Text of Klein's Comments Supporting Rejected Applications

Robert Klein, who served 6 ½ years as the first chairman of the $3 billion California stem cell agency,  testified before the agency's board for the first time on July 26, 2012. Klein, a real estate investment banker and attorney, spoke on behalf of two applicants whose grants had been rejected by the agency's reviewers. The appearance has raised questions about the propriety of Klein's actions.

Here is a link to an item on his appearance. Here is the text of his comments as reported in the transcript of the meeting.

“As the board knows, I've never addressed any grant from the floor. It is critical here to understand that we have here StemCells, Inc., which is the only company in North America and, for that matter, maybe in the world, that has had two stem cell therapies in the brain with these specific neural stem cells. They have a huge body of experience here. 

“Secondly, one of the fundamental issues here that it (the company's grant application) was downgraded on was the issue of the fundamental concept, the platform concept, of injecting two focal injections in the brain, in the hippocampus of the brain. It's important to note that I've sat on three (CIRM)peer reviews where the scientists really affirmed this specific approach with extremely high scores, three different views. All right.

“So it's very important to realize we have a standard deviation here of 12 (on the review scores). These scientists were completely split. With some recusals on that panel, if you have 12 or 13 that can really vote, three or four very low scores can bring it out of the funding category all the way down. It is in the region where this board is looking where the other three peer reviews, right, early translation, the one before that was the planning grant review, that the hippocampus was a good platform.

“Then they said the key weakness was you can't show migration. Dr. Laferla (a co-PI on the application) has told me that today the Journal of Neuroscience accepted the publication of the data demonstrating migration. It was stated previously in the application, but it wasn't accepted for publication. It now is. That is the fundamental weakness that they identified in this approach.  

“So we have a reaffirmed approach to the hippocampus by three different peer review groups and a substantial portion of these reviewers along with data dealing with the weak point. I'm sorry it happened today. The data was out there, accepted for publication today, means that it should definitely fall into this category. And, of course, Dr. (Alan) Trounson (president of CIRM) wouldn't have been able to review that in process because he was recused from this grant by his own voluntary recusal. So the progress of this data being accepted for publication is new information today. 

“If I look at the entire history of CIRM, as Leeza (Gibbons, a CIRM director) says, building up to this point, we have reaffirmed this approach from the very beginning with Dr. Laferla, with multiple scientific approvals, and board approval, and we have the best company in North America with the greatest experience with these neural stem cells, with the best researcher we have for the potential to address this disease, and we have brand-new data that demonstrates and totally contradicts the key weakness on which it was downgraded.”

Here is the text of Klein's remarks on behalf of a second application, also rejected by CIRM reviewers.

“This is the only other disease team grant I will address. Very specifically, this was a disease team grant that I was on the peer review in the planning grant stage. There are some fundamental issues here. Is the international company on which the one antibody that's not coming from Stanford, the two for sorting are coming from Stanford, is the other antibody coming from this international company a commitment that you can rely on? 

“The reviewers said this was a showstopper. That's the word they used. They made a decision this was a showstopper because they did not believe the company because they thought that the documentation was inadequate. You now have a letter that goes into great proprietary depth about the depth of this company's commitments written by the head of development and translation internationally for the company. 

“If we cannot depend on company commitments of this type, and you will review the letter in executive session, if you have one, I will not understand how we'll be able to collaborate with companies with proprietary products and processes where they're making commitments to academic institutions of the highest standard. I believe this company is going to perform. I was on an hour call to confirm with eight members of that company their level of commitment, and I am completely convinced by that point. 

“The review is completely factually wrong on this issue about the other two antibodies for sorting this. Dr. (Irv) Weissman has just said they have not only been developed, they have been used in clinical trials. There's data on them. And they are, in fact, being thawed under FDA direction to reuse in this trial. 

“So I believe there's a major factual difference. Remember with Karen Aboody there was a major factual error that was pivotal in elevating that, and we found tremendous performance on that grant by Karen Aboody of City of Hope. 

