California's Stem Cell/Gene Therapy Budget to Hit All-Time High of More than $500 Million
Spending plan boosted to help deal with Trump's research machinations
As the Trump administration continues to ravage the nation’s biomedical research efforts, California’s state stem cell and gene therapy program is set to hit its highest level of research spending in its two-decade history.
A key panel at the agency unanimously approved a $505.7 million research budget last week for the fiscal year beginning in July. The full board is expected to ratify the decision at its meeting June 26.
The move boosted the spending plan of the agency, known formally as the California Institute for Regenerative Medicine (CIRM), by $37.1 million, doubling what was proposed for a basic research round by the CIRM staff.
That action is likely another first. Never before have CIRM directors boosted proposed annual spending substantially beyond the level recommended by staff, at least in the recall of this writer, who has covered all of its spending over the past 20 years. CIRM’s president told directors the total was the highest ever.
The major motivation for the increase was what one director called the “big fire” sweeping through the national biomedical research scene. The conflagration surfaced once again yesterday in a story displayed prominently on the news feed from the New York Times. It reported that “China and Europe are on hiring sprees….The number of postdocs and graduate students in the United States applying for jobs abroad has spiked.”
The approval on May 29 of the record-level of spending in California followed an intense discussion among CIRM directors. It ranged from financial discipline and financial flexibility to changes in the biomedical world and the “strength of the California scientific enterprise.”
Flexibility and Finances
Traditionally, CIRM directors have routinely accepted annual budgets prepared by the CIRM staff. But legally they can reject, alter or send spending plans back to the staff for changes.
(See this May 23 article about how CIRM has left $560 million on the table over the last four years.)
In approving the increase, some directors expressed a desire for more flexibility, especially throughout the year when they are asked to deny funding for worthy projects because of budget caps. Other directors expressed concern about losing financial discipline.
Jonathan Thomas, CEO and president of CIRM but also a former chair of its board, said, “We do have to exercise financial discipline, but there are circumstances which do argue for consideration of alternatives.…
“We want to be very careful that, as a general matter, we don't assume that because we might want to double the budget here, that we'll double the budget for the next thing or triple the budget for the thing after that.”
At the beginning of last week’s meeting, Judy Gasson, a UCLA professor of medicine and chair of the board’s Governance Committee, broached doubling the size of the DISC-O program.
“The entire scientific biomedical world has changed significantly since we started this process. And some of these changes were not really changes that we could have anticipated. And there's no way that CIRM is going to be able to make up in any way, shape, or form for the decreases in funding that are being experienced through the NIH (National Institutes of Health).
But she said, “We anticipated receiving 150 applications for the DISC-0 opportunity. And instead we received 371. This opportunity represents the high impact basic research foundation that will lead to our future translational and clinical research programs from CIRM that will benefit patients and their families.”
As initially proposed, the DISC-0 round would have funded roughly 12 awards. It would now cover 24 or 25.
$41 Million Left on Table
Director Pat Levitt, chief scientific officer, vice president, and director at the Saban Research Institute, Children’s Hospital Los Angeles, supported an increase, but also raised questions about flexibility on spending.
“It looks like we left $41 million on the table last fiscal year in terms of the DISC grants. It's very disappointing, to be honest, because we had situations in which we were informed that the review committee recommended funding (some applications), but we couldn't do it because we were capped in that particular category. Yet there was $41 million that was not spent on DISC grants,” Levitt said.
“I would just like reassurance that there is flexibility, that when things come up at a board meeting when we're making really minute-by-minute decisions about what's going to get funded, we have ability to sort of say, ‘Can we pause for a minute and talk about this,’ and then use whatever we're allowed to use from a rule standpoint to be able to address that. Because if there's no flexibility, then it's basically rubber stamping what we're approving once a year.”
Director George Blumenthal, former chancellor of UC Santa Cruz, said, “Normally, I have a lot of concern about the rate at which we spend CIRM funds and try to make sure that we preserve funding for as long as possible. But in the context of these times, I think Judy's suggestion is not an unreasonable one at all, given all that's happening on the national scene.
“I guess I would point out -- first emphasize a point J.T. (Jonathan Thomas) made, that if we consider increasing the DISC-0 budget, that it is not a precedent for future actions of the board. This is a one-time only deal. Secondly, on the scale of the budget we're talking about, $37 million isn't that big a fraction of our budget.”
“Loosey-Goosey” Policy?
Another board member, Keith Yamamoto, vice chancellor for Science Policy and Strategy, director of precision medicine, UC San Francisco, said, “There's a big fire going on in Washington, too, that's affecting all of us almost on a daily basis....
“Given the situation that we're in, we don't know what the situation is going to be at the end of the day, but given the situation that we appear to be in right now in terms of what is proposed, I think being able to recognize and respond to the flexibility that the board has in making adjustments to the way that our resources are being allocated in response to situations we never could have imagined, I think it is something that we need to just always be aware of….
“I certainly support strongly Judy's proposal and would caution us to not say this is a one-time only thing…. I think maintaining the flexibility in response to situations at hand, developments of new technologies, as J.T. mentioned, or outside influences on the way that the scientific enterprise moves forward are going to be really important for us to be responsive to. So my own counsel would be to support what Judy is proposing, not draw a hard line.
“I'm not trying to say that we should just keep this loosey-goosey and open to a daily change in interpretation,” Yamamoto continued. “But I think being aware of and responsive to the environment that we're in is important.
“Obviously, CIRM's strength depends upon continued strength of the California scientific enterprise overall. And the strength of that enterprise is very dependent, not only on what CIRM’s resources are doing, but what the federal government's resources are doing. And I think just being aware of the situations that we're in almost on a day-to-day basis is going to be important for CIRM’s continued success moving forward.”
Final Say and Missing Figures
CIRM CEO Thomas repeatedly assured the board members that the board has final say on all spending. However, the financial rules are buried in the 17,000 words of the ballot initiative that finances the stem cell agency. The simple answer is that the 35-member board can do pretty much whatever it wants if there are sufficient votes, based on state law. It could, for example, create a $20 million flexible fund that could be carried over year-to-year to allow the board to deal with the sort of situation described by Levitt.
Missing from last week’s budget meeting were the following figures:
CIRM’s cash on hand,
The amount of cash it expects to ask for in bond funding in 2025-26 and the rationale behind that calculation,
The amount expected to be recovered from awards in 2025-26 that fail to meet milestones,
Projections of how long CIRM’s remaining $3.64 billion will last under various spending scenarios.
Also complicating its budgeting is the fact that CIRM is on a financial allowance. While CIRM’s cost to taxpayers was estimated in 2020 at $12 billion, it can only receive $540 million a year from the bonds that the state floats to support CIRM. Since CIRM was refinanced in 2020, it has not asked for the full amount.
Near the conclusion of the budget discussion, Thomas told directors, “We are playing an extremely major role in funding this space. And while others are retrenching and cutting, we are enlarging the scope of what we're doing.
“That will continue throughout the implementation of (our new priorities), and we should feel very good about that in terms of how we are advancing the field in California…. We are absolutely one of the major players in the world…. And the board should feel very good.”
A transcript of the May 29 meeting can be found here. The California Stem Cell Report recommends the CIRM TV version of the meeting to understand its full intensity. The discussion begins at 20 minutes into the session.