The Massachusetts Life Sciences
Initiative: Stakeholder Update
Presented by:
Luis Barros
SVP of Investments and Industry Development
Massachusetts Life Sciences Center
March 6, 2009
 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
1
Chapter 130 of the Acts of 2008 –
Major Objectives
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
2
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”
3
The Massachusetts Life Sciences Law –
MLSC Board of Directors
 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.
4
Massachusetts Life Sciences Center
Scientific Advisory Board
• CHAIR: Harvey Lodish, Ph.D., Whitehead • Lila Gierasch, Ph.D.,
Institute, and Professor of Biology and of
Bioengineering, MIT
Professor of Biophysical
Chemistry, Department of Biochemistry, University of
Massachusetts Amherst
• James Barry, Ph.D., Vice President, Corporate • Richard A. Goldsby, Ph.D., John Woodruff
Research and Advanced Technology Development,
Boston Scientific
• Doug Cole, M.D., General Partner, Flagship
Ventures
• James J. Collins, Ph.D., Professor of
Simpson Lecturer and Professor of Biology, Amherst
College
• Jeffrey Leiden, M.D., Ph.D., Managing
Director, Clarus Ventures
Biomedical Engineering, Boston University
• David T. Scadden, M.D., Professor of
• Patricia K. Donahoe, M.D., Director of the
• Alan E. Smith, Ph.D., Chief Scientific Officer,
Medicine, Harvard University, Co-Chair, Department of
Cell and Regenerative Biology, Harvard University,
• George Q. Daley, M.D., Ph.D., Children's Stem
Co-Director, Harvard Stem Cell Institute, Director, MGH
Hospital Boston, Harvard Medical School, Harvard Stem
Center for Regenerative Medicine
Cell Institute
Genzyme Corp.
Pediatric Surgical Research Laboratories and Chief
Emerita of Pediatric Surgical Services at Massachusetts
General Hospital, and the Marshall K. Bartlett Professor • Allison Taunton-Rigby,
of Surgery at the Harvard Medical School
Director, RiboNovix, Inc.
• Jonathan Fleming, M.P.A.,
Managing
General Partner, Oxford Bioscience Partners
Ph.D., CEO and
• Philip Zamore, Ph.D., Professor, Biochemistry
and Molecular Pharmacology, UMass Medical School
• Jean M. George, M.B.A., Partner, Advanced
Technology Ventures
5
 Overview of the Life Sciences Initiative
 FY 09-10 Strategic Priorities
 Certification
 Programs
 Tax Incentives
 MLSC Investment Fund Programs
 Investments and Returns to Date
 What You Can Expect to See in the Next Few Months
6
Work Plan for MLSC Ramp Up
Developing the MLSC’s Business Model
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
BOARD and
SAB
INPUT
MARKET INPUT
MLSC PORTFOLIO STRATEGY
Solicitations
Decision
Criteria
Performance
Metrics
Positioning and Branding
7
Strategic Priorities
Key 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?
MLSC Investment Portfolio
High
Breadth of
Investments
Worst Case
Low
Invest too little,
too broadly to
make an impact
Large
Market,
Difficult to
Enter and
Penetrate
Low
Make focused
investments at
adequate levels to
make impact
Best Case
High
8
Strategic Priorities
Where Do Stakeholders Believe the MLSC Can Make a Difference?
