Sacramento Biotech Interests Eyeing Proposed $5.5 Billion California Stem Cell Measure

The proposed $5.5 billion California stem cell initiative attracted some media attention this week in Sacramento in an article that said the area's biotech researchers and companies "are keeping a close eye on where those dollars go."

The piece by Felicia Alvarez in the Sacramento Business Journal outlined the impact of the state stem cell agency in the area and addressed the future should the measure win approval in November 2020. UC Davis has used $143 million from the agency to build its stem cell program. 

The article said more funding would dovetail nicely with plans for a development called Aggie Square by UC Davis at its Sacramento complex, which currently houses its stem cell program.  David Lubarsky, UC Davis Health CEO, said, 

“We believe many companies and life science manufacturers will gravitate to Sacramento and Aggie Square to align themselves with this technology."

Alavarez also wrote, 

"Aggie Square could eventually be expanded into a nationwide manufacturing site for stem cell-based medicines, and an eventual distribution hub, Lubarsky said."

However, Cate Dyer, CEO of StemExpress, expressed a desire for changes in the proposal. Dyer sits on the board of the UC Davis Institute for Innovation and Entrepreneuership. She said, 

“I would like to see some changes made to this bill in what Californians intended it to be — directly benefiting health care in California and returning the royalties and fees back to the state.”

Dyer also said some stem cell-related start up efforts out of UC Davis have struggled. Dyer said, 

“Students contact me all the time that are tied up in these agreements with the university that they can’t get out of. They can't get their business external enough that investors would want to come in.”

The Sacramento Business Journal article is a rare news story dealing with the proposed initiative, which would make sweeping changes in the state stem cell agency, formally known as the California Institute for Regenerative Medicine. 

Not all of those changes are beloved  by all members of its 29-member governing board, which has scheduled a meeting Friday morning to consider the proposal. (See here for a 3,300-word critique by one board member here. See here for an article on last week's sometimes testy discussion of the measure.)

Directors could, at Friday's meeting, make recommendations for alterations. The deadline for actually changing the terms of the measure is Monday at 5 p.m. The only person who can make changes in the proposal is Robert Klein, the sponsor of the measure and the first chairman of the stem cell agency. Directors of the agency have the choice of writing their own initiative as an alternative to Klein's or taking other alternative steps.

The meeting is open to members of the public, who can comment as well, at a number of locations throughout the state.  It is also scheduled to be available online. 

Have Your Say on $5.5 Billion California Stem Cell Measure; Locations, Internet Access to Public Meeting Friday

The public can participate and listen in on the stem cell agency's meeting on Friday dealing with the proposed, $5.5 billion ballot initiative that could lead to changes in the measure. Some of the agency's board members have already expressed reservations. 

The session is scheduled for two hours beginning at 9 a.m. It will be available via the Internet and also at telephonic locations throughout the state. Here is a current list of the locations, including the stem cell agency headquarters in Oakland.  The locations could change. Instructions for Internet access can be found on the agenda. 

• State stem cell agency -- 1999 Harrison Street Suite 1650, Oakland, CA 94612

Other Locations (updated Nov. 14, 2:36 p.m. PST):

• 10901 N. Torrey Pines Road, La Jolla, CA 92037
• 1001 Health Sciences Rd., Irvine, CA 92697
•  291 Campus Drive, Stanford, CA 94305
• 8700 Beverly Blvd 2015, Los Angeles, CA 90048
• 583 Mrak Hall, 1 Shields Ave., Davis CA  95616
• 100 Kimball Way, South SF, 94080
• 12-231 CHS, David Geffen School of Medicine, UCLA
• 4005 N Fresno St., Fresno, CA 93726
• 837 Health Science Road, Irvine, CA 92697
• 769 Evans Hall, University Dr, Berkeley, CA 94720
• 8170 Laguna Blvd., Elk Grove, CA 95758
• Marina Village Conference Center - 1936 Quivira Way, San Diego, CA 92109
• 765 Market St. Apt 31D, San Francisco, CA 94103
• 15775 Gum Tree Lane, Los Gatos, CA 95032
• 10850 Gold Center Drive, Suite 325, Rancho Cordova, CA. 95670
• 600 16th Street, Genentech Hall, S272D, San Francisco, CA  94158

Fresh Comment on CIRM's Abilitiy to File its Own Ballot Initiative

The vice chairman of the California stem cell agency board, Art Torres, today responded by email to a question about the possibility of the agency filing its own ballot initiative to provide billions in refunding for the agency. He was referring to an item posted earlier today headlined "Survival of the Financially Strapped California Stem Cell Agency? It Can Write Its Own Ballot Initiative."

