Assembly Select Committee on Biotechnology and Medical Technology

Yeah, right. Yeah.

Test.

Well, good morning, everybody. I'd like to welcome you to the Assembly Select Committee on Biotechnology and Medical Technology's hearing for Tuesday, August 19th, 2025.

As Chair of this Committee, I'm grateful for all that are here in attendance and for their participation and welcome other Committee Members as well or Non-Committee Members that would like to be able to learn from and engage with many of our presenters on this important topic, to come to room 447 at their leisure.

I know there's a lot of activity going on in the building here today across a variety of subjects right now, but this is the most important thing because we know how important the biotechnology and medical technology industries are to the state of California.

And we know that there are a lot of threats that we are living through right now.

And that's what we hope to be able to use this time in the next two hours to be able to expose and really define a lot of the experiences that we are hearing from today and look forward a pathway that California can continue to remain competitive, remain successful, for a lot of the goals that we share.

We have, of course I said a lot of numerous biotechnology companies here. It is an incredibly large sector and a very innovative sector that is continuing to be able to provide the advancements and the cures and the therapies and the discoveries that we are so proud.

Not just because it's good for public health and it's good for society, but we're particularly proud of the leaders that we have in the community here that are producing a lot of that. These intersect really directly with our educational institutions, whether it's the University of California, Stanford, or any other institution that's here in the State of California.

We are proud of their direct work and their commitment to frontline advancements and knowledge base that really inform a lot of the therapies, the cures, the work that biotechnology takes on, but also, for the experiences that we have in building up the next generation and training them to be the future leaders in these sciences and these technology areas.

We have a lot of groundbreaking technologies that we know are going to be able to impact our health and well being.

So, the purpose of this hearing today is to better understand a lot of the impacts that have already occurred or we project are going to be incurred from a lot of federal actions that have resulted from grant cuts to some of the research funding that we're well aware through news media that we have been subject to. The National Science Foundation, the National Institutes of Health, particularly, have been eviscerated in their ability to be able to help continue to support many of the California research institutions, in addition to the effects, the downstream effects, on the biotechnology and...technology industries.

Today, we are going to hear as a Committee from representatives of the biotechnology trade organizations and these higher education institutions, and they're just a representative sample of so many other institutions and organizations that are across our state as well.

I had a lot of requests to be a part of this panel, and so, that would be wonderful if we had all the time in the world because this definitely deserves that level of attention and input.

But I'm really grateful for those that have been able to join us here today to be able to provide an overview and a synopsis of what the entire industry and the academic sector is facing.

So, to begin, I'd like to welcome Gregory Thiel from Biomedical Manufacturing Network, who has testified, of course, before our select committee a couple years ago to give us a bigger picture on some of these actions are currently affecting California's biotechnology sector. Gregory, welcome, and thank you again for coming to the Committee.

Great. My pleasure. Thank you for inviting me, and I do have the best opportunity because I get to talk about the geography of the industry. And so, three things I want to share with you today. One is just how California fits into this larger global picture.

And that's really important, obviously, because when policy is changed, it affects California very directly and most directly because we hold such a prominent role in this industry. That's number one. Number two, I want to talk a bit more about how the industry's grown since we last talked.

And then, finally, I want to focus in on some of those microclimates I shared with you last time and how important they are for the whole economy of the state. So, first, first slide here. The Biomedical Manufacturing Network focuses in on organizations that do research and development and manufacture things.

Okay, so, and the umbrellas that we use is biotech, pharma, medical devices and equipment, genomics and digital health care, and contract research organizations and contract manufacturers as well. So, that's what fits under the biomedical umbrella, right.

And so, globally, there are 15,000 company sites in the biomedical industry and most of them are medical, but there are some that are materials, some that are food related. And of those 15,000, 10,000 of them are in the United States. And of those 10,000, 5,000 are in California.

So, that's an important first point, is 15,000 in the world. It's a robust area. And like I said, we focus on R and D and manufacturing. Some of my colleagues also focus on distribution and other aspects of the value chain, but we focus on them—people research and making things.

And so, 15,000, 10,000, 5,000. 5,000 in our state. And that's what—so, my first point is that when someone takes a shot at our industry, they're taking a shot at California. They really, truly are. So, I think that's an important first takeaway. Now, second is just how diverse this is.

The industry has three really strong hotspots in the State of California. The San Francisco Bay Area with over 2,000 companies. Los Angeles, which people don't talk about enough, they have over 1,000 companies, and there's another 1,000 down in San Diego. Again, R and D and manufacturing, those are the two functional areas that we focus on.

And so, the makeup is interesting. San Diego, the majority of their companies are biotech and pharma. So, they're very much research development, and so, when my colleagues talk about the effects of spending cuts and funding and investment dollars, they especially hit biotech and pharma very directly. So, San Diego is really in that crosshairs because of that.

Los Angeles, the majority of their companies are in medical devices and equipment. And as they say in medical device and equipment, hardware is hard. And so, they didn't have a lot of money to start with, so, they've dodged some of this a bit more than the biotech and pharma parts of the industry.

I think that's an important understanding as well. So, like I said, the Irvine area is dominated by hardware companies, and they haven't relied on non-dilutive funding the same way biotech and pharma companies have in the past, so, they've survived some of this a bit better. And there's less anxiety in the medical tech area.

The San Francisco Bay Area with over 2,000 companies, very diverse. There's biotech and pharma, especially in south San Francisco, but there's also a strong medical technology in Fremont and North San Jose, and then digital healthcare and genomics, very strong in San Francisco and Palo Alto. So, it's a very diverse set up there.

So, second point is the state has very strong clusters in San Francisco, Los Angeles, and San Diego, with some differences from between each of the three regions. So, third point here is the microclimates. And you know how in California we talk about microclimates all the time?

You can be at the, at the beach and it's 70, you can go inland and it's 110. And so, we have these microclimates. So, I stole that concept and I use it for the biomedical industry because there are some very significant differences even within this larger state ecosystem. And so, let me start with Berkeley here.

Berkeley has close to about 200 companies, with neighboring Emeryville. Almost all of them receive some type of non-dilutive funding, so government funding, and it's really a place where research develops. A lot of companies fail, but they're advancing the understanding, they're testing hypotheses.

And so, this is one of the microclimates that is especially in the crosshairs of funding cuts. So, this is one. Next is Silicon Valley. Silicon Valley's a more diverse ecosystem or microclimate, but the important thing about this microclimate is that it's very integrated with the other tech sectors.

And so, if you have a test device that takes in a biological sample, it also has electronics, it has some type of interface with the Cloud, and so, it uses a lot of other technologies. So, a downturn in companies in this medical technology area that affects the tech sector as well.

So, that's another important takeaway from this microclimate is that we're not just, you know, going after one industry, we affect other industries because they're integrated, and Silicon Valley is a great microclimate that shows that. Next is Irvine.

Like I said, Irvine revolves around the University, obviously, and is very much hardware and medical technology, some digital technology, more and more, but again, a little more sheltered from some of the impacts to funding, but, but a strong manufacturing base in this part of the state. Next is Los Angeles.

There's an arc between Santa Monica all the way into Pasadena through UCLA, where a lot of biotech companies are springing up and a lot of talent is developed. And this is another microclimate that's in the crosshairs because much of the funding for these startups and much of the talent development comes from federal funding.

So, it's an important microclimate for, for the state. The next two are Fremont and Carlsbad. Okay, these, this is the found—these are two foundry areas in the, in the state.

And what I mean by foundries back in, that's old school, I'm a manufacturing engineer by training and, and I'm from the, I'm from Wisconsin where they, they make stuff and get dirty. Well, we make stuff and stay fairly clean and clean rooms. But Fremont and Carlsbad are two significant foundries where we employ a lot of people who don't have PhDs and master's degrees.

And so, when we cut off our supply of funding for new biotech ideas, new pharma ideas, new medical device innovations, that then leads to fewer things manufactured in places like Fremont and Carlsbad, and that affects everyone. So, if anyone ever says, oh well, we're just affecting these elite people who have PhDs and masters, that's not true.

Over 30% of the companies all across life science are in manufacturing in this state. And those manufacturing jobs are those middle wage jobs that we all talk about in all of our policy meetings and how important they are for the rest of California outside of the academic centers. So, these two microclimates really show that.

Next is South San Francisco. This one, in many ways, is just a powerhouse. It's the birthplace of the biotech industry. Over 300 companies here in the biotech and pharma industry. A lot of small companies relying on funding. And so, they're advancing understanding.

And the interesting thing is people often say, well, there's high turnover in this industry relative to other industries. The difference is we're testing hypotheses. So if a company fails, that means we've tested something and we move forward from there.

So, it isn't like we tried out a widget and it didn't work and so we forgot about it, moved on. No, we don't do that. We build on each of the failures as well. And I think that's an important sign of this microclimate is that there's a lot of hypothesis testing going on.

Next is San Francisco, overlooked by many, many people, even in our industry. Over 300 companies in San Francisco and most of them are in genomics and digital healthcare. So, we mistake them for tech companies, but they're a valuable part of our industry because they often interface and advance some of our other technologies.

Biotech advances are often expressed through a genomics application or Digital Healthcare Application, so this microclimate is really an emerging sector that we should keep a close eye on. And funding really affects these companies. They're small and they need the money to scale up. Next is San Diego and this is the last micro comment I'll present to you.

This, like I said, is a biopharma powerhouse, but, but thousand companies, very vulnerable, very vulnerable to funding cuts. The companies are small, they spin out of the University. They, like I said, we need them to test hypotheses. They need the funding to do that. So, big industry. 15,000 companies globally. We have a third of them here in California.

Diverse interfacing with much of the rest of the economy and there's these important microclimates, all of them affected differently. And let me just say, if you need any data, any maps, anytime, I'm always willing to help and share. Thank you very much.

Great. Thank you. Mr. Thiel. Want to welcome Dr. Patel, Dr. Jackson as well, to the Committee. If it's okay with you, we'll go ahead and finish the presentations from our first panel and sort of group our questions after that.

Really appreciate that overview, not just for how significant we are on the world stage, but also how significant all of the industries are and the nuances for, you know, some of the clusters as well between different regions that we hold very dear as representatives.

