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Burnham's Endowment Declines, but Assets Nearly Double on Grants

NEW YORK (GenomeWeb News) - The Burnham Institute for Medical Research has issued its annual financial statements, supplemental schedules, and compliance reports for the fiscal year that ended June 30. The statements showed losses in endowment, investment, rental, and royalty income during the past fiscal year, as well as gains in its net assets and research grants tied to its new Florida facility.

Burnham ended its 2009 fiscal year with a near-doubling of its total net assets, to almost $197 million from $107.7 million the previous year, the statements showed. The increase reflected most of the $101.3 million classified by Burnham as "temporarily restricted" funds related to various aspects of its recently-completed expansion into the Sunshine State, including a portion of the $350 million it won in state and local government grants, and the development of temporary and permanent facilities.

Burnham last month celebrated the grand opening of its $85 million, 175,000-square-foot facility in Orlando's Lake Nona Medical City. In all, Lake Nona accounted for $101.3 million, or more than three-fourths, of the $124.8 million of Burnham's temporary restricted funds — a category that also includes funds restricted for use at future periods, as well as for specific research purposes.

Net assets of Burnham's endowment fell 13 percent, from nearly $17.5 million in FY 2008 to $15.2 million in FY 2009, largely due to $2.6 million in losses on investments, according to the financial statements.

The statements, filed Oct. 28, also showed that the institute's return on its investments — encompassing interest and dividends, net realized and unrealized losses, and management fees — swung into the red during the period, from a $1.6 million gain in the year ending June 30, 2008, to a $2.95 million loss the following year.

Also declining was Burnham Institute's rental income from third parties, which dropped from $195,000 in the 2008 fiscal year, to $61,000 this past fiscal year. Revenues from royalties, rent, and other sources also fell 14 percent, from $964,000 in the 2008 fiscal year to $834,000 this past fiscal year.

The institute fared better in securing federal grants and contracts, raising its revenue in the category 5 percent year-to-year, from $80 million in FY 2008 to $84 million in FY 2009. All but $3 million of the $84 million was raised by faculty and staff at Burnham's campus in La Jolla, Calif.; the remainder from the Lake Nona campus.

Another bright spot for Burnham was a decrease in deferred revenue from Florida operations due to "uncertainties and/or conditions placed on the use of the assets." That category fell to $7.4 million in the year ending June 30, from $54.5 million a year earlier.

Also in the financial statement, Burnham promised to step up its procedures requiring timely collection of conflict of interest statements by its 74 principal investigators.

Burnham's independent auditor, Deloitte & Touche, said three of five principal investigators whose anti-conflict statements it reviewed submitted their paperwork after the institute's deadline. However, none of the five reported having any conflicts under the policy, required by the National Institutes of Health.

"Additionally, the Institute will continue to remind all PIs of the Institute's policy and federal requirements to disclose all of their significant financial relationships that may give rise to a conflict of interest," Burnham stated in a response included with the compliance report.