Two More Editorials: The California Stem Cell Agency Should Heed IOM Recommendations for Reform

Two other major California newspapers today said the $3 billion California stem cell agency needs to “clean up its act” if it wants to be successful in continuing its efforts at turning stem cells into cures.

The editorials appeared in the Los Angeles Times, the state's largest circulation newspaper at more than 700,000, and the San Jose Mercury News in California's Silicon Valley. The Mercury News has a reported circulation of nearly 600,000, although that figure includes other Bay Area newspaper owned by the same chain.

Both editorials focused on the 17-month evaluation of the agency by the prestigious Institute of Medicine (IOM) as did earlier editorials in The Sacramento Bee and the San Francisco Chronicle. The IOM recommended sweeping reforms at the agency that would alter its structure and target conflicts of interest. 

The Times said,

“The $700,000 spent on the study...will be wasted if the institute's oversight board fails to heed the (IOM) committee's criticisms, which echo the findings of the Little Hoover Commission and other groups over the years.”

The editorial continued,

“The 29-member board is made up almost entirely of representatives of advocacy groups and research institutions that have a direct interest in how the money is spent.”

The Times cited the California Stem Cell Report's calculations that about 90 percent of the $1.7 billion awarded by CIRM has gone to institutions linked to current and former members of its governing board. 

The Times noted an award to a Northern California firm that has stirred some criticism. The editorial said,

“The board also overrode the advice of its scientific advisors — twice on a single application when it considered a grant for a well-connected company, StemCells Inc. based in Newark, Calif. The board granted the company $20 million after Robert Klein, the driving force behind the passage of Proposition 71, which created and funded the agency in 2004, and its former head, lobbied so intensively for the company that one board member described it as 'arm-twisting.'"

The Times concluded,

“The agency has used more than half of its funding and one day will almost certainly want to ask taxpayers for more. It should remember that voters will look for evidence of public accountability as well as respected research.”

The San Jose paper sounded a similar note about the agency. Its editorial said,

“(I)f it wants to survive...it should heed the Institute of Medicine's advice to eliminate conflicts of interest on its board -- and do it before awarding the remaining $1.2 billion of the $3 billion voters approved for stem cell research.”

But the paper said the stem cell agency should not be provided any more state funding.

“Long-term funding was never the intent when Proposition 71 passed in 2004. It was supposed to kick-start research at a time when federal funding was blocked and to establish California as a major player in the rapidly advancing medical field. 

“The agency could continue to bring value to the state as an advocate and funder of research, but only if it can attract private donors, partners and investors. For that to happen, it will need a board that passes the ethics test, with more independent experts and industry executives free of conflicts. 

“At the outset, stem cell advocates took immense pride in structuring the agency to keep it relatively free of legislative interference despite the use of public money. Politicians kept their hands off, which was good. But the agency created its own inappropriate influences in the way it constituted its board. Now it needs to clean up its act.“

Meager Coverage of Yesterday's Bristling IOM-CIRM Meeting

Mainstream news coverage today was skimpy, to put it mildly, of the testy session yesterday involving the governing board of the California stem cell agency and representatives of the prestigious Institute of Medicine(IOM).

Only two pieces appeared, one in the San Diego U-T and another on the web site of the Los Angeles Times. Both discussed what the Michael Hiltzik of the Times column called “overt hostility” on the part of several board members (see yesterday's item here). Bradley Fikes of the San Diego paper said the patient advocates on the board “strongly criticized” the IOM report on the grounds that it “unfairly suggests that they have a conflict of interest.”

One of the recommendations of the IOM is that the agency develop ways to manage personal conflicts of interest dealing with patient advocates and others at the agency.

Fikes wrote,

"'I'm a colon cancer survivor,' said Art Torres, vice chairman of the oversight committee, and a patient advocate designate. 'Does having colon cancer make me biased?'
“Jeff Sheehy, another patient advocate designate, protested what he called a 'defenestration' of patient advocates, whose interests often span multiple diseases.”