Next, I'd like to welcome Tim Scott, the President and CEO of Biocom California, for presentation.

Thank you, Assemblymember Ward. And thanks, Gregory. I always enjoy your discussions every time. I'm the President and CEO of Biocom California. I have a couple of slides here, but I really want to just tell you a story. Contrary to what our friends in Massachusetts think, California is the birthplace of biotechnology.

Whether it's Genentech in the 70s in the Bay Area, Amgen in the early 80s in Los Angeles, or Hybretech in San Diego, also in the early 80s, it is the second, today, the second largest industry in California, which as you know, is the fourth largest economy in the world.

So, it's come a long ways in the last 50 years. And most importantly, these companies are laser focused on providing technologies for unmet needs and making sure that those are accessible to patients all over the world. The industry is cyclical and as you've probably read and heard, the Pandemic drove the industry up.

The markets went up quite a bit and have dropped off in 2022-2023, down post-Pandemic. But it's cyclical. It always comes back. We've been through multiple cycles.

The problem right now is that the cacophony of uncertainty at the federal level, whether it's tariffs or pricing, NIH funding, or FDA cuts, has led us to this third year of a biotech winter that we're currently in. And while we're a resilient bunch, we know that we're going to recover from this.

It takes time, especially with the uncertainty that we have at the federal level. So, as we wait for that to calm down, we continue to work through things. The threat to NIH funding is really critical.

As you know, about 57, a little over $57 billion in NIH funding, about 10% of that comes to California organizations in the form of NIH funding for academic and research institutions.

But also, in terms of SBIR grants, which Dr. Thiel was referring to, which support small companies that license these technologies from the University and take them forward to the point where they can get to VC funding. We call that the valley of death and trying to get across that to get the next round of funding.

NIH funding is a critical catalyst. And when NIH funding is threatened like it is now, venture capitalists put their pencils down and stop doing deals. It has a chilling effect on the venture capital industry. And likewise, the IPO market for biotech companies has been closed for at least a year and a half.

That has caused significant problems to the industry, in terms of being able to move drugs forward. And it causes a real threat to small companies and the biotech industry that Gregory just described for us. Prior to taking on this role six months ago, I've been a biotech entrepreneur for the last 25 years.

And so, I want to share with you a story about one of my companies, Tiga Therapeutics, which I started in 2014. We started with $3 million in friends and family money and $7 million in NIH funding. That NIH funding was used to develop a recombinant heparin. So, you're wondering, what is heparin and why is this important?

Heparin is an anticoagulant. It's dosed 300,000 times a day in hospitals in the United States. If you're in the hospital, you're likely on heparin. It's what they use to flush IV lines. It's what they use for multiple indications in the hospital environment. There's two problems with heparin. One is it comes from pigs.

A lot of people don't realize that it's purified from pig intestines. And so, as goes the pig population, so goes the heparin supply. And it's have been threatened multiple times with real problems, and people have died because of it. The second problem is that most of the pigs in the world live in China.

And so, 80% of the U.S. supply of heparin comes from China. 80% of the US supply of heparin comes from China. So, developing another source is really critically important. And using NIH funding to develop that source is also really critical.

And so, as we look at that and understand the value of that, it's also important to understand that we have 1,800 members that are all doing something not involved with heparin, but something similar. They're all solving significant health problems.

They're bringing significant drug and device discoveries to address the human need and then making those available to everybody around the world. And while California can't necessarily affect the NIH funding issue, there are things that California can do, particularly with regard to the R and D tax credit. It's a huge benefit to the pharmaceutical industry.

And also, there's a real opportunity to bring additional manufacturing to the State of California. What a lot of people don't understand is that 30% of the life science labor force in California is manufacturing.

Manufacturers would like to stay here and if we can incentivize them, it provides incredibly high paying jobs for people that don't necessarily have a degree. And I'll pause there.

Thank you.

Great, thank you for—taking a number of notes here. Appreciate the overview here as well. Next, we'd like to welcome Mike Guerra, the President and CEO of California Life Sciences.

Thank you, Chairman Ward and Members of the Select Committee. I love that Tim ended there with the story of what he's done because the stories of what our industry do and don't do and the challenges are so important. And then Greg is just always fantastic.

So, I put some notes down just because I wanted to keep my thoughts straight, and this is such an important topic.

You know, at California Life Sciences, we represent the universities and the laboratories that perform that vital research, the small biotech companies that focus on those novel therapies, as well as the large companies who bring those therapies to market and they get them into clinical trials and at the end of the day, they get them the patients in need.

And I think that's something that we lose sight of a lot is we all do this because we're trying to help those patients in need. The ecosystem is finely balanced and its highly interdependent network that begins with those research universities like we just talked about and the academical medical centers that really is the foundation of biomedical research.

And without the proper funding, that foundation is just not there and able to take it all the way through everything else we just talked about. It moves through the small and the mid-sized biotechs. It translates discoveries into products. And those pharmaceutical companies can then scale that innovation and then bring it to the companies, as we talked about.

If any one part of that chain weakens, the entire system falters. And we only have one slide here, but I think it's an important slide because all these four pieces, if something in that chain weakens or something in that chain breaks, we are in serious trouble.

I mean, we just do not have the infrastructure and ability to continue that cycle going if we don't have it, and that funding is such an important part. Earlier this year, the Federal Government proposed those significant NIH cuts, and it's something that obviously is concerning to us with all the different grants, et cetera.

And I'm excited to hear some of the academia folks talk about that because at my board meetings, it's one of the most highly talked about things.

And we have members from Cal State University System and Stanford and USC and to hear what they're going through, their pay cuts, their educators who are being offered 20-year commitments from China to go do their research anywhere in the world. It's real and it's happening. So, I'm very excited to hear what they have to say.

In 2024 alone, NIH grants supported more than 3,100 California-based projects. And we equate it in dollars a lot. But 3,100 projects is a huge number. And without this funding, those medical centers are going to be forced to scale back, eliminate research, eliminate people, give people pay cuts in an industry, or at least in academia, where you're already not making the kind of money that you need to make.

This would not only stall the progress, but it could drive career scientists out of the field entirely, which is what I just referenced.

And if that happens, it creates a talent drain that's going to take us decades to recover from. And we already have a problem in California keeping talent because of our cost of living, so this is just one more thing that we have to focus on.

At the same time, proposed antitrust reform by the California Law Revision Commission, which we expect to be inserted into the Bill next legislative session, is aimed at limiting mergers and acquisitions. And for those of us that have been around a while, that is an absolute cornerstone of what we do within the biotech segment.

Early stage and mid-sized companies, the possibility of acquisitions is really one of those things that is a pathway for investors to recoup their funding. And if we harm that, it just makes it that much harder for folks to invest in those companies to go to the next part.

And M and A activity is servilely restricted. It's going to chill the venture investment, leaving those promising companies without the funding needed to survive. And again, we know what that effect is going to be.

And in the rare case that we see new drug discoveries and therapies get across the FDA finish line, when we do, it's not without a merger acquisition somewhere in the process. It is almost 100%, if you look at all of those therapies that come to market. And then these threats operate in the ecosystem, but their combined effect would be catastrophic.

Not just one of them, but if you take both of them and you take all the other things that are going around, it is something we just won't be able to recover from.

So, the NIH cuts could choke off the flow of the early-stage discoveries and severely damage the workforce pipeline, which I mentioned due to the reduction of the training and the PhDs. And that's something what we've been hearing over and over again and I'm hoping they're going to talk about next.

But the number of PhDs that have been reduced or eliminated going into 2025 and 2026 is absolutely scary. And we need to maintain our top position in California with our academic institutions. The life sciences sector, it's not like other industries. It cannot simply rebuild.

It's going to take years for us to recover from these different things that could come up. And meanwhile, other companies like China, as I mentioned, are aggressively courting our companies, are aggressively courting our academia folks and our folks who are leading the charge there. And we got to get in front of this as quickly as possible.

Our continued partnership with you all and the leadership is really important to us. We want to make sure that what we all do together is always in the best interest of the patients, which is at the center of this slide.

And I think if we can continue to operate in that fashion, think about what's in the best interest of the patients and then enable our ecosystem, our companies, to be successful. We're going to see that fruit, but we can't let our legs get chopped out from underneath us.

Great. Thank you, Mr. Guerra. And our last panelist for this panel, it'll be Asher Lisec, the Vice President of State Policy for PhRMA.

Thank you so much, Assemblymember.

And for you all being here today, before I talk a little bit about my time at PhRMA, I want to talk about a little bit of what I did before I came to PhRMA.

So before I came to PhRMA, I actually worked in academic research and had the privilege of working at many of the top academic medical centers around this country. Worked at MD Anderson, I worked at Cincinnati Children's Hospital, I worked at UNC Lineberger Cancer center in North Carolina.

And I had the privilege of working with some of the best scientists and physicians in the country and in the world. Second to California, of course.

From accounting to genetic samples in deep freezers where my fingers have still not recovered, to consenting patients, to working in research Administration at these institutions, I saw firsthand the importance of this partnership between academic medicine and our biopharmaceutical manufacturers.

And without both of us being strong, ultimately the people who will be hurt the most are our California patients that rely on innovation and are waiting for those next treatment and cures. So I want to spend a little bit of time double clicking on what we've heard from our great panel so far today in two particular areas.

And the first is the importance of the collaboration as it relates to clinical research. So in 2023, there were 2,695 active clinical trials going on in the State of California. And so that's where you are looking at a drug or a device that is in later stage development.

And now human subjects are being have given permission to give part of their life to advancing science and medicine. We have invested around $3.4 billion in those clinical trials that are going on in the State of California. But we can't do those clinical trials without some other very important pieces.

One, you need an institution to do the clinical trial. We need the UC hospitals. On top of that, we need the physician scientists to serve as our principal investigators. It takes years to develop in your career and develop the expertise you need to serve as a principal investigator for a manufacturer funded clinical trial.

We also need the staff to do most of the grunt work like I used to do. To execute a clinical trial, you need people to consent patients, you need people who are going to do data. You need the nurses that people can call if they're feeling like they're having an adverse event.

