Denny Sanford Donates $100 Million for Stem Cell Research at UC San Diego

Denny Sanford, UC San Diego photo

The richest man in South Dakota, a state that looks askance at human embryonic stem cell research, is giving $100 million to promote the stem cell field in California.

He is Denny Sanford, a 77-year-old billionaire who made his fortune in the credit card business. Sanford is donating the money to UC San Diego. In a press release from the university, he said,

“I believe we’re on the cusp of turning years of hard-earned knowledge into actual treatments for real people in need. I want this gift to push that reality faster and farther.”

The gift is not Sanford's first to stem cell research in the San Diego area. He gave $30 million to Sanford Consortium for Regenerative Medicine in 2008.

The announcement of the $100 million donation is the sort of news that excites the stem cell field globally but especially in California, where the state is funding stem cell research to the tune of $3 billion. The news helps generate optimism about the stem cell field and can create an environment that could attract more philanthropy and business investments.

That is not a small matter for the state's stem cell agency, which will run out of cash for new grants in 2017. Next month, directors of the agency are scheduled to take their first look at a proposed strategic roadmap for future funding, which may well involve a combination of public and private funding.

According to Gary Robbins of the San Diego UT, Sanford's latest gift is part of a $275 million stem cell effort at UC San Diego. Robbins said it will allow the university to hire 20 to 25 scientists, many of whom will be seeking stem cell agency grants, and also help to support recruitment of patients for clinical trials. UC San Diego has already received $138 million in 61 awards from the stem cell agency, ranking fourth among institutional recipients.

The UC San Diego press release yesterday also quoted David Brenner, vice chancellor for health services at the campus and a member of the California stem cell agency governing board, as saying,

“We are the only academic medical institution in the region with the scientists, physicians, facilities and clinical delivery system to bring the promise of stem cell therapies to fruition. No place in the world has a better chance of success.”

Larry Goldstein, currently director of the UC San Diego stem cell program, will head the new Sanford Stem Cell Clinical Center at the school.

The news coverage on the gift, which included stories in the Los Angeles Times and other publications, contained a number of mentions of the state stem cell agency, a plus for the enterprise, which is working hard to raise its public visibility.

Sanford's latest gift is not his largest. He gave $400 million to Sanford Health, a diabetes research center in South Dakota in 2009. He has donated more than $1 billion altogether and intends to give away all his money by the time he dies. He likes to say, “Aspire to inspire before you expire.”

Sanford lives in Sioux Falls but has a home in the San Diego area, where he has long been active in the community as well as in support of Prop. 71, the measure that created the state stem cell agency in 2004.

Sanford is also a sailor, a particular point of interest for this writer, who has lived on a sailboat for the last 15 years south of the border. Sanford has been active in San Diego sailing circles for some time. But his interest goes back a number of decades. He raced sailboats on Lake Minnetonka in Minnesota, where he grew up. And in 1973, he received the Bail Bond Award from the Wayzata Yacht Club on Lake Minnetonka for unspecified acts that demonstrated “the greatest love, spirit, and care for the Wayzata Yacht Club.”

The Future of the California Stem Cell Agency: Cures, Priorities and Brain Drain

The California stem cell agency is nearing the end of its “normal” life span, and the topic of its future comes up with some regularity nowadays within the Golden State's stem cell community.

It is a tiny community that has benefited to the tune of $1.9 billion so far from the passage of Prop. 71, the ballot measure that created the agency nine years ago this month.

The latest public discussion of what UC Davis stem cell researcher Paul Knoepfler has dubbed “CIRM 2.0” came on Knoepfler's blog last week and a short time later on the agency's own blog. CIRM is the acronym for the California Institute for Regenerative Medicine, the formal name of the agency.

Predictably the most recent discussion, as generally occurs, emphasized the importance of the science and promise that it poses. Rarely heard, however, is whether the agency's efforts have been worth $6 billion (CIRM's projected cost including interest) and whether spending billions more over another decade ranks among the top ten priorities, for example, facing the state during the same period. That is the fundamental question facing CIRM if it is to seek additional public funding for its operations beyond 2017, when the cash for new grants will run out.

On his blog, Knoepfler cites four main reasons for the state to continue to support the agency at a high level. He says that it has “strongly boosted” the state's economy, made the state a global leader in stem cell research, created strong scientific momentum and, finally, that California faces a “potential harmful stem cell brain drain” should CIRM close its doors.

In a comment posted on Knoepfler's item, Jeanne Loring, head of the stem cell program at Scripps, said the future of CIRM inevitably arises in any conversation between any two stem cell researchers in California.

 She said a “continued investment in CIRM will pay off enormously” for the state. She said,

“CIRM has had the same effect on stem cell research that Genentech had on biotechnology; it showed that taking a chance on a focused investment in new technology could transform the future of medicine. Now, with CIRM’s focus on supporting partnerships of stem cell researchers with successful biotechnology companies, we have the best of both California-centric worlds: the power of technology applied to the abilities of stem cells. Such partnerships, especially in rapidly growing fields like genomics, will sustain progress beyond CIRM’s current reach.”

There is little doubt that CIRM has had a positive impact on California. But the claims that it has “strongly boosted” the California economy are dubious. Such assertions are based on a report commissioned by the agency itself at a cost of $300,000. According to the RFP for the project, the recipient of the contract for the study was to execute "a vibrant and aggressive strategy to support the goals and initiatives of CIRM.” (See here and here.)

