Scripps Research president returns to USC
Steve Kay was appointed in September to co-lead financially troubled TSRI
By Bradley J. Fikes • San Diego Union-Tribune [August 1, 2016]
In another shuffle of its top leadership in recent years, the financially deteriorating Scripps Research Institute in La Jolla is losing its president, Steve Kay, who is rejoining the University of Southern California.
Kay, a prominent academic biologist and proven fundraiser, had been named last September to co-lead Scripps Research with CEO Peter Schultz. On Monday, both USC and Scripps Research announced Kay was returning to USC.
At the time, the institute said the pairing was ideally suited to bring financial and organizational stability to a place renowned for its work on a variety of life science subjects — from viruses to cancer — but was struggling to secure major gifts from philanthropists amid its decline in getting federal funding.
Kay and Schultz said in September that they would focus on raising money from the private sector and accelerating efforts to turn Scripps Research’s lab findings into commercially viable technologies — which in turn would bring the institute money from intellectual property revenues.
As Kay returns to USC some 10 months later, his new job will involve much of the same emphasis on translating basic discoveries into new drugs and other treatments. He will serve as Director of Convergent Biosciences; Provost Professor of Neurology, Biomedical Engineering and Biological Sciences.
Scripps Research said in a Monday statement that Kay had made the “personal decision” to return to USC, after a new executive team had been recruited during the summer.
“The TSRI team has enjoyed a strong, collegial relationship with Steve that will continue as he embarks on his next endeavor,” Schultz said by email. “We thank him for his many contributions, which include increasing TSRI’s philanthropy efforts, leading the executive team build out and working closely with our Board of Trustees and faculty on continuing to advance our vision for TSRI’s future.
“Given the ongoing momentum and progress in implementing that vision, as well as the collective expertise of the new executive team, there are no immediate plans to replace Dr. Kay as president.”
Schultz and Kay had been named as co-leaders by the Scripps Research board after a lengthy search to replace Michael Marletta, who announced in July 2014 he would step down. Marletta arrived at Scripps in 2012, replacing long-time leader Richard Lerner, who remains active on the faculty.
Marletta had been heavily criticized by faculty for proposing a plan to integrate TSRI with USC. The plan would have brought in money that Scripps Research needs for long-term financial security. But faculty said it gave up the institute’s historic role as an independent world-class academic center.
The institute has been running a deficit for years, caused by by declining federal research funding and the loss of huge pharmaceutical partnerships as drug companies get more selective in their dealmaking.
Other academic centers such as the nearby Salk Institute and Sanford Burnham Prebys Medical Discovery Institute have compensated with increased philanthropic donations. Scripps Research is trying to do the same, but hasn’t had much success to date.
In May, Fitch Ratings downgraded the institute’s bonds from AA- to A+. Fitch projected Scripps Research would end its fiscal year with a $20 million operating deficit, $3.4 million higher than projected.
“While the weak operating results are a credit negative, the level of balance sheet resources, as compared to both debt and operations partially mitigates this concern, at the ‘A+’ rating level in the near term,” the Fitch report stated. “In fiscal 2015, available funds totaled approximately $206 million, equal to 69% of expenses and 166% of long-term debt (which includes non-cancellable operating leases).”
In other words, the institute is financially stable in the near term, but the trend points the wrong way.
The long-term need for money was one factor behind Kay’s hiring. He was respected as a fundraiser at USC, and known for his expertise in translating biomedical research into potential treatments. This translational emphasis is also a strength of Schultz, who has co-founded biomedical companies, along with co-founding his own biomedical institute in 2012, the California Institute for Biomedical Research, or Calibr.
In September, Schultz said he had personally recruited Kay as an ideal partner for leading Scripps Research.
TSRI said Monday it has assembled a new executive team. It has promoted James R. Williamson to Vice President of Academic Affairs, along with four new executive team leaders. They are Richard King, Jennifer Crosby-Meurisse, Cara Miller and Julia Ronlov. In addition, Jared Machado has been promoted to Chief Financial Officer, and Douglas A. Bingham named as Executive Vice President and General Counsel.
“The new leadership team brings together a diverse and highly experienced executive team whose expertise will be critical in driving forward TSRI’s strategic vision, and I am thrilled to have them on board,” Schultz said in the statement.
“I’d like to personally thank Steve for his numerous contributions and leadership over the last year, as well as his dedication to assembling such a strong team that will carry forward our focus on innovative science and translational research,” Schultz said. “We wish him all the best in his future endeavors.”
Speeding up science
Kay first joined USC in 2012, where he was dean of USC’s Dana and David Dornsife College of Letters Arts and Sciences. He had been recruited from UC San Diego, where he was dean of the School of Biological Sciences.
Michael Quick, USC Provost and Senior Vice President for Academic Affairs said he had kept in touch with Kay as a friend, and would half-seriously ask if he was ready to return to USC. About two months ago, Kay expressed growing interest in returning to run the university’s translational program, which he helped put together.
The Convergent Bioscience program brings together experts from varying fields to tackle a problem, Quick said.
“We’re trying to think hard about how do we more rapidly translate basic science into more practical, measurable outcomes for the biomedical sciences,” Quick said.
“Let’s get the engineers, let’s get the basic scientists, let’s get the physicians, in the same room, on the same lab bench, doing work together.”
The program received a $50 million donation about two years ago from Gary Michelson, which is now being used to build the Michelson Center for Convergent Bioscience.
The building will provide the physical location where the experts will work together. The Viterbi School of Engineering and USC Dornsife College of Arts and Letters are jointly collaborating on the program.
“When Steve was dean of Dornsife College, he helped negotiate that agreement,” Quick said. “I’m sure that Dr. Michelson’s thrilled by that, because he knows Steve.”
The building is a year away from opening, he said.