Moffitt, Merck announce new cancer treatment plan

Tampa Bay Business Journal - 6:01 PM EST Monday
by Michael Hinman

In a move expected to bring more higher-paying biotechnology jobs to the Tampa Bay area, H. Lee Moffitt Cancer Center & Research Institute announced a partnership Monday with Merck & Co. to expand efforts to develop personalized medicine in treating cancer. The partnership had been several months in development.

It will create 170 jobs over a three- to five-year period with an average salary of $80,000, said William Dalton, chief executive officer for Moffitt.

"This deal will put Florida on the map in a way that makes the area one of the top sectors of economic development in the world," Gov. Jeb Bush said.

Funding for the project will come from the following sources: $15 million from the state of Florida, $20 million from Hillsborough County, $500,000 from the city of Tampa and "a very substantial amount" from Merck.

The M2GEN project will involve collecting thousands of tumor tissues and clinical data from patients from across the state, which will be analyzed to identify genetic markers specific to that tumor. Through this study, Moffitt and Merck (NYSE: MRK) officials say they can identify drugs that will give physicians the knowledge they need to individualize treatment for patients with a specific type of cancer, known as personalized medicine.

"This provides a human connection as well," Bush said. "There are people that are desperately seeking experimental treatments. This will create the capacity to discover and customize drugs to care for people in our state."

A company will be formed and located in Hillsborough County near the Moffitt campus at the University of South Florida Fowler Avenue site using incentives from the state, county and Tampa. Although no site was announced, it is believed to be near the current Moffitt location.

This is great news! Hats off to all who made this possible!

Well, that's a bit underwhelming, considering the hype we've been hearing for months about how Tampa was announcing a "major" local biotech deal.

The only thing I can say about it is... Why it is that it only costs $200k per job for this deal, while the deals made in Orlando and West Palm are each costing over a million dollars per job created? Exactly what is the difference?

Well, that's a bit underwhelming, considering the hype we've been hearing for months about how Tampa was announcing a "major" local biotech deal.

The only thing I can say about it is... Why it is that it only costs $200k per job for this deal, while the deals made in Orlando and West Palm are each costing over a million dollars per job created? Exactly what is the difference?

Probably one of three things- or a combination:

1. Tally went about the Scripps deal like a bunch of A-holes, which set them up for Burnham to "hold them hostage" for similar $$$ once the precedent was set; or

2. Merck is giving more $$$ than the other two companies were giving; or

3. Moffitt already exists, which increases the "pull"; whereas the UCF MEd School and UF facility do not, and whatever similar deal in PB Co. for Scripps.


...actually, for a better analysis, more info on the extent of the project would be needed. Another element is which other states, if any, were competing against FLA?

Source: http://www.sptimes.com/2007/01/30/Business/Merck_s_share_of_deal.shtml

Merck's share of deal: $95M
By KRIS HUNDLEY
Published January 30, 2007


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[AP Photo]
Giant drugmaker Merck & Co. Inc. has pledged nearly $100-million, including $65-million in cash, to create a major cancer tumor research center in Tampa.
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Giant drugmaker Merck & Co. Inc. has pledged nearly $100-million, including $65-million in cash, to create a major cancer tumor research center in Tampa.

The pledge, disclosed in confidential documents obtained by the St. Petersburg Times, indicates Merck is willing to shoulder more than half the cost of establishing M2GEN, a for-profit subsidiary of Tampa's H. Lee Moffitt Cancer Center and Research Center, a far bigger percentage than other recent biotech incentive packages in Florida.

Nevertheless, the arrangement remained in limbo Monday as both county and state officials continued to drag their feet on approving public funds that are critical to the deal. The Merck/Moffitt partnership, which was announced last month, calls for $15-million from the state's Quick Action Closing Fund and $28-million in cash and land from Hillsborough County.

Merck has agreed to give Moffitt $5-million upfront and $13-million annually for the next five years. The world's second largest drug company will also donate $30-million in in-kind services, profiling at least 30,000 tumors for M2GEN. In exchange, Merck will have exclusive access to the tumor database for drug discovery purposes.

Documents describing the deal say six biotech companies are exploring a move to the Tampa Bay area to work with M2GEN. In letters to Enterprise Florida, the state's economic development agency, three of the companies said their participation could generate up to 140 new jobs. M2GEN alone will be responsible for 165 positions, the documents say, putting the public investment at $263,000 per job. That is substantially lower than the cost to create jobs in other recent biotech deals.