And all of those things take resources. And so while our companies come and bring money to the table to Fund the actual activity of that clinical trial, there's other institutional things you're going to need already built in physically to that center. One of Those being as simple as a research pharmacy.

You can't store drugs that are in clinical trials in the same pharmacy that you would store drugs that are already approved. That requires an investment from the hospital to build a research pharmacy to hire the appropriate people to work in that research pharmacy. You also need dedicated time from a physician, principal investigator.

So a lot of time when you're starting out As a new MD, you have 100% of your time developed to the clinic and to seeing patients. And for you to be able to do research, you have to bring in a lot of money to get dedicated time to do research.

And so we need those principal investigators to have the support of their academic institutions that have that time dedicated to the advancement of science. The second thing I want to double click on is what we heard about California's competitiveness right now. The US has the privilege of leading the world in scientific advancement for pharmaceutical treatments and cures.

Unfortunately, the rest of the world wants to compete in this area. These are the jobs they want, and quite frankly, they want to help the patients where they live in their country.

And so what we see in places like China is that they are growing their R and D investment three times faster in China today than they are in the United States. And they're now making up 13% of all R and D investing in the entire world.

They are also doing something else very important to what we heard from Mr. Guerrero here. They are investing in right now they are graduating 50% more STEM students every year than the US and their students are outscoring on math and science tests.

So if we don't have these equal investments, we are going to unfortunately not be the leader in the longer term. And so I don't think these numbers should scare us.

I think that we should lean into it and figure out ways to support not just the pharmaceutical industry, but also the institutions that are doing this really important research so that the California patients can get the treatments and cures they deserve where they live, so they can go through that hard time with their family, friends and loved ones nearby.

Thank you.

Great. Thank you. I want to thank all four of our panelists for helping to provide this kind of baseline setting of the high level overview of not just what we are seeing here on the worldwide stage, but also and not what we're seeing in our individual clusters throughout the state right now.

But you know, the real world impacts that are threats that are out there right now to our total economic output, to our jobs, to our institutions, and how all of these things are very delicately intertwined but threats that could affect any parts of those sectors or even just one part of that sector has cascading effects to a lot of other institutions, and not just the jobs and the economic output here of California, but the success and the continued advancements that I think a lot of these, a lot of this research, a lot of this innovation is producing.

I want to turn to our Committee Members and see if you have any questions and comments for our panel. I'll start with Dr. Jackson.

Thank you very much, Mr. Chair, and thank you for your leadership on this very important issue. My first question to our panelists is really, how long can the industry weather this federal disruption?

Well, I would say it's probably already caused some permanent damage. I know that Mike had referred to the University doctoral programs. The ones that we're seeing have been cut in half pretty much.

So if there was 25 students that were going to be brought into a particular Department, they're only bringing in 12, and that's this year starting today. That's going to have a huge effect on the people that were graduating in a couple of years. So it's already having a pretty significant effect.

NIH funding hasn't been cut yet, but it's threatened. That threat has really chilled the entire ecosystem that we have. And so there's a lot of non movement in that ecosystem because of that. A lot of the large pharma companies who look to biotech for their innovation are now going to China looking for innovation.

Now we have a problem because we have Members that are wanting to get introductions to China to be able to find these drugs. And we also compete with China in many ways. But 25% of the drugs that are currently in development right now are drugs that have been licensed from China.

It's an industry that's looking to overtake the United States as a leader in biomedical research, and they're right on our heels. The investment that we make in NIH funding is the start of that ecosystem. It's the catalyst of that ecosystem. And for every dollar that we put into that, we get about $1.65 out.

And when I say we, I'm referring to the taxpayers and what we get back as a country.

Yeah, I don't think it's a matter of how long we can last. I think it's how much damage we can control. It's already there. So the academic institutions aren't going to go away, obviously, but what's coming out of them will just continue to be less and less.

And if we let China and other nations, countries come in and take control. Where we are the biotech capital of the world and the birthplace of biotechnology in California specifically. The catch up is just not there. I don't know that we could catch up.

So I think now it's about limiting the damage of what's happened so that we can try to get back on track, but their foot's already in the door. I'm not sure how we pull it out.

To your point about limiting damage. I really think about this as, how long can California patients sustain this loss of funding? And I'll just tell that through two stories. When I was at MD Anderson, we had a patient on our institutional review boards. They bring patients to make sure clinical trials are ethical before they go forward.

This patient had CML back before there was Gleebeck. And they told him his only option was to have a stem cell transplant was right before Christmas, and that he had about a 5050 shot. Over the weekend, he read an article in the paper about this clinical trial for Gleevec.

And he called, and a clinical trial nurse answered and said, yeah, come in today, right before Christmas. And he did. And he was part of the landmark trial that got Gleevec approved, and he lived. The thing about cml, though, is it doesn't go away. And ultimately, that patient was gonna fail that clinical trial.

He was gonna fail Gleevec, and he was gonna need something else. And for the 20 years prior to me coming to MD Anderson, there was always a clinical trial that he was able to join that ultimately worked when he failed. And so the pace of innovation kept up with his failure of his disease progression.

When I worked at UNC, I volunteered at a Ronald Mcdonald House for adults. And there was a patient that came in, and I just loved her. And she was on a clinical trial for another type of cancer for head and neck cancer. She ultimately did all right in the first phase and then failed.

And she looked for other clinical trials, and there weren't anything available for her yet. Unfortunately, she passed away. And so those are the patients and the real stories that are out there today waiting for medical progress, and we owe it to them to continue to invest in innovation.

So what I'm hearing from you all is that in the absence or the chilling effect of Federal Government's decisions. That. It would be helpful for us, as a Legislature, to help try to fill in those gaps on the research side when it comes to the lack of funding that is now available to our research universities.

And then, of course, we know about the R and D tax credit that you all continue to advocate for. Is there anything else that you can think of that would really make the type of difference to help us weather through and not give up our advantage?

Well, I had mentioned earlier there's a real opportunity to bring additional manufacturing to California. That is the bread and butter of economic output of the state, which is about $400 billion. As you've probably read. There's a lot of pharmaceutical companies that have advertised that they're bringing onshore their manufacturing.

California is a real opportunity to be able to capture part of that because we've got incredible research institutions here, and manufacturers love to be able to locate themselves near where the research is being done.

Okay, thank you very much, Mr. Chair. Thank you. Dr. Patel.

Thank you for being here. As a new Member representing the San Diego area and having a background in biotech, I'm very keenly interested in the subject area, and I have about 1000 thoughts going through my head right now. I love that all this information was presented to us in this format.

It helps really set the stage. I will not ask all thousand questions, Mr. Chair. But a question I do have when I'm looking at this slide presented by. Is it Mr. Guerrera from the California Life Sciences?

Yeah.

We have these four sectors, and I'm also thinking about the supply chain and the pipeline for supplies, whether that's disposables, reusables, reagents, starting reagents. We know that a lot of our supply also comes from China, and we don't really talk about that in this framework, but that's also really vulnerable right now, too.

Absolutely. Yeah. Look at Covid and what happened through the supply chain and just getting PPE for folks, for masks and everything else. Yeah, we didn't look at it in that entirety. We could throw a couple other things and supply chain would be at the top of the list for sure.

What are those other couple things?

Well, I mean, I think when you look at this and some of it's intertwined, to go back to Mr. Jackson's question about what else we as a state, I don't know how to say it without saying it directly, don't seem to care about biotechnology and whether companies come or not.

And while Massachusetts likes to say they're the biggest, and they always, by the way, when they look at those numbers, they split NorCal and SoCal in Massachusetts and say, look, we're the biggest. Well, we're one state. So NorCal and SoCal and LA combined, which they now separate out, is significantly bigger for all the right reasons.

But I bring that up because their Governor is so entwined in their industry. It's amazing. She spoke at the bio convention, what 23 weeks ago? Two, three months ago in Boston. And by the way, it's here in San Diego every other year.

And here's 20,000 people that come to town, which we've never been able to get the Governor to go to.

But, but I bring it up because not only did she come speak, but she talked about her passion for biotechnology, the millions of dollars that she has pushed into workforce development, to housing, to building up the infrastructure to support biotechnology in Massachusetts.

So all those things, they fall in different areas or you can stick it in a separate bucket.

But the governmental support and to help get companies funded or the tax incentives that we don't have that every other state out there, you look at the growth chart now they're starting at a lower level, but they're growing their biotech in every other state in hundreds and thousands of percentiles. Cause they're starting, it's much a small bucket.

And we're essentially going the other way because so many leave and then there's acquisitions and all the different things. 2 and 2 don't equal 4.

But I think that governmental support in what we're trying to do for our industry, the people with workforce development, the housing, the keeping the folks that graduate from our amazing academic institutions in California instead of having them come here to learn and then going and funneling into all these other states really finishes this ecosystem.

Yeah, you've really touched on a few of the things that occupy space in my head on a regular basis. One of them is we invest in our students in their public education from TK through 12, preschool in many cases all the way up to higher education.

And then we're not providing them with the ability to return that investment to California taxpayers by finding affordable housing to live and start their careers, good paying jobs to continue to enrich the innovation economy in California and San Diego specifically, frankly. So you mentioned something about antitrust laws that limit mergers and acquisitions.

Can you speak to me a little bit more about that?

Well, I mean it's going to be from, from what we understand introduced in the next cycle and they really looking to limit and what's the right word? Moderate. Not moderate.

Throttle maybe. Throttle. I'm just throwing out words for you.

It's going to decimate what is right now an open mergers and acquisition ability within California. And if you have to go through, through and jump through all these different hoops when other states don't have it and they're doing it by industry, but our industry is one of them that's being identified.

The venture capital is really up in arms about it. The big biotech companies, because so much of their research is done by going out and they do deals with small companies, they acquire them or they license technology or they do all these different things. And then the small and mid sized companies, their exit strategy.

Tim knows this better than me. But what 95 and 98% of the time is not to take a public company public, it's to be acquired or to merge.

And if you have all these new threats to what can be done through that process with mergers and acquisitions, it will be a huge disruptor to what the industry looks like and how small companies are wanting to grow or what their exit strategy might be and for the big companies, what they want to do.

