Final Cyberspace Dash Underway for $5.5 Billion California Stem Cell Initiative

Above is the instructional video from the stem cell initiative campaign web site. 

The campaign to save California's stem cell research program from financial extinction is making an "unprecedented," electronic sprint to gather the final signatures to qualify its $5.5 billion rescue measure for the November ballot. 

In the next eight days, the campaign says it needs 35,000 more signatures to be sure that the multi-billion-dollar ballot initiative is presented to voters next fall. 

The stem cell agency, officially known as the California Institute for Regenerative Medicine (CIRM), is running out of money. It will begin closing its doors in November without more funding.  The campaign's web site says, 

"Over 915,000 voters have already signed petitions to help qualify our initiative for the November 2020 ballot. In the last full week before public signature gathering was shut down due to the coronavirus, over 120,000 voters signed – a tremendous response. But we need at least 950,000 signatures to secure a place on the California ballot this fall. 

"Help us meet our goal by signing and returning a petition today. The campaign must gather the last 35,000 signatures through mail-in submissions by April 11th."

In response to questions from the California Stem Cell Report, campaign spokeswoman Sarah Melbostad described the online move as "unprecedented." She said,

"What’s happening right now across the world is unprecedented, which means the innovative changes we’re making to gather signatures through a mail-in option are unprecedented as well." 

The campaign's unusual Internet pitch is aimed at putting petitions in the hands of its supporters. The effort requires downloading documents, reading detailed instructions on filling them out and then returning them by regular mail. Normally, paid signature gatherers take care of all that.

The process is not simple and is likely to be daunting for some.  The campaign's web site mentions "wet signatures," the importance of printing out the 16 pages of the petition and the need to complete the "circulator declaration." A seven-minute instructional video has also been posted by the campaign (see above). 

The campaign's message stresses speed. 

"Time is of the essence; a fast response is needed to preserve our opportunity to guarantee our ballot position."

The legal minimum of valid signatures of registered voters is 623,212. The extra hundreds of thousands of signatures are needed because many are disqualified by election officials during the certification process.

The campaign's online pitch also includes a schedule of 30-minute webinars aimed at building support and answering questions. They begin tonight at 6:15 p.m. PDT and continue on April 5, 7 and 11. 

USC vs. UC San Diego: Unprecedented $50 Million Settlement in Academic Recruiting War

The University of Southern California in Los Angeles is coughing up $50 million and publicly apologizing for its tactics in recruiting a star Alzheimer's resarcher from UC San Diego, it was reported Thursday.

The Los Angeles Times story about the unprecedented settlement described the case as an "ugly academic war." It had the potential of bringing $340 million in research grants to USC.  

The move settled a $185 million lawsuit that at one point involved two directors of the $3 billion California stem cell agency, along with researcher Paul Aisen.

The Times story said the "unprecedented litigation in which UC accused its private rival of repeatedly stealing away top scientists and their lucrative research grants with 'predatory' practices and a 'law-of-the-jungle mind-set.'"

Aisen was a neurology professor at UC San Diego. He and his lab staff left the La Jolla school in 2015. The Times reported that the departures were secretly orchestrated by top administrators at USC.

The Times story, written by Harriet Ryan and Teresa Watanabe with additional reporting by Bradley Fikes, said,

"The self-described 'quarterback' of Aisen’s recruitment was then dean of USC’s Keck School of Medicine Carmen Puliafito, subsequently revealed to have been using drugs and partying with criminals during the time he was courting the scientist."

At the time, Puliafito and David Brenner, dean of the UC San Diego medical school, were both members of the governing board of the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. Aisen, however, has not received funding from CIRM, which has financed $56.5 million in other Alzheimer's research. 

According to the Times, the apology said that the recruitment tactics "did not align with the standards of ethics and integrity which USC expects of all its faculty, administrators and staff."

The Times story continued,

"UCSD Chancellor Pradeep Khosla welcomed the settlement and said he was open to working with USC in the future.
"'For California and the country, it’s good that two great research universities can work on the Alzheimer’s problem,' he said in an interview. 'I look forward to a constructive collaboration in the future in solving other societal problems.'
"It is not unusual for professors to move to other institutions, but it is often a collegial process in which the universities work together to transfer grants and research."

The Aisen case was not the first instance of USC researcher poaching. The Times wrote,

"In 2013, Puliafito lured two well-funded brain researchers from UCLA, outraging the state university, which complained to government regulators. USC agreed to pay UCLA more than $2 million in a confidential settlement."

New Stem Cell Labs for California: The $1.1 Billion CIRM Achievement

The California stem cell agency and 12 universities and research institutions today officially kicked off an unprecedented, $1.1 billion stem cell lab construction program that Gov. Arnold Schwarzenegger hailed as "good news" for both science and the economy.

The agency completed action on the grant program this morning and announced a new total figure for the building effort -- $1.1 billion instead of roughly $800 million. CIRM said the revised amount resulted from "additional institutional commitments for faculty recruitment packages and other related capital costs."

In a news release from CIRM, Schwarzenegger said,

"This will go a long way toward medical research that could save lives and improve them for people with chronic diseases. But also, this kind of public-private investment in a growing jobs sector is exactly the kind of good news our economy needs right now."

Robert Klein, chairman of CIRM, said,

"This Prop. 71 stem cell research facilities program is one of the largest building programs ever dedicated for a new field of medical science and it will deliver an impact that will be felt world-wide."

Alan Trounson, president of CIRM, said,

"These facilities will house basic and clinical researchers working collaboratively, with stem-cell-specific core labs literally ‘down the hall’ – an arrangement that is instrumental to our ability to accelerate the pace of research toward clinical application."

The news release from CIRM also quoted a number of the private donors who were tapped to provide additional funds to the institutions, including Eli Broad, whose foundation ponied up more than $50 million to UCLA and USC. He said,

"California is at the epicenter of stem cell research,.By creating new research centers and attracting the very best scientists from around the world, we will enable the rapid progress of one of the most promising areas of scientific and medical research today. The partnership between public institutions, the state, private foundations and donors demonstrates the unprecedented commitment California is making to stem cell research."

Also quoted by CIRM was Li Ka-shing, a Hong Kong philanthropist who contributed $40 million to UC Berkeley. He said,

"When I made a gift to support the establishment of the Li Ka Shing Center for Biomedical and Health Sciences at Berkeley, I was inspired by the passage of Prop. 71 and the promise of significant advances in stem-cell research."

The institutions receiving the government funding are the University of California campuses at Davis, Berkeley, San Francisco, Los Angeles, Merced, Santa Cruz, Santa Barbara and Irvine, the San Diego Stem Cell Consortium (which includes UC San Diego, Scripps, Salk and Burnham institutes), Stanford, USC and the Buck Institute north of San Francisco.

Eight of the applicants took a 9 percent reduction in the initially recommended amounts, opting to take the cash sooner rather than later.

CIRM's news release includes details about program, including a breakdown of what was requested and the amount granted.

Economic Interest Statements of CIRM Directors Posted Online by California Stem Cell Report

Eight months ago, the only public body charged with overseeing the financial practices of the California stem cell agency unanimously recommended more openness and transparency on the part of the $3 billion enterprise.

Chaired by California's top fiscal officer, Democrat John Chiang, the Citizens Financial Accountability Oversight Committee said that CIRM should post online the statements of economic interests of its directors and top executives, following the practice of both Republican Gov. Arnold Schwarzenegger and Chiang himself.

Chiang said,

“To ensure that taxpayer dollars are spent lawfully, wisely and successfully, the stem cell program must pursue the highest standards of transparency to be fully accountable to the public.”