 Additionally, the California economy runs in the neighborhood of $2 trillion a year with approximately 19 million persons in the work force. Biotech, which accounts for a relatively picayune 200,000 employees or so in California, is a miniscule economic player. (See here and here.) Stem cell companies and research are even smaller. As for the $1.9 billion CIRM has awarded, it has gone to only 625 recipients, a handful of which are businesses or institutions.

If the agency is to be evaluated as an industry-development engine, the criteria are also considerably different than would be used to evaluate a research-funding organization. Such an industrial evaluation was resisted strongly by Robert Klein, the first chairman of the agency, when the California Stem Cell Report suggested it to him some years ago. Ironically, Klein likes to trot out CIRM's own, dubious economic study when it suits his purpose.

Production of stem cell “cures” or therapies is also unlikely to employ the hundreds of thousands of Californians needed to make a major economic impact. Actual production of any “cures” is likely to occur overseas for the usual business reasons and thus not provide massive amounts of jobs within the state. That said, the owners of successful stem cell companies could become extremely wealthy a la their cousins in the Silicon Valley.

California Gov. Jerry Brown, who is widely expected to seek re-election next year, has already identified two, long-term mega-projects that he believes are fundamental to the economic well-being of California – high speed rail and a massive water project. The cost of those two efforts is likely to run in the neighborhood of close to $100 billion, according to the most recent estimates. That is not to mention the financially starved University of California, state colleges and community colleges or even the youngsters who need to learn to read and write in the state's public schools. Adequate support of those institutions, which are critical to the state's economy, would require many more billions. Brown notably has not spoken publicly about his views on the value of the stem cell agency. His support would be needed for CIRM to acquire additional public dollars.

For the people of California, the question would be: How does stem cell research fit in with their perception of the needs of California, ranging from education to water to other priorities? At this point, the stem cell agency and its work are virtually unknown to the general public. The agency is working hard to improve its visibility and create an atmosphere conducive to generating more cash. But it is very much up in the air whether CIRM can successfully set the stage for infusion of more billions of public dollars.

Italian Researcher Cattaneo Honored as 2013 Stem Cell Person of the Year

Elena Cattaneo, EuroStem Photo

Italian stem cell scientist Elena Cattaneo today was named the 2013 Stem Cell Person of the Year for her work as a researcher and her efforts to remove “partisan extremist politics” from financial support for science. 

UC Davis researcher Paul Knoepfler announced his choice this morning on his blog, ipscell.com. Knoepfler began the contest last year and personally provides the $1,000 award. The first winner was Roman Reed, a California patient advocate.

In Knoepfler's announcement, he cited Cattaneo's work on neural stem cells, particularly in connection with possible therapies for Huntington's Disease. Cattaneo is director and co-founder of the Unistem, the center for stem cell research at the University of Milano, Italy, and has been appointed a senator for life in Italy.

Knoepfler also said,

"She is that rare stem cell scientist who goes well above and beyond the call of academic duty to act as an advocate as well."

He said that she has "a track record of taking important public stands on key issues over the years."

Most recently, Knoepfler cited her efforts in connection with an organization called Stamina in Italy that was providing a stem cell therapy to large numbers of patients. The treatment this month was banned from testing in Italy after a panel of scientists determined it was excessively risky and not supported by evidence.

The decision followed a campaign by Cattaneo and others. Knoepfler wrote,

"She and a dozen fellow Italian scientists stood up to what was a flawed Italian governmental decision to allow Stamina to proceed with a gutsy letter. It takes courage to not only do your research, but also to take a stand against your own government's flawed decision and ultimately prevail. Her actions have helped to keep thousands of patients safer and protect the stem cell field."

Her efforts and those of others inspired a play called "Staminalia: A Dream and a Trial," which premiered in Portugal in 2010. According to the EuroStemCell Web site, the play "goes beyond the science of stem cells to tell the story of a stem cell researcher and a mother who sees ethical and political limitations impacting not only into her scientific freedom, but also into her private life."

Flawed Research, Cursory Peer Review, Perverse Incentives

“Billions of dollars worth of wrong” is how the situation in life science research is described in the Los Angeles Times this week.

Strong words, but supported by findings from Amgen and Bayer HealthCare that may be well known in relatively tiny scientific circles but rarely heard in an outlet such as the Times. It is the largest circulation paper in California and says it reaches 8.6 million adults weekly in Los Angeles via print and the Internet -- not to mention its national pull.

The column on “verifiable facts” and science was written by Pulitzer Prize winner and author Michael Hiltzik.

Among other things, he cited a study by Amgen of Thousand Oaks, Ca., which examined 53 “landmark papers” in cancer research and blood biology. Only five could be proved valid, a shocking result, according to Amgen. Similar results were turned up by Bayer in Germany.

Hiltzik continued,

"'The thing that should scare people is that so many of these important published studies turn out to be wrong when they're investigated further,' says Michael Eisen, a biologist at UC Berkeley and the Howard Hughes Medical Institute. The Economist recently estimated spending on biomedical R&D in industrialized countries at $59 billion a year. That's how much could be at risk from faulty fundamental research.