Torres said,

"The agency could write its own initiative but no power to place it on the ballot or circulate it for signatures. I think the meeting on Friday is the best way to collect recommendations to pass on." 

As was noted in the item, a sponsor would have to be found to pick up whatever initiative that the agency might offer. Torres' comment has been added to the original item. 

Survival of the Financially Strapped California Stem Cell Agency? It Can Write Its Own Ballot Initiative

Directors of the California stem cell agency --- some of whom are not happy with a proposed $5.5 billion ballot initiative that would rescue the agency -- have a choice: They can write their own ballot measure. 

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is permitted under state law to draft its own ballot initiative, a provision that escaped notice at the governing board's meeting last week. 

It was during that session that the dissatisfaction among some CIRM directors  surfaced significantly. A number of board members expressed reservations about the proposed ballot initiative, which would make major changes in the agency's operations. "Not helpful," was one characterization. "Handcuffs" was another. 

Another meeting was called for a week from today (Nov. 15) to consider the $5.5 billion proposal, which has a deadline of Nov. 18 for making changes. Any alterations can only come from Robert Klein, the sponsor of the initiative and the first chairman of the 15-year-old agency. 

Not discussed last week's board meeting was a sentence in a legal memo prepared by James Harrison, the former general counsel of the agency. In addition to the memo, Harrison briefed directors with a slide presentation on the restrictions on the use of public funds to support a ballot initiative. The sentence said,

"However, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters."

The California Stem Cell Report this week queried Jeff Sheehy, one of the less-than-pleased CIRM directors, for a comment on the possibility of pursuing an alternative to the Klein initiative. He said in an email:

"I have to admit that I had no idea that CIRM could draft its own ballot measure. I am surprised that this option was not brought to the board earlier. I think CIRM drafting its own ballot measure is a great idea and we should start this process as soon as possible, assuming that the rest of the board supports doing so."

 (Update: In response to a question, Art Torres, vice chairman of the CIRM board, said following initial publication of this item today, 

("The agency could write its own initiative but no power to place it on the ballot or circulate it for signatures. I think the meeting on Friday is the best way to collect recommendations to pass on." )

Harrison made it clear last week that running a campaign is illegal for CIRM. Someone from outside the agency would have to step in to do that as well as raising the tens of millions of dollars needed to place it on the ballot and conduct the campaign.

CIRM, meanwhile, is running out of the $3 billion that voters provided it in 2004 and will have to start winding down next year unless voters provide it with more cash. The most obvious source has seemed to be the ballot measure offered up by Klein, a Palo real estate investment banker who also directed the writing of the initiative that created the agency in 2004.

Time is running out for initiatives for the November 2020 ballot. A lengthy signature gathering process is involved in addition to an array of statutory requirements. 

However, an initial draft of a measure -- sort of a placeholder -- could be submitted quickly after a sponsor stepped up. The measure could be fleshed out and refined during the 30-day comment period with revisions made after that period closes.

In another possible scenario, Klein could withdraw his current initiative if he needs time to consider changes desired by the board. A new proposal then could be drafted and submitted for fresh ballot certification. 

Supporters of the agency could also go to the state Legislature and ask lawmakers to place a funding measure on the ballot. That would involve some major political obstacles and negotiations. So far, CIRM directors have not been inclined to move in that direction.

Here is a link to additional legal discussion of how local California governmental agencies can engage in drafting a ballot initiative and placing it on the ballot. 

What's Old is New Again: Multibillion-dollars in Stem Cell Spending and Conflicts of Interest

Controversy about conflicts of interest at California’s $3 billion stem cell agency arose once again last week -- this time involving a plan to basically hand over conflict regulation to a prestigious, national organization that is virtually unknown outside of the scientific world. 

That little known group is the National Academies of Sciences (NAS), which doesn't rank high in anybody's breakfast table talk. However, the NAS has already weighed in with recommendations for solving conflicts of interest at the California stem cell agency. And the agency's board has said "neyt" to the NAS proposals.

Instead, the directors of the agency, formally known as the California Institute for Regenerative Medicine (CIRM), enacted their own, less sweeping changes to try to reduce the perception of conflicts of interest among the 29 members of the board.