CIRM has all but ignored the recommendation. Instead, it has moved to prevent the committee from exercising more financial oversight of the state's unprecedented research operation.

In response to the controller's recommendation, the California Stem Cell Report is publishing online the statements of economic interest of the 29 directors of the stem cell agency along with those of some of the agency's top executives.

When Schwarzenegger announced his efforts at improving openness, he said,

“Transparency is fundamental to promoting efficiency and effectiveness in government and strengthening the democratic process by giving citizens enough information to reach their own conclusions about how their tax dollars are being spent.”

Understanding and assessing the performance of the California stem cell agency is even more critical than with most other state enterprises. CIRM holds a unique and unprecedented place in state government. Created by a $30 million ballot initiative campaign, it is isolated from the normal financial oversight functions of the governor and legislature. Its stream of income – all borrowed money(state bonds) – cannot be touched, despite California's grave financial crisis.

At the same time, CIRM is riddled with built-in conflicts of interest. Its 29-member board is
heavily influenced by directors tied to institutions that are the beneficiaries of its largess. More than $900 million of the $1 billion-plus that directors have handed out has gone to enterprises with members on the board.

None of this is going to change any time in the near future. Which makes it all the more important for the public to understand who has what at stake when it comes to giving away billions of dollars.

You can find the statements of economic interest here. Here is a link to a state document that helps to explain the nature of the information. You can find the statements of economic interest for Chiang's stem cell oversight committee on his Web site. Here is a link to the transcript of the committee's meeting last January during which questions were raised about accountability and openness at CIRM. Here is a link to the transcript of a subsequent CIRM board meeting during which CIRM President Alan Trounson described  (on p. 132) the discussion at Chiang committee meeting as a “strange critique” and “irrational attack.”  Here is a link to a piece by Los Angeles Times columnist Michael Hiltzik, who attended the meeting and wrote that the agency "has self-righteously fought every attempt to improve public oversight over its disbursement of what is, after all, the people's money."

(The statements of economic interest involving CIRM directors were provided via email by the agency at the request of the California Stem Cell Report, which the agency is required to do by law. They are also available via conventional mail from the Fair Political Practices Commission in Sacramento and in person at both agencies.)

Biotech's Financial Troubles and CIRM's New Loan Program

The California stem cell agency is about to embark on an unprecedented, $500 million biotech lending program at a time when the industry finds itself in an “evolve or die” mode.

The loan effort has been sold to CIRM directors as a no-lose proposition that could generate $100 million in “profits” that could be plowed back into research. That would happen even with loan default rates as high as 50 percent, so the story goes.

However, all those predictions were based on assumptions from a different financial era – a time when the stock market was thriving, capital was flowing and optimism reigned.

Today, a much different picture is being painted by those who know the industry best.

The Burrill Report, published by the respected Burrill & Co. of San Francisco, today carried a piece by its editor-in-chief, Peter Winter – headlined “Evolve or Die” – concerning a recent report on the state of biotech. Winter wrote,

“In its 2009 Beyond Borders annual report on the biotechnology industry, Ernst & Young warns that the global financial crisis threatens to render the business models that have driven the sector to date unsustainable. According to Glen Giovannetti, Ernst & Young’s global biotechnology leader, the funding drought is placing these business models that fueled biotech’s growth since its inception under unprecedented strain.”

Winter continued,

“Currently, biotech finds itself caught in a financial crisis that has analysts speculating whether many biotech companies can recover. The situation that they find themselves is different this time because this crisis is deep-rooted, systemic, and persistent.”

Winter wrote,

“Those that do survive will have adapted to changes that are not only being brought about by the prevailing financial crisis, but also by several mega-trends that will shift existing paradigms and, in doing so, create new, sustainable business models, Giovannetti says.”

CIRM's lending program is supposed to target the riskiest biotech firms for loans – ones that cannot find conventional or even venture capital financing. Some CIRM directors who support the loan program find comfort in the belief that lending the money is better than just giving it away in the form of a grant.

They point to lending plans to give CIRM stock warrants in the recipient companies and a stake in any IP that is developed. What hasn't been fully discussed is the total collapse of a loan recipient. In such a case, the warrants would be worthless. And also in such cases, IP can sometimes vanish and computer files disappear, leaving CIRM holding a multimillion-dollar, empty bag.

CIRM is currently looking at three firms that will evaluate the business models of the loan applicants. Assuming that Burrill and Ernst & Young are correct, that evaluation will be trickier than ever, raising questions about whether both CIRM and the evaluators it hires can step outside of the box. Doing so may pose uncomfortable financial risks for a state-funded agency. But it may also be the only way CIRM has any hope of securing either a scientific or financial return on its $500 million in high-risk loans.

(Editor's note: You can find a host of links to information on the biotech lending program, including its financial assumptions via this item. No business plan, however, exists for the effort.)

Signature Drive Ends for $5.5 Billion California Stem Cell Initiative; Will it Qualify for the Ballot?

Backers of a $5.5 billion ballot initiative to save the California stem cell research program from financial extinction said today that they had finished their petition drive to qualify the measure for the November ballot and expressed confidence that they had the more than 600,000 signatures needed. 

The announcement came after the campaign had missed three of its self-imposed deadlines for collecting 950,000 signatures as well as the state-recommended deadline of April 21.  The campaign said that the petitions have been delivered to county election officials around the state for verification of the signatures, a lengthy process that must be completed by June 15. If the work is not finished by then, the measure will not appear on the ballot. 

The initiative needs 623,212 valid signatures to qualify. The campaign's news release today said it had 925,000, down from its goal of 950,000. However, disqualification rates can run as high as 50 percent. Early last month after its public signature-gathering was halted because of coronavirus restrictions, it said had only 915,000. The campaign then kicked off what it called an "unprecedented," Internet, mail-in campaign to solicit signatures.  Later it began a direct mail effort, also unusual for an initiative qualification drive. 

The stem cell agency was created in 2004 by another ballot initiative and financed with $3 billion in state borrowing. It is now running out of money and will begin closing down in the fall if substantial funding is not received. 

Robert Klein, chairman of the campaign, said he was "confident" that the campaign had enough valid signatures to qualify for the ballot. He said, 

“Submitting signatures in time to qualify for the general election would not have been possible without our coalition of patient advocates, who banded together to help us
overcome the unprecedented challenge of signature gathering during a global pandemic – the effort is emblematic of our movement that has been widely supported and driven by patients and their families from the beginning”

Klein, who led the 2004 ballot campaign that created the agency, also cited the $5 million special, Covid-19, grant round now being conducted by the stem cell agency as example of the valuable work performed by the agency, officially known as the California Institute for Regenerative Medicine (CIRM).

One of the recipients of  a $750,000 award in the covid round, John Zaia of the City of Hope, was quoted in the campaign news release as saying,  

“We could be on the brink of medical discoveries that could save the lives of patients impacted by Covid-19 and other diseases, and this research simply would not be possible without the initial investment Californians made in the state’s stem cell program in 2004.

“Now, it is absolutely critical that this investment is renewed, allowing researchers like myself to continue to discover treatments and cures that can improve or save the lives of patients today and for generations to come.”

The City of Hope and many other recipient institutions have had a seat on the CIRM governing board since its inception.  According to CIRM figures, the City of Hope has received $117 million in grants since 2005. Zaia has received $33 million. 

The process of verifying and counting signatures is tedious under normal circumstances. County officials are now further hampered by work-related restrictions created by the coronavirus crisis. 

It is not clear whether enough signatures can be verified by June 25. That's the state deadline for qualifying for the November ballot. Two other unrelated initiatives failed or were withdrawn yesterday, state election officials said. Ironically one of the proposals would have allowed for the gathering of signatures online as a way to speed the task. 

