Stem cell cha-ching! CIRM has economic impact in billions, 56K+ jobs

CIRM impact
Graphic on CIRM impact page.

We here in California have been fortunate to have our own stem cell and regenerative medicine agency called CIRM, standing for the California Institute for Regenerative Medicine.

How much has CIRM helped the California economy and has it had broader economic impacts outside of California? How will that impact its future?

CIRM impact
Graphic on CIRM impact page.

CIRM has been around for more than a dozen years. It was the end result of Proposition 71, which dedicated $3 billion to research funding. CIRM has funded a wide range of research using that money including many areas quite distinct from one of its early missions was a focus on human embryonic stem cell research.

Now CIRM is basically out of funds and to continue in its same robust funding manner it’ll need a new big influx. The other options, if that doesn’t happen, are that CIRM either ends or it continues in a much scaled-down form supported by philanthropy.

This period of transition seems like a logical time to contemplate how the “experiment” in a sense of CIRM has turned out so far. CIRM itself has a whole page on its own impact on its website that is worth a look. In my view, one of the most striking, positive impacts of CIRM has been the 56 clinical trials to which it has contributed funding.

I believe some of those are going to yield approved products that help patients in new ways.

At another level, CIRM’s potential impact can be measured economically, which is the focus of a new, independent report today from the agency. Here’s an overview of the report from CIRM and here’s a link to the actual report itself:

“An independent Economic Impact Report says the California Institute for Regenerative Medicine (CIRM) has had a major impact on California’s economy, creating tens of thousands of new jobs, generating hundreds of millions of dollars in new taxes, and producing billions of dollars in additional revenue for the state.

The report, done by Dan Wei and Adam Rose at the Price School of Public Policy at the University of Southern California, looked at the impacts of CIRM funding on both the state and national economy from the start of the Stem Cell Agency in 2004 to the end of 2018.”

Sounds very encouraging. I like the fact that this was explicitly an independent analysis and report, even if CIRM paid for it. Here are the main bullet point take-home messages of the report:

  • $10.7 billion of additional gross output (sales revenue)
  • $641.3 million of additional state/local tax revenues
  • $726.6 million of additional federal tax revenues
  • 56,549 additional full-time equivalent (FTE) jobs, half of which offer salaries considerably higher than the state average

That $10.7 billion number is striking to me. I’m not an economist, but it’s surprising how far that seems to exceed the total cost of Prop 71 including interest on the $3 billion that went for research. The report also specifies billions more in positive impact outside of California.

That figure of more than fifty-six thousand new jobs is also quite impressive.

CIRM has had some critics over the years including especially earlier on those who opposed ES cell research, but also others who had additional issues such as economic concerns. This report powerfully refutes the notion some have cast lately that CIRM didn’t help California, although I’m betting some of the critics will either ignore the report or question its accuracy.

Overall, I’d say the report is a major shot in the arm for the effort to go back to us California voters to ask for another round of CIRM funding, which I support.

Other factors that may come into play related to the campaign for a potential 2nd round of CIRM funding including federal restrictions on important research such as constraints on fetal tissue research by the Trump Administration and the possibility that they could restrict stem cell research too in some ways. California likes its independence from the feds and is very supportive of cutting-edge biomedical research.

David Jensen over at California Stem Cell Report has more details on this new economic impact report.

Disclosure: much earlier in my career I had a CIRM New Faculty Grant and I have had trainees in my lab who were supported by CIRM training grants.

13 Comments

  1. And not a single treatment for anything. That’s the bottom line. The economic impact report cited by CIRM are merely one man’s predictions from 2012. Additionally, all of the “Cha-ching” “Economic Impact” you cite doesn’t come close to making up for the interest that had to be paid on the loan much less the principle. Looks like the gravy train is running out of track…

  2. I may have said this before…a few hundred times, but I’ll say it again: CIRM’s most important contribution was to establish an infrastructure, a critical mass of stem cell knowledge. Like all investments in new ideas, it was a risk; not all of the money was spent wisely. New technology is difficult to establish, and no matter how great an idea seems to be, research fails, therapies fail, companies fail.

    I see a parallel with the NIH’s human genome project that put billions of dollars between 1990 and 2003 into deciphering the human genome. There were many people who thought that was a bad investment at the time, with no obvious pay off in the short term. But the 13 years of investment in the human genome project created a critical mass of scientists who went on to use genomics to cure disease. The cancer therapies that are now saving so many lives could not have been imagined without the infrastructure built by the human genome project. The most powerful genome-based therapy, cancer immunotherapy, was approved by the FDA in 2017.

    In my own case, 13 years of CIRM’s investment in infrastructure worked. I built a thriving lab with CIRM funding, and when I decided to pursue a a stem cell-based therapy, my team’s work was so well established and respected that we obtained investment to start a biotech company to take the therapy to the clinic.

