Presented by: Luis Barros SVP of Investments and Industry Development Massachusetts Life Sciences...

Presented by:Luis BarrosSVP of Investments and Industry DevelopmentMassachusetts Life Sciences Center

The Massachusetts Life Sciences Initiative: Stakeholder Update

March 6, 2009

2

Overview of the Life Sciences Initiative

FY 09-10 Strategic Priorities

Certification Process

Programs

Tax Incentives

MLSC Investment Fund Programs

Investments and Returns to Date

What You Can Expect to See in the Next Few Months

3

State investments in the life sciences “Super Cluster” to:

Promote economic development

Support the Commonwealth’s world-class academic medical centers, research institutions, universities and industry leaders

Promote a highly skilled and educated workforce

Create an industry-friendly environment

Strengthen and protect Massachusetts’ global leadership position in the Life Sciences

Support the development of treatments, therapies and cures

Chapter 130 of the Acts of 2008 –Major Objectives

4

The Massachusetts Life Sciences Law –Key Elements

10-year, $1b investment:

$500m in Capital Funding (20 year bonds) Just under $300M in targeted investments identified in the law

$250m (through annual $25m budget appropriations) for the MA Life Sciences Investment Fund

$250m in tax incentives (with an annual cap of $25m) to be awarded to “certified life sciences projects”

5

Secretary of Housing and Economic Development Greg Bialecki

Secretary of Administration and Finance Leslie Kirwan

President of the UMass System Jack Wilson, PhD

A CEO of a Massachusetts-based life sciences corporation Josh Boger, PhD, President and CEO, Vertex Pharmaceuticals

A researcher involved in the commercialization of biotechnology, pharmaceuticals or medical diagnostic products Lydia Villa-Komaroff, CEO, Cytonome

A physician licensed to practice medicine in the Commonwealth and affiliated with an AMC Peter Slavin, MD, President, Massachusetts General Hospital

A person with financial expertise in the life sciences Marc Beer, former CEO, ViaCell Inc.

The Massachusetts Life Sciences Law –MLSC Board of Directors

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Massachusetts Life Sciences CenterScientific Advisory Board

• CHAIR: Harvey Lodish, Ph.D., Whitehead Institute, and Professor of Biology and of Bioengineering, MIT

• James Barry, Ph.D., Vice President, Corporate Research and Advanced Technology Development, Boston Scientific

• Doug Cole, M.D., General Partner, Flagship Ventures

• James J. Collins, Ph.D., Professor of Biomedical Engineering, Boston University

• George Q. Daley, M.D., Ph.D., Children's Hospital Boston, Harvard Medical School, Harvard Stem Cell Institute

• Patricia K. Donahoe, M.D., Director of the Pediatric Surgical Research Laboratories and Chief Emerita of Pediatric Surgical Services at Massachusetts General Hospital, and the Marshall K. Bartlett Professor of Surgery at the Harvard Medical School

• Jonathan Fleming, M.P.A., Managing General Partner, Oxford Bioscience Partners

• Jean M. George, M.B.A., Partner, Advanced Technology Ventures

• Lila Gierasch, Ph.D., Professor of Biophysical Chemistry, Department of Biochemistry, University of Massachusetts Amherst

• Richard A. Goldsby, Ph.D., John Woodruff Simpson Lecturer and Professor of Biology, Amherst College

• Jeffrey Leiden, M.D., Ph.D., Managing Director, Clarus Ventures

• David T. Scadden, M.D., Professor of Medicine, Harvard University, Co-Chair, Department of Stem Cell and Regenerative Biology, Harvard University, Co-Director, Harvard Stem Cell Institute, Director, MGH Center for Regenerative Medicine

• Alan E. Smith, Ph.D., Chief Scientific Officer, Genzyme Corp.

• Allison Taunton-Rigby, Ph.D., CEO and Director, RiboNovix, Inc.