The campaign has removed from its web site the outdated information concerning its petition solicitation effort, including the phrase "time is running out," which ran on its home page. But here is a link to the petition page from April 22 as archived by the California Stem Cell Report:  

CIRM News Coverage: Inertia, Limits and Business-as-Usual

The routine occurred yesterday, and California newspapers were on it like a dog on a bone.

California newspapers consumed many inches of valuable news space for two pedestrian legal events while at the same time largely ignoring more far-reaching and significant news concerning the California stem cell agency.

The routine matter involves litigation against the agency, and the coverage illustrates nicely how the media works or doesn't work.

Here are the specifics. The losers in the lawsuit against CIRM filed their expected appeal. The state then filed its expected move to expedite proceedings. Nothing changed. There were no surprises. It would have been real news if neither event occurred.

So why was the predictable legal action covered while California newspapers have largely ignored more important developments at the agency, including its unprecedented $1 million gala fundraising effort and what also appears to the unprecedented case of a top state agency executive using his own nonprofit advocacy group to lobby the legislature? This is not an idle musing on our part. Others are wondering, including some members of the CIRM's Oversight Committee.

The answers range from inertia to business-as-usual to the internal structure of newsrooms.

The first difficulty newspapers face in covering the stem cell agency is where it fits. Newsrooms are generally organized along lines that have changed little for decades. Coverage responsibilities are broken into turf areas. Generally politics and state government are covered by the Capitol bureaus. Business by the business news departments. Science by a reporter working on the city or state/national desk. When a business reporter branches out into a story involving a state agency, woe to him or her unless all the appropriate editors have been consulted in advance. Otherwise turf hackles will rise.

CIRM is a cross-over story. It has powerful elements involving politics, government, business, science, health, not to mention religion and ethics(that is a often city-side story). It does not fit neatly into the traditional news definitions. Resolving the differences and deciding on a consistent approach to coverage requires thought and work from editors who are hard-pressed by their daily deadline chores. So decisions are put off. It is simply easier to muddle along in the same old way, which, we should add, is one of the reasons why newspapers have lost significant readership over the last few decades.

CIRM is novel, which should make it a "good" story. However, novelty can again pose barriers. It is simple to cover an election, relatively speaking. It is has been done hundreds of thousands of times. Most of the questions about the nature of the coverage have been asked and answered, perhaps not as well as some would like, but to the satisfaction of many in the news industry. But then comes a state government story (or is it a state government story?) about bigtime fundraising by a state agency. Is it really a historical first? Is it illegal? Is it wrong? Who says so? (After all, reporters cannot make assertions on their own; they must quote an authority.) Editors want black and white answers. There is a low tolerance for ambiguity in the news business. Meantime, the editor tells the reporter, you are already late on that weekend piece I asked you to do. Let's talk later about this other story, if it is a really a story.

State agencies, such as CIRM, additionally have traditionally been given short shrift by Capitol bureaus, which prefer the public arena of the legislature and the high profile of the governor. It is rare to find a state agency that is covered consistently and thoroughly.

In recent weeks, we can add coverage of the June primary election to the mix. Newspapers, which have been squeezing their staffs hard as profits dwindle, are particularly hard-pressed during major election periods. They require diversion of resources to election matters. Secondary matters are put off, sometimes forgotten.

Coverage of CIRM is not easy. It operates in a public backwater – not in the hallowed halls of the Capitol, where reporters are feed and often pampered informationally. In contrast, important CIRM meetings are scattered around the state, requiring expensive trips by reporters. The issues are gray. The subjects are difficult, complex and unfamiliar for most newsies. (What do you mean, there is a patent thicket?). The stories are boring unless skillfully told.

Newspapers covered Wednesday's CIRM lawsuit developments because they fit easily into the traditional definitions of news. No matter that the filings are of little consequence. They fit what newspapers do and have done and will continue to do.

What does all this mean for coverage of the California stem cell agency? The immediate impact comes from the beginning of the summer vacation period. Editors and reporters who normally handle the CIRM stories may not be around. So expect less attention during the coming dog days. The election will continue to consume news space (more limited overall nowadays for profit reasons) as well as newsroom resources that otherwise might be used to cover CIRM. At the same time, the agency is beginning to be old news. After all it has been around for 18 months, which is sometimes more than a lifetime for a news story. Not to mention that is only one of many subjects most reporters are required to cover. Overall, we can expect stabilized or waning coverage of the agency at least through the fall, short of a major scandal or an example of aggressive, first-rate reporting that would stimulate the competitive juices of other newsies. If a scandal develops, it will generate a feeding frenzy that will will ignore any constructive work that CIRM has done.

All this said, we are not denigrating the efforts of the reporters, or even the editors, who have worked diligently on stem cell coverage. But we all operate in environments that limit and shape what we do. Newspapers are no different.

Here are links to the latest stories about the litigation:
Reporter Jim Downing of The Sacramento Bee, Lee Romney of the Los Angeles Times, Steve Johnson of the San Jose Mercury News, Terri Somers of the San Union-Tribune, Rebecca Vesely of the Oakland Tribune. Here is CIRM's press release.

Text of Bee Article on the State of Affairs at CIRM

Here is the overview piece on the California stem cell agency that appeared Nov. 28, 2010, on the front page of The Sacramento Bee's Sunday's opinion section. The version in The Bee can be found here.  The author is also the publisher/editor of the California Stem Cell Report.

With a review pending, the state's stem cell agency looks for new leadership, new therapies and more money

By David Jensen
Special to The Bee

Lured by visions of nearly magical medical solutions for everything from cancer to Alzheimer's, California voters six years ago approved a plan to borrow billions of dollars to pay scientists to look into human embryonic stem cell research.

Today the unprecedented $3 billion research effort by the California Institute for Regenerative Medicine faces a watershed moment, including the most sweeping review yet of its progress along with the departure of the man whose name has become synonymous with California stem cell research. Additionally, leaders of the program are pressing hard for concrete results that will persuade voters to cough up billions more to continue the effort.

This confluence of self-examination and changing of the guard comes amid criticism over the agency's promise of transparency and openness as it operates independently from oversight of the governor and Legislature; conflicts of interest by a board of directors who have directed $1 billion in grants to universities and research enterprises to which they have links; and the fact that no embryonic stem cell therapy is ready for patients, although the 2004 campaign for Proposition 71 seemed to offer hope for speedy development of cures.

Proposition 71 was described as a 10-year effort that would sidestep the Bush administration's ban on funding of human embryonic stem cell research. Actors Michael J. Fox, who has Parkinson's disease, and the late Christopher Reeve, who played Superman, were featured in ads promising cures in the campaign.

The ballot initiative gave the new state agency $3 billion in state bond financing and has fueled a lab building spree at California research organizations and universities, fed by $271 million in seed money from the California Institute for Regenerative Medicine, known as CIRM. As of this month, CIRM has handed out $1.1 billion to about 400 California scientists and research institutions. That is a pace that runs close to $56,000 an hour since the state treasurer first sold California stem cell bonds on Oct. 4, 2007.

The campaign was headed by Robert Klein, a Palo Alto real estate investment banker who was subsequently chosen chairman of CIRM. Klein says he is stepping down in December at the end of his six-year term. The agency's 29 directors are expected to meet next month to pick a new leader.

Longtime CIRM observer John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, said Klein's influence has been so pervasive that it is hard to predict what his departure will mean. "Perhaps, now the agency will move out of its ongoing startup mode and finally develop more routine procedures," Simpson said.

Also next month, the agency's directors will deal with a key, strategic report from a blue-ribbon panel that recently conducted the most sweeping review ever of CIRM's programs. CIRM barred the public from nearly all of the review sessions that were orchestrated over a three-day period at its headquarters in San Francisco.

