SAN FRANCISCO—California’s stem cell agency needs to change its governance structure, enhance its organization and management, and get good advice as it transitions to the next stages of its program, an Institute of Medicine report released Dec. 6 said.

The IOM report, done at the request of the California Institute for Regenerative Medicine, comes as the agency enters its eighth year after voters in 2004 approved selling $3 billion in bonds to fund stem cell research.

“As it transitions to a broadened portfolio of grants to stimulate progress toward its translational goals, the Institute should obtain cohesive, longitudinal, and integrated...