Advocates Urge Bioscience Funding
Wednesday, January 31, 2007

By David DeKok of The Patriot-News

It's not that they're worried about funding cuts. They believe they deserve more money.

Leaders and legislative supporters of the bioscience industry in Pennsylvania, armed with the highlights of an upcoming report on their industry, made a case in Harrisburg yesterday for additional direct support and tax relief from the state. They argued it is one of the best investments the state could make.

"The beauty and wonder of this industry is that lives are saved and improved, and not many industries can make that claim," said Mickey Flynn, president of Pennsylvania Bio, the industry trade association. "It is an industry we cannot afford to ignore."

Bioscience "greenhouses" in Harrisburg, Pittsburgh and Philadelphia were set up to encourage the growth of new bio-science companies. They received $100 million in funding from the 2001 tobacco settlement, while another $60 million went to four venture investment funds.

"We have not had any communications about any cuts whatsoever," Flynn said after the news conference.

But with the tobacco settlement funds being eyed by the Rendell administration as a possible source of at least some of the funding for the governor's health care initiative, the industry is said to be concerned about what might happen if the settlement distribution is reopened, and other organizations and causes demand some of it, too.

"We want to encourage them to do even more," Flynn said of the Legislature. "Our industry was identified as No. 1 [in the state] for investment."

Bioscience, as defined by supporters, includes old-line pharmaceutical firms such as Merck and GlaxoSmithKline as well as the one- or two-person research projects on new medicines and medical devices at places like Penn State Milton S. Hershey Medical Center. It also includes the state's nascent ethanol industry.

State Sen. Rob Wonderling, R-Bucks, called biosciences the "fastest growing part of the Pennsylvania economy." He said the average employee of a bioscience firm earns $26,000 more annually than employees of other industries in the state.

"We have a vibrant new industry in Pennsylvania that has created new jobs, good jobs," said state Sen. Connie Williams, D-Montgomery.

Pennsylvania Bio intends to push the Legislature to increase the amount of net operating loss that can be deducted from state taxes. Many startup companies have high expenses but no taxable income from which to deduct those expenses. The group hopes to make it possible for a company in that position to sell its tax loss to a company that can make use of it.

The group said 77 new companies in Pennsylvania can be directly tied to greenhouse funding. The three greenhouses have invested $30.5 million, which enabled the companies to obtain $222.5 million in investment from other sources.

Greenhouse investments typically result in the greenhouse getting equity in the companies.

At some point, assuming they are successful, the equity investment is liquidated and the proceeds returned to the fund for use by other startups.

David DeKok: 255-8173 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it