Building a Successful Life Building a Successful Life Sciences Corridor in MichiganSciences Corridor in Michigan Presentation to the National Governors’ AssociationPresentation to the National Governors’ Association

OverviewOverview

Michigan’s EconomyMichigan’s Economy•Current StatusCurrent Status•Michigan’s Economic Development StrategyMichigan’s Economic Development Strategy

Michigan Life Sciences Corridor InitiativeMichigan Life Sciences Corridor Initiative•Creation Creation •FundingFunding•BaselineBaseline•CompetitivenessCompetitiveness•AccomplishmentsAccomplishments

Michigan’s Economic StrengthsMichigan’s Economic Strengths

Nation’s Top Automotive ProducerNation’s Top Automotive Producer Largest Office Furniture IndustryLargest Office Furniture Industry Second Largest Plastics IndustrySecond Largest Plastics Industry Largest Leisure Travel Destination in the Largest Leisure Travel Destination in the

Great Lakes RegionGreat Lakes Region

Michigan’s Economic StrengthsMichigan’s Economic Strengths

More than 700,000 new jobs created in More than 700,000 new jobs created in the past decadethe past decade

More than 50% in high-tech fields such More than 50% in high-tech fields such as engineering, medical, and business as engineering, medical, and business servicesservices

Created more than 30,000 Created more than 30,000 manufacturing jobs while the nation lost manufacturing jobs while the nation lost 600,000 in the past decade600,000 in the past decade

Michigan’s Economic Michigan’s Economic Development StrategyDevelopment Strategy Economic Development InfrastructureEconomic Development Infrastructure

–One Stop Shopping InfrastructureOne Stop Shopping Infrastructure–Customer ServiceCustomer Service–State-Local PartnershipState-Local Partnership–Business ClimateBusiness Climate

Business Retention and Expansion Business Retention and Expansion Business AttractionBusiness Attraction Emerging Business Sector DevelopmentEmerging Business Sector Development

Emerging Business Sector Emerging Business Sector DevelopmentDevelopment Profiled Michigan Industry BaseProfiled Michigan Industry Base Identified High Growth Potential SectorsIdentified High Growth Potential Sectors

- Industry Trends, Cross-Cutting Applications - Industry Trends, Cross-Cutting Applications Identified Select “Fits”Identified Select “Fits”

- Advanced Manufacturing: Emphasis on High Advanced Manufacturing: Emphasis on High Value-Added Manufacturing, R & D, Value-Added Manufacturing, R & D, Engineering, Corporate HeadquartersEngineering, Corporate Headquarters- Information Technologies: Applications Information Technologies: Applications Development and Systems IntegrationDevelopment and Systems Integration

Life SciencesLife Sciences

Solid Industry BaseSolid Industry Base- 3 Major Pharmas- 3 Major Pharmas

Stronger Than Average Market PositionStronger Than Average Market Position- #10 in Sales and Employment- #10 in Sales and Employment

Strong Research InfrastructureStrong Research Infrastructure- 3 Top 50 Research Universities- 3 Top 50 Research Universities

- $1 billion Van Andel Research Institute- $1 billion Van Andel Research Institute

Good Long-Term Growth ProjectionsGood Long-Term Growth Projections Weak Business InfrastructureWeak Business Infrastructure

Life Sciences in Michigan - 1999Life Sciences in Michigan - 1999

MI Academic R&D:MI Academic R&D: $508M$508M

(1999)(1999) 200 Ph.D. per year200 Ph.D. per year

Patents 7thPatents 7th

MI Life Sciences companies:MI Life Sciences companies: $1.6 Billion sales – 10$1.6 Billion sales – 10thth

16,800 workers – 1116,800 workers – 11thth

$1.2 Billion R&D investment$1.2 Billion R&D investment

300 firms (56 employees/firm)300 firms (56 employees/firm)

Concentration:Concentration:MIMI USAUSA

• Drugs + Pharmaceuticals Drugs + Pharmaceuticals 70% 70% (46)(46)

