[Cover Stor y: Biotech]
Orlando’s Medical City is a big step toward critical mass for the state’s biotech initiative. By Mark Howard
1 Burnham Institute for
Medical Research (open)
COST: $85 million SIZE: 175,000 square feet
2 University of Central Florida
College of Medicine (2010) and Burnett School of Biomedical Sciences (opening this year)
STAFF: Ultimately 303, including 30 lead scientists
COST: Medical college, $98 million; Burnett School, $68 million
SALARIES AND BENEFITS: $27.8 million
SIZE: Medical college, 198,000 square feet; Burnett School, 170,000 square ft.
FOCUS: Research into diabetes, obesity, cardiovascular disease, cancer and drug discoveries
FACULTY AND STAFF: 412 (full and part time)
NOTABLE: Burnham is one of only four NIH comprehensive centers for chemical biology and drug discovery in the nation. One of Burnham’s research areas at Lake Nona uses a $12-million robotic “Ultra High Throughput Chemical Screening System” that can screen more than 2 million chemical compounds per day.
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SALARIES AND BENEFITS: $40.6 million NOTABLE: The first 41-member class began studies this year, all with fully funded scholarships, at the UCF campus. The medical education program moves to Lake Nona in May. Biomedical researchers move into the Burnett building this year. There are also plans to relocate UCF’s College of Nursing to Lake Nona.
3 Nemours Children’s Hospital (2012)
COST: $380 million SIZE: 630,000 square feet STAFF: 2,600 projected Salaries and Benefits: $81 million projected NOTABLE: The hospital will have 95 beds. The 60-acre health campus will feature a children’s outpatient specialty clinic, an emergency department and education and research centers.
4 Orlando Veterans Affairs Medical Center (2012)
COST: $665 million SIZE: 1.2 million square feet STAFF: 2,101 projected SALARIES AND BENEFITS: $262 million projected NOTABLE: The hospital will serve more than 400,000 veterans in central Florida with 134 hospital beds, 120 community living center beds and an outpatient clinic. The center also has a 60-bed residential rehabilitation program.
of Florida 5 University Academic and Research Center (planned)
COST: $61 million SIZE: 100,000 square feet STAFF: 120, serving 200 students NOTABLE: The center will house a Comprehensive Drug Development Center, including a Ph.D. program; a College of Pharmacy that will move from Apopka; and 15 biomedical research laboratories.
6 M.D. Anderson Cancer Research Institute (opening this year)
SIZE: The institute will move to 30,000 square feet on the fifth floor of UCFâ€™s Burnett School building (photo above), paying the university $2.5 million to occupy space for up to five years as M. D. Anderson Orlando plans and builds a freestanding research facility at Medical City. The institute includes 25 researchers and could triple in size after the freestanding facility is constructed.
[Cover Stor y: Biotech]
he three-story Burnham Institute building stands out as a shiny, landscaped oasis amid 600 dusty acres in southeast Orlando that have been scraped naked by bulldozers and smoothed with 10 million square yards of fill dirt. The first of what ultimately will number 300 Burnham scientists and support staff have settled in to their new digs inside the $85-million research building.
