Sunday, January 29, 2006

Correction

In two items concerning stem cell researcher Jose Cibelli and his role on CIRM's Standards Working Group, we incorrectly reported that he had resigned from the group. CIRM's website states, in a footnote, that he has "voluntarily withdrawn from active membership" with the group.

Friday, January 27, 2006

Policy for Removal of Stem Cell Advisers Advances

The California stem cell agency is moving forward with development of a policy on removal of members of its working groups – the panels that make key recommendations on facilities, grants and ethical and research standards.

Ordinarily consideration of such a policy would merit little notice, but it came up shortly after one working group member, stem cell researcher Jose Cibelli, became embroiled in the Korean stem cell scandal. Cibelli has resigned from his post at CIRM and has asked Michigan State University, where he is employed, to investigate his involvement in the Korean affair.

California stem cell chairman Robert Klein said today that the development of the removal policy was underway prior to the Cibelli matter.

According to the policy considered by the Governance Subcommittee, members of working groups may be removed for the following

"1. An intentional violation or violations of the Working Group conflict of interest policy applicable to the member;

"2. Two or more grossly negligent violations of the Working Group conflict of interest policy applicable to the member;

"3. Consistent failure to perform the assigned duties of the Working Group member or unexcused absence from three consecutive Working Group meetings;

"4. Violation of medical or ethical standards by the member in his or her professional capacity as determined by the appropriate research institution or the appropriate professional group;

"5. In the case of a member of the Medical Research Funding Working Group, employment by an institution located in the State of California;

"6. In the case of a member of the Medical Facilities Working Group, acceptance of a contract in his or her professional capacity that would create a conflict of interest under Proposition 71 and that cannot be avoided through the procedures and policies preventing actual conflict of interest at the Working Group;

"7. The conviction of a felony or act involving serious moral turpitude."

The full text of the policy can be found here. The Governance Subcommittee did not have a quorum and so could not vote on the policy. It will go to the full Oversight Committee for final consideration.

CIRM Hires Sacramento Lobbyist for Another Three Months

The California stem cell agency has re-engaged a top Sacramento lobbyist to watch over its interests in the Capitol, where legislation is being considered that would have a major impact on its operations.

The contract with Nielsen, Merksamer, Parrinello, Mueller & Naylor was reported to the agency's Governance Subcommittee at a meeting this morning. The firm will be paid $7,500 a month for three months – with a one month extension – beginning Jan. 23.

Last year's contract (first reported by this blog) with the same firm stirred something of a flap, partly for the way it was handled and partly because it is unusual for a state agency to hire a private lobbyist. Virtually all major state agencies have internal lobbyists, which are euphemistically called "legislative units" or some other term.

While one can argue about the cost of the private lobbyist, CIRM needs to have an effective voice in the Capitol, both to communicate with legislators but also to advise the agency about navigating the legislative corridors. If CIRM had an effective lobbyist in place 12 months ago, it would have saved itself a lot of anguish. And it probably would have led to better policy from the beginning.

CIRM would be better served, however, if it could handle its legislative relations without a private lobbyist, but that is not likely to happen until its financial situation improves.

During today's meeting, Oversight Committee member Claire Pomeroy, dean of the UC Davis Medical School, said that communication between CIRM and the legislature "needs to be a high priority." But she also asked, "How are we going to monitor what we are getting for our money."

Stem cell chairman Robert Klein said he would ask Nielsen Merksamer for regular reports on its activities.

CIRM staff also reported that it has requested proposals from five accounting firms for an audit of the agency, as required by law. The audit is budgeted for $50,000. The agency is paying another $45,000 to the State Department of Justice in connection with the litigation against CIRM. And more is expected to be needed.

Here is a link to the agenda item involving the contracts and a summary of all contracts.

Thursday, January 26, 2006

CIRM Nearing Final Action on Ethics and Research Standards

The California stem cell agency next week will move forward on research and ethical standards that it says will lead the nation in several areas.

According to a press release from CIRM, it will be the first in the nation to:

"legally mandate specialized review by a Stem Cell Research Oversight(SCRO) committee;

"enhance state and federal policies in the areas of voluntary-informed consent;

"and ensure that women's reproductive needs are protected and
prioritized before the research."

The complex, 10-page draft of regulations is due to be considered at a Los Angeles meeting of the Standards Working Group on Monday and Tuesday. Its recommendations will go to the full Oversight Committee Feb. 10, a meeting that is already scheduled to take up another complex subject, intellectual property.

Whether the draft will satisfy its critics is yet to be determined. One, the Center for Genetics and Society, has raised concerns that the agency is considering a loophole that would allow use of eggs from other countries that have lower standards than California.

The draft rules contain language stating that CIRM-funded research is limited to cells obtained "under the oversight of an IRB (or, in the case of foreign sources, an IRB-equivalent)." It goes on to state that CIRM-funded research requires that "the donation of gametes, blastocysts, somatic cells or tissue occurred without payment beyond reasonable compensation for participation. A determination of reasonable compensation shall be performed in accordance with the policies governing the institution involved in derivation activities."

Prop. 71 forbids payments to egg donors in California, but it allows for reimbursement of expenses. Just how those expenses are defined has been debated extensively by the working group. The working draft contains the following definition: "necessary and reasonable costs directly incurred or expended as a result of donation or participation in research activities." A footnote on page 6 adds that expenses "is not used here to allow for differences…that may exist in outside (non-CIRM funded) institutions."

It was not clear from the draft whether the "necessary and reasonable expenses" rule would entitle a woman to be reimbursed for the hiring of a $500-an-hour lawyer/consultant to help her during many hours of wading through the complex informed consent documents and procedures. That hourly figure may sound high to some, but many lawyers, including those who work for CIRM, regularly charge such fees.

The draft does require development of procedures to ascertain whether a donor fully understands "the essential aspects of the research."

The standards group has held eight meetings around California to develop the documents scheduled to be discussed Monday. You can find links to all the proceedings here. Monday's agenda with several background documents is posted here.

The meeting cannot be heard at any offsite locations, but only at the Luxe Hotel in Los Angeles. That is unfortunate, given the important nature of its deliberations. It is the policy of CIRM not to make meetings of the Oversight Committee and its Working Groups, the most important entities within the agency, available to the public beyond their physical locations. Cost was cited as a reason by one official.

Wednesday, January 25, 2006

The Stem Cell Agenda of a State Senator

What does Deborah want? It is a question that floats around in the minds of some folks at California's stem cell agency.

Deborah is Sen. Deborah Ortiz, D-Sacramento, chair of the state Senate Health Committee and the legislative mover-and-shaker on stem cell issues. She is carrying a proposed constitutional amendment that would tighten oversight of CIRM and guarantee benefits to California from CIRM-funded research. She also plans to re-introduce a bill designed to protect women who donate their eggs for stem cell research.

She laid out her agenda clearly in a speech Monday that received no media attention. But her comments go to the heart of stem cell work in California. The principles behind them – accountability, transparency and disclosure -- additionally go to the heart of stem cell work anywhere in the world. Here in California, it is important to note that she says it is not necessary to make constitutional changes in CIRM; "binding regulations" would suffice.

In her speech she said Prop. 71 is "light" in the following areas:
"--meaningful conflict of interest standards for the appointees who review and make recommendations for funding,

"--open meeting and public records requirements to ensure that the public has information about projects that are recommended and not recommended for funding;

"--workable provisions to ensure that taxpayers get a return on their investment in stem cell research, consistent with the promises made to voters.

"--stringent standards to protect women who may consider donating eggs for stem cell research."
Her legislation would:
"--require members of the Prop. 71 working groups, without exceptions, to disclose their interests in research institutions, biotechnology, and pharmaceutical companies involved with stem cell research;

"--require meetings and deliberations of the Prop. 71 governing body and working groups to be conducted in public, with narrow exceptions for scientific peer review discussions, medical privacy, discussion of proprietary or scientific prepublication information, and personnel matters.

"--require Prop. 71 grantees to agree to share royalties on successful inventions with the state and to require licensees to sell any resulting products or treatments to the state at the best price they provide it to any purchaser.

"--require women considering donating their eggs for research to provide written informed consent and prohibit compensation of egg donors beyond the direct expenses entailed in undergoing egg extraction."

Ortiz said she believed the problems were "fixable" and hopes to engage in further dialogue with CIRM on solutions.

