Is $100M in Stock Enough to Make MD Anderson Go Public with its Conflict-of-Interest Management Plan?

Last week, it was reported in both The Cancer Letter and the Houston Chronicle that The University of Texas MD Anderson Cancer Center had closed a deal to sublicense intellectual property to two pharmaceutical firms, Intrexon and Ziopharm Oncology. There is nothing terribly unusual about that.

The deals, however, were mostly in exchange for equity, $50 million in stock from each company plus $15-20 million per annum. The technology is chimeric antigen receptor T cells (CAR T) and The Cancer Letter article suggests that the clinical trials testing the technology’s efficacy will be done at MD Anderson, at least in part.

This struck me as odd.

In 2002, after the previous President of MD Anderson was accused of conflict-of-interest on the front page of the Washington Post when 195 patients who were human subjects on clinical trials at Anderson using the drug he invented, were reported not to have known of his financial interest in their well-being following the trial, that President formed a committee to rewrite the conflict-of-interest rules for MD Anderson faculty and institutional decision makers. I was part of that committee, but it had been a long while since I had reviewed the policy and wondered if the new policy (dated 2/21/2014, Version 61.0) would allow such a deal as the newly signed one because the policy I helped author would not have allowed this stock deal to go through with trials to be run at Anderson by Anderson faculty under the President’s supervision.

Here is what I found in the most recent policy:

1. The purpose of the policy (CONFLICT OF INTERST POLICY FOR FACULTY MEMBERS, TRAINEES, FACULTY SUPERVISORS, INSTITUTIONAL DECISION MAKERS, AND INVESTIGATORS OF THE UNIVERSITY OF TEXAS MD ANDERSON CANCER CENTER, #ACA0001) is still “to protect patient safety and welfare, safeguard the reputation of the institution, preserve the integrity of the affiliated research…”
2. Compensation is defined as “any form of benefit including, but not limited to, salary, retainer, honoraria, intellectual property rights or royalties or promised, deferred or contingent interest.”
3. Conflict of interest is defined as “a significant financial interest or outside relationship that could directly and significantly influence (or be perceived to directly and significantly influence) the employee’s performance of the employee’s Institutional Responsibilities, including patient care or the design, conduct, and/or reporting of research.”
4. Financial interest is defined as “anything of monetary value, whether or not the value is readily ascertainable.”
5. Institutional decision makers include the President, Executive Vice Presidents, Vice President and Chief Financial Officer, Controller and any written designees.”
6. A management plan is a “formal written plan to address a financial conflict of interest.”
7. An ownership interest is “in any corporation, partnership, or other legal entity including stock…held in blind trusts (to the extent that the identity of the companies in the portfolio in the blind trust is unknown).”
8. A supporting entity is one “that sponsors an IRB Approved Protocol or other research study; or provides funds for a research study”
9. Section 1.2.E prohibits making “personal investments that could reasonably create a substantial conflict between the employee’s private interest and the interest of the institution;”
10. Section 2.2.A “No research will be conducted at MD Anderson for which payment is dependent upon a specific outcome” (but wouldn’t the stock value of both companies increase markedly if the clinical trials at Anderson are successful or apparently beneficial?)
11. Section 2.2.B No Institutional Decision Maker or his/her spouse and/or dependent children may hold any Ownership Interest or receive Cash of $10,000 or more in any 12-month period from a Supporting Entity funding research for which an MD Anderson faculty member or others at MD Anderson serve as Principal Investigator.”
12. Section 2.4.B “A Covered Individual may not serve as the Principal Investigator (or Co-Principal Investigator) for an IRB Approved Protocol or sponsored research agreement if he/she…has any Ownership Interest in the Supporting Entity…of $10,000 or greater”
13. Now here’s the loop hole: Section 2.4.E “the President may give written permission to a faculty member with a potential Financial Conflict of Interest authorizing that faculty member to act as the Principal Investigator of that IRB Approved Protocol.” (In other word, numbers 1 through 12 no longer matter if the President says they don’t.)
14. However, in such a case, if the investigator “holds equity in the Supporting Entity, the IRB Approved Clinical Protocol must be multi-institutional, and the lead Principal Investigator must be an individual from another institution.”
15. “Neither faculty members nor the institution may hold the Investigational New Drug Application (IND) for such an IRB Approved Protocol.”
16. Section 9.3 “No direct Supervisor will be responsible for oversight or approval of another person’s compliance with the commitment of time requirements as specified…if such Supervisor has an Ownership Interest…from the outside entity…”
17. In section 10.1 it states “if MD Anderson has an Ownership Interest in a Supporting Entity funding, any IRB Approved Protocols related to that Supporting Entity, such IRB Approved Protocols will be reviewed at least once a year by an independent clinical research monitoring organization, which will review all efficacy and safety data, and this relationship will be disclosed on the patient informed consent documents. Phase I and Phase II IND exempt studies may be conducted entirely within the institution; Phase II studies must be conducted as multi-institutional trials; Phase III studies and Phase II studies aimed at gaining FDA approval…must be conducted as multi-institutional trials with the lead Principal Investigator being from an institution other than MD Anderson.”
18. In section 12.1 on Compliance the reporting of non-compliance is to the very Institutional Decision Makers referred to as being covered by the policy.

So all I am asking is that MD Anderson reveal the details of the new agreements.

