Technology  March 17, 2006

Bioscience cluster takes leap forward

Creating a bioscience cluster is a long-term project, but only a few years after implementing an initial plan, Colorado and Larimer County are making huge leaps forward.

On March 8, the state Legislature’s House Finance Committee voted endorsed two bills that would boost funding for bioscience research. Colorado State University had a hand in developing both.

“The idea for both bills came out of our work with CSU,´ said Denise Brown, executive director for the Colorado Bioscience Association.

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House Bill 1360 – passed on a 10-2-1 vote – will provide $2 million from limited-stakes gaming funds for a grant program aimed at improving and expanding bioscience discoveries at research institutions. House Bill 1361 – passed with an amendment that would push it back a fiscal year – will create an incentive program for Colorado bioscience companies to help offset some of the research cost involved with using university labs.

These bills, which next require approval from the House Appropriations Committee, aren’t specific to CSU. House Bill 1360 is meant to bridge the gap in Colorado research institutions between research and commercialization. The program, if approved, would provide matching funds of up to $150,000 per technology to study commercialization strategies for new discoveries.

House Bill 1361 would provide as much as $25,000 to offset the indirect costs charged for use of core lab facilities at research universities. According to the Colorado Bioscience Association, indirect costs – which are mandated by federal guidelines – are about 25 percent of the direct costs.

Kathi Delehoy, associate vice president for research at CSU, spoke at the March 8 hearing in support of House Bill 1361. She explained that a core laboratory is one that’s used by many different researchers working on unrelated projects.

“The key is the high-end, costly equipment,” she said.

The core labs at CSU contain equipment that is often much too specialized and costly for a private biotechnology firm to own. CSU’s core labs are the Macromolecular Resource Facility, the Equine Orthopaedic Research Center, the Chemistry Central Instrument Facility and the Orthopaedic Bioengineering Research Laboratory.

“The industry might not be aware of those facilities,” she said.

Each program will contain a one-time appropriation – $2 million for HB 1360 and $1 million for HB 1361. Brown estimates that the programs will last longer than one year, due to the amount of time required to complete a research project.

The programs would also be limited in scope to research projects that would advance human and animal health and agriculture.

“With a limited amount of resources, we really wanted to focus on the life sciences,” Brown said.

According to the Colorado Bioscience Association, more than half of all Colorado’s research funding is in the life sciences.

The intense focus on the life sciences and the growth of a biotechnology cluster is not a pursuit that Colorado is alone in.  The traditional clusters along each coast – Boston, San Diego are long active biotech communities – provided a model that many states are attempting to emulate.  The bioscience legislation is a start for Colorado, but the state might be behind some of its peers.  Many states have instituted incentive programs for the bioscience industry and are pumping big bucks into them.

In 2004, Kansas signed the Kansas Economic Growth Act.  The bill called for more than $500 million during the following 10 to 12 years to be used to foster growth in the state’s bioscience industry.  Connecticut has a number of bioscience specific incentives:  the $55 million Bioscience Facilities Fund that is used to develop laboratory space; the Connecticut BioSeed Fund, which provides up to $500,000 to accelerate growth for start-up companies; and several tax programs including the Tax Credit Exchange and the Sales Tax Relief program. By comparison, Colorado is not leading the way in garnering support for its bioscience industry.

Cooperation required

Creating an industry cluster takes cooperation from the government, industry and university system. Leaders from all of these segments have been working in Larimer County for nearly two years. The first fruit of their labor was the Larimer County Bioscience Initiative – a localized version of the state bioscience plan.

The Larimer County Bioscience Initiative Strategic Plan focused on CSU as an anchor for the region. The Colorado Bioscience Association and CSU created a subcommittee to discuss the relationship between the university and the industry.

“CSU has been very sincere and very on-task in wanting to find ways to do business with the bioscience industry,” Brown said.

From July 1, 2004, to March 7, the Colorado State University Research Foundation processed 74 invention disclosures – 53 percent of which were in the bioscience field. During fiscal year 2005, CSU intellectual property was the basis for three new biotechnology companies -Keen Ingredients, Cytomation GTX and Schwartz Biomedical.

It is the hope of supporters that House Bills 1360 and 1361 will result in even more Colorado bioscience companies. According to information from Colorado Bioscience Association, there are 400 bioscience companies in Colorado that employ about 16,000 with average salaries of more then $63,000.

The wages in the bioscience industry are relatively high, and a good trade-off for lost and lowered wages in the information technology field, according to Rep. Jim Riesberg, D-Greeley. Riesberg, who co-sponsored House Bill 1360, has high expectations for the bioscience legislation.

“It gets us back in the ballgame,” he said. “Based on things that are happening, it could spin-off 40 to 50 new companies.”

Riesberg estimated that each new company would likely employ about nine people. He said that Colorado can’t compete for the attention of the bioscience companies located along the coasts, because most of them are already near an excellent research institution. Instead, the state needs to take advantage of its own resources.

“We’re right in the center of some of the best research institutions in the country,” he said. “We have to plant the seed and grow our own companies.”

Past efforts

Not that the universities haven’t been trying.

CSURF started the Commercial Opportunity Fund in 2003 to accelerate the technology transfer process. Much like the funding in House Bill 1360, the opportunity fund is not for basic research but instead focuses on providing funding to enhance the commercial success of promising technologies.

Of the four proposals the fund received, two were funded. The availability of funds has been a limiting factor.

The University of Colorado also has programs similar to the ones proposed by House Bills 1360 and 1361 – the Proof of Concept Investment Program and the Proof of Concept Grant Program.

The university’s technology transfer office put into place an investment program about two years ago. The program provides up to $100,000 to a company that needs capital to move a university-generated technology from raw technology into commercialization.

“We started with one program, and the response was great,´ said David Allen, associate vice president for technology transfer at the University of Colorado.

The grant program was initiated this fall. It provides $10,000 or $25,000 for further development and validation of university technologies that have commercialization potential.

After the first round of applications closed early this year, 41 proposals had been received, and the program had selected 13 projects.

For both universities, the programs that would be created by House Bills 1360 and 1361 will generate interest and funding.

“We’ve just taken some baby steps,” Allen said. “This (legislation) allows us to take steps that are congruent with what other universities around the country are doing.”

And the legislation is only the tip of the iceberg. The Colorado Bioscience Association formed subcommittees to work with the University of Colorado and National Jewish Research Center to find more ways to beneficially unite universities and the industry.

“We’re not as deep into the process with the other two as we are with CSU,” Brown said.

She expects to see more ideas generated from her agency’s relationships with the other institutions in a year or so. During that time, the CSU subcommittee will also continue its work to advance the bioscience cause for the state and the region.

Creating a bioscience cluster is a long-term project, but only a few years after implementing an initial plan, Colorado and Larimer County are making huge leaps forward.

On March 8, the state Legislature’s House Finance Committee voted endorsed two bills that would boost funding for bioscience research. Colorado State University had a hand in developing both.

“The idea for both bills came out of our work with CSU,´ said Denise Brown, executive director for the Colorado Bioscience Association.

House Bill 1360 – passed on a 10-2-1 vote – will provide $2 million from limited-stakes gaming funds for a grant program aimed at…

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