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UF Bets EDA's $8.2M 'Tropical Storm' Award Will Help Nurture Startups in Planned Innovation Hub

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One year ago next week, Tropical Storm Fay whipped parts of the east-central Florida peninsula with winds of 65 to 75 mph and deposited up to 26 inches of torrential rain — the most rain dumped on the Sunshine State in nearly a decade.

The storm killed five residents of Florida, where power to 93,000 homes was knocked out, including 15,000 homes that were flooded and caused $195 million in damage.

All told, Fay caused $560 million in damages in the US, Cuba, Haiti, and the Dominican Republic, according to a Feb. 8 report by the National Hurricane Center.

As a result, the University of Florida, which has a campus in Gainesville, qualified for a share of the $400 million in federal funding — namely a second supplemental appropriation from the US Economic Development Agency — toward projects deemed to promote long-term economic recovery in areas damaged by natural disasters.

UF has taken advantage of the opportunity, in hopes of benefiting future startups from the university in the life sciences and other technologies. This week, EDA awarded $8.2 million to UF toward its planned 45,000-square-foot Innovation Hub, set to rise in Gainesville in 2011 on what is now a parking lot on the campus of Shands AGH community hospital. The grant is among the largest ever awarded by EDA's regional office in Atlanta.

The Innovation Hub will house UF’s Office of Technology Licensing and UF Tech Connect, the main commercialization offices for the university; and feature office, wet lab, and dry lab space for startups, along with conference rooms and other amenities that include alumni-giving networks, entrepreneurial education and mentoring for UF faculty and students; and investment and government grant workshops.

The Hub would expand a tech-commercialization effort that until now has emphasized nurturing life-sciences startups 14 miles north of Gainesville in Alachua at the Sid Martin Biotechnology Incubator. Its 40,000-square-foot facilities are tailored to life-sci startups, including 22 wet labs, $1 million of shared equipment, an animal facility, pilot-fermentation facility, and climate-controlled greenhouses.

Patti Breedlove, associate director of the Sid Martin Biotechnology Incubation Program, told BioRegion News two of the incubator's eight resident life-sci companies are graduating from it this month: Xhale, a developer of pharmaceuticals and health monitoring and diagnostics based on inhaled breath and novel vapors; and Integrated Plant Genetics, a developer of genetic technologies for horticultural, agricultural, and forest tree improvement and arboreal disease control.

One of the incubator's largest companies — Banyan Biomarkers, a maker of in vitro diagnostic products to help traumatic brain injury — is expected to graduate next year.

Sid Martin sits 15 miles north of UF's Gainesville campus, within the 200-acre Progress Corporate Park. The park's developer group, Innovation Partners Limited, has added three buildings totaling about 100,000 square feet in the past two years, housing tenants that include several graduates of the biotech incubator. This past spring, the 33,000-square-foot Progress Two and 33,000-square-foot Progress Three buildings were completed by IPL.

"[The Innovation Hub] will put a big spotlight on UF's commercialization activities, and I think will draw a lot more talent and investment to town here, which will benefit all of our companies," Breedlove said this week.

She said decisions by biotech companies about whether to locate in the Innovation Hub or Sid Martin "will be driven by two things: One, do they want to be near campus? Are they at the stage where they're working closely with their researchers on campus? They may be attracted by the enriched programmatic environment of the Hub, which will have a lot of environmental programs," she said.

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"The companies that want to be further from campus don't need to be in close proximity to their founders, and want more expansion space, I think, are likely to come up here," Breedlove added. "Or, [if they] have highly specialized needs for animal facilities, more scientific equipment than what will be offered at the new site, [they] will also come up here" to Sid Martin.

UF has been a successful player in tech commercialization among US academic centers in recent years. In its 2008 academic year, it had about 300 new invention disclosures, executed 73 license agreements, launched 12 startup companies, filed 287 patent applications worldwide, won 52 US patents, and generated about $53 million in licensing income, Jane Muir, associate director of UF's Office of Technology Licensing, told BRN.

That compares with just over $48 million the previous year, during which UF had 327 new invention disclosures, executed 74 license agreements, launched nine startup companies, filed 162 patent applications worldwide, and won 77 US patents, according to the Association of University Technology Managers' US Licensing Activity Survey: FY 2007.

Muir told BRN sister publication Biotech Transfer Week [See story in current issue] that UF spends $600 million a year on research. That figure is well above the $473.8 million recorded by AUTM for FY 2007, and $459 million AUTM listed for in its FY 2006 survey.

BRN earlier this week interviewed Muir, the principal author of the successful EDA grant, about the Innovation Hub and its future role in nurturing startups. Following is an edited transcript of that interview:

Where does this project tie in with UF's Sid Martin Biotechnology Incubator? Is this an extension of Sid Martin for another part of the state?

It's a completely separate project. Sid Martin is UF's biotech incubator, and this will be the Florida Innovation Hub at UF.

Would the Innovation Hub have a broader tenant roster than biotech?

Yes, much broader. What we're envisioning at the Hub is that while there will be incubator space, it's going to be much bigger and broader than that. It will be the home for several of the entities at the university that are responsible for technology commercialization, and creation of new businesses. And that is our office of technology licensing, and then also our UF Tech Connect program.

What's the distinction between Tech Connect and OTL?