Because if you look at the big pharmas of the world and my colleague here can talk to it because she has the 35 largest in the world, but I don't even know what the percentage is, but it's a very small percentage of R and D that's homegrown. It is all through acquisition and mergers and partnerships and licensing.

Yeah, well that is the new model, right? Because it's a high risk, high reward basis. And with the large corporations having to account to their, to their shareholders, it makes it really difficult for a large company to take the high risks that we might need to take in the industry to bring those innovative products forward for patients.

Another question I have is going back to the workforce bottleneck as I'm starting to think of it, right? Not only are we putting a chokehold on our ability to train incoming workforce, whether that's just in General STEM interest, right.

In those undergrad opportunities where students may be looking for a research opportunity in a lab as part of their work study or something like that, those jobs are going to start to go away. The PhD programs, the postdoc programs for sure.

So we're going to have this population bottleneck at these really critical parts of learning for that workforce foundation. And then you add on top of that the cuts to Pell grants.

So for those PIs who are looking for to do those clinical trials, so that's another part, maybe one level above on that workforce pyramid, but this is really going to put that population bottleneck. And we know in science for so many different reasons that it's not just one individual that's going to turn the industry.

Everything builds upon everything else. And at some point we won't have that critical mass to have people going from industry to industry to publishing that volume of papers that will need. That'll trigger that next brilliant idea.

So beyond trying to fight against the Federal Government and with our own struggles with our budget here in California, we've been able to restore. I'm on the budget sub three, the education budget. We managed to push back on cuts to higher education in the UCS and the CSUs. What else can we do?

I'm hearing that maybe an R and D tax credit, maybe pushing back on antitrust laws, inviting manufacturing to come back. But how do we shore up this workforce bottleneck? As I'm seeing it, it's like a population dynamic. If you think about it in scientific terms.

In General, it's helpful to think of it as an education continuum. So in the early phases From K through 12, our goal through our Generation Steam program at Biocom is to inspire kids to go into stem.

After that, once they're in college, the goal is to get internships for them to be able to continue to get them the skill set that they need. Because there's a skills gap between what kids have when they graduate and what the companies want them to have.

And so to be able to provide that skills is really critically important. I mean, if you're in a fishing village in the middle of the South Pacific, everybody knows how to fish. That doesn't mean they're going to be a fisherman when they grow up.

But one thing that California could do is its two largest industries are tech and biotech. Every kid in California that graduates as a senior in high school should understand biotechnology and they should understand technology. It shouldn't be limited to two computer classes and one biology class.

So we need to focus more on that type of inspiration for those kids. And then when you look later, these kids may graduate, they may not want to go get a Ph.D. and that's okay, but they can still go work in the industry.

And so the programs that our Biocom Institute has, one of them is called biotc, which is technology certification, takes kids that are in community colleges and provides them training so that they can go and work at a pharma manufacturing plant. These are the highest paying jobs that you can get in the state.

So it's really a good opportunity for us to be able to train these kids and be able to provide them these jobs here in California.

Well, thank you for highlighting that program. I think it's going to become more crucial than ever as we see cuts to public funding for STEM in General. But biotech specifically Career pathways. So thank you for that.

I think the only thing I would add, and Tim's programs and all of those are fantastic. And a lot of the different organizations have those. More state funding for that STEM education, I think, is huge. But you're going to hear from ICAID here shortly, who is the Director of CSU Biotech. And that program is how many years?

I. 15. zero, it's 37. From the funding perspective that it hasn't changed.

26 years.

26. 26 years. The funding from the government to CSU's biotech program has not raised or lowered by a penny. Think about what inflation has done. Different things, and that's only one program. But I sit on their Advisory Committee for the CSU.

But what they're trying to do with a very small budget, that hasn't changed in all those years. There's other University systems and different programs that have similar biotechs, but they work with undergrad and graduate students to really enhance biotechnology and work with the industry to get those people out there.

Figuring out a way to help Fund that and other programs I think will also help keep those people here in California versus getting the education.

And Mike, you just reminded me that the Governor, as I understand, would love to have an apprenticeship program developed for 250,000 students. This is a perfect opportunity for that program.

I think what Mike and Tim both have said remind me of the power of maps to take us back to the start.

He has some good maps.

Because if you know about all the companies and you can find yourself on the map, you see, it's more likely for you to see like you're part of something. Back to what you said, right? If people think, hey, I could be part of this, that's one of the powers of these maps.

You say, well, just down the street from me, there's six companies. So these maps are all online if you need them, and spread them far. And wide so our young people can. Say, hey, this is viable. This is in my neighborhood.

And as companies always tell me, we love to hire people who are local because they stay home with their moms and we don't have to worry about relocating here or the sticker shock from real estate. So I think the power of maps could help too.

Yeah, definitely. I enjoyed looking at all those maps. It shows that we do have that critical mass that's necessary and that we have something to protect here. It's a very precious thing and we need to put in effort to protect it. It doesn't happen organically. It takes energy. Thank You.

I will Reserve the rest of my questions for another day.

Thank you very much. Ms. Papan, anything welcome as well to the Committee? Not anything at the moment.

I mean, if I could lower the price of real estate for you, I would. There you go. But that doesn't seem to be coming anytime soon. It did spark one question most of. Thank you all for being here. And this subject matter is certainly not new to some of us.

They've been in the trenches on it, I guess.

My question is, I recognize that a lot of the work must be done in a labor, collaborating with other employees, but given that we have AI or that you have different ways of doing cancer research now, where you're trying to tailor it, but you have just maybe a little sample of somebody's cell or whatnot.

Now, I'm really getting out of my area of expertise, but bear with me. Can some of it be done in other areas, geographically speaking?

As much as we'd love to keep you here, we want to see your company succeed, but we may not be able to meet all of what you're looking for, especially as it relates to real estate, which is such a tough one for all of us, especially where I come from.

So my question is the nature of the research and the nature of the beast changing a tad, such that you can keep your corporate entities here, but perhaps some of the work might have to be done elsewhere or in more remote geographic areas, perhaps in the State of California as well.

And if you've already answered that question, I apologize.

But I think the hard part, I'm. So curious about it, and I'm not a scientist by trade. In fact, my college class at San Jose State way back was the last time I was there.

But what I would say is the hubs in California and in Northern California and San Diego and Boston is what that attractiveness is and that sharing and melding of minds and all those different things. So can it physically be done somewhere else? Sure.

But people are here because they want to be part of that epicenter that's in Northern California or Southern California or Boston, to be fair to our friends in Boston.

And there's certainly a synergy that comes with perhaps just bumping into somebody in the hallway and running an idea by them or how did that. How did that Tesco last night or whatever it might be. I mean. I mean, I. I definitely get it.

And I'm oversimplifying that response, but I think that's probably. Unless you guys disagree that. Yeah, I mean, factor.

I mean, please, if you look at Massachusetts to go back to one of the competitors with California, but they don't have the weather.

But okay, you keep calling for Mass if you need to, but go ahead.

You know, they have their scientists, scientific hub next to MIT, next to Harvard, and that's where you see a lot of the PhD level research going on. But to your point, I think one of the things Massachusetts did well is they said, how can we get investment from this industry for associate's degrees and for other things?

And so what they started to do was invest in the infrastructure needed to do manufacturing in rural parts of Massachusetts. Okay.

And so what we've seen is a pop up of manufacturing facilities in rural Massachusetts because there was an investment made to bring in the water needs, to bring in the electric needs, to bring in the other things. And that's a, that's a partnership between our organizations. We've come into states like North Carolina and helped build that infrastructure.

In some areas, we've partnered with people in Massachusetts to bring that infrastructure to rural Massachusetts. But certainly I do think there's opportunities outside the peak PhD sciences, outside of the hubs around universities to look specifically at manufacturing. And it's something that our companies are looking at growing their footprint in.

In the United States right now.

Excellent. Excellent. And you know, I chair the water committee, which you think may not have anything to do with anything here, but as we restrict the amount of groundwater that folks are allowed to take out of the ground, it does impact ag. And there is a lot of concern over what does that mean economically to various things.

And I know you mentioned bringing some manufacturing here. Now I've tied the two together. So I appreciate that this has been illuminating, certainly. And then I will just add one other remark, and that is the tax credits.

Your industry people do not know that your industry was willing to help out the state in putting a stay on some of those tax credits. And we are enormously grateful to your industry for doing that. There are many industries that have not done that.

And the public needs to know that you all stepped up to the plate at a time when we needed you. So I know I probably would feel safe in speaking for at least my colleagues here that we will push it is on our radar.

And I just want to take a moment publicly to express the gratitude that this industry showed this state and the public really needs. I spread it far and wide wherever I go. But I have so much in my district, and I'm enormously proud, not only of the altruistic work that you do, but your good corporate citizens.

And you were certainly very helpful when the state needed you. So that's not a question. I just wanted you to know that this is one member who is eternally grateful for not only what you do, but the type of corporate citizens you have been.

You might be surprised that Biocom was founded on the issue of water at a time when San Diego was cutting off water for particular reasons. And the biotech industry came together and said, you can't do this to the biotech industry. You have to have water.

And we have that guaranteed.

They are indeed.

And we have that guaranteed water and guaranteed water program still in effect today for the city as well, for a lot of those parts of our community as well.

And building on what Assemblymember Papan had said, too, you know, yes, we appreciate the state's continued investment and recognizing that the conversations that we had last year, not this year, but last year for the temporary suspension of that R and D tax credit was just added.

It was meant to be temporary because this can't become a permanent new baseline here. We have to get back to a level of investment that we've always had, that partnership between the state government and industry here as well, to make sure that we are remaining competitive.

And I appreciate as well, bringing up sort of the thoughtfulness about thinking about other emerging areas of the state as well. Not to try to be inter competitive with our different regions within the state right now. But if there might be, you've got to have that synergy, right, of like local workforce talent, available space, possibly cheaper land.

And so whether it's in the Sacramento, Davis region or in the Inland Empire, if there might be new opportunity areas as well, to be able to not in year one, but you know, sort of, you know, point a direction for future growth of business as well and everything.

California I think still remains the land of possibilities here for some of those future companies. Couple of quick questions just to wrap up this panel right now. We had talked a little bit about, you know, the intersection between the work that we're doing here, the products and goods that we're.

