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States Eying Stem Cells, Subsidies to Lure Biotech in 2008 Amid Real Estate Slowdown

Stem cells and subsidies will continue to dominate life sciences economic development news in 2008, if the top stories of the year that ends this week are any indication.
California’s acknowledged lead in stem cell research funding will face new challenges as Massachusetts gets set to spend $1 billion on life sciences efforts over the next decade, while the governors of New York and New Jersey try to get their states’ funding efforts on track — in the latter case, by seeking a second bond referendum to reverse a rejection delivered by voters in November.
And while California, New York, the question isn’t how much more money should be spent on biotech, but whether any should be spent in a state that is about to impose tolls on long-free Interstate 80.
Nationwide, commercial real state professionals will watch whether the largest landlords follow through on ambitious development plans at a time when much of the rest of the market has slowed down following the credit crunch.
BioRegion News previews the likeliest of the largest life sciences economic development stories taking shape in 2008, with more than a little look back at the past year’s stories:
Stem Cell Agency Welcomes New President; Reviews Grants
California’s stem-cell agency will set sail in 2008 on a new leadership course to be charted by Alan Trounson. The pioneer Australian stem-cell researcher agreed in September to lead the California Institute for Regenerative Medicine, succeeding a string of interim leaders stretching back to April, when Zach Hall resigned as president and CEO.
Hall’s resignation touched off a year of turmoil for CIRM, which included news that the state-created agency will face a full audit from Controller John Chiang following news reports that John Reed, a member of CIRM’s oversight board, lobbied for his research institute after it was denied a $638,000 grant.
Reed said through a spokeswoman that he later realized questions could be raised about his activity, which he initially reasoned was proper because he served on the Independent Citizens Oversight commission as an individual, not in his capacity as president and CEO of the Burnham Institute. CIRM also faced unfavorable newspaper editorials after it waited until a formal board meeting to disclose four institutions that joined Burnham in lobbying for grants despite having officials serve on the ICOC board.
On a brighter note, CIRM was assured of its future when California’s highest court refused in May to hear the arguments of plaintiffs who sued the state seeking to overturn the $3 billion, 10-year voter referendum allowing for state funding of stem-cell research, Proposition 71.
CIRM has awarded almost $260 million to 22 research institutions and universities since April 2006.
Commercial Real Estate
REITs Busy as Top-Tier Markets Foresee a Strong 2008
The new year will show if the nation’s top life sciences real estate investment trusts practice what they preach when they said in recent months they will step up their sales and leasing activity in 2008, even as the rest of the nation’s commercial real estate market is slowing down.
Alexandria Real Estate Equities says it is on track to sign leases with life science tenants at two life sciences campuses it is now constructing, Mission Bay in San Francisco and East River Science Park in New York City [See New York City, below]. The REIT also has several overseas projects planned for 2008, including completion of a two-building, 280,000-square-foot campus in China; and groundbreakings for a 4.5 billion rupee ($114.7 million) expansion of a 106-acre bioscience park in Bangalore, India; and the 30,000-square-foot first phase of its eventual 1.4 million-square-foot Edinburgh BioQuarter project in Scotland, a joint venture with Scottish Enterprise.
HCP, which changed its name in September from Health Care Property Investors, joined the ranks of life science REITs in August when it closed on a $2.9 billion acquisition of the 5.2 million-square-foot US life sciences portfolio of British-owned Slough Estates Group. Slough’s strongholds of the San Francisco Bay Area and San Diego saw plenty of property turnover last year, as the real estate arm of General Electric, Arden Realty, closed on a series of acquisitions totaling 7.75 million square feet [BioRegion News, July 16, 2007]. By year’s end Arden had begun delivering on its promise of selling off the life science properties to REITs; Alexandria shelled out $190 million for eight properties totaling a half-million square feet in San Diego.
BioMed Realty Trust expects to complete in 2008 the core and shell of a 320,000-square-foot expansion of its Landmark at Eastview R&D campus in the New York City suburb of Tarrytown, NY, as well as an 84,000 square-foot San Diego lab building that will serve as Illumina’s new headquarters. BMR will also reposition a 238,000-square-foot warehouse building on Forbes Boulevard in South San Francisco, which the company bought for $32.5 million in the third quarter.
South San Francisco and the rest of the Bay Area’s hot Peninsula sub-market finished 2007 with a 43 percent jump in average asking rents sought by landlords for office space (to $4.24 per square foot per month), and a 20 percent boost in industrial asking rents (to $.93 per square foot per month). However, R&D space asking rents stayed steady year-to-year, at $2.61 per square foot per month.
“As available product continues to diminish, competition for remaining quality space is expected to continue applying upward pressure on average asking lease rates,” CB Richard Ellis concluded in a report accompanying its statistics on the San Francisco region’s fourth-quarter life sciences market activity.
In the Boston region, lease rates should continue to rise during 2008, though not as sharply as in the two years from 2005 to 2007. That reflects new space coming on the market, two key properties of which will be completed this year by BMR — the 705,000-square-foot Center for Life Science in Boston’s Longwood Medical Area, and the 420,000-square-foot 301 Binney St. in East Cambridge, Mass.
“With new space coming on the market and some existing second-generation space becoming available as well, the rate of run-up of rents is going to stem a little bit,” Peter Bekarian, a vice president with Jones Lang LaSalle, told BRN.