The office of technology licensing, we're responsible for reviewing all the new discoveries that happen on campus — of which there's about 300 every year — and then making decisions about patenting and licensing. I'm also the director of the Tech Connect program, which is housed in the office of technology licensing, but it focuses on the technology-based startup companies. We have a very nice synergistic relationship, because about 10 to 15 percent of all new discoveries are actually appropriate for startup companies. And so, in the tech licensing office, once we identify those, we then push them over into our Tech Connect program. And that is where we begin the matchmaking process of finding the experienced entrepreneurs to hook up with the scientists, getting the business plan created, and also refining the funding for the company.

When you say this will be broader than biotech, what types of businesses in what types of technologies will the Hub be able to accommodate?

While we will have wet lab space in the facility, because a good share of what comes out of the University of Florida is life sciences [startups], we'll also have some dry labs. We'll have office space. So there will be any of the technology-based companies. We've had, in the last year and a half or so, a lot of [startups] coming out of engineering and material sciences.

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Would that include nanotechnology?

We've got nanotech. We've got info tech. We've got med device companies.

Will there be any particular focus on the medical-device sector, as a complement to Sid Martin?

We certainly have quite a plethora of med-device technologies coming out these days. With the funding environment being what it is, they seem to be more palatable to venture capitalists, because they have a shorter timeframe to market. So we think that the interest in those particular opportunities will continue.

What's the projected proportion of life-sci companies within the pipeline of startups the Innovation Hub will serve? Would biotech account for, say, a quarter or a half of the startups?

I would envision probably about half.

Of the total 45,000-square-foot facility, how much of that will consist of wet labs?

We will probably have about six to eight wet labs in the building.

When do you project the Hub to be filled after it opens in 2011?

Certainly that will be our goal. Whether or not that's going to be reality, it would sure be a lot easier if the funding environment was different. We are planning to be in the facility by December of 2011. And I think it's very realistic to assume that we will have at least half if not more of the facility occupied. But I don’t have a crystal ball, so it's hard to say.

What I can tell you is that we recently had a private developer who built graduation space in Alachua for the companies that were coming out of our biotech incubator — a 40,000-square-foot facility, which was completely pre-leased before the doors ever opened.

What effect will further development in Alachua have on the Innovation Hub project? Will the Hub negate the need for additional space there?

Absolutely not … if we're doing our job right. The goal is that this will be the Florida Innovation Hub. We're envisioning a much bigger, broader program. In addition to the actual facility, we're hoping to bring forth lots of programmatic activities that will only accelerate our ability to create these companies.

For example, we're going to be creating a mentoring program, whereby we can bring in, and tap into our very large and devoted gator alumni network, and those individuals that have the experience, that they are willing to bring to bear on some of these startup company opportunities — matching them with those opportunities. We're going to be having programs whereby we'll bring in students. We've got some of the best and brightest students, so we'll be having them help with market research, and assessing opportunities, etc. We're going to have a common space so that we'll be able to host a lot of both training and networking opportunities. We can bring our faculty in, for example, and every year, a couple of times a year, we do a series called Entrepreneurship for Scientists and Engineers. We can host networking events for CEOs and VCs — just a ton of those kinds of programmatic activities that will accelerate our ability to be successful.

A lot of [startups] are going to be life sciences companies that will need more space, and more of the core equipment that won't be available in this particular facility. The biotech incubator has over $1 million of shared equipment. It's in the incubator itself, but a lot of the companies that graduate to private space remain affiliate members, so they can have access to that equipment.

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Again, if we're doing our job right at both of the facilities, the goal is to create sustainable, profitable companies that are going to continue to grow and create the jobs for turning this economy around. The goal is to expand the need for this graduation space, and continue to grow these companies into successful, mature companies.

If the Innovation Hub is indeed in Gainesville, what would draw companies to expanding back in Alachua? Wouldn’t companies graduating from the Hub be more likely to want to stay in Gainesville?

That's going to be up to them. There is a biotech cluster up in Alachua that employs about 1,300 people. That's certainly going to have its appeal to certain types of companies. And at the same time, as we continue to create more opportunities for companies to grow into the Gainesville area, there are going to be those companies that will find it important to be close to the university, and to have close access to the expertise that resides there, and making it easy for them to come and go. I think there's going to be demand for both [Gainesville and Alachua].

Is the breadth of tech startups at the Innovation Hub a response to the change in the VC market?

Oh, no. This Florida Innovation Hub — basically the impetus is, taking advantage of an opportunity that presented itself. We've been talking for a long time about creating incubator space closer to campus. And when we found out about the national disaster relief money, we took advantage of it. There was $400 million set aside across the country. And part of the qualifier was, you had to have certain qualifying events that had a certain number of FEMA claims. EDA is known for their success in funding incubators, and the number of jobs that are being created as a result. So, when we found out about the funding, we were probably one of the first ones to put forth a proposal. And they looked very favorably at our proposal.

How long was the pursuit of EDA funding in the works?

The announcement actually hit the street the end of February. We submitted our proposal in May.

What's the timing for breaking ground, for beginning work on the project?

The RFP stated that [we have] to break ground within nine months. Completion of the project is required within 18 months. We're looking at December 2011 as the move-in date.

That would mean you're looking at the middle of 2010 to break ground?

Yes. I would say early second quarter.

How much of the cost of the Hub does the $8.2 million grant cover?

Part of it. It’s actually one of the larger construction grants to come out of [EDA's] Atlanta regional office. The university is putting up an additional $5 million.

The $13.2 million will be the total cost of the project, then?

That's correct. Now we don't know that that's necessarily enable us to build out the entire 45,000 [square feet], but it will do the majority of it, that's for sure.

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