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.  

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.

Skloots, Collins and More on Henrietta Lacks' Cell Line Deal

More details about the unprecedented arrangement involving Henrietta Lacks' cell line emerged today in a wide range of publications, including a Nature journal piece that said it was not a precedent.

The article was co-authored by Francis Collins, head of the NIH, and Kathy Hudson, deputy director for science, outreach and policy at the NIH.

“It is important to note, however, that we are responding to an extraordinary situation here, not setting a precedent for research with previously stored, de-identified specimens. The approach we have developed through working with the Lacks family is unique because HeLa cells were taken and used without consent, and gave rise to the most widely used human cell line in the world, and because the family members are known by name to millions of people.”

The restrictions on use of the cell lines came about after a flap erupted about their recent use without the knowledge of her descendants. (The California Stem Cell Report carried a commentary on it yesterday.) Rebecca Skloots, author of the best-seller, “The Immortal Life of Henrietta Lacks,” wrote about the controversy in a March 23 op-ed piece in the New York Times. She said,

In the article, Skloots said,

“Imagine if someone secretly sent samples of your DNA to one of many companies that promise to tell you what your genes say about you. That report would list the good news (you’ll probably live to be 100) and the not-so-good news (you’ll most likely develop Alzheimer’s, bipolar disorder and maybe alcoholism). Now imagine they posted your genetic information online, with your name on it. Some people may not mind. But I assure you, many do: genetic information can be stigmatizing, and while it’s illegal for employers or health insurance providers to discriminate based on that information, this is not true for life insurance, disability coverage or long-term care.

“'That is private family information,” said Jeri Lacks-Whye, Lacks’s granddaughter. “It shouldn’t have been published without our consent.'”

Nature also carried a Q&A with Collins in which he said,

“This has wrapped in it science, scientific history, ethical concerns, the bringing together of people of very different cultures, a family with all the complications that families have.”

In the Wall Street Journal this morning, Ron Winslow described the arrangement with the NIH like this.

“Under the pact, two descendants of Ms. Lacks will serve on a six-member panel with scientists to review proposals from researchers seeking to sequence the DNA of cell lines derived from her tumor or to use DNA profiles of such cells in their research. That gives family members a highly unusual voice in who gets access to personal health information.

Terms call for controlled access to the genomic data and credit to the Lacks family in papers and scientific presentations based on the research done with the DNA data.”

In an interview in The Scientist, Skloots, who was involved in the Lacks-NIH negotiations, said the Lacks family asked for her participation.

“The only reason I was involved in this is because scientists did this without the family’s consent and then it got all of this press coverage, and no one asked the question, 'Did the family give consent?' So I sort of waded back in.”

She continued, 

“That OpEd that I wrote was the first time I’d ever publicly expressed an opinion, which was, 'Really?!? Are we going to continue to not ask the Lacks family questions?' I was kind of shocked in a sense that nobody thought to raise that issue.”

Good News, Bad News and the California Stem Cell Agency

A few weeks ago an anonymous reader admonished the California Stem Cell Report to be more positive about the $3 billion agency and its efforts to develop the cures that its backers promised California voters more than eight years ago.

The comment was thoughtful and pointed out that “almost all the time” the agency “has done the right thing.” The reader made the remarks in the context of continuing coverage of the Institute of Medicine (IOM) report that found there were major flaws in CIRM's operations. (The reader's comment can be found here at the end of the post.)

Given the reader's remarks, it seems a good time to review the operating principles and biases of the California Stem Cell Report.

Bias No. 1: Openness and transparency come first in any government operation. They are fundamental to the integrity of all government enterprises. Bias No. 2: The California stem cell agency is generally doing a good job at funding stem cell research. We generally favor all manner of stem cell research. 

Regarding our operating principles, the goal is report news and information about the agency along with analysis and explanation. One key to understanding what this blog does is to understand what news is. News by definition is almost always “bad” as opposed to “good.” News deals with the exceptional. It is not news that millions of drivers commute to work safely each day on California freeways. It is news when one is killed in a traffic accident.

The California Stem Cell Report also tries to fill information voids. We understand that the stem cell agency believes certain information is not in their best interests to disclose. Such is always the case with both private and public organizations. However, it is generally in the public interest to see more information rather less, particularly information that an organization would rather not see become public.

Analysis and explanation of what the stem cell agency does is rare in the California media and even less seen nationally or internationally. This blog focuses primarily on the public policy aspects of the agency – not the science. The agency is an unprecedented experiment that brings together big science, big government, big academia, big business, religion, morality, ethics, life and death in single enterprise – one that operates outside the normal constraints of state agencies. No governor can cut CIRM's budget. Nor can the legislature. Even tiny changes in Proposition 71, which created CIRM, require either another vote of the people or the super, super-majority vote of both houses of the legislature and the signature of the governor. All of this is the result of the initiative process – a well-intended tool that has been abused and that has also created enormous problems for the state of California that go well beyond the stem cell agency.

Then there is the funding of the agency, which basically lives off the state's credit card. All the money that goes for grants is borrowed and roughly doubles the actual expense to taxpayers.

Since January 2005, we have posted 3,452 items on the stem cell agency because we believe the California Institute for Regenerative Medicine (CIRM) is an important enterprise – one that deserves more attention that it receives in the mainstream media. Our readership includes persons at the NIH, the National Academy of Sciences, most of the major stem cell research centers in California, academic institutions in the Great Britain, Canada, Norway, Germany, Russia, China, Australia, Singapore and Korea – not to mention the agency itself and scientific journals.

We do not attempt to replicate what the California stem cell agency itself does, which is to post online a prodigious amount of positive stories and good news about the agency. To do so would serve no useful public purpose and would simply be repetitive. That said, there is room to acknowledge the work that the agency does, particularly the staff, but also the board. We try to point that out from time to time.

The California Stem Cell Report also welcomes and encourages comments, anonymous and otherwise. Directors and executives of the agency have a standing invitation to comment at length and have their remarks published verbatim, something almost never seen in the mainstream media.

