The policy statement is reasonably clear, but it does not deal with the risk involved. Nor does it explain exactly what CIRM might do with the warrants it takes in the companies it lends to. Will it hold them, trade them or eventually wind up owning stock in a number of biotech firms? If it owns stock, how will it be voted and under what conditions will it be sold? Who makes those decisions – CIRM directors, the CIRM president or chair?
Here is one excerpt from the policy document, laying out the purpose of the proposal.
"The goal of a loan program is to fund the translation of research into research tools, medical diagnostics and devices, and therapeutic products. These loans will be targeted at the funding gaps in product development that will serve to leverage participation by follow-on investors, such as venture capital and other capital markets, and result in more products that enter the market."Below in a separate item is a piece on the loan proposal, written last week by yours truly for BioWorld Perspective, a free, weekly newsletter from BioWorld, which has 13,000 readers in the biotech industry. Sphere: Related Content