Dollars For Genes: Revenue Generation by the California Institute for Regenerative Medicine

Richard J. Gilbert, Economics Department, University of California, Berkeley

Abstract

Proponents of the $3 billion ballot initiative that created the California Institute for Regenerative Medicine (CIRM) forecast that CIRM-funded research would earn royalty income in the range of $537 million to $1.1 billion. Using data on past licensing revenues as well as expected discoveries, this paper estimates that CIRM licensing income will be only a few percent of expenditures and California’s share of this licensing income will be less than one percent of R&D expenditures in current dollars. The allocation of these relatively small revenues is of secondary importance to the greater objective of disseminating CIRM-funded stem cell technology quickly and widely. While investments in stem cell research will generate some financial return for the state of California, the primary benefits from these investments will be progress toward improved therapies for the treatment of major chronic and acute diseases.