Susan Windham-Bannister on the State of the State’s $1B Life Sciences Initiative, Part II

Xconomy Boston — 

Politics play a significant role in Massachusetts’s 10-year plan to invest $1 billion into its life sciences sector. Gov. Deval Patrick championed the effort, which aims to grow the life sciences sector in the state and create new jobs. And every year the Massachusetts Life Sciences Center, the quasi-public agency in charge of the initiative, seeks support from politicians on Beacon Hill to approve part of its annual budget.

In the second part of my interview with Susan Windham-Bannister, the chief executive of the Life Sciences Center, we focused on the role of politics in the state’s $1 billion plan. (Here’s the first part of the interview that focused on topics related to Genzyme, Biogen Idec, Carl Icahn, and a two-year status update on the initiative itself). There have been major political changes in the Bay State since the $1 billion plan was signed into law in June 2008.

To name a couple of those changes, Gov. Patrick is now in a close race in his bid for reelection with Republican candidate Charlie Baker, the former chief of the Boston-based health insurer Harvard Pilgrim Health Care (read on in the Q&A below for Windham-Bannister’s comments on Baker’s healthcare background). Also, Scott Brown, who won the late Ted Kennedy’s former seat in the U.S. Senate in January, voted against the bill that created the $1 billion initiative back in June 2008 when he was still a state senator.

What do these political changes mean for the state’s $1 billion life sciences plan? Windham-Bannister recently tackled my questions on this topic in addition to others related to politics. For example, I’ve been wondering how, with the majority of industry and academic activity clustered within and east of the Route 128 corridor, the Life Sciences Center has managed to distribute its funding elsewhere in the state. Also, I got her take on what the life sciences community lost with the death of Sen. Kennedy, who was the industry’s go-to man on Capitol Hill to help bring federal research funding to the state.

It’s also worth mentioning that Windham-Bannister herself has close ties to the Patrick administration. While she says she won’t endorse any of the gubernatorial candidates in her official role as head of the Life Sciences Center, she acknowledges that as a private citizen she’s giving her time and financial support to the Patrick reelection effort. Like other current heads of state agencies (quasi or not), Windham-Bannister’s job security would weaken if Baker beats Patrick in November. Don’t forget that the previous head of the center, a Mitt Romney appointee named Aaron D’Elia, was ousted from his job not too long after Patrick was sworn in as governor in January 2007.

As I noted in yesterday’s Part I of my interview with Windham-Bannister, the state’s $1 billion life sciences initiative consists of three main funding buckets: half a billion dollars for capital projects, $250 million in tax incentives, and $250 million for its investment fund. The latter bucket, the investment fund, requires approval in the annual state budget—putting it in the hands of the powers that be on Beacon Hill. Patrick and the state legislature, facing major budget deficits, have knocked down the proposed $25 million annual investment fund to $15 million and $10 million in fiscal years 2009 and 2010, respectively.

Here are excerpts from my conversation with Windham-Bannister on the political aspects of the $1 billion initiative:

Xconomy: What has the life sciences community lost with the passing of Ted Kennedy, who was a champion for biomedical research funding for decades?

Susan Windham-Bannister: Obviously, Senator Kennedy had made healthcare, broadly, his focal point for most of his career. When I wrote my dissertation, I did an analysis of his Health Security Act, so this goes way, way back. So, yes, we’ve obviously lost a champion. But I think that other members of our delegation understand the importance of life sciences, and the significance of life sciences in Massachusetts, and are stepping in very quickly. At a recent ribbon cutting at the Marine Biological Laboratory, we had the ranking U.S. Senator [John Kerry] as well as Congressman Bill Delahunt. And yes, Delahunt is retiring. I think this shows the level of support and interest. Obviously, I don’t think we can replace overnight the reach and the influence that Senator Kennedy had. But I think that in the hands of Senator Kerry, as the senior member of the Massachusetts delegation, we’re in good hands.

