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Ohio Officials Ponder How to Spend $150M to Create Bio Jobs, Bio-Fuels

Ohio officials have begun discussing how to spend $100 million set aside for growing the state’s biomedical workforce over the next five years, plus another $50 million for bio-based alternative sources of energy, the state’s Department of Development said last week.
Both plans fall under a nearly $1.6 billion stimulus bill recently signed into law by Gov. Ted Strickland.
The $100 million portion of the initiative will be in addition to $23 million to be made available for life sciences-research projects later this year under Ohio’s $1.6 billion, 10-year Third Frontier Project, created to expand the state’s high-tech research capabilities and promote company formation in the life sciences and other tech specialties.
Late last month, the state commission that oversees Third Frontier awarded another $23 million from the Ohio Biomedical Research Commercialization Program for six biomedical research projects slated for funding in the fiscal year that ended June 30.
Unlike the Third Frontier, which focuses on research and tech commercialization efforts, the stimulus measure is intended to generate a total 57,000 jobs over the next five years in a number of industries deemed by the state to be fast-growing. In addition to spending $100 million over three years to stoke investment and jobs in “biomedical” or life sciences jobs, the law will set aside $50 million over three years for “bioproducts” jobs to be produced by drawing farmers into the growing alternative energy industry.
In addition to the biomedical and bioproducts spending, the stimulus package calls for the state to spend $200 million in Clean Ohio Revitalization funds to clean up polluted urban properties or “brownfields, and another $200 million in Clean Ohio Conservation funds to preserve farmland and green space — but only if state voters approve extending the life of the Clean Ohio program in a Nov. 4 referendum.
Also in the stimulus plan: $400 million for public works infrastructure projects such as roads, bridges, and sewer and water systems; $250 million to create a new student internship and co-operative education program intended to keep the state’s smartest students from moving out of the state; $150 million for solar, wind and other renewable forms of energy; $120 million in historic preservation tax credits; and $100 million for logistics and distribution businesses.
Ohio’s Department of Development will spend the summer establishing working groups of businesses and industry groups in economic sectors covered by the new law, hoping they will help officials in establishing criteria for funding biomed and bioproducts projects, as well as projects addressing renewable energy, logistics and historic preservation.
“The job stimulus money is targeted toward short-term economic growth, whereas the Third Frontier funds traditionally go toward the research and development end of things, projects that may need 10 to 15 years to come to fruition,” Kelly Schlissberg, a spokeswoman for Ohio’s Department of Development, told BioRegion News last week.
“Our timeframe that we’re looking at now, as far as when we can get these funds out, and when we’re going to have the programs ready, that’s what we’re in the process of doing right now,” Schlissberg said. “Our goal is having the programs ready to go, and funding being ready to start being distributed, by probably mid- to late-September.”
Uses for the funding could range from economic subsidies to help recruit companies to Ohio, or helping the state’s existing companies expand, or training workers for life sciences jobs.

“It’s the nature of the process that it tends to favor more academic-oriented research, but we have been pushing them to do more applied research.”

Among groups looking to work with economic development officials is the state’s life-sciences industry group. BioOhio spokesman Matt Schutte said last week his group had offered the state recommendations for spending the biomedical money. He said BioOhio would not discuss those recommendations, which had been among ideas sought by state economic development officials.
“We’re excited about [the stimulus plan]. It’s just [that] there are a lot of unknowns. It’s a little early to really get into how the program criteria are going to be developed, how it’s going to be financed, who is going to be eligible to participate,” Schutte told BRN.
Creating biomedical jobs is among goals of the $1.57 billion economic stimulus package — officially called House Bill 554, available here — that Strickland signed into law on June 12.
Strickland, a Democrat serving his first term, had initially proposed a $1.7 billion stimulus designed to help create 80,000 jobs, but scaled back his plan in a deal with the Republican legislative leaders who control both houses of the General Assembly. Strickland has promoted the stimulus as an essential tool for reversing the state’s year-to-year job shrinkage stretching back almost two and a half years.
