Connecticut Governor Dannel Malloy and Commissioner Catherine Smith of the Connecticut Department of Economic and Community Development met with CURE members August 25 to explore issues facing the life sciences industry in Connecticut and to discuss how the state and the industry can work together to grow Connecticut's economy.

The meeting, which took place in the main conference room of CURE member Achillion Pharmaceuticals in New Haven, was yet another sign of the Governor's commitment to the industry, which he made clear during his election campaign and his appearance last March at the StemConn 2011 stem cell research symposium.

Paul Pescatello, president and CEO of CURE, introduced the Governor.

"What we're looking for," the Governor said, "is to make sure our legislature and executive branch are on the same page and doing the things necessary to lay the groundwork for job creation in our state on a long-term and systematic basis. In essence," he continued, "what we're trying to do in the State of Connecticut is create our own research triangle from New Haven to Storrs to Farmington."

As an example of his commitment to the life sciences, he described how his administration had recently moved beyond the concept of mere bed replacement at the UConn hospital facility in Farmington to a broader concept that included the creation of 15 new laboratories "and plans for inviting 50 of the greatest minds that we can attract from around the world to our state to conduct their research."

Governor Malloy introduced Catherine Smith, Commissioner of the Department of Economic and Community Development, explaining that a lot of functions had been consolidated into the new DECD. "We have anchors at Yale and UConn and other research institutions that can really help Connecticut move forward in the life sciences," Commissioner Smith said. "Innovation is an opportunity for us, an area we want to put a lot of emphasis on," she continued.

Before calling on CURE members in the audience to ask questions or make comments, Pescatello emphasized the unique importance of the biopharma industry to the state. "A dollar invested in biopharma has the greatest ripple effect across the state's economy of any industry," Pescatello said. "But we are an unusual industry in terms of the amount of investment required. It now takes almost $1.5 billion dollars in investment to get FDA approval of the average new drug. Even so, medicines account for only 10 to 12 percent of the overall cost of healthcare. New medicines like those being developed at Connecticut biopharmas are actually lowering the cost of healthcare and represent a way out of the current healthcare crisis."

Click here for a copy of the fact sheet that was shared with the Governor at the meeting.

Pescatello introduced David Scheer, the chairman of Achillion's board of directors, who said, "I think everyone in this room would love to work with you and your administration to find ways to make Connecticut more attractive, more efficient and effective, in innovating and in bringing new products forward. One thing that could be transformative would be to find ways to use early-stage investment to more efficiently translate some of the innovation coming out of the universities into companies that can really carry the torch."

Anthony Sabatelli, chief patent counsel at Rib-X Pharmaceuticals, mentioned two pieces of federal legislation he thought were important to Connecticut-based companies. One is the GAIN bill, which provides incentives for antibiotic development, an area of development, Sabatelli said, that has slowed in big pharma but could be taken up by smaller companies if the incentives were in place. Sabatelli also mentioned patent reform legislation. He was hopeful that new legislation would be signed by the President later this fall.

Michael Schmertzler, president and CEO of Kolltan, mentioned that his company was taking on some former Pfizer employees dislocated by the recent changes there. He said the credibility of Connecticut as a location for long-term biopharma development needed to be reinforced. Venture capitalists, he said, were sometimes skeptical about why a company was located in Connecticut. He said one important consideration was to keep the state an attractive location for key personnel and their families.

One issue raised by several speakers was that Connecticut taxes the equity capital of small start-ups even when they have no revenues. This has a debilitating effect, the speakers said, especially in light of how long it takes to develop new drugs and how much capital is involved.

Another issue raised by several speakers was that of making New Haven more accessible, and therefore a more desirable location for attracting talent. The need for good apartment space and an airport close by was mentioned. The Governor said these issues were on his radar screen.

Joe Reilly, president and CEO of Soft Tissue Regeneration, underscored the need for a concise plan that could be marketed to company executives in the industry who were thinking of relocating or expanding. He said he thought it was important that some large companies come in as anchors. "You don't need a 500-page plan, but you've got to keep at it year in and year out," he said. The Governor said he was working to develop, before the next legislative session, proposals that would make it very clear how serious Connecticut is about job creation. He added that he had recently lifted a travel ban that had handcuffed state officials from pursuing out-of-state leads.

Mark Van Allen of the UConn Research and Development Corporation said that a research strategy was needed at UConn that matched with what the state was trying to achieve. "You need core areas of research that VCs can come and look at," he said. He added that Connecticut needed to invest in more start-ups. "It's a matter of volume," he said, "because no one can really predict for certain the winners among research projects at the bench."

Tim Shannon, a venture partner with Canaan Partners, said he supported the Governor's efforts to develop a clear statement of what Connecticut intends to do regarding business and the economy. "There are a lot of committed people here," he said. "We need a mechanism for bringing the key parties — UConn, Yale, and the State — together with investors."