The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Category Archives: Bailout

Flow-Through Shares for Healthcare Part 3 of 3: What If It Actually Happens

Part 1 of this series described the basics of flow-throughs and Part 2 examined both the structure and the level of financing that flow-through shares have provided to the mining and oil & gas industries. This part analyzes the factors contributing to a decision by the government to expand flow-throughs to healthcare and biotech companies, and the impact that decision might have on the industry.

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Flow-Through Shares for Healthcare Part 2 of 3: Flow-Throughs in Mining and Oil & Gas

In Part 1 of this series, we mentioned two flow-through share financings completed in 2010 (chosen at random for illustrative purposes). The following discussion examines those financings in more detail, and puts them in the context of overall funds raised by the mining industry in recent years.

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Flow-Through Shares for Healthcare Part 1 of 3: What Are Flow-Through Shares?

The extension of flow-through tax incentives to development stage biotech and healthcare companies has been discussed for many years, including twice previously on this blog (here and here). One of the most recent articles supporting this change was written by David Allan, a former investment banker who is a founder and current Chairman of YM Biosciences (Biotechnology Focus, March 2011). In order to properly assess what impact this action might have on our industry, we need to first understand how flow-through shares work. Read more of this post

Biotech in the Provinces: OBEST Launches Regional Meetings in Ontario; Western Canada Innovation Agreement to Provide Seed Funding

The Ontario Bioscience Economic Strategy Team (OBEST)* is holding regional cluster meetings starting today that will be chaired by bioscience CEOs from across the province. OBEST launched its evergreen strategy to sustain and grow the province’s health-science industry last week with a meeting of the OBEST advisory committee, which is chaired by Dr. Daniel Billen from Amgen Canada, and includes C-level representatives from business, patient groups, government, academia, ag-biotech and Ontario’s biotech companies.

Innovative ideas are being sought from everyone with a stake in the industry via the regional cluster meetings, which will inform the Advisory Committee’s work.

Meanwhile, out West, the Centre for Drug Research and Development, together with the Provinces of British Columbia and Alberta, and Johnson & Johnson Corporate Office of Science and Technologywill administer a fund supporting innovative health research programs, called the Western Canada Innovation Agreement.  The seed funding will enable early-stage discoveries to achieve commercialization in the life sciences sector.  For more information, visit www.jnjcosat.com/cosat.

* OBEST is an initiative of OBIO, where I am the corporate secretary.

U.S. Therapeutic Discovery Stimulus Reaches Biotechs in Canada, Israel, Germany

As part of the health reform bill, the U.S. launched a $1 billion Therapeutic Discovery Project tax credit/grant stimulus program. The program announced grant recipients this week, deploying $1 billion just over 7 months after the law was passed, and 5 months after the IRS guidelines were released implementing the project.

A full list of recipients has been posted by the IRS, and interestingly includes a “foreign” recipients section comprising: Canada’s Enobia Pharma, Germany’s mtm laboratories, and Israel’s Pluristem Therapeutics (Nasdaq: PSTI). Canadian biotechs with U.S. affiliates also reported receiving grants: Allon Therapeutics, Ondine Biomedical, and Neuraxon, so far.

The massive influx of cash has produced a predictable call for second helpings, while here in Ontario we’re still waiting for a first deployment from the $7 million announced at the end of April.

Flow-Through Shares for Biotech: Welcome to National Biotechnology Week in Canada

Tomorrow is the first day of National Biotechnology Week in Canada. The imagenation.ca website has lots of info, and you can follow @BIOTECanadaNBW on Twitter.

One of this year’s big policy initiatives is a push to expand Canada’s Flow-Through Shares program from mining and wind power to include biotech and other cleantech companies. I gave a short presentation today on what Flow-Through Shares are, how they work and why they’re a great idea for Canada’s biotech industry.* Enjoy:

Happy National Biotechnology Week, everyone!

*Modified from a presentation authored by Ogilvy’s Flow-Through Guru Rick Sutin.

