Art Caplan on Fake Stem Cell Research: 'Off-the-Rails Syndrome?'

One of the more prominent bioethicists in the nation, Art Caplan, is asking,

“Why so Much Fake, Unduplicable Stem Cell Research?”

Caplan weighed in on Medscape.com today, citing the STAP flap involving Japanese and American researchers as well as a scandal involving a false but widely accepted – for a time -- claim that a Korean scientist had cloned human embryos.

Caplan said,

“Stem cell research seems again and again to go off the rails when it comes to the ethics of research.”

He continued,

“I think there are a couple of reasons why this particular area has gotten itself in so much hot water. One is that there is a relative shortage of funding. Because of the controversial nature of cloning -- getting stem cells from human embryos -- some avenues of funding have dried up, and it puts pressure on people to come up with other ways to try to make human stem cells. With less funding, there is more pressure. Sometimes people cut corners. I think that can lead to trouble.

“Another problem in the stem cell field is that if you can come up with a way to produce human stem cells without sacrificing or cloning embryos from humans, you are going to find yourself being a hero to the world. That is what happened in Japan.”

Caplan said,

“There is a lesson here: Until somebody replicates and until somebody can show that they can also do what has been alleged, there isn't a breakthrough. There is only confirmation and then breakthroughs. I think we have to be a lot more careful -- both in science and in media coverage -- before we start saying, 'Aha -- here is a single study, a single report, a presentation. Now we have shown that something can be done.'”

Caplan said,

“Another major problem in the stem cell field is that the number of people doing research in this area has shrunk. It is obviously of keen interest to come up with regenerative medicine solutions to all kinds of healthcare problems. I think a lot of post-docs and graduate students are saying, "I am not sure that I want to set my career track into a field that is sometimes controversial and where funding may be dipping." That may mean that there are fewer people to watch one another. It is not a big field, so maybe part of the reason that it keeps getting in trouble is less ability to do peer review.”

Our thoughts: There is no doubt some spectacular fraud has surfaced in stem cell research. But the problem of replication within stem cell research may not be entirely out of line with problems elsewhere in science. Los Angeles Times columnist Michael Hiltzik wrote last fall about a study by Amgen that examined 53 “landmark papers” in cancer research and blood biology. Only five could be proved valid, a shocking result, according to Amgen. Similar results were turned up by Bayer in Germany, Hiltzik said.

Additionally, as Caplan notes, the stem cell community is small and the hype is grand. With stupendous expectations come the likelihood that every missed shot – fraudulent or not – becomes an equally stupendous failure that is colored by suspicions of scientific misdeeds. Plus there are truly bogus practitioners at work, charging desperate people large sums for untested and potentially harmful treatments.

The mavens of science, those who control the medical schools and set the standards, may have some responsibility for some of the problems with replication. Writing May 8 on the blog of the Global Biological Standards Institute, scientist Beth Schachter touched on this in a post headlined, 

“What are science trainees learning about reproducibility?”

She asked one Ph.D. student at UC San Francisco what sort of training are he and his fellow students receiving on reproducibility and standards. The response?

“None.”

'Immortal' Stem Cells and Informed Consent in California

The California stem cell agency is looking for some help in connection with a $32 million stem cell banking program to be sure that people who donate tissue understand that their cells will be transformed and made “immortal.”

The agency has issued a $150,000 request for proposals (RFP) for a 12-month study dealing with informed consent matters in the banking effort. The agency's RFP said it is “a unique program because it involves the creation of 9,000 iPS cell lines, from 3,000 individuals” that could increase to 5,000.

The RFP requests a report that will provide “in-depth analysis of donors' current understanding with respect to the informed consent process” and “recommendations for education materials that may improve program performance over time.”

Issues dealing with informed consent and research were highlighted a few years ago in a book, "The Immortal Life of Henrietta Lacks," that was on the New York Times hardcover bestseller list for more than 40 weeks. 

The California stem cell agency's RFP said,

“Unique aspects of the tissue collection for disease modeling awards that is critical for donors to understand include that researchers intend to:
“• Test donors blood and skin samples for infectious disease
“• Transform donor cells and make them into immortal iPSC lines
“• Record the genetic sequence of donor their cells
“• Distribute donor cells and associated medical and genetic information widely
“• Use cells and associated information to develop commercial medical products with no financial compensation to donors.
“In addition, minors and/or individuals with cognitive impairments will be recruited for this research and consent may be obtained from their legal guardian."

The proposed California study is linked to a $4 million segment of its $32 million stem cell banking effort approved in March of 2013. Former CIRM President Alan Trounson said at the time,

“This initiative will provide scientists with access to multiple cell lines that should have much of the genetic variations that represent the variety within any human disease such as Alzheimer’s, heart disease, lung fibrosis and autism.”

The deadline for applications is June 1. Here is a link to a 2010 CIRM report on issues involved in the stem cell banking program, which was only a proposal at the time.

Capricor and California Stem Cell Agency Say All is Well With $27 Million Investment

One recent headline in Forbes magazine read, 

“Stem Cell Therapy To Fix The Heart: A House Of Cards About To Fall?”

Over at the Boston Globe, another story this month said,

 “A provocative new study calls into question the rationale for using stem cells to repair the heart — a much-hyped experimental therapy that grew out of insights from a groundbreaking Boston researcher’s laboratory.”

Eduardo Marban
Cedars-Sinai photo

But it appears that heart stem cell regeneration is like cheese, you might say. There are many different varieties. And in the case of a $27 million investment in heart cell regeneration by the California stem cell agency, all the players say things are just fine with their project.

The state's research effort involves a publicly traded company called Capricor Therapeutics. The Beverly Hills firm and one of its founders. Eduardo Marban, director of the Cedars-Sinai Heart Institute in Los Angeles, received the $27 million from the state stem cell agency.

In the wake of the news reports involving heart stem cell regeneration, the California Stem Cell Report queried both Marban and the stem cell agency. Marban replied within 37 minutes last week. Here is the text of what he had to say in his email.

“All of the critiques have been leveled at competing technologies. Indeed, I have been among the more vocal critics (for example see http://www.tctmd.com/show.aspx?id=124193).

