All is not well in Florida's biotech industry, a business whose future as a key player in the Sunshine State remains perilously unclear.
The latest controversy is now being played out in Orlando's 650-acre, once highly touted health and life sciences park called "Lake Nona Medical City." That's the Florida home of Sanford Burnham Prebys, an elite California-based life science research organization recruited at great cost 10 years ago to expand to Florida.
Sanford Burnham was supposed to flourish, collaborate and create thousands of new industry jobs with nearby life science organizations. Instead, it's on the verge of exiting the state.
Sanford Burnham blames a decade marked by a deep recession, major cuts in federal funding by the National Institutes of Health, a slump in grant funding and a resulting challenge in attracting top talent to Orlando.
"We do not have the critical mass of scientists or funding to sustain the Lake Nona site as an independent research facility long term," Sanford Burnham CEO Perry Nisen stated this past summer.
The research institute tried to hand off its Orlando operation as a gift to the University of Florida, which was already part of the Lake Nona biotech scene. In late October, UF backed out of the deal.
Complicating matters, Sanford Burnham was lured to Florida with up to $300 million in funding from the state in exchange for the biotech company creating 303 jobs. That number was never reached, prompting state officials in an Oct. 28 letter to warn Sanford Burnham it was in default on its original incentive agreement and an advance from the state of more than $155 million.
The letter demands Sanford Burnham hand back half — $77.6 million — unless it honors the original agreement and stays in Florida for a full 20 years.
"Be assured that the state of Florida will thoroughly investigate and prosecute all available claims against Sanford Burnham," the letter states.
In response, the research firm in an Oct. 31 letter to Florida's Department of Economic Opportunity denied any breach of contract. It said the original agreement called for Sanford Burnham not to create 303 jobs but to make a "best effort" to do so.
This confrontation of lawyers is hardly what Florida Gov. Jeb Bush had in mind in 2003 when he personally went to California to woo Scripps Research Institute to open a biotech arm in Florida. Bush, armed with what was then a stunning sum of $500 million in funds and the political advantage of being the brother of the nation's president, persuaded Scripps to set up a life science research campus near Jupiter.
Bush was nothing if not optimistic. In a 2003 column for this newspaper, he wrote of the Scripps venture: "This development is a seminal moment in Florida's history and future and will propel the Sunshine State to the forefront of the biotech industry."
The Scripps arrival was likened to Walt Disney choosing Central Florida for his new theme park. Bush even said Scripps alone could transform Florida the way NASA had done decades earlier.
Three years later, Sanford Burnham followed Scripps to Florida with the state committing more than $800 million in public funds as sweeteners to the two companies.
Back then, Bush's plan seemed simple enough. Bolstered by gobs of government funds, he wanted to kick-start lagging-wage Florida into the elite biotech business. As Florida's first governor in the 21st century, Bush thought the state needed to shake up an aging state economic model too dependent on citrus, real estate and retirees. He wanted to improve the odds of the state becoming a real and respected player in a new global economy.
So here we are, more than a dozen years later. Is Bush's plan working?
The good news is there is definitely more of a quality biotech industry growing in Florida now than if Bush had never gone biotech recruiting back then.
The bad news is that while Florida recently became the third-most-populous state in the country, it is not even close to, in Bush's words, being propelled "to the forefront of biotech."
Alas, the nation's leading biotech clusters — locations with high densities of scientists, access to serious funding and venture capital, high-level university involvement and a strong track record of commercial spinoffs of life science companies — are alive and well, and far away from sunny Florida.
They are in places like San Diego and San Francisco, in Boston, Seattle, the Washington, D.C., and Baltimore area and in Chicago. In the entire Southeast, the Raleigh-Durham, N.C., area is the only acknowledged biotech cluster with muscle and staying power.
Don't blame Bush. His plan, admittedly a long shot, might have worked had Florida bothered to follow through. After Bush's term as Florida governor ended in 2007, the state's fledgling biotech industry found it was more than ever on its own.
Florida's next governor, Charlie Crist, showed little interest in his predecessor's biotech dreams, choosing instead to make his own mark by pitching alternative energy as the state's economic future. Crist got quickly distracted, with his 2007-2011 term running smack into a Great Recession that left little opportunity to advance much of any agenda.
When Gov. Rick Scott took office in 2011, Florida's unemployment was in the double digits. Adopting the mantra "jobs, jobs, jobs," Scott pursued job creation to drive down the state unemployment rate. Higher-wage, higher-skilled jobs were nice but never a priority.
Still, other companies with biotech credentials came to Florida on the heels of Scripps and Sanford Burnham. Organizations like the Max Planck Institute, Torrey Pines Institute of Molecular Studies and the Vaccine and Gene Therapy Institute all jumped on the Florida incentive bandwagon.
None of those heavyweights landed in the Tampa Bay market, choosing as expected to cluster near one another for support. Locally, the biotech business is mostly confined to smaller startups and efforts by the likes of USF and Moffitt Cancer Center (including its promising cancer-fighting M2Gen spinoff) to try to commercialize academic research.
There are hopeful signs. Florida scientists managed to win a record number of grants from the increasingly stingy National Institutes of Health this year.
The bottom line? Florida is further along the path to building a biotech cluster that matters than it would have been had Bush not tried to prime the pump 13 years ago. The problem, of course, is that when times get tough — or the state incentive coffers run dry — high-end biotech players like Sanford Burnham that are based somewhere else will have little reason to stick around.
It has not helped that Florida's leadership has waffled over the importance of biotech, preferring to spend more time and resources of late to celebrate record tourism. And incoming leadership in the state Legislature seems poised to press a hard-line "free market" agenda. That makes the idea of the state pouring more public funds into the extremely expensive and competitive biotech business here seem remote.
Sorry about that, Florida biotech. You're no Disney or NASA. You have a harder road to follow.
Contact Robert Trigaux at [email protected] Follow @venturetampabay.