Monday, November 20, 2017

California Stem Cell Agency Faces Rising Cash Burn Rate; Readying for New, Multibillion Dollar Bond Attempt

Cash is flowing out the door fast at California’s $3 billion stem cell agency, which now expects money to run out for new research awards by the end of 2019 instead of the middle of 2020.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, expects to be down to its last $269 million in uncommitted funds by end of this year. And it is working on a new plan to raise $200 million in private funds to sustain its operations through 2020.

The financial projections -- crafted as the agency faces what its leaders call a "critical stage" -- are online this week on the CIRM web site and include proposed lower caps on the size of awards in 2018 and 2019. The agency said the increase this year in the pace of funding was generated by more, higher quality research applications.

Maria Millan, CIRM photo
In documents prepared for a key CIRM meeting next Monday, Maria Millan, CEO of the agency, said her budget scenario would maintain CIRM’s “value proposition as intact as possible” while work moves forward on a proposed, multibillion dollar bond measure in November 2020. She also said enough funds would be available to “wind down” the agency if the bond measure fails.

(See here for Millan's plan and here for longer term bond funding.)

The agency was created by a ballot initiative in 2004, Proposition 71, which financed it with a $3 billion bond measure. No other significant funding was provided. The ballot campaign raised rosy expectations among voters that stem cell therapies were right around the corner.

So far the agency has not backed a therapy that has been approved for widespread use. But it is helping to support 38 clinical trials, the last stage before a therapy is approved by the federal government for widespread use. Many more trials, which can take years, are expected to be funded prior to 2020,

CIRM Chairman Jonathan Thomas, in a presentation prepared for next week’s meeting, pointed to “early successes” such as those involving work by Donald Kohn at UCLA. Thomas also cited “promising early returns” with Asterias Therapeuticswork on spinal cord injuries.

Thomas’ proposal, in addition to private fundraising, calls for a “citizen-led” bond measure in the fall of 2020 to sustain CIRM on a more long-term basis. During next week's meeting, Robert Klein, the Palo Alto real estate investment banker who led the 2004 ballot initiative campaign, is expected to address the prospects for another initiative measure, possibly as large as $5 billion.

As back-up options, Thomas identified the possibility of asking the legislature and governor to place a bond measure on the 2020 ballot along with seeking donor funds for co-funding of specific projects.

In Millan's presentation, she said it is “essential to preserve CIRM’s value proposition to increase the probability of and the speed by which stem cell treatments can reach patients.”

The session on Monday involves the Transition and Science subcommittees of the CIRM board. The committees are expected to recommend budget and fundraising plans to be ratified by the full board at its meeting Dec. 14.

In September, the Transition group took a crack at a wider range of possibilities. The latest proposals are a refinement of what was discussed then.

Next week's meeting will be based at CIRM’s headquarters in Oakland with telephonic sites where the public can participate in La Jolla, Duarte, South San Francisco, Los Angeles and San Francisco. Public comments can be emailed to mbonneville@cirm.ca.gov. The session will also be audiocast on a listen-only basis. Instructions can be found on the agenda along with addresses for the telephonic locations. 
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