Unless advocates for biotechnology and life science take a big, big stand in the N.C. House, the state’s biotech sector is about to take a huge hit in the pocketbook.

A Senate budget calls for a 50 percent cut in funding – or $8.6 million – for the North Carolina Biotechnology Center. While not as bad as Gov. Pat McCrory’s 60 percent slash, the Senate’s total would mean big reductions for the Center. It’s also a nasty indicator that major cuts are coming since two of the three budget players are on record now as supporting a substantial reduction.

The horse trading that always happens around budgets could lead to some sort of salvation for the Biotech Center. Its CEO, Norris Tolson, has warned that significant cuts in funding will have a ripple effect across the North Carolina life science cluster, which is the nation’s third largest.

So no one at the RTP campus is waiving white flags.

“The House will have its own ideas and we’ve seen a good deal of difference between House and Senate lawmakers on a lot of topics,” WRAL’s Mark Binker tells The Skinny.

“That said, McCrory’s budget hits the biotech center pretty hard as well. So if you think of the budget as a three-way negotiation between the House, Senate and governor, two of the three parties involved agree on the Biotech Center.”

“Long-Term Damage”

As one would expect, the Biotech Center is working to find some sort of compromise. 

“We understand that the changing and challenging revenue picture for the state has an impact on funding for all state-supported agencies,” Robin Deacle, vice president of corporate communications for the Center, told WRALTechWire.

“The competition for biotech jobs is global, and the proposed state support is essential for creating these high-paying jobs in North Carolina. We are encouraged that the budget proposal allocated this critical funding for biotechnology sector development.

“Still, a cut of this magnitude to Biotechnology Center operations will cause long-term damage to the state’s leadership in this sector. Without strong funding, we cannot make the investments necessary to grow this segment,” she added.

“Ultimately, this will reduce the number of life-science jobs. The ripple effect is severe – one job in biotech creates four total jobs for the state’s economy. North Carolina can’t afford to lose this job-creation potential.”

Tolson, a veteran Democrat and political veteran, and biotech backers were rocked by McCrory’s original proposal to slash funding to $7.2 million from $17.2 million. 

Broken Promises?

As we have written before, the growth of the state’s life science/biotech industry over the past three decades has been nothing short of remarkable. A 2012 research report from The Battelle Group found that biotech and related firms are responsible for more than 237,000 jobs that produce nearly $15 billion in salaries and $59 billion in economic output. Over the decade covering 2001-2010, the life science sector grew an impressive 23.5 percent, which Battelle says was faster than any other state. And North Carolina already has the third largest biotech cluster in the country.

And, as we have previously noted, a key to that grow has been the Biotech Center, which serves as a champion for the sector, operates numerous offices across the state, supports startups and research efforts with a variety of loans and grants, and also helps the state recruit new companies as well as more jobs.

Just last week, the Biotech Center awarded $2.5 million in loans and grants.

McCrory stunned the biotech sector in March when proposed slashing the non-profit, state-funded Biotech Center’s budget to $7.2 million from $17.2 million.

“We have two choices with a $7.2 million budget,” he told WRALTechWire.

“First, we could renege on our commitments to nearly 200 biotechnology projects across the state. We could then use that money for operations going forward. I do not believe that is the correct course of action. I believe the Biotechnology Center should keep its commitments on behalf of the state of North Carolina.


“Second, we can stop investing in early-stage technology. Startup companies would lose a critical source of funding – sometimes our loans are the only money they can get. Recruitment of new life-science companies to North Carolina would stop.

“Either scenario prevents us from executing on our mission. Without operating funds, we can’t make the important connections that power this state’s biotechnology industry. And without award money, ideas will never make it out of the laboratory. Worse, they may go to other states, which are dedicating more and more dollars to life sciences, even in tough budget times.

“Either way, we will lose our leadership position in this sector. And we will lose jobs.”