Business-friendly Changes Proposed for Revenue Sharing by Stem Cell Agency

The $3 billion California stem cell agency, which hopes to generate income for the state through the sale of stem cell therapies, is moving to make its profit-sharing rules more friendly to business.

The proposed changes will come up Monday morning before the Intellectual Property and Industry Subcommittee of the CIRM governing board.

No stem cell research funded by CIRM has yet been commercialized. Its intellectual property regulations, which determine payback criteria, were developed shortly after CIRM was created in 2004. Ed Penhoet, one of the founders of Chiron and now a venture capitalist, chaired the panel that worked out the rules. He has since left the CIRM board.

A CIRM staff memo described the payment rules in the case of a "blockbuster" therapy as "uneven" and "lumpy." The memo said they "could be a disincentive for the engagement of industry." Other rules were described as creating "administrative challenges and uncertainty." The proposed changes, the memo said, would address those issues and ensure a "comparable economic return to California."

Here are links to the specific changes -- see here and here.

Public sites where interested parties can take part in the discussion are located in San Francisco, La Jolla, Los Angeles and Irvine. Specific addresses can be found on themeeting agenda.

The proposed changes must go before the full governing board and then into the state's administrative law process before taking full effect.  

Business Success Rate at Stem Cell Agency: Zero in Latest Round After 14 Fail

California biotech companies chalked up a zero in the latest funding round by the state's $3 billion stem cell agency, although 14 tried to run a gauntlet that industry has complained about for years.

All $69 million in last month's translational research round went to 21 academic and nonprofit insitutions. No business received an award. One firm, Eclipse Therapeutics of San Diego, appealed to the agency's governing board but was not successful despite having a higher scientific score than at least two winners.

The miniscule amount of funding for commercial enterprises – less than 4 percent of $1.4 billion handed out so far – has been a matter of concern for some time for both industry and some members of the CIRM governing board. Most recently, industry executives complained at an April hearing of the Institute of Medicine panel looking into CIRM's operations. Even a 2010 review commissioned by CIRM said the agency needed to do better by business.

The question of funding goes beyond a simple matter of fairness or "good science," as CIRM describes its funding goal. Without efforts by industry to turn research into cures, CIRM will not be able to fulfill promises to voters in 2004 when they approved creation of the stem cell agency. CIRM last month approved a set of five-year goals that push more aggressively for development of commercial products, but the goals lacked such things as a financing round devoted solely to business applicants.

In last month's translational round, applicants went through a three-step process, which is conducted primarily behind closed doors. First came what CIRM calls pre-applications. Those were reviewed by CIRM staff with the help of outside advisors if necessary. Applicants who cleared that hurdle were allowed to apply for the full, peer-reviewed round. During that process, the CIRM Grants Working Group reviews applications, makes decisions and sends them to the full CIRM board for ratification and possible changes. The board almost never has rejected a grant approved by reviewers. But the board has ultimate authority and sometimes funds applications that reviewers have rejected. The applicants' names are withheld from the board and the public during the process, although some of the board discussion and the final vote is conducted in public. CIRM does not release the names of rejected applicants unless they appeal.

In the translational round, a total of 42 pre-applications out of 167 were approved by staff, according to CIRM. Thirty-eight came from nonprofits and academics out of the 153 such institutions that applied. Four out of 14 business pre-applications advanced to full applications but none made the final cut. All of the winning applications were linked to institutions that have representatives on the CIRM governing board. Those representatives are not allowed to vote on or take part in discussion involving applications to their institutions.

The primary decision tool used by the grant review group is a scientific score. In last month's round, scores of approved grants ranged from 88 to 53. However, eight grants that were ranked above 53 were rejected by the board. One of those higher-ranking applications came from San Diego's Eclipse Therapeutics, which scored 58. The low-ranking grants were approved for what CIRM describes as "programmatic" reasons.

More than three weeks ago, the California Stem Cell Report asked CIRM for figures on the numbers of applications in the translational round, including those for business. CIRM said the figures had not been compiled and would not be available until after the awards were made on May 24. The numbers were finally supplied yesterday.

Our take: The number of applicants, and their breakdown, is basic information that should be part of board's decision-making process. The statistics should be routinely available well in advance of the board's meeting. Indeed, the agency in its earlier days used to routinely publish the figures. It may be now that generating them is more time-consuming than necessary. The recent performance evaluation of the agency said CIRM needs to make major improvements in how it handles critical information needed for its top management and board.

