California Begins Sale of $250M in Bonds for Stem Cell Research
On Wednesday, State Treasurer Bill Lockyer (D) opened sales to individual investors for $250 million in bonds to fund the California Institute for Regenerative Medicine, the San Francisco Chronicle reports (Pender, San Francisco Chronicle, 10/4).
Voters approved the creation of the stem cell agency under Proposition 71, a 2004 ballot measure that authorized the sale of $3 billion in state bonds over 10 years for stem cell research (Anderson, Sacramento Business Journal, 10/2).
Individual investors on Wednesday purchased $68.6 million in bonds, more than double the $30 million anticipated by the treasurer's office. Based on the demand, Lockyer extended the individual order period until Thursday morning.
The minimum buy-in for individual investors is $5,000 (Downing, Sacramento Bee, 10/4).
After Thursday's additional ordering time, the sale will be open to institutional buyers, such as mutual funds and insurance companies (San Francisco Business Times, 10/3).
Lockyer said the bond sale "will provide the nation's largest-ever investment in human embryonic stem cell research" (Sacramento Bee, 10/4).
CIRM will receive about $200 million of the bonds, while $48 million will pay off bond anticipation notes that funded the agency while legal challenges were resolved.
The bonds are subject to federal income taxes, but California has petitioned the Internal Revenue Service to exempt the bonds from federal taxes.
The bonds must be redeemed by the state between April 2009 and April 2010. The interest rate is fixed until redemption (San Francisco Chronicle, 10/4).
This week, the Los Angeles-based CHA Regenerative Medicine Institute withdrew its application for $2.6 million in funding by CIRM, the Los Angeles Times reports.
Dale Carlson, spokesperson for the state stem cell agency, said officials were reviewing the center's grant proposal before giving final approval. The application received preliminary approval in March.
Carlson said the center did not give an explanation for withdrawing its application.
However, Jan Yi, CEO of the center, said the organization withdrew its application so as not to undermine public support for CIRM. The Foundation for Taxpayer and Consumer Rights criticized the preliminary approval of the grant, arguing that CHA Regenerative Medicine Institute is not a true not-for-profit organization.
The center intended to use human embryonic stem cells to study amyotrophic lateral sclerosis, or Lou Gehrig's disease (Heisel, Los Angeles Times, 10/4).
On Wednesday, CIRM announced that after further review, an approved grant request by the Burnham Institute in La Jolla has been denied, the San Diego Union-Tribune reports.
The $638,000 seed grant would have funded research that could have led to the creation of new human embryonic stem cell lines, according to the Union-Tribune.
The grant was approved by the agency, but upon further review, staff reversed the decision after finding that the principle investigator of the project was not a full-time employee of the Burnham Institute, where the work would be done (Somers, San Diego Union-Tribune, 10/4).