A loan program approved by California’s stem cell agency could distribute as much as $500 million over the next six or seven years to help early stage companies bring stem cell-based products to market.

The California Institute For Regenerative Medicine has committed $614.3 million to stem cell research grants as of Aug. 15. Now the agency hopes to use some of its original $3 billion budget in a way that might stretch its research dollars by using them to generate loan income instead of disbursing them all through grants.

Decisions about the program’s size, goals and structure remain to be made. The agency said it is still deciding whether to run the loan program in-house or pick outside delegated underwriters and how much to lend in total. And still unresolved is whether the program is intended as a loss-leading driver of innovation in a commercially risky field or more of a way to help bolster CIRM’s budget by generating loan-related income, said John Simpson, director of the stem cell project at the advocacy group Consumer Watchdog.

The agency said in one report that it still needs to decide if it’s better to fund more work early on, with the hope of having a greater number of successes, or whether it would be better to fund fewer projects at first to see what happens.

CIRM estimates that in the 2015-2017 fiscal years it could recover as much as $420 million from loan proceeds committed in 2009-2011. But Simpson worries "there’s a potential danger if the stewards of the program raise high expectations about how much money they can generate with the loan program."

Alnoor Shivji, president and CEO of Fremont’s Wafergen Inc., compared the potential of CIRM’s loans to that of early investments in Silicon Valley’s semiconductor industry, which helped support nascent players like chip design and fabrication shops in that industry’s early days. That’s something he believes CIRM’s grants have not accomplished.

Despite being turned down with co-applicants for a CIRM research grant earlier, Shivji is excited about the potential for the loans to provide capital for development and commercialization of his company’s research equipment. But he wonders if the loans will be used to support research equipment companies like his. It’s the kind of decision that has yet to be made.

CIRM expects it might make loans of as much as $24 million to teams applying for large disease-focused grants in January, according to a proposal it published to spur discussion of the loan program. It could loan as much as $25 million to support clinical trials of stem-cell derived treatments. But final amounts have yet to be determined.

Final approval of the program’s structure and terms could come Dec. 8 or 9, when CIRM’s governing body meets in Irvine.