California Launches $50 Million, Fast-Track Stem Cell Drive

Directors of the $3 billion California stem cell agency today approved a $50 million plan that will radically reshape its efforts to produce a widely available stem cell treatment, a goal that it has not yet reached after 10 years of trying.

Speed is what the new push is all about – shortening the agency’s funding cycle for awards from nearly two years to about four months.

The plan was devised by Randy Mills, who has been president since last May of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. He has dubbed the effort “CIRM 2.0” and says,

“We are in the business of trying to save people’s lives….We have to behave with the appropriate sense of urgency.” 

CIRM 2.0 will begin next month for awards related to clinical trials with $50 million allotted for the first six months of the year. The program will be extended to other award programs as well. The agency hands out cash at an average rate of $190 million a year and has about $1 billion left.

The program appears akin to a venture capital process but without face-to-face pitches by those seeking funds.

Researchers from both business and nonprofits will be able to apply on the last business day of each month instead of very sporadically. No caps will be stipulated on the grants, but budgets will be closely scrutinized prior to reaching reviewers.

CIRM directors from nonprofit institutions vigorously balked at a 10 percent cap on indirect costs in the awards.  The indirect funds go to the institution and not for research. Some of the indirect rates currently run as high as 20 percent of the total award and are much valued by California research institutions, most of whom have members on the CIRM board of directors.

Director Donna Weston, chief financial officer of the financially troubled Scripps Institute, led the move against the 10 percent cap. Others indicated that researchers at some nonprofits would not be allowed to apply for grants that only contained a 10 percent rate. As result, the board agreed on a 10 percent cap on indirect costs for businesses and 20 percent on nonprofits.

No opposition was heard online during what appeared to be a unanimous vote. The California Stem Cell Report queried CIRM about whether it is a legal conflict of interest for directors from nonprofit institutions to vote on the indirect cost change that would benefit their institutions.

James Harrison, general counsel to the board, replied,

"No, it is a standard, so it is exempt."

Mills’ plan calls for researchers to receive their money within about four months of submitting an application. Board approval is scheduled for 90 days after submission. Work must begin within 45 days after board action. Unsuccessful researchers with applications that have potential will be coached by the agency so that they can turn in a successful proposal. Successful applicants will see greater involvement in their work by CIRM staffers and will face go-no go milestones. Failing to meet a milestone will mean loss of funding.

Moving the cash quickly to biotech businesses is critical, says Mills, who was a CEO of a stem cell firm for 10 years. Most operate on a thin financial edge and are perpetually raising money. Business applicants, however, will have to show six months of cash-on-hand to win approval. Matching funds will be required in some of the first rounds, and in some cases also from non-profits.

   

Mills predicts that CIRM 2.0 will result in higher quality applications because of the coaching and because proposals are less likely to be submitted prematurely in order to conform to CIRM’s previous funding cycles.

CIRM directors also approved Mills’ reorganization plan that is likely to break up silos at CIRM that may have formed over the past eight years. Mills said his structure will be more efficient and encourage innovation. The new plan calls for the staff – Mills prefers the word “team” – to be organized on much different lines than previously. Units will be organized on therapeutic lines such as “blood and cancer” and “organ systems.” Currently the CIRM team has been organized into such things as “research and development” and “scientific activities.”

For more on CIRM 2.0, see here, here and here. Here is a link to the CIRM press release.