• Philip Zamore, Ph.D., Professor, Biochemistry and Molecular Pharmacology, UMass Medical School

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Certification

Programs

Tax Incentives




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July – September ‘08“Active Listening” to:• Universities, Research Institutes

and Academic Medical Centers• Industry Executives• Investment Community• Trade Organizations• Professional Societies• Key Opinion Leaders• Other Life Sciences Initiatives• Economic Development Groups• Small Business Leaders

July – September ‘08“Active Listening” to:• Universities, Research Institutes

and Academic Medical Centers• Industry Executives• Investment Community• Trade Organizations• Professional Societies• Key Opinion Leaders• Other Life Sciences Initiatives• Economic Development Groups• Small Business Leaders

Work Plan for MLSC Ramp UpDeveloping the MLSC’s Business Model

BOARD andSAB

INPUT

BOARD andSAB

INPUTMARKET INPUTMARKET INPUT

MLSC PORTFOLIO STRATEGYMLSC PORTFOLIO STRATEGY

SolicitationsSolicitations Decision Criteria

Decision Criteria

Performance Metrics

Performance Metrics

Positioning and BrandingPositioning and Branding

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Strategic PrioritiesKey Questions

What important unmet needs and challenges does the Life Sciences community face that could be addressed by the Center?

Where are the best opportunities for the MLSC to have impact?

What are the implications for the MLSC’s top priorities for the next 2-3 years?

Large Market,

Difficult to Enter and Penetrate

High

Low

Low High

Bre

adth

of

Inve

stm

ents

MLSC Investment Portfolio

Worst Case

Best Case

Invest too little, too broadly to

make an impact

Make focused investments at

adequate levels to make impact

Size of Investments

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• FUND EARLY-STAGE COMPANIES and TECHNOLOGY TRANSFER

• PROMOTE WORKFORCE DEVELOPMENT

• STRENGTHEN THE COMPETITIVE POSITION OF ACADEMIC and MEDICAL RESEARCH INSTITUTIONS

• SERVE AS A CONVENER AND COORDINATOR

• FUND EARLY-STAGE COMPANIES and TECHNOLOGY TRANSFER

• PROMOTE WORKFORCE DEVELOPMENT

• STRENGTHEN THE COMPETITIVE POSITION OF ACADEMIC and MEDICAL RESEARCH INSTITUTIONS

• SERVE AS A CONVENER AND COORDINATOR

Investment and Economic

Development Communities

AcademicCommunity

IndustryCommunity

Strategic PrioritiesWhere Do Stakeholders Believe the MLSC Can Make a Difference?

Stakeholders Included in the Center’s Active Listening Phase

Medical Community

Recommended Priorities for the MLSC

Recommended Priorities for the MLSC

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MLSC FY ’09 Programs At-a-GlanceMLSC FY ’09 Programs At-a-Glance Address Priorities of the Life Sciences CommunityAddress Priorities of the Life Sciences Community

Translational Research

Therapeutic Candidate

LeadOptimization

Pre-ClinicalRegulatoryReview

RegulatoryApproval

Clinical Adoption/ Marketing

ClinicalTrials

Education and Workforce Dev Program

(Academic and Non-Profit Institutions)

Cooperative Research

(Tech Transfer)

Cooperative Research

(Tech Transfer)

New Faculty

Young Investigator

Workforce Development

Workforce Development

Life Sciences Accelerator Program (Companies)

Working CapitalWorking Capital

Investor Risk Reduction

Investor Risk Reduction

Leverage Outside Capital

Innovation Program (funds other promising opportunities)Innovation Program (funds other promising opportunities)

Tax Incentive Program $25M

Commercial-ization

Capital Investments Program $15M

Product Prototype Development

ML

SC

In

vest

men

t F

un

d P

rog

ram

s =

$12

MM

LS

C I

nve

stm

ent

Fu

nd

Pro

gra

ms

= $

12M

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Certification

Programs

Tax Incentives




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Certifying Life Sciences Companies

The Life Sciences Act requires that any company receiving monetary benefits must be certified by the Life Sciences Center, with the exception of applications to the Small Business Matching Fund. The MLSC will certify companies as they apply for funding.

The Life Sciences Act contains claw-backs and decertification procedures if companies do not reach their promised project employment/revenue/ROI goals.