The report, released Wednesday, had high praise for the agency's work, but it made no attempt to measure CIRM against the campaign promises of 2004. The panel recommended closer ties with the biotech industry, some segments of which have been unhappy with CIRM. It also recommended performing a triage on existing research to weed out nonproductive efforts, a process it warned will irk some patient advocate groups that supported Proposition 71. Also recommended was an improved public relations and public education effort, which will be necessary if voters are to approve more funding. It said the board should consider some management and structural changes in a suggestion that echoed some proposals last year from the state's Little Hoover Commission, the state's good government agency.

In an 88-page report, the Hoover commission proposed a wide range of changes at CIRM. It suggested reducing the size of the unwieldy, 29-member board and the elimination of conflicts in the roles of the chairman and president of CIRM. It also called for more oversight, disclosure of the votes of individual board members on grants and more openness and transparency.

Noting that most of CIRM's grants have gone to institutions connected to its directors, the Hoover commission said that suspicions that CIRM is an "insiders' club" undermine the legitimacy of the agency. Even the prestigious British scientific journal Nature warned in 2008 of "cronyism" at the stem cell agency.

In January, a sister panel to the CIRM board of directors unanimously called for more openness at the agency and endorsed the findings of the Hoover commission. The panel, the Citizens Financial Accountability Oversight Committee, was created by Proposition 71 to provide financial oversight of CIRM. State Controller John Chiang, the state's top fiscal officer and chairman of the committee, said, "To ensure that taxpayer dollars are spent lawfully, wisely and successfully, the stem cell program must pursue the highest standards of transparency to be fully accountable to the public."

In February, state Sen. Elaine Kontominas Alquist, D-San Jose, chair of the Senate Health Committee, introduced something of a reform bill for CIRM. She said in a news release that the agency is "essentially accountable to no one."

But a CIRM lobbying effort, led by former state Sen. Art Torres, now co-vice chair of CIRM, was successful in watering down much of Alquist's proposal, which was ultimately signed into law and will eliminate a 50-person cap on CIRM staff when the legislation goes into effect Jan. 1. Removed from the bill was a provision that would have directed Chiang's committee to conduct a performance audit, the first ever, of the agency. Instead, CIRM itself will commission the performance audit and control its terms.

CIRM laid out its own assessment of its performance last month in a document prepared for the three-day review. The stem cell agency said its spending "contributed" to research published in nearly 600 articles in scientific journals. It said that its awards played a partial role in research that has led to the initial stages of two clinical trials. It cited the funding of labs at institutions throughout the state and points to the spending as a benefit to the California economy. CIRM as well has had a significant impact on the embryonic stem cell scene nationally, keeping it alive and talked about despite the Bush ban.

However, CIRM has not delivered on the overheated campaign rhetoric of 2004. A TV ad featured twin brothers, one with cerebral palsy. The healthy brother said, "His life is different. With stem cells it doesn't have to be that way." In the ballot pamphlet sent to every voter in California, supporters said, "Vote yes on Prop. 71. It could save the life of someone you love."

Consumer Watchdog's Simpson said the "unrealistic expectations created in most voters' minds will continue to haunt the agency."

The campaign rhetoric ignored the slow and tedious nature of scientific inquiry, not to mention the required approval of therapies by federal authorities. Only one clinical trial using human embryonic stem cells is currently under way in the nation. A second was given the go-ahead by the federal government last week. Both are privately funded and do not involve California's stem cell agency. CIRM's strategic plan in 2006 acknowledged that use of the actual therapies will come only years from now.

As Klein gets ready to step down, he is publicly touting another huge bond measure for the ballot – up to $5 billion – that could come as early as 2012. He has pushed for tangible research results that can be used to sell the bond measure to voters, who don't seem to be in a mood for additional government spending.

Regardless of the outcome of a future bond measure, CIRM is likely to be in business for another decade. It still has about $2 billion to hand out. And despite the 10-year time frame bandied about in the 2004 campaign, no sunset date exists for the stem cell agency. Whether the historic $6 billion investment, which includes $3 billion in interest, ultimately pays off for California – with therapies – is still very much an open question.

(David Jensen has been writing about the California stem cell agency since 2005 on his website, the California Stem Cell Report, californiastemcellreport.blogspot.com.)

Dodging the Salary Bullet

Most of the time we write about things that affect CIRM. Here is one thing that won't – legislation to freeze salaries of high paid state employees.

The measure, AB 53, would impose a two-year ban on raises of about 785 state employees who make more than $150,000 annually. It is now before Assembly Appropriations Committee after winning unanimous approval from the Assembly Public Employees Committee on April 1.

The logic behind the bill by Anthony Portantino, D-La Canada, is that well-paid state employees should share the pain of budget cuts affecting children, seniors and so forth. The California stem cell agency has a bunch of folks who make more than $150,000 – too many in the eyes of some critics.

However, California lawmakers are politically unable to touch the agency because of Prop. 71, which requires an unprecedented 70 percent, super-majority vote of both houses and the signature of the governor to change state law affecting CIRM.

The significance of the legislation concerning CIRM is that high salaries are a red flag issue for the public even though they may be justified. Check out some of the comments on the story in The Sacramento Bee on the measure.

Juggling California Stem Cell Scenarios: Rebirth or RIP?

Directors of the $3 billion, California stem cell agency on Friday will be engaged in a curious mix of end-of-life planning plus a serious look at the possible rebirth of the 15-year-old program, which is unprecedented in state history.

On the meeting's agenda is a proposed budget for the 12 months beginning in July, which amounts to a wind-down plan if voters reject a $5.5 billion bond measure this fall that would refinance the agency. The agency has run through nearly all of the $3 billion provided by voters in 2004.  The spending plan would wrap up ongoing multi-year grants, archive records and help to assure that the state receives any royalties for stem products that it has helped to finance. 

On a positive note, the 29 directors will discuss the $5.5 billion ballot initiative and almost certainly endorse it.  The measure is more than money. The initiative would not only provide cash via the issuance of state bonds but charge the agency with more specific responsibilities, such as spending at least $1.5 billion on "diseases and conditions of the brain and central nervous system, including but not limited to Alzheimer's disease, Parkinson's disease, stroke, dementia, epilepsy, schizophrenia, depression, traumatic brain injury, brain cancer, and autism." 

The measure is also aimed at ensuring accessibility to any new stem cell therapies, whose prices could run to $1 million or more. The agency, however, has yet to participate in funding a stem cell therapy that is widely available to the public.

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

A campaign organization called Californians for Stem Cell Research, Treatments and Cures has already been created. It has a website and is soliciting contributions for what could be a $50 million campaign. Interested persons can also sign up for its mailing list. No opposition campaign group has surfaced, although the Center for Genetics and Society in Berkeley has raised serious questions and reservations.

The ballot initiative has not yet qualified for the November ballot. However, short of an extraordinary event, it seems all but certain to be placed before voters. 

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, was created in 2004 by voters through the use of the state's ballot initiative process, a "direct democracy" tool that permits those who can gather hundreds of thousands of signatures to take their proposals directly to voters.  Initiatives bypass the legislature and the governor.  CIRM also operates effectively outside of the control of the governor or lawmakers under the terms of the initiative that created it.

A scientific research state agency funded with billions of dollars has never existed in California history. It is the largest such state stem cell effort in the nation. At one point it was the single largest source in the world for funding human embryonic stem cell research. 

Friday's online meeting, which begins at 9 a.m. PDT, is open to members of the public who can comment on any issue. Full directions for the online access are on the agenda.  If you haven't logged into a meeting of the agency previously, it would be helpful to review the instructions on the agenda 15 minutes in advance. 

