State to collect from stem cell institute

Published on

The San Francisco Examiner

SAN FRANCISCO, CA — The president of California’s stem cell institute told a group of scientists and biotech business executives Monday that intellectual property regulations for discoveries funded by the state were meant to provide some investment return, but not to discourage private sector participation.

Voters established the California Institute for Regenerative Medicine in 2004 with the passage of Proposition 71, which provided $3 billion in bond funding for stem cell research. The measure mandated that the state financially benefit from the patents, royalties and licenses resulting from research, therapy development or clinical trials funded by the state.

Last month, the stem cell institute awarded its first round of research grants, totaling approximately $45 million over two years. A second round of research grants, totaling $80 million, will be approved on Thursday.

To date, the grants have been awarded only to nonprofits, not companies, since regulations regarding who shares in the profits businesses make from scientific discoveries with taxpayer-funded grants have been developed, but not given final state approval.

“There are those in Sacramento who think we should be getting more, but we do not want to discourage the private sector,” CIRM President Zach Hall said at a UCSF conference sponsored by a life-sciences venture capital company.

Last month, the chair of the Senate Health Committee, Sheila Kuehl, D-Santa Monica, and state Sen. George Runner, D-Antelope Valley, introduced a bill, SB 771, that would boost the state’s return on its investment, as well as push for more affordable cures for the state’s low-income residents.

For example, current regulations for commercial entities include a cap on the amount of revenue coming back to the state from products developed with stem cell institute funds, instead of allowing an open-ended percentage that would continue to bring in money with the product’s financial success. SB 771 would
eliminate the cap.

John Simpson, of the nonprofit Foundation for Taxpayer and Consumer Rights, said he’d like to see the regulations not only provide a return to the state, but one to “average, everyday Californians” who might be price-gouged by some drugs and therapies that result from the funding.
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