Scripps Research Institute in Palm Beach, FL

By Stefanie Ramsperger and Jack Rogers
From the March/April 2013 issue

The recovery in the biotech sector appears to be solidifying. According to the most recent biotechnology report published by Ernst & Young, the sales in established biotech markets grew more than 10 percent in 2012. This threshold hasn’t been crossed since the outbreak of the worldwide financial crisis. Expenditures for research and development significantly increased by 9 percent.

About $33.4 billion in venture capital was raised in the sector. However, mostly big enterprises profited from this inflow whereas small- and medium-sized companies still have to suffer from a depletion of seed money since the Recession. In contrast to the U.S., financing in Europe has not regained the levels seen prior to the financial crisis. A retreat in the public markets in 2011 resulted in overall financing levels that are back to those seen in 2008, reflecting the continuing struggles of the Eurozone countries over the sovereign debt of some member countries.

While the biotechnology sectors of Eurozone countries are relatively small, the uncertainty has driven investors across the continent to seek lower risk. One bright spot is that, similar to the U.S., Europe has seen venture capital hold relatively steady. Across Europe, there were 56 venture rounds of greater than $5 million (down from 65 in 2010). The most significant venture capital transactions included $39 million raised by Symphogen (Denmark), $99 million raised by Biocartis (Switzerland) and $96 million raised by Circassia (United Kingdom). Biotech accounts for approximately 15 percent of total venture capital investment across Europe, a slightly higher percentage than in the U.S. in 2011.

In Europe the list of commercial leaders—Actelion, Elan Corp., Eurofins Scientific, Ipsen, Meda, Novozymes, Qiagen and Shire—has not changed since 2007. In 2011, the revenues of these commercial leaders increased by 19 percent, while those of the other companies decreased by an identical percentage. The same pattern was repeated across all the major indicators, with the health of a few large companies increasing as the rest of the industry saw its performance worsen.

In this year’s Global Biotech Report, we zero in on several locations in Europe that are well-positioned for future success, including three biotech hubs in Germany and key biotech/ pharma centers in Austria, Belgium and Luxembourg that have strengthened their competitive position in the global market in recent years. As always, we also take a fresh look at the leading biotech and pharmaceutical hubs in the U.S.

Hessen Keeps Getting Bigger In Biotech/Pharma

Biotech is among the most important sectors of the Hessen region and this sector is growing every year. With Frankfurt recognized as the financial capital of Germany, the area is well known for its excellence in the service sector. However, the region also excels in manufacturing industries, and it is Germany’s logistics gateway to the world.

More than 19,500 people are employed in the biotech/pharma sector in Hessen. The area has 225 biotech companies (of which 59 are core biotech concerns), and 14 percent of these employ at least 500 people. In the last decade, Hessian biotech companies have more than doubled their revenues to over 5.2 billion Euros.

The strength of Hessen’s biotech sector are a multitude of R&D programs, its number of industry patents and its domination in the medical sector of biotechnology—known as “red” biotech, accounting for 81 percent of all Hessian biotech revenues (according to the latest Location Study Hessen-Biotech, which was commissioned by Hessen’s location marketing organization, Hessen Trade and Invest GmbH). However, industrial biotechnology (“white” biotechnology) is on the rise. About 56 percent of all biotech companies in Hessen have their own R&D programs.

White biotechnology is located at the interfaces of chemistry, biology and the engineering sciences. “It uses microorganisms and enzymes to create new substances and processes for the purpose of producing innovation for many different user sectors, for example amino acids, vitamins and aromas for the food industries,” explains Dr. Thomas Niemann, Director Technology and Future at Hessen Trade and Invest GmbH.

The biotech/pharma activities in Hessen center around two clusters: one is located in Central Hessen, the other is in the southern part of the State. Hessen is a stronghold in biotech production. Out of a total capacity of more than 830,000 liters of fermentation production in the manufacture of “red” biotech in Germany, more than 250,000 liters are attributed to Hessen. Production takes place in Frankfurt (sanofi-aventis), Marburg (Novartis- Behring), and Hanau (Heraeus).

Höchst Industrial Park in Frankfurt is one of Europe’s largest chemical and pharmaceutical parks and looks back to almost 150 years of chemistry tradition. Just in 2012, tenants invested 310 Million Euros, bringing the total to about 5.5 Billion Euros since 2000. Höchst hosts 90 on-site companies, among them sanofi-aventis, Bayer CropScience, Clariant and Celanese. Researchers, manufacturers, customers and service providers come together at the site and cooperate in terms of raw materials and infrastructure. They also join forces with regard to future-oriented technologies, because the Industrial Park embodies a wealth of research and production know-how. Site operator Infraserv Höchst offers services with regards to secondary processes; for example, they provide the companies with raw materials on-site, do the facility management and run site security. New companies can also rely on their patent lawyers, engineering consultants and other personnel services, which decreases their starting cost.

Hessen has five universities and five Schools of Applied Sciences that cooperate with biotech companies. Hessen is particularly strong in the field of Medical Technology. It comprises a total of 900 medical tech companies, which employ more than 20,000 people. Many of them are located at Höchst Industrial Park. According to Dr. Niemann, “one-third of the German production capacity of biotechnological medicine is centered in Hessen.”

Recently, the importance of “white” (industrial) has increased in the area. The Cluster Initiative Integrated Biotechnology (CIB) in Frankfurt supports networking in this field. The cluster was one of the winners of the “BioIndustry 2021” contest held by the Federal Ministry of Research. The Hessian state government also has set up a state initiative for the Development of Scientific and Economic Excellence (LOEWE) with the aim of providing long-term support for the research landscape. “This especially includes new ideas in Industrial Biotechnology,” says Niemann. “In Hessen, funds of more than 32 million Euros are made available for Industrial Biotechnology.”

Another promising biotech field is “personalized medicine.” CI3 is a network in Hessen to advance individualized immune intervention. It has been selected as one of Germany’s leading edge clusters in 2012 and has thus been awarded 40 million Euros by the German government. “Research in this field is very promising,” confirms Niemann. “The cluster, that is supported by the states of Hessen, Rhineland-Palatinate and Baden-Wurttemberg and has 120 member-institutions, is on its way to the very top.”

The cluster CI3 works on innovative medicine that is exactly adjusted to the individual patient, who suffers, for example, from tumors or autoimmune diseases. The center of the cluster is based in Mainz. The idea of the cluster is that companies and research facilities will work in partnerships on 78 different projects. The project partners estimate a total volume of approximately 130 million Euros.

“Universities, other research facilities, small and medium-sized companies as well as international players in the field—we have the whole value chain in Hessen,” says Thomas Niemann. Among the project partners are, for example, the technical university Darmstadt, Goethe University Frankfurt, the Paul-Ehrlich-Institution, Georg-Speyer-Haus, Abbott, Biotest, sanofi-aventis and Merck.

Berlin: Biotech Mega-Hub

The Berlin-Brandenburg region concentrates on clinical research. In the capital of Germany, biotechnology is a strong force driving innovation and growth, interfacing with the pharmaceutical, diagnostics and medical technology sectors. Berlin-Brandenburg has a versatile research and clinical landscape. HealthCapital, the cluster management of the region’s healthcare industries, was implemented in 2010. Its goal is to coordinate companies, research and education institutes to foster collaboration and innovation.

Among the focus areas of Berlin-Brandenburg are biomedicine and diagnostics, therapeutics and regenerative medicine and industrial biotechnology. Berlin-Brandenburg is home to more than 200 biotech companies. The sector employs more than 4,000 people. In addition, pharmaceutical and medtech companies in the area have another 10,000 employees each.

Like Munich, Berlin is a top location for start-ups. In 2012, Berlin was ranked the top start-up region in Germany by Foreign Direct Investment magazine. The region offers foreign companies reimbursement grants of up to 50 percent. Berlin is not only home of various start ups, but existing bioscience companies are expanding in the area. In 2012, Takeda made Berlin its distribution headquarters. The Japanese pharmaceutical company is Berlin’s most recent arrival, having relocated its distribution unit from Aachen and Konstanz to Berlin.

Also, sanofi-aventis and B. Braun Melsungen made large investments to expand their existing locations in Berlin. B. Braun Melsungen had their roofing ceremony in January 2013. The 38.2 million Euro expansion project increases the size of the production site by 65 percent. Injectable solutions in plastic containers will be manufactured there. The building will probably be completed by October 2013. Production lines will be installed in 2014. B. Braun Melsungen expects to create 25 new jobs by 2015.

In the past five years, B. Braun Melsungen already had invested 40 Million Euros in Berlin for expansion projects. 670 employees already work for the company in Berlin. In total, the business has three sites in Germany’s capital.

Among other major global corporations that are located in the capital region are Bayer Pharma AG, Berlin-Chemie AG, Pfizer Deutschland and sanofi-aventis. In the past years, sales revenues of more than 5 billion Euros were generated by pharmaceutical products of 24 Berlin-based pharma companies. Together, they employ 10,000 people in the area.

Among a variety of research institutes in Berlin that focus on Life Sciences are four Max Planck institutes, two Fraunhofer institutes, Leibniz institutes and Helmholtz centers, five universities and four universities of the Applied Sciences.

The Berlin Institute of Health (BIH) was founded in November 2012. On this occasion, Professor Walter Rosenthal, chairman of the board and scientific director of the Max Delbück Center for Molecular Medicine Berlin Buch, said: “The founding of the Berlin Institute of Health is a unique opportunity for the German science landscape to restructure the collaboration between a non-university research institution and a university medical center in the field of basic and clinical research.” The BIH will be established in 2015 by the state of Berlin as a public corporation and it will combine the research of the Charité and the MDC, one of 18 research institutions of the Helmholtz Association. The MDC employs more than 1,600 people from 57 countries and works with a budget of more than 70 million Euros per year. The goal is that the cooperative venture with the Charité will harness the strengths and expertise of both partners and significantly advance health research not only in Germany but also on an international level. It will focus on an interdisciplinary approach. For research of the BIH in the coming years, extensive technology platforms are being setup.

“Based on its excellence in interdisciplinary and transnational cooperation, the cluster HealthCapital Berlin- Brandenburg is generating innovations which are to benefit patients as soon as possible,” says director BioTOP Berlin-Brandenburg and cluster manager HealthCapital, Dr. Kai Bindseil. “The application spectrum for biotechnology is constantly increasing. While biotech has concentrated on developing new medicine and diagnostics in recent years, we are now moving on to new markets due to intelligent interconnections with branches like information and communication technology.”

To enforce cooperation at the interface of biotech and IT, Berlin brings together IT and biotech science and industry to develop interdisciplinary projects for innovative IT-supported healthcare. One example is the project “IT-Future of Medicine (ITFoM). The Max Planck Institute for Molecular Genetics is leading in the project. 60 institutions and companies have joined forces to develop computer models by which personalized “virtual patients” will be derived from the molecular, physiological, anatomic and environmental data of every individual patient. The goal is to develop optimal concepts with minimal side effects.

Public support remains an important factor for financing new products because only few companies have access to venture capital funding. A study by Fleischhauer, Hoyer & Partner has shown that venture capital has increased compared to the crises. With 70 million Euros most of the money was invested in biotech. Investments in medtech were also high with 66 million Euros. The study shows that the Berlin-Brandenburg area ranks third (Bavaria and North Rhine-Westphalia rank first and second) in regional distribution of all investment. According to the latest BioTOP Report, public funds worth up to 42 million Euros are provided by the federal states for fixed-asset investments and new product developments. The leverage effect generated a further 45 million in private investment. The federal government and the European Union provide additional double-figure million Euro funding.