1. Who owns the $100M in stock? It surely cannot be in a blind trust. We all know what’s in it.
2. Who is overseeing whom when the trials start?
3. Where will the CAR T cells be manufactured?
4. Where will the trials be done and who are the lead investigators and do they have any of this stock themselves?
5. Why did they bother writing a policy when the President can wave a wand and excuse all the bad behavior the policy putatively outlaws?
6. And what is going to prevent Dr. DePinho from asking for another appearance on CNBC to push these two stocks as he pushed Aveo before that company imploded? (Look at what happened just because of the MD Anderson announcement):

From the New York Times’ Andrew Pollock, January 19, 2015:

“Last week, two companies working together agreed to pay the MD Anderson Cancer Center $100 million in stock for technology that can be used in such therapy. They paid an additional $15 million in stock to persuade the cancer center to sign the deal in time for it to be announced at the J.P. Morgan conference.”

“Expensive as that was as a public relations strategy, it paid off, at least in the short run. Shares of one of the companies, Ziopharm Oncology, went up 55 percent on Wednesday, the day after the announcement was made. Shares of the other, Intrexon, rose 31 percent.”

What am I missing?

How can this arrangement as announced possibly be in compliance with the latest COI policy of MD Anderson and if so, let’s see the details.

Zwelling is a medical oncologist and former vice president for research administration at MD Anderson.

MD Anderson Responds: Consider the Source and Venue

This letter from the MD Anderson administration and received from Jim Newman, director for external communications.

To The Cancer Letter:

Throughout the past three years, The Cancer Letter seems to have been willing to print whatever allegations were provided to it concerning MD Anderson, with seemingly no effort to determine the credibility of the sources or legitimacy of the accusations.

While our responses to several of the publication’s assertions have attempted to provide a more factual picture, we have not previously gone on record to question the bias of sources or slanted commentary presented, as we have been confident that the readership is aware of the great work done by our 20,000 cancer fighting people every day.

Following The Cancer Letter’s invitation to respond to the latest criticism from a former faculty member who failed to obtain peer-reviewed support for reappointment, was faced with the reality of no longer being employed at MD Anderson, and subsequently left the institution for another position from which he was terminated within months, we believe the time has come to make the record factually accurate.

Dr. Zwelling’s lengthy criticism of MD Anderson’s license agreement with two biotechnology companies, which will enable further development of CAR T therapies, is nothing more than highly selective and misleading quotes from MD Anderson’s Conflict of Interest Policy coupled with a list of questions based on his own fictional hypotheticals.

Here’s what readers need to know:

The agreement announced last week does not in any way violate MD Anderson’s Conflict of Interest Policy, which is comparable to policies at other fine academic institutions. We invite your audience to read the policy themselves http://www.mdanderson.org/about-us/compliance-program/handbook-of-operating-procedures/aca0001.pdf. As one who claims to have been a partial author of previous versions of the policy, we are surprised Dr. Zwelling does not recognize that the agreement can be successfully managed in accordance with both the current policy, as well as previous versions.

The reality of the situation is this: While MD Anderson is currently conducting a handful of CAR T therapy studies, no one who will personally benefit from the agreement is directing those active studies, nor will they be allowed to do so in the future. Furthermore, those who will personally benefit are the exceptional scientists and doctors who have produced this outstanding work. Most academic institutions actively promote such efforts through rules that provide for sharing licensing benefits with inventors. Moreover, there are no current studies at MD Anderson being funded by either of the companies who licensed the technology. MD Anderson’s Conflict of Interest Committee and other responsible offices will nevertheless monitor the situation to ensure if and when potential conflicts arise, they will be addressed quickly and appropriately.

If and when one or more of the MD Anderson investigators who pioneered this approach do apply to conduct new CAR T trials, we will do what we always do—review the situation and determine if (a) a conflict of interest exists, and if so (b) whether the conflict is best eliminated or managed. If the conflict can be appropriately managed, MD Anderson will then create a customized conflict of interest plan with impartial oversight so that the research follows institutional guidelines created to ensure patient care decisions are not impacted and research is conducted without bias. Our position on these matters remains the same—patient safety comes first and research integrity is just as important. This has been the case for 74 years and it will continue for generations to come. On both individual and institutional conflict issues, there are multiple ways that a conflict can be managed, all with necessary monitoring and transparency. Guidelines for managing conflicts have always been a part of our rules.

Given MD Anderson’s current strong, stable financial position, the value from the transaction ultimately received by the institution after it is shared with another university, inventors and potentially other entities, coupled with the conflict management safeguards that will undoubtedly be taken if required, demonstrates the absurdity of suggesting that the institutional holding in these shares could even remotely influence the work done by our world-class faculty. Moreover, it is our solemn responsibility to save lives by converting discoveries in journals to medicines in the clinic through a number of mechanisms including collaborations with the private sector. If such life-saving collaborations yield a monetary return for the institution, those resources are reinvested in our mission areas of patient care, prevention, research and education.

Dr. Zwelling decries the fact that a portion of MD Anderson’s Conflict of Interest Policy can be adapted in special circumstances. He selectively quotes the policy when making this point. A quick review of it reveals that Dr. Zwelling’s broad claim that the policy allows the president to “excuse all bad behavior” is highly-inaccurate at best and highly manipulative at worst.

In closing, while Dr. Zwelling publicly shares his disgruntled criticisms of his former employer on a near-daily basis through various venues, in this case it appears his frustrations with MD Anderson have clouded both his memory and judgment. We feel his most recent comments to The Cancer Letter are unfair to both his former colleagues and other caring people who continue to fight this disease every day through exceptional clinical care and decisive research with the potential of bringing new medicines to suffering patients and their families.