$41 Million in California Stem Cell Grants Virtually Approved

Directors of the California stem cell agency today all but approved about $41 million in early translational grants, rejecting all appeals by applicants and accepting staff recommendations on marginal grants.

The roll call vote was held open this morning to record a vote by one board member who was not present at the time. It is virtually certain that the member will vote in favor of affirmative action on the applications in question.

One member of the board, Joan Samuelson, abstained from voting on any of the applications. She said she did not think the board had adequate information on its total grant portfolio, particularly in view of the declining amount of money available.

The agency has about $600 million in uncommitted funds and is scheduled to run out of cash for new grants in 2017.

The research acted on today is aimed at “proof of concept for development of a therapy candidate and/or studies to select a development candidate. The approved grants can be found on this CIRM website page and are listed in tier one and tier two.  Identities of the applicants are withheld by CIRM to avoid embarrassing rejected candidates and to avoid disclosing the names of applicants to board members before they vote. However, applicants often appear before the board, as they did today, and identify themselves.

Five applicants appealed negative decisions on their applications by grant reviewers. The agency declined to disclose the appeal letters or identify the applicants, information that was a public record under the previous appeal procedures. New processes were put in place this spring that moved the appeals behind closed doors and made them subject to staff instead of board review. Nonetheless, rejected researchers have a legal right to address the board on appeals or any other matters.

At the request of the California Stem Cell Report, the agency provided the numbers of the grants on which appeals were filed. They are: 06787, 06888, 06761, 06793 and 06830. Review summaries on the applications can be found here. 

We have asked the agency to provide its legal and policy justification for now withholding information that was once a public record.

Stem Cell Board Moves into Closed Door Lunch Session

Today's meeting of the California stem cell agency governing board is now in recess for a closed-door lunch session involving the evaluation of CIRM President Alan Trounson. It is not clear when the open session will resume, but probably it will be at least 90 minutes.

UCLA Application for $1.8 Million Moves Ahead at Stem Cell Board Meeting

Directors of the California stem cell agency this morning moved forward on a $1.8 million application from UCLA that the agency's reviewers declined to approve outright.

The application (No. 6831) was moved into a category that will be approved routinely later today by the board. CIRM staff recommended that the application be approved.

Advocates speaking on behalf of the application identified UCLA as the institution involved. A researcher also spoke, but his name was not clearly audible on the Internet audiocast.

California Stem Cell Board Moves Positively on 'Wobbler' Grant Application

Directors of the California stem cell agency this morning ratified a staff recommendation for funding of a $1.8 million application that was a "wobbler" when it was examined behind closed doors by agency reviewers.

The CIRM staff had recommended funding of the application (No. 6823) with the condition that the agency staff be satisfied with the support to be provided by a collaborator. Reviewers had declined to approve the application outright.

The agency has not disclosed the identity of the applicant.

Discussion Begins in $70 Million Grant Round

Directors of the California stem cell agency have begun discussion of applications in its $70 million early translational round. Above is the Power Point presentation to the board of some of the applications including the range on the scientific scores in the round.

Stem Cell Agency Pays Tribute to the Late Duane Roth

The governing board of the California stem cell agency today paid tribute to the late Duane Roth, co- vice chairman of the agency, who died recently as the result of a bicycle accident.

With members of Roth's family present, CIRM Chairman J.T. Thomas characterized Roth, 63, as a "voice of reason" on the 29-member board. The video included testimonials from both staff and board members.

He was described as a "kind person" who could find "common ground" on difficult issues. Roth was deeply involved in San Diego affairs that went well beyond the stem cell agency. More than 1,000 persons attended memorial services for Roth earlier this month in San Diego.

CIRM President Alan Trounson said following the video that he will "miss (Roth) terribly" and expressed  "hope that his memory will lighten and brighten the day for all of us."

Jeanne Loring, a stem cell researcher at Scripps, said Roth "inspired us to do more than we thought we could do." She said he was an unusual kind of businessman who respected science.  "I wish I could thank him one more time," she said.

California Stem Cell Agency Board Opens Meeting

The California stem cell agency today started its meeting this morning at 9:11 a.m. with the announcement that the board is expecting the arrival of a "very important guest." The board began its business by dealing with routine business. The board may have difficulty with maintaining a quorum later in the day, it was announced.

Technical Problems with Stem Cell Audiocast

This morning's meeting of the governing board of the California stem cell agency was scheduled to begin five minutes ago, but technical problems are reported with its Internet audiocast. We will let you know when the audiocast begins.

