Amidst morale ‘crisis,’ CA stem cell agency could take months to find new president

California’s $12 billion stem cell and gene therapy program could be treading water for the next 12 months in the view of at least one of its leaders as it searches for a new president of the 19-year-old enterprise.

The prediction came earlier this week at a meeting of the 35-member governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is officially known. It is the largest regenerative medicine institution in the world and the largest state stem cell research program in the nation.

The search comes at a critical time for CIRM, which has yet to fulfill the expectations of voters in 2004.  Campaign rhetoric led voters to believe that revolutionary cures were close at hand. However, CIRM has failed to back financially a stem cell treatment that is available to the general public.

Past presidential searches have been burdened by a legal, dual executive arrangement that has been described by a former board member as a “dog’s breakfast.” Overlapping responsibilities for the president and board chair were locked into state law by the ballot initiative that created CIRM in 2004.

The new president could also be CIRM’s last, depending on whether the agency can muster more billions of dollars within nine years or less. Indeed, a path to sustainability is likely to be a major CIRM concern during the next few years as it re-evaluates its priorities, a task that will be put on hold until a new president is on board.

Board Chairman Vito Imbasciani summoned directors on Monday for what he called an “extraordinary” meeting after CIRM President and CEO Maria T. Millan resigned abruptly earlier this month. No reason was given by her or CIRM.

But on Monday directors talked briefly about a “crisis situation” involving staff morale. Board member Joe Panetta, president of BIOCOM (a biotech industry group), said he was “somewhat surprised” by the problem. Other members of the board also expressed concern, particularly in terms of whether an interim president was needed.

Anne Marie Duliege, a veteran of the board who served during a 10-month search for a CIRM president in 2013, said an interim president should be named. She said the search could extend for 12 months. Others agreed that the process is likely to go on into at least the summer.

Past presidential searches have been burdened by a legal, dual executive arrangement that has been described by a former board member as a “dog’s breakfast.”

Directors said no significant decisions will be made until a new president is selected. A caretaker would be all that is necessary, coupled with assistance from the vice chair and chair of the board. Both persons are salaried employees of CIRM.

Decisions on the responsibilities of an interim president and selection were put off until the Dec. 14 meeting of the CIRM board. But the board approved a search committee co-chaired by CIRM board members Kim Barrett, vice dean for research, School of Medicine, UC Davis, and George Blumenthal, former chancellor of UC Santa Cruz.

CIRM has had difficulty in the past filling the CEO spot, which has a salary range of $427,000 to $632,000. Some observers have argued that it is too low given the high level of pay in the biotech industry and the cost of living in the Bay Area, where CIRM is headquartered.

Two of CIRM’s three presidential searches took 10 months. The third, which led to Millan’s appointment, took only four months. However, she was already a vice president at CIRM and was endorsed by the outgoing CEO as his successor.

CIRM is now in a much different position, however, than when the CEO searches took so long. Legal challenges have been overcome and better operational standards are in place.

The dual executive arrangement has been a constant over the years and was created by a ballot initiative that now totals 17,000 words (The combined size of Proposition 71 of 2004 and Proposition 14 of 2020.).  The measures were drafted behind closed doors under the supervision of Robert Klein, a Palo Alto, Ca., developer. Klein later became CIRM’s first chair and clashed sharply and publicly with its first president, Zach Hall, who had been recruited by Klein.

Relations between subsequent presidents and chairs have been smoother — at least publicly — but there is no guarantee that will continue in the future.

The dual executive setup was criticized in three major studies of CIRM, including two funded by the agency itself. In 2007, it was publicly labeled a “dog’s breakfast” by Richard Murphy, then a member of the CIRM board and the president of the Salk Institute. Murphy later served as a CIRM interim president for CIRM.

In a 2013 study, the National Academy of Medicine recommended major changes in the CIRM’s executive operations. The study cited previous, similar concerns by California’s Little Hoover Commission, an independent state good government department, and CIRM’s own External Advisory Panel.

CIRM paid $700,000 for NAM study, which said: “To strengthen lines of communication and provide clear direction for the agency, the co-CEO management approach at CIRM should end, with the agency president placed in charge of all operations and the chair fulfilling only oversight duties, external affairs and board administration. The administrative limits set in Proposition 71 require a careful allocation of staffing and resources: the current overlapping roles of the president and the board chair complicate this effort, creating multiple reporting channels and functional redundancy.”

The NAM report noted that the co-executive conflict could be eased without requiring a change in state law, which would be politically and legislatively difficult. The CIRM board and chair could delegate some of the overlapping responsibilities to the president. Based on experience in recent years, the key is to have a board chair and president who see eye to eye.

At the time of the report, the CIRM board did not receive its recommendations warmly, and few changes were made. In 2020, with the new initiative (Proposition 14) refinancing CIRM, the board could have fixed the dual executive problem, but it failed to do so.

(See here for the full text of what the National Academy of Medicine had to say about the “interaction” between the president and CIRM chair.)

Jensen is a retired newsman and has covered CIRM for 18 years on his newsletter, the California Stem Cell Report. He authored the book, “California’s Great Stem Cell Experiment,” in 2020.