One of the most enjoyable aspects of my job as president of the Indiana Economic Development Corp. and secretary of commerce was the opportunity to represent our governor and the state of Indiana on goodnews occasions.
On April 26, 2005, I bestowed official state certification on Intech Park, a business incubator that had qualified under the Indiana Certified Technology Park Program. Certified tech parks enjoy the advantage of being allowed to capture and invest in the development of their park certain tenant-generated state and local tax revenue. To qualify for certification, a park must have an active educational component. Intech Park was co-sponsored by Purdue University.
Joining us that day was Purdue President Martin Jischke. As part of my presentation, I commented that Purdue must be involved in the illegal cloning of humans, citing the obvious evidence that one Martin Jischke could not possibly be in so many places at the same time. I had no idea that what would come next could have a profound effect on the Indiana 21st Century Research and Technology Fund and Indiana’s quest to become a major player in the fields of science and technology.
The 21st Century Fund was created in 1999 by the General Assembly to stimulate the process of diversifying the state’s economy by developing and commercializing advanced technologies in Indiana. The fund is authorized to spend $75 million over a two-year cycle. It is not enough.
During lunch, Jischke introduced me to tablemate Ron Ellis, president and CEO of Endocyte. Endocyte is a privately held biotechnology company developing several promising products to treat cancer and other serious illnesses. Ellis shook my hand and said, “I want to thank you. We were down to our last few dollars and ready to close our doors when the 21st Century program provided us with a grant of $2 million, and now we have a strong pipeline with a number of products in various stages of clinical and preclinical development.”
About that time, Jischke whispered in my ear, “These guys are going to be bigger than Eli Lilly. This is going to be a billion-dollar company.” (Jischke is always enthusiastic and that enthusiasm is contagious.)
I was pleased to accept the thanks of Ellis on behalf of my predecessor, who made the 21st Century Fund grant to Endocyte. Then I began to wonder. If I were broke and about ready to close my doors, what would I be willing to provide in return for a cash infusion (read transfusion)? What percentage of my company would I grant to someone who kept me in business? Endocyte has no obligation to share with the 21st Century Fund any of its upside potential.
It is the responsibility of the IEDC to review and, if necessary, rewrite the regulations on all state economic development programs, including the 21st Century Fund.
Sparked by that conversation with Ellis, the regulations that govern the fund were revised to include a requirement that successful companies return at least the amount of the grant they received from the fund and, under certain circumstances, much more.
From the date the revised regulations were promulgated, 24 grants have been made by the 21st Century Fund. In every case, contracts with the recipient organizations have included an obligation to repay a multiple of the 21st Century grant based upon the success of the endeavor.
Ellis will be a panel member at the Indianapolis Business Journal’s Life Sciences Power Breakfast June 26. Come and meet this remarkable executive, congratulate him on his success at Endocyte, and remind him that his expression of appreciation at receiving a 21st Century grant gave birth to an idea that will probably allow this fund to be less dependent on the Legislature, grow more rapidly, and provide larger benefits to entrepreneurs in the years to come.
Maurer is a shareholder in IBJ Media Corp., which owns Indianapolis Business Journal. To comment on this column, send e-mail to firstname.lastname@example.org go to IBJ Forum at www.ibj.com.