After Days of Waiting in Line, 20+ Startups Apply for Tax Credits Under Maryland Program
More than 20 Maryland life sciences companies have submitted a record high number of applications for the Maryland Biotechnology Investment Incentive Tax Credit program. The distribution of credits on a first-come, first-served basis — plus the difficulty of raising capital in a weak economy — prompted many connected with the startups to sleep in sleeping bags in an auditorium at the University of Maryland's BioPark in Baltimore for as many as five days before the July 1 date for accepting applications, Karen Glenn Hood, a spokeswoman for the state Department of Business and Economic Development, told the Baltimore Sun.
Under the tax credit program, the value of the tax credits is equal to half of an eligible investment made in a qualified Maryland biotechnology company during the taxable year, up to a maximum $250,000.
To qualify for the credit, companies must be less than 12 years old; be headquartered in Maryland; employ fewer than 50 people; and have a valid certification from DBED. Investors are required to submit applications for the credits to DBED, which is supposed to review the applications and issue initial credit certifications within 30 calendar days.
Gov. Martin O'Malley and state lawmakers agreed to maintain the program's funding at last year's $6 million when they agreed to a $32.3 billion state budget for the fiscal year that began July 1. The outcome was a victory for life-sci leaders, who successfully fought off a $2 million cut to the program initially agreed to by Maryland's House of Delegates.
Hood told the Sun DBED officials would need about a week to review the applications, and determine how much total money had been requested in the form of the tax credits.
The first company in line, Baltimore cancer diagnostics company BioMarker Strategies, joined with other companies in writing guidelines intended to ensure order among the companies pursuing the credits, the Maryland Daily Record reported.
While DBED has defended the first-come, first-served approach as the best way to award the tax credit, others have expressed a preference for a lottery system or credits worth 30 percent of investments instead of 50 percent, to ensure every company gets a share, according to the Daily Record.
DBED acknowledged that the program was oversubscribed last year, when representatives of 14 companies waited in line outside DBED's old offices in downtown Baltimore. DBED officials barred this year's line from forming at its new offices, at the World Trade Center at the Inner Harbor, citing security concerns
The agency told the Daily Record that all of the companies seeking the credits last fiscal year got them because many of the investments fell through during the year.
Israel Announces Capital Fund of 1B Shekels for Biotech Startups
Israel's ministries of industry and trade and finance announced plans last week to set up a capital fund of up to 1 billion shekels ($255 million) to finance biotechnology startup companies. The state would contribute some 250 million shekels to the fund, which it hopes to rise to 1 billion shekels using loans from private investors, according to Reuters.
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The government will split profits from activities in the fund between itself and private investors, the ministries said in a statement. The ministries hope the fund will encourage and advance growth in Israel's biotech sector — an area of growing concern for officials on Israel's national and local levels. Last month, Jerusalem Mayor Nir Barkat announced his city would join the Jerusalem Development Authority — which he co-oversees with Israel's ministers of finance and Jerusalem Affairs — in raising and spending about 100 million shekels ($25 million) over the next five years to promote the city's life sciences and health business cluster [BRN, June 19].
"There's great importance to the fact that 250 million shekels of government money is allocated to the development of an industry whose workforce is of great value and whose development and prosperity are crucial to the economy," Eli Ofer, chief scientist at the Industry and Trade Ministry, told the wire service.
UK Sets Aside $243.8M for New Innovation Fund for Life-Sci, Other Tech Startups
The UK government has launched a new UK Innovation Fund, with the goal of investing in life sciences and other high-tech start-ups.
Lord Mandelson, First Secretary of State, told an audience at the London Stock Exchange last week the government will put up an initial £150 million ($243.75 million), but hopes the fund will swell to £1 billion with private funds. The news was welcomed by the private equity and venture capital industries, which had been lobbying the government to enter into ventures with the private sector to boost investment in small- and medium-sized businesses, according to Dow Jones Newswires.
Lord Drayson, Minister for Science and Innovation, said the government will appoint a manager to run the fund of funds and it hopes to make its first investment by the end of the year, the wire service reported.
"I am delighted that ministers have accepted a model on which the BVCA has campaigned for more than two years and I am sure can make a real difference provided it is implemented with the urgency that it deserves," British Private Equity and Venture Capital Association Chief Executive Simon Walker told Dow Jones. His group and individual VC firms argued that encouraging venture capital investment is key if the UK economy is to recovery from the current global upheaval, and maintain competitiveness with other economies for life-sci and tech businesses and their jobs.