Tuesday, January 24, 2006

Light Coverage of Stem Cell IP Decisions

Three California newspapers carried stories this morning on key decisions involving who benefits economically from the state's $6 billion stem cell research program.

Two of the papers – The Sacramento Bee (reporter Jim Wasserman) and the San Diego Union Tribune (reporter Terri Somers) – led with the news about efforts to provide relatively lost cost therapies to low income and uninsured persons.

The Contra Costa Times (reporter Sandi Kleffman) began with the stem cell agency's plan to share something less than 25 percent of revenues from therapies with the state.

You will find minor differences in some of the details of what the stories reported. That is primarily caused by the loose language of the changes made during yesterday's meeting. Also two of the papers – The Bee and the Union Tribune – covered the session at Stanford remotely through a conference call, which makes it difficult to hear at times.

Speaking of conference calls and apropos of our earlier items on the Carlyle hotel, Sherry Lansing, a member of the CIRM IP task force, checked in from the swank and privacy-oriented Carlyle in New York City. But we don't know whether any members of the public were there. Lansing made a few comments during the meeting that began at 1 p.m. and checked out of the call by about 3 p.m.

No stories were seen on the Web from the San Francisco Chronicle, the hometown newspaper of the stem cell agency, and the Los Angeles Times, California's largest newspaper.

Here are links to The Bee story, Contra Costa Times and the San Diego Union Tribune.

Monday, January 23, 2006

Confirmed: $40 Million Raised for CIRM

The California stem cell agency has raised nearly $40 million, an amount that will allow funding of the first year of its training grants and more.

The California Stem Cell Report has confirmed a story first published in the San Francisco Examiner last week. Reporter Marisa Lagos said that stem cell chairman Robert Klein disclosed the general amount in a little-noticed speech in the Bay Area.

We have been told the money has been raised through bond anticipation notes, which Klein has called a type of bridge loan. They are sold at higher rates of interest than conventional state bonds. They are intended to be repaid only if the state wins the lawsuit challenging the existence of the stem cell agency. If it loses, the bond purchasers receive nothing.

Klein's plan was to sell the notes to charitable organizations – the theory being that they could just consider them gifts if the state loses the lawsuit.

One of the purchasers of $5 million in notes is Herb and Marian Sanders, co-chairs of the Golden West Financial Corp. of Oakland, the parent of World Savings Bank.

Revenue and Results Sharing Plus More March-In

The California stem cell agency Monday moved a step closer to adopting rules that will give the state of California a share of returns on revenue generated from inventions created by state-funded stem cell research.

The agency also moved towards requiring greater sharing of research than currently provided under much-criticized federal rules.

The actions were taken on a 7-0 vote by the agency's Intellectual Property Task Force. Basically the group adopted with some changes the draft of the policy prepared for today's meeting (see "25 percent" and the full text of the draft). The proposal covers only non-profit organizations.

The requirement on 25 percent revenue sharing would kick in only after revenues reach $500,000 (adjusted for inflation, a change added Monday). The revenue sharing applies only to the portion to be received by the grantee's organization. The individual grant recipient gets his cut first.

Regarding the sharing of research results, Ed Penhoet, chair of the task force, said the draft "pushes the envelope" compared to what is currently occurring nationally. He said the state could be "selectively disadvantaged" because other states will not have to share information while California would do so without requiring reciprocity.

But he did express hope that California's move towards sharing of research and non-exclusivity in terms of licensing inventions would spur a national movement in that direction.

The task force also made changes in the draft policy aimed at making therapies available at lower costs and to put muscle behind a requirement for plans to help uninsured persons.

One change would require that research licensees that develop therapies make them available at the lowest commercial prices to Medi-Cal or uninsured persons. Licensees could do that or come up with a plan for access to the therapies by Medi-Cal or the uninsured.

The task force then approved a rule to allow the state to "march in" – basically take back the rights of licensees when they fail to comply with their own plans. Federal law provides for "marches in" but none have ever occurred.

The language of the changes was loose and will more fully refined when the rules come up for adoption by the Oversight Committee on Feb. 10. Penhoet promised that the revisions will be posted online Feb. 5 on the CIRM, five days before the meeting.

Also on Monday, a key California state legislator released a statement on her position on intellectual property and accessibility of therapies. Sen. Deborah Ortiz, D-Sacramento, is carrying a proposed constitutional amendment that would force CIRM to change its IP approach.

Her position and the proposal approved on Monday appear to be creeping closer although they are still some distance apart.

Here is the text of the statement from Hallye Jordan, director of communications for Ortiz. It was not available elsewhere on the Web at the time of this writing:

"With the ICOC task force meeting today to consider intellectual property guidelines, as well as the recent proposals of the California Council on Science and Technology and the Foundation for Taxpayer and Consumer Rights, I thought it might be helpful to understand what Senator Ortiz is considering for legislation she intends to move this year.
"The senator supports the concept of requiring grantees to share with the state 25% to 50% of any revenues generated, with no direction that those funds by used for education and research. The senator believes the revenues should be available to help pay back the costs of the bonds. She also is considering allowing CIRM to direct the state’s share to a nonprofit organization if necessary to allow for the use of tax-exempt bonds. In addition, she is considering requiring the CIRM to provide a higher share of revenues to the state if possible without hindering research and the development of promising stem cell therapies.
"If CIRM is contemplating using taxable bonds, CIRM should be required to adjust the percentage upwards to so that the state can offset the use of more expensive taxable bonds with a higher level of royalties.
"If they are using tax exempt bonds, CIRM should be allowed to direct the state’s share of royalties to a nonprofit organization that is dedicated to enhancing access to clinical trials and therapies for low-income populations
"The Senator believes it is critical that licensees and grantees sell drugs, therapies or products developed with Proposition 71 funds to the state at the best price they are offered to anyone else.
"She also believes it is critical that CIRM be required to impose any and all licensing conditions that are necessary to ensure open dissemination of basic research tools and findings, including research exemptions, open source and nonexclusive licensing, retention of IP rights, and assignment or sharing of IP rights with entities designated by the ICOC to collectively manage IP rights associated with stem cell research."

Patenting, Access to Research Materials and Therapies: A Commentary

An experienced and knowledgeable veteran of the intellectual property world has prepared a preliminary critique of the draft IP policies of the California stem cell agency.

The commentary comes at our request from Terry Feuerborn, who was executive director of the Office of Technology Transfer within the Office of the President of the University of California from 1994 to 2000. He also was recipient of the 2000 Bayh-Dole Award from the Association of University Technology Managers.

As we noted in our previous item on the draft policies, the devil is in the details. Feurborn touches on some of those type of problems. Here is the full text of his comments.

"In general, the draft IP policy is headed in the right direction. There are rough edges, of course, but the overall thrust of the document is reasonable given the politics involved. Here are some features that could benefit from additional review:

"The introductory paragraph of Part II says that the IP terms and conditions will be adopted as a set of regulations with the force and effect of law. Given the very complex world of research, patenting, and licensing, and the many surprises that occur, will this provision become an inflexible strait-jacket? At the very least, there should be some provision for making exceptions when unusual circumstances are encountered.

"Grantees are required to submit different kinds of reports to CIRM. The wording in some places can be interpreted to suggest that information be included that would be highly confidential in nature--such as enabling invention information. Is this intended or just an oversight? It is assumed that reports submitted to CIRM will become publicly available. In addition, there is a requirement that research "data" be made available. Others should talk about the overall wisdom of this requirement. With respect to data related to human subjects, however, this would be objectionable for a host of compelling reasons.

"In some places, grantees are required to monitor the performance of licensees in ways that are likely to exceed what grantees are actually capable of doing without extraordinary resources. It is hard enough for licensors to monitor the extent to which licensees are paying royalties in a proper manner.

"The draft policy requires that research materials be made available to all requesters at no cost except for the recovery of expenses. This could be very troubling for grantees if the research materials are exotic in nature or are truly difficult to produce. It is not a matter of cost in all cases. It may be a matter of time and effort on the part of the most senior research personnel that could better be spent on research rather than responding to requests from all over the world. In addition, the request is to be satisfied within 60 days. Will that be technically possible in all cases? Since this will, according to the draft, be a legal requirement, what will be the consequences if it is impossible to meet a 60-day deadline?

"Under the requirements for licensing of CIRM-funded inventions, licensees must have 'plans for access to resultant therapies for Medi-Cal and uninsured California patient populations.' This plan is to be in place before a license can be granted. This may be an impossible task in some cases. For early stage technology, particularly, the nature of the resulting commercial product may not be known until years of investment and development have passed. Is it possible to have a meaningful plan when a license is issued in that context? How will start-up companies deal with this requirement since both their future products and their future resources will be unknown?