State of the Biotech Industry — Heading into BioFinance

As the BioFinance conference in Toronto starts up today, I thought it would be worth looking at a few recent data points for the biotech industry:

  • The Q1 Burrill data (via PharmPro) shows above-market gains for public biotechs (up 8% in Q1), $6.1 billion of pharma partnering deals were done, and total biotech VC investments were up 7% in Q1 (over Q4 ’09) though follow-on VC rounds were down 52%.
  • Regenerative medicine company Tengion Inc. is heading for an IPO this week, aiming (low, says John Carroll) for 4.4 million shares at $8 to $10 apiece, with current stockholders taking about $15 million of the offering.  Watch this one for a good barometer of what a clinical stage biotech (lead product in Phase II) can aspire to.
  • Public investment is still running strong in many jurisdictions as well.  Ontario is waiting to learn how MRI’s new money will be spent; Palm Beach Gardens in Florida is setting aside 681 acres for a biotech park; and the Washington DC region continues to invest in its strong cluster, including a new tax law in Virginia that “creates a three-year window under which entrepreneurs and investors can start and invest in early stage technology companies in Virginia without having to pay any long-term capital gains taxes on the returns those companies generate.”

Stay tuned here and @crossborderbio on Twitter for updates from the conference.

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Ontario Budget 2010: Reserving Final Judgment

In the post below, I noted the increased budget for the Ministry of Research and Innovation. More than one little birdie says this increase portends significant pending program changes. So put away your poison pens for now and we’ll keep our ears to the ground for good news from the deployment of that additional funding.

Update: I have received confirmations/assurances this morning from several additional sources that MRI announcements will be made in the next few weeks. Stay tuned.

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2010 Ontario Budget Stands Still on Innovation

Ontario’s 2010 budget was released today.  It contains no new innovation-related initiatives, leaving the province to fall further behind competitive jurisdictions. Read on for more detail, but also see this post noting that signs point to further announcements.

Despite recent strategic initiatives in Québec and across the U.S., and despite opportunities to improve funding for biotech companies without any new expenditure, the 2010 budget chooses to rest on last year’s now questionable laurels. 

The section on “Innovation” in the 2010 budget’s Sector Highlights reads, in its entirety, as follows:

“From the discovery of insulin to the BlackBerry ®, the impact of Ontario inventions has reached around the world.

Today, Ontario’s economic and social prosperity has come to depend on its ability to innovate and compete in the global marketplace. Recognizing this, the McGuinty government is investing in an aggressive innovation agenda to ensure the province is one of the winning economies in the 21st century.”

The remainder rehashes prior years’ initiatives. 

There are two hints  of possible improvements directed at innovation:

  1. A bullet in the “Small and Medium-Sized Businesses” section says the government is “[p]roposing to extend the refundable Ontario Innovation Tax Credit to more small and medium-sized businesses.”  There is no further detail that I can locate on this proposal anywhere in the budget documents.
  2. The Ministry of Research and Innovation gets an increased budget, from $295 million in 2008-2009 to $343.8 million in 2009-2010 and $411.5 million in 2010-2011.  There is no information that I can locate on how these additional funds would be deployed. 

No detail is provided on either item, so the underlying goals or likely effects are impossible to determine.  Although there are increases for post-secondary education and general improvements to the corporate tax environment (the net effect of which against the HST is uncertain), the overall impression is undeniably disappointing.

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Biotech Bailout: How Much Does it Cost Government to Attract Biotech Jobs?

Governments want to create jobs.  Not just any jobs, “creativity-oriented jobs” and “knowledge economy jobs.”  But what does it cost government to create one of these jobs?  We don’t really know, but on this blog we’ve been tracking data points all year to try to get some sense of how to invest effectively to attract the workers who will keep our economy competitive into the next century.

This week, a report from Florida’s legislature created what appears to be a new high-water mark: $1.4 million for each new biotech job.  $759 million investment in eight biotech campuses over the last six years, with about equal amounts coming from other levels of government, resulting in a total of 1,100 jobs.  However, as the report points out, not that much time has elapsed.  This also seems like a count of only the most direct jobs, and these have a high leverage ratio, each one supporting 5-7 additional jobs.

One valuable conclusion from the report: creating a cluster takes a multifaceted approach.  The biotech campuses were of limited help because early stage capital was not available.

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Photo of meat grinder from flickr user gpiper under a Creative Commons license.