“Although some alarmist headlines have inappropriately questioned all cardiac stem cell work, the issues have to do with only one specific subtype of cardiac stem cell, which is marked by the expression of an antigen called c-kit. This is NOT the cell type being developed by Capricor; in fact, my laboratory has found that c-kit-positive cells play no role in Capricor’s cell product. That product, known as CAP-1002, contains a small fraction (less than 5 percent) of c-kit-positive cells which can be completely removed with no loss in potency. CAP-1002 is believed to work by indirect 'paracrine' mechanisms that differ fundamentally from those postulated for the c-kit-positive cells.

“By way of background, the critiques of c-kit-positive heart cells have come in two forms: first, in concerns expressed by the editors of the Lancet regarding data integrity in the SCIPIO trial; this was conducted by Piero Anversa and colleagues using c-kit-positive cells. Second, a recent Nature paper (attached in case you do not have a copy), of which I am an author, questions the claim that c-kit-positive cells are true cardiac progenitors.

“These concerns in no way undermine Capricor’s technology. In fact, CAP-1002 remains the only heart-derived cell product in commercial development. I am proceeding full speed ahead with mechanistic and translational work on CAP-1002, and Capricor continues to feel bullish about the product, which is now in phase 2 trials (the furthest along of any CIRM-funded project).”

Kevin McCormack, a spokesman for the stem cell agency, also said that Capricor is using a different method and a different stem cell than the one being called into question.

You can hear the May 15 Capricor conference call on its first quarter results here. Its stock price jumped from $6.15 on May 14 to as high as $7.65 during the day May 15. Its 52-week low was $1.15 and its 52-week high $17.15.

(Editor's note: If you would like a copy of the Nature paper that Marban referenced, please send an email to djensen@californiastemcellreport.com.)

Trounson Calls for Closer Ties Between Biotech Industry and Academic Research

Alan Trounson, the departing president of the California stem cell agency, was in Australia earlier this month beating the drum for tighter links between science and industry.

Trounson, a native Australian, said researchers are “starving” in Australia and did not have much good to say either about the amount of the federal research funding in the United States.

According to an account on probonoaustralia, Trounson, who is now working as a senior adviser to the California agency, declared,

"What is hampering our smartness in converting high quality science discoveries to community benefit? Is Australian science research sustainable without the ability to expand beyond the publicly funded institutional base of universities, medical centers and (the national science agency)? Where is our biotech industry? Who spans the (funding) valley of death? There is a distinct scarcity of industry connecting with the Australian medical research community and a lack of venture investment in the biosciences."

He continued, 

“We need to really encourage the very smart academics to become interested in applying their discoveries for the community benefit – universities have to change how they recognize and reward scientists who enter this pathway – not penalize them. 

“It isn’t about number of publications or grants... – these are not the measure for making the innovative contributions needed. They probably handicap the conversion to a more effective system that the community will recognize and endorse. 

“The current federal grant system is broken in the USA...and would not be any better here. Money is trickling down an unsustainable pipeline that fails to encourage developments of use to the community. 

“The system must be fixed despite the inertia that exists even among the majority of scientists. We will have no viable research environment soon if we continue to look away from the problems that are evident and are turning away the smart young scientists.”

Trounson spoke during the 10th anniversary symposium of veski, an Australian group he helped to found. It is designed to foster an “innovation economy.”

Trounson's portrayal of Australian science was not all bleak. He cited major achievements scored by researchers down under. He said,

“We might have cause to be optimistic about the next 20 years! Maybe even expect Australia to have a minister of science driving high tech developments and a strong biotechnology industry employing scientists and medical graduates maturing in universities and research centers.”

Trounson's last day at CIRM is June 30. He is returning to his family in Australia.

CIRM 2.0, Randy Mills and Crystallization

Two California stem cell bloggers, one a UC Davis researcher and another a veteran patient advocate, earlier this month hailed the appointment of biotech industry veteran Randy Mills as the head of the $3 billion stem cell agency.

Scientist Paul Knoepfler, who also considers himself a patient advocate, said, 

“Biotech leader (Randy) Mills (formerly of Osiris) serving as the new CIRM president ushers in a fundamentally new era for CIRM, and so it immediately kicks off CIRM 2.0.”

Knoepfler said that CIRM was originally all about pluripotent stem cells but that has changed.

“The notion of a leader with a primarily for-profit mesenchymal stem cell(MSC)-centered focus at the helm of CIRM would have seemed impossible even just a few years ago. However, a tidal shift just happened. Okay, so it didn’t happen all at once overnight and observers of CIRM could see this trend begin a few years ago, but the appointment of Mills as the new CIRM prez crystallizes this change.”

MSCs can be isolated from fat, bone marrow or placenta and are the hottest type of adult stem cell today with 306 clinical trials.

Knoepfler, who is a recipient of a CIRM grant, continued,

“The CIRM of today and the future is primarily going to be about focused stem cell clinical product development (the main goal of Prop. 71) and raising capital to support that development beyond 2017.”

Patient advocate Don Reed, a longtime follower and supporter of the stem cell agency, said on the Daily Kos,

“My impression? Overwhelmingly positive.”

Reed noted that Mills “worked his way through college in the emergency room, so he has a strong sense of urgency for the work at hand. About himself, he stressed that he was 'patient centered... We are going to work relentlessly for the benefit of the patients and the people of the state of California.'”

Last year, Knoepfler posted a four-part series on mesenchymal stem cells, the stuff Mills developed as CEO of Osiris. The series was based on an interview with Arnold Caplan of Case Western University, the father of mesenchymal stem cells. The four items deal with the science but also touch on FDA regulation and medical tourism. The series begins here.

Knoepfler also carried an item last October on the sale of Prochymal by Osiris to the Australian firm Mesoblast in a $100 million deal. Mills left Osiris two months later for “personal reasons.”

Randy Mills: Stepping into a $3 Billion California Adventure

SAN FRANCISCO – A 42-year-old former business executive from Maryland is expected to slip his spanking new card key into a slot this morning outside of the third-floor offices here of the California stem cell agency.

It will open the door to a $3 billion adventure into scientific research, California politics and government and one of the riskier areas of the biotech industry – one that is also filled with visions of nearly miraculous cures and revolutionary changes in medicine.

