Stem Cell Blogging from Toronto

For a close-up, on-the-scene look at the biggest stem cell conference in the world, check out the blog on the web site of the California stem cell agency.

Don Gibbons, CIRM's chief communications officer, has filed one blog item already about and is Tweeting a couple of times a day. He wrote,

"What a rapt full house of attendees heard was an impassioned evening of hope and excitement balanced nicely with restraint and patient persistence."

Gibbons said in an email this morning,

"I am on the ISSCR education committee that plans the opening public session that I wrote about in the blog and made an oral presentation the following day on public education and (the CIRM) high school curriculum project."

CIRM has also sent 20 patient advocates to the meeting in Toronto of the International Society for Stem Cell Research as part of a $200,000 program. Don Reed of Fremont, Ca., is one of them. He is also filing reports on his blog.

CIRM Provides Public With More Info on Next Week's Important Directors' Meeting

To its credit, the $3 billion California stem cell agency today pumped a goodly dollop of information onto its web site dealing with the complex and costly matters that its 29 directors will vote on next week.

Before today's workday began and with only five business days remaining before its board meeting, the agency had provided little information via the meeting agenda for next Wednesday and Thursday in San Diego.

But by 5 p.m. today, CIRM offered to the California public and the stem cell research community links to information on five out of 24 items, including the selection of the new chair and the latest version of its reorganization plan.

Other background material now available includes:

• A $47 million extension of training grants to possibly as many as 17 institutions, all of which currently have grants. Most of the recipients have representatives on the board although they are barred from voting on grants to their institutions.
• An $882,974 increase in a grant to Henry Klassen of UC Irvine because of a "clerical error."
• Reappointment of a number of scientists to the grant review panel.

Still missing is information on the important, new grant review procedures for the big-ticket clinical trials and disease team rounds.

At this point, the information dealing with selection of the new chair appears to be unchanged from that which could be found earlier elsewhere on the CIRM website. It also appears that no changes were made earlier this week by the directors' Governance Subcommittee in the reorganization plan.

The agenda says that teleconference locations are available to the public in Pleasanton and at UCLA. Persons wanting to utilize the location at UCLA will need to call CIRM for more details because the agenda information is not specific.

The agenda also has instructions for listening to the meetings via the Internet.

CIRM Deficient Again on Informing the Public and Stem Cell Community

Directors of the $3 billion California stem cell agency have scheduled a two-day meeting in San Diego next week that is chock-a-block full with complex and enormously expensive business ranging from generous grant programs to revamping reviews on its highest profile financing rounds.

That is not to mention the matter of electing a new chairman for what may well be the final years of the research enterprise.

Outgoing Chairman Robert Klein has stuffed 24 items into the agenda. Some are routine but others are controversial, such as the management restructuring plan. Another far-reaching proposal involves significant changes in how the agency reviews applications in its clinical trials and disease team rounds, which can award $20 million or more on an individual application.

Meanwhile, the public and the California stem cell research community is coming up short. With only five business days left before the meeting begins next Wednesday, CIRM has failed to post on the board agenda any significant background information on the matters that its 29 directors are set to consider.

CIRM leadership fusses and fumes from time to time about the lack of media coverage, particularly "good" media coverage of the agency. One of the basics in helping to drive media attention is to make information about an enterprise accessible and transparent. CIRM is famously deficient in that area when it comes to its most important activity – meetings of its board of directors. (See here, here, here, here, here and here for a few examples.)

Beyond that, as a taxpayer-funded endeavor, CIRM has an obligation to openness and transparency under California law.

The agency will run out of cash in a few years and is talking up a fresh pitch to California voters for as much as $5 billion – money that the state has to borrow. Given the financial crisis in California state government – which is not going away in one or two years – CIRM will need tangible research results that the public will find persuasive. But another critical measure is the agency's record of openness and transparency. A pattern of withholding information leads even supporters to suspect the worst.

As state Controller John Chiang, the state's top fiscal officer, said more than a year ago,

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

California Stem Cell Agency Beefing Up PR, Financial Expertise

The Governance Subcommittee of the California stem cell agency yesterday approved a major reorganization of the way it does business, including the hiring of its first-ever chief financial officer and a new, executive-level public relations person to add to its $1 million PR efforts.

The CFO will report to both the chairman and the president. The new PR person reports only to the chair. It is unclear what his or her relationship will be to the existing CIRM communications chief, who reports to the president. The creation of the posts appears to add a new layer to the much-criticized dual executive arrangement at CIRM.

The Governance panel, composed of 10 CIRM directors, unanimously approved the new management plan on Monday, according to Don Gibbons, the agency's communications chief. The proposal now goes to the full 29-member CIRM board next week for final adoption. The positions are among the 56 employees (including two members of the board) approved in the CIRM budget for the coming year.

CIRM directors have described the proposal as a "starting point" for its new chairman, who is expected to be elected, also next week, at the two-day San Diego meeting. Directors have indicated that no hiring is to take place until the new chairman has begun work. Additionally, a job description has not yet been written for the new PR position. That comes up on June 20. Some CIRM directors have raised questions about the urgency of adopting the plan on the eve of the election of a new chair.