During the year ending in May, Ohio lost a net 14,000 jobs, bringing the state’s total non-farm employment to more than 5.6 million. The Buckeye State finished 2007 with a net statewide loss of 9,600 jobs over 2006, and lost another net 10,400 jobs in 2006 over 2005.
HB 554 will create two new programs designed to generate biomedical and bioproducts jobs. Both programs will be overseen by the Third Frontier Commission, which oversees its namesake initiative.
Third Frontier has been busy recently on the biomed front. On June 26, the commission announced awards totaling $23 million to six public-private research groups, to be paid through the biomed research commercialization fund’s fiscal year 2008 funds:
  • Diagnostic Hybrids, Case Western Reserve University's School of Medicine, and Apath — $5 million to further develop a yeast-based cloning system for viral diagnostics/treatment monitoring and to market these trials to hospitals, clinicians and pharmaceutical companies;
  • The Cleveland Clinic's Clinical Tissue Engineering Center, Akron General Medical Center, Case Western Reserve University, University of Akron, and University of Cincinnati — $4.9 million in funding to expand its network and programs beyond musculoskeletal applications in the areas of burn and scar care, wound healing, and nerve repair;
  • Case Western Reserve University, Copernicus Therapeutics, and Polgenix — $3.9 million for the application of three complementary activities: development of nanoparticles for treatment of cystic fibrosis and retinitis pigmentosa; commercialization of a two-photon ophthalmoscope for early detection of retinal disease; and development of contrast agents for the detection of clean margins during breast cancer surgery;
  • The Cleveland Clinic, NASA Glenn Research Center, Ohio State University, Case Western Reserve University, and Makel Engineering — $3.8 million to develop a nitric oxide sensor that will enable asthma patients to monitor their asthma at home;
  • The Cleveland Clinic, Case Western Reserve University, and the University of Toledo — $3 million to develop small molecules that can enhance repair of the brain in multiple sclerosis with the goal of both delaying progression of disability and reversing it; and
  • The Cleveland Clinic's Lerner Research Institute, Ohio Willow Wood, and Cleveland State University — $2.1 million to develop a more functional prosthetic limb for transfemoral amputee soldiers.
For the second time in the history of the 5-year-old program, an Ohio-based life-sciences company will lead one of the grants. The OBRCP has traditionally named a university or non-profit research institution to head funded projects.
“It’s the nature of the process that it tends to favor more academic-oriented research, but we have been pushing them to do more applied research,” Marc Cloutier, senior advisor for biotechnology for the Ohio Department of Development, told BRN sister publication Biotech Transfer Week [BTW, July 2].
Third Frontier intends to award another $23 million in biomed research projects this fiscal year, according to a presentation posted on the initiative’s web site. The commission will issue formal requests for funding proposals in September, set a December deadline for receiving RFPs, review proposals through March 2009, and decide award winners the following month.
As a result of the stimulus plan, the commission will award loans, loan guarantees, or grants to businesses or not-for-profit entities to develop and commercialize:
  • “Biomedical and biotechnological products, processes and applications, including medical devices, diagnostics, informatics, therapies, and drugs.”
  • “Bioproducts, including biopolymers, chemicals, and advanced materials that use biomaterials and renewable agriculture resources, through efforts including, but not limited to, agribusiness and the agricultural industry in Ohio, state and local government entities and agencies, educational institutions, or research organizations and institutions.”
For the new Ohio Biomedical Development Program, the stimulus act would spend $40 million this fiscal year, another $40 million in fiscal year 2010, and $20 million in FY 2011. The new Ohio Bioproducts Development Program would be funded at $20 million this fiscal year, $20 million in FY ’09 and $10 million in FY ’10.