Finally, given the questions raised by the Institute of Medicine about disclosure of potential conflicts of interests, the author of this blog and his immediate family have no financial interests in any biotech or stem cell companies, other than those that may be held by large mutual funds. We have no relatives working in the field. We do have the potential personal conflicts, cited generally by the IOM in connection with some CIRM board members, involving relatives who have afflictions that could be possibly be treated with stem cell therapies in the distant future.   

Stem Cell Orthodoxy and Peer Review

Going against the grain can be difficult as UC Davis stem cell scientist Paul Knoepfler learned again in connection with his research that dealt with similarities between cancer and iPS cells.

His “unsettling” findings troubled some scientists who reviewed his paper prior to its publication in September in Stem Cells and Development. (See here and here.)

As many readers know, iPS or reprogrammed adult cells are currently a hot research avenue in stem cell research because they avoid many of the ticklish ethical and political problems connected with human embryonic stem cells.

Knoepfler shared his thoughts on the publication and peer review process on his blog last week. He wrote,

“Not surprisingly...there are certain members of the stem cell field who would rather focus away from the ideas that iPS cells are similar in some respects to cancer.”

Knoepfler, whose research was financed in part by the California stem cell agency, wrote,

“Once we had a manuscript together comparing iPS cells to cancer cells, we sent it to several high profile journals without much luck. We thought that the fact that our data indicated that iPS cells are similar to cancer cells might make reviewers and editors excited. We thought that the paper was novel and thought provoking in a number of ways. At the same time I realized the theme of the paper would be controversial. 

“I would say two general things about the review process at the two journals that turned down the paper. First, the reviewers at these journals were enormously helpful with their suggestions and helped us improve the paper substantially. Second, they were clearly very uncomfortable with the notion that iPS cells are related in some ways to cancer so unsettled in fact that I believe it influenced their reviews.”

At one journal, a reviewer said the findings were either “not sufficiently novel” or “trivial.” “Little useful insights” said another. And a third said, “many unsettling results....”

Knoepfler commented on this blog,

“Yeah, it may be unsettling that iPS cells share traits with cancer cells, but if that is the reality, isn’t it important that people know that and think about it, talk about it, and address the issue with eyes open?”

Knoepfler's item and similar comments from other researchers that can found elsewhere on the Internet indirectly raise questions about the California stem cell agency's process of peer review of applications for hundreds of millions of dollars in funding, especially in the wake of this summer's unprecedented rash of appeals of decisions by grant reviewers.

The key question is whether the agency's closed-door process reinforces orthodoxy or, in fact, is all but controlled by what amounts to scientific conventional wisdom. Obviously, no researcher likes to see a paper rejected or a grant denied. But the record number of appeals at CIRM and other private complaints could well indicate that potentially profitable proposals are receiving a less than welcome reception behind closed doors from agency reviewers.

The agency's board itself is hard-pressed to make such determinations. It is hamstrung by procedures that do not permit it to expand an application directly – only a staff-written summary. Names of applicants and institutions are censored, although the board is required by law to discuss in public most aspects of a research proposal. Exceptions are permitted for proprietary information. Additionally, a handful of the 29 members of the governing board do participate in the reviews, which come before final action by the board. 

Currently the agency is pushing hard to commercialize stem cell research and fulfill at least some of the promises to voters that were made in 2004. To do that, the agency may well have to step outside of the normal comfort zone of the good burghers of stem cell science.

California Stem Cell Agency Launches Five-Year Push for Cures

The $3 billion California stem cell today officially embarked on a course that will mean closer ties to the biotech industry in hopes of fulfilling the campaign promises to voters to turn stem cells into cures.

On a unanimous voice vote, directors approved changes in the seven-year-old agency's strategic plan. The action will likely mean less money for some activities that enjoyed more cash in the past,  but directors put off action until at least late July.  The plan also sets the course for what may be the last years of life for the unprecedented state research program. Authorization to borrow more money (state bonds) for its grants will run out in about 2017.

During a brief discussion of the plan, which has been debated for some months, CIRM Director Jeff Sheehy noted that the agency has now entered "the realm of trade-offs."  Ellen Feigal, CIRM's senior vice president for research and development, told the board that the plan will require hard decisions and sharp focus on priorities. 

Among other things, for first time CIRM overtly set a goal of creating 20 programs that include outside investment that focus on products. Another five-year goal explicitly calls for financing at least 10 therapies in early-phase clinical trials, affecting at least five diseases. Overall, the plan seeks to achieve clinical proof-of-concept for stem cell therapies.

In contrast to the Proposition 71 campaign rhetoric, CIRM's strategic plan acknowledges that developing therapies takes a very long time, often decades.

Two scenarios were presented to the board for spending the agency's remaining $836 million for grants and loans. One would allocate $506 million for development research, $195 for translational research and $135 million for basic research, but nothing for training and "facilities/core resources."

The other scenario calls for $486 million for development research, $160 million for translational research, $105 for basic research, $60 million for training and $25 million for "facilities/core resources."

The first scenario would mean a $85 million cut in training and shared lab programs – cash that helps to finance researchers and that benefits the many institutions that have representation on the CIRM board. The board put off action on either scenario after CIRM President Alan Trounson said he wanted more time to prepare a complete analysis of the scenarios. 

The plan also calls for creation of a platform to enable grantees, disease foundations, venture capitalists and others to purse CIRM's mission when its state bond funding runs out. The possibility exists that another bond measure would be submitted to voters. But in either case, CIRM will need a solid record to attract support. 

$2.4 Million for State Stem Cell Lawyers: Too Much or Not Enough?

The California stem cell agency is spending $2.4 million a year on lawyers, a figure that one agency director has described as "awfully bloated."

More than one dollar out of every ten that CIRM spends on its operations goes for legal advice, and the subject came up at a meeting last month of a meeting of its directors' Finance Subcommittee. The issue triggered a sharp exchange revolving around a proposal to hire an additional attorney to deal with intellectual property issues.

