How To Really Stand Up To Cancer

This is something you did not hear in Obama's healthcare reform package.

Last summer a number of Hollywood luminaries and entertainers assembled for a telethon with a goal of raising a $1B super fund for curing cancer, called "Stand Up To Cancer" (SU2C). (See: http://www.standup2cancer.org/) It was and is a worthy endeavor with the goal to raise a sufficient amount of capital and grant it over a few years to the most promising cancer research teams in the US.

The SU2C grants were designed to be much larger and more productive than the typical NIH/NCI grants, which average roughly $600,000. The idea was for these grants to be more on the order of $10-20M per year for 15-25 of the most promising research teams. Four of the top cancer specialists in the country were lined up on the SU2C advisory board to help identify the most promising teams. Great concept.

In the late summer of 2008 all was going swimmingly for SU2C. They held their first telethon to much enthusiasm, which you can watch from their web site, and the response was overwhelming. In their first endeavor, the fund attracted $250M in pledges, and then....

....something went terribly wrong.

Lehman went bankrupt, the market melted down, and of the $250M of pledges, only $100M has been honored. As a result, the "superfund" is not so super. This does not mean it will not one day fulfill its goals, but to date, only five teams have been awarded $73M, with many more deserving teams that had been earmarked for grants left on the wayside struggling for NIH/NCI grants and donations to slowly advance their important breakthroughs. And venture capital has all but dried up, since it was whacked heavily by the markets, as well.

Philanthropy is one of the great attributes of America. We do it more and better than any other nation, and we have some mega-players like Bill and Melinda Gates and Warren Buffett who break the record books. But when the economy hits a major road bump, philanthropy gets hit hard, Bernie Madoff aside. So does the IPO market, and, in turn, so does venture capital. As a result, despite tremendous discoveries and advancements on many fronts during this life science revolution going on around us, and despite our being on the verge of truly being able to stand up to cancer, this country and the world is left relying on barbaric chemo and radiation, for those that can afford it.

There are better ways.

One way is to take 10% of the $10B increase in NIH/NCI grants and collaborate with Stand Up to Cancer to do the job right. Another would be to highly reduce or eliminate capital gains tax on venture capital to stimulate more capital investments in these most important technologies. Why should capital gains on VC, where money is tied up for 7-10 years, be taxed at the same rate as someone who buys a public equity and holds it for one year? It's irrational.

Healthy VC means healthy innovation, which means more jobs and more people paying income taxes. The wealth creation from this alone would more than pay back the government many times over. Eliminating capital gains tax on VC would do more to stimulate Wall Street and raise far more tax revenues than the extremely low multiplier effect of the $1T "stimulus" package, and it would cost the tax payers a small percentage of this amount. It's no coincidence that the Clinton budget surpluses accompanied the healthiest stock and IPO market in US history.

Here's why the return on investment of making these simple changes would be dramatic. Venture capital represents .2% of our GDP, yet the companies that were started by VC account for 17% of our nation's revenues. Even if the average venture firm's fund is 7-10 years, it' s a great ROI.

We need to combine both larger grants by the NIH and encourage investments by VC. By combining them both, billions of dollars would be unleashed at the very time they are most needed and can do the most good. Much, if not all, of the technology to advance the treatment of most cancers, without the dependence on chemo and radiation, already exists.

It just needs money and the right direction.