Aussie biotech firm eyes VGTI space in Cleveland Clinic deal

Australian biotech researcher Vaxine Ltd. would relocate its headquarters to the former Vaccine & Gene Therapy Florida laboratory under a deal in the works with Cleveland Clinic and Port St. Lucie.

Vaxine would occupy 40,000 square feet in the high-tech lab and pay $1.5 million per year in operating, maintenance and assessment costs as part of the deal, records show.

Cleveland Clinic would fill the remaining 60,000 square feet and cover the costs of recruiting and employing 100 research scientists at the lab in the next five years.

Cleveland Clinic is negotiating to take over the 100,000-square-foot building at 9801 SW Discovery Way from Port St. Lucie for the proposed Florida Biomedical Translational Research Institute. Therapies for cancer, allergies, infectious diseases and neurological disorders developed at the new institute would be clinically tested at the Clinic’s hospitals in Tradition, Vero Beach and Stuart as well as its health system in northeastern Ohio.

Vaxine’s identity and new details about the deal for the former VGTI building were revealed Monday by county Economic Development Council President Pete Tesch during a City Council meeting.

“This is an exciting upstart company,” Tesch told the council. “We were able to make a match between Cleveland Clinic and Vaxine.”

Cleveland Clinic and Vaxine applied for county and state grants as an incentive for hiring 100 relatively high-paid employees, Tesch said.

The St. Lucie County Commission agreed Tuesday to provide $50,000 to serve as the local match for a $250,000 state Qualified Target Industry Tax Refund grant.

The Florida Department of Economic Opportunity has given preliminary approval to the state grant, Tesch told the City Council.

Nick Petrovsky is the chairman and founder of Vaxine Ltd., of Adelaide, Australia, Tesch said. It started operating in 2002 and has 50 employees.

“The company is internationally recognized as a global leader in vaccine development and is one of the top recipients of National Institutes of Health funding,” Tesch said. “Their vaccines and their immunotherapy help accelerate and improve the process against infectious diseases.”

Petrovsky serves as director of endocrinology at Flinders Medical Center and is professor of medicine at Flinders University.

“Petrovsky has developed vaccines against influenza, hepatitis B, sting allergy, malaria, Japanese encephalitis, rabies and HIV,” the Flinders University website says.

Petrovsky and Cleveland Clinic Florida’s chief of staff, Dr. Joseph Ianotti, are set to tour the lab building next week, Tesch said. They also plan to visit the biotech and healthcare facilities at Indian River State College.

Cleveland Clinic’s interest in the former VGTI lab was first disclosed during the May 28 City Council meeting, but the identity of the private sector partner was kept confidential.

The clinic obtained nearby Cleveland Clinic Tradition Hospital as part of its Jan. 1 takeover of Martin Health System and Indian River Medical Center.

Port St. Lucie, which owes $57 million in debt on the custom-built VGTI lab, assumed control of the property in August 2017 and has been marketing it as the Florida Center for Bio-Sciences.

VGTI Florida closed in October 2015 in part because of the loss of funding from the National Institutes of Health.

The lab and the hospital are crucial building blocks in the city’s efforts to establish a “jobs corridor” along the 4-mile stretch of Interstate 95 between Tradition Parkway and Becker Road.

City Manager Russ Blackburn said he anticipates presenting the proposed terms of the deal with Cleveland Clinic for the high-tech lab to the City Council by the end of August.

A transaction transferring the building to Cleveland Clinic could close by the end of the year, Blackburn said.

“We have not concluded those conversations or negotiations at this point,” Blackburn said during a break in Monday’s council meeting. “When we reach a point where we’ve got the business terms and conditions, we’ll bring it back to the council.”

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