Implications of a New Multibillion Dollar Bond Campaign for CIRM

The chairman of the California stem cell agency, Robert Klein, this week raised the possible size of a new bond issue to finance stem cell research to as high as $5 billion.

Klein made the comment in a piece by Ron Leuty in the San Francisco Business Times. Leuty reported that Klein, who directed the 2004 electoral campaign that created CIRM, said the new ballot measure could could come by 2016 and raise $3 billion to $5 billion.

Previously, the publicly reported figure topped out at $4 billion. Katie Worth of the San Francisco Examiner reported that number in August, which appears to the first disclosure in the media of the size of the bond issue. (She is also one of the few reporters that has attended a recent CIRM board meeting and written a story about it.)

Media reports of a new bond issue have significant implications -- political and financial -- for CIRM and how it is perceived by the public. To win voter approval of a bond issue will require a political campaign. The Prop. 71 in 2004 cost about $30 million. Another campaign is not likely to require as much, but the cost will run into millions. Funds will needed to be raised from many sources, some of whom will be making flinty-eyed judgments on the financial value of CIRM's activities on their particular enterprises. Some are likely to expect something in return for their campaign contributions.

The proposed bond issue also places CIRM squarely in a political context. Nearly all of its actions will be judged in the not-so-pleasant light of an electoral campaign. Klein acknowledges the need for politically acceptable results from CIRM. Not coincidentally they can also mean advancing the science and therapies.

Here is part of what Leuty wrote concerning Klein's discussion of another electoral campaign for a multibillion dollar bond issue.

"That may seem like a tough sell in a state smacked upside the head by a recession, but Klein is the ultimate salesman/evangelizer/patient advocate. He pulled together a powerful group of people cutting across political party lines and backgrounds to get Prop. 71 passed when most people had no scientific concept of stem cells."

Leuty continued,

"'Strategically, what we’re focused on is trying to make sure there is enough therapies advanced to Phase I or Phase II efficacy trials (where) voters of California can judge the performance and decide if they should approve another $3 billion to $5 billion,' Klein, the outgoing chairman of the San Francisco-based agency, told me in a phone conversation Tuesday. 'The voters are going to have to see real evidence.'"

Klein said CIRM will not run out of funding until late 2016 or early 2017, although different scenarios exist, depending on quickly CIRM hands out money. Leuty wrote,

"By then, many clinical trials will be well under way. Even if the National Institutes of Health starts funding basic embryonic stem cell research, Klein said, CIRM would be a natural partner for funding the translation of that work into bedside therapies.

"'In five or six years, we will have a very strong showing and evidence that when given stable funding we will have novel ways to reduce suffering,' Klein said."