For start-ups, the High-Tech Gründerfonds (HTGF), leading investor in innovative start-ups, has created a new fund worth more than 300 million Euros. Among the investors are Altana, BASF and Robert Bosch.

From Invention To Innovation In Bavaria

“Success through synergies” is the motto of the Bavarian cluster initiatives. To assist entrepreneurs in the starting up and expanding of biotech, Bavaria has set up three agencies under the cluster Biotechnology Bavaria: BioM is responsible for greater Munich, BioMed Würzburg is located in the north of Bavaria and BioPark Regensburg GmbH is responsible for biotech in the core of the state. Bavaria is home to over 320 biotech and pharmaceutical companies.

The cluster in the greater Munich area is home to around 200 companies. 19,000 employees work in the Munich Biotech region. With two universities, two universities of Applied Sciences, the Max Planck Institute of Biochemistry, Neurobiology and Psychiatry and the Helmholtz Research Center for Environmental Health, the region offers an excellent environment for innovation. These institutes include, for example, the Center for Nanosciences, which is one of the world’s leaders in the development and application of nanobiologies. The Life Sciences Campus in Martinsried forms the core of Munich’s Biotech region. The agency “Invest in Bavaria” states: “The campus is home to nearly half of the region’s Biotechs.”

IZB – Biotech Incubator Martinsried Bavaria

The focus of this area is on “red biotechnology,” particularly on diagnostics and therapeutics. The region is dominated by small and medium-sized companies, but eight corporations are listed on the stock exchange, among them MorphoSys.

Freising, located just a few minutes north of Munich, is home of the Weihenstephan campus. It is one of Europe’s major centers of green biotechnologies and has its own incubation center.

In 2012, BioM announced that the Bavarian Ministry of Economics granted four groups of young academics in the field of biosystems research. The subsidies by the state mount up to 1.5 million Euros for each team of young academics. The duration for the grant is five years. This lays the cornerstone for a new research network in the field of molecular biosystems (BioSysNet) that is being established within the framework of a new strategy called “Aufbruch Bayern.” The four young academics that lead the research groups have previously worked in Italy, the Netherlands, Switzerland and in the U.S. The goal of BioSysNet is to further strengthen Bavaria’s competitive situation in molecular biosystems.

BioSysNet is part of a Bavarian research center for molecular biosystems and thus profits from the subsidies by the Ministry of Science, Research and Arts and is being supported by “Aufbruch Bayern.” The total subsidies amount to 18.1 million Euros.

Bavaria’s north attracts entrepreneurs in the field of biotechnology and medical technology with its Innovation and Start-up Center for Biotechnology and Biomedicine. The Würzburg region is the largest entrepreneurship center in the district of Lower Franconia. The project “Life Sciences in Würzburg” has been established to provide consultancy services and to promote start-ups.

A third hub for biotechnology in Bavaria is in the middle of the state, in Regensburg. Back in 1998 the BioPark Regensburg GmbH was founded. The industrial park was supported by the State of Bavaria and built directly on the university campus at a total cost of 42 million Euros. The park has been expanded in 2001, 2006 and 2011 and now offers 18,000 square meters of laboratory, office and storage space for companies and institutes. Currently, 36 leaseholders and 550 employees have chosen the BioPark. The Regensburg region is home of 47 companies with more than 3,145 employees, 900 of them working in the core area of biotechnology. This makes the Regensburg area the second top biotech region in Bavaria.

The specialties of the university of Applied Sciences in Regensburg are fluorescent bioanalytics, molecular diagnostics, biofunctional surfaces, sensors and applied biomedicine.

In January, BioPark Regensburg GmbH announced that a new center for biomedical engineering will be established in the area. The “Regensburg Center of Biomedical Engineering” (RCBE) will move into interdisciplinary lab facilities in Regensburg’s BioPark. The aim of the new center is to bundle biomedical, medical, IT and engineering competencies and make use of the interfaces.

It comes as no surprise that Regensburg bundles its competencies in interdisciplinary research. For four years the University of Applied Sciences in Regensburg has offered classes in “Medical Information Technology.” Since 2011, “Biomedical Engineering” is a course of studies. Graduates are qualified to work at the interface of medicine and IT, or engineering, respectively. The RCBE will now support and bundle research competencies in these fields. Its focus will be on biomechanics, e-health and equipment technology for medical engineering.

Collectively, companies in Bavaria have performed well in the past years. Employment figures rose slightly by two percent. Bavaria’s 166 small and medium-sized core biotech companies employed a record-setting 4,000-plus  people in the state. Since 2006, employment in these companies has grown by 30 percent. 126 of the 166 small and medium-sized companies are located in the greater Munich area. Core biotech companies account for 10,300 in Bavaria, a plus of 300 employees at Roche, Penzberg, which is remarkable. Adding pharma to this count brings employment in the sector to well over 20,000 people.

There were four newly established companies and among the most recent openings of international subsidiaries are three US-biotech companies and one Japanese pharmaceutical company. LabPMM, San Diego California, opened its German diagnostics Laboratory and Myriad Genetics, Salt Lake City, Utah, set up its central European laboratory in a new building in Martinsried.

Bavaria was countrywide the only state in the past year to attract foreign companies for greenfield development. Bavaria was able to chalk up about 70 million Euros of external biotech funding for Germany in 2011. Numbers for 2012 are not available yet, but it can be estimated that external funding will be higher after a rather meager year. At the same time, revenues of Bavarian biotech companies went up to a new record of more than 510 million Euros.

In 2010, the Munich Biotech Region along with Bavaria’s Medical Valley Nuremberg were winners of the Leading Edge Cluster competition by the German Federal Ministry of Education and Research. Until March 2015, the main research and development strategy for several projects in the Munich area will push personalized medicine. Like the cluster CI3 in Hessen which got the same award only two years later in 2012, the Federal Ministry of Education and Research contributes 40 million Euros for the cluster. The Munich Biotech region received another 60 million Euros by the Bavarian ministry and industry partners.

Next to this, a number of Bavarian biotech companies receive grants by the European Union for their research and development projects. One example is the EUROCALIN Consortium, which includes ten companies, for example Pieris AG in Freising. Over the last 15 years, Roche has invested more than 2 billion Euros for their location in Penzberg to develop and produce therapeutic proteins. In the last two years alone, they invested more than 350 million Euros in new plants for production of therapeutics and diagnostics in Penzberg.

Belgium: Beehive Of Biotech

In Belgium, Flanders has specialized in plant biotechnology, whereas Wallonia has focused on health biotechnologies and medical technologies. Most biotech companies in Belgium are located in the northern part of the country, Flanders. Approximately 17 percent of the companies are in the Capital region, and Wallonia is home to around 34 percent of the companies.

More than 15 percent of the European biopharmaceutical exports come from Belgium. The country is said to be the largest exporter in pharmaceutical goods. A quarter of the world’s vaccines are produced in Belgium. As the world’s second largest vaccine producer, the company GlaxoSmithKline (GSK Biologicals) in Rixensart, southeast of Brussels, contributes to a great deal to this. Approximately 30,000 people work in the biotech sector.

Biotech in the three parts of Belgium is organized in special associations. Flander’s association is called “FlandersBio,” the association in the Capital Region is called “Brussels Life Tech” and Wallonia’s association is “BioWin.” Flanders in the North looks back to a strong tradition of biotechnology that is centered around the university towns of Gent, Mechelen and Leuven. Flanders is home to more than 120 biotech companies, most of which belong to the health and green biotechnologies sectors.

Brussels is home to mostly young biotech companies. Although the region covers not even one percent of the country’s territory, it represents more than 15 percent of the biotech activity in Belgium. Most companies in the capital work in medical biotech.

The same holds true for companies in Wallonia. Since 2005, the regional government of Wallonia supports biotechnologies with the so-called “Marshall Plan.” Setting out from this action plan, the Walloon government has updated and optimized its priorities via a “Marshall Plan 2.Green.” It has been endowed with a budget of 2.75 billion Euros for the period 2009 to 2014. 1.15 billion Euros are alternative funding.

One of the most important regional clusters is the “BioWin” life science network. 27 research and development projects are being funded within the cluster. “BioWin is establishing Wallonia as a world leader in various areas of cutting-edge technology, such as biopharmacy, cell therapy, radiopharmacy, diagnostics, biotechnological products for research and industry, bioinformatics and the processing of complex data,” says Frédérick Druck, communication and international relations director at BioWin.

The cluster has 510 members with 116 businesses and around 80 percent of its members are small and medium-sized companies. 400 research units employ about 11,000 researchers from five academic centers of excellence. With 14,300 employees and a turnover of 4.4 billion Euros, the health sector is key to the economy of Wallonia.

Of the 27 projects that have been funded as a result of the Marshall Plan, five have been completed. Druck says: “In the coming years, we will create 1,200 new jobs.” He adds: “With the help of the cluster we have made a big step in excellence in technologies.” One outcome of this is that 51 patents connected to the projects have been submitted and seven new products have been launched on the market. “We see that five new businesses have been set up,” Druck adds. “Now that there is a network there is a real dynamic.”

Internationalization is key to BioWin in order to strengthen its global competitiveness. Therefore, WAL-Dx/BioWin, the Walloon in vitro diagnostic network and its partner, EuroMediag, the diagnostic cluster of EuroBioMed, the health cluster for the PACA and Languedoc-Roussillon regions (France) joined forces to create EDCA, the European Diagnostic Cluster Alliance. The network already includes nine clusters and represents 400 companies and 40 universities across Europe.

“It was also important for us to create new technological platforms,” Druck says. MaSTherCell, Wallonia’s first technological platform dedicated to the clinical and commercial production of cell therapy products for third parties is a case in point. Realized in 2011, it helped create 20 new jobs. By 2014, 35 jobs will be created and 50 new jobs are predicted by 2017.

“In Wallonia, the universities in Brussels, Charleroi and Liège are hotspots for research,” says Druck. In total, 14 universities and several other research facilities add to Belgium’s great research experience. Flanders and Wallonia have five universities each and four schools are located in the Brussels area. On a regular basis, Belgium’s universities rank among the top 25, according to the Academic Ranking of World Universities. Leuven University, for example, has specialized on medicine, cell biology and gene therapy. Gent University, by contrast, focuses on biomedicine and plant genetics. Hasselt University is known for its expertise in autoimmune diseases.

The financial situation for biotech companies in Belgium is favorable. “For the last eight months we note that very small companies have found 60 million Euros private capital at venture capital funds,” says Frédérick Druck. The website reports that Belgium is Europe’s leader with regard to venture capital.

One recent investment was made by the biopharmaceutical company Union Chimique Belge (UCB). The company inaugurated a new biotechnology pilot facility at the Braine-l’Alleud site of UCB in September 2012. The site operates a research and production facility employing 1,500 people. The biopharmaceutical facility was constructed with an investment of 65 million Euros. Approximately 100 new jobs will be created. With the opening of the pilot biotech center, UCB is gearing up to reinforce its biotech activity through industry and academia collaboration. It is among the first plants in Belgium to produce cell-culture-based therapeutic proteins. The plant is a milestone in the development of new biological medicines and molecular development.