Events last Thursday at the CIRM board meeting captured the essence of the conflict concerns. Nine awards totalling $54 million were involved. All went to enterprises that had links to institutions represented by CIRM board members. None of the board members tied to the recipient institutions was allowed to vote on the applications. 

However, the entire CIRM board makes the decisions that create the agency's grant programs, ranging from clinical trials to basic research. And over the years, roughly 90 percent of the $2.7 billion in CIRM awards has been swept up by institutions with representation on the agency's governing board, according to calculations by the California Stem Cell Report. 

Seven years ago, the NAS looked at that situation and other CIRM activities at the agency's behest. CIRM paid the NAS $700,000 for the work, done through what was then called the Institute of Medicine (IOM). 

Here is how the chairman of the 13-person study group, Harold Shapiro, a former president of Princeton University, described the problem to the Los Angeles Times in 2012. 

“They (the CIRM directors) make proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight.”

The report said, 

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

Issues about conflicts surfaced even before the agency came into being when opponents used matter during the 2004 ballot campaign that created the agency. 

The electoral effort to establish the agency was directed by Robert Klein, who also directed the writing of the initiative and then became the agency's first chairman. Klein, a Palo Alto real estate investment banker, has now submitted to state officials a new ballot measure to give the agency $5.5 billion more.

It would make major changes in the agency, increasing its board size from 29 to 35. Some of the additional members would come from enterprises that would stand to benefit from the largess of the retooled agency.  

Klein's initiative would legally require CIRM to establish conflict of interest regulations that are "generally aligned with standards adopted by the National Academy of Sciences." That is new language that could provide a rationale for not creating tougher standards and take some of the heat off the agency and its directors. 

Jeff Sheehy, a longtime patient advocate member of the board and chair of its science committee, released to the California Stem Cell Report a 3,300-word critique of the Klein initiative. Sheehy said last week in his analysis, 

"Questions related to conflicts of interest regarding the distribution of $5.5 billion in state funds obtained via debt financing should NOT be handed to an entity that is not under the control of the State of California. In addition, the National Academy of Sciences has no public meeting requirements nor other measures around public accountability and transparency that are uniformly applied to all government bodies in California.

"Those sections removing conflicts of interest oversight from the purview of Californians should be removed. The way to address any concerns expressed around conflicts of interests by board members is to add new language changing the composition of the ICOC(the agency's governing board)."

For a look at one experience in California dealing with state stem cell issues and the NAS, see this item on the California Stem Cell Report. 

On Friday Nov. 15, the CIRM board will meet to consider Klein's new initiative, which requires more than 600,000 signatures to be placed on the November 2020 ballot. Klein is the only person who can make changes in it. He has until Monday Nov. 18 at 5 p.m. to do so, if he wishes. 

Klein has not yet commented on the upcoming CIRM board hearing. The California Stem Cell Report will carry his written response verbatim when it is received. 

Stem Cell Researcher on $5 Billion Retooling of California's Stem Cell Agency: Learn from Experience, 'Do This Better'

California stem cell scientist Jeanne Loring has endorsed an insider's critique of a proposed refinancing plan for the state's stem cell agency, calling the analysis "logical" and coming "from the heart."

Loring's statement this week to the California Stem Cell Report addresses the 3,300-word evaluation by Jeff Sheehy, who has served on the agency board since its inception in 2004. 

In her comments, she endorses his analysis as logical and detailed. Among other things, she supports a reduction in the size of the agency's board from 29 to seven or 11 and stronger leadership of the panel. 

Loring is an award-winning scientist who has received more than $20 million in grants from the agency, officially known as the California Institute for Regenerative Medicine (CIRM). She is a co-founder and chief scientific officer of Aspen Neuroscience of San Diego, Ca., and professor emeritus at Scripps Research in La Jolla.

The CIRM board is known as the Independent Citizen's Oversight Committee and has called a Nov. 15 meeting to consider the ballot initiative. Its sponsor has until Nov. 18 to submit changes in the proposal. 

The California Stem Cell Report more than welcomes additional comment on this important subject, both pro and con. You may comment at the end of this item. Or send your commentary to djensen@californiastemcellreport.com. It will be carried verbatim.

