Financial Lifeline for Biotech Companies in Florida

Lilly Rockwell | 2/27/2012

The Public Sector: It's All About the Feds

[Photo: Jason Nettle] "If you look at states we are competing with like California and Massachusetts, many of them have identified biotech as an industry they would like to cultivate and have a long list of programs supporting these businesses at an early stage. The state of Florida doesn't have much at all." — Ray Johnson, president, Cytonics

AxoGen, a 10-year-old regenerative medical company in Alachua, makes products and technologies that help repair nerve damage. These days, the company, which had $3.5 million in revenue through the first three quarters of 2011, gets its investment capital through the stock market.

As with most biotech companies, however, the basic research that underlies AxoGen's technology was funded by the federal government. Some $1.4 million in grants from the National Institutes of Health paid for the research that produced the technology that AxoGen licensed from the University of Florida.

While private companies continue to fund the lion's share of research and development activity in the U.S., only about 4% of private R&D funding goes for basic research. The federal government funds nearly 60% of basic research in the U.S., with foundations (10%), colleges and universities (10%) and state and local governments (3.5%) accounting for much of the rest. State government provides some funding through special programs aimed at research or companies in their earliest stages ["State Programs"].

Last year, NIH — the federal agency that accounts for more than half of all federal spending on basic research — awarded $493 million to scientists at Florida universities, research institutions and businesses, a 26% increase over 2010 and a 35% increase since 2007.

Top Florida Recipients of NIH Funding (2011)
1	University of Miami Miller School of Medicine, Miami	$118,731,107
2	University of Florida, Gainesville	108,629,959
3	University of South Florida, Tampa	81,337,599
4	H. Lee Moffitt Cancer Center and Research Institute, Tampa	41,810,382
5	Florida International University, Boca Raton	19,621,969
6	Jaeb Center for Health Research, Tampa	19,592,591
7	Scripps Florida, Jupiter	18,472,431
8	Florida State University, Tallahassee	17,524,805
9	University of Miami-Coral Gables, Coral Gables	10,226,325
10	Mayo Clinic, Jacksonville	9,262,254
Source: National Institutes of Health

The growth in NIH funding largely reflects the recent presence of powerhouse research institutes in Florida, such as Jupiter-based Scripps Florida. Scripps alone saw its NIH funding more than quadruple from $4 million in 2010 to $18 million in 2011.
Despite the increases, Florida ranked 13th among states in NIH funding in 2011, trailing Texas, North Carolina and Illinois, as well as research powerhouses such as California and Massachusetts.

Going forward, competition for grants from the NIH and other agencies will likely grow more intense. After doubling in the five years up until 2003, NIH's budget has remained relatively flat over the last five years. And, says Harry Orf, former Scripps Florida vice president for scientific operations: "The number of people doing research and the number of grant applications has grown."

Top Florida Business Recipients of NIH Funding (2011)
1	Altor BioScience, Miramar	$2,504,093
2	Saneron CCEL Therapeutics, Tampa	1,569,916
3	TissueTech, Miami	1,121,882
4	Cytonics, Jupiter	882,440
5	Optima Neuroscience, Alachua	744,779
6	Banyan Biomarkers, Alachua	646,640
7	Firebird Biomolecular Sciences, Gainesville	644,620
8	Converge Biotech, Miami	450,290
9	HeartWare, Miami Lakes	385,813
10	Convergent Engineering, Newberry	358,494
Source: National Institutes of Health

NIH Grants: U.S. vs. State
Year	Nationwide	Florida
2007	$23 billion	$365 million
2008	$23	$418
2009	$24	$424
2010	$22	$391
2011	$24	$493
Source: National Institutes of Health