Luxembourg: Europe’s Solid Rock

“[Luxembourg has] a solid foundation to generate future economic diversification and growth,” says Dr. Thomas Dentzer, Head of Life Sciences Sector Development and Luxembourg BioHealth cluster manager. As the competitiveness of a country is more and more dependent on effective innovation networks involving private and public sectors, Luxembourg has implemented various initiatives in order to strengthen the research and development and innovation potential of companies and to reinforce links with public research organizations and academia.

Luxembourg’s House of BioHealth

“The Luxembourg Cluster Initiative, launched by the Luxembourg government, actively encourages networking between the private and the public sectors,” explains Dentzer. Healthcare and biotechnology are among the key technologies that have been identified as being important for the future sustainable development of the Luxembourg economy. Luxembourg’s research and development and innovation policy brings together biotech with other networks, such as eco-innovation-technologies or IT.

The Luxembourg BioHealth Cluster brings together public and private stakeholders whose activities are related to health science and technologies in Luxembourg. “It aims to foster partnerships and collaborations that favor innovative projects, thereby reinforcing and capitalizing on the national strategy developed to achieve scientific excellence in molecular medicine,” says Dentzer.

Luxembourg is strong in biomedical research. “The trends in Luxembourg, also due to the focus on personalized medicine, are going in the direction of computational biology and bioinformatics, using the latest IT-solutions to investigate complex processes,” adds Dentzer. The medical field is taking advantage of Luxembourg’s IT infrastructure and its expertise in data security.

Among the most important research facilities in the Grand Duchy of Luxembourg are the Integrated BioBank of Luxembourg (IBBL), the Luxembourg Centre for Systems Biomedicine (LCSB) and, most recently, the House of Biohealth, a new life science incubator.

The mission of IBBL is to work with the people of Luxembourg to provide high quality specimens and data, catalyze partnerships and support research. To accomplish its aims IBBL will, for example, support the four priority research programs in the personalized medicine initiative (cancer, type 2 diabetes, Parkinson’s disease and normal population cohort). The LCSB, by contrast, is accelerating biomedical research by closing the link between systems biology and medical research. Neurodegenerative diseases like Parkinson’s disease, metabolomics and disease network analysis are in the focus of LCSB’s research.

Luxembourg’s most recent research facility is the House of Biohealth. The construction of the new life sciences incubator was officially launched in  November 2012 by the Secretary of Economy and Foreign Trade, Etienne Schneider. It aims to facilitate the transformation of research results into marketable products and services, and it is expected to receive its first tenants in the beginning of 2014. It will be built in the vicinity of the future city of sciences in Esch-Belval. Dentzer says: “This unique facility will offer office space as well as laboratories providing the necessary infrastructure for the creation and development of start-ups as well as already established companies in the fields of biotech, cleantech and ICT.” Within 10,000 square meters of laboratory space, the building is expected to host 500 to 700 researchers.

The building is a joint project of the Luxembourg Ministry of Economy and Foreign Trade, the ZARE Park for economic activities in Esch-sur-Alzette and private investors.

The Luxembourg government has developed financial aids for companies involved in research and development. The Ministry of Economy and Foreign Trade, for example, targets small enterprises or small private research organizations established in Luxembourg which were created less than six years before the aid is granted and which either will, in the foreseeable future, develop new products, processes or services, which involve a significant risk of technical or industrial failure or which have used at least 15 percent of their operating expenses for research and development over the least one of the three years preceding the granting of the aid, or over the current year. All of the enterprise’s expenses are eligible. This aid can only be awarded once and it cannot exceed one million Euros. Financial aids for new innovative businesses are, for example start-up loans or equipment loans offered by the Société Nationale de Crédit et d’Investissement. To support intellectual property rights, Luxembourg offers an 80 percent tax exemption to income from patents, trademarks, design, models and software copyrights or domain names. Capital gains generated on intellectual property will be exempt up to 80 percent. Plus, in 2009, net wealth tax was abolished on qualifying intellectual property.

Biotech company WaferGen Biosystems, Inc. set up its European headquarters in Luxembourg in 2010. The Luxembourg government provided the company with significant support towards increasing its research and development activities and raising its profile in Europe. WaferGen is working in partnership with the Integrated Biobank of Luxembourg and maintains offices in the business incubator Luxembourg Technoport. WaferGen is an emerging leader in the development, manufacture, and sale of state-of-the-art systems for genome analysis for the life science and pharmaceutical industries.

Another company that installed its European Headquarter in Luxembourg is Neo Medical Systems. The company collaborates with Luxinnovation and the BioHealth cluster. Founder Francois Scalais submitted a business plan to the 1,2,3,GO programme, which selected the company as a laureate in the 2012 round. With a prototype of a system that provides 3D laparoscopic images in operating rooms, Neo Medical Systems is currently preparing to participate in the Seed4Start initiative to bring in additional financing. Scalais explains: “Luxembourg is great for us.”

 Austria: Connecting East And West

The total revenue in biotech in Austria accounts for approximately 3 billion Euros. The vast majority is generated by only 36 large companies like Boehringer Ingelheim, Sandoz or Sanochemia that have 5,800 employees. In 2010, the research strength of these companies was as high as 107 percent. Innovation hubs are in Tirol, Upper Austria and Styria. The most important innovation hub for biotech, however, is Austria’s capital region, Vienna. Every second biotech company in Austria is based in Vienna.

The cluster LISAvienna connects more than 400 companies, 99 of which are core biotech companies, and 22 research facilities. 9,000 life scientists work in Vienna.

Austria is known for its research funding. In 2011, Austria raised the research rate/premium from eight to 10 percent for expenses in research and development. Companies that invest in innovation get the premium in cash.

“Two national funding agencies, AWS and FFG, fund pre-seed formations of companies with 200,000 Euros”, says Susanne Locker. She is a project manager in the LISAvienna cluster management. “AWS and FFG fund young high-tech-start-ups with one million Euro seed-financing.” The research funding company FFG supports innovative projects financially.

One central funding initiative is the Competence Center for Excellent Technologies (COMET). It aims to strengthen cooperation between industry and academia. During its run duration from 2006 to 2019, 1.5 billion Euros will be invested in industry-oriented research; a great part of this will go to life sciences.

One of Austria’s focus areas is cancer research. The competence center Oncotyrol in Innsbruck has a research volume of 37.5 million Euros until 2015. In 2012, the EU-project OPTATO was started to develop new strategies against an incurable bone marrow tumor. It has a research volume of four million Euros.

Also, the institute of molecular pathology (IMP) that is based at the Campus Vienna Biocenter, enjoys an excellent reputation. More than 200 researchers from all over the world work here. Boehringer Ingelheim invests more than 160 million Euros per year for cancer research in Vienna.

Among the most important research facilities next to IMP and Oncotyrol are the Austrian Institute of Technology (AIT), the Institute of Science and Technology Austria (IST Austria), the Austrian Center for Industrial Biotechnology (acib) and the Research Center Pharmaceutical Engineering (RCPE) in Graz.

The RCPE was founded in 2008 in the context of the funding program COMET. RCPE’s CEO Johannes Khinast says: “With our special research focus, corporations like Pfizer, GlaxoSmithKline, Roche, Novartis, sanofi-aventis, Bayer, AstraZeneca, Abbott or Merck like to partner with us. We work together with 10 renowned research facilities. There are only two comparable non-university research institutes in the world.”

In 2012, pharma-giant Baxter announced it will build a 30 million Euros production facility in Vienna. The company is planning to launch the operating site at the end of 2014. In 2011, Baxter invested approximately 47 million Euros in production sites in Austria. In 2012, the pharmaceutical corporation invested 100 million Euros. In total, the company employs 4,100 people in Austria. Baxter employs 900 people in Vienna and Orth in the field of research and development. Three out of four scientists who work for Baxter around the globe are thus based in Austria. The country is Baxter’s largest site in the world.

In 2012, Austria’s investment agency ABA was able to attract 201 foreign companies across all sectors to start their business or relocate to Austria. They invested 282.4 million Euros. 2,385 new jobs were created, which is an increase of 31 percent, compared to 2011.

One of 11 life science companies that invested in Austria in 2012 is biolitec AG. The German company develops medical laser systems and fiber optics. Biolitec CEO Dr. Wolfgang Neuberger says: “The infrastructure, funding options and flexible group taxation were crucial for our decision to relocate our headquarters to Vienna.”

Texas Biotech Out Of The Labs, Into The Market

In the U.S., the race is on to move promising biotech initiatives out of labs and into commercial production.

In the Lone Star State, a University of Texas spinoff company has pulled in $2 million to test a new technique for culturing non-embryonic stem cells. According to a regulatory filing, StemBioSys raised at least $2 million of a $3.5 million equity offering. CEO Dr. Steven Davis told the San Antonio Business Journal late last year (when the company began raising the round) that it would fund research projects to validate the quality of the stem cells generated by the company’s technology.

StemBioSys is developing XC-marrow ECM, a propriety three-dimensional culture for growing mesenchymal stem cells from bone marrow, adipose tissue and umbilical cord blood. These immature cells have multiple potential uses in research and therapeutics because they can self-renew and mature into a variety of cell types. Stem cell therapies are being studied as a repair mechanism for tissues all over the body, from the heart to the brain to the knees.

The company says its three-dimensional extracellular matrix can grow cells quicker than conventional media while retaining stem cell properties and may help overcome key obstacles in creating stem cell therapies. The technology was developed by Dr. Xiao-Dong Chen, an associate professor of medicine at the University of Texas Health Science Center and the company’s chief scientific officer, and licensed from UT.

Although it’s only available for research purposes now, this kind of technology could have therapeutic applications down the line. “If this research transfers successfully to clinical application in humans, we could establish personal stem cell banks,” Chen said. “We would collect a small number of older stem cells from patients, put those into our young microenvironment to rescue them–increasing their number and quality–then deliver them back into the patient.”

The company has struck a deal with GenCure, an affiliate of the nonprofit South Texas Blood & Tissue Center, to receive mononuclear cells from clinical grade umbilical-cord blood that it uses for R&D purposes. It was founded in 2010 in San Antonio, Texas and has received previous funding from the Texas Technology Development Center’s McDermott Pre-Seed Fund.

Currently, there are more than 160 Austin-area companies with over 8,200 employees operating in the areas of Biotech, Diagnostics, Medical Device, CRO/IRB, Pharma, Biosecurity and Agribio, among others. Texas is one of the leading biotech states in the country, with 3,400 companies and an estimated economic impact of $75 billion.

As relatively young industries in Austin, life science and biotechnology companies enjoy unique successes, with strong growth projected in the areas of biologics/biotech and medical device/diagnostics. Here’s a breakdown of the leading sectors:

• Medical device/diagnostics (40 percent)
• Biologics/biotech (20 percent)
• Contract Research Organizations (20 percent)
• Pharmaceuticals (10 percent)
• Other (11 percent)

Molecular Biotech Center Opens In Salt Lake City

The University of Utah has developed a well-deserved reputation for its research and business innovation, a reputation now enhanced by a new high-tech facility that could promises a financial return as well.

Leaders from the Utah Science Technology and Research Initiative in 2012 dedicated the James L. Sorenson Molecular Biotechnology Building—a $130-million, 208,000-square-foot research facility where scientists, physicians and engineers will collaborate to create new advances in the biotech field.