Skin in California’s Stem Cell Game

The California stem cell agency’s road map to its financial future makes a big, $200 million assumption.

The amount would be the agency’s skin in the game for a new, public-private partnership to continue with the agency’s work after 2017, when its cash basically runs out.

The $200 million figure is contained in the assumptions for development of the proposed partnership, which is now in the very early stages of being crafted by a Marin County consultant, James Gollub. He was told that whatever he comes up with can assume a onetime, $50 million to $200 million public contribution.

The sixty-four-dollar question – to use a term from the 1940s -- is how to raise that sort of cash. Consider two unappetizing possibilities. The 29 members of the agency’s governing board could go to Sacramento and ask lawmakers and the governor to give them the money, a prospect that most of them would not relish. Such a move would open the door to tinkering or more with the agency’s structure and operations.  Or the board could seek more bond financing via a statewide election, requiring an electoral campaign that would cost many millions to mount. In both cases, there is no guarantee that funds would be forthcoming. Money is still tight in California government, and voters may not fancy spending more on stem cell research, especially if the agency has not delivered on the promises of the 2004 ballot campaign that created the $3 billion program.

A third possibility, however, exists, but it also could be difficult considering pressures to spend all that the agency has. The board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has about $600 million in uncommitted cash. It could take $200 million off the table and reserve it as seed money for whatever future plans would involve. Or the board could simply roll back commitments it has made for lower priority grant rounds – ones that have not yet been initiated. Some are in concept stages, and others have not yet been posted as RFAs.

Scrimping on existing efforts is not going to suit the condition of all board members. The question of priorities on spending came up last month in connection with the agency’s generous, $69 million researcher recruitment effort that benefits many institutions represented on the agency’s board. Jeff Sheehy, who is a patient advocate member of the board but also a communications manager at UC San Francisco, and others bridled at adding more money to the recruitment program. Sheehy cited scarcity of funds and said it was a “distraction” from more important efforts. His view, however, did not prevail.

Today the board is scheduled to act on a grant round that is budgeted for $70 million. However, grant reviewers have approved grants totaling only $37 million. Board members, if they wish, could indicate that the surplus $33 million be designated as a down payment on the future of the agency – an organization in which they take great pride.

Live Coverage for Tomorrow's California Stem Cell Meeting

The California Stem Cell Report will provide live coverage of tomorrow’s meeting of the governing board of the $3 billion California stem cell agency. Stories will be filed as warranted during the daylong session, which begins at 9 a.m. PDT in La Jolla, Ca. Coverage will be provided via the Internet audiocast.

Those wishing to listen to the event live on the Internet can find instructions on the meeting agenda. Also available is a Webex transmission, which provides viewing access to the many documents that are used during the meeting but have not been made available yet to the public.

In addition to the La Jolla location, those wishing to participate in the meeting can do so at teleconference locations in Menlo Park and Duarte, both in California. Directions for the audiocast and Webex broadcast can be found on the meeting agenda.

Future Financing Plan for California Stem Cell Agency Coming Up in December

The California stem cell agency today released the $150,000 contract and proposal from James Gollub Associates to create a “strategic road map” for the $3 billion state program, which is scheduled to run out of cash for new grants sometime in 2017.

The goal of the road map, according to the contract, is to develop a “preferred model for a public-private sponsored entity to fund the most desirable translational projects in the CIRM portfolio.” That would appear to rule out future funding for basic research and training, which the agency has supported well during its nine-year history.  It would also be an acknowledgement that the agency cannot count on $300 million a year for grants as it has in the past.

Under the terms of Prop. 71, which created the agency in 2004, the effort is currently financed by state bonds, money borrowed by the state of California that flows directly to the agency without oversight by the governor or legislature. Authority to issue the bonds expires in 2017.

The contract calls for an initial report from the Gollub by Nov. 30 with the agency to decide by March 1, 2014, on whether it wants an operations and business plan from the Tiburon, Ca., firm.  Presumably the agency’s governing board would hear recommendations from Gollub at its December meeting.

The contract, signed July 16, specifies that Gollub will conduct at least 20 interviews with stakeholders to evaluate four possible models that it will develop. The stakeholders will include “investment, academic and government groups” and possibly others to be determined later.

