Scripps' Loring on CIRM Grant Petitions

Jeanne Loring, director of the Center for Regenerative Medicine at the Scripps Research Institute, filed a comment today that shed some additional light on the nine petitions that are seeking to overturn negative decisions on their grant applications.

Loring, who has served on grant review committees with the NIH, said,

“I don't think the intention of any of the petitioners was to subvert the review system. Grant applicants who are used to the NIH system expect to have a chance to revise and resubmit their applications in response to the reviewers' critiques.”

Loring, one of the nine petitioners, was reacting to an anonymous comment that the appeals were “undermining the review process and challenging the authority of the reviewers.”

You can read her full comment at the end of the “CIRM Challenged” item.

Live Coverage of CIRM Board Meeting

Stick with the California Stem Cell Report if you want to track the events in San Diego tomorrow and Wednesday at the meeting of the board of California stem cell agency. Whether it is the nine efforts to overturn negative actions on grant applications or the future path of the agency, we will try to bring it all to you in a timely and straightforward manner. We will be monitoring the session via the Internet from a mooring on an estuary in El Salvador and will be filing stories as warranted.

At some point we even hope to be able to tell you what a “Development Candidate Portfolio Review" is. That's item 16 on the agenda. No further explanation of the subject has been offered to the public with only about 12 hours remaining before the meeting begins.

CIRM Challenged by Nine Scientists on Negative Grant Decisions

A ninth researcher has filed a petition to overturn a negative decision on a grant application scheduled to be considered at a meeting tomorrow of the board of the $3 billion California stem cell agency.

The scientist is Judith Shizuru, the third applicant from Stanford to seek reconsideration of an application in the $30 million immunology round. Forty-four applications were filed. Fifteen were approved by the CIRM Grants Working Group. Nearly one-third of those rejected have now appealed the actions.

Regardless of the decisions by the grant review group, the CIRM board can do as it pleases with applications. However, it has been loath to overturn reviewer decisions. A number of board members are uncomfortable with the entire appeal process, including public appeals by scientists at its meetings. Nonetheless, some researchers have been successful.

In addition to Shizuru, here are the the names of the others who have submitted what CIRM calls “extraordinary petitions:” Olivia Martinez and Joseph Wu, both of Stanford; Defu Zeng and Chih-Pin Liu, both of the City of Hope; Genhong Chen and Elaine Reed, both of UCLA;  Jeanne Loring of Scripps, and Husein Hadeiba of the Palo Alto Institute for Research and Education, Inc.

With the exception of Hadeiba, all the institutions of the scientists have members on the 29-person CIRM board. However, they are barred from taking part in discussion of or voting on the grants in question.

An anonymous comment filed on one of our earlier items on the petitions said the "situation is out of control." The comment also declared that the researchers "are undermining the review process and challenging the authority of the reviewers."

Links to all the petitions letters can be found on the agenda for the CIRM board meeting. The summaries of the reviewers' comments can be found here. Click on the number of the grant to read the summary.

Here are two earlier items we wrote on the petitions: "Yamanaka Invoked" and "Six Scientists."

(Editor's note: An earlier version of this item incorrectly said the applications totalled 45 and that 16 were approved.)

Kleiner Piece Listed in 'Best of Web'

Our article last week on the Kleiner-CIRM connection rated a “Best of the Web” listing on the widely read Gooznews Web site.

The article shared the distinction with stories from the Wall St. Journal and New York Times, among others.

Gooznews is published by Merrill Goozner, a longtime journalist and author of “The $800 Million Pill.”

For those of you who may have missed the Kleiner piece, here is the first paragraph:

"A biotech company heavily backed by venture capitalists who contributed nearly $6 million to the election campaign that created the California stem cell agency was awarded a $1.5 million grant this spring from the very same agency."

The piece was also mentioned on healthycal.org, a solid government policy Web site published  by Dan Weintraub, the former Sacramento political columnist. 

Stem Cell Agency Budget Soars 28 Percent

The California stem cell agency plans to spend $15.7 million next year for its day-to-day operations, up 28 percent from this year's estimated spending of $12.3 million.

The $3.4 million increase is for the fiscal year that begins in 10 days. The hefty hike in spending comes at a time when the rest of state government is mired in a financial crisis that shows no signs of ending. CIRM's funds are provided, however, from state bonds – money borrowed by the state – and cannot be touched by the governor or the legislature under the terms of Prop. 71, which created the agency.

Because CIRM's budget consists of borrowed cash, the ultimate cost of its operations will be substantially higher than the nominal figures provided by the agency. CIRM has access to $3 billion in bonds. With interest, that translates to roughly a $6 billion bill for the state of California. In other words, the agency's operations will really cost nearly $32 million – not $15.7 million. And the $490,008 salary of CIRM President Alan Trounson will actually cost the people of California something a hair shy of $1 million.

But even at $32 million, CIRM's budget can easily be eclipsed by one or two of the beefy rounds of grants that the agency awards for stem cell research.

