Cohen Introduces Legislation to Fund Stem Cell Research with Venture Capital

COHEN INTRODUCES LEGISLATION TO FUND STEM CELL RESEARCH WITH VENTURE CAPITAL

'New Jersey Stem Cell Research Assistance Act' Would Provide Millions to Help Jumpstart Research Opportunities in the Garden State

(TRENTON) - Assemblyman Neil M. Cohen announced today he has introduced legislation to create the "New Jersey Stem Cell Research Assistance Program" to help stimulate the state's fledgling stem cell research program by encouraging venture capitalists to invest in research funding.

The bill would allow investors to contribute up to $500 million over five years to fund stem cell research efforts in New Jersey.

Cohen (D-Union) is a prominent supporter of stem cell research and the lead Assembly sponsor of the initial law permitting stem cell research in New Jersey as well as the laws creating umbilical cord blood collection centers and world-class stem cell research facilities in the state.  He said his legislation represents a unique public-private funding mechanism not being explored anywhere else in the country that would reinvigorate the state's plans to become a premiere location for the progressive, potentially life-saving research.

"Investing in stem cell research is one of the single most important activities New Jersey can be engaged in," said Cohen.  "It offers the chance to generate life-changing treatments and cures for those suffering from incurable or untreatable diseases.  And it lays the groundwork for billions of dollars in economic investment in the state at a time when the national economy is in a recession."

Cohen said he first formulated the idea to use venture capital as a means of stem cell research funding after reading about investment firms funding economic development in other states.  Cohen says he plans to meet with Wall Street investment banks to discuss his legislation in the coming weeks.

One firm, New Jersey-based NW Financial Group, LLC, an investment company specializing in governmental financial advising and municipal underwriting, said the legislation would only serve to help the state's economy and allow New Jersey to successfully compete with states like Maryland, California, and New York, all of which have committed billions of dollars to attract biotech jobs.

"The stem cell and biotech industries produce high paying jobs that are coveted by states, said Michael Hanley, the firm's managing director.  "It is important for New Jersey's economy to continue to attract growth industries.  Similar types of partnerships have been successful in other states such as Utah and Michigan and allows the potential for states to encourage investment and benefit from partnering with the private sector without impacting their budgets."

Cohen's bill (A-3131) would direct the New Jersey Economic Development Authority (EDA) to establish a "New Jersey Stem Cell Research Assistance Program," funded through a specially created venture capital fund.  Interested financiers would be able to deposit up to half a billion dollars into the fund in $100 million installments over five years.

Interested researchers would submit loan applications to EDA, detailing the type of adult or umbilical cord stem cell research to be conducted and the amount of funding requested.  EDA would review individual research grant applications, in conjunction with the New Jersey Commission on Science and Technology, and distribute money from the fund on a case-by-case basis, utilizing the same structure that was put in place in preparation for the now-defunct $450 million stem cell research bond act.

The fund would be capped at $100 million in research loans annually, with individual research loans not to exceed $50 million per project, per year, a portion of which would be required to fund non-profit and academic research projects.  Any unused loan revenue from year to year would be able to be rolled over into the next year.

To encourage venture capitalists to participate, the measure also would grant investors tax credits equal to their contribution in the fund.  These credits, which would not exceed $100 million annually, would only be issued if a funded research project failed to repay the loan or otherwise collapsed.  The tax credits would be non-transferable and would not be able to be exercised for five years after the initial investment of venture capital.

Cohen said that the legislation would serve as a model for other states and would help New Jersey keep its commitment to becoming a world-class center for stem-cell research - started with the creation of a statewide series of interconnected research laboratories - without placing an additional burden on taxpayers.

"We have the infrastructure, the talent, and the desire to place New Jersey on the leading edge of stem cell research opportunities," said Cohen.  "The unique public-private funding approach taken in this bill will serve as a shining beacon to other states and will bring us one step closer to finding the cures to humanity's most devastating illnesses."

The bill has been referred to the Assembly Financial Institutions and Insurance Committee for consideration.

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