Biotech Bailout: Five Reasons Ontario Needs to Do More to Support Bioscience Companies in 2010

As we head into another budget cycle here in Ontario, there has been a flood of news showing that other jurisdictions are investing heavily in recruitment and stimulus for biotech companies.  Each one of these investments raises the bar for what has to be done in Ontario to build our own companies and capitalize effectively on our R&D resource base:

  1. Close to home, Quebec’s recently-announced $122 million Biopharmaceutical Strategy is expected to match Ontario’s OTEC tax holiday (not so useful for biotech) and adds $30 million for R&D credit monetization (fantastically useful for biotech).
  2. Across the border in the U.S., things have been even busier.  The Senate version of the health care reform bill includes the famous (/infamous) 12-year exclusivity period for biologics, but according to a BioWorld article the bill also includes “a therapeutic discovery project tax credit.”  Sen. Arlen Specter (D-Pa.) also reportedly offered a measure that would create a translational science grant program through the National Institutes of Health, called the Cures Acceleration Network, and that would aid in expediting the FDA review.
  3. Add to the federal stimulus an array of state-level initiatives:
  4. Even the traditional U.S. biotech hotbeds are not standing still:  North Carolina’s $250 million innovation fund is almost up and running, with an RFP out for a fund manager. (h/t @GenomicsLawyer)
  5. And in case you still think we can afford to rest on the laurels of the OETF and OVCF, take a look at John McCulloch’s post on the MaRS blog about his trip to the Suzhou New District in China, which has already incubated NASDAQ-listed solar power company Canadian Solar.

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Image from User:Bdk on WikiMedia under the GNU Free Documentation License.

Planned UK Bioscience Park Features “Open Innovation,” is Brought to You By GSK, the UK Government, The Wellcome Trust and the EEDA

A new biotech “hub” (aka campus, park, centre, cluster…) is being planned at GSK’s Stevenage Campus in the UK.  Whatever you call it, the organizers are pitching two novel features:

  • An “Open Innovation” model; and
  • Access to GSK management and expertise.

I’m not sure how far “open innovation” could really go, in an industry that depends on patents and compliance, but in this particular case the description from the reports on this new park sounds mostly like a good set of core facilities:

“shared access to specialist skills, equipment and expertise to stimulate new innovation in drug development”

It will be interesting to see how far the “open innovation” really goes.  It will also be interesting to see how often “access to GSK” turns into “access for GSK.”  As the Telegraph article says, the park will:

“provide the UK’s largest drug company with first-hand evidence of business projects in the biotechnology sector, which GSK could then choose to acquire.”

Why invest in this project?  The pitch to the government funders is the usual one: jobs.  Up to 1,700 jobs.  No, wait, up to 3,000 jobs!  The total funding of around £37.6m comes from the UK Strategic Investment Fund (£11.7m), GSK (£10.9m), the Wellcome Trust (£6m), the Technology Strategy Board (£5m) and the East of England Development Agency (EEDA) (£4m).

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Québec’s $122 million New Biopharmaceutical Strategy Includes $30 million for Genomics, May Include SR&ED Tax Credit Financing

mdeieThe Province of Québec rolled out a new “biopharmaceutical strategy” Thursday that they say aims to provide “development support for biotech and biopharmaceutical firms.”

The Roll-Out:

The announcement was beautifully coordinated with the relevant constituencies, as illustrated by the near-immediate chorus of support:

The Big News:

BIOQuébec can’t help bragging a little that “the Minister has retained some of the recommendations made by BIOQuébec.” The pride is justified, though.  Biotech advocates have been asking — since before the last federal budget — for a way to monetize the refundable tax credits they’ve been banking.  As part of the new strategy, BIOQuébec says the government will allow

“biotechnology companies within the human health industry [to] benefit from a short term support measure thanks to the quarterly financing of their tax credits.”

Interestingly, BIOQuébec appears to have some information about that initiative that is missing from the government publications (nope, not even in the French version), which only say it aims to “implement new methods of funding R&D tax credits adapted to the specific needs of health-related biotechnology firms.”

Money Talks:

On the financial front, the initiative also highlights a 10-year tax holiday (sparse on details, but expect it to look a lot like the OTEC in Ontario) and Teralys Capital.

Finally, the strategy notes “three specialized start-up funds aimed at the technology sectors” with $41 million each that will be supported by “private-sector partners.”  Is the Pfizer-FRSQ Innovation Fund one of these?  Wednesday, that fund announced grants totalling $2.3 million for genomics studies of inflammatory bowel disease and metastatic colorectal cancer.

My Bottom Line:

This looks like a broad set of initiatives that aims to improve everything from student recruitment through R&D and commercialization to purchasing and reimbursement decisions.  I particularly can’t wait to see what the SR&ED monetization program looks like.  Hopefully we’ll learn in time to work with other governments *cough*Ontario*cough* as they start 2010 budget processes.