CIRM President Alan Trounson and the No. 2 executive at CIRM, Ellen Feigal, also raised questions about some of the aspects of the new structure in a memo posted on the CIRM web site. Art Torres, co-vice chair of the board, rebutted the questions in another posted memo.

In other matters, the Governance committee approved a new $325,000 contract for legal work from attorney Nancy Koch for the coming fiscal year and a $450,000 contract for the coming year with the Mitchell Group, a Long Beach, Ca., firm that recruits information technology professionals. The arrangements are among the $3.3 million in spending for outside contracts that is the second largest item in CIRM's $18.5 million operational budget, trailing only the $10.3 million compensation for its staff.

Action on a proposed code of conduct for CIRM directors was put off for unspecified revisions.

Defining a PR Post: CIRM Directors Take a Crack

A dozen directors of the California stem cell agency are scheduled to spend about 30 minutes next Monday crafting a job description for a new, top level public relations person at the $3 billion enterprise.

Ordinarily, such an activity would not come to the attention of directors, much less warrant the attention of even this blog. However, the position is caught up in the touchy management reorganization that grew out of the directors' performance evaluation last year of CIRM President Alan Trounson. The new post seems to have evolved from dissatisfaction with how CIRM and its efforts have been portrayed in the mainstream media coupled with the likelihood that the agency may seek $5 billion in additional bond funding from California voters in a few years.

CIRM already spends about $1 million(including internal compensation and outside contracts) on communications and PR efforts, directed by Don Gibbons, the agency's chief communications officer. Gibbons works under the direction of the CIRM president. The new position would report to the chairman of the agency.

No salary has yet been specified for the new post, but it is likely to match or exceed Gibbons' $196,409 annual salary in 2010.

Creation of the job seems to be following the model of the much-criticized dual executive situation at CIRM involving the chairman and the president. The new position would report independently to the chairman. It is not clear what his or her relationship would be to Gibbons.

Outgoing CIRM Chairman Robert Klein said at the May 4 directors' meeting that although the "public communications officer" would report to the chair

"...(I)t's going to be important to have a collegial relationship and a coordinated relationship with the president so we have a coordinated voice in this organization."

So far, the CIRM budget contains no support budget for the new PR person although clearly he or she is going to need one.

Our comment: Based on 30 years experience in the news business in Los Angeles and Sacramento and two years as a flack (PR person) for the governor of California, it is clear that this dual PR arrangement will be a mess. It is essential that the agency's PR effort operate under the direction of one person. Otherwise, it will fumble and stumble, lack clarity, react slowly and constantly be searching for direction. Putting two persons in charge of an enterprise means that no one is in charge.

CIRM President Alan Trounson is already balking at designating the new position as a senior officer of CIRM. However, without that designation and access, CIRM should not bother with hiring another person. To be effective, the senior PR person must be part of the top executive team and be prepared to give advice at the earliest stages of proposals and at the highest level. Otherwise, dubious initiatives may be launched with no real understanding of how they will play out in the media or affect the public -- much less how they can be sold.

Finally, top executives at CIRM should not confuse their own excellent expertise on matters of science, law and financing with expertise in communications and media campaigns. These matters require specialized knowledge, skills and years of experience and contacts that the top executives at CIRM do not have. That is not to diminish their capabilities, which are considerable, but it simply reflects the fact that they followed a different professional path.

The directors' Communications Subcommittee will take up the job description in a teleconference meeting that has public locations in both Northern and Southern California, including San Francisco, Duarte, La Jolla, South San Francisco, Irvine with more likely to be added. Specific locations can be found on the meeting agenda.

Reading About Stem Cells in Farsi: An Outreach Effort

California stem cell researcher Paul Knoepfler has begun an effort to spread the word globally about stem cell research in languages ranging from Polish to Farsi.

Writing last week on his blog at UC Davis, Knoepfler said,

"I think stem cell technology will transform medicine across the globe, but it will take a concerted effort to make certain that stem cell-based therapies do not become a type of medicine only available to the relatively wealthy or predominantly available only to English speakers in the U.S. and around the world.

"Access is a key issue."

Knoepfler has kicked off his campaign with something he calls the Stem Cell Outreach Program for Education or SCOPE. The first entry is a short summary of key facts about stem cells and why people around the world should care about them.

The document is available in Chinese, Spanish, Portuguese, Farsi, Romanian, Polish and English. More languages are expected in coming weeks.

Knoepfler is also looking for web sites that can provide links to the material in order to make it available to the widest possible audience.


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High Speed Rail and California Stem Cell Agency on Same Lobbying Track

The California stem cell agency has a number of things in common with the California High Speed Rail Authority. Both generate a certain amount of controversy. Both use billions in money borrowed by the state. And both are among the rare state agencies with a federal lobbying effort.

The rail authority was created by California voters in 2008 when voters approved $8 billion in bond funding. It already has snagged $3.5 billion from the feds, but needs many billions more.

The stem cell agency is all but ready to spend about $180,000 on outside lobbying help in Washington during the next 12 months. The rail authority has already spent $40,000 on lobbying in the first three months of this year, according to a story in The Sacramento Bee on June 12.

Where they diverge – so far – is the news coverage about their lobbying efforts. The Bee's story said that state Sen. Doug LaMalfa, R-Richvale, has begun an investigation into whether lobbying restrictions have been violated by the rail authority. LaMalfa said the publicly funded lobbying is "outrageous" and "inappropriate, at the very least."