California Stem Cell Health Dividends: A Whopping $900 Billion? Maybe Only $175 Billion?

A team of University of Southern California researchers said today that work by California's stem cell agency could pay off with nearly $900 billion in "health dividends" by 2050 by treating or curing afflictions ranging from diabetes to heart disease.

The study, commissioned by the agency, acknowledged the difficulty in forecasting the benefits of research backed by the the state program, which is unprecedented in California history. But the report said,

"We find that nearly half of Californians aged 50 and older will develop diabetes during their lifetime. Furthermore, more than one-third will experience a stroke, and between 5 and 8 percent will develop either breast, colorectal, lung, or prostate cancer.  

"Taking into account the high prevalence and the social and economic burden of these diseases, an intervention that reduces the incidence of these selected cancers, diabetes, and stroke by 50 percent would generate almost $900 billion in social value between 2018 and 2050.  

"A more modest 10 percent decline in incidence translates to $175 billion in social value during the same period. Put in this context, the CIRM investment would be worthwhile if it increased our chances of success even modestly. Against the billions of dollars in disease burden facing California, the relatively small initial investment is already paying dividends as researchers work to bring new therapies to patients."

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), was created by voters in 2004, who provided it with $3 billion. It has yet to fund a product that is widely available to the public. However, the agency is involved in 56 clinical trials, which are the last stage before a treatment is certified for widespread use.

CIRM expects to run out of cash for new awards by the end of this month. It hopes that a proposed initiative for the November 2020 ballot will provide it with an additional $5.5 billion. 

Today's report, titled "Future Health Dividends for California," and its companion study last week on the agency's economic impact are likely to be significant topics during the 2020 campaign. 

The 22-page study came up with a "social value" calculation using the Future Elderly Model -- "a microsimulation model of health and economic outcomes for older Americans." Basically it involves quality of life outcomes as well as more straight forward financial projections. The study also lays out its methodology and limitations including an acknowledgement that the projections are not guaranteed. 

Today's report and last week's economic study cost CIRM a total of $206,000. The work was performed at USC's Leonard D. Schaeffer Center for Health Policy & Economics. The authors are Bryan Tysinger, Karen Mulligan, Henu Zhao, Alwyn Cassil  and Dana Goldman.

Here is a link to an item on the CIRM blog about the study.

Bloomberg: California Stem Cell Cash Shrinking, Pressure for Results

The headline this morning on Bloomberg News read “California’s Stem-Cell Quest Races Time as Money Dwindles.”

 The status report on the $3 billion California stem cell agency came as its 29 directors meet in Los Angeles today to consider new directions for the agency – not to mention finding a source to replace the funding which runs out in 2017. (Live coverage of the meeting will begin at 9 a.m. PST on the California Stem Cell Report.)

 The article by Mark Melnicoe is a rare national/international look at the Golden State's unprecedented, nine-year-old effort to turn stem cells into cures, as the agency's motto goes. The California Institute of Regenerative Medicine (CIRM), the formal name for the agency, is largely ignored by the national media. California news outlets also devote few resources to covering agency matters.

Melnicoe's piece covers familiar ground for readers of California Stem Cell Report and others familiar with the agency. But it is a valuable tool for understanding how “outsiders” may view the effort.

Melnicoe wrote,

“California’s government-run stem-cell research agency, on course to spend $3 billion in taxpayer money to find treatments for some of the world’s most intractable diseases, is pushing to accelerate human testing before its financing runs out.”

He continued,

“The largest U.S. funding source for stem-cell research outside the federal government, it’s under pressure to show results to attract new money from pharmaceutical companies, venture capitalists or even more municipal bonds. 

“'We need to figure out how to keep them going,' said Jonathan Thomas, a founding partner of Saybrook Capital LLC in Los Angeles, and chairman of the institute’s board, which meets today. 'We could do public-private partnerships, venture philanthropy, a ballot box.'” 

The Bloomberg article also sounded a cautionary note. It said,

“Brock Reeve, executive director of the Harvard Stem Cell Institute, said a rush could waste money by going too far down paths with false promise. 'There have been a lot of clinical trials in the stem cell field broadly that haven’t panned out,' Reeve said.” 

Specifically mentioned in the Bloomberg piece was the clinical trial by Geron, the first in the nation of an hESC therapy, which was partially financed with a $25 million CIRM loan. The trial was abandoned by Geron, which then sold its stem cell assets to Biotime, an Alameda, Ca., firm, whose top executives come from Geron. Biotime has not resumed the trial.

Gravy Train Bedfellows: Catfish Farmers and California Stem Cell Research

What do a couple of porn kings, some plumbers and bricklayers, travel agents, yacht builders and catfish farmers have in common with the $3 billion California stem cell agency?

They are all looking to ride the trillion-dollar, bailout/stimulus gravy train that is underway in Washington, D.C.

Everybody is doing it, so why not us? That's the logic.

We must, however, add a qualifier to the business about CIRM, which continues to operate amply funded despite a $40 billion budget crisis affecting other California state departments.

CIRM directors are not yet officially begging for a handout from the Obama administration. But the matter, championed by CIRM Chairman Robert Klein, is breezing through the agency. It comes up again tomorrow afternoon at a meeting of the directors Finance Subcommittee, where it is likely to be sent on with a favorable recommendation to the full board unless some board members stand against Klein.

As is often common with CIRM, the latest specifics about Klein's gravy-train proposal are being withheld from the public even though the meeting is less than 24 hours from now. (The agency's failure to provide such information is persistent, corrosive to the public trust and puts the lie to Klein's pledge of transparency and openness, but that is a subject of another item.)

Here is what we have been able to ferret out about Klein's plan to snag some of the federal goodies. He wants a federal guarantee for CIRM's $500 million biotech lending program. With such a guarantee, the size of the program could be boosted to $1 billion, Klein says. Another element is a move to improve research and development tax credits for the biotech industry. (You can find the latest, Dec. 19, 2008, discussion of this here in a CIRM transcript.) Klein may have other proposals in mind as well.

There is a logic to Klein's effort. Huge amounts of money are going out the door. Biotech ventures, not to mention stem cell research, are chronically short of cash. The industry has high promise, according to conventional wisdom. If you are running a business, it behooves you to grab the cash when you can. Next year, the door will be closed.

But the federal largess comes with a cost, maybe not to CIRM but to the nation as a whole. Many competing demands exist, some for worthwhile efforts that will die if they do not receive help. Klein's proposals may well be be competing with other calls for assistance from California state government or cities and counties, not to mention $1 billion promised by President Obama for autism research.

The financial pie is, in fact, limited. CIRM is well-funded and can progress quite smartly without siphoning off federal assets that might be better used. Moreover, the biotech industry has an army of lobbyists who are more than capable of carrying their own water without the assistance of CIRM, which is a minuscule player in Washington anyway.

The Wall Street Journal today reported on the impact of the competition for federal dollars. It said,

"...(T)he unprecedented largess granted through the $825 billion economic-stimulus bill may bind Obama's hands later. The growing deficit will make it difficult, if not impossible, to fulfill spending promises that total hundreds of billions of dollars....This burst of spending so early in his presidency could also hobble Mr. Obama politically in the years to come as the country's soaring budget deficit demands cutbacks in social programs and even potential tax increases."

I may be old-fashioned, but under such circumstances, I think CIRM should remove itself from the hand-out line and get back to the doing the best it can with its already ample resources. As another president remarked at his inauguration 48 years ago,

"Ask not what your country can do for you. Ask what you can do for your country."

