The Californa Stem Cell Agency: A Blueprint for Living Without $300 Million a Year

The likely future of the $3 billion California stem cell agency was unveiled this week, and it envisions an enterprise no longer tied to state funding and much more closely linked with industry as a collaborator and “bundler” of resources.

Gone would be the $300 million a year in cash that the state borrows so that agency can award grants to academics and occasionally to business. Likely to be missing are faculty recruitment awards, non- business training programs and perhaps most of the agency's basic research effort.

Instead, the California Institute for Regenerative Medicine(CIRM), as the agency is formally known, would build a relatively small number public-private partnerships to back projects close to turning out commercial therapies. It would ally itself with the Alliance for Regenerative Medicine, a national lobbying and industry group in Washington, D.C. And the agency's funds would come possibly from foundations, philanthropists, investors, biopharma, the health insurance industry and federal agencies such as the NIH and Medicare.

That is part of the scenario painted in a $150,000, 69-page report by consultant James Gollub of Tiburon, Ca. CIRM earlier this year commissioned the report because the agency will run out of state funds for new grants in 2017.

The governing board of the stem cell agency will hear a report on the Gollub's recommendations at its Dec. 11 and Dec. 12 meeting in Los Angeles. The report will come as part of consideration of proposals by the agency's new Scientific Advisory Board that the agency should sharpen its focus on six to eight projects to push them closer to bearing commercial fruit. The proposed “strategic roadmap” also comes as the agency is looking for a new president to replace Alan Trounson, who is leaving to rejoin his family in Australia.

Trounson has prepared an outline of a plan on how to start implementing the proposals.

Gollub made three major recommendations, one of which would require a $50 million investment from CIRM with another $50 million to $100 million coming from other sources, including wealthy individuals such as businessman Denny Sanford who recently gave UC San Diego $100 million for stem cell research.

The report said additional costs, including those for outside consultants, could be absorbed by CIRM or funded through awards on a charge-back basis. In others words, a grant would include funds that a researcher would have to pay to the agency for its “internal program management services.” CIRM is limited by law to an operating budget that can total only 6 percent of its $3 billion, which keeps its overhead quite lean.

Gollub noted that that CIRM has already moved partially into the areas of his three proposals, all of which would begin in the next year or so. They are:

• Create public-private partnerships to move projects into early clinical trials, focusing on specific disease areas. Co-funders providing at least $50 million would screen and select the projects from those presented by CIRM. This could be scaled up from a pilot project next year and possibly involve creation of a nonprofit group by CIRM.
• Create a “regenerative medicine accelerator” to provide “commercial readiness services” to each(Gollub's italics) grant recipient whether academic or business. The accelerator effort would be linked to agency's proposed $70 million Alpha Clinic plan. The accelerator also would assure that the “clinical trials structure meets pharmaceutical industry expectations.”
• Create a pre-competitive regenerative medicine R&D program that would organize collaborative efforts to break through barriers to development of therapies. This would involve production but also what the biotech industry calls “reimbursement,” which is a catch word for making a profit from development of a therapy. One of the issues in the industry is the expense of some medical treatments, and stem cell therapies are expected to be very high. The idea is to work with the insurance industry and the federal government to be sure the appropriate cost is supported by Medicare and insurance programs. Partnering with the Alliance for Regenerative Medicine would enter into this effort, which would be ultimately funded by both CIRM, the new non-profit and other partners.

The general direction of the recommendations is to “de-risk” stem cell therapy development and provide a focal point for overcoming many of the regulatory and manufacturing obstacles facing a new medical technology.

The report said CIRM has as a “strong innovation feedstock” of more than 90 projects that are close to moving into clinical trials. Some of those projects are likely to appeal to Big Pharma, which has been increasingly looking outside of its own companies for R&D.

For donors willing to pay for the privilege, Gollub's “strategic roadmap” recommended that CIRM create a group that would have “'a seat at the table' to see early stage  research, discoveries and clinical performance.”

The report said the CIRM's new world would require a “robust, dedicated fundraising group” within the agency, which now has minimal capacity in that area. However, the study envisions members of the governing board, many of whom are top notch fundraisers, as making a major effort to raise cash.

Scaling up the initial public-private partnerships, accelerators, etc., would also require additional staff. Gollub's report did not present costs beyond the initial pilot project stage.

California Stem Cell Report Taking Some Time Off

The California Stem Cell Report is going dark for a number of days while yours truly makes an ocean passage from Chiapas to Zihuatanejo.

