whether it is functioning at "peak performance."

IOM Begins 'Peak Performance' Review of California Stem Cell Agency

The $700,000, Institute of Medicine study of the California stem cell agency kicks off Wednesday with a two-day public meeting in Washington, D.C., but the IOM will deal with its conflict of interest concerns behind closed doors.

The blue-ribbon review is expected to play a key role in public perceptions of the $3 billion agency and whether California voters are likely to approve another multibillion bond measure for the unprecedented state effort.

According to the IOM,

"The principal objective of this review is to ensure that all aspects of CIRM's operations are functioning at peak performance."

Harold Shapiro, chairman of IOM
review panel -- Princeton photo

The study, which is funded by CIRM, will be conducted by a 13-member committee chaired by Harold Shapiro, a professor of economics and former president of Princeton University, that is supported by IOM staff. None of the members of the committee are from California.

The session on Wednesday will be devoted to briefings by three top CIRM officials and former CIRM chairman Robert Klein. He will provide a one-hour overview including the agency's funding model and management systems. Jonathan Thomas, the new chairman of CIRM, will provide a 15-minute "charge" to the committee.

Also briefing the panel will be Ellen Feigal, CIRM's senior vice president for research and development, and Elona Baum, general counsel and vice president for business development. Absent from the IOM meeting will be Alan Trounson, president of CIRM. The IOM said the CIRM witnesses were selected by the agency. We have queried CIRM about Trounson's absence.

No time has been allotted specifically on the IOM agenda for public comment.

The IOM report is expected to be released in November 2012 as major financing issues face CIRM. The agency is expected to run out of funds in about 2017, although it will have to scale back its multi-year grant programs sooner if it does not have a guaranteed stream of cash.

On Oct. 3, the California Stem Cell Report queried Adrienne Stith Butler, senior program officer for the study, concerning the meeting. She replied,

"As is typical for a first committee meeting, the committee will meet in closed session for its orientation and the bias and conflict of interest discussion. The sponsor will deliver the charge to the committee in open session. The open session agenda will be posted 10 days in advance of the meeting and a closed session summary (general topics discussed) will be posted within 10 days after the meeting."

We asked Stith Butler why bias and conflict of interest matters are being discussed privately and commented,

"One would think that openness and transparency are paramount in such issues."

She replied by citing a document that spelled out the IOM conflict of interest policy but which did not provide a justification for it. The policy says, in part,

"Access to such information within the institution will be limited to those offices whose proper business requires access to such information."

Our take? It is indeed the "proper business" of the people of California to be informed about bias and conflicts in connection with an investigation of an enterprise that is costing them $6 billion(including interest). Much of the conflict and bias discussion could easily be conducted in public without infringing on the privacy of panel members. Doing so would help to remove questions that are certain to be raised, particularly in the context of an electoral campaign.

It would behoove the panel to move to conduct its initial conflict and bias discussion in public and then go into a private session, if one is actually necessary. A lack of transparency will damage the study group's credibility, particularly in the context of a statewide electoral campaign for continued funding of CIRM's efforts.

In addition to Shapiro, the other members of the IOM committee are Terry Magnuson, vice dean of the medical school at the University of North Carolina; Richard Berhringer, professor at the University of Texas cancer center; Rebecca Eisenberg, professor of law at the University of Michigan; Insoo Hyun, associate professor of bioethics at Case Western Reserve medical school; Gary Koretzky, vice chair for research at the University of Pennsylvania department of medicine; Cato Laurencin, a professor at the University of Connecticut and CEO of the school's Institute for Clinical and Translational Science; Aaron Levine, assistant professor of public policy at Georgia Tech; Michael May, CEO of the Centre for Commercialization of Regenerative Medicine, hosted by the University of Toronto; Cheryl Moore, executive vice president of the Howard Hughes Medical Institute; David Scadden, co-director of the Harvard Stem Cells Institute, Allen Spiegel, dean of the college of medicine at Yeshiva University, and Sharon Terry, CEO of Genetic Alliance, a nonprofit health advocacy organization.