Ron Leuty of the San Francisco Business Times skipped the IOM matter and wrote about the awarding of $36 million in grants. However, a list of the most popular stories on the Business Times web site, ranked as No. 5 Leuty's story last week on the IOM study, just below an article about Stanford's $111 million concert hall.

Fikes also had a piece on ViaCyte, which is in his area, receiving another $3 million from CIRM.

Appeals at the California Stem Cell Agency: Worthwhile or Worthless?

Jon Shestack, a patient advocate member of the governing board of the California stem cell agency, weighed in today on the virtues of the grant application appeal process at the $3 billion research enterprise.

His remarks came in a “comment” filed on the Duchenne item that appeared yesterday on this site. (His full comment can be found at the end of that item.)

Shestack said that the handling of the $6 million CIRM grant involving Duchenne research is “a casebook study on why the special(extraordinary) petition is worthwhile. There was indeed new and relevant information that only became available after grant review. Scientific staff and leadership flagged it.”

The utility of the petitions is one of the reasons that we ran the story about Duchenne and the team at UCLA. The extraordinary petition process is currently under fire by both the Institute of Medicine and the stem cell agency itself, which has appointed a task force to come up with changes. But, while the petition process is certainly less than perfect, so is the peer review/grant review process.

The Duchenne application is not the only “case study.” An application by Karen Aboody of the City of Hope is often cited as another case. There are undoubtedly others.

The petition process was adopted several years ago by the board as a tool to manage willy-nilly appearances of scientists before the CIRM governing board whose applications were rejected by reviewers. Now the Institute of Medicine has recommended the petitions be abandoned, saying they undermine the integrity of grant review process. The IOM cited a major controversy in Texas involving its cancer research agency as an example of how grant reviews or the lack of them can go bad – not to mention conflict of interest problems there. CIRM has already started to look for better solutions regarding appeals. Many of its directors are troubled by emotional presentations from patients in connection with petitions and the lack of adequate information to make informed decisions on the spot about the contested matters.

Whether appeals can be put in a tidy, scientific box is debatable. Researchers have the right, under state law, to address the board on any issue whatsoever. And at least some of them will continue to do so -- regardless of any appeals changes --  when millions of dollars and their careers are at stake.

Opinions and decisions of CIRM reviewers are not holy writ. They can and do make mistakes, as we all do. In making changes in the appeals process, the goal of the agency should be to devise a public and transparent process rather than enshroud it in more secrecy. CIRM also should find a way to do a much better job of communicating to applicants the availability of appeals and precisely how to appeal when it becomes necessary.   

LA Times: On the California Stem Cell Agency and Wasting $700,000

The headline on the Los Angeles Times web site this afternoon read,

"Is California's stem cell program preparing to waste $700,000?"

The question was raised by Pulitzer Prize-winning columnist Michael Hiltzik, whowas commenting on the presentation today by the prestigious Institute of Medicine's (IOM) on its sweeping recommendations for changes at the state stem cell agency. 

Hiltzik wrote, 

"If you're betting that the California stem cell agency will spurn key recommendations of a blue-ribbon review panel that criticized its leadership and management structures, you might want to double that bet. Several board members showed overt hostility to the panel's recommendations during a public meeting today."

Harold Shapiro, chairman of the IOM panel and former president of Princeton University, delivered the briefing. The group's study took 17 months and cost the stem cell agency $700,000.

Hiltzik's piece summarized the IOM proposals, which echoed many criticisms that have been aired for years in California.  Hiltzik wrote, 

"CIRM Chairman Jonathan Thomas glided over those issues when he introduced Shapiro. Thomas observed that the Institute of Medicine report included many statements "validating CIRM, its process, what it was able to achieve," which is a bit like launching the investigation of a plane crash by focusing on all the planes that land safely every day. Thomas did mention that the Institute of Medicine had made numerous recommendation about how to "take something which is already a great experience and improve it even further." 