“The technology that is developed here is going to be a multidisciplinary …cross-pollination of ideas,” said Dinesh Patel, chairman of the USTAR Governing Authority, as reported by KSL.com. Located midway between the engineering and medical areas of campus, the new research building will facilitate increased interaction among faculty and student researchers,

Up to three additional buildings are planned to expand the university’s biotech center.

Financial support for the facility came from $100 million in state bonding and the balance from private donations, including $15 million from the Sorenson Legacy Foundation and $1.25 million from Micron Technology. Construction of the project began in April 2009 and was completed in December 2011. Tenants started moving in last month.

According to the KSL.com report, researchers at the new facility will have the ability to perform “dry” nano (fabrication) for silicon chips, etc., as well as “wet” nano—for use in biomedical devices. The facility also boasts precision equipment, including a $3 million confocal microscope for florescent imaging of cellular processes. Nanofabrication is the design and manufacture of devices with dimensions measured in nanometers. One nanometer is a millionth of a millimeter—less than the diameter of a human hair. The process is of interest to computer engineers because it could open the door to super-high-density microprocessors and memory chips that could one day store a data bit in a single atom.

Since its inception in 2007, USTAR has helped produce more than 300 invention disclosures and patent filings, along with 44 start-up companies or industry partnerships, according to a program statement.

USTAR collaborates with the University of Utah and Utah State University to create world-class research teams in strategic innovation development areas. Highly regarded faculty members, supported by teams of top researchers, lead the teams.

The infrastructure and multidisciplinary nature of the new Sorenson Molecular Biotechnology Building and at the related facility at Utah State University will likely help draw bigger research grants to Utah.

“To successfully win big federal and industry grants takes more complex, collaborative teams of researchers,” Patel told KSL.com. “The physical and intellectual infrastructure this building represents has already helped the U. of U. win a $20 million advanced materials grant.”

The new facility houses the Brain Institute, Nano Institute of Utah and Department of Bioengineering, according to USTAR spokesman Michael O’Malley.

Thus far, the USTAR program has recruited 32 principle researchers to Utah from such prestigious institutions as Harvard, MIT and UCLA. As of Dec. 2011, the researchers have generated nearly $80 million in grants since 2007, with more than $81 million in research proposals pending.

NBAF Bio-Defense Lab Moves Forward In Manhattan, KS

In Kansas, state leaders are celebrating recent progress in the region’s largest biotech project: the National Bio- and Agro-Defense Facility (NBAF), in Manhattan, KS.

The federal Department of Homeland Security signed a formal land transfer agreement with the state to move ahead with NBAF.

“While there is much more work to be done, signing of the land transfer agreement is a good step forward in securing the future health, wealth and security of our nation,” Gov. Sam Brownback said in a news release. “It demonstrates DHS’ continued commitment to completing the NBAF in Manhattan. Kansas stands ready to partner with DHS to move this important national security priority forward.”

Rendering of the National Bio- and Agro- Defense Facility in Kansas

DHS will acquire about 46 acres of land near the north end of Kansas State University for the lab. The transfer clears the way for construction to begin, and a groundbreaking later this year.

NBAF scientists will research animal and human diseases and develop cures and vaccines to counter them. According to the news release, DHS already has invested more than $125 million in the lab, which is expected to cost $650 million. The state has committed $105 million dollars of matching funds for the facility and $35 million dollars of research funding. The project is expected to have a $3.5 billion economic boon to the state in its first 20 years, including 757 construction jobs and 326 permanent positions.

NBAF researchers would study animal-related diseases—including foot-and-mouth disease, classical swine fever, African swine fever, Nipah virus, Japanese Encephalitis, Rift Valley fever and contagious bovine pleuropneuomonia—and develop vaccines and treatments. The facility would be run jointly by Homeland Security and the U.S. Department of Agriculture.

“This was the next step we have all been waiting for and moves us further down the construction timeline,” said U.S. Sen. Pat Roberts. “We will continue to monitor each step in the process to ensure NBAF remains a top national security priority.”

VC Funds Flowing Into Florida Bio Initiatives

The bioscience industry in Florida is on the rise in terms of new companies and venture capital flowing into businesses, according to BioFlorida, an industry trade organization.

Venture funding for the industry in 2012, for example, rose 19 percent over 2011, to $103.5 million, according to a BioFlorida release. That was the best year for venture capital in the industry since 2007. Plus, the amount of deals rose from 15 in 2011 to 19 in 2012.

The amount of biotech start-up companies in the sector is growing, too. BioFlorida reports that tally is up 13.5 percent since the first quarter of 2012.

The statewide data comes from a University of Florida Sid Martin Biotechnology Incubator report. “The new data is evidence of a strong, innovative and sustainable bioscience business climate here in Florida,” says David Day, assistant vice president of the University of Florida Office of Technology Licensing and the Sid Martin Biotechnology Incubator.

“Not only is Florida experiencing growth in the number of biotechnology businesses, we are also seeing a continued increase in venture capital investments—demonstration of investor confidence in our biotechnology start-ups and breakthrough research,” Day added.

Naples-based biotechnology firm Kirax is planning a new high-rise headquarters. “My goal is to continue to expand Kirax in Naples,” said Edmundo Muniz, president and CEO of Kirax, which develops pharmaceuticals, in an interview with the Naples Daily News. “You will see a big tall building in Naples with the word ‘Kirax’ across the top.”

Southwest Florida is playing catch-up with other regions of the state in developing a biotech cluster. Of the 219 biotechnology companies based in Florida, seven of them are located in Southwest Florida, according to Florida BioDatabase. That puts the region sixth out of the state’s eight regions in terms of numbers of biotech companies, tied with Northeast Florida and behind the Panhandle and Central Florida, according to the database.

Florida experienced a biotech boom from 2006 through 2011, with the number of companies growing by 42 percent compared to just 5 percent nationwide, the university’s Florida BioPulse report shows. More than 10 percent of the nation’s biotech companies call Florida home.

The report gives much of the credit to then-Gov. Jeb Bush, who pushed a controversial $310 million incentive package through the state Legislature to lure the Scripps Research Institute to Palm Beach County, which threw in another $187 million for the first phase of construction.

The institute specializes in biomedical research. It opened in 2009. Scripps “opened up the dam” for biotech in Florida, said Patti Breedlove, associate director of UF’s Sid Martin Biotechnology Incubator.

“That was a pivotal moment,” she said. “People stopped laughing about the possibilities of biotech in Florida.”

Getting Southwest Florida a larger share of the biotechnology pie isn’t “on our radar now,” said Michael Wynn, co-chairman of The Partnership for Collier’s Future Economy, an arm of the Greater Naples Chamber of Commerce.

He said he sees a “huge potential” for attracting biotechnology firms when the county is ready to redirect its focus there, citing the region’s quality of life and the plethora of CEOs that live here and whose connections with the biotech world could be tapped.

In Estero, Florida Gulf Coast University’s fledgling biotechnology program has graduated 40 students, and is setting its sights on creating a master’s and doctorate degree program, said Takashi Ueda, an associate professor of biology and the biotechnology program leader. A 241-acre research park, dubbed Innovation Hub, is planned to break ground at FGCU in early 2013 with a focus on renewable energy sources, including biotech.

Roche Breaks Ground On Indy Learning Center

Late last year, Indianapolis Mayor Greg Ballard joined Roche Diagnostics President and CEO Jack Phillips as well as other Roche executives and community leaders to break ground on the company’s new Learning and Development Center. The center is the first element of a $300 million site transformation investment that was announced in June 2012. The city of Indianapolis and the Indiana Economic Development Corporation offered Roche tax abatements, tax credits and training grants.

“Roche has been an important part of our life sciences heritage for nearly 50 years now, and this expansion signals an important commitment to the region,” said Ballard.

“Central Indiana has been our home since 1964 and we are here to stay,” said Jack Phillips, president and CEO of Roche Diagnostics, adding that the company’s history and growth in the region is due in part to the community’s outstanding workforce and partnerships with the state and city that have enhanced job creation.

The capital investments at Roche’s North American headquarters on the northeast side of Indianapolis will support the company’s growing diagnostics and diabetes care businesses.  The new Learning and Development Center will host the training of more than 1,500 customers from across the nation each year.

“As a key piece of our North American Headquarters, the new Learning and Development Center will serve as a hub and gateway for worldwide operations,” said Phillips. “We felt that it was important for the building to reflect our global influence, right here in Indianapolis.”

Mississippi Medical Center Unveils New Research Hub

Construction of a new research building, which will include space for start-up biotechnology companies, is commencing this year at University of Mississippi Medical Center in Fondren. UMC leaders plan to spend $35 million initially on the eight-story shell of the Cancer and Biomedical Science Research Center and plan to finish the ground, first and second-floor interiors of the 220,000 square-foot building. That work should take about 18 months. Contractors would complete additional floors as funds become available. “We have very limited amounts of research space right now,” said Dr. John Hall, UMMC associate vice chancellor for research. “This building will help us recruit scientists, expand our research centers and institutes, and develop the Biotechnology Research Park at UMMC.”

Biotech company incubator space will occupy about 25,000 square feet on one floor. That will mark the first phase of a long-term plan to construct the Mississippi Biotechnology Research Park. The building also will house laboratory animal facilities and UMMC Cancer Institute labs. Hall said administrators will survey space needs of departments and research centers. UMMC leaders put plans on hold last year for a Mississippi Biotechnology Research Park project at the old farmers market when Congress swore off federally targeted funds, known as earmarks. The project already had received nearly $20 million in federal earmarks, and UMMC had taken ownership of the farmer’s market property, located at West Street and Woodrow Wilson Avenue. With little likelihood of further federal support, administrators opted to include biotech incubator space in the Cancer and Biomedical Science Research Center, which allowed use of the $20 million for the on-campus building.

Frederick County, MD: U.S. Biotech Research Hub

Frederick County, Maryland, is the prime location for bioscience companies to establish and continue their dynamic success in a global marketplace. Already home to more than 70 cutting edge bioscience companies, Frederick County has the second largest cluster of bioscience companies in Maryland.

In fact, Maryland is home to the highest concentration of federal biotech research facilities, anchored by the National Institutes of Health (NIH). Taken together, Maryland’s bioscience research complex is conservatively estimated to represent nearly $8 billion in research and development expenditures annually, third in total size only to California and New Jersey. The state also has a leadership position in academic R&D per capita, led by Johns Hopkins University, the top recipient of NIH funding in the U.S.

MedImmune is completing work on its $600-million Frederick Manufacturing Center, which will employ 250; when it ramps up to full production the center is expected to be the largest bulk biotech manufacturing facility in the United States.

Frederick County’s burgeoning biotech cluster continues to expand exponentially. A good example is MedImmune, now part of AstraZeneca, which recently completed its $250-million, 337,000- square-foot Frederick Manufacturing Center, creating 200 new jobs and bringing total employment to 450. The Frederick facility will be one of the biggest bulk biotech manufacturing facilities in the country. The workforce at the $600-million facility is expected to double when the plant ramps up to full production. MedImmune also has expanded its headquarters complex in Gaithersburg, investing $200 million and increasing the lab staff to 600.