Randy Mills
Osiris photo

C. Randal Mills, more commonly known as Randy, begins his first day on the job today as CEO of the state's nearly 10-year-old stem cell research effort, the California Institute for Regenerative Medicine (CIRM). It is an enterprise that has been praised for its contributions to science but now

faces financial extinction unless it develops new sources of funding. The borrowed money that finances the agency's new grants will run out in 2017, leaving CIRM with only the task of winding down existing research.

Mills, the former CEO of Osiris Therapeutics of Maryland, embodies changes already underway at the agency, which is pushing hard to commercialize stem cell research. With the arrival of Mills, the three top executives are all more tied to industry than academia. Ellen Feigal, the No. 2 person at the agency, was with Amgen prior to joining CIRM. Elona Baum, general counsel and vice president for development, was with Genentech.

Mills has given no public clue about whether he is planning major changes at the agency. In a very brief comment April 30, when he was named to the post, he said only that patients were his top priority. In announcing the appointment, CIRM Chairman Jonathan Thomas said Mills will take a “fresh look” at the agency and will “evaluate what we are doing right and what we can do better.”

It is clear that Mills, who has a Ph.D. in drug development from the University of Florida, will bring a definite business mindset to CIRM, which has been dominated by a culture closer to academia than industry. In 2009, he told PharmExec.com,

“When I came to Osiris in 2004, Osiris was what I called Osiris University. It was highly academic, brilliant people doing great science, but there was no commercial focus. That's changed nicely over the last four years....”

The previous two presidents of CIRM, Zach Hall and Alan Trounson, came from largely academic and non-business backgrounds. Mills' career has been spent in business, including an eight-year slog to drive the stem cell product Prochymal into the market. In 2012, Prochymal became the world's first government-approved stem cell drug approved for use on an off-the-shelf basis. That occurred in Canada. However, the drug is currently only available in the United States under special, limited access standards set by the FDA. Prochymal was sold last fall to Mesoblast of Australia in deal that could reach $100 million.

Mills, as might be expected, has remained mum on any personnel changes he may have in mind. He may have something to say about the five positions that were eliminated by Trounson in his proposed budget, which is due to be presented to the CIRM board May 29.

The elimination of the positions did not involve firing any employees. They involved jobs vacated by departures or ones that had not been filled. Nonetheless, the five slots represent nearly 10 percent of the existing 56 employees. Mills may want to have the ability to hire some additional staff on his own in an effort to implement matters he considers important. But any action he might take would be limited by the budget cap imposed by state law on CIRM.

Decisions are likely to come faster under Mills. Trounson was almost fabled for his globe-trotting absences which tended to delay things at CIRM. Under his tenure, CIRM had a host of lingering management problems that were cited in a 2012 performance audit that was required by state law. The agency says it is addressing those deficiencies. Along with faster decisions may come a turn away from consensus-driven action, a slow and cumbersome process that many business executives avoid, believing it is impossible to make everyone happy.

Some of the decisions for Mills could involve as much as $400 million. CIRM has only about $600 million in uncommitted funds. However, that figure does not include board-approved conceptual plans for handing out the $400 million. No RFAs have yet been posted for those rounds. If Mills is looking for new directions or would like to pour more money into an existing effort, such as those aimed at later stage clinical trials with businesses, he could either slow the release of specific RFAs or go back to the board to ask it to reconsider the efforts.

The 29-member board is unlikely to turn down requests from their new CEO. Rejection of a Mills' proposal would be interpreted as a sign of a lack of confidence in him.

At least initially, Mills is also likely to have a smooth road in connection with the controversial and much criticized dual executive arrangement at the agency. Under Proposition 71, which created the $3 billion agency in 2004, the chairman and the president have overlapping responsibilities. That has led to public tensions in the past, particularly with the first agency chairman, Robert Klein. However, under Trounson, public airing of those problems has subsided. Plus current chairman Thomas has a much different management style than Klein.

Thomas has main responsibility for finding new sources of funding for the agency and is talking about some sort of private-public partnership. Mills' role in the fund-raising is not publicly well defined. But Thomas has praised Mills' ability in raising $160 million for Osiris. Thomas may want to harness Mills' presentation and persuasion talents.

As CEO of CIRM, Mills will be the person responsible for generating the type of research results that will resonate with potential private investors as well as the public. One advantage he has is that the agency is little known to the vast majority of the California population. In such situations, public opinion is more easily shaped.

Nonetheless, the San Francisco Chronicle recently took the occasion of Mills appointment to say that CIRM has not lived up to its hype. The newspaper's editorial said the agency should not expect more public funding.

The biotech industry is likely to be pleased with the appointment of one of their fellows as president of CIRM. The industry has been critical of the agency in the past, although it is currently dancing closer to business. The key issue has been the meager amount of awards to industry. According to CIRM calculations, only about 7 percent of the $1.7 billion in awards has gone to business, up from about 4 percent calculated by the California Stem Cell Report a few years ago. More cash has trickled down via subcontractors hired by grant recipients.

The increasing coziness with industry is necessary to develop an actual FDA-certified product that can be used to treat patients. But ties to industry also raise conflict-of-interest issues. CIRM has been dogged by conflict questions since its inception because of the nature of its board, which was dictated by Proposition 71. Roughly 90 percent of dollar value of the awards has gone to institutions with links to past and present members of CIRM's governing board, according to calculations by the California Stem Cell Report. (See here and here.)

In 2010 in the New England Journal of Medicine, Bernie Lo of UC San Francisco, chairman of the CIRM Standards Group and who also led an Institute of Medicine(IOM) study on conflicts of interest, warned that "irreconcilable differences" exist involving medical research and the private sector because of sharply divergent priorities.

The IOM study said,

"Despite their benefits, relationships with industry create conflicts of interest that can undermine the primary goals of medical research. Where there are conflicts, legitimate and serious concerns can be raised about the openness of research and potential bias in the design, conduct, and reporting of research "

Mills' left Osiris in December of last year for what were reported as “personal reasons.” At 42, he has a long career ahead of him. Carrying on well at CIRM, which is facing its financial demise, could be a springboard to a large leap forward for Mills in a few years into another position in the biotech industry, as well elsewhere.