Burnham, the La Jolla, Calif.-based research institution that’s among the top four recipients of grant funding from the National Institutes of Health, will have plenty of company soon enough. In addition to the Burnham, the site known at least for the time being as “Medical City” encompasses: The University of Central Florida’s new College of Medicine, including the Burnett Medical Science Building, both nearing completion The M.D. Anderson Cancer Center, which will operate on the fifth floor of the Burnett building until it builds its own facility nearby The Nemours Children’s Hospital, now under construction The Orlando Veterans Affairs Medical Center, a more than half-billion-dollar facility already funded by Congress and expected to be finished by 2012 A University of Florida Academic and Research center planned close to the Burnham building. Meanwhile, adjacent to the Medical City property, the county has opened a state-of-the-art public high school that
will eventually serve many of the children of the scientists, physicians and researchers who’ll populate Medical City’s workforce. All told, more than $1.5 billion in biomedical-related construction is complete, under way or funded — on a parcel of less than one square mile. The fact that so many medical and biomedical facilities are opening in one community in Florida within two years of each other would be noteworthy by itself. The fact that they are opening on one parcel of land, in a coordinated fashion, with a collaborative mission, is even more significant — for both Orlando and the state. The state of Florida and local communities have invested around a billion dollars of the public’s money in nudging Florida’s economy out of its traditional cheap-land, cheap-labor development. The strategy: Mimic San Diego’s evolution by using research institutions to spin off scientific discoveries with commercial potential. From the onset, it’s been a high-risk, high-reward strategy. Joe Panetta, CEO
of the life sciences trade organization Biocom in San Diego, calls biotech “the riskiest business on the planet” even as he touts the $67,000 average wage, cultural benefits and “massive business activity” that biotech clusters and companies generate. Scripps, the first Southern California research operation enticed to build a Florida satellite, was expected to be a nucleus around which a cluster would form over time. And Scripps has in fact begun to snag research dollars and high-profile scientists after slogging through a politically tangled search for a site. But Scripps came alone and has to generate much of its own momentum in attracting talent, related research and related businesses. Medical City, by contrast, is arriving as a constellation rather than a single star. The sudden presence of a cluster of institutions represents a big step toward critical mass for the state’s biotech initiative and shifts the biotech center of gravity to the middle of the state. Within less than two decades, the institutions at
Burnham’s Orlando facility already attracts almost $40 million in NIH funding. CEO John Reed says a chance to immediately be part of a cluster was the biggest factor in Burnham’s decision to open in Orlando.
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Ultimately, more than 300 scientists will work at Burnham Institute in Orlando.
and simulation businesses and research capacity in central Florida, should give Florida the business dynamo that it has always yearned for — a scientific research and commercial complex that can begin to play in the same league as areas like the Route 128 corridor around Boston and Research Triangle Park in North Carolina. “Absolutely,” says Thaddeus Seymour Jr., vice president and general manager of Health and Life Science Investments for Lake Nona, a division of Tavistock Group, which seeded the emergence of Medical City with both
cash and land. “We think that way. It’s also the way Orlando thinks, and the way the state thinks.” Creating new science and turning it into better health — and money — requires a four-slice pie, Seymour believes: In addition to a research institution, a successful cluster needs an educational component (the medical school); a clinical treatment center (Nemours and the VA); and a set of commercial players — venture capitalists, entrepreneurs, lawyers and investors who translate the science into the marketplace. The slices aren’t always
UCF’s College of Medicine encompasses both the medical school and the Burnett School of Biomedical Sciences, which offers three undergrad degrees and three graduate degrees.
same size: San Diego’s biotech cluster, Seymour says, is long on research and commerce, shorter on treatment and education. Houston, by contrast, is recognized as a top destination for heart treatment, less so as a commercial, educational or research center. Boston and San Francisco have a balanced presence in all four areas, Seymour says, with well-developed educational institutions, treatment hospitals, research institutions and commercial sectors. The other cities’ clusters developed organically, in fits and starts, over many years. Medical City, however, is coming to life with a solid foundation in three of the four slices. Burnham President and CEO John Reed says a chance to immediately be part of a cluster, “working in proximity to a diversity of partners,” was the single biggest factor in his organization’s decision to locate in Orlando. Initially, he says, the mix will help each institution with the essential task of recruiting scientific talent — and by extension the grant funding that top scientists bring with them. Often, he explains, highprofile researchers also want to teach at a medical school or participate part time in a clinical practice at a hospital. In addition, says Reed, the presence of a cluster makes it easier to find a workplace for professional-level spouses who frequently work in related fields — a surgeon, for example, married to a researcher. Longer term, clusters enable institutions to collaborate more easily on grant proposals to federal agencies like the National Institutes of Health, where Burnham gets 80% of its funding, and then on the research itself. Already, Burnham is partnering with M.D. Anderson on one proposal and has created a joint venture with Florida Hospital, a regional hospital group, involving diabetes research. Burnham’s operation at Medical City will focus primarily on diabetes and obesity, Reed says, leveraging Burnham’s ongoing research into other aspects of the body’s metabolism, including cancer, in which something goes awry. In short
[Cover Stor y: Biotech]
“We’ll have dozens of venture capital firms, if not physically located here, then down here regularly... . What we have to worry about is creating the right environment.”