"The requirements for sharing royalty income with the State of California seem to be reasonable, given the wording of Proposition 71, but it would be more fair to grantees if the costs of patenting all CIRM-funded inventions could be deducted before the sharing provisions went into effect. A new formula may be required, but a policy of this nature would encourage the filing of more patent applications--thus helping to ensure that all promising technology developments would be protected by patents.

"The march-in rights are perhaps the most troubling aspect of the draft policy. It is one thing for the Federal government to impose such provisions in the Bayh-Dole Act, it may be quite another thing for CIRM to have such authority. In the case of CIRM, who will decide that a "grantee...or licensee has not made responsible efforts in a reasonable time....", or that they have not met "requirements for public use," or that "health and safety needs" have not been reasonably satisfied. How will decisions be made about such matters? What provisions are made for appeal? Can outside parties ask CIRM to exercise its march-in rights because the outside party is unhappy in some way? To what extent will uncertainties introduced by this provision discourage potential licensees, given the hundreds of millions of dollars required to develop new medical drugs and devices?

"The questions raised here are only some that need to be addressed."

Rival IP Proposal From Watchdog Groups

No blank check for biotech – that's the rallying cry of the Foundation for Taxpayer and Consumer Rights and the California Nurses Association and their position on intellectual property issues involving the California stem cell agency.

Reporter Terri Somers of the San Diego Union Tribune wrote about the organizations' proposals this morning and noted that some are similar to what the agency is considering in its draft.

Here is a summary from the press release by the foundation and the nurses association. The full text can be found here. The stem cell agency will consider its IP policies at a meeting this afternoon at Stanford.

"Research institutions that get CIRM funds should pay the state at least 25 percent of net royalties in excess of $100,000 received for any invention or discovery developed with Prop 71 funds.

"The state's share of any royalties would be used to help fund access to Prop. 71 therapies for people who cannot afford it.

"The licensees of discoveries developed with Prop. 71 funds must sell any resulting drugs, therapies or products to the state at their lowest price.

"The stem cell institute would create a patent pool that would include all patents resulting from research it funds. A three-person board including the California Attorney General would govern the pool.

"The institute would be able to tell an applicant that no patent is possible for a particular project if it determines that keeping the expected results in the public domain best promotes further research.

"Any California-based researcher would be able to use the results of Prop. 71-funded research for further research without paying a licensing fee.

"The California Attorney General would have march-in rights -- the ability to intervene -- if a drug or therapy were priced unreasonably or any other public benefit requirement is not met.

"The institute would have the responsibility to take control of new therapies for public health and safety reasons. For instance, meeting the public need of getting vaccines to market.

"All investors and researchers involved in commercial enterprises resulting from Prop. 71-funded research would be required to file disclosure forms. These would be public records."

Sunday, January 22, 2006

Lots of News on CIRM on Monday

Monday will be a busy news day for the California stem cell agency. Its task force on intellectual property is holding a hearing in the afternoon. The Foundation for Taxpayer and Consumer Rights is holding a news conference just prior that to unveil its own proposal for sharing the swag from stem cell inventions. And California State Sen. Deborah Ortiz is giving a speech on many of the same issues. She is the author of legislation to tighten oversight of CIRM and ensure financial returns to the state from the agency. We will have coverage and commentary throughout the day.

Chron Carries Bleak Story About CIRM

The San Francisco Chronicle carried a pessimistic overview of the California stem cell agency in a front page story on Sunday.

The piece covered much of the same ground that other papers have traveled in recent weeks, but in many ways the story by reporter Carl Hall painted a bleaker outlook.

Some of the language in the article about CIRM:

"stuck in a seemingly endless legal morass"

"magnet for attacks"

"really a stressful time"

"reduced to begging for handouts"

The article made no reference to the report last week in the San Francisco Examiner that the agency had received another $5 million donation. The Examiner also reported that stem cell chairman Robert Klein said in a speech that he has raised an additional $40 million.

We have queried CIRM about the fund-raising information, but agency has not responded – either to deny or to confirm.

Friday, January 20, 2006

FTCR: CIRM Highhanded and Stonewalling

Citing the case of a Michigan researcher, a watchdog group says it demonstrates that the California stem cell agency has a "high handed preference for secrecy."

According to John Simpson, stem cell project director for the Foundation of Taxpayer and Consumer Rights,
"The stem cell institute just doesn't seem to understand that it's a state agency. They need to tell the public what's going on. Instead, when the facts are inconvenient, they stonewall or hope nobody will notice. Their behavior only undermines the institute's credibility and, sadly, the stem cell research projects they hope to sponsor."
The foundation referred to the resignation of Jose Cibelli from the agency's standards group. See Cibelli item below.

The foundation's press release continued,
"As of Friday morning (1-20-06), the only indication of the situation on CIRM's website was a footnote on the posted list of working group members. It reads, 'Voluntarily withdrawn from active membership until further notice.'"

New York's Carlyle Hotel and California IP Hearing: Planning on Attending?

For those of you in the New York City area interested in the big money issues involved in intellectual property and the California stem cell agency, you are supposed to be able to hear the proceedings at the Carlyle hotel late Monday afternoon.

The luxury hotel prides itself on its privacy, but CIRM tells us that the proceedings will be able to be heard beginning at 4 p.m. EST. CIRM has promised to provide a room location at the Carlyle, but it has not been forthcoming. You may want to double-check before you make a special effort to be at the Carlyle.

If you do attend, please drop us a note on your impressions about the affair. Send it to djensen@californiastemcellreport.com. Or you can post it directly on the blog, by clicking on the word "comments" that follows each item.

Researcher Cibelli Quits California Stem Cell Agency

Stem cell researcher Jose Cibelli, who co-authored a fraudulent paper in the Korean scandal, has resigned from his work with the California stem cell agency.

The Sacramento Bee reported his departure this morning in an editorial. Cibelli is under investigation at Michigan State University, a probe he requested himself.

The Bee wrote:
"'Until that issue is resolved, Cibelli has voluntarily withdrawn from his activities on the Standards Working Group, as of Tuesday of this week,' said institute spokeswoman Nicole Pagano."

Among other things, the Standards Working Group deals with the ethics of stem cell research, which came up at a Dec. 1 meeting in which Cibelli participated (see Cibelli item Jan. 12). The discussion included the Korean scandal, but The Bee says it was given short shrift. That triggered a contrary response from the group's co-chair, Bernard Lo of UC San Francisco.

The Bee said,
"For now, it is unclear if Cibelli knew about Hwang's fabrications or simply was duped. Either way, the incident doesn't speak well of his ability to set and enforce rigorous standards on scientists who hope to receive grants from the California institute."

The newspaper continued:
"In a Dec. 29 editorial, this page criticized the institute Standards Working Group for not delving into the South Korean scandal. The working group's chair, Bernard Lo, sent us a highly misleading letter (published Jan. 8) that suggested the working group had engaged in such a discussion at its Dec. 1 meeting, even though it hadn't.

"Much more has been disclosed about Hwang since that meeting. As a result, Lo has no excuse not to have a full discussion about the scandal on Jan. 30. That's when the Standards Working Group is scheduled to meet again - without Cibelli."

Perhaps coincidentally, the CIRM's Governance Subcommittee has scheduled a meeting one week from today that includes discussion of a policy for removal of working group members.

Thursday, January 19, 2006

CIRM IP Plans: The 25 Percent Solution for the Golden State

The California stem cell agency has come up with a proposal to generate cash for California from inventions developed as the result of state-funded research grants.

It was among a number of matters addressed in a working draft of intellectual property policies that will be considered Monday at a CIRM meeting at Stanford (click here to find offsite locations at UCLA, Sacramento area and New York City).

The revenue sharing proposal calls for the state to receive 25 percent of the grantee organization's share of money garnered under a license agreement of a CIRM-funded patented invention. That would be after the individual grant recipient gets his or her cut. And the sharing plan does not kick in until revenues exceed $500,000. CIRM would require that the 25 percent fee be used for research and education that will benefit California.

Other proposals in the working draft are aimed at consistency with the Bayh-Dole Act, which is the model for splitting up the goodies on federally funded research. However, the draft is also designed to avoid some of the negative consequences of Bayh-Dole.