The proposal presented by Gollub contains more information on the firm and the persons who will be working on the project. In addition to Gollub, they include Steve Marshall, Amy Rassen and Annika Barnes, all Gollub employees. The contract and proposal can be found below.

  Gollub Proposal by DavidJensen

  Gollub-CIRM Strategic Roadmap Contract by DavidJensen

Stem Cell Grant Applicants Identities and Secrecy

The California stem cell agency today took issue with a statement in an item yesterday that said the agency withheld the names of grant applicants prior to action on their applications by the agency’s governing board to avoid embarrassing the researchers.

The agency said that the reason was to avoid identifying applicants to members of the governing board prior to its vote on the applications.

The agency’s official practice of withholding the identities of institutions and individuals seeking public funds has a long history.  The agency itself has breached the policy on more than one occasion.  While it also does not officially release the names of applicants denied approval, that practice is also breached when appeals are filed.

Interested readers can find a short discussion of the policy and links to additional material at the end of this item. 

Correction

The "New Procedures" item on Aug. 26, 2013, incorrectly stated, based on information provided by the stem cell agency, that six applicants in this week’s early translational round had filed appeals to overturn negative decisions by grant reviewers.  The agency today said the correct number is five. 

New Procedures at CIRM: California Stem Cell Agency Staff Nixes Grant Application

For the first time in its nine-year history, the staff of the $3 billion California stem cell agency this week  formally and publicly weighed in on grant approval actions by its prestigious reviewers, recommending that one application be rejected and another approved with conditions.

The staff, led by CIRM President Alan Trounson and Patricia Olson, the agency’s executive director of scientific activities, made recommendations to the agency governing board on three applications that can be described as “wobblers.” In other words, the board could go either way on the proposals when it considers them at its meeting in La Jolla on Wednesday.

Trounson recommended that the governing board reject one of the wobblers  (No. 6666),  a $2.0 million proposal, even though it received a higher scientific score – 70 – than the other two applications. Trounson recommended approval of two $1.8 million projects (Nos. 6831 with a scientific score of 66 and 6832 with a scientific score of 69), with staff-imposed conditions on one.

 Trounson said the agency is or 

 "will be funding 2 similar approaches to address photoreceptor degenerative disorders so addi-tional investment in an earlier stage project is harder to justify.”

All three fall into a newly defined category, called tier 2, for ranking of applications. The CIRM web site said tier 2 proposals are now ones that possess “moderate scientific quality, or consensus on scientific merit cannot be reached and may be suitable for programmatic consideration by the ICOC(the governing board).”

A fourth application  (No. 6648) for $4.3 million that scored below all three at 64 was approved, however, by reviewers after they imposed a condition on the proposal.  CIRM staff did not publicly address that application. The application review summary said that the researcher – who was not identified – must “demonstrate, within 12 months, the ability to make the hESC–derived 3-D sheets. This is a go no/go milestone for the project.”

The agency’s standard practice is withhold the identities of applicants prior to board action because they might be embarrassed.

In the other instance where conditions are to be imposed, they appeared to deal with an in-kind contribution of “essential services, technology and expertise.”

The new process for evaluating marginal or wobbler applications was established last March in response to an Institute of Medicine study last year that made a host of recommendations for improvements at the stem cell agency.

The staff recommendations on applications came in a $70 million early translational round that is aimed at “proof of concept for development of a therapy candidate and/or studies to select a development candidate.

In all, including staff and reviewer actions, 13 applications were recommended for funding, although the board has almost never rejected reviewer decisions. The 11 grants initially approved by reviewers total $37 million. With the two more recommended by staff, the figure would be about $41 million. A total of 39 applications were considered for funding.

Five applicants filed appeals of reviewer rejections, a CIRM spokesman said today. The  California Stem Cell Report has asked for copies of those appeals and CIRM staff action on them. Appeals are also being conducted under a new staff-dominated procedure, although all applicants have the right under state law to appear before the board to address any subject.

Budgeted grant funds that are unused are available to the board for future grant rounds in any area they so desire.

(An earlier version of this item incorrectly said six applicants had filed appeals, based on information from the agency. The correct figure is five.)