Recommended Priorities for
the MLSC
• 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
Stakeholders Included in the Center’s Active
Listening Phase
Academic
Community
Industry
Community
Investment and
Economic
Development
Communities
Medical
Community
9
MLSC FY ’09 Programs At-a-Glance
Address Priorities of the Life Sciences Community
MLSC Investment Fund Programs = $12M
Translational
Research
Therapeutic
Candidate
Lead
Optimization
Pre-Clinical
Regulatory
Review
Clinical
Trials
Education and Workforce Dev
Program
(Academic and Non-Profit Institutions)
New Faculty
Young
Investigator
Cooperative
Research
(Tech Transfer)
Workforce
Development
Regulatory
Approval
Clinical
Adoption/
Marketing
Commercialization
Life Sciences Accelerator
Program
(Companies)
Working Capital
Investor Risk
Reduction
Product Prototype
Development
Leverage Outside
Capital
Innovation Program (funds other promising opportunities)
Tax Incentive Program
$25M
Capital Investments Program
$15M
10
 Overview of the Life Sciences Initiative
 FY 09-10 Strategic Priorities
 Certification
 Programs
 Tax Incentives
 MLSC Investment Fund Programs
 Investments and Returns to Date
 What You Can Expect to See in the Next Few Months
11
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
12
 Overview of the Life Sciences Initiative
 FY 09-10 Strategic Priorities
 Certification
 Programs
 Tax Incentives
 MLSC Investment Fund Programs
 Investments and Returns to Date
 What You Can Expect to See in the Next Few Months
13
MLSC Tax Incentive Program –
Overview
 $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”
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
14
MLSC’s Early Stage Program Objective:
Help Smooth the Difficult Financial Path to Market
Universities,
Institutes,
Medical
Centers
Current State
Economic
Development
Programs
Emerging technology Fund,
Tax Exempt Industrial Financing
Workforce Training: Workforce Training Fund
R&D Tax Credits
Tax Structure and Incentives:
Investment Tax Credit
Single Sales Tax Factor
TIF Agreements
Infrastructure: CDAG, PWED, MORE
Companie
s
Financing:
Patent Filing
Annual Net Cash Flow
(in millions)
1000
750
Launch
Discovery
1250
Initial R&D
Product/prototype
Discovery,
identification
Preclinical
Development
Phase I
Phase II
Phase III
500
250
0
Current programs help
late stage companies
Grants
and
Angels
Funding Gap
-250
Highest Risk
& Lowest
Valuation
-500
MLSC Support
Venture
Funding
Venture
Funding
Mezzanine
Financing
Funding Gap
Medium Risk
& Medium
Valuation
MLSC Support
FDA/510k
Review
Approval
Corporate
Public
Equities &IPO
Public
Equities
& Debt
Time in Market
Lowest Risk &
Highest
Valuation
MLSC Support
15
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 Timeline
Application deadline – March 6, 2009
Awards announcement – no later than April, 21, 2009
16
 Overview of the Life Sciences Initiative
 FY 09-10 Strategic Priorities
 Certification
 Programs
 Tax Incentives
 MLSC Investment Fund Programs
 Investments and Returns to Date
 What You Can Expect to See in the Next Few Months
17
Investments and Returns: The Bottom Line
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.
 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!
18
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.
Has committed a minimum of
$500,000 to match investments
made by the MLSC in FY 2009-10
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
19
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, and
the private sector to meet infrastructure needs, while creating hundreds of jobs
here in Massachusetts. This is the sort of targeted investment we must continue
making even during challenging economic times, as we work to foster economic
growth in Massachusetts.” - Governor Deval Patrick, Metrowest Daily News
20
Investments and Return YTD
The MLSC and the Life Sciences Initiative are attracting quality life sciences
companies to the Commonwealth.
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.
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)
21
Investments and Return to Date
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.
22
Investments and Return to Date
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.
23
Investments and Return to Date
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.
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.
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.
24
Investments and Return to Date
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:
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
 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”
25
Investments and Return to Date
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
Awarded July 08
Faculty Start-up Grants
5 awards
($3.75 million over 3
years)
•
Boston University
•
Brandeis
•
UMass Amherst
•
UMass Boston
•
UMass Lowell
Cooperative Research
Grants 6 awards
($4.5 million over 3
years)
•
•
•
•
•
•
Awarded July 08
Brigham & Women’s
Hospital
Harvard University,
School of Engineering
& Applied Science
Immune Disease
Institute
Massachusetts
General Hospital
UMass Lowell
UMass Medical School
Awarded Dec 08
26
Investments and Return to Date
 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
27
 Overview of the Life Sciences Initiative
 FY 09-10 Strategic Priorities
 Certification
 Programs
 Tax Incentives
 MLSC Investment Fund Programs
 Investments and Returns to Date
 What You Can Expect to See in the Next Few Months
28
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
29