….The multibillion-dollar bank run on Silicon Valley Bank…. could involve some of the scores of companies backed with tens of millions of dollars in research awards from the $12 billion California stem cell agency.

The state stem cell agency did not have to worry about its own funds. They are held largely by the state and are not involved. But the collapse of the bank raised the possibility that some of the agency’s grant recipients would be endangered.

Lack of access to funds for salaries and other costs could threaten their survival or their ability to hit milestones on the research backed by the agency, known formally as the California Institute for Regenerative Medicine (CIRM). If awardees miss milestones, they miss the next installment of cash from CIRM.

The agency could also be asked by financially strapped companies to advance payments without waiting for the completion of milestones, in effect becoming an investor of last resort. Regardless of actions today on uninsured deposits, the SVB failure could tighten financing generally for biotech firms, which were already facing harder times.

It is unclear if CIRM has a good grasp of the finances of all its awardees. Money matters may come up during the application review process, which is conducted behind closed doors. The reviews focus almost entirely on the science involved.

CIRM does ask clinical applicants to address “Plans for Risk Mitigation & Financial Contingency: Potential risks, mitigation strategies, associated costs, and non-CIRM sources of contingency funding.” Public summaries of the application reviews disclose almost nothing, however, on the financial strength of the winning applicants.

The names of the reviewers are also secret. It is unclear whether any have the financial and industry background to make a well-informed assessment of a company’s financial capabilities.

It is also unclear whether CIRM’s latest day-long application review session on Friday will see a deeper-than-usual financial analysis. The meeting involves the approval of awards of up to $4 million each for transactional research.

The identities of troubled companies have yet to surface widely in the media. But an article by Ron Leuty in the San Francisco Business Times had the following to say about one firm, Sangamo Biosciences, Inc., which had received nearly $8 million from CIRM. Those projects are concluded, however.

“Sangamo Therapeutics Inc. (NASDAQ: SGMO) of Brisbane said ‘substantially all’ of its $34.4 million deposited at SVG are uninsured ‘At this time, Sangamo does not know to what extent it will be able to recover its cash deposits at SVB nor the timing of any recovery,’ the gene therapy company said in a Securities and Exchange Commission filing Friday.

“Sangamo had cash, equivalents and marketable securities totaling $307.5 million at the end of last year. The company last month said it would make no further investment in a sickle cell disease program, and last week it decided not to sell an undisclosed amount of shares from a shelf registration because of ‘unacceptable’ financing terms and ‘evolving market conditions.’”

Full story at Substack.