(As for those porn kings, catfish farmers and others mentioned earlier, here are couple of links to them in stories in the Los Angeles Times and New York Times as well as a Phoenix, Ariz., radio station. The porn kings request seems to a bit of humor, highlighting the unsavory nature of the gravy train bandwagon.)

-------

If you have thoughts on any of these issues, you can comment below by clicking on the word "comment" or you can write CIRM directly via its web site (info@cirm.ca.gov) and ask to have your comments made part of the public comment allowed at each CIRM board meeting.

The public can participate in the meeting tomorrow afternoon at teleconference locations in La Jolla, Berkeley, San Carlos, Palo Alto, Irvine and two in San Francisco. Addresses can be found on the agenda.

Chiropractors, CIRM and Its Legislative Posture

The 120 men and women who sit in the California Legislature generally tend to think they have prime responsibility for writing the laws that govern the state. And they often get edgy when state agencies, even ones that have special constitutional status, seem to be straying from the governmental straight and narrow.

Such was the case recently with the California's chiropractic board, which is enshrined in the State Constitution. Gov. Arnold Schwarzenegger's appointees to the board became carried away in what a deputy attorney general described as a fit of "lawlessness." Now the board faces a serious legislative investigation that could include elimination of its $3 million budget.

While this is something of a minor tempest – although not for chiropractors -- the chiropractic board shares several things in common with California's much heftier, $3 billion stem cell agency. Both are written into the State Constitution. Both were created by initiative. Both have issues involving conflicts of interest. And both function in near obscurity except when they hand out buckets of money – in the case of the stem cell agency – or when a scandal erupts, as in the case of chiropractic board.

Obviously major differences exist between the two boards, including the quality of the appointees. But the case of the chiropractors illustrates how quickly matters can go awry in an insular agency and how quickly the legislature may move to step in. The case will also probably show how quickly the governor can put distance between himself and what The Sacramento Bee called a "laughingstock."

Last Sunday we discussed the sometimes acrimonious relationship between CIRM and the California legislature, particularly in the light of bipartisan legislation by the chair of the Senate Health Committee, Sen. Sheila Kuehl, D-Santa Monica. Her measure would inject the legislature into the difficult and touchy matter of how the stem cell agency decides to share the potentially enormous wealth from cures developed with state-funded research. After a shaky start with lawmakers, CIRM has moved to improve its legislative relations and keep lawmakers well informed.

Our piece, which appeared as an op-ed in The Sacramento Bee, was necessarily limited because of space. But we wanted to share more that we heard from CIRM and two longtime observers of the agency, who also have been critical of its performance from time to time and sometimes even more often. What follows are virtually verbatim comments.

First, from Dale Carlson, chief communications officer for the stem cell agency:

"We have an active government affairs program underway in Sacramento focused on legislators and statewide office holders, as well as their respective staff members. We want to keep them apprised of our efforts and progress, the status of key regulatory and funding initiatives, and the challenges we are confronting in pursuit of our mandate and obligations.

"The objective is to ensure that key decision-makers have current, accurate, and reliable information about CIRM's activities, the field of stem cell research, and related issues. We seem to receive reports of new scientific developments every week, and with more states committing funding to the field each year, it's likely that pace will accelerate. It's a challenge for us to stay abreast of the science, federal policy, and other states' emerging policies, all of which have an effect on our scientific project.

"We're very proud of the work we're doing, the processes we follow to engage the public in the development of policies and regulations that are required by the law, and the willingness we've demonstrated to adopt and apply good ideas from variety of sources. We want to be recognized as a credible source of information on all things stem cell, regardless of whether the question is directly related to CIRM's activities.

"Our legislative affairs program includes one-on-one meetings and group briefings. (Early in February), for example, ICOC Vice Chair Ed Penhoet and several CIRM staff held a session with staff from the Speaker's office and the Senate Health Committee and others, to review our IP policies for non-profits and for-profits. Both have been the subject of great interest and discussion in Sacramento (as well as throughout the state and in Washington, D.C.), with legislators offering many suggestions for how those policies might be crafted and strengthened. Our presentation described the progress we've made to date - emphasizing that the regulatory process is still moving forward and unlikely to be completed for several months - as well as a review of the issues we're struggling to address. "(Later in February), (CIRM President) Zach Hall, Arlene Chiu, and Mary Maxon (Chiu and Maxon are CIRM staff) conducted a broader briefing on the basics of stem cells, the progress we've made in our first two years, including on the IP policies, and the grants approved by the ICOC.

"Kirk Kleinschmidt, our Director of Legislation and Research Policy, has day-to-day responsibility for the effort. In addition to arranging these group sessions, he's regularly in the capital meeting with individual members. Gene Erbin from Nielsen Merksamer is on retainer to support the effort. Per the provisions of Proposition 71, (Stem Cell Chairman) Bob Klein oversees the legislative affairs program in consultation with the Legislative Subcommittee and the ICOC. He's in regular contact with federal and the statewide office holders as well as the legislative
leadership."

Carlson also said that Klein, Penhoet, Kleinschmidt and Patricia Olson, who led development of the CIRM strategic plan, had a 90-minute meeting with Kuehl last Wednesday.

Carlson said it was a "detailed discussion of our IP policies, the drug/therapy development process and the extensive public process we've followed."

"This is the kind of relationship we want with the legislature. Respectful and substantive. We want them to be assured that we're going about our responsiblities thoughtfully and carefully, and that we welcome good ideas and the opportunity to discuss our efforts."

Carlson said the CIRM board will meet in Sacramento April 10 and expects to finish its meeting in time for board members to visit with legislators in the afternoon.

Jesse Reynolds, project director on biotechnology accountability for the Center for Genetics and Society in Oakland, has followed CIRM closely during the last two years as well as the Prop. 71 campaign.

Here is what he had to say in response to our query:

"Prop. 71 is a deeply flawed set of laws, with numerous exemptions to the norms of transparency, oversight and accountability....

"Hopefully, the leadership of the CIRM won't be as hostile to much-needed reform as it was during previous attempts. Then, the state's 'stem cell czar,' Robert Klein took the unprecedented step of hiring a lobbyist with taxpayer funds. What's more, while serving as chair of the CIRM's governing board, he simultaneously headed up a private lobbying organization, which advocates for more funding and less oversight of stem cell research. These actions are not appropriate for the head of a state agency.

"Klein's statements that 'the Legislature is not needed' and that then-Senator Ortiz was 'an ongoing threat' are not only wrong, but highlight his cavalier attitude in his role as a public servant. As the people's elected representatives, the Legislature certainly has a critical role in overseeing a multi-billion dollar program. As a senator, Ortiz did more for stem cell research and Proposition 71 than any other elected official."

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights in Santa Monica, Ca., is another longtime follower of CIRM matters. He said,

"Key to any IP policy are provisions that ensure affordable access for all Californians to any cures or treatments resulting from stem cell research they funded. The ICOC originally envisioned meeting that goal by requiring treatments purchased with public funds to be sold at the federal Medicaid price and that there be a plan in place that would provide access to the treatments for uninsured people.

"In drawing up the actual regulatory language to implement those policies, the ICOC has softened those proposals.....

"I think Kuehl's bill would increase payback to the state, but doesn't do enough to ensure affordable access for all Californians. There should be a provision that if there are unreasonable prices the attorney general can intervene. I cite Genentech's Avastin as an example of what cannot be allowed. The drug was developed with $44.6 million in public funds from the National Cancer Institute yet Genentech charges $100,000 a year for it.

"I'd also like to see action on governance and accountability issues. I don't know what Sen. Kuehl's plans are in this regard. Members of the various working groups should be required to file public disclosures of their interests. All applicants and their institutions should be identified, not just recipients. Finally the ICOC is too large. It should be trimmed from the 29 members who now have seats.