As we noted last week, the stem cell agency provided a much more detailed look this year at its spending plans, a vast improvement over the information that was offered a year ago. However, CIRM did not calculate percentage increases from this year's actual spending compared to what is proposed for next year. Both the percentage increases reported in this piece, along with the actual dollar increases, are the work of the California Stem Cell Report. They are drawn primarily from numbers on CIRM's “projected expenses” document.

The biggest increase in the budget is for salaries and benefits – a 22 percent ($1.5 million) increase from about $7 million to $8.5 million. The agency, which now has 45 employees, plans to hire five more persons in the coming year. The budget documents do not discuss hiring scenarios if legislation passes that would remove the 50 person cap at CIRM. Increases in state-mandated benefits amount to $400,000. Assuming an average of 47.5 employees for the year, salaries and benefits will consume $178,589 for each staffer.

The second largest item in CIRM's operational budget is for outside contracts. The agency relies heavily on non-state help because of the personnel cap. The figure for the coming year is $2.8 million, up 21 percent from $2.3 million this year.

The cost of meetings for the grant working group, which judges grant applications, will soar 151 percent from $452,000 this year to $1.1 million, a jump of $683,000. The budget documents available online do not explain the increase. But they do report that the figure would cover 12 meetings. The grant group archives show that it held only four meetings during the current fiscal year.

Another big jump will be seen in spending for information technology, particularly for the grant management system, which CIRM has been doggedly wrestling with for several years. Spending in that area will rise 53 percent, from $817,000 to $1.2 million, an increase of about $433,000.

The grant management system is a critical tool for the agency. CIRM is trying to oversee more than $1 billion in grants to more than 300 recipients and, at the same time, hand out many hundreds of millions more in the next year or so. It is building custom programs for entire process, from applications to oversight. Currently, CIRM has a $125,000 RFP out for “systems analysis and software development services” and hopes to have a company on board next month.

CIRM's spending plans (see here for all the budget documents) will be considered today by the directors' Finance Subcommittee in a scheduled one-hour teleconference meeting that has public locations in Cornelius, N.C, San Francisco(2), Los Angeles, San Diego, Stanford, Irvine and La Jolla.

At a San Diego meeting beginning on Tuesday, the full board is expected to approve the budget with no major changes. Teleconference locations for the public are available in Washington, D.C., and the City of Hope in Duarte, Ca.

Out-of-state locations are provided for directors who cannot attend the meetings in person, but the sites are public by law.

The full board meeting can also be heard on the Internet. Instructions for dialing in can be found on the agenda. Addresses of teleconference locations are also on the agenda, but some are so vague that you should call CIRM in advance for additional directions.

More Grant Appeals Filed: Yamanaka Invoked

The California stem cell agency has set another benchmark, although this is one that it may not want to trot out at international stem cell gatherings.

Eight scientists whose applications were rejected for funding by the CIRM grants working group and scientific reviewers are seeking to overturn those decisions at the agency's board meeting in San Diego on Tuesday.

It is the largest number of “extraordinary petitions” ever filed and amounts to more than one out of every four applications that were turned down. The total number of applications received was 44. Fifteen were approved. Some of the researchers are likely to appear at the board meeting and make a personal pitch.

The CIRM board has budgeted $30 million for this round of grants. Regardless of the actions by the grant review group, the board can do whatever it wants with the applications, including rejecting all 44.

The board, however, almost never rejects a positive decision by reviewers and rarely overturns the judgment of the scientific reviewers who evaluate the applications during closed-door sessions.

Yesterday we carried an item on the six scientists who had filed petitions at that point. Today CIRM posted two more petitions. They are from Husein Hadeiba of the Palo Alto Institute for Research and Education, Inc.(see petition here) and Joseph Wu of Stanford(see petition here). Both focused on scientific criticism offered in the review summaries. (All the summaries can be found here. Individual reviews can be found by clicking on the number of the grant.)

In support of his appeal, Wu cited remarks this week in San Francisco by Shinya Yamanaka, winner of the prestigious Kyoto Award, also this week. Referring to criticism of his application as having an “unclear rationale,” Wu wrote,

“We believe the 'unclear rationale' is actually a 'clear rationale' and is being adopted by iPS cell pioneers such as Shinya Yamanaka and his whole team in Japan.”

We also should note that the agency seems to be moving more quickly to post these petitions, a definite improvement over past efforts.

(Editor's note: An earlier version of this item incorrectly said the applications totalled 45 and that 16 were approved.) 

Tracking the Wild CIRM

Looking for more on the history of the California stem cell agency?

Here are two Internet sites – other than our particular collection here on the California Stem Cell Report -- that collect stories on California stem cell events that have occurred since Prop. 71 was passed in 2004

The first is on Sfgate.com and includes a variety of stories and video.

The second is healthvote.org. It carries a great deal of material, including TV ads from the campaign. Its news watch feature is useful but not up to date and not complete. Here is the "check up" segment that includes an article that addresses the question of “what has happened since the election?”

