Joint Affiliation Board and Byrd Advocacy Board October 20, 2008.

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Joint Affiliation Board and Byrd Advocacy Board

October 20, 2008

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Discussion Outline

• CEO Report• Key Messages

• Summary of Accomplishments to Date

• Developments Since September 12, 2008

• Financial Management

• Organization Structure

• Blueprint for Strategic Action

• Calendar Outlook

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CEO Report

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Key Messages

As of Today

• The Transition Team has made significant progress

• A personnel reduction action has reduced the spending rate by ~ $2 mm per year

• The budget for FY 2009 has been analyzed and is in process of being recast

• A new Organization Structure is being implemented

• Priorities are to preserve:

• Mission, vision and values

• State-wide initiative/collaboration

• Research, Clinical and Educational & Community Outreach objectives

Past Present Future

• No Longer a Topic • Brief Update • Today’s Focus

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Summary of Significant Accomplishments to Date

Research Clinical Financial Mgmt.

Administration

• Asset Maps: Byrd, USF, USF Health

• “Town Hall” for Scientists• Byrd Investigators USF COM

Faculty • Four COM Investigators Co-

Locating to Byrd; Two have already co-located

• New Recruitment• Grad Student Support• Vivarium Renovation• Vivarium Facility Manager• Lab and Space Plan• Planning Three New Cores• Recruiting Chief Scientific

Officer and Chief Clinical Officer

• Developed Plans for Competitive Renewal of ADRC

• Established Alzheimer Disease Comprehensive Clinical Center (ADC3)

• Plan for Multi-Disciplinary Team Care for AD

• Cooperative structure forged for Byrd, Suncoast and USF MDC

• Maintain and Adequately Support State-wide Consortium

• Control of Financial Assets• Review of “Internal Controls”• Grant Management

Accounting Analysis• Bank Account Review• Cash and Cash Management

Review• Review of Policies,

Procedures, Accountability• Expense Reduction• Recast Budget

• Centralized Coordination of Affiliation Activity

• Developed “Tactical Plan” • Right-sized Byrd Staffing• Byrd Staff USF Personnel• Financial Support for Byrd

Facilities• Facility/Space Plan• Info Services Support• Organization Structure

Strategic • Plan for Unique Comprehensive

Basic, Translational and Clinical Research Enterprise

• “Blueprint for Strategic Action”

Development• Assessed Existing Program,

Staffing, Results• Development Plan

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Financial Management

Context for Expense Reduction• Primary goal: preserve the scientific and

clinical missions

• Situation demanded prompt action; preserved insurance coverage by acting in September

• Personnel action conducted by USF HR senior professionals

By the Numbers

Started with 71 people, including temps

• 50 will continue (mostly scientists and clinicians)

• 38 offered USF positions

• 12 part of MDC and ADRC initiatives (under consideration)

• 2 resignations

• 19 were released

• 8 temporary personnel

• 11 Admin/Support overhead

FY 2009 Impact: ~ $1.5 mm

Annualized Financial Impact: ~ $2 mm

Summary of Expense Reduction Action September 24, 2008

This action was necessary… but not sufficient.

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Financial Management

Original Budget• Beginning Cash Balance: $17.8mm

• Net Loss from Operations: ($6.6mm)

• Some budget assumptions and obligations were not implemented at the time the budget was adopted, eg:

• Personnel reductions ($1.5mm)

• Academic Grants ($1.1mm)

• The impact of required revisions results in an estimated Net Loss from Operations of approximately ($9-$10mm)

Draft Recast BudgetNet Loss from Operations: ($8 - $9mm)

• The recast budget recognizes savings from administrative personnel reductions, planned investments in Core Labs, some infrastructure enhancements, and the like.

• Some budget assumptions are not yet finalized, eg: New sources of revenue, enhanced Development Plan, and the financial impact of Addenda to Affiliation Agreement.

