Economic Development Generating Excellence (EDGE) Policy Board annual report

              E 1450.3 E23a 2009 c.1
Economic Development Generating Excellence (EDGE) Policy Board
Annual Report 2009
The mission of the EDGEPolicy Board is to bolster Oklahoma's long-term economic growth
by investing the earnings from the EDGEendowment in the State's knowledge infrastructure.
Technology-based research and development, commercialization of technology and
entrepreneurial business successes attract capital, create more high-paying jobs, expand and
diversify the State's economy, and provide greater prosperity for Oklahomans now and in the
future.
The State Legislature invested $150 million of public funds as the initial installment of an
EDGE endowment targeted at $1.0 billion. An appointed EDGE Policy Board allocates the
earnings toward applied research and technology commercialization. Annual earnings from the
current endowment are approximately $5.5 million. The EDGE Fund Board of Investors is
managed by the Office of the State Treasurer as directed by Scott Meacham. Responsibilities of
the Board of Investors are to:
• Manage the assets of the fund;
• Invest the funds in accordance with laws applicable to state retirement funds;
• Certify the funds available for expenditure - limited to not more than 5% of the assets
of the fund;
• Discharge duties with care, diversifying the investments ... so as to minimize the risk of
large losses; and
• Submit report of EDGE Fund's investments and asset value annually to the Governor
and State Treasurer.
The EDGE Fund is uniquely designed to
strengthen Oklahoma's technology-based
economy and to attract federal funds. Because
of these distinctive characteristics, only the EDGE
Fund can use state money to:
• Make multi-million dollar investments
into competitively selected technology-based
research and development
projects;
• Direct investments toward the applied
research needs that are requested by
Oklahoma business sectors;
• Use a variety of different funding
instruments to maximize the economic
returns to Oklahoma citizens (grants,
contracts, gifts, loans, partnerships)
depending upon the best investment strategies;
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EDGE Fund Policy Board Members
H.E. "Gene" Rainbolt Samuel Combs III
(Chair) President, ONEOK
Chairman of the Board, Distribution Co
BancFirst Corp (Pro Tempore Appointee)
(Governor Appointee)
Thomas C. Kupiec, Ph.D. Ken Levit
President and CEO, Executive Director, George
Analytical Research Kaiser Family Foundation
Laboratories and DNA (Pro Tempore Appointee)
Solutions
(Speaker Appointee)
Gary W. Derrick Gregory McKenzie
Derrick & Briggs Attorney at Law(Governor
(Governor Appointee) Appointee)
Bond Payne Paul G. Risser, Ph.D.
Chairman of the Board, Executive Director, EDGE
Heritage Trust Policy Board
(Speaker Appointee)
• Give stated preference to collaborative proposals that involve researchers from
multiple institutions and active businesses partners;
• Manage the investment decision-making process to bring together the most powerful
combinations of researchers and businesses; and
• Spend public money for the specific purpose of increasing the State's institutional
research and development capacity.
The unique power of the EDGEconcept is the leadership role accorded to the Policy Board.
Most funding agencies make decisions in response to proposals submitted to one or more
program topics. The EDGEPolicy Board, however, has the opportunity to deploy its resources
strategically in multiple ways, all focused on strengthening Oklahoma's technology-based
economy. Thus, the Policy Board can use a suite of different funding instruments, much like an
orchestra conductor who combines the strengths of a variety of instruments and cadences to
create a powerful symphony. The resulting "performance" of the EDGE"symphony" will be an
integrated, evolving set of innovative investments-matched to Oklahoma's talents,
capabilities, and aspirations-and focused on building long-term prosperity.