Incident at the Marriott: Stem Cell Agency Bars Public From Meeting

The California stem cell agency barred two academics from entering one of its conferences earlier this week in San Francisco.

The action appears to violate the spirit and probably the letter of the California State Constitution and state open meeting laws. Under section three of the constitution, approved by 83 percent of voters in 2004, members of the public have a broadly construed right of access to what their government is doing. That includes meetings at San Francisco hotels.

The incident involves Tina Stevens of San Francisco State University and and Diane Beeson of California State University, Hayward. Stevens is executive director of the Alliance for Humane Biotech. Beeson is on the board of directors – none of which has to do with whether they should have access. The law entitles the lowliest worker an equal right to government access.

Here is the account that Stevens and Beeson sent to the California Stem Cell Report.

“On Monday, June 14 we went to San Francisco's Sutter Street Marriot Hotel to attend the CIRM - Medical Research Council Human SCNT Workshop. Both academics with long-standing interests in women's health and research policy, we were heading for the session on, 'Procurement of Human Oocytes: What has been the Experience to Date?' Despite the fact that there was no public notice of an upcoming workshop on a topic of sustained interest to women's health advocacy groups, we heard about it via the grapevine and decided to attend. But upon arrival, we were barred at the door. The session on egg procurement had been switched to an earlier morning time slot and already had taken place, we were told. Our printed agenda was outdated. Further, we would not be granted entrance to the meeting underway. Why? It was closed to the public because conferees maintain concerns over protecting their intellectual property. Questions remain. What intellectual property concerns could there be over oocyte procurement policy? Why was the agenda switched up? Why wasn't a workshop concerning egg donation posted on the CIRM website in the first place when the topic is known to be of serious concern to the public, especially to women's health advocates?

“Outside the conference room, hotel staff bustled over luncheon preparations: plump rolls, dome-covered serving dishes and stacks of shiny crockery near folded cloth napkins, multiple gleaming beverage urns. California can't muster tax dollars to fund classes for students at public universities but has managed to finance posh buffets for scientists who've prioritized safeguarding their intellectual property over the public's right to know.”

We sent a copy of their account to Don Gibbons, chief communications officer for CIRM. Here is his response:

“All of CIRM's scientific workshops are by invitation only. These workshops are designed to gather information for critical decisions regarding the direction our funding should take. In order to get the latest, most up-to-date information, we have to assure scientists that their proprietary and unpublished information will not be made public. The workshop this week was not on egg donation, it was on nuclear transfer research and whether or not CIRM should continue to consider funding projects in that field or whether other technologies had made the pursuit of this difficult science no longer necessary. As always, we will be publishing a report from the workshop on our web site.

“The women who wrote to you were not told to leave, they were asked to wait until the staff member managing the event could get one of the senior staff to talk to them. They were asked for their names or IDs so she could inform us of who was making the request and they refused to provide any names or identification.

“Our lunch was simple chicken, tofu with carrots and plain steamed rice. We were offered coffee, tea and water. Hardly posh. When you are asking folks to work for you for free and take a very short lunch break it seems reasonable.”

Our take: We have written more than once concerning problems with CIRM's lack of openness. We have commented on the rampant conflict of interest issues at the agency and its lack of accountability, along with its move towards increasing closeness to the biotech industry. All of which go to CIRM's credibility and the public's trust in the agency. This lastest incident appears to be another case that does not reflect well on CIRM.

CIRM says the meeting was aimed at securing “information for critical decisions” about how it is going to spend taxpayers' money. That subject would certainly seem to be a matter of considerable public interest and justify a public need to know. As for asking for identification, that appears to be a clear violation of state law. The state attorney general's guide to California's open meeting law says agencies covered by the act are barred from imposing “ANY CONDITIONS” on attendance at a meeting.

As for the need to protect intellectual property, proprietary or unpublished information, that claim is simply poppycock. CIRM has not disclosed how many persons were in the closed-door meeting, but it is impossible to keep information secret when even more than a handful of persons is present, and most likely not even then.

Prop. 71, approved by 59 percent of voters in 2004, exempted CIRM from some aspects of the state's sunshine laws. It is not clear whether those exemptions apply in this case. But the state Constitution (section three) was also changed by voters in 2004 to guarantee the right of the public to access. That change was approved by a much larger vote (89 percent) than Prop. 71. It is our understanding that if conflicts exist in such cases, the measure with the larger vote takes precedence.

Legalities aside, it is not in CIRM's best interest to bar persons from any of its sessions – not to mention that it is not in the best interests of the people of California. CIRM needs to do more than meet the minimum standards of the state's sunshine laws. To fail to do so will create a record that will surely harm CIRM's public support and hamper its efforts to secure more funding after it runs out of the $2 billion it has left to spend.

Yamanaka Wins Kyoto Award

The Japanese stem cell scientist who pioneered reprogramming of adult stem cells has won the prestigious Kyoto Award, a $550,000 prize from the Inamori Foundation for research in advanced technology.