"Eisen says the more important flaw in the publication model is that the drive to land a paper in a top journal — Nature and Science lead the list — encourages researchers to hype their results, especially in the life sciences. Peer review, in which a paper is checked out by eminent scientists before publication, isn't a safeguard. Eisen says the unpaid reviewers seldom have the time or inclination to examine a study enough to unearth errors or flaws.

"'The journals want the papers that make the sexiest claims,' he says. 'And scientists believe that the way you succeed is having splashy papers in Science or Nature — it's not bad for them if a paper turns out to be wrong, if it's gotten a lot of attention.'"

Hiltzik goes on to discuss the flawed nature of peer review and “perverse incentives” in scientific research along with the new PubMed Commons project at the NIH, which Hiltzik said is aimed at substituting “continuing scrutiny” for “ a cursory, one-time peer review.”

Hiltzik's main piece appeared on the Web yesterday. Today he had a follow-up dealing with the late Richard Feynman's “cargo cult science,” the term physicist used for published research that did not prove valid.

Hiltzik's bottom line?

"The demand for sexy results, combined with indifferent follow-up, means that billions of dollars in worldwide resources devoted to finding and developing remedies for the diseases that afflict us all is being thrown down a rathole. NIH and the rest of the scientific community are just now waking up to the realization that science has lost its way, and it may take years to get back on the right path."

For The Record

The California Stem Cell Report yesterday reported on an opening at the California stem cell agency for a high-level person to work on charting a future sustainability course for the enterprise.


The new position redefines the role of the deputy to the chairman of the agency and renames the position. For the record, the post was held previously by Lynn Harwood, who left the agency when her husband took a job at Harvard, the agency said.

California Stem Cell Agency Seeks New, Top Finance/Governance Aide

The $3 billion California stem cell agency is looking for a new, high-level staff member to play a key role in developing a plan for its future beyond 2017.

The posting for the position came last week, less than two months before a possible “strategic roadmap” for the agency is scheduled to be unveiled. CIRM, as the agency is known, will run out of cash for new grants in 2017.

The new hire will assist in “meeting the financing and sustainability goals” of the agency and will be a key aide to CIRM Chairman Jonathan Thomas, a Los Angeles bond financier. The job title -- – “deputy to chair for public finance and governance” – includes language new to CIRM i.e. “for public finance and governance.”

Salary for the position could run as high as $216,279, depending on the qualifications of the person.

CIRM is looking for someone with an MBA or other finance-related, advanced degree. The person should be knowledgeable not only about California government but have experience with biomedical research funding, grant-making and financial forecasting, among other things.

The previous deputy to the chair was Lynn Harwell, who left, the agency said, when her husband took at job at Harvard. Her formal title was “deputy to the chair, finance, policy and outreach.” The change in nomenclature obviously indicates a change in the focus of the job.

(Editor's note: The final paragraph of this item was added a day after the original item was posted.)

Back in Romantic Old Mexico

For those of you who keep track of such things, the California Stem Cell Report is now emanating from Mexico once again after several years in Central America, including Panama.

More specifically, we are now in a marina just north of the Guatemalan-Mexican border near Tapachula, an area that grows many of the mangoes imported to the United States. Currently, however, they are out of the season and the soy bean harvest is coming to an end.

We have been living south of the border aboard a 39-foot sailboat, a cat-rigged ketch called Hopalong, since 1998. Of course there are trips back to the Old Country for visits with the grandchildren and to catch up on meetings of the California stem cell agency and related matters.

The plan is to travel farther north in Mexico this winter to enjoy the great food to be found in this country and to engage with its fine citizens. Beyond that, as cruising sailors say,

 “We have no plans, and we are sticking to them.”

Stanford Loses Star Stem Cell Researcher to Montana State University

Renee Reijo Pera, Stanford photo

The California stem cell community today chalked up its second departure of the month with the announcement that Renee Reijo Pera is leaving Stanford to join Montana State University.

The news about Reijo Pera, whose research is recognized internationally, comes only one week after Alan Trounson announced he was leaving his post as the president of the $3 billion California stem cell agency to return to Australia. 

Reijo Pera, 54, will become the new vice president for research, creativity and technology transfer at Montana State in Bozeman beginning Jan. 15. Currently director of Stanford's Center for Human Pluripotent Stem Cell Research and Education, Reijo Pera has won $24.4 million from the California stem cell agency in addition to her federally funded research.

She has been at Stanford since 2007 after leaving UC San Francisco. Prior to her 10 years at UC San Francisco, she was at MIT and the Whitehead Institute for Biomedical Research. (Her resume can be found here.)

Reporter Gale Schontzer of the Bozeman Daily Chronicle wrote anicely detailed story on Reijo Pera's appointment. Schonzter said that MSU research funding dropped 17 percent this year to $94 million, partly because of the loss of some researchers. She quoted a Montana spokesperson as saying that Reijo Pera “has amazing credentials that we think will continue to move our research forward.”

Schontzer reported that Reijo Pera's salary will be $200,000, “making her the third highest-paid administrator on the Bozeman campus.”

Reijo Pera also told the reporter that she “'absolutely loved' Stanford, but felt 'it's kind of time to do the next thing…. There is potential to do more at Montana State.'”

The news article also provided some interesting history on Reijo Pera. Schontzer said, 

“In high school, Reijo Pera said she had no interest in science or college. But after graduating and working as a car dealership bookkeeper, she wanted more. She enrolled at the University of Wisconsin-Superior to major in business. A class in human genetics for non-majors changed her life.”