In the next fiscal year, the agency expects to have legal team of six (four lawyers and two administrative assistants) on board out of a total CIRM staff of 60. It also has three outside lawyers or firms under contract at an annual cost of $1.1 million. Overall, CIRM is spending 13 percent of its $18.5 million operational budget on legal matters. Its budget for legal services will increase $50,000 next year.

CIRM's proposed budget includes a cut in external legal contracts to help finance the addition of another staff attorney. Elona Baum, CIRM's general counsel, is also advancing an additional proposal this month that would pay for another staff attorney indirectly through CIRM loans to business, thus avoiding problems with the 6 percent legal cap on the agency's budget.

At the April 2 meeting of the Finance Subcommittee April 2, Art Torres, CIRM's co-vice chairman and an attorney himself, vigorously questioned the addition of another lawyer. In an exchange with Baum, Torres said,

"Well, wait a minute. We already have you. We have Ian. We have Scott. We have James. What more do we need to add more to our legal services budget, which looks awfully bloated."

Baum and CIRM President Alan Trounson defended the addition of a staff lawyer. Both cited the need to protect intellectual property and promote commercialization of CIRM-funded inventions. Trounson and Baum said grantee institutions are failing to do so. Consequently, they said, the stem cell agency is "at risk."

In one exchange, Torres said,

"There are current counsels within the UC and Stanford and USC that ought to be taking care of this for their grantees."

According to the transcript, Trounson replied,

"Well, they're not – you know, this is not being taken care of in a way which is -- which is -- which is reasonable to the organization here. and I think it's putting the organization at risk...."

Baum cited an "a very in-depth" memo that she said justified hiring an additional attorney. Following the meeting, the California Stem Cell Report asked for a copy of the memo.

It consisted of a one-page job description. Dated March 5, it was written by Baum and directed to Trounson. It described the duties of the new lawyer but not the justification for hiring the person. In addition to IP work, duties including 350 hours of work to "provide increased certainty of commercialization rights," 250 hours for due diligence in the grant award process, 200 hours of work on genomics and reprogrammed adult stem cell efforts. The memo calls for 690 hours on business transactions including 150 hours to administer the loan program and 200 hours on agreements with companies seeking to relocate to California.

Much of the committee discussion focused on the need for legal expertise on IP issues, which Baum said the agency lacked.

CIRM first took a crack at hiring an IP attorney in 2008, seeking both a consultant and a fulltime staff attorney. A fulltime staffer was never hired. However, Nancy Koch was hired as an IP consultant for six months at $150,000 and has been with the agency since. Koch was deputy general counsel of Chiron Corp. and its successor Novartis Vaccines and Diagnostics, Inc. During 11 years at Chiron/Novartis, Koch was responsible for a wide range of intellectual property matters including litigation and licensing. Her current contract is for $250,000 for a year but would be reduced to help provide cash for a staff attorney. Baum said last month that Koch is primarily involved now with collaborative arrangements with other countries.

Our take? It is commonplace to be critical of lawyers, their profession and their numbers. CIRM, however, is an unprecedented agency operating in uncharted scientific waters with an enormous reponsibilility for generating a return for the state. It is engaged with firms that will be negotiating aggressively to cut the most beneficial deal possible for themselves – not for California taxpayers, who are paying the freight. CIRM must protect the state's interests. And first-rate IP lawyers do not come cheap. In 2008, the agency was lowballing when it offered $150 an hour. If CIRM fails to generate a financial return for the state, critics are sure to say that it was overmatched legally when it dealt with the private sector. On the other hand, the agency is sure to be battered by contemporary critics for its battalion of barristers.

The issue of a new hire went unresolved last month, and it was turned back to a handful of directors and staff to solve. CIRM directors will deal with it again at their meeting later this month.

A final footnote: Philip Pizzo, a CIRM director and dean of the Stanford medical school, was part of the meeting during which Trounson identified Stanford as failing to take of care of some of its IP responsibilities. Pizzo said towards the end of the meeting, "If Stanford is going to be referenced, we ought to be clear that we've got all the facts correct about what Stanford does or doesn't do."

Pizzo said Stanford does a "great job."

(An earlier version of this item said incorrectly said that CIRM would have six lawyers on staff next year.)

The Search for Stem Cell Cures: Can California's $3 Billion Agency Move Audaciously?

IRVINE, Ca.-- California's unprecedented stem cell research effort faces a tight timetable for making major progress in fulfilling promises to voters seven years ago, complicated by potential conflicts of interest, a blue-ribbon panel was told this morning.

David Jensen, editor of the California Stem Cell Report, made the comments to the Institute of Medicine panel looking into the performance of the $3 billion California Institute of Regenerative Medicine.

The panel's inquiry comes as the agency is re-evaluating its strategies as it faces loss of funding in about 2017.

Here is the full text of Jensen's statement.
Statement to IOM-CIRM Panel by California Stem Cell Report April 9, 2012


"

Engineering Stem Cells on the Ballot: Chuck Winner and the California Stem Cell Agency

Chuck Winner is a name that doesn't surface often in connection with California's $3 billion stem cell research effort.

Chuck Winner (left) at USC in 2006
USC Photo

In fact, he rarely appears in the news. Winner's name, however, did surface yesterday when Gov. Jerry Brown appointed him to the state's horse racing board. Most of the stories about the appointment were in horse racing publications. But none, including The Sacramento Bee's, mentioned the Prop. 71 campaign managed by his firm, Winner & Mandabach Campaigns of Santa Monica, Ca.

Nonetheless, he and his firm were the key to winning approval of the 2004 ballot measure that created the California Institute of Regenerative Medicine, an enterprise that is unprecedented in state or national history.

The firm's $35 million campaign for Prop. 71 attracted 59 percent of the vote. That same year, the firm also successfully managed four other ballot measures in the Golden State. Its lifetime average is remarkable. The firm's web site says it has won 90 percent of the 150 ballot measure campaigns it has run throughout the country.

Winner-Mandabach has this to say about how it pulled off the Prop. 71 campaign:

"Surveys (in 2003-04) showed that most voters supported the basic concept of expanding stem cell research. However, because of the state’s serious budget and debt problems, it was also clear that passing such a huge bond measure for any purpose would be a major challenge.

