Article Postponed on Folsom baby and the Stem Cell Agency

Due to circumstances beyond the control of the California Stem Cell Report, the promised article on a legislative appearance by a Folsom father of an infant involved in a stem cell agency clinical trial has been delayed until Monday.

The father appeared at a legislative hearing earlier this month, along with his wife and child. The baby was afflicted with an immune deficiency disorder that would have been fatal. But he was treated in a clinical trial backed by the stem cell agency and is now healthy.

California's Stem Cell 'Gold Rush:' Nearly 14 Years of Prospecting

A committee of the California Legislature today examined the state's $3 billion stem cell agency. Officials of the agency and others presented their perspective. Here is the text of prepared remarks by David Jensen, publisher of this blog, who appeared at the invitation of the Legislature.

(On Aug. 21, the stem cell agency reprinted the text below on its blog, noting that "at CIRM we know that not everyone agrees with us all the time, or supports all the decisions" of the agency.) 

   2018-08-15 Jensen Assembly Biotech Committee Testimony by DavidJensen on Scribd

California Lawmakers Schedule Update Next Week on the State's $3 Billion Stem Cell Agency

The parents of this child will be testifying next week at a state legislative hearing

For the first time in many years, a California state legislative committee is going to take a look at the state's $3 billion, 13-year-old stem cell research program.

An informational hearing is scheduled for next week, Aug. 15, by the Assembly 
Select Committee on Biotechnology, chaired by Kevin Mullin, D-San Mateo. His district includes a number of biotech firms. No legislation is up for action, and the hearing is not intended to necessarily lead to legislation.

Scheduled to appear before committee are Jonathan Thomas, chairman of the governing board of the agency, and Maria Millan, president and CEO of the agency, formally known as the California Institute for Regenerative Medicine (CIRM).  

The last time a CIRM CEO appeared before a state legislative committee was in 2005 when Zach Hall, then interim CEO testified. 

Also on tap is Jan Nolta, head of the stem cell program at UC Davis, which now stands as the No. 5 recipient of CIRM funds with $138 million. From Folsom will come a couple, Pawash Priyank and Upsana Thakur, whose infant child is now alive as the result of experimental research backed by the agency. The publisher of the California Stem Cell Report, David Jensen, is also scheduled to appear.

The stem cell agency is unique in California history and is a global leader in funding of stem cell research. It operates outside of the normal state budgetary process with its state bond funding flowing directly to it without the usual state budgetary oversight exercised by the governor and the legislature. That is all due to the ballot initiative that created the agency in 2004 and altered the state constitution.

The agency is scheduled to run out of cash next year. It is hoping that voters will approve $5 billion more for it in November 2020.

Next week's hearing, which will be in room 444 in the Capitol, will be available live on the Internet on the day of the  hearing via this page.  It will be archived as well and will be found via this link.

(To see the text of testimony at the hearing, search this blog on the term "assembly biotech hearing.")

(Editor's Note: An earlier version of this item misspelled the last name of Kevin Mullin.)

Torres Receives $225,000 Salary as CIRM Vice Chair

Directors of the California stem cell agency this afternoon unanimously approved a $225,000 salary for one of its co-vice chairmen, Art Torres, declaring that his work was “extraordinary” and has helped to improve relations in the nation's capital and elsewhere.

Torres (at right) joined CIRM in March on a half-time basis, with a $75,000 salary. Today's action gives him a $150,000 boost for work on an 80 percent basis.

Michael Goldberg, a CIRM director and general partner with Mohr, Davidow Ventures, a venture capital firm in Menlo Park, Ca., said Torres has picked up the work that previously was done by a fulltime legislative relations staffer. CIRM Director Jeff Sheehy, a communications manager at UC San Francisco, described Torres' work as “extraordinary” in telling the CIRM story to lawmakers.

No one at the directors meeting at Stanford University spoke against the salary move. However, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., was monitoring the proceedings in Southern California via an Internet audiocast.

Responding to a query, he said,

"At a time when California is in a severe economic crisis, state workers' salaries are being cut and they are facing mandatory furloughs, this raise is highly inappropriate. Art Torres knew the terms of the job when he took it. He should have been happy simply not to face the cuts endured by other state employees."

Torres has made a career as a public servant and politician. The former head of the state Democratic Party (1995-2009) had a 24-year career in the state legislature. He was first elected to the state Assembly in 1972, later served in the state Senate and became the first Latino nominated as a Democrat for statewide office(insurance commissioner).