Whatever the reason, given CIRM's poor track record with business, the agency's directors should diligently track industry's success rate on applications. If proposals ranked as low as 53 are approved while higher ranking applications from business are bypassed, it warrants more than cursory examination.

'Ugly' Stem Cell Headlines and a Stem Cell Essay Contest

California stem cell researcher Paul Knoepfler has been busy recently pumping out a plethora of items on his blog, including his own stem cell essay contest and a summary of "ugly" stem cell headlines.

He also rails, albeit briefly, against the Los Angeles Times "hate fest" against the California stem cell agency and offers some advice on developments involving prostate cancer, an affliction that he suffered from a few years ago.

Knoepfler, a UC Davis scientist, puts some cash on the line in his essay contest, with a prize of a $50 iTunes card plus publication of the winning piece. He is looking for a "convincing, non-fiction essay on stem cells thinking entirely outside the box." No more than 500 words. He has two categories, one for persons under 18 and one for persons over that age. June 30 is the deadline for submissions.

Knoepfler also wrote about Twitter and how it can be used by scientists in a useful item called "The scientist's top 10 guide to Twitter." We recommend it.

Two California Stem Cell Agency Directors Plump for Proposition 29

Two directors of the $3 billion California stem cell agency have popped up in the battle over the anti-tobacco initiative on tomorrow's ballot in the Golden State.

They are Sherry Lansing and Kristiina Vuori, who were the subjects of a column by Michael Hiltzik of the Los Angeles Times dealing with Proposition 29, the "Son of CIRM" measure that would raise $800 million for research by increasing the price of cigarettes by $1 a pack. In addition to serving on the CIRM board, Lansing heads her own anti-cancer foundation and is chair of the board of the UC regents. Vuori is head of the Sanford-Burnham Institute in La Jolla.

Proposition 29 is patterned after the measure that created the stem cell agency. The organization established by Proposition 29 would also be governed by a board that is run by representatives of organizations almost certain to receive the bulk of the funding, as is the case with CIRM.

In an op-ed piece on Friday, Lansing and Vuori said the Times and Hiltzik had fallen for "a smokescreen" put up by tobacco companies which are spending something in the neighborhood of $40 million to defeat the initiative. Lansing and Vuori said the measure is needed to stop smoking by young people as well as providing cash for research for tobacco-related diseases. Young people are more sensitive to price increases of cigarettes than adults, according to research.

Lansing and Vuori referred to a column in which Hiltzik opposed the measure because it would divert money from more immediate state needs, including health and welfare programs for children, education and the poor. (See here for thecolumn and here, here and here for related items.)

In his most recent column, Hiltzik said,

"The...problem with Proposition 29 is its pigeonholing of the money for cancer research rather than for immediate needs here in California that are absolutely dire. It’s all well and good to say that cancer research benefits everyone, but the real question is whether it should be the absolute top priority for a state that can’t afford to keep its children fed or offer them medical care in the here and now. 

"Lansing and Vuori say the fact that Prop. 29 'fails to provide funding for schools, roads or affordable housing' is irrelevant, because it was 'was never intended to solve these problems.'

"In the context of the state’s needs, this is a rather callous approach to take. Let’s spell out why, so Lansing and Vuori won’t be so inclined to dismiss these necessities of life so casually."

Hiltzik cited a list of state government cuts that have meant the loss of health coverage for 400,000 California children, eliminated welfare benefits for 578,000 poor California families and would mean an end to state college student aid for 72,000 young people from less affluent families.

Hiltzik continued,

"That’s just the beginning of what might be cut because the state needs money—and won’t be able to lay its hands on the hundreds of millions of dollars that Lansing, Vuori, and their research colleagues are angling for. They don’t want voters to be reminded that there are competing demands for the tobacco money, and they do so by failing to mention that they exist, and also by presenting the spending on cancer research as the voters’ only choice. 

"It’s the only choice because the promoters of Proposition 29 designed it that way. Advocates of programs like this love to pass them in via voter initiatives because they leave no room to measure them against alternative needs."

 A final note: The New York Times carried a piece yesterday on Proposition 29 that drew 481 comments. The article said, 

"Organizers argued that the tax would have less chance of passing if voters thought it would go into the state coffers, and said that their only goal here was cutting down on smoking."

 Also yesterday, Willie Brown, the former mayor of San Francisco and a keen observer of California politics, predicted voter approval of the measure along with an increase in cigarette smuggling from adjacent states and the sale of discount smokes at the 58 Indian casino sites in the state. 