"Shapiro got only a few minutes into his presentation before board members started interrupting him with objections to the Institute of Medicine's recommendation for a majority of independent members."

Hiltzik concluded, 

"Thomas promised to stage a public workshop on the Institute of Medicine report soon and to subject them to 'lengthy discussion.' 

"Does that sound as if the board will be taking seriously the advice that it change the way it does business? Stay tuned, but don't hold your breath."

Winners From Today's Awards by the California Stem Cell Agency

The 12 winners in the latest round of grants from the California stem cell agency all come from institutions linked to directors on the agency's governing board. Board members with conflicts of interest are not allowed to vote on the grants or participate in the debate. Since the inception of the agency, more than 90 percent of its awards have gone to institutions linked to the directors. Here is a link to the CIRM press release on today's meeting.

Here is the list of researchers who won awards today.

New Faculty Physician Scientist Translational Research Awards

RN3-06530	Robert Baloh	Cedars-Sinai Medical Center	$3,031,737.00
RN3-06378	Reza Ardehali	University of California, Los Angeles	$2,930,388.00
RN3-06504	Jason Pomerantz	University of California, San Francisco	$3,084,000.00
RN3-06396	Mana Parast	University of California, San Diego	$3,013,252.00
RN3-06425	Tracy Grikscheit	Children's Hospital of Los Angeles	$3,408,000.00
RN3-06532	Tippi MacKenzie	University of California, San Francisco	$2,661,742.00
RN3-06479	Ann Capela Zovein	University of California, San Francisco	$3,084,000.00
RN3-06529	Alan Cheng	Stanford University	$3,091,595.00
RN3-06455	Ali Nsair	University of California, Los Angeles	$3,004,315.00
RN3-06460	Emanual Maverakis	University of California, Davis	$2,964,000.00
RN3-06510	Michelle Monje	Stanford University	$2,800,536.00
RN3-06525	Ophir Klein	University of California, San Francisco	$3,084,000.00
Total			$36,157,565.00

ViaCyte Wins Another $3 Million from California Stem Cell Agency

The California stem cell agency, which has awarded ViaCyte, Inc., $36 million, today pumped another $3 million in the firm following the collapse of an alliance between the San Diego firm and GlaxoSmithKline.

The now failed ViaCyte-Glaxo-CIRM arrangement was ballyhooed by the CIRM in October because it would have been the first deal involving Big Pharma and the stem cell agency. The resources of Big Pharma are needed to pursue the expensive path of turning stem cell research into cures.

Meeting in Los Angeles, the CIRM governing board approved the additional funds on a 13-0 vote with two abstentions.  The action came following a closed door session to discuss how the funds would be spent. No details were provided publicly on that matter.

ViaCyte has also told Biocentury that it is pursuing even more funding after the alliance with Glaxo broke down. CIRM President Alan Trounson said ViaCyte is likely to receive another $3 million from the Juvenile Diabetes Research Foundation. Trounson also said that other sources are being examined as well. 

Patricia Olson, executive director of CIRM, scientific activities said the agency's advisors continue to have faith in ViaCyte's effort to develop a treatment for diabetes. The company plans to start a clinical trial on its product in 2014.

The ViaCyte-Glaxo-CIRM deal was cause for celebration last fall. Alan Trounson, CIRM's president, said the deal would “resound” globally. He told directors,

 “This is verification of our program. To have (the head of Glaxo regenerative medicine program) join us through a partnership arrangement with GSK means that a project that we've shepherded from the basic science through to the preclinical work and is heading to the clinic we're now going to do in partnership with a very major organization.”

California Stem Cell Directors Adjourn Meeting

Today's meeting of the governing  board of the California stem cell agency has adjourned. We will have an item coming up shortly on approval of $3 million for ViaCyte, Inc., of San Diego.