$17.9 Million California Stem Cell Spending Plan to be Scrutinized by New CEO

The new president of the California stem cell agency, Randy Mills, will take a crack at the agency's proposed, $17.9 million operational budget before sending it to directors for approval later this month.

The budget represents a 9.5 percent increase over estimated spending for the current fiscal year, which ends June 30. Mills has not yet had a chance to put his stamp on it. He was appointed as CEO of the agency on April 30. He will assume his responsibilities on Thursday.

The spending plan was examined this afternoon by the CIRM directors' Finance Subcommittee, which is chaired by Stephen Juelsgaard, former executive vice president of Genentech. It was Juelsgaard's first meeting as chairman of the panel, and he systematically sought explanations for a number of items that had large dollar or percentage increases.

The budget did not come to a vote by the committee. Juelsgaard said it needed a review by Mills to see if he wants to make changes prior to submitting it to the full board May 29. Mills has given no public indication of whether he might make substantial changes in the agency's operations. 

There was little discussion of a new, $600,000 item in the agency's budget for rent costs beginning in November 2015. The agency loses its free office space Oct. 31, 2015, and is facing the task of finding a new headquarters in a sizzling office market in San Francisco. However, it was noted that the $600,000 figure could change as CIRM becomes more deeply enmeshed in a search for new space.

Currently the agency has 19,500 square feet for 56 employees. The value of the current lease was placed at $1.2 million annually as of June of last year.

Asked earlier today about assumptions in the $600,000 figure, Kevin McCormack, senior director for public communications, replied,

“The assumptions for the $600,000 are that we will have a smaller space in a less trendy neighborhood, and while it would be lovely for employees to get free parking, it's not something that we are counting on.”

Parking in San Francisco is scarce and expensive. The public parking lot in the CIRM building charges $3.00 for every 20 minutes for ordinary customers.

During the examination of the budget, Juelsgaard raised questions about which expenses fall within the legal cap on operational spending. By state law, CIRM can spend no more than 6 percent of its grant total on its operational budget with the exception of legal expenses.

Juelsgaard and Jeff Sheehy, another CIRM board member, both questioned whether spending for BayBio and Biocom, biotech industry organizations, could be justified as legal expenses and thus be exempt from the limit, according to the terms of Proposition 71. That measure is the 2004 ballot initiative that created CIRM. The staff indicated those expenses would be moved out of the budget for the legal office and into another area.

Sheehy said that if CIRM has, in the past, placed such spending in the "legal" category it should retroactively correct that. Legal expenses for the coming year are budgeted at $1.9 million, including $711,200 for outside contracting, compared to $2 million for the current year. 

Juelsgaard also asked about expenses in a category called “reviews, meetings and workshops,” which totals $2.5 million. It is the second largest spending category in the budget, falling behind compensation, which is expected to total $12.1 million.

The category includes $300,000 for a conference involving hundreds of CIRM grantees. The agency did not stage such a conference last year, but has in previous years. The CIRM staff also noted that grant review meetings can cost up to $150,000. Some of the closed-door sessions last two days. All of the scientific reviewers are scientists from out-of-state, including some from overseas. The agency has nine reviews scheduled for the coming year.

Today's budget session involved new figures for the estimated spending for the current year, which alters the budget increase reported in an item Friday on the California Stem Cell Report. The earlier increase was based on calculations based on what then were the latest CIRM estimates for its current spending.

New Home for the California Stem Cell Agency? A Million-Dollar-Plus Matter

The California stem cell agency is located south of Market Street in San  Francisco, close to the San
 Francisco Giants ballpark (upper right).  It is one of the hottest  office leasing areas in the city. 
 Since  the agency has been there, the area has changed from seedy to gentrified.

The $3 billion California stem cell agency has a 19,500-square-foot problem.

That is the amount of free office space that the agency will be losing in a little over a year. What's more, it puts the agency square in the middle of a red-hot office leasing market in San Francisco, where its headquarters is located. Rates have shot up 70 per cent since 2010, according to a leasing industry estimate.

One tech company executive said in March that she just signed a lease that was so expensive “it made me want to throw up,” according to a report in March on Business Insider.

Eleven months ago, the value of CIRM's space and unspecified “incentives” was estimated at $1.2 million annually by the agency's outside auditor. That estimate would be considerably higher today and even higher next year when the agency would be signing a new lease. However, the California Institute of Regenerative Medicine(CIRM), as the agency is formally known, is allotting only $600,000 annually for office rental, according to figures released Friday afternoon.

That would seem to mean that the agency will be either moving from San Francisco or cutting way back on its square footage or both. Remaining at its current location with less space may not be possible, given the agency's rocky history with its landlord, who donated the space as part of an $18 million package offered by San Francisco to lure CIRM to the city. Additionally, the agency has a legal cap on its budget, which means that it would be difficult to accommodate a large increase in rent.

A move to another city would be a major disruption for some employees who have made housing decisions based on the location of the headquarters. Relocation additionally can be anxiety-producing for employees worried about their work space as well as posing issues for moving computer servers and other hardware that needs to be functional virtually around the clock.

According to a 2006 CIRM document, the agency's space includes 18 offices with windows, 17 internal offices and 19 cubicles. The agency's space also contains a number of conference rooms and common areas in addition to a large reception area.

The headquarters houses 56 employees. Employment is likely to remain close to that level for the next two years. Some consultants and outside attorneys also work at the agency from time to time. After 2017, the number of employees is likely to decline unless new funding is secured. Without additional cash, the agency will be limited to overseeing the waning number of research grants that would still be underway.

As of a few years ago, free parking was provided to employees, a substantial benefit in a city where parking can cost $15 a day or more. Continuing that benefit could add to office space costs. Parking is so tight in San Francisco that a Web site has been created that focuses on the matter. More than one smart phone app has been created to deal with parking, including one that allows a driver leaving a public parking space to auction off the space to other drivers for prices up to $20.

CIRM's vice chairman, Art Torres, former head of the state Democratic Party, is looking into the possibility of securing some sort of subsidies through the city of San Francisco to maintain the agency's headquarters within the city. However, he has not publicly discussed that endeavor since last May.  

