Trounson Proposes $70 Million, Fast-Track Stem Cell Clinic Plan for California

Alan Trounson, president of the California stem cell agency, this summer plans to seek $70 million for creation of what he calls Alpha Clinics, high-powered organizations that will fast-track stem cell therapies to patients.

The proposal is scheduled to come before CIRM board at its meeting in late July and would consume a significant slice of the $700 million to $800 million that the $3 billion agency has left to hand out.

Trounson broached the need for the clinics as far back as two years ago, but did not put a price tag on the concept until an interview published online late today in the Los Angeles Times. The interview will be carried in the print edition of the paper tomorrow.

In the Q&A session between Times columnist Patt Morrison and Trounson, he said, 

"I'm intending to set up a network of stem cell clinics in California in the next couple of years, to make treatments available as clinical trials or as registered treatments for patients. I'm going to ask the [CIRM] board for about $70 million to get that set up. It will make California a go-to place for stem cell therapies. I want to make sure it's part of our medical fabric."

In other media reports in previous years, Trounson has said the Alpha Clinics would speed delivery of stem cell-based therapies and reduce costs of clinical trials by building on the success of specialist cancer, transplant and in-vitro fertilization clinics.

Leigh Dayton wrote about Trounson's plan in The Australian last July 14. Dayton said,

“Initially the clinics would use the capacities and infrastructure in the most advanced university medical clinics to deliver bone-marrow stem cell therapies. As research evolves, so will the treatments and services offered.”

Trounson also discussed the Alpha Clinics during an appearance at USC in 2011. A university publication wrote,

"These clinics will initially serve to get patients into clinical trials or to offer sound advice to individuals who might otherwise go overseas to receive harmful stem cell therapies from disreputable clinics.

"'I’m willing to invest money to get these [clinics] up,' Trounson said. 'I think if nothing happens beyond 2017 and we don’t get any refunding, we can leave a footprint of stem cell clinics in California that will go on forever.'"

Trounson was not at last week's CIRM board meeting, but Ellen Feigal, senior vice president for research and development, said a white paper is being prepared on Alpha Clinics. She said a concept proposal would be brought to the board July 25 at a meeting in the San Francisco Bay Area. Once the board approves the concept, the staff will then prepare and post the RFA.

Interested parties can address suggestions or questions to Feigal at info@cirm.ca.gov.

Sacramento Bee: Ongoing Conflict Problems No Help for Future Funding of Stem Cell Agency

The Sacramento Bee says conflict of interest problems continue to trouble the California stem cell agency despite its assertions that it has “turned a page” on the issues.

In an editorial Saturday, The Bee said that CIRM Chairman Jonathan Thomas “has vowed to be aggressive in avoiding conflicts in dispersing millions of public dollars for stem cell research. Yet serious conflicts continue to be revealed involving CIRM.”

The Bee cited articles on the California Stem Cell Report earlier this month about a $21,630 gift by its former chairman, Robert Klein, and the employment by Klein of Vice Chairman Art Torres. The Bee said the situation “throws into question a $20 million grant awarded last year to StemCells Inc., a company that wants to transplant neural stem cells to treat Alzheimer's disease.” (See here, here and here)

The Bee also cited the case of Lee Hood, an internationally renown scientist who violated the agency's conflict of interest policy. Hood failed to disclose to CIRM a conflict involving an application that he was reviewing on behalf of the agency. The Bee said the agency's failure to detect the conflict was “serious oversight."

Eight readers commented on the editorial and agency, generally unfavorably about CIRM.

But reader “bchild” said,

“It took a couple years for them to start funding projects and it may take years to see results. Wall Street got 1.5 trillion and the promise of 10x that if they get into trouble again, the scientists (and their business buds) just want a couple billion...In the end who do you trust more with public money? At least there is the appearance of public benefit here..."

The Bee concluded,

“None of this helps CIRM's reputation in being fair and impartial in spending $3 billion in public funds. It surely won't help the institute's standing with the Legislature and the public, should it need help staying in operation when its funding is exhausted in a few years.”

The editorial was also carried by at least one other paper in the McClatchy chain.

Multimillion Dollar Carrots for Stem Cell Research in California

Directors of the California stem cell agency approved an $80 million business-friendly plan that will dangle multimillion dollar carrots before biotech firms in an effort to push therapies into the marketplace.

The upfront payment effort will allow CIRM to take part in early stage clinical trials at no risk and could generate a list of achievements that will be useful in creating support for fresh funding after CIRM's money runs out in 2017.

The proposal is the first-ever from CIRM that involves no upfront payments. Instead, recipients will have to meet agreed-upon criteria to receive either grants or loans.