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Has NRC-IRAP Run Out of 2009 Grant Money?

NRC-IRAP LogoNRC-IRAP, which got $170 million in the 2009 Federal budget (spread over 2 years) for company funding, has been very active lately, including in biotech.

Maybe too active?  I heard rumo(u)rs (plural!) this week that IRAP may be out of funds for this cycle.  Are they?

Drop us a line.

OBIO Panel Presents OETF and BIP Information

The Ontario Bioscience Industry Organization (OBIO) and the Ministry of Research and Innovation (MRI) co-hosted an event a few days ago entitled: “Funding Opportunities in 2009-2010 for Bioscience Companies: What CEO’s Need to Know About Ontario’s ETF and BIP Programs.”

The speakers were:

  • Chair: Kevin French, Senior Act. Manager, RBC;
  • Industry:
    • Rocky Ganske (President & CEO, Axela),
    • Peter Pekos (President & CEO, Dalton Pharmaceuticals),
    • Tom Wellner (President & CEO, Therapure Biopharma);
  • Investors:
    • Rob Koturbash (Managing Director, Maple Leaf Angels)
    • Steve Ottaway (Managing Director, GMP Securities),
    • Peter van der Velden (CEO, Lumira Capital);
  • Government:
    • John Marshall (Director, MRI, responsible for OETF)
    • Ryan Lock (Acting Director, MRI, responsible for BIP)

Lots of great information on funding opportunities, and luckily, the whole thing is archived (here) online.  To access the presentation, enter “OBIO” when prompted.

U.S. Stimulus Stimulates Health Care and Academic Jobs

The NPR Health Blog reports that in the cloud of U.S. unemployment numbers (pdf) there is a high-tech silver lining: the health care and education sectors actually added about 52,000 jobs in August.  It cites examples from a Boston Globe article that highlights stimulus-stimulated activity in Massachusetts research labs.

Also note this piece at GenomeWeb, which quotes Leerink Swann analyst Isaac Ro, who includes “stimulus funding” as one of the “theme[s]” justifying a higher target and rating for Millipore (NYSE: MIL).

Check out the birds’ eye view of NIH ARRA grants and zoom and click to get all the details for your favo(u)rite institution.

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NRC-IRAP Is On A Roll: 7 Bio Investments in 7 Weeks

NRC-IRAP LogoNRC-IRAP,* which got $170 million in Canadian stimulus money, has been deploying funds quite rapidly and has included a significant number of biotechs in its largesse.  I found these from July and August:

Am I missing others?  Let us know in the comments.

Oh, and speaking of government money, hopefully you’ve started following the Twitter stream @crossborderbio and you saw this announcement earlier today about EDC and Brookfield’s $1 billion fund for DIP lending.

* National Research Council of Canada Industrial Research Assistance Program.  Stick to the abbreviation.

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New Tennessee State Tax Credits Incentivize Venture Fund Investments

Tennessee_state_flagThe Tennessee legislature passed a bill earlier this month that indirectly creates $120 million of venture funding.  It gives tax deductions to insurance companies that invest in qualified entities called “TN Investcos” which are in turn instructed to make “focused investments of capital in early or seed stage companies with high growth potential.”  Firms that meet the requirements and are interested in being one of the six Investcos apply to the Tennessee Department of Economic and Community Development.  The companies receiving TN Investco funds must:

  • be independently owned and operated and headquartered in Tennessee,
  • conduct its principal business operations in Tennessee, and
  • have at least 60% of its employees located within Tennessee. 

Restrictions include:

  • no more than 100 employees, and 
  • not principally engaged in professional accounting, medical, or legal services; banking or lending; real estate development; insurance; oil and gas exploration; or direct gambling services. 

According to a memo on the legislation by Tennessee law firm Waller Lansden, a similar $100 million tax credit program started in 2004 in Alabama has “created 781 jobs bearing an average annual wage of $40,628″ and “generated more than $32 million in new annual payroll for the state.”

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New Data Shows 70% of Canada’s Biotech Companies Have Under 12 Months’ Cash. BIOTECanada’s New Ask: Government Loans.

Canadian moneyA Canwest story today highlights new BIOTECanada data showing 70% of survey respondents have under 1 year of cash, up from 50% in January.  FierceBiotech picked it up as well, guaranteeing a full dose of international attention.  