Chasing the Sun and Stem Cells From San Diego

The San Diego U-T this morning carried a profile of stem cell researcher Jeanne Loring of Scripps, describing her as a “stem cell evangelist” and a believer in scientific collaboration as opposed to the solitary work her geologist father pursued.

Bradley Fikes, who covers biotech for the San Diego newspaper, wrote the piece about Loring, who is director of the Center for Regenerative Medicine at Scripps.

The article was unusual for the mainstream media, which generally focus its profiles on persons who are more in the public limelight – not scientists.

Fikes noted Loring's early career in biotech businesses in the San Francisco Bay Area in addition to the San Diego, both of which are biotech hot spots. He wrote,

“Unlike the 'pure' academic who regards partnerships with businesses as compromising science, Loring said ties with industry can be rewarding. Businesses can take basic research discoveries and turn them into drugs and other therapies, she said, and that 'translational' arrangement is hard to replicate in a walled-off academic setting.”

The article also touched on Loring's life away from the lab including a pursuit -- eclipses of the sun --that has taken her to Zambia, Libya and Bolivia.

“'The eclipse vacations are the perfect thing for us,' Loring said. 'You can always work, but the eclipse is going to happen at a certain time and a certain place, and you have to be there when it happens.'”  

California Stem Cell Agency Budget Up 10.5 Percent

The California stem cell agency this week proposed a $17.9 million operational budget for the coming fiscal year, roughly a 10.5 percent increase over its current spending.

The largest expenditures in the proposed agency budget are for employee compensation, $12.1 million, up about 4 percent from current spending; grant reviews and meetings, $2.5 million, up 47 percent, and external services (outside contracting) $2 million, virtually unchanged.

The budget information on the agency's Web site was posted yesterday, only two business days before it is to be considered by the agency directors' Finance Subcommittee. The posted information did not explain or justify the increases. Nor did it contain a comparison to the agency's actual spending this year.

The year-to-year comparison was calculated by the California Stem Cell Report, based on figures that were presented to directors in the middle of March (see chart below) and those posted yesterday.
(Later information showed that the annual increase is about 9.5 percent, based on fresher figures for estimated spending this year.)

The boost in compensation is most likely tied to a slight increase in the size of the CIRM staff, which now totals 56. The largest component in the jump in the grant reviews and meeting expenses is a $300,000 meeting for the 600 recipients of the agency's grants. CIRM did not stage a grantee meeting during the current fiscal year.

The agency's operational budget does not include grants or awards for research, only the expenses for handing them out and overseeing their execution. The agency is limited by law to a budget of 6 percent of its awards, which will eventually total $3 billion. It has given out $1.7 billion so far.

The latest budget will be taken up on Monday by the Finance Subcommittee, which is chaired by Stephen Juelsgaard, former executive vice president of Genentech. It will be his first session as chairman of the finance panel. Juelsgaard has demonstrated a flinty-eyed approach to financial matters during full meetings of the CIRM governing board.

The new budget will also be the first for CIRM's new president, Randy Mills, who formally begins his job on Wednesday. However, the proposal probably does not likely to reflect any significant input from Mills, who has made his career in business. He may have proposals for changes in it after he officially begins work or perhaps even on Monday.

Recent Reader Comments on Randy Miller and SF Chron Editorial

The "recent comments" sidebar on this Web site has stopped functioning. While I attempt to repair it, here are some recent comments that have not shown up in that feature.

Anonymous has left a new comment on your post "San Francisco Chronicle: California Stem Cell Agen...":

What would you have expected to happen once the taxpayers funded scientist and PhD's associated with Big Pharma to do???? Build fancy administration buildings, laboratories, and sit around all day and discuss there. How many of these individuals who helped spend approx.. $2.4 Billion of taxpayers funds actually had patients in their care? Look at all the recent articles where scientist falsified data or their findings could not be replicated by others....physicians who actually care for patients have made greater strides in the field of regenerative medicine than CIRM could make in 30 years. CIRM will be another boondoggle where no one is held responsible for the waste of taxpayer funds. Gov't, Scientist, and PhD's should should move aside and allow actual doctors to care for their patients with the clinical advancements that have already been made in the field of regenerative medicine.

Anonymous has left a new comment on your post "Former Osiris President Chosen as New CEO at Calif...":

It is very disappointing that CIRM selected Randy Miller who backed obsolete mesenchymal stem cells (MSC), not someone with human embryonic stem cell (hESC) experience to back voter-approved Prop71. Randy Miller, together with CIRM vice president Ellen Feigal, are responsible for several multi-million CIRM disease team awards to MSC at UC Davis that have no commercial validation at all, and many anti-hESC and anti-Prop71 conflict of interest comments in CIRM undisclosed grant reviews. The only way for CIRM to revive and bring cures to patients is to publicly support Prop71 by giving out hESC research awards, do the right thing that CA voters and patients have waited for so long. If CIRM cannot even issue a RFA for hESC research, if CIRM cannot have a transparent grant review process to fund hESC research according to Prop71, if CIRM continues to take its anti-hESC position, as where all the money of CIRM awards so far have pointed to, it is hard to imagine anything is going to change except let a well-wished proposition down the drain.

Randy Mills and His $640 Million California Stem Cell Experience

The new president of the California stem cell agency -- even before his appointment last week -- participated in handing out more than $640 million in awards from the agency to businesses and academic researchers.

Perhaps more importantly, all of those awards involved advanced stages of research leading to clinical trials, the current focus of the Golden State's research enterprise.

The participation of Randy Mills, the former CEO of Osiris Therapeutics, in the approval of the grants and loans came during the closed-door review of their applications. He was a member of the panel of out-of-state reviewers used in eight CIRM award rounds. The panel of scientist is large, but each award round uses only a small subset of the total group. 

Mills' five years as a reviewer gives him a special insight that is not even shared by most of the members of the CIRM governing board. Only seven members of the 29-member CIRM board sit on the review panel.

CIRM Chairman Jonathan Thomas, who is a non-voting member of the grant review panel, last week said that Mills demonstrated "a sharp intellect and a keen analytical mind" during grant reviews.