“So you have a decision to make. As a risk issue, do we believe this company? Finally, this is broader than SCID. 

“Donald Kohn has written a letter that's in the public domain that I suggest you read. It makes it very clear that opening the niche for repopulating the immune system without chemotherapy and radiation is a key contribution to every form of genetically modified stem cells for an entire range of childhood diseases and other genetic diseases in addition to therapies like sickle cell or aids. 

“I suggest that that profound contribution that can be made to the field is a risk that is worth taking early on because of his contribution to so many other areas. You have 12 other letters from North America's leading pediatric geneticists that fundamentally provide extraordinary support for this position and this approach.”

CSCR Reading List: A Look at the Grant Appeal Process at the California Stem Cell Agency

Here is a list of articles from the California Stem Cell Report as well as CIRM documents dealing with the grant appeal process at the California stem cell agency. The list was prepared on Aug. 16, 2012. To read the entire articles, click on the links.

Articles from the California Stem Cell Report

Aug. 7, 2012

Researcher Alert: Opportunity for Fresh Appeal in $243 Million Disease Team Round

A tiny opening exists for scientists who failed to win approval last month of their bids for $20 million research awards from the California stem cell agency.

July 26, 2012

Stem Cell Directors Approve $151 Million to Commercialize Stem Cell Research

Directors of the California stem cell agency today approved $151 million in research awards aimed at commercializing stem cell research and pushing therapies into clinical treatment....Five of the applications involving appeals were sent back by the board for more review. (See here, here and here.) They will be considered again in early September or October.

July 24, 2012

Record Appeals by Researchers in Huge California Stem Cell Agency Round

The California stem cell agency's latest grant round – which is budgeted for $243 million – has drawn an extraordinary and record outpouring of appeals from more than half of the scientists rejected by the grant reviewers. Nine of the 15 applicants who were turned down have filed appeals to the governing board for its meeting Thursday in Burlingame. No other CIRM grant round has drawn as high a percentage of appeals, formally known as extraordinary petitions. (See here for a story on the previous record for percentage of appeals.)

Aug. 10, 2010

Emotionalism and Potential Favoritism Cited as Need for Changes in CIRM Grant Appeals
Passion and favoritism, democracy and gamesmanship – all are part of the ongoing discussion among directors of the $3 billion California stem cell agency as they try to fix what some of them call a “broken” grant appeal process.

July 19, 2010
UC Davis Scientist Praises CIRM Appeals Change
A stem cell researcher at UC Davis today said a change in the CIRM grant appeals procedure makes “a lot of sense.” Writing on his blog in regard to "extraordinary petitions," Paul Knoepfler said, “I think the proposed change makes a lot of sense and would greatly improve the process. Sometimes the reasons in the petitions are clearly not meritorious and as it now stands, they end up wasting CIRM's time. The last time CIRM received 9 petitions as well, which represented a remarkably large fraction of the total applications. A stricter process would discourage the submission of large numbers of petitions, an important issue given that the number of petitions received by CIRM continues to grow.”

CIRM Finally Discloses Grant Appeal Proposals
The California stem cell agency early today belatedly posted a two-page memo on proposed changes in how it will deal with appeals by scientists whose grant applications have been rejected by reviewers.

July 18, 2010
Sticky, Troubling Appeals by Rejected Researchers Targeted by Stem Cell Agency
A key step in the process for awarding billions of dollars in research grants is “broken,” according to many directors of the California stem cell agency, and major changes are looming that will affect hundreds of scientists.

June 22, 2010
Immunology Grants: CIRM Gives $25 Million to 19 Researchers
Directors of the California stem cell agency today approved $25 million for immunology research, overturning four negative decisions by its grant reviewers. Directors faced a record nine public petitions to reverse its reviewers. After some grumbling, the directors, who see only a summary of the application and reviewer comments, okayed the four.

