Arizona began to build a critical mass of research in niche areas that capitalized on existing strengths in bioengineering, cancer therapeutics, and neurosciences. Leading scientists and clinicians in these fields also identified cross-cutting competencies vital to the success of these core research areas: bioimaging, tissue repositories, and a translational research infrastructure to accelerate the movement of research discoveries into new medical interventions. Targeted investments are being made in these sectors.
The results are impressive. Since 2005, Arizona has surpassed the growth rate of the Top Ten states in biomedical research grants from the National Institutes of Health, the “gold standard” measure of research strength. This suggests that the state’s biomedical research is broad and deepening.
A strong biomedical research enterprise alone, however, will not yield a critical mass of bioscience enterprises. Nor is it likely to prevent disease or improve diagnostics and treatment. It can, however, be a seedbed and springboard for bioscience companies. That is Arizona’s next Big Step – turning research capacity into new technologies, firms, products, and jobs. Battelle calls this “technology commercialization.”
The costs and time required to take a new discovery to market are substantial. After the basic research is completed and promising opportunities discovered, major costs are incurred to validate the findings on a larger scale, assess the potential market, prepare manufacturing and marketing plans, and achieve “investment-grade status.” Investors are needed to risk capital and steer the new firm or product into the marketplace successfully. These steps are critical to achieve the twin benefits of investments in the biosciences – improved medical care and a thriving bioscience economic base.
Arizona confronts three significant gaps in its efforts to build an effective technology commercialization strategy:
• Availability of start-up resources (technology transfer, facilities, and management expertise) to undertake the necessary market and technology assessments, prototype development, and engineering optimization to determine if the research can be turned into a product or firm;
• Business service support and mentoring to help with business plans, sales and marketing assessments, and other support services involved in incubating a new firm or product. This often requires an experienced management team familiar with bioscience markets;
• Adequate risk capital, including “angel investors” to provide initial capital ($50,000 to $200,000 per project), seed funding for the most promising opportunities ($500,000 to $800,000 per project), and initial start-up funding (estimated at $1 million to $3 million per project).
Battelle notes that those states most likely to succeed in developing a thriving bioscience economy will be those that select the smartest investments and manage them for long-term impact. Arizona seems poised to take this next step. The number of patents and licenses granted by Arizona universities is up substantially, and the biosciences remains one of the fastest growing segments of Arizona’s economy.
Battelle recommends that Arizona focus its commercialization efforts on three signature opportunities that align the state’s core research strengths with its growing bioscience industry base. These are:
• Molecular therapies, vaccines, and diagnostics evolving from research in genomics and proteomics, which are revolutionizing how we treat, prevent, and predict the onset of disease and infectious agents;
• Advanced medical technologies leveraging the convergence of biosciences with fields such as imaging, information technology, nanotechnology, and similar engineering disciplines;
• Sustainable bio-related technologies deriving from organisms such as microbes and plants to produce material resources, energy, and manufactured products without damaging or depleting the earth’s resources. Arizona’s desert environment offers ample testing grounds.
In advising states and regions on the ingredients needed to build a bioscience sector, Battelle has learned that private foundations – with their commitment to a community, their long-term horizon, endowment, and objectivity – are uniquely positioned to bring together public- and private-sector interests to achieve a common agenda. In Arizona, this has translated into a niche role for the Flinn Foundation.
The Foundation’s board of directors is committed through at least 2012 to helping Arizonans build a competitive bioscience economy. To honor that commitment, in partnership with others, the Foundation is prepared to apply a variety of resources – grants, loans, direct investments, and board, staff and consultant expertise – to help fill strategic research gaps and invest in Arizona’s bioscience future. It is an exciting and challenging opportunity.
John W. Murphy
President and
Chief Executive Officer