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
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."
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.
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.]
Keith Black: Black owns between $10,000 and $100,000 of
stock in Genentech, which conducts stem cell research.
John Reed: Reed serves on the board of Stratagene Holding
Corporation, which utilizes stem cell research in the development
of its products.
Brian Henderson: Henderson owns between $2000 and $10,000
of stock each in Genentech and Medtronic, which both engage
in stem cell research.
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.