I also think it will be very hard to disrupt what have become very strong relationships and success stories between the funding agencies in Washington and [researchers] in Massachusetts. Massachusetts receives more NIH dollars per capita than any other state, and the second in aggregate dollars to California, which is a much larger state. So a big part of our job, in addition to the support and advocacy our legislative delegation will provide, is for us to continue to make all the research institutes in Massachusetts capable of continuing to be competitive. So I think advocacy is important, but the research institutions here also stand on their merit as well.

X: What impact has Scott Brown had on the life sciences community during his short time thus far in the U.S. Senate?

SW-B: I’m not aware. I really can’t comment. I’m not aware of any major impact he’s had.

X: Why should life sciences executives care who gets elected as governor of Massachusetts next year?

SW-B: Governor Patrick has been a solid champion of the life sciences cluster here in Massachusetts. He recognized early on during his first campaign the importance of this sector. He promised in 2007 during BIO [one of the industry’s largest meetings] when it was in Boston that he was going to work with the Legislature to try and get this $1 billion initiative enacted. He succeeded in doing so the following year. He’s consistently attended BIO, and he missed this year at BIO only because of the drinking water issue in Massachusetts. So I think he made totally the right decision. But before that he was the only governor who had consistently attended the industry meetings. So I guess that we could only hope that another governor would be as supportive as Governor Patrick.

X: What do you think are the potential consequences for the Life Sciences Center if Patrick isn’t reelected?

SW-B: I think it’s too early to tell. I don’t think that we’re hearing from any of the candidates on what their specific positions are. We know that Charlie Baker has been very, very engaged at least in the healthcare community. So from his vantage point, as the former CEO of Harvard Pilgrim, he certainly understands the benefits of better treatments, therapies, and cures on the cost of care, affordability. But it’s too early to tell. I don’t think they’ve come out with any definitive positions.

X: You were heavily in Governor Patrick’s corner during his previous gubernatorial race. What are you doing to help him get reelected?

SW-B: I am doing this job well. I think that is the very best thing we can do to support the governor, to demonstrate that this initiative has great value and can achieve the objectives that he envisioned for it. [Windham-Bannister later added in an e-mail that she would also be contributing her time and money to the governor’s campaign—Eds.]

X: How has the Life Sciences Center been able to balance its mission to grow the life sciences industry in the state with political pressures to distribute its resources throughout the state?

SW-B: When you look at the distribution of our investments, I think that has created a great deal of comfort. Over 80 percent of our investment dollars have gone to recipients outside of Route 128, and about two-thirds of the funds have gone to the central part of the state. [In fact, the center awarded $90 million of the $191 million it invested in its first two years to the University of Massachusetts Medical School to support construction of a new biomedical research center on its Worcester campus.] The funds are very well balanced between public and private academic institutions, and between large and small companies. Our story is one that demonstrates that, not only are we making good investment decisions, they are also well distributed—and those are factors that are reviewers are taking into account. I think it has enabled us to float above what is considered political interest to get our work done.

X: What’s your process for making investment decisions?

SW-B: We have a process that is rigorous and transparent and for most of our programs, competitive. I think we’ve gotten tremendous respect from the Legislature and other stakeholders about the way in which we go about making our investment decisions. We have a blue-ribbon scientific advisory board, which is broadly representative of the regions of the state and the academic institutions and industry. We have peer review groups that represent experts from industry sectors, the investment community, the academic community, and we have our board of directors.

X: What has the center lost with the significant cuts to its investment and administrative budget in the past two fiscal years?

SW-B: I really like to point out what we’ve been able to do with what we’ve received. We have a focused strategy. We’re looking to use our dollars to seed, accelerate, and in every case, get others to match at least dollar-for-dollar what we invest. As you can see, we’ve been able to get a lot done with our funds. That being said, what the commonwealth has seen as an opportunity cost is we could have created more jobs and attracted more funds. So we think about it as, what more could we have gotten done [if our budget was not cut]. We feel very good about what we’ve done with our dollars. We’re hoping that the state will continue to stay the course, because we’re demonstrating what we can do with a great reduction in our dollars. Think of what we could do if we received more funds.

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