Torres' talents and experience are unique within CIRM. No other director possesses the web of political connections and government experience that Torres brings to the state-financed stem cell effort. He also has maintained his political roots, campaigning last weekend in Hayward for a candidate for the Alameda county board of supervisors.

The candidate is Nadia Lockyer, wife of the state treasurer, Bill Lockyer, who is a friend and former state legislative colleague of Torres. Lockyer also presides over the sale of state bonds, which are virtually the only source of funding for the $3 billion stem cell agency.

The other vice chairman is Duane Roth, a San Diego businessman who has declined a salary.

Art, Bill, Nadia and Stem Cell Billions

The vice chairman of the $3 billion California stem cell agency, Art Torres, today will return to his old roots as a campaigner when he hits the hustings on behalf of the wife of the state treasurer, Bill Lockyer.

Torres(at left), who is up for a pay increase at the CIRM board meeting next week, will be “pounding the pavement” in Hayward for Nadia Lockyer, who is running for a seat on the Alameda County Board of Supervisors, according to an item on the Political Blotter.

Torres, former chairman of the state Democratic Party, and Bill Lockyer are friends and served together for many years in the California Legislature. Lockyer is also instrumental in matters of money for the stem cell agency. He is the person who presides over the sale and allocation of state bonds, which are virtually the only source of funding for CIRM.

Josh Richman wrote on the Political Blotter that Torres was quoted in a Nadia Lockyer news release as saying that he is proud to support her candidacy.

Torres also said,

“I have had the pleasure of knowing her ever since she was a young person who was intent on serving her community and making a difference. Over the years, Nadia has proven herself as a leader who has consistently fought to empower her community, and Alameda County will greatly benefit from her dedication, hard work, and enthusiasm.”

All politics is local – that's the way the old saying goes. In this case, it also reaches into the laboratories of the more than 300 researchers whose work is financed by the California stem cell agency -- not to mention the hundreds more expected to be funded in next several years, as well as their institutions and businesses.

Chiropractors, CIRM and Its Legislative Posture

The 120 men and women who sit in the California Legislature generally tend to think they have prime responsibility for writing the laws that govern the state. And they often get edgy when state agencies, even ones that have special constitutional status, seem to be straying from the governmental straight and narrow.

Such was the case recently with the California's chiropractic board, which is enshrined in the State Constitution. Gov. Arnold Schwarzenegger's appointees to the board became carried away in what a deputy attorney general described as a fit of "lawlessness." Now the board faces a serious legislative investigation that could include elimination of its $3 million budget.

While this is something of a minor tempest – although not for chiropractors -- the chiropractic board shares several things in common with California's much heftier, $3 billion stem cell agency. Both are written into the State Constitution. Both were created by initiative. Both have issues involving conflicts of interest. And both function in near obscurity except when they hand out buckets of money – in the case of the stem cell agency – or when a scandal erupts, as in the case of chiropractic board.

Obviously major differences exist between the two boards, including the quality of the appointees. But the case of the chiropractors illustrates how quickly matters can go awry in an insular agency and how quickly the legislature may move to step in. The case will also probably show how quickly the governor can put distance between himself and what The Sacramento Bee called a "laughingstock."

Last Sunday we discussed the sometimes acrimonious relationship between CIRM and the California legislature, particularly in the light of bipartisan legislation by the chair of the Senate Health Committee, Sen. Sheila Kuehl, D-Santa Monica. Her measure would inject the legislature into the difficult and touchy matter of how the stem cell agency decides to share the potentially enormous wealth from cures developed with state-funded research. After a shaky start with lawmakers, CIRM has moved to improve its legislative relations and keep lawmakers well informed.

Our piece, which appeared as an op-ed in The Sacramento Bee, was necessarily limited because of space. But we wanted to share more that we heard from CIRM and two longtime observers of the agency, who also have been critical of its performance from time to time and sometimes even more often. What follows are virtually verbatim comments.

First, from Dale Carlson, chief communications officer for the stem cell agency:

"We have an active government affairs program underway in Sacramento focused on legislators and statewide office holders, as well as their respective staff members. We want to keep them apprised of our efforts and progress, the status of key regulatory and funding initiatives, and the challenges we are confronting in pursuit of our mandate and obligations.