Here are the other "core principles" of the proposed IP policy, in addition to the state revenue sharing plan.

"Ownership: CIRM grantee non-profit organizations will own intellectual property that arises from CIRM-funded research activities.
"Broad Sharing: Intellectual property, including but not limited to data, knowledge, scientific articles, biomedical materials and patented inventions, that are made in the performance of CIRM-funded research will be shared broadly and promptly with the scientific community. This CIRM sharing policy is structured to extend the sharing of CIRM-funded intellectual property beyond practices commonly in use by the scientific community in 2005.
"Research Exemption: Patented inventions that are made in the performance of CIRM-funded research are to be made available for research purposes (at no cost) in California research institutions.
"Licensing: For patented inventions that are made in the performance of CIRM-funded research, grantee organizations are expected to negotiate non-exclusive licensing agreements where possible except in those circumstances when exclusivity is required to encourage the successful commercial development of the invention into products and services that can benefit the public. Further, grantee organizations are expected to grant licenses to companies with defined plans for access to resultant therapies for Medi-Cal and uninsured Californian patient populations.
"March-in rights: CIRM will retain march-in rights to be exercised in the event that CIRM-funded inventions are not developed in a timely manner or in the event that public health and safety concerns arise."

The proposal additionally contains interesting efforts to set up databases, assure wide and no-cost dissemination of research results and an emphasis on speedy development of therapies. Whether the CIRM proposal will meet the demands of critics is yet to be determined. It is a detailed and complex proposal, and, to use a cliché, the devil is in the details. For example, how can CIRM guarantee that its 25 percent fee goes for research and education? If the money goes into the state general fund, it is up for grabs for just about anything. Locking the money into research and education probably requires legislation, which could mean horse-trading with lawmakers, a practice that CIRM publicly eschews. That doesn't even address the question of whether research and education are the appropriate uses. Why not use the funds to aid low income seniors with chronic health care problems? Or why not use it to provide health care for women egg donors who suffer serious adverse consequences as a result of their contributions to stem cell science?

That is not to mention, why 25 percent? Is that a reasonable figure? How did the IP Task Force arrive at it?

We should note that plan was unveiled with no public outreach. It was simply posted quietly to CIRM's web site, two – possibly three -- business days before Monday's meeting. As we remarked earlier, amazingly casual for something that could involve billions of dollars. And it allows almost no time for serious responses by all interested parties at Monday's hearing.

Correction

In the "Klein Should Quit" item Jan. 18, we misspelled the first name of an official of the Center for Genetics and Society. It should be Marcy -- not Marcia -- Darnovsky.

More on the Mystery of The Bonds

The San Franciso Examiner also carried a story this morning on the call for Robert Klein to resign. The piece by Marisa Lagos had a couple of interesting tidbits that we have not seen elsewhere.

One involved these two paragraphs:
"Daniel Perry, vice president of the national lobbying group the Coalition for Advancement of Medical Research, said the report 'poisons the atmosphere.'
"I think [the criticisms] are unfair and unwarranted, and certainly not respectful of a decision that a majority of California voters made,' he said."

The other came from Lagos' exclusive coverage of a speech Klein gave earlier this week in San Franciso. According to Lagos, he discussed the controversy about the question of whether the California stem cell bonds would be taxable to investors as opposed to nontaxable. Varying estimates place the cost to the state of the taxable bonds at more than $500-million over the cost of nontaxable bonds. The San Francisco Chronicle reported last year that Klein, during the campaign for Prop. 71, concealed the fact that taxable bonds were likely to be required. That deception was one of reasons for the call for Klein's resignation.

However, Lagos says that in his speech earlier this week, Klein argued that "even if all the bonds are taxable, they will still end up costing taxpayers less than $6 billion, the number sold to voters."

Klein has never fully laid out a response to the Chronicle story. His latest comments will keep the issue alive.

CCST IP Report Smacked for Short-changing State

The intellectual property recommendations of the California Council on Science and Technology concerning stem cell research would short change the state, according to a consumer advocacy group.

The Foundation for Taxpayer and Consumer Rights of Santa Monica took issue with the council's final IP report and recommendations to follow what it called the "flawed" federal model. The release of the recommendations came only a few days before Monday's hearing by CIRM into who should benefit economically from inventions derived from state-funded research.

John Simpson, stem cell project director for the foundation, said:
"Too often the flawed federal rules only benefit drug and biotech companies underwriting their research, but providing no fair and easy access to the medical cures the public financed."

The foundation also said:
"A recent analysis of the effect of federal rules on the 50 top-selling drugs over a five-year period found that forty-five of them received millions of dollars of taxpayer money with virtually no payback to patients or taxpayers."
It continued:
"The Council acknowledges that there are other models for managing the discoveries -- so-called intellectual property (IP) -- that result from publicly-funded research. These include public domain for science, patent pooling and experimentation with licensing that would require access to drugs and cures at an affordable prices."

The council's final report has attracted little media attention. Reporter Laura Mecoy of The Sacramento Bee may have been the only reporter to note its issuance.

Prop. 71 Inspiring "Awe" Elsewhere

"If you look at Prop. 71, it's like the income tax code. You
read our initiative, it's like a haiku."


So says Bernie Siegel, who is leading a $200 million embryonic stem cell research effort in Florida.

His comments came in an article in Capitol Weekly in Sacramento that examined efforts to fund stem cell research in other states. The piece by Malcolm Maclachlan demonstrated that there is some truth to the old saw that pioneers are the ones with the arrows in their backs.

"'A key lesson so far has been that low profile efforts seem more effective,' said Aaron Levine, a PhD. candidate at Princeton University who has been studying stem cell campaigns in different states. 'Because Proposition 71 dealt with such large sums of money, it became a national, if not international, issue and attracted significant opposition,'" Maclachlan wrote.
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Also quoted in the article was Fiona Hutton, former spokeswoman for CIRM and the Prop. 71 campaign. She is president of Red Gate Communications, which is helping with stem cell efforts in Missouri and Kansas. Those campaigns are aimed at protecting stem cell research rather than providing funding. She noted that many of the efforts in other states did not gain footing until Prop. 71 passed.

While Siegel pointed to the complexties of Prop. 71, he also said it validated the concept of state-funded stem cell research.

"I'm not a critic of Prop. 71. I'm in awe of Prop. 71," Siegel said.

Coverage of the Call for Klein's Resignation

The call for the resignation of California stem cell chairman Robert Klein received coverage in a number of California newspapers this morning, but not much out of state at this point.

Stories were carried in San Francisco Chronicle, San Diego Union Tribune, San Jose Mercury News, Sacramento Bee and the Oakland Tribune and allied papers. For example, the San Jose story also appeared in the Contra Costa Times. The Oakland story appears in other newspapers in the same ownership chain.

Missing from the coverage was the Los Angeles Times. Newsday in New York state had a reporter on the conference call yesterday for the report card news, but no story today. One may appear later.

For the most part, the stories were cast in a predictable fashion. But the San Jose story by Steve Johnson had this interesting line:

"David Magnus, director of Stanford University's Center for Biomedical Ethics, said the stem cell institute has had some problems. Nonetheless, he added, it has 'moved at light speed' at adopting its policies compared with the state Department of Health Services, which hasn't yet complied with a 2003 law ordering it to draft its own stem-cell research guidelines."

Wednesday, January 18, 2006

Ortiz Calls for More CIRM Accountability

The most influential California state legislator on stem cell issues appeared to agree with much of the criticism of CIRM in today's report card, but stopped short of calling for the resignation of its chairman.

Here is the text of the statement by Sen. Deborah Ortiz, D-Sacramento, chair of the Senate Health Committee:

“It is critical for all of us who supported Proposition 71 and its promise of cures for debilitating and chronic diseases and conditions to have confidence that the grants are awarded fairly and productively, and that California’s $3 billion to $7 billion investment is protected.

“While the California Institute for Regenerative Medicine has taken steps toward addressing concerns about public accountability and open government, they are not enough. The CIRM must adopt stronger standards for disclosure of conflicts of interest, including prohibiting the institute’s president from waiving such disclosures at his discretion. CIRM also must narrow its exceptions from open meeting and public records laws to allow greater disclosure about grant applications that are funded or rejected.

“The CIRM also must adopt regulations to protect patients who donate embryos for research, and take strong steps to protect the pocketbooks of Californians by ensuring taxpayers receive a financial return on their investment in stem cell research that is consistent with the wording of the initiative and the promises that were made during the campaign.