Here is the full text of Loring's comments: 

"I’m a stem cell researcher who has benefited greatly from California’s investment in human pluripotent stem cells. I’ve been attending the Independent Citizen’s Oversight Committee (ICOC) meetings since 2005; I’ve been to more than 50, which is more than many of the current ICOC members have attended. I am writing because my own observations support Jeff Sheehy’s insightful critique of the 2020 ballot measure. I know that it is likely that he will be criticized for raising his concerns, but there is no stronger supporter of CIRM’s regenerative medicine mission than Jeff Sheehy. With all due respect to the other 28 members of the ICOC, I’ve seen that Jeff has always been the best prepared for their meetings. 

"I urge the promoters of the new initiative to not confuse criticism with anti-CIRMism. Jeff’s assessment is logical, detailed, and comes from the heart; his goal is to de-politicize the agency and make it more accountable to the people of California.

"There is tremendous concern that the decisions of the ICOC, both on policy and in deciding what grant applications to fund, are politically and selfishly motivated. This concern is warranted, as manifest in some of the wasteful decisions the ICOC has made. This can be fixed. I would like to see stronger leadership of the ICOC, in the form of a fully committed chairman, and that the committee take its responsibilities more seriously. I agree with Jeff that the ICOC should have fewer members, 7 or 11 instead of 29 or more, so that no member can escape his or her responsibility.

"The ICOC is supposed to make judgements that assure that the funding provided by CIRM is consistent with CIRM’s mission for the people of California. Unfortunately, I have seen too many situations in which it is clear that the ICOC members too often defer to the grant reviewers, who are all from outside California, and have no stake in the outcome of their decisions. The ICOC has too often approved grants of tens of millions of dollars without spending any time investigating the applications and deciding whether the money will be used in the best interest of Californians.

"I fervently hope that Jeff’s specific suggestions about the ballot measure be considered by ICOC members, politicians, and voters. There is a chance now to learn from experience and do this better, and all that will take is to engage the critics who know what they are talking about.

"Anyone who has an untreatable condition should be aware of the practical value of regenerative medicine. We in California have an opportunity that the rest of the world can only wish for - to make lives fundamentally better for those who suffer now and will suffer in the future from diseases and injuries that only regenerative medicine can help."

Skeptical Look at $5.5 Billion Plan to Refinance California's Stem Cell Research Program

A longtime critic of California's $3 billion stem cell agency this week chalked up pluses and minuses of the research effort, which it said is "essentially broke," and sounded a skeptical note about a plan to refinance it with $5.5 billion more.

The Center for Genetics and Society (CGS) "essentially" agreed with what it described as a "scorching" critique of the proposed ballot initiative to provide the agency with additional billions. In addition to the cash, the initiative would make major changes in the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

In a post on the CGS blog, Pete Shanks, a consultant with the Berkeley organization, briefly recounted the history of CIRM and some of the past criticism of it. But he focused primarily on the critique last week by longtime CIRM board member Jeff Sheehy. Shanks said,

"Sheehy’s range of concerns is wide. He convincingly criticizes proposed changes in the board structure, in handling conflicts of interest, and in the way CIRM addresses ethical concerns. He objects to the measure’s failure to maximize financial returns to the State from any successful therapies. He is also apparently baffled by the strange requirement that CIRM must expand its (apparently successful) 'Alpha Stem Cell Clinical Program' — seemingly a clear example of fixing what ain’t broke."

Shanks also wrote,

"The original governance scheme of CIRM has been widely criticized, first at the time of its formation by a number of public interest organizations (including the Center for Genetics and Society) and subsequently by the Little Hoover Commission in 2009 and by the Institute of Medicine in 2012.”

He continued,

"One of the main criticisms of CIRM involved widespread conflicts of interest on its governing board and the lack of effective oversight from the legislature, both of which were built into the structure quite deliberately. The proposition amended the California Constitution by specifically adding the establishment of CIRM and the right to conduct stem cell research as Article XXXV . It also required waiting at least three years, obtaining votes from a 70 percent supermajority of both houses of the Legislature, and the Governor’s signature before any amendment could be made. And it exempted the research it authorizes from “other current or future state laws or regulation.” Unfortunately, the new language not only avoids making many needed reforms, but it may also actually make the structural issues worse."

