The California stem cell agency is in
the midst of making significant changes in its lending regulations,
but says it is not part of an effort to transfer a $25 million loan
to Geron to another company.

That does not mean, however, that the agency is not going to
transfer the loan at some point. CIRM says it already has the
authority to do so.

Talk has surfaced from time to time at
CIRM meetings about the likelihood of helping to continue with the
hESC clinical trial that Geron abruptly abandoned last fall. The
surprise termination of Geron's hESC program came only a few months
after CIRM and Geron signed a $25 million loan agreement in August.
Geron is trying to sell off its hESC business, although Geron's hESC
team has already left the company, according to industry reports.

Modification of the CIRM loan
regulations has been underway for some time. Tomorrow the CIRM
directors' Intellectual Property and Industry Subcommittee will consider the latest proposals.

Some of the changes deal with
relinquishment and transfer of loans. The modifications explicitly
give CIRM President Alan Trounson the ability to transfer a loan
without having to go through additional reviews or seek board
approval. Other changes are also designed to clarify and remove
ambiguities in the transfer arrangement, which may well be necessary
in order to make a transfer acceptable to a buyer of the Geron
assets.

Geron paid off the loan last fall but
it is not clear whether that action would preclude a transfer. At one
point earlier this year, Trounson said he was involved in helping to find a buyer, but it is not clear whether any CIRM official is
currently involved. Geron has hired  Stifel
Nicolaus & Co. to help peddle
the hESC business.

CIRM's loan changes are complex. The
agency has not yet put together in one place a straightforward
rationale and explanation of all the modifications. Nonetheless,
biotech and stem cell firms should pay close attention to the
proposals. They could mean the difference between the infusion or
loss of millions for a company's research.

The proposals are expected to go before
the full CIRM board later this month. Then they will be subject to
the state's administrative law process, including a period for public
comment.

Tomorrow's meeting has public
teleconference locations in San Francisco, Los Angeles, La Jolla and
two in Irvine. Specific addresses can be found on the agenda.