Constitutional Questions Raised on Sweeping Changes at the California Stem Cell Agency

The outside counsel to the governing board of the California stem cell agency is preparing an opinion on whether some of the major changes recommended by the blue-ribbon Institute of Medicine(IOM) study might require a vote of the people.

More than three years ago, the same issue was raised  and used by the agency to resist unwanted changes.

Kevin McCormack, agency spokesman, said today that James Harrison of Remcho Johansen & Purcell of San Leandro will perform the analysis. Harrison has been counsel to the CIRM board since its inception. He also wrote part of Proposition 71, which created the stem cell agency in 2004.

Harrison's analysis was disclosed after CIRM Director Sherry Lansing, who is also chairwoman of the University of California Board of Regents, said this morning that the board's "hands are tied" concerning some of the IOM proposals because they could require a vote of the people. Other members of the board bristled at the IOM recommendations.

In 2009, Harrison tackled a similar task in connection with related, proposed structural changes at the $3 billion stem cell research effort. In reaction to proposals by the Little Hoover Commission, the state's good government agency, Harrison said,

“The Little Hoover Commission’s proposals would effect drastic and disruptive changes to CIRM’s governance and operating systems. Such changes run counter to the voters’ intent, and do not further Proposition 71’s purposes.”

The California Stem Cell Report wrote at the time, 

"The 10-page legal memo hung most of its arguments on a provision in Prop. 71 that states that it can only be amended by the legislature if the changes 'enhance the ability of the institute to further the purposes of the grant and loan programs.'
"Harrison's memo said the Hoover proposals (in question) could only be enacted through another ballot measure...."

The Little Hoover proposals dealt with the structure of the board and the conflicting responsibilities of the president and the chairman. The IOM has recommended major changes in both areas and approvingly cited the Hoover study .

Harrison's analysis will also delineate which IOM recommendations can be implemented by board action and which will require legislative approval.

The IOM report, which cost the stem cell agency $700,000, recommended a host of changes that critics for years have said are needed. But the 17-month study also went beyond what the critics had proposed. The IOM said that the 29-member governing board should be stripped of power to approve individual grants. Instead, the board would be limited to voting for or against a slate of applications.

The IOM also proposed far-reaching changes to remove conflict of interest problems, clean up a troubling dual-executive arrangement and fundamentally change the nature of the governing board. The recommendations would greatly strengthen the role of the agency's president, significantly alter the role of patient advocates on the governing board and engage the biotech industry more vigorously.

CIRM's governing board and its first chairman, Robert Klein, an attorney who directed the writing of the stem cell initiative and wrote parts of it, have mightily resisted related proposals. In 2009, Klein even warned of lawsuits if legislative action were initiated for reforms (see here and here). 

In an editorial today, The Sacramento Bee said changes are long overdue at the agency. The Bee said CIRM has "been consumed by a siege mentality that has prevented any real introspection.”  In another editorial earlier this week, the San Francisco Chronicle said that prompt and major changes are needed at the agency.

Many of the more significant recommendations clearly require either a rare, super, supermajority vote of the legislature (70 percent) and the signature of the governor or another ballot initiative, which is very unlikely. Achieving the 70 percent vote is exceedingly difficult except on the most noncontroversial matters before the legislature. The requirement permits only 13 members of the 40-member Senate to block any CIRM legislation, giving minority viewpoints extraordinary power over the content of any CIRM legislation.

(See here for a list of IOM recommendations that would likely require legislative action.)

CIRM Directors Approve $36.2 Million in Stem Cell Grants

Directors of the California stem cell agency today approved $36.2 million for 12 physician-scientists, turning down four appeals from scientists whose applications were rejected by reviewers.

Names of the winners were not immediately disclosed, although the agency will publish their names later today. The vote on the individual grants also was not announced.

Here are links to items dealing with the appeals and the grant round. See here, here and here.