Not mentioned in the Bozeman Chronicle story was a professional, Montana-Stanford linkage involving stem cell scientist Irv Weissman and Reijo Pera. In 2007, Weissman, director of the Stanford stem cell institute, hailed the hiring of Reijo Pera after playing a role in recruiting her.

Weissman has strong ties to Montana where he grew up and where he has a ranch.

Primer and Paean: Consumer Guide to Stem Cells

The article today on xconomy.com had some intriguing elements: “secret online communities,” $100,000 payments to scam artists and talk of New York Times best-sellers – not to mention stem cells.

The article was about UC Davis researcher Paul Knoepfler and his new book, “Stem Cells: An Insider's Guide.” The story was written by Bernadette Tansey, a former San Francisco Chronicle reporter. Tansey said that Knoepfler's book “may never break into the New York Times best-seller ranks, but he still might make some publishing history.” She wrote,

“Knoepfler could be the only biology researcher ever to write a comprehensive consumer guide about the health care treatments being developed in his own field—complete with safety cautions.”

Tansey summarized Knoepfler's book as “a scientific primer and a paean to the promise of stem cell research.” She also said the stem cell researcher sees

“a growing network of secret online communities, as well as overt advertisements, (that) have spurred US patients to pay fortunes out of pocket to ill-trained physicians, who perform experimental procedures backed by little or no evidence.”

Knoepfler's greatest concern, Tansey said, “is for patients who have been lured by the false claims of dubious for-profit clinics to pay as much as $100,000 for unproven 'stem cell treatments.' These injections, he says, may actually consist of cells culled from pigs, cows, or sheep, and bear unknown risks such as contamination or immune system reactions.”

The California Stem Cell Report carried an item last month on Knoepfler and his book. We agree that it is quite helpful and accessible, especially for persons seeking more information about undergoing stem cell treatments.

Semi-finalists Emerge for Stem Cell Person of the Year

The balloting for semi-finalists for the Stem Cell Person of the Year is now complete, and two persons tied to the California stem cell agency are among them.

Twelve persons in all made the cut with scientist Robert Lanza of Advanced Cell Technology receiving the most votes. Jeff Sheehy, a member of the governing board of the stem cell agency and an AIDS activist, and Pat Olson, executive scientific director of the agency, are also among the semi-finalists.

Now, however, it is not a matter of who receives the most support. Only one vote counts. And that belongs to Paul Knoepfler, the UC Davis stem cell researcher who originated the Person of the Year award last year. He runs it and personally awards the winner $1,000.

Knoepfler said he expects to announce the winner in a week or so. The names of all those being considered can be found on in this item on Knoepfler's blog, ipscell.com.

Minor News Coverage of Trounson Resignation; More Likely Later Today

So far today news coverage has been light of the resignation of Alan Trounson as president of the $3 billion California stem cell agency.

In addition to the California Stem Cell Report, which was first with the news last night, Ron Leuty of the San Francisco Business Times and scientist/blogger Paul Knoepfler carried items.

(See here for the main story on the California Stem Cell Report and here for an email from Trounson. See here for the agency's press release at 6 p.m. PDT yesterday.)

Leuty's report was a straight-forward news account, but Knoepfler, a stem cell researcher at UC Davis, weighed in with a brief analysis. Knoepfler wrote,

“A new CIRM president will find herself or himself tasked with not only running the agency, but also leading the agency to what will likely be a new kind of future. The new president will need vision as to what CIRM will do once the funding from Prop. 71 runs out in a few years and they’ll also need the know-how and management skills to make that vision into a reality.

“There aren’t that many people in the entire world who have the chops to take that on and be successful.”

Later today, more stories are likely to be seen as other media catch up with the events.
The evaluation subcommittee of the governing board of the agency has also scheduled a meeting for this morning concerning the board's evaluation of Trounson. We have queried the agency about whether that meeting will go on as scheduled.

Text of Trounson Letter Re Resignation

Last week the California Stem Cell Report emailed Alan Trounson concerning his continued tenure as president of the California stem cell agency. (See here for the earlier main story on his resignation late today.) The query noted that he had missed some meetings of the governing board of the agency and had been away for three months in Australia earlier this year, among other things. Here is the text of his response.

“I missed the May and October Board Meetings. In May, I was completing as Chair of the Scientific Advisory Board review of the Max Planck Institute for Molecular Biomedicine, Muenster, Germany. In October, I was invited along with 50 other leading scientists from around the world to speak and participate in the Nature Medicine Conference on Stem Cells and Regenerative Medicine in Hanover – Issues to Solve for Biology and Medical Applications. This was a critical global meeting for CIRM to be represented at. On both occasions I requested the Board meeting be moved to enable me to be there but this was not possible. In both cases the Chair agreed I should attend the activities in Germany.

“Between Christmas and the end of February, I was in Australia but worked for CIRM for 50% of this time, excluding holidays, on reports, meetings (teleconferences, SKYPE conferences), articles for scientific journals for CIRM and meetings with collaborating partners and grantees there. I returned to San Francisco in mid-February for the Genomics GWG Review. I returned to Australia for my daughter’s wedding and then returned to San Francisco at the end of February. Dr Ellen Feigal and I were in continual communications while I was away and CIRM worked very smoothly and efficiently under her management and my guidance.