Qiagen, a Netherlands-based supplier of sample and assay technologies in the life sciences sector, expanded its North American headquarters and manufacturing center in Germantown. The $2-million, four-phase expansion is adding about 90 new jobs. Qiagen employs more than 3,500 globally, including nearly 700 across its three locations in Maryland at Germantown, Gaithersburg and Frederick.

Lonza Bioscience invested $26 million in an expansion of its cell production and office space in Walkersville, adding 80 employees bringing total employment to 480. Additionally, Life Technologies undertook a $5 million expansion of their life sciences manufacturing distribution center.

Many new and expanding bioscience companies choose Frederick County as their preferred business location for the following reasons:

• Business Friendly Environment
• No business personal property tax
• Competitive tax structure
• Fast Track permitting assistance
• Start-up companies benefit from a high-tech incubator at Frederick Innovative Technology Center

Recent bioscience expansions also include the Fort Detrick National Interagency Biodefense Campus; new laboratories and office for Interagency Biodefense R&D and new facilities at the SAIC-Frederick, Inc./National Cancer Institute.

Maryland Gov. Martin O’Malley is seeking to spur biotech development with his $100-million InvestMaryland program, which would provide tax credits to insurance companies so they could invest in technology companies, including biotech research facilities. The state also is well under way with its Bio 2020 plan to invest at least $1.3 billion in biotech across the decade. The 15-year-old Maryland Venture Fund, which makes direct investments in technology and life sciences early-stage companies, has invested $25 million and returned more than double that investment.

Under the Bio 2020 plan, the Maryland Biotechnology Center was established within the Maryland Department of Business and Economic Development to coordinate a host of state, university and private sector initiatives to support biotechnology innovation and entrepreneurship in Maryland. The Center works closely with university technology transfer offices and commercialization programs such as the Maryland Technology Development Corporation (TEDCO) and the University of Maryland’s Maryland Industrial Partnerships (MIPS) program to foster and fund collaborative initiatives between bioscience enterprises, universities, and federal labs. In certain qualifying cases, the Center can supplement funding of industry-university and industry-federal labs research partnerships.

The Center has created a BioEntreprenuer Resources Program which assists entrepreneurs in leveraging available public and private capital. The Center also works closely with the University of Maryland School of Law’s Intellectual Property Legal Resource Center (MIPLRC). The MIPLRC provides free legal services on the subjects of business and intellectual property to start-up bioscience enterprises.

Higher-Ed Partnering For Progress In Minnesota

A biotechnology partnership has been initiated between Minneapolis Community and Technical College (MCTC) and the University of Minnesota. In addition to the transferability of the Biotechnology program in its entirety, the partnership ensures graduates of MCTC’s Biotechnology program with grade point averages of 3.5 or higher will be enrolled at the College of Biological Sciences at the University of Minnesota, one of the University’s most prestigious schools.

“Minnesota has earned its place in the medical device industry by nurturing scientists,” said LifeScience Alley President and CEO Dale Wahlstrom. “This partnership moves students between two strong academic programs to graduate studies or careers in Minnesota’s famed bioscience sector.”

The first cohort within the new biotechnology partnership includes seven MCTC students. MCTC’s Biotechnology faculty leader Rekha Ganaganur noted all seven of the students have undergraduate research or internship experiences and some have obtained jobs in the bioscience industry. She applauded the vision of Robert Elde, the dean of the University of Minnesota’s College of Biological Sciences. “Dean Elde knows Minnesotans want colleges to collaborate to enhance the biotechnology workforce of the future.” Ganaganur is grateful for the LifeScience Alley membership for serving on the MCTC advisory group which made the partnership possible.

Elde and Ganaganur pledged their programs to support students who start their academic careers at community colleges. MCTC program participants can consider themselves University students as they grow their academic careers. “The partnership is a positive example of a collaborative effort that will help ensure a pathway for students to the top scientific careers in our state,” said MCTC President Phil Davis. “I am extremely impressed with the caliber of students enrolled in our programs, and MCTC welcomes this as a way to encourage academic success.”

New Jersey New Incentives For On-The-Job Training

NJ Gov. Chris Christie Administration recently announced that financial hiring incentives are now available to employers through the state Department of Labor and Workforce Development (LWD) if they hire and train former pharmaceutical industry employees. Employers willing to hire displaced pharmaceutical workers may reduce the cost to train new employees under this new on-the-job training program, which will reimburse each employer up to 50 to 90 percent of a new hire’s salary for up to six months and a maximum of $14,000.

“As a former business owner, I fully understand the expense associated with training new employees.  This is an opportunity for employers to bring on new staff and offset their training costs. This program benefits employers and employees and will help stimulate job growth here in New Jersey,” said Dept. of LWD Commissioner Harold J. Wirths.

New Jersey employers from all industries are eligible to participate in this program, which is commonly known as an On-the-Job-Training program, as long as the prospective new hires are among the former pharmaceutical industry workers covered under a National Emergency Grant first issued to the LWD by the U.S. Department of Labor in 2010.

The program is managed in collaboration with the state’s Life Sciences Talent Network at BioNJ. It is designed to help workers who were displaced from the pharmaceutical industry due to the economic downturn by providing job training and assistance in finding new employment. New Jersey applied for the grant to keep the state’s pharmaceutical talent in the state and maintain New Jersey’s economic competitiveness. The workers covered under the grant include those who were displaced from approved locations of Bristol-Myers Squibb, Hoffman-La Roche, Johnson & Johnson, Merck & Co., and Pfizer companies.

Under the new On-the-Job Training component, employers will not incur any fees and LWD or the Life Sciences Talent Network staff will pre-screen applicants for eligibility or will assist in qualifying candidates prior to the actual hire. New Jersey also is paving the way for increased cooperation between the state’s bio-pharma industry and academia.

Lt. Governor Kim Guadagno recently announced the formation of a new Council on Innovation to advise the NJ Partnership for Action on how industry and academia can better work together to improve New Jersey’s economy and attract more federal funding. Creation of the Council is among 15 recommendations in a report released by New Jersey Policy Research Organization (NJPRO) and Innovation NJ. In addition, Lt. Governor Guadagno announced Secretary of Higher Education Rochelle Hendricks as the newest member of the NJ Partnership for Action. The report recommends policy changes that would create an “innovation ecosystem,” making it easier for industry and academia to collaborate on new ideas and inventions.

Other recommendations include cutting red tape by creating standard agreements governing intellectual property rights and collaboration between entities. Identifying areas of expertise within New Jersey’s colleges and universities that can form the basis for Centers of Excellence. Designation of a single center of excellence for a topic would provide guidance to interested parties searching for a research partner; having a chief administrator at each college and university who will serve as a one-stop shop coordinator for businesses to connect with university information and resources.

Secretary Hendricks emphasized the importance of aligning businesses and academic institutions to grow New Jersey’s economy, attract more federal funds and bring innovative products and ideas to market.

“We need to be efficient and effective to win the competition to market commercial ideas and products,” she said. “Many of our academic institutions are already doing ground-breaking research. With improved collaboration among state agencies, colleges and businesses, that research can be directly connected with the economy, helping our institutions continue to compete on a national and global scale.”

Kentucky Spreads Seed Capital To Bio Start-Ups

Kentucky is offering a host of programs geared to jumpstart biotech start-ups. Commonwealth Seed Capital, LLC (CSC) is an independent fund that makes debt or equity investments in early-stage Kentucky business entities to facilitate the commercialization of innovative ideas and technologies. Investments are typically made in these specified innovation areas: health and human development; information technology and communications; bioscience; environmental and energy technologies; and materials science and advanced manufacturing.  CSC invests in companies that have a significant Kentucky presence, the prospect for substantial growth and the potential to generate an appropriate rate of return.

The Kentucky Cabinet for Economic Development also offers a matching funds program to facilitate biotech start-ups. The Cabinet will match, on a competitive basis, Phase 1 and Phase 2 federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards received by Kentucky high-tech small businesses and those willing to become Kentucky-based businesses.

This includes matching Phase 1 federal awards up to $150,000 to support the exploration of the technical merit or feasibility of an idea or technology. The program also provides up to $500,000 of federal Phase 2 awards, which support full-scale research and development.

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Rendering of new Boeing facility in West Jordan, UT

By Jonathan Sanders
From the January/February 2013 issue

A recent Utah Cluster Acceleration Partnership study reported that Utah’s life sciences industry grew by 25.8 percent from 2001 to 2010, which included a 9.2 percent increase in jobs from 2007 through 2010. At the national level, growth in life sciences employment was 8.4 percent from 2001 to 2010, but essentially flat during the period 2007 through 2010.

Across four major subsectors— Medical Devices and Equipment; Drugs and Pharmaceuticals; Research, Testing, and Medical Labs; and Biomedical Distribution—Utah is specialized with at least 20 percent higher level of industry concentration than is found at the national level for that subsector. In addition, each of the major subsectors of the life sciences industry is growing faster in Utah.

Utah’s life sciences industry is a source of high-wage jobs. The average wage for jobs in the life sciences stands at $59,480, or 53 percent above the private sector average of $38,932.

The life sciences industry has a significant impact on the Utah economy. In 2010, the cluster contributed $14.6 billion in economic output to the state and supported more than 63,000 jobs with workers earning $3.5 billion in personal income. Utah is targeting growth in four life science sectors:

• Novel medical devices
• Molecular diagnostics and personalized medicine
• Molecular medicine; drug discovery, development, and delivery
• Natural products/dietary supplements

In addition, the Utah Governor’s Office of Economic Development has a long history of offering tax incentives for biotech companies such as Edwards Life-sciences and Merit Medical. Most recently, the state supported a major expansion of BioFire Diagnostics, whose innovations in molecular diagnostics are helping propel Utah into its future life sciences economy.

Rounding out Utah’s life sciences story is continued investment in research and development and educating the workforce of tomorrow. Exemplifying this effort is the Utah Science Technology and Research (USTAR) initiative (innovationutah.com). USTAR accelerates the ability of the University of Utah (U of U) and Utah State University (USU) to recruit world-class researchers, specifically into high-growth focus areas such as neuroscience and biomedical innovations. The initiative enabled the construction of two interdisciplinary research and development facilities at Salt Lake City and Logan campuses. USTAR operates outreach teams across the state to help entrepreneurs and existing companies commercialize new technology and access the resources available at higher education institutions.

The new 208,000 square-foot USTAR center at the U of U and the 118,000 square-foot sister facility already in operation at USU in Logan have accelerated the state’s ability to bring in entrepreneurial- minded, “catalyst-type” researchers. As a result, Utah is fulfilling its objective to become a world-class research destination, particularly in bioengineering, genetics and cancer research.

USTAR also has invested in the BioInnovations Gateway, a life sciences incubator that supports up to seven client companies while exposing high school and college students to intensive internships in biomanufacturing and biotechnology. Client companies have not only trained these young students, but have also hired them upon graduation. For more information, contact Michael O’Malley at momalley@utah.gov or 801-538-8879.

BOEING SETS UP SHOP IN WEST JORDAN

Boeing has announced the purchase of a new building in Salt Lake County, UT. Employees at the new site, located in West Jordan, will focus on fabrication of composite horizontal stabilizer components for the 787-9 jetliner.

“The site we’ve chosen is an ideal location to add composite manufacturing capability focused on Boeing’s key business strategies,” said Ross R. Bogue, vice president and general manager of Boeing Fabrication. “This new facility will provide a real competitive advantage in our supply chain by expanding our internal composite capabilities.”