The grant reviewers make the de facto decisions on the vast majority of grant applications. The governing board has almost never overturned a positive decision by the reviewers. The full board receives only the review summaries that are available to the public, with the exception of proprietary information. Indeed, board members have complained over the years about not having enough information to make decisions when faced with appeals from rejected applicants.

The reviewer sessions are where the scientific merit of the proposed research is scrutinized and criticized in detail and scored. Until recently, other issues were considered as well, what the agency calls “programmatic” review, which covers nearly everything.

The role of the president of the agency during the closed-door review is not clear, although he does not have a vote. Alan Trounson, the current president of the agency, was believed by some California researchers to be active during the closed-door process, injecting comments and likely affecting decisions by reviewers at least on some occasions. However, the agency does not release transcripts or minutes from the review sessions.

Late last year, the CIRM president was authorized to make public recommendations to the full board concerning applications. That process is new, but stirred controversy in January in the $40 million stem cell genomics round.

Here are the award rounds involving Mills and the dollar amount that was budgeted for each: Strategic partnership I, $30 million; strategic partnership II, $40 million; strategic partnership III, $80 million; disease team II, $240 million; disease team III, $100 million, early translational II, $80 million, and early translational IV, $70 million. A specific amount for the 8th round, disease team II planning, was not available at this writing on the CIRM Web site, but that round was relatively small, $1 million or so or less.

New California Stem Cell CEO Begins Work May 15

C. Randal Mills, a man who has spent his entire professional life in the private sector, will take over on May 15 as the new president of the state of California's $3 billion stem cell agency.

Mills, 42, was named last week to succeed Alan Trounson, a longtime academic researcher who is leaving to return to his family in Australia. Mills, former CEO of Osiris Therapeutics of Maryland, is scheduled to begin half-time work in 10 days at the stem cell headquarters in San Francisco. At that point, Trounson will be designated as a senior scientific advisor to the agency. Mills' work will initially be half-time while he works out his move from Maryland.

The news from the agency, which is formally known as the California Institute for Regenerative Medicine (CIRM), came along with more details about Mills' employment agreement, including provisions that deal with outside activities that he might pursue.

Randy Mills (left) and Jonathan Thomas
CIRM photo

The information was contained in an “offer letter” from CIRM Chairman Jonathan Thomas to Mills, dated and signed by both men on April 28, two days before the agency governing board ratified its terms(see here and here). The letter was provided by the agency at the request of the California Stem Cell Report. The full text can be found at the end of this item.

As reported previously, Mills' annual salary will total $550,000, compared to the $490,008 earned by Trounson. Mills' total compensation at Osiris was $554,750 in 2013, according to company filings with the federal government. He left Osiris in December 2013 for “personal reasons.”

The

offer letter provided for $95,000 in relocation and travel costs for house-hunting and moving. Mills is also entitled to reimbursement for meals and temporary housing for 60 days, contingent on approval by the state Personnel Administration Department. That would amount to $40 a day for meals and $178 a day for lodging. That could run up to $13,080 if the full 60 days are used.

Mills' agreement with CIRM allows him to use his “personal time and resources” to engage in outside activities that are compatible with his CIRM duties. Those outside activities include service on boards of for-profit companies, which can be lucrative, as well as service on non-profit boards. The agreement stipulates that such service be disclosed to the chairman of the board and that he confirm that the service is compatible with Mills' role as president.

Mills, who goes by the nickname Randy, is subject to the agency's conflict of interest policy which requires him to divest himself of any investments in companies that devote more than 5 percent of their research budget to stem cell research. In addition to the policy, Mills is required by state law to disclose his economic interests generally and is subject to the agency's “incompatible activities statement”(see below) and the “employee conflict of interest code.”

Mills will serve at the pleasure of the board. However, if the board fires him “without cause” within 36 months, he will be entitled to six months salary.. The agency's offer letter also said,

“You shall not be entitled to any payment if the (governing) board terminates you for cause, including knowing violation of state conflict of interest law and/or CIRM policy, willful or corrupt misconduct or a criminal conviction.”

The offer letter said the effective date of the appointment is June 2. However, Kevin McCormack, senior director of public communications, said last week that stipulation has been modified to reflect the May 15 start. McCormack said Trounson will serve as a scientific advisor to CIRM to June 30 “to help shepherd through a number of projects and commitments he has made.” Presumably that would include the closed-door review of applications in the $80 million Alpha stem cell clinic plan, which is scheduled to be acted on by the CIRM board later this year.

Here is the text of the April 28 offer letter and the agency's incompatible activities statement. 

Offer letter from California stem cell agency to Randy Mills

Incompatible Activities Statement California Stem Cell Agency

San Francisco Chronicle: California Stem Cell Agency 'Hasn't Lived up to Hype'

One of the “problems,” you might say, with things like picking a new president is that it calls attention to one's activities, for better or worse.

A case in point is an editorial this morning in the San Francisco Chronicle, which used the selection of a new president for the California stem cell agency as a springboard to a wider discussion. Its conclusions are not likely to make the agency happy. The newspaper said the $3 billion research effort has compiled a “decidedly mixed” record. The headline declared,

“State stem cell agency hasn't lived up to its hype.”

The editorial, which reflects the institutional stand of the Chronicle, noted that the agency will run out of cash for new research in less than three years. It continued,

“As far as the public is concerned, nagging questions remain: Has the institute been effective enough? How good should California taxpayers feel about the institute's use of their $3 billion? 

“The answer is a decidedly mixed one. 

“Part of the problem is that California taxpayers had outsize expectations when they passed Prop. 71(which created the agency).”

The editorial said,

“Progress on stem cell research has been significant - but it's been the progress of the tortoise rather than the hare. It was irresponsible for the backers of Prop. 71 to convince the California public that cures were just around the corner, and it is unfortunate that so many Californians are disappointed with the institute because they believed this.

“'People were schooled to believe that all of these breakthroughs were right around the corner,' said Marcy Darnovsky, executive director of the Center for Genetics and Society. "You can't schedule scientific breakthroughs.'

“'That's not the institute's fault. Still, it's been a struggle to get the agency to use the best organizational practices. In 2012, a blue-ribbon committee of the National Academy of Sciences released a report after a yearlong review that found conflicts of interest on the CIRM board that threatened to 'undermine respect for its decisions.' It also found significant flaws in the agency's grant-approval process.'