June 19, 2010
More Grant Appeals Filed: Yamanaka Invoked
The California stem cell agency has set another benchmark, although this is one that it may not want to trot out at international stem cell gatherings. Eight scientists whose applications were rejected for funding by the CIRM grants working group and scientific reviewers are seeking to overturn those decisions at the agency's board meeting in San Diego on Tuesday. It is the largest number of “extraordinary petitions” ever filed and amounts to more than one out of every four applications that were turned down. The total number of applications received was 44. Fifteen were approved. Some of the researchers are likely to appear at the board meeting and make a personal pitch.

May 18, 2010
Competing for California Stem Cell Cash: Rules of the Game Coming Under Scrutiny
Every California stem cell scientist and researcher looking to join the field – be they from academia or business – should pay very close attention to a meeting next week of a key group of directors of the $3 billion California stem cell agency. They plan to discuss possible changes in how scientists compete for stem cell cash, which is no small matter since CIRM has another $2 billion to hand out over the next several years.

CIRM documents

Pre-application review – CIRM report (Jan. 2010) on the process

Extraordinary petition policy – Version as of 5/25/10

Appeal policy – Version as of 5/25/2010

Transcript of July 20, 2010, meeting of CIRM directors Science Subcommittee. Discussion of petitions begins on page 40.

Transcript of the June 22, 2010, CIRM directors meeting. Discussions of extraordinary petitions begin on pages 24 and 67.

Transcript of 5/25/10 Science Subcommittee meeting dealing with appeals issue. Discussion begins on page 99.

$70 Million Research Proposal Up Next Week at California Stem Cell Agency

Directors of the $3 billion California stem cell agency will hold a special, teleconference meeting next Tuesday to deal with business that was put off last month, including a new, $70 million research round.

The meeting is necessary because directors could not finish their business July 26 after they lost the supermajority quorum required to do business. They delayed action on a number of matters, including the translational research proposal, which is scheduled to be posted as an RFA next month.

The governing board also had discussed dealing with changes in its intellectual property rules at next week's meeting, but that proposal is not on Tuesday's agenda. The next meeting of the board is Sept. 5 and 6 in San Francisco. The agency has confirmed that it will be a two-day session.

At least one new appeal is expected to come up in September in the $243 million disease team round that consumed so much time in July.

Next week meeting involves a host of locations throughout California. The public is entitled to participate in the session from any of those sites. The specific addresses can be found on the agenda.

Researcher Alert: Opportunity for Fresh Appeal in $243 Million Disease Team Round

A tiny opening exists for scientists who failed to win approval last month of their bids for $20 million research awards from the California stem cell agency.

On July 26, the agency's governing board okayed $151 million for eight scientists during a day filled with emotional testimony from patients, as well as appeals by researchers seeking reconsideration of rejection by grant reviewers at the California Institute for Regenerative Medicine. The board also asked reviewers to take a fresh look at five applications in its signature disease team round.

However, the board failed to act on eight applications, meaning that they are still pending. Normally the board will approve -- as a group -- one set of applications. Then, at the same meeting, it will vote to reject another set of applications. On July 26, however, the hard-pressed directors late in the afternoon lost the supermajority quorum (65 percent) required to do business and adjourned without acting on all the applications.

This situation rarely occurs on award rounds. In our recollection, it has happened only once before although there may have been other occasions.

That leaves an opening for more researchers to ask the board to act favorably at its Sept. 5-6 meeting in San Francisco on applications rejected by reviewers. Money is available. The July 26 round was budgeted for $243 million.

At the meeting last month, discussion by directors provided several clues to appropriate avenues for reconsideration. They were interested in appeals, formally called extraordinary petitions, that brought genuinely new information to the table. Serious errors in the reviews – something more than differences of opinion – were of interest. Wide variance in the spread of scientific scores on specific applications, including the preliminary scores, also triggered directors' interest.

Researchers considering appeals would be well-advised to listen to the audiocast of the meeting to hear the discussion of appeals. The transcript of the meeting also should be posted soon on the CIRM website, probably this week. The transcript can be found via this page when it is posted. The audiocast instructions can be found on the July 26 meeting agenda.

