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California’s $3 billion stem-cell agency, which has been without a permanent leader since the end of April, finally filled that void yesterday by naming Alan Trounson as its second president.

Hopes are obviously high that the widely respected Australian scientist, pictured at left, can bring some stability to the institute, formally known as the California Institute for Regenerative Medicine. A string of CIRM staffers, including former president Zach Hall and chief scientist Arlene Chiu, have departed or announced their resignations in the past several months, despite the fact that the agency is finally starting to get rolling with major grant programs for stem-cell science and research facilities. Although CIRM insists that these departures are individual decisions unrelated to any larger issue, it sure looks like the agency’s heavy responsibilities, lean staffing and Byzantine management structure are simply burning out its employees. (CIRM insiders have since confirmed that assessment in confidence. See my previous coverage here.)

Trounson certainly has a glittering resume and experience in both academia and business, having founded several fertility clinics and at least one biotech company, Singapore’s ES Cell International. (He’s currently director of the stem-cell and immunology laboratories at Monash University in Victoria, Australia.) With luck, his background will stand him in good stead in dealing with Robert Klein II, the strong-willed real-estate magnate who heads CIRM’s powerful oversight board, and who clashed with Hall several times during his tenure as president — even squabbling over who had the right to assign office space, according to a piece by David Jensen over at Wired News. Trounson, who will earn $475,000 a year, has already released a statement touting his intention to forge a “partnership” with Klein and the oversight board.

That said, the challenges CIRM still faces are significant, and it doesn’t help that Trounson apparently won’t even start his new job until the end of the year — and even then will likely work part-time while he winds down his involvement with his Monash laboratory. With all due respect to acting president Richard Murphy, it’s still likely to be a while before CIRM gets the steady hand on the tiller it appears to need so badly.

For more information, see the comprehensive coverage at Dave Jensen’s California Stem Cell Report, which also includes links to a number of mainstream-media stories.

(CORRECTED: See below.)

These should be the best of times for California’s $3 billion stem-cell program. Lawsuits that barred the institute from spending its vast sums have been dismissed, serious money has started to flow to scientists, and a $227 million capital-spending project that will build new laboratories across the state is gearing up.

For all its successes, however, the stem-cell organization — formally known as the California Institute for Regenerative Medicine — can’t seem to keep its top officials on board. First, there was the abrupt resignation of the institute’s first president, Zach Hall, who departed CIRM at the end of April, months earlier than his original plan, amid internal tensions over that capital-spending project. By mid-summer, the stem-cell body had made little progress finding a replacement and instead tapped Richard Murphy, the recently retired head of the Salk Institute and a former member of the stem-cell institute’s powerful oversight committee, to take the reins on a temporary basis (PDF link).

Then came the news last week that the institute’s top scientific official, Arlene Chiu, is also leaving unexpectedly. Chiu, who joined CIRM with great fanfare in mid-2005, ended up shouldering additional responsibility when Hall left. Last week, she said simply that she would be returning to her home in Los Angeles to “pursue new professional directions” — a statement that carries more than a whiff of burnout. (At least she’s not leaving to spend more time with her family.) Chiu doesn’t leave until October, and will remain a consultant to the institute after that.

CIRM spokesman Dale Carlson says these and other recent staff departures noted by David Jensen over at the California Stem Cell Report were all for individual reasons, that they’re unrelated to one another and that “[t]he timing is coincidental and nothing more should be read into them.” Maybe that’s true, and absent calling them all up, there’s really no way to know for sure, although CIRM certainly has an incentive to put out the message that all is well.

That said, it seems safe to say that the stem-cell agency is probably one of the most grueling places to work in all of biomedicine. Structurally, CIRM is a Rube Goldberg-inspired contraption in which a panel of 26 appointed academic luminaries, business types and patient advocates oversees a professional staff of no more than 50. The powerful oversight committee chairman, Robert Klein II, essentially runs the show, which undoubtedly complicates the job of finding a prominent biologist — not usually the shyest and most self-effacing people around — willing to give up their laboratory in order to butt heads with Klein over the institute’s management and direction.