Max Planck Sails to Groundbreaking, but Won’t be Only New Institute
Germany’s Max Planck Institute expects to break ground in the new year on a new research center near the Scripps Research Institute on the Jupiter campus of Florida Atlantic University. That follows an early Christmas gift from the state of Florida —approval of a $94 million subsidy comprising more than one-third of the state’s $250 million Innovation Incentive Fund, created last year and increased this year to stimulate development of larger projects in biotech and other technologies.
The state more than matched the $86.9 million for infrastructure approved by Palm Beach County officials.
The center would be Max Planck’s first institute in the US, and 79th overseas, and would focus on bioimaging research. Max Planck has projected the Florida facility would create 1,824 direct and indirect jobs over the next 20 years, and add $5.3 billion to Florida’s gross state product, measured at $610 billion in 2006 by the US Bureau of Economic Analysis.
Scripps will continue construction this coming year on its permanent facility, which broke ground in March 2007. It will rise within 100 acres of the FAU campus in Jupiter — a three-building, 364,000-square-foot campus set to open in the first quarter of 2009. Also continuing construction is the Burnham Institute for Medical Research, which in October broke ground on an $80 million, 175,000-square-foot campus in the Orlando. Fla., master-planned community of Lake Nona.
In 2008, Florida’s life sciences industry plans to celebrate the opening of at least one new research institute. The Torrey Pines Institute for Molecular Studies expects in December to complete an $80 million, 100,000-square-foot campus now under construction within the Florida Center for Innovation, part of the mixed-use, master-planned Tradition community in Port St. Lucie, Fla. The Florida project will complement, not replace, Torrey Pines’ facility in the San Diego suburb of La Jolla, Calif. 
H1-B Visas
Supporters Eye Higher Cap Uncoupled from Immigration Debate
Supporters of additional H1-B visas for life sciences and other tech professionals from overseas say their cause can prevail in 2008 — by uncoupling the issue from the wider and angrier debate over immigration reform.
Opposition from both Democrats and Republicans prompted the Senate to defeat an immigration bill that would have also raised the number of individuals eligible for H1-B visas from the current 60,000 to 115,000. The bill would have allowed eventual citizenship for the nation’s estimated 12 million illegal immigrants — an unwarranted amnesty, opponents argued. A Senate amendment raising the cap to 140,000 also went nowhere.
Since then, supporters of a looser visa cap have sought short-term relief by pursuing a separate bill devoted solely to H1-B, an effort that will continue this year: “If Congress just brought up a short-term legal immigration bill, it would pass overwhelmingly,” Robert Hoffman, vice chair of Compete America, a coalition of businesses, research institutions, and trade groups favoring a higher visa cap, said in an interview this month.
“The challenge is to try to move this without other interests trying to attach more controversial measures to the legislation. That’s really what’s slowing this down.”
Another challenge, Hoffman said, is distilling several ideas into a single bill. Supporters have yet to decide whether to include in a bill the re-issuing of unused H1-B visas granted in past years, or measures to reduce the backlog of green-card applications.
Patrick’s $1B Life Sciences Initiative Bill Heads for Finish Line
Gov. Deval Patrick should win in 2008 the approval he spent all this year trying to gain for his 10-year, $1 billion biotech bill. Patrick’s Life Sciences Initiative would set aside $100 million per year over 10 years on economic incentives to attract and retain biotech companies, subsidize research, and train future professionals [BioRegion News, May 14, 2007].
Patrick announced the bill in May, seizing on Boston’s hosting of the Biotechnology International Organization 2007 Global Conference. The bill drew initial supportive comments from House of Representatives Speaker Salvatore DiMasi (D-South Boston) and state Senate President Therese Murray (D-Plymouth). But by fall, legislative leaders made it clear to Patrick they wanted some say in the legislation.
Patrick initially resisted, even accusing lawmakers of discouraging Novartis from expanding in the state (it chose Singapore for a $700 million plant) by refusing quick action on the measure. But a month later, the governor joined DiMasi and Murray in announcing a timetable that sets final approval for February. The deal allows for the late January decision deadline first disclosed to BioRegion News by the chairman of the state General Assembly’s joint economic development committee, Rep. Daniel Bosley (D-North Adams) [BioRegion News, Nov. 5, 2007].
BU Finishing NEIDL Biolab, but Can Opponents Keep It from Opening?
Boston University expects the new year will bring the completion and opening of its $178 million, 192,000-square-foot National Emerging Infectious Diseases Laboratory, now taking shape within its BioSquare research park. While construction is 70 percent complete and progressing, the divide between the university and project opponents will delay further, and could ultimately scuttle, the opening of the facility once planned to open during the summer.
The latest blow to BU came Dec. 13, when the highest court in Massachusetts sided with opponents in finding the state’s approval of the project’s environmental under then-Gov. Mitt Romney as “arbitrary and capricious.” The Supreme Judicial Court directed BU to complete a new environmental study that the court would need to approve before the facility can open and conduct research.
Douglas Wilkins of the Cambridge, Mass., law firm Anderson and Kreiger, which represented several NEIDL opponents in the state case, told BRN the decision effectively blocks BU from obtaining additional state permits the lab needs, such as an industrial wastewater discharge permit, and thus blocks the university from opening the lab to conduct any but the lowest level of research: “Anything that requires a state permit, they’re not going to get a state permit without going through the process,” Wilkins said.