• Medical instrumentsMedical instruments 29 % 29 % (50)(50)

• BiotechnologyBiotechnology 1 %1 %(3.8) (3.8) Source: Battelle StudySource: Battelle Study

Michigan Life Sciences CorridorMichigan Life Sciences Corridor

Goal:Goal:

Advance Michigan from a top ten Advance Michigan from a top ten to a top five life sciences research to a top five life sciences research and commercial centerand commercial center

Creation of the Life Sciences Creation of the Life Sciences CorridorCorridor $1 Billion$1 Billion ($50 M per year) committed ($50 M per year) committed

to Life Sciences Corridor Initiative to Life Sciences Corridor Initiative Opportunistic: Tobacco Settlement Opportunistic: Tobacco Settlement Private-University-State PartnershipPrivate-University-State Partnership Supplemented by MEDC Economic Supplemented by MEDC Economic

Development ActivitiesDevelopment Activities

Michigan Life Sciences Corridor Michigan Life Sciences Corridor FundFund

Category ICategory I $20 million$20 million Centers of Centers of

excellence;excellence;enabling enabling technologies, technologies, inquiry-driven inquiry-driven science projects science projects and activitiesand activities

Basic Research

Applied Research

Commercialization

Category IICategory II $25 million$25 million Development Development

ventures: ventures: demos, demos, prototype, trialsprototype, trials

Category IIICategory III $5 million$5 million Business activities Business activities

in support of in support of technology technology commercializationcommercialization

Competitive and Rapid application processCompetitive and Rapid application process•Electronic RFP, pre-proposal, full proposalElectronic RFP, pre-proposal, full proposal•MLSC staff host regional information sessionsMLSC staff host regional information sessions•Peer Review Agency pre-proposal reviewPeer Review Agency pre-proposal review•Peer Review Agency full proposal reviewPeer Review Agency full proposal review•LSSC review: Balance, matching funds, rating LSSC review: Balance, matching funds, rating and ranking, available funding by categoryand ranking, available funding by category•Award decisions, contracts with award Award decisions, contracts with award recipientsrecipients•Turnaround from RFP to final award 9 monthsTurnaround from RFP to final award 9 months

Michigan Life Sciences CorridorMichigan Life Sciences Corridor

MLSC Definitions of SuccessMLSC Definitions of Success

ScienceScience Top 10 ranked life science Top 10 ranked life science

institutionsinstitutions Attraction of external Attraction of external

research funding, students, research funding, students, and facultyand faculty

MI Universities have MI Universities have transferred intellectual transferred intellectual property to form 150 new property to form 150 new companiescompanies

Hundreds of collaborative Hundreds of collaborative research programs with research programs with Michigan-based companiesMichigan-based companies

BusinessBusiness 250 new life sciences 250 new life sciences

companies launched, 150 companies launched, 150 survived, 15 completed survived, 15 completed IPO’sIPO’s

100 new companies with 100 new companies with proprietary products proprietary products

>$1 Billion of private equity >$1 Billion of private equity raisedraised

Deep and broad life sciences Deep and broad life sciences business service community business service community

15000 new jobs15000 new jobs

MLSC 2000-2001 MLSC 2000-2001 Commercialization AwardsCommercialization Awards

Seed FundsSeed Funds Michigan University Commercialization Michigan University Commercialization

InitiativeInitiative MLSC Catalyst FundMLSC Catalyst Fund

Applied Research CapacityApplied Research Capacity Training and ConsultingTraining and Consulting

Nephros TherapeuticsNephros Therapeutics

Nephros Therapeutics,Nephros Therapeutics,Ann Arbor-based Ann Arbor-based medical device medical device companycompanyreceived an award to received an award to conduct clinical trials conduct clinical trials on its bio-artificial on its bio-artificial kidney. In the trials kidney. In the trials the device has already the device has already saved the lives of saved the lives of three Michigandersthree Michiganders