Scenario Likely Outcome

1. Original Budget Run out of cash within 30 to 36 months

2. Original Budget w/ Revisions Run out of cash within 20 to 26 months

3. Original Budget w/ Revisions and Recent Personnel Cuts Run out of cash within 26 to 32 months

5. If Able to Secure Recurring POM Funds

6. If Able to Secure Recurring POM, Additional State Funding, and

Advocacy Board Assistance

Run out of cash within 27 to 33 months

Financially self-sufficient operation

4. Draft Recast Budget Run out of cash within 22 to 28 months

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Observations and Implications

• Current financial performance not sustainable – will deplete cash (assuming current state unchanged, eg State funding, new grants, new revenue, etc.)

• Top Priority: Increase Revenue, including new sources of revenue, additional funding from State, NIH, other Federal sources, venture capital, and private foundations

• Personnel reduction was necessary, but not sufficient. Need additional approaches to manage expenses, eg State funding for Plant, Operations & Maintenance (POM)

• Budget recast is necessary. Need to consider other factors, eg increase in facility utility costs, financial implications of USF Agreements, etc., especially if we want to pursue an “investment strategy” in anticipation of successful ability to increase revenue.

• The Blueprint for Strategic Action is intended to set the course to guide the Byrd Center out of this situation.

Financial Management

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Conceptual Perspective

ADRC Network

Statewide Grants

Organization Structure

Guiding Principles• Maintain the Byrd identity• Focus on “mission critical” functions• Minimize “cost to manage”

• Leverage USF & USF Health capabilities• Organization structures are evolutionary

and will change with growth of Byrd

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Joint Affiliation Board

Byrd Advocacy Board

CEO

Research ClinicalBusiness Services

• Basic, Translational & Clinical Research

• Vivarium• Compliance• Intellectual Property• Grants Management

• Patient Care• Community Outreach• Education• Compliance

• Financial Management• Information Services• Facilities/Space

Management & Maintenance

• External Affairs / Development

Functional Responsibility Chart

USF Board of Trustees

Organization Structure

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Byrd Organizational Responsibility Chart

Chief Executive Officer

Chief Clinical

Officer *

Chief Scientific

Officer *

Joint Affiliation Board

Byrd Advocacy Board

Director Business Services

USF/USF Health Support

Clinical Infrastructure� Facility Management� Information Technology� Communication � Financial Management� Legal� Compliance � (Research & Clinical) Governmental Relations� Purchasing� Development� Human Resources� Research Infrastructure�

Scientific Advisory Board

Alzheimer’s Disease Comprehensive Clinical Center

USF Memory Disorder Clinic

Vivarium

Alzheimer’s Disease Research

Center Network

Basic/Translational Research Labs

Suncoast Alzheimer's Center

Byrd Clinical Services/Trials

Statewide Consortium

Alzheimer’s Disease Research

Center Director

Alzheimer’s Disease Research Center Administrator

* Chief Clinical Officer and Chief Scientific Officer could be the same individual, depending on the individual.

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Blueprint for Strategic Action

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Headline News – October 20, 2013

Entrepreneurial Practice of Medicine:Byrd Center an Innovative Role Model

Clinical Trial Success: The Cure for Alzheimer’s Soon?

NIH Funds Breakthrough Research at Byrd Center

Governor’s Salute: “The Byrd Center is a Model of Excellence for State,

University and Private Sector Collaboration”

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History of the Future – How Did We Do It?

Four Keys to Our Success

Steadfast Focus and Investment on

Byrd’s Ultimate Mission:

Find a Cure!

UniqueEntrepreneurial Interdisciplinary Program Model

Organized, Leveraged &

Mined Statewide Talent

Balanced Financial

Model

Johnnie B. Byrd, Sr. Alzheimer’s Center and Research Instituteand the University of South Florida