“When I was asked to become President, by Governor Schwarzenegger and previous Chairman Bob Klein,  I made a commitment to them for CIRM.  I did that with the understanding that my partner Karin and our young son could be with me in California.  They did move here for 3 years, but it turned out to be impossible for Karin to continue her career in women’s health research at a Californian university.  For her to work at any California institution would have created too many conflict issues, either because of the rules or because of 'appearance' concerns. Karin and our young son moved back to Australia, and I moved to an apartment 2 blocks from CIRM.  I work seven days a week for CIRM in the absence of my family. I have a 12-year old son who misses me terribly for the last 2.5 years we have been separated (as do the other 3 older children).  I have sacrificed considerable personal family rewards to continue to commit to driving CIRMs vision.

“The whole 'evaluation of the president' process with the board has always seemed (to me) to drag on forever with meeting after meeting.  I have not attended any of this year’s meetings, but my dialog with them has been about evaluating whether my role at CIRM could be modified in some way to accommodate my families needs.  Duane Roth was the key person for me in those discussions, as he was on so many issues.  It has taken some time to regroup after his untimely death and enable this to move forward again.”

CIRM Press Release on Trounson Departure

Here is the news release today from the California stem Cell agency on Trounson's resignation.

CIRM President Alan Trounson To Step Down
October 16, 2013
San Francisco, CA – Alan Trounson, PhD, has announced he is going to step down as President of the stem cell agency, the California Institute for Regenerative Medicine (CIRM), in order to spend more time with his family in Australia.

Dr. Trounson says the agency’s governing Board, the Independent Citizens Oversight Committee (ICOC), has asked him, and he has agreed, to remain as President, while the agency begins the search for a new President.

The agency is also discussing with Dr. Trounson the possibility of him remaining affiliated with the agency in a role to be determined.

“We have accelerated the development of regenerative medicine, and I would love to continue at CIRM as these advancements begin making a difference to patients with debilitating injuries and disease. But the agency needs a full-time President and I need to spend more time with my family. The two needs are incompatible, so it is necessary for me to step down as President. This was a very difficult decision to make,” says Dr. Trounson. “I have loved working at CIRM and being part of something truly pioneering – a revolution in stem cell science and medicine – but ultimately it came down to a choice between CIRM and a life including my family.”

“Alan has been a remarkable leader of the agency for almost six years,” says Jonathan Thomas, PhD, JD, Chair of the Board. “He has led us through some challenging times, been the driving force behind some truly innovative ideas – such as the Bridges and Creativity Training Programs, the Alpha Clinic model for delivering new therapies to patients, a stem cell genomics program and an iPS cell bank for interrogating the cause and developing new treatments for really serious and complex diseases. He has helped establish us as a world leader in the field of stem cell research. We are truly grateful for his vision, his expertise and his leadership. He has created a legacy which he can be proud of.”

Dr. Trounson joined CIRM in late 2007 after serving as Professor of Stem Cell Sciences and Founding Director of the Monash Immunology and Stem Cell Laboratories at Monash University in Melbourne, Australia. He also founded the National Biotechnology Centre of Excellence – more commonly called the ‘Australian Stem Cell Centre’, co-founded the Monash Institute for Reproduction and Development – and was a pioneer in the development of human in vitro fertilization (IVF).

"Since joining CIRM in 2007, Alan has helped transform not only this agency but the entire field of stem cell research," says Sherry Lansing, Cancer Patient Advocate and longtime Chair of the Board's Governance Subcommittee. "Alan has instilled a sense of urgency in our core mission -- funding research that is leading to faster clinical trials of treatments for deadly diseases."

Jeff Sheehy, another longtime Board member and a Patient Advocate for HIV says; "Alan has been an irresistible force in moving stem cell therapies into the clinic and, as a patient advocate, I am deeply grateful to him for his relentless determination.  One of the key features of his extraordinary leadership over the last six years has been his ability to achieve one of the seminal visions embedded in Proposition 71, the seamless integration of patients, industry and researchers into a harmonious, synergistic union.  We are much, much closer to cures, thanks to his efforts."

“It’s been an amazing time, working with some of the most dedicated people and inspirational individuals,” says Dr. Trounson. “I feel both fortunate and honored to have been part of something that is transforming the face of medicine, and part of an organization that is helping lead the world in that transformation. I have been privileged to work with some very special colleagues at CIRM and I know their expertise, professionalism and dedication will be a tremendous resource for my successor.”

About CIRM: CIRM was established in November 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Act. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was overwhelmingly approved by voters, and called for the establishment of an entity to make grants and provide loans for stem cell research, research facilities, and other vital research.

Trounson Resigns as President of $3 Billion California Stem Cell Agency

The California stem cell agency today announced the resignation of Alan Trounson, who has served for nearly six years as president of the $3 billion research enterprise.

Trounson, an internationally known pioneer in IVF research, said he was resigning so that he could rejoin his family in Australia, where he has spent most of his personal and professional life.

Trounson's wife and youngest son moved back to Australia from California about three years ago. In a news release from the stem cell agency, Trounson said,

“(T)he agency needs a full-time president, and I need to spend more time with my family. The two needs are incompatible, so it is necessary for me to step down as president."

In an email to the California Stem Cell Report, Trounson said,

“I have a 12-year old son who misses me terribly for the last 2.5 years we have been separated (as do the other 3 older children). I have sacrificed considerable personal family rewards to continue to commit to driving CIRM's vision.”

