As Legislative Session Ends, Florida Economic Development Bill Dies
The end of Florida’s legislative session also brought the end of an economic development bill that would have imposed greater legislative oversight, and a new funding mechanism, for Florida’s Innovation Incentive program, as well as addressed other economic development issues.
The measure, Senate Bill 2778, died after its author, state Sen. Mike Fasano (R-New Port Richey) refused to go along with changes made to the measure by the House of Representatives, Gregory Giordano, Fasano’s chief legislative aide, told BRN last week.
The House on May 1 stopped action by declaring the bill “laid on the table,” at the end of a day in which it substituted its legislation, House Bill 7111, for Fasano’s bill.
The House version’s provisions included:
- Creating a new “small business advocate” and a nine-person panel, both to advise state agencies of the effects of future regulations on smaller businesses.
- Creating three 10-day timeframes for decisions on state economic incentives – one on whether applications are complete, one for a recommendation by the state’s public-private economic development agency, Enterprise Florida, and a third for a decision by the state Office of Tourism Trade and Economic Development.
- Requiring OTED to submit by Dec. 31 a strategic plan for attracting more spring training facilities of major-league baseball clubs.
- Requiring recipients of Innovation Incentive funds to pay the state Biomedical Research Trust Fund 15 percent of royalties and revenue from royalties and naming rights, up to a maximum $200 million — with the Scripps Florida Funding Corp. to decide whether Innovation Incentive recipients must give the full amount, or just $155 million. That decision would have been allowable either at that benchmark or the expiration of their economic deals, whichever was earlier.
The House changes came days after Fasano’s bill passed the state Senate. That bill required royalty payments of between 10 percent and 15 percent to the state — of which 90 percent had to be paid into the Biomedical Research Trust for life-science recipients, or the Economic Development Trust Fund for recipients in other industries. The remaining 10 percent had to be deposited into the Building Florida’s Future Revolving Loan Guarantee Trust Fund.
The bill also:
- Set a 65-day timetable for decisions on Innovation Incentive requests; allowed universities that meet certain criteria to be eligible for investment partnerships with the state-created Florida Opportunity Fund, which invests seed capital and early-stage venture capital funds into startups in the life sciences and other industries;
- Required employers receiving money from the fund to submit quarterly and annual reports detailing their progress in meeting job-creation goals.
- Required the state to set aside $20 million of general revenue to guarantee loans by rural and cash-strapped municipalities seeking to attract employers in the life sciences and six other industries.
Also, the Senate created a uniform economic development incentive application process for all business incentives reviewed by Enterprise Florida, and approved by OTTED. Until now, Innovation Incentive requests alone required approval by the Legislative Budget Commission.
An amendment intended to promote new spring training facilities failed.
Colorado Launches Program to Support Bioscience Tech Transfer
Colorado has established a Bioscience Research Grant Program that will pump $26.5 million over the next five years into initiatives designed to speed the commercialization of bioscience research at Colorado’s universities and research institutions, the Colorado Bioscience Association said recently.
Specifically, the money will be used to help university tech-transfer offices accelerate the development of bioscience discoveries; to support early-stage bioscience companies spun out from university biosciences research; and to build additional infrastructure necessary within the state to support its bioscience commercialization goals, CBA said.
On April 24, Colorado Governor Bill Ritter signed House bill 1001, which was sponsored by Representative Jim Riesberg (D-Greeley) and Senator Bob Bacon (D-Fort Collins).
Under the new program, which will be managed by the Colorado Office of Economic Development and International Trade, $5.5 million has already been allocated from the state’s general fund to support bioscience commercialization in the current 2007-2008 fiscal year, which ends June 30.
Next fiscal year, the program will authorize the use of another $4.5 million from state gaming funds; and then another $5.5 million from gaming funds in each of the following three years.
The research grant program will support three specific areas. The first area, proof-of-concept grants, will receive no less than 30 percent of the total available funds, and will be given to tech-transfer offices at universities and research institutions to accelerate basic science discoveries toward commercialized products in the areas of agriculture, human and animal health, the environment, and biofuels.
