Biotech Biz Pushes For Fed Increases

Recruit and retain scientists. Attract more venture capital money. Start more businesses. Develop more treatments and cures for diseases.

Those are some of the ways that New Haven that bioscience and biotechnology companies would like to spend money if Congress gives the National Institutes of Health more funding.

More than 30 captains of New Haven’s biomedical industry gathered at the 5 Science Park offices of Arvinas, a biopharmaceutical company, Wednesday to tell U.S. Sen. Chris Murphy how that funding benefits the cause of medical research and the local economy.

Murphy (pictured) is a member of the health subcommittee of the U.S. Senate Appropriations Committee, which writes the budget for the U.S. Food and Drug Administration (FDA) and the National Institutes of Health (NIH). As Congress prepares to put together the 2018 – 2019 budget, Murphy saidm he plans to fight for further increases for the NIH.

Since the mid-to-late 1990s, the NIH’s budget has grown from about $10 billion to $37 billion. But Murphy said that hasn’t been a sustained, consistent growth. Years of slow growth, followed by major investments during the Clinton and Bush administrations, followed smaller increases. He noted that Connecticut received $523 million in NIH grants in 2017.

Arvinas founder Craig Crews said that when he started his company the NIH wasn’t willing to take a risk on his work. When the NIH’s budget expanded so did its risk tolerance, and he got funded.

“You can see what has resulted from that,” he said. The growing company, which started out of Crews’ lab at Yale University, is now on track to employ more than 85 people. The company, which develops cancer drugs, also has been able to snag licensing deals with pharmaceutical companies and has raised $110 million in venture financing.

“There is this delta between medium risk and no risk. I’m afraid if we continue to have a flat budget the future of our industry is not going to be funded,” Crews said. Government grants can help a company take the next, often higher risk steps in the research and development process of making a medical breakthrough, creating a new drug, or designing a new medical device.

Jon Soderstrom (pictured), managing director of the Office of Cooperative Research at Yale, said that in the last decade about 50 venture-backed startups have been created in New Haven. Those startups have attracted over $1 billion in professional venture capital and more than $3 billion or $4 billion when you look at all capital. But this couldn’t have happened without funding along the way from the NIH and also the federal Small Business Administration’s Small Business Innovation Research program, which encourages small businesses to conduct federal research and engage in research and development.

“It is the engine that is driving the New Haven economy right now,” he said. ​“What we saw when the NIH budget flattened out, so did we. There was a bit of a lag effect but it flattens and our economy flattens with it.”

State Rep. Lonnie Reed (pictured) of Branford, who served as the House Chair of the Energy & Technology Committee and Co-Chair of the Bipartisan Life Sciences Caucus, said that NIH funding is often critical in keeping a startup from going out of business as it awaits follow-along funds from the state and pursues venture capital money.

She said what the state has going for it is that the scientists in the state tend to work together to pursue NIH grants, rather than individual scientists competing against each other for the same pot of money.

“They’ve really professionalized their approach,” she said.

Richard Torres of the startup Applikate Technologies said that NIH funding makes the difference in whether people go into research or stay in more limited fields of academia. He said the SBIR program funds collaborations between industry and academia which leads to the hiring of engineers, designers, who all live and work in communities throughout the state.

Another participant noted that those funds support graduate students who also live in cities like New Haven where they rent apartments and shop in local stores. Torres said he secured grants from NIH that helped him cover the cost of his education and stay on the research path.

Murphy said that only in the last two years has Congress been able to provide consistent 6 and 7 percent increases, which moves the NIH budget beyond the range of medical inflation. That’s a hard precedent to sustain, he warned, but he promised to keep trying

“You are robbing Peter to pay Paul,” he said. ​“You have a budget cap that applies to all non-defense discretionary spending. If you want to continue to get high, single-digit increase for NIH funding, you have to take that money from somewhere else. Inside the non-defense discretionary side, this is one of the places where we do have bipartisan consensus and so we continue to capitalize on it.”