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Wednesday, February 2, 2005 - Page updated at 12:00 AM

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Gregoire seeks $350 million biotech fund

Seattle Times business reporter

Life Sciences Discovery Fund


What: A proposed $350 million state fund for biomedical research grants and facilities.

Who: The bill has been introduced in the Legislature at Gov. Christine Gregoire's request.

Where the money would come from: The tobacco settlement; the amount represents about 8 percent of the state's award through 2025.

How it would work: A panel of seven scientists, appointed by the governor, would make grants to support promising ideas at research centers such as the University of Washington, Fred Hutchinson Cancer Research Center and Pacific Northwest National Laboratory.

Goals: To advance research that would lead to development of new drugs, medical devices, diagnostic tools and software.

Gov. Christine Gregoire, in her first major initiative to boost Washington's economy, is pushing to create a $350 million Life Sciences Discovery Fund to bankroll biomedical research in the state.

Gregoire, who made the idea a key part of her campaign's job-creation strategy, is hoping to build momentum for the plan, beginning with a news conference in Olympia tomorrow. By attracting matching private money and federal grants, backers say the total financing resulting from the fund could reach $1 billion.

Though Gregoire's proposal was criticized by Republican gubernatorial rival Dino Rossi during the campaign, it has attracted backing from key leaders in both political parties.

Top Republicans in the Senate — Senate Minority Leader Bill Finkbeiner, R-Kirkland, and Senate floor leader Luke Esser, R-Bellevue — have signed on as co-sponsors. So have House appropriations chairwoman Helen Sommers, D-Seattle, and Senate Majority Leader Lisa Brown, D-Spokane.

The plan calls for taking $350 million of tobacco-settlement money that will flow into the state from 2008 through 2017 and funneling it into promising research ideas at research institutions such as the University of Washington, Washington State University and the Pacific Northwest National Laboratory in Richland.

The money represents about 8 percent of the state's total tobacco windfall through 2025.

"It's an industry that may not be in its infancy, but it's at least in its teens, and people in the Legislature see this as important," Esser said. "With the cyclical nature of Boeing and the natural-resources industries, there's a desire to diversify the economy, and we already have incredible research institutions that we'd like to maintain and build upon."

The bill is essentially a reworked version of Bio21, a proposed statewide trust fund for biomedical research that state business and research leaders crafted over the past two years at the request of former Gov. Gary Locke.

Esser, who worked on the Bio21 committee two years ago, said there's strong sentiment in Olympia to support biotechnology in some form. But he said the money may be better spent on building long-term research facilities, instead of solely providing research grants.

Washington state expects to get $4.5 billion from the 1998 national settlement between states and the tobacco industry. Backers of the plan are quick to point out the money for the life-sciences fund does not take money away from state health programs, but would be taken from a bonus Washington will receive beginning in 2008, in connection with Gregoire's leadership on the tobacco litigation.

Backers of the plan say the fund could attract more private matching dollars and enable researchers to make progress that could lead to more federal grants as well. Ultimately it could add $1 billion of research funds to the state's economy, they say.

Under House Bill 1623, introduced Monday, the fund would award competitive research grants to nonprofit research centers under the oversight of a seven-member scientific board appointed by the governor and confirmed by the Senate. The money could be used on key facilities and equipment, encouraging collaboration among the state's research centers, and recruiting and retaining star scientists.

The fund would also finance research into new understanding of genes and cells and translating the knowledge into better drugs, diagnostic tools, medical devices and software.

Washington state is considered part of a group of second-tier biotech clusters, along with North Carolina's Research Triangle Park and the nation's capital, according to a 2002 report by the Brookings Institution. Boston and the San Francisco Bay Area are the clear leaders.

Based on a study by Battelle Memorial Institute, supporters of the plan have projected that the intensified research funding could create 20,000 jobs over the next 10 to 15 years and 100 companies.

Adding urgency to their pitch, they point out that 40 other states are pursuing plans to become biotech hot spots.

Some, like California with its $3 billion stem-cell research initiative, have committed large sums to cultivating the sector. Florida paid $310 million to lure a branch of the prestigious Scripps Research Institute. North Carolina has authorized $240 million in tax breaks and incentives for Merck to build a vaccine factory there.

There is no organized opposition yet to the plan. But Rep. Maralyn Chase, D-Edmonds, said she is skeptical of the industry's job-growth projections. She said she would prefer the state invest the tobacco-settlement money in education.

Still, Chase said she thinks the biotech fund has "a very good chance of passing, but that doesn't mean it's right."

The Washington Biotechnology and Biomedical Association, a trade group for the state's biotech and medical-device companies, is supporting the plan this year after distancing itself a year ago.

Ruth Scott, the organization's president, said her group regards the fund as only one element of a comprehensive biotech-growth strategy. A broader plan, she said, must include better access to seed capital for startup companies, and streamlined rules for transferring technology from public research institutions to businesses.

The Life Sciences Discovery Fund, in keeping with the state's constitutional ban on outright grants to for-profit businesses, is not set up to give grants to biotech startups.

Susannah Malarkey, executive director of the Technology Alliance, a high-tech advocacy group, said she's optimistic the Legislature will approve the plan.

"I think the stars have aligned for us, with a governor who campaigned for this, who brought the tobacco money into the state, and with a more educated Legislature on the competitive issues," Malarkey said. "We now have a business and research community that understands what this fund can do."

Scott, the biotech association president, said the fund's backers risk overhyping biotechnology as a creator of jobs and overlooking its potential in other areas, such as improving the practice of medicine.

Biotechnology does not have a booming track record of job growth. Washington's top seven companies added just 187 workers (5 percent annual growth) from 2001 through 2003, according to filings with the Securities and Exchange Commission.

"Jobs are important, but this goes beyond jobs," Scott said. "It's about whether we can find new treatments for diseases we've never been able to treat before. If we can do that, everyone will benefit."

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com

Copyright © 2005 The Seattle Times Company

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