The Policy Board is composed of seven members, as follows:
(A) Four individuals who serve as senior officers of an Oklahoma business or
financial company having knowledge of the Oklahoma economy and its potential
to advance to a technology-based economy; the Governor appoints two of these
individuals and the President Pro Tempore of the Senate and Speaker of the
House of Representatives appoint one each;
(B) One scientist, engineer or officer of a technology-based Oklahoma company
or public or private research institution appointed by the President Pro Tempore
of the Senate;
(C) One attorney licensed to practice law in Oklahoma, who has experience with
start-up companies and business practices appointed by the Governor; and
(D) One venture capitalist with experience in the commercialization of
technology and investment in technology-based companies appointed by the
Speaker of the House of Representatives. [62 0.5. 2006, §52.B]
EDGE Fund Policy Board Meetings
10:00 AM-12:00 PM
Presbyterian Health Foundation Conference Center
Kiva Room
655 Research Parkway
Oklahoma City, Oklahoma 73104
State legislation stipulates that the Board of
Directors shall meet at least once each calendar
quarter and at other times upon call by the Board
Chair, or the Executive Director or upon written
request by a majority of the members of the
• January 20, 2009 Board. [62 O.S. 2006, §52.D]
• April 07, 2009
• July 15, 2009
• November 10, 2009
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The authorizing legislation further states that the EDGE Fund Policy Board shall consider
only those projects and programs which satisfy one or more ofthe following criteria:
• Expanding directly the number of researchers, technicians, support services and
associated activity within Oklahoma
• Increasing the formation and growth of advanced technology companies in Oklahoma
• Leveraging additional federal research grants and/or privately funded research into
Oklahoma research institutions
• Improving the health status and quality of life for Oklahoma
At its meeting on November 10, 2008, the EDGEFund Policy Board heard presentations
and evaluated the merit of five projects recommended for funding. The following proposals
were funded for two years, contingent upon satisfactory progress as defined by project-specific
performance measures. Each of the projects has provided the EDGE Policy Board with
Quarterly Updates and will be subject to an annual evaluation by November i", 2009.
Principal Investigator Project Title Organization Total Awarded
Paul DeAnglis, PhD Oklahoma Glyco-manufacturing Hyalose, LLC 1,237,611.00
Facility: Going Global with Next-gen
Sugar-based therapeutics
Jing-xing Ma, MD, Nanoparticle-mediated drug Charlesson, LLC 2,881,031.00
Ph.D. delivery for the treatment of
Diabetic Retinopathy and Age-
Related Macular Degeneration
John S. Greene, Ph.D. The Renewable EDGE The University 1,749,819.00
of Oklahoma
Shivakumar Raman, Shape Engineering Towards The University 3,000,000.00
Ph.D. Advance Manufacturing (SEAM) of Oklahoma
David Boone, Ph.D. RESTORED: Restored Education OrthoCare 1,600,000.00
Science and Technology for Innovations,
Orthopedic Rehabilitation and LLC
Economic Development
Each of the projects has shown progress consistent with its contracted project
milestones, with several of the companies exceeding expectations for the time period.
Oncethe EDGE Policy Board receives the annual reviews, the Board will evaluate the
efficacy of each program in reaching the EDGEgoals and the benchmarks of the specific project.
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Each year the EDGE Policy Board follows nine steps to assure the most prudent
investments. These are:
1. Invite letters of intent
2. Advisory Committee reviews and recommends pre-proposals to the Policy Board
3. Policy Board reviews and invites select applicants to submit full proposals
4. Technical reviews by peer experts
5. Advisory Committee reviews proposals and technical reviews
6. Advisory Committee recommends fundable proposals
7. Policy Board decides on funding investments
8. Memorandum of Agreement is established with each recipient
9. Evaluate and report on each investment
May 20, 2009 at 5:00 PM CST
Request for Pre
Deadline for submission of Pre
Policy Board selects Proposal applicants
April 22, 2009
July 15, 2009
September 16,2009 at 5:00 PM CST
October 23,2009
Deadline for submission of Full Proposals
November 10, 2009
Advisory Committee Meeting
Announcement of Full Proposal(s)
selected as recipient(s) of EDGEfunds
On April 22, 2009 the Policy Board announced the Request for Proposals with a media
release and over 800 letters sent to research companies, colleges and universities throughout
the State. The submission deadline was May 20, 2009. The EDGEFund received another year
of enthusiastic responses with 65 pre-proposals. This large number of pre-proposal
submissions confirms the great potential for the development of innovative high-technology
research in Oklahoma.