CIRM Directors Discussing $36 Million in Grants

Directors of the California stem cell agency are currently discussing possible awards in a more than $36 million round of grants. One appeal seems to have failed when one director backed away from an expression of interest. The appeal involved research on a stem cell-based pacemaker by Eugenio Cingolani of Cedars Sinai in Los Angeles.

(An earlier version of this item said the amount was more than $32 million.)

A Singular Scientific Story: Duchenne's Disease, a Family and the California Stem Cell Agency

Unusual and personal conditions, including a tie to the $3 billion California stem cell agency, surround a promising scientific development reported today by a husband and wife research team at UCLA. 

Their research involves Duchenne muscular dystrophy (DMD), an inherited disease that afflicts about one in 3,600 boys and results in muscle degeneration and, eventually, death.

Carrie Miceli
UCLA photo

The researchers, Stan Nelson and Carrie Miceli, said they have discovered a promising FDA-approved drug that could advance the fight against the affliction.

Miceli and Nelson have an 11-year-old son, Dylan, with the disease. They have been studying the affliction for some time, but their most recent and ambitious research plan was rejected earlier this year by stem cell agency grant reviewers, a process that normally kills an application. Undaunted, Miceli and Nelson appealed to the full stem cell agency board last July. Backed by an emotional presentation involving patient advocates, they won approval of a $6 million grant.

Adding to all this, their appeal used a process known as an “extraordinary petition,” which the Institute of Medicine (IOM) last week said should be abandoned because it undermines the integrity of the CIRM grant review process.

Stan Nelson
UCLA photo

Even prior to the IOM recommendation, the CIRM board was moving to restrict its free-wheeling appeals procedures.

As for the $6 million CIRM grant, it will carry the important burden of advancing the findings that were published in the journal Science Translational Medicine. However, the money was not used in the study reported today.

The research showed that dantrolene, the FDA-approved drug, “provides a powerful boost to the (Duchenne) therapy currently being tested in clinical trials,” according to a UCLA press release.

The news release said,

“(The researchers) hope this one-two punch used in combination will overcome the genetic mutations that cause DMD, restore a missing protein needed for proper muscle function and allow those affected by the disease to lead relatively normal lives.”

“Their youngest son, Dylan, 11, was diagnosed with DMD in 2004. While he’s still ambulatory – many DMD patients require the use of wheelchairs by about age 10 – Dylan can no longer run or climb stairs and he can’t shoot a basketball over his head like other boys his age.  Despite these challenges, Miceli said Dylan remains a happy, funny and engaged boy, full of life and passion.

“'We entered into this field because of the diagnosis of our son, but we hope our research can help many others,' she said. 'There are drugs that can help manage the symptoms of the disease, but nothing that changes its course dramatically. We’re trying to correct the defect that causes DMD with highly personalized genetic medicine.'” 

UCLA said the grant from CIRM will be used for “longer term studies of their drug combination therapy in mouse models to ensure it can restore dystrophin levels to normal or near normal levels. They also will explore whether DMD patients with other mutations can benefit from the combination therapy.”

Asked for comment, Kevin McCormack, a spokesman for the stem cell agency, said today's findings "are certainly very encouraging." He continued,

"Clearly there is still a long way to go before we know if this approach will work in people but we're delighted that funding from the stem cell agency is helping  the researchers move their work forward....This is what voters set out to do when they approved Proposition 71 to create the stem cell agency."

Some California Stem Cell Board Members Bristle at IOM Recommendations

Some directors of the $3 billion California stem cell agency today sharply challenged recommendations by the Institute of Medicine(IOM) concerning conflicts of interest and the role of patient advocates on the governing board.

Much  of the criticism came from the 10 patient advocate members on the board, whose roles would be significantly altered  under the IOM recommendations. Jeff Sheehy, a patient advocate for HIV/AIDs and vice chairman of the agency's grant review group, said he saw no evidence in the IOM report for its recommendations regarding patient advocates. He said,

 "If you had some here, I would be more comfortable." 