Shanks noted the hype surrounding the 2004 initiative that created CIRM. He said,

“Advocates for the new initiative have already demonstrated that they plan to pin their case for billions of additional public dollars on a dubiously rosy prospect of medical breakthroughs and cures, as they did in 2004. They would no doubt be delighted if they could also do-over the political argument that animated their first campaign, though to date Donald Trump has shown no interest in the issue. How voters will judge the promises, and how much weight they will give to non-monetary issues — built-in conflicts of interest, lack of oversight, outsourcing decisions about ethical standards, and the like — remains to be seen.”

The CIRM governing board has scheduled a Nov. 15 meeting to consider the proposed ballot measure. Changes in it can be made by its sponsor by the end of work Nov. 18. 

Public Participation Locations for Consideration of $5.5 billion California Stem Cell Finance Measure

Here is the current list of public locations for the Nov. 15, 9 a.m. meeting of the governing board of the California stem cell agency to consider the proposed $5.5 billion ballot initiative that would refinance the agency. 

The measure will also make major changes in the operations of the enterprise. 

The meeting comes only three days before the deadline for making changes in the proposal.

The meeting will be available on the Internet, making it possible for the public to participate remotely. More details are available on the agenda. The list of locations may change. Check the agenda to be sure a location is available. 

The listed locations are generally sites from which a member of the board can participate remotely in the meeting. 

Main meeting site: headquarters of the California Institute for Regenerative Medicine, as the stem cell agency is formally known, 1999 Harrison Street Suite 1650, Oakland, CA 94612

Telephonic locations:
10901 N. Torrey Pines Road, La Jolla, CA 92037
1001 Health Sciences Rd., Irvine, CA 92697
291 Campus Drive, Stanford, CA 94305
8700 Beverly Blvd 2015, Los Angeles, CA 90048
583 Mrak Hall, 1 Shields Ave., Davis CA 95616
100 Kimball Way, South San Francisco, 94080
12-231 CHS, David Geffen School of Medicine, UCLA
4005 N Fresno St., Fresno, CA 93726
837 Health Science Road, Irvine, CA 92697600 16th Street, Genentech Hall, S272D, San Francisco, CA 94158

California Stem Cell Directors to Air $5.5 Billion Refinancing Measure: Some Less Than Pleased

Directors of California's 15-year-old stem cell research program, which is now down to its last few millions, next week will take up a $5.5 billion proposal to refinance the effort, and not all of them like it.

The proposed ballot initiative has been submitted to state election officials. But it still can be changed up to Monday Nov. 18 at 5 p.m. That is three days after the 29-member governing board has scheduled a discussion of the complex, 30-page measure. That meeting is scheduled for Friday Nov. 15 at 9 a.m.

The only person who can make changes in the measure is Robert Klein, the first chairman of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. Klein is the official sponsor of the new initiative as he was on the initiative, Proposition 71, that created CIRM in 2004.  His current measure would go on the November 2020 ballot.

 Klein, a Palo Alto real estate investment banker, is also chairman and founder of Americans for Cures, a stem cell research advocacy group.

During a sometimes testy meeting last week, some CIRM directors said that Klein's new measure contained features that, in the words of one, were "not helpful." Directors did not go into details about the substance of the proposal, but debated mostly about whether it should be publicly reviewed by the board before the deadline for making changes.

Klein's original, 2004 measure financed CIRM with the issuance of state bonds, which are now running out. It did not provide other substantial sources of cash. Today the agency is down to roughly $27 million, which is earmarked for sickle cell research. CIRM directors gave away $54 million last Thursday for research into eye disease, Parkinson's and epilepsy, among other afflictions. 

Last Wednesday, CIRM Director Jeff Sheehy, who has served on the CIRM board since its inception, released to the California Stem Cell Report, a 3,300-word critique of Klein's new measure. On Thursday, Sheehy brought up Klein's measure at the board meeting during a discussion of CIRM planning in 2020. CIRM Chairman Jonathan Thomas ultimately said a number of directors had questions about the initiative and proposed a full board meeting before the deadline for changes.

The California Stem Cell Report has asked Klein via email whether he has closed the door to possible changes. Separately Klein has been asked for a written response to Sheehy's analysis, which the California Stem Cell Report will carry verbatim when it is forthcoming.

The Nov. 15 meeting is expected to be available online with public participation via the Internet. Telephonic sites are expected to be available in addition to CIRM's Oakland headquarters. Here is a link to the agenda with details.

(Editor's note: An earlier version did not carry a link to the agenda since it was not posted online at the time this item was written.)