Shinya Yamanaka, who also has a lab at UCSF's Gladstone Institutes and is working with a CIRM-connected firm, is in San Francisco for the International Society of Stem Cell Research's annual convention.

David Pearlman, science editor of the San Francisco Chronicle, wrote,

“Robert Lanza, chief scientific officer of Advanced Cell Technology and an adjunct professor at Wake Forest University's stem cell research center, said recently that Yamanaka's work 'is likely to be the most important stem cell breakthrough of all time.'”

Jef Akst of The Scientist reported,

“Yamanaka's 2007 Cell paper was one of the most-cited papers last year, according to ISI. Last year, the No. 1 spot in The Scientist's Top 10 Innovations of 2009 went to a group that induced pluripotency in mouse embryonic fibroblast cells using only proteins, including the protein form of Yamanaka's four transcription factors, avoiding genetic modification altogether.”

Yamanaka is director of the Kyoto Universityh's iPS research center, which has an agreement with iPierian, Inc., of South San Francisco, a company backed with $20 million from the Kleiner Perkins venture capital firm of Menlo Park, Ca.

The iPierian Web site says,

“iPierian is the first company to focus the power of iPS technology to revolutionize the drug discovery process by producing iPS cells derived from patients to create truly disease-relevant model systems. These systems can be used for the discovery of new drugs and ultimately for treating diseases more safely and effectively.”

Ipierian has a $1.5 million grant from the California stem cell agency seeking to identify small molecules that promote the reprogramming of human somatic cells to the pluripotent state. Berta Strulovici is the principal investigator on that grant. The firm says it plans to seek more during a clinical trial grant offering from CIRM in the next month or so.

Four principals in the Kleiner firm contributed nearly $6 million to Prop. 71, which created the California stem cell agency in 2004. The amount was 25 percent of all funds raised for the campaign.

Six Scientists Appeal Rejection of Grants; Read Their Letters to CIRM

Six researchers this week are publicly appealing negative decisions on their requests for millions of dollars from the $3 billion California stem cell agency.

The “extraordinary petitions,” which are available online, were filed in connection with a $30 million round of stem cell immunology grants that the CIRM board is scheduled to vote on at a meeting in San Diego beginning next Tuesday.

The petitions generally focus on reviewer comments concerning the science of the proposals. Some discuss value judgments made by reviewers. Some cite what the applicant considers are errors. One researcher notes that she is a Latina leader in bringing minorities into science(one of CIRM's aims is to increase diversity in the field). Another said that “certain key points of our proposal that may not have been fully appreciated by the review panel, perhaps due to lack of clarity on our part.” Another took issue with a reviewer's comment that the principal investigator did not have a “sufficiently strong CV.” Another pointed out that the application received a score of 67, which is two points below the cutoff line. CIRM board members have noted in the past that such minor numerical differences are virtually meaningless.

Here are the names of the scientists filing the petitions: Genhong Cheng of UCLA, Elaine Reed also of UCLA, Jeanne Loring of Scripps, Olivia Martinez of Stanford,  and Defu Zeng  of the City of Hope and Chih-Pin Liu, also of the City of Hope. The CIRM board includes members from all those institutions. However, they are not allowed to take part in deliberations or vote on applications of their institutions.

Click on names of the researchers to read their letters. Summaries of reviewer comments on all 44 applications can be found via this item.

Reviewers made positive decisions on 15 proposals. The board, however, can do anything it wants with the applications, although it rarely acts favorably on petitions. A number of board members are uncomfortable with the process, which is slated for a major public review in August.

Some of the scientists filing petitions are also likely to appear before the CIRM board meeting next week to make an additional pitch for their applications.

Interested persons can hear a discussion of the grants and the petitions during the meeting via an Internet audiocast. Directions for listening to the audiocast can be found on the board agenda.

Here is a link to additional reading on the appeal process at CIRM, including agency documents.

(Editor's note: An earlier version of this item incorrectly said that 44 applications were received and 16 approved.)

Fresh Info, and Plenty of It, From CIRM for Big Meeting Next Tuesday

The California stem cell agency today presented to the public an impressive array of information on its operations and plans, ranging from the nitty gritty of the budget of its chairman's office to a scenario that would see its operations extending into 2023.

All of the topics are scheduled for discussion or action at the CIRM board's two-day meeting that begins next Tuesday in San Diego.

We have been critical of CIRM's failure to provide the public with adequate and timely information concerning its activities. Today's postings represent a dramatic improvement. The agency and its staff are to be commended.

CIRM offered plenty of grist – more than we can do justice to in a quick summary. But here are a few highlights.

One of the more interesting matters to be considered by the 29 CIRM directors next week involves a long-range look at its expenditures and its strategic goals.

The staff's 12-page analysis had the following to say about a plan that would have the agency running through its $3 billion by 2019.