A CIRM staff document said,

“The major development milestone and success criteria will be mutually agreed upon between CIRM and the applicant at the beginning of the project(s) and at a minimum will require completion of a clinical trial that shows some level of biological activity/clinical efficacy and safety. The advantage to CIRM of this...is that CIRM funds will only be applied to projects that are successful.”

The proposal was wrapped into what the agency calls its strategic partnership plan, which also has a more conventional aspect, providing loans and grants in advance.

As part of the program, the CIRM board also today approved a $6.4 million award to Sangamo BioSciences of Richmond, Ca., to help develop a therapy for beta-thalassemia. The firm will have to match the amount of the award.

California Stem Cell Agency: 5 Percent Budget Increase for Coming Fiscal Year

Directors of the California stem cell agency today approved a $17.4 million operating budget for the fiscal year beginning July 1, an increase of 5.1 percent over spending for the current year.

As usual, the agency tries to portray its budget as a decrease in spending. Directors were told that it represented a 3 percent decline from the current year. However, the comparison is not made to actual spending for this year. Instead, the staff compares the 2013-14 budget to budget figures proposed last May, which are now no more than time-worn ephemera.

Most of the budget goes for salaries and benefits ($12.2 million ) with outside contracting running next ($2 million). (See here for details.) The budget projects 59 employees for next year compared to 57 currently. CIRM staff said the number of employees is expected to remain about the same until 2017 or so when its workload is projected to diminish.

The agency is expected to run out of money for new grants in 2017, but it is working on a plan to develop a combination of private and public funding to continue its work.

The spending plan reflects the cost of overseeing about $1.8 billion in nearly 600 grants and loans plus developing new research proposals that are likely to be funded in the next few years. The operational budget is capped by law at 6 percent of the amount of funds the agency distributes over its lifetime.  

$36 Million Recruitment: Names of Researchers Being Lured to California

Here are the names of the researchers being recruited to California by the California stem cell agency with $36 million in awards. The sixth asked not to be revealed since he/she has yet to tell the current institution and are in negotiations with their new institution

·      Hiromitsu Nakauchi of the University of Tokyo, who would be moving to Stanford University

·      Barry R. Stripp of Duke moving to Cedars-Sinai Medical Center

·      Richard Gregory of Harvard and Children’s Hospital, Boston moving to UC Santa Cruz

·      Eric Ahrens of Carnegie Mellon moving to UC San Diego

Stem Cell Agency Approves $36 million to Recruit Six Scientists to California

The California stem cell agency today awarded $36 million to six scientists to lure them to the Golden State, in what was the agency's largest-ever recruiting round.

The awards more than doubled the amount of CIRM has spent on recruitment. Until today, the agency had awarded only $23.2 million for four awards.

Today's awards ranged from $7.5 million to $4.8 million. The agency did not immediately identify the recipients. However, testimony at the meeting indicated that two of the institutions involved were UC San Francisco and the Gladstone Institute (the $7.5 million award) and UC Santa Cruz (a $5.4 million award). (The agency later released the list, which can be found here. Here is a link to the CIRM press release.)

The differences in the size of the awards had to do with the overhead charges that are levied by the institutions at which the scientists would work, CIRM staff said. The "direct costs" of the research for each grant was $4.5 million.

Six applications were considered in the latest round, including one that was scored at 75 that was rejected by grant reviewers. However, CIRM staff recommended that application, which involved UC San Francisco and Gladstone, be funded. (See here and here.)

Previous winners of the recruitment awards were Robert Wechsler-Reya, Sanford-Burnham; Dennis Steindler, The Parkinson's Institute; Andrew McMahon, USC, and Peter Coffey, UC Santa Barbara.

Big Boost Proposed for Stem Cell Agency Researcher Recruitment Program

The staff of the California stem cell agency is recommending boosting the agency's faculty recruitment program to nearly $59 million, up from $44 million approved in 2010.

The funds would go to lure six scientists to the California. Since 2010, only four researchers have won recruitment awards.

If the additional funds are approved, the cash would be consumed by the grants today. It is not clear whether additional recruitment awards will be given by the agency.  

California Stem Cell Agency to Court Patient Groups This Summer

Jonathan Thomas, chairman of the California stem cell agency, said this morning that he and a team from the agency will begin a round of meetings this summer with patient advocate groups throughout the state.

He said the effort is aimed at keeping the groups up to speed on developments at CIRM. While Thomas did not mention it to the agency's governing board, it is also critical that the agency have strong support from patient advocate groups as it tries to develop new sources of funding, either public or private.

The agency will run out of cash for new grants in 2017 and hopes to have a plan for the future before the board later this year. Its initial assumptions include as much as $200 million in onetime public funding with more cash coming from the private sector.

Currently the agency is funded by state bonds at a cost of about $6 billion, including interest. It spends roughly $300 million a year on grants and loans for research.