Distribution of EDGE Submissions for
.3% FY2010
o Aerospace
_ Agriculture
o Biotechnology
.18%
_IT!
Telecorrmunications o Nanotechnology
_ Other
o Sensors
015% _ Weather Science
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Last year the EDGE Fund received
94 pre-proposals, This decrease is not
due to a lack of evolving technology
and scientific research in the state,
but rather that applicant now have a
better understanding of the EDGE
goals and the business and research
expectations of projects. Although
the EDGE Fund received fewer
applicants than last year, the
consensus is that the pre-proposals
received were much better
developed and decidedly more focused on the long term economic goals of Oklahoma.
For the FY2009 proposal solicitation, the Board focused on the following areas: aerospace,
agriculture, biotechnology, energy, information technology, nanotechnology, sensors, weather
science, and other.
In 2008 the applicants were split with a majority among the biotechnology, agriculture, and
energy fields. In 2009 EDGE saw a strong showing from the information technology and the
aerospace fields. The increased participation of these focal areas illustrates that EDGE Funds
can be used among all business sectors, and as the fund continues to grow so can the diversity
of our economic structure.
Because of the wide range of topical areas and types of projects eligible for EDGEfunding,
the Policy Board did not invoke specific numerical evaluation criteria. However, the following
criteria were used to evaluate all proposals with preferences to those that:
1. Meet the goals of the EDGEFund, including the development and commercialization of
applied research and technology, and/or increase the State's research and
entrepreneurial capacity and/or expand and diversify Oklahoma's technology-based
economy;
2. Leverage public and private resources to demonstrate broad support, to conduct the
project and to sustain the impacts of the project;
3. Demonstrate that the research or technology is significant in its own right and likely to
exert consequential positive impacts on Oklahoma's economy and quality of life;
4. Engage the highest level of expertise and the most advantageous techniques and
technologies;
5. Exhibit significant imagination and creativity; articulate the highest probability of
success and the rationale for that probability; and
6. Offer a sound business plan.
The 65 pre-proposals clearly indicated the power of the EDGEprogram to foster innovation
and identify technology commercialization opportunities. In addition, through this process,
EDGEhas brought the private sector together with the public and private research community
in unprecedented ways by combining cutting-edge applied research with Oklahoma's business
opportunities.
12 $6.5 Million to $2.5 Million
6 $500,000 or less
44 $2.5 Million to $500,000
3 > $6.5 Million
The total funding requests for 2009 were approximately $75M for first year, and $63M for
second year. The total requested funds for this year was $142M.
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The Policy Board is assisted by an appointed Advisory Committee whose members bring
technical expertise and extensive experience in evaluating and managing technology
research and commercialization. The Advisory Committee reports to the Board through the
Advisory Committee Chair and other regular communication channels.
The Committee is charged with three primary responsibilities: (a) to review submitted
pre-proposals and recommend those applicants to be invited to submit full proposals, (b) to
evaluate the full proposals requesting support from the EDGE Fund and to recommend those
that justify funding to the Policy Board for making its final decision on those projects to be
supported, and (c) complete yearly evaluations of currently funded projects with
recommendations for future funding actions to the Policy Board.
The Advisory Committee was expanded this year to cover EDGE's ever increasing topical
diversity and to allow for more expertise in the focal areas for this year. The eleven-member
Advisory Committee reviewed all pre-proposals and voted independently. From these
individual reviews and scores, the top 25 proposals were discussed in detail during a conference
call of the Committee. The EDGE Policy Board also received all the pre-proposals for review.
EDGEFund Advisory Committee Members
J. Donald Capra, M.D. (Chair)
President Emeritus, Oklahoma Medical Research Foundation
Oklahoma City, OK
Richard A. Dixon, Ph.D. Leroy Chiao, Ph.D.
