Attention lawmakers: This state-funded project has created no companies

Minnesota’s medical device trade group thought it was making the case to preserve state funding for a treasured genomics research collaboration when it told lawmakers the project help create a new company.

The problem? No such company exists.

“It was a miscommunication on [LifeScience Alley's] part and we apologize for any confusion it may have caused,” Ryan Baird, the association’s spokesman, said of the claim made in its 2011 Legislative Agenda, a lobbying document circulated among state legislators with whom LifeScience Alley has worked in the past.

LifeScience Alley and many others in the Minnesota medical industry would like to keep $8 million in the state budget for the Minnesota Partnership for Bioscience and Medical Genomics, which is a collaboration between the University of Minnesota and the Mayo Clinic. The trade group’s legislative agenda simply stated: “The first company has already been licensed out of these research efforts.”

But the statement referred to a license that was pending and no longer exists, said Robert Nellis, a partnership spokesman from the Mayo Clinic. No entities have any licenses with the Partnership, although many different organizations have had temporarily licenses in the past, Nellis explained.

The gaffe comes at an inopportune time. The state has invested more than $80 million to date since early in the last decade. But it cut $1.2 million out of $8 million in Partnership state funding last year, and Minnesota’s governor suggests he wants an additional $838,000 cut more over two years.

The Partnership has also attracted $20 million in private and corporate funding and another $80 million in National Institutes of Health funding, Nellis said.

The Partnership awards 2-year grants to researchers and that is leveraged to win longer NIH and other grants, Nellis said. And he contended it is incorrect to assume the goal of the Partnership is to create companies and license products.

But politicians have from the start expected the project to serve as an economic engine that would create hundreds of jobs in the state. “This partnership will create hundreds of new highly-skilled research positions in Minnesota, significant advances in healthcare and the birth of a major new industry creating thousands of quality jobs and positioning Minnesota as a world center in this field,” then-Gov. Tim Pawlenty said in 2003.

The genomics company that wasn’t may only reinforce some politicians’ thoughts about the project’s shortcomings.

“I don’t see that they have created any jobs other than R&D jobs at the U and Mayo” said state Rep. Tim Mahoney, D-St. Paul, who co-authored the historic angel investment tax credit bill that passed last year in Minnesota. “If these institutions continue to ask for state support, then we have to ask what’s the return of investment for the state of Minnesota.”

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