No similar sentiments have been heard from state legislators about CIRM's federal lobbying foray. But one reader left this anonymous comment on The Bee's rail story.

"It should be illegal for any government enity to lobby with our tax money.... They take our tax money and spend it to ask for more of our tax money...... Is it any reason our government is a mess and corrupt?"

One difference currently exists between the rail and the stem cell lobbying. CIRM is not proposing at this point to ask for federal assistance, although outgoing CIRM Chairman Robert Klein talked up a massive, $10 billion package in 2009 that would help CIRM and the biotech industry.

CIRM Directors Tackle Touchy Management Issues

Key leaders of the California stem cell agency have scheduled a 60-minute meeting tomorrow to decide long-standing, thorny matters at the $3 billion enterprise, ranging from the province of the new chairman and the current president to just exactly who is a senior officer of CIRM.

The matters, which come under the rubric of "internal governance policy," have been around for some time – in some cases for years, particularly the much-criticized dual executive arrangement involving the chair and the president. In this latest episode, only bits and piece of that management issue have surfaced. (Here are links to an introductory memo and the text of the proposal.)

The proposed changes in the structure of CIRM involve both major and minor matters, including the agency's bond financing and budgeting and adding staff in the chair's office, boosting it from eight to nine persons. Currently CIRM has about 50 employees. The board has 29 members.

The governance proposals were originally prepared by CIRM President Alan Trounson and grew out of the evaluation last year of his performance by the CIRM governing board. The plan has triggered an unusual exchange of memos on the agency's web site that illustrates the contentiousness of some of the issues. First is a "Memo from two staff members to Governance Subcommittee of Board." Then comes a "Memo from Vice-Chair Senator Art Torres in response to memo from two staff members."

The nomenclature describing the memos has significance. The description is controlled by the office of the chair, which posts material to meeting agendas -- in this case the directors' Governance Subcommittee, which is the group that meets tomorrow. The memo from "two staff members" did not originate with ordinary CIRM employees but Trounson and Ellen Feigal, who is the recently hired No. 2 executive at CIRM with the title of vice president for research and development.

The "two staff members" memo takes issue with a number of provisions in the proposed internal governance policy. The memo also appears to seek a 30-day delay in considering the plan. At that time, Trounson and Feigal propose consideration of a presidential reoganization plan as well as another from the new chair, who is to be chosen June 22-23 at a meeting in San Diego.

Among other things, the Trounson-Feigal memo says the new chair may not be qualified to supervise public meeting and conflict of interest issues as well as the legal and financial accountability of the CIRM board. Thus, they suggest a provision to that effect in the new policy should be deleted. Trounson and Feigal said the executive director of the CIRM board and the new public media director should not – and they underlined not – be considered senior officers of CIRM. They also said the new position of chief financial officer, who will direct budget and bond financing matters, should reside in the office of the president for the purposes of budgeting. Presumably that would give the president a bigger handle on the compensation for the CFO, who is supposed to report to both the chair and the president.

In his response, CIRM co-vice chairman Torres took issue with nearly everything in the Trounson memo.

All this involves devilish details that can add up to much more than their surface appearance. During debate last month on the plan at both the Governance Subcommittee and the full board meetings, the discussion became so touchy (see debate excerpt below) that the committee and the board felt compelled to go into executive session. During the board meeting, Trounson exited the room before the topic came up. Feigal and Elona Baum, CIRM general counsel, were left to represent his position and ran into some resistance from board members.

Given that a new chairman is yet to be elected, two board members, co-vice Chairman Duane Roth, a San Diego businessman, and Claire Pomeroy, dean of the UC Davis Medical School, have objected to action on the plan, even though it is couched as a "starting point." The response has been that the plan has been in the works since Trounson's evaluation last year and needs to be moved forward.

It would be easy to dismiss the flap over internal governance as inside bureaucratic baseball. But the proposal and discussion about it highlight issues at the heart of how CIRM does its business for the people of California. Without effective management, it is not at all certain that taxpayers will get a meaningful return on their $6 billion investment (including interest). The issues also speak to the limitations and handicaps that Prop. 71, drafted by outgoing Chairman Robert Klein, places on the research effort. The 10,000-word proposal wrote into state law management minutia, which is now nearly impossible to change, also because of Prop. 71. Beyond that, CIRM and its conduct are  providing a civics lesson in whether the ballot initiative process can or should be used in connection with complex California issues. Finally, how CIRM conducts its affairs will have major impact on the hESC research worldwide and help determine whether the public supports stem cell research or regards it as something less than worthy.

Also on Monday's agenda is the first-ever code of conduct for the CIRM board. (See here and here.)

If you are interested in taking part or listening in on Monday's meeting, teleconference locations are available throughout California, including San Francisco, Los Angeles, South San Francisco, La Jolla, Irvine, Stanford and Palo Alto. Specific addresses can be found on the meeting agenda.

Here is an exchange from the May 4 CIRM board meeting debate on the internal governance policy.
CIRM Management -- Excerpt from debate at the directors meeting May 4, 2011

CIRM Headed for Another Federal Lobbying Effort

After an abortive attempt in 2009, the $3 billion California stem cell agency is moving forward once again with a significant commitment – for CIRM – in the lobbying game in Washington, D.C.