Goods that we're getting from China in specific, but say from overseas. This is an international industry.

What are you seeing or what are the initial sort of as volatile as it's been on the issue of tariffs, on the issue of international trade, what are you seeing as far as, you know, the near term impacts that might be facing the success of business?

Well, the Section 232 National Security Investigation that's going on now that that hasn't been revealed yet what they're going to do about that. And that was going to directly affect tariffs. And so we haven't received that yet.

So that most of the effect that we have is on folks that are building because of the tariffs that affect building materials. We're still waiting for that to come out. So not a lot of information.

Current numbers. Is there any projection as well about what that's going to do? I hear you. For steel and for other building materials, but also to Dr. Patel's point, reagents and supplies and things that we use in bulk.

Yeah, our friends choosing to say for medical devices it's having more of an effect right now because it's not affecting the APIs of the drug industry so much, but rather the engineering and components that a lot of that is built overseas and then brought in and assembled in California or here in the US. So the tariffs are definitely affecting our companies that are on the medtech side.

Ultimately that we passed on to higher prices for patients. Yep. We talked a lot about the threats that we have under the NIH and NSF grant, at least the overtures that some of these are going to be cut right now.

Is there any early quantification of what that's looking like in either a dollar value or percentage value to many of these companies, to the industry as a whole, and of course the downstream effects. You mentioned this chill vc.

Are you already starting to literally see some of that reduction in investment compared to baselines from one to two years ago? And what might this do to the. You're making decisions now about, you know, jobs in the future, activity in the future. Right now, any early numbers that, you know, we should really sit with.

As you know, we're trying to fully appreciate, I guess, the scope of the damage that's already been done.

My colleagues have touched on the effect of on patients and the effects on the workforce. We haven't talked about the effects on the number of companies, the number of startups. And so my organization tracks incubators and accelerator programs and the ones that have contacted me most recently have said that their applications are down 50%. Wow.

So what's that saying is not only are we not developing the talent and of course we're not developing some of the cures, but we're not developing that midpoint, the companies that tie that all together. And so I think that's one of the early indicators is that fewer people are starting companies. Alarming.

I think that's a great point. The incubators that we work with very closely in both Northern and Southern California for years have a vacancy and had a waiting list and many of those have multiple vacancies, up to 50% vacancy or more. And I think that is a direct impact in many ways of that trickle down effect.

I don't know that we've quantified it as an industry yet overall from the NIH and how that trickles, but I know bio and pharma have been looking at it in different ways and we might be able to get that to you in the not too distant future. The VC has certainly dried up.

How much I can say is directly related to NIH versus the industry as a whole and the IRA and the MFN and the tariffs and everything else that trickles down.

It's all encompassing to a negative impact to the venture capital and what people are seeing and how difficult it is to get seed funding and Series A, Series B, what have you. So is there an impact? Yes. Can I directly say it's this.

More than that, there's so much going on that it would be hard to single out one. But it is absolutely not helping it and I think it'll flush itself out here in the upcoming months where we'll be able to quantify it better for you.

I mean, venture capital is so critical to the industry. And if you're a venture capitalist today, you're looking at the beginning of the process and seeing that NIH funding may be threatened. And so you're wondering if you're going to be able to get the deal flow that you're interested in.

On the other end, you're looking at an IPO market that is closed and that's your exit. And no VC invests money unless they have an exit in mind.

The M and A market is active, but that's the only thing that's really trying to move things through the ecosystem at the moment is the opportunity that we potentially have for MA activity. And that's strong because Large Pharma is facing a patent cliff over the next 10 years. That's pretty dramatic.

They need to replace those drugs that are going off patent with new technologies. And so there's always going to be activity there. But if they can't find it in California or the US because those companies don't exist, they'll go elsewhere. And right now they're going elsewhere, namely to China to get a lot of that technology.

Thank you. Yeah. And I appreciate, like I said, that a lot of this is volatile and just happening in real time right now.

We're just trying to catch our breath to appreciate, you know what, and figure out those solutions that maybe can help to at least buy us some time, hold up a firewall and be able to protect the jobs and industries that we have at the moment right now.

But we know, to paraphrase what you said, that any of these actions are not good, right? Not certainly. The early effects that we're having right now, the theoretical impacts that likely will happen, because that's what does happen with economic impacts of some of these decisions. Is there. My last question, is there anything that you're seeing.

I was curious about how you mentioned that for the total grant funding that's out there right now, that we only receive about 10% of NIH and NSF funds that are awarded to U.S. institutions, given the size of the industry that's over here.

But maybe that's because academia is spread out a lot more robustly than those job centers, those. Well, you know, half of the businesses that are in the US located here in California. But is there anything that you're seeing right now from some of these actions that anybody has surmised might be specific to or specifically disadvantaging California business?

Or is this something. Are these effects something that are shared by Massachusetts, by the Research Triangle, Texas.

I mean, I think California in a good way had our unfair share of funding in NIH funding and different things, our academic institutions and everything. So we're adversely affected in the same way because we had a bigger piece of the pie. We're getting impacted more by the dollars, but by the percentage.

There's other states that are impacted more. So it's how you slice and dice it. But from a percentage, California is certainly impacted the most. It's really just, you know, hard to tell where that trickle down meets as people are still trying to figure out. There's legal battles going on.

It's kind of the funnel's been turned off, it's been turned on. Certain people are getting the money there. I saw in the news one of the chancellors from one of the schools went to the Oval Office and ended up getting, I forget how many hundreds of millions of dollars put back in.

And we had some of our academia board Members say, I didn't know that was an option, we can go meet with the White House and get it put back in. So I think people are still trying to figure out what does that really mean and how are those funds going to be impacted as we go forward?

I mean, Dr. Bhattacharya at the NIH just announced in the last couple days that every single NIH grant would be reevaluated and they would either reduce the amount of money, eliminate the amount of money, but if it didn't fit within the programs that the current HHS has, that it's going to be reduced or eliminated.

Devastating, but something that possibly we can, you know, talk with our leadership as well about making sure that our lobbyists, our representatives that work on our behalf in Washington, D.C. can really turn up the activity to inform congressional representatives about, you know, really prioritizing this and the work that we would hope that they would be doing for our state's benefit.

Thank you very much to this panel. Really appreciate your insight, your overview. And like I said, this is something that I know will be happening real time. So please continue to stay engaged with this Committee and all of our Members about issues as they come up so we can be prepared to assist and respond as appropriate.

Absolutely. Thank you.

Thank you. Next we have our second panel. It really is also looking at some of the impacts that we're having from the federal grant cuts and administrative decisions, but specifically to many of our higher education institutions.

As the panel gets assembled, you know, I'll just remark that as was sort of talked about in our introduction, you know, these institutions that we have between private sector business and also our. Both private and public sector universities here are necessarily intertwined.

I think it was encapsulated well by the one slide that showed, you know, how all areas of biomedical success here are connected and depend on each other. And that pressure points on anyone are really going to affect the entire ecosystem here.

And you know, that front line as well, training our next generation, doing the basic research and really trying to make sure that you're an active part of that ecosystem.

So our first panelist that I'd like to invite for remarks is Dr. Teresa Maldonado, who is the Vice President for research and innovation at the UC Office of the President. You may begin your presentation.

Great. Thank you. Excuse me. Thank you so much. Good morning, Chair Ward and Select Committee Members. And I also want to thank the first panel. Those remarks were amazing and very much aligned with our remarks today, I believe. So, my name is Teresa Maldonado and I serve the system in research and innovation.

So I work with all 10 University campuses. So I'm here today to discuss some of the impacts of unprecedented federal actions on the University of California biotechnology research and innovation enterprise. The strong partnership between the Federal Government and universities has been in place, place and valued for over 75 years.

In 1945, Vannevar Bush presented the Endless Frontier Report to President Harry Truman with a premise that, quote, basic research is the pacemaker of technological progress, end quote. So that is industrial R&D would advance through federal support of basic research at the universities where the talent is found.

The National Science Foundation was formed five years later and the NIH and other federal agencies started to expand their portfolios. I'd like to add that NSF and NIH in particular are two federal agencies that support fundamental research. That is the type of research that leads to new discoveries, often unexpected.

Since then, the State of California, the nation, and in fact, the world have benefited from the strong partnership between the Federal Government and our California universities. There is no other state that comes close to the quality of universities and community colleges than California. And we have launched new industries and made global impact over many decades.

So grants supported that have been underway and projects that are in the middle of completion have been canceled or suspended. Future award cycles as we know them today are being drastically scaled back.

NIH and NSF funding cuts, the proposed reduced facilities and administrative cost rates and the new federal policies that are emerging have already disrupted the entire biotech research ecosystem at the University of California. And now UC is facing the administration's $1 billion settlement proposal.

These federal actions jeopardize the academic and financial infrastructure and threaten the competitiveness of UC's research enterprise. They also threaten our doctoral training programs and risk shrinking the pipeline of highly skilled researchers and professionals.

The cumulative effect extend well beyond the UC impacting the entire state, the nation, and the next generation of scholars whose contributions advance economic, security and societal quality of life.

In fiscal year 2024, nearly $37 billion in grants were awarded by NIH to researchers across the United States, and these funds supported over 400,000 jobs and nearly $95 billion in new economic activity nationwide in California.

Researchers across the state successfully competed for nearly one in seven of those grants for about $5.1 billion, and UC received about half of those NIH funds, or over two and a half billion in federal fiscal year 2024.

As for the National Science Foundation, the Federal Government distributed over $1 billion to California, with 525 million to the University of California. However, this year is much different. These numbers are at risk. UC has had hundreds of millions of dollars of NIH and NSF funding suspended or terminated. Thanks to recent court decisions,

the Federal Government was required to restore funding for NSF grants that had previously been sustained. These numbers are constantly changing by the day, and new federal policies recently introduced will continue to alter the research landscape. The University of California's commitment to academic excellence and innovative research is reflected in our contributions to this pathway to economic growth.

UC researchers average five inventions a day and to date over 1200 startups have been founded based on UC patents. Less funding from NIH and NSF will lead to less innovation and a reduction in invention disclosures and fewer patent filings. Innovation does not happen without fundamental research. We saw that with the last panel beautifully presented.