"The objective is to ensure that key decision-makers have current, accurate, and reliable information about CIRM's activities, the field of stem cell research, and related issues. We seem to receive reports of new scientific developments every week, and with more states committing funding to the field each year, it's likely that pace will accelerate. It's a challenge for us to stay abreast of the science, federal policy, and other states' emerging policies, all of which have an effect on our scientific project.

"We're very proud of the work we're doing, the processes we follow to engage the public in the development of policies and regulations that are required by the law, and the willingness we've demonstrated to adopt and apply good ideas from variety of sources. We want to be recognized as a credible source of information on all things stem cell, regardless of whether the question is directly related to CIRM's activities.

"Our legislative affairs program includes one-on-one meetings and group briefings. (Early in February), for example, ICOC Vice Chair Ed Penhoet and several CIRM staff held a session with staff from the Speaker's office and the Senate Health Committee and others, to review our IP policies for non-profits and for-profits. Both have been the subject of great interest and discussion in Sacramento (as well as throughout the state and in Washington, D.C.), with legislators offering many suggestions for how those policies might be crafted and strengthened. Our presentation described the progress we've made to date - emphasizing that the regulatory process is still moving forward and unlikely to be completed for several months - as well as a review of the issues we're struggling to address. "(Later in February), (CIRM President) Zach Hall, Arlene Chiu, and Mary Maxon (Chiu and Maxon are CIRM staff) conducted a broader briefing on the basics of stem cells, the progress we've made in our first two years, including on the IP policies, and the grants approved by the ICOC.

"Kirk Kleinschmidt, our Director of Legislation and Research Policy, has day-to-day responsibility for the effort. In addition to arranging these group sessions, he's regularly in the capital meeting with individual members. Gene Erbin from Nielsen Merksamer is on retainer to support the effort. Per the provisions of Proposition 71, (Stem Cell Chairman) Bob Klein oversees the legislative affairs program in consultation with the Legislative Subcommittee and the ICOC. He's in regular contact with federal and the statewide office holders as well as the legislative
leadership."

Carlson also said that Klein, Penhoet, Kleinschmidt and Patricia Olson, who led development of the CIRM strategic plan, had a 90-minute meeting with Kuehl last Wednesday.

Carlson said it was a "detailed discussion of our IP policies, the drug/therapy development process and the extensive public process we've followed."

"This is the kind of relationship we want with the legislature. Respectful and substantive. We want them to be assured that we're going about our responsiblities thoughtfully and carefully, and that we welcome good ideas and the opportunity to discuss our efforts."

Carlson said the CIRM board will meet in Sacramento April 10 and expects to finish its meeting in time for board members to visit with legislators in the afternoon.

Jesse Reynolds, project director on biotechnology accountability for the Center for Genetics and Society in Oakland, has followed CIRM closely during the last two years as well as the Prop. 71 campaign.

Here is what he had to say in response to our query:

"Prop. 71 is a deeply flawed set of laws, with numerous exemptions to the norms of transparency, oversight and accountability....

"Hopefully, the leadership of the CIRM won't be as hostile to much-needed reform as it was during previous attempts. Then, the state's 'stem cell czar,' Robert Klein took the unprecedented step of hiring a lobbyist with taxpayer funds. What's more, while serving as chair of the CIRM's governing board, he simultaneously headed up a private lobbying organization, which advocates for more funding and less oversight of stem cell research. These actions are not appropriate for the head of a state agency.

"Klein's statements that 'the Legislature is not needed' and that then-Senator Ortiz was 'an ongoing threat' are not only wrong, but highlight his cavalier attitude in his role as a public servant. As the people's elected representatives, the Legislature certainly has a critical role in overseeing a multi-billion dollar program. As a senator, Ortiz did more for stem cell research and Proposition 71 than any other elected official."

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumers Rights in Santa Monica, Ca., is another longtime follower of CIRM matters. He said,

"Key to any IP policy are provisions that ensure affordable access for all Californians to any cures or treatments resulting from stem cell research they funded. The ICOC originally envisioned meeting that goal by requiring treatments purchased with public funds to be sold at the federal Medicaid price and that there be a plan in place that would provide access to the treatments for uninsured people.

"In drawing up the actual regulatory language to implement those policies, the ICOC has softened those proposals.....