As some of you know, this report is published from a sailboat called Hopalong on which this writer lives fulltime south of the border with his spouse. And Hopalong does move about from time to time.

We may have Internet access along the way to monitor the affairs of the California stem cell agency but cannot count on it. We should be back to the grindstone in about two weeks.

Searching for CIRM's Financial Future, Plus a $100 Million California Stem Cell Round

The California stem cell agency next week is expected to give away as much as $100 million as it pushes aggressively to generate therapies that will benefit the Golden State as well as the world.

At the same time, the agency will decide whether it will focus more intensely on a handful of projects as it tries to come up with a plan to finance its future. The $3 billion agency is currently funded by money that the state borrows, but cash for new grants will run out in 2017.

The agency is looking for a way to continue operations through some sort of public-private partnership. A consultant's report was due on that subject on Nov. 30. At its meeting Dec. 11 and Dec. 12 in Los Angeles, the board is scheduled to spend one hour hearing a presentation on the report at the end of a lengthy examination of recommendations from the agency's new Scientific Advisory Board(SAB), the panel that proposed that CIRM sharpen its focus. The California Stem Cell Report has asked for a copy of the document, which is a public record.

The SAB report plays into the agency's need to come up with results that will stimulate both private and public interest in supporting the agency's future operations. So far, CIRM has lacked the research results that resonate widely with the public.
 
The agency has prepared a tightly organized schedule for examining the SAB proposals, which could mean that the agency's shared labs, bridges and training grants programs would be phased out. However, CIRM staff is only recommending an end to the shared labs program.

The staff has proposed creation of an “accelerated development pathway” for six to eight projects, as recommended by the SAB. The staff document did not describe what that would entail or how much it would cost.

Also on the staff list is a proposal to advance the most promising early translational research programs and a $10 million proposal by CIRM President Alan Trounson to participate in a global effort “to create (a) Haplotype Bank and GMP library.” No further details on that plan were available at the time of this writing.

For the stem cell community, the immediate big news next week will be board action on applications in its signature disease team program. This is the third round, and awards could run as high as $20 million each for a total of $100 million. The round also involves possible collaborators in England, Spain and China, a country that has been pushing hard on stem cell research. No state funds will be used overseas.

According to the RFA, the purpose of the disease team effort is “to advance early clinical development of novel therapies derived from or targeting stem cells, potentially offering unique benefit with well-considered risk to persons with disease or serious injury.”

The summaries of the grant review findings have not yet been posted on the CIRM Web site, but are likely to come later this week. The CIRM governing board almost never overturns a positive recommendation from its reviewers. Sometimes it will approve an application rejected by reviewers. However, directors are feeling squeezed financially and may not be as open to elevating rejected applications as they have been in the past. Look for rejected applicants to personally petition the board for approval along with affected patient advocates.

Also on the agenda is the topic of the search for a new president for the agency to replace Trounson, who is resigning to return to Australia and his family. An item was posted on that yesterday.

Next week's meetings are open to the public in Los Angeles and at teleconference locations in La Jolla and Pleasanton. Addresses can be found on the agenda. The board also usually provides an Internet audiocast and a Webinar link to PowerPoint presentations used at the meeting. Directions for using those tools are likely to be posted on the CIRM Web site later this week.

California Stem Cell CEO Search: Non-Scientist Candidates Quite Welcome

The $3 billion California stem cell agency could well have a non-scientist as its new president as it pushes to develop commercial products and develop future funding sources for the nine-year-old research enterprise.

Directors of the agency meet next week to settle on the criteria for the new CEO, who directors would like to see in place as soon as possible. Specifically missing from the board's latest wish list is a requirement that the individual be a scientist or researcher. Instead, the criteria say candidates should have “experience with and personal commitment to medical and scientific research including familiarity with stem cell research.”

In terms of academic credentials, the proposed criteria specify either or both an M.D. or Ph.D. degree or “equivalent industry experience or similar body of knowledge developed in professional roles.”

That sort of broad description could mean several things. One is that the board already has a candidate in mind and directors don't want to hampered by perceptions that only a scientist can run CIRM, as the agency is known. The description also significantly widens the field of possible candidates, virtually inviting non-scientists to apply for the position, which carries a salary of up to $548,788 annually.

The criteria, however, make it clear that candidates should be heavyweights in development of scientific products. The agency wants tested leaders of scientific organizations, experience with R&D, including the regulatory process for development of new treatments, and persons who have no problem shutting down projects that aren't going anywhere.