"The campaign overseen by Winner & Mandabach to overcome those odds involved a year-long coalition building effort that ultimately recruited over 40 Nobel Prize winning scientists and more than 100 patient groups, disease foundations and business groups – the largest, most diverse coalition of its kind ever formed to support a state ballot measure. The supporting groups helped mount an intense grassroots outreach and activation effort to their members, who numbered in the millions."

Winner-Mandabach continued,

"The TV advertising developed by the firm featured award-winning scientists, patients and their families, and highly-respected patient advocates like Michael J. Fox and the late Christopher Reeve. The ads focused on the potential for cures that could save millions of lives. Details of the initiative and economic issues were addressed through in-depth mail pieces and earned media efforts that included the release of an economic study showing that stem cell cures would help reduce the state’s skyrocketing health care costs. Prior to the implementation of the paid media campaign in late-September, polling showed Proposition 71 below the 50% threshold. But after an intense 6-week advertising, earned media and grassroots campaign, Prop. 71 steadily gained support, even in the face of final attacks by conservative groups and activists like Mel Gibson, and attacks from the left by some anti-biotech groups. Because of its precedent-setting nature, the Prop. 71 campaign became the most watched ballot measure campaign in the nation and generated worldwide press attention. On election day, it was approved overwhelmingly by a vote of 59% to 41%."

The key to success on any ballot measure is a firm like Winner-Mandabach, although high profile individuals – in the case of Prop. 71, Robert Klein, who became the first chairman of the stem cell agency – are often given complete credit. Top notch campaign firms have a keen understanding of voters, appropriate political timing and effective PR and TV advertising campaigns. Without Winner-Mandabach – or a firm with the same skillset – the California stem cell agency would not exist.

Chuck Winner, however, does not have an uncritical view of the ballot initiative process, which has resulted in much expensive mischief in California. He told a USC audience in 2006,

"It’s abused time and again. My opinion is that when you circumvent the legislative process or representative democracy to solve a problem, you can take it to an extreme and that extreme becomes, in some ways, worse than the problem you were trying to solve in the first place. Single-issue up or down initiative votes are very often not the best way to govern."

As for the horse racing business, Winner, a Beverly Hills resident, has been involved in horse racing since 1986. His partner, Paul Mandabach, is also involved in the sport of kings. Their firm has not disclosed their record at the track.

(Click here to see two powerful ads developed for the 2004 campaign, including the famous Christopher Reeve spot.)

The Afterlife of the California Stem Cell Agency: Venture Philanthropy and Big Pharma

The $3 billion California stem cell agency, which is facing its possible demise in five years, is exploring an afterlife that dips into "venture philanthropy" on a national level as well as investment ties with Big Pharma.

The Golden State's unprecedented research program laid out those possibilities in a "transition plan" sent this week to Gov. Jerry Brown and the state legislature. The plan was required under a law passed two years ago. The agency's future direction was also aired at a meeting last month in Los Angeles.

The California Institute for Regenerative Medicine(CIRM) will run out of funds for new grants in 2017. Its only real source of funding is cash that the state borrows (bonds). CIRM says that only $864 million remains for new research awards, and some of its recent grant rounds exceed $200 million. The current position of the agency is that it is "premature" to consider asking voters in financially strapped California to approve another multi-billion dollar bond measure.

The venture philanthropy effort involves creation of a nonprofit organization. CIRM Chairman Jonathan Thomas said in January that he is "test-driving (the proposal) with some high net worth donors we know to be interested in the stem cell space." Thomas was addressing the Citizens Financial Accountability and Oversight Committee, the only state entity specified charged with overseeing the agency and its directors. He said,

"We're busily putting together in conjunction with a national organization called the Alliance for Regenerative Medicine the plans for a nonprofit venture philanthropy fund."

He said it would "would accept applications for awards from researchers and companies all over the country, not just those funded by CIRM, but those funded by NIH or the New York Stem Cell Foundation or the state of Maryland or whatever."

The Alliance for Regenerative Medicine is an industry-dominated lobbying group, based in Washington, D.C.  The group's executive director and co-founder is Michael Werner, a longtime pharma and health industry lobbyist, who is also a partner in the influential Washington law firm of Holland and Knight.

The "biopharma investment fund" proposed by CIRM is less well developed. CIRM said it plans to explore opportunities with companies to fund stem cell research in California. The transition document uses as an example an $85 million deal between Pfizer and UC San Francisco, which gives the company special access to biomedical research.

The transition plan also touches on other issues such as winding down grants after its new grant money runs out, along with protecting intellectual property.

The plan could be considered a marketing tool for the agency's afterlife efforts. The document devotes a good portion of its nine pages to recounting the history of CIRM and touting its accomplishments.

Thomas used the occasion of the submission of the plan as a springboard for a piece yesterday on the CIRM research blog.He concluded his item by quoting from the plan itself. CIRM's achievements during the past seven years, he wrote, "will allow California to continue world (stem cell) leadership in the coming decades."

Luring Stem Cell Researchers to California: A $5.6 Million Bid

The $3 billion California stem cell agency has played a role in bringing two star researchers to the Golden State through its $44 million recruitment program and is about ready to bring in a third.

Next Thursday in Los Angeles, CIRM's governing board is expected to approve a $5.6 million grant to an unidentified scientist to lure him or her to an unidentified California institution.

The funds will go for the researcher's efforts to develop "a regeneration-based functional restoration treatment for spinal cord injury," according to a summary of reviewer comments on the CIRM web site. The grant was scored at 86 by scientific reviewers.

The summary quoted the researcher as saying,

"We recently made breakthrough discoveries in identifying key biological mechanisms stimulating the re-growth of injured axons in the adult nervous system, which led to unprecedented extents of axon regeneration in various CNS injury models. While our success was compelling, we found that many regenerated axons were stalled at the lesion sites by the injury-induced glial scars. Furthermore, it is unclear whether the regenerated axons can form functional synaptic connections when they grow into the denervated spinal cord. This proposed research program is aimed at solving these obstacles by using human stem cell technologies."