Stem Cell Miracles and Campaign Promises : Thomas-Trounson vs. Hiltzik of the Times

The Proposition 71 campaign of 2004, which has filled the coffers of more than 500 researchers and institutions with $1.4 billion, was the subject today of a discussion about miracles.

Specifically did the campaign promise miracles?

The story begins with a column May 27 by Michael Hiltzik of the Los Angeles Times about the "Son of CIRM" initiative, Proposition 29, on the June ballot. It seeks to fund more medical research with $800 million handed out by an organization patterned after the stem cell agency.

In the column, Hiltzik did not speak well of the agency and said the 2004 campaign promised miracles.

In a letter today in the Times, J.T, Thomas, chairman of CIRM, and Alan Trounson, president of CIRM, said the campaign did not promise "miraculous cures."

Hiltzik filed a riposte this afternoon on his blog, quoting from TV campaign ads featuring Christopher Reeve and Michael J. Fox. Hiltzik also wrote,

"Joan Samuelson, a leading Parkinson's patient advocate, is shown in another ad asserting, 'There are more Americans than I think we can count who are sick now, or are going to be sick in the future, whose lives will be saved by Prop. 71.' Shortly after the measure passed, Samuelson was appointed to the stem cell program's board. 

"Do these ads amount to promising 'miracles'? Given that the essence of scientific research is that no one can predict the outcome, to assert as fact that 'lives will be saved by Prop. 71' is plainly to promise something downright extraordinary, if not outright miraculous. 

"Yes, this is the language of advertising, not research, but for Trounson and Thomas to pretend that the ad campaign somehow promised merely 'good science' and not specific outcomes, as their letter suggested, is (at least) miraculously disingenuous."

California Stem Cell Agency Fires Back at LA Times Columnist

The top two leaders of the California stem cell agency today took strong issue with a column in the Los Angeles Times that spoke less than favorably about the history and efforts of the state research enterprise.

Pulitzer Prize-winning writer Michael Hiltzik mentioned California's $3 billion stem cell effort in a piece May 27 about Proposition 29 on the June ballot. The "Son of CIRM" initiative, tailored after the ballot measure that created the stem cell agency in 2004, would provide $800 million annually for research into tobacco-related illnesses. The money would be derived from a $1 dollar-a-pack tax on cigarettes.

Among other things, Hiltzik said,

"Proposition 71(the stem cell initiative), you may recall, was sold to a gullible public via candy-coated images of Christopher Reeve walking again and Michael J. Fox cured of Parkinson's. The implication was that these miracles would happen if voters approved a $3-billion bond issue for stem cell research."

The reponse from J.T. Thomas, chairman of the CIRM board and a Los Angeles bond financier, and CIRM President Alan Trounson came in the form of a letter to the editor. The letter was only four paragraphs long and may have been cut prior to publication, which is common practice for letters to the editor. We have asked CIRM about whether there is more to the letter. (Following publication of this item, CIRM spokesman Kevin McCormack said the complete text was published by the Times, which has a 150-word limit on letters. The CIRM letter was 148.)

Here is the full text as published.

"In his article opposing Proposition 29, Michael Hiltzik makes a number of misleading statements about Proposition 71, the voter-approved measure funding stem-cell research. 

"No ads for Proposition 71 promised miraculous cures. They promised good science, and that is what is being funded, with more than 62 promising therapies for 40 different diseases on their way to clinical trials. 

"The stem-cell agency has conflict-of-interest rules as strict as any government agency. We undergo state-mandated audits to ensure we follow all rules and regulations, and the most recent one, completed just this month, praised the agency for its performance. 

"As for being 'an unwieldy bureaucrac just 6% of the money we get goes to pay for staff; 94% goes to fund research here in California, creating new jobs, generating income for the state and, most important, helping find treatments for deadly diseases."  

The Market's Invisible Hand and Its Impact on Stem Cell Research

As the $3 billion California stem cell agency intensifies its efforts this year to push cures into the clinic, a Canadian academic is raising a host of serious questions about the drive towards commercialization in scientific research.

Exhibit No. 1 was stem cell research, in an article Monday in The Scientist magazine. It was written by Timothy Caulfield, a Canada Research Chair in Health Law and Policy, and a professor at the Faculty of Law and School of Public Health, University of Alberta. He said,

"Commercialization has emerged as dominant theme in both the advocacy of science and in the grant writing process.  But is this push good for science? What damage might the market’s invisible hand do to the scientific process?"