“With new space coming on the market and some existing second-generation space becoming available as well, the rate of run-up of rents is going to stem a little bit.”

BU responded to the SJC decision with a 29-word statement: “The biosafety lab and the research it conducts will save and not endanger lives. We are confident that the additional environmental impact study will satisfy the court.”
Wilkins could not address what effect the SJC decision will have on an ongoing federal lawsuit filed by opponents against BU, and also concerning the study of environmental effects. BU had hoped to address criticism of its environmental study through a risk assessment report it submitted in July.
With Massachusetts torn between backing the controversial project and backtracking on promoting life sciences activity in the state [See story above], Patrick’s Executive Office of Energy and Environmental Affairs commissioned a review of the risk assessment by an 11-member committee of the National Research Council, an arm of the National Academy of Sciences. The council slammed the risk assessment as “not sound and credible” and the product of flawed research [BioRegion News, Dec. 3, 2007].
BU responded by pledging to “stand ready to provide whatever information we can in order to respond to questions and concerns, and to document that the South End site is as safe as or safer than alternative locations” — but the university also withheld comment on what it would do if the federal and state lawsuits succeed in blocking BSL-4 research.
New Jersey
After Surprise Defeat, Stem-Cell Research Supporters See Success This Year
Supporters of state funding for embryonic stem-cell research in New Jersey are predicting 2008 will be kinder to them than 2007 was.
The supporters, led by Gov. Jon Corzine, were stunned on Election Day when a coalition of voters holding religious, moral, and anti-tax objections to that research prevailed over the governor, state-funded Rutgers University, and life science industry leaders in defeating a $450 million stem-cell bond referendum by a 53-47 percent margin. The defeat came despite two university polls showing voter support, one of them from Rutgers’ Eagleton Institute of Politics.
“We’re committed to getting stem cell research going in the state of New Jersey. We’re going ahead to try to raise money and get the institute established,” Wise Young, Richard H. Shendell chair in neuroscience at Rutgers, told BioRegion News this month. In addition to private and perhaps federal funding, he said, “we’re going to see if the state of New Jersey can help.”
To that end, Young and other supporters will seek legislative approval for a second stem-cell referendum — a decision lawmakers won’t likely make until the summer.
Young, the founding director of the WH Keck Center for Collaborative Neuroscience, joined Corzine and other officials in an October groundbreaking ceremony for the $150 million, 18-story Stem Cell Institute of New Jersey tower on Little Albany Street in downtown New Brunswick, paid for through a $270 million stem-cell capital project approved in 2006. That center is supposed to begin construction in earnest this year, with opening set for 2009.
New York
Alexandria, Columbia U. Hone Projects to Anchor NYC Cluster
Two future anchors of an expanded biotech cluster in New York City are set to take shape in the coming year.
But one of those anchors, Columbia University, could spend part of the year in state Supreme Court, if opponents make good on threats made earlier this month to sue the City Council over its approval of zoning to allow a $7 billion mixed-use project with 2.6 million square feet of new research lab space and 296,201 square feet of support space [See story, this issue].
“We believe that there is a lot of potential for us to halt the raising of [development] money and for us to halt the actual construction,” said Tom DeMott, leader of the Coalition to Preserve Community, told BioRegion News.
Further south and east of Manhattanville, Alexandria Real Estate Equities is constructing its 675,000-square-foot first phase of East River Science Park, on 3.5 acres sandwiched between Bellevue Hospital Center and New York University Medical Center.
Alexandria is expected in 2008 to announce its first tenants for the first phase — slated for completion in 2009 — of a campus approved for 1.2 million square feet of lab and office space.
SUNY Eyes $3B Research Program; Stem Cell Action Expected