The summary said,

"The PI was described by reviewers as a superb scientist and emerging leader with outstanding accomplishments and exceptional promise. The candidate has already made key contributions to the understanding of mechanism underlying axonal regeneration that have significantly advanced the field of neuroregeneration. He/she has been extremely productive, publishing a number of seminal papers in the highest profile journals including Science, Nature, Neuron and Nature Neuroscience."

The stem cell agency's recruitment efforts have helped to bring Peter Coffey ($4.9 million from CIRM)from the UK to UC Santa Barbara and Robert Wechsler-Reya ($6 million)- to Sanford Burnham in La Jolla from Duke University.

IOM Begins 'Peak Performance' Review of California Stem Cell Agency

The $700,000, Institute of Medicine study of the California stem cell agency kicks off Wednesday with a two-day public meeting in Washington, D.C., but the IOM will deal with its conflict of interest concerns behind closed doors.

The blue-ribbon review is expected to play a key role in public perceptions of the $3 billion agency and whether California voters are likely to approve another multibillion bond measure for the unprecedented state effort.

According to the IOM,

"The principal objective of this review is to ensure that all aspects of CIRM's operations are functioning at peak performance."

Harold Shapiro, chairman of IOM
review panel -- Princeton photo

The study, which is funded by CIRM, will be conducted by a 13-member committee chaired by Harold Shapiro, a professor of economics and former president of Princeton University, that is supported by IOM staff. None of the members of the committee are from California.

The session on Wednesday will be devoted to briefings by three top CIRM officials and former CIRM chairman Robert Klein. He will provide a one-hour overview including the agency's funding model and management systems. Jonathan Thomas, the new chairman of CIRM, will provide a 15-minute "charge" to the committee.

Also briefing the panel will be Ellen Feigal, CIRM's senior vice president for research and development, and Elona Baum, general counsel and vice president for business development. Absent from the IOM meeting will be Alan Trounson, president of CIRM. The IOM said the CIRM witnesses were selected by the agency. We have queried CIRM about Trounson's absence.

No time has been allotted specifically on the IOM agenda for public comment.

The IOM report is expected to be released in November 2012 as major financing issues face CIRM. The agency is expected to run out of funds in about 2017, although it will have to scale back its multi-year grant programs sooner if it does not have a guaranteed stream of cash.

On Oct. 3, the California Stem Cell Report queried Adrienne Stith Butler, senior program officer for the study, concerning the meeting. She replied,

"As is typical for a first committee meeting, the committee will meet in closed session for its orientation and the bias and conflict of interest discussion. The sponsor will deliver the charge to the committee in open session. The open session agenda will be posted 10 days in advance of the meeting and a closed session summary (general topics discussed) will be posted within 10 days after the meeting."

We asked Stith Butler why bias and conflict of interest matters are being discussed privately and commented,

"One would think that openness and transparency are paramount in such issues."

She replied by citing a document that spelled out the IOM conflict of interest policy but which did not provide a justification for it. The policy says, in part,

"Access to such information within the institution will be limited to those offices whose proper business requires access to such information."

Our take? It is indeed the "proper business" of the people of California to be informed about bias and conflicts in connection with an investigation of an enterprise that is costing them $6 billion(including interest). Much of the conflict and bias discussion could easily be conducted in public without infringing on the privacy of panel members. Doing so would help to remove questions that are certain to be raised, particularly in the context of an electoral campaign.

It would behoove the panel to move to conduct its initial conflict and bias discussion in public and then go into a private session, if one is actually necessary. A lack of transparency will damage the study group's credibility, particularly in the context of a statewide electoral campaign for continued funding of CIRM's efforts.

In addition to Shapiro, the other members of the IOM committee are Terry Magnuson, vice dean of the medical school at the University of North Carolina; Richard Berhringer, professor at the University of Texas cancer center; Rebecca Eisenberg, professor of law at the University of Michigan; Insoo Hyun, associate professor of bioethics at Case Western Reserve medical school; Gary Koretzky, vice chair for research at the University of Pennsylvania department of medicine; Cato Laurencin, a professor at the University of Connecticut and CEO of the school's Institute for Clinical and Translational Science; Aaron Levine, assistant professor of public policy at Georgia Tech; Michael May, CEO of the Centre for Commercialization of Regenerative Medicine, hosted by the University of Toronto; Cheryl Moore, executive vice president of the Howard Hughes Medical Institute; David Scadden, co-director of the Harvard Stem Cells Institute, Allen Spiegel, dean of the college of medicine at Yeshiva University, and Sharon Terry, CEO of Genetic Alliance, a nonprofit health advocacy organization.

Race for the Chair: Political and Financial Pressure Help Thomas Win CIRM Chairmanship

SAN DIEGO, Ca. –- Directors of the $3 billion California stem cell agency late yesterday evening elected Los Angeles bond financier Jonathan Thomas as chairman of the unprecedented research enterprise as it strives to fulfill seven-year-old campaign promises to turn stem cells into cures.

The board voted 14-11 to choose Thomas over Frank Litvack, a cardiologist/businessman, also from Los Angeles. The vote came with no debate following a three-hour closed session. Each candidate appeared separately in private, followed by a discussion among board members, also in private. Only one member of the public spoke out on the election during the public portion of tonight's meeting, during which each candidate read a statement.

The California Stem Cell Report was told that Gov. Jerry Brown's office called six members of the CIRM board during the past two days and managed to switch some members from Litvack to Thomas. The governor's office did not respond to queries about the matter.

Outgoing Chairman Robert Klein said the key factor in the vote was the state's current financial crisis and its possible negative impact on CIRM, which depends solely on state bonds for cash. Earlier Thomas sounded an alarm about CIRM finances, telling directors it was necessary to move to assure financial stability. CIRM faces both short and long term financing problems. Thomas could be the last chairman of CIRM unless he and the board devise a way to finance it beyond 2018, roughly the date when the agency runs out of money.  (For more on Thomas' remarks, see here.)