(Editor's note: Kevin McCormick, CIRM's spokesman, later commented on the agency's practice of withholding the identities of applicants to avoid embarrassment to applicants who are not approved. He said,  "Actually they are withheld so that the board doesn't know the identities of the researchers or the institutions whose applications they are voting on." 
(We should note that official CIRM policy is to withhold all applicant names until board action, but it does not release any of the names of denied applicants even after board action. However, it has in the past released in advance of board action the names of applicants when it suits its purposes . Also, the names of many applicants can be discerned based on information provided in the review summaries of the applications. The identities of applicant institutions can also be determined based on which board members are allowed to participate in discussion of specific applications as well as being allowed to vote. For more on the practice of withholding names, see here, here, here and here. )

California Stem Cell Agency's $150,000 Search for Its Financial Future

A San Francisco consultant, who is often known as an “economic therapist,” has been selected to devise a “strategic road map” for the financial future of the $3 billion California stem cell agency.

James Gollub: 'economic therapist'
Gollub Associates photo

James Gollub, managing director of the firm bearing his name, is under a $150,000 contract to lay out by this fall a detailed plan for the agency. The nine-year-old research effort is scheduled to run out of money for new awards in 2017.

Gollub was selected after the agency posted a request for proposals (RFP) last spring. The RFP assumed an additional $50 million to $200 million in a onetime “public investment.” The RFP also assumed additional private funding of a yet-to-be-determined nature.

Gollub is described as a co-founder of the field of cluster-based economic development. One web site said he is known as an “economic therapist.” The website for his current firm says,

“A leading expert in innovation bridge building....
“Global experience assisting universities, institutes, government agencies and public-private partnerships link innovation sources to innovation seekers.
“Committed to the goal of increasing flow of needed solutions, optimizing financial returns and sustainable economic impacts from innovation.”

Gollub's current firm dates back to March of this year. His Linked In profile says,

“James Gollub Associates (JGA) LLC was launched to build on 36 years of Gollub’s professional research and consulting experience. That experience began with 16 years at SRI International, three years at DRI/McGraw-Hill, five years at IDeA, nine years at ICF International and three years with E-Cubed Ventures LLC. During that time Gollub has worked globally to deliver economic strategies for over 30 national, state and metropolitan regions, develop strategies to accelerate growth of new industries (clusters), plan public and private R&D institutes and advise on over 15 science and technology parks.”

The need for a financial transition plan for CIRM was publicly identified as long ago as 2009 by the Little Hoover Commission in its lengthy study and has been reiterated periodically by other bodies since then. Under the terms of Prop. 71, which created the agency, CIRM has only  a 10-year authority to issue state bonds, the borrowed funds that have sustained the research effort. Legal maneuvering blocked the issuance of bonds until 2007.

The California Stem Cell Report asked the stem cell agency on May 31 for a copy of Gollub's response to the RFP. Yesterday we asked for a copy of the contract with Gollub. Those documents will be published when they are received.

New Ties to Big Pharma and Venture Capital Proposed at California Stem Cell Agency

The $3 billion California stem cell agency wants to recruit major biotech and venture capital firms to help provide tens of millions of dollars in research awards to California enterprises.

It's part of a move to “jump start” partnerships in a relatively new, $80 million, business-friendly program that is aimed at pushing therapies into the marketplace. The recruitment plan will come before the agency's governing board at its meeting next Wednesday in San Diego. 

Participating companies will have a special relationship with the state agency, including early input into concept funding proposals prior to their being presented to the agency's governing board. The “industry collaborators” will also be able to attend agency workshops and meetings involving hundreds of grant recipients. Presumably other, non-collaborating firms would be barred.

Other provisions of the plan call for special event-hosting arrangements aimed at creating more collaborations and posting of information from the selected collaborators on the CIRM website.

According to a CIRM staff document, the initiative would be limited to biotech and pharmaceutical firms with a market capitalization of at least $500 million and “qualified venture capital firms.” The document did not define what a “qualified a venture capital firm” is. The document also appeared to bar participation of privately held firms because of the “market capitalization” criteria, which typically uses a formula involving publicly traded shares.

Elona Baum, the agency's general counsel and vice president, business development, said in a statement provided to the California Stem Cell Report,

“This is aimed at trying to jump start the creation of the partnerships that are required to satisfy the commercial validation requirements of the Strategic Partnership Funding Initiative so that timelines are better synced-up as between our review and approval cycles for the Strategic Partnership RFAs and the lengthy time required for investors to conduct due diligence and negotiate an agreement with prospective applicants to Strategic Partnership RFAs.  CIRM's independent review and approval remains the same and is wholly independent. While there may be input given to a particular RFA it only at the high level concept stage and of course CIRM has no obligation to agree. In the context of the Strategic Partnership awards, CIRM wants to fund innovative high quality science that has attracted additional  investors.  Investors will help leverage CIRM fund and will be an important source of future funding to further the project.”  

