Industry concerns mount over CIRM grants

Abstract

It has not been an easy start for the California Institute of Regenerative Medicine (CIRM), the voter-created agency charged with dispensing $3 billion to promote stem cell research in the state. Although staff moved into their offices in November 2005, the institute dealt with litigation challenging its very existence until the case was dismissed this May. It has also been plagued by instability at the top. President Zach Hall stepped down in April after reports of power struggles with Robert Klein, head of the governing board. Former board member Richard Murphy was named interim president, then in midSeptember the committee that oversees CIRM voted to make Australian Alan Trounson the new president. In August, CIRM science officer Arlene Chiu announced plans to leave. All of which suggests disarray, but for money-thirsty biotechs, the institute’s personnel issues are “off the radar,” says Ken Woolcott, formerly general counsel at IDEC Pharmaceuticals and now an early-stage investor in San Diego, who is working with a stem cell company. The main concern for biotechs is the grants themselves: how to get them and what strings will be attached. CIRM does not currently plan to offer grants exclusively to companies; instead for-profit and non-profit entities will compete for the same grants in programs not yet announced. Those that do receive money from CIRM will take on an obligation to the state, as well. CIRM must be notified of any patent applications and licensing agreements; exclusive licensing deals are sanctioned only if organizations promise timely development and plan to provide uninsured Californians with access to any resultant therapies; and a fraction of any revenues generated from CIRM-funded inventions must be given to the state (Box 1). The size and scope of any grants is still unknown. The largest sum CIRM has awarded for an individual research project so far has been about $3.2 million. The institute’s scientific strategic plan allocates nearly $900 million for work designated as “preparing for the clinic,” and just more than $450 million is designated as clinical research. But the California Healthcare Institute, an advocacy group, has said that the revenue sharing and access requirements could mean that companies are less likely to seek CIRM funds, potentially delaying or preventing therapies and diagnostics. Geron CEO Tom Okarma agrees. He says his company is unlikely to apply for any basic science grants, but would welcome funds for clinical research. Geron’s investors have already done the ‘heavy lifting’ to generate the company’s technologies, Okarma says, and grants that might siphon away revenues don’t appeal. But companies with fewer means of raising capital might find CIRM’s restrictions acceptable. And those are the very companies that CIRM hopes to target, says CIRM’s scientific review officer, Kumar Hari. The goal is to help struggling companies through the so-called ‘valley of death,’ the period after startup in which companies often lack the strong clinical evidence necessary to attract investment. For companies working with human embryonic stem cells, the valley is even deeper because they are not eligible for federal funds. In a sense, CIRM and companies are playing a game of chicken. CIRM needs to figure out how many restrictions it can have in place and still attract quality companies for its grants; companies need to figure out if their research is strong enough to attract capital with fewer conditions, or if the grants are a good option. At a meeting on September 7, the institute solicited input on administration policies that would make its grants more appealing to companies. Interest was greater than anticipated, with attendance from some halfdozen firms ranging from Invitrogen in La Jolla, California, to lesser known startups. Another meeting is expected in October. Duane Roth, a member of CIRM’s governing board and head of San Diego–based regional development program, CONNECT, says companies are still confused about rules likely to come with the grants. Some have questions concerning how the money can be spent. Grants apply only to research conducted in California, for example, but certain services, such as clinical research or primate studies, might be obtained most CIRM governing board head Robert Klein, pictured here, now has a new president in place, but there are still questions about the policy attached to for-profit grants. K ur t R og er s/ Sa n Fr an ci sc o C hr on ic le /C or bi s

DOI: 10.1038/nbt1007-1063

Cite this paper

@article{Baker2007IndustryCM, title={Industry concerns mount over CIRM grants}, author={Monya Baker}, journal={Nature Biotechnology}, year={2007}, volume={25}, pages={1063-1064} }