"Another thought: ICOC members themselves have expressed concerns about some provisions of Prop 71. It might be useful for both CIRM and the legislature to attempt to identify such areas and agree on making those changes."

CIRM Finances On Table Next Tuesday

The financial affairs of the $3 billion California stem cell agency will come under scrutiny next Tuesday at a meeting in Los Angeles headed by California's chief fiscal officer.

The occasion is a session of the Citizens Financial Accountability Oversight Committee, which was created by Prop. 71. By law, the six-member board is chaired by the state controller, John Chiang.

On the agenda next week are the recommendations of the Little Hoover Commission for a restructuring of the CIRM board and other actions to improve the agency's performance. Also up for discussion is CIRM's financial performance, an update on grant awards and the grant process along with discussion of “risk analysis” involving CIRM, which has embarked on an unprecedented $500 million loan program for biotech businesses. The agency projects a $100 million “profit” on the loans despite projected default rates as high as 50 percent.

Time Now for CIRM to Let Sunshine In

California Gov. Arnold Schwarzenegger today set a fine example of openness – one that should be emulated by the California stem cell agency.

His action follows by one day another sterling case of transparency – this one involving a member of the board of directors of the California stem cell agency, Philip Pizzo(on right), whose main job is running the Stanford School of Medicine.

Both men acted to maintain and bolster support for important societal institutions at a time when public confidence in our leaders has been sadly eroded.

It took a bit of a scandal -- disclosed by the Los Angeles Times -- to force the governor to make his move. But today, Californians can check out for the first time online the economic interests of the top state executives appointed by Schwarzenegger. They can also view the officials´ monthly travel expense reports. (The information is a public record, but has not been easily accessible previously.)

The governor put the material online after Michael Rothfield of the Times reported that several top members of his administration charged taxpayers thousands in airfare, hotel and meal costs with little oversight. Two members have since left.

In announcing the new online information, the governor said,

“Since taking office I have taken steps to make government more accountable and responsive to the people. By making the economic, gift and travel information of the senior members of my administration easily available online, we are taking unprecedented steps to open up our government to the people – yet another critical step toward more government transparency.”

On Wednesday, Pizzo announced that Stanford will be posting online “the medical- and research-related consulting activities for some 1,200 physicians and faculty affiliated with the medical school.”

Pizzo, dean of the medical school, said,

"Industry collaborations are critical to furthering research efforts and innovative patient care, but at the same time, concerns over these activities are eroding the public trust. I hope that steps to increase transparency will resonate with those we serve, educate and work with — and reinforce that trust."

The Stanford medical school has been in the forefront of moves to increase transparency in medical research. In 2006, Stanford physicians were barred from ”accepting biomedical industry gifts, including drug samples, anywhere on the medical center campus or at off-site clinical facilities where they practice,” the school says.

The California stem cell agency has promised the highest standards of openness and transparency. In some ways, it is quite open. But it is an agency that was constructed with huge built-conflicts. Its board of directors is dominated by folks from the institutions that have been the chief beneficiaries of CIRM´s largess. As of last October, 18 institutions with representatives on the board (past and present) had received $552 million in CIRM grants.

The political reality is that the structure of the agency is not going to change. Given that fact, it behooves CIRM to lay all its cards on the tables. At least that way, the public knows who stands to benefit from the billions CIRM is giving away at a rate of $24,000 an hour.

CIRM should make the statements of economic interests from its directors and top officials available online in easily searchable and downloadable databases along with their travel and other expenses.

The agency should also disclose the economic interests of its scientific grant reviewers. Although they make the de facto decisions on grants, the reviewers´ statements of interest are withheld from the public and the scientists who are the subject of their scrutiny. That is a situation that naturally generates suspicion, especially since their deliberations are conducted behind closed doors.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., wrote about the Stanford action on his organization´s blog. Simpson called for more disclosure from CIRM. In a comment to the California Stem Cell Report, Simpson said,

“Bob Klein (CIRM chairman) talks about transparency. He ought to do something about…. Working group members aren't required to file any public disclosure now and that is outrageous. If the governor can post monthly travel reports, so can the stem cell agency. Doing less means that claims of transparency are nothing more than empty rhetoric.”

CIRM is currently a bit strapped for cash, but the governor´s office has already done the hard work of setting up online templates for the disclosure statements. It would take little more to fill in the information.

Evidence of public´s current disenchantment with our leading institutions can be read and heard every day. CIRM can help to restore confidence by following the governor´s lead. CIRM will also help itself by acting in a way that demonstrates its responsiveness to concerns about its conduct and openness.

The Private Touch in ESC Research

The Washington Post today caught up with some of the doings at the California stem cell agency, reporting that private, "almost unprecedented contributions" have saved the day at CIRM.

The story by Sonya Geis said the loans have also helped fuel other giving for embryonic stem cell research in California, echoing a point made in the San Diego Union-Tribune series, "The Stem Cell Wars."

"Private money is also building new stem cell labs on university campuses across the state. Los Angeles philanthropist Eli Broad gave $25 million to the University of Southern California for a stem cell institute, sound-technology pioneer Ray Dolby gave $16 million to the University of California at San Francisco, and local donors are contributing to a $75 million expansion at the University of California at Davis.

"'I was amazed by the number of wealthy Californians who have stepped up and decided to support a public agency,' said Owen Witte, director of the new Institute for Stem Cell Biology and Medicine at the University of California at Los Angeles. 'I've never heard of anything like this.'"

Geis erred on one point, however. She said "affluent Californians gave $31 million" to CIRM. The money was actually loaned to the agency and is to be repaid with interest. However, if CIRM loses the lawsuit against it, the lenders will not be repaid.

CIRM's Klein Honored by Scientists

The International Society for Stem Cell Research announced last week that it is making its first ever public service award to Robert Klein, the outgoing chairman of the $3 billion California stem cell agency.

In a news release, the scientific group cited Klein "for his outstanding contribution of public service to the field of stem cell research and regenerative medicine."

The ISSCR said,

"Through his vision as author and champion of the California Stem Cell Research and Cures Initiative (Proposition 71), Klein secured long-term financial support for stem cell research in California. Through his leadership at CIRM, Klein developed a framework that fosters new and established talent, innovative science and clinical application. His advocacy for stable financial support for stem cell research on the international stage has been unprecedented."

Dissecting the Legislative Strategy Behind the Latest California Stem Cell Bill

Think motherhood when you think about new state legislation aimed at California's $3 billion stem cell agency.

That's the strategy on the latest bill that targets the world's largest source of funding for human embryonic stem cell research, all of which comes at the expense of California taxpayers.

Think of those millions of taxpayers as investors. Who can say they should not receive a tidy return on their $6 billion (including interest) commitment? Who can oppose a nonpartisan, thorough-going review of the agency, which has stumbled more than once and which is riddled with built-in conflicts of interest? Especially when that agency lives in a constitutionally protected, ivory-tower world, far from the bloody financial fray now underway beneath the Capitol dome.

While motherhood is not as popular as it once was, these are motherhood questions for lawmakers and hard to oppose.

The current political climate may now be as receptive for passage of the bill, SB1565, as at any time. Legislative demonstrations of fiscal prudence are the order of the day in the Capitol. Stifling government profligacy is the paramount virtue.

CIRM gave supporters of the legislation more leverage when the agency offered an ill-timed plan to boost the maximum pay ranges of CIRM's top executives by 50 percent, or $200,000 annually in some cases. The CIRM pay plan received a public and negative airing on the same day that a $16 billion state budget deficit was announced. A subcommittee of CIRM directors balked at the executive pay proposal, but it will surface again next Wednesday. Introduction of the CIRM legislation came only a few days after that subcommittee hearing, probably not coincidentally.