Under this part of the program, no more than $150,000 will be granted to individual research projects with commercial potential, and must be matched equally by a dedicated source of funds from either the research institution or an outside entity.
Christine Shapard, deputy director of CBA, told BRN sister publication Biotech Transfer Week that the grants are meant to “go toward researchers who they want to do a little more POC analysis. It could go toward the market research to find out what other companies are in the same space … or to get a better sense if it’s really a viable commercial product.”
Shapard said that the money will likely be pre-allocated so that the research institutions receiving the most federal research funding — led by the University of Colorado, Boulder, and Colorado State University in Fort Collins — would also receive the most commercialization assistance. She also said that the POC grants would in most cases supplement similar programs that each institution already has in place internally.
The second component of the new program, which will also receive no less than 30 percent of the HB 1001 funds, will support in-state early-stage bioscience companies. Companies receiving these grants must be headquartered in the state, must “produce or develop therapeutic or diagnostic products, devices, or instruments to improve human or animal health, improve agriculture or biofuels, have received less than $5 million in grants and third-party investors, and employ fewer than 20 persons,” according to bill language provided by CBA.
The third initiative of the new bill will support bioscience industry infrastructure development, and will receive no more than 40 percent of the total HB 1001 funds.
According to the bill, this program will support partnership efforts between the bioscience industry and research institutions that support the commercialization of therapeutics, diagnostic products, devices, and biofuels.
A longer version of this article appears in last week’s issue of Biotech Transfer Week.
Missouri House Committee Approves Senate Economic Development Bill
The Missouri House of Representative’s Special Committee on Job Creation and Economic Development last week approved Senate Bill 718, which modifies certain tax credit programs administered by the Department of Economic Development.
The bill, SB 718, was sponsored by Senator Harry Kennedy.
The bill increases the amount of tax credits that may be issued in any fiscal year for economic development projects from $4 million to $6 million and increases the annual cap on tax credits authorized for the Small Business Incubators program from $500,000 to $2 million.
The bill also allows companies to receive tax credits for new or expanded business facilities for expansions done before January 1, 2018. At least five hundred new employees and at least $20 million in new investment must be attributed to the expansion.
In addition, the act creates a new program under the state’s Enhanced Enterprise Zone Tax Benefit Act known as “mega-projects.” Employers who establish mega-projects within an EEZ will be allowed an income tax credit equal to a percentage of their new annual payroll for employees located at the project.
In order to be approved as a mega-project, the new capitol investment must be projected to exceed $300 million and the project must be projected to create at least 1,000 new jobs over a period of eight years. The new jobs created must have an average wage in excess of the county average wage and the taxpayer must offer health insurance to all new jobs and pay at least eighty percent of the premiums for such insurance.
A Mega-Project Fund created by the bill will be used to “offset negative cash flow resulting from the redemption of mega-project tax credits,” according to a summary of the bill on the house website. If no mega-project is approved before Dec. 31, 2008, all money in the fund will revert to the general revenue fund.
The bill also allows a tax credit equal to no more than 6.5 percent of a taxpayer's research expenses. The annual aggregate cap on the amount of these tax credits has been increased from $9 million to $10 million.
Qualified research expenses are limited to those incurred in the research and development of “agricultural biotechnology, plant genomics products, diagnostic and therapeutic medical devices, and prescription pharmaceuticals consumed by humans or animals,” according to the summary. Expenses incurred in the research, development, and manufacturing of power system technology for aerospace, space, defense, or implantable or wearable medical devices are also permitted.
In addition, the bill permits the Department of Economic Development to authorize up to $5 million in tax credits per year to encourage equity investment in technology-based early stage Missouri companies. Investors who contribute the first $500,000 in equity investment to a qualified Missouri business may be issued a tax credit equal to 30 percent of the investment or 40 percent of the investment if the qualified business is in a rural area or distressed community.
Investors can receive a credit of up to $50,000 dollars for an investment in a single qualified business and up to $100,000 dollars for investments in more than one qualified business per year.