“I am committed to reintroducing vetoed legislation to protect women who donate eggs for research by requiring full disclosure and written consent regarding possible adverse health risks associated with the procedures. I also am committed to moving legislation to further open up the deliberations of both the CIRM and the Independent Citizens Oversight Committee, guard against conflicts of interest and ensure Californians receive a fair return on their investment and that medical cures created through this taxpayer-funded research are made available to Californians at affordable prices."

Quick Look at Coverage of Stem Cell Report Card

The Sacramento Bee moved quickly today to post a story on the call for the resignation of stem cell chairman Robert Klein. The story came about one hour after the end of the conference call with reporters from across the country.

Some of the media outlets represented during the call were the predictable California outlets. But Newsday, Reuters and the Bureau of National Affairs were represented as well. The Reuters report was not available via the Internet at the time of this writing.

We will carry an item Thursday on news coverage of the report card on CIRM. Meanwhile you can find the story by Bee reporter Laura Mecoy by clicking here. Her story should receive some national attention as well because it is budgeted as part of the Scripps Howard News Service.

CGS: CIRM Turns in Mediocre Performance; Klein Should Quit

The Center for Genetics and Society Wednesday gave the California stem cell agency a mediocre "C minus" grade and called for the resignation of its chairman, Robert Klein.

The 32-page report card by the Oakland-based watchdog group said, "CIRM's first year has been a great disappointment."
"In terms of governance, the CIRM has often failed to operate as an accountable,responsible, and transparent state agency. In the area of politics, it has failed to establish a cooperative relationship with state legislators. And in the policy arena, the CIRM has fallen far short of the expectations raised during the initiative campaign that led to its creation: It has so far failed to adopt policies to ensure that any successful stem cell therapies will be affordable to most Californians, or to reassure Californians that they will see any share at all of financial returns that the research they are funding may generate," CGS said.
In response to our inquiry, CIRM spokeswoman Nicole Pagano said the agency had a "great first year."
Her statement (the full text follows this item) said,
"This is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.

"They have been working against Proposition 71 since the beginning, despite the overwhelming support of voters in California who approved the measure well over one year ago.

"Their report rehashes old issues that they have already expressed to our board; which they have duly considered and addressed."

The center is a nonprofit group based in Oakland that supports embryonic stem cell research. Members of its staff have regularly attended meetings of the agency and its subcommittee during the past year, testifying about the center's concerns.

The center gave CIRM "D" grades in the following areas: "maximizing health equity," minimizing conflicts of interest, cooperating with the state legislature, providing responsible leadership. The agency received its best grades – "C plus" – for establishing ethical safeguards and research standards and protecting women who provide eggs for research and other research subjects.

Klein came in for considerable criticism by CGS:
"…(Klein) has misused his authority in ways that have significantly undermined trust and confidence. His missteps and arrogance have been widely noted. The editorial page of the Sacramento Bee, for example, has dubbed Klein the 'self-appointed czar' of the stem cell research program and a 'rogue operator.'"
Marcia Darnovsky, associate executive director of the center, told reporters during a conference call that Klein had operated CIRM "more like a private enterprise than a public agency."

Another CIRM critic commented on the call for Klein to resign. John Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights of Santa Monica CA, said:
"I certainly understand the public outrage that led to the call for Bob Klein to step down, but the stem cell institute's problems go beyond personalities. We'll just have a revolving door of Bob Kleins until the structure is fixed. Fixing the stem cell institute requires two things: First, it needs to follow all of California's good government laws and behave like any other state agency. Second, the institute needs to adopt rules controlling ownership of any Proposition 71-funded medical discoveries that are based on the foundation principles of affordability, accessibility and, accountability."

Today's CGS report card cited the built-in conflicts of interest at the agency and noted the coziness of such arrangements:
"The relationship between the ICOC (CIRM's board of directors) and the institutions it funds can be seen in the first round of training grants, announced on September 9, 2005. Of the 16 institutions that were awarded almost $40 million, 14 are represented on the ICOC. Viewed another way, all but two of the 17 ICOC members affiliated with an institution eligible for this round of funding saw their institutions receive grants."

On the "health equity" issue, the report said,
"To date, CIRM leadership has resisted the inclusion of affordability and accessibility of stem cell treatments as a key criterion in its policy considerations."

It said CIRM "could require that any successful therapies developed with its money be made available to the state’s medical insurance programs at reduced or no cost. Or it could require grant recipients to set aside a portion of any IP revenue in an accessibility fund."

CGS said CIRM has put in pace stem cell research guidelines recommended by the National Academies, but those are inadequate in some areas.

During the conference call among reporters, CIRM officials noted that while CIRM can set standards for only the research it funds, there are no state or federal standards for stem cell research. They suggested that the state legislature and CIRM work together to develop consistent standards.

CGS also gave CIRM a "C plus" for protection of women, but noted that there are no provisions for helping women egg donors who suffer serious side effects from the egg donation process.

The center's report said that CIRM faces "regulatory challenges never previously confronted by any other public body in the United States."

"While some of its difficulties may be 'start-up' problems that might be expected in any effort this large, the greater bulk are the result of numerous missteps and misjudgments, resistance to legislative and public oversight, and a tendency towards arrogance in the face of criticism."
It continued:
"We believe it is incumbent upon the CIRM’s leadership, staff, and board to enter the institute’s second year with a new spirit, one that acknowledges—in deeds as well as words—the need for transparency, accountability and public oversight."

Text of CIRM Response to CGS

Here is the full statement from CIRM, which is not expected to be available on the Web, in response to the CGS report card.

"This is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.

"They have been working against Proposition 71 since the beginning,despite the overwhelming support of voters in California who approved the measure well over one year ago.

"Their report rehashes old issues that they have already expressed to our board; which they have duly considered and addressed.

"We feel we've had a great first year and here are the reasons why:

* 56 public meetings-all with opportunities for public response
* Appointment of ICOC and three working groups that include
nationally recognized leaders in the fields of grant review, stem cell research, and ethics
* Adopted NAS Guidelines for Human Embryonic Stem Cell Research
* First grant review and approval of the CIRM Training Grant
Program that will train nearly 200 fellows at 16 institutions statewide.
* Scientific Meeting in October that featured presentations by
stem cell researchers and clinicians from the United States as well as Australia, Canada, Israel, Sweden and the United Kingdom.
* Received $18 million in office space and incentives from the
city of San Francisco

"We have equal enthusiasm for 2006:

* At the end of January our Standards Working Group will finalize their draft to send to the ICOC. Building on the NAS Guidelines, this document will establish the medical, ethical, and scientific standards for CIRM funded research. This document is the first state or national regulation of its kind and it represents a scientific and ethical blueprint for how stem cell research ought to be conducted. With the ICOC's approval, they will undergo the APA process and become formal regulations with the force of law in California.

* Bond Anticipation Note funding our training grants and a smaller research grant

* Planning for a May Scientific Conference examining the risks of Egg Donation; to be co-sponsored by the Society for Gynecologic Investigation

* Strategic planning for the long range funding"

Coming Up

The Center for Genetics and Society has issued a critical report card on the California stem cell agency. Its recommendations include a major personnel change at CIRM and stiffening conflict-of-interest standards. We will have an item on the recommendations shortly.

IP Report: More Sharing of Stem Cell Research Results

California should take steps to share its stem cell research tools and require stem cell grant recipients to provide a plan for managing their inventions for the benefit of California, the final intellectual property report of the California Council on Science and Technology says.

The general thrust of the final report seems similar to the interim report last summer with some modifications. It also seems aimed at meeting some of the complaints about how the existing Bayh-Dole model has stifled wide dissemination of research.

Here are the key findings:
"We recommend four general principles for the state’s IP policy:
"The policy is consistent with the federal Bayh-Dole Act.
"The policy creates incentives for commerce in California from state-funded research to the greatest extent possible.
"The policy encourages timely publication of results to diffuse knowledge widely, and provides guidance on the kinds of data that are desired to be placed in the public domain or available under open source, Creative Commons, or other broad-use licenses, including software and special databases.
"Requires diligent commercialization of IP-protected technology into products that benefit the public.
"With these principles in mind, we recommend that the state develop IP policies that accomplish the following:
"1. Permit grantees to own IP rights from state-funded research.
"2. Where appropriate, require that grantees (institutions, individuals, or both) provide a plan describing how IP will be managed for the advancement of science and benefit to California.
"3. Grant basic research funds without requiring that grantees commit to providing a revenue stream to the state. If, however, a revenue stream develops over time, require that revenues be reinvested in research and education.
"4. Generally, make state-developed research tools widely available to other researchers.
"5. Require diligent efforts to develop state-funded IP into applications and products that benefit the public.
"6. Retain within the state Bayh-Dole-like “march-in” rights if the owner of IP is not undertaking appropriate steps to transfer or use the technology to benefit the public.
"7. Leave license particulars to the owner who is in the best position to judge how best to ensure that discoveries are made widely available through commercialization or otherwise.
"8. Reserve the right to use IP by or on behalf of the state for research or non-commercial purposes.
"9. Establish and maintain state-administered functions to track all IP generated through state funding."