Proposed approach to certification: Definition of “life sciences” company as specified in the Act User friendly web-based process for applicants Will not bar early-stage companies from receiving investments; calibrated responses as

appropriate for small or early stage companies vs. large, more mature companies Certification is not an independent attribute – the Center will only certify companies that are

funded

The same certification questions will be embedded in all program applications, along with questions specific to the

funding being requested

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Certification

Programs

Tax Incentives




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$250 million over 10 years Maximum of $25 million per year 9 different credits/benefits

Applicable to companies at all development stages Several credits are refundable (ITC, FDA User Fee, R&D Expense)

Non-transferable Refundability protects intended beneficiaries

Life Sciences Center has full discretion over recipients and criteria Consultation with DOR and ANF required by statute

Each beneficiary must be a “certified life sciences company”

MLSC Tax Incentive Program –Overview

Year 1 Timeline for Tax Incentive Program Applications Online application live – January 1, 2009 Application deadline – May 15, 2009 Awards announcement – no later than September 15, 2009

Year 1 Timeline for Tax Incentive Program Applications Online application live – January 1, 2009 Application deadline – May 15, 2009 Awards announcement – no later than September 15, 2009

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Patent Filing Launch

1250

250

500

750

1000

0

-250

-500

Discovery

Preclinical Phase I Phase II Phase III FDA/510k Review

Approval

An

nu

al N

et

Cash

Flo

w (

in m

illion

s)

An

nu

al N

et

Cash

Flo

w (

in m

illion

s)

Current programs help late stage companies

Current State Economic Development Programs

Emerging technology Fund,Tax Exempt Industrial Financing

Workforce Training FundR&D Tax Credits

Investment Tax CreditSingle Sales Tax Factor

TIF Agreements

Tax Structure and Incentives:

Financing:

Workforce Training:

Infrastructure: CDAG, PWED, MORE

Development

Initial R&D Product/prototype

Discovery, identification

Venture Funding

Mezzanine Financing

Public Equities & Debt

Grantsand

Angels

Universities, Institutes, Medical Centers

Universities, Institutes, Medical Centers

Companies

Companies

Funding Gap Funding Gap

MLSC Support MLSC SupportMLSC Support

Time in Market

Public Equities &IPO

Venture Funding

Highest Risk & Lowest Valuation

Lowest Risk & Highest

Valuation

Medium Risk & Medium Valuation

Corporate

MLSC’s Early Stage Program Objective:Help Smooth the Difficult Financial Path to Market

MLSC SupportMLSC Support

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Accelerator Program At-a-Glance

5-Year Loan

$100-$500K target range

10% Interest rate

Unsecured

Payable on financing event of at least $5M

Preference for matching other sources of capital

Pre Series A & Opportunistic

Life science sectors as defined by the statute: device/diagnostics, biotech, pharmaceuticals, bioinformatics, etc.

Round 1 TimelineApplication deadline – March 6, 2009Awards announcement – no later than April, 21, 2009

Round 1 TimelineApplication deadline – March 6, 2009Awards announcement – no later than April, 21, 2009

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Certification

Programs

Tax Incentives




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Investments and Returns: The Bottom Line

To date the MLSC has committed $33 million in public funding to support growth in the life sciences

These investments have leveraged more than $327 million in additional private investment

These investments are projected to create more than 850 new jobs across the state

And we have only just begun!

It’s been just seven months since the signing of the Life Sciences Act, and we are already seeing a substantial return on this investment, both in jobs created, and in support for life-saving scientific research.

It’s been just seven months since the signing of the Life Sciences Act, and we are already seeing a substantial return on this investment, both in jobs created, and in support for life-saving scientific research.

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Corporate Consortium Program

The MLSC is committed to highly leveraging the public tax dollars that we invest by attracting matching dollars from the private and non-profit sectors. At its December 2008 meeting, the MLSC Board of Directors approved the launch of the MLSC’s Corporate Consortium Program, with Johnson & Johnson as the charter corporate member.

Other major life sciences corporations have expressed interest in joining.