-Thaddeus Seymour Jr.
order, Reed expects Burnham will be attracting at least $50 million in grants through its Orlando facility, and he says that “when Medical City is fully established we expect grant revenue in the billions.” Tavistock has some expectations, too. The Medical City site is just one part of 7,000 mostly undeveloped acres that comprise the Lake Nona Development of Regional Impact. On the Medical City acreage alone, Tavistock plans to build a town center including both urban-style residences and more than 1 million square feet of commercial, hotel and retail space. The company has cleared a hundred or so acres for science and technology companies it expects to be attracted by what’s being built now. Ultimately, Tavistock expects about 25,000 people to live in Lake Nona, with 10,000 onsite jobs. In its early years, Medical City’s weakness will be its commercial slice — the absence of venture capital that’s a traditional and still glaring flaw all across Florida’s business landscape. Seymour expects the collaboration that’s built into the Medical City cluster will speed the development of drug discoveries, medical devices, healthcare information software and other technologies that will attract commercial interests. “I think if we do it right, all kinds of organizations will be involved on the commerce side,” says Seymour. “We’ll have dozens of venture capital firms, if not physically located here, then down here regularly spending time here with scientists. What we have to worry about is creating the right environment” for the collaboration that’s required to produce scientific progress. “We talk about how to do in 10 years what it took San Diego to do in 30 to 40,” says Seymour. Rasesh Thakkar, a senior managing director at Tavistock, puts it more bluntly: “Money follows scientists. Then money follows money. Then it grows from there.
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Burnham scientific director Daniel P. Kelly with the facility’s $12-million robotic Ultra High Throughput Chemical Screening System, used for identifying compounds useful in drug development.
Medical City Began with University of Central Florida President John Hitt’s belief that his university, by developing a biotech research capability, could help transform the region’s economy. Ironically, a medical school wasn’t part of Hitt’s vision until her learned that “you don’t find a bioscience cluster around anything but a medical school.” The school’s decision to locate not just the medical school, but UCF’s entire allied health sciences effort- the nursing school and research operation-off-campus at Lake Nona “made possible the whole concept of the Medical City,” says Hitt, who also welcomed a University of Florida research facility that Burnham wanted as part of the mix. “You’ve got to have a lot of talented people working close to one another. It
Jeffrey E. Green, Nemours vice president and chief administrative officer for Florida, says the Nemours facility will integrate both research and disease prevention outreach programs into the hospital’s clinical activities. In addition, he says, “We teach medical students and residents and nurses. There’s a real opportunity for that training to occur and for that trained staff to stay in Florida.”
Tavistock Group went about creating value at its 7,000-acre Lake Nona development doggedly and with an eye toward long-term gain rather than short-term profit. It donated the land for both the UCF medical college and Burnham. It seeded the local fund-raising effort to build the medical school with 50 acres and $12.5 million- challenging the community to raise the other half. It donated $17 million and 50 acres to Burnham. Joe Lewis, Tavistock’s owner, also bought advertising for Burnham on the Golf Channel during the Tavistock Cup golf tournament he hosts. Lewis has continued to make his mansion in the Isleworth development available to host receptions for donors, VIP guests and prospective Burnham scientists and administrators.
