A program that invests in health care and life science research projects that can demonstrate proof of concept, typically coming out of universities and medical institutions, is getting a $500,000 investment from Philadelphia’s economic development arm. The new investment is designed to bring more capital to entrepreneurs in Philadelphia at earlier stages, according to a press statement.
The source of the investment is Philadelphia Industrial Development Corporation’s Penn Venture Fund. Through the fund it will invest up to $500,000 in the University City Science Center’s QED Program, the country’s first multi-institutional proof-of-concept funding program for health care and life sciences technologies. The investment is to be allocated up to $100,000 at a time across five project rounds, starting next year.
Stephen Tang, University City Science Center CEO, said that PIDC’s investment will help launch new companies that commercialize Philadelphia-based discoveries.
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The announcement came on the same day as news that venture capital firm First Round Capital would manage the city’s $6 million StartUp PHL Seed Fund.
In an emailed response to questions, University City Science Center spokeswoman Jeanne Mell said the funding from PIDC would kick in next year when funding for Round 6 projects are awarded, since the call for proposals for Round 6 is just going out next month. “We expect to continue to support four projects (two life science and two health IT) per round.” She added that PIDC funding will be dedicated to projects from the 11 Philadelphia institutions that participate in the QED program. “At this point we don’t know how many Philly awardees there will be in Round 6 and in future Rounds.”
John Grady, PIDC president said in an email with an eye to the group’s focus on startups: “We wanted to invest in some of the earliest stage research coming out of our world renowned university-based research sector. At the same time, the Science Center was seeking investment to expand their initial success with QED and we saw this as a great opportunity to meet our respective objectives.” Although it has invested in early stage life science companies before, such as with Ben Franklin Technology Partners of Southeastern Pennsylvania, Grady said the investment was its first in the QED program.
Technically the investments are loans that will are to be repaid from PIDC’s share in proceeds from successful projects. The fund traces its roots back to the 1980s.
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The QED Program, which includes 22 institutions across Pennsylvania, Delaware and New Jersey, has funded 16 projects since it was started four years ago. So far, five of the projects have resulted in technology options or licenses, and projects in the program have raised nearly $9 million in follow-on funding. The QED program is funded with a $1 million grant from the U.S. Economic Development Administration, with financial support also coming from the Commonwealth of Pennsylvania’s Ben Franklin Technology Development Authority, Discovered and Developed in Pennsylvania program, the William Penn Foundation and WEXFORD Science & Technology.
The last round marked the first time the QED program provided funding for health care IT projects, in an acknowledgement of the growth of interest in using health care IT in scientific research. Among the health care IT projects awarded investment were an app to assist with physical therapy for stroke patient recovery and medical technology to improve the identification of prostate cancer using computer-based image analysis of MRI scans.
Stephen Tang, the University City Science Center CEO, has said recently that the Science Center is exploring opportunities for further involvement in the digital health sector.
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