Flap may have cost millions
Official kept CPRIT from possible royalties, spokesman charges.
Infighting at the state’s cancer-fighting agency might have cost Texas millions of dollars and has the agency’s foundation director suggesting changes in law to police potential conflicts between the foundation’s donors and the agency’s grant recipients.
The Cancer Prevention and Research Institute of Texas — better known as CPRIT — could have shared in royalties that pharmaceutical giant GlaxoSmithKline offered the MD Anderson Cancer Center if the state agency had financed a Houston-based business incubator that included a cancer center, the agency confirmed Tuesday.
The GlaxoSmithKline investment could be worth as much as $335 million to the Houston cancer center over the life of the partnership, according to a MD Anderson news release, if the center’s research on anti- bodies makes it to market.
Bill Miller, a spokesman for Jimmy Mansour, chairman of the agency’s oversight committee, blamed Alfred Gilman, who resigned this year as CPRIT’s chief science officer because the incubator grant was not reviewed by his committee of scientists. The grant
got approval from the agency’s commercialization division, but Gilman ignited a firestorm with his allegations of interference from the oversight committee.
“Dr. Gilman’s overreaction cost CPRIT millions,” Miller said. “It’s a sad day for CPRIT and those associated with fighting cancer.”
Gilman did not respond to an email or calls seeking comment.
Miller’s comments are the first salvo in what is expected to be a fight in the Legislature over the direction of the state agency, whether to focus on basic research or invest more in companies that commercialize research into products. The tiny agency, with a couple dozen staffers, has $300 million a year to spend on fighting cancer and is the nation’s second-largest source of cancer research money.
Against a backdrop of investigations and a state audit, the agency and its foundation are trying to restore credibility with state lawmakers after it was recently disclosed that the agency two years ago awarded an $11 million grant to Peloton Therapeutics, a Dallas startup, with no review.
On Tuesday, Jennifer Stevens, executive director of the CPRIT Foundation, wrote to state Sen. Jane Nelson and Rep. Jim Keffer, the authors of the legislation creating the agency and its foundation, to urge changes in state law to protect against conflicts of interest between the foundation and the agency’s review for grants.
The Legislature has prohibited donors to the foundation from receiving grants, but Stevens wrote that it is a “challenge” to enforce because the foundation staff learns the identities of the grant recipients only after the agency makes the awards.
On the other hand, the foundation also has declined to release the names of all of its donors, citing their right to privacy. That policy leaves the public unable to determine whether foundation donors are getting grants.
In her letter, Stevens wrote that “to my knowledge, no CPRIT grantee is also a donor to the Foundation.” For the first time, Stevens also acknowledged some donations have been returned.
Marc Palazzo, an outside spokesman for the foundation, said a handful of small donations were returned “out of an abundance of caution” to university regents whose institutions received grants and, in one case, a doctor who was employed by a grant recipient. The donations ranged from $500 to $2,500.
In her letter, Stevens suggested that the Legislature should require the donors’ list and a slate of grant applicants to be reviewed by either the agency’s compliance officer, the attorney general or state auditor.
Stevens also addressed that the Internal Revenue Service exempted the foundation, at its request, from filing forms called 990s that would provide more details about its fundraising and expenses. The IRS exempted the foundation because its only purpose was to support a state agency, primarily supplementing the salaries of agency executives.
Stevens said that practice was in place when she was hired as executive director in the summer of 2009. She acknowledged that filing 990s is standard practice for almost all other nonprofits, adding that the foundation’s activities were being limited by the exception.
She said the foundation’s board, which was initially dominated by members of the agency’s oversight committee, expanded the board and agreed to begin filing 990s by the end of this year. She said the foundation acted this year — “ahead of recent media attention” — because it would allow the foundation to collaborate with other cancer-fighting organizations as well as become more involved in economic development.
The foundation’s new initiative, “LeadTexas,” would allow the foundation to “raise awareness and recruit new jobs to our state,” Stevens wrote.
She said Gov. Rick Perry’s economic team — as well as regional economic development leaders and advocacy groups — have reacted positively to the initiative.
Cathy Bonner, a former aide to the late Gov. Ann Richards, who started the campaign for a statefunded cancer research effort, has been critical of the cancer agency.
“The legislation was
spokesman for Jimmy Mansour, chairman of the agency’s oversight committee never intended to give money to private companies and individuals so they could develop products to make money in the cancer marketplace,” Bonner said. “CPRIT has lost its focus on saving lives and has become a private playground to make certain people rich.”
In 2007, Texas voted to sell $3 billion in bonds to finance a 10-year effort to find cures for cancer. The Legislature included commercialization of research and the creation of jobs in the enabling legislation, but the bulk of the money so far has gone toward research.
“There will always be an internal fight over how much goes to medical research and how much goes to commercialization,” Keffer said. “The Legislature will always lean to commercialization because it gives us results to hang our hat on.”
As for the Houston-based incubator, the state could have another chance.
The cancer agency withdrew the $18 million grant after Gilman’s resignation highlighted the lack of a scientific review of the application. But Scott Merville, an MD Anderson spokesman, said the cancer center would hope to reapply should the cancer agency resume financing business incubators.
Keffer blamed the cancer agency’s problems on “sloppiness.”
“I don’t think there is anything sinister or underhanded,” Keffer said. “It’s not going to Joe Cancer Shop. It’s going to Rice (University) and MD Anderson.”