The new site, located 20 miles from Boeing’s fabrication and assembly site in Salt Lake City, was purchased from Masco. The close proximity of the two facilities will help improve the efficiency from component fabrication to assembly of the 787-9 horizontal stabilizer. The composite component fabrication facility is expected to create approximately 100 new jobs.

When finalized, the facility will provide the Boeing Salt Lake team with the flexibility to meet the demands of a highly competitive market.

“Boeing appreciates its continued relationship with the state of Utah and we are looking forward to creating a new partnership with the city of West Jordan,” said Craig Trewet, director of Boeing Salt Lake.

CAPTIONS:

p. 9 – Rendering of new Boeing facility in West Jordan, UT

UTAH FAST FACTS

• Population (2011 Est.): 2,817,222
• Largest Cities (2011): Salt Lake City, 189,899; West Valley City, 131,942; Provo, 115,321;
West Jordan, 105,675; Orem, 90,727
• Targeted Industries: Data Centers, Adv. Composites, IT, Digital Media, Renewable Energy, Manufacturing, Retail, Sports & Outdoor Products
• Key Incentives: Enterprise Zones, Rural Fast Track Program, ED Tax Increment Financing, Motion Picture Incentives, Private Activity Bond
• GDP (All Industry 2011): $124.5 billion*

*Bureau of Economic Analysis, U.S. Department of Commerce

The post BUSINESS REPORT: Life Sciences Grow High-Wage Jobs in the Beehive State appeared first on Business Facilities.

Already home to world-class research labs at Georgia Tech and the Centers for Disease Control, Metro Atlanta lures another high-tech gem in Baxter’s $1.3-billion bio-pharma investment.

By Business Facilities Editorial Staff
From the January/February 2013 issue

Gold

Project Title: Baxter International Bio-Pharmaceutical Manufacturing Plant
Entered By: Georgia Department of Economic Development

The nominees for Business Facilities’ 2012 Economic Development Deal of the Year Awards competition reflected a diverse cross-section of growth strategies, most of which are built on a foundation of new manufacturing capacity.

Entries from 17 states that jousted for our top awards included a biotech mega-complex in Georgia, a world- class commercial aircraft assembly facility in Alabama, a yogurt plant in Idaho and even a refinery in Philadelphia. All of the contenders held the promise of hundreds of new jobs; the biggest projects offered the potential to transform the economies of entire regions.

As always, our award recipients were selected by a blue-ribbon panel of industry experts who carefully reviewed project details provided by the finalists. The task of separating the wheat from the chaff was especially challenging for our 2012 awards, as all of the nominees were worthy contenders.

Projects nominated for Business Facilities’ annual Economic Development Deal of the Year competition are asked to submit an Economic Impact Analysis for the project (using standard analysis methods including RIMS II, REMI or IMPLAN) and a narrative detailing how the project came together.

Our judging panel, including leading site selection consultants, evaluates the overall impact of the project and assesses the effectiveness and innovation of the location’s approach to landing the deal. Key factors in this evaluation include creative use of incentives, regional cooperation, partnerships with higher education resources, potential for growth and execution of overall economic development strategy.

The judges have spoken and Baxter International’s decision to make a $1.3-billion investment in Georgia is our 2012 Economic Development Deal of the Year Gold Award winner.

The Baxter bio-pharmaceutical facility, an integrated campus which will include three main manufacturing components as well as warehousing, utilities and lab support facilities, is expected to directly create 1,800 jobs with an economic impact of $6.2 billion.

Over a 10-year period, the bioscience complex will generate an overall regional economic impact estimated at nearly $13 billion, creating more than 8,700 direct, indirect and induced jobs. The campus will be located in Covington, GA in Stanton Springs, a 1,620-acre master-designed industrial park west of Interstate 20 at the intersection of Newton, Walton, Jasper and Morgan counties.

Artist’s rendering of Baxter International bio-pharmaceutical campus in Georgia.

Baxter’s new biologics manufacturing facility will include an advanced plasma fractionation facility, giving the bio/pharma giant additional capacity for testing and purification of its medications. Products to be made at the Georgia site will include immunoglobulin treatments for patients with immune deficiencies and albumin products used as plasma-volume replacement therapies in critical care, trauma and burn patients.

“Baxter’s decision to come to Georgia marks a new era in the growth of our biosciences industry and will have a far-reaching impact on our economy,” Gov. Nathan Deal said when the project was announced. “We are honored to welcome this flagship company to Georgia and proud that our state’s vast resources for the biomedical field will assist the company with the groundbreaking medical advances it is renowned for.”

Deerfield, IL-based Baxter makes medical devices, pharmaceuticals and biotechnology products with a focus on hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions. The company’s 2011 revenue was $13.9 billion; it employs about 19,000 U.S. workers and has 14 plants, including three in Puerto Rico.

According to the Georgia Department of Economic Development, Baxter will get about $80 million in state incentives, including $65.6 million based on the number of jobs it will create, and a $13.7 million project development grant.

“This mega-project will anchor Georgia’s thriving bioscience sector for years to come, moving the Peach State into the front ranks of national biotech players,” Business Facilities Editor in Chief Jack Rogers said.

Rogers said BF’s judging panel was particularly impressed by the regional cooperation that brought this project to fruition, and the flexibility shown by state and county agencies in tailoring solutions to meet Baxter’s needs. Baxter narrowed the location search to four candidates internationally in 2009.

The entities involved in landing the project included the Georgia Department of Economic Development, the Joint Development Authority of Walton, Newton, Morgan and Jasper Counties and the Technology Park of Atlanta.

The quick turn-around time between the site selection decision announcement last April and construction of primary facilities in the Baxter project is unprecedented, Rogers noted.

“Baxter announced its decision in April and by August 1 ground was already broken on a 1-million- plus-square-foot facility,” he said. “Georgia’s willingness to cut red tape will be followed by a ribbon-cutting on a world-class bioscience complex.”

Construction of the first manufacturing buildings at the new Baxter campus is expected to be completed in 2015, with full commercial production commencing in 2018.

The Metro Atlanta plant will be Baxter’s third in the Southeast; it also has plants in North Cove, NC, and Cleveland, MS. According to a Triangle Business Journal report, Baxter International executives toured sites in Granville County, Wake County and Lee County in North Carolina before selecting the Covington, GA location.

Metro Atlanta already is home to several major research institutions, including Emory University, Georgia Tech and the federal Centers for Disease Control and Prevention.

Baxter’s plant puts Georgia on the map as a player in the life sciences industry, said Mike Cassidy, president of the Georgia Research Alliance. “It’s validation of a long-term strategy to make the state attractive to the life sciences industry,” Cassidy said.

South African energy giant Sasol makes the largest private-sector investment for a single industrial project in U.S. history with its Lake Charles, LA petrochemical complex. In this photo, Louisiana Gov. Bobby Jindal (left) and officials hail Sasol’s mammoth petrochemical project.

Silver

Project Title: Sasol North America Inc.
Entered By: LED, Southwest Louisiana Economic Development Alliance, Port of Lake Charles

One of the largest private-sector investments for a single industrial project in U.S. history is our 2012 Economic Development Deal of the Year Silver Award winner.

Sasol Ltd., a global energy company based in South Africa, decided that Louisiana’s highly developed pipeline infrastructure is perfectly suited to its plans to develop a $10-billion gas-to-liquids processing plant that will enable it to tap into the natural gas bonanza in the U.S. emanating from abundant shale gas reserves.

In addition to the processing plant, which will yield 96,000 barrels/day of premium fuels, Sasol North America also plans to build a $4.5-billion cracker unit at its Lake Charles Chemical Complex in Westlake, LA. The cracker will produce up to 1.4 million tons annually of ethylene used to make plastics.

The new facilities in Calcasieu Parish will result in the creation of more than 5,000 permanent jobs in the Southwest Louisiana region, in addition to the 5,500 construction jobs that will be engaged in building the project through 2020. The expanded Lake Charles complex will have a direct economic impact in the region estimated at more than $29 billion over the next 20 years.

BF’s judging panel was particularly impressed with Louisiana’s willingness to go the extra mile in securing land options for the project, the customized incentives package offered to Sasol and the state’s creative use of LED’s GIS mapping in presenting its proposal to the energy giant.

Using a multi-layered GIS map displayed on an iPad, LED officials were able to show site details, utilities, nearest rail access, proximity to the river and the Port of Lake Charles during the first site visits by the Sasol team. According to LED, the introduction of the new GIS mapping enabled Southwest Louisiana to pull ahead of a Canadian province that was competing for the project.

In announcing the mega-deal, Gov. Bobby Jindal said the $14.5-billion petrochemical complex “will bolster Louisiana’s position as the No. 1 exporter of energy in America.” Gov. Jindal also noted the Lake Charles complex will represent a huge new source of demand for natural gas in the state, including gas extracted from deposits in the Haynesville Shale formation.

The Sasol project was a joint effort involving Louisiana Economic Development, Southwest Louisiana Economic Development Alliance and the Port of Lake Charles.

To secure the project, Louisiana offered Sasol a custom incentive package that includes a performance-based grant of $115 million for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of LED FastStart™, the nation’s No. 1 state workforce training program.

In addition, the company will qualify for Louisiana’s new Competitive Projects Payroll Incentive (up to 15 percent payroll rebate for each GTL job) and Quality Jobs Program (up to 6 percent payroll rebate for each ethane cracker job).

One of the largest grants in the history of the Texas Enterprise Fund and local property tax abatements bring Apple’s primary operations nexus to the Texas state capital.

Bronze

Project Title: Apple Inc. Americas Operations Center
Entered By: Austin (TX) Chamber of Commerce

Apple’s selection of Austin, TX as the site for its new $304-million Operations Center is the Bronze Award winner in Business Facilities’ 2012 Economic Development Deal of the Year competition.

The new facility, which will increase Apple’s workforce in Austin to more than 6,700, will serve as the primary operations nexus for the company in the Americas outside of Apple’s global headquarters in Cupertino, CA, centralizing accounting, human resources, sales, marketing and finance.

State, county and local agencies came together to put together a package for Apple that sealed the deal in an intense site-selection battle for the operations center. The Austin Chamber of Commerce, Travis County and the Governor’s Office of Economic Development and Tourism were key players in bringing the project to fruition.

“Texas put down a marker with an aggressive incentives package which made it clear that the Lone Star State did not intend to be outgunned for this project, which turbocharges a strategic growth sector for the Austin region,” said Business Facilities Editor in Chief Jack Rogers.

The state of Texas awarded one of the largest grants from the Texas Enterprise Fund in the history of the program—$21 million—which together with a property tax abatement from the City of Austin and Travis County provided for a total incentive package of $35 million for the operations center. Apple gave candidate locations a three- month window in which to make their proposals.

The new 1-million-square-foot campus in Austin will directly create 3,635 jobs generating about $273 million in new wages over the next 10 years. The Apple facility in Texas will become one of four major global operations centers for the tech giant outside of its California HQ.

The impact of this project on the state is estimated at 16,000 jobs (direct and indirect), $1.4 billion in personal income and an overall Economic Output impact of $5.7 billion.

Austin is no stranger to BF’s annual Economic Development Deal of the Year competition. The $3.6-billion expansion of Samsung Austin Semiconductor’s huge chip fab complex was our 2010 Deal of the Year Gold Award winner.