UC research generates valuable IP in the form of patents and licensed technologies derived from our outstanding fundamental research outcomes that turn into useful products or cure disease. Our IP also generates royalty income that is often reinvested into the innovation ecosystem.

For example, UC San Diego researchers have discovered new treatments for head and neck cancer and these treatments have been licensed and commercialized. A startup spun out of microbiome research at UC Davis is advancing infant health and nutrition and research from UC Irvine has led to sight saving implants for glaucoma sufferers.

These successes are just a tiny sample of how UC biomedical research is contributes to a thriving, Healthy California. Additionally, some research offices and tech transfer offices are supported by facilities and administrative Administration cause known as fna.

At this moment, the US Patent and Trademark Office is examining the impact of the proposed reduced FNA rate on 1 moving forward with inventions already disclosed and 2 examining patent applications under review due to reduced budgets. Finally, research impacts are being felt by UC students who are an important integral part of our research ecosystem.

Our graduate student researchers are primarily supported by federal research grants. Scaling back those grants means fewer opportunities for our graduate students. Thank you again for inviting me to speak here today. I continue to be concerned about our future of research in the State of California and the University of California.

And as always, I appreciate the partnership with the state in these discussions. Thank you.

Thank you, Dr. Maldonado. Next we have Dr. Ruth O'Hara, the senior Associate Dean for Research and the Lowell W. And Josephine Q. Berry Professor at Stanford University. Welcome.

Good morning, Chairman Ward and Members of the Committee. So honored to be here this morning to talk to you. That was really just wonderful historical overview that we received from Dr. Maldonado. And I just want to echo that

as stated by the NIH leadership itself, academic institutions are viewed as being the incubators for groundbreaking biomedical and biotechnological discoveries that pave the way for new and improved approaches to disease prevention, new diagnostic tools, therapeutics.

Supported by their institutions and federal and state funding, researchers at academic institutions lead very complex basic translational and clinical research critical to actually these discoveries and these sectors. NIH provides not only supportive funding in the form of grants, but invaluable infrastructure for the review of, awarding of and implementation of those grants.

And indeed it is a model for the world in terms of biomedical research. The positive impact across the nation on patient care, recovery and survival is enormous.

But it is worth noting, particularly in response to some of the comments earlier, that individuals who have a critical illness are more likely to have a better survival rate if they are fortunate to to be located proximal to the major institutions across the nation.

We located in the part of Silicon Valley as an institution take innovation very seriously and we have been a leader in pioneering research everything from computer science, digital technologies, artificial intelligence, now data science, but also the groundbreaking biological discoveries that have led to transformational changes in treatments such as cell therapies for cancer.

Like our colleagues here today, we believe one of the most vital contributions of academic institutions is the educational programs we provide to train and mentor the workforces physicians, scientists, professionals who serve the biomedical and biotech, industrial and academic enterprises.

About a third of Biosciences PhD holders countrywide are employed directly by biomed and biotech industries, but the rest work in academia, education, nonprofit organization, state government and federal agencies, and in many capacities that directly and indirectly actually affect those sectors.

The Pipeline for the biomedical and biotech workforce that begins at so many of our institutions, including Stanford, often stays in California. Indeed, California is one of the highest levels of employed doctoral level scientists and engineers in the nation.

But despite the incredible and much appreciated contributions of federal funding that foster our preeminence as a nation in these regards, the recent disruptions to federal funding and the pauses or terminations to grants in particular raise for us two major concerns.

Disruptions to our biotech, biomedical and academic pipelines, but also the impact of these precedents being set on the future of these fields and sectors. The career development, training and mentorship support that's provided by NIH and other federal agencies has ensured our ability to recruit the best and the brightest in the nation.

However, these recent pauses have really illustrated how deep our reliance is on these particular pipelines. Over 1,000 grants aimed explicitly at training and career development are currently frozen or have been terminated nationwide.

The effects of a termination of even a single career development grant can have significant and far reaching effects, including the loss of the ability of that investigator to complete their study, their loss of data, of resources and staff to help them complete the study.

And even short pauses can cause tremendous disruption because a young investigator may have to let the valuable postdoctoral fellow actually go because that grant has been terminated.

As an individual who speaks to every single grant recipient who has a terminated or post grant at Stanford, let me tell you the anxiety regarding consequences for promotion and long term career development is enormous.

And I can tell you we are already seeing early stage investigators leave academic and training settings in our institution to pursue more stable sectors. There is potential for substantial attrition of the vital biotech and biomedical research workforce. And the consequences go far beyond the individual early stage investigator.

The labs of all investigators provide significant experiential educational training opportunities for across the earliest stages. Spoken so eloquently to in the last session.

When these grants are paused or terminated, it leaves many high school students who are coming for a summer intern, undergraduates, master level students, graduate students and postdoctoral fellows without critical internships that are often encompassed in these grants. And this leaves them without the critical training opportunities that are the core of our biotech and biomedical science pipelines.

For every grant disrupted at Stanford, we estimate that between five to 10 trainees and scientific staff at a minimum are negatively impacted. But there is another concern that I want to raise today. We are so grateful for decades of support of all federal funding opportunities that come to us through NIH, NSF, to our state.

They've been nothing short of extraordinary and we continue to be extremely grateful for the support we receive. But as we look to the future, NIH grant pauses and terminations are stated to be in response to changing NIH priorities. Indeed, the academic community is used to those changing priorities.

Every time we get a new NIH Director, a new Administration over the past decades, we'll see a shift in priorities. It's really important.

There's an emphasis on making sure, to Assemblymember Papan's point, that we actually make sure that the training and changes we're bringing and the discoveries we're making actually extend beyond our campus borders and indeed beyond our state borders.

It really is of note that we want to make sure that clinical trials are accessible to all, no matter where they reside. This is a very important feature of biomedical research. But such changes in the past did not result in terminations or pausing of ongoing grants. Investigators were able to complete the research as they had proposed.

A significant concern for the future is the precedent setting nature of these actions. Are we to expect in two years or three years or four years with any change in NIH leadership, that different grants would now be paused? The continuity of research funding and research opportunity is vital.

And grants in the past that finished and completed, even though the current priorities of the NIH Director or others had changed, were allowed to complete, and sometimes those became extremely valuable discoveries. So this is a significant concern.

Having widespread terminations or pauses to align projects with the new administration's priorities damages biomedical research because scientific advances depend on that stability, the ability and continuity to plan ahead. These are extremely important issues we're discussing today. I would say academic institutions are very resilient. It's an inherent quality.

And we've had challenges before to our research ecosystem that we have risen to a manner of all sorts of challenges over the year. But I think it's never more important than to have what you've done today, which brings so many of us together from industry, from the Cal State system.

I mean, the Cal State system of STEM education is phenomenal, really second to none. Their math and science is extraordinary. And we are so fortunate to have our UC system here as well.

So we believe that coming together across academic, biotechnological, biomedical sectors, we can work together to recognize and address these new challenges, to ensure that the brightest future sustains and that US biomedical and biotechnological research really.

Sustains its preeminence. And thank you for allowing me to make these comments today.

Thank you, Dr. O'Hara. I appreciate that very broad overview as well. And I didn't want to be remiss. And welcome as well Assemblymember Nguyen to the Committee and to the hearing here today.

And just one last plug out there, if any other members would like to come to room 447 and hear, I think, a lot of this important input.

It's really to be able to understand the magnitude of what we're facing right now, California is already facing right now, particularly if any Republican Members would like to come to Committee and hear about the impacts to business and to our students.

With that, I'd like to welcome our next panelist, Dr. Imumorin, the Executive Director of California State University Biotechnology, or CSU Biotech. We welcome your presentation.

Thank you very much, Mr. Chairman and Members of the Select Committee. It is my pleasure to be here today to share some of our experiences with what is happening to federal actions in the California State University system. And I'd like to open by thanking all those who have spoken before me.

They have raised a lot of important issues, they've clarified a lot of the challenges. But I think the CSU system occupies a slightly different niche. The CSU isn't what you might ordinarily consider as research intensive, maybe as the UC system might be, or even Stanford. But I like to frame my comments on that three pillars.

Federal support is important for faculty development, for student learning, and for the pipeline, for workforce development. All of those patents, all of those inventions that turn into companies, they need people to work there. And those people don't fall out of the sky.

Somebody has to educate them, somebody has to train them, and somebody has to get them ready so that when that company is scaling, is hiring people, is building labs, is manufacturing things, there will be people who are trained and ready to do those things. And so that's what I want you to keep in mind.

So life sciences in California occupies many, many areas, as you can see on this slide. Everything from biotechnology through biopharmaceuticals, medical devices. And my colleagues from industry have already laid out all of these details for this Committee. And you might also realize that STEM jobs are high paying jobs.

This is one thing that makes research support from Nih, NSF and federal agencies really important because the outcomes of that support is responsible for not just any kind of job, but jobs that can only be held by people who have been specially trained and have specific kinds of skills. And those skills are tied to academic institutions.

I mean, our data, for instance, show that on average, the CSU system produces between 6 and 7,000 STEM graduates every year. And starting salaries for these people is somewhere in the upper 50s to early 60s and can hit six figures within a decade after graduation. And these kinds of jobs support local economies. They support the tax base.

And it's really clear that if these jobs kind of go away or they reduce, their effects ripple through the entire system. And I took some time to kind of gather some data on this slide to show you how the incomes stack up for all these different types of jobs. And these are very important to pay attention to.

So as of today, about 133 federal grants have been either terminated or scaled back or outrightly canceled, totaling about $140 million. Of that number, we have about 70 of them from NIH and NSF, just slightly under $30 million that have been terminated.

And these already are impacting our system, as somebody has already, as my colleagues have already alluded to, projects have ended. People have been let go. Data is in jeopardy. And these students who are being trained under this grant, many of them have no longer have opportunities to get this training.

And so we stand the risk of losing an entire generation of young people, of scholars, of innovators, of research scientists, as these sort of actions continue. And finally, I like to point out something about CSU Biotech, a program that I lead in the CSU system. We were established in 1987 to support biotech education and research.

We are very grateful for the support that we have received from the state for about a quarter of a century now. And that money, even though it's relatively tiny, we have been able to kind of leverage those resources to support our faculty who go on to use our seed grants to get bigger grants from NIH and nsf.

