Showing posts with label transition. Show all posts
Showing posts with label transition. Show all posts

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. 

Friday, September 22, 2017

Ballot Measures to Mergers: California Stem Cell Agency Examines Alternatives to Its Demise

Discussing the future of CIRM on Monday: Left to right, Chair Jonathan 
Thomas,  Vice chair Art Torres, Director Diane Winokur. Photos behind
 them are  of  persons helped by the agency's clinical trials. 
Photo by The California Stem Cell Report.
OAKLAND, Ca. -- Directors of California's $3 billion stem cell research effort are looking at ways to stave off the agency's death ranging from asking voters for billions more to being acquired by some sort of private entity.

The choices came before a new Transition Subcommittee of the agency's governing board last Monday. It is considering options as the money runs out for the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

Current projections estimate that cash for new awards will end in mid 2020. However, directors could alter the award rate and survive longer. That would shrink the flow of cash to possibly hundreds of researchers from Sacramento to San Diego.

CIRM's funds come from money that the state borrows. The ballot initiative that created it in 2004 provided for $3 billion in state bond funding but no other significant revenue. The agency has roughly $650 million remaining.

No directors at the meeting expressed support for simply letting financial nature take its course and permitting the agency to slowly expire.

One option that seemed to attract significant interest would call for the agency to ask the legislature and the governor to place another multi-billion dollar ballot measure before voters in 2020. That option would involve the governor who succeeds Jerry Brown in 2019.  Brown is wary of adding any height to what he calls California's "wall of debt."

Such an option requires a two-thirds vote of both houses of the legislature and the signature of the governor. (A CIRM memo on legislative options incorrectly said that only a majority vote was needed. It was corrected during the meeting.)

One possibility would involve another ballot initiative, a process that would not need approval of the legislature. However, under new state law provisions, the legislature is required to hold hearings on ballot initiatives. Such a process could result in changes in a proposed initiative.

CIRM directors seemed to acknowledge that either going to the legislature directly or using a ballot initiative would likely mean significant changes involving the agency. Director Steve Juelsgaard said the result could be a "very different CIRM."

The options considered this week also included private fund-raising. Some directors indicated that raising $200 million to $300 million a year was not entirely realistic. However, some combination of fund-raising and public support was also a possibility.

The last-ditch option involved acquisition of the agency by another enterprise including possibly a venture capital driven entity.  CIRM Chairman Jonathan Thomas said a possibility could involve an organization such as the Gates Foundation or the Wellcome Trust. He said California has a "tremendous asset" in CIRM and a "ton of IP(intellectual property)."

Director Jeff Sheehy said he had "never heard of a state agency that was merged or acquired."
"I wouldn't put my head in that noose," Sheehy said.

Thomas said the next step will be to hold a joint meeting of the directors' Science and Transition Committees in November and take the resulting recommendations to the full board in December.

Monday, September 11, 2017

Curtailing Research Awards and Other End-of-Life Matters at California Stem Cell Agency

If you are interested in whether the $3 billion California stem cell agency is going to live or die, you may want to check in on a meeting one week from today.

A new committee of the agency's directors that was formed to deal with transition issues is scheduled to meet for three hours next Monday to consider various scenarios and how the agency might deal with them.

The impetus for the meeting is a projection that it will run out of cash for new awards in mid 2020 with no funding  in realistic sight.

One of the possibilities for extending the life of the agency is to curtail its award programs, which could possibly give the agency another one or two years of existence. The California Institute for Regenerative Medicine, as the agency is formally known, has roughly $650 million left but has been taking on clinical trials, some of which have been running $20 million a pop.

The session will be based out of the agency's headquarters, but teleconference locations are listed in Los Angeles, Duarte and La Jolla. The public can ask questions or make statements from those locations in addition to the main site in Oakland. Listen-only access is also available on the Internet. Full instructions and addresses can be found on the meeting agenda.

Sunday, August 13, 2017

Thinking About Its Demise: California Stem Cell Agency Launches Examination of Alternatives

California's $3 billion stem cell research agency, which is facing its financial demise in a few short years, has formed a team of its directors to tackle transition planning and examine possible alternatives, including ones that would extend its life.

The first meeting of the group of directors is tentatively scheduled for Sept. 18. Jonathan Thomas, chairman of the governing board of the California Institute for Regenerative Medicine(CIRM), as the agency is formally known, said earlier this summer:
"The legislature has asked that we put together and start thinking about a transition plan, which can contemplate a variety of factors."
In response to a question last week, a spokesman for the agency, Kevin McCormack, said that a notice with more details would be posted 10 days prior to the meeting.