Senior Vice President and Director of the Retired NASA Science Officer
Plant Biology Division, The Noble Houston, Texas
Foundation
Ardmore, Oklahoma
Robert McNeil, Ph.D. Robert Hines, Ph.D.
Managing Director, Sanderling Venture President, Tech Resources, Inc. and
Partners Researcher, Questline
San Mateo, California Columbus, Ohio
Duane J. Roth Ph.D. William Paiva, Ph.D.
Chief Executive Officer and Board Manager, Oklahoma Life Sciences Fund
Member, CONNECT and Venture Partner, Sevin Rosin Funds
San Diego, California Tulsa, Oklahoma
Edward Ungar, Ph.D. Warren Qualley, Ph.D.
President Senior Weather Engineer, Harris
Taratec Corporation Corporation
Columbus, Ohio Washington, D.C
Susan Bridges, Ph.D. Lori Wrottenbury
Co-director Institute for Digital Biology Director, Oil and Gas Conservation Div.
Mississippi State, MS Oklahoma Corporation Commission
Oklahoma City, OK
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With respect to those
invited to submit full
proposals, the Policy Board
accepted all the
recommendations made by
the Advisory Committee and
included two additional ones.
There were 65 pre-proposals
and 14 were selected for full
proposals, of those selected
13 submitted completed
applications.
The applicants invited for full proposal this year include:
• Steve Trost (Strategic Solutions International, LLC)- Cattle Health Research Alliance:
Integrating Development, Use, and Validation of Advance Biosensors
Agriculture
Aerospace
• Alfred Stritz (The University of Oklahoma) - Research, Development, Testing, and
Production of Modular Unmanned Aerial Vehicles (M-UAVs), including Turnkey Modular
Unmanned Aircraft Systems (M-UASs), based on product platform and product Family
Concepts.
• Ken Viera (UML) - Oklahoma Flight Innovation, Research and Testing-Unmanned Aerial
Systems (OKFIRST-UAS)
Biotechnology
• Wayne Drevets (LlBR- Laureate Institute for Brain Research) - Laureate Brain Research
Consortium: Commercialization of Novel Methods for Diagnosis Treatment and
Prevention of Neuropsychiatric Disorders
• Robert Floyd (Otologic Pharmaceutics) - Preclinical investigation of HPN-07 and NAC for
the prevention and treatment of acute noise induced hearing loss.
• John Harley/ Kenneth Kaufman (Oklahoma Medical Research Foundation) - JKA
Genomics: GWAS to GENE,combining many genomes for rapid genotyping.
• Scott Rollins (Selexys Pharmaceuticals Corporation) - Oklahoma Drug Development
Consortium (ODDC)
• Richard Harty (Altheus Therapeutics, Inc) - Therapeutic and Diagnostic Innovations in
Inflammatory Bowel Disease
Energy
• Jeffrey Harwell (University of Oklahoma) - Boosting Oklahoma Oil Production with Next
Generation Surfactant Technology
• Kenneth Oglesby (Impact Technologies) - Application of an Innovative Drilling System for
Optimized Ground Source Heat Pump Installations
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Information Technology! Telecommunications
• David Kendrick (The University of Oklahoma Health Sciences Center) - Greater Tulsa
Health Access Network (Greater THAN)
• Gerard Newman (NewMan Technologies, Inc) - The EDGEin Display Technology
Sensor Technology
• Nick Materer (Oklahoma State University) - Commercialization of Passive Wireless
Corrosion Sensors
• Terry Golding (Amethyst Research Inc) - Nano-Engineered Infrared Sensors
EOGETop 13 Proposals Percentage of
Business Sectors
15% 15%
15%
cAerospace
• Agriculture
n Biotechnology
C Energy
• Inforrration Technology/
Teleconrrunications
C Sensors
Full proposals undergo rigorous evaluation from three perspectives:
a) Technical Review: Each proposal is assigned to experts in an appropriate
technical field who evaluate the project's importance, soundness, feasibility,
and probability of success. Because proposals may include a wide of research
disciplines and technologies, experts are selected to address major components of
the proposed project.