Even though the remaining 30% of respondents likely include some with big recent successes — Bioniche, Allostera and Zymeworks — and some with creative approaches — ConjuChem, Neuromed, etc. — the top-line number is grim indeed.  Plus, as Kasia Majewski points out:

“Most firms have found away to extend their cash, but they’ve done that by massive layoffs, by shutting done operations to the bare bones. So essentially the lights are on but there’s one guy home.”

Given that there has been no systemic cash infusion, it’s not surprising that the number of firms in trouble has gone up since January. 

On the other hand:

There is a bolus of fund-of-funds and direct capital waiting to be deployed, including:

Plus, Lumira Capital’s Q2 newsletter (pdf) points to the new BDC money, Alberta Investment Management Corp’s PE plans and the new Alberta Enterprise Corporation as potential additional sources of funding in the medium term.

BIOTECanada bottom line:

In the winter, the organization was focused on tax initiatives.  Yesterday, though, the focus was entirely on

“negotiations with Industry Canada to obtain a loan program for Canada’s biotech sector that can hold the industry over until capital markets rebound. … [Specifically,] government loans to be repaid after a two- year period at six per cent interest.”

Maybe it’s the new money looming on the horizon, or the seeming lack of traction for the tax policy asks, but the focus has definitely shifted.

My bottom line:

Even the new loan program advocated by BIOTECanada will not help if the other government funding doesn’t make it to biotech companies and VCs. We’ve been keeping an OVCF scoreboard that still shows a goose-egg for biotech investments.  It may be early days for these new capital sources, but the hour is late for Canadian biotech companies.

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Bailout Update: New UK Life Sciences Blueprint Aims to Promote Innovation

world_map_2002The UK has a new Life Sciences Blueprint that sets as a goal the creation of an internationally-recognized life sciences cluster.  Here’s the press release and here’s the full report (pdf). 

Innovation Pass and Changes at NICE:

The Blueprint kicks off an “Innovation Pass” program under which certain novel medicines (criteria TBD) will be available for a 3-year period without the otherwise mandatory predicate of review by the National Institute for Health and Clinical Excellence (NICE).  A further report is due from Sir Ian Kennedy next week (July 22) that aims “to identify the aspects of value and innovation which NICE should take into account in its work.”  If innovation stimulus is considered a part of the comparative effectiveness analysis, who knows how widely the door may open even after the Innovation Pass. 

Between these changes and the recent report on genomic medicine from the House of Lords Science and Technology Committee, which recommends that the purview of NICE be extended to “include a programme for evaluating the validity, utility and cost-benefits of all new genomic tests for common diseases, including pharmacogenetic tests,” big changes may be heading NICE’s way.

Also notable:

  • The Government will invest £150 million alongside private sector investment, with the aim of leveraging enough private investment to build a £1bn, 10-year Venture Capital Fund.  This is Lord Drayson’s idea that we held up at the time as a model for technology-agnostic lobbying;
  • Along with a variety of educational initiatives and programs, the Society of Biology will begin to accredit undergraduate bioscience degrees to help ensure that graduates leave with the core skills and competencies required by employers;
  • A reassessment of the UK’s various R&D tax incentive programs (A little tax joke for you there as a prize for making it this far down the post.);
  • An £18 million program for regenerative medicine R&D; and of course
  • A marketing initiative to make sure everyone knows all the great stuff they’re doing.

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Relocation, Relocation, Relocation: Biotech Incentives and Economic Development

Despite the skepticism expressed in the New York Times article last week, the efforts by various jurisdictions to attract biotech business continues apace.

For one, the Mayor of Jerusalem announced a $25 million program to build infrastructure and human resources for a biomedical research park at Hebrew University School of Medicine.  Of course, they’ll have to do it without Rafi.

And at least one jursidiction — Wisconsin — seems to have been having some recent successes:

Stay tuned to the money=jobs post on our Biotech Bailout page for more.

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What is the State of Canada’s Biotechnology Industry?

There have been a lot of opinions over the last couple of weeks, with little consensus.

On the pessimistic side:

  1. E&Y’s annual biotechnology report was released a week ago, and the reported taglines ranged from “time of reckoning” to “biotech business model crumbles“. 
  2. The first report from Canada’s Science, Technology and Innovation Research Council said that Canadian businesses are stingy in funding research and development.