He continued,

"We are not all powerful. We are a minority on the (29-member) board." 

Jonathan Shestack, another patient/adovcate director, said the IOM's conclusions on "conflicts of interest could not possibly be more incorrect than they are." He said,

"Advocates are here to advocate."

Harold Shapiro, chairman of the IOM study, said, "We are not against patient advocates." He said that the IOM supports advocates and that its recommendations could increase the role of patient advocates, albeit in a different manner.

Shapiro added that conflicts of interest do not necessary bar participation by board members. He said, however, they must be disclosed and managed.

Director Robert Price of UC Berkeley said,

 "We have gone to great lengths to manage conflicts of interest."

The IOM recommended that all board members be removed from the grant review process, which would be turned over to the CIRM president. The board would only vote on a slate of applications, not individual grants. More disclosure would be required of personal conflicts of interest, including health matters, that the board said research has shown can create bias.

 The IOM report said,

 “Far too many board mem­bers represent organizations that receive CIRM funding or benefit from that funding. These com­peting personal and professional interests com­promise the perceived independence of the ICOC(the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”

More than 90 percent of the $1.7 billion that the CIRM board has awarded has gone to institutions that are represented on the CIRM governing board.

J.T. Thomas, chairman of the CIRM board, said that the agency takes the recommendations "very seriously" and that they would discussed further at a board workshop in early January. The workshop is scheduled to be public but the date and location has not been announced. Thomas said the recommendations will receive "lengthy discussion" thereafter and review by appropriate subcommittees of directors.

No one from the public commented during the roughly 90 minute discussion.  Eighteen out of 29 board members were present at the beginning of today's meeting.

IOM Report: Many Major Changes at Stem Cell Agency Require Legislation

As the Institute of Medicine began its presentation today to the governing board of the $3 billion California stem cell agency, one of its key directors, Sherry Lansing, pointed out that some of the IOM recommendations require legislative action and perhaps a vote of the people.

Her essential point was that the agency is hamstrung by the very measure that created it in 2004. She did not elaborate on her comment, but here is a look at some of matters she was talking about. (Lansing is chairwoman of the UC board of regents and former CEO of a Hollywood film studio.)

The ballot measure locked in management minutia and more, and then slapped on tight restrictions that make it nearly politically impossible to alter even such matters as who is in charge of production of the annual report. (By order of law, the chairman, in case you are wondering.)

And if the 29-member governing board -- so sized and specified to every nit and nat by the ballot measure -- wants to make the sweeping changes recommended by the IOM, agency directors face a formidable task in California's Capitol.

Many of the most important recommendations for the California stem cell agency require a vote of the California legislature and signature of the governor. The IOM's choice of words – that these proposals “may” need legislation – is conservative. There is little doubt that legislative action would be needed to fully implement the recommendations below.

The vote needed is no simple majority. It is a rare, super, super-majority (70 percent) of each house. The requirement was also written into state law by Proposition 71, the 10,000-word ballot initiative that created the stem cell agency. The 70 percent requirement gives extraordinary power to minority viewpoints that must be dealt with to win passage of legislation. In the state Senate, for example, it would take only  13 senators to block a bill.  

With that background, here are direct quotes from the IOM report on its legislative recommendations.

Separate Operations from Oversight

The board should focus on strategic planning, oversee financial performance and legal compliance, assess the performance of the president and the board, and develop a plan for transitioning CIRM to sustainability. The board should oversee senior management but should not be involved in day-to-day management. The chair and the board should delegate day-to-day management responsibilities to the president. Each of the three working groups should report to management rather than to the ICOC.

Change the Composition and Structure of the Board and Working Groups

CIRM should put systems in place to restructure the board to have a majority of independent members, without increasing the size of the board. It should include representatives of the diverse constituencies with interests in stem cell research, but no institution or organization should be guaranteed a seat on the board. Consideration should be given to adding members from the business community. The terms of board members should be staggered to balance fresh perspectives with continuity.

