Tuesday, October 25, 2005

Proposal for a California Stem Cell Venture Fund

How does the Golden State of California get a return on its $6 billion investment in stem cell research? Certainly the question of the month. Two separate hearings involving the issue, including one session today in Sacramento, are scheduled for the final six days of October.

Now comes a suggestion that the state create a venture fund with a single investor (the state) so that all the proceeds from stem cell investments flow back to the state.

"It seems a lot simpler than some of the other proposals put forth," says David J. Pyrce, who operates Bear Creek Advisors, a California life science consulting firm.

Pyrce made his suggestion in an email to the California Stem Cell Report. He pointed to Maryland which has a venture capital fund that has invested $24 million since 1994 and generated $48 million.

Here is how Pyrce thinks the California Stem Cell Venture Fund might operate:

"1. The State of California creates a for-profit investment fund, with a commitment of $3 billion.
"2. This fund makes investments in stem cell based research efforts.
"3. In exchange for that investment, the fund establishes an ownership position in that research.
"4. This is commonly done in academia. When a pharmaceutical company invests in research efforts of an academic, it is called
"5. From that point forward, the fund will own a percentage of any products resulting from that funded research.
"6. The administrative process of this investment vehicle is also quite simple, typically run with an organization of less than 10

Such a proposal may well require changes in the law that created the California stem cell agency. But a vehicle for those changes, SCA13, is before the California State Senate, should this concept attract interest.

No comments:

Post a Comment

Search This Blog