Caulfield noted that research has played a role in commercial enterprises and that the goal-oriented research has led to important developments. But he also wrote,

"There are many recent examples of how commercialization plays out in top-down policy approaches to science.  The UK government recently justified a £220 million investment in stem cell research on the pledge that it will help stimulate an economic recovery. A 2009 policy document from Texas made the optimistic prediction that stem cell research could produce 230,000 regional jobs and $88 billion in state economic activity.  And President Obama’s 2011 State of the Union address went so far as to challenge American researchers to view this moment in time as 'our generation’s Sputnik moment'—the opportunity to use science and innovation to drive the economy, create new jobs, and compete with emerging economies, such as China and India. 

"The impact of this commercialization pressure is still unfolding, but there is a growing body of research that highlights the potential challenges, including the possibility that this pressure could reduce collaborative behavior, thus undermining scientific progress, and contribute to the premature application of technologies, as may already be happening in the spheres of stem cells and genetic research. For example, might the controversial new Texas stem cell research regulations, which allow the use of experimental adult stem cell therapies without federal approval, be, at least in part, a result of the government’s belief in the economic potential of the field? 

"Such pressure may also magnify the growing tendency of research institutions and the media to hype the potential near future benefits of research—another phenomenon that might already be occurring in a number of domains and could have the effect of creating a public expectation that is impossible to satisfy. 

"Furthermore, how will this trend conflict with the emerging emphasis on an open approach to science? A range of national and international policy entities, such as the Organisation for Economic Co-operation and Development, suggest 'full and open access to scientific data should be adopted as the international norm.' Can policy makers have it both ways?  Can we ask researchers to strive to partner with industry and commercialize their work and share their data and results freely and as quickly as practical?"

In late July, the governing board of the California stem cell agency is expected to make some hard financial decisions about where its future spending will be targeted. Just last week it approved a five-year plan with explicit goals for speeding stem cell research into the marketplace.

California Stem Cell Hoopdedoo Over Rick Perry: Strange Bedfellows and Education of Politicians

A onetime aspirant to become the leader of the free world was in California recently touring the lab of a stem cell researcher in La Jolla.

The visit was somewhat unusual. The visitor was Rick Perry, the governor of Texas who campaigned unsuccessfully for the Republican nomination for president and who is a strong opponent of hESC research. The lab is run by Scripps' Jeanne Loring, who engages in hESC research among other things.

The event – if you can call it that – also led to a video on YouTube of Perry at the lab, three blog items by UC Davis stem cell researcher Paul Knoepfler and responses from Loring and Michael Thorsnes,  who put up the video and who has what he modestly describes as "significant political experience" in the Democratic party. Thorsnes, a retired San Diego lawyer and now a photographer, raised about $5.4 million for John Kerry's and Al Gore's presidential efforts as well as other Democrats.

Issues raised in all the hoopdedoo include consorting with the enemy, openness, exploitation of scientists for political gain, public education and education of political leaders, promotion of patient causes, rushing to judgment and even strange bedfellows.

As far as we can tell, Perry's visit received no attention in mainstream media, but Thorsnes, a key figure in arranging the visit, put up a video of it on the Internet. Knoepfler, who is the rare stem cell scientist with a blog, saw the video and on May 21 raised what he now calls "a big stink" in a blog posting. Subsequently Knoepfler toned down the language in that item because of what he says was its "overly extreme verbiage."

For several years now, Knoepfler has been writing a fine blog that deals mostly with stem cell science but also public policy, biotech business and more. Unfortunately, however, his original item is no longer available, but our recollection is that Knoepler's item was strong, indicating that Loring should not have allowed the visit because it would bolster the political fortunes of an enemy of science or at least hESC science. Knoepfler cited what he called the campaign-style video as evidence of exploitation. 

On May 24, after a related May 22 item dealing with Rick Perry, Knoepfler said he rewrote the original item to temper his comments as a result of learning more about what led up to the visit.   That included more information from Thorsnes, who is chair of the executive advisory board of the Parkinson’s Disease Association of San Diego. 

Loring was quoted in original item as saying, 

"I think that scientists have an obligation to educate the public. I welcome visits from both stem cell proponents and opponents, so I have a chance to clarify any misconceptions about what it is that we really do. We have to figure out how to deal with our opponents as well as our friends. I have a policy of welcoming opponents so I can teach them. It works. Education wins minds."

The California Stem Cell Report queried Loring about any additional comments she had on the subject. She replied,

"Governor Rick Perry left my lab understanding far more about induced pluripotent stem cells than he did when he arrived. If we don't engage those who don't share our views, who will tell them the truth? How will they know that we are ethical and working to improving human health? 

