Unfortunate news coming out of Texas.

A nonprofit research group set to conduct clinical trials in Texas had received the largest grant ever given out by a Texas-cancer fighting agency is going to be shut down. What makes the incident even more untimely is the fact that the nonprofit group had barely even begun work on this new project at the time of this decision.

The Cancer Prevention and Research Institute of Texas had chosen to give a $25.2 million grant to the Statewide Clinical Trials Network of Texas in 2010. Things had looked pretty bright for their future after receiving this substantial research grant. Now, they will be remembered as a cautionary tale of what happens when funds and conflicts of interest are not handled properly.

The cancer agency was the subject of a critical audit on Monday, where it was reported that the clinical trials network had received $7 million so far. However, in a separate interview with the Houston Chronicle, the president of the network, Dr. Charles Geyer, announced that they had been awarded closer to $10 million.

In the interview, Geyer went on to explain, “It was really almost [like] setting up a clinical trials factory. Developing and managing clinical trials, particularly across a lot of institutions, takes a lot of work and resources.”

A Salvage Operation Does Not Look Likely

Later that same day, 30 staff members were let go, and only six have been kept on temporarily to ensure the shutdown of the network. Geyer admits that at this time, it seems unlikely that they will be able to salvage the remains of the network’s mission, in spite of the funds that have been spent and the two-plus years of initial groundwork that they put in.

When questioned further about the clinical trials network, Geyer stated, “My own opinion is that it would be very difficult to reconstitute it. It’s certainly not impossible. It would take unprecedented coalescence of the Legislature and a lot of people for that to happen. We’re all hopeful, but I’m not real optimistic that would happen.”

(This network had originally been established to help make clinical trials more accessible at various institutions across the state of Texas.)

Dr. William Butler, chancellor emeritus of the Baylor College of Medicine and chairman of the clinical trials network, believed that they could have helped many of the cancer patients around the state with this network. In a statement, he said, “Under this plan, investigational cancer studies no longer would have been limited to people who live near the state’s academic health centers. This was the best chance many of the state’s cancer patients had to receive what are often the only treatments that offer them hope.”

When brought under the microscope of State Auditor, John Keel, it was revealed that the cancer agency had violated several laws when awarding the grant. Keel found that they had been improperly advancing the funds to the clinical trials network, and they also were not monitoring how these funds were being spent.

Bonuses, Decorations …and Conflicts of Interest

The audit listed a number of costs as “unallowable” including $300,000 that had been spent on employee bonuses, decorations, new furniture, and travel. It also dug up a number of significant conflicts of interest involving key officials of the cancer agency and the clinical trials network.

Apparently, the chief executive of the cancer agency, Bill Gimson, and the chief scientific officer, Dr. Alfred Gilman, were serving on board of directors for the network as well. In addition, the receiving agent for the network was the executive director of the O’Donnell Foundation, Carolyn Bacon Dickson. Further investigation had revealed that this foundation (which is linked to Peter O’Donnell, the Dallas philanthropist) had awarded 1.6 million to a different foundation that was supplementing the salaries of a few of the top players over at the cancer agency.

(Geyer was quick to dodge any questions involving Dickson’s involvement in this issue, only suggesting that he felt she had done nothing wrong.)

Since this network is listed as a non-profit charitable organization, they were required to file specific tax forms known as 990s. A breakdown of their tax form from 2011 shows that salary expenditure was $809,000 (nearly 60 percent of the organization’s revenues). Then there was another $120,000 put towards legal expenses, $65,000 spent on travel, and $60,000 in office-related costs.

The Network’s Cancer Clinical Trial Portfolio

Geyer had publicly touted a portfolio of seven cancer clinical trials which had been designed by the network in order to make certain experimental treatments available to a larger percentage of Texas patients. Unfortunately, there is no report as to whether any of these cancer clinical studies had enrolled a single participant.

In October, a press release was distributed announcing the launch of a new study for G-202, an experimental drug which has been developed to treat liver cancer. In the press release, this clinical study was honored as a first which will help to launch the network’s cancer clinical trial portfolio.

(This trial was to be based at the University of Texas Health Science Center in San Antonio, but it has yet to be initiated.)

Last month, Elizabeth Allen, a spokeswoman for the institution, stated, “That study is open but on hold until we hear from CPRIT. No patients have been signed on yet.”

CPRIT was approved by Voters in 2007

The Cancer Prevention and Research Institute of Texas (CPRIT) was approved by voters in 2007, and it was given access to $3 billion in taxpayer funds so that they could further cancer research.

The complication with the grant awarded to the clinical trials network was not the only dirty laundry discovered about CPRIT. Investigations have revealed apparent flaws in two other grants awarded by CPRIT, both for commercialization of drugs. One was an $11 million grant that went to Dallas-based Peloton Therapeutics, while the other was a $20 million award given to the University of Texas M.D. Anderson Cancer Center and Rice University.

Currently, legislators are debating a number of routes that they could take with the cancer agency, ranging from some more moderate reforms to discontinuing its guaranteed source of funding. As criminal and civil investigations into the agency have commenced, most of the senior leaders have chosen to resign.