Massachusetts’ Role in the Biotech Market

MASS Life sciences centerA Massachusetts state agency approved $2.2 million in grants this month to fund startups that reach early-stage milestones. The move stems from an identified gap in the Bay State’s booming biotech market.

According to Susan Windham-Bannister, the outgoing president of the Massachusetts Life Sciences Center, “This was a gap in which Massachusetts often loses companies to other states.”

Although the center provides grants to early-stage companies to reimburse them for hiring interns, this is the first time it’s given grants to companies to help them achieve early milestones–including prototype development, market analysis, clinical trials, and business plan development. From 98 applicants, the center awarded 12 state-sponsored grants of between $50,000 to $200,000.

Zintro expert Michael L. Salgaller, Ph.D. is an experienced biopharma, healthcare, and venture capital executive in senior management. He explains, “Such state-sponsored economic development activities have a mixed record of success in producing successful entrepreneurial activity in the biotech sector. In Maryland, the Technology Economic Development Corporation (TEDCO), has been recognized for several years as the #1 funder of early-stage companies.

“Nonetheless, the state remains at the second-tier of biotech hubs. These types of funds do provide early validation, as well as critical support for proof-of-concept work and/or operation activities. Any many such companies go on to secure risk capital. However, there is little data that state economic development funds give life-blood to deserving companies that would have died otherwise.

“Many argue funds go to stronger companies that would have secured angel or high net-worth individual monies anyway. Investor tax credits and similar incentives have shown to generate additional and higher risk capital investment in states such as Maryland and California. States whose legislatures decided not to maintain such tax credit programs – including Washington – realize they are at a comparative disadvantage that $50K from a state program only partially overcomes.”

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