Former state Assemblyman and Sen. Art Torres, vice chairman of the Center for the Institute of Regenerative Medicine, recently floated a $5 billion trial balloon.
As his agency awards the last of $3 billion in bonds approved by Proposition 71 to support stem cell research, he said, perhaps voters should be asked in 2018 to approve up to $5 billion in additional bonds.
Torres said the agency is “starting” to show results, with 27 clinical trials underway for new therapies to treat blindness, HIV, heart disease and several types of cancer.
But progress should be measured in more than the education of new scientists, the creation of new research centers or in the progress of clinical trials.
In the 2004 voter guide, supporters of Proposition 71 made this pledge: “By making California a leader in stem cell research and giving our state an opportunity to share in royalties in the research, 71 will generate thousands of new jobs and millions in new state revenues.”
That promise remains unfulfilled. The stem cell agency, in fact, recently failed to raise just $75 million in new funds from private investors.
Even if all stem cell clinical trials resulted in drug candidates, they would still come up against the so-called “Valley of Death” – the term used to describe the well-documented shortage of funding for early-stage translational research.
When early-stage funding is scarce, breakthrough discoveries sit on the shelf and don’t get translated into novel therapies because many of them, including but not limited to stem cells, lie outside the comfort zone of larger companies. That eats up years of patent protection, to the point where it is no longer economical to translate these laboratory breakthroughs into products.
A better alternative to doubling down on the current approach would be to target the Valley of Death with a statewide bond issue that would provide funds directly to California-based companies developing new drugs to cure diseases and prolong healthy lives.
This bond, administered by the University of California, would have three distinctive features:
▪ A focus on entrepreneurs: Funds would be available only to companies;
▪ A focus on California: Only companies with a headquarters and a majority of employees in California, the nation’s center of overall innovation, or willing to relocate here; and
▪ A focus on breakthrough medicine: Only companies working on projects that have the potential to greatly impact patient health would qualify.
The Defense Advanced Research Projects Agency has used a similar approach to jump-start innovation in defense-related technologies.
This would not be a giveaway to private companies.
In exchange for the funds they receive, companies would tender to the University of California shares of their common stock, with an estimated value as determined by the most recent outside valuation or price set by investors.
These shares would become part of the UC endowment, and the University of California would be free to sell or leverage these shares, or acquire additional shares, as it sees fit.
This bond would not only build an army of new companies working on cures, it would provide funding for hiring more UC professors or reducing the out-of-pocket cost of higher education.
In its most recent strategic plan, the stem cell agency pledged not to follow the path of least resistance, but “to do what was right and necessary, whatever that may be, to best accomplish the mission and help the people we serve.”
In the race to treat and cure diseases, perhaps it’s time to hand the baton to another runner.
Joe Rodota served as Cabinet secretary to former Gov. Pete Wilson and director of policy for Arnold Schwarzenegger’s 2003 recall campaign. He can be contacted at email@example.com. Bernard Munos is a senior fellow with FasterCures and the founder of the Innothink Center for Research in Biomedical Innovation. He can be contacted at firstname.lastname@example.org.