“The institute responded to all of this criticism by dragging its feet about making necessary changes to improve operations and create a board with more independence. Last year, it changed its voting procedures for board members who are members of institutions, to answer the criticism - but the change came awfully late.”

The editorial concluded,

“Prop. 71 was an initiative passed based on the politics of the time. It's difficult to call it a total failure, especially during a time when U.S. public investment in scientific research is so low.

But stem cell research has finally gotten off the ground all over the country, and the institute's operations over the past decade haven't inspired the confidence California voters would need to offer the agency more money. The agency will need to rely on private investment if it's to continue its mission.”

The Chronicle's editorial today stood in sharp opposition to its position Sept. 30, 2004, when it enthusiastically endorsed Proposition 71. Ironically, the 2004 editorial carried some of the hyperbolic adjectives that its editorial today deplored, including such expressions as “bold,” “brimming with potential,” “unquestioned promise,” “significant (economic) windfall” along with the phrase “considerable savings on health care.”

The bottom line – 10 years ago – for the Chronicle on the California stem cell agency?

“As a society, we have a moral and ethical obligation to pursue this potentially life-enhancing science with a sense of mission that is now lacking in the nation's capital. California has long been a leader in biotechnology and other burgeoning research industries. Proposition 71 gives the state an opportunity to fund another crucial area of medical technology. This state is big enough to support such an adventurous and exciting quest -- and it should -- since it offers not just promise, but hope.”

The California stem cell agency could and does make much the same argument today for continued financial support.

(Editor's note: The National Academy of Sciences report mentioned in the editorial was prepared by a committee of the Institute of Medicine, which is the health arm of the academy.)

CIRM 2.0 and Randy Mills: Crystallizing a 'Tidal Shift' at the California Stem Cell Agency?

Two California stem cell bloggers, one a UC Davis researcher and another a veteran patient advocate, are hailing the appointment of a biotech industry veteran as the head of the $3 billion stem cell agency.

Scientist Paul Knoepfler, who also considers himself a patient advocate, said yesterday,

“Biotech leader (Randy) Mills (formerly of Osiris) serving as the new CIRM president ushers in a fundamentally new era for CIRM, and so it immediately kicks off CIRM 2.0.”

Knoepfler said that CIRM was originally all about pluripotent stem cells but that has changed.

“The notion of a leader with a primarily for-profit mesenchymal stem cell-centered focus at the helm of CIRM would have seemed impossible even just a few years ago. However, a tidal shift just happened. Okay, so it didn’t happen all at once overnight and observers of CIRM could see this trend begin a few years ago, but the appointment of Mills as the new CIRM prez crystallizes this change.”

Knoepfler continued,

“The CIRM of today and the future is primarily going to be about focused stem cell clinical product development (the main goal of Prop. 71) and raising capital to support that development beyond 2017.”

Patient advocate Don Reed, a longtime follower and supporter of the stem cell agency, said on the Daily Kos,

“My impression? Overwhelmingly positive.”

Reed noted that Mills “worked his way through college in the emergency room, so he has a strong sense of urgency for the work at hand. About himself, he stressed that he was 'patient centered... We are going to work relentlessly for the benefit of the patients and the people of the state of California.'”

Last year, Knoepfler posted a four-part series on mesenchymal stem cells, the stuff Mills developed as CEO of Osiris. The series was based on an interview with Arnold Caplan of Case Western University, the father of mesenchymal stem cells. The four items deal with the science but also touch on FDA regulation and medical tourism. The series begins here.

In Knoepfler's book, "Stem Cells: An Insider's Guide," he said Caplan coined the name mesenchymal stem cells(MSC). Knoepfler said in the book,

"MSCs can be isolated from fat, bone marrow, or placenta. MSCs are the hottest type of adult stem cell today with 306 clinical trials."

'As Soon as Mills Sat Down' -- CIRM Chairman on the Stem Cell Agency's New CEO

Officials at the California stem cell agency were extraordinarily taciturn during April as its governing board worked its way through selection of a new president.

Kevin McCormack, the senior director for public communications, would not even disclose the number of candidates being considered in the semi-final or final round, seemingly innocuous figures. On Wednesday, at least one reason for his reticence became apparent.

The 29-member governing board had only one candidate to consider at their final, closed-door meeting in Burlingame, CIRM Chairman Jonathan Thomas said. Their Presidential Search Subcommittee had, earlier this month, screened seven semi-finalists and eliminated all but C. Randal Mills, more commonly known as Randy Mills.

As Thomas commented today on the stem cell agency's blog,

“As soon as Randy Mills sat down we knew we had the person we were looking for.” 

Thomas cited Mills experience, “his sharp intellect and keen analytical mind” and told an emotional story about a 14-year-old leukemia patient involved in clinical trials for Prochymal, a stem cell treatment developed by Mills' then firm, Osiris Therapeutics.

Thomas went on to say,

“Ours is a complex organization. Not only do we fund ground-breaking scientific research, but we are also a state agency. Our mission is to find therapies and cures for chronic disease and injury as quickly as we can and, as a public agency, we operate in a fishbowl. The position of president requires a rather unique set of skills to be able to handle all aspects of the job. 

“We are also at a challenging point in our life. It is now almost ten years since the passage of Proposition 71, the voter-approved initiative that created us. In that time we have made extraordinary progress, helped fund 10 projects that are in clinical trials and have several more starting clinical trials this year. But our work is far from done. We have many other research projects that are making great progress and we want a new president who will help ensure that we are able to move those, as quickly as possible, from the lab and into clinical trials in people. 

“Randy is that person. He has the scientific knowledge, the organizational skills, the business acumen and the personal qualities that this position needs.”

For a very brief look at Mills' views on change and accomplishment, see here.

The New California Stem Cell CEO on Change and Accomplishments

In June 2009, Randy Mills, the new CEO of the California stem cell agency, wrote a brief, first-person reflection on his career and motivations for Pharmaceutical Executive. At the time, he was five years into his service as the top executive at Osiris Therapeutics.

Among other things, he said he worked his way “through college in the emergency room. It taught me a lot about life, death, and human suffering.”