Klein told the California Stem Cell Report that Thomas would be paid something in the range of $390,000 to $395,000 annually for 80 percent time on the job. (The agency later said the correct figure is $400,008.)

Thomas is chairman and co-founder of Saybrook Capital of Santa Monica, Ca. The firm specializes in distressed government bonds. The current state budget crisis in California has left the state with the worst bond rankings of any state in the nation. State Treasurer Bill Lockyer, who controls the sale of state bonds, and the governor and lieutenant governor all nominated Thomas.

On Monday Lockyer sent a strong letter to his five appointees to the CIRM board urging them to vote for Thomas. He said the bond financier was the only candidate with a "complete toolkit" for the job. Lockyer stressed Thomas' background in bond financing.

Unless CIRM receives funds from a fresh bond sale, it will run out of cash in the middle of next year. However, the state is limiting its bond sales because of its budget crisis. CIRM will face tough competition to have its bonds placed in the two sales rounds expected to come up in the next 12 months. .

Some observers interpreted Lockyer's letter as a veiled warning to the entire 29-member board to approve Thomas, with the letter implicitly raising the possibility that the agency could come up short in the next bond rounds.

Longer term, CIRM has only about $1.4 billion or so to hand out for grants or loans. Klein has touted a $3 billion to $5 billion bond measure that would be presented to voters sometime during the next few years. To win support of the proposal, the agency will need a record of substantial accomplishment that resonates with the public.

During Thomas' six-year term, the agency will also have increasing responsibilities for monitoring its massive and growing grant portfolio. The task will become more challenging with larger and more complex grants and loans that have achievement benchmarks that must be met. If not, CIRM is supposed to withdraw its cash. At the same time, the agency continues to wrestle with its computerized grant management system.

To accomplish its goals, CIRM is working ever more closely with the biotech industry. Some industry executives have been dismayed at the tiny fraction of funding that has gone to businesses. A blue-ribbon review panel last fall cited the need to bolster funding for industry. At the same time, the taxpayer-funded agency must assure that the state receives full value for its dollar.

Litvack also had a blue-ribbon business resume along with a record of scientific accomplishment. One description calls him a "serial entrepreneur." He was CEO of Conor MedSystems of Menlo Park, Ca., when it was sold a few years go to Johnson &  Johnson for $1.4 billion. More recently he has been involved with Pervasis Pharmaceuticals and Capricor, Inc.

Litvack touted his scientific and business experience in developing new products and running the FDA gauntlet. State Controller John Chiang, who recently gained national attention for cutting off the pay of California legislators because they failed to pass a balanced budget, nominated Litvack. Chiang said,

"Litvack knows from personal experience what it takes to develop new medical technologies and move them through the regulatory process to adoption in the market place."

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."

Klein Makes It Official -- His Last Day is June 23

Robert Klein, the first and only chairman of the $3 billion California stem cell agency, has officially resigned effective June 23.

His resignation came in a May 10 letter to the statewide officials who are responsible for nominating candidates for chair of the unprecedented research effort, which is generally regarded as the single largest source of funding in the world for human embryonic stem cell research.

Klein's resignation letter is significant because he has talked about leaving his post at earlier dates several times in the past but never has. His May 10 letter makes it official.

The governor, treasurer, controller and lieutenant governor are expected to make their nominations on Monday, if not sooner. The board is expected to choose among the candidates to fill Klein's slot at its meeting in San Diego June 23.

Klein has served six-and-a-half years as chair of the 29-member CIRM board of directors. His letter mentions eight years of work. That includes the time that he and a handful of others spent writing the 10,000-word ballot initiative, Prop. 71, that created the stem cell agency. It also includes his direction of the 2004 statewide electoral campaign on behalf of Prop. 71.

Here is the text of Klein's letter.

"It has been my honor to serve as the Chairman of the Governing Board of the California Institute for Regenerative Medicine (“CIRM”) for the last six and a half years. With your support and the support of the other constitutional officers and the Legislature, we have made great strides towards achieving our goal of finding therapies and cures for Californians who suffer from chronic disease and injury. Just last week, CIRM’s Governing Board approved a loan to Geron, a California company, to support a human clinical trial involving the use of embryonic stem cells to treat individuals with spinal cord injury. We expect that CIRM’s Disease Team Research Awards, which were approved last year, will lead to additional human clinical trials within the next 24 months.

"Having spent the last eight years of my life dedicated to the cause of stem cell research, I remain deeply committed to CIRM’s mission. When I .,agreed to be considered for a second term, however, I made it clear that, in light of my personal and professional obligations, I could only serve six months. I am therefore writing to submit this letter of resignation from my position as the Chair of the Governing Board of CIRM, effective at the close of business on June 23, 2011."

"Thank you for your leadership and support of stem cell research. I strongly believe the advances of California’s stem cell scientists and clinicians will profoundly reduce the future of human suffering from chronic illness and injury."

CIRM Directors Moving on New Chairman and New Directions for Stem Cell Agency

Directors of the California stem cell agency are likely to settle this May on a new chairman of the $3 billion enterprise, replacing the man who has been the spirit behind the effort even before it was a gleam in voters' eyes.

The proposed timetable for election of a successor to Robert Klein, the first and only chair of CIRM, will come before directors at their meeting in Burlingame on Thursday.

Also on the agenda are far-reaching recommendations from CIRM management for new directions for the six-year-old, unprecedented state research program.

However, most attention is likely to be focused on the selection of Klein's replacement in a process that is proceeding more openly and orderly than last year's closed-door attempt by Klein to engineer the selection of his successor.

This week Klein offered his own view of the role of the chair in a new memo to board members, arguing for a person who would work on an 80 percent to 100 percent basis, presumably at a salary that could run to $500,000 a year. Klein, a real estate investment banker and lawyer, has worked without salary for most of his six-year term. In December 2008, the board designated his position as 50 percent with a $150,000 salary.