California Stem Cell Directors to Take Up $23 Million Recruitment Grants

Today's meeting of the governing board of the $3 billion California stem cell agency begins in less than 30 minutes, and the California Stem Cell Report will provide coverage throughout the day. Among the items on the agenda are awards totaling more than $23 million, aimed at recruiting star scientists to California. The board will also consider a plan aimed at businesses that would dangle $80 million in front of them to push therapies towards commercialization. The effort would involve no upfront payments. The meeting is scheduled to  begin at 9 a.m. PDT.

Nature Reports on Lee Hood Conflict Case

The journal Nature and genomeweb.com today picked up the story from the California Stem Cell Report about the conflict of interest case at the California stem cell agency involving renown scientist Lee Hood of Seattle, Wash.

Science news aggregators on the Internet also relayed various versions of the story. The facts were first reported on this blog yesterday. The matter involved a $24 million application for a genome project involving Irv Weissman of Stanford. Hood was one of the reviewers in the round. Hood and Weissman are longtime friends and own property together in Montana. They have also have a number of professional relationships.

In piece by Ewen Callaway, Nature additionally referred to ongoing conflict of interest issues at the agency, including the findings of an Institute of Medicine study. Harold Shapiro, head of the study, said the agency directors make "proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight." 

The genomeweb item was also brief and did not mention the IOM study.

Grant Reviewer Conflict in $40 Million Round at California Stem Cell Agency

Internationally renown scientist Lee Hood, winner of a National Medal of Science, violated the conflict of interest policies of the California stem cell agency earlier this year when he was involved in reviewing applications in a $40 million round to create genomics centers in California.

Lee Hood
Institute of Systems Biology photo

The agency quietly disclosed the February violation in letters dated April 2 to the leadership of the California Legislature. The letter (full text below) said that Hood “agreed that there was a conflict of interest that he had overlooked.”

The conflict of interest involved a $24 million application that included participation by another eminent scientist, Irv Weissman of Stanford University, and funding for facilities at Stanford.

Hood owns property jointly with Weissman in Montana. In 2008, San Francisco Magazine, in a well-reported piece on the ballot measure that created the stem cell agency, described the property as a ranch and Hood as Weissman's “good buddy.” Hood has co-authored research papers with Weissman. Both are on the scientific advisory board of Cellerant Therapeutics, Inc., of San Carlos, Ca., a firm co-founded by Weissman. Hood's nonprofit firm, Institute for Systems Biology in Seattle, lists Stanford as a partner in the genetics of aging in humans. At Stanford, Weissman is director of the Institute for Stem Cell Biology and Regenerative Medicine, whose research involves aging. Weissman also serves on the Hood's institute's scientific advisory board.

Hood has not responded to an inquiry yesterday by the California Stem Cell Report for his perspective on the conflict of interest matter.

The conflict was not discovered by the agency during the review. It was raised by another reviewer at the end of the review, which, for the first time in CIRM history, failed to conclude with a decision supporting any of the proposals. Reviewers' comments have been sent back to applicants with another review scheduled for November. The agency said Hood will not take part in that session.

CIRM spokesman Kevin McCormack said today that Hood's conflict was “clearly a case of a new reviewer making an innocent error.” McCormack said it was not a violation of the state's conflict of interest law. The agency's conflict policies go beyond economic issues and deal with personal and professional conflicts. 

The agency's letter to the state legislative leadership said,

“Dr. Hood had not previously participated in a meeting of the GWG(grant review group), and as a result, he was not familiar with CIRM’s conflict of interest policy, particularly the policy’s inclusion of 'personal' conflicts of interest.  Thus, when he completed the conflict of interest form for the Genomics Awards review, he inadvertently neglected to indicate that he had a personal relationship with an investigator who was involved in one component of a joint application submitted by two institutions. Dr. Hood and the investigator are close personal friends and their families own vacation property together. Because of his personal relationship with the investigator, Dr. Hood had a conflict of interest with respect to the joint application under CIRM’s conflict of interest policies.”

The agency's letter said that Weissman would have received $11,000 over five years under the terms of the application, but that it also involved  "creation of a data center at one institution and three research projects that would be undertaken at (Weissman's) institution (Stanford). 

The California Stem Cell Report asked the agency about the involvement of CIRM President Alan Trounson, who has been a guest at the Montana ranch, and whether he recruited Hood as a reviewer. Last year, Trounson excused himself from participating in public discussion of another application involving Weissman.

McCormack said,

“Alan helps recruit many reviewers, including in this case Dr. Hood, but he is not involved in assigning reviewers to individual applications.”