Michigan in the Forefront of Life Michigan in the Forefront of Life Sciences TechnologiesSciences Technologies

Human Genome ProjectHuman Genome Project Rubicon Genomics is developing technology that will close the Rubicon Genomics is developing technology that will close the gaps in sequencing and identifying areas of sequence gaps in sequencing and identifying areas of sequence divergencedivergence

Stem Cell ResearchStem Cell Research- Michigan Center for Cell Therapy is harvesting and Michigan Center for Cell Therapy is harvesting and growing embryonic stem cells from umbilical cord bloodgrowing embryonic stem cells from umbilical cord blood

Bio-terrorism DefenseBio-terrorism Defense NanoBio, BioPort and Neogen are contributing to NanoBio, BioPort and Neogen are contributing to decontamination, anthrax vaccination, and food safety decontamination, anthrax vaccination, and food safety testingtestingGeneCodes, developing software to identify DNA from GeneCodes, developing software to identify DNA from World Trade Center victimsWorld Trade Center victims

Michigan Life Sciences Corridor Michigan Life Sciences Corridor Class of 2001Class of 2001

CimulusCimulus CSCGCSCG DermaCoDermaCo GeneGo*GeneGo* Genetics Genetics SquaredSquared

KeraCureKeraCure Molecular Molecular Therapeutics*Therapeutics*

NanoBio*NanoBio* NanoMedNanoMed NephRxNephRx

Novo-Novo-DynamicsDynamics

OriginusOriginus OsteomicsOsteomics Proteomics Proteomics Research Research ServicesServices

QuatRxQuatRx

SensiCoreSensiCore StreamlineStreamline

Proteomics*Proteomics*Thera-Thera-SonicsSonics

Xoran Xoran TechnologieTechnologiess

SenseGeneSenseGene

DendriticDendriticNano-Nano-technologiestechnologies

New TargetNew Target

TherapeuticsTherapeutics

* Recipient of MLSC funding

Michigan Ranked in Top 5 by Michigan Ranked in Top 5 by 20102010

Then (1999)Then (1999)

MLSC createdMLSC createdMI ranked in top tenMI ranked in top ten

Database of 300 life Database of 300 life sciences companiessciences companies

MBA: 20 members, $25KMBA: 20 members, $25K

CEO Survey: MI 5th CEO Survey: MI 5th destination to relocatedestination to relocate

NOW (2001)NOW (2001)

$2.4 billion new investment, $2.4 billion new investment, 2067 jobs and 22 new 2067 jobs and 22 new companiescompanies

Searchable Database 532 life Searchable Database 532 life sciences companiessciences companies

MBIA: 53 members, $250KMBIA: 53 members, $250K

CEO Survey: MI 2nd destination CEO Survey: MI 2nd destination to relocateto relocate

Michigan Life Sciences Business Michigan Life Sciences Business ExpansionExpansion Pfizer’s announcement of its expansion Pfizer’s announcement of its expansion

of the Ann Arbor research campus is the of the Ann Arbor research campus is the largest corporate expansionlargest corporate expansion or or relocation in the United States, for 2001relocation in the United States, for 2001

Complementary MEDC ProgramsComplementary MEDC Programs

Venture Capital InitiativesVenture Capital Initiatives Support for University Economic Support for University Economic

DevelopmentDevelopment SmartZonesSmartZonessmsm

High Technology IncentivesHigh Technology Incentives Dedicated Marketing and Business Dedicated Marketing and Business

Development StaffDevelopment Staff

Are we on our way? YesAre we on our way? Yes

Growing an industryGrowing an industry Diversifying our economyDiversifying our economy Gaining national recognitionGaining national recognition Building research excellenceBuilding research excellence Enhancing health and well-being of Enhancing health and well-being of

all citizens of Michiganall citizens of Michigan

Visit our website at:Visit our website at:

www.michigan.orgwww.michigan.org

Questions & AnswersQuestions & Answers

Michigan Life Sciences CorridorMichigan Life Sciences Corridor