By Don C. Reed
First, a seeming distraction.
In 1997, my wife Gloria and I bought a house. The asking price was somewhat above our comfort zone, ($165,000, a lot back then) but we bought it anyway.
Three days later, we had a visit from the same realtor who sold us the house, wanting to buy it back — for $215,00 — $50,000 more than we had paid.
We said no, (and live there still) but it was a pleasant surprise to find unexpected value in our home.
Like our house, the California stem cell program is packed with hidden benefits, many of a financial nature.
To me, (and this may sound strange) those extra bonuses almost do not matter.
California did not build our glorious stem cell agency (the California Institute for Regenerative Medicine, or CIRM) to be a money-raising cash cow.
CIRM’s real purpose was clear from the beginning: to save lives and ease suffering with stem cells and other biomedical advances.
It is doing that, spectacularly: from the 40 little children whose lives were literally saved from “bubble-baby” disease, to the progress in remediating blindness, to regained function in the hands and arms of paralyzed people.
But there is more.
As we move closer to (one hopes) to decision-making time, when California will vote to renew CIRM’s funding, we need to know about the financial aspects.
We must be sure that backing stem cell research was a prudent investment.
Granted, California is operating at a major surplus right now, so we can definitely afford the $5 billion a renewal will need. But even so, we cannot spend significant sums without knowing the impact on our state. California expenditures must benefit the state, and that benefit should be clear.
So: if you go to page 1 of the Economic Impact Analysis conducted by Stanford University Analysis Group’s Professor Lawrence Baker, you will find a paragraph jam-packed with meaning:
“The … impact of the Institute is increased by three factors:
1. … donor matching funds;
2. Research leverage as researchers … obtain grants from other sources;
3. The economic multiplier effects as the funding moves through various levels of the economy….”
(“The multiplier theory and its equations were created by British economist John Maynard Keynes. Keynes believed that any injection of government spending created a proportional increase in overall income for the population, since the extra spending would carry through the economy.”)
What does that add up to? About three billion dollars extra financial benefits, roughly the cost of CIRM itself.
Below is information from Kevin McCormack, CIRM’s Communications Director.
According to McCormack, the “hidden benefits” (not hidden, really, but perhaps unexpected) include:
$1 billion in co-funding (funding from institutions, industry or investors who join with CIRM to fund a specific project at the outset) bringing more funds to California research.
$1.6 billion for Partnership Funding (support committed by partners independent of CIRM funding to help a project advance, such as Orchard Therapeutics for example raising $150 million in a series C round of private funding — or by raising $225.5 million in an Initial Public Offering (IPO) by going public.
$541 million in Additional Funding (this is any funding that a principal investigator can secure by leveraging CIRM’s backing of the project to attract additional funds from investors, such as getting more funding from the NIH by using data collected during a CIRM-funded phase), again bringing more research funding to California, initially driven by CIRM funds.
“And of course all that additional money creates additional jobs…and helps further develop the industry here and further cements California’s position as a global leader in the field.” — Kevin McCormack, personal communication.
Biggest benefit? CIRM creates an atmosphere conducive to the creation of treatments and cures.
Example: consider the humble mouse. For most of us, mice are nasty little rodents that cause home fires (chewing through electrical wires, they self-electrocute and may catch the house on fire) — but when it comes to cure, mice are heroic little mammals, to whom we owe a debt of gratitude.
Why? Consider the benefit: if you give a disease to a mouse — an incurable illness — and that helps you find a cure? Granted, a mouse is not a man, and not everything that fixes a rodent will benefit people; but still it cannot be denied that to make a sick animal well may point a path to cures for humans.
Cure science depends on mice and lab rats. But where do you get them? These are not just rodents you catch in somebody’s garage! You may want mice infected with a certain disease, or, with immune systems weakened, so that it will not reject a possible cure.
CIRM needed medical mice. They found a company which specialized in exactly that — and made funding available. What happened?
“The Jackson Laboratory, based in Maine…greatly expanded their West Coast operation in 2009, when they received CIRM funding…establishing an independent West Coast operation that today employs approximately 120 people.”
See how that worked? There was a medical need. CIRM answered that need — and jobs sprang from it. 120 families were immediately benefited.
And that is just one example.
CIRM is an abbreviation for the California Institute for Regenerative Medicine.
But for me, CIRM is a four-letter word — which stands for cure.
Don C. Reed is the author of “CALIFORNIA CURES: How the California Stem Cell Program is Fighting Your Incurable Disease!