Stem Cell Contingency Planning in California: Winding Down a $3 Billion Operation

The $3 billion California stem cell agency has put together a "wind down" budget for its coming fiscal year -- a spending plan that takes into account the possibility that voters will not refinance the effort with more billions this fall. 

The budget was approved by the agency's governing board finance committee last week. It proposes spending $12.3 million for the 12 months that begin July 1. Should voters reject a $5.5 billion refinancing of the agency in November, the plan anticipates a 42 percent staff reduction at the end of this year. 

The agency is now down to 33 employees, who have numbered more than 50 in past years. 

Maria Millan, CEO of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known, said that details of the plan will be fleshed out as the year progresses.  It will also be discussed at a governing board meeting on June 26.

She said that CIRM has $854 million in awards under current management. They would be phased out over the next several years. Millan said that $47 million is available currently for research awards. Decisions on the use of the money will come before the board, also on June 26. 

If the ballot measure is approved, the agency's budget will require substantial modification and hiring to deal with the increased funding and new activities provided for in the ballot measure. 

During the public comment period, David Jensen, publisher of the California Stem Cell Report noted the  significance of CIRM both as an historic state enterprise and for its scientific impact on the stem cell field. He said, 

"Preserving the CIRM story digitally in a readable and accessible format should not be all that costly. And it would be a significant contribution to helping those who come after us learn about how this $3 billion effort came about and navigated with considerable success through the early days of what some may ultimately call the stem cell revolution. It would be a sad day if the complete record of the California Institute for Regenerative Medicine is not preserved for posterity." 

Several CIRM board members expressed enthusiasm for the suggestion. Millan said that archiving the data and information that CIRM has gathered is part of the wind down proposal under its public communication component. 

*This item has been brought to you by The California Stem Cell Report: The only independent source of information and news devoted solely to the stem cell agency for the last 15 years.*

Turning Off the California Stem Cell Spigot: Will Private Donors Step Up?

Benchmarks are important to the $3 billion California stem cell research program. When scientists fail to achieve them, the flow of cash from the agency disappears. 

Last week, the stem cell agency quietly announced something of a funding benchmark for its own, 14-year-old efforts.

The bad news? In just six days, the agency will shut off  applications from California stem cell scientists and companies for multimillion dollar awards.

The agency, formally known as the California Institute for Regenerative Medicine (CIRM), last Thursday said that its dwindling finances forced the closure. 

CIRM has only $33 million left for new awards and already has requests in the pipeline for $88 million. Private funding is a possibility, but major donors have not yet surfaced publicly.

Immediate reaction to the announcement was muted but ranged from dismay to tributes to the agency and the work it has financed. 

One scientist, Jeanne Loring, chief scientific officer at Aspen Neuroscience in San Diego, said the action was like "a rug being pulled out from under you." Loring also said in an email that the agency has built an "enormous resource in stem cell expertise in California" and played an important role in her own work at Scripps Research. 

Loring's work has received $17.4 million from the agency since 2005. (See the full text of her remarks here.)

Steve Peckman, deputy director of the Broad Stem Cell Research Center at UCLA, said the agency has chalked up "impressive success" and made California an international leader in the field. (See the full text of his remarks here.)

UCLA has received $289 million from the agency. 

Robert Klein, who led the ballot campaign in 2004 that created the agency, said the application shutdown will create a gap that will hold back development of critical therapies. Klein is expected to lead another ballot initiative in November 2020 to provide $5.5 billion for CIRM. (See the full text of his remarks here.)

Klein is chairman and founder of Americans for Cures of Palo Alto, Ca. He was also the first chairman of CIRM. 

CIRM has provided funds to about 600 researchers and 128 institutions and companies. The researchers run labs that vary in the number of employees, but the total would include  hundreds more stem cell workers. 

The agency is currently trying to raise $200 million privately to continue its awards programs between now and the fall of 2020. No philanthropic gifts have been announced. Queried last week by the California Stem Cell Report, the agency said that it had nothing new to report in the fundraising effort that began last year.  

It is unclear how the application shutdown will affect the fundraising effort. It may serve as a prod, however, for some potential donors and help to crystalize decision-making as CIRM executives stress the importance of the agency.

CIRM's announcement left open the possibility of re-opening applications come September. The agency expects to have a better handle then on how much cash might be returning to CIRM from awards that have missed benchmarks. The amount is not expected to be huge. 

The agency has reported that it has enough money to sustain a wind-down of the agency and to administer remaining multi-year grants, should the yet-to-written ballot measure fail. 

Klein is optimistic, however, regarding the prospects for a bond measure 16 months from now.  He told the California Stem Cell Report that unspecified polls show that 70 percent of voters support re-funding the agency when they learn of the "remarkable progress" that has been achieved as a result of CIRM-backed research.