Florida Senate Joins House in Eliminating Funding for Innovation Incentive; Royalty Model Under Review
Florida’s state Senate has joined the state House of Representatives in eliminating funding next fiscal year for the Innovation Incentive program, a key economic development incentive credited with attracting a half dozen research institutes to the state.
The state Senate had approved $25 million for Innovation Incentive when it passed its version of a budget for the fiscal year starting July 1 earlier this month [BRN, April 7]. But with lawmakers scrambling to plug a $2 billion shortfall blamed on the wobbly economy and a consequent drop in sales and mortgage taxes, a conference committee of state senators and representatives agreed to eliminate funding for the program altogether — as done by the House of Representatives when it passed its budget bill.
“It was decided that since $25 million would really not do anything significant (unlike the past appropriations in the hundreds of millions), the funds that were initially allocated by the Senate were disbursed elsewhere,” Gregory Giordano, chief legislative assistant to Fasano, told BRN via e-mail last week.
The program received $200 million in the 2007 fiscal year, and $250 million in the current fiscal year, set to end June 30. Lawmakers will not use one-shot funds to make up for the general revenue previously pumped into Innovation Incentive, Giordano said: “Unfortunately there are no non-recurring dollars available to dump into the Incentive Program.”
Instead, lawmakers hope to create a new source of funding for the program through the portion of royalty payments that research institutes will have to pay the state under a bill that passed the Senate earlier this month and is under review by the House. The House measure [HB 7111] requires fund recipients 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 of $155 million at that benchmark or the expiration of their economic deals, whichever is earlier.
The Senate bill [SB 2778] requires royalty payments of between 10 and 15 percent to the state — of which 90 percent must 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 would be deposited into the Building Florida’s Future Revolving Loan Guarantee Trust Fund.
“The upside of all this is that with changes to the royalty payments to the state, the fund will be built up again in the future,” Giordano said.
Innovation Incentive is credited with bringing to Florida the Burnham Institute for Medical Research, the Torrey Pines Institute for Molecular Science, SRI International, the University of Miami’s Institute for Human Genomics, and Germany’s Max Planck Institute.
With Pneumonia Drug Past Phase III, Theravance to Idle 115 People
Theravance will lay off 115 employees — about 40 percent of its work force — across all departments as part of a restructuring disclosed last week by the South San Francisco biopharmaceutical company within a press release announcing its first-quarter financial results.
Theravance CEO Rick Winningham said the completion of Phase III development activity on the anti-pneumonia drug telavancin will lead to "certain work force changes" to focus on other drugs, a new drug application and discovery programs starting in the second quarter. The layoffs will cost $5.8 million, most of it to be spent in the second quarter, but are projected to yield $17 million in annual savings.
Affected employees will be eligible for a severance package that includes severance pay, continuation of benefits, counseling and job-search help, the company told the San Francisco Business Times.
TEDCO Tech Transfer Fund Awards $75K to Two Early-Stage Life Science Companies
Two Maryland life sciences companies have received grant funding toward commercializing their technologies from the Maryland Technology Development Corp., also called TEDCO, through its Maryland Technology Transfer Fund.
TEDCO awarded $75,000 to Expression Pathology, a Gaithersburg, Md., company working with the US National Institutes of Health to develop new technology to discover and measure protein biomarkers in cancer tissue. TEDCO also awarded $50,000 to ChromoTrax of Frederick, Md., which is developing technology for diagnosis and treatments of patients with genetic-based diseases in collaboration with the University of Maryland.
The grants, announced last week with two other grants awarded to other tech businesses, mark the second funding round by TEDCO to the life sciences companies.
NC’s Council for Entrepreneurial Development to Present Biotech 2008 in Winston-Salem
The Council for Entrepreneurial Development will present Biotech 2008, a two-day conference to take place May 19-20 at the Benton Convention Center in Winston-Salem, NC.
Registration is $275 for members of CED, the Biotechnology Industry organization and its North Carolina chapter, NCBIO; $375 for non-members; $175 for university faculty and government employees; and $75 for students. More information is available here.
Featured speakers include former North Carolina governor James Hunt; Frederick Frank, vice chairman and director of Lehman Brothers and chair of both the Irvington Institute for Immunological Research and the National Genetics Foundation; John Maraganore, president and CEO of Alnylam Pharmaceuticals in Cambridge, Mass.; and Edward Saltzman, founder and president of Defined Health in Florham Park, NJ, a business development and disease-area strategy consultancy for the pharmaceutical industry.
Panel topics will include North Carolina-based initiatives and innovation centers, partnering, challenges for biotech startup, strategies for financing biotechnology development, the paradigm shift in US Food and Drug Administration approval, and globalization’s impact on the life sciences.
Conference co-chairs are Sue Cole of Granville Capital in Greensboro, NC; Vipin Garg, president and CEO of Tranzyme Pharma in Durham, NC; and Terry Conrad, president and CEO of Merz Pharmaceuticals in Greensboro.