Building a Successful Life Sciences Corridor in Michigan Presentation to the National Governors’ Association

1. Building a Successful Life Sciences Corridor in MichiganPresentation to the National Governors’ Association

2. Overview • Michigan’s Economy • Current Status • Michigan’s Economic Development Strategy • Michigan Life Sciences Corridor Initiative • Creation • Funding • Baseline • Competitiveness • Accomplishments

3. Michigan’s Economic Strengths • Nation’s Top Automotive Producer • Largest Office Furniture Industry • Second Largest Plastics Industry • Largest Leisure Travel Destination in the Great Lakes Region

4. Michigan’s Economic Strengths • More than 700,000 new jobs created in the past decade • More than 50% in high-tech fields such as engineering, medical, and business services • Created more than 30,000 manufacturing jobs while the nation lost 600,000 in the past decade

5. Michigan’s Economic Development Strategy • Economic Development Infrastructure • One Stop Shopping Infrastructure • Customer Service • State-Local Partnership • Business Climate • Business Retention and Expansion • Business Attraction • Emerging Business Sector Development

6. Emerging Business Sector Development • Profiled Michigan Industry Base • Identified High Growth Potential Sectors - Industry Trends, Cross-Cutting Applications • Identified Select “Fits” • Advanced Manufacturing: Emphasis on High Value-Added Manufacturing, R & D, Engineering, Corporate Headquarters • Information Technologies: Applications Development and Systems Integration

7. Life Sciences • Solid Industry Base - 3 Major Pharmas • Stronger Than Average Market Position - #10 in Sales and Employment • Strong Research Infrastructure - 3 Top 50 Research Universities - $1 billion Van Andel Research Institute • Good Long-Term Growth Projections • Weak Business Infrastructure

8. Life Sciences in Michigan - 1999 MI Academic R&D: $508M (1999) 200 Ph.D. per year Patents 7th MI Life Sciences companies: $1.6 Billion sales – 10th 16,800 workers – 11th $1.2 Billion R&D investment 300 firms (56 employees/firm) Concentration: MI USA • Drugs + Pharmaceuticals 70% (46) • Medical instruments 29 % (50) • Biotechnology 1 % (3.8) Source: Battelle Study

9. Michigan Life Sciences Corridor Goal: Advance Michigan from a top ten to a top five life sciences research and commercial center

10. Creation of the Life Sciences Corridor • $1 Billion ($50 M per year) committed to Life Sciences Corridor Initiative • Opportunistic: Tobacco Settlement • Private-University-State Partnership • Supplemented by MEDC Economic Development Activities

11. Michigan Life Sciences Corridor Fund Category I • $20 million • Centers of excellence;enabling technologies, inquiry-driven science projects and activities Basic Research Applied Research Commercialization Category II • $25 million • Development ventures: demos, prototype, trials Category III • $5 million • Business activities in support of technology commercialization

12. Michigan Life Sciences Corridor • Competitive and Rapid application process • Electronic RFP, pre-proposal, full proposal • MLSC staff host regional information sessions • Peer Review Agency pre-proposal review • Peer Review Agency full proposal review • LSSC review: Balance, matching funds, rating and ranking, available funding by category • Award decisions, contracts with award recipients • Turnaround from RFP to final award 9 months

13. MLSC Definitions of Success Science • Top 10 ranked life science institutions • Attraction of external research funding, students, and faculty • MI Universities have transferred intellectual property to form 150 new companies • Hundreds of collaborative research programs with Michigan-based companies Business • 250 new life sciences companies launched, 150 survived, 15 completed IPO’s • 100 new companies with proprietary products • >$1 Billion of private equity raised • Deep and broad life sciences business service community • 15000 new jobs

14. MLSC 2000-2001 Commercialization Awards • Seed Funds • Michigan University Commercialization Initiative • MLSC Catalyst Fund • Applied Research Capacity • Training and Consulting

15. Nephros Therapeutics Nephros Therapeutics, Ann Arbor-based medical device company received an award to conduct clinical trials on its bio-artificial kidney. In the trials the device has already saved the lives of three Michiganders

16. Michigan in the Forefront of Life Sciences Technologies • Human Genome Project • Rubicon Genomics is developing technology that will close the gaps in sequencing and identifying areas of sequence divergence • Stem Cell Research • Michigan Center for Cell Therapy is harvesting and growing embryonic stem cells from umbilical cord blood • Bio-terrorism Defense • NanoBio, BioPort and Neogen are contributing to decontamination, anthrax vaccination, and food safety testing • GeneCodes, developing software to identify DNA from World Trade Center victims

17. Michigan Life Sciences Corridor Class of 2001 * Recipient of MLSC funding

18. Then (1999) MLSC created MI ranked in top ten Database of 300 life sciences companies MBA: 20 members, $25K CEO Survey: MI 5th destination to relocate NOW (2001) $2.4 billion new investment, 2067 jobs and 22 new companies Searchable Database 532 life sciences companies MBIA: 53 members, $250K CEO Survey: MI 2nd destination to relocate Michigan Ranked in Top 5 by 2010

19. Michigan Life Sciences Business Expansion • Pfizer’s announcement of its expansion of the Ann Arbor research campus is the largest corporate expansion or relocation in the United States, for 2001

20. Complementary MEDC Programs • Venture Capital Initiatives • Support for University Economic Development • SmartZonessm • High Technology Incentives • Dedicated Marketing and Business Development Staff

21. Are we on our way? Yes • Growing an industry • Diversifying our economy • Gaining national recognition • Building research excellence • Enhancing health and well-being of all citizens of Michigan

22. Michigan Life Sciences Corridor Visit our website at: www.michigan.org Questions & Answers