(The best available information on the CIRM web site shows a Sept. 5-6 governing board meeting. However, that schedule also shows other two day meetings earlier this year, which actually have turned out to be only one day.)

Stem Cell Blowback from Proposition 71

Proposition 71 last week once again stood in the way of action by the $3 billion California stem cell agency.

This time it was a bit of minutia embedded in state law that prevented the agency's governing board from going forward. The result is that the board will have to hold another meeting in August to approve matters that need to be acted on in a timely fashion.

The minutia involves the supermajority quorum requirement for the board, the percentage of board members needed to conduct business legally. Proposition 71, the 10,000-word ballot initiative that created the agency in 2004, stipulates that 65 percent of the 29 members of the board be present for action.

Here is what happened: Late last Thursday afternoon, CIRM directors were moving fast after a long day of dealing with $151 million in research awards. But as they attempted to act on proposed changes in the agency's important intellectual property rules, one of the board members left the meeting, presumably to catch a flight. The result was that the meeting quickly ended after it was decided to deal with the IP proposal and another matter during a telephonic meeting this month.

The quorum problem has plagued the CIRM board since its inception, although the situation has eased since J.T. Thomas, a Los Angeles bond financier, was elected chairman in 2011. A few years back, the board also changed its rules to allow a limited number of board members to participate in meetings by telephone, reducing the pressure on board members to physically attend meetings.

The obvious solution would be to change the quorum to 50 percent, a reasonable standard. However, the board is legally barred from doing that. To make the change would require a super, supermajority vote, 70 percent of each house of the state legislature and the signature of the governor. That is another bit that is embedded in state law, courtesy of Proposition 71. To attempt to win a  70 percent legislative vote would involve a political process that could be contentious and also involve some horse-trading that the stem cell agency would not like to see.

Why does the 65-percent quorum requirement exist? Normally, one would think such internal matters are best left to the governing board itself. It is difficult to know why former CIRM Chairman Bob Klein and his associates wrote that requirement into law. But it does allow a minority to have effective veto power over many actions by the governing board.

Of course, there is another way to look at the problem: CIRM board members could change their flights and stick around until all the business is done. But that would ignore the reality that all of them are extremely busy people and have schedules that are more than full.

All of this goes to one of the major policy issues in California -- ballot box budgeting and the use of initiatives that are inflexible and all but impossible to change, even when the state is in the midst of a financial crisis in which the poor, the elderly and school children are the victims. One California economist has called the situation "our special hell."

For more on some of the other problems created by Proposition 71, see here(cap on size of staff, which took legislation to remove), here (board cannot nominate its ownchairman), here (dual executive arrangement).

$20 Million in Stem Cell Irony

A bit of irony popped up this week in the wake of approval of $151 million in awards by the California stem cell agency.

One of the awards was $20 million to StemCells, Inc., of Newark, Ca., which is also fighting hard for another $20 million from the state research enterprise.

However, back in 2008, Kenneth Stratton, general counsel for the firm, put some distance between his company and the agency, which is handing out $3 billion in toto.

Stratton said,

"We will take CIRM money last. We don't want to be in a position where, years from now, we are actually forced to sell [our products] in California at a loss."

But last week, Martin McGlynn, CEO of StemCells, said in a press release,

“We are extremely grateful to CIRM for its support.”

Times have changed for both the company and CIRM, which is in the process of altering the intellectual property rules that offended Stratton in 2008. The changes were due to be approved last Thursday, but action was put off by the CIRM board. It was overwhelmed as it dealt with the record pace of appeals by researchers who were scrambling to overturn negative decisions by grant reviewers.

StemCells' application for another $20 million is one of those being appealed. The board will take it up again in either September or late October, after it undergoes additional scrutiny by the agency.

CIRM is touting its IP changes as being more friendly to business. They also can be made retroactive to cover awards to business made in the past. CIRM directors expect to meet by telephone, probably in August, to approve the new IP rules.