Yesterday the directors' Finance Subcommittee indicated that it favored spending $180,000 during the coming fiscal year to hire a lobbyist, which would make CIRM one of the rare California agencies with its own federal advocate. The move comes at a time when Gov. Jerry Brown is slashing the Washington lobbying office for the entire financially troubled state from six persons to two.

The CIRM directors' committee did not have a quorum so it could not vote, said Don Gibbons, chief communications officer for CIRM, but he said that the committee informally supported the proposal by outgoing CIRM Chair Robert Klein and co-vice chair Art Torres, a former state lawmaker. The plan will go to the full board later this month in San Diego.

Two years ago, CIRM hired a flamboyant but well-connected lobbyist, Tony Podesta, for $240,000 for 10 months work. The latest public accounting shows that he was ultimately paid less than $21,000. Klein began that lobbying effort only after debate about mission creep at CIRM and whether CIRM could really make a difference on issues where it is only a tiny, tiny player.

In a memo made available to the public only yesterday, CIRM noted that the directors' Legislative Subcommittee on Monday voted to oppose patent "reform" legislation now before Congress. The battle over the bill involves some of the largest pharmaceutical companies in the world and has already resulted in millions of dollars in lobbying expenditures by affected enterprises.

The CIRM memo said the bill and other federal proposals

"...could have a substantial impact on CIRM’s mission, ranging from a bill that would fundamentally change U.S. patent law to a bill that would support regenerative medicine through funding for research and commercial development of regenerative medicine products and development of a regulatory environment that enables rapid approval of safe and effective products."

"In addition, the Sherley v. Sebelius litigation, regardless of outcome, is likely to lead to
additional efforts by opponents or proponents of human embryonic stem cell research to push legislation regarding federal funding for human embryonic stem cell research."

The memo continued,

"To ensure that the chair and vice chairs have the support necessary to keep abreast of new developments and to protect and advance CIRM’s interests, it is critical that CIRM have the support of a government relations firm in Washington, D.C."

From Conflicts of Interest to Unfilled Promises: LA Times Columnist Lambastes CIRM

California's largest circulation newspaper, the Los Angeles Times, was the stage this week for a broadside concerning the failings of the $3 billion California stem cell agency.

Among other things, the June 7 column by Pulitzer Prize-winner Michael Hiltzik, said CIRM

• "...(H)as always displayed a curious lack of vision about its own responsibilities,"
• Has not "resolved the persistent questions about whether its grant-making process is subject to adequate public oversight or free of conflicts of interest, "
• Has failed to deal with "chronic management difficulties,"
• Has not found the therapies promised in the 2004 ballot campaign that created the agency and has failed to temper the "inflated optimism" created by electioneering rhetoric.

"Indeed," Hiltzik wrote, "given the current research and budgetary environment, the institute probably shouldn't exist."

All this coming from a writer who also said, " There's no question that stem cell research is important and potentially groundbreaking."

Hiltzik has been critical of CIRM since the 2004 election for a host of reasons. (See here,here, here and here.) Some may disagree with his opinions, but his columns appear in the nation's fourth largest circulation newspaper, currently with 605,243 average daily copies for the most recent six month period. Its influence, however, is much larger. It boasts a cumulative readership over a seven-day period of 4.4 million, exceeding even the best-performing TV stations in the area. The Times defines what is news in the Los Angeles basin, if not all of Southern California. It is the starting point for TV and radio news coverage in the area every day of the week. And when journalists elsewhere in the country look for solid coverage of California affairs, the Los Angeles Times is one of the first places they go.

All something for CIRM to consider as its governing board weighs the choice of a new chairman and forges ahead with aggressive forays into big-ticket financing rounds aimed at pushing stem cells into the clinic. The stem cell agency is also gearing up for another pitch to California voters for billions more in state bonds, perhaps as much as $5 billion, on top of the $3 billion it already has. (Double those amounts for the true cost when you add in the interest on the borrowed money.) But unless something changes in a major way in the California economy or in CIRM's slim list of accomplishments, that bond proposal is likely to be defeated and CIRM will run out of government funds in about five years, maybe less depending on its burn rate.

One way to look at the Hiltzik column in the Times, as well as other stories of that ilk, is that they are only a PR problem. Improve CIRM messaging, hire another $200,000-year spokesman and send out more Tweets on Twitter. That takes care of it. Another view would hold that genuine improvements need to be made, procedures altered and meaningful results – that is, meaningful to the untutored public – generated and cemented in the public mind. It is not as if Hiltzik is a lone voice.  Even CIRM's own blue-ribbon external review panel last fall stressed the need for significant changes, although not necessarily all those mentioned by the Times writer.

Hiltzik quoted state Controller John Chiang, who is the state's top fiscal officer and who chairs the only state entity with specific oversight of CIRM, as saying,

"We're at a critical crossroads. The voters invested a significant amount of money for what they thought was going to be life-changing improvement….[CIRM] hasn't produced a game-changer in the public mind-set."