On the other hand:

  1. The BIO SmartBrief story on E&Y’s report noted the E&Y data showing that mergers and acquisitions had a near-record year in 2008, amounting to $28.5 billion in the U.S. alone.
  2. And, Rx&D’s response to the STIC report notes that pharma R&D investment, MaRS and Montreal’s biotech/pharmaceutical cluster are all highlights of the report.
  3. Finally, BIO President and CEO James C. Greenwood said that most biotech firms likely will survive the financial crisis despite a shortage in cash assets and the lack of investments brought about by the deep freeze in initial public offerings.

My take?

E&Y’s 2008 data is consistent with the PwC-BIOTECanada report and likely reflects extra pessimism because it cuts off before the latest stimulus investments, including over $1 billion in Ontario and Québec.  As that money, plus the Ontario Venture Capital Fund, gets deployed, I think Greenwood is likely to be right and things will start to look up. 

Although Q1’s venture capital and private equity numbers still look grim, the Monday Deal Review is showing increasing activity the last few weeks and even a few offerings by public companies.

Canadian Science Funding Update — Open Letter From Canadian Scientists Generates Equal, Opposite Open Letter from Gary Goodyear

Canadian scientists, dismayed by cuts of $113 million to the three primary granting agencies in this year’s federal budget, sent an open letter of protest to PM Harper last week that collected 2,000 signatures.

The response, from Minister of Industry Tony Clement, was certainly better pitched than the response at budget time from the government’s initial spokes-o-practor, Gary Goodyear.   Mr. Goodyear also responded to the protest letter — penning a letter to Nature — and succeeded in not igniting any additional controversy.

I have three points in reaction to the budget and the protest letter:

  1. The federal government clearly chose an investment in infrastructure and training at the expense of basic research, but is clearly embarrassed to say so in light of peer country decisions.  The U.S. has prominently featured major increases in research funding, and the UK has pledged not to let science be a victim of the economy (though we will see Wednesday if they put their money, or their foot, where PM Brown’s mouth is).
  2. The Ontario government has done significant work to close the gap in research funding and infrastructure matching funds left by the federal budget
  3. We are starting to see local impacts of the funding decisions generate pressure on individual MPs.  For example, the federal minister of public works, Christian Paradis, was “angry” and said he will do everything he can to ensure that the famous Mont Mégantic Observatory, which is in his riding of Mégantic-L’Érable east of Montreal, receives funding to remain open.  The NSERC, which decided to drop the observatory’s funding, has cut a number of projects to cope with a $70-million drop in its budget.

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Some Good Clean Tech Synergy: Biotech + Cleantech + Nanotech = $

A story today at GenomeWeb shows a collaboration among biotech, cleantech and high-tech interest groups successfully generating government support:

Illinois life-science industry advocates for the second straight year are urging state lawmakers to set aside $25 million in grants and tax credits to assist biotech, pharmaceutical, and medical-device startups commercialize new technologies.

Unlike last year, when the proposal died in a state House of Representatives committee, the state’s life-sci industry group expects this year’s version to pass. One key reason: The legislation … would award cash to other tech industries, including alternative-energy, or so-called “clean,” technologies, and the state’s fast-growing nanotech sector.

This type of cross-tech synergy has contributed to government support for other funding initiatives as well.  Look no farther than MaRS, or go as far afield as the UK; common needs for tech commercialization build stronger constituencies.

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New Life Sciences Industry Data

New data from Delaware and Arizona last week:

Some highlights from a study by Edward Ratledge and Simon Condliffe of the University of Delaware’s Center for Applied Demography and Survey Research:

  • The biopharmaceuticals industry contributed $4 billion to Delaware’s economic output in 2008.
  • 247 biopharmaceutical firms employing 12,000 people, paying $1.6 billion in wages,
  • average salary of $132,000, which grew at a pace of 22.8% over the past five years, almost 8% faster than the wages of Delaware’s other industries
  • An additional 16,000 people are employed in support industries.
  • The industry is expected to add more than 120,000 jobs nationwide between now and 2016.

In Arizona, a similar study by Battelle Technology Partnership Practice had the following stats:

  • The state of Arizona and private philanthropists have pledged more than $1 billion to grow Arizona’s bioscience economy.
  • Excluding biotech jobs at hospitals and university labs, the industry employed 13,543 workers who earned $777.8 million [= average salary of $57,432] and contributed $177.8 million in state and local taxes.

For more stats on life sciences money and jobs, see our Bailout Page.