The conflict of interest involving Hood was easily detectable in routine searches on the Internet, including a Google search on the search term “lee hood irv weissman.” The first two entries in that search yesterday turned up serious red flags.

Asked whether the agency performed “any sort of serious examination” of the confidential statements of interests filed by reviewers prior to review sessions, McCormack said,

“Yes, we do a serious examination of statements of interest from all our reviewers. However, this conflict was not identified by the reviewer either in the financial disclosure statement or identified in the conflict of interest list. Normally we do not check Google for all possible combinations of 15 GWG reviewers times about 200 individuals listed in these applications. That would be about 3000 independent Google searches to identify a possible conflict.”

The agency's legislative letter said that it plans to “amend its regulations to add greater clarity in an effort to prevent future conflicts from arising and to augment its efforts to educate reviewers, particularly new reviewers.”

Our take?

This is the latest in a series of questionable activities involving the stem cell agency, which is trying to come up with a plan to sustain itself after its state funding runs out in 2017(see here, here and here). The agency is giving more-than-serious consideration to an effort to raise funds from the private sector, which can lead to new and more difficult ethical considerations than a state-funded agency would normally face.

What these questionable activities demonstrate is that the $3 billion agency needs to give much more thought, to put it mildly, to its policies ranging from conflicts of interest to incompatible employee/director activities to the conduct of top management in providing special treatment for donors.

It also is clear that the statements of interests of reviewers are not examined closely for their accuracy by CIRM staff and attorneys. McCormack's remarks clearly indicate that the agency does not think it has time to be sure that no conflicts exist among its plethora of reviewers. That is precisely the reason reviewers' statements of interests – economic, professional and personal – should be made public rather than kept under wraps by CIRM. Then, interested parties, presumably mainly applicants, can check a panel of reviewers, if they wish, for conflicts in a particular round. Obviously, the agency can and should withhold the names of reviewers examining a specific application – the release of the names on the panel in a given review session is sufficient.

Tomorrow the CIRM governing board's evaluation subcommittee meets privately to discuss Alan Trounson's performance. It appears to be the second part of an evaluation process that began last October. Trounson's involvement with Weissman and Hood -- and his actions in connection with a $21,630 gift from a member of the public, albeit a not-so-ordinary member of the public -- should also be on the evaluation subcommittee agenda.

  California Stem Cell Agency Letter Re Lee Hood Conflict

Text of CIRM Comments on Lee Hood Questions

Here is the full text of the statement today by Kevin McCormack, senior director for public communications at the California stem cell agency, in connection with the conflict of interest issue involving Lee Hood, president of Institute for Systems Biology of Seattle, Wash. See here for a story on the matter.

McCormack's comments came in response to the following questions from the California Stem Cell Report.

“Did (CIRM President Alan) Trounson recruit Hood to serve on the grants working group?

“Does CIRM perform any sort of serious examination of the statements of interests of its scientific reviewers prior to specific review sessions. The conflict involving Weissman and Hood was easily detected by a Google search. The first two entries on the search term "lee hood irv weissman" raise serious red flags. Additionally, I imagine it is more than common knowledge among many in the scientific community that these two scientists are longtime friends.”

Here is McCormack's reply,

“Alan helps recruit many reviewers, including in this case Dr. Hood, but he is not involved in assigning reviewers to individual applications. Furthermore he expects all reviewers to declare whatever conflicts they have.  

“Yes, we do a serious examination of statements of interest from all our reviewers. However, this conflict was not identified by the reviewer either in the financial disclosure statement or identified in the conflict of interest list. Normally we do not check Google for all possible combinations of 15 GWG reviewers times about 200 individuals listed in these applications. That would be about 3000 independent Google searches to identify a possible conflict. While this relationship may be known to some it certainly was not known to the CIRM staff who checked the conflicts. If it had been they would have raised it before the meeting.

“It's also important to point out that Dr. Hood was a new member of this review panel and was not familiar with our conflict of interest rules. This was clearly a case of a new reviewer making an innocent error.

“Finally, CIRM’s rules are stricter than state law, and this would not have been a conflict under California conflict of interest law.”

Replicating Oregon Cloning in California: Views on the Legality

Oregon's stem cell cloning achievement has triggered some discussion about whether it could be replicated legally in California, which bans paying for eggs as was done in Oregon.

Stanford researcher Irv Weissman said it is “not true” that Oregon's stem cell research would be illegal in California. Leftovers from IVF clinics could be used, he said.

But in response Oregon researcher Shoukhrat Mitalipov said that “SCNT (the process he used) did not work with discarded human eggs.”

He added,

 “SCNT worked with eggs from healthy young volunteers (paid of course). IVF patients (whether paid or not) have reproductive health problems and may not provide acceptable quality eggs for SCNT.” 