Coming up in the next year or so are two expensive assessments of CIRM – total cost around $1 million. CIRM directors are talking about making changes based on those recommendations. However, it is not to early to act on some issues that already are troubling CIRM and hampering its abilities to fulfill the seven-year-old election promises to millions of California voters.

The Race for the Chair: Weaning CIRM From Government Support

Cardiologist Frank Litvack, a candidate for chair of the $3 billion California stem cell agency, has suggested that CIRM seriously consider how it could fund its research without relying on the state of California.

In his second statement to CIRM directors, Litvack, who also has a long career in business, on Monday covered much of the same ground that he did last week. But he was more specific when it came to what on Friday he called "evergreening" CIRM. Litvack said,

"Further thought should be given to the concept of getting CIRM to be partially or wholly self-funded in the future. One such method might be getting upside participation in the financial success of its grantees. Recently the federal government was quite successful in this regard during the banking, insurance and auto bailouts. I realize that each of these topics is replete with opinions as well as with controversy. Nonetheless, they need to be further explored and developed."

Taking CIRM or any government agency department private may seem a bit of a reach to some. However, CIRM is one the few state departments that has the legal ability to create a nonprofit organization. Such an organization could serve as springboard for weaning CIRM off government financing. Of course, the tough part is raising the money.

Here is the full text of Litvack's remarks on Monday.Remarks by Frank Litvack to CIRM Evaluation Subcommittee June 6, 2011

The CIRM Chair Race: Candidate Thomas Touts His Public Finance Experience

In his first appearance before directors of the $3 billion California stem cell agency, bond financier Jonathan Thomas, a candidate for the chairmanship of the agency, stressed his professional background as an investment banker and attorney and his service on government boards.

Thomas sidestepped the issue of whether he was an advocate of the controversial dual executive arrangement at CIRM. The overlapping roles of the chair and president have been sharply criticized by the state's top fiscal officer, John Chiang, and the state's good government agency, the Little Hoover Commission.

In a statement to the directors' Evaluation Subcommittee on Friday, Thomas did not directly mention the dual executive situation. But in a comment referring to the other candidate for chair, Frank Litvack, Thomas said,

"Though some have sought to label us as favoring 'oversight' on the one hand versus 'hands-on' on the other, I believe that both of us would in fact look to exercise oversight and, in addition, to exercise all of the numerous statutory responsibilities set forth in the language of Proposition 71. The big question here isn’t about labels…it’s about who is best prepared to carry out these combined efforts."

Thomas is chairman of Saybrook Capital of Santa Monica, an investment firm specializing in distressed government bonds. CIRM's only real source of cash is California state bonds, rated the lowest in the nation.

Thomas elaborated on his connections with Advanced Cell Technology of Santa Monica, Ca., one of two companies in the United States with an hESC product in a clinical trial.

He said,

"As I proceeded through my career in law and finance, I took particular interest in stem cell research and looked for a company to work with in that arena. In 2000, I began tracking Advanced Cell Technology (or “ACT”), a then fledgling-company pursuing therapeutic products from embryonic stem cell research. After extensive review of their intellectual property portfolio and lengthy due diligence, I led an early round financing to cover the Company’s operating expenses. I have tracked ACT over the years and am familiar through it with the ups and downs typical of the biotechnology industry. Now, 11 years later, ACT has two of the three products derived from embryonic stem cell research currently in clinical trials. It will be interesting to see how things play out."

Thomas reiterated that he would divest his current holdings in the company, which has applied several times for CIRM funding but has never won a grant.

Thomas stressed his background in public finance, which he said is "an esoteric corner of the finance industry, different in many important and nuanced respects from finance in the corporate sector." He said he has served as an adviser to government bodies and served on the Los Angeles Harbor Commission and the Alameda Corridor Transportation Authority, both for seven years.

Thomas said,

"I am keenly aware of the State’s financial difficulties. If problems arise with getting allocations from the Department of Finance for enough bonds to meet the Agency’s cash flow needs, I am very familiar with the ins and outs of private placements as an alternative funding source and know all the individuals and institutions to make that happen.

"I have been through many bond elections. Should the Agency decide to pursue a second general obligation bond measure, I will be fully prepared to help lead that effort."

Responding to a request by the California Stem Cell Report, Thomas today provided the following copy of his remarks. He said our email request last week had been sidetracked by a spam filter into a spam folder.

Remarks by Jonathan Thomas to CIRM Evaluation Subcommittee 6-3-11

Litvack Envisions Oversight Role for CIRM Chair, Shoring Up 'Messaging' and Industry Ties

Frank Litvack

Los Angeles cardiologist/businessman Frank Litvack, a candidate for chair of the $3 billion California stem cell agency, says he regards the job as part-time and says that the chair should not be involved in day-to-day management.

His comments (see the full text below) were made Friday to the CIRM directors' Evaluation Subcommittee. Litvack said,

 "My  belief  is  that  the  chairman’s  role  is  best   accomplished  by  a  leader  on  a  part-­‐time  basis.    An  organization  that   has  two  chief  executives  carries  with  it  the  intrinsic  potential  for   serious  challenges."

By law (Prop. 71), CIRM has a dual executive arrangement with overlapping responsibilities for the chairman and the president. The arrangement has stirred controversy and criticism and has led to public disputes between the two executives in the past.

