Stem cell plans put on ice as lawsuits hold up grant funds.

In the 13 months since California voters approved a landmark initiative channeling $3 billion to stem cell medical research, no money has been channeled to local universities on the front lines.

Blame the lawyers.

Two lawsuits filed by a coalition of groups with taxpayer rights or pro-life leanings are being allowed to proceed, at least for now, by an Alameda County judge. A trial is set for Feb. 27.

Until then, the California Institute for Regenerative Medicine has been blocked from selling up to $250 million worth of bonds this year to fund initial research projects.

"It's been terribly disappointing that these funds, approved by the voters, are being held up," said Kenneth Trevett, chief executive of the Los Angeles Biomedical Research Institute at Harbor-UCLA Medical Center in Torrance, which has at least three grant proposals ready to submit when state funding becomes available. "Stem cell research could become a strong catalyst here for research and spin-off companies for treatments that can really help patients."

To get around the delay, the state institute has proposed selling up to $50 million in bond anticipation notes. The notes reduce taxpayer liability, but are riskier for investors because they must agree that their loans would be converted to grants or donations if bond opponents prevail.

Several Los Angeles institutions have ambitions to launch or expand their stem cell research programs to include human embryonic cells, which are considered to hold the most promise in understanding and treating complicated diseases such as cancer and Parkinson's.

Dana Cody, executive director of the Napa-based Life Legal Defense Foundation, a financial backer of the lawsuits, threatens to seek another injunction if the state proceeds with the sale of anticipation notes.

"While there's less risk for taxpayers, we contend there still will be irreparable damage because the institute would be able to make grants and the money would be spent," she said.

Big plans

For now, institutions around the state are resetting timelines, carving out funds from existing budgets, and approaching longtime donors for aid.

Trevett's institution, also known as L.A. BioMed, hasn't yet formed a separate stem cell research program, but Cedars-Sinai, Medical Center, UCLA and USC launched their own institutes in the past year and are actively recruiting from a limited pool of seasoned researchers.

USC is considering a separate building on campus for its institute, and Cedars-Sinai, which is in the final stages of recruiting a director for its program, wants to devote a floor in a future new research facility adjacent to the hospital.

David Meyer, Cedars-Sinai's vice president for research, said he has funded a handful of $50,000 seed grants from his more than $55 million budget to get some of his researchers' projects launched.

Dr. Michael Friedman, chief executive of the City of Hope National Medical Center in Duarte, has taken a different approach, seeking out donors on behalf of the state institute, as well as his hospital's own programs.

"Because we recognize that it may take some time before we can do the research we'd like to do with the state grants, it's important for us to pursue both approaches," Friedman said.

While most of City of Hope's stem cell research over the past 30 years has concentrated on human adult and non-human fetal cells, the hospital has begun studies utilizing both older federally approved human embryonic stem cell lines as well as new lines. The later studies require careful accounting to keep their funding separate from federal sources.

Robert Klein, chairman of the state institute, admits that his group's funding problems have scared off some researchers, noting that two respected National Cancer Institute researchers, Nancy Jenkins and Neil Copeland, opted to go to a Singapore government-sponsored stem cell program instead of Stanford University. Both cited the uncertainty caused by the litigation.

But other researchers are taking the chance that California's initiative, the first of its kind in the nation, will succeed and turn the state into a mecca for cutting-edge research.

Robin Wesselschmidt, who came to USC in September from St. Louis, had been actively looking at opportunities in the state since Prop. 71 was approved in 2004. "The fact that the average citizen here was open to funding a program like this convinced me that the critical mass to do some really breakthrough work was going to happen in California," she said.

Still, Wesselschmidt, an expert in mouse embryonic research who will be setting up the core facility at USC's Institute of Stem Cell and Regenerative Medicine, admits to hedging her bets.

"The reason I came to USC was they promised that they had their own funding to get their program started and there were not going to be delays," she said.