And so what we are facing is they get all this preliminary data. Well, the door is closed, or mostly closed to leverage this preliminary data that we have helped them to generate. And this is a significant return on investment for the state. In our case, it averages about 11x.

So every dollar we give to a faculty Member in the biotech space, on average, we get more than a 10%, I mean, a 10x return on that investment. And so federal actions have now put that entire enterprise in jeopardy. So with that, I would like to thank you for this opportunity to share these insights. Thank you.

Thank you, Dr. Imumorin.

And our final panelist, and I'm going to say probably our most important panelist, because she is probably the face of so many out there as well, who care very much about the work that got her here today and the direction that her career is going is Jade Fachin, graduate research student, researcher at UCLA and a representative from the UC Graduate and Professional Council.

Thank you so much. Hi everyone. Good morning. Chair Ward and Members of the Committee, thank you so much for having me. And thank you so much for all the panelists before me really elucidating on the gravity of the situation and bringing a lot of objective facts.

I will also be giving you facts in a way of how graduate students have felt from the impact. I am a rising 4th year PhD student in the Molecular Cellular Integrative Physiology program at UCLA and I study peripheral sensory neurons. And this just means how and which senses are affected in the context of disease.

That's enough about the specificity of my research. We could talk about that later if you'd like to.

I'm very grateful to pursue that research and I'm equally grateful to be here today to really be transparent about the effects that have happened to me, to amplify the voices of my colleagues and answer any questions that you may have after so federal grants, they are quite prestigious rewards.

They go through strategic planning and are through rigorous rounds of scrutiny from experts in the field. Principal investigators submit these grants. Graduate students submit these. They are rewarded, they are not given out. It's quite a celebration when one receives something as prestigious as a federal grant.

So seeing my lab amongst newly established labs, well established Labs, in a 30 page document of suspended grants was quite surreal to say the least. So these funds are earned and they're planned. Overnight, they are taken away. What do you do? Personal reflection here is we pivoted quite quickly and we reorganized.

We prioritized experiments, seeing what we have, what our colleagues are doing, trying to allocate our resources the best that we can on short term notice. So what this looks like is when you know, when you don't know when the main source of your resource funding will be available. Again, you have to think of short term solutions.

We're able to be creative, we're able to see and synthesize the data that we have and talk with our collaborators and seeing how we can help each other. But again, these are short term solutions. A little bit of a seemingly inconsequential consequence of this is we had a freezer malfunction come up quite recently.

And as many scientists know, you have all your samples, you have your reagents, your antibodies, they are stored there. They are costly. These samples are pretty so we were. Luckily we had really kind neighbors that were able to help us out with that storage. But that is something that requires money to fix and maintain.

That is time, money that is foundational to what we are doing. So it was quite scary. And you think something as inconsequential as a freezer would be, we felt the impact of that overnight as well. So pivoting a little bit into us, outside of my own personal experience, my Department in the Physiology Department, we had retreats canceled.

Right now I'm thinking of a cardiovascular retreat and a neurobio retreat. So retreats are not the vacations that we may be thinking of initially, at least I didn't initially. But they allow one to bring research outside of your lab and receive critical feedback in the eyes of experts in the field.

So when you're presenting your research in your lab, everyone knows the nuances, the background research. You kind of hear the same stories over and over. So the valid and the importantness of extending your research, talking about it with other people in the field, getting a better story, getting all these creative ideas is paramount to progress.

So it's quite aside from that, trainees like myself, this is our opportunity to share our research as well. So scientific communication becomes very important in this and is also jeopardized when they are just canceled out of the blue. So these are very special places that are the crux of collaboration, inspiration, networking, and again, science communication.

The rest of my time here, I really want to spell out the uncertainty that graduate student researchers have faced. So we are multifaceted early career scientists and we wear a lot of hats very proudly. We're also very motivated. We've come so far.

We have a lot of knowledge built up, but many every day we learn something new and we're ready to share that. A lot of that sharing of our knowledge is as we've alluded to before, in the form of undergraduates, undergraduate students. We're mentoring them, we're teaching them. High school students can come in, master's students come in.

It's a team, we're all a team. And a lot of these individuals are aspiring to be doctors or researchers themselves. Again, really emphasizing that. An email came from our chancellor Thursday night and just saying, we are sorry the federal grants have been suspended.

The next morning or the afternoon was August 1st, when we received the official notification that we are no longer able to access our federal grant funds. Again, quickly pivoting, trying to accommodate, students were left confused, wondering, what's next? How long will this happen?

We, we want to trust our Administration to do the best that they can because we kind of have our hands tied. We're sitting there in the lab, we're doing what we can with what is in front of us.

But we really want to amplify our voices and trust that there are people on our side to help fight back for this punishment. So also an interesting note is that in this time of confusion and melancholy, some dejection even, we found a lot of adaptive students.

We've alluded to that as well, and trying to remain productive in how, however we can. I really commend my colleagues for their adaptability and conviction in these tough times. So even though the situation becomes slightly out of our control, we are one of the groups that are definitely directly impacted by the inflammatory repercussions.

And these contingency plans will look different for each graduate student. Each lab, each principal investigator also wanted to allude to the current job market recent graduate students are facing with the uncertainty and with declining jobs from industry.

As you saw in the percentages, a lot of our training, we love to go either in industry or academia and those jobs are becoming saturated because many well qualified scientists have been in this field are no longer in that position. Everyone is going to go for whatever job they feel they are prepared for.

But now suddenly new, fresh, new PhDs are competing with PhDs and people with 10 plus experience in the field. It's competitive, it always has been, but even more so. Last point is that science builds upon itself. Dr. Patel alluded to this earlier as well and and experiments that are contingent on time are being upheld and jeopardized.

So in consequence, these cures, breakthroughs and further discoveries are being jeopardized. Basic research, applied research, basic being foundational, applied research, going to the clinical trials, to the people. It's very circular, all being jeopardized from this foundation. Finding answers through experiments and collaboration lead to further curious questions and to continue elaborating on a topic or disease.

It's a continuum. You find answers in what you have, you synthesize your data, you ask more questions, you push those boundaries. Labs must now limit their questions and are now constrained financially and intellectually because of this. Pushing the boundaries of knowledge becomes difficult when you're not able to Fund these subsequent exciting next questions.

Graduate students want to be here, they want to be in lab. We want to be doing research and expanding science, asking those questions, pushing those boundaries. So I'm here to elucidate on the effects of the suspensions, but also asking for stable funding to keep these labs going, keep researchers supported through scholarships, fellowships and research opportunities.

We need to keep my colleagues and I in the game in the long run so that experiments that we conduct can become diagnoses and therapies that Californians and the nation deserve. I'm happy to answer any questions and to connect you with additional students and prepared to offer their experiences and aspirations as well.

We want to continue being leaders at the UC, State and nationwide level. But however, there is a fire going on right now. It's difficult to manage, contain and there will be a mess. There will also be residue and we're already feeling it daily. But with that, thank you for your time and attention.

I'm really happy to be here.

Thank you very much for being here and for that very important and personal testimony. I also want to welcome the seven Members of the Burr to Committee hearing as well today too and open it up to any Committee Member that wishes to have a question or comment of this panel. Dr. Patel.

Always have questions and want to get some thoughtful insight. The first question that comes to mind is looking at the financial impact, right what we're seeing.

Do we have a way to disaggregate data from the unemployment to see what the increases are in our graduate students, postdocs, industry people, specifically in biotech, to see the actual dollar impact. And what I'm trying to get at here is that one way or another our society is going to pay for this loss.

We're going to pay for it in unemployment, in increased number of people accessing medical, government support services, or we can Fund the grants.

I mean one way or another society is going to be paying for this short term, long term there is a cost and I would love to start being able to get at the bottom of what that cost actually is. Do we start, do we collect that kind of data? Are we able to disaggregate in that way?

Do you want to go first or I go ahead?

And maybe as an academic project even.

I think we can. Certainly we gather that data. All training programs have data on it's essential and particularly if they're funded federally. But we do it for all our training programs on where our graduates go, how they sustain. And that's at every level. It's at our master's level, our graduate students pursuing PhDs, our medical doctors.

One of the big challenges for us and has been for decades is making sure we retain physician scientists, don't lose them to the better paying sector of private practice or other such opportunities. So we will have that data.

I think the impact is challenging to observe right away, particularly for larger institutions that may have an opportunity to support, as in our case, the graduate students, where they can finish out. And we made that commitment.

But I think we're still going to see attrition and we will be tracking that because I think what we're observing is an anxiety that's so profound that even on occasion where grants have been reinstated, we have seen those investigators actually walk away because they're nervous of sustaining with will this happen me again next year?

But we will definitely have data on that. And there are institutions, smaller institutions, that have already limited their admissions classes for incoming graduate students.

So I think very good data is being gathered and we'll be able to get a better sense over the next maybe half year of how many individuals are actually leaving and which sectors of our equity development portfolio they're leaving from.

Thank you for that.

If I can add, since I work with all 10 campuses and I'm thinking about the disaggregated data part of your question, I'm taking it as an assignment to talk to Executive Vice President David Rubin. He's also at UC Office of the President. He works with the five medical centers and we do gather these data.

But you know, I see macro level data and I'm thinking about this disaggregated part. Like each trainee grant and the impact to get down to the grant level will take some work. But I know people are looking at this information, these data. It would be an interesting report to pull together.

20% of the grants terminated or paused at Stanford were trainee grants. They were either a training mechanism that in turn supports multiple fellows, MD and PhD. They were an individual grant to a graduate student or a career development award to a postdoctoral fellow. Right.

And certainly, as Dr. Imumurin pointed out, with how these jobs stack up with years of service and investment in those career pipelines, we also know these setbacks will also stack up in the economy and the ability for our young scientists to be able to pursue the careers of their dreams and contribute in a meaningful way to a society.

I wish it was enough for us to have that moral compulsion to Fund academic research for the long term gain of our societies. However, if we can stress the financial benefits in this moment, maybe there is a way to push this narrative a little bit harder.