Trounson joined the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, in late 2007. He was personally recruited by Robert Klein, the first chairman of the stem cell agency, during a trip to Australia. Trounson also said today that then Gov. Schwarzenegger asked him to serve.

During Trounson's tenure, the agency's portfolio has soared from $283 million and 156 awards to its current $1.9 billion and 570 awards. It has about $600 million remaining in uncommitted funds.

Trounson's departure comes at a critical moment for the agency, which is trying to find a way to continue with major operations beyond 2017, when the money for new grants will run out. It is also pressing hard to commercialize stem cell research, the primary goal of Prop. 71, the ballot initiative that created the agency in 2017.

CIRM said Trounson has agreed to stay on as the agency begins its search for a new president. The agency said it is discussing the possibility of some sort continued affiliation for Trounson with the stem cell effort.

Members of the agency's governing board had high praise for Trounson today. Jonathan Thomas, chairman of the board, said in the CIRM news release that Trounson helped established the agency as a “world leader.”

“He has led us through some challenging times, been the driving force behind some truly innovative ideas – such as the Bridges and Creativity Training Programs, the Alpha Clinic model for delivering new therapies to patients, a stem cell genomics program and an iPS cell bank for interrogating the cause and developing new treatments for really serious and complex diseases.”

Sherry Lansing, chair of the directors' Governance Subcommittee and a former Hollywood studio head and former chair of the University of California regents, described Trounson as an “irresistible force.” She said,

“We are much, much closer to cures, thanks to his efforts."

Trounson's years at CIRM were not without controversy. In 2009, Marie Csete left the agency as its chief scientific officer. She told the journal Nature her advice was “not respected” at the agency.

This year, news surfaced on the California Stem Cell Report concerning Trounson's conduct in connection with a $21,630 gift from Klein to the agency along with a conflict-of-interest case involving a scientific grant reviewer who Trounson recruited.

The stem cell agency has had difficulties recruiting candidates for president in the past -- for among other reasons -- the early legal challenges and because of its dual executive arrangement legally dictated by Prop. 71. The dual CEO situation means that the chairman and president have overlapping responsibilities. CIRM is also an unusual mix, at least for a state agency, of science, academia, business and politics. Previous presidential searches also have become enmeshed in an internal debate over whether the president should be a big name scientist or more of an administrator.

The agency currently has new challenges that include creation of a“strategic road map” for its future and tough decisions on which projects to back for commercialization – not to mention the agency's short life span if it cannot find new financing.

In response to a query, Kevin McCormack, a spokesman for the agency said no severance is being provided to Trounson. The spokesman said Trounson's current salary is $490,008, the same as when he joined the agency.

You can find the CIRM press release here. Here is the text of Trounson's email to the California Stem Cell Report.

California Stem Cell Debt: Refinancing $146 Million

The state of California is planning a $2.2 billion bond sale next week with about $146 million of it going to refinance debt run up by the California stem cell agency.

The new, long-term borrowing will pay off short-term debt used for stem cell research over the last two years.

The $3 billion agency was set up to subsist on money borrowed long-term by the state with general obligation bonds. The ballot initiative that created the agency, Prop. 71 of 2004, authorized the bonds. Interest on the bonds roughly doubles the cost of the research.

In 2011, Gov. Jerry Brown sounded an alarm about California's burgeoning wall of debt and sales of bonds were cut back. The agency maintained its operations through the short-term borrowing (commercial paper).

Authorization for the bonds ends in 2017 and the agency is scheduled to run out of cash for new grants that year as well. The agency is attempting to devise some sort of public-private mechanism to generate funds after 2017.

A financial statement prepared by the state treasurer's office for the Oct. 22 bond sale said that $1.2 billion in stem cell bonds was outstanding and $1.6 billion was unissued as of Sept. 1.
Individuals will have an opportunity this month to buy the bonds during an early order period. But they will not enjoy the benefits provided by non-taxable bonds.

All of the stem cell bonds are taxable, as opposed to many state bonds that are not. During the 2004 ballot campaign for Prop. 71, the public was led to believe that the agency would be financed with non-taxable bonds, which would have meant much lower borrowing costs for the state to the tune of hundreds of millions of dollars.

In 2007, Bernadette Tansey, then of the San Francisco Chronicle, reported that Robert Klein, head of the Prop. 71 campaign and first chairman of the stem cell agency, knew that taxable bonds were likely to be required but did not disclose that fact to the public.

The agency has awarded $1.9 billion and has about $600 million in uncommitted funds. The remainder of the $3 billion is going for administrative expenses over the life of the agency. The agency said last week it had $61.4 million on hand as of Sept. 30.

Earlier this month, Michael Marois of Bloomberg News reported,

"(State Treasurer Bill) Lockyer has said he plans to offer an estimated $12.5 billion of debt in the next 18 months. As of Sept. 1, California had $79.4 billion in long-term bonds outstanding, out of $147.8 billion authorized by voters, according to Lockyer’s website.”

Final Voting This Week for Stem Cell Person of the Year

Thousands of votes have been tallied so far in the balloting for the Knoepfler Lab's Stem Cell Person of the Year as this week's deadline fast approaches.