KEY TAVISTOCK EXECUTIVES Thaddeus Seymour Jr. is vice president and general manager of Health and Life Sciences for Lake Nona. A former senior executive at Curascript, a biotech pharmacy and distributor, Seymore functions as the “chief of innovation” for Medical City, overseeing the development of new business ventures and corporate recruitment and working to ensure that Medical City’s various scientific institutions realize the potential for collaboration inherent in the cluster.
other details. Burnham executives touring a local elementary school were greeted by students wearing “Future Burnham Scientist” T-shirts- supplied by Tavistock. Meanwhile, as Nemours fought with two regional hospital giants over its plans to build a freestanding hospital, Tavistock approached Nemours about building its facility at Medical City- putting Nemours farther away from its competitors than its proposed site and helping to facilitate the agreement that freed Nemours to build its hospital.
Rasesh “Sesh” Thakkar, a senior managing director of Tavistock, is a UCF grad who has been Tavistock’s chief operative in the evolution of Medical City.
Community/Business Support Virtually every sector of Orlando’s economy was involved in fund raising for the medical college or Burnham or both, including donations that have funded scholarships for the entire first class at the med school. “In the 17 years I’ve been president,” Hitt says, “this is the project that attracted the most interest from the community.” The enthusiasm and intensity behind the fund raising for UCF’s football stadium, which opened in 2007, he says, was “nowhere near what it was for the medical college.” Big donations came predictably from wealthy businesspeople like Harvey Massey (Massey Pest Control) and Jim Seneff (CNL), but also in smaller denominations. The two major regional hospital groups, Florida Hospital and Orlando Health, collaborated in supporting the med school and Burnham efforts. Disney gave Burnham free display space at Epcot’s Innovation Way. The Orlando Magic’s jet brought Burnham executives to visit the city; Magic players were among those who met the Burnham entourage. Florida’s Blood Centers leased Burnham space at its headquarters and helped supply adult stem cells from donated blood for research. Veterans groups, meanwhile, lobbied intensively to get the VA Medical Center, which had been approved in 2004 but had no site or funding, off the dime.
James Zboril, president and CEO of Lake Nona Property Holdings, manages the 7,000 acre Lake Nona development, including real estate sales and the development of the mixeduse community around the scientific core of Medical City.
From left: Thaddeus Seymour Jr., Rasesh Thakkar and James Zboril
Government Involvement Government help for Medical City began with the approval of more than $70 million in subsidies from Orlando and Orange County to help build Burnham’s facility. It continued with visible participation from the respective mayors, Buddy Dyer and Rich Crotty, during the courtship of Burnham, and then further with expedited approvals for infrastructure needs. City and staff members met each weekend for more than a year to coordinate infrastructure and meet Burnham’s timetable. The school board sped construction of a high school just off the Medical City site. The effort to move the VA’s plans forward got a boost from the fact that both of Florida’s U.S. senators at the time lived within a stone’s throw of each other in Orlando and were familiar with the Lake Nona area.
Whereas Orlando had chased Scripps with traditional behind-thescenes meetings and promises, most of the med school effort and the Burnham Jacob Stuart courtship took place in public venues, says Jacob Stuart, president of the Central Florida Partnership. That, he believes, helped generate the broad community support that was essential to creating Medical City. “That’s the lesson Florida should begin to talk about. We are moving into era of openness. You can’t do economic development with just a closing fund.”