“This scenario raises the concern that CIRM may be pushing its programs forward too fast to meet its mission. Stem cell science is a rapidly progressing, fast moving field. However, it is still a young discipline. The next big advances to come out of basic research can only be imagined but it is not unreasonable to expect additional paradigm-shifting results in the next couple of years that will rival the initial development of iPS technologies. CIRM may well be in position to contribute to those breakthroughs but will it have enough money and time remaining to push them into the clinic? Currently, there are programs in the pipeline with potential for significant clinical benefits but, given the early stage of stem cell research and the well-documented studies of success rates in drug development, it is difficult to predict how many, if any, of them will fulfill that promise. However, as the field matures there will surely be many more therapeutic candidates and it is reasonable to predict that some of the later ones will have a greater chance of success because they will be able to take advantage of more advanced technologies.”

The staff also took a crack at the issues on a scenario into 2023.

The budget information, which has been the subject of some attention recently on the California Stem Cell Report, is vastly improved over last year. Detail is heaped on detail. Legitimate year-to-year comparisons are made. Expenses can be viewed by “cost centers,” meaning the office of the chairman, the president and so forth.

The proposed budget for the fiscal year that begins in two weeks totals $15.7 million, compared to the $9.7 million spent through May. Last year, directors approved a $13 million budget for the agency. CIRM ran significantly under budget on its payroll costs, the largest item in the budget, and external contracts, the second largest.

For next year, CIRM projects that salaries and benefits will increase by $1 million beyond last year's approved budget. However, the proposed figure of $8.5 million is well above the $6.3 million spent through May. CIRM has 45 employees currently and hopes to hit 50. It may exceed that if legislation passes removing the 50 person staff cap. Even without hiring beyond 50, benefit costs will rise by $400,000 because of state-mandated retirement benefits for some employees.

Other significant increases include $633,000 for grant working group meetings, $1.1 million compared to $574,000 approved for this year but even higher when compared to actual spending of $337,000 through May. External contracts will rise $506,000, hitting $2.8 million compared to last year's approved figure of $2.3 million. But the jump is much greater when compared to actual expenses through May of $1.4 million. Information technology, which appears to mainly involve continuing work on CIRM's critical grant management system, will jump $431,000, from $818,000 approved last year to $1.2 million. Actual spending through May is only $610,000.

Also up for consideration at the board meeting is a $45 million grant round for research into basic biology. The three-year awards will be available to both business and academic researchers.

CIRM also reported for the first time a partial accounting of some of the benefits it is receiving from the City of San Francisco's package to win placement of the agency's headquarters in Baghdad-by-the-Bay. For the current fiscal year, they included:

“• Rent – valued by auditors at $1 million
“• Overhead on office space - $650,000 (approximate)
“• Free internet line - $15,000
“• Use of Moscone Center for ISSCR annual meeting - $100,000
“• Use of City Hall Rotunda (2 receptions) - $10,000 each”

CIRM should compile an overview of the entire package in the not-too-distant future.

Also available as of this evening are five "extraordinary petitions" by researchers seeking to overturn negative decisions on their applications for immunology grants. They are Genhong Cheng of UCLA, Jeanne Loring of Scripps, Olivia Martinez of Stanford, Elaine Reed of UCLA and Defu Zeng of the City of Hope.

The postings of the petitions also came earlier than those for previous meetings of the CIRM board.

Campaign Contributions, Kleiner Perkins, iPierian and CIRM Grant

A biotech company heavily backed by venture capitalists who contributed nearly $6 million to the election campaign that created the California stem cell agency was awarded a $1.5 million grant this spring from the very same agency.

The firm, iPierian, Inc., of South San Francisco, reportedly plans to seek many more millions from the California Institute for Regenerative Medicine in the near future.

The venture capitalists are principals in Kleiner Perkins Caufield & Byers of Menlo Park, Ca. They include John Doerr and his wife, Ann, who contributed nearly $4 million to the Prop. 71 ballot initiative, according to state records. Doerr is well-known in company start-up circles and was involved in the early funding of Google and Amazon.

Other Kleiner contributors to the campaign included Vinod Kholsa, $500,000; Joseph Lacob, $750,017, and Brooks Byers, $480,000.

The Kleiner-related contributions amounted to 25 percent of the $24 million contributed in 2004 to create the stem cell agency.

During the 2004 campaign, some critics said that Prop. 71 amounted to little more than seed money for the venture capital community. The state voter guide's argument against the proposition said, “...(P)harmaceutical company executives and venture capitalists contributed $2.6 million (to gather signatures) to put this measure on the ballot. By getting taxpayers to fund their corporate research, they stand to make billions with little risk.”

In 2008, Kleiner launched its investment into what is now iPierian with $20 million. Kleiner is its single largest financial backer. One of Kleiner's partners has a seat on the five-member iPierian board.

In response to a query, James Harrison, outside counsel to CIRM, strongly defended the agency. He said its conflict of interest code exceeds the requirements of state law. The full text of Harrison's comments can be read here, but he said in part,

“In order to advance CIRM's mission, it is critical that venture firms like KPC&B (Kleiner) invest in stem cell companies so that these start-up companies have the funds necessary to bring therapies to the market.”