News Coverage of CIRM Awards: Substantial but Not Extensive

The California stem cell agency today enjoyed substantial, if sparse, news coverage of the

$151 million in research funding approved by its board yesterday.

Both the San Francisco Chronicle and The Sacramento Bee carried solid stories on the grant awards. In the case of the Chronicle, the story included compelling photos of patients who spoke during emotional, tear-filled presentations.

The stories represent a modest change from the past, when media outlets all but ignored the agency's awards.

The Bee's Richard Chang wrote,

“For Melissa Biliardi of Santa Maria, the (CIRM board) vote symbolizes hope. Her son, James Birdsall, 32, was diagnosed four years ago with Huntington's disease. The degenerative brain disorder could prove fatal over the next 10 to 15 years. There is currently no cure or treatment, but with the grant, UC Davis researchers hope to deliver an effective therapy in four years.
"'This is the most hope we've ever had for a cure or treatment,' Biliardi said.”

The Chronicle's Erin Allday wrote,

“California's stem cell funding agency on Thursday approved nearly $100 million in grants for research into heart disease, cancer and spinal cord injuries, and to the cheers of dozens of patients and their supporters, it also awarded money to rare but devastating diseases with no cure.”

The articles demonstrated the effectiveness of patients and patient advocates in telling the CIRM story. Reporters are always looking for a warm human dimension – especially to enhance a dry, bare-bones science and government story.

Responding to a question from the California Stem Cell Report, Kevin McCormack, spokesman for CIRM, also mentioned radio news coverage in the San Francisco Bay Area. He said the awards were covered in “two different stories on KCBS-AM radio, one that ran several times yesterday and another that ran several times today. KGO-AM radio also ran a story several tim, and, of course, the best of all, today's KQED-FM Forum.”

The KQED show, which was also carried nationally on Sirius radio, consisted of an hour-long look at CIRM, with some calls from listeners. Guests on the show were CIRM President, Alan Trounson, UC Davis stem cell researcher Jan Nolta and yours truly, David Jensen.

Other stories appeared in the SanFrancisco Business Times and Genetic Engineering News. The Bee's story appeared in the Modesto Bee as well.

Coverage of Directors Meeting Concludes

Coverage of today's meeting of the governing board of the California stem cell agency is now concluded. Late in the afternoon, the board lost its quorum, a supermajority dictated by Prop. 71, and adjourned, leaving a number of items to be dealt with either by a telephonic meeting or the regular session scheduled for early September.

Two More Disease Team Applications Sent Back for More Review

Directors of the California stem cell agency today referred two additional research applications for $37 million in disease team funding back to reviewers for further consideration.

Both were the subjects of appeals by researchers whose proposals were rejected by grant reviewers.

One was from Timothy Hoey of OncoMed Pharmaceuticals in Redwood City, who sought $20 million.  The other was from Henry Klassen of UC Irvine, who sought $17 million. (See here and here for their appeals.)

The  board began the day by directing staff to come back to the board in early September. But with the large number of grants to be reassessed, it was acknowledged some might not be acted on until the board's meeting in late October.

Disease Team Round Hits $151 Million with Final Action

Directors of the California stem cell agency approved an additional $20 million disease team grant today before adjourning their meeting. The grant brought the disease team round to a total of $151 million.

The award went to Judith  Shizuru  of Stanford. Scientist Irv Weissman and Robert Klein, former chairman of the stem cell agency, both spoke on behalf of her appeal of a negative decision by grant reviewers. 

At the suggestion of the current board chairman, J.T. Thomas, the board placed conditions on the grant would stipulate Stanford pick up certain unknown, additional costs if necessary. 

Here is a link to the CIRM press release on today's action.

CIRM Directors Continue Discussion on Disease Team Grants

The CIRM directors are continuing to purse action on the remaining disease team applications. Two more have been sent back for more review. Another is up for approval.

