Wednesday, February 03, 2010

CIRM Directors Change Big Biotech Loan Program

SAN FRANCISCO – Directors of the California stem cell agency tonight approved changes in the terms of its $500 million biotech loan program with little discussion and no dissent.

Approved were the guidelines that can be found here. Elona Baum, CIRM general counsel, highlighted some of the changes from the previous loan terms. They included lowering the minimum size of a loan below $3 million under some circumstances, designating the default interest rate as LIBOR plus 2 percent and compounding interest instead of using simple interest.

The changes also included new terms for use of warrants as part of the loan process and acceleration of loan payments in the event of a change of control, at CIRM's discretion. Also approved were extensions of loans beyond five years up to 10, with payment of 25 percent of accrued interest and an increased interest rate each year. Loans could be extended beyond 10 years with approval of the directors' Finance Subcommittee.

No biotech businesses or members of the public commented on the changes. The loan terms are guidelines. CIRM staff is preparing a final Loan Administration Policy.

Also approved by CIRM directors were:

Initiation of a $40 million grant round for “tools and technology”

dealing with CIRM research standards

Creation of a directors Scientific Issues Subcommittee, but no members were named

Put off until March was a proposal for CIRM to begin to fund at least part of clinical trials. No details were available from CIRM.

The CIRM board briefly discussed last week's meeting of a key state panel that urged it to be more open, transparent and accountable. Among other things, the Citizens Financial Accountability Oversight Committee recommended that CIRM post online the statements of economic interest and travel expense claims of its board members and top management. Some members of the CIRM board said the committee's recommendations were not based on factual information.

The board also discussed a scathing San Diego Union-Tribune editorial this morning and generally expressed a desire to be able to respond quickly to negative articles. Some board members also expressed dismay that they had not been given a copy of the editorial early in the day. Duane Roth, a San Diego businessman and a CIRM director, has written a letter in response to the San Diego paper that he said he expected to see published this week.

(Editor's note: An earlier version of this item did not contain the sentence concerning board members dismay about not receiving a copy of the editorial earlier.) Sphere: Related Content

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