Monday, September 22, 2008

CIRM Spending Plans, More Details on Biotech Loans and Delegated Underwriting,

Directors of California's $3 billion stem cell research agency meet this Thursday to finish up work on its faculty grant program, deal with a proposed $500 million biotech loan program and act on a new plan to handle requests for reconsideration from rejected applicants.

The board will also discuss just how much cash is currently available for grants. A CIRM document shows that currently the agency has committed $1 billion through June 2009 and only has $1.9 billion left to give away. Its plan now calls for the research funding effort to continue through the first half of 2017.

The CIRM document also appears to project a $510 million "profit" from its biotech loan plan. CIRM plans to plow back the "profit" into more grants or loans. The agency has said defaults could be as high as 50 percent in the loan program. It has yet to lay out in a straightforward manner how it can generate "profits" of $510 million with default rates of that magnitude.

The CIRM board will also discuss the "business review" plan for the biotech loan program. It proposes contracting with delegated underwriters, mentioning their use by Fannie Mae. The business review plan cites the Fannie Mae delegated underwriting system for multi-family housing as a success as compared to "recent problems" with the single-family program.

Not provided in the business review plan are details about how the underwriters would be selected(other than issuing an RFP), how they would be paid and what provisions would be in place to avoid conflicts-of-interest in what is a tiny financial world.

The compensation plan is important because if it gives an underwriter major incentives for qualifying businesses for loans, it could also be encouraging lax financial standards.

The biotech loan policy can be found here. Missing is background material on "loan portfolio policies."

Also on the agenda for San Diego are names for CIRM funded labs, a petition to designate a "covered stem cell line" as acceptably derived and a project to consolidate nonprofit and for-profit IP regulations. Discussion of the $210 million disease team RFA is also scheduled, a session not to be missed by those who plan to vie for the cash.

As of this writing, three days prior to the directors meeting, background material is available on their agenda on five of the 13 substantive, public items to be discussed.

Coinciding with the meeting is the first ever Stem Cell Awareness Day. In a news release, CIRM President Alan Trounson said the day, which involves his old employer, Monash University, in Australia, is designed to "inform a broad audience of patients, clinicians, students and the general public about some of the many advances in the field that California is helping to accelerate through CIRM funding.”

The day will include a Webcast from the CIRM meeting location in San Diego involving juvenile diabetes presentation but not of the directors meeting itself. A live, interactive online Q&A is scheduled for the afternoon with California research scientists taking questions.

CIRM will preview its new Web site offline at the directors meeting. The new site is expected to be available to the public in October. Other events are scheduled in California, including ground-breaking at UC Davis on its new stem cell lab, which is partially funded by CIRM, and the launch of a new, stem cell Web site at Stanford.

You can find a full rundown on the day's events here along with instructions on how to log on for the Internet activities.

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