I'm thinking of California as the fourth largest economy and the impacts that we're facing based on these cuts, they will have that ripple, as we've heard time and time again, and the ability for America to be number one in an industry for whatever that's worth being able to wear that crown high.

I'm thinking about how these funds directly stimulate our economy in so many different ways that it's not just directly through the UCS and the CSUs, but also through innovation and technology. And the way for us to do that. Is there a way to look at that, calculating the ripple in the economy, what each NIH dollar does.

I know we saw numbers of. It's like $1 of investment is $1.65 in returns to our economy. Is that the correct number?

Well, I think it depends on both the sector and it also depends on the particular set of institutions because it depends on where the terminal degree is at a level of an undergraduate.

And then it might be different than if it's at the level of PhD, but we actually estimated at Stanford to be closer to 2.5, which is really substantial because of the innovation component. The other thing too is we may be leaving out sectors here that are also very important.

Teachers, teachers of science and stem from K through 12 is vital and making sure that we're not losing their enthusiasm for pursuing those degrees that set them up to go into the classroom and start building from K the actual workforce that we so need going forward today and rebuilding what people have expressed as a concern about trust in biomedical sciences in particular.

So there are many different sectors where support will be vital and not discontinuing support. Thank you. Thank you.

Thank you, Dr. Bail, Assemblymember Zbur.

So thank you all for being here. Sorry I missed parts of your presentation. I was watching some of it when I was was in another room earlier.

I just have a sort of a bigger picture question and that is, are you, and you may not be able to answer this, but are you tracking these cuts compared to what's happening in other states?

And I guess the question is, are the cuts primarily because funding is being cut overall in the big bad Bill, or is it in part due to the fact that California is being punished? And I was wondering if any of you could address that.

Yeah, go ahead. Thank you very much for that question. California is the largest state in the US Population wise. It is the largest and it has a lot of institutions who by the size and scale of their research enterprise, just makes them bigger winners of these grants. So.

Well, if you cut back grants, even if you cut the same percentage per state, California is still going to get hit more. So that's one piece.

The demographics of California is another piece because many of these training grants are actually some of them are specifically earmarked in quotes for say, underrepresented for women, for Hispanics, for blacks, that sort of thing. So with the whole anti DEI crusade and cutting back on grants that support DEI effort, if you will.

Well, some of them disproportionately also affect California. And I speak directly as somebody who works for the CSU system where almost 60% of our students are either first generation or they are low income or they are unrepresented.

And so many of these training grants like urise, although HBCU UP doesn't apply much to California because you don't have a lot of HBCU institutions here. But that also affects HBCUs as well. And so yes, and there's actually databases online now where people are sort of building a repository of all the federal grants that are caught.

They exist and they have become so good that you can search by state, you can search by institution, you can search by agency. And it's almost like a data dashboard. Some people volunteer to do this because they figured this is a crisis and we have to keep track of this.

And so I'm happy to get that information to, you know, the Members of the Committee at a later time that information exists. So it's easy to pick two states and look at them side by side.

Just as a quick follow up question, I think that would be helpful.

You know, I, my impression is, and I don't know whether this is true, but that over time California has not received its fair share of funding anyway, even though we're very large and we may have a lot of grants because of the state size of our population.

But we also know in the big picture, California is a donor state generally in the broader scheme of things, and we bring fewer dollars back into California than our taxpayers pay the Federal Government.

So I start with the operating assumption, which may or may not be true, that we already are at a disadvantage because in the desire to have geographic representation across the country, we already don't get our fair share of funding in California, given the size of our economy and the importance of our research institutions already.

And so that's the starting assumption. And so taking the next step is the question I have is, are our institutions then being disproportionately punished now in California either because of the kinds of issues you are raising with specific things being defunded, or because there are political decisions coming into the decision making.

And so anything you can give us, I think on that, any data and information on that I think would be helpful and I would be interested and I'm sure most of the other Members here would be interested as well.

There is a complication to that excellent data that is highly valuable and all of us are looking at to understand the impact is that many large institutions, particularly here in California, were very collaborative, so it will capture an individual grant to California.

What it doesn't always capture is that a grant is terminated at Boston University, for example, that it may have a subcontract to institutions across California. So that information is also not always captured by just here are the individual grants.

But in fact it's the collaborative relationships that are also funded across the country that bring so many of us together that can be caught in that particular termination or pause.

That's a very important comment. Many of our grants, the large ones, are very collaborative and RPIs have collaborators all across the country. And so we're trying to track the subawards to the ones we lead and then we're subaward recipients on others that folks in other states may lead.

And the NSF NIH grants on the whole, this is my own assumption observation, but I need to dig. You know, they Fund fundamental research and so I'm not seeing that type of dynamic as much as with the mission driven agencies.

Well, thank you very much and want to thank Assemblymember Ward for bringing us together. I think sort of compiling this information, the more you can give us. I think it's, you know, a really important time in our democracy and really trying to push back on some of these what I view as very unwise, harmful cuts.

And I think the more information we have to arm ourselves, the better. And so I just want to thank you all for being here today and thank.

Just a quick comment on SOB award. There's actually a new policy that just came out, so the NIH is sort of redesigning how sober words are done. And I think that may have some heeding harms because there's no large project funded by the NIH NSF that is actually done by one institution.

Exactly.

Almost none. Right. Because the skills and the intellectual heft to pull off some of these projects simply require that people will collaborate across Department, across institutions, across states, even across countries. And the policy that I'm referring to is for international components for SOB awards. So that's even something we haven't talked about at this hearing at all.

How these federal actions is already harming the international practice of science, which is eventually hurting us all.

Thank you, Assemblymember Papan.

So just to follow on this theme a little bit, my question is you raised the word Continuity. And that left quite an impact. And amidst the chaos of overnight decisions that allow adaptive students perhaps to rise to the top, I don't know.

But is there a particular theme that you see that may be able to help with the cause that is continuity? In other words, you might have to change a little bit.

But are there things that we can really focus in on that will help with this idea of promoting continuity so we don't lose everything overnight, you know what I'm saying? And you may not know that, but if you can formulate some of them now or later, I'd love to know.

Well, actually, over its time, NIH in particular has recognized and in fact all federal funding for grants originally in the very early days were much Shorter grants, and it was recognized that you couldn't get results. And there was a significant effort into designing grants to typically be between 3 and 5 years.

And there's even some extension on that currently because of the recognition for large, complex grants to reach their goals and milestones, they need a little extra time. But we really have as the norm a five year, so an interruption, the opportunity when a grant is terminated to actually reframe that may not exist for that grant.

So to pivot. You talk beautifully about pivoting. It's a very important thing right now. But it might have to be outside the context of that given grant. And so that's where the challenge arises.

When a grant actually comes to a pause or a termination and there isn't recourse, then we have to make sure we're working with our trainees in particular to set them on the best path forward.

And I'd like to add that my first thought is the continuity of support of the personnel, such as our graduate students. But we also have cell lines, we have research infrastructure of all types that require continuous funding to keep, you know, keep refrigerant, the freezers, you know, lasers, et cetera, data repositories, you know.

So the whole research infrastructure that we don't talk about often is in the background that supports one, you know, multiple grants. These resources are shared by different groups and the continuity of those resources is critical.

Any other Member questions or comments? Well, I want to thank the panel. I guess just one kind of concluding question that I had is, you know, we just started, we're starting the new academic year right now. How have you seen over the last couple of, well, just the last six months. How has that impacted this year's incoming.

Class in terms of numbers? We actually see as many, if not more applications for all Stages, whether it's our master's students or medical students. So that gives us the applications are still there. So there's still hope. Exactly for optimism. We have to make sure that the internships, the opportunities, the training opportunities can sustain.

Of course. Okay, well, let's keep that up. And certainly the encouragement that we're doing for the next generation as well for our high school students and you know, this is an era that we're going through harmful that it is, and that is causing impact. And you know, we gotta about how to get through that.

And thank you for being nimble, creative and staying true to the growth that you're doing right now as a student. But I think it sets a model as well for how others as well are.

You're not alone certainly in the situation and how much we support to make sure that you can get through this and get over the hump and go on to do great things and help out society.

And I think to that end, just as I concluded the first page panel, you know, this is something that we'd be happy to take to our lobbies, our D.C. representatives here that represent the California State Assembly, that this needs to be prioritized and we'll continue working together.

Please keep that active feedback loop to inform us as you're seeing, you know, new evidence or new information that will help, you know, that we can appreciate and we can respond to and really work on your behalf. Thank you so much. Thank you.

Thank you so much. Thank you for the excellent questions.

Thank you all very much. With that, we have a public comment portion of this hearing as well. And so as you are exiting the presenters table, a microphone is here in the center of the room. If anybody has a comment they want to add to the. That's germane to the topic of the day.

I invite you to line up and maybe have about one minute given that we're just a little over time. I appreciate you being here today.

Hi, really quickly, my name is.

Let me make sure if we're turned on, I think we're connected over there. You can go ahead.

Okay. My name is Patricia Ardonez Kim. I am the Executive Director for the UC Graduate Professional Council, officially representing 63,000 plus graduate professional students across the state. I would also like to emphasize everything the panelists have said and I urge the Legislature to consider funding and developing SB829, which is currently in suspense. Due to funding.

I understand that it's for the California Institute of Scientific Research. If you're looking for an answer to the continuity issue, it's mainly about resources and funding and I believe that would be beneficial for the issue at hand should the state and biotech industry also want have interest in developing for workforce and innovation.

I also want to juxtapose that with an opportunity in developing the biotech and agriculture industries in Merced and Davis. Those areas are ripe for and they're ready for workforce development, especially in the areas of health, agriculture and folks ready to work. Thank you so much for your time. Amen.

Thank you very much. Amen. Any of the Members of the public wishing to provide testimony here today? Okay. Seeing none.

I want to thank again all of our panelists here today and those that showed up and those that were listening online to be able to understand the details impacts that we are seeing right now from some of these very aggressive, wrong headed and quick decisions that are having both real time and future impacts as well for biotechnology advances, for the sector as a whole and for the future opportunities that we have through our students.

This will conclude our hearing as well. We'll be set to announce the next Committee hearing in short time for the Select Committee on Biotechnology Medical Technology. I want to thank everyone for their participation. Participation today.