The latest job description for the person to replace CIRM President Alan Trounson, an internationally known scientist, came together after an earlier meeting of the board's Presidential Search Subcommittee, which will review and perhaps modify it at a public meeting Dec. 10 in Los Angeles. Then the full board will act on it during its two-day meeting Dec. 11-12, also in Los Angeles.

Teleconference locations for both public meetings can be found on their agendas, which are here and here.

December Decision on Sharper Focus at California Stem Cell Agency?

A key panel at the $3 billion California stem cell agency has set the stage for action next month on recommendations that it move “at speed” to sharpen its focus to on six to eight projects likely to come closer to turning research into cures.

The governing board's Science Subcommittee met last Friday to discuss the recommendations from the agency's new Scientific Advisory Board. The proposals were first heard by CIRM directors in early October. No action has been taken so far but the advisory board's report comes up again Dec. 11.

Responding to an inquiry, Kevin McCormack, spokesman for the agency, today said last week's meeting gave the subcommittee and staff a chance to discuss the recommendations and possible action. Some of the recommendations could mean a lessening of financial support for some CIRM programs.

The agency has awarded $1.9 billion and has about $600 million in unallocated funds. It will run out of cash for new awards in 2017 and is working on a plan for future financial support. A consultant is expected to suggest a plan to the board also at its December meeting.

The full text of the recommendations and the staff's response can be found here.

New Public Finance Aide Appointed at California Stem Cell Agency

The California stem cell agency has named a veteran staffer to fill a key slot in developing a plan for its financial future beyond 2017.

Amy Lewis
CIRM photo

She is Amy Lewis, who has been with the agency since the very beginning. Indeed, her work in connection with CIRM, as the agency is known, dates back to the ballot initiative campaign that created CIRM in 2004.

In response to an inquiry, Kevin McCormack, chief spokesman for the agency, said Lewis previously served as grants management officer after working as deputy chief of staff to then CIRM Chairman Bob Klein. Her new title is deputy to the chair for public finance and governance.

During the campaign for Prop. 71, she was the “lead development staffer” in Northern California, McCormack said. She has an MBA from the University of San Francisco with an emphasis in finance.

Lewis will be a key aide to CIRM Chairman Jonathan Thomas, who is working on a plan to finance the agency after its money for new grants runs out in 2017. The position that she fills was reconfigured after the departure of Lynn Harwell to spell out that it would involve “meeting the financing and sustainability goals” of the agency.

Parsimony and Stem Cells: California's Changing Cash Outlook

Last week it was California Gov. Jerry Brown's financial “reality sandwich.” This week it is Mac Taylor's prodigious fiscal feast.

Both men are key players in California's economic scenario and quite possibly the future of the California stem cell agency.

Taylor does not have the household name that the governor does. But he is the state's legislative analyst, the bipartisan and widely respected expert and adviser to the California Legislature on state spending and income.

Taylor's message this week came in sharp contrast to the picture of parsimony drawn last week by Jerry Brown when he warned UC Regents to lower their expectations about their request for $120 million more than he thinks they should have. The governor said there are many competing interests that have legitimate claims to state funding in addition to the University of California. It was language that could apply to the stem cell agency, which will run out of cash for new grants in 2017 and is hoping for more public support.

Brown's remarks covered really only the next 18 months. Taylor on the other hand covered that period and beyond, into 2020.

Gone are $100 billion in cumulative state deficits over the last four years. Instead, by 2018, the state could be running annual budget surpluses of $10 billion, according to an article by James Nash on Bloomberg News concerning the legislative analyst's report.

Taylor's analysis is not necessarily directly at odds with Brown's views. They were both discussing the budget but in different ways. Nevertheless, it comes as good news for the agency. More state cash means a greater likelihood that large amounts can be funneled into stem cell coffers.

Taylor's forecast was also widely celebrated by the many other petitioners who have seen their favorite programs suffer during the Great Recession.

Jerry Brown, however, was not sanguine about California's spending. According to David Siders of The Sacramento Bee, the governor is not budging from frugality and plans “to say no when necessary.” Siders quoted him as saying,

“We have deferred maintenance on our roads, that is serious, we have unfunded and growing liabilities in our pension and retiree health – state, university and local level. That’s real.”

Timing is everything for the stem cell agency. If it can catch the state on an upward financial bounce and show results that resonate with policy makers, good things could happen. But Taylor also noted that even a modest economic downturn could send the state once again into deficit spending. And, ironically, rising costs for health care, an issue of considerable concern to the stem cell agency, could be one of the competing interests that could squeeze out spending for stem cell research.