    This approach works. It just takes time. Right now is the time that it is beginning to pay off.

    • That’s a pretty cozy deal. Taxpayers give CIRM money to develop treatments for diseases like Parkinson’s, Alzheimer’s, MS and ALS. Academic researchers use any promising technology they happen to develop to raise venture capital for private companies in which they own stakes to commercialize it for huge profits. This amounts to risk-free venture capital provided by the government. If it works, great. Start a private company. If not, who cares? Just get another grant and try something else. Nothing to see here. This is not to mention all the questionable grants CIRM made to insiders, which has been well documented over the past decade.

      Anyway, the fact remains that roughly 10 years and $3 billion dollars (not including interest) later, CIRM hasn’t produced a single treatment for anything, which was what they sold the public on initially. Now, all they need is another 10 years and $5 billion (with interest) more to get the job done.

      But, hey, maybe things will pan out after 20-25 years and $15 billion dollars or so, and we will all reap the benefits of a $475,000 per patient cancer treatment.

      • Bill,
        From the 56 clinical trials supported so far, in my view at least some are going to become approved new treatments, helping people and sending $$$ back to the state of California. My impression is that the vast majority of those running trials with support from CIRM have good intentions and truly want to help people.
        Also on The Niche, people can make anonymous comments as you do, but I wonder if you’d be so cynical if you were commenting under your own real name and perhaps with your own connections within the stem cell world apparent. There’s a bitterness to your comments.

        • Genetic/Ad Hominem attacks aside, which part of my comment is not true? Is CIRM not providing risk-free venture capital to academic researchers (jeanne Loring is a case in point)? Has CIRM not been called out in the past for making questionable grants amongst other things? Has any CIRM research over the past 10 years resulted in an FDA-approved treatment? What bearing on any of these questions does my name have? By the way, why did you not publish my last comment?

          • Bill-you said: “Is CIRM not providing risk-free venture capital to academic researchers (jeanne Loring is a case in point)?”

            The answer is that I am NOT a case in point. If you read my message, you would know that I am instead an example of something else: an academic who did NOT receive any CIRM funding for my company.

  3. Bill-
    I wish you weren’t so cynical. All of my funding from CIRM was for basic research; I received NO CIRM money for translation of my research to a clinical trial. If I had gotten funding from CIRM for my clinical development (as a “risk-free venture capital” investment,) I wouldn’t have had to raise actual venture investment.

    I needed the investment to do the necessary preclinical studies and pay for the clinical trials. This is going to take a while and huge profits are not on the horizon. If CIRM had invested in my company, I would have been happy to share the benefits…but they did not.

    I think that people who are alive because of the “$475,000 cancer treatment” are happy to be alive, and their families are happy that they are alive. I hope that someday my science will be the source of such joy for patients and their families.

    I am grateful to CIRM for the funding that got me this far..but I have to take it from here.

  4. I concure about the companies coming in at the tax payers expense and walking away with v
    contracts and where is our return, we ought to get some money back for supporting this development. so that should be written in the contract as a return or a tax break I already had stem cell and the swelling in my leg is almost back to normal so maybe we can get a deduction . .I am still hopeful and hope you see the point , I was such an advocate ,and somewhat disappointed . maybe thats why people are going out of the country. and George churchat Harvard and his discoveries. I was completely healthy untill went to an encocrioologit and i should have walked away , so I’m watching a hoping for regeneration, due to one lousy pill .

  5. Clearly stem cells are the future of medicine. They have so much potential. It is also clear that CIRM is not capable of harnessing the power of stem cells. 3 billion dollars spent and nothing to show for? Now they have the audacity to ask for more money…..

  6. Dr. Alturi- If not CIRM, then whom? It would be a disaster to throw the established infrastructure away. It’s already starting to erode as the support for the established research centers has disappeared. I’m talking about the pipeline of skilled workers who were training in the labs of CIRM grantees. I’m not talking about the clinical centers, which are not training new scientists.

  7. Dr.Loring,

    I know you mean well and I truly believe that. I read your thoughtful article when it was published in Nature. In our clinic we use bone marrow concentrate to treat discs and seeing amazing results. As you know, low back pain is one of the most difficult conditions to treat. Bone marrow concentrate has broken that barrier. In my 20 years of practice, I have never seen any treatment which works as well for back pain. I admit it’s an anecdotal experience. We are different from “scam” stem cell clinics as we dont advertise heavily, charge exorbitant fees and use only autologous bone marrow stem cells. If done the right way, stem cells can make a difference in patients’ lives.

    The point I am trying to make is that while I recognize that bench work is absolutely essential, prudent collaboration with clinicians can get the best bang for the buck.

    • Sounds interesting – but if it is anecdotal I guess that it is not approved by a state regulatory body, in which case I would like to ask if patients pay for the whole treatment and, importantly, are you insured against any damage caused to patients, or do they have to sign a claims waiver?

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