Litvack made the text of his remarks available at the request of the California Stem Cell Report. Jonathan Thomas, a Los Angeles bond financier and the other candidate for CIRM chair, did not respond to an identical request. (Thomas later said the request had been diverted by his email spam filter and sent the text on June 6. It can be found here.)   CIRM directors will vote later this month on the two men.

Thomas reportedly favors continuation of the current dual executive structure and is more inclined towards a fulltime role, along with a larger salary. The CIRM board earlier this spring identified a range of $137,500 to $400,000 annually for the job with no more than an 80 percent commitment.

Litvack said,

"The  role  of  the  president  is  daily  management.  He  or  she  must  be  free   to  pursue  this  role  without  encumbrance.  The  function  of  chairman,   on  the  other  hand,  is  not  day  to  day  management,  rather  it  is  to   articulate  the  vision  of  the  organization  and  represent  the   organization  to  outside  parties."

Litvack also said CIRM's most strategic imperative is "to get new products into the clinic."

He sketched out several initiatives for CIRM, including a "core expertise in pre-clinical and regulatory affairs." Litvack said,

"It (the agency)   may  consider  developing  a  publicly  available  repository  of  expertise   and  data  so  as  to  assure  that  each  new  IND  applicant  is  not reinventing  the  wheel  and  wasting  precious  time  and  money.     Stepped  up  collaboaration  with  other  organizations  devoted  to  the   promotion  of  innovation  and  translation  including  the  passionate   and  commited  disease  advocate  community,  the  clinical  researchers   as  well  as  with  FDA  and  other  regulatory  agencies  would  be  of   strategic  and  tactical  value.    CIRM  leadership  must  take  a  pivotal   role  in  facilitating  the  interactions  of  therapy  innovators  with   the  FDA.  While  CIRM  will  always  stand  for  safety,  however,  when  it   comes  to  critical  and  life- threatening  illnesses,  patients  should   have  a  more  active  role  in  their  therapeutic  options."

Litvack also discussed the need to "shore up" CIRM's "messaging" and its relationship with industry. He said, "

The  public  is  waiting  to  hear  what  is  being   done  with  their  money.    Patients  are  waiting  to  hear  when  exactly  it   is  that  science  will  deliver  what  they  have  been  waiting  for."

As for industry, which has been unhappy with its meager share of CIRM largess, Litvack said,

"The  cell  therapy  industry  is  nascent, and  the  capital  markets  have   not  recently  been  kind  to  it.   CIRM  needs  to  shore  up  its  commercial   relationships,  as  most  new  therapies  will  require  the  private  sector  ."

Here is the full text of Litvack's comments on Friday.
Remarks by Frank Litvack to the CIRM Evaluation Subcommittee 6-3-11

Researcher Alert: New Industry-Oriented Stem Cell Fund, Major Changes in Assessing Some Grant Applications

The California stem cell agency is proposing far-reaching changes in how it reviews its highest profile grant applications along with creation of a new, industry-friendly "opportunity fund" that would be kickstarted with $25 million.

Unfortunately, details of proposals were revealed too late publicly for meaningful comments from the scientists and businesses that would be most likely affected. The CIRM directors' Science Subcommittee will consider the proposals on Monday. The agency's plans were not laid out fully on its web site until Friday, in the case of the grant review changes, and yesterday for the new fund.

The grant review proposal involves major disease team and clinical trial research rounds. The plan would depart radically from the current peer review process and bring CIRM and potential investigators together early to work out issues and smooth the way for better applications and better results from the research.

The CIRM proposal said,

"These are complex grants requiring multidisciplinary expertise for execution, and a multidisciplinary group of external experts to review the applications."

Under the plan, the agency would hold a Q & A session with investigators prior to the application deadline. Investigator questions would be addressed and key categories of needed information discussed.

Peer reviewers would provide their assessments of the applications 14 days prior to the meeting of the grant review group along with a list of key questions and issues. Applicants would receive the questions 10 days in advance of the review session and would be asked to provide written responses.

Applicants would have a chance to address "pivotal questions" by telephone on the actual day of the review, but apparently only at the discretion of the review group. Some applications could be deferred until additional information is gathered.

CIRM said it believes the changes – aimed principally at dealing with "pivotal questions" – will improve the research and also facilitate timely review.

Creation of an opportunity fund was recommended by a blue-ribbon external review panel last fall. CIRM said its proposal would "attract industry participation through a funding mechanism that is more aligned with industry’s financing practices."

Under the the first phase of the fund, CIRM President Alan Trounson would have $25 million to help out select grant recipients: disease team and targeted clinical development projects and early translational projects that target a development candidate.

Called a bridge funding program, it would "enable uninterrupted funding of development activities (but not new patient enrollment) to occur until the next relevant RFA/review is offered," CIRM said.

The grants would limited to $5 million and one year. Recipients would be required to submit an application in the next applicable round.

The next phases of the opportunity fund would involve the following:

"...timely short-term one year funding to new projects where an external high impact research opportunity has been identified through an inventory of the research landscape, collaboratively partnered with a California researcher and the team is assembled and research is available for immediate implementation."

And

"...preclinical, first-in-man studies and Phase II studies for projects satisfying the accelerated review eligibility requirements and receiving GWG (grant review group) recommendation."

