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Ignite Institute Plans Q2 HQ Decision and Launch Despite Inova, County Pullout

By Alex Philippidis

NEW YORK (GenomeWeb News) — The Ignite Institute, a startup research center focused on translation of personalized medicine discoveries, will decide on a permanent headquarters in Fairfax County, and launch from there its previously-announced research programs and gene sequencing partnership with Life Technologies during the second quarter — despite losing private and public backers for the project in recent weeks, the institute's President and CEO Dietrich Stephan told GenomeWeb Daily News.

Late last month, Inova Health Systems withdrew a commitment to provide $25 million over five years to the institute, saying the recession-wracked financial markets made it harder than envisioned to raise the funds from investors. Inova, northern Virginia's largest not-for-profit healthcare provider, originally envisioned offering its patients access to new diagnostics and treatments developed by the center.

Inova's pullout, in turn, prompted Fairfax County to retreat from its own plan to partially finance the permanent facility by issuing up to $150 million in Fairfax County Economic Development Authority industrial revenue bonds, the chairman of the county Board of Supervisors, Sharon Bulova, told GWDN yesterday.

Despite those setbacks, Stephan said in an interview, Ignite remains poised to launch this quarter, and remains on track toward growing to at least the 415 jobs it has promised to create over five years in return for $25 million in state funding. That funding was approved nearly unanimously by both houses of the state legislature over the winter — a vote especially gratifying, he said, given the state's $4 billion budget deficit.

Ignite hopes to add to that funding with contributions from "a multitude of other clinical partners that we're in discussions with, and have been for a while," Stephan said. He would not identify the potential partners.

"Because one partner drops out doesn't mean that five others can't come in," Stephan said. "It's unfortunate that Inova does not want to participate, because the real return would be to them, not us, in terms of providing better outcomes to their patient base, which is what this institute offers.

"As far as I'm concerned, we're moving forward. We're on track. We've got a number of other partners that are lining up to slot in, and this is sort of typical startup mode for an institute that's large and complex," Stephan added.

In the absence of a single healthcare provider such as Inova, Stephan said, the institute would carry out trials and diagnostic validation the traditional way, by seeking "the clinical group that is expert in the space" for a given disease.

He said Ignite still holds to its business model, which anticipates the institute needing $400 million over five years — about $80 million annually — and will keep intact its original research focus, which will start with neurological and mental health disorders when the facility opens, then expand at a later point to oncology and pediatrics, then to cardiovascular and metabolic disease.

Ignite has forged partnerships with three universities — George Mason, George Washington, and Virginia Tech — as well as with Life Technologies, from which the institute has agreed to buy 100 new SOLiD 4 sequencing systems, creating the largest next-generation genomic sequencing facility in North America.

The first 25 of the units will be installed and operational when Ignite begins operations at its permanent HQ later this quarter, Stephan said, adding that units would be phased in over the next 12 months in increments of 25.

Stephan said Ignite remains in talks with owners of two sites that contain buildings capable of being converted to lab/research use. He would not disclose the sites, but did say the site Ignite chooses will become the institute's permanent facility, and would start operations later this quarter concurrently with the sequencing facility.

Ignite has ruled out a third Fairfax County site, also undisclosed, that would have required the construction of a new building from scratch, which would take more time and money than the conversion now contemplated. The conversion cost has yet to be determined.

Later this year, Stephan said, Ignite plans to build out "between 20,000 and 40,000 square feet" of laboratory space at the state-run Center for Innovative Technology in Herndon, Va. The institute now occupies a few thousand square feet of offices at CIT, an incubator for tech-based businesses.

Ignite will complete the build-out in phases, Stephan said, ultimately using the labs for a few years before donating the space to the state, which would re-fill the space with startup life sciences companies.

Also later this year, Ignite expects to begin hiring researchers, with up to 500 expected to join over the next five years. The institute now has an "implementation team" of some two dozen interim staffers working to create its facilities, from interim administrators to the research facility development firm Murphy McManus, to the PricewaterhouseCoopers team that helped develop the Translational Genomics Research Institute in Phoenix, where Stephan was an original researcher.

The county Economic Development Authority was to have issued up to $150 million in industrial revenue bonds for the project under a financing arrangement announced Nov. 16 by then-Gov. Tim Kaine and his successor, current Gov. Robert McDonnell. The arrangement included a total $25 million from the state — a $3 million grant from the Governor's Opportunity Fund toward the cost of the temporary space, then another $22 million to be paid out in four annual installments of $5.5 million.

While the state followed through on its commitment, Inova said it could not follow suit, citing the economy. "Given the scope and scale of the project and the time needed for capital development in the current market, Inova has reassessed its research investment priorities and decided not to continue its partnership," Inova said in a three-paragraph statement.

Despite pulling out of the Ignite project, Inova said in its statement that it "remains strongly committed to develop and support initiatives that bring medical innovation and breakthrough science and research to the population at large in Northern Virginia through the existing community-based health system."

Inova carries out translational research in collaboration with researchers from institutions such as George Mason and Virginia Commonwealth universities, as well as area biotechnology companies. The healthcare provider uses personalized medicine protocols toward development of biomarkers for use in diagnosing and treating several diseases.

Asked if Inova's pullout from Ignite was permanent, a spokesman for the health system told GWDN, "The institute's door remains open to re-engage in the future."

The prospect of landing a potential anchor for a life sciences cluster excited Fairfax County enough, Bulova said, to join Ignite in seeking to acquire a permanent headquarters property — something she said the county had never done before with any other large-scale employer.

Bulova said she was hopeful that Fairfax County could assist Ignite some time in the future when the economy, and the county's finances, both recover. Over the past year the county has frozen employee salaries and cut spending in almost every agency, yet is struggling to plug a budget shortfall projected at $257.6 million in the $6.1 billion spending plan being crafted for the fiscal year that starts July 1.

"It was just a rough time to do something as ambitious as the Ignite Institute," Bulova said. "Unfortunately, we could not move forward with it right away."

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