The Montana Department of Commerce said it declined a job-creation grant to a Missoula biotech company based upon the state’s guidelines surrounding the Big Sky Economic Development Trust Fund.
Todd Jackson, a spokesperson for the agency, said that while a number of promising businesses apply for the grants, not all receive funding, including those identified as research and development.
“Although there are many great business projects that apply for grants through Commerce, not all applicants will receive grant funding due to limited program funding and grant program criteria,” Jackson said. “Commerce recognizes that Novoron is doing groundbreaking work and we hope to support such efforts through other programs that may be available.”
Novoron, a San Diego-based biotech company, announced its plans in September to expand into Missoula, where it sought to open an office and build a team in its pursuit of curing injuries to the central nervous system.
The Missoula Economic Partnership said investors at Two Bear Capital in Montana helped pique the company’s interest in locating to Missoula. But when MEP submitted a job-creation grant to the state on the company’s behalf, it came back declined.
That left economic leaders and elected officials in Missoula perplexed given the company’s growth potential and the expansion of the city’s biotech industry.
“It’s hugely disappointing that the Department of Commerce doesn’t seek to invest in a growing industry like bioscience, which has been identified by the Small Business Administration as an industry that’s ripe for investment in Montana,” said Nicole Rush with MEP. “I don’t understand their reasoning.”
MEP suspected the decline may have been due to Commerce’s definition of a “basic sector” company, or one that exports a product and brings new money back into the state.
Jackson defined a basic-sector company as “a business with a focus on out-of-state markets and clients.”
“Commerce determined the (Novoron) project does not yet meet the program’s definition of a basic-sector company, as defined by statute and rule, as Novoron is strictly a research and development company,” Jackson said. “In 2019, Commerce received a similar application from Prime Labs that was also denied for the same reason.”
While Novoron and Prime Labs are described as research and development, they both have the potential to export knowledge and import revenue. Missoula is home to a number of similar firms working in the biotech industry.
MEP has identified the industry for its growth potential and has labeled it a “best fit” industry for Missoula’s green economy. Similar companies in Missoula pay high-wage jobs and often hire University of Montana students upon graduation.
Jackson said the Department of Commerce has other funding opportunities to aid companies like Novoron and Prime Labs, including Small Business Innovation Research funding, or the Small Business Technology Transfer project.
Commerce suggested those additional funding opportunities increase the likelihood that technology-based companies in Montana will be able to develop products and services that can be successfully marketed out of state.