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Feature Articles : Sep 1, 2011 (Vol. 31, No. 15)

Global Incentives Seek to Buoy Innovation

BIO2011 Highlighted Regional Perks Designed to Rapidly Move Advances from Lab to Market
  • Vicki Glaser

Global representation at the 2011 BIO meeting was extensive. Countries, regional clusters, individual states, research consortia, and universities each showcased the advantages of its infrastructure, resources, location, economic incentives, workforce, and cultural characteristics that make it attractive to entrepreneurs and young companies as well as established players in the biotechnology and pharmaceutical arenas.

While many recent initiatives intended to stimulate local biotech innovation and commercialization stem from government initiatives and public monies—a top-down approach—other sources of funding, partnerships, and consortia are industry driven.

Overall, the emphasis across the globe is on building infrastructure and establishing clusters of technology-based R&D, expertise, and services together with the funding and guidance needed to shepherd promising discoveries to the market.

An example was the announcement by Montgomery County, Maryland, of a new local initiative intended to supplement state and federal funding resources and attract new biotech companies to the region.

The county, through its Department of Economic Development, is part of the BioMaryland public/private partnership. It boasts at least 330 entities in its biotech cluster including the NIH, the FDA, the 300-acre Shady Grove Life Sciences R&D Park, several regional innovation centers, and more than 300 life science companies.

The Maryland Biotechnology Center offers a range of funding and other support programs for companies, including the biotechnology investor tax credit and the biotechnology translational research and commercialization awards. In addition, the state provides funds through the Maryland Technology Development Corporation (TEDCO) and the Maryland Stem Cell Research Fund. Of the $71.4 million allocated, more than $50 million has been committed for peer-reviewed stem cell research grants.

The initiative unveiled by Montgomery County is an additional tax credit opportunity for investors in biotech companies located in the county that have also applied for the state's biotechnology investor tax credit program. The state funding is available to seed and early-stage investors in qualified companies and offers income tax credits equal to 50% of an eligible investment up to $250,000. The state received 180 applications for the $8 million available to fund these tax credits in the current year.

“Since the process is driven by the company's ability to attract investment, the market is dictating the winners,” said Judith Britz, Ph.D, director of the Maryland Biotechnology Center.

Investors in later-stage companies will soon be able to apply for $75 million venture funding through the state's new InvestMaryland plan. Both the tax credits and venture funding are part of BioMaryland 2020, a 10-year plan for investing $1.3 billion in Maryland's life science industry, which has been responsible for one-third of the state's job growth during the past eight years.

A translational research award from the Maryland Biotechnology Center supplied some of the funding to support a stem cell consortium announced earlier this year, a public-private partnership for developing and manufacturing stem cell therapies that was established jointly by the University of Maryland Baltimore's Stem Cell Biology and Regenerative Medicine (SCBRM) program and Paragon Bioservices.

Paragon is a contract research and GMP manufacturing organization located in the Baltimore BioPark adjacent to the UMB medical campus. Marco Chacón, Ph.D., president and CEO of Paragon, credits Curt Civin, director of the SCBRM, with the vision behind the consortium. It gives researchers access to a core facility at Paragon that provides stem cell production and cell banking capabilities on a fee-for-service basis.

“One of our roles is to provide a translational platform,” said Dr. Chacón. Life Technologies has joined the consortium and is providing educational services and training opportunities to researchers.

Meanwhile, over the past 12 months, the California Institute for Regenerative Medicine (CIRM) has provided more than $230 million to support statewide collaborations of scientists working to translate advances in stem cell research to clinical trials by 2014.

Crossing the so-called “valley of death” from the laboratory to human studies is risky and expensive, noted Ellen Feigal, M.D., vp for R&D at CIRM. “It is this often grant- and fund-free zone between discovery and translation to patients that causes the most researchers to stumble and fail in their quest for novel applied therapies.”

CIRM's disease targets include diabetes, stroke, HIV, and macular degeneration. Of the $230 million in total funding, $46 million has been given to research teams headed by California biotechnology companies.

Another organization keen on supporting biotech is Seeding Labs. Since its initiation as a grassroots effort in 2003 and formal founding in 2007, the nonprofit has provided more than $1 million in laboratory equipment to researchers in the developing world.

Seeding Labs has helped provide resources to scientists in 17 countries to date. It coordinates not only an equipment-transfer program but also a fellows program that brings scientists to the U.S. for training, an ambassadors program that matches U.S. scientists with host institutions in the developing world, and an online network to foster research connections.

At the BIO conference, Seeding Labs announced a new partnership with Thermo Fisher Scientific, which donated its first instrument, a NanoDrop 1000 microvolume spectrophotometer, to the equipment transfer program.

The donation is part of Thermo's “Upgrade with Reward$” program in which owners of a NanoDrop 1000 can upgrade to the NanoDrop 2000 or 2000c and receive financial incentives. The company will then refurbish the NanoDrop 1000 instruments and donate them to Seeding Labs. The first instrument is headed to Egerton University in Kenya.

International Collaboration

At BIO, Massachusetts Governor Deval Patrick, Israel's Office of the Chief Scientist, and the U.S.-Israel Science and Technology Foundation together with three Massachusetts economic development agencies unveiled a $2 million collaboration to support commercialization of technology in the life sciences, clean energy, and technology industries.

The new Massachusetts-Israel Innovation Partnership (MIIP) centers around a joint solicitation for industrial R&D collaborations between Massachusetts and Israeli companies, with parallel funding for R&D expenses for each participating company derived from its own state.

The Israeli government has historically taken an active role in supporting life science R&D in the country, including the establishment of a dedicated government-based biotechnology venture capital fund to accelerate the growth of the industry.

