State Support For Biotech Misses Target | 10-year, billion-dollar commitment may run long
For a researcher that's just starting out, getting funding is somewhat of a Catch-22, said Jeffrey Bailey, an associate professor with the Worcester-based University of Massachusetts Medical School.
To get major grant money, researchers need preliminary data showing their work has merit. But to get the initial data, the researcher needs money.
But Bailey and dozens of other researchers around Massachusetts have been able to take advantage of the Massachusetts Life Sciences Center's new investigator pipeline, which provides grants to startup researchers that need cash. It helps researchers like Bailey get their projects off the ground and lay the ground work for grant funding from a national institution.
âIt's definitely helped,â Bailey said about the two-year, $100,000 Life Sciences Center grant he received in June 2009. He used the money to hire lab workers to study malaria and Lou Gehrig's disease.
The new investigator program is one of a handful run through the Waltham-based Life Sciences Center. It's part of the state's 2008 commitment of a $1 billion investment in life sciences over 10 years.
Funding for the center, however, hasn't quite lived up to original expectations. And with budget issues continuing at the state this year, future funding for the Life Sciences Center isn't looking to get back on its original track any time soon.
Delayed Goal
Kofi Jones, a spokesperson for the state's executive office of housing and economic development, said Gov. Deval Patrick âremains dedicated to supporting innovationâ throughout Massachusetts. But, she said, the economic climate has changed since the program was announced in 2008.
âGiven the current economic realities, it may take longer than 10 years to reach the $1 billion dollar mark,â she said.
Many programs at the state have been subject to budget cuts, and the Life Sciences Center is no exception.
For example, the Life Sciences Investment Fund, which the new investigator grant program is a part of, was originally supposed to receive $250 million over the 10 years, or $25 million per year.
In the first year of the program, the Center got $15 million to doll out in grants. This year the budget was cut to $10 million. Next year, Patrick's budget calls for level-funding the program at $10 million.
The catch is, for the money to be released, the state's comptroller must declare a year-end âconsolidated net surplus,â which basically means the state has money left over somewhere in the budget after all the bills have been paid.
Similarly, the tax incentive programs that the center gives out were originally slated to be $25 million a year for 10 years. The Center hit those targets last year and this year, but Gov. Deval Patrick's budget proposal for next year calls for the center to release no more than $20 million in incentives.
âWe are certainly sensitive to the budget challenges the state is facing,â said Angus McQuilken, vice president for communication for the Life Sciences Center. âCritical health and human services as well as many others are being cut across the state. Nobody is going to be held harmless from the impact.â
But, the issue is simple, McQuilken said: The less money available for the Life Sciences Center, the less grants and funding will be available to companies in one of the state's fastest growing sectors.
âThere is an opportunity cost to not making these investments,â McQuilken said. âAnd in a down economy is exactly when these investments need to be made.â
So then, was the original plan of $1 billion over 10 years too ambitious?
State Sen. Jamie Eldridge, D-Acton, said he likes to aim high.
âI think it was an excellent plan at the time,â he said. âWith the economic crisis all areas of state government have been suffering.â
Eldridge said he supports Patrick's plan to scale back tax incentives, not only in the life sciences, but also in the film industry. Eldridge said he's open to the idea of new taxes on candy, soda, cigars and smokeless tobacco.
Even with less money going to the Life Sciences Center than was originally conceived, those in the life sciences industry are still happy to be receiving state support.
âWe all have to be rational,â said Kevin O'Sullivan, president of the biotech development group Massachusetts Biomedical Initiatives or MBI.
The original 10-year, $1 billion commitment was a big one from the state.
âI don't know if I ever thought we would really get to a billion,â he said. âBut that doesn't mean it's a failure. It's been anything but. It's been a very positive bill.â
Showing the state has a commitment to the industry is the important thing, O'Sullivan said. For outsiders looking at Massachusetts, it shows that the state government is behind the industry and fostering its growth, he said.
Plus, O'Sullivan credits the Life Sciences Center with using the money to leverage private investments. Through matching grant programs, which make Life Sciences Center money contingent on other funding sources, the organization has been able to leverage about $700 million in investments that are projected to create 6,400 jobs.
That sentiment resonates from organizations that have received funding from the center.
At Worcester Polytechnic Institute, for example, officials hope to construct the next phase of Gateway Park in the coming years thanks to a $6.6 million investment from the Life Sciences Center this year. The money is being used to leverage the remaining costs of the $30 million project from private investors.
âThe next phase of Gateway Park would not be happening if it wasn't for the Life Sciences Center's support,â said Jeffrey Solomon, executive vice president and CFO at WPI.
Gateway Park already has one new building in the park which opened in 2007, and they hope with the Life Sciences Center's support to open the next one in the coming years.
Bill Gruber, founder, president and CEO of Interlace Medical in Framingham, said he's using a $300,000 tax incentive his company received from the Life Sciences Center late last year to hire some workers.
Interlace is a medical device company that specializes in female gynecological products. It has grown from a one-man startup in 2006 to 25 employees today.
While he would have liked to see more money - he noted that Cambridge's Genzyme received a $6 million in tax incentive during the same grant announcement - he said it's still appreciated.
âFor young companies, this is a big deal,â he said. âWe're just getting off the ground, so any kind of break we can get we will take.â n
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