"The visit was arranged by Michael Thorsnes, a well-known Democratic fundraiser. He is a very impressive person who knows politicians of every stripe, and he arranged the meeting with Perry so that I could explain our project to make iPSCs from people with Parkinson's disease, and our work using iPSC derivatives in multiple sclerosis. Perry is promoting 'adult' stem cell therapy in Texas, and I wanted to be sure that he understood the difference between 'adult' stem cells and pluripotent stem cells. He does. Educating those in positions of power is one of our responsibilities, and I take it very seriously."

Our take: Perry is first and foremost a politician with large ambitions. It is more than legitimate to think about how such a visit might be used or misused. Nonetheless, foregoing the opportunity to educate political leaders, who control research spending in this country, means isolation of the scientific community and less understanding on the part of lawmakers. As far as Perry's possible political gain is concerned, it is conceivable that the visit could backfire on Perry should a political opponent characterize the Loring lab tour as some sort of endorsement by him of hESC research.

Everybody's particular interests were at work in this episode: Thorsnes' desire for support for his cause, Perry's political schmoozing and his own special interest in stem cells – pro adult and con hESC, and Loring's desire to promote scientific research in general and to educate a major political figure.

As for the video, Knoepfler now says he would allow a lab visit by Perry but no video. But in this digital age, that condition could kill a likely visit. If researchers want to talk to politicians – and they should -- risks are always involved, but that is the price of relying on public funding and building public enthusiasm for continued support.

One final note: Earlier in this item, we said it was unfortunate that the original Knoepfler post is not available. Without being able to read the original, it is difficult to completely understand the subsequent string of events. On the California Stem Cell Report, when corrections or other changes are made, we always retain something to show what the original item said and note where changes are made and why. It keeps the record straight and provides a necessary paper trail. All in all, however, from Perry's visit to today, it has been a robust and healthy exchange for the stem cell community and beyond.

CIRM Board Member Prieto Endorses Proposition 29

One of the members of the governing board of the California stem cell agency, Francisco Prieto, has commented on the item yesterday dealing with California's Proposition 29, which would create a CIRM-like agency to fund research into tobacco-related illness.

Prieto, who is a Sacramento physician and president of the Sacramento Sierra Chapter of the American Diabetes Association, said in an email,

"I'm with George Skelton(Los Angeles Times columnist). Whatever you think about ballot box budgeting, you could take every penny raised by this and bury it in the ground - it would still: Reduce smoking (mostly by preventing some kids, the most price-sensitive group of smokers from starting) . Save lives. Hurt the lying tobacco companies. All very good things."

CIRM has not taken a position on the measure.

A Look at the 'Son of CIRM' Proposal on the June California Ballot

In the last couple of weeks, two well-respected Los Angeles Times columnists have visited what might be called the "Son of CIRM" initiative on the June ballot in California. It is aimed at fighting cancer by spending $800 million or so annually on research with the money coming from a $1-a-pack tax on cigarettes.

One of the columnists, Michael Hiltzik, said the measure, Proposition 29, is another example of why California is a world leader in "paving the road to hell with good intentions." The other writer, George Skelton, said,

"Prop. 29 would increase cancer research. Reduce smoking. Save lives. Hurt the lying tobacco companies. Good plan."

In his work at the Times, Hiltzik deals primarily with business and financial news. He has written from time to time critically about the $3 billion California stem cell agency.  Skelton is a longtime observer of the Califorrnia political scene and has been around since Pat Brown was governor.

In a column slated for publication Sunday, Hiltzik said that the drafters of the cancer measure closely examined Proposition 71, which created the stem cell agency in 2004, and "managed to reproduce the earlier measure's worst features."

He said the Proposition 71 "retired the trophy for doing the wrong thing in the wrong way for what sounds like the right reasons." Hiltzik wrote,

"Proposition 71, you may recall, was sold to a gullible public via candy-coated images of Christopher Reeve walking again and Michael J. Fox cured of Parkinson's. The implication was that these miracles would happen if voters approved a $3-billion bond issue for stem cell research. Who could be against that? 

 "As it turned out, the stem cell measure created an unwieldy bureaucracy and etched conflicts of interest into the state Constitution. By last count about 85% of the $1.3 billion in grants handed out by the program, or some $1.1 billion, has gone to institutions with representatives on the stem cell board. The program is virtually immune to oversight by the Legislature or other elected officials. For these reasons and others, it has grappled with only mixed success with changes in stem cell science and politics that have called its original rationale into question."