The cutoff date is this Wednesday at 11:59 p.m. PDT (0659 Greenwich Mean Time). For those of you who aren't up to speed on this event, it is backed by Paul Knoepfler, a UC Davis stem cell researcher and blogger who initiated the award in 2012. He personally coughs up $1,000 for the winner. He also decides who the ultimate winner will be. This week's ballot is to decide the final 12  out of a field of 30 nominees.

We asked Paul to give us an update today (Sunday) on the state of the balloting. About midday, he sent along the following.

“We now stand at 3,300 valid votes with 3 1/2 days of voting left for picking the top 12 finalists.

“ I've added a countdown timer clock to the deadline at the top of the blog. That's kind of fun.

“Robert Lanza and Chris Centeno are vying back and forth for the top vote spot.

“Patient advocate Ted Harada is steady at 3rd place and Don Reed at 4th place. Followed now by the Pope at 5th place.

“Italian scientist and advocate Elena Cattaneo is next followed by Jeff Sheehy(a governing board member) of CIRM (the California stem cell agency) and bioethicist Leigh Turner.

“Then Sabrina Cohen, advocate, and Pat Olson (executive scientific director) of CIRM.

“The last two spots at the moment in the top 12 are Mitalipov, who did human therapeutic cloning this year, and Masayo Takahashi, running the first iPS cell human clinical study.

“About 1,000 votes in total had to be removed because a few voters broke the rules of 4 votes per day.

“When the time is up, the top 12 vote getters will move on as finalists.”

Our recommendation: Vote for Pat Olson, who has served the stem cell agency since 2006. She is a fine representative of the staff of the agency, which has labored mightily this year and over the last nine years, pumping out about $300 million a year for stem cell research. Thousands of applications have been evaluated, and 570 awards handed out with many more to come – not to mention the critical monitoring of the publicly funded grant work.

As we all know, science is a collaborative enterprise. Making good things happen is the business of more than one person. And it is fair to say that the staff of the California stem cell agency has been an important key in maintaining the vitality of the stem cell field research as it has traversed some rocky roads since 2004.

Rules for voting can be found here.

Ephemeral $9.4 Million Stem Cell Deal: Bluebird Bio and California Stem Cell Agency

A $9.4 million deal between a Massachusetts biotech firm and the California stem cell agency has quietly collapsed, raising questions about whether the firm will fulfill its promise to open facilities and hire people in the Golden State.

The company is bluebird bio (the company prefers the lower case spelling) of Cambridge, Mass., which was acclaimed for the success of its initial stock offering last June that ultimately raised $116 million.

One year ago this month, the governing board of the $3 billion stem cell agency awarded bluebird $9.4 million with little public discussion. The stem cell agency, which is known as CIRM, said the money would help create “a stem cell and gene therapy approach to correct a genetic disease in young patients with B-thalassemia, an inherited blood disorder that can cause widespread organ damage and premature death.”

In addition to the funds, the action also provided a “Good Housekeeping Seal of Approval” for bluebird from a major and well-respected funding organization. Bluebird said at the time it was “delighted.” Both the “seal” and the ostensible cash proved to be valuable later when generating investor interest in bluebird's stock offering.

Nick Leschly, CEO of bluebird bio, calls himself "chief bluebird"

The award was one of the first in the agency's business-friendly strategic partnership program. However, as months passed, negotiations continued fruitlessly between the CIRM staff and the company, which is 28 percent owned by the storied Boston biotech venture capital firm, Third Rock. 

When asked today about the discussions, Kevin McCormack, CIRM's senior director of public communications, said,

“They decided not to take the money.”

Bluebird, with no fanfare, had already disclosed the breakdown of the deal as part of a routine SEC filing on Aug. 14. The company said,

“The award was conditioned upon terms and conditions by CIRM generally applicable to its grant recipients and the negotiation of a grant agreement with CIRM. No amounts have been received under this award. The company no longer expects it will accept the CIRM award. The company is currently exploring other opportunities to engage in CIRM programs.”

The California Stem Cell Report has queried the company for further explanation and will carry its response verbatim when it is received. The company, however, has not yet even responded to a query from last May.

One of the questions involves statements by bluebird that it planned a substantial expansion in California.

According to the CIRM summary of the review of the bluebird application, the company said,

“We will have at least two clinical sites in California, and more likely up to 4 sites, 2) our viral vector manufacturing will occur in California, 3) our cell processing will occur in California, 4) we will hire several consultants and full-time employees within California to support the program. Overall, several million dollars will be spent employing the services of people, academic institutions, and other companies within the state of California.”

The company has said that it is working with Donald Kohn at UCLA and Elliot Vichinsky at Oakland's Children's Hospital.

The NIH clinical trials Web site shows that bluebird is recruiting patients for a beta-thalassemia
trial at an unspecified location in Oakland.

Last spring, the bluebird Web site listed a California location at 1001 Bayhill Dr, Suite 200, in San Bruno, which is south of San Francisco. An Internet search last spring indicated, however, that is a generic address for a number of business including a realty firm, a roof repair business and a family law attorney. Today bluebird's Web site no longer lists a California location.

Like most biotech companies, bluebird is losing money. According to an article Aug. 15 in the Boston Business Journal by Don Seiffert, bluebird's first quarterly report since going public also showed that the firm “lost share value on a per share net loss that was six times worse than analysts were expecting.”

