Arizona’s bioscience initiative broadens gains through sixth year

January 20, 2009

By Flinn Foundation

How does Arizona fare six years into its long-term plan to build a thriving biosciences region? In a nutshell, the state has recorded rapid growth well above U.S. norms in generating federal grants and adding new bioscience jobs and firms. But the enduring need for capital investment for young companies continues to be an Achilles heel.

These findings are from new data released by Battelle, the Ohio-based nonprofit contract research firm that has tracked the progress of Arizona’s Bioscience Roadmap since it was launched in 2002. The Roadmap project, commissioned by the Flinn Foundation, has been guided by a statewide collaboration of 350-plus officials from business, science, academia, government, finance, law, and other areas.

“Arizona has one of the nation’s fastest-growing bioscience industries,” said Walter H. Plosila, Ph.D., senior advisor to the Battelle Technology Partnership Practice. “It’s not a major bioscience destination yet—that will require several more years—but Arizona has gained a national reputation as an emerging bioscience center.”

Among the updated metrics from Battelle’s annual tracking:

Federal Grants: Arizona’s growth in research grants from the National Institutes of Health (NIH)—the industry gold standard—grew 24 percent from 2002, the year of the Roadmap launch, through 2007. This doubles the growth rate of the nation’s top-10 states.

R&D Expenditures: Bioscience-related academic research and development expenditures at the state universities reached $415 million in 2007, a 48 percent gain since 2002. This exceeds the 42 percent mark of the nation’s top-10 states.

Bioscience Jobs: During 2002-07, Arizona bioscience jobs grew by 23 percent, compared to the U.S. average of 8 percent. In a rarity among states, job growth occurred across all five subsectors that comprise the biosciences—drugs and pharmaceuticals; research, testing, and labs; medical devices and equipment; hospitals; and agriculture feedstock and chemicals.

Bioscience Firms: The number of bioscience establishments in Arizona grew by 22 percent during 2002-07, outpacing the national average of 11 percent.

Venture Capital: At $86 million, Arizona recorded its best year in 2007 since the banner year of 2002, though fell short of the Roadmap goal of $100 million for the year. Reflecting a national trend, venture capital investments fell in 2008 at $65 million. The state continues to account for less than 1 percent of national venture capital investments.

University licensing income: While the state’s universities have been showing continued gains in spinning out new companies, securing more patents, and other measures of technology transfer, 2008 saw a substantial drop-off in licensing income. At $1.5 million, the mark fell 50 percent from 2007.

“Despite the decline on certain tech-transfer measures in 2008, overall the universities have shown steady progress in tech transfer since the launch of the Roadmap,” Plosila said.

While the data revealed statistical gains, 2008 marked profound developments that help to advance the Roadmap. Examples:

  • Ventana Medical Systems of Oro Valley was bought out by Roche, the world’s largest pharmaceutical firm, with plans for local expansion.
  • The Arizona-based Partnership for Personalized Medicine, involving TGen, the Biodesign Institute at Arizona State University, and Nobel laureate Lee Hartwell of Seattle, landed a major role in the $200 million bioscience initiative in the nation of Luxembourg.
  • The University of Arizona landed one of the largest research grants ever in Arizona at $50 million, and another contract of $44 million.
  • Several achievements added to Arizona’s infrastructure to turn innovative ideas into new products and companies via private and public investment vehicles for early-stage companies.

In addition, Battelle has determined that 17 of the 19 Roadmap actions recommended in 2002 have recorded progress, including 10 with substantial progress. Grants from Science Foundation Arizona moved three actions from “progress” to “substantial progress” in 2008.

“At this juncture of the Roadmap, the focus has intensified on translating research into new products and companies,” said John W. Murphy, Flinn Foundation President and CEO. “Arizona has built a solid biomedical research infrastructure. We now have an opportunity to make significant strides by accelerating the bench-to-bedside process, especially in niche areas where Arizona excels.”

Battelle is the world’s largest private, nonprofit research and development organization, headquartered in Columbus, Ohio. Battelle’s Technology Partnership Practice provides research and facilitation for the Roadmap project.

The Flinn Foundation is a Phoenix-based, private, nonprofit philanthropic endowment. In addition to commissioning the Roadmap project, the Foundation staffs its committees and workgroups. The Foundation is dedicated to improving the quality of life in Arizona principally by advancing the medical sciences. It fulfills this mission through its support of various scientific and educational programs and activities, including the Flinn Scholars program.