Hiltzik continued,

"Proposition 29, similarly, places most spending from the tobacco tax in the hands of a nine-member board that must comprise one cardiovascular physician affiliated with a California academic medical center; the chancellors of UC Berkeley, UC San Francisco and UC Santa Cruz; two representatives of lobbying groups devoted to tobacco-related illness (including one who has been treated for such a disease); and three representatives from National Cancer Institute-designated cancer centers in the state. There are 10 of the latter, including five UC campuses and the City of Hope. Plainly, every member of the board will represent an employer that thinks it's in line for some of the money."

Skelton took a different approach on May 14. Using the words of a federal judge, he lambasted the tobacco industry for its "a certified history of deception, distortion and lying. And let's not forget fraud and racketeering."

Skelton dealt with the current TV ads being aired in California against the initiative. They criticize the measure for its conflicts of interest and also say that the money would be spent out of state.

Skelton wrote,

"The anti-29 side is hitting this hard: that the research money generated in California could be spent out of state. And the politest thing possible to say about that claim is that it's disingenuous. It's stretching something that's conceivable into a virtual certainty."

Skelton continued,

"The anti-29 camp charges that (the structure of the board) would allow a conflict of interest in awarding contracts. But there are state laws that protect against such conflicts.

"Anyway, the tobacco crowd can't have it both ways: complaining that the money could be spent outside California and also griping when the system is set up to practically guarantee that it will be spent in California."

Our take:

Ballot box budgeting – which is at the heart of both the stem cell and cancer initiatives -- is one of the reasons that California is staggering from one year to the next in a perennial financial mess. Initiatives also sometimes create nasty blowback that can damage the effort that they ostensibly serve. Such is the case with the California stem cell agency, which suffers from management and other minutia embedded in Proposition 71 that is virtually politically impossible to change.

Hiltzik wrote,

"Gov. Brown's latest budget proposal calls for cuts of $1.2 billion in Medi-Cal and $900 million in CalWorks (a relief program for families with children) and steep cuts in financial aid for college students and in court budgets. The University of California and Cal State systems are becoming crippled by 20 years of cutbacks in state funding, leading to soaring tuition charges. Tobacco-related illnesses create some of the burden on Medi-Cal and other public healthcare programs, yet a minimal portion of Proposition 29 revenue, if any, would go to helping taxpayers carry that burden. 

"With the overall state budget gap approaching $16 billion, how can anyone make the case for diverting a huge chunk of $800 million a year in new revenue to long-term scientific research, whether in California or not? Even if you believe that case can be made, the proper place to make it is in the Legislature, where all these demands on the budget can be weighed and balanced against one another — not at the ballot box, where the only choice is to spend it the way the initiative's drafters choose or not to raise it at all."

The California Stem Cell Report agrees wholeheartedly.

(A personal disclosure: I worked for Skelton when he was bureau chief for United Press International in Sacramento some decades ago and consider him a friend. I am also acquainted with Hiltzik but have not known him as long. I hold both men in high regard.)

Thin Coverage of California Stem Cell Board Meeting

Media coverage of yesterday's $69 million in research awards and other matters involving the California stem cell agency was nearly non-existent today.

That is not unusual, however, since the $3 billion enterprise is not within the attention span of the mainstream press and electronic outlets.

The California Stem Report could find only two stories involving yesterday's actions. One by Ron Leuty appeared in the San Francisco Business Times and was a look at the grant awards. The other appeared on Nature's website.

Unfortunately, Nature's lead was incorrect. It said,

 "The California Institute of Regenerative Medicine (CIRM) voted on 24 May to accept a new strategic planwhich shrinks or eliminates support for basic research, facilities and training, while funneling more of its funds toward clinical development."

The CIRM governing board actually put off until at least July decisions on which programs to cut and which to expand. Basic research is not likely, however, to take a major hit, for a variety of reasons.

'Sun Never Sets on CIRM' – California Agency Awards $69 Million to Researchers

The California stem cell agency today awarded $69 million in grants, including the first involving a collaboration with researchers in China, but none of the awards went to California biotech businesses.

The awards were made in the agency's third translational round, which funds projects that are in the initial stage of identifying drugs or cell types that could become drug therapies.

CIRM originally allocated $95 million for the round, but CIRM spokesman Kevin McCormack said that grant reviewers determined that no applications beyond $69 million were worthy of funding.

