Stem Cell Bid May Be in Limbo for Year-Plus

California’s $3-billion foray into stem cell research, approved by voters more than a year ago, will not begin in earnest for perhaps 15 more months because of legal challenges to the initiative, officials said Friday.

“It will be the spring of 2007 before we will be able to pursue stem cell research on the scale that the voters of Prop. 71 expect,” Zach Hall, president of the California Institute for Regenerative Medicine, told his board of directors Friday.

Litigation has delayed the sale of state bonds intended to finance the research effort, which was endorsed by 61% of voters in November 2004. Hall predicted that the money eventually would be released.

Meanwhile, however, he said the institute would continue to seek $50 million in temporary private funding -- tapping sources such as philanthropies and wealthy individuals -- to start training stem cell researchers. He also suggested raising more than $2 million in private funds to support collaborations with other scientific organizations, including international meetings and conferences.

Hall said the institute, though starved for cash, needed to take such steps this year to demonstrate its “strong scientific presence.”

“We cannot afford to lose the momentum of hope ... that Prop. 71 brought us,” Hall told the board. “It is those activities that will keep us alive as an agency and keep us active and visible during this important year.”

The fundraising is also critical to keeping the operations running at the fledgling institute, which was established by Proposition 71. It has been fueled thus far by a $3-million state loan and a $5-million philanthropic gift, but that money is set to run out in June. Not one dollar has been spent by the institute on stem cell research.

As a result, universities and other institutions have had to rely on their own funding sources to begin building their stem cell research programs, not wanting to be left behind should the state funding come through.

Major institutions statewide have invested millions in laboratory space and recruitment of prominent or promising scientists. Still, academic officials said, they do not have nearly enough money to support the army of researchers envisioned by backers of Proposition 71.

Robert Birgeneau, an institute board member and chancellor of UC Berkeley, said his campus would be able to “expand significantly our research programs” if the initiative funds were released.

He described the delay in dire terms.

“It’s extremely unfortunate,” he said. “Each day we’re held up, more people are going to die.”

Stem cell research is controversial because it involves the destruction of embryos. But many scientists believe that it holds great promise for treating and understanding such diseases as Parkinson’s, Alzheimer’s and insulin-dependent diabetes. Researchers caution, however, that therapies remain a long way off.

Bob Klein, chairman of the institute’s oversight committee and a major backer of the initiative, said Friday that he was very close to raising the $50 million in temporary funding, known as bond anticipation notes, for the institute. This money will be repaid with the Proposition 71 bond funds if the initiative is upheld in court.

But Klein could not say when dollars would arrive in the hands of researchers. And the $50 million is a fraction of the $300 million a year that Proposition 71 would provide.

California Atty. Gen Bill Lockyer has advised the institute that lawsuits challenging the constitutionality of the initiative must be resolved before Wall Street will finance the sale of voter-approved tax-exempt bonds. Two suits are pending, one of which alleges that the initiative is illegal because it gives the agency’s board control over spending taxpayer dollars without legislative oversight.

Even if the institute wins, appeals could keep the money tied up for months.

A Superior Court judge declined to throw out the two lawsuits but at the same time ruled in November that the parties challenging the initiative had so far failed to prove it unconstitutional.

In other actions Friday, the institute board approved new ethical, medical and scientific accountability regulations. For instance, it called for women who donate eggs for research to be made fully aware of the possible risks, such as bleeding and infection.

The board also adopted guidelines regulating patents and profits resulting from Proposition 71 research. The state would be entitled to royalties and discounts on therapies for low-income patients.