The Phoenix-based Translational Genomics Research Institute (TGen) has parlayed investment from the State of Arizona into a 2008 direct annual economic impact of $44.5 million, a new study reports. That sum more than doubles the direct impact that a similar study found in 2006.
According to the independent study, TGen’s total annual economic impact in 2008 was $77.4 million. Tripp Umbach, which conducted the analysis for TGen, projects a 2025 total economic impact–including the productivity of spinoff firms and other commercialization activities–of $321.3 million. Under that forecast, in 2025 TGen operations and commercialization of TGen-led research would be responsible for 4,116 direct and indirect jobs in Arizona.
“Our previous analysis showed that your organization provided a significant return on investment to the Arizona economy and future returns were anticipated to be even more dramatic,” wrote Paul Umbach, Tripp Umbach’s president and CEO, in a letter prefacing the report. “As a result of your better than expected performance over the past two years our projected impact numbers for 2015 and 2025 are also significantly stronger.”
Since fiscal year 2003, the Arizona Legislature has annually steered $5.5 million to TGen from the Arizona Biomedical Research Commission‘s Health Research Fund to cover administrative costs such as personnel, equipment, supplies, and travel. That funding gives TGen an important competitive advantage, since the National Institutes of Health and other national funders almost never award grants to institutions solely for operational costs.
Tripp Umbach calculated that the return on the state’s investment from TGen’s operations rose from $3.95 for every dollar invested in 2006 to $8.09 in 2008.
The study also found that the combination of TGen operations and the commercialization of TGen research generated direct and indirect tax revenue of $5.7 million for the state–already a greater amount than the state’s annual investment. By 2025, that figure could reach $27.4 million.
“Bioscience was never intended to be the sole component that would change the economy in Arizona,” said Jeffrey Trent, TGen’s president and research director, in the Arizona Republic. “But I think it is an important knowledge-based pillar that the state has invested in, and I think if it continues to invest, it is likely to have an economic impact.”
The Tripp Umbach report stated that TGen’s emphasis on establishing collaborations at the national and international levels–such as its strategic alliance with the Michigan-based Van Andel Research Institute and its contract to provide expertise to the Integrated Biobank of Luxembourg–were important contributors to the institute’s achievements.
“Strong collaboration with other organizations and strong support from the State of Arizona has allowed TGen to grow faster and more dynamically than any other research institute in the United States,” the report stated.
According to the Phoenix Business Journal, TGen’s net income more than doubled from 2007 to 2008, to $1.9 million. That rapid growth will allow it to make significant investments in workforce, said Tess Burleson, TGen’s chief operating officer. She told GenomeWeb Daily News that the institute would be hiring around 35 new staff to its current roster of 300.
“It will be about 80 percent research investigation, about evenly divided between computational biology and wet labs, with really only about a fifth of the positions coming in the area of administrative project management,” Dr. Trent said in GenomeWeb Daily News.
Burleson said that TGen will also be sustaining its commercialization efforts. The nonprofit institute has spun out or licensed its technology to seven companies, with two more deals in progress. “We’re actually looking at potentially a 10th and an 11th on the horizon, Burleson said in GenomeWeb Daily News.
The most recent such deal is a licensing agreement with Casework Genetics, a forensics firm that will use technology developed at TGen and the University of California at Los Angeles to identify the DNA of individuals within complex sample mixtures.
For more information:
“TGen to Boost Workforce to Support Commercialization Activities,” GenomeWeb Daily News, 10/08/2009
“Economic benefits of TGen more than doubled in 2 years,” Arizona Republic, 09/30/2009
“Total TGen impact could hit $321M by 2025,” Phoenix Business Journal, 09/29/2009
“TGen provides Arizona with $77 million in annual economic impact; $321 million predicted by 2025–new study shows,” TGen news release, 09/29/2009
“Energizing Arizona’s Biomedical Future | 2009: Positive Economic Benefits of TGen on the State of Arizona,” Tripp Umbach, 09/17/2009