GRA Venture Fund Announces Successful First Closing in Tough Economy
The GRA Venture Fund, dedicated to advancing seed or early-stage companies that have emerged through the Georgia Research Alliance VentureLab commercialization program, has announced that it raised $18,750,000 in its first closing. The private investment fund awards $1 in state funds for every $3 raised by private investors, a public-private effort intended to generate more early-stage financing for startup companies seeking to commercialize technologies discovered in Georgia's six research universities affiliated with the GRA.
The six are the Georgia Institute of Technology, Emory University, University of Georgia, Medical College of Georgia, Georgia State University and Clark Atlanta University.
“This is a great start for a fund that will strengthen Georgia’s position as a center for innovation and entrepreneurship by helping our homegrown technology and research companies thrive and stay in Georgia," Georgia Gov. Sonny Perdue said in a statement.
Fred Cooper, a GRA trustee leading the project for the GRA Board, said in a statement: "The fund, coupled with significant State commitments, including attractive income tax credits for investors, has the potential to provide in excess of $100 million in venture financing."
GRA VentureLab awards seed grants and loans to universities and early-stage companies. VentureLab has assisted some 85 new companies since its inception in 2002. Jones Day serves as legal counsel for the fund.
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Florida Places $300K Bet on NeoGenomics; Hopes the Molecular Clinical Lab Will Return the Favor
[By Kirell Lakhman of The Sample, a BRN sister publication]
NeoGenomics Laboratories, a molecular clinical lab in Fort Myers, Fla., will use a $300,000 tax incentive to hire 75 new lab techs, lab directors, pathologists, and support personnel — which will more than double the lab's existing headcount.
The tax incentive was announced last week by the Lee County Office of Economic Development and reported by a local paper. Fort Myers is based in Lee County.
State officials have told the Cape Coral [Fla.] Daily Breeze that the new salaries and additional revenue are expected to eventually generate $12.7 million in taxable receipts.
NeoGenomics, which has been in Fort Myers since 2003, offers testing in cancer genetics, flow cytometry, immunohistochemistry, and molecular diagnostics through its network of regional laboratories. The firm currently employs 72 people, according to the economic-development office.
The economic-development department said $240,000 of the incentive will come from the state while the remaining $60,000 will come from Lee County.
The incentives are part of Lee County's $25 million Financial Incentives for Recruiting Strategic Targets, or FIRST, Initiative, intended to award incentive cash to companies in the life sciences and other higher-wage industries that relocate to or expand within Lee.
FIRST awards cash to companies that operate within a target industry or sector designated as high-impact by Florida law. In addition to investing capital in a cumulative amount equal to or greater than the award amount, recipients of FIRST funding must, in return for receiving funding, create at least 75 new full-time equivalent jobs within a three-year period, paying an average wage of at least 125 percent of the Lee County annual average. [BRN, Jan. 5].
NeoGenomics generated $6.9 million in revenue during the three-month period ended March 31 — which is 66 percent better than the same time one year ago. The company also recorded more than $33,000 in net profits during the quarter, and closed out the quarter with more than $857,000 in cash and equivalents.
Laws Limiting Gifts from Drug, Med Device Companies Take Effect in Massachusetts, Vermont
Under laws that took effect July 1 in Massachusetts and Vermont, pharmaceutical companies and medical-device makers have been banned from giving doctors gifts ranging from resort trips to coffee mugs. Vermont's law goes further by banning not only trinkets and entertainment, but free meals for doctors as well — a ban that has exceptions in Massachusetts, the Wall Street Journal has reported.
The two New England states join Minnesota, where a partial ban on gifts is in effect. Legislatures in Oregon, Texas, Connecticut, Colorado, Illinois and Maryland have been debating whether to impose similar bans, or to require public disclosure of such gifts, the Journal reported.
Gift bans also are in place at Stanford University's medical school, Ohio State University, and the University of Pennsylvania.
Massachusetts Life Sciences Center Approves $695K for Stem Cell Registry at UMass Med School
The board of directors of the quasi-public Massachusetts Life Sciences Center — the state agency overseeing the state's $1 billion, 10-year Life Sciences Act — has approved $695,000 for the International Stem Cell Registry at the Shrewsbury, Mass., campus of the University of Massachusetts Medical School.
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The center and UMass Med announced the launch of the registry in September 2008, with $570,000 in funding from the agency. The registry provides an online resource of information on human embryonic and induced pluripotent stem cells to the academic and private sector biomedical research community and to the public.
The registry is housed alongside the Massachusetts Stem Cell Bank, also funded by the center. The stem cell bank is a 15,000-square-foot facility with research and training space that maintains human and reprogrammed stem cell lines for use in related research. The bank was funded through a $7.7 million grant from the center.
