GOVERNOR JEB BUSH ANNOUNCES 'SEMINAL MOMENT' IN FLORIDA HISTORY AS MAJOR BIOMEDICAL INSTITUTE CHOOSES PALM BEACH FOR NEW RESEARCH FACILITY ~Scripps Florida will bring more than 6,500 jobs, increase state economy by $3.2 billion ~ TALLAHASSEE - Governor Jeb Bush announced today that one of the world's largest biomedical research institutes - The Scripps Research Institute - has chosen Palm Beach as the location for its second major research facility. Scripps Florida will create 6,500 jobs, generate about $1.6 billion in additional income to Floridians and boost the state's gross domestic product by $3.2 billion in the next 15 years. An additional 40,000 jobs will be created as a result of the industry clustering that is expected to take place surrounding the Scripps Florida nucleus. The Scripps Research Institute employs 2,900 at its La Jolla (San Diego), California facility and is the number one funded research institute by the National Institutes of Health (NIH). In the past 22 years, Scripps has been responsible for 40 biotech spin-off companies in Southern California and is currently home to three Nobel Laureates, 15 American Association for the Advancement of Sciences fellows and 14 National Academy of Sciences members. This premier faculty has been responsible for groundbreaking research in leukemia, ovarian cancer, Lou Gehrig's disease, Alzheimer's and AIDS. Florida will leverage the Institute's 42-year track record to build on the state's current biotech research capabilities. "Scripps' is the brand name in biomedical research, and its decision to build a sister research facility in Florida is a seminal moment in our state's history," said Governor Bush. "Just as the visions of Henry Flagler, John Gorrie and Walt Disney changed Florida's future, so too will the people of Scripps. This expansion will bring Florida to the forefront in this lifesaving research and advance our current biomedical economy. One only need look to Southern California to understand the impact this facility will have on attracting academia, federal research grants, biotech startups, pharmaceutical companies, venture capitalists and other investments in our state" "Based on our history and experience in La Jolla, the extension of Scripps activities will increase the scope and depth of significant research in biomedical science," said TSRI President Richard A. Lerner, M.D. "The synergy between Scripps biomedical research in California and Florida is expected to lead to major new developments to improve human health." Florida, ranked 12th in the nation for academic research and design, will leverage its current research activity with the intellectual capital of Scripps to grow jobs and further stimulate and diversify the state's economy. Florida's biomedical industry - including pharmaceutical manufacturing, medical devices and R&D - employs approximately 37,000 workers with average wages exceeding $40,000. In Southern California, the Institute has helped to foster the so-called "clustering" effect, which has led to 499 biomedical/pharmaceutical companies located in the San Diego region, 80 percent of which are within a three-mile radius of Scripps. San Diego has seen more than $3.5 billion in venture capital investment in 2000 and 2001, compared to $3.0 billion in Florida during the same time period. According to economic models, Florida can expect to see the similar economic benefits, including an expected 44,000 jobs created by biotech companies that opt to be in close proximity to Scripps Florida. Governor Bush will propose the Legislature designate $310 million from the one-time federal economic stimulus monies as part of the initial seed money necessary to bring Scripps to Florida. There will be a 44.8 percent return on investment for this money. This state commitment will be in addition to local support that will include temporary lab space and construction of a new 360,000-square-foot, state-of-the-art research facility. After this initial seed funding, the Scripps Florida research budget will come directly from The National Institutes of Health and other grant monies. "There is no better way to spend the one-time federal economic stimulus money than by investing in a project that spurs targeted economic growth. This investment will return more growth and revenues down the road. Florida is proud that our budget and economy continues to grow, and we will not reverse this trend by making the mistake of using one-time money to pay for recurring costs. It's clear that strategy serves only to stagnate the economy and grow budget deficits," said Governor Bush. In addition to its direct economic impact, Scripps outreach with K-20 education will be a significant benefit to Florida's universities and public school system. Scripps Florida will serve as a nucleus to university research statewide, in a collaborative open access way. A fully-staffed, fully-equipped drug design port will help qualified researchers in Florida convert their research findings into new drug discoveries. Scripps Florida also will provide joint degree programs for all universities in the state. In addition, the institute's focus on providing unique on-site research opportunities for local teachers and students will benefit K-12 education in the state. While students of all ethnic and cultural groups will be accepted into the programs, Scripps Florida will place a special emphasis on identifying and recruiting students who are historically underrepresented in the sciences. The Governor's Office worked closely with the Business Development Board of Palm Beach Co. Inc. (BDB) and the Palm Beach County Commission to realize this expansion project. "We are very excited about the prestige and economic opportunities that will result from Scripps Research Institute's decision to expand in Palm Beach County, said Warren Newell, Vice Chair of the Palm Beach County Board of Commissioners. "The County Commission pledges its full support for meeting the needs of the Institute in Florida." "The Business Development Board is proud that our County met the expectations and requirements of an organization of the stature of Scripps," said Greg Fagan, BDB Chair. "Palm Beach County, our region, and state will realize significant benefits, recognition, and positive economic impact from the new institute. The focus of the world will be directed to Palm Beach County as this biotechnology and life sciences partnership is announced." For more information on this announcement please visit www.myflorida.com. ****************************************** The Scripps Research Institute At A Glance Founded: 1961; its predecessor, the Scripps Metabolic Clinic was founded in 1924 through a gift of philanthropist Ellen Browning Scripps. Governance: President Richard A. Lerner, M.D., a chemist, appointed 1991; 32-member Board of Trustees; 13-member Scientific Board of Governors, including 8 Nobel Prize Laureates. Location: La Jolla, California, a part of the City of San Diego. Facilities: More than 1 million square feet of laboratory space in 12 buildings. Staff: approximately 3,000 including 288 principal investigators (three Nobel Laureates), 775 postdoctoral fellows, 