Presidents Report

C. Randal Mills, Ph.D. President and Chief Executive Officer

California Institute for Regenerative Medicine

September 10, 2014

Topics

Staying FOCUSED on the MISSION

Budget Commentary

CIRM 2.0 Building a be#er stem cell agency

Our Mission

Accelera)ng stem cell treatments to pa)ents with unmet medical needs.

It is all about the patients.

The Four Part Test

Will it speed up the development of a stem cell treatment?

Will it increase the likelihood of success?

Will it meet an unmet medical need?

Is it efficient?

BUDGET REVIEW

Two Separate Funds

$180M

Administrative Budget

$2.75B

Award Budget

Grants Administration Budget

$180M

Administrative Cost

$89 million spent

$91 million remaining

Current spending rate is about $13 million per year

Funded until 2021 at current spend rate

Award Budget

$2.75B

Award Budget

$1.9 B awarded (not all spent) Estimated $50-100M of the

$1.9B awarded will be recovered

$880M not awarded Leaves approximately $1B

available to award

Sufficient funding at current rate until 2020

Key Issues

All the Kings Horses Spending money faster does not necessarily speed up the development process

A Penny Saved? Our goal is not to save money it is to find cures

Quality Matters Uncertain CIRM will be able to maintain a $190 million annual award rate with our current pipeline we need more high quality projects

CIRM 2.0 Building a be#er stem cell agency

CIRM 2.0: Purpose

To create a process at CIRM for a#rac)ng, awarding and administering grants that be#er serves our mission

If successful, this should lead to:

More high quality applications Reduced cycle time

Accelerated progression of funded projects

Clarity

The Overall Process

Application Contracting Administration Review

Example process for clinical stage

projects

The Overall Process

Application Contracting Administration Review

Concept plan approval, RFA generation, LOI review, and

application submission.

The Overall Process

Application Contracting Administration Review

Includes eligibility evaluation, COI checks, GWG review and

Board approval.

The Overall Process

Application Contracting Administration Review

Budget reconciliation, plan amendments, milestone and

financial term agreement.

The Overall Process

Application Contracting Administration Review

Disbursement, progress reporting, CDAP, and milestone evaluation.

The Overall Process

Application Contracting Administration Review

9-15 months

The Overall Process

Application Contracting Administration Review

9-15 months 5-7 months

The Overall Process

Application Contracting Administration Review

9-15 months 5-7 months 5-7 months

The Overall Process

Application Contracting Administration Review

9-15 months 5-7 months 5-7 months

Overall Cycle Time 19-29 months

The Overall Process

Application Contracting Administration Review

9-15 months 5-7 months 5-7 months

Overall Cycle Time 19-29 months

4 years

Significant Opportunities

Timing More frequent calls Shorter review time

Structure Agreements that better motivate the behavior we want Clear success criteria

Accelerating Activities More frequent interaction where we can help (FDA, BD, etc.) Seamless transitions

CIRM 2.0 Rollout Plan

Now October Continue to meet with stakeholders Refine working ideas Meet with the Scientific Subcommittee

October Board Meeting Present concept plan to the Board

December Board Meeting Adopt necessary policy and procedure modifications

January 1st Launch first phase

Thank you!

C. Randal Mills, Ph.D. President and Chief Executive Officer

California Institute for Regenerative Medicine