Life Science Discovery Fund prepares for what could be its most important grant

The life Sciences Discovery Fund, in a finale made possible by a $2 million error by a legislative leadership intent on ending state funding for the organization whose years of grants have enhanced Washington's life-science competitiveness, is preparing for what could be its most important grant-making decision.

 

The board of LSDF, which was created a decade ago from the state's $1 billion share of tobacco-settlement money to promote the growth of the life-science industry, will soon be reviewing four finalists for what are characterized as "ecosystem" grants. The $2 million will go to one or more organizations that can stimulate momentum toward commercializing life-science innovations.

 

And while details of the four applications will remain under wraps until the LSDF board reviews them late this month and on February 8 announces one or more awards, one application that would pair the commercialization activities of the state's two research universities should attract considerable interest when those details emerge. That teamed application from UW and WSU is intriguingly titled the "Concept-to-Commerce Coalition."

 

The word "legacy" is one that has begun to be used by those who lament the decision by lawmakers to defund LSDF and who believe that what Executive Director John DesRosier dubbed "ecosystem 2016" grants could serve to create a follow-on to LSDF's decade-long role of funding life-science innovation.

But DesRosier, who has guided LSDF since it came into existence in 2005, insists "we're not using the term 'wind down' since we want to keep our options open," although he is retiring in April.

And the fact the organization must remain in existence over the next two years to manage the 46 grants already awarded from the fund means LSDF can't just go away. And that leaves some supporters buoyed by the possibility that a new role could emerge for LSDF, possibly with an administrative role managing another type of health-related activity.

"LSDF is in a transition as a model that we know has to change in response to current circumstances, said board member Roger Woodworth, chief strategy officer for Spokane-based Avista Corp.

"It has been a wonderful asset for the state that has been remarkable in terms of attracting, administering and validating a variety of exceptional ideas," Woodworth added. "It is in transition but that doesn't mean we throw it away or shut it down."

The unanticipated opportunity for the "ecosystem 2016" grants came about when the lawmakers, primarily the Republican majority that was never invested in the value of LSDF, specified that while the funds LSDF needed to manage the existing grants would remain in its account, its remaining operating funds would shift back to the general fund.

 

Except that when the lawmakers spelled out the operating-funds total of $11 million, there was unexplainably almost $2 million left in the LSDF account, unallocated and not ordered sent to the general fund. So it remained under LSDF control.

DesRosier notes that the "ecosystem" grant competition will be different from individual grants LSDF has made to for-profit or non-profit life-science entities that have received pieces of the $106 million in grants made since 2007.

"This grant-making won't be about trying to perpetuate ourselves but rather be a key step to support the life-science ecosystem with funding support for one or more organizations that either already exist or would come to existence to stimulate momentum in commercialization," DesRosier said.

"The opportunity for the life-science sector in Washington is a huge one and that's why, when this fund was first created a decade ago, it was a smart way to begin to capture the enormous intellectual capital that existed in this state," says Carol Dahl, LSDF board chair.

Dahl, who is executive director of the Lemelson Foundation that supports what are called "impact inventions," points to the fact that almost 70 percent of the $1.5 billion in federal funds that flow into Washington each year is for life science.

But Dahl is among the many observers who seek ways to address the dilemma that while this state has developed one of the nation's most impressive life sciences non-profit sectors, it trails many other regions in the development of a for-profit sector. The Seattle area's biotech cluster, for example, is dramatically exceeded by the industry size in The Bay Area/Silicon Valley and San Diego, as well as places like Boston and North Carolina's Research Triangle.

As one national ranking of biotech clusters characterized it, the industry in the Seattle area is "being anchored more to academic and independent research institutions than local companies."

In other words, this state is experiencing a gap between early stage ideas and things that investors can be convinced to embrace.

"I believe in the future of the state's life science community, but there needs to be a change in people's willingness to invest in it," she said. "They need to develop a confidence about being part of the commercialization of what those federal dollars are producing in what has become one of the nation's most impressive life sciences non-profit sectors."

In fact, it was because of LSDF grants that a number of the emerging life science companies that are growing, creating jobs and carving out key roles in their industry were able to bridge what's famously known as "the valley of death" between concept and the time when investors can be lured to be involved.

Enhancing commercialization is what each of the four of the ecosystem grant applicants seeks to foster, including the team-grant proposal put together by UW and WSU.

Anson Fatland, the associate vice president for economic development and external affairs for Washington State University, explained how teaming with his UW counterpart came about after both universities had submitted initial proposals back in September when the plan for the life science eco-system grants was first unveiled by LSDF.

Fatland noted that once he and Patrick Shelby, who directs the New Ventures group at the UW Center for Commercialization, were both invited to submit full proposals, "we decided to sit down and talk about what we were trying to do."

"We realized we had a truly unique opportunity for innovation activities across the state, allowing the industry to really talk about a legacy grant," Fatland said.

The other applicants are Accelerator Corp., which is seeking money for a commercialization funding program; the Washington Biotech and Biomedical Association, and what's called the Southsound Research Coalition, which also involves UW along with Madigan Army Medical Center and Multicare Healthcare Systems.