The Institute for Systems Medicine, a Spokane effort that had hoped to raise $100 million or more to attract world-class scientists here, has refocused itself on building the infrastructure it believes Spokane needs to be a player in basic research.

That new focus, says Tony Bonanzino, the organization's new CEO, is the base upon which Spokane then can pursue ISM's original goal, which he describes as "a wonderful vision," but not realistic without taking some other steps first.

Notably, ISM's new focus won't be nearly as expensive. The group earlier had hoped to raise $55 million by now, en route to its envisioned first five-year funding of $110 million, though only roughly $3 million of that has been raised. Now, says Bonanzino, ISM likely will start with an annual budget of $2 million or less.

Bonanzino, the former CEO of Hollister-Stier Laboratories LLC, was tapped to head ISM late last month, in a volunteer capacity.

"This is something that can't be allowed to fail," he says. "Frankly, it's critical to the long-term health of the community."

ISM's new business plan isn't completed yet, but Bonanzino says it will focus on creating three pieces of infrastructure needed to boost research here: a searchable database of clinical information, a tissue bank, and a clinical instrumentation lab. A fourth "tool" ISM hopes to provide is some funding for research, he says.

The idea is that as those tools become available to scientists who already are here, they'll be able to secure grants to launch more research. Because ISM will charge research organizations for access to its database, tissue bank, and lab, it will use those funds to acquire more of all three of those resources and slowly will build Spokane's capacity to do basic research, Bonanzino says.

ISM also will offer its capabilities to scientists outside of Spokane, he says.

"In lieu of going out to the world and bringing in world-class experts, we'll focus on the infrastructure so that people can have access to that, to let the institutions that are here do what they do best," Bonanzino says. "We want to build a biomed infrastructure in Spokane."

ISM hopes to tap a public funding mechanism its organizers helped lobby the Washington Legislature to create. It's called the Health Sciences and Services Authority (HSSA), and it was launched here last month.

The authority will oversee money the Legislature said could be diverted from the state's share of the sales-and-use tax collected in Spokane County. The Legislature approved the diversion of 0.02 percent of the tax, currently estimated at $1.2 million a year, into a fund to be used for bioscience-based development.

Bonanzino says he expects the authority to be ready in January to hear proposals from organizations interested in getting some of those funds.

In addition to whatever funding ISM can secure from the HSSA, it will seek other government and private grants, and also will solicit donations from the private sector. Unlike previous plans, however, ISM will be looking for private donations more in the line of a few hundred thousand dollars, rather than in the millions or tens of millions, Bonanzino says.

Whatever funding it secures from the HSSA is intended to be temporary, he says, because ISM's hope is to be self-sufficient within six years, surviving on the fees it charges and research grants.

One challenge for ISM is that it has debt of roughly $500,000 that it's working to pay off.

"It's fair to say that we're working to clear past obligations from marketing and lobbying efforts," says David Holmes, a loaned executive to ISM from Avista Corp., who is serving as the organization's chief operating officer.

ISM received early funding from Washington state, Spokane County, and the city of Spokane, as well as Washington State University, Gonzaga University, and the Providence and Empire Health hospital systems. It also raised a small amount in private donations, including from Spokane developer John Stone, who helped champion the early effort, and it has received in-kind support from Avista and others, Holmes says.

Last spring, Bonanzino says, ISM's board came to the realization that the organization likely wouldn't meet the goals it had set for itself and would have to rethink its focus. "Someone woke up one morning and said, 'This isn't going to work,'" he says.

Says Holmes, "Donations weren't coming in as expected, and our burn rate (of spending) was too high."

About that time, Ryland "Skip" Davis, former CEO of Sacred Heart Medical Center, became chairman of ISM.

"It looked to me that they had basically spent most of the money without any demonstratable program visible," Davis says.

Davis, who also is CEO of Providence Strategic Ventures, says Providence was supportive of the effort from the beginning, but by last spring it and other benefactors were questioning ISM's viability.

He and Bonanzino, however, both applaud the vision of the organization's initial leadership, and are reticent to lay blame.

Says Bonanzino, "I haven't spent a lot of time looking back. I know where the institute is now and what we need to do to succeed."

ISM, he says, will have to prove to funding sources that it can measure its success.

"It's no different than working with a venture group," Bonanzino says. "They want to see how you're going to get to the outcome. They expect you to be accountable."

A new mission

Bonanzino equates the need ISM will try to meet to the extensive mechanical, utility, and subway tunnels beneath New York City.

"We need to build what we need below the surface first," he says. "You start with a clinical database, then add a tissue bank and the instrumentation. We build this up to create a phenomenal infrastructure. That will help us attract the world-class scientists."

The clinical database ISM would like to create would be a resource that scientists, both here and elsewhere, would be able to use for research. Theoretically, it would include extensive data tracked by physicians about their patients, including symptoms, diagnoses, treatments, outcomes, and current and historical data about the patient, all of it anonymous to protect patient identities.

"Think of the value of that" to researchers, says Bonanzino. "The ramifications are enormous."

The task, however, would be complicated, he says, because disparate information would have to be decoded from its current state, and all identity information would have to be stripped out.

"We'll need someone with expertise in bioinformatics," he adds.

Bonanzino says there are very few such central databases nationally, and none here.

The planned tissue bank, meanwhile, would require freezers where samples could be stored, as well as some instrumentation, Bonanzino says. ISM would seek tissue samples from hospitals, physicians, and clinics, both here and elsewhere, and would provide access to those samples to scientists who need them for research.

He says it's likely that ISM at least initially would lease space for that work, as well as for a planned instrumentation lab, on the Riverpoint Campus.

"It won't take much space at first," he says. As ISM's capacity grows, it eventually would look to have its own building, likely somewhere in the University District.

The idea behind the planned instrumentation lab is that some equipment needed for research isn't available here, and if ISM were to make it available, that would help scientists land more grants. ISM might simply allow researchers or organizations to lease time in such a lab, or perhaps ISM would hire its own lab staff and provide certain research-related lab tasks on a fee-for-service basis.

"Ultimately, this amounts to jobs," says Bonanzino. "I've got to believe we'd need a dozen people (at ISM) within a year."

ISM also plans to seek grants itself that would enable it to fund research here, Bonanzino says. He says three research projects currently are sitting ready in Spokane that just need funding.

"Funding is just as much of a tool as the data bank, tissue bank, and instrumentation," he says.

While ISM originally planned to focus its efforts specifically on the studies related to human genetic abnormalities, it now has broadened that to all basic health-related research.

It also has scrapped plans to create a star-studded advisory board of renowned scientists, Bonanzino says.

"You have to have something before you can get credibility," he says.

For now, ISM is very lean. Its office space is located in the Health Sciences Building on the Riverpoint Campus, and is being provided free by WSU. Its only paid employee is Evan Castiglia, who serves as director of business development.

Avista also is providing accounting help to ISM as it prepares its new business plan. The organization has hired Desautel Hege Communications, of Spokane, to help it through that process, Bonanzino says.

Among ISM's current board of directors are Davis; Tom Paine, of Avista; Fred Brown, of Next IT; Gary Weber, of Gonzaga; Jon Eliassen, of Terrapin Capital Group; John Gardner, of WSU; Dr. Stefan Humphries, of St. Luke's Rehabilitation Institute; Dr. Howard Kenney, of Arthritis Northwest; and Steve Duvoisin, of Inland Imaging Investments Inc.

"This is a dream that's worth having for Spokane," says Davis.