Ex-President of California Stem Cell Agency Now On Board of StemCells Inc.

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StemCells Inc.’s board of directors now includes the former president of the California stem cell agency that gave the company $19.4 million in research funding.

StemCells Inc., a Newark company developing stem cell-based therapies, said Monday Dr. Alan Trounson is joining its board of directors, noting that he previously oversaw “the largest scientific funding body for stem cell research in the world.” In October 2013, Trounson said he would step down from leading the California Institute for Regenerative Medicine, the state agency charged with funneling $3 billion in taxpayer money to stem cell research projects at universities, non-profit institutes and companies.

Trounson had led the agency since 2007. In April 2013, the agency awarded StemCells Inc. a $19 million forgivable loan to study potential stem cell-based therapies for Alzheimer’s disease.

StemCells’ founders include Dr. Irving Weissman of Stanford University, which is also the biggest recipient of funding money from the stem cell agency: $280 million to date.

As a board member, Trounson will likely receive compensation, including stock, in StemCells.

Trounson’s joining of the board “calls into question not only his ethics, but unfortunately casts a shadow over CIRM and its award process as well,” said John M. Simpson, an advocate who has followed the stem cell agency at Consumer Watchdog in Santa Monica. “Whether it’s true or not, this has every appearance of being a payback for the money CIRM paid out to Irv Weissman (founder of StemCells, Inc.) and Stanford University. StemCells Inc. and Stanford have received more than $300 million from CIRM — more than any other researchers.”

“A reasonable ‘cooling-off period’ — say two years — would have been appropriate before Trounson joined the board of a private company enjoying CIRM’s largess,” Simpson added. “I can only hope Trounson sees his error and steps down from StemCell Inc.’s board.”

A StemCells spokeswoman declined to comment.

Created by voters in 2004, the stem cell agency has been criticized in the past for apparent conflicts of interest. In 2012, The Sacramento Bee noted that roughly 90 percent of its grants have gone to institutions that have been linked to members of its board.

The agency’s funding has been pivotal for StemCells. ”We’re a publicly traded company, and the marketplace has funded our efforts to date through the sale of stock in the company,” Martin McGlynn, the president and CEO, told The Chronicle in a Saturday story about the stem cell agency. “But we would not have been able to undertake another program, and certainly one as challenging and as risky as Alzheimer’s, were it not for the fact that (the California Institute for Regenerative Medicine) was willing to provide funding to us.”

In addition to Alzheimer’s, StemCells is developing therapies for spinal cord injuries, a rare central nervous system disorder, and the eye disease called dry age-related macular degeneration.

Update, 12:54 p.m.: This has been edited to include comments from Consumer Watchdog and StemCells.

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