Although the state’s $3 billion stem-cell research institute could help companies such as VistaGen Therapeutics of Burlingame find new cures for a range of health problems, it won’t bolster California’s coffers the way its backers had promised, a new study has concluded. Many claims supporting last year’s passage of Proposition 71, which launched the research effort, ``are based on unrealistic assumptions about the potential economic impact,’' according to the study unveiled Tuesday by the California Council on Science and Technology. ``Some statements about these returns verge on hyperbole.’'The report by the non-profit advisory group, which was created by the Legislature, said the stem-cell effort would help the state’s economy by creating jobs, luring businesses to California, generating tax revenue from new stem-cell products and improving public health.But insisting on a share of the profit from companies that get the state’s stem-cell grants would likely backfire, by discouraging businesses from participating, the report said.That warning was reiterated by H. Ralph Snodgrass, chief executive of VistaGen, which was founded in 1998 and was one of two Bay Area stem-cell companies toured Tuesday by Congressman Tom Lantos, D-San Mateo.VistaGen, which is trying to grow genetically modified stem cells to help identify promising new drugs for diabetes and other ailments, has nine employees. Snodgrass said he would like to add more to push his research along faster. As a result, he intends to apply for the stem-cell institute’s grants, but worries the state will attach financial strings to the money that will make the program unpalatable to his and other businesses.
