They're talking about pain at the $3 billion California stem cell agency. And mortality. But not the end of life as you and I know it.

They're talking about the pain that comes from cutting off millions of dollars for scientists. They're talking about what will happen when the state stops borrowing money to finance stem cell research – a final-breath moment that arrives in about five years.

One might think that this is the natural order of business nowadays in California. However, the state's stem cell agency has been the great exception during these troubled financial times.

Thanks to Proposition 71, the agency is well shielded from the state's fiscal typhoons. The 2004 ballot initiative that created the California Institute for Regenerative Medicine, or CIRM as the agency is formally known, also provided a direct stream of state bond cash. The governor and lawmakers cannot legally get their fingers on CIRM's money.

But there are limits. When the bond authorization runs out, CIRM will need more cash. One remote possibility is voter approval of more bonds. The agency, however, is primarily discussing raising money privately and establishing a nonprofit organization.

All this and more will be on the table – in one form or another – at a meeting Thursday of the CIRM board. It has handed out $1.3 billion so far and is expected to award another $95 million in grants this week. It has only $836 million left for grants. I say "only" because even $836 million goes only so far when the agency ladles out grants in $240 million dollops, as is expected in July.

In a strategic planning document, Ellen Feigal, CIRM's senior vice president for research and development, has laid out its future direction. She said that for the first time CIRM would overtly create 20 programs, with outside investment, that focus on products. Another five-year goal would explicitly call for financing at least 10 therapies in early-phase clinical trials, affecting at least five diseases.

In contrast to the Proposition 71 campaign rhetoric, CIRM's strategic plan acknowledges that developing therapies takes a very long time, often decades.

CIRM's sharper focus is not without fiscal pain. One scenario would mean a $75 million cut in training and shared lab programs – cash that helps to finance researchers and that benefits the many institutions that have representation on the CIRM board.

CIRM's changing priorities create "stark tension," said one board member, Michael Friedman, CEO of the City of Hope in the Los Angeles area, in January. "We're going to have to make some really painful and difficult decisions," he told directors.

CIRM's success – or lack of it – will play a critical role in its future finances, whether they are based on another bond measure or private support. Its plan calls for establishment of a platform for others to use to pursue CIRM's mission. That includes creating biotech companies and recruitment of additional firms. It also means the possible creation of a nonprofit venture philanthropy fund. To do that, the agency needs a solid plan with solid achievements to lure in the hundreds of millions of dollars necessary to continue its efforts at anything close to their current level.

CIRM has other work to do as well. Just last week, a CIRM-financed performance audit – the first ever – made 27 recommendations for improvements, ranging from better generation of critical information for decision-making to fewer staff meetings. The $236,944 study said the agency lacks an "integrated financial information system," and its current process is unnecessarily arduous and "may be prone to error."

State Controller John Chiang, chairman of the only state body charged with oversight of CIRM and its board, said Californians "expect effective management of their tax dollars. The performance audit clearly shows that improvements can be made."

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