Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

Colorado, Florida, New Jersey, Pennsylvania, and Washington gear up to boost growth plans while trying to balance budget woes.

As with the four top biotechnology clusters profiled by GEN earlier this month, the next five largest life science focused states face long-term challenges of finding financing for start-ups and managing the growth that they expect over the next several years.

Bioclusters in Colorado, Florida, New Jersey, Pennsylvania, and Washington are also likely to see state governments more constrained in their ability to help as they had in past years; large budget deficits are forcing them to cut spending. These states are thus trying to revamp their respective industry growth strategies.


Colorado life science leaders are working with state lawmakers this year to create a “fund of funds” for venture capital firms that invest in life science and other technology start-ups. It would also extend the Bioscience Discovery Evaluation Grant Program (BDEGP), a $27 million initiative set to expire next year. “We’re looking at hopefully starting a $100 million fund,” Holli Baumunk, president and CEO of the Colorado BioScience Association (CBSA), told GEN.

While CBSA is assessing options that include public funding, it is leaning toward more private-sector funding given the state’s budget woes; Colorado faces a $1.1 billion shortfall. “The appetite is not really there right now to do it on the public side because of the budget issues,” Baumunk remarked.

BDEGP awards $5.5 million annually toward proof-of-concept initiatives, company formation, and infrastructure to support the growth of the industry. As of last month, the state appropriated $14 million toward the program. The industry credits the initiative with: creating 598 direct and indirect jobs in the state; leveraging $68 million in follow-on investment, grants, and matching funds; and helping 18 companies spin out of Colorado’s research institutions, with at least three more companies pending as a result of proof-of-concept grants.

Baumunk said a measure to extend BDEGP five more years is pending in the state General Assembly sponsored by Rep. Cheri Gerou (R) and Sen. Pat Steadman (D). BDEGP is among state programs funded from gaming dollars. The budget shortfall is raising concerns that the money will be diverted to the general fund rather than continue to be used for BDEGP or other programs. Baumank noted that the program may lose a total of $300,000 from the $5.5 million appropriated each year.


The state’s life science industry group, BioFlorida, is supporting the creation of an R&D tax credit measure modeled after the federal program. This is the purpose of Senate Bill 942 sponsored by Sen. Ellyn Bogdanoff (R) and House Bill 671 sponsored by Rep. Ritch Workman (R).

Also, this year The Jackson Laboratory will try again to develop a personalized medicine campus in Florida. On March 2, the laboratory announced plans for a facility focused on genetic-based treatments for heart disease, Alzheimer disease, and diabetes. The new plan would require $100 million in county funds as well as $100 million in state funds.

While a site has yet to be selected, the laboratory expects to partner with the University of South Florida (USF), Sarasota Memorial Health Care System, Sarasota County, and the Gulf Coast Community Foundation. “We will also locate some offices and labs in Tampa at the USF Health campus, so we’ll be in both communities,” Michael Hyde, Jackson Lab’s vp for advancement and external relations, told GEN.

It is still uncertain whether new Gov. Rick Scott (R) and state lawmakers will support Jackson Lab’s new plan. It seeks less public funding than last year’s proposal, which envisioned $130 million each from the state and county.

“The projections are lower mostly because of the shared laboratory space offered by USF Health,” Hyde said. “We are waiting for a chance to talk with Governor Scott. His support is crucial for the project to move forward.”

Last year Collier’s Board of County Commissioners gave preliminary approvals for the laboratory’s initial plan to build a campus despite opposition by residents who argued the subsidy to the nonprofit Jackson Lab amounted to corporate welfare. Three lawsuits followed, one by Collier officials seeking confirmation that the project had “valid public purpose” to allow county bond funding.

Florida had 60,896 life science jobs in 3,385 “establishments” as of 2008, according to Battelle and BIO. The term establishments refer to the number of locations of for-profit employers, or businesses. It does not include university medical centers and research institutes because current industrial classifications and available data do not allow for an isolation of research-oriented establishments outside of the larger hospitals sector, Battelle and BIO explained.

Employment grew 18% from 2001, and the number of establishments rose 40.5%. MoneyTree recorded five companies receiving a total of more than $14.1 million in venture capital last year, down from six deals totaling just over $22.9 million in 2009. BioFlorida said those numbers will likely improve if the state creates a $25 million seed fund to invest in early-stage biotechs.

New Jersey

New Jersey is losing thousands of big pharma jobs to mergers and layoffs but is more than making up for the loss with new biotech jobs, according to the state’s life science industry group, BioNJ. New Jersey’s biotech segment of the life science sector grew from 10,000 jobs in 2007 to an estimated 15,000 jobs last year. The number of establishments rose from 238 to more than 300.