A copy of the bill is available here.
Indiana U Offers Life Science Business Certificate Program
Indiana University's Kelley School of Business said last week that it has established a new executive certificate program to teach professionals about the business aspects of the life science industry.
The executive certificate program, which begins in September, is targeted to working professionals, including engineers, researchers, scientists, product managers, logisticians, and attorneys.
Faculty will include those who also teach in Kelley's traditional and online MBA programs, as well as guest lecturers “who have been successful in launching and running life science companies across the country,” the university said in a statement.
The Kelley School also will offer these courses to managers participating in San Diego State University's new MBA program for executives in life sciences.
More information about the certificate program is available here.
Pittsburgh Life Sciences Greenhouse Surpasses $10M in Investments
The Pittsburgh Life Sciences Greenhouse said last week that it has so far provided more than $10 million in investments to 48 companies.
The organization, formed in 2002, recently invested $235,000 in Lipella Pharmaceuticals, a firm developing therapies for bladder dysfunction, which pushed it over the $10 million mark.
The goal of the PLSG is to support the growth of western Pennsylvania’s life sciences economy by investing in local life sciences technologies.
“Hitting the $10 million mark is a significant accomplishment for the PLSG and the life sciences industry in our region,“ said John Manzetti, PLSG president and CEO, in a statement. “We are making a significant impact on life sciences commercialization in western Pennsylvania: new company formation is up, new wealth is being created, and new products – with important, positive ramifications for human health and quality of life – are beginning to reach the marketplace.”
In addition to direct investments into companies, Manzetti said that the organization is working with more than 250 companies “to guide them through the difficult challenges they face in the early stages of company development.”
Pennsylvania Bio Offers Group Buying for Fisher Scientific Products
Pennsylvania Bio, an association that promotes the state’s biotechnology business, has reached an agreement with Thermo Fisher Scientific under which its members will have group purchasing power for Fisher Scientific’s laboratory products.
The agreement gives Pennsylvania Bio members access to the Fisher Scientific catalog, and it allows the organization to offer members a portal for electronic purchases, portfolio management, needs assessments, e-commerce initiatives, and inventory and chemical management, Pennsylvania Bio said in a statement.
Pennsylvania Bio estimates that the purchasing program could help its roughly 330 members realize savings of around 10 percent on its Fisher Scientific purchases.
NewBridge Pharmaceuticals to House Global HQ at DuBiotech
Dubai Biotechnology and Research Park said that NewBridge Pharmaceuticals has agreed to locate its global headquarters at the life science business park in the United Arab Emirates.
The agreement was signed by Steven Burrill, chairman of NewBridge Pharmaceuticals and CEO of Burrill & Company, and Abdulqader Alkhayat, executive director of DuBiotech.
Established by Burrill & Company, NewBridge is seeking to develop therapies to fight chronic diseases such as diabetes, obesity, cancer, and cardiovascular maladies in the Middle East, Africa, Turkey, and Caspian regions.
“NewBridge is the first of this new genre of companies that we aim to build and bring to the region,” Burrill said in a statement.
Initially, NewBridge will inlicence and commercialize approved therapeutics and devices. Later, it plans to expand its research, development, and manufacturing capabilities in the areas of small molecules, biologics, cellular therapies, and medical devices.
New Life Science Fund in Ireland Closes $117M Round
Newly launched Fountain Healthcare Partners said last week that it has closed its inaugural fund, Fountain Healthcare Partners I, with €75 million ($117 million) of committed capital.
The fund said in a statement that it is the largest dedicated life science venture capital firm based in Ireland.
Fountain will invest the majority of its capital in Europe and will have a strong emphasis on the life science sector in Ireland. The first close “significantly exceeded initial expectations” and the fund is now targeting approximately €100 million in commitments for its final close.
Fountain is headquartered in Dublin and has a second office in New York. "The purpose of our New York office is to maintain on-the-ground connectivity with the US life-science sector. Specifically this office will provide our firm and our investee companies access to people, intellectual property, partnering and exit opportunities, syndication capital, and deal flow," said Aidan King, Fountain's New York based partner.