The chair and other ICOC members should be prohibited from serving on the working groups. During the reconstitution of the working groups, the current level of representation of disease advocates should be maintained, such board members being replaced with other disease advocates who are not board members.

Revise Conflict of Interest Definitions and Policies

CIRM should revise its definitions of conflict of interest to recognize conflicts arising from nonfinancial interests, such as the potential for conflict arising from an individual’s interest in a specific disease, and should reassess its policies for managing conflict of interest in light of this broader definition.

Restructure the Grant Review and Funding Process

CIRM should restructure the grant review and funding process to separate oversight and strategic planning from day-to-day operations. The ICOC should remain responsible for oversight and articulation of an overall strategic plan. However, grant management, funding recommendations, and grant administration should be the responsibility of the CIRM scientific staff, reporting to the president. This restructuring would help mitigate concerns related to conflicts of interest and would also put the review and funding process in the hands of those best equipped to make those decisions.

The committee recommends several changes pertaining to the development and approval of RFAs, composition of the Grants Working Group, reordering of rankings by CIRM staff, notification of applicants, and process for making final decisions.

Enhance Industry Representation in Key Aspects of CIRM Organization

Industry representation on the ICOC, the Scientific Advisory Board, the Standards Working Group, and the Grants Working Group should be enhanced to leverage industry’s expertise and resources in product development, manufacturing, and regulatory approval in support of the ultimate goal of bringing therapies to patients.

Consider Harmonizing Intellectual Property Policies with Policies of Bayh-Dole Act

 As other sources of funding for stem cell research become available and as the field of regenerative medicine advances from the laboratory to the clinic, the ICOC should reconsider whether its goal of developing cures would be better served by harmonizing CIRM’s IP policies wherever possible with the more familiar policies of the Bayh-Dole Act.  

IOM Presentation Begins

The first order of business at today's meeting is the presentation by the Institute of Medicine of its $700,000 study of the $3 billion California stem cell agency. Harold Shapiro, chairman of the IOM study, and Terry Magnuson, vice chairman, will conduct the briefing.

Stem Cell Board Meeting Begins

Today's meeting of the governing board of the California stem cell agency has just begun. Roll is being called. The pledge of allegiance is being recited.

Covering the California Stem Cell Agency from Panama

For those of you interested in the unlovely details of how we cover the  California stem cell agency, here is a quick look at the process for today's meeting.

We are anchored in a sailboat in Panama Bay off the City of Panama. We will attempt to log into a phone broadcast of the agency's governing board meeting in Los Angeles using the instructions provided on the meeting agenda. That will happen, we hope, using Skype, which can sometimes be dicey here. Our Internet connection is a via a USB modem to a Claro 3.5G wireless phone service. It is a prepaid account for "unlimited" use at $15 a month. We also have a cellular phone with prepaid service, as a possible backup, with a different provider. But that could prove to be very expensive for an eight-hour meeting.

On past board meetings, we used CIRM's Internet audiocast, which had its problems from time to time. CIRM appears to have dropped that service.

Sacramento Bee and IOM: Restructuring Needed at California Stem Cell Agency

The Sacramento Bee today praised the Institute of Medicine (IOM) recommendations for wide-ranging changes at the $3 billion California stem cell agency.

The newspaper's editorial and an earlier one in the San Francisco Chronicle come as the IOM formally presents its findings this morning to CIRM directors, some of whom would likely lose their seats if the recommendations are implemented.

The Bee said that for years “numerous outside critics” have recommended similar changes at the state agency to avoid conflicts of interest and possible misuse of public funds. The Bee wrote,

“Instead of listening, leaders of this institute(CIRM) – a poster child of how ballot initiatives can be manipulated to create quasi-public institutions with little public oversight – have been consumed by a siege mentality that has prevented any real introspection.”