He continued,

“When I accepted the position of CEO at Osiris, I was only 32. The company had been around for 12 years, but was really struggling. I needed to change the culture, and fast. Unfortunately, that meant changing many of the people who had been involved with the company for a long time. It was very hard, but five years later the transformation is dramatic, and the lumps are now fond lessons.”

He also said,

“At Osiris, we've built a culture where patients come first, and we've accomplished much over the last year: We formed the largest stem-cell partnership ($1.4 billion) to date with Genzyme Corporation; we created and sold our first commercial stem-cell product line for $85 million in cash; and we won a $227 million Department of Defense contract. But I think my most significant accomplishment is receiving the first-ever FDA expanded-access approval for a stem-cell therapy, providing life-saving treatment to children who would likely otherwise die.”

Media Coverage of California's New Stem Cell CEO: Mills, Prochymal and Fresh Eyes

Randy Mills (pink tie) and three CIRM directors following today's meeting. Left to
 right, Francisco Prieto, a Sacramento physician. Mills, Jeff Sheehy, a communications
manager at UC San Francisco, and Ken Burtis, a genetics professor at UC Davis
California Stem Cell Report photo

The appointment of Randy Mills, former CEO of a Maryland stem cell firm, attracted quick attention today from the mainstream media as well as the scientific press.

Here is a sample of the coverage as of early evening Wednesday California time.

Kelly Servick of the journal Science wrote,

“Under Mills’ leadership, Columbia, Maryland-based Osiris became the first company to receive regulatory approval for a stem cell drug. Canadian regulators in 2012 approved Prochymal to treat complications from bone marrow transplants. 'We need something like that to happen with some of our projects,' says (Jeff) Sheehy (a member of the CIRM governing board). 

“The board’s choice 'reflects an evolution of CIRM and how they look at themselves,' says Michael May, CEO of the Centre for Commercialization and Regenerative Medicine in Toronto, who in 2012 served on an Institute of Medicine panel tasked with reviewing CIRM’s structure and policies. 'The message is [one of] being more business-like.' Mills is viewed as a pioneer in the stem cell industry, May adds, and may help cultivate partnerships that support CIRM as it looks for new potential funding sources.”

Bradley Fikes of the San Diego U-T reported,

“Biotech reporter Adam Feuerstein dinged Mills last May for claiming Prochymal was the most widely used stem cell drug in the world, when it actually had no sales.

"'Mills has a different definition of 'widely used' than most investors,' Feuerstein wrote.

"Osiris sold Prochymal and the rest of its stem cell business in October to Australia-based Mesoblast for up to $100 million; $50 million in cash and stock and up to an additional $50 million in milestone payments.”

Monte Morin and Eryn Brown of the Los Angeles Times quoted CIRM Chairman Jonathan Thomas as saying Mills will “bring a fresh set of eyes and will help work with our staff on our directions going forward.”

Natalie Sherman of the Baltimore Sun and Erin Allday of the San Francisco Chronicle noted that Mills was part of the large panel of scientists who make the virtually all the decisions on funding grant applications. Chris Rauber of the San Francisco Business Times also had a story.

The agency's press release can be found here.

The California Stem Cell Report will carry an item tomorrow on additional coverage that is likely to surface. 

Former Osiris President Chosen as New CEO at California's Stem Cell Agency

BURLINGAME, Ca. – Directors of the California stem cell agency today selected Randy Mills, the former CEO of Osiris Therapeutics, Inc., of Maryland, to replace Alan Trounson as president of the $3 billion research enterprise.  

The governing board of the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, unanimously chose Mills, who will be the third CEO in the agency's history.

His strong private sector background will become increasingly important at the agency, given its aggressive push to commercialize stem cell research and bring it into the clinic.

Mills' appointment came as the agency faces its possible financial demise. Its funding for new awards is scheduled to end in less than three years. It has only $600 million left in uncommitted funds. CIRM is exploring new ways to raise cash, including some sort of public-private partnership. The new president will play an important role in finding the money.

Mills raised $160 million to support Osiris, said CIRM Chairman Jonathan Thomas. Mills told reporters later that his focus is 100 percent on bringing cures to patients.

Mills will be paid $550,000 annually and will receive $95,000 in moving and relocation expenses. Trounson, who is returning to Australia to spend more time with his family, was paid $490,008 annually, a figure that remained unchanged from 2008, when he joined the agency. CIRM said Mills' compensation was less than for similar jobs at universities and nonprofits. 

Thomas said that Mills will be examining the agency's operations to determine what it is doing well and what it can do better. No cures or therapies have been developed through research funded the agency. Nonetheless, Thomas recently said that the agency has a record that the state can be proud of. He said that CIRM currently has "10 projects that are in or have been in clinical trials – including therapies for heart failure and HIV/AIDS – and we anticipate several more in cancer, diabetes, sickle cell disease and blindness going into clinical trials this year.”

But even some of its directors have noted the difficult and lengthy task of turning research into cures. Stephen Juelsgaard, former executive vice president of the biotech firm Genentech, in recent months has cited figures that show only 10 percent of potential therapies entering clinical trials are approved for use.

Part of Mills' new job will be retention of the agency's highly skilled 56-person staff, which includes 29 persons holding Ph.D. or M.D. degrees. Some of those staffers may start looking for new positions if they believe the agency is not going to secure new funding In some business situations, that could be done with retention bonuses that would encourage key employees to stay on. However, the agency is limited by law to an operational budget of 6 percent of its research awards, which its directors generally agree is very tight.

Also, in 2015, CIRM is scheduled to lose its free office space in San Francisco, a benefit received as a result of San Francisco's successful bid for the headquarters. It has yet to locate new space in the city, which is experiencing skyrocketing rates for office leases. Several years ago, the agency's outside auditor estimated it would cost CIRM $1 million annually to replace the space. That figure would be much higher today because of the rising leasing costs in San Francisco.

Osiris CEO Moving to California Stem Cell Agency

BURLINGAME, Ca. -- The new president of the California stem cell agency is Randy Mills, the former CEO of Osiris Therapeutics, Inc., of Maryland. Directors chose Mills during a closed-door meeting at the Hyatt Regency hotel. More details upcoming.

Editor's note: An earlier version of this item incorrectly reported that Mills was still CEO of Osiris.