Samsung has committed to investing more than $13 billion in the Austin facility, which has vaulted Texas into second place among national leaders in semiconductors, behind only California. The 2010 project netted more than 7,600 new jobs (direct and indirect) and came with an estimated economic impact of nearly $2 billion over the first three years of operation.

Last year, the Austin Chamber of Commerce was the winner of our first annual Economic Development Excellence Award (Population Greater Than 500k). Austin also had an excellent showing in our 2012 Metro Rankings Report, taking first place in our coveted Economic Growth Potential ranking (employment greater than 450k).

Honorable Mentions

Projects:Airbus Assembly Facility (Mobile, AL Chamber of Commerce); eBay Campus (Utah Governor’s Office for Economic Development); Caterpillar Production Plant (Georgia Department for Economic Development); Bridgestone Americas Tire Plant (South Carolina Department of Commerce).

Gov. Robert Bentley (second from right) congratules Airbus officials as they announce the selection of Mobile as the site of the European aircraft giant’s new North American assembly plant.

The number of projects deserving of recognition in our annual Economic Development Deal of the Year contest always exceeds the number of awards categories. This year, our judges have selected four entries to receive our Honorable Mention Awards.

Airbus announced in July that it will invest $600 million in an aircraft assembly facility at the Brookley Aeroplex in Mobile. The plant—which will assemble A319, A320 and A321 passenger aircraft—is expected to commence operations in 2015, creating 1,000 new jobs. The assembly facility will hit full capacity in 2018, when it is expected to produce up to 50 aircraft per year.

“Mobile’s selection as the only site in the Western Hemisphere assembling aircraft for Airbus cements Alabama’s status as an up-and-coming aerospace manufacturing giant,” said Business Facilities Editor in Chief Jack Rogers.

Mobile’s victory in the fierce competition for the Airbus plant was the culmination of a seven-year effort by state and local officials to land the prize from Europe’s aerospace giant. The triumph also marked a stunning turnaround from the disappointment of the U.S. government’s reversal of a 2008 decision to award Airbus’s parent, EADS, a huge U.S. Air Force refueling tanker project. EADS had selected Mobile as the site for tanker production, but in 2011 Congress rebid the project and awarded it to Boeing.

The decision by eBay to construct a new 40-acre campus in Draper, UT will directly bring 2,200 new jobs to the state, creating more than $1.6 million in new wages over the next 20 years.

“The ongoing eBay expansion is another success story for Utah’s burgeoning software and IT industry cluster,” Rogers said, noting that industry giants including Microsoft, Twitter, Adobe and IM Flash already have put down roots in the Beehive State.

Rogers added that the Economic Development Deal of the Year judging panel was impressed by the cooperation between eBay and Utah to develop alternative energy resources, including wind energy power generation, which will be used to provide electricity to the Draper facility.

“eBay chose Draper for a customer support center in 1999 primarily because of the quality of the workforce, favorable business climate and proximity to San Jose,” said William Lasher, eBay senior director. “As the Draper facility grew, we became increasingly aware that the business conditions in the state were ideal.”

The Economic Development Tax Increment Financing eBay received from the state, coupled with incentives from local cities, were helpful when eBay made decisions about whether to grow the Draper operation during the past 10 years (creating 1,000 new jobs). Lasher said. eBay was especially impressed with the level of involvement from state and local economic development agencies in working with eBay to solve its problems and meet its needs, he added.

Caterpillar reviewed proposals from more than 100 locations in the U.S., as well as sites in Canada and Mexico, before selecting Athens, GA to be the home of its new $200- million factory. The Georgia plant, which will employ 1,400, will manufacture construction equipment previously produced in Sagami, Japan.

Earth-moving equipment like the unit above will be produced at Caterpillar’s new plant in Athens, GA.

An emphasis on the availability of workforce training, including presentations from Georgia Quick Start and Athens Technical College, helped seal the deal. The Georgia Department of Economic Development, the Economic Development Authorities of Athens-Clarke and Oconee counties, and Electric Cities of Georgia all played a role in shaping the proposal for the Caterpillar project.

“Georgia put its best foot forward in presenting all of its resources to this industry giant,” Rogers said.

The Caterpillar project will have an estimated direct Economic Output impact of $2.92 billion over the next 10 years, directly creating more than $78 million in new wages. When it made the decision to put the new plant in Athens, Caterpillar already was operating facilities in Griffin, LaGrange, Toccoa and Thomasville, GA, so the equipment giant was very familiar with the benefits of locating in a manufacturing-friendly state.

Bridgestone Americas $1.2-billion investment in the construction of a new 1.5-million-square-foot off-road radial (ORR) tire manufacturing facility on a site in Aiken County, SC—and a 474,000-square-foot expansion of an existing tire plant nearby—marked the largest single initial capital investment in South Carolina’s history.

“Bridgestone’s decision to transplant technology and manufacturing to South Carolina that had been exclusive to its facilities in Japan is another indication of the Palmetto State’s emergence as a world-class manufacturing competitor,” Rogers said.

The Bridgestone facility is expected to have a direct Economic Output impact of nearly $2 billion over the first two years of operation, directly creating more than $362 million in new wages.

The new ORR manufacturing plant is part of the company’s global sourcing strategy. The facility will be a greenfield site in the Sage Mill Industrial Park in Aiken County. Previously, large and ultra-large ORR tires had been produced exclusively at Bridgestone’s
Shimonoseki and
Kitakyushu plants
in Japan. Bridgestone will install
ORR production
technologies developed in Japan in
the new plant to
more effectively
respond to customer needs and growing global demand. The new plant will be a green facility—it is expected to meet LEED Construction Certification environmental standards.

Business Facilities congratulates all of the winners in our 2012 Deal of the Year competition. Nominations are now being accepted for our 2013 contest here.

The post COVER STORY: 2012 Economic Development Deal of the Year Awards appeared first on Business Facilities.

• Mobile (AL) Area Chamber of Commerce for Airbus’ selection of Mobile as the site of its final assembly facility.
• Utah Governor’s Office of Economic Development for eBay’s Utah campus.
• Georgia Department of Economic Development for Caterpillar’s choice of Athens, GA as the site of its new production facility.
• South Carolina Department of Commerce for Bridgestone Americas’ tire plant.

Airbus announced in July that it will invest $600 million in an aircraft assembly facility at the Brookley Aeroplex in Mobile. The plant, which will assemble A319, A320 and A321 passenger aircraft is expected to commence operations in 2015, creating 1,000 new jobs. The plant will hit full capacity in 2018, when it is expected to produce up to 50 aircraft per year.

“Mobile’s selection as the only site in the Western Hemisphere assembling aircraft for Airbus cements Alabama’s status as an up-and-coming aerospace manufacturing giant,” said Business Facilities Editor in Chief Jack Rogers.

Mobile’s victory in the fierce competition for the Airbus plant was the culmination of a seven-year effort by state and local officials to land the prize from Europe’s aerospace giant. The triumph also marked a stunning turnaround from the disappointment of the U.S. government’s reversal of a 2008 decision to award Airbus’s parent, EADS, a huge U.S. Air Force refueling tanker project. EADS had selected Mobile as the site for tanker production, but in 2011 Congress rebid the project and awarded it to Boeing.

The decision by eBay to construct a new 40-acre campus in Draper, UT will directly bring 2,200 new jobs to the state, creating more than $1.6 million in new wages over the next 20 years.

“The ongoing eBay expansion is another success story for Utah’s burgeoning software and IT industry cluster,” Rogers said, noting that industry giants including Microsoft, Twitter, Adobe and IM Flash already have put down roots in the Beehive State.

Rogers added that the Economic Development Deal of the Year judging panel was impressed by the cooperation between eBay and Utah to develop alternative energy resources, including wind energy power generation, which will be used to provide electricity to the Draper facility.

Caterpillar reviewed proposals from more than 100 locations in the U.S., as well as sites in Canada and Mexico, before selecting Athens, GA to be the home of its new $200-million factory. The Georgia plant, which will employ 1,400, will manufacture construction equipment previously produced in Sagami, Japan.

An emphasis on the availability of workforce training, including presentations from Georgia Quick Start and Athens Technical College, helped seal the deal. The Georgia Department of Economic Development, the Economic Development Authorities of Athens-Clarke and Oconee counties, and Electric Cities of Georgia all played a role in shaping the proposal for the Caterpillar project.

“Georgia put its best foot forward in presenting all of its resources to this industry giant,” Rogers said.

Bridgestone Americas $1.2-billion investment in the construction of a new 1.5-million-square foot off-road radial (ORR) tire manufacturing facility on a greenfield site in Aiken County, SC—and a 474,000-square-foot expansion of an existing tire plant nearby marked the largest single initial capital investment in South Carolina’s history.

“Bridgestone’s decision to transplant technology and manufacturing to South Carolina that had been exclusive to its facilities in Japan is another indication of the Palmetto State’s emergence as a world-class manufacturing competitor,” Rogers said.

Projects nominated for Business Facilities’ annual Economic Development Deal of the Year competition are asked to submit an Economic Impact Analysis for the project (using standard analysis methods including RIMS II, REMI or IMPLAN) and a narrative detailing how the project came together.

The judging panel, including industry experts and leading site selection consultants, evaluates the overall impact of the project and assesses the effectiveness and innovation of the location’s approach to landing the deal. Key factors in the evaluation include creative use of incentives, regional cooperation, partnerships with higher education resources, potential for growth and execution of overall economic development strategy.

Click the highlighted links to read about winners in Gold, Silver, and Bronze along with the winner of BF‘s State of the Year Award.

The post Airbus, Caterpillar, Bridgestone, eBay Earn Honorable Mentions from Business Facilities in 2012 Economic Deal Of The Year Competition appeared first on Business Facilities.

Pictured here is an image of the new Boeing Salt Lake building. (Photo: Boeing.)

Boeing has announced the purchase of a new building in Salt Lake County, UT. Employees at the new site, located in West Jordan, will focus on fabrication of composite horizontal stabilizer components for the 787-9.

“The site we’ve chosen is an ideal location to add composite manufacturing capability focused on Boeing’s key business strategies,” said Ross R. Bogue, vice president and general manager of Boeing Fabrication. “This new facility will provide a real competitive advantage in our supply chain by expanding our internal composite capabilities.”

The new site, located 20 miles from Boeing’s fabrication and assembly site in Salt Lake City, was purchased from Masco. The close proximity of the two facilities will help improve the efficiency from component fabrication to assembly of the 787-9 horizontal stabilizer.

The composite component fabrication facility is expected to create approximately 100 new jobs. “Hiring will begin immediately,” said Craig Trewet, director of Boeing Salt Lake. “We’ll begin by hiring project managers and engineers and will then be filling production positions over the next several quarters.”

When finalized, the facility will provide the Boeing Salt Lake team with the flexibility to meet the demands of the highly competitive markets that Boeing serves. This further demonstrates Boeing’s commitment to the state of Utah and to the company’s current and future workforce.

“Boeing appreciates its continued relationship with the state of Utah and we are looking forward to creating a new partnership with the city of West Jordan,” Trewet said.

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XC Front MTB Wheel (Photo: ENVE Corp.)

ENVE Composites, Inc., manufacturer of high end carbon fiber composite products for the cycling industry, will open its newest facility in Ogden, UT, bringing 324 new jobs to the State over the next seven years. Over the seven year life of the project, ENVE will pay over $63 million in new wages. During the same time period, the company will pay $5.3 million in new taxes.

