Friday, December 04, 2009

Changes Upcoming in $500 Million State Biotech Loan Program?

California biotech firms looking to dip into a new $500 million source of capital would be well-advised to sit in on a meeting next week of the state's stem cell agency.

A group of its directors – the Loan Task Forcemeets next Wednesday at noon on the Stanford University campus to discuss the state of the unprecedented lending program and, more specifically, the loan terms. The session offers a golden opportunity to learn about the program, influence its direction and chat with key figures at the $3 billion funding agency.

The loan program is clearly in its formative stages. CIRM only approved its first loan --- $20 million loan to Novocell, Inc., of San Diego – a little more than a month ago.

Curiously, while CIRM has embarked on an effort to become more friendly to the biotech industry, it has provided little public information about the specifics to be discussed next week. That's the sort of stuff, however, that is needed to draw busy executives to the task force meeting to provide valuable input on the program and to encourage them to seek funding.

With three business days left before the task force meeting, the agenda states only that the panel will hear a presentation and discuss loan terms.

In order to provide more information to businesses, the public and other interested parties, the California Stem Cell Report yesterday queried Duane Roth, chairman of the task force and vice chairman of the stem cell agency, about next week's meeting.

Roth, a San Diego businessman, told us that the meeting will include a review of the initial loan policy and terms in light of feedback from potential applicants. He indicated that the session will focus on items that need further review or adjustment. Those specifics and any others identified at the meeting would come back to the task force and then the full CIRM board for action on later dates. It is fair to say that significant changes could be in the works.

The biotech loan program is significantly different than ordinary commercial lending. It specifically targets firms that otherwise could not raise cash or secure conventional financing. The idea is provide help to firms that are in what is known as the financial “valley of death.”

For more on the biotech loan program, click on the label “biotech loans” at the end of this article. You can find a list of members of loan task force here. Sphere: Related Content

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