Highlights of the program include: Funds the MLSC’s mission by attracting

matching corporate investments in our (industry-targeted) programs

The MLSC will initially seed the Program with a minimum of $500K from each corporate participant

MLSC’s internal team will conduct sourcing, due diligence and decision; manage portfolio of investments

Final investment decisions are made by MLSC’s Board

Has committed a minimum of $500,000 to match investments made by the MLSC in FY 2009-10

Has committed a minimum of $500,000 to match investments made by the MLSC in FY 2009-10

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Investments and Return to Date

On October 31, 2008 the MLSC Board voted to provide a $5.2 million grant to the Town of Framingham for construction of a new wastewater facility to serve the Framingham Technology Park.

The Framingham wastewater project will allow Genzyme Corporation to build a new facility and create 300 new manufacturing jobs within the next year.

“This grant represents a partnership between the state, a local community, andthe private sector to meet infrastructure needs, while creating hundreds of jobshere in Massachusetts. This is the sort of targeted investment we must continuemaking even during challenging economic times, as we work to foster economicgrowth in Massachusetts.” - Governor Deval Patrick, Metrowest Daily News

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Investments and Return YTD

In May 2008, RainDance Technologies President and CEO Chris McNary announced that the company would move its operations from Connecticut to Lexington, Massachusetts. McNary cited the Commonwealth’s $1 Billion Life Sciences Initiative “as the stimulus for RainDance’s decision to relocate to Lexington from out of state this May.”

RainDance employs 54 people at its Lexington facility.

The MLSC and the Life Sciences Initiative are attracting quality life sciences companies to the Commonwealth. The MLSC and the Life Sciences Initiative are attracting quality life sciences companies to the Commonwealth.

In December 2008 the MLSC awarded the Harvard School of Engineering & Applied Sciences and Physics Department, in collaboration with RainDance Technologies, a $250,000 annual grant for three years to develop a new fluorescence activated cell sorter that will “further advance the growth of droplet biology and the positioning of RainDance and Harvard as world innovation centers for this important technology – as well as bolster the goals of the State’s Life Sciences Initiative and further position Massachusetts as a biotech industry leader.” (Chris McNary)

In December 2008 the MLSC awarded the Harvard School of Engineering & Applied Sciences and Physics Department, in collaboration with RainDance Technologies, a $250,000 annual grant for three years to develop a new fluorescence activated cell sorter that will “further advance the growth of droplet biology and the positioning of RainDance and Harvard as world innovation centers for this important technology – as well as bolster the goals of the State’s Life Sciences Initiative and further position Massachusetts as a biotech industry leader.” (Chris McNary)

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The Center is helping Massachusetts companies expand and create jobs.

In January, 2009, the MLSC Board of Directors approved a $7.4 million grant, to be paid over two years, that will facilitate the expansion of Organogenesis, a Canton-based regenerative medicine company. Organogenesis was the first company to successfully commercialize and mass produce a living cell product. The company forecasts that the Center’s investment will bring the following returns:

A return on investment for the Commonwealth of approximately $6 million in annual tax revenue by 2013;

A greater than twofold increase in the company’s workforce by 2013, including the creation of approximately 280 new jobs;

Leveraging of more than $50 million in private investment;

A world leading regenerative medicine manufacturing facility as an anchor of the industry within the state; and

Potential for substantial federal grants directed to Massachusetts.

A return on investment for the Commonwealth of approximately $6 million in annual tax revenue by 2013;

A greater than twofold increase in the company’s workforce by 2013, including the creation of approximately 280 new jobs;

Leveraging of more than $50 million in private investment;

A world leading regenerative medicine manufacturing facility as an anchor of the industry within the state; and

Potential for substantial federal grants directed to Massachusetts.

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On November 17th, 2008 the MLSC joined with Governor Patrick and Senate President Murray to announce funding of $10 million to renovate the Loeb Lab at the Marine Biological Laboratory in Woods Hole. The project will create 200 jobs in the building trades at it’s peak, and up to 50 permanent jobs in the life sciences.

