I was heartened on Feb. 6 at BioNJ’s Annual Dinner Meeting when Senate President Steve Sweeney announced to a crowd of 650 life sciences professionals, patient advocates and patients his enthusiastic support for the New Jersey Innovation Evergreen Fund.
Under the fund, the state would auction tax credits to New Jersey corporations over five years in order to raise $250 million to invest into startups, while seeking to pair those funds with at least $250 million from private venture capital sources. The combined $500 million infusion would target New Jersey-based startups that show the promise and potential to scale up and create jobs.
When proposed in October 2018 by Gov. Phil Murphy, the New Jersey Innovation Evergreen Fund was received with enthusiasm and support by the life sciences industry and recognized as an unprecedented and important step forward for New Jersey’s economic future.
During the past decade, New Jersey’s life sciences industry has experienced increasing competition from other states focused on raising their quotient of startups. Notably, California and Massachusetts have, respectively, created 10 and four times the number of companies compared with New Jersey (885 biopharma companies founded in California between 2012 and 2015, 430 in Massachusetts, and only 89 in New Jersey).
Regionally, we need to work toward leveling the competitive playing field with Massachusetts and its $1.5 billion investment, Pennsylvania and its Ben Franklin and Greenhouse Initiatives, New York’s novel START-UP NY program and Maryland’s Excel Maryland initiative. These incentive programs — taking the form of venture capital and other up-front financing, abatements and preferential tax treatment — are giving New Jersey a run for its money. However, the New Jersey Innovation Evergreen Fund provides a strategy to rival other successful life sciences hubs.
When BioNJ first got started in the early 1990s, there were hundreds of millions of dollars in venture money on Nassau Street in Princeton alone, much of it being deployed in New Jersey. Fast forward to present times, and New Jersey is not keeping pace with other states in the area of venture capital funding investment. From 2014 to 2016, California completed 148 biopharma deals, receiving venture capital funding of $1.9 billion invested, and Massachusetts completed 105 biopharma VC deals that generated $1.8 billion invested. In sharp contrast, in that same period, 19 New Jersey deals received venture capital funding investments totaling $255 million.
The Innovation Evergreen Fund is unique and will help to put New Jersey back on the map in terms of venture capital in a way that harkens back to when the Technology Business Tax Certificate Transfer Program, better known as the Net Operating Loss Program, was announced in the 1990s. There was nothing like it in the country and there still isn’t, although there have been numerous attempts at imitation over the years.
The life sciences industry represents more than 3,200 life sciences facilities and 430,000 employees in our state, annually generating $33 billion in wages and benefits, nearly $1 billion in state taxes and $105 billion in economic output. And, I am proud to report that New Jersey leads the way in therapies and cures for patients, with more than 50% of all new novel FDA medicine approvals in 2019 coming from companies with a footprint in New Jersey.
We need to act quickly to ensure that the Garden State remains a thriving hub — leading the way in medical innovation, including groundbreaking research in cell and gene therapy, immunotherapy and rare diseases. I urge our elected leaders to come together and do what is best for patients, for New Jersey and for our economy by approving the establishment of the New Jersey Innovation Evergreen Fund.
Debbie Hart is CEO and president of BioNJ.