Their comments came in emails to the California Stem Cell Report in connection with yesterday's item that said because the Oregon researchers used paid donors for eggs, the research would be illegal in the Golden State.

Weissman said,

 "Not true. They did it with nearly 40 percent efficiency, which does not require paying for eggs, just use leftovers from IVF clinics."

There is no question that it is illegal to pay donors for their eggs in California. The question is whether the research could be done properly without using paid donors. In recent years, researchers at Harvard and elsewhere have said they needed paid donors for stem cell research to properly perform their research and could not find them without providing compensation.

Weissman Says Oregon-style Stem Cell Research Could be Done in California

Stanford researcher Irv Weissman says it is “not true” that Oregon's stem cell research could not be done legally in California.

In a brief email to the California Stem Cell Report, he commented in connection with yesterday's item that said because the Oregon researchers used paid donors for eggs,the research would be illegal in the Golden State.

Weissman said, 

"Not true. They did it with nearly 40 percent efficiency, which does not require paying for eggs, just use leftovers from IVF clinics."

There is no question that it is illegal to pay donors for their eggs in California. The question is whether the research could be done without using paid donors. In recent years, researchers at Harvard and elsewhere have said they needed paid donors to properly perform their research and could not find them without providing compensation.

We have queried Shoukhrat Mitalipov in Oregon concerning his views on Weissman's comments. We welcome other comments as well. Comments can be filed directly by clicking on the word "comment" at the end of this item or you can email them to djensen@californiastemcellreport.com. 

We should also note the comment from researcher Paul Knoepfler of UC Davis who notes that SCNT cloning is permissible in California, which is what was done in Oregon. The state does ban reproductive cloning, however.

Oregon-style Stem Cell Cloning Research Illegal in California: No Pay for Eggs in Golden State

The good news out of Oregon is that some diligent scientists in the Beaver State have accomplished a major advance in stem cell research --- the cloning of human stem cells.

That bad news is that their research would have been illegal in California, and probably will be banned for decades, if not longer – thanks to Proposition 71 of 2004.

The proposition was the ballot initiative that created the $3 billion California stem cell agency, which is hailed internationally as being one of the world leaders in financing stem cell science. Unfortunately, the 10,000-word initiative also contains language that was aimed at winning voter approval of the measure -- not promoting good science.

The team writing the initiative, led by Robert Klein, the former and first chairman of the stem cell agency, put in a provision that made it illegal to pay women for their eggs. The Oregon researchers paid women $3,000 to $7,000 each for their eggs, reflecting the current market rate based on prices paid in connection with IVF. In some cases for IVF, the compensation is dramatically higher. (See here and here.) Stem cell researchers in recent years in the United States have found that they cannot secure an adequate number of donors without matching IVF donor compensation.

While compensation for eggs is a matter of some controversy, strong cases have been made that women should make their own decisions about selling their eggs – not the what some call the nanny state. Of course, that should occur under well-regulated situations. But Proposition 71 backers wanted to remove any possible campaign objections by opponents of stem cell research, and so they inserted the ban along with management minutia and other dubious material.

Can't that be changed, one might ask? Not without a herculean effort. That means another ballot measure or a super, super majority vote in the California legislature plus the signature of the governor. Imagine a measure on the ballot to allow women to sell their eggs. The uproar would be heard internationally. In 2004, when Proposition 71 was approved, it would have been better to leave the compensation issue unaddressed. Then it could have been dealt with through regulation or normal legislation, both of which are far more flexible than ballot measures that alter the state Constitution and state law.

Our quick and limited survey of the news coverage indicated that many of the mainstream media stories omitted the price of the eggs, which may suggest that the issue of compensation is becoming moot.

In related news about the Oregon accomplishment, UC Davis stem cell researcher Paul Knoepfler has posted a good look at the some of the misinformation that is surfacing on the Internet about the research, including its implications.

He said,

“Keep in mind that on day one of the iPS cell era in the stem cell field we had a huge number of misconceptions because we simply had so much to learn. Same is true here.”

Jessica Cussins over at the Berkeley-based Biopolitical Times also has a solid roundup of the coverage of the Oregon research and the analysis of its significance.

Here are links to two blog items from the California stem cell agency on the Oregon research, including one dealing with “cloning hysteria” and a more general look.

The Klein Donation: Top Stem Cell Agency Execs, Lawyers Aware of Gift but Fail to Report It

A number of top level executives, in addition to six lawyers, at the California stem cell agency knew of Robert Klein's $21,630 donation in May of last year although they failed to report it to the agency's board as required by agency regulations.