Kleiner did not respond to a request yesterday for comment.

The grant to iPierian was approved with the vote of the man who was the head of the Prop. 71 campaign, Robert Klein, a real estate investment banker in Palo Alto, Ca. He is now also chairman of the $3 billion California stem cell agency. Klein sits on the grant review group that makes the de facto decisions on grants. He participated in the closed-door session during which the iPierian grant (see review summary here) was approved and the full board meeting at which the decision was ratified. Harrison said no conflict of interest existed for Klein.

Harrison said,

“California conflict of interest law does not require recusal under
these circumstances. Indeed, the connection is so attenuated, it is difficult even to understand how this could ever rise to the level of a conflict.”

Harrison said Klein had no knowledge of the involvement of the Kleiner campaign contributors with iPierian. Harrison also said that Klein has pledged to “refrain from holding any financial interests in biotech companies as long as he is chairman.”

Another member of the grant review group had a direct connection to iPierian and was recused. She is Amy Wagers, a Harvard scientist who sits on both the iPierian scientific board and the CIRM grant review group. Wagers did not respond to a request for comment.

The stem cell company has other ties to CIRM. George Daley of Harvard, co-chair of the iPierian's scientific advisory board, is on the blue-ribbon scientific panel that is slated to assess CIRM's progress next fall. In addition to Wagers, two other members (Kevin Eggan and Chad Cowan)of the iPierian advisory board serve on CIRM groups that make decisions on grants and recommend research policies to the CIRM board. John Walker, the president of iPierian, and Ted Love, a CIRM board member, both serve on the 9-member board of directors of Affymax, Inc., of Palo Alto, Ca.

Daley and iPierian did not respond to a request for comments.

Ipierian has said it is interested in applying for more cash from CIRM. According to Ron Leuty of the San Francisco Business Times, the firm plans to seek an award in CIRM's new, $50 million clinical trial round. It is expected to be one of only three companies applying in that round.

We will carry the full text of remarks from Kleiner, iPierian or individuals mentioned in this item if we receive them.

Text of CIRM Response on iPierian Grant and Campaign Contribution

Here is the text of an email June 15, 2010, from James Harrison, outside counsel to the California stem cell agency, concerning the iPierian grant.

David,

Thanks for speaking with me this morning. CIRM's Governing Board has
set conflict of interest standards that exceed the requirements of state
law, and Mr. Klein has exceeded even these standards by refraining from
holding any financial interest in biotech companies during his tenure.
I understand that your story will suggest that Bob Klein should have
recused himself from the Board's consideration of an application
submitted by iPierian for a Basic Biology II Award because iPierian is
backed by Kleiner Perkins Caufield & Byers, one of whose principals is
John Doerr who, along with his wife, contributed money to the Prop. 71
campaign. I strongly disagree with your suggestion that Mr. Klein's
participation in the Board's consideration of the iPierian application
creates a conflict. Here are the facts:

1. The Board awarded a Basic Biology II grant ($1.48 million) to
iPierian in April 2010.

2. KPC&B invested $20 million in iZumi in July 2008.

3. iZumi merged with Pierian to form iPierian in July 2009.

4. In 2003 and 2004, John and Ann Doerr contributed to the Prop. 71
campaign.

5. Chairman Klein had no knowledge that: (a) KPC&B had invested in
iZumi; (b) iZumi had merged with Pierian to form iPierian; (c) KPC&B
became an investor in the new company as a result of the merger; or (d)
that George Daley was associated with iPierian (although had he known,
it may have increased his respect for the company).

6. Chairman Klein has no financial interests in biotech companies and
has pledged to refrain from holding any financial interests in biotech
companies as long as he is Chairman.

7. California conflict of interest law does not require recusal under
these circumstances. Indeed, the connection is so attenuated, it is
difficult even to understand how this could ever rise to the level of a
conflict.

8. In order to advance CIRM's mission, it is critical that venture
firms like KPC&B invest in stem cell companies so that these start-up
companies have the funds necessary to bring therapies to the market.

Bob also asked me to relay to you that he has great respect for John and
Ann Doerr, who contributed to the Prop. 71 campaign and to other
research institutions to support their efforts to find a cure for cancer
and other major diseases.

Thanks for your consideration of these points.
__________________________
James C. Harrison
Remcho, Johansen & Purcell, LLP
201 Dolores Ave.
San Leandro, CA 94577

CIRM Releases Budget Info

For those of you eager to dig into CIRM's proposed budget for next year, the agency yesterday afternoon posted a raft of documents dealing with the spending plan. At first blush, it appears to be a 21 percent increase over the budget that was approved for this fiscal year, which concludes at the end of the month. However, the spending for this year is running under budget, which would mean that the increase is actually higher. We will have more details on the budget later.

Read Reviewer Remarks on 45 Applications for California Stem Cell Grants

To its credit, the California stem cell agency yesterday posted a timely link to summaries of the scientific reviews of applications for funding to the tune of roughly $30 million.

