RD236 - Commonwealth Research Commercialization Fund: Advancing Technology and Economic Development in Virginia by Investing in Priority Research and Commercialization Activities Annual Report July 1, 2011 – June 30, 2012

Executive Summary:
In accordance with Code of Virginia Sections 2.2-22.33.1 G and 2.2-2221 (18), and on behalf of the Innovation and Entrepreneurship Investment Authority (IEIA), the Center for Innovative Technology (CIT) respectfully submits this report regarding the performance of the Commonwealth Research Commercialization Fund (CRCF) in FY2012. The CRCF accelerates innovation and company formation in the Commonwealth, while solving important state, national, and international problems through technology research, development, and commercialization.

During the 2011 session of the General Assembly, $6 million was appropriated to CRCF for the purpose of advancing science- and technology-based research, development, and commercialization to drive economic growth in Virginia and to encourage collaboration among its institutions of higher education and partnerships between these colleges and universities and business and industry. CIT managed two FY2012 solicitations resulting in 47 awarded projects. (*1) These projects are performed by companies, universities, and research institutes across the state and are advancing technology commercialization aligned with Virginia’s key strategic technology priorities as outlined in the Commonwealth Research & Technology Roadmap. CRCF leveraged the Commonwealth’s $5.85 million investment with $12.7 million in matching funds. FY2012 CRCF awards tackle major challenges facing the state, the nation, and, in fact, humankind. For example, these latter projects are attempting to create groundbreaking diagnostics and treatment options for some of the deadliest and most challenging cancers, including brain cancer, pancreatic cancer, and renal cancer, and parasitic diseases that are pervasive and difficult to treat. The work the Commonwealth organizations are doing, with CRCF support, have the potential to have a profound and lasting benefit to society through job, intellectual property, and company creation in Virginia.

CRCF funds have helped Virginia-based organizations to gain additional large-scale funding. For example, as a result of their CRCF award, Parabon NanoLabs of Northern Virginia developed relationships with two large companies – Janssen Pharmaceuticals and Johnson & Johnson – for their work to treat brain tumors. This relationship led to additional funding and studies by the National Institutes of Health (NIH) and the Nanotechnology Characterization Laboratory (NCL). Similarly, the CRCF award to Phthisis Diagnostics, a small business in Charlottesville, was crucial to $260,000 in private investment.

The FY2012 CRCF included five programs: Commercialization, Eminent Researcher Recruitment, Facilities Enhancement Loan, Matching Funds, and SBIR Matching Funds, for which $2 million of the $6 million FY2012 appropriation was specifically designated. Per legislative direction, awards made for CRCF projects must support technology sectors identified in the Commonwealth Research and Technology Strategic Roadmap. The Roadmap, a comprehensive planning tool Virginia leaders use to help determine research areas worthy of economic development and institutional focus, identifies technology sectors with the most commercial promise and that will drive economic growth throughout the state. Eleven technology sectors were eligible for funding in FY2012.

CIT assessed interest in and demand for Commonwealth research and commercialization support through a Request for Information (RFI), issued to the research community and industry in June 2011. Findings demonstrated a pent-up demand from Virginia’s private sector, academia, political subdivisions, research institutes, and federal labs; 144 entities across the state requested a total of $120 million for 305 projects addressing such technology sectors as advanced manufacturing, aerospace, energy, information technology, and life sciences.

Following issuance of the RFI and in consultation with the technology community and the Administration – particularly the Secretariats of Education, Commerce & Trade, and Technology – CIT established the Research & Technology Investment Advisory Committee (RTIAC), a body created in 2011 legislation to recommend CRCF awards to IEIA and develop guidelines for the first FY2012 solicitation. RTIAC members are identified in Appendix B.

In total for FY2012, 181 eligible proposals were submitted from all of the Commonwealth’s ten technology regions and from these submissions, 47 projects were awarded CRCF funding. Funded projects covered ten of the 11 technology sectors identified in the Roadmap as priorities eligible for CRCF funding. Many CRCF projects began well into the second half of FY2012; findings and work discussed in this report will reflect the recent starts. Outcomes of the progressed work will be included in more detail in the FY2013 Annual Report, along with such results as additional funds received through grants, contracts, and investments. The Fund Administrator will report on projects for up to five years after their period of performance in order to better capture commercialization results and economic outcomes, including job and company creation, and new revenues.

In addition to overseeing FY2012 solicitations, CIT submitted the FY2011 Annual Report in October 2011. This report discussed the two Commonwealth Technology Research Fund (CTRF) projects completed in FY2012: Eastern Virginia Medical School’s "The Development of BioEclipse, the First Biologically Optimized Treating Planning System for Proton Radiotherapy" and Virginia Tech’s "A Center for Community Security and Resilience," and FY2012 planning by the Fund Administrator.

The Administration and General Assembly continue to support the mission of the CRCF. The FY2013 and FY2014 budgets each include $4.8 million for the Fund. Planning is underway for the FY2013 opportunities.
(*1) 47 projects were awarded in FY2012 although 51 projects were selected for funding; four organizations declined fall 2011 awards.