What’s more, CIRM itself was deliberately designed to function on a shoestring. That hard cap of 50 staffers was initially intended to reassure California voters that the agency wouldn’t waste taxpayer money on a hiring binge, and in that sense, it’s clearly worked. On the other hand, add the fact that the agency hasn’t even come close to filling all 50 positions to the string of departures, and it begins to look a lot like the institute is paying the price by burning through its human resources at an accelerated rate. (See also this related comment from Christopher Thomas Scott of Stanford’s Stem Cells in Society program over on Dave Jensen’s blog.)

This is certainly one way to run an organization, and it’s probably helped the stem-cell organization avoid criticism of how it’s managing taxpayer funds. (It also would have been unseemly to staff up too much when the agency was living primarily off of charitable donations, as it was before the courts dismissed the lawsuits.) On the other hand, there are other risks to running so lean. Last spring, CIRM approved a $2.6 million grant to a Los Angeles outfit called the CHA Regenerative Medicine Institute, a nonprofit subsidiary of a for-profit South Korean company, and one whose founding president appeared to be embroiled in plagiarism allegations. The resulting mini-scandal appears to have since fizzled out, particularly once the plagiarism allegations were retracted, but it’s an early cautionary tale for CIRM, which surely doesn’t want to face future scandals that could have been prevented with a bit of additional staff oversight.

Read More:
* On CIRM and stem cells, see this item on whether the U.S. “brain drain” is reversing or not, and this item on whether Big Pharma is tiptoeing into embryonic stem-cell investments (with a followup here).
* For other biotech-related pieces, check out this item on Koronis and its unique anti-HIV strategy, these looks at recent baby steps toward “personalized medicine,” a take on the ridiculously large IPO envisioned by Talecris Biotherapeutics, and two items on startups that aim to pioneer the dawning age of “personal genetics.”
* On more general medical subjects, see my admittedly opinionated takes on healthcare reform, evidence-based medicine, the nascent push for electronic health records and Andy Grove’s quixotic healthcare-reform crusade.

CORRECTION: This item originally stated that CIRM “handed out” a $2.6 million grant to the CHA Regenerative Medicine Institute. That grant is still in administrative review, so I’ve corrected the wording.

The California Supreme Court swept away the last legal impediment to the state’s $3 billion stem-cell research program Wednesday when it declined to review two lawsuits that challenged its constitutionality.

Ideological foes of the state’s stem-cell effort, which voters approved by a large margin in a 2004 ballot initiative, have waged a two-year battle in the courts to shut it down. The opponents — a coalition of anti-tax and limited-government conservatives and anti-abortion activists — argued that the California Institute for Regenerative Medicine is rife with conflicts of interest and that its establishment violated the state constitution because CIRM wasn’t fully under control of the state government. (The initiative text shields CIRM from legislative interference for three years, and beyond that point requires legislative supermajorities to enact any changes.)

The suits effectively froze CIRM’s ability to dole out research funds, since the uncertainty over entire effort’s constitutionality made it impossible to sell the state bonds that will fund research proposals and laboratory construction at universities across the state.

The court’s decision was largely foreshadowed by a district court ruling in CIRM’s favor more than a year ago. The institute’s opponents, however, insisted on pressing their case through two levels of appeal, to no avail.

Yesterday’s ruling occasioned the overheated rhetoric we’ve become accustomed to whenever the subject of stem cells comes up. Robert Klein II, chairman of CIRM’s powerful advisory board and effectively head honcho of the entire effort, called the ruling “a great victory” and said “our $3 billion is free from these restrictions put on by the ideological right.” Meanwhile, Terry Thompson, a lawyer for two of the plaintiffs, declared that the ruling “establishes a precedent for well-meaning but misdirected rich people to invade the public treasury for projects of their own and parlay a few million dollars [of campaign expenses] into a few billion dollars of wasted taxpayer money.”

CIRM has already managed to issue $158.8 million in research grants, thanks to some creative financing that included a $150 million state loan approved by Gov. Arnold Schwarzenegger and the sale of $45 million in “bond anticipation notes” to mostly wealthy individuals whose money would have been lost had the court decision gone the other way. The first $250 million in state bonds, likely to be issued in July or August, will mostly go to repay the loan and notes.

With California’s stem-cell program in the clear, the big question now is whether activists will mobilize against similar but smaller scale efforts in New York and Massachusetts — not to mention, of course, whether their luck will be any better if they do.

For more, see the SF Chronicle, the San Jose Mercury News and the LAT.