Stem Cell Directors Approve $151 Million to Commercialize Stem Cell Research

Directors of the California stem cell agency today approved $151 million in research awards aimed at commercializing stem cell research and pushing therapies into clinical treatment.


Patients and researchers cheered when the action was announced. 


The awards of up to $20 million each were ratified by CIRM's governing board, which added two to the six applications approved by reviewers. The original six totalled $113 million. Directors budgeted $243 million for today's round.


Five of the applications involving appeals were sent back by the board for more review. (See here, here and here.) They will be considered again in early September or October.

The awards are the second largest research round in CIRM's history, surpassed only by an another, earlier $211 million “disease team” round. The latest effort is aimed at bringing proposed clinical trials to the FDA for approval or possibly starting trials within four years. That deadline coincides roughly with the date when CIRM is scheduled to run out of cash unless new funding sources are developed.

CIRM is currently exploring seeking private financing. It could also ask voters to approve another state bond issue. (Bonds currently provide the only real source of cash for CIRM.)  In either case, the agency needs strong, positive results from its grantees to support a bid for continued funding.

Today's action came after nine out of the 15  applicants who were rejected by reviewers appealed the  negative decisions. Two of the appeals were successful at today's meeting. It is a good bet that at least some of those referred for more review will be ratified by the board in September. 

The appeals were based on a variety of issues, ranging from technical science questions to inconsistencies in CIRM's research approaches and mistakes by reviewers. The outpouring of appeals was the largest in CIRM history in terms of the percentage of applicants seeking to overturn reviewer decisions.

The round also marked another first in terms of the total initially approved by reviewers. On occasion in the past, reviewers have not approved enough awards to consume all the funds budgeted by the CIRM board. But never before has the amount fallen so far short.

Most of the awards went to enterprises connected to persons on 29-member CIRM governing board, continuing a trend that has existed throughout CIRM's history. Board members with conflicts, however, are not allowed to vote or participate in the

The full list of the winners and the CIRM press release can be found here.

(Editor's note: This item was updated from an earlier version and the figures increased as the CIRM board added another grant and took additional action.)

CIRM Board in Executive Session

The governing board of the $3 billion California stem cell agency has gone into executive session to consider confidential information on applications for $20 million disease team awards.

Harvard's McMahon on His Way to USC

Andy McMahon
Harvard photo

The governing board of the California stem cell agency this afternoon approved a $5.7 million grant to lure a Harvard researcher to the University of Southern California in Los Angeles.

The scientist is Andrew McMahon, who serves on the executive committee of the Harvard Stem Cell Institute. CIRM officials said McMahon is ready to begin his work immediately at USC.

McMahon won stellar reviews from CIRM's grant reviewers who said he was an “exceptional scientist and one of the leading young developmental biologists.” Reviewers gave his proposal a score of 90 and, in summary, said,

“Major strengths include the candidate's exceptional productivity and contributions to the fields of mammalian embryology and kidney development, the significance and potential of the research program, the PI's proven leadership capabilities, and the outstanding institutional commitment.”

$18 Million Cedars Sinai ALS Proposal Headed for Approval

The California stem cell agency today cleared the way for approval of an $18 million grant to develop a new cell-based therapy for treatment of ALS.

The agency's governing board moved the application into a category that is expected to approved later today.

The action came on an appeal by researcher Clive Svendsen of Cedars Sinai. Also supporting the application were a number of persons with ALS.

StemCells, Inc., and Capricor Stave Off Rejection from Stem Cell Agency

Two California stem cell firms today won a reprieve from rejection in their bids for $40 million in funding from the California stem cell agency.

They are StemCells, Inc., of Newark and Capricor, Inc. of Beverly Hills. StemCells was founded by Stanford researcher Irv Weissman. Capricor was formed to commercialize research at Cedars of Sinai that had been previously financed in part by the state's $3 billion enterprise. Frank Litvack, who unsuccessfully vied for the chairmanship of the stem cell agency in June 2011, is the recently appointed executive chairman of Capricor.