California Stem Cell CEO Search: More Names Surfacing­

While the $3 billion California stem cell agency awaits help from an executive search firm, more names are being mentioned as possibilities to become the new president of the organization.

Keep in mind that these are names that the public is bandying about, not any sort of official CIRM directors' list, which may not exist at this point.

UC Davis researcher Paul Knoepfler triggered the discussion of possibilities this week when he posted a list of a dozen names that people in the field have suggested might be considered. As a result, Knoepfler ­received suggestions from his readers of additional possibilities.

They include Ellen Feigal, the No. 2 person at the agency, and Arlene Chiu of Cedars-Sinai, who was chief scientific officer at the agency until she left in 2007.

Knoepfler also emphasized that the dozen names he listed do not constitute any sort of CIRM list. If some readers may think he is floating trial balloons for the agency, that does not appear to be the case.

Knoepfler's entry into this obviously speculative arena, however, is worthy. Bringing specific names into the discussion could well help sharpen both the focus in the search and the understanding of the type of trade-offs that are likely to be necessary. It also may stimulate comments from people in the stem cell field about what is needed in a new president. Those comments can either be forwarded to the agency or laid out in public commentary either here or on Knoepfler's blog.

As for the executive search firm, the agency hopes to have a contract signed by Dec. 16. But it is certain that some agency board members have already put out tentative feelers to suitable persons.

On Oct. 16, CIRM President Alan Trounson announced his plans to depart and no doubt is increasingly focused on returning to Australia and his family, especially as the holiday season approaches.

California's Stem Cell CEO Search: The 'Not-So-Knoepfler' Dozen

A few comments trickled in today concerning yesterday's item on the 12 possibilities who could be considered as candidates to become the new president of the $3 billion California stem cell agency.

The dozen individuals were listed by UC Davis researcher Paul Knoepfler in an item on his blog. The California Stem Cell Report piggybacked on that piece, adding some additional information in an item that included the expression “the Knoepfler dozen.”

This morning Knoepfler wanted to clarify that he was not necessarily personally recommending any of them.

He said,

“To be clear, these are not the 'Knoepfler Dozen.'. These are not my picks for candidates. In fact I took myself out of the equation in terms of intentionally not including my own opinions so these 12 represent specifically the ideas of others for CIRM presidential candidates, not my own. I think some of these are great candidates, but I have some others too in mind. Maybe I should do another post on that.”

We also received an email from a Minnesota researcher who said, “Do you really think this is the list?  Hmmm.”

No, I do not believe this is CIRM's list. But some persons mentioned might have been discussed by some CIRM directors informally as possible candidates. As I noted, at least one person on the list has been considered in the past.

Finally, one of the persons on the list, who must remain nameless, emailed this question in connection with a comment in last night's item that great researchers are often terrible managers: “I'm a terrific manager. Does that make me a bad scientist??”  

The Knoepfler Dozen: Kicking Around Names for Stem Cell Agency Presidency

A UC Davis stem cell researcher today came up with a list of 12 persons who have the “stem cell chops” to become the new president of the $3 billion California stem cell agency.

They include a few folks from the NIH, two women and one of the earliest pioneers in the nation in stem cell research.

Writing on his blog, scientist Paul Knoepfler pulled together the names based on “behind-the-scenes” discussions with “some folks in the know.” It is much too early in the process to identify genuine candidates. Nonetheless, they are possibilities, however remote, and represent the type of persons that Knoepfler and his colleagues are talking about.

A couple of caveats when evaluating these names and whether they would even consider leaving their current, very nice positions. One is that they would have to give up their labs. Outgoing CIRM President Alan Trounson has lamented more than once about how he had to do that. Also, questions arise about whether a person considering the post would want to leave his or her current employment for a job that could basically vanish in less than three years.

The agency will run out of money for new grants in 2017. Unless it finds additional funding, the last few years of operations beyond 2017 will involve simply administering the last grants. Even if it does raise more cash, it is exceedingly unlikely that the agency will be able to continue hand out $300 million a year.

That said, here are Knoepfler's dozen. First, the women: Jeanne Loring of Scripps and Story Landis of the NIH. The stem cell pioneer is Michael West, CEO of Biotime, who founded Geron back in 1990.

The others are Jim Battey, who was previously a late stage candidate for the job, and Mahendra Rao, both of the NIH; Rusty Gage of Salk, Larry Goldstein of UC San Diego, Arnold Kriegstein of UC San Francisco, Tom Okarma, former CEO of Geron and now head of Asterias Biotherapeutics, which now owns Geron's stem cell assets, Brock Reeve of Harvard, Clive Svendsen of Cedars-Sinai and Keith Yamamoto of UC San Francisco.