The State University of New York will push this coming year for a $3 billion, 10-year program of subsidies for academic research in life sciences as well as physical sciences. The Empire State Innovation Fund was among recommendations included in an 85-page preliminary report issued Dec. 17 by the Commission on Higher Education, a 29-member panel appointed by Gov. Eliot Spitzer.
“It was identified by the commission as a way to spur research in New York state that is economically development driven,” said John Reid, the commission’s executive director, in an interview with BioRegion News days after the preliminary report’s release. “It is literally trying to draw the best research out of New York state that we can find.”
The preliminary report cited New York’s shrinking share of National Science Foundation academic research and development funding, from 10 percent in 1980 to 7.9 percent in the 2005 federal fiscal year: “Had New York State simply maintained its 10 percent share, an additional 27,600 jobs would have been generated in the state's economy.”
A final report is due from the committee in June that is expected to flesh out the proposals further. Among questions: How to define “proposals with the most economic development promise,” which the preliminary report called the key criterion for awarding the innovation fund’s money.
Spitzer will be hard pressed to fund the research program. As it starts work this winter on a budget for the fiscal year starting April 1, the state’s legislature will have to plug a projected $4.3 billion shortfall. The governor’s ability to do that will be hampered by his feud with state Senate Majority Leader Joseph Bruno (R-Brunswick) over the governor’s use of state troopers to fish for damaging info on Bruno, among other issues.
But Spitzer should fare better in advancing the state’s nascent stem cell research program. This past year Spitzer, Bruno and Assembly Speaker Sheldon Silver (D-Lower East Side, Manhattan) committed $600 million over the next decade to a new Empire State Stem Cell Trust that will collect and distribute funds for stem-cell research — $100 million for the trust, plus $50 million a year over 10 fiscal years starting in 2008-09. Spitzer later named 11 members to committees comprising the Empire State Stem Cell Board, charged with approving state grants for stem-cell research.
NIH Budget
Look Past Election Day for Congressional Accord on a FY2009 Budget
If President Bush and Congress couldn’t agree on a budget for the National Institutes of Health until three months into the current fiscal year, the outlook for quick action on an FY 2009 budget during a presidential and congressional election year is even bleaker.
Congress ended 2007 by budgeting $28.9 billion for NIH programs, just $133 million or 0.46 percent above the previous year’s level. (Technically NIH’s budget is $329 million higher, but that reflects $196 million earmarked for the Global AIDS Fund).
The result reflected Bush’s partial success against both Democratic-controlled houses of Congress. Earlier this year, they approved a $1.1 billion hike in NIH spending as part of a larger health and education spending bill vetoed by Bush. But the president’s initial spending plan called for about $600 million less than the agency’s 2006-07 budget of $28.8 billion.
“We think this is the best that we’re going to be able to do this year,” Jon Retzlaff, director of legislative relations for the Federation of American Societies for Experimental Biology, told BioRegion News this month.
AsBush and Congress jockey for political advantage in 2008, next year’s NIH budget won’t likely take shape until after next New Year’s Day, Retzlaff said.
“The president was absolutely uncompromising. He drew a line in the sand, and Democrats had no choice but to come down to that level. Why [would Democrats] work with someone if they’re going to take the same approach next year? Why not just put the agencies on a continuing resolution until the elections are over and hope that you can negotiate in good faith?”
North Carolina
Biotech Center Will Seek More from State, Establish New Centers
The state-funded North Carolina Biotechnology Center and its president Norris Tolson have a pair of top priorities for 2008: Build upon the double-digit funding increase secured through the state legislature this past summer, and establish three new centers tied to emerging technologies beyond the life sciences.
