At the University of Florida, meanwhile, a biomedical spinoff called RegenMed recently landed its first million in financing from a new-found source: A private Florida investor wooed by the UF Foundation. A year ago, the foundation changed its mission statement to reflect a unique new goal -- finding not just philanthropists to donate to the university, but investors to take a chance on its spinoff companies.
"You can sit around waiting for the state, or you can sit around waiting for the venture capitalists," says David Day, director of UF's Office of Technology Licensing. "Or you can move forward, and that's what we're trying to do."
Indeed, many in Florida's fledgling biotech field have moved forward in the past year, making progress on a number of fronts that traditionally have bedeviled the industry. "Definitely some of the necessary components for growth of a biotech industry are finally coming together," says David Gury, chairman and CEO of Boca Raton-based Nabi Biopharmaceuticals.
For one, after suffering for years from a lack of management talent, Florida is beginning to see what the industry calls "serial entrepreneurs" -- experienced biotech managers moving from one company to the next in the same community. In Ponte Vedra Beach, for example, managers of SunPharm, which was acquired by GelTex Pharmaceuticals in 1999, now lead Copharos, which last year completed its first phase of clinical trials of a new method to diagnose cancer.
Meanwhile, at least a half-dozen new venture capital funds have opened in the state's three biotech "hot spots" -- Miami, Tampa and Gainesville -- helping to provide the private financial backing for young firms that too often has been missing. "We came into Florida because we knew there was some unique opportunity here," says Dan Rua, a managing partner with Inflexion, which plans to invest between $250,000 and $1 million each in 10 to 12 Florida startups over the next three years. "But the stuff we're seeing has far exceeded our expectations -- from the deal standpoint to the quality of the technology to the entrepreneurial enthusiasm."
In addition, Florida -- which has lagged far behind competitors such as Michigan, North Carolina and Georgia in funding biotech research -- made a promising investment in biotechnology this year. The state pumped $10 million each into Gov. Jeb Bush's "Centers of Excellence" in regenerative health at UF and in biomedical and marine biotechnology at Florida Atlantic University.
But the news isn't all good. Florida's budget problems make future funding for the Centers of Excellence program far from certain. At press time, only the Senate budget included any money for it; a third of what the state spent this year. That could reinforce a longstanding perception that Florida has "good ideas without much planning or without much follow-through," says Claire Thuning-Roberson, vice president for product development and compliance at Sunol Molecular Corp. in Miramar and chairwoman of the industry group BioFlorida.
Going 'too far'
More frustrating to some bio-scientists: State legislators may deal Florida biotech a whole new hand of problems. For example: Rep. Jim Kallinger, R-Winter Park, and Sen. Dan Webster, R-Winter Garden, have proposed bills that outlaw both human cloning and the therapeutic cloning that scientists call "somatic cell nuclear transfer."
In that process, scientists remove the nucleus of a somatic cell -- such as a skin cell -- from a patient. They then use it to replace the nucleus of a donated egg cell and stimulate it to begin dividing. The scientists can harvest stem cells five to six days later.
Scientists believe the process could lead to therapies in which doctors would use stem cells with the patient's own DNA to treat diseases such as Parkinson's, heart disease or cancer. Since the cells have the same genetic make-up as the patient donor, the patient's body won't reject them.
Even though the dividing cells are never fertilized with sperm, Kallinger and others call it human cloning: "Once you put that somatic cell into the egg, you have a zygote. Once you've created a zygote and you stimulate it to replicate itself, you've created a living human embryo," says Kallinger. "You've just created human life."
Florida's industry supports a ban on cloning humans. But it opposes these bills "because they go too far," stresses BioFlorida President Paul Hassie. "Florida must create incentives for investment," he says. "Banning the use of important technology and restricting how research is performed will send an alarming message to potential investors that Florida is really not serious about expanding its biotechnology industry."
Kallinger's bill is identical to one being debated in Congress. If it becomes federal law, an identical Florida law wouldn't pose a problem, scientists here say. But it would be a serious setback for the industry if Florida passes a more restrictive law than the rest of the nation.
Bush's communications director, Jill Bratina, says the governor is "supportive of the concept that Rep. Kallinger is advancing" but couldn't say whether he would sign such a bill. "Keep in mind that there are other ways to achieve the same research goals," Bratina says.
Senate President Jim King says the therapeutic ban is unlikely to pass this year; he agrees that passage of a stricter law than other states could negatively affect Florida research institutions. "I think it's safe to say that the Senate is very, very reluctant to go down that slippery slope right now," he says.
In an attempted compromise that he believes is "open-minded and moralistically sound," King has asked Webster to sponsor his proposal for a Center of Universal Research to Eradicate Disease, known as CURED. If approved, the center would serve as a clearinghouse for stem-cell research in Florida and coordinate the donation of placentas and umbilical cord blood. Both are rich in the stem cells researchers say could help cure fatal diseases -- and they don't carry the controversy surrounding the somatic process.
Wrong approach?
