Scripps Florida seemed such a promising prize that Gov. Jeb Bush referred to it by an ambitious code name: Project Air Conditioning.
A decade after Florida wooed the nonprofit lab with the largest economic development subsidy in state history — and the hope that Scripps would become the biggest thing since central AC — Bush’s big bet on biotech looks more like Project Swamp Cooler.
Florida taxpayers are reaping some rewards from their $1.5 billion investment in Scripps and seven other biotech institutes, but the spending spree has yet to transform the state’s economy. Even biotech boosters acknowledge that the pace has proved sluggish.
“I believe this is going to happen,” said Stephen Chakoff, head of the Jupiter drug development firm CHS Pharma. “Is it going to happen as quickly as many people anticipated 10 years ago? Obviously it hasn’t.”
When Bush announced The Scripps Research Institute’s expansion to Palm Beach County in October 2003, he touted an economic impact study that said the investment in Scripps would spawn some 6,500 spinoff jobs and create as many as 50,000 high-paying jobs statewide in 15 years.
To accommodate all the Scripps spinoffs and drug companies expected to flock to the area, Bush often said northern Palm Beach County would need 8 million square feet of space for labs, offices and drug plants.
Ten years on, Scripps Florida has created only three spinoffs, and one promising company that moved to Jupiter to be near Scripps was sold and moved out of the area. Dreams of Big Pharma plants coming to town and hiring hundreds of Palm Beach County workers remain just dreams.
Job promise ‘silly’
Demand for real estate by biotechs has proved tepid, too. A biotech building near the Scripps campus has leased about 23,000 square feet to life sciences companies, and other small companies are scattered through Jupiter.
In retrospect, promises of tens of thousands of biotech jobs statewide and millions of square feet of lab space in Palm Beach County seem “silly,” said John Couris, chief executive at Jupiter Medical Center, a nonprofit hospital that partnered with biotech lab VGTI Florida on research and battled with Scripps Florida over the need for a teaching hospital in Palm Beach Gardens.
“Some people in some organizations might have overpromised and underdelivered,” Couris said. “That’s not uncommon when people get excited about something.”
Commercial real estate broker Neil Merin, head of NAI/Merin Hunter Codman in West Palm Beach, doubts Florida will achieve even a fraction of the economic activity envisioned as a result of Scripps Florida.
“Everybody overpromised,” Merin said. “We may never, ever be at those kind of levels.”
To be clear, Scripps Florida has met the job-creation goals it can control. In exchange for $310 million from the state and $269 million from Palm Beach County, Scripps Florida promised to hire 545 workers at its Jupiter labs by Dec. 31, 2013.
Close to making job goal
As of late September, the institute had hired 525 workers, and it plans to add at least 20 people by the end of the year, said Dawn Johnson, Scripps Florida’s scientific director.
“We’re doing exactly as we said we were going to do,” Johnson said.
Scripps Florida has brought in $355 million in grants from the National Institutes of Health. But living up to the hype — Bush and others compared Scripps not just to air conditioning but also to the space program and Walt Disney World — hasn’t been easy.
“We’re just one part,” Johnson said. “We got the ball rolling.”
After Scripps landed $579 million in state and local incentives in 2003, Florida taxpayers spent an additional $1 billion to lure other nonprofit biotech institutes, including $311 million to the Burnham Institute in Orlando and $188 million to Max Planck Florida in Jupiter.
While the nonprofit labs are up and running in state-of-the-art facilities in Miami, Port St. Lucie and St. Petersburg, the parade of start-up biotechs and out-of-state drug giants has yet to arrive.
“In today’s world, it’s just hard to produce a lot of jobs,” said Joe Collard, the former head of Scripps spinoff cuRNA.
CuRNA is a biotech success story, but it illustrates that victories in the uncertain world of drug development often are incremental rather than transformative. Created to commercialize research by a former Scripps Florida scientist, the company hired a handful of employees, then sold for $10 million in 2011 to Opko Health of Miami.
Opko Health moved some of cuRNA’s employees to Miami, and some remain in Jupiter.
Just getting started
Another Scripps spinoff, Xcovery, is making similarly small strides. The company has 10 employees in West Palm Beach, said Chief Executive Sherry Snyder — who repeated the biotech mantra that creating a biotech hub takes decades.
“Unfortunately, it takes some time,” Snyder said. “The start is there. You just get to five or six companies, and then you can say we’ve got the seed for a biotech industry.”
