Stem-cell institute gets loans

MONEY ENABLES IT TO OPERATE NEXT YEAR

California's $3 billion stem-cell institute, financially hamstrung for more than a year by two lawsuits, is about to get a $181 million infusion to keep it running through the end of next year, officials said Monday.

The money includes a new $31 million loan from nine philanthropic groups and individuals, and a $150 million loan that Gov. Arnold Schwarzenegger announced in July.

The stem-cell agency -- formally known as the California Institute for Regenerative Medicine -- had been unable to use the governor's loan until it was approved Monday by the institute's finance committee.

The fact that the finance committee is overseen by state Treasurer Phil Angelides, who opposed Schwarzenegger for governor, had prompted speculation that politics was involved in the delay getting the loan approved. But state officials have denied that.

``An overwhelming majority of Californians approved this stem cell research program nearly two years ago, but a handful of opponents temporarily blocked its progress in the courts,'' said Robert Klein, who chairs the institute. With the two loans announced Monday, ``major stem cell research programs in this great state can now be funded.''

When California voters passed Proposition 71 in 2004, they authorized the institute to spend nearly $300 million a year for 10 years through the sale of state bonds. The money primarily was intended to finance research into human embryonic stem cells, which many scientists hope one day will yield treatments for a variety of ailments.

But the bond sale has been held up by two lawsuits claiming the institute is unconstitutional. Although an Alameda County Superior Court Judge found no basis for the suits earlier this year, the cases are pending before the 1st District Court of Appeals in San Francisco.

Whichever side loses that appeal is expected to take the cases to the California Supreme Court, which could delay the bond sale, needed to finance the institute, well into next year.

The loans are expected to finance dozens of stem-cell research grants over the next few months, said Kirk Kleinschmidt, the institute's legislation and research policy director. He added that both loans will be repaid if the agency defeats the lawsuits and can sell state bonds. But if the suits prevail, the loans will become donations, he said.

The institute has been operating so far with $22 million in previously announced loans and gifts.