[Cover Stor y: Biotech]
PROFILE: JOE LEWIS
A HANDSHAKE BILLIONAIRE
EXPANDING ITS TARGET Burnham’s focus on diabetes and obesity at Medical City complements its ongoing research into cancer and aging. Burnham CEO John Reed describes the type of discoveries that are likely to emerge:
Traditional drug therapies,
including some based on so-called “small molecule” drugs that show promise in targeting specific kinds of cells
Gene and cell-based therapies
in which genes are delivered to human cells or organs to treat disease or repair damage
Therapies based on discoveries related to DNA sequencing-
understanding the genetic basis of an organism has become essential for researchers to understand how it works
Technologies that are useful as laboratory tools and can be sold back to laboratories
Medical devices, ranging from diagnostic tools to medical platforms like software systems that assist in research or diagnosis. Reed expects that “within the next couple years you’ll see a couple of companies spun out of research” done at Medical City. 58
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It’s possible that the individual institutions that comprise Medical City, over time, would have found their way to Orlando. But if there’s one key player in their arrival at the same time on the same site, it’s Joe Lewis and his investment company, Tavistock Group. Lewis’ influence on Florida’s effort to build a life sciences sector extends back to the very origins of the effort — to the vision of bringing a research institution to Florida around which a biotech cluster could form. “Joe Lewis was the catalyst for me to go out to San Diego and meet” Scripps executives, says former Gov. Jeb Bush. The governor, who had met Lewis previously, was reintroduced to him by David Brown, an attorney with Broad and Cassel in Orlando and a neighbor of Lewis as well as a Bush supporter and fund raiser. Lewis “wanted to replicate what had happened in San Diego,” Bush says. “If not for Joe, I don’t know if I’d have gone out there. He piqued my curiosity, which was a dangerous thing to do when I was governor.” Lewis, 72, an Englishman, lives only intermittently in Orlando, dividing most of his time between his primary estate at Lyford Cay in the Bahamas and another on more than 50,000 acres in Patagonia in Argentina. His net worth is estimated variously at between $2 billion and $5 billion. You can call him secretive. You can call him reclusive. Or you can just call him a private man who prefers to avoid the limelight. But you can’t call him to ask which he prefers because he rarely talks to reporters about himself — even more rarely on the record.
Business beginnings Here’s a distillation of the story his surrogates at Tavistock and other media accounts tell: He grew up in modest circumstances in post-war London, where his family lived above a pub, the Roman Arms. He worked in his father’s catering business and became wealthy building a theme-restaurant chain and a string of tourist shops. Selling food, faux atmosphere and sweaters to tourists introduced him to the vagaries of the foreign exchange markets, the investment arena in which he became enormously wealthy. Along the way, he earned the
nickname “the Boxer” — a double entendre reflecting both his heavyweight status and the similarity of his name to that of the late American champion Joe Louis. To this day, Lewis sometimes operates under corporate entities like “Boxer Asset Management.” Lewis’ biggest currency coup came on Sept. 16, 1992 — “Black Wednesday.” Lewis was among a group of traders, including George Soros, who bet that the English pound was overvalued compared to other European currencies and would fall in value as Britain sought to align it with those currencies. It fell like a stone, and the British government was forced to spend billions propping it up before withdrawing the currency from the European Exchange Rate Mechanism. Soros made $1 billion; Lewis may have made as much. A few years later, Lewis reportedly reaped another massive windfall betting against the Mexican peso.
Orlando coups Lewis first came to Orlando in the 1980s, when Disney tried to hire him to run the English Pavilion at Epcot. An anecdote reflects Lewis’ eye for creating value: A golfer and tennis player, he liked the area, particularly the community of Windermere southwest of downtown Orlando. Through country club connections, Lewis met Arnold Palmer, who led the group that was developing the exclusive Isleworth community near Windermere. Palmer’s effort had been clobbered by slow sales and a lawsuit from local residents, who objected to fertilizer runoff and other pollution from the golf course development streaming into the area’s many lakes. The property went into bankruptcy in 1990; Palmer’s group may have expected to buy it back and proceed, but Lewis swooped in and bought Isleworth out from under Palmer’s group in a courthouse-steps auction. He then shocked local government officials accustomed to developers wanting more density and asked to be allowed to build fewer homes at Isleworth. He also planted thousands of trees and shrubs and cleaned up the lake, ultimately winning a number of environmental awards. Lewis built a
mansion there, and Isleworth has become an ultraposh haven for the rich, and often the famous, including Shaquille O’Neal and Tiger Woods, who has been quoted calling Lewis a business mentor. Similarly, when an English family developing the Lake Nona Golf and Country Club ran into financial trouble, Lewis acquired that development in 1996. Along the way, he became a formidable, if understated, presence in Orlando business and philanthropic circles. In 1997, through the Orlando-based family foundation his daughter runs, he offered $7.5 million in a challenge to jumpstart fund raising for the local M.D. Anderson Cancer Center — a model he repeated in donating toward the construction of the UCF medical school. The foundation, along with Tavistock’s main office, is housed in palatial quarters on an outparcel at Isleworth. The company controls about 170 companies in 15 countries, including well-known names in apparel like Gottex and Puma, restaurant chains, biotech startups and real estate developments [“Tavistock’s Empire,” below]. At one point in the 1990s, Lewis was the largest shareholder in Christie’s, the art auction house. The company, says managing director Rasesh Thakkar, maintains a focus on quality and creating long-term value through both investment and management. In the course of pushing the creation of
Tavistock’s Joe Lewis had no desire to see his name on UCF’s med school. His preference: Sell the naming rights to generate more money for the university.