The directors' Governance Subcommittee last month recommended that the new chair work on an 50 to 80 percent basis, which could mean a salary in the range of $137,500 to $400,000. The subcommittee also recommended additional criteria for the new chair, which will come before the board on Thursday. Director Joan Samuelson added her additional thoughts for a global role for CIRM in a memo to the board.

The subcommittee backed away from making an immediate decision on delineation of responsibilities of the chair and president. Under Prop. 71, which created the stem cell research effort, the chair and president have overlapping responsibilities that have created friction in the past and generated criticism from the state's good government agency, the Little Hoover Commission.

Under the proposed timetable for selection of Klein's replacement, the board would provide the nominating state officials (governor, lieutenant governor, treasurer and controller) with recommended criteria, anticipated time commitment and salary range. The officials would be asked to make nominations by April 11. An evaluation subcommittee of directors would then conduct closed-door sessions with candidates. At the May 3-4 board meeting, candidates would make public presentations to directors with a possible final vote following. Klein has said he will serve only until the end of June.

Selection of the new chair will also be influenced by board decisions on implementation of the recommendations of last fall's external review report. Prepared by a blue-ribbon panel, the report recommended improved ties with the biotech industry, expansion of CIRM's international links and a more active role in seeking out promising research areas.

Some industry executives have been been critical of CIRM. Biotech businesses have received a tiny fraction of the $1.1 billion handed out so far by the agency.

CIRM management's response to the external report called for closer ties with industry, including formation of a special advisory panel and possibly twice-a-year RFAs specifically targeting industry. Management also proposed that some translational RFAs could require partnerships between academia and industry.

The management response additionally recommended reaching out to involve research elsewhere in the country. The 12-page memo said,

"When entities with promising new developments outside California are identified, CIRM will encourage them to partner with California institutions and apply to general or specific RFAs. The challenge is to find ways to pull projects under CIRM’s umbrella while staying within the spirit and regulations that govern the Institute."

Some of the management language in its memo is tentative, rather than flatly declaring that this or that task should be done, and does not require up or down votes by the board, if any votes are required at all. How the board responds to those suggestions will be critical in shaping future CIRM action.

The external review report also recommended clearer delineation of the responsibilities of the chair and president. The management memo appeared to agree but made no specific suggestions.

The blue-ribbon report recommended improvement in public awareness of the agency and its work. In response, the management memo, among other things, recommended hiring a public communications officer in the office of the chair, who would presumably operate independently from the current communications staff, which is under the president. CIRM already has a large public relations/communications effort, including outside consultants.

The management memo mentioned an "office of science education and communication" within CIRM that would enhance its public relations efforts. The memo said,

"The amount of effort required to produce continually renewed content cannot be under estimated."

In addition to the Burlingame location, the public can participate in the directors meeting at locations in Irvine and Los Angeles. Specific addresses can be found on the agenda. The meeting is also expected to be audiocast on the Internet.

Has CIRM Funded Stem Cell Research that Bush Would Have Banned?

When California voters approved creation of an unprecedented, $3 billion stem cell research program more than six years ago, they were told the money would go to finance research that then-President George Bush had banned.

Has that actually happened? Yes, but mainly no, according to a research paper published in Nature Biotechnology in December 2010.

In the first-ever such analysis of CIRM grants, Aaron Levine, assistant professor in the School of Public Policy at Georgia Tech, reported that through 2009 only 18 percent of California's dollars went for grants that were "clearly" not eligible for federal funding.

Levine's finding has implications for another, multibillion-dollar bond ballot measure that CIRM Chairman Robert Klein has proposed. The campaign for such a measure would have to address the question of whether the promises of the 2004 ballot initiative that created CIRM have been fulfilled.

CIRM does not offer on its web site figures that can be compared to Levine's calculations. The agency does present some statistics about the amount of funding for embryonic stem cell research, but makes no effort to break out the percentage of grants that would not have received funding during the Bush years.

Levine's numbers on California were part of a broader look at state funding of stem cell research in recent years. He reported that by the end of 2009, six states had awarded nearly 750 grants totalling $1.25 billion. California accounted for $1 billion of the total. Per capita funding amounted to about $1 in Illinois and nearly $28 in California.

In all of the states, percentages were low for research that was clearly ineligible for federal cash under the Bush standards. Levine wrote,

"Most state hESC funding appears to have supported research also eligible for federal funding during the Bush Administration. This finding is surprising, given the explicit intent of several state programs to preferentially support science not eligible for federal funding, but likely reflects the nature of the grant proposals state agencies received, particularly given the number of grants states awarded to scientists relatively new to the field of hESC research.

Levine continued,

"Several factors could explain the relatively small share of grants that went toward clearly ineligible research. Some scientists who wished to pursue this research may have been unable to access the raw materials or acquire the intellectual property rights required to do so. Alternatively, these findings could simply reflect scientific interest. The discovery of induced pluripotent stem cells may, for instance, have reduced scientific interest in the derivation of new hESC lines. Finally, these findings may reflect a preference on the part of scientists to use well-established and well-studied hESC lines. This last explanation may be particularly relevant for new scientists entering the field of hESC research, as using recognized cell lines may give their initial research efforts greater credibility."

In California, another factor enters into funding for Bush-banned research, particularly given the 2004 campaign promises. CIRM makes overt decisions about what to fund. Its RFAs spell out what is acceptable and non-acceptable. The agency could have specified that it would not fund any research that would be eligible for federal funding. But whether that would have been "good science" is another question. CIRM also spent nearly $271 million on new labs at many of its directors' research institutions, diluting the percentage that would be construed as financing Bush-banned research.

We are querying CIRM concerning Levine's statistics.

Levine also reported that the state stem cell research efforts appear to have drawn new scientists into the field, with the largest impact occuring in California. He wrote that 42 percent of those funded in this state appeared to be fresh to the field.

In addition to the Nature Biotechnology piece, Levine has created an online database of state grants that he plans to update regularly. In an email to the California Stem Cell Report, he said,

"While CIRM already makes this information readily accessible, some of the other state programs do not and I hope this database will facilitate comparisons among the various programs and prove to be a useful tool for people interested in state stem cell programs. "

Two State Agencies Looking Into CIRM Tomorrow and Friday

This is a busy week for the California stem cell agency, but not all the action is in Burlingame where CIRM board convenes tonight for a preliminary round, followed by the main event tomorrow.