Blueprint for Strategic Action 2008 – 2013

Global Powerhouse for Everything Alzheimer’s

• ADRC Mandate• Memory Disorder Clinics• General Public Awareness

for Patients, Care Givers and Learners

• Literacy: Diversity Outreach• National Role Model

• Comprehensive & Multi-Disciplinary Clinical Evaluation & Management

• Clinical Trials• Physician-Scientist &

Physician Collaboration

• $20mm in NIH Funding• Renowned ADRC• Integrated, Inter-Disciplinary,

Multi-Institutional Program• People, Place, Services,

Infrastructure

• Most Unique in the World Under One Roof

• Leverage/Mine Statewide Resources, Capabilities

• Broad Neurosciences Agenda

• National Role Model

• Credible, On-Going, Diverse Revenue Base

• “Best ROI Example” for State Funding

• Magnet for Alzheimer’s Fund Raising

• Venture Capital

Meet Statewide Needs for Citizen Awareness, Education & Outreach

State-of-the-Art Basic & Translational

Research

Integrated Clinical Research &

Clinical Care

Integration:“Synergy Works!”

Creative Capitalization & Financial Model

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The “Horizon Map” Milestones

State-of-the-Art Basic & Translational

Research

IntegratedClinical Research &

Clinical Care

Meet Statewide Needs for Citizen Awareness, Education & Outreach

Integration:“Synergy Works!”

Creative Capitalization & Financial Model

Horizon 1: First Year

Horizon 2:2 to 3 Years

Horizon 3:3 to 5 Years

• Recruit Chief Scientific or Clinical Officer

• Appoint ADRC Administrator

• Vivarium Fully Functional

• AD Comprehensive Clinical Center: Byrd, Suncoast, USF

• Recruit Chief Clinical Officer• International Program

Development

• Create Plan for Expansive Education Program

• Launch Enhanced Program

• Integrate with Full Breadth & Depth of USF Capabilities

• Leverage Statewide Resources

• Stabilize Operating Expense• Renew ADRC• Seek State Funding• Fund Raising Strategy• Active Byrd Advocacy Board

• NIH Grant Funding• Vivarium Expansion• New Faculty Recruitment• Expansion of Lab Space on

Floors 5 and 6

• State, Regional & National Prominence

• Recognized by State as Best Education & Outreach Program Content

• Recognized by State as Best Model for Multi-Institutional Integration

• State Funding Renewed• Clinical Research Revenue• Clinical Care Revenue• Venture Capital Revenue• Fund Raising Revenue

• Top Quartile NIH Grant Funding

• Many Patents – Need New Floor for Incubator

• Global Prominence

• Global Role Model for Education & Outreach

• Become a model program for basic, translational research and clinical care integration

• Financially Self-Sufficient• Byrd viewed as “Best ROI

Example” for State Funding

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Calendar Outlook

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Calendar Outlook

October November December January

• Synergy Social Hour

• Suncoast Event

• Memory Screening Clinics

• Scientific Event and Legislative Reception

• CSO Recruitment

• New Faculty Recruitment

Proposed Board Meetings

• January 16, 2009

• April 17, 2009

• July 17, 2009

• October 16, 2009

Dates Times• Joint Affiliation Board:

10am – 12 noon

• Byrd Advocacy Board: 12:30 – 2:30pm

• Budget Analysis

• Revenue Planning for Extramural Funding

• Redesign Board Roles

• Proposed Statutory Revision

• External Advisory Committee of Florida ADRC

• Area Legislative Delegation

• Area Legislative Delegation

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Summary and Discussion

Conclusions

• Current financial performance is not sustainable

• Top priority: Additional funding – Advocacy Board Assistance Critical

• Personnel reduction was necessary, but not sufficient

• Budget recast is necessary – especially if pursue an “investment strategy”

• Blueprint for Strategic Action provides our roadmap

Scenario Likely Outcome

1. Original Budget Run out of cash within 30 to 36 months

2. Original Budget w/ Revisions Run out of cash within 20 to 26 months

3. Original Budget w/ Revisions and Recent Personnel Cuts Run out of cash within 26 to 32 months

5. If Able to Secure Recurring POM Funds

6. If Able to Secure Recurring POM, Additional State Funding, and

Advocacy Board Assistance

Run out of cash within 27 to 33 months

Financially self-sufficient operation

4. Draft Recast Budget Run out of cash within 22 to 28 months