As a result, the 29 directors were not aware of the gift when Klein, former chairman of the agency, appeared before them two months later and successfully asked them to override a grant reviewer decision rejecting a $20 million award to StemCells, Inc., of  Newark, Ca. It was the first time in the eight year history of the agency that its board had approved an application rejected twice by its scientific reviewers. The proposal had been given a score of 61 out of 100. The board rejected higher scoring applications in that particular round.

According to a person familiar with the agency, members of its executive committee, some of whom are lawyers, were aware of the Klein donation in May. Other lawyers not on the executive committee knew as well. Previously, it was not known that the donation was known so widely among CIRM executives and lawyers. It also was not clear that they knew that Klein intended to appear before the board in July. At the time of his donation, reviewers had already rejected the StemCells, Inc., application but it was not supposed to be publicly known.

Most of the CIRM executives and lawyers aware of the gift were also present at a public meeting of the CIRM board in May as well as July but did not alert the board to board to the donation.

Last week, an agency spokesman said the failure to report the Klein gift was  “due to the lack of additional donations, a transition in CIRM’s finance office and an oversight."

The board will be formally told of the gift at next week's board meeting, more than a year after it was made.

The donation by Klein, a Palo Alto, Ca., real estate investment banker, financed a trip by six CIRM science officers to Japan for an international stem cell conference. CIRM President Alan Trounson subsequently directed the officers to give special access to Klein, among other favors Trounson granted Klein. Two of the officers were heavily involved in the grant round that included the StemCells, Inc., application. The science officers participate in the application of the closed-door review process but do not vote on proposals. Trounson excused himself from participation in public discussion of the StemCells, Inc., application because of his relationship with the company's founder, researcher Irv Weissman of Stanford University. 

The board vote approving the application was a narrow 7-5. It is not clear whether the vote would have changed if the board had been informed publicly about Klein's gift. But it would have heightened concerns that Klein was using his six-year service as chairman of the agency plus the donation to sway the board, which rarely overturns the decisions of its scientific reviewers. CIRM directors go along with reviewer decisions on 98 percent of applications, according to agency calculations.

One of the votes in favor of Klein's position came from Art Torres, one of two vice chairman of the agency. Torres' state-required economic disclosure statements show that he received at least $31,000 from firms controlled by Klein during 2012 and 2011. Torres works four days a week for the agency, earning an annual salary of $225,000. Torres told the California Stem Cell Report that his vote had no connection to the consulting work he did for Klein's real estate firms.

Klein has denied any impropriety in connection with his donation. He has not responded to questions involving Torres.

Klein, StemCells, Inc., and $31,000 in Consulting Fees for Torres

The Robert Klein-StemCells, Inc., affair has taken another turn with the disclosure that a vice chairman of the California stem cell agency was paid at least $31,000 over a two-year period by Klein and also voted on behalf of Klein's effort to win approval of a $20 million award for StemCells, Inc.

Art Torres received what he reported were consulting fees during 2011 and 2012 from firms controlled by Klein, former chairman of the agency. In 2012, Torres backed Klein's efforts to override grant reviewers' rejection of the $20 million application from the Newark, Ca., publicly traded firm.

Art Torres, center, with Bob Klein, left, at Klein's last meeting in
2011 as chairman of the California stem cell agency.
 Incoming chairman Jonathan Thomas is at right. 

The 29-member board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, narrowly voted 7-5 last September for the award. It was the first time that the board has approved an application rejected twice by its scientific reviewers. It was also the first time that Klein has lobbied the board on behalf of a specific application since stepping down in June 2011. He was elected chairman in 2005 as the agency was just beginning its work and is an iconic figure to many in the California stem cell community.

Asked for comment last week by the California Stem Cell Report, Torres said,

"My decision to support an award to StemCells, Inc. to explore the use of neural stem cell transplantation to treat Alzheimer's disease was based on the merits of the application and the hope it offers to patients who suffer from Alzheimer's, a disease that affects millions, including Bob Klein's late mother. I have no financial interest in StemCells, Inc. nor does Bob Klein, and my decision to support the award has no connection whatsoever to the work I do with Bob Klein."

Kevin McCormack, senior director for public communications at CIRM, said that Torres' statement would be the only comment on the matter from the agency.

Klein did not respond to questions, declaring that personal issues were occupying his time.

The California Stem Cell Report's questions to all three dealt with the propriety of Torres' employment by both CIRM and Klein while Klein was asking the board to award a business $20 million. The governing board has a code of conduct that declares members should “maintain the highest standards of integrity and professionalism.” However, it does not speak to questions of appropriate employment by CIRM directors outside of the agency.

In January 2012, Torres authored a document discussing CIRM's conflict of interest rules. He said they are intended “to eliminate even the appearance of impropriety.” He also referred to CIRM's policy on “incompatible activities” for employees. It deals with activities that could “discredit” the agency or that are “inimical” to it. However, it does not specifically deal with the type of situation involving Torres and Klein, who is a real estate investment banker and attorney. The policy additionally does not address cases where a governing board member is also an employee of the agency.

