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Potential Conflicts of Interest at the CIRM


Originally published April 6, 2005
Last modified October 3, 2006

The California stem cell research program is compromised by two sorts of conflicts of interest. Proposition 71, which established the California Institute for Regenerative Medicine (CIRM), built conflicts of interest into the structure of the new agency. The proposition mandates that at least half of the CIRM's governing board, the Independent Citizens' Oversight Committee (ICOC), must represent institutions which are likely to conduct stem cell research.

In addition to these built-in institutional conflicts, some members of the ICOC have personal conflicts of interest. Initial research by the Center for Genetics and Society has revealed that seven of the twenty-nine ICOC members have significant business relationships with companies involved in stem cell research. These relationships include substantial equity investments and board memberships, detailed below.

CGS has compiled summaries of the ICOC members' backgrounds and financial interests. These ICOC members have investments or leadership positions in companies that are currently, or have in the past, been involved with stem cell research. Worth of stock ownership is reported on Form 700s that were submitted upon appointment to the ICOC.

Edward Penhoet, ICOC Vice-Chair: Penhoet reported more than $1 million dollars in stock in three of the biotechnology companies on whose boards he sits:

In January 2005, Penhoet told the San Jose Mercury News, "Penhoet... said, 'I'm not aware that any investment I have or any board that I serve on is involved in stem cell research.' Should that change, he said, he would resign from the company board and sell any holdings."

David Baltimore: Baltimore sits on the board of Cellerant, a privately-held California-based company dedicated to the commercialization of human stem cell therapies. Baltimore likely owns an equity stake in Cellerant.

Baltimore also serves on the board of Amgen, the world's largest biotechnology corporation, and has between $100,000 and $1 million dollars invested in it.

Amgen has a strategic relationship with ViaCell, a stem cell company. As recently as January of this year, a headline at Forbes.com read, "Amgen Profits From Stem Cell IPO." In exchange for a $20 million dollar stake in ViaCell, Amgen granted ViaCell a worldwide license to stem cell growth factors developed by Amgen. Furthermore, Amgen retains an option to collaborate with ViaCell on "product or products that incorporate an Amgen growth factor or technology."
http://www.forbes.com/markets/2005/01/21/0121automarketscan09.html
http://www.viacellinc.com/index.asp?p=viacellNews&id=35
http://www.viacellinc.com/index.asp?p=51

In addition to Baltimore, Edward Fritzky is on the board of Amgen. Fritzky also has a seat on the board of Geron, the largest and most prominent stem cell corporation.

Tina Nova: Nova is the founder and CEO of Genoptix, Inc., which develops lasers applicable in stem cell isolation.
http://www.atv.com/includes/content/press/28jan02gen.php3

Gayle Wilson: Wilson owns between $100,000 and $1 million of stock in the biotech company Boston Scientific Corp., which researches and is commercializing stem cell therapies. [Wilson announced her resignation from the ICOC in January 2006.]
http://www.bostonscientific.com/common_templates/articleDisplayTemplate.jhtml?task=
tskPressRelease.jhtml&sectionId=2&relId=24,25&uniqueId=ABPR2202&clickType=
endeca&acceptedWarning=PR

Keith Black: Black owns between $10,000 and $100,000 of stock in Genentech, which conducts stem cell research.
http://www.genentech.com/gene/searchgene/search.jsp?q=stem+cell

John Reed: Reed serves on the board of Stratagene Holding Corporation, which utilizes stem cell research in the development of its products.
http://search.stratagene.com/?index=19012&lastq=&doc0=0&sortsel=rel&opt=
ANY&query=%22stem+cell%22

Brian Henderson: Henderson owns between $2000 and $10,000 of stock each in Genentech and Medtronic, which both engage in stem cell research.
http://www.genentech.com/gene/searchgene/search.jsp?q=stem+cell
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?
itemId=1096494658984&lang=en_US

Other biomedical industry involvement

Other ICOC members have significant investments or leadership positions in the broader biomedical industry. These also raise concerns about conflicts of interest for several reasons:

Proposition 71 funds are not restricted to stem cell research. In fact, the $3 billion of public funding may be allocated to any biomedical research.

Any discoveries made using CIRM funds will be licensed to companies for commercialization. These are likely to be traditional pharmaceutical and biomedical corporations.

A growing number of traditional pharmaceutical and biomedical corporations are now engaging in stem cell research themselves.

Many scientists assert that stem cell research will not only lead to direct stem cell therapies, but will also improve our general understanding of human biology and lead to a broad array of new treatments. This is an exciting prospect, but it means that the entire spectrum of biomedical investments may indicate personal conflicts of interest for ICOC members.

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