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Regional: Michigan Corridor Awards Disappoint Region s Startups

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The regional-pavilion setup at BIO 2002 made it even easier to notice the grumblings of Michigan-based genomics and proteomics companies. The complaint: after last year’s $100 million funding for life sciences drew companies to the area like a 21st-century gold rush, the new 2002 awards leveled out at $30 million, and a good chunk went to university programs instead of to the private sector. Of 111 proposals, just three of the awards were for private, science-based companies. At least one company was already entertaining the possibility of leaving Michigan after its much-anticipated state funding didn’t come through.

The Michigan Life Sciences Corridor, which kicked off last year with $1 billion of the state’s tobacco settlement behind it, planned to give out $50 million annually over 20 years. But 2001 saw a double-year handout and the creation of 22 new life science companies, likely compounding problems this year by raising expectations about how much the state would dole out to lure life sciences to the Great Lakes region. To make matters worse, this year’s tax revenues didn’t meet the state’s target, so “we were asked to cut our appropriations,” explains Raili Kerppola, managing director of the life sciences corridor. That meant total awards hovered at $45 million, with nearly $15 million already set aside for the Core Technology Alliance, a long-term collaboration between four in-state universities and the Van Andel Research Institute.

“The competitiveness of the applications is just tremendous. From the time the program was initiated, there was a concern whether there would be $50 million worth of top-quality research efforts,” Kerppola says. But this year’s competition, like last year’s, “had more highly recommended proposals than we could have funded.”

She stresses that the university-directed money is no attempt to get out of giving funds to companies. “The structure of our funding is such that 40 percent … is earmarked for universities only. To change that, [someone] would have to change legislative language.”

Additionally, much of the money in these early years of the corridor is being used to set up infrastructure that will, at least in theory, stretch the state’s dollars in the long run. Awards this year went to start a seed fund, and awardees promised to raise as much as 15 times the amount they get from the state to help young life sciences companies in Michigan. Also, Kerppola says the university alliance program was developed to help private-sector companies as well — the participating labs are “technology service centers that are open to private researchers.”

“The private sector did exceedingly well in the categories they were qualified to apply in,” Kerppola says. “The bottom line is that at this point in time, where we are with the corridor, we need to do long-term investments. We wish we had more money, but we don’t.”

— Meredith Salisbury

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