Torres' economic disclosure statements, which are required by state law, contain only broad ranges for compensation, and the amount could be significantly higher than $31,000. Torres reported that in 2011 he was paid between $10,001 and $100,000 by both Klein Financial Corp. and K CP Cal, which share the same address as Klein's offices in Palo Alto. In 2012, Torres reported receiving between $10,001 and $100,000 from K CP Cal and between $1,001 and $10,000 from Klein Ventures LLC, which also has the same address.

Torres reported that the payments were consulting fees and that the firms dealt with real estate. He did not respond to requests for more details.

Torres earns $225,000 a year in his part-time role as one of two vice chairmen for the agency. Under the arrangement, he works four days a week.

Torres was chairman of the state Democratic Party and a longtime state legislator. He was nominated for vice chairman in 2009 by state Treasurer Bill Lockyer, among others.

Last week, another financial arrangement involving Klein surfaced in connection with the StemCells, Inc., application. Klein gave the agency $21,000 last May,two months before he pitched the board on the StemCells, Inc.,application. The donation was not reported to the board prior to Klein's appearances before the panel. The agency's regulations require such gifts to be reported to the board but do not specify a time frame. Following inquiries from the California Stem Cell Report, the agency said it would report the donation at the agency board meeting next week.

Klein's donation financed a trip by six CIRM science officers to Japan for an international stem cell conference. The agency directed the officers to give special access to Klein. Two of the officers were heavily involved in the grant round that included the StemCells, Inc., application, which scientific reviewers scored at 61 on a scale of 100.

A Patent War on iPS: One Researcher's View

As the California stem cell agency pushes ever more aggressively to turn research into cures, the second largest share of its awards, in terms of numbers of grants, has gone to efforts involving induced pluripotent cells, also known as reprogrammed adult cells.

But questions do exist whether those efforts can surmount barriers that have to do with patents and ownership of the intellectual property.

UC Davis stem researcher and blogger Paul Knoepfler discussed some of the problems in a post yesterday. He wrote,

“All the talk and the slew of publications about potentially using iPS cells to develop therapies to help patients is exciting in theory, but unfortunately the reality is that it is not entirely clear if most researchers are, from a legal standpoint, even allowed to develop and commercialize iPS cell-based therapies at all.

“The patent landscape for iPS cells is complicated to put it mildly. A Google patent search for “induced pluripotent stem cells” produced almost 200,000 results.

“A search for “cellular reprogramming produced more than 1,000 results.
I’m not sure all of these results are really separate patents, but still….that’s a big complicated mess.…..

“It is no exaggeration to say there are likely dozens of institutions around the world wanting to commercialize iPS cell-based products.

“Will they all have to pay expensive licensing fees or end up in court?
…or will the patent holders voluntarily and freely allow others to commercialize iPS cell-based medical treatments?

“I don’t think so.

“This could get really messy.”

Patient Advocate Reed Defends Klein Donation to Stem Cell Agency

The California Stem Cell Report today received the following email from Don Reed, a patient advocate, who has long been involved in California stem cell agency affairs. Reed is vice president of public policy for Americans for Cures Foundation, a position he has held for some years. Americans for Cures is the personal lobbying organization created by Robert Klein, former chairman of the California stem cell agency. Reed said his opinions below are his own and may or may not reflect those of the foundation.

“I must take issue with your entry, 'Robert Klein Gives $21,630 to the California Stem Cell Agency,' May 05, 2013.

“When Bob Klein donated $21,630 to the California stem cell program (to allow scientists to attend a research conference in Japan) he was doing exactly what he always does: advancing research to ease suffering and save lives.  The scientists needed a way to attend a top-level conference. Believing in the benefits of researchers sharing thoughts, Bob paid for their trip.

“Unfortunately, your article appears to imply corrupt motivations.

“'A seemingly innocuous…gift…generated a wave of special favors for (Klein) that stretched out to include a gold mining multimillionaire from Canada.'.
A 'wave of special favors?'  The article states that 'Klein wanted to meet with the six science officers…'  and to get their impressions on the conference.

“Is that not natural? First, would it not be helpful to hear from the scientists if the trip was worth the time and expense? Second, Bob Klein works in real estate, a full-time job. He does not have the scientist’s automatic involvement to keep him up to speed on everything new in regenerative research. But he wants to know the latest: what is working, what is not. He is always eager for a chance to speak one-on-one with an expert.

“He met with a Canadian millionaire? Why is this shocking? The millionaire supports stem cell research; so does Bob. California is working closely with Canada on several projects; they pay their scientists, we pay ours; more bang for the buck. If there is a person with the resources and will to advance Canadian research, it is natural that Bob would want to develop a deeper interest in the shared research.