At a meeting in June, Thomas laid out the need for the transition team. He said all options are on the table including asking the legislature for cash or to place a measure on the ballot for more bond funding.

The agency's only real source of money is state bonds, authorized by voters in 2004. It has roughly $600 million left. The agency has projected it will run out of cash for new awards in mid 2020, although that could vary, depending on whether it slows down the pace of awards.

Several directors at the board meeting in June expressed a "sense of urgency" about dealing with the fate of the agency. CIRM Director Jeff Sheehy, a member of the San Francisco board of supervisors and an HIV/AIDS patient advocate, voiced concern about the uncertain nature of the agency's future.

Sheehy said,
"It seems to me that we will be talking about a substantial scaling back of the organization in 2020....We've kind of created this expectation that we were going to go to 2018 and come back with new money."
Sheehy referred to talk that a new bond initiative might be launched in 2018, a move that the board's former chairman, Robert Klein, has publicly advanced. Sheehy said, however, that he spoke with Klein, who told him that he was now considering 2020 instead.  Klein's method would require the gathering of hundreds of thousands of valid voter signatures to place the proposal on the ballot and would bypass the legislature. 

The year 2020 includes a presidential election, which has higher voter turnout and generally is considered a better time to win approval of bond measures. Presumably, the agency might be able to secure extra funding to span any financial gap or, alternatively, lower the frequency of awards to stretch out the cash. 

The members of the transition group are Thomas, Sheehy, Art Torres, Steve Juelsgaard, Joe Panetta, Kristiina Vuori, Linda Malkas, Diane Winokur, Shlomo Melmed, Al Rowlett and Judy Gasson. Short bios on each of them can be found via this page. 

The California Stem Cell Report will carry an item with the date and location of the September meeting when it becomes available. 

Thursday, February 23, 2012

The Afterlife of the California Stem Cell Agency: Venture Philanthropy and Big Pharma

The $3 billion California stem cell agency, which is facing its possible demise in five years, is exploring an afterlife that dips into "venture philanthropy" on a national level as well as investment ties with Big Pharma.

The Golden State's unprecedented research program laid out those possibilities in a "transition plan" sent this week to Gov. Jerry Brown and the state legislature. The plan was required under a law passed two years ago. The agency's future direction was also aired at a meeting last month in Los Angeles.

The California Institute for Regenerative Medicine(CIRM) will run out of funds for new grants in 2017. Its only real source of funding is cash that the state borrows (bonds). CIRM says that only $864 million remains for new research awards, and some of its recent grant rounds exceed $200 million. The current position of the agency is that it is "premature" to consider asking voters in financially strapped California to approve another multi-billion dollar bond measure.

The venture philanthropy effort involves creation of a nonprofit organization. CIRM Chairman Jonathan Thomas said in January that he is "test-driving (the proposal) with some high net worth donors we know to be interested in the stem cell space." Thomas was addressing the Citizens Financial Accountability and Oversight Committee, the only state entity specified charged with overseeing the agency and its directors. He said,
"We're busily putting together in conjunction with a national organization called the Alliance for Regenerative Medicine the plans for a nonprofit venture philanthropy fund."
He said it would "would accept applications for awards from researchers and companies all over the country, not just those funded by CIRM, but those funded by NIH or the New York Stem Cell Foundation or the state of Maryland or whatever."

The Alliance for Regenerative Medicine is an industry-dominated lobbying group, based in Washington, D.C.  The group's executive director and co-founder is Michael Werner, a longtime pharma and health industry lobbyist, who is also a partner in the influential Washington law firm of Holland and Knight.

The "biopharma investment fund" proposed by CIRM is less well developed. CIRM said it plans to explore opportunities with companies to fund stem cell research in California. The transition document uses as an example an $85 million deal between Pfizer and UC San Francisco, which gives the company special access to biomedical research.

The transition plan also touches on other issues such as winding down grants after its new grant money runs out, along with protecting intellectual property.

The plan could be considered a marketing tool for the agency's afterlife efforts. The document devotes a good portion of its nine pages to recounting the history of CIRM and touting its accomplishments.

Thomas used the occasion of the submission of the plan as a springboard for a piece yesterday on the CIRM research blog.He concluded his item by quoting from the plan itself. CIRM's achievements during the past seven years, he wrote, "will allow California to continue world (stem cell) leadership in the coming decades."

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