The Golden Leaf Foundation says it will invest as much as $100 million to stimulate biotechnology growth in North Carolina over the next six years.

Valeria Lee, president of the foundation, which is one of three trusts set up to manage the state’s portion of the tobacco settlement money, says the $42 million earmarked for investment in biotechnology companies this year is only a start.

“We’ll be looking to spend as much as another $100 million in the sector over the next six years,” she says.

According to Lee, the foundation’s executive committee is holding meetings to decide how to disperse the $42 million this year. “We’re still developing guidelines and expect to have some decision on how we’ll proceed to make those investments by mid-October,” Lee says.

Two options for handling investments

Lee says Golden Leaf may go ahead with its original plan to create an investment fund that would be managed by an outside group. The group would raise additional venture cash to mingle with the Golden Leaf money in a larger fund.

But, Lee points out, “We’re also looking at the possibility of having the staff and organizational capacity to just make those investments directly. We get several inquiries a week regarding possible opportunities for us to invest in the sector.”

Lee says she doesn’t think the foundation will go that route. “If we use outside managers, it will be their job to look for companies (in which to invest).”

She says the foundation will look to the North Carolina Biotechnology Center as a resource.

“We’ve had several conversations with them,” Lee says. “They have focused on early stage investments and our fund is more interested in later stage companies just about ready for manufacturing. But the Biotechnology Center has been an essential part of this sector in North Carolina and we will look to them to help us make determinations.”

Lee says the foundation is particularly interested in the bio-pharmaceutical industry. “We’re not restricting ourselves to that, but it’s what drove us to give priority to biosciences. The reason it has so much interest to us is the possibility of supporting a part of North Carolina’s economy in both agriculture and manufacturing.”

NC faces increasing competition

Lee acknowledges that this year’s $42 million would only be enough to make one or two later stage investments in biotechnology companies which require huge junks of cash to get through clinical trials. That’s one of the reasons why the foundation is considering mingling its funds with those of an outside organization.

The foundation has already decided on but hasn’t announced where it will place another $12 million to establish funds which will invest in North Carolina and give priority to the biosciences, according to Lee.

A driving force behind the fund’s commitment is the increasing competition North Carolina faces for biotechnology investments. Lee points out that many states and regions are vying for biotechnology industries.

“We’re not the only ones who think it’s a growing sector,” she says. “It could be an important part of any state’s future. We don’t want to lose our competitive advantage. So we will be looking at other opportunities to put money in this sector as time goes by.”

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