The CIRM governing board overturned a negative reviewer decision on one grant after the scientist – W. Douglas Boyd of UC Davis -- filed an appeal. The appeals of two other researchers, including one from a San Diego business, were not successful (see here and here).

CIRM did not disclose the number of applications from businesses. The agency has been sharply criticized for failing to fund businesses in a substantial way.

The approved grants involve collaboration with researchers in Australia and Germany as well as China. The collaborations are based on agreements worked out earlier by CIRM with overseas groups, which fund their own countries' researchers. No CIRM cash is involved, according to the agency.

CIRM President Alan Trounson, a native of Australia and researcher there until joining the stem cell agency, said in a press release,

"The sun now never sets on the CIRM collaborative projects..."

The news release also said,

 "The Chinese Ministry of Science and Technology has committed roughly $850,000 in collaboration with a team at UCSF to study liver failure. This is the stem cell agency’s first joint effort with scientists in China, which is home to a fast-growing stem cell research community."

The UCSF liver team is led by Holger Willenbring, whose goal is "to develop a source of autologous therapeutic cells for patients with liver disease who otherwise would require a liver transplant," according to the CIRM review summary. The agency did not spell out the details of how the collaboration would work.

All of the winning applicants, with the exception of a Salk researcher, work for institutions linked to at least one of the 29-members of the CIRM governing board. CIRM directors, however, are barred from voting or even discussing applications in which CIRM attorneys have determined there is a conflict of interest.

You can find the names of all the successful applicants in the CIRM news release.    

CIRM Board Meeting Concludes

The governing board of the California stem cell agency adjourned its meeting earlier today. Our coverage will conclude with the $69 million grant award item.

Stem Cell Agency Board Sticks with More Financial Disclosure

The governing board of the $3 billion California stem cell agency today rejected a proposal that would have restricted transparency surrounding the financial interests of its directors and top executives.

On a unanimous voice vote, the board decided it would stick with the more complete disclosure rules that it has operated under since 2005. CIRM staff had offered changes that would have narrowed the amount of economic information that the board members and the executives would have been required to disclose.

The directors' Governance Subcommittee, however, on May 3 rejected the plan. Sherry Lansing, a former Hollywood film studio CEO and chair of the subcommittee, said at the time,

"I personally feel strongly that because of CIRM's unique mission and the agency's incredibly long-standing commitment to transparency, i believe that we should continue to set an example by requiring the broadest disclosure for members of the board and high level staff."

Retention of existing disclosure rules comes at a time when more conflicts may arise. The agency is moving to engage the biotech industry more closely as it pushes to develop stem cell therapies. Already one case of conflict has arisen this year dealing with industry. It involves a "special advisor" to CIRM who was nominated to become director of a firm sharing in a $14.5 million grant. She also was working for the firm. (See here and here.)

The CIRM board also has built-in conflicts of interest, written into the law by Proposition 71, which created the agency. About 92 percent of the $1.3 billion awarded so far has gone to institutions tied to members of the CIRM governing board. Board members are not permitted, however, to vote on or discuss grants to their institutions. But it is fair to say that if California voters had foreseen that nearly all of the grants would have gone to directors' institutions, they would not have approved creation of the stem cell agency.

As the California Stem Cell Report remarked earlier, it is a good move for CIRM to retain more transparency rather than less. As one of the Moss Adams staffers said today – in a different context – during the presentation of the first-ever performance audit of CIRM,

"When people have to fill a void in information, they assume the worst."

California Stem Cell Agency Launches Five-Year Push for Cures

The $3 billion California stem cell today officially embarked on a course that will mean closer ties to the biotech industry in hopes of fulfilling the campaign promises to voters to turn stem cells into cures.

On a unanimous voice vote, directors approved changes in the seven-year-old agency's strategic plan. The action will likely mean less money for some activities that enjoyed more cash in the past,  but directors put off action until at least late July.  The plan also sets the course for what may be the last years of life for the unprecedented state research program. Authorization to borrow more money (state bonds) for its grants will run out in about 2017.

During a brief discussion of the plan, which has been debated for some months, CIRM Director Jeff Sheehy noted that the agency has now entered "the realm of trade-offs."  Ellen Feigal, CIRM's senior vice president for research and development, told the board that the plan will require hard decisions and sharp focus on priorities. 

Among other things, for first time CIRM overtly set a goal of creating 20 programs that include outside investment that focus on products. Another five-year goal explicitly calls for financing at least 10 therapies in early-phase clinical trials, affecting at least five diseases. Overall, the plan seeks to achieve clinical proof-of-concept for stem cell therapies.