A $2 Million Bill: Outside Contracting by California Stem Cell Agency

The $3 billion California stem cell agency this week posted a list of its outside contractors, who range from a a $25,000 stem cell licensing consultant to a $550,000-a-year law firm.

The agency expects to spend $2 million during 2013-14 on outside contracting, down from $2.9 million in 2012-13. This week's report covers the 2012-13 year.

Outside contracting is the second largest item in the agency's budget, which is slated to spend $17.4 million this fiscal year for operational expenses, up 5 percent from last year's spending. The largest amount, $12.2 million, goes for salaries and benefits. (For more on the budget, see here, here and here.)

Topping the contractor list is the law firm of Remcho, Johansen & Purcell of San Leandro, Ca., which had the $550,000 contract. CIRM, as the agency is known, reported that Remcho came in under budget by $95,595. That contrasts to some previous years when the firm, which has represented the stem cell agency since its inception, required additional cash on top of its original contract. James Harrison of the Remcho firm is its face at the agency and is designated as the outside counsel to the agency's governing board. In all, the agency is slated to spend $2.2 million on legal expenses, including in-house work.

David Earp is the stem cell licensing contractor. He was paid only $13,125 on his $25,000 contract during 2012-13. It is unclear whether he will be paid the $11,875 balance. Earp was chief patent counsel and senior vice president for business development for Geron before it dropped its stem cell program. Earp was heavily involved in the $25 million loan that CIRM made to Geron in 2011. In February 2008, he testified before CIRM about its then proposed loan program.

The list of contractors included $200,000 to the AlphaMed Press of Durham, N.C., as seed funding for a stem cells translational journal, $156,434 to Hyatt Hotels for the meeting of CIRM grant recipients, $250,000 to Kutir Corp. of Newark, Ca., for informational technology services and $290,000 to the Mitchell Group of Woodland Hills, Ca., also for information technology services.

The list of contractors will be presented to the CIRM governing board at its meeting next week. The list does not usually trigger any significant discussion.

Correction

The stem cell spending item yesterday incorrectly stated that the California stem cell agency would run out of funds for new grants in 2013. The correct year is 2017.

California Stem Cell Agency Spending: Where the Money Is Going

Analysis of CIRM funding by Pat Olson, executive director of CIRM scientific activities July 2013

The California stem cell agency will have committed $472 million to translational research – a key to commercializing stem cell therapies – if it awards the full $70 million in new grants and loans slated to come before its governing board next week.

The nearly $500 million will amount to about 17 percent of its funding so far, according to an analysis last month by Pat Olson, the agency's executive director of scientific activities. The largest percentage of the agency's cash, however, will be going for “development” – 35 percent or $970 million. Olson defined “development” as “essentially our IND enabling, our preclinical development programs and our clinical development programs.”

Basic research is to receive 17 percent or about $469 million with buildings and facilities taking up $443 million or 16 percent. Training and career development has consumed about 15 percent or $414 million.

However, those calculations include $577 million in funds that have been allocated but not yet awarded. Another $491 million is “concept approved” but also not awarded. The agency's governing board could change those allocations or withdraw approval of concepts, although it has not yet shown signs that it might do so.

The agency will run out of money for new grants in 2017 and is examining the possibility of generating more cash through some sort of public-private partnership. To develop support for continued funding, the agency is under pressure to generate results that will resonate with the public and potential private funding sources. Those results are most likely to come from a late stage translational/clinical trial effort.

Here is a link to CIRM's translational portfolio as of September 2012.

(An earlier version of this item incorrectly said that the agency would run out of money for new grants in 2013. The correct year is 2017,.)

Flim-Flam Stem Cell Artists Targeted by CIRM

The California stem cell agency has joined with other prestigious stem cell organizations to help put a stop to the flim-flam artists that prey on desperate people by promising miracle cures from stem cell treatments.

The agency announced the action today on its blog, declaring that it has posted a new patient advisory document that provides a “ robust and detailed set of issues patients should consider when making treatment decisions.”

Don Gibbons, CIRM's senior science and education communications officer and author of the blog item, said the document addresses one of his special concerns: Internet “ads that come up on web searches and seem to be offering everything to everyone.”

Some of those ads can be found on many stem cell-related web sites, including this one, that carry ads that are placed there automatically by Google.