The reviews include positive decisions by reviewers on 16 grants dealing with stem cell immunology, which are certain to be ratified by directors at their meeting next Tuesday in San Diego.

We have been critical of CIRM's failure to provide background information on important matters to be considered at its public meetings. In this case, the material came five days in advance of date when it is to be discussed and acted on.

Look for more information concerning the rejected grants later this week or early next. It is likely that some researchers will file “extraordinary petitions” seeking to overturn negative findings by the CIRM grant review group. Those petitions can filed up to five days before the board meeting. CIRM President Alan Trounson and his staff then make a decision on whether the appeal has merit.

Grant applicants are not identified until after the CIRM board takes action, and then only on winning researchers. Information contained in the reviews, however, includes the scientific score of approved grants and summaries of reviewer remarks, such as this on a rejected grant:

“Given the team's lack of progress on basic questions related to the T59 approach over the past several years, there is concern regarding the team's ability to provide new and important information with the proposed experiments in this application.”

Or this on a grant with the top score(87 out of 100):

“The reviewers considered the principal investigator (PI) to be exceedingly well qualified to direct the proposed research. The juxtaposition of his/her hematology and immunology expertise with the co-investigator's knowledge and experience in stem cell biology was viewed as a unique and noteworthy asset that significantly enhances the potential for success.”

Any researcher seeking cash from CIRM would do well to read all 45 reviews in order to understand better what is likely to gain approval.

CIRM's board meeting begins in four business days. But still missing from the agenda is a host of additional necessary background information. That includes the proposed spending plan for CIRM for the next fiscal year, which begins at the end of this month. The budget documents were delivered to CIRM Chairman Robert Klein, who controls the board agenda, on June 7 but were apparently not up to snuff.

In response to a query about the delay in posting, CIRM spokesman Don Gibbons said the budget is being revised. Also missing is information dealing with the agency's “strategic financial projections.”

For those who want to listen in on the meeting, the agenda now contains instructions on how to do that on the Internet.

The Latest on Calimmune and California Cash

The story of Calimmune and a $20 million CIRM grant has a brief, new chapter this week – an installment that includes the word “mysterious.”

For those of you who may have forgotten, Calimmune, which is based in Tucson, is involved with UCLA in some CIRM-funded research. The young firm has connections to Johnson & Johnson, Australia and former CIRM director David Baltimore, a Nobel laureate. We carried an item with more details last November.

Yesterday, Paul Knoepfler, a stem cell scientist at UC Davis, carried an item dealing with Calimmune on his blog. The piece was part of an ongoing discussion about CIRM funding to businesses. CIRM is barred from funding research out-of-state, be it conducted by business or academia.

He wrote,

“David Jensen reported that Calimmune has lab space in Pasadena. The only reference to that that I can find is here, where it is mentioned as a company in the "Pasadena Biosciences Group", a group of tech companies sharing a building in Pasadena.

“Being somewhat puzzled, I inquired with CIRM about Calimmune and they responded that they have verified that Calimmune has a California facility.  So as far as I can tell, all companies with CIRM funding have ongoing science in California.

“Calimmune still seems mysterious to me. Perhaps the most unusual things about Calimmune is it has no website and there is nearly zero information on it on the Internet. No apparent publications. No press releases. No industry analysis. It has been referred to as 'tightly held'...I guess so!”

When we originally reported about Calimmune, Louis Breton, the president of the firm promised more details around the beginning of this year. Nothing was forthcoming at that time, and he failed to respond to an email we sent to him on March 9.

State of Stem Cell Research Examined This Morning

Two prominent California stem cell researchers are featured this morning on radio station KQED's “Forum” call-in show to discuss the state of stem cell research.

Guests on the program, which can be heard on many public radio stations and Sirius radio, are Arnold Kriegstein, director of the UCSF Institute for Regeneration Medicine, and David Rowitch, professor of pediatrics and neurological surgery and chief of neonatology at UCSF. CIRM does not have a guest listed for the program, but UC San Francisco has received $105 million from CIRM.

The broadcast is keyed to the annual convention of the International Society of Stem Cell Research, which begins later this week in San Francisco.

Comments and questions can emailed via the Forum Web site for consideration for use during the show, which begins at 10 a.m. PDT.  The show will be archived for later listening.

California Stem Cell Directors to Give Away $30 Million Next Week and Tackle Budget

One day after a one-hour meeting to consider its budget for the coming fiscal year, directors of the California stem cell agency are scheduled next week to approve the $13 million-plus spending plan.

The budget, which will go into effect at the beginning of July, was the subject of a recent kerfuffle involving the failure of the agency to post publicly its expenditure plans. The budget is among the matters to be approved by directors of the $3 billion research effort June 22-23 at a meeting in San Diego. The directors are also expected to give away $30 million in about 20 grants that are likely to involve researchers in Australia and Germany.

