Loans Could Help Translate Stem Cell Research Into Therapy
The California Institute for Regenerative Medicine plans to begin underwriting loans to biotechnology companies in an effort to maintain funding for stem cell research products as they develop into clinical therapies and attract investors, the San Diego Union-Tribune reports.
California voters in 2004 approved Proposition 71 to provide $3 billion in funding for a state stem cell agency.
The loan program likely will comprise a small portion of the agency's funding, according to the Union-Tribune.
A task force of CIRM board members has been soliciting public input for the program. The committee has yet to determine the terms of the loans or the application review process.
Robert Klein, CIRM chair, said the agency may use the affordable housing area as a model for underwriting the loans.
Some executives contend that venture capital investors remain reluctant to invest in stem cell research because it is in its infancy.
Meanwhile, pharmaceutical companies also have been slow to invest in the field for similar reasons, as well as political problems, according to Alan Lewis, CEO of Novocell, an embryonic stem cell company.
As a result, there is a gap in funding of stem cell research between the initial stages and the late-stage clinical trials and commercialization, according to the Union-Tribune. The stem cell agency's loan program seeks to fill in the gap by maintaining funding.
William Caldwell, CEO of Advance Cell Technology, said the loans are lucrative for companies because it only makes them liable for repayment with interest. By contrast, grants from the agency do not have to be repaid, but recipients must give the agency a percentage of the profits made with any commercial product that the grant money helped to develop (Somers,San Diego Union-Tribune, 2/3).