"I think Kuehl's bill would increase payback to the state, but doesn't do enough to ensure affordable access for all Californians. There should be a provision that if there are unreasonable prices the attorney general can intervene. I cite Genentech's Avastin as an example of what cannot be allowed. The drug was developed with $44.6 million in public funds from the National Cancer Institute yet Genentech charges $100,000 a year for it.

"I'd also like to see action on governance and accountability issues. I don't know what Sen. Kuehl's plans are in this regard. Members of the various working groups should be required to file public disclosures of their interests. All applicants and their institutions should be identified, not just recipients. Finally the ICOC is too large. It should be trimmed from the 29 members who now have seats.

"Another thought: ICOC members themselves have expressed concerns about some provisions of Prop 71. It might be useful for both CIRM and the legislature to attempt to identify such areas and agree on making those changes."

CIRM IP Legislation Faces Tall Hurdle

The following – written by yours truly -- appeared today in The Sacramento Bee as an op-ed piece. We will bring you more details of CIRM's current legislative efforts on Monday.

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Nearly three years ago, California voters created a unique and nearly autonomous agency that set the state on a $3 billion foray into embryonic stem cell research. Under the terms of Proposition 71, voters told the new California Institute for Regenerative Medicine to hand out $300 million annually in hopes that the grants would lead to cures for everything from diabetes to cancer.

Voters also told legislators not to mess with the institute at least for three years. Now that time is nearly up. And two powerful legislators are mounting the first effort -- under the terms of Proposition 71 -- to intervene in the institute's affairs.

The stakes are enormous and involve potentially billions of dollars of profits from stem cell therapies and cures.

The legislation was introduced last month by the chair of the Senate Health Committee, Sheila Kuehl, D-Santa Monica, and the Republican caucus leader in the Senate, George Runner of Antelope Valley. Their Senate Bill 771 is aimed at ensuring that California receives a healthy return on its investment and that state-funded cures are affordable and accessible.

But the senators face an extraordinary obstacle. Under Proposition 71, their legislation requires not just a majority vote to pass -- not just a supermajority vote (two-thirds) -- but a super, supermajority vote of 70 percent. That means 13 senators can kill the bill.

California's biotech industry and the institute are probably already compiling a list of their 13 best friends in the Senate. The state's leading biomedical organization, the California Healthcare Institute, is unhappy with the stem cell institute's intellectual property rules for sharing the wealth, declaring that they provide "a substantial disincentive" for creating commercial cures.

The rules determine who owns the results of the state-funded research, in other words, the intellectual property. They also determine how the intellectual property may be used and who, including the state, will receive royalties and under what conditions.

The California Healthcare Institute has not taken a position on Kuehl's bill but has indicated that it does not want to be hamstrung.

Runner and Kuehl, however, have an unlikely source of support. That's the legacy of the less-than-adroit legislative maneuvers by California stem cell Chairman Robert Klein. Much as President Bush's decision to limit funding for stem cell research spawned Proposition 71, Klein's actions ironically have fostered an environment conducive to the Kuehl bill's success.

Klein not only irritated some lawmakers, but some members of the stem cell institute's Oversight Committee as well. They were not pleased by his broadsides, such as denouncing the former chair of the Senate Health Committee, Deborah Ortiz, D-Sacramento, as an "ongoing threat." That message was delivered last year in a widely disseminated e-mail to patient groups via Klein's nonprofit advocacy group, Americans for Stem Cell Therapies and Cures.

The stem cell institute has attempted to strengthen its legislative ties. It took the unusual step, for a state agency, of hiring a private lobbyist, the well-connected Nielsen, Merksamer, Parrinello, Mueller & Naylor for $4,100 a month. More recently, the institute reached out to lawmakers and legislative staff, sending delegations to Sacramento twice last month, including Zach Hall, the institute's president, and Ed Penhoet, vice chair of the Oversight Committee and head of its intellectual property task force.

Kuehl has a tall hurdle to clear -- the 70 percent vote, not to mention the governor. She is stepping into a complex arena -- intellectual property -- where little unanimity exists, as the institute has discovered. But even if the bill fails, it will help to provide broader input on policies about intellectual property, developed during sparsely attended hearings. The measure additionally will serve as an important test of the institute's openness and political savvy.

While the agency is uniquely independent, California lawmakers are capable of creating much mischief when they feel their constituencies have been slighted. And that is mischief that the institute should avoid, so it can focus on its primary mission, as the institute proclaims, "turning stem cells into cures."