The lead author on the CIRM bill is Sen. Sheila Kuehl, D-Santa Monica, who is chair of Senate Health Committee. Republican Sen. George Runner of Antelope Valley, who is part of the GOP leadership, is co-author.

Their position is that CIRM has offered an inadequate return to California investors/taxpayers. Kuehl and Runner instead propose to guarantee in state law that California residents have affordable access to therapies developed with state cash, an issue which affects CIRM's intellectual property rules. The lawmakers also want to mandate a study of CIRM with recommendations for changes. Kuehl said that one reason for her latest legislation involves breaches of the agency's conflict-of-interest policy by a number of its directors.

The bill needs 70 percent approval of both houses of the Legislature –- a super, supermajority requirement created by Prop. 71. The unique and unprecedented requirement is intended to protect the agency, but lawmakers may now regard it as a challenge to their authority.

CIRM has opposed similar legislation in the past, but it has not taken an official position on SB1565, which is the embodiment of simplicity in some ways. It could be easily severed to put the requirement for a study on CIRM operations in a separate measure, which could help its chances.

CIRM is likely to oppose the study, however, because it could generate public hearings and open the door to greater changes in CIRM procedures. At the very least, the hearings could lead to critical news coverage and possibly threaten CIRM's credibility and clout.

Next Wednesday some CIRM directors and executives will be visiting with lawmakers following the agency's Oversight Committee meeting. Kuehl's legislation is likely to come up during those sessions along with the pay proposal. CIRM supporters should be prepared with some good answers.

Nine Years on the California Stem Trail: A Look Behind the Curtain

Back in November 2004, the re-election of President George Bush dominated the news throughout the nation. But out in California, there was talk of a new gold rush, triggered by a measure buried deep on the ballot that month.

The latter-day argonauts were not expected, however, to be scratching out nuggets. Instead they would be fiddling with stem cells, particularly human embryonic stem cells. It all looked like big bucks for the biotech industry -- $3 billion from a new state agency.

That was when the idea for this blog began to percolate. A few weeks later -- nine years ago this month  -- the first item appeared on the California Stem Cell Report. It now seems a likely occasion to reflect on the scope and purpose of what appears here and to discuss readership and other matters.

David Jensen
Editor California Stem Cell Report

First, to answer an oft-heard question: Why am I am writing about this particular agency, formally known as the California Institute for Regenerative Medicine(CIRM)? The simple answer is that it is interesting, at least to some, and important. The agency – created by Proposition 71 of 2004 – is an exceptional and unprecedented state effort. Nothing like it has existed in
California history. It operates with unusual autonomy. The governor and the legislature cannot touch its funding or direct its research. It survives on $3 billion borrowed by the state, which will roughly double the cost of the research to $6 billion or so because of the interest on the borrowing. It also marks another first with its use of California state debt to pay for scientific research.

At one point, CIRM was the world's largest single source of funding for human embryonic stem cell research. The agency has lured top researchers from other states and countries. And it represents a unique mash-up of government, politics, big business, big science, big academia, morality, ethics, life and death and even sex.

Since 2005, the California Stem Cell Report has been read by researchers, policy makers and other interested parties around the world. They log in from Singapore and Great Britain, Canada and Korea as well as institutions ranging from the NIH and Harvard to Stanford, UC San Francisco, Scripps and Sanford Burnham and more.

I estimate that only a few thousand persons around the world are deeply interested on a regular basis in stem cell research, making the potential audience for this Web site rather small. But Google reports that as of today 729,841 page views have been registered during the life of the blog. (I have posted 3,608 items.) Last month, which was slow because of the holiday, the California Stem Cell Report chalked up 16,878 page views, which are the basic Internet standard for measuring readership.

The items that seem to grab the most attention involve individuals as opposed to the nuts and bolts of either science or policy. When CIRM directors considered election of a new chairman in 2011, readership jumped. Machinations involving selection of new presidents at the agency draw readers. Of course, reports about dubious activities or problems also are of significant interest. The lure of stories about people nonetheless is not much different than seen in the mainstream media, based on my 35 or so years in the news business.

Another matter that has drawn an extraordinary amount of interest involves money: specifically the expected cost of stem cell therapies. In 2010, I posted on Scribd a study financed by CIRM -- one that the agency was not trumpeting -- that examined the issue of costs. Since then, it has been read 14,096 times, the most of any document that I have posted on the Scribd service, which provides a way to mount documents and link to them via the blog.

In its initial years, the blog primarily surveyed California media reporting on the stem cell agency, providing links and commentary with some original reporting. But today the focus is mostly on original reporting with analysis and commentary. The agency and its doings have slipped off the radar of the mainstream media, where they probably will remain short of a major scandal or a massive PR effort by the agency.

One of my goals was to provide detailed information, news and analysis about California's unusual research effort – far more than could be done by print media. The idea was to exploit one of the unique characteristics of the Internet-- the capability of publishing nearly unlimited amounts of information. Newspapers constantly cut, squeeze and trim stories because of both cost and their desire to publish a large number of articles about many different subjects. With the Internet, there is virtually no limit on the amount of content, a feature that is both good and not-so-good. Another goal was to go beyond the official handouts and to provide a guide to where useful information can be found.

The California Stem Cell Report differs from the mainstream media in another regard. The blog carries the remarks of representatives of the agency and other interested parties VERBATIM, even when they sometimes involve harsh attacks on the conduct of the blog. Major media almost never allow such access.

I have a couple of biases that underpin what I do. One is the assumption that it is beneficial generally for the government to fund scientific research. The other and more important principle is that government agencies should operate with maximum openness and transparency and that their first obligation is to the people – not the researchers that they fund or the institutions that have something at stake.

While readers can judge for themselves the success of the blog, the scope of the readership from the NIH to California's biotech hot spots suggests it is well-received. Mainstream media reporters as well as science writers often use the California Stem Cell Report as a reference and starting point. The blog has also served as a springboard for acceptance of my own occasional freelance articles in such places as The Sacramento Bee and Wired News. And in 2012, I testified before the Institute of Medicine, at its invitation, during preparation of its $700,000 report on the stem cell agency.

As for how the work is done, the writing and reporting are performed largely from a sailboat in Mexico and Central America, on which my wife and I live full-time. Sometimes that has presented difficulties, but as cellphone and Internet service has improved over the years, the task has become easier. We make visits back to California regularly during which I meet with agency officials and others and attend CIRM's public meetings.

I have focused largely on the policy and business aspects of the agency because that is where my knowledge and background lies. During my career, I have covered and edited stories from the state Capitol for United Press International and spent 10 years as the business editor of The Sacramento Bee along with editing prize-winning investigative projects, including the 1992 Pulitzer Prize-winning series, “The Monkey Wars,” by Deborah Blum, who now teaches at the University of Wisconsin. I also served two years and one week with Jerry Brown during his 1974 campaign for governor and into his first term.

As for my financial interests, my wife and I have never had any investments in any enterprise that could benefit financially from the activities of the stem cell agency except for possibly through index-based mutual funds over which I have no control. But like most of world, my family has suffered from conditions that theoretically could benefit from development of stem cell therapies. 

I am always interested in thoughts and comments from readers, critical or otherwise. My skin is reasonably thick. I have always told reporters who have worked for me that if you perform your act in a public place you should be prepared for any sort of reaction. I welcome suggestions for stories and improvements.

Feel free to contact me at djensen@californiastemcell.com. Or if you prefer to withhold your identity, you can leave a comment anonymously via the “comment” function at the end of each item.