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Bailout Updates: Results May Vary

We’re beginning to see a round of adjustments in government budgets. 

On the one hand, some programs are facing further cuts as aspirational commitments meet fiscal reality.  For example, state legislators in Washington are proposing cuts of betwen 50 and 90 percent to spending on the state’s Life Sciences Discovery Fund over the next two years.  Similarly, the government in Ireland, which had funded a remarkable increase in innovative activity, announced an emergency budget that will reduce academic funding and salaries.

On the other hand, some early cutbacks are looking shortsighted and are being reconsidered or worked around.  For example, genomics funding that was originally cut (or not increased) in the Canadian budget has triggered an inflow of funds from other sources: $26 million from the Canada Foundation for Innovation, and provincial funds in Ontario and Quebec.  In the UK, where the focus has been on education funding, the Biotechnology and Biological Sciences Research Council is providing most of the £13.5M to launch and operate The Genome Analysis Centre (TCAG) that will use genomics to support food security and animal health research.

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There’s No Bailout Like a Good Exit

A Bloomberg article this morning takes a look at the recent boom in Israel’s biotech and device stocks, and credits the government cash infusion (which we noted at the time) for some of the buoyancy; but also attributes much of the gain to speculation that the J&J-Omrix deal is the beginning, not the end, of acquisitions in the well-priced sector.  According to Bloomberg data, bargains still abound in Israel:

Most of the stocks still trade below their initial public offering prices and are valued at less than half of their global competitors relative to cash, according to data compiled by Bloomberg.

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This Week in Texas: One Step Forward, Two-Step* Back

One Step Forward: Earlier this week, Governor Perry of Texas announced $50 million of funding for Texas A&M University System’s National Center for Therapeutics Manufacturing yesterday, following up on his keynote at a conference in February where he spoke highly of the state’s biotech industry. 

Two Steps Back: At the same time…

*Joke, not typo.

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Ontario Budget 2009: Initial Reactions are “Encouraging”

Generally positive reviews of Ontario’s 2009 budget are coming in from the innovation community:

TBI gives a shout-out to the Emerging Technologies Fund:

The Biotechnology Initiative (TBI) would like to credit Premier Dalton McGunity and Minister of Research and Innovation John Wilkinson for their quick response to the looming economic uncertainty by the creation of the Emerging Technologies Fund… The life sciences community in Ontario is greatly encouraged as a result of the creation of this Fund.

Rx&D is also “encouraged”:

Canada’s Research-Based Pharmaceutical Companies (Rx&D) is encouraged by initiatives in the Ontario Government’s 2009 budget designed to fuel innovation and growth in Ontario’s biopharmaceutical and life sciences industry…

“The support in the budget for research infrastructure, genomics, tax incentives for innovation and the increased funding for the Ministry of Research and Innovation demonstrate that the McGuinty Government is strengthening its commitment to make science and innovation a priority.” 

So is the Retail Venture Funds Association:

The McGuinty government has made encouraging policy initiatives that help bring innovative high-tech applications to market more efficiently…  The Ontario Budget released today contained far-reaching initiatives that will help the province’s entrepreneurs, scientists and researchers develop and market new technology here instead of other jurisdictions.

The Ontario Medical Association is…

encouraged that the government is investing $2-billion into eHealth, which is playing an increasingly important role in improving patient safety and efficiency of our health care system. Electronic Medical Records (EMRs) have had a tremendous impact on patient safety, continuity of care, and quality of care. To date, over 3,000 physicians have made the transition to EMRs and by the end of 2009, over 4 million patients will have an electronic health record.

Did I miss any?  Are you encouraged too?  Let us know in the comments

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$250 million Ontario Emerging Technologies Fund Seen, Raised by $825 million Quebec Venture Capital Fund

Ontario announced the $250 million Emerging Technologies Fund yesterday … pretty much exactly what Monday’s letter to McGuinty from the CVCA requested. That has got to be, by the way, either:

  1. the world’s first psychic government relations campaign, or
  2. the world’s fastest government stimulus.

Not to be out-done, the Québec budget today included an $825 million venture capital fund.  The government is teaming up with the Fonds de solidarité FTQ (english), the investing arm of the province’s labour federation, and the Caisse de dépôt et placement du Québec (english).

It will be interesting to see whether VC funds who receive OVCF money will also be eligible for the ETF matching.  The Ministry says that full guidelines will be posted on the MRI web site before the end of June 2009.

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