The public and interested parties can take part in tomorrow's discussions telephonically at locations in San Francisco, Healdsburg, Irvine(2), La Jolla and Stanford. Specific addresses can be found on the agenda. 

Monday's meeting calls for discussion of the grant review changes and the opportunity fund, which presumably means that they will be acted on at a later date by the committee. But if researchers or businesses want to help shape the proposals, they should listen in on Monday, make comments at the time or/and file written suggestions via email to CIRM following the meeting. Both written and oral comments are needed to have a maximum impact. 

Advanced Cell Technology and the California Stem Cell Agency

Over in the Investor Stemcell Forum, participants are engaged in a bit of a fracas concerning whether Advanced Cell Technology of Santa Monica, Ca., has ever failed to receive a CIRM grant.

The trigger for the discussion was a piece on the California Stem Cell Report concerning the selection of a new chair for the $3 billion California stem cell agency.

The June 2 item said, "Bond financier Jonathan Thomas says he would liquidate his holdings in Advanced Cell Technology of Santa Monica, Ca., an unsuccessful applicant for CIRM funding, if he is elected chairman of the California stem cell agency."

For the record, Nature reported on Nov. 29, 2010, that ACT has applied several times for CIRM grants but never was approved. In 2008, the California Stem Cell Report carried an item about how an ACT scientist publicly complained that a financial conflict of interest played a role in one grant denial.

The California stem cell agency refuses to disclose the names of rejected applicants. The winning applicants are only identified by CIRM after the board acts on their applications.

Patent Reform Critics Say Legislation is 'Constitutionally Infirm'

The California stem cell agency yesterday posted its analysis of federal patent legislation that pits General Mills against the National Small Business Association, Merck against the Institute of Electrical and Electronics Engineers and, in California, SangamoBioSciences against CONNECT.

On Monday, the CIRM directors' Legislative Subcommittee will take up the wide-ranging and technical legislation with an eye to endorsing or opposing it.

The analysis was written by Scott Tocher, staff counsel to CIRM Chairman Robert Klein. It said,

"CIRM’s interest in the health and productivity of the patent system in general is clearly a vital interest of the agency. CIRM’s mission requires dual goals of academic openness and the need to bring scientific advances to the public via commercialization. A robust and fair patent system will ensure that the fruit of CIRM-funded research is propelled through the development process and reaches patients."

Tocher's analysis indicates the key point of the battle over the legislation involves a matter that critics say makes the legislation "constitutionally infirm."

Tocher wrote,

"For the first time since its genesis in 1790, U.S. patent law will award patents to the first person to file for a patent rather than to the first person to arrive at an invention. All other major patent offices in the world already award patents on a first-to-file basis. Though equitable, the first-to-invent system leads to disputes that the Patent Office has been forced to resolve through complicated Interference proceedings. Under the new system, filers will still have to show possession of the invention, and will still have to establish novelty. They will not, however, face concerns that others may have arrived at the invention first and simply not have filed yet. There will no longer be Interference proceedings, and applicants will no longer be able to 'swear behind' prior art cited against them by giving evidence that, despite their later filing date, they arrived at the invention first."

Tocher continued,

"This is by far the Act's most significant change, and will likely increase the pressure for all entities to file for patent rights as soon as an invention is made. This change will also increase the risk in electing to forego patent rights in favor of maintaining an invention as a trade secret."

Tocher wrote,

"If enacted, this provision almost certainly will face a legal challenge in light of the United States Constitution’s provision that 'Congress shall have power … To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.' To the extent that a first-to-file system awards a patent in some cases not to an 'inventor' in the common understanding of that word, but to a person who is first to file, critics argue the legislation is constitutionally infirm."

Tocher listed some of the enterprises for and against the measure. Backers include General Mills and Merck. Sangamo BioSciences, a CIRM grant recipient, is also in favor. One of the opponents is CONNECT, a San Diego business development organization, whose CEO is Duane Roth, co-vice chairman of the stem cell agency.

Also posted on the CIRM agenda yesterday was an item from the California Stem Cell Report dealing with the patent legislation.

The Candidate's Letters: What Thomas and Litvack Have to Say

Here is a brief look at the letters of interest submitted to the board of the $3 billion California stem cell agency by two men in pursuit of a six-year appointment as its new chairman. First the item on Jonathan Thomas, then Frank Litvack. CIRM directors begin evaluating the men on Monday.

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Bond financier Jonathan Thomas says he would liquidate his holdings in Advanced Cell Technology of Santa Monica, Ca., an unsuccessful applicant for CIRM funding, if he is elected chairman of the California stem cell agency.

In a May 23 letter to the CIRM board, Thomas, chairman of the Saybrook Capital, also of Santa Monica, said he raised funds for ACT early on and still holds a "small portion" of the company's stock.

Other than that, he said he has no other "actual or potential" conflicts.

Thomas' letter did not discuss the holdings of his firm, which deals in municipal bond financing, the only real source of cash for the $3 billion California state stem cell agency.

Thomas, who is also a lawyer, cited his public finance expertise and said it would be helpful in the event of a ballot measure seeking additional funding in 2014 or 2016. Outgoing Chairman Robert Klein, a real estate investment banker and attorney, has touted a proposal that could run as high as $5 billion.

