Kathleen Coviello is the New Jersey Economic Development Authority’s (NJEDA’s) Chief Economic Transformation Officer.
In this role, she oversees the authority’s strategic sector, economic transformation products (corporate tax credit programs, clean energy and offshore wind products, innovation and venture products, and strategic innovation centers) and the product operations departments. The division provides value-added business engagement and products targeted at commercial businesses within the state’s strategic sectors.
As a leader across these departments, she works to support high-quality job creation, catalyze private investment, and build a diverse innovation ecosystem in New Jersey.
The state with a competitive advantage
In the heart of the United States lies a flourishing haven for life sciences businesses: New Jersey. The Garden State presents an exceptional competitive advantage, catering to startups, mid-sized companies, and even global pharmaceutical giants. Boasting a myriad of benefits, it has become an ideal place to support and grow life sciences ventures.
At the forefront of this success is a recent report from the Biotechnology Innovation Organization (BIO) and the Council of State Bioscience Associations (CSBA), lauding New Jersey as a national leader in innovation and economic growth within the industry. With 4,340 bioscience establishments and over 104,989 industry employees, the state is undeniably a driving force in propelling the life sciences sector forward.
Under the leadership of Governor Phil Murphy, New Jersey has made commendable strides in nurturing its life sciences ecosystem. Recognizing the critical need for capital for startups, the New Jersey Economic Development Authority (NJEDA) offers a range of programs supporting companies at every stage of their journey. From funding and affordable lab space to top talent and mentorship, these initiatives have helped numerous companies overcome challenges and thrive.
Keeping startups and investors connected
One of the NJEDA’s standout programs, the Net Operating Loss Program, has been a lifeline for companies yet to reach profitability. It allows them to sell their New Jersey net operating losses and unused research and development (R&D) tax credits for much-needed cash, without sacrificing equity. This non-dilutive funding, totaling over $1.2 billion for nearly 600 companies, has proven to be a game changer, enabling businesses to use their losses creatively to fund research and working capital. The average award for companies approved to sell their net operating losses through the program in 2022 was over $3.1 million.
To incentivize investors to collaborate with life sciences companies, the Angel Investor Tax Credit Program offers a 20 percent refundable tax credit against qualified investments. Businesses located in Opportunity Zones or New Market Census Tracts, and certified minority or women-owned businesses are eligible for a five-percent bonus. This unique program ensures investors, even from outside the state, enjoy a guaranteed return on their risky investments, enhancing their return on investment. Over $800 million in investments have been leveraged from investors that received tax credit awards through the program since it began in 2013.
An innovation ecosystem
Fostering collaboration between startups and research universities, the NJEDA partners with the state’s Commission on Science, Innovation, and Technology (CSIT) to provide state-of-the-art equipment through the Catalyst and Clean Tech R&D voucher programs. The grants provided through these programs help offset costs for accessing laboratory facilities, ensuring startups can preserve precious capital while conducting cutting-edge research. For each program, a startup can apply for multiple vouchers, capped at $25,000, within any 12-month period.
The commitment to a thriving innovation ecosystem is highlighted through the establishment of the New Jersey Innovation Evergreen Fund (NJIEF). By doubling available capital (up to $12.5 million per investor annually) for qualified investors supporting life sciences companies, the NJIEF streamlines the fundraising and scaling process for ambitious entrepreneurs.
This fund also attracts valuable support from global corporate partners, such as consumer health company Haleon and pharmaceutical company Daiichi Sankyo, who bolster New Jersey’s innovation landscape and aid the recipients of the funding. Both companies were among eight corporations that purchased a combined $50 million in tax credits to fuel the NJIEF. The corporations, all with significant footprints in New Jersey, also made strategic commitments totaling nearly $3.8 million to bolster the innovation community.
Diversity, equity, and inclusion
These frameworks are paramount in New Jersey’s innovation ecosystem. With a commitment from Governor Murphy, the NJEDA has prioritized resources aimed at helping minority- and female-led companies flourish.
To empower women-led startups, First Lady Tammy Murphy and the NJEDA joined forces with Golden Seeds, a nationwide angel investor network dedicated to investing in female-led startups. The New Jersey Chapter of Golden Seeds has already invested over $5 million in startups and fostered over 100 connections between startups and investors. Coupled with the state’s Angel Investor Tax Credit Program, the investor network is a strong value proposition to support women-led life sciences companies in New Jersey.
To provide aspiring entrepreneurs with a head start, the New Jersey Innovation Fellows program offers grants of up to $400,000 to first-time entrepreneur teams. Mentorship, training, and income replacement capital form an integral part of the program, allowing entrepreneurs to focus on their ventures without financial worries. This support is especially valuable for those transitioning from pharmaceutical careers to life sciences entrepreneurship.
Collaboration equals greater success
In New Jersey, the NJ Ignite and NJ Accelerate programs are revolutionizing the startup landscape by providing direct loans and rent support to companies that embrace collaborative workspaces. With over five dozen thriving collaborative workspaces, including incubators, accelerators, and coworking spaces, entrepreneurs are brought together under one roof, accelerating their achievements, and increasing their likelihood of success.
These programs recognize the importance of fostering a collaborative environment, where innovative minds can connect, share ideas, and leverage collective expertise to drive progress in the fast-paced world of entrepreneurship. By supporting these vibrant hubs of creativity and collaboration, New Jersey is paving the way for a dynamic and prosperous future for its aspiring entrepreneurs.
One of those collaborative workspaces central to this thriving ecosystem is the NJ Bioscience Center – Incubator. Nestled within the state’s research corridor, between Rutgers and Princeton universities, the NJ Bioscience Center stands as a symbol of New Jersey’s dedication to the life sciences sector. Offering 27 wet labs, educational programs, and a host of supporting resources to cater to companies at all stages of growth, the center has been instrumental in the launch and growth of successful ventures like GENEWIZ, Amicus Therapeutics, and Visikol Inc.
New Jersey’s life sciences sector holds strong
The grand vision for New Jersey’s future in life sciences extends to the development of the New Jersey Health + Life Science Exchange (HELIX) in New Brunswick. As an innovation district, HELIX aims to foster collaboration among academic partners, health care systems, and life sciences companies, creating a world-class hub of innovation and a robust talent pipeline for the industry.
For aspiring entrepreneurs, there’s never been a better time to explore the boundless opportunities New Jersey offers. With a wealth of programs, resources, and visionary support, the Garden State has firmly established itself as a premier destination for those looking to make groundbreaking advancements in the field of life sciences. Visit www.njeda.gov and www.njeda.gov/csit to join the countless innovators shaping the future of this thriving ecosystem.