The CIRM board sent the firms' bids back for more scientific review based on their appeals of reviewers' negative decisions as well as testimony at the board meeting today. The board will take up the applications, which seek $20 million each, again in early September.

Robert Klein, who was the first chairman of the stem cell agency, appeared before his old board as a member of the public on behalf of the StemCells appeal. He said new evidence will be published soon in a scientific journal that supports the StemCells approach. Klein also said that he was personally involved in three CIRM grant reviews in which scientists affirmed the company's approach. (Here are links to the appeal and to grant reviewer comments.)

The other application also involved new information. Litvack, former CEO of Conor Medsystem, told the board the firm has made considerable progress since CIRM's closed-door review of applications last April, both in terms of management and science. The firm's appeal said Litvack's appointment is part of the management improvements at the firm.

Sherry Lansing, a member of the CIRM board and former CEO of a Hollywood film studio, enthusiastically recalled a presentation last year before the board about the results of the initial research. She the firm has solved the problems cited by reviewers. She said,

“We have a fiduciary responsibility to select the best science.”

Stem Cell Directors Order More Consideration on $20 Million UCLA Research Application

Directors of the California stem cell agency today deferred action on a $20 million proposal that was rejected by its grant reviewers and sent it back for more consideration. 

The move involved an application by Stanley Nelson and M. Carrie Miceli of UCLA dealing with Duchenne muscular dystrophy. They are parents of a child with the affliction, which is usually fatal by age 25. The CIRM review summary said it is “a devastating and incurable muscle-wasting disease caused by genetic mutations in the gene that codes for dystrophin, a protein that plays a key role in muscle cell health.”

Nelson had filed an appeal seeking to overturn reviewers' action. Five  mothers and two fathers with children suffering from the disease made emotional appeals to CIRM directors on behalf of the application. Following their presentation, Art Torres, co vice chairman of the CIRM board, responded equally emotionally that the board is dedicated to finding therapies for such afflictions as Duchenne muscular dystrophy

The board approved more review for the application after it was disclosed that a company issued a press release two days ago that showed that  a drug involved in the proposal was more effective than reviewers believed. Philip Pizzo, a member of the board and dean of the Stanford medical school, expressed caution about the press release, given its timing and source. His comments came prior to the appearance of the parents.

The application is scheduled to be brought back to the full board in September for further action.

Rejected Grants May Be Sent Back for More Review

California stem cell agency chairman J.T. Thomas has raised the possibility of sending some of the disease team applications back for additional review if the board feels that is necessary to consider new information and resolve scientific disputes. 

Thomas discussed such a move at the beginning of the discussion of the $243 million disease team round. Nine out of 15 rejected applicants have appealed to the full board.  Some have presented new information. Others have disputed the scientific work of reviewers. 

The board used such a referral process for one application in the past. That grant was ultimately approved.

Discussion Beginning on Disease Team Grants

The governing board of the $3 billion California stem cell agency has begun discussion of applications in the $243 million disease team round. A large number of speakers are in the audience and will be limited to three minutes each.

Short-term Borrowing to Continue to Provide California Stem Cell Cash

The California stem cell agency will continue to be funded with short-term borrowing -- commercial paper -- provided through the state treasurer's office, J.T. Thomas, chairman of the agency's governing board, said today. 

Until late last year, the $3 billion agency was funded through state bond funds, but California Gov. Jerry Brown is trying to reduce the state's long-term debt load, which has skyrocketed in the last decade. 

Thomas told directors this morning that short-term funding comes at "the lowest possible interest rate." He said the arrangement leaves the agency in "very good shape."

The state will provide the funding to CIRM on a month-to-month basis in addition to providing a two month cushion, Thomas said. 

At some point, the short-term debt is likely to covered by state bonds.  As of June 30, CIRM

had $50.9 million on hand, down $42 million from April 30. During the fiscal year ending June 30, the agency paid out $232.7 million compared to $201.4 million in the previous fiscal year.