Big Boost in Funding for CIRM

The California stem cell agency has picked up another $5 million from a wealthy San Francisco Bay area couple, the San Francisco Examiner reports.

Writer Maria Lagos quoted stem cell chairman Robert Klein as saying the money is coming from Herb and Marian Sanders via their charitable foundation. She also said Klein has raised a total of $40 million, but declined to disclose details.

He made the disclosure in a speech to about 75 persons at an event hosted by the San Francisco Planning and Urban Research group. CIRM has no information on its web site concerning the funds.

It was not clear whether the money is coming as straight donations or as bond anticipation notes. In either case, it would be a major step in solving the financial difficulties facing CIRM.

The Sanders are co-chairs and co-CEOs of Golden West Financial Corp. of Oakland, the parent of World Savings Bank.

Tuesday, January 17, 2006

IP Advisory

Given the time of day, it does not appear that the stem cell IP report by the California Council on Science and Technology will be forthcoming today. We will carry an item when it is available.

Coming Up

The California Council on Science and Technology is scheduled to release its final report on intellectual property and stem cells later today. We will have an item on it when it becomes available.

LA Times on Cirm: Disappointing, Arrogant, Unresponsive, But Promise Remains Strong

The Los Angeles Times today editorialized about the California stem cell agency, declaring that its first year was "especially disappointing."

The Southern California piece was one of three articles that surfaced this morning dealing with CIRM, including one in Oakland and another critical op-ed piece in the Baltimore Sun.

The Times said CIRM has been arrogant, unresponsive and intransigent at times.

Nonetheless, the newspaper wrote, the promise of the agency "remains strong" and could be strengthened even more with beefier standards for ethics and accountability.
"But the oversight committee's chairman, Robert Klein, seems to be allergic to sunshine. Much of the committee's first meeting had to be scrapped when a public-interest lawyer pointed out that it failed to meet the state's open-meeting laws. The institute's first employees were drawn from the Proposition 71 campaign and Klein's stem cell charity group, ignoring the state's civil service rules on advertising for the most qualified candidates," the newspaper wrote.

"Unfortunately, the oversight committee continues to insist that members of the working groups, including the research reviewers, do not have to publicly reveal their financial interests in stem cell research. The members of these boards will make crucial recommendations about how to spend billions of taxpayer dollars, and for the public not to know whether they stand to benefit from any particular grant is unacceptable.

"The committee does stipulate that members of the working groups reveal their conflicts of interest to the committee itself, but that is inadequate. The world of stem cell research, industry and advocacy is too incestuous for such an arrangement."

Sounding a harsh note in Maryland was an opinion piece by Richard Hayes, executive director of the Center for Genetics and Society in Oakland. He focused on implications of the Hwang affair. But the article also said, concerning Proposition 71,
"It entrusted control of the money to a new state agency dominated by the very institutions that stand to receive the research grants. It exempted the agency's most important policy committees from California's open meetings and conflict-of-interest laws.

"It failed to guarantee the safety and health of women who provide eggs for cloning research. It contained no provisions to ensure that intellectual property arrangements would benefit the people of California. And late last year, it was revealed that real estate millionaire Robert Klein, the prime author and funder of the initiative and the current chairman of the program, knowingly misrepresented its likely full cost to California voters by perhaps $1 billion.

"What's going on here is both a very old story and a very new one. The old story is the drive for fame, fortune and power and the willingness of some people - in this case, scientists and biotech entrepreneurs - to put their personal drives and ambitions above the common good.

"The new story is the immensity of what is at stake. The new human genetic technologies are giving scientists the power to change the nature of human life forever. They are being developed at breakneck speed. Neither public understanding nor governmental oversight has been able to keep up. Scientists and biotech corporations are playing to our deepest desires and fears in their effort to secure the commanding heights of the technology, the law and the market."

Reporter Rebecca Vesely of the Oakland Tribune reported on the progress of the agency and its plans for the next year. Her straight-forward piece covered much of the same ground as an article last week by Terri Somers of the San Diego Union Tribune.

Monday, January 16, 2006

CIRM and Stem Cell IP Hearings: A Cold Shoulder to the Public

Only four business days remain before the California stem cell agency takes another crack at who will benefit economically from inventions developed as the result of the $3 billion in taxpayer-supported research.

This is one of the major issues for CIRM this year. It is also the subject of separate legislative proceedings, including a proposed constitutional amendment, SCA13, by State Sen. Deborah Ortiz, D-Sacramento, that is on the floor of the State Senate. What California does this year will have an impact across the nation as other states also consider whether existing models for sharing the wealth are doing the job.

Despite the importance of the issue, no background material or proposed drafts of regulations can be found in the agenda of CIRM's Intellectual Property Task Force, as posted on the Web at the time of this writing. It simply says, "Consideration of draft IP Policy." Amazingly casual for a matter that could involve billions of dollars.

No draft of proposed regulations, much less a synopsis of what is under consideration. No explanation of whether the entire issue is on the table or whether particular subsets are to be considered. No links to previous material on the CIRM web site, which could have easily been done.

The scanty agenda of the IP task force is no exception. Generally, little or no material is available in a timely manner in advance of CIRM meetings. That makes it virtually impossible for interested parties or the public in general to prepare thoughtful comments on some very complex and important issues. All they have is three minutes at the end of the meeting to make some off-the-cuff observations. Even some members of the agency's Oversight Committee have complained about not having enough time to review agenda material because it is so tardy.

A cynic would conclude that CIRM is not interested in keeping affected parties even partially informed. Our opinion is that this is another example of the chronic cold-shoulder CIRM gives to much of its public disclosure responsibilities. The agency began business like this 12 months ago. Then it could be contributed to start-up problems. But it is past time for CIRM to fulfill its promise of adhering to highest standards of openness and transparency. Even small school districts in California do a better job of making their agenda material available online in advance of meetings. An agency that proposes to give away $3 billion must do better.

There is a new fillip to the task force's meeting, however. It will be accessible to the public in New York City at the Carlyle Hotel. One of the task force's members, former Hollywood executive Sherry Lansing, will be staying at the hotel and is going to participate via an audio hookup. The Carlyle describes itself as a "purveyor of privacy and a sanctuary of refined taste," but a CIRM official assures us that the public will be permitted to listen in on the deliberations. They also are likely to be allowed to speak during the public comment sessions.

The actual session of the task force meeting will take place at Stanford University. Other offsite locations for the 1 p.m. Jan. 23 session are in Elk Grove near Sacramento and UCLA. Specific room numbers are available in the agenda. We will carry the room number for the Carlyle when we receive it.

Additional material for the agenda may be posted by CIRM by this Friday. But for those of you who simply can’t wait, here are some links that will help to understand what CIRM is getting at. We should note that nearly all of the CIRM material comes from postings weeks after the date of the events. Moreover, even the text of CIRM's interim IP policy on training grants, approved more than a month ago is still not available online.

The transcript of the Dec. 6 meeting of the Oversight Committee. Discussion of IP begins on page 96.

The full transcript of the IP Task Force meeting Oct. 25.

The full transcript of the Nov. 22 IP Task Force meeting.

The full text of the National Research Council’s report: Reaping the Benefits of Genomic and Proteomic Research: Intellectual Property Rights, Innovation, and Public Health (2006). This is recommended reading by the chairman of the IP Task Force, Ed Penhoet.

Interim report on stem cell IP by the California Council on Science and Technology.

Draft of the interim policy for IP training grants presented at the December meeting of the Oversight Committee. This was approved with some slight modifications. The text of the approved policy is not available online at the time of this writing.
A host of material from the Oct. 31 hearing by Sen. Ortiz into intellectual property, including the transcript, background on Bayh-Dole and alternative intellectual property models.