Medical City, Lewis has been active and frequently visible but always prefers to have his managers at Tavistock define the company’s public profile. True to his preference for a low profile, he asked that the M.D. Anderson Cancer Center be named not for himself, but for his father, who died of cancer in 1987. Lewis reportedly declined an offer to have the medical school named after him, saying the naming rights should be leveraged into another large donation to benefit UCF.
$800-million mistake Lewis does not bat 1.000. Beginning in 2007, he assembled a 9% stake in Bear Stearns, buying shares, typically, under his own name and through corporate entities like Cambria, Darcin, Mandarin and Aquarian Investments — all of which list a Tavistock managing director, Jefferson Voss, as vice president. Lewis lost as much as $800 million when the crumbling firm sold itself to JPMorgan Chase in early 2008. The mas-
REAL ESTATE In addition to the Isleworth and Lake Nona communities in Orlando, Tavistock is developing the Albany Resort Community on New Providence Island in the Bahamas with Tiger Woods and Ernie Els as partners. Tavistock has partnered with the Jamaican government on a 2,300-acre resort community
“Joe’s going to make money out of this,” says UCF President John Hitt, “and I think it’s great. Isn’t it the genius of our economy that people can do well out of doing good? Joe has a better understanding of how to create value than anybody I’ve ever seen. He’s not worried about the next quarter. I don’t know him all that well, but if Joe Lewis looks me in the eye and shakes my hand, it’s a deal. I’m ready to go.”
MANUFACTURING Tavistock has distribution rights to Puma, Vans (apparel and footwear), Gottex (swimsuits) in some Latin American countries, Freddo (ice cream), Bristol Cars, Condici (women’s apparel) and Microdyn (antibacterial and water-purification products).
Tavistock Group’s holdings encompass some 170 companies in 15 countries. LIFE SCIENCES Through its life sciences division, Tavistock invests in early-stage bioscience companies, including several San Diego-based firms developing drugs to treat muscular sclerosis, cancer, hospital-acquired infections and other illnesses.
sive loss generated enough publicity that Tavistock issued a press release reassuring the community that it would not affect the progress of Medical City; a similar release went out to reassure fans of the Tottenham Hotspurs, the English soccer team that’s part of Lewis’ portfolio. Lewis’ and Tavistock’s exertions on behalf of Medical City are, of course, not without self-interest. He owns the 7,000 acres that comprise the Lake Nona development.
called Harmony Cove in Jamaica, and Lewis has bought a major interest in a Bulgarian property development company.
SPORTS Tavistock hosts the Tavistock Cup golf tournament and the Isleworth Collegiate Invitational Tournament in Orlando. It owns the Tottenham Hotspurs and Slavia Prague soccer teams and a sports and gaming company called Enic.
FINANCIAL SERVICES The company operates investment operations in Europe and the U.S. along with an accounts receivables company, a mortgage company and other financial services companies.
RESTAURANTS Based in San Francisco, a Tavistock subsidiary operates the Alcatraz Brewing Co., Blackhawk Grille, Café Del Rey, California Café, Napa Valley Grille, ZED 451 and Freeb!rds World Burrito.
Albany Resort Community in the Bahamas