In contrast to the Proposition 71 campaign rhetoric, CIRM's strategic plan acknowledges that developing therapies takes a very long time, often decades.

Two scenarios were presented to the board for spending the agency's remaining $836 million for grants and loans. One would allocate $506 million for development research, $195 for translational research and $135 million for basic research, but nothing for training and "facilities/core resources."

The other scenario calls for $486 million for development research, $160 million for translational research, $105 for basic research, $60 million for training and $25 million for "facilities/core resources."

The first scenario would mean a $85 million cut in training and shared lab programs – cash that helps to finance researchers and that benefits the many institutions that have representation on the CIRM board. The board put off action on either scenario after CIRM President Alan Trounson said he wanted more time to prepare a complete analysis of the scenarios. 

The plan also calls for creation of a platform to enable grantees, disease foundations, venture capitalists and others to purse CIRM's mission when its state bond funding runs out. The possibility exists that another bond measure would be submitted to voters. But in either case, CIRM will need a solid record to attract support. 

CIRM Board Resumes Meeting

The governing board of the California stem cell agency has just resumed its meeting and Internet audiocast. It is discussing applications for $95 million in funding.

CIRM Directors Audiocast Down

The Internet audiocast of today's meeting of the governing board of the California stem cell agency has been down for more than 30 minutes. CIRM says it is attempting to solve the problem.

CIRM Directors Pleased with Performance Audit Findings

The $3 billion California stem cell agency received a "very favorable" performance audit report compared to other government agencies, CIRM directors were told today.

Representatives of Moss Adams, which was paid $234,944 by CIRM for the study, made the comments during a presentation today to the agency's 29 directors. During their comments, CIRM executives and directors focused on the favorable aspects of the findings of the six-month study.

CIRM Chairman J.T. Thomas said the report showed that CIRM is "doing better than being on the right track." Co-vice chairman Art Torres said,

 "Comparatively we have done very well."

The report praised the professionalism of the CIRM staff – "a high caliber group" – and noted the seven-year-old agency is both "ramping up and ramping down" at the same time – a reference to the end of state bond funding for CIRM in 2017.

Prior to the presentation, CIRM President Alan Trounson said the staff would review the findings and come up with a plan for the board at its July meeting. The agency is already implementing some of the recommendations.

The audit was required by a recent state law that also allowed CIRM to hire more than 50 persons, a cap imposed by Proposition 71, which created the agency. The audit found a need for improvement in 27 areas and made recommendations. Of the 20 recommendations with the highest priority, half involved how CIRM manages its information, much of which is needed for good decision-making. The audit did not assess the scientific performance of the agency.

The Moss Adams report, performed by the Seattle firm's San Francisco office, said,

"CIRM board members and senior management do not receive regularly updated, enterprise-level performance information. The ability to evaluate performance against strategic goals is critical to effective leadership and program monitoring, evaluation, and reporting. CIRM does not currently have a formal performance reporting program."

In addition to decision-making information, Moss Adams called for improvements in the agency's long-troubled grants management system, better grant outcome tracking, development of a results-based communications plan, creation of a comprehensive, formal business development plan, formulation of a comprehensive information technology plan that would include steps to establish clear responsibility for CIRM's website and improved monitoring of invention disclosure forms from grantee institutions.

Last week, in a long overdue move, the agency hired a director for information technology, who is expected to solve many of the problems cited in the audit.

State law requires another performance audit in a few years. 

CIRM Board Opens Today's Meeting

Today's meeting of the governing board of the $3 California stem cell agency is now underway. Chairman J.T. Thomas is giving his report. We will carry stories as warranted today.

Live Coverage of Tomorrow's California Stem Cell Meeting

The California Stem Cell Report will provide live coverage of tomorrow's meeting of the governing board of the $3 billion California stem cell agency. Directors are expected to make major decisions about the agency's future direction, hear the results of the first-ever performance audit and award about $95 million in grants or loans.

The meeting will be held near the San Francisco airport with another public teleconference location at UC San Francisco. Los Angeles will also have two public teleconference locations. Another will be in La Jolla.

The meeting will be audiocast live on the Internet, which the California Stem Cell Report will monitor from its base in Panama near the Pacific entrance to the Panama Canal.

Instructions for listening in on the audiocast can be found on the agenda along with specific addresses for the public teleconference locations. The meeting is scheduled to begin at 9 a.m. PDT.