Tolson promised to boost funding for the center and for economic development programs that benefit life sciences companies through contacts he developed during 14 years of government service, and 28 years as an agricultural chemical executive with DuPont, from which he retired in 1993.
Tolson joined the biotech center as its president in June, ending a search that began after Leslie Alexandre stepped down in January; she went on to become director of corporate relations for healthcare and life sciences at North Carolina State University. Tolson is a very familiar face in state government circles given his previous position as secretary of revenue under Gov. Michael Easley, as well as previous positions as secretary of commerce and secretary of transportation under former Gov. Jim Hunt, and as a state representative from Edgecombe County from 1994 to 1997.
“Many of the folks in this legislature that we’re working with are old colleagues of mine from when I was in the General Assembly,” Tolson told BRN in June. “I think we can find ways to invest together.”
Also in 2008, the biotech group is expected to work on launching a new North Carolina Center for Advanced Medical Technologies, using a three-year strategy it unveiled in September with the North Carolina Biosciences Organization.
The biotech center will also join the Piedmont region’s three largest universities — North Carolina Agricultural and Technical State University; the University of North Carolina at Greensboro, and Wake Forest University — to establish the North Carolina Center of Innovation in Nanobiotechnology. The three teamed up to win a $100,000 planning grant from the biotech center toward COIN, one of several new centers the center began planning in 2007.
The Piedmont region’s largest research campus, the Piedmont Triangle Research Park in Winston-Salem, NC, is expected in 2008 to reveal details of a redevelopment plan for 2.19 million square feet of space within 74 acres comprising the park’s northern district. PTRP is co-developing the plan with Baltimore-based Struever Bros. Eccles & Rouse [BioRegion News, Dec. 3].
Rendell Eyes Third Try for $500M Salk Bill
Gov. Edward Rendell will decide this year whether to spend a third straight year pursuing legislative approval for his proposed Jonas Salk Legacy Fund, which would boost state biotech spending by $500 million.
Rendell first proposed the Salk fund in 2006, and re-introduced it this past year, each time running into concerns by lawmakers about too much spending — a concern magnified by a strong anti-incumbent movement following the 2005 legislative pay raise, and more recently, the rise of opposition to imposing tolls on I-80 as agreed over the summer by Rendell and state legislators. The state Senate’s Republican majority would limit new state life science spending to $13.4 million — half to stoke venture capital investments in early-stage life science companies, the rest to fund the state’s three Life Science Greenhouses in Philadelphia, Harrisburg, and Pittsburgh.
Kevin Ortiz, a spokesman for Pennsylvania’s Department of Community and Economic Development, said officials are discussing whether to push for Salk a third time: “It’s something that the governor is going to continue to pursue, something that at some point is going to be pursued, most likely through a budget cycle, but nothing has been set in stone.”
One likely reason for Rendell’s hesitation: 2008 is an election year for all of Pennsylvania’s state representatives and half its state senators, as well as for attorney general, auditor general, and treasurer.

The Scan

Genome Sequences Reveal Range Mutations in Induced Pluripotent Stem Cells

Researchers in Nature Genetics detect somatic mutation variation across iPSCs generated from blood or skin fibroblast cell sources, along with selection for BCOR gene mutations.

Researchers Reprogram Plant Roots With Synthetic Genetic Circuit Strategy

Root gene expression was altered with the help of genetic circuits built around a series of synthetic transcriptional regulators in the Nicotiana benthamiana plant in a Science paper.

Infectious Disease Tracking Study Compares Genome Sequencing Approaches

Researchers in BMC Genomics see advantages for capture-based Illumina sequencing and amplicon-based sequencing on the Nanopore instrument, depending on the situation or samples available.

LINE-1 Linked to Premature Aging Conditions

Researchers report in Science Translational Medicine that the accumulation of LINE-1 RNA contributes to premature aging conditions and that symptoms can be improved by targeting them.