Statement and testimony by the Center for Genetics and Society on CIRM Intellectual property policies.

Statements by the Foundation of Consumer and Taxpayer Rights on CIRM intellectual property policies.

The task force is composed of persons drawn from the CIRM Oversight Committee. They are: Edward Penhoet, chair; Susan Bryant, Michael Goldberg, Sherry Lansing, Ted Love, Philip Pizzo, Francisco Prieto, John Reed, Jeff Sheehy, Oswald Steward and Janet Wright.


Big Stem Cell Soiree Scheduled For San Francisco

If you want to pay $1,495, you can hear California stem cell chairman Robert Klein and CIRM president Zach Hall speak at The Stem Cell Meeting March 12-14 in San Francisco.

The Stem Cell Meeting (yes, that is its title) is being produced by Burrill & Company, a San Franciso life sciences merchant bank with more than $500 million under management.

Hall and Klein are among a host of impressive folks, including two representatives from Congress and biotech business execs and researchers, scheduled to appear at the conference at the Palace Hotel.

If you are interested in being one of the top sponsors of the conference – a $45,000 privilege – it looks you are probably too late. Only three were available and those slots seem to have been sold, based on what we saw on the web site for The Stem Cell Meeting.

If you want to see Klein and Hall in action for free, check them out at the next meeting of the CIRM Oversight Committee Feb. 10 in at Stanford.

It has always struck me as odd that public officials appear at gatherings that effectively bar the public from hearing them. However, it is not an uncommon practice.

New Stem Cell Links Added

We have added two new links to those carried on this blog. One is to the stem cell page of the Foundation for Taxpayer and Consumer Rights. The Santa Monica organization has a number of interesting items, including an analysis of CIRM's interim policy on intellectual property and a look at the conflicts of interest of the agency's Oversight Committee.

Also added to the links is the blog of the editors of the American Journal of Bioethics. The site is wide-ranging but includes interesting commentary and information on many of the issues confronting CIRM, although they may not relate them specifically to California. Its coverage of the Hwang scandal is especially useful.

We encourage you to take at look at the sites. Please send us suggestions for other sites that may be of interest to readers of these pages. You can do so by clicking on the word comments at the end of this item – it permits anonymous posts – or by sending a message to djensen@californiastemcellreport.com.

Sunday, January 15, 2006

The Financial Message on Stem Cell Research

For the ethically challenged, a couple of business news outlets have pointed out another good reason for high stem cell research standards – money.

Without confidence in the research and its results, both big and small investors will shy from coming up with the cash that is necessary to turn research into therapies that will cure millions and generate billions in profits.

Both Business Week Online and Bloomberg News carried pieces on the financial impact of the Korean fraud.

The headline on the Bloomberg article, prepared by Heejin Koo and William Sim, said, "Fake Stem Cell Research Work May Cost Korean Industry Billions." The article noted that Hwang's research was once estimated to be worth $34 billion to the Korean stem cell industry by 2015.

Reporter Arlene Weintraub of Business Week Online wrote that the unsettled state of stem cell research has:
"...kept most venture capitalists away from anyone with the phrase 'stem cell' in their business plan. When the Korean scandal started erupting in December, shares of ACT(Advanced Cell Technology Inc.) fell 16 percent and rival Geron Corp. (NasdaqNM:GERN - News) tumbled 4 percent, despite the fact that interest in biotech was strong and the Amex Biotech Index was up 6 percent in the same period. Korea 'is just another body blow,' says ACT investor William Woodward of Santa Monica (Calif.)-based Anthem Venture Partners."

The piece noted the financial importance of articles in scientific journals.
"Geron's recent history reveals how much is at stake. On Sept. 1, the Menlo Park (Calif.) company announced that cardiac-muscle cells derived from human embryonic stem cells survived and multiplied in the hearts of rats, suggesting the cells might someday be useful for treating cardiac disease in humans. The research was published in the American Journal of Pathology. Geron's stock immediately traded up 3 percent to $11.20, on four times its normal trading volume. Such share-price bumps have allowed the company to go back to investors in a position of strength: It now has $200 million in cash and no debt."

Not mentioned in the Business Week piece was Geron's performance recently during the greatest attention to the Korean scandal. Geron's share price was $9.53 on Dec. 12. Since then it has dropped to $8.52 on Jan. 13.

Weintraub also wrote that the shaky state of commercial funding of stem cell research has led to some "contortions."
"When ACT decided to raise money by going public last year, investment bankers were so uninterested that the company opted instead to reverse-merge into a shell company that once made Hopi Indian dolls. It wasn't quite as splashy as an initial public offering, but the symbolism was perfect: The dolls represent ancestral spirits to whom the Hopis pray for rain and other gifts. New shares in hand, ACT raised $18 million from hedge funds and other risk-taking investors -- enough to carry the company into 2007. But the spirits didn't smile on this stock, which fell from a high of $7 to a recent $1.90 a share."

Nonetheless, Lanza still has a Hopi doll of a red-tailed hawk in his office.

California Stem Cell Research: Hype, Folly and Contempt?

If you believe a Washington Post editorial and an op-ed piece in the San Francisco Chronicle this weekend, California should fold up its stem cell research rather than capitulate "to "the unholy lust of scientists."

Citing the Korean scandal, self-described "professional philosopher" David S. Odeberg called for separation of science and state in his piece in the Chronicle.
"How could the millions thrown at scientists be anything other than a veritable inducement to misconduct? When you combine it with the innumerable honors and awards that await the next would-be secular savior of humanity, one wonders that fraud is not even more common than it appears to be," he wrote.

Odeberg, professor of philosophy at the University of Reading, England, continued:
"It would be an act of utter folly and of contempt for honesty and integrity were Gov. Arnold Schwarzenegger's beloved California Institute for Regenerative Medicine now to go ahead."

The Washington Post, whose editorial was carried on some California websites, also noted the pressures on scientists to overstate their results. But its main argument was that states are a "bad place" to conduct stem cell research because it would be politicized at the state level.
"In California, universities already are hiring scientists and building labs, even though lawsuits have prevented the state's $3 billion funding program from issuing any grants. This kind of hype makes it particularly difficult for states, which do little basic research funding, to judge the value of individual stem cell research projects."

The Post did not mention that the reason states are seeking to fund embryonic stem cell research is because of the President's own politics and personal beliefs and the political gridlock in Congress on the issue.

Friday, January 13, 2006

Bioethics Blog Disagrees with CIRM Exec

The editors blog of the American Journal of Bioethics does not agree with the position of Zach Hall, president of CIRM, that peer review can prevent a Korean-type scandal in California.

Here's the key quote:

"This from the guy who is giving out the money. Oversight is the key to giving the money out responsibly. It is one of the reasons why we should give government funding in the first place. California has become the standard-bearer for state-based biotechnology research funding…."

This would be okay, "but not if the standard-bearer claims that fraud is best prevented by peer review."

Chronicle: CIRM Needs Careful Regulation

The San Francisco Chronicle said today the Korean stem cell scandal is a “cautionary tale” that shows that the California stem cell agency needs additional public regulation.

The editorial in today’s paper said:

"What is to prevent similar fraud and ethical lapses from happening here in California, where voters agreed to spend $3 billion on stem-cell research?
"'Scientists,' responded Zach Hall, president of the California Institute for Regenerative Medicine, the funding entity created by Prop. 71. Warning that every industry has the potential for an Enron, Hall touted the American system of peer review as the best way to expose rogue scientists and bad science and to keep research-funding decisions apart from undue political, religious or geographic influences. 'What will not stop this from happening is government oversight,' he said.
"In a world of 'pure' science, maybe. But stem-cell research is, at this point, anything but pure. Scientists rail about the 'political'interference in their work by the religious-right aligned Bush administration, but what was the campaign launched by the stem-cell research proponents to sell the stem-cell bonds, if not political? With business and political capital -- not to mention the state's image as a technological innovator -- on the line, the stem-cell institute needs oversight, both regulatory and scientific."


The editorial continued:
"Questions remain about the sourcing of the human eggs and about which avenues of research are best pursued with the taxpayers' money. Would voters embrace research that might require hundreds of human eggs to produce a therapy for a single person? If these rules are adopted, who enforces them? Are there punishments for infractions?
"These matters of great public concern should be subject to government regulation -- especially when taxpayers are picking up the multi-billion-dollar tab for this research."