By contrast, the number of full-time pharma employees shrunk by 4,600 between 2009 and last year. In 2010, the pharma trade group Healthcare Institute of New Jersey recorded 55,366 jobs. BioNJ president Debbie Hart told GEN that her group is reaching out to pharma employees seeking to enter education and training programs for biotech jobs. The programs are run by the state Department of Labor and Workforce Development and funded by a $3.6 million federal grant awarded to the agency last year.

The Garden State employed 88,854 people in 2,000 establishments in 2008, according to Battelle and BIO numbers that included medical device, testing labs, and agricultural bio positions.

This year, New Jersey is also looking at expanding state programs that benefit the life science industry. Last month Gov. Chris Christie (R) proposed doubling funds for the state Technology Business Tax Certificate Transfer Program from $30 million to $60 million. Last year, however, Christie persuaded Democratic majorities to halve the program’s funding, citing the need to plug an $11 billion budget shortfall; this year the deficit is $10.5 billion.

The program allows qualified biotechnology and technology businesses to sell unused net operating losses and R&D tax credits to unrelated profitable corporations for at least 80% of their value. In February the New Jersey Economic Development Authority released a report crediting the program with generating $1.342 billion in taxes from employees whose companies benefited since 2000 from the program. The report pegged the cost of the program to be $202.6 million in 2000 dollars ($259.1 million today). The report also recommended limiting program beneficiaries to biotech companies rather than a mix of tech specialties.

Additionally, Christie wants to double the R&D tax credit, from 50% to 100%. He is also pursuing broader business initiatives, namely reducing red tape and encouraging businesses to promote New Jersey to other businesses.


Pennsylvania life science leaders will work with new Gov. Tom Corbett (R) and the state General Assembly to develop a new 10-year plan to promote the industry’s growth in the Keystone State, Pennsylvania BIO president Christopher P. Molineaux told GEN. The new strategy will update a 10-year plan crafted by industry leaders and officials in the late 1990s and implemented by then-Gov. Tom Ridge (R) in 2001.

Molineaux noted that the state needs to address two challenges: growing life science as big pharma shrinks and assisting start-ups. Pharma giants have shed plenty of jobs, of which “upwards of 1,000 of those are scientists,” he noted. The immediate challenge is to figure out a way to keep those scientists in Pennsylvania, given their talent and growing biotech competition from other states, Molineaux explained.

Pennsylvania used $100 million in tobacco settlement funds to launch three biotechnology centers called Life Science Greenhouses. They are located in Harrisburg, Philadelphia, and Pittsburgh. The state used another $60 million in tobacco money toward equity investments in state-based health companies and $8 million for loans to medical and graduate students in biomedicine and life sciences.

Gov. Corbett has pleased the biotech industry by proposing to raise funding for Pennsylvania’s R&D tax credit from $40 million to $55 million, despite a $4 billion budget shortfall.

Pennsylvania had 80,929 life science jobs, up about 11% since 2001, according to 2008 figures released last year by Battelle and BIO. The state’s biotech start-ups raked in $196.1 million in 36 venture capital deals last year, up from 30 deals totaling nearly $149 million, according to a quarterly MoneyTree Report released by PricewaterhouseCoopers and the National Venture Capital Association, using Thomson Reuters data.


With a budget shortfall of at least $5 billion projected for the next two years and maybe more due to declining tax collections, state lawmakers are weighing funding cuts to public universities. Washington Biotechnology and Biomedical Association president Chris Rivera told GEN his group supports House Bill 1666, which would in part create a privately funded $1 billion endowment with tax credits for contributing businesses. It would also require four-year public colleges and universities to issue at least 6,000 Bachelors degrees annually by 2018, of which at least 2,000 must be in biotech or other science-technology-mathematics majors.

Washington has 26,300 jobs in the life sciences, Rivera said. That’s just a couple of hundred above the 26,130 counted in ’08 by Battelle and BIO. Biotech and medical device jobs grew 5% between 2007 and 2009, compared to a 4% decline in overall jobs. The life science growth does not include jobs at basic research institutions, which Rivera said accounted for another full percentage point of growth.

Two Seattle research institutes plan to expand this spring. The Institute for Systems Biology will relocate within the city, consolidating two sites within the 140,000 square foot former Merck/Rosetta Inpharmatics building. And The Bill & Melinda Gates Foundation will consolidate space at five buildings.

Dendreon plans to move its administrative offices into the Russell Investments Center, where it has inked a lease for 175,000 square feet. The company will also relocate its laboratories into 98,000 square feet of leased space.

VC deals grew in 2010 to 17 totaling $111.85 million from 13 deals totaling $67.34 million the previous year, according to MoneyTree.

Alex Philippidis is senior news editor at Mary Ann Liebert, Inc., and Genetic Engineering & Biotechnology News.

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