b) Advisory Committee: Considering advice from the technical reviewers, the Advisory
Committee conducts a panel review of the proposals and recommends to the Policy
Board those proposals that are the highest priority for funding.
c) EDGEPolicy Board: The EDGEPolicy Board makes all final funding decisions. In
making these decisions, the Board evaluates the technical reviews of each project
and the recommendations of the Advisory Committee. In addition, the Policy Board
considers the strengths, needs, and opportunities of Oklahoma's technology
research capacity, as well as, investments in research and commercialization that
will benefit Oklahoma's private sector.
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In making its final decisions about those projects to be funded, the EDGEPolicy
Board takes a long view of how best to orchestrate multiple technological, human, and
financial resources through EDGEfunded projects to strengthen Oklahoma's economy, provide
higher paying jobs, and enhance the prosperity of its citizens.
The EDGE Policy Board used the following four criteria to evaluate each of the 13 Proposals
submitted under this solicitation:
A. Merit (50%) Quality of the proposed work and its potential for success by advancing the
technical state-of-the-art and technical competence; relevance to Oklahoma technical needs
and the EDGE mission; and potential importance to intended recipients of the developed
technology.
B. Technical Approach (20%) Realism of the proposed technical approach and methods and
their potential for attaining stated objectives and milestones on schedule using the techniques
and resources described; corporate/organizational and individual qualifications for the work;
adequacy of equipment, materials and facilities proposed; and quality of technical management
and plans.
C. Anticipated Benefits (15%) Potential to advance Oklahoma's capabilities in the broad and
specific areas of interest at a reasonable cost and in a timely manner; potential for sustained,
significant benefit to the State; and potential for generating intellectual property or follow-on
support from sources other than the EDGEPolicy Board.
D. Costs and Budget (15%) Realism and reasonableness of costs, overall budget, and project
schedule; leverage, cost-saving, or value added aspects to the proposed effort. Cost and budget
are considered a substantial evaluation criterion but are secondary to technical merit.
It should be noted that in 2008 the final round applicants were dominated by projects
from the two major cities with a strong preponderance in the biotechnology arena. This year
EDGE has successfully established a wonderful competition among numerous other industries
within the state, encompassing not only our major city employers, but our outlying rural areas
as well.
Along with the progress made with the EDGE programs grant recipients, the Policy
Board has evolved its website to become an interactive and educational outlet for companies
and individuals looking to expand their economic interests throughout Oklahoma. In the one
year since its establishment, the EDGE program has created a sound footing in the scientific
community as a recognized successful program for innovation of Oklahoma's science and
technology industry.
Conclusion
As was exhibited by last year's applicants, many deserving and recommended proposals
could not be funded simply because the earnings from the EDGEendowment were insufficient.
The EDGEFund is a unique and powerful mechanism for fostering innovative, technology-based
business and research designed to strengthen Oklahoma's economy. Because the endowment
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currently consists of public funds appropriated by the State Legislature, the Board is committed
to making investments consistent with the intentions of the EDGElegislation. Therefore, it was
important that each project demonstrate carefully constructed public-private collaboration,
clearly anticipated expected returns on the investment particularly in creating more high-paying
jobs in Oklahoma, and that projects involve the highest levels of innovative technical
competence and technology commercialization. EDGEis not just a funding source, but a broad
mechanism to encourage and expand Oklahoma's research and development capacity.
During this year of the program, the EDGE Policy Board has refined the evaluation
process to support its truly merit-based decisions. Moreover, each of the funded projects
includes clear performance measures consistent with the objectives of the EDGE program.
Projects selected last year all include deep collaborations between Oklahoma's business
community and research organizations. Beginning next year, the EDGE Policy Board will be
able to report the returns on these investments to the citizens of the State. In addition, the
Policy Board will provide analyses and recommendations about ways in which the EDGE Fund
can further advance the economic development of Oklahoma.
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