The Bee noted that about 90 percent of the $1.7 billion handed out by the eight-year-old agency has gone to institutions connected to members of the 29-member governing board. One of the IOM recommendations would bar the board from voting on individual grant applications. Instead, the applications would be voted on as a block.

The Bee continued,

“It is to CIRM's credit that it solicited the Institute of Medicine report last year. Although some taxpayers may blanch at the report's $700,000 price tag, it will be worth the cost if it leads to a restructuring of how CIRM operates. 

“Of course, if it fails in that task, it will only affirm the view of many voters that they should never again endorse a California research initiative, especially one like Prop. 71 that lacks proper controls and accountability over taxpayer dollars.”

Coming Up: Live Coverage of IOM Presentation to Directors of the California Stem Cell Agency

The California Stem Cell Report will begin its live coverage today of the meeting of the governing board of the California stem cell agency at 9 a.m. PST (Noon EST). On today's agenda is the official presentation of the IOM's sweeping recommendations to the agency's directors. Stories will be filed as warranted.

For information on how to listen to the meeting live or find one of the teleconference locations in California, see this item.

Neil Littman: New Business Development Officer at the California Stem Cell Agency

The California stem cell agency this week mentioned the hiring of a business development officer as part of its plan to engage industry more robustly but did not identify him.

Neil Littman
Linked In photo

The California Stem Cell Report queried the agency about the new hire. Kevin McCormack, the agency spokesman, identified him as Neil Littman, who most recently worked as a senior associate in the merchant banking group at Burrill & Co. in San Francisco.

Littman's responsibilities will include “facilitating opportunities for outside investment in stem cell research in California for both CIRM-funded and non CIRM-funded programs by biopharmaceutical strategic partners, equity investors and disease foundations.”

McCormack said that Littman's “strategic advisory experience includes buy-side and sell-side M&A, as well as in-licensing and out-licensing of both development stage and commercial products.”

Littman also worked at Thomas Weisel Partners and at Deutsche Bank Securities. He received a M.S. in biotechnology with a concentration in biotechnology enterprise from The Johns Hopkins University, and a B.A. in molecular, cellular and development biology from the University of Colorado Boulder in 2002. 

Littman's salary at CIRM is $160,000 annually.

StemCells, Inc., and California Stem Cell Agency Remain Stalled over $40 Million

The California stem cell agency and StemCells, Inc., are still stalled in negotiations over how the firm will become eligible for $40 million from the state research effort – three months after the agency's governing board approved the awards.

The key issue is whether the agency is satisfied that the Newark, Ca., firm can provide $40 million in matching funds that it promised under the terms of two $20 million awards approved in late July and early September. The September award was approved on a 7-5 vote by agency directors after it was rejected twice by CIRM reviewers.

In response to a query by the California Stem Cell Report, Kevin McCormack, an agency spokesman, yesterday said the company and CIRM have not reached agreement.

CIRM directors okayed the September award in an appeals process that used a mechanism called “extraordinary petitions.” Last week, a blue-ribbon, Institute of Medicine study of the agency said the petitions should be abolished because they damage the integrity of the grant review process.

The September approval was the first time that agency directors approved an application that was rejected twice by reviewers. The action followed two appearances by the former chairman of the agency, Robert Klein, on behalf of StemCells, Inc. It was his first such appearance on behalf of an applicant.

The StemCells, Inc., award also triggered a column in the Los Angeles Times by Pulitzer Prize-winning columnst Michael Hiltzik. He wrote that the process was “redolent of cronyism” and said a “charmed relationship” existed among StemCells, Inc., its “powerful friends” and the stem cell agency.

StemCells, Inc., stock price reached a 52-week high on Sept. 4 of $2.67, well up from its 52-week low of 59 cents June 4. The stock was trading at $1.78 at the time of this writing.