230 graduate students, 1,500 technical and administrative staff. Specialties: Basic biomedical research including immunology, molecular and cellular biology, biochemistry, neurosciences, autoimmune diseases, cardiovascular diseases, and synthetic vaccine development. Organization: Seven scientific departments; several centers and institutes; the Kellogg School of Science and Technology offering Ph.D.'s in chemical and biological sciences; the Skaggs Oxford Scholarships program; science education programs for middle and high school students and teachers. FY 2003/4 Operating budget: approximately $280 million Funding sources: National Institutes of Health and other federal agencies (ranks #1 in NIH funding to independent research institutions), collaborative partnerships with leading pharmaceutical companies such as Novartis, philanthropic support from foundations, health-related associations, individuals, licensing of technology to private industry. Spin-off companies: More than 40 companies have grown out of Scripps research and technology developments. More information: www.scripps.edu. ****************************************** The Economic Impact of Scripps Florida Biotech Research Institute Economic Impacts without the Emergence of a Biotech/Pharma Cluster . The development of a leading biotechnology research institute in Florida, in partnership with the national leader in this field and topped ranked NIH-funded research institute, would yield substantial economic benefits to Florida. A strategic partnership with The Scripps Research Institute (TSRI) of San Diego, CA brings together a proven business model with the economic development strengths of Florida's economy, strategic location, and growth-oriented public policy. . TSRI has over 40 years of success in attracting national research funding (both public and private), creating strong ties to academic institutions and the education/science community, and developing a biotech industry cluster that has led to over 40 high-tech business startups. . The Scripps Florida business plan calls for starting research activity in a leased facility while building a state-of-the-art research campus; recruiting world class faculty using TSRI's international reputation and Florida's excellent quality of life; and leveraging TSRI's administrative infrastructure and expertise to quickly attract external funding sources and become financially self-sufficient by the 8th year of operation. . Scripps Florida's staffing plan calls for employing 31 workers in the first year of operation and steadily increasing that number to 545 by the 7th year of operation. Based on TSRI's experience in San Diego and its reputation and successful track record, we expect that direct employment can grow to 2800 by the 15th year of operation. The direct employment in Scripps Florida will lead to indirect and induced economic multiplier effects leading to an expansion of economic activity, employment and income in the State. . Construction of Scripps Florida's research campus will begin in the first year of operation and take three years to complete. The projected cost of the research campus is $140 million. An additional $50 million investment in scientific equipment is projected over the first seven years of operation. These construction and capital expenditures will also produce economic multiplier impacts in the State. . We anticipate that TSRI's success in developing a biotech industry cluster in San Diego can be duplicated in Florida, and at a quicker pace than in its California experience. The knowledge and experience gained by TSRI in its 42 years of operation effectively paves the way for Scripps Florida. Startup ventures created with the assistance of Scripps Florida's research discoveries can also yield substantial benefits to Florida's economy. . We have estimated the economic impacts from the direct employment and capital expenditures anticipated for Scripps Florida, as well as the impacts from the startup ventures it is likely to generate, using an extended input-output (economic) model of Florida. We have developed this model using a professionally accepted methodology and IMPLAN modeling software. Our computer simulations reveal substantial economic benefits from Scripps Florida. . The results of our analysis of the potential economic impacts of Scripps Florida are shown in the Table 1 below, but may be summarized as: - An average of 2,777 new employment positions during the first 15 years of operation, but the employment impact grows steadily over the period and by the 15th year the direct, indirect and induced economic impacts support nearly 6500 jobs. - Additional labor income that averages $106 million per year over the first 15 years, and provides total additional income of $1.6 billion for the entire 15-year period. - Additional state and local revenues (from the resulting expansion in economic activity) of $211 million over the entire 15-year period. - Additional Gross State Product (i.e., Florida's GDP) of $3.2 billion over the first 15-year period. - The anticipated State financial support for Scripps Florida is shown in column (6) of the following table and amounts to a total of $310 million. The cumulative net economic benefits to Floridians from this project (in the form of labor income and revenues to state and local governments less the State's $310 million investment) are estimated at $1.5 billion. - The comparison of economic benefits to Floridians with the State's $310 million of financial support implies an annual rate of economic return of 45 percent on the State's investment. ****************************************** Economic Impacts of a Biotech/Pharma Industry Cluster . The economic impacts and net benefits shown in Table 1 do not include the impacts from the emergence of a biotech/pharmaceutical technology cluster that is likely to emerge in close proximity to the proposed research center. The experience in San Diego represents an example of what may happen in Florida as well. . San Diego's biotech/pharma cluster contains nearly 500 firms, employing 35,000 workers and paying an average salary of $54,000. . We have prepared an analysis of the potential economic impact that can be expected from the development of a similar industry cluster (within the context of Florida's economy). The results of this analysis are provided in Table 2 below, but may be summarized as: . An average of 8,260 new employment positions during the first 15 years of operation, but the employment impact grows steadily over the period and by the 15th year the direct, indirect and induced economic impacts support nearly 44,300 jobs. . Additional labor income that averages $396.5 million per year over the first 15 years, and provides total additional income of $5.9 billion for the entire 15-year period. . Additional state and local revenues (from the resulting expansion in economic activity) of $536 million over the entire 15-year period. . Additional Gross State Product that averages $594 million per year over 15 years and represents an additional $8.9 billion in economic activity over the entire 15-year period. J. Antonio Villamill Robert D. Cruz, Ph.D.