The fund will invest €50,000 to €7 million per company and will focus on specialty pharmaceuticals, biotechnology, medical devices, and diagnostics.
According to Fountain, Ireland is Europe's “most established location” for global life science companies with more than 40,000 people employed in the sector and exports worth more than €27 billion.
Thirteen of the top 15 pharmaceutical companies and 15 of the largest 25 medical device companies in the world have substantial operations in Ireland.
Entrepreneur Launches $59M Medical Startup Fund in Wales
The UK’s Western Mail reported last week that biotechnology entrepreneur Sir Christopher Evans plans to establish a £30 million ($59 million) investment fund for medical projects in Wales.
Evans plans to invest the money into five or six businesses that he told the paper could eventually be valued in the region of £100 million.
Evans is chairman of the medical sciences investment house Excalibur and is one of Wales’ most successful entrepreneurs.
“The money will not be invested in anything outside medical science and it is there to be spent and invested over a three-year period. Most of the companies earmarked for investment will have been chosen within 24 months,” he told the Western Mail.
Study Finds Most Tech Entrepreneurs Aren’t Wunderkinds
A new study by the Ewing Marion Kauffman Foundation and researchers at Duke and Harvard universities has found that most US-born technology and engineering company founders are middle-aged, well-educated, and hold degrees from a wide assortment of universities — a finding counter to the popular perception of technology entrepreneurs as 20-something “wunderkinds launching businesses from college dorm rooms,” according to a statement from the Kauffman Foundation.
The study, which analyzed U.S. engineering and tech companies founded from 1995-2005, found that twice as many US-born tech entrepreneurs start ventures in their 50s as do those in their early 20s.
While Ivy-League graduates were found to achieve the greatest business success, 92 percent of US-born founders graduate from other universities, according to the study.
“Because entrepreneurship is an indicator of economic vitality in regions and across the country, this study raises important policy questions about how to foster greater tech entrepreneurship to boost economic growth,” said Robert Litan, vice president of research and policy at the Kauffman Foundation, in a statement. “Probably the most compelling fact in the study is that advanced education is critical to the success of tech startups.”
In 2005, the average sales revenue of all startups in the sample was around $5.7 million, employing an average of 42 workers. Startups established by founders with advanced Ivy-League degrees had higher average sales and employment – $6.7 million and 55 workers, respectively. Startups established by founders with high school degrees had average revenues of $2.2 million and 18 workers.
The study also found that the average and median age of US-born founders was 39 when they started their companies.
The top 10 universities from which US-born tech founders received their highest degrees are Harvard, Stanford, University of Pennsylvania, the Massachusetts Institute of Technology, University of Texas, University of California-Berkeley, University of Missouri, Pennsylvania State University, University of Southern California, and University of Virginia.
Around 45 percent of the tech startups were established in the same state where US-born tech founders received their education. Of the US-born tech founders receiving degrees from California, 69 percent later created a startup in the state; Michigan, 58 percent; Texas, 53 percent; and Ohio, 52 percent. In contrast, Maryland retained only 15 percent; Indiana, 18 percent; and New York, 21 percent.
Further information about the study is available here.
NCBC, Biofuels Center Present Biotech Leadership Award to Syngenta
The North Carolina Biotechnology Center and the Biofuels Center of North Carolina have awarded their third annual Industrial Biotechnology Leadership Award to Syngenta, an agricultural biotechnology firm with a research facility in Research Triangle Park, NC.
The award honors “outstanding technical achievement, business leadership, the translation of new technologies into commercial products, support for education, and community service,” according to a statement.
Syngenta was chosen from among 10 nominees by a committee that included representatives from the Biotechnology Center, the Biofuels Center, the NC Department of Commerce, and the NC Department of Agriculture and Consumer Services.
The selection committee cited Syngenta’s “commitment to innovative biotechnology research leading to enzymes useful in developing biofuels, its support of agriculture, [and] education and community service.”