“And why should Klein be criticized for supporting a research project attempting to alleviate Alzheimer’s? He saw his own mother die of the disease, after losing the ability  to recognize her own son.  I am familiar with that particular Alzheimer’s project, and it had some amazing results, restoring memory to laboratory rats. This was a water maze test, and the rats recovered the memory of a pathway out of the water, which they had forgotten. To the best of my knowledge, no one else in the world had achieved memory return, and the project deserved the most serious consideration.  Yes, the board of directors voted against the Grants Working Group; it is not only their right but their responsibility to exercise judgment, and not merely be a rubber stamp for the GWG.

“There is also the matter of free speech. Anybody else in California can come to the meetings of the program and voice their opinion—why should Klein be denied the right to voice his opinion?

“Bob Klein owns no stem cell stock, no biomedical enterprises. Financially, supporting stem cell research has cost him a great deal. This is the man who led the fight to build the California stem cell program, donating roughly six million dollars, taking out loans on his house to help finance Proposition 71. And, for six years (without salary) he worked full-time as Chair of the Board of the oversight committee. Physically and emotionally, it has been an exhausting decade for him. He has not profited in any way, except to see the advancement of research for cure.

“Passing a $3 billion stem cell program in the midst of a recession was like relocating Mount Everest—seemingly impossible, but he did it anyway. He moved the mountain. Thousands of people helped, but one man made it possible. Without Bob Klein, California would not have the greatest stem cell program in the world: challenging diseases considered incurable since the dawn of time. That he should continue to support it, with his dollars, time, energy and creativity, is commendable.

“Sometimes a good deed is just that: no sinister motivations, no secret agendas-- just a positive action which benefits all.”  

WARF hESC Patent Update: Seven Years and Challenge Still Underway

Last week UC Davis stem cell researcher Paul Knoepfler and Scripps researcher Jeanne Loring engaged in an online Q&A that touched on patents and how they can stifle research and discourage development of therapies.

Loring did not mention it in the Q&A but she is the key figure in the ongoing challenge to the WARF (Wisconsin Alumni Research Foundation) patents on human embryonic stem cells. Her effort began in 2006 but has dropped out of the news. We asked her for an update on the case.

Here is the text of what she replied,

“Dan Ravicher is the lawyer behind several big patent cases, including the recent Supreme Court case challenging human gene patenting (Myriad), and a challenge to Monsanto's restrictive enforcement of its patents on genetically modified seeds. 

“I'm lucky that he is also the lawyer working with John M. Simpson (of Consumer Watchdog) and me to challenge the WARF patents.  Currently, we are getting ready for another year of appeals and counter-appeals on the third of WARF's three patents that give them control over all human embryonic stem cells.

“This is Dan's summary of the current situation:

"'We filed challenges at the Patent Office to all three of WARF's hESC patents. During those challenges, WARF agreed to narrow all three of the patents, and they also loosened their licensing requirements. But, even though the patents were narrowed, we still think they're invalid, and thus disagree with the Patent Office's decision to re-issue them in the narrowed forms. Unfortunately, due to the age of the patents and changes in the law, we were only allowed to appeal one of the three decisions, and that appeal is now pending at the Court of Appeals in Washington. But, we expect the decision in our appeal will affect the validity of the other two patents, since they're all basically on the same technology." 

“The 'narrowing' of the patents has had an unexpected consequence.  Before the narrowing, WARF's patents would have covered iPSCs as well as hESCs. After the narrowing, they can only claim hESCs.”

In the Q&A on Knoepfler's blog, which also involved an interesting discussion of IPS research, Loring said,

“Patents on fundamental things -- genes, human embryonic stem cells, iPS cells -- allow the patent holder to have a monopoly, preventing anyone else from using whatever they’ve patented.

“Patents are supposed to stimulate investment in development.  Why, as Justice Scalia said last week, would anyone have the incentive to study a gene and, for example, develop diagnostic tests, if they couldn’t prevent everyone else from working on that gene?

“But patents also stifle competition and the advances that come from having many different groups studying the genes or cells.  One of the main reasons I returned to academia was so I could have freedom to study human ES cells without worrying about getting threatening letters from a patent holder, demanding that I either stop working on the cells or pay a steep licensing fee.

“There will inevitably be problems commercializing iPSC-based therapies and assays, because at least three institutions own patents on aspects of iPSCs.  I’m paying attention to the patent 'landscape,' but have decided to deal with those problems when they arise, and hope that the iPSC patent holders realize that the potential of these cells is too great to keep to themselves.  It would be better for all of us if the issue of stem cell patents never has to be decided in the Supreme Court.”