April 21, 2006

Calif. judge OKs state’s $3 bln stem-cell effort

SAN FRANCISCO (Reuters) - California's stem-cell research
institute is a constitutional state agency, a state judge ruled
on Friday in a decision that may allow it to begin to issue up
to $3 billion in general obligation debt.

Alameda County Judge Bonnie Sabraw held that the California
Institute for Regenerative Medicine, approved by state voters
in November 2004, is a legitimate state agency. Groups opposed
to the research the institute would fund, which may include the
use of human stem-cells from human embryos, had challenged its
constitutionality, which put its efforts to issue up to $300
million in debt annually on hold.

"The court decision upheld Proposition 71 in its entirety,"
Robert Klein, the institute's chairman, said on a conference
call, referring to the measure enacting the institute. "We have
a victory across the board on every issue presented."

The stem cell institute earlier this month issued $12.1
million to researchers, marking its first grants, backed by
bond anticipation notes while its debt authority faced the
court challenge.

The grants would be drawn from $14 million in notes sold to
six philanthropic groups by the California Institute for
Regenerative Medicine to jump-start its research grants until a
court challenge to its authority to sell state general
obligation debt is resolved.

California voters approved the institute's formation by
passing a November 2004 ballot measure. It allows the institute
to sell up to $3 billion in state debt to fund stem-cell
research that many scientists believe will lead to
breakthroughs for treating various illnesses and ailments.