The grants are for stem cell transplantation immunology research, a matter of special interest to CIRM President Alan Trounson. He has said immumnology issues need to be resolved before therapies can be fully developed. Plus, the international applicants could well include some of his former colleagues in the state of Victoria in Australia. Foreign collaborators, however, must find funding elsewhere. CIRM is barred from financing research outside of California.

As usual, no details or other background information is available on the matters to be considered by the full board nor for the one-hour, budget meeting of the Finance Subcommittee. Last year, however, directors approved a $13 million budget. Presumably that figure will rise somewhat for the coming fiscal year. Maybe more, if it includes spending for hiring substantially more staff, which would be permitted under legislation pending in Sacramento.

Other matters to be decided by the board include the concept behind a new round of grants for basic biology research, appointment of new member to the Standards and Grants Working Groups and a “technical” change in the CIRM compensation program.

Also on the agency is discussion of strategic financial projections. While it is widely believed that CIRM has a 10-year life that began in 2004, no such legal limit exists. CIRM Chairman Robert Klein has discussed a timetable that extends CIRM's life to 2017. It could continue beyond that if the agency can secure additional funding after its existing $3 billion in state bonds run out.

Another discussion topic for directors is something called “development candidate portfolio review.” CIRM's agenda offered no clue to what that matter covered.

The San Diego meeting is unusually long -- scheduled for two full days. Normally the board begins late in the afternoon and then continues into the evening on the first day of a two-day meeting. It has been finishing up on the second day in mid-afternoon. Next week's meeting begins at 10 a.m. on the first day and runs to 8 p.m. The second day is scheduled for 9:30 a.m. to 4:30 p.m.

The board's Evaluation Subcommittee is in the process of conducting the first-ever evaluation of Klein's performance. It held one closed-door session last week and has another scheduled this week. A personnel session is included in the full board meeting next week. If the board takes some action on Klein, it might be announced following that executive session.

The Finance Subcommittee will hold its teleconference meeting on the budget with public access available in San Francisco, Los Angeles, La Jolla, Irvine and San Diego. Specific locations can be found on the agenda. The public will have an opportunity to participate at those locations.

The meeting of the full board is likely to be available on an audiocast on the Internet, but public participation is not available by that means. Directions for the audiocast are expected to be posted later.

Budget Contretemps: CIRM Takes Another Run at Spending Plan

The California stem cell agency has rescheduled for June 21 consideration of its budget for the fiscal year that begins in July.

CIRM cancelled an earlier meeting scheduled for Thursday after it failed to post publicly the budget documents on its web site, a perennial problem with important information needed for CIRM meetings. The Thursday meeting was scrubbed after the California Stem Cell Report on Tuesday published an item headlined, “CIRM Stiffs Public on Spending Plan.” Documents were also not available for the June 21 meeting at the time of this writing.

In a comment filed yesterday with the California Stem Cell Report, Don Gibbons, CIRM's chief communications officer, said the budget documents were submitted to CIRM Chairman Robert Klein five days ago. It was not clear whether those documents were being revised. We queried Gibbons this morning concerning the missing information for the public.

A CIRM insider said that it is “a bit alarming” that CIRM failed to provide the budget information to both the public and directors for the Thursday budget meeting of the Finance Subcommittee. The source said that the same problem occurred last year, and the staff promised to distribute the information in a timely fashion. The insider said the issue reflected poorly on the stem cell agency. (The full text of the source's remarks can be found here.)

California's state Constitution provides the public with a broadly construed right to state government information.

CIRM's Gibbons has not responded to our request Wednesday for an explanation for cancellation of Thursday's budget meeting.

CIRM's Budget Preparation Problems a 'Bit Alarming'

The California stem cell agency called off its budget review meeting this week apparently because of its inability to provide the spending plan information in a timely fashion.

According to a source who can be identified only as a CIRM insider, the situation is “a bit alarming.”

The source said,

“Frankly, the budget documents were not provided in time for anyone, either board members or the public, to digest and understand them in order to conduct a meaningful decision-making process. What is surprising and a bit alarming is that the same problem occurred last year and staff committed then to timely dissemination of the budget for this year. The cavalier 'aw shucks' attitude towards preparing and disseminating on a timely basis the budget, which one knows a year in advance will be due, reflects either incompetence or an intentional effort to avoid meaningful oversight by the directors."

Another reader, who also must remain anonymous and who works elsewhere in state government, said that the problems indicate that CIRM needs help and organizational changes. He said his own agency has been successfully putting its budget together for months now with the assistance of the state Department of General Services and Department of Finance.

CIRM has not responded to our request earlier this week for explanation of why it cancelled yesterday's meeting of the directors' Finance Subcommittee. The cancellation came after we published on Tuesday an item headlined, “CIRM Stiffs Public on Spending Plan.”

Our comment: It is clear that this is a matter that reaches the highest levels of the stem cell agency. Failure of an orgtanization to perform routine tasks – which is what budget preparation is – in a routine fashion is a strong indicator of pervasive management problems.