New Money-Raising Effort at CIRM

The California stem cell agency began a new, $2 million fundraising drive yesterday to pay for such things as a national conference in May on the medical risks of human egg donations and how to reduce them, according to the San Diego Union Tribune.

Reporter Terri Somers quoted Zach Hall, president of CIRM, as saying the effort is aimed at financing “nongrant” scientific activity. Hall also said the agency is now focusing on creating a structure that will allow it to move quickly once litigation against it is resolved.
"We want to hit the ground running once the money comes in. Rather than sending out a slow and gradual stream of funding, the plan now is to let a torrent of funding flow like waters set free from a sluice gate."

Somers wrote that the “image of a torrent worries” Jesse Reynolds of the Center for Genetics and Society.
“He wondered if there was enough good science to warrant such funding at this time. But he was also somewhat comforted by the plan.
“Originally, the institute's leaders talked about making their first grants last May, which Reynolds said was ludicrous. To hear them now talking about having their organizational infrastructure in place first sounds better, he said.”

The latest fundraising effort is in addition to the $50 million effort to sell bond anticipation notes.

Thursday, January 12, 2006

CIRM, Cibelli, Korea and The Bee

An official of the California stem cell agency is taking issue with a Sacramento Bee editorial that indicated that CIRM was not taking the Korean scandal sufficiently seriously.

The editorial referred to a meeting Dec. 1 of the Standards Working Group. At that time, the Hwang affair had not surfaced completely, but it was evident that extremely serious problems existed.

Bernard Lo, co-chair of the group and director of the UC San Francisco Program in Medical Ethics, said in his letter:

"Contrary to the assertion that we went 'out of our way' to avoid discussion of Hwang's difficulties, a review of the written record of the Dec. 1 meeting of this committee, posted on Dec. 12, demonstrates that the Korean developments were the catalysts for extensive discussion on egg donation. The result was numerous recommendations to prohibit the practices that sparked the Korean controversy. Further, we have developed enforceable rules that exceed existing state and federal guidelines to ensure that research is conducted safely and ethically."
A search of the 263-page transcript shows that the word "Hwang" was mentioned twice and "Korea" or variations of it popped up eight times. Obviously such a simple count does not measure the quality of the discussion. Korea did trigger some exchanges, and the group also discussed a wide range of ethical subjects, including the value of a woman's eggs.

One of the members of the standards group is Jose Cibelli, a reknown Michigan State University scientist. He is also a co-author of the fraudulent March 2004 paper by Hwang that reported the first-ever closed human stem-cell line. Cibelli was present at the December meeting and participated in the discussions.

Queried by the California Stem Cell Report, a spokeswoman for Michigan State said,
"Michigan State University is conducting an investigation into Dr. Cibelli’s role on the '04 paper, where he is listed as a co-author. The investigation was started at Dr. Cibelli’s request. Given the investigation, there won’t be any comment available. For more information on the process, see: http://www.msu.edu/unit/vprgs/level2/conductres.htm
We should note that CIRM officials have stated in the past that scientists are often reluctant to criticize their peers' work in public. It is one of their justifications for maintaining closed door reviews of grant applications.

California Pushing Ahead with Cloning ESC

From San Diego, where stem cells meet the surf(see "Science of Surfing"), comes a couple of stories dealing with the California stem cell agency and some of the California fallout from the Korean scandal.

Reporter Terri Somers of the San Diego Union-Tribune wrote in some detail about the plans of California scientists to jump into the field of cloning human embryonic stem cells. It was that effort in Korea that turned out to be frauduent.

But scientists in California aren't giving up, and they hope to secure funds from the California stem cell agency to pursue their work.

Somers wrote:

"My guess is that just about everyone who has a stem cell research center is going to jump into this," said Jeanne Loring, a stem cell researcher at the Burnham Institute in La Jolla.


"All of the California research institutes stressed that in moving forward, they will follow the latest and strictest ethical guidelines to avoid the lapses uncovered in South Korea."

Also weighing in from San Diego was Richard Murphy, president of the Salk Institute and a member of the Oversight Committee for CIRM. His op-ed piece in the San Diego paper was a reprise of CIRM one year later. He said:

"I am often asked when California's stem cell research is going to get off the ground. The answer is, we don't know. At the moment, state-supported human embryonic stem cell research is at a standstill, tied up in the courts by research opponents who are arguing that Proposition 71 is unconstitutional.


"But these opponents have not succeeded in preventing CIRM's employees from creating an impressive state-supported stem cell institute that is ready to spring into action once the monies flow. Government agencies are often targets for criticism, but Californians are getting more than their money's worth from this one."

Wednesday, January 11, 2006

IP, IP, IP and More IP

The website of the Health Committee of the California state Senate is awash in intellectual property – that is, information dealing with the multimillion dollar questions of who profits from research funded by the California stem cell agency.

The Health Committee is chaired by Sen. Deborah Ortiz, D-Sacramento, who is carrying a proposed constitutional amendment concerning IP and CIRM. So much of the information comes from her hearing last Oct. 31, including a transcript of the proceedings.

But there are additional links to to background information at the University of California, the NIH, the California Council on Science and Technology and alternative IP models. Also included is information from last March's hearing into implementation of Prop. 71 and a hearing on the measure prior to its passage in November 2004.

If you want to know what is going on with IP issues and CIRM, this is one of the places you need to check out.

Tuesday, January 10, 2006

Vaccine Advisory

For those of you who have been looking for the "sunshine vaccine" item, it has been reposted a couple of items below. It was inadvertently removed during a feeble attempt to fix some html coding errors.

Hwang Reaction: Research Needs More Care

In the first of what is likely to be a series of comments about the impact of the Korean stem cell fraud findings, a top Stanford researcher says they show that researchers must "work more deliberately."

Irving Weissman, director of the Stanford Institute for Stem Cell Biology and Regenerative Medicine, released a statement that included the following:

"With the dollars provided by California's Proposition 71, Stanford intends to recruit scientists who will find ways to do nuclear transfer research, first in animal models and then with human cells, using the safest and most effective methods.

"The Stanford Institute for Stem Cell Biology and Regenerative Medicine is committed to advancing the field through the creation of new stem cell lines, research to further understand stem cell biology and the development of treatments for disease. Proposition 71 will play a significant role in helping Stanford researchers as well as other California institutions achieve the full therapeutic potential of stem cells."

Weissman called the Korean scandal a "personal tragedy" for Hwang and his scientific colleagues.

"While the announcement is a disappointing setback for nuclear transfer stem cell research, we are all making significant progress in the fields of adult tissue stem cell research, embryonic stem cell research and cancer/leukemia stem cell research. We must work more deliberately on nuclear transfer stem cell research, but we must go forward ethically and responsibly, as the future potential applications for the diagnosis and treatment of human diseases using these tools is so great," Weissman said.

CIRM Promises Open Search on General Counsel

After we posted the item below, the California stem cell agency emailed the following comment on Bedford's position at CIRM.

"CIRM will engage in a full and open recruitment process for the position of General Counsel when our funds become available."

Update on CIRM's General Counsel: An Orrick Connection

The California stem cell agency may have found the man who will be its new general counsel once the money really starts rolling in.

He is Daniel R. Bedford who is working fulltime pro bono at CIRM while he winds up affairs at Orrick, Herrington & Sutcliffe LLP of San Francisco.

It is our understanding that Bedford will fill the general counsel slot at a later point, but neither he nor CIRM would confirm that. Currently CIRM has put a hold on new hiring because of its budget crunch.

Bedford is assisting "CIRM generally on its many legal matters," says Nicole Pagano, a spokeswoman for CIRM. "At the moment most of his time is devoted to helping CIRM put together its Grants Administration Policy and advising on internal governance questions."

According to Orrick's web site, Bedford focused his practice on complex asset-based and lease financing, with an emphasis on agribusiness, domestic and international project financing, and tax-advantaged leasing."

His work has included representation of John Hancock Life Insurance in areas concerning equity and debt direct private placements. Other clients included public transit districts and Banc of America Securities. Much of his work involved various kinds of debt, which would seem to be a good fit with the needs of CIRM in connection with the issuance of state bonds.

Bedford has also participated in complex negotiations for natural gas pipelines involving government agencies, both in the US and involving Argentina, Chile, Brazil and Bolivia. Orrick's site did not list any involvement with biotech firms.

Orrick is bond counsel to California, but Orrick's site does not show any work by Bedford for the state.

Bedford received a B.S., M.B.A. and J.D. from Stanford University, where he was a member of Phi Beta Kappa.

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