Two other state bodies will be looking at CIRM at meetings in Los Angeles and Sacramento. One of the panels is the only entity specifically charged with oversight of the $3 billion agency's finances. That is the Citizens Financial Accountability Oversight Committee(CFAOC), which convenes in Los Angeles on Friday. The second group is the state's good government agency, the Little Hoover Commission, which recommended in 2009 a number of changes at CIRM to improve its operations and transparency.

On tap for the CFAOC is a look at implementation of the first-ever law passed dealing with the Golden State's unprecedented $3 billion research effort. The measure, SB1064, removes a 50-person cap on the agency's staff, allows for compensation of up to $15,000 a year for some patient advocates serving on the CIRM board and requires the agency to commission the first-ever performance audit of its program.

The CFAOC is chaired by the state's top fiscal officer, Controller John Chiang. An early version of SB1064 contained a provision, supported by Chiang, that would have had the CFAOC commission the performance audit. But CIRM successfully lobbied to take the audit out of the hands of the CFAOC. You can expect questions to be raised during the Friday meeting about the progress of CIRM on setting up its audit.

Also likely to come up is the subject of staffing, particularly in connection with sweeping recommendations by CIRM's external review that would seem to require substantial additional staff.

A new member of the CFAOC, Jim Kovach, former head of the Buck Institute, is expected to be sworn in. Kovach was appointed by CIRM Chairman Robert Klein, whose last appointee to the panel attended one meeting last January and then quit. Kovach is a physician, a lawyer and former professional football player with the San Francisco 49ers and the New Orleans Saints.

You can find a host of budget and other financial documents related to the meeting on the CFAOC website.

The agenda for the Little Hoover Commission says only that a "scoping memo" involving CIRM will be presented to the full commission tomorrow afternoon in Sacramento. The commission staff has not elaborated on just exactly what that means although it comes under the subject of "schedule/project selection."

As for tonight's meeting of the CIRM directors' Governance Subcommittee, you can read about that here. The full board meeting that begins tomorrow morning was subject as well of a number of earlier piecesl on the California Stem Cell Report. (See here, here, here, here and here.) For those of you following those items, the agency still has not posted any information about the cost or scope of its proposal to pay for the attendance of perhaps hundreds of persons at an international stem cell conference in Toronto in June.

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.)

California Stem Cell News: A Not-So-Good Story Line

If one is to believe Google, the top of the news today about the California stem cell agency is a story that relates how its $3 billion effort has failed to deliver on the emotion-ladened campaign promises of 2004.

The piece in the Los Angeles Times, the state's largest circulation newspaper, was ranked No. 2 in a Google news search this morning on the term “California Institute for Regenerative Medicine.” Ranked at No. 1 was a summary of the article. Yahoo news placed the Times article a tad higher than Google, declaring it was No. 1.

The story yesterday by Jack Dolan of the Times' Capitol bureau follows one earlier this month in the New York Times that warned that California voters are not likely to see a good return on their unprecedented investment in stem cell research.

Both stories highlight one of the major challenges facing the state stem cell agency, especially if CIRM seeks another $3 billion to $5 billion from voters in a couple of years.

To win approval of such a bond measure in a statewide election, it will take more than a few hundred research papers, one of the measures of success that CIRM uses. The papers may contribute to the development of the science, but voters expect more tangible results. They want to see paralyzed people walk, blindness cured and memories recovered – all of which are not likely between now and time for an election for more funding for CIRM.,

That is not to say that another bond measure is doomed, but it will take some great science and top-notch marketing – not to mention luck – to win approval of more cash for research.

The story that CIRM wants to see should be much different than Dolan's piece, which does not give the agency much to celebrate, at least in terms of PR.

Dolan wrote,

"Under (CIRM Chairman Robert Klein's) stewardship, the agency has funded research leading to hundreds of scientific papers, but scientists say marketable therapies for maladies such as cancer, Alzheimer's and spinal cord damage promised during the campaign remain years, if not decades, away."

Dolan cited the built-in conflicts of interest at CIRM. He wrote,

"'When you're talking about spending $1.1 billion dollars, there's absolutely no excuse for people making the decision to give themselves the money,' said Robert Fellmeth, executive director of the Center for Public Interest Law at the University of San Diego.

"While board members recuse themselves from voting on grants where they have a direct conflict, the mere presence of so many conflicted members is a concern, Fellmeth said. 'There is a quid pro quo atmosphere that develops, because you defer to each other.'"

Dolan additionally hammered at the high salaries at the upper levels of CIRM, a matter that resonates roundly and negatively with voters.

Little of what he wrote is new to the readers of this blog, but a piece in the Los Angeles Times reaches a new and far wider audience than that of the California Stem Cell Report. A story in the Times also stimulates additional links to the article, sometimes in a manner that does not cast CIRM in the best light.

The Scientist magazine linked to the story in a three-paragraph item that began like this:
“The California Institute for Regenerative Medicine has been plagued with criticisms and doubts during its first six years in operation, yet the chairman of the institute plans to ask state voters for another $3 billion in bonds in 2014 to keep the institute up and running.”

Then there was this headline from blogger Wesley Smith: “CIRM to Try and Sucker Californians Into Letting It Borrow Even More Money." Smith wrote,

"Who cares that California is falling into the ocean fiscally?  Who cares that our taxpayers are groaning under high taxes and an astonishing level of bond debt?  Not the California Institute of Regenerative Medicine.  Like the man-eating plant in (the play) 'Little Shop of Horrors,' its appetite is insatiable.  It wants more!"

Rankings of news stories on Internet search engines, of course, change over time, sometimes in a matter of hours. But pieces such as those in the New York and Los Angeles Times will still be part of the news background for CIRM come election time. Reporters from around the state and nation will find them as part of their coverage of the bond measure. More questions will be asked. And CIRM will need to find some good answers.