The state’s commitment of $10 million was leveraged by MBL to receive an additional $15 million in private funding from the Howard Hughes Medical Institute (HHMI). According to Dr. Gary Borisy, Director and CEO of the MBL, the MLSC’s commitment of $10 million helped secure the HHMI grant.

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In October 2007 the MLSC Board of Directors approved funding to support the creation of an International Stem Cell Registry and Embryonic Stem Cell Bank at the University of Massachusetts Medical School. The MLSC is investing $7.7 million in the UMass Medical School Stem Cell Bank and $570,000 in the Stem Cell Registry.

With optimism around the Obama Administration’s lifting federal restrictions on embryonic stem cell research, the Center’s stem cell investments will help position Massachusetts to compete for new federal research dollars, as well as provide stem cell lines to national and international academic and commercial organizations.

On September 11, 2008 the MLSC and UMass Medical School announced the official launch of the International Stem Cell Registry. Announcement of the Stem Cell Bank will occur this winter.

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In 2008, the MLSC launched a $12 million Matching Grant Program for new investigators, faculty positions, and cooperative research. To date $10.6 million has been awarded. These grants:

Are enabling 11 young Massachusetts scientists to continue their research, establish independent laboratories and possibly secure larger-scale NIH funding Are improving the ability of five (5) universities and academic medical centers across Massachusetts to compete more effectively for top faculty Are funding research collaborations between six (6) industry and academic partners focused on new therapies and technologies with high commercialization potential Will accelerate the translation of treatments and therapies “from the research bench to the bedside”

The Center’s grants leveraged $10.6 million in matching funds from private and public research institutions and industry sponsors -- creating a $21 million investment in translational research across the Commonwealth

The Center’s grants leveraged $10.6 million in matching funds from private and public research institutions and industry sponsors -- creating a $21 million investment in translational research across the Commonwealth

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The Matching Research Grants have been broadly diverse:

New Investigator Grants 11 awards

($3.75 million over 3 years)

• Beth Israel• Boston University• Broad Institute• Harvard Medical School• Massachusetts General

Hospital• MIT(2)• Tufts Veterinary Medical

School• UMass Amherst• UMass Lowell• Whitehead Institute

Faculty Start-up Grants 5 awards


• Boston University

• Brandeis

• UMass Amherst

• UMass Boston

• UMass Lowell

Cooperative Research Grants 6 awards


• Brigham & Women’s Hospital

• Harvard University, School of Engineering & Applied Science

• Immune Disease Institute

• Massachusetts General Hospital

• UMass Lowell• UMass Medical School

Awarded July 08Awarded July 08 Awarded July 08Awarded July 08 Awarded Dec 08Awarded Dec 08

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In September 2008 the Life Sciences Talent Initiative report, Growing Talent, was released jointly by the MLSC and Mass Biotechnology Council.

The Report:

Examines the life sciences workforce needs throughout the Commonwealth

Quantifies workforce needs in the Massachusetts life sciences cluster

Establishes foundation for MLSC workforce development programs

In September 2008 the Life Sciences Talent Initiative report, Growing Talent, was released jointly by the MLSC and Mass Biotechnology Council.

The Report:

Examines the life sciences workforce needs throughout the Commonwealth

Quantifies workforce needs in the Massachusetts life sciences cluster

Establishes foundation for MLSC workforce development programs

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Certification

Programs

Tax Incentives




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What You Can Expect in the Next Few Months

Upcoming events:

Roundtable discussions regarding MLSC programs and application process (ongoing)

MLSC headquarters opening (by May 1, 09)

Museum of Science event with Legislators (March, 09)

Opening of Massachusetts Embryonic Stem Cell Bank (TBD)

Groundbreaking events in Framingham and Woods Hole (TBD)

Showcase Research Matching Grants awardees (Ongoing)

Bio 2009 (May 18-21, 09 in Atlanta)

Roundtable discussions with key constituent groups including disease advocacy organizations and regional economic development groups

Presented by: Luis Barros SVP of Investments and Industry Development Massachusetts Life Sciences...

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