Notably missing from the list are possibilities from Stanford, UCLA and USC.

A note re Goldstein of UC San Diego, he was recently named to head the $100 million Sanford stem cell operation, which makes it unlikely he would move to the stem cell agency.

CIRM's job description also currently carefully omits a requirement that the new president be a scientist, only that the person have scientific credibility.

One scientist knowledgeable about CIRM's operation recently told the California Stem Cell Report that great scientists often make terrible managers, a sentiment that may come into play during the selection process.

California's Stem Cell CEO Search: Directors Emphasize Speed, Job Description Changes Underway

Directors of the California stem cell agency are rejiggering the job description for the new president of the $3 billion research enterprise, including possibly language that says that the person does not necessarily have to be a scientist.

The directors' Presidential Search Subcommittee met last Friday to take its first crack at the task of hiring someone to replace Alan Trounson, who is returning to his home in Australia to rejoin his wife and family. The agency has also posted a request for bids from executive search firms to assist in the task.

The California Stem Cell Report queried the agency about the outcome of Friday's meeting, some of which occurred behind closed doors. Kevin McCormack, a spokesman for the agency, said via email,

“There are a number of revisions being made to the (job) description to update it and that will be circulated to the subcommittee when they are done.”

We asked specifically about the language in the description that said the new CEO had to have “scientific credibility” but omitted a requirement that the person be a scientist. McCormack replied,

“There were so many suggestions on what to include in the criteria that I would be hesitant to definitively say what's in and what isn't. Hopefully we'll have the new criteria shortly.

“There was one very clear message that we want to expedite this to get a new president as quickly as possible.”

McCormack said the subcommittee will meet again before the full board meeting that begins Dec. 10.

Sharing Jerry Brown's 'Reality Sandwich:' The California Stem Cell Angle

California Gov. Jerry Brown yesterday served up a “reality sandwich” that may not augur well for the financial future of the $3 billion California stem cell agency.

It was a “lower-your-expectations” message that harkened back to Brown's first term in office when he surprised many in the state with his frugal ways.

Brown delivered the news to the University of California regents, one of whom is also Sherry Lansing, a longtime and influential member of the 29-member governing board of the stem cell agency.

Brown told the regents that he plans to budget the university for a $146 million increase (5 percent) in state funds during the upcoming fiscal year. The regents want an additional $120 million. Brown said that was not going to happen.

David Siders of The Sacramento Bee reported that Brown, who once studied for the Catholic priesthood, told regents that they may think that his "Jesuitical harshness is not nice.” But he said that there are many competing interests within the state and "that's kind of the reality sandwich we have to chew on."

UC Regent Lansing said that she is not ready to give up on more cash for UC and that she believed in UC's “power of advocacy,” according to Katy Murphy, writing in the San Jose Mercury News. Last summer, at the stem cell agency's governing board meeting in July, Lansing also stressed the need for “renewal of the (state) bond money” that finances the operations of the agency, which is known as CIRM.

The stem cell enterprise faces a more serious fate than the University of California. The agency will run out of money for new awards in 2017. It is looking at some sort of public-private partnership to continue its efforts. Its initial assumptions include as much as $200 million in public support.

The state's economic situation could improve within two years. However, the pressing demands of a host of high priority needs in California will increase as well. Stem cell research will face tough competition against the many compelling state problems that have been given short shrift during the past five years or more.

That's all part of the “reality sandwich” for CIRM to sample in December when its directors will be briefed on a new plan for financing the agency's future.

South Dakota Catches Up on $100 Million Sanford Stem Cell Donation

For Denny Sanford, it was close to one of those moments when, as Samuel Johnson once said, your mind is concentrated “wonderfully.” Or not-­so-wonderfully.

For Sanford it came Oct. 19, just 15 days before he announced he was giving $100 million to UC San Diego for stem cell research.

“I was within minutes or hours of death," he told reporter Jon Walker of the Argus Leader newspaper in South Dakota earlier this week. Sanford, 77, had suffered a near fatal blood clot in his lungs at 2:30 in the morning while on a pheasant hunting trip near Gregory, S.D.

“I couldn’t walk or breathe. It’s pretty scary when you can’t walk eight or 10 feet.”

Sanford called his physician at Sanford Health in Sioux Falls, S.D., who launched the facility's emergency plane. The billionaire was treated successfully and now reports he is back in the San Diego and in good condition.

