A governing board with the state’s $3 billion stem cell institute has approved a proposal for funding the development of new stem cell therapies.

The conceptual plan, announced March 11, calls for the California Institute for Regenerative Medicine to fund early stage clinical trials involving stem cell therapies, and related manufacturing activities, that can be performed in less than three years. The agency would provide the lesser of $25 million or half the project cost to nonprofit researchers and for-profit companies.

Biotechnology companies testing new stem cell therapies often have a difficult time appealing to pharmaceutical companies or venture capitalists for funding because of the inherent risks involved with the young, mostly untested area of research. Last year marked a major milestone when Bay Area biotech Geron Corp. received FDA clearance to begin testing its human embryonic stem cell-based treatment for spinal cord injury on humans. Much of the stem cell science, however, remains in the earliest stages of testing.

“The clinical development awards will provide critically needed support for the earliest and hardest-to-fund stage of clinical research,” CIRM Chairman Robert Klein said in a release. “These therapies should provide health care cost savings and create new tax revenues for California when chronically ill people and their caregivers are able to return to work.”

CIRM said it anticipates a call for entries this spring, with applications due in July. Funding recommendations from the independent grants working group will come before its governing board for final approval in December.