Stories are important for any company, particularly one that is involved with an initial stock offering. Ben Fidler of Xconomy wrote about the bluebird story just last week. He said,

“Given the failures of gene therapy in the past, how was Bluebird able to raise so much money from both public and private investors? (Nick) Leschly (the company CEO) notes that bluebird had to be careful in the way it told its story to generate excitement rather than fear. To do so, it started with the rare disease it was going after, rather than the method it was using to do it.

“'We needed to retrain peoples’ receptors from not running to the [other] side of the room when you heard the words gene therapy to, ‘just hold on, let us tell you the data,' he says. 'So it really became gene therapy at the intersection of orphan diseases very quickly.'

“What bluebird didn’t anticipate, however, was that gene therapy 'all of a sudden got interesting.' Large pharmaceutical companies started investing in the field again, and it woke investors up, and buoyed bluebird as it tried to raise more cash—ultimately carrying out one of the most successful biotech IPOs this year.

“'I’d love to say it was planned. No, it was good timing I think with a good story, and that combination led to a successful IPO,' he said.”

Earlier today we asked the California stem cell agency for a copy of the letter from bluebird rejecting the $9.4 million. CIRM's McCormack replied,

“Bluebird didn't send us a formal letter or email announcing they were not taking our money. It was a phone call in which they explained that circumstances changed with their successful IPO and the money that came in from that. In light of that success bluebird no longer needed our money to co-fund the project. They were able to move the project forward on their own and decided to do so.

“So how do we feel about this? Well, our goal has always been to help move the most promising therapies into clinical trials, and in this case that is what is happening. Having our independent panel of experts review and recommend their project, and then having our governing board approve funding clearly helps establish the credibility and viability of any company’s research. Funding approval from CIRM is the scientific equivalent of getting the Good Housekeeping Seal of Approval and undoubtedly helped with their IPO. So, now they are moving the project ahead on their own, and we still have almost $10 million that we can use to help other companies and other promising therapies.

“As for their 'exploring other opportunities to engage in CIRM programs' that may be the case but we are not currently in any discussions with them.”

(Photo credit: bluebird bio)

Zeroing in on Therapies at the California Stem Cell Agency

BURLINGAME, Ca. -- Directors of the California stem cell agency today mulled over a recommendation that they focus intensely on a handful of research projects that are most likely to result in commercializing a stem cell therapy.

No decisions were made, but directors raised questions about whether such a move would mean a reduction of funding for other research efforts or affect other projects in a negative way.

The recommendation and others came from agency's new scientific advisory board(SAB), appointed by CIRM President Alan Trounson at the behest of an Institute of Medicine study. The agency received the panel's report only on Monday and cobbled together staff responses for today's directors' meeting.

The SAB proposals were bad news for the agency's shared labs program, which costs CIRM $7.5 million a year and is set to expire in 2014. The panel recommended an end to the program after that date. CIRM agency staff agreed, declaring that the original rationale was no longer valid and that the program could be wrapped into the recipient institutions' budgets, if they wished to continue with it.

The SAB, which has only one California member, said the stem cell agency should focus on six to eight projects that would lead to early stage clinical trials involving safety and proof of concept(stage one and 2A).

Discussion of the plan came after Ellen Feigal, senior vice president for research and development, briefed the directors on 70 agency grants that are moving well along the clinical development pathway. She told them, however,

“We are not going to take 70 projects forward.”

The agency currently has $600 million in uncommitted funds after handing out $1.9 billion over the last nine years. However, it could come up with more funds if it decided to “uncommit” some grant rounds conceptually approved but for which applications have not been solicited. CIRM is scheduled to run out of cash for new grants in 2017.

Feigal said that the SAB proposal could have “downstream implications” if extra money is required to intensify efforts on six to eight projects. However, she also said the agency could simply provide an “expedited pathway.”

CIRM Director Sherry Lansing noted that the agency is “trying desperately to get a win.” She suggested putting out a “do-you-need-help” RFA which would target applicants that have well-developed projects that could be moved ahead rapidly with some cash. 

Director Jeff Sheehy said the agency needs to “talk about sustaining what we have built.” He said,

 “It is not like our folks are going to graduate from our funding to NIH funding.”

The NIH is already suffering from a major cash crunch.

The recommendations from the SAB and staff reaction will be heard by the directors' Science Subcommittee, chaired by Sheehy, before the directors' December meeting. The December meeting is also expected to include a briefing on a proposal for creation of a “strategic roadmap” for future CIRM funding.

Here is the Power Point summary of the recommendations and staff responses. We have asked the agency for a copy of the original document from the SAB.

California Stem Cell Directors Adjourn

Directors of the California stem cell agency adjourned the public portion of their meeting at 2:02 p.m. today. They moved into a closed personnel session to discuss the evaluation of CIRM President Alan Trounson. No further public action is anticipated today.

Stem Cell Directors to Discuss Advisors' Proposals for Changes

BURLINGAME, Ca. -- Directors of the California stem cell agency will be working through their lunch today. When they regroup in a few minutes, the first item on the agenda is expected to be the recommendations of the new scientific advisory board.

The advisory board was selected by the agency, but it has some proposals for changes and refocusing efforts at the agency. Discussion of the proposals will continue at the agency's board meeting in December, when it is also expected to discuss its road map for funding beyond 2017, when money for new grants will run out.

The Power Point presentation of the recommendations can be found here. The information was not available to the public until this morning.