Biotech leaders are back to square one

BYLINE: By Rachel Melcer St. Louis Post-Dispatch

A day after their favored projects were stripped from a state spending bill, Missouri's biotech business leaders are putting the best face on the loss, but also are facing facts.

Projects related to human health research aren't going to get majority approval in the Legislature, they said. Foes of abortion and, by extension, embryonic stem cell research, have become an impassable roadblock.

On Thursday, Gov. Matt Blunt removed from a proposed $350 million capital spending package all projects involving medical research, though agricultural biotech items remain. Among the losers is the Center for Emerging Technologies incubator in St. Louis and the midtown Cortex biotech business corridor, each of which had hoped to receive $5.5 million.

Civic leaders and the state's Department of Economic Development say they will look for other funding mechanisms that don't require a legislative vote.

"Every state has certain issues and challenges when you try to pass legislation, and that's one of ours," said Economic Development Director Greg Steinhoff."

Voters last fall approved Amendment 2 to the state constitution, maintaining the legality of all stem cell research permitted at the federal level. Supporters had hoped that would clear the way for appropriations on life science projects that foes linked to the controversial technique, though supporters say they are unrelated.

But Amendment 2 failed in 92 out of 116 counties, which leaves a lot of state representatives who believe their constituents oppose stem cell research, Steinhoff said.

Kelly Gillespie, executive director of MoBio, the Missouri Biotechnology Association trade group, said he is frustrated because it is "incredibly unlikely" that embryonic stem cell research would have been conducted at any of the facilities that were scrapped. Missouri has a wealth of scientific assets focused on other areas of biotechnology, and those need financial support to be translated into companies that create jobs and pay taxes, he said.

John Dubinsky, chairman of Cortex, said the corridor will progress without the appropriation, which would have helped startups build costly wet lab space. Cortex will try to find other support but, in the meantime, will focus on attracting larger biotech firms that can afford their own facilities.

"The risk is that if we can't provide that space, these (startups) will be tempted to move out of state," Dubinsky said.

Marcia Mellitz, president of the Center for Emerging Technologies, said the incubator is full and will proceed with plans for an expansion without the state seed money it had anticipated.

"We have to regroup," she said. That includes working with Economic Development officials to find alternative public funding sources. The first two buildings of CET were supported by state and federal tax credits.

In its nine years, CET has hosted companies that raised $720 million in venture capital, much of that from out of state, and paid $65 million in state and local taxes.

Gillespie and Steinhoff said they will continue to challenge lawmakers and, in the meantime, focus on $43.5 million in agricultural biotech and research commercialization projects that remain in the bill.

The next legislative test is likely to be an appropriation for the Missouri Life Sciences Trust Fund, which under a 2003 bill is due to receive 25 percent of the state's tobacco settlement money.

Last year, lawmakers voted against the appropriation, which would have totaled nearly $40 million. This year, biotech supporters have pledged to restrict spending from the fund to agriculture projects such as a biofuels center and terrorism defense work.