The confidential analysis of M2GEN incentive package also mistakenly described the city of Tampa's cash contribution to the deal, code-named Project Bold, as $5-million.

In fact, Tampa agreed to put $500,000 toward the Merck/Moffitt endeavor. Mark Huey, Tampa's manager of economic development, said the city doesn't have the resources to make a multimillion-dollar commitment to the project. Even a half-million-dollar lump sum payment is unusual.

"We've never done that before," Huey said. "We've always done it based on performance or job creation or capital investment."

Sen. Rudy Garcia, a Republican from Hialeah, brushed off the official overstatement of Tampa's contribution, saying "What's an extra zero?"

As co-chairman of the joint legislative budget committee, Garcia single-handedly stalled approval of state funds for the deal last week, saying he had unanswered questions about how Florida would benefit.

"They're asking Florida to come up with $15-million while we have other needs in other areas of the state," he said.

Earlier in the month, Hillsborough County officials also raised concerns about their pledge and criticized the city's contribution. Commissioner Ken Hagan noted that the county recently committed to give the city nearly $7-million in tourist tax dollars to fix the Tampa Convention Center roof and air conditioning system.

Commissioner Mark Sharpe, a key supporter of the project, was optimistic that the city will ultimately come through. "A plan that's good for the taxpayers takes time," he said. "The devil's in the details."

New reality for deals with big incentives

The fact that monkey-wrenches are suddenly being thrown into what was presented as a done deal reflects a new political reality in Tallahassee. Over his last three years in office, former Gov. Jeb Bush delivered several multimillion-dollar incentive packages to lure high-profile biotech institutes to Florida.

So powerful was Bush's influence that not a single question was raised when the state budget committee signed off in August on nearly $180-million in incentives that were identified only by their code names.

The Merck/Moffitt partnership, which will give Moffitt an edge in the development of personalized cancer medicines, was touted by Bush as "a milestone day for Florida." But now that Bush is out of office and his successor, Gov. Charlie Crist, is distracted by other concerns, county and state officials have suddenly become emboldened.

"I sense that the prior governor's office thought no one should ask any questions about these projects," said Garcia, who joined the budget committee in January. "But quite frankly, that isn't good enough for the people of Florida."

Second phase may be real stumbling block

Public officials may also be hedging on their contributions to Merck/Moffitt deal because the nationally renowned cancer institute has made it clear that a second and far more expensive project is in the works that would entail a substantial relocation and expansion of the Moffitt campus. Hillsborough Commission Chairman Jim Norman said Moffitt representatives have told him not to support the M2GEN deal if he does not intend to support the second phase in which the dollar amounts are expected to be much greater.

"I'm not trying to kill their deal," Norman said. "But I'm going to get whacked over the head by people who say 'You've committed this county and you don't know what you've committed to?' I can't do that."

Garcia had similar questions. "What if Phase 2 never materializes?" he said. "Is Phase 1 (Merck/Moffitt) a stand-alone project?"

A spokesman for Enterprise Florida said the agency is working on getting Garcia some answers before the next state budget committee meeting Feb. 22.

Moffitt officials declined to comment on expansion plans or delays in public approvals.

"It's going to happen," Moffitt spokeswoman Michelle Foley said. "Where and how fast is still being worked out."

Times staff writers Janet Zink and Bill Varian contributed to this report. Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996.

Fast Facts:

Here's the deal

The Merck/Moffitt partnership: Who promised what?

H. Lee Moffitt Cancer Center: $5-million

Merck: $65-million cash, $30-million in-kind services

State Quick Action Closing Fund: $15-million*

Hillsborough County: $20-million cash, $8-million land*

Tampa: $500,000

*Pending official vote

The Quick Action Closing Fund

What was allocated in 2006:

$5-million: Project Pinnacle*

$1.3-million: Project Sunshine*

$2.7-million: Office Depot

$7.272-million: Torrey Pines Institute for Molecular Studies

Balance as of Jan. 29: $28,728,000

*Identity of recipient not yet disclosed

Source: Florida Joint Legislative Budget Committee

[Last modified January 29, 2007, 23:15:09]

This is really big for USF as becoming a very attractive location for medical students. With deals like this USF is really rising in the ranks of Florida schools.