Deadline This October: California Stem Cell Agency Seeking Detailed Public-Private Plan for its Future

The $3 billion California stem cell agency, which is currently scheduled to go out of business in a few years, hopes to come up with a detailed plan by this fall for a novel public-private arrangement that would extend its life.

The rough outlines of the proposal assume $50 to $200 million in “public investment,” although it is not clear whether that would be a one-time figure or an annual amount from presumably the state budget or perhaps another state bond measure. The concept includes additional private funding of a yet-to-be-determined nature. (The agency later said that the public investment figures would be a one-time event.)

The broad sketch of the agency's latest thinking about how to regenerate itself was found in an RFP posted four days ago on its website.

CIRM is seeking a consultant who would flesh out the general concepts that it has offered. Work would begin in mid June and be completed in four months, close to the ninth anniversary of the agency, formally known as the California Institute for Regenerative Medicine. The RFP did not contain a figure for the cost of the study, but said that the price would be part of the criteria for evaluating bids.

CIRM was created in November 2004 when California voters approved Proposition 71, a ballot initiative. Since then it has awarded $1.8 billion to 595 recipients. It is funded by money borrowed by the state (bonds), but cash for new grants is scheduled to run out in 2017. Interests costs on the bonds raise the total cost of the agency to roughly $6 billion.

CIRM said in the RFP that the plan for its future should provide

“...an in-depth analysis of various public-private funding models with potential to attract private sector investment to, and facilitate further development of the most promising CIRM-supported research projects; and recommend a single preferred approach for achieving this goal, complete with details relating to the recommended structure and an operational plan.”

The RFP also contained a just-released, $31,750 study by CBT Advisors of Cambridge, Mass, that examined mechanisms for financing translational research, which is the key focus nowadays at the stem cell agency. Such research is aimed at pushing laboratory findings into the marketplace.

Among other things, the CBT report, whose lead author was Steve Dickman, said,

“The nature of CIRM as a state agency is perhaps the biggest weak point (and) has to be addressed politically and cleared up as soon as possible or raising money will be unnecessarily challenging.”

The CBT study did not address how that might be done, which could be a considerable task. Proposition 71 modified the state constitution and state law and can be altered only by a super, super majority vote of the legislature or by another ballot initiative.

California is the first state to provide billions for stem cell research by using borrowed money. It also is unique in California state government in that its funding flows directly to the agency and cannot be altered by the governor or the legislature.

Translating all that into some sort of public-private arrangement would be novel among state government departments and could well require legislative or voter approval.

The California Stem Cell Report has queried the agency concerning the frequency of the assumed “public investment” and CIRM's budget for the RFP. We will report that information when we receive it.  (The agency later declined to disclose what it was prepared to pay for the study.)