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Stuart Garfield
Wednesday, December 16, 2009
Federal funds prop up basic science research
By Lucy Caldwell-Stair, Special to Mass High Tech
MHT's Galen Moore: Six Mass. tech firms head to world economic forum
MHT's Julie Donnelly: Life science startups finding investments
MHT's Efrain Viscarolasaga: Tech companies may have to wait for stimulus funds
Things are hopping at Forsyth Institute, the 100-year-old oral health research group located near Boston’s Longwood medical area. Flush with 13 new two-year National Institutes of Health stimulus grants totaling $6.4 million, Forsyth has hired 15 new scientists to study the causes of gum disease. Forsyth has also applied for grants to pay for construction and new large equipment for a new headquarters scheduled to open in 2010 in Cambridge.
“It’s really great to be recruiting for people in this economy. The grant money allows us to be very competitive,” said Forsyth president and CEO Philip Stashenko. “We want to know why some bacteria emerge pathogenic under certain conditions, how to modulate the host’s inflammatory response to bacteria by using RNA silencing, and what is the cross talk between biofilms and the host’s immune system.”
Forsyth Institute is among 88 Massachusetts research facilities that have received 1,228 individual grants this year from an NIH funding pool enlarged by the American Recovery and Reinvestment Act (ARRA).
“These funds will spur basic research in Massachusetts, the strength of the region, and will translate into new companies and new jobs,” said Peter Abair, director of economic development at the Massachusetts Biotechnology Council.
Biotechs in the Bay State are likely to get about 11 percent of the $10.4 billion in stimulus funds, if awards are made in the same proportion as recent NIH grant cycles, Abair said.
Biotechs starving
Most of the NIH funds are going to academic research centers, and some large awards have been made to private companies. About $1.1 million was given to IQuum Inc. in Marlborough to develop a test to identify avian influenza strains, and Woburn-based Network Biosystems Inc., known as NetBio, received almost $2.7 million to develop rapid DNA analysis.
However, many of the smaller biotechs aren’t bringing in the federal dollars and have been forced to employ the same survival strategies that were used in past recessions — licensing their intellectual property, halting new research and looking for someone to acquire them, said observers.
“There is a Darwinian selection that is well under way,” said Jonathan Fleming, managing general partner at Oxford Bioscience Partners. Yet shakeout trends, including bankruptcies, are not widely documented, he said.
“It’s not very easy to get this data. Venture capitalists don’t announce bad news. But it’s definitely happening.”
Even pipeline-starved big pharma is holding back, according to Fleming. “Big pharmas say they want transactions, but what they are doing is buying in South America, China, Korea and India, and announcing big layoffs in the U.S.,” Fleming said.
The “hostility” of the FDA toward expedited drug testing and the possibility of price controls on drugs are also detrimental to the life sciences industry. The cleantech and IT sectors look more attractive to investors, Fleming said.
Other venture capitalists, like Jeff Lipton, managing director at Jefferies & Co. Inc. investment bank in New York are more optimistic.
“Deals are getting done, but they are taking longer. Everyone is being cautious and conservative. In addition, any dollars flowing out of Washington to fund new technologies will support general employment as they scale up,” he said.
A second source of stimulus funding is available to biotechs that work at the intersection of biotechnology and clean technology. One of the first award winners in New England is United Technologies Corp., with 500 employees at its research lab in East Hartford, Conn. The company has received $2.2 million from the Advanced Research Projects Agency-Energy (ARPA-E), a new agency of the U.S. Department of Energy. Its research focuses on synthesizing an enzyme found in nature that will more efficiently capture up to 90 percent of the carbon dioxide found in power-plant emissions. Carbon capture would be the first step in sequestering carbon underground or putting it to another use.
“We’re using something we learned from the chemistry of biological enzymes,” said researcher Harry Cordatos. The enzyme is a copy of carbonic anhydrase, a catalyst that is made by all living organisms to manage carbon dioxide in respiration.
The enzymes will be integrated into a film and become part of a membrane that is installed in smoke stacks. Using such enzymes would consume far less energy and cost less than the current technology that is based on amines and ammonia.
“It’s very early-stage research and high risk at this point, but high impact if successful,” Cordatos said. “Once we demonstrate that we can make a film, scaling up may not be as demanding.”
Lucy Caldwell-Stair is a freelance writer in Newton.
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