Thomas said he has had "direct experience as an underwriter, financial advisor or issue in billions of dollars of bond financings."

He also proposed hiring Rob Church of Hogan Lovells, a Los Angeles law firm. He said that Church has had many years of experience working with the FDA on clinical trials, a costly area on which CIRM is pinning much hope.

Thomas noted that he has a long term interest in science, majoring in biology and history at Yale and earning a doctorate from Oxford studying the role of disease in British expansion into East Africa.

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Frank Litvack, a Los Angeles cardiologist, also has a wide range of business interests but says he would divest any that pose a conflict of interest.

In a May 25 letter to the CIRM board, Litvack detailed his business background, much of it reported earlier, along with current activities including his role as an "informal adviser" to a firm that is based on research by a CIRM grant recipient, Eduardo Marban.

He said does not have "an informed opinion" on whether the job of chairman requires full or parttime work, "absent spending time within the organization." He said his other commitments are "elastic" and would devote the time necessary to do the job.

Litvack called himself a "consensus builder." He said the chairman should lead the areas that "fall outside of the president's statutory responsibility including aspects of finance related to agency funding and philanthropy, public communications as well as optimizing relationships with industry and international collaborators."

Litvack said he has raised several hundred millions of dollars for companies but that his most fulfilling role has been as a clinician.

Regarding cell therapy, Litvack, who is listed on the staff at Cedars-Sinai in Los Angeles, said he is on the board of Pervasis Pharmaceuticals of Cambridge, Ma., whose product is an endothetial cell therapy. He said that for two years he has been an unpaid advisor to Capricor Inc., of Los Angeles , a cardiac stem cell company. He said,

"The company is based on the research of Dr. Eduardo Marban, a CIRM grant recipient ($5.6 million) and director of the Cedars-Sinai Heart institute. I have advised them with regards to clinical trial strategy and the shift from autologous to allogeneic stem cells."

Prieto on Patent Reform

The vice chair of the CIRM Legislative Subcommittee, Francisco Prieto, has offered a brief comment on the subject of patent reform, a matter that will come before the panel on Monday.

Prieto, a Sacramento physician, said in an email last night to the California Stem Cell Report,

"I'm not sure we'll take a position, but we do want to be informed, and have a pretty serious interest. The outcome affects the ultimate result of most of the fruits of our labor: whether and how any treatments developed from CIRM funded research are able to be developed and marketed. That ultimately will decide whether any treatments or cures ever actually make it to the clinic and into patients who need them."

Meanwhile, CIRM has provided links on the meeting's agenda to the text of the complex legislation and two items offered by advocates in the fray. CIRM has yet to produce its own analysis, a rundown on the pros and cons and an explanation of how CIRM's position would make a difference in the outcome.

In a related matter, the Finance Subcommittee, three days after the meeting on patent reform, is scheduled to consider hiring a federal lobbyist, which would make the stem cell agency one of the rare state departments with its own national lobbyist.

Here is a list of the members of the Legislative Subcommittee, which is chaired by Art Torres, co-vice chair of the agency and former head of the California state Democratic Party.

CIRM Plans for Lobbyist to Push Patent Reform Position

Shades of Tony Podesta. The other shoe is dropping at the $3 billion California stem cell agency.

This time it comes in the form of open-ended approval for the chairman of the agency to hire federal lobbyists. No details are yet available on the CIRM web site. But on June 9, the directors' Finance Committee will convene for 30 minutes to act on the proposal.

All that is known about the matter at this point is the verbiage in the agenda item:

"Consideration of augmentation of budget of the Office of the Chair to fund, as necessary, contract for federal governmental relations support."

The matter dovetails nicely with the plan to push CIRM into the stormy patent reform battle in Washington.

Some of you may recall that CIRM hired the well-connected, powerful and flamboyant Podesta – he wears red shoes – for $240,000 for 10 months in 2009. (See here, here and here.) Podesta was ultimately paid only $20,077.92, according to a CIRM document. No public explanation has been provided for the difference.

The lobbying effort in 2009, pushed hard by outgoing Chairman Robert Klein, was not without controversy. It made CIRM one of the rare state agencies with its own lobbyist. (See here and here.)

One can only speculate on what will emerge next week. But one would wonder why there is any need to act on the lobbying plan or much less even schedule a meeting on it until a new chairman is elected later this month.

hESC Patents Piece from San Diego Researchers

The foray by the California stem cell agency into the tricky and arcane world of patent reform triggered a note today from the acting director of the San Diego Consortium for Regenerative Medicine, Xuejun H. Parsons.

She pointed out that the San Diego Regenerative Medicine Institute has a short piece on its web site about the patentability of human embryonic stem cells. CIRM was created by California voters in 2004 to fund hESC research because the federal government would not, but the agency has drifted away from a sharp focus on hESC.

The web site item briefly discusses the need for patents and links to a more comprehensive article by Parsons, Yang D. Teng, Dennis A. Moore and Evan Y. Snyder. The piece  in the journal "Recent Patents on Regenerative Medicine" is a technical overview of the science linked to the patents. It may be of interest to CIRM directors as they ponder whether to take a stand in the savage fight in Congress over patent reform legislation.