Days after Strickland signed the stimulus bill into law, the 13-member Ohio Agriculture to Chemicals, Polymers, and Advanced Materials Task Force convened by state officials made public the state’s goal in building up bioproducts. The panel’s vehicle was a 45-page report recommending that Ohio wed its agricultural industry with its chemicals, polymers, and advanced materials industries to create a world-leading producer of agbioproducts.
“The growing biofuel and bioenergy sectors will need to extract the most value from its biomass resources” usable for producing energy, such as crop residues, wood biomass, livestock manure, municipal and food processing wastes, the task force concluded in its report. That biomass, the panel added, “will mean not only creating biofuels and energy, but will also mean producing higher value materials such as specialty chemicals and polymers.”
The task force’s Report and Recommendations to the General Assembly and the Governor, available here, recommends:
  • Promoting biomass production on “marginal” lands such as reclaimed strip mines;
  • Creating incentives for agbio akin to those targeted to biofuel makers;
  • Creating a new Office of Ag Bio-Business Competitiveness to assist businesses and measure the state’s performance against other states and nations; and
  • Teaming up the state development and agriculture departments to develop an Agbioproducts Technology Center, possibly within the existing Ohio Bioproducts Innovation Center.
The stimulus plan’s total $150 million for biomedical and bioproducts would come from $230 million the state originally collected in a Tobacco Prevention Foundation Endowment Fund. That fund will be liquidated and its proceeds transferred to a new “Jobs Fund.”
The legislation also creates new seven-member advisory boards in biomedicine and bioproducts, both to consist of experts in the industries to be appointed by Strickland and leaders of the General Assembly. The state must provide office space for both advisory boards, whose members will serve without pay, but can be reimbursed for expenses connected with their duties.
In addition to creating the advisory boards and the biomedical and bioproducts programs, Strickland used the stimulus plan to offer additional support to the state’s life sciences industry. The governor used his line-item veto to remove from the bill an amendment that would have prevented any of the $100 million in biomedical funding from being used on research into human cloning. The bill defined cloning as creation of a “human zygote, human blastocyst, or human embryo by any means other than the fertilization of a human egg by a human sperm.”
The amendment, introduced by state Sen. Steve Buehrer (R-Delta), passed both the Senate and a joint House-Senate conference committee; Republicans control both houses of the General Assembly.
In a veto message, Strickland said that he opposed human cloning, but contended that Buehrer’s amendment would “severely limit scientists' ability to conduct potentially lifesaving stem cell research.”
Citizens for Community Values, a Cincinnati-based group dedicated to promoting “Judeo-Christian” moral values across Ohio, took issue with the amendment veto in a statement on its web site: “Governor Strickland would sacrifice nascent human life in order to boost Ohio’s economy.”
“All human life is precious and deserves protection under the law,” declared CCV, which is associated with the evangelical Christian ministry Focus on the Family and the “Judeo-Christian” public policy group Family Research Council.
In May, the stimulus plan’s biomedical portion came under scrutiny from a policy research group focused on “issues that matter to low- and middle-income workers.” Policy Matters Ohio argued that the industry should not be exempted from a provision of the bill requiring funding recipients to set performance measures, and report their progress in meeting them.
“These standards should be applied not just to the co-op/internship program, but also to the other new programs for logistics and distribution, bioproducts, biomedicine, and advanced energy,” said Jon Honeck, a senior researcher based in the Columbus office of Policy Matters Ohio, in his May 19 testimony before the state House of Representatives’ Finance and Appropriations Committee.
State lawmakers came to agree with Honeck and Policy Matters Ohio, amending the bill to let state funding recipients in all four industries cited by Honeck and Third Frontier agree to “performance measures and reporting requirements” in return for state aid. The state has yet to spell out how it will measure performance: Through a statewide policy, or a case by case basis?
“It is our hope that there will be a fairly set policy,” Honeck told BRN in an interview last week. “How they decide to implement it, in terms of wiggle room on any particular project, is, I think, up to administrative discretion.”

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