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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.

(Note: This item has been copied over to the Life Sciences page from its original location on the VentureBeat main page. To view it in its original context, with comments, click here.)

Amgen’s anemia rollercoaster — Biotechnology titan Amgen may have dodged a bullet when a study released Thursday showed that its anemia drug Aranesp didn’t shorten the lives of patients, after several other studies had suggested the opposite. But its anemia franchise isn’t out of the woods yet. A Wednesday report in the Journal of the American Medical Association revealed that for-profit dialysis clinics prescribe far higher doses of anemia drugs to their patients than do their non-profit counterparts, suggesting a profit motive behind the overuse of drugs that have been linked to cardiovascular problems at high doses.

Now it appears that Congress may weigh in: The WSJ quotes Rep. Fortney “Pete” Stark, a California Democrat, calling for changes in Medicare reimbursement to eliminate any incentive to overuse the drugs, which stimulate production of the red blood cells that carry oxygen.

More on “generic” biologics — Here are two takes on the move to allow copycat versions of biotech drugs that I neglected to mention in yesterday’s post on the subject. Writing at Forbes.com, Scott Gottlieb — former FDA deputy commissioner for medical and scientific affairs, now a pundit at the neoconservative American Enterprise Institute — makes the counterintuitive argument that copycat biotech drugs will speed the development of new drugs, even if they’re just simply improved versions of older ones.

Meanwhile, pharma/biotech consultant David E. Williams dismisses the biogenerics push as “a bad bill that deserves to die” on his Health Business Blog, but suggests that Congress could adopt a more straightforward solution: Simply mandate price cuts on biotech drugs once their patents expire. It’s such a wacky but weirdly intriguing idea that I can’t even tell if it makes sense, but I certainly doubt that Congress could muster the political will for such a naked exercise of government power — it simply violates too many current assumptions about the usefulness and necessity of markets.

Stem cell divisions — The president of California’s $3 billion stem-cell research program resigned abruptly on Tuesday, citing both health concerns (a recent diagnosis of prostate cancer) and tensions between patient advocates and biomedical academics over plans to spend up to $300 million on new research facilities. Zach Hall’s departure will now come earlier than expected — he’ll depart at the end of April instead of the end of June — but plans to name a successor are already underway. Despite his title, Hall wasn’t the head honcho of the California institute; that honor is reserved for Robert Klein II, chairman of the inaptly named Independent Citizens Oversight Committee, who is also rumored to have clashed with Hall more than once. David Jensen of the estimable California Stem Cell Report has all the details.

Dollars for doctors (and everyone else) — Why does U.S. healthcare cost so much? The economics blog Marginal Revolution hosted a fascinating debate on the subject earlier this week, prompted by Tyler Cowen’s capsule review of a new book by Maggie Mahar titled Money Driven Medicine. The argument is too complex to do it much justice here; the best summary I can make without writing an essay myself is that the entrepreneurial instincts of doctors and medical-technology suppliers (including drug companies), combined with weak resistance from desperate patients, leads to market failure, including drastic overuse — and misuse — of medical services. Don’t miss Mahar’s contribution to the Marginal Revolution debate in comments. Two other takes on the book are here and here.

In a similar vein, this post from the group blog Health Care Renewal aims to explain why so many academic researchers seek out funding from pharmaceutical and biotech companies these days. Turns out it’s not just the greed of companies eager to co-opt paragons of the ivory tower; instead, blogger Roy Poses suggests that university incentives similar to the ones that motivate car salesmen are at fault. Definitely worth a read if the question has ever crossed your mind.

Research odds and ends from the week that was:
• Scientists discovered a gene that appears to be key to “self-renewal” in both embryonic and adult stem cells.

• Surgeons are exploring ways of conducting minimally invasive procedures using “natural openings” in the body such as the mouth, the rectum or the vagina.

• Take that, white supremacists: Physical anthropologists now believe that European skin only lightened up 6,000 to 12,000 years ago, suggesting that “our European ancestors were brown-skinned for tens of thousands of years” prior to that. The link is subscription-only, so here’s a brief snippet of the Science news article:

Researchers have disagreed for decades about an issue that is only skin-deep: How quickly did the first modern humans who swept into Europe acquire pale skin? Now a new report on the evolution of a gene for skin color suggests that Europeans lightened up quite recently, perhaps only 6000 to 12,000 years ago. This contradicts a long-standing hypothesis that modern humans in Europe grew paler about 40,000 years ago, as soon as they migrated into northern latitudes. Under darker skies, pale skin absorbs more sunlight than dark skin, allowing ultraviolet rays to produce more vitamin D for bone growth and calcium absorption. “The [evolution of] light skin occurred long after the arrival of modern humans in Europe,” molecular anthropologist Heather Norton of the University of Arizona, Tucson, said in her talk.

Zach Hall, president and top scientist at California’s $3 billion stem cell institute said he will resign from the agency within the next six months.

He cited personal reasons, but he often butted heads with Robert Klein, chairman of the board. The institute is also battling a number of lawsuits which have hampered it from getting its job done. Also leaving is staff member Kate Shreve. Staff member Walter Barnes retired earlier this year, and its PR person Nicole Pagano also left.