Sanford is famous in both San Diego and South Dakota for giving away more than $1 billion. He still has about $1 billion but says he plans to give it all away and die broke. His largest contribution, $400 million, has gone to Sanford Health.

Sanford has spent years in South Dakota and is often described as a South Dakota resident. However, the Argus Leader says he is a former Sioux Falls businessman who has homes in South Dakota, Arizona and California.

Walker's newspaper is part of the Gannett chain that also operates USA Today, which yesterday picked up the reporter's two stories , one on the California stem cell donation and one on Sanford's lung blockage. The two articles were combined and rewritten by USA Today to focus on the $100 million stem cell donation. Walker's byline was put on the story in keeping with common newspaper practices. It was a score for Walker to have a byline on a national story in a national publication with 2.88 million circulation.

(Samuel Johnson had a number of things to say about close encounters with mortality. Here is a link to one.)

Scientific Advisors to Stem Cell Agency: Time to Move 'At Speed'

John Bell, chair of CIRM SAB
Academy of Medical Sciences photo

The $3 billion California stem cell agency is preparing to take a close look at recommendations from key advisors that it should focus more sharply on a handful projects in order to transform research rapidly into commercial therapies.

The governing board's Science Subcommittee on Nov. 22 will examine the proposals by its new Scientific Advisory Board(SAB), created last summer as the result of a $700,000 Institute of Medicine study. Among other things, the advisory board said CIRM directors should zero in on six to eight projects that would lead to early stage clinical trials.

The recommendations come as the agency, known as CIRM, is wrestling with its own mortality. Cash for new awards will run out in 2017. The directors next month will hear a consultant's report on a plan for financing the agency's future. It is expected to involve some sort of public-private funding, which will only be forthcoming if the agency demonstrates research results that resonate with possible funding sources.

At last month's governing board meeting, CIRM director Sherry Lansing, a former Hollywood film studio chief, former chair of the UC regents and a prodigious fundraiser, sounded an urgent note.

She said that the agency is “trying desperately to get a win.” She raised the possibility of 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.

The Oct. 9 board meeting was the first time that Lansing and the other 28 CIRM directors had seen the recommendations, which were prepared outside of public view. They were only received by the agency staff two days before the board meeting.

The agency has yet to post on the Internet the full SAB document. However, the California Stem Cell Report asked for a copy, and the complete text can be found at end of this item.

 The report said,

“(F)or stem cell research to continue to advance at its current pace in California, future potential investors and supporters of stem cell research must perceive a tangible benefit to human health, and this can only happen through a clear success at the stage of clinical proof of concept. It is important that this occurs during the currently projected lifespan of CIRM, so that deserving projects and resources are positioned in the strongest way possible to attract future investments after expiration of the current CIRM funds.”

The agency's scientific advisors, only one of whom is from California, said the agency has a “strong chance of success” in securing additional funding if it moves “at speed.”

The panel, chaired by Sir John Bell of Oxford University in the United Kingdom, said it was “optimistic” that “a clinical proof of concept can be achieved in one or more settings with CIRM projects within the next three years.”

The report contained some comments that indicate that the advisors are not fully aware of all the circumstances surrounding CIRM. The panel prepared its report after being briefed by CIRM staff and four academic recipients who had received CIRM awards. No representatives from industry were heard. The advisors' report said,

“The SAB had a very positive view of the interactions between CIRM and the commercial sector.”

Many in the biotech community, however, have been less than pleased with CIRM, to point of holding a private dinner to air their grievances with then CIRM Chairman Robert Klein, filing multiple appeals of grant reviewer decisions and testifying before the Institute of Medicine. Only a tiny percentage of the $1.9 billion in CIRM awards has gone to business.

The agency, however, is working diligently to improve its industry relations, which are critical to turning research into something that can actually be used in the marketplace.

The advisors, handpicked by departing CIRM President Alan Trounson, praised CIRM's achievements so far as “considerable” and “transformative.” But it noted that the agency lagged behind other funding bodies in terms of “attention and attribution.”

The panel said,

“CIRM has been catalytic in generating many of the scientific advances in this field, but its brand recognition internationally and even nationally is limited and this should be corrected.”

The agency has suffered in the past from PR missteps but has been moving with some success in the past year to gain more favorable attention. However, it remains a relatively young organization. It receives almost no coverage in the mainstream media and very little more in the scientific media. Breaking through the media clutter is difficult, especially given that CIRM has not been part of major stem cell developments that naturally generate front page attention.