Another company, Envoy Therapeutics, moved to Jupiter in 2009 to be near Scripps. But its 13 scientists left the area this year after Envoy was sold to a Japanese firm.
The jobs Bush projected a decade ago didn’t account for delays caused by a dispute over where Scripps Florida would be located. The Great Recession also hampered the development of the state’s biotech industry. On the other hand, the promise of 50,000 jobs came years before the seven additional research labs agreed to come to Florida, and their arrival has raised the state’s profile only in the life sciences.
Still, some biotech boosters remain optimistic.
“The cluster effect is really working,” said Mark Emalfarb, chief executive of Dyadic International, an enzyme firm in Jupiter. “I think Jeb’s investment has been a success. A lot of people don’t.”
Dyadic International, which has 13 employees in Jupiter, was based here when Bush recruited Scripps Florida.
“We were here before the world showed up,” Emalfarb said. “If Scripps didn’t come here, we would have been on our way out.”
Biotech via Skype
Others aren’t so sure that Palm Beach County biotech cluster can achieve the grand vision Bush laid out. The biotech industry has seen wrenching changes in the past decade. Scripps Florida and other institutes rely on federal funding, but the NIH budget, once soaring, flatlined and then shrunk. Drug manufacturing has moved to China.
And technology has changed the very nature of industry clusters, Merin said. Scientists around the world can collaborate by Skype or e-mail, lessening the importance of a large campus like the one Scripps runs in La Jolla, Calif.
“Bioscience has become much more decentralized,” Merin said. “Scripps Florida was built on the idea that they were recreating La Jolla — but it was half a century later. The world is different now.”
Some biotech entrepreneurs say Bush miscalculated by lavishing money on nonprofit labs but devoting little to the cash-strapped start-ups expected to be created by Scripps and others.
“They gave too much to one group and didn’t leave any for everybody else,” said Fred Sancilio, head of Riviera Beach drug firm Sancilio and Co.
Ray Johnson, president of Cytonics Corp. in Jupiter, made that point to Bush when the former governor visited Scripps Florida in 2009. Small companies need the state to offer venture capital and lab space, Johnson argued.
“We can safely say we gave at the office,” Bush responded.
“I’m still bothered by that comment,” Johnson said. “It just doesn’t happen that easy. We’re not going to see the big secondary effect of spinoffs and start-ups until there’s a better answer to the funding and support question.”
While Bush was an enthusiastic supporter of the biotech initiative he kicked off, biotech subsidies have slowed since Bush left office.
“In the Scott administration, the focus has really been not on trying to move an entire industry at once but trying to work on discreet projects that can be the building blocks of the economy,” said Jesse Panuccio, head of the Florida Department of Economic Opportunity. “I still believe that long-term these investment are going to pay dividends, but they have been slower-growing than might have been anticipated at the beginning.”
The biotech executive who first persuaded Bush to woo Scripps to Florida urges patience.
“It maybe hasn’t gotten to the level of jobs and business activity people might like, but the amount of activity is terrific,” said David Gury, former head of Nabi Biopharmaceuticals. “It takes a period of time that’s just not predictable.”
Gury sparked Bush’s interest in biotech during a 1999 trade mission to Israel. During the trip, Gury described the success of California and Massachusetts in building research hubs. Despite the slow start, Gury said Florida’s biotech industry is on the right path.
“Ultimately, I think you’re going to see a tremendous impact,” Gury said. “Whether it’s going to be the same impact as air conditioning, I don’t know.”
Still waiting for biotech boom
A decade ago, Gov. Jeb Bush said a $310 million state subsidy to Scripps Florida would yield big results.
The projection: The biotech industry would create 50,000 jobs statewide 15 years after the Jupiter lab opened.
What’s happened: Florida biotech employment dipped 1.8 percent from 2001-2010 and fell 12 percent from 2007-2010, according to the most recent Batelle/BIO State Bioscience Industry Development Report.
The projection: Scripps would attract 499 companies looking to commercialize research from the lab.
What’s happened: Scripps scientists have created three spin-off companies. Another company opened in Jupiter to be near Scripps but moved to California after it was bought by a Japanese firm.
The projection: Scripps Florida would hire 545 employees by Dec. 31, 2013.
What’s happened: Scripps Florida had 525 workers as of late September and said it’s on track to reach its goal.
What Bush touted
Former Gov. Jeb Bush said in October 2003 that bringing Scripps here would create:
- 6,500 spinoff jobs, part of 50,000 high-paying jobs statewide in 15 years
- A need for 8 million square feet of space for labs, offices and drug plants in northern Palm Beach County.