David Miron-Wapner, executive director of the U.S.-Israel Science & Technology Commission, also highlighted the Kamin program launched earlier this year by the Office of the Chief Scientist, which provided research grants to scientists at academic and research institutions and hospitals to support applied R&D with promise for commercialization.

“That's where the pipeline starts,” said Miron-Wapner, and that is a period between basic research and industry involvement traditionally plagued by a shortage of funding.

Attracting top researchers, established and startup biotech companies, technical services providers, and venture funding and international investors to a region requires piecing together not only a host of tangible factors—including a robust infrastructure of academic institutions and public and private research organizations, state and local government incentives, policy, and funding support, as well as bioparks, incubators, and hospitals to support translational and clinical R&D, but also intangible factors.

Among these, Victor Perton, Commissioner to the Americas of the State Government of Victoria (Australia), highlights quality of living, collegiality, and the café (not to mention pub) culture that defines Melbourne, Victoria's capital city. The café culture “builds relationships and trust,” said Perton.

Stella Clark, Ph.D., CEO of The Bio21 Cluster, a collaborative network of biomedical and biotech research organizations in Victoria, cites the physical proximity factor in Melbourne as a key advantage for young scientists and entrepreneurs, who do not have far to go to link up with a colleague or have a chance encounter with a potential collaborator or investor.

The network of academic institutions, hospitals, research centers, and companies contributes to approximately 15,000 researchers within a 1.5 square kilometer area that is situated about a half mile from the financial center of Melbourne, according to Dr. Clark.

Furthermore, the tax burden in Melbourne is about 88% lower compared to the U.S. in general, Perton noted. He also pointed to a “friendly visa system” that makes it easy for scientists to visit and participate in research programs as another benefit of doing business in Australia. Additionally, “we have solved the problem of informed consent across state borders.”

During the first quarter of 2011, biotechnology companies across Australia achieved their highest-ever market capitalization, totaling A$25.8 billion ($28 billion)—a 5% increase for the quarter—according to government statistics.

Although the state of Victoria's population accounts for about 25% of Australia's total, it receives about 40% of government R&D funding. Perton attributes much of the successful growth of the biotech industry in the region to the Melbourne government's long-standing support of infrastructure development.

Its “if you build it they will come” mentality has been a success. Key elements of the infrastructure in place to support biotech and life science innovation in Victoria include the Victorian Platform Technologies Network, the Victorian Life Sciences Computation Initiative (a life science supercomputing center supported in part by IBM) located at the University of Melbourne, the Melbourne Center for Nanofabrication, and the Victorian Centre for Advanced Materials Manufacturing.

Effective July 1, Melbourne adopted a new $1.8 billion R&D tax credit system intended to benefit primarily subsidiaries of foreign-owned firms, small-to-medium sized entities, startups, and incubator companies.

Under the new system, companies with turnover of less than A$20 million ($21.7 million) will be eligible for a 45% refundable tax credit. For companies posting a tax loss, the government will provide an up-front cash refund of 45% for eligible R&D activities. Large companies can also qualify for a nonrefundable tax credit.

In July, the Victorian government announced a 33% funding increase to support the Medical Research Commercialisation Fund over the next four years, a venture fund that invests in early-stage medical research with demonstrated commercial potential.

Additionally, under construction in Melbourne is a billion dollar cancer center funded jointly by the Victorian and Australian governments.

Sparking Regional Development

At BIO, Lyonbiopole announced a funding commitment of more than $3 billion by 2015 to support biotech R&D activities in the Rhcne-Alpes region of France, home to about 600 life science companies, with a particular emphasis on infectious diseases and cancer.

Since its establishment in 2005, the Lyonbiopole cluster has supported the development of 92 R&D projects for a total investment of €470 million ($669 million), more than one-third of which has come from public funding sources.

The cluster boasts an Infectious Diseases Center that hosts six R&D teams, including the Platine project team, a European Immunomonitoring Platform set up by an industrial consortium composed of Innate Pharma, Transgene, and ImmunID, and the academic research labs Inserm and the Léon Bérard center.

Scheduled to open in mid-2013 is acCInov, a 64,600 sq. ft. real estate program located next to the Infectious Diseases Center on the Charles Mèrieux campus in Lyon Gerland. It will house innovation platforms intended to provide biological analysis and bioproduction services.

In 2011, the Russian Federation adopted a program called Pharma2020, defining a national road map intended to support development of the country's pharmaceutical and medical industry from 2011 through 2020. The program's main objectives encompass increased exports, commercialization of innovative products, and training of qualified personnel.

Defined targets include support for 10 world-class research centers for drug development and seven for medical device development, 734 million rubles ($26.2 million) in national drug production, 81 billion rubles ($2.9 billion) in pharmaceutical product exports, and 5,000 professionals trained/retrained.

Biopharmcluster “Northern”, established around the Moscow Institute of Physics and Technology, is reportedly the first cluster of pharmaceutical and medical organizations created in Russia. Development programs in the cluster are co-financed by governmental and nongovernmental partners, and state support is available at the municipal, regional, and federal level.

Enterprise Ireland is an agency of the Irish government that supports the growth of applied research in universities, helps companies grow, export, and enter new markets, invests directly in startup companies (more than 85 to date), and also invests in venture capital funds in Ireland such as Innovation Fund Ireland.

Keith O'Neill, Ph.D., director of life science and food research commercialization at Enterprise Ireland, described the role of the agency's Innovation Partnership Program as follows: “It identifies a business need for research and delivers to the company an academic partner.”

The government provides 80% of the funding for the research collaboration. Dr. O'Neill emphasized the one-on-one support Enterprise Ireland provides. Each company is paired to an investment advisor who provides guidance on seed funding, access to markets, R&D grants, and other investment opportunities.