King is considering funding the center with interest from the state's $150 million biomedical research trust fund -- also the source of the Centers of Excellence funding. But some industry leaders say King's approach is wrong-headed because it allocates scarce research money based on political criteria rather than scientific promise -- and is likely to lead to a lack of follow-through as the political winds blow. They point to Miami's once highly touted Center for Health Technologies, a biomedical incubator funded by the Legislature that helped launch dozens of startups before funding dried up and it closed in 1997.
Despite the politics and the catch-up game Florida is playing to fund and attract biotech, those in the industry are far more positive than they've been in the past. "We're a large and diverse state and it's hard to coalesce anything on a statewide basis, yet it's happening," says Mike Poland, a partner at Ernst & Young in Tampa who specializes in health sciences. "I think we're poised to really make some great strides."
BIOTECH TRENDS IN FLORIDA
The good news
- The industry is better organized: Along with BioFlorida, the statewide trade association based in Gainesville, the industry is coalescing in two regional efforts: The South Florida Bioscience Consortium formed in March, and the 18-month-old Gulf Coast Life Sciences Initiative that focuses on biotech coming out of the University of South Florida and H. Lee Moffitt Cancer Center in Tampa.
Florida ranks 11th nationwide in its number of biotech firms. Here are the top dozen states for biotechnology in the U.S.:???1) California???2) Massachusetts???3) Maryland???4) North Carolina???5) Pennsylvania???6) New Jersey???7) New York???8) Washington???9) Georgia?10) Texas?11) Florida?12) ColoradoSource: Ernst & Young- Florida-centric funds are popping up: In addition to new VC offices in Florida opened by Eno River, Inflexion and Draper Fisher Jurvetson, whose new Florida affiliate is Draper SI Ventures of Fort Myers, the Tampa investment bank Athena Capital Partners is raising money for biotechs and encouraging out-of-state companies to move here. For example, Israel-based CBD Technologies, which genetically modifies trees grown for timber, is considering relocating to the Tampa Bay area as part of its partnership with Athena. Company executives are considering the move for access to capital, to research at UF and USF and to easy
international travel.
- State institutions are beginning to invest: Long unwilling to invest foundation dollars into their own biotech startups, several Florida universities, including UF, USF and the University of Miami, are considering investing in one of the Florida-specific funds. So far, only the University of Central Florida in Orlando has done so, with an institutional investment in Inflexion.
- Past investments are paying off: In 1995, the Legislature earmarked more than $2 million to match USDA funding for what is now the Sid Martin Biotechnology Development Incubator in Alachua, about 15 miles north of Gainesville, where 28 biotechnology companies have started up in the past eight years. (Scorecard: 12 current companies, 10 graduated or acquired, six closed.) The incubator's key ingredient: $750,000 worth of infrastructure, including wet labs, a greenhouse, small- and large-animal labs, a small fermentation facility and other scientific equipment and lab space that young bio startups can share. The state's new investment in the regenerative health center at UF will bolster the incubator with a 45,000-sq.-ft. fermentation facility next door.
The bad news
- Other states continue to far outspend Florida in biotech: Just one example: The N.C. Biotechnology Center has spent $10 million a year since 1981 to fund university research, develop businesses and spearhead workforce training. Along with growing the clusters of companies on which the industry thrives, other states have managed to lure some of the best bio-scientists away from Florida. Last year, UF lost a key genetics researcher to the Medical College of Georgia in Augusta -- a less-known institution luring big names with the help of the Georgia Research Alliance's powerful eminent scholars program. Five years ago, in a blow that continues to reverberate through Florida's marine-bio community, the University of North Carolina at Wilmington hired away from UM's Rosenstiel School of Marine and Atmospheric Science a husband-and-wife team renowned internationally for their work in marine biotechnology.
- Florida isn't capitalizing on its coastline: Ironically, the state with more miles of coast than any other in the continental U.S. lags particularly in marine biotech companies, which work to develop products such as pharmaceuticals or industrial compounds from the sea. A recent study by Florida Sea Grant found only five marine biotech companies in the state. FAU's Center of Excellence for Biomedical and Marine Biotechnology aims to address this problem, with a specific goal of spinning off technology into local firms.
- Technology discovered here is often brought to market elsewhere: At the Harbor Branch Oceanographic Institution in Fort Pierce, scientists blame Florida's lack of large companies. Breakthroughs such as an anti-tumor compound harvested from sea sponges are being developed out of state by companies such as Novartis. "I think the Center of Excellence money is a great way to go, but $10 million is not a lot when it comes to biotech research," says Biomedical Marine Research Director Amy Wright. "Think about it this way: Merck spends $9 million a day on research."
- Likewise, bio-ag breakthroughs from Florida universities are snapped up by out-of-state companies: But the Florida Research Consortium is working on initiatives to encourage Florida universities and companies to consider each other first. "There's a real effort, and I think you're going to see a harder look and a fairer chance for both our universities and our companies in the future," says Gary Margules, UM's assistant provost for technology transfer and a member of the consortium.