“The International Stem Cell Registry and the Massachusetts Stem Cell Bank are putting Massachusetts ahead of the curve as a leader in stem cell research,” Susan Windham-Bannister, president and CEO of the life-sci center, said in a statement.
NYS Approves Solicitations for 11 ARRA Projects
The New York State Economic Recovery and Investment Cabinet has approved 11 solicitations for funding under the American Recovery and Reinvestment Act as eligible for additional state money equal to 10 percent of the federal award.
Awardees would receive $1 million from New York state, through Gov. David Paterson's new $100 million Innovation Economy Matching Grants program, for every $10 million in ARRA funding they win.
Deadlines, plus descriptions of the solicitations eligible for the state matching funds:
• July 13: The NIST Measurement Science and Engineering Research Grants Program (2009-NIST-ARRA-MSE-Research-01). Funds are to advance the state of knowledge and practice to promote US innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. (About $35 million will be available for 20-60 awards ranging from $500,000 to $1.5 million each).
• July 14: The DOE Industrial Energy Efficiency (DE-FOA-0000044). Funds will support the deployment of energy efficient technologies for cogeneration, district energy, waste energy recovery, or efficient industrial equipment. (Note: Approximately $156 million will be available for up to 70 awards ranging from $500,000 to $100 million in 4 areas of interest).
• July 17: The National Institutes of Health, Extramural Research Facilities Improvement Program (RFA-RR-09-008). Funds will support projects to expand, remodel, renovate, or alter biomedical or behavioral research facilities. (Note: $1 billion to be shared for this award and two other NIH solicitations announced this spring. Awards for this phase of the program will be for projects between $5 million and $10 million).
• July 17: The DOE Enhanced Geothermal Systems Component Research and Development/ Analysis (DE-FOA-0000075). Funds are to develop new technologies to dramatically improve energy efficiency in information, communication technologies that can be commercialized within 3-5 years. (Note: $56 million available for awards in three topic areas, with 20 to 30 awards expected to be made, ranging from $1.5 million to $5 million).
• July 21: The DOE Energy Efficient Information and Communication Technology (DE-FOA-0000107). Funds will to develop new technologies to dramatically improve energy efficiency in information, communications technology (ICT) with an emphasis on new technologies that can be commercialized within the next three to five years. (Note: $50 million for awards in three topic areas. Awards will range from $300,000 for concept studies to $10 million for demonstration and field testing with 5 to 15 awards expected)
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• July 22: The DOE Geothermal Technologies Program (DE-FOA-0000109). Funds will focus on areas associated with geothermal energy and seek to maintain an aggressive schedule for project completion as well as the creation and maintenance of jobs. (Note: $170 million will be available nationally for up to 60 awards ranging from $1.5 million to $5 million, plus 5 awards ranging from $1 million to $20 million)
• July 22: The DOE Regional Sequestration Technology Training program (DE-FOA-0000080) consists of funds for trade groups, companies or others to develop regional sequestration technology training programs for site developers, geologists, engineers and technicians. (Note: $6.97 million for approximately 7 awards ranging from $500,000 to $1 million).
• July 29, 2009: The DOE Wind Energy Consortia between Institutions of Higher Learning and Industry (DE-FOA-0000090). Funds will support consortia between institutions of higher learning and industry that will perform focused research on critical wind energy challenges. (Note: $24 million available for up to 3 awards of $8 million to $12 million each).
• July 30: The DOE High Penetration Solar Deployment (DE-FOA-0000085) offers funds for modeling tools and database of experience with high penetration scenarios of PV on the electric power system. Also, for demonstration the integration of PV and energy storage into Smart Grid applications. (Note: $17.5 million available for up to 11 awards ranging from $5 million to $18 million)
• July 30: The DOE Solar Market Transformation (DE-FOA-0000078). Funds will address current market barriers to the adoption of solar technologies and establish a nationally coordinated effort to spread solar installation training to the local level. (Note: $20 Million available for up to 10 awards ranging from $2 million to $3.5 million and one award of up to $6 million). New York City could be an eligible applicant under criteria that will award up to $2 million for deployment and training.
• July 30: The DOE Enhanced Geothermal Systems Demonstrations (DE-FOA-0000092). Funds will go towards projects that demonstrate techniques to extract heat and energy from geologic formations. (Note: $90 million available for up to 10 awards with a maximum $25 million each).
To apply for a matching fund commitment letter, please go to the New York State Recovery website