The SAB recommendations have been largely endorsed by the agency's staff. Following the Nov. 22 meeting on the proposals, they will go to the full governing board at its December meeting for action. The public can attend the meeting Nov. 22 in San Francisco and a teleconference location in Duarte at the City of Hope. Advance comments can be filed with CIRM via email at info@cirm.ca.gov.

  Scientific Advisory Report California Stem Cell Agency October 2013

The California Stem Cell CEO Search: Not Necessarily a Scientist but Should be Unperturbed by Public Criticism

Some sketchy clues are surfacing concerning the nature of the search for a new president for the $3 billion California stem cell agency.

They popped up in an RFP for help from an executive search firm to find candidates to replace Alan Trounson, who is resigning to return to his home country of Australia. (He is scheduled to be in Chile this week.)

The RFP contained a “draft” of a description of the job of the new CEO. It said that the salary could range as high as $548,788 annually with a benefit package that appeared to be negotiable. That could be important if the new president might come from out-of-state to California's sky high home prices.

According to the description, the new president should be a “well-recognized leader.” Notably the description did not specify that the individual must be a scientist but said the person should have “scientific credibility.” The individual must have both “unassailable integrity” and “ a solid reputation for ethics and integrity and be sufficiently self-possessed to not be perturbed by criticism or controversy.” The agency also appeared to exclude candidates from overseas, limiting the search to the United States.

The RFP indicated that the job description might be changed as the governing board works through its selection process. The board's Presidential Search Subcommittee will hold its first meeting this Friday, some of which is public.

The RFP also said that “outside time limit” for selection of the president is six months from the award of the contract, scheduled for Dec. 16. Responses to the RFP must be submitted no later than Nov. 26. No price tag was put on the search contract although the last one in 2009 was budgeted for $100,000. And it did not come up with Trounson, the person who snagged the job that time around.

Our take? The agency faces several critical decisions in the next few months, including action on a plan to finance its future since it runs out of money for new grants in 2017. Also on the table are decisions on the handful of research projects that it expects to back more strongly in hopes of more successfully promoting commercialization of stem cell therapies. That is not to mention the ambitious proposed $70 million Alpha stem cell clinic effort. Assuming six months to hire a new president and another six months before the person is actually in place, the new CEO could be well behind the curve by the time he or she is on the job. While it is three years or so before money runs out, the reality is that the agency must move with considerable dispatch to cement its continued existence. Building support and positive recognition is a long-term project, and right now the stem cell agency is little known outside of scientific circles, which are small indeed. Producing something akin to a cure is also crucial in winning support from lawmakers, the public or the private sector.

The nine-year-old agency has had only two presidents, not counting one interim CEO. Selection of those presidents was marked by considerable difficulties, including divergent views of the CEO role among board members. However, the need for speed and continuity at the agency may smooth over some of those rough spots in this latest presidential search.

Prowess and Conflicts: A Media Primer on the California Stem Cell Agency

The major daily newspaper in the San Diego area, a hotbed of biotech and stem cell research, is carrying a lengthy piece on the status of the California stem cell agency.

The article was written by Bradley Fikes. The headline on the article on the Web site of the San Diego UT said,

 “Stem cell program is making progress.” 

Fikes said that “CIRM’s scientific prowess is generally acknowledged by its critics” and cited nine early stage clinical trials that have received some agency funding for research along the way. But he also wrote,

“It’s clear that treatments haven’t come as fast as optimists had hoped. No therapies funded by the agency have been approved.”

He continued with a mention of the 2004 ballot campaign that created the agency, an effort that was criticized for hyping stem cell research. Fikes wrote,

“As it turned out, researchers simply didn’t know enough about stem cells to rush them into clinical trials. So the agency, the California Institute for Regenerative Medicine, or CIRM, stuck to the basics.”

The piece is something of a primer on the agency, which is appropriate for the general readership of the newspaper. Even with San Diego's strong stem cell presence, the overwhelming majority of readers of the paper are unlikely to know much about the research or the agency.

Fikes also mentioned the longstanding conflict of interest issues at the agency. The California Stem Cell Report has calculated that about 90 percent of the $1.9 billion awarded by the agency's directors has gone to institutions linked to directors. Fikes wrote,

“'From the very beginning, it was clear that CIRM fundamentally was composed of people who decided to give out the money who, by and large, represented the people who receiving the money,' said John Simpson of Santa Monica-based Consumer Watchdog.”

As of this writing, no readers of the newspaper had filed comments on the article.

The Search for a New California Stem Cell Agency CEO

The governing board of the $3 billion California stem cell agency faces a critical leadership challenge in the next few months as it attempts to find a new president for the nine-year-old organization.

It is a challenge in at least two ways. One is the more or less straight-forward process of finding candidates to replace Alan Trounson, who is leaving to return to his family in Australia. The second is whether the governing board can move quickly and unite on the needed attributes for the next president.

That may sound simpler than it is. But the 29-member board is large and unwieldy. A nine-member board, for instance, would be able to make decisions much more quickly. In the last presidential search, the board had difficulty in coming together on the qualities for a new CEO. Today the choice would seem to be between a star or semi-star researcher or a knowledgeable person who can synthesize the choices and make the stem cell train run on time.

The agency also is confronting an unusual financial situation – at least in terms of recruitment – that is likely to make it more difficult to find top level candidates. The agency will be all but out of business in 2017 unless it can secure additional funding. Money for new grants will run out that year. Top candidates for the presidency may find that possibility unappealing. The situation will also require a president who understands fund-raising, both public and private, and can successfully navigate California political and governmental byways. The agency is currently involved in developing a plan for its future finances, including possibly some sort of public-private combination.

Another issue that is likely to complicate recruitment is the troublesome dual-executive arrangement at the agency in which the chairman of the organization and president have overlapping responsibilities. Some candidates may not be willing to step into such a situation, which is legally dictated by Prop. 71, the ballot measure that created the agency, and which is politically impossible to change in the next couple of years.

The new president will also have to be a person who can help retain staff at the San Francisco-based agency, which has only slightly more than 50 employees. Now is not the time to be losing key personnel, but given the funding situation, some may be tempted to take advantage of appealing opportunities elsewhere.

One straight-forward way to deal with the vacancy is to look internally. Such a course has several advantages: It would require no learning curve and would demonstrate a commitment to existing employees. But foremost, it could be done quickly and ensure stability. Another possibility is to find a candidate – retired or in the late stages of his or her career – who would be willing to step in for a few years to keep the agency on course during this critical period. It could be appealing to the right person, given the unusual nature of the agency and the challenges that it faces.

Trounson is remaining in place at least during the initial stages of the presidential search. But he is already a lame duck and will unavoidably become more of one as time passes. His focus will naturally and justifiably shift to his family concerns and his return to Australia. That will inevitably create managerial slowdown and procrastination at a time when speed is necessary – not only for finding new funding sources but for making important strategic decisions on the most promising avenues to pursue to commercialize stem cell research.

The board's Presidential Search Subcommittee meets one week from today to begin its work. A public session will precede a closed-door personnel meeting. Some documents from previous presidential searches are available on the CIRM Web site via the agenda for the meeting. The public can take part in the public portion, which is likely to be quite brief, at locations in San Francisco, Los Angeles, Irvine and La Jolla. The specific locations can be found on the agenda.

Stakeholders in the stem cell community are welcome to weigh with comments or suggestions at the session or by sending them to info@cirm.ca.gov.

The members of the subcommittee, in alphabetical order, are Sue Bryant, interim provost at UC Irvine; Anne-Marie Duliege, chief medical officer at Affymax; Sam Hawgood, dean of the UC San Francisco medical school; Steve Juelsgaard, former executive vice president of Genentech; Sherry Lansing, former chair of the UC regents and Hollywood studio CEO, Jeff Sheehy, a patient advocate board member and communications manager at UC San Francisco; Jonathan Thomas, chairman of the agency board and a Los Angeles bond financier; Art Torres, vice chairman of the agency and former head of the state Democratic party, and Kristiina Vuori, president of the Sanford-Burnham Institute.

Tracking the California Stem Cell Agency: The Calendar for 2014

The coming year will be a big one for the California stem cell agency and all the many researchers, institutions and companies who have millions of dollars tied to it.

The key decisions involve hiring a new president and creating a new course to a secure financial future – not to mention handing out hundreds of millions of more dollars.

Tracking the doings of the San Francisco enterprise can best be done through attendance at its day-long board meetings, where the public and interested parties have an opportunity to talk board members and the agency staff.

CIRM recently posted its schedule for seven meetings during 2014, ranging from San Diego to the San Francisco Bay area. All are currently one-day sessions with the exception of December 2014, which will involve two days. You can find the schedule here for guidance in planning your 2014 calendar. Keep in mind that meeting dates sometimes change but those changes are not always reflected on this particular calendar.

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.