“Utah’s Outdoor Products and Recreation industry cluster is rapidly growing. We are happy to welcome ENVE Composites’ new facility to our Utah business community,” Gov. Gary R. Herbert said.

ENVE Composites, Inc. manufactures wheels, forks, seat posts, handlebars and stems along with composite tubes for custom bicycle frame builders. The company produces 100 percent of its bicycle rims in the U.S.

“ENVE is committed to U.S. manufacturing,” CEO Sarah Lehman said. “The State’s support will make on-shoring jobs from Asia and our expansion possible.”

In support of ENVE’s job creation and $20 million capital investment, the Utah Governor’s Office of Economic Development (GOED) Board of Directors has approved an Economic Development Tax Increment Finance (EDTIF) post-performance refundable tax credit of up to $1,336,424, or 25 percent of new state tax revenues collected from the company over the incentive’s lifetime.

“This important incentive offered to ENVE by the GOED board is a tangible demonstration of our state’s commitment to expanding Utah businesses. ENVE’S decision to expand within Ogden’s Outdoor Recreation Cluster was based on its thorough evaluation of all regional and international expansion options; we’re extremely pleased that Ogden won. ENVE is an important business partner to Ogden,” said Mike Caldwell, Mayor of Ogden.

“Utah has a large worldwide market for outdoor products and composites. With the expansion of ENVE’s facility in Utah, we will continue to maintain our reputation of producing some of the best goods in the nation,” GOED executive director Spencer Eccles said. “We are also happy to work with ENVE to keep high-paying jobs from going overseas.”

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By Jenny Vickers

When it comes to the biotech sector, the bloom is off the rose. Prior to the global financial meltdown in 2008, venture capitalists were placing big bets on a wide range of biotech initiatives—including startups in biomed, agricultural biotech, biofuels and industrial biotech—with the conventional wisdom nearly unanimous that these initiatives could leap from the labs to the marketplace and scale up quickly. But as the gloom of the Great Recession permeated, seed money for biotech became scarce and competition for a dwindling pool of projects became fierce. One benchmark puts this new landscape in bold relief: foreign direct investment in the biotechnology sector dropped by 20 percent in 2011.

Although the recovery appears to be solidifying (at least in the U.S.), the pre-collapse excitement that heralded biotech as a hot growth sector has given way to a more realistic assessment that biotech hubs will have to be built the old-fashioned way, with long-term planning and comprehensive strategies that do not expect instant success.

Industry analysts still believe there will be a hefty return in new jobs and revenues for those who stay the course and build a firm foundation for tomorrow’s biotech bonanza. In this year’s annual report on the state of biotech and pharmaceuticals, we zero in on several locations that are well positioned for future success.

Florida: Bastion Of Biotech
Over the past decade, Florida has established itself as one of the top locations for biopharmaceuticals innovation and industry growth. The state also is home to some of the nation’s most highly regarded bioscience research centers and several major hubs of cutting-edge science and business development, including Scripps Florida, the Sanford-Burnham Medical Research Institute, Torrey Pines Institute for Molecular Studies and the Max Planck Florida Institute.

Florida is currently the 2nd-fastest growing biotech industry in the U.S. According to the Florida BioDatabase, a freely accessible public database that tracks the biotechnology industry in Florida and is published by the University of Florida’s Sid Martin Biotechnology Incubator, the number of Florida bioscience companies grew 42 percent to a current total of 193 from 136 in 2008. Biotech companies tracked by the BioDatabase are characterized by having a true research and development core that helps fuel the innovation of new products for Florida’s growing biomed industry.

“Florida is on track to become a strong player in the biotechnology industry,” said Dr. Michael Schmitt, editor of the Florida BioDatabase. “Our state has the key ingredients for growth including a strong research base and an increasing trend in venture capital funding.”

Overall, the percentage growth of venture capital funding for the biomedical industry in Florida outpaced the national average with investment dollars in 2011 rising by 210 percent over 2010 to $87 million.

Most of Florida’s bioscience growth is centered in the central and southern regions. The Lake Nona Medical City is under construction in Central Florida. Some tenants include the University of Central Florida College of Medicine, the Sanford-Burnham Medical Research Institute at Lake Nona and the Orlando VA Medical Center. Construction is also under way on the University of South Florida’s Center for Advanced Medical Learning and Simulation in the Tampa Central Business District. In South Florida, the new science and technology park at the University of Miami is helping to shape a strong innovation community.

Outside of new development projects, existing bioscience companies are expanding across the state.

In April 2012, Arthrex, Inc. broke ground at its new 190,000-square-foot manufacturing plant in Collier County. Arthrex is a manufacturing company that makes orthopaedic surgical supplies. More than 3,000 such products have been developed by Arthrex and are marketed worldwide. The company also provides educational services for orthopaedic surgeons and their patients.

Collier County commissioners gave Arthrex the green light in January, offering the company more than $2 million in financial incentives over the next five years if the company creates 600 new jobs. The commissioners are excited one of the fastest-growing companies in the nation has decided to stay and grow in Collier County. In 2011, Arthrex was named to Inc. magazine’s prestigious Inc. 500|5000 list, an exclusive ranking of the nation’s fastest-growing private companies.

In April 2012, the Metro Orlando Economic Development Commission announced that Orlando-based AcariaHealth Inc. is receiving a $400,000 tax refund to create up to 80 new jobs in the next three years. AcariaHealth is a specialty pharmacy focused on handling the medication needs for patients with hemophilia, hepatitis C, Crohn’s disease, multiple sclerosis and rheumatoid arthritis.

The expansion includes a $600,000, 20,000-square-foot addition to its existing facility. The company also has plans to bring a distribution center to Orlando. The new jobs will pay an average of $47,000 annually, adding $3.8 million to the local economy.

In the same month, medical technologies company Medtronic Inc. announced it will soon break ground on a $14-million expansion project in Jacksonville, FL. The project includes a new 75,000-square-foot building to expand its surgical technologies division headquarters in Jacksonville. Medtronic expects to create 175 new full-time jobs by the end of 2015. Medtronic has nearly 700 employees in Jacksonville. The surgical technologies business designs and manufactures products for the diagnosis and treatment of ear, nose and throat diseases and cranial, spinal,  and neurologic conditions.

Incentives from the city and state were approved in August 2011. Medtronic, based in Minneapolis, reported overall revenue of $15.9 billion in fiscal year 2011 with surgical technologies making up about 8 percent of that revenue.

Palm Beach County is home to a thriving biotechnology and life sciences cluster with more than 4,180 people employed in life sciences and related industries, more than 115 companies primarily engaged in R&D or manufacture of biotechnologies, medical devices, and pharmaceuticals, and 50 additional companies primarily engaged in the environmental and biological sciences. The county is home to two world renowned biomedical institutes—Scripps Florida and Max Planck Florida Institute.

Scripps Florida is home to the Translational Research Institute, a collection of scientific centers employing cutting-edge technologies to speed development of new therapies and products, translating breakthroughs into practical applications.

Scripps Florida is a state-of-the-art biomedical research facility located in Jupiter, FL. Using the latest cutting-edge technologies, researchers at Scripps focus on basic biomedical research and drug discovery. As of January 2011, more than 400 faculty members, scientific, technical and administrative staff were employed at the 350,000-square-foot campus, which is comprised of three research buildings. By 2014, the campus is expected to house more than 60 faculty and 550 total staff.

Scripps Florida also is home to the Translational Research Institute, a collection of scientific centers employing cutting-edge technologies to speed development of new therapies and products, in essence, beginning the important process of “translating” breakthrough scientific discoveries into practical applications.

The Max Planck Florida Institute, located at Florida Atlantic University’s McArthur Campus, is the first Institute the German-based Max Planck Society has established in the U.S. The startup costs of the Institute were supported by $86.9 million from Palm Beach County and $94 million from the state’s Innovation Incentive Fund. The Institute, which focuses on brain function and neural circuits, adds a strong international component to Palm Beach County’s life sciences cluster and to the general economic base.

BioFlorida, the state’s trade organization for the life sciences, has been working to ensure that Palm Beach County remains an epicenter for the state’s biosciences industry. BioFlorida joins Scripps and Max Planck in forming the Life Tech Initiative, a consortium of all public and private universities along the I-95 corridor from Miami to Port St. Lucie, involving academia, research institutes and the biotechnology industry in southeast Florida.

The Initiative provides an overarching umbrella for the entire Southeast region. The consortium also includes the Business Development Board of Palm Beach County (BDB); Florida Atlantic University; Palm Beach State College; the Research Park at Florida Atlantic University; Florida International University; and the other public universities, colleges and economic development organizations in Southeast Florida.

BioFlorida also has partnered with the Life Science Technology HUB (LST HUB), which supports the life sciences and technology industries in Palm Beach County, to extend its reach across the state.

The LST HUB was created with the intent to grow the cluster specifically in Palm Beach County, modeled on a San Diego organization credited with the growth of the high-tech and life science cluster there. LST HUB is gathering resources—investors, business and marketing professionals—and integrating them with life science and technology professionals, students and educators. The goal is creating an ecosystem for the growth of new companies and jobs.

Indian River State College is at the center of a regional effort to boost interest and achievement in science, technology, engineering and math. IRSC has launched a wide range of initiatives that foster scientific aspiration in these STEM disciplines. The College’s state-of-the-art science laboratories are utilized by an increasing number of students each semester to develop the skills they need for a career in biotechnology—skills sought by the biomedical research firms moving here. In fact, an IRSC chemistry student Jason Fenwick was one of the first laboratory technicians hired by Torrey Pines Institute for Molecular Studies when the California firm expanded to this area.

Now under construction, IRSC’s STEM Center at the St. Lucie West Campus will serve as a feeder program, providing skilled employees for nearby research institutes.

The three-story facility will provide much-needed classroom space and sophisticated teaching laboratories in genetics, chemistry, ecology, molecular science, botany and microbiology. The focus will be on linking math and science concepts to real-world applications.

Indiana: 100 Years & Counting
Indiana has been a center of innovation in the life sciences, pharmaceutical and medical device industries for more than a century. Driven by intellectual capital, public support, academic partnerships, workforce excellence and business and industry collaborations, Indiana has established itself as one of the nation’s leading life sciences states.

Indiana is home to more than 500 life sciences companies and is one of the nation’s top four life sciences leaders in terms of the number and concentration of life sciences jobs. Indiana has the second highest concentration of biopharmaceutical jobs in the nation. The state’s pharmaceutical industry ranks fifth in the nation in terms of sales, shipments, receipts and revenues. In addition, Indiana is among the top 10 states for medical technology and is one of only five U.S. states to specialize in three of four key biosciences areas: agricultural feedstock and chemicals, drugs and pharmaceuticals and medical devices and equipment.

Pharmaceutical and medical device industry leaders like Eli Lilly and Company, Zimmer, Biomet and DePuy Orthopedics are based in Indiana. The state also is home to WellPoint, the nation’s largest health benefits company; Roche Diagnostics, the top medical diagnostics company in the world; and the internationally recognized Regenstrief Institute, home of the largest coded, continuously operated electronic medical records system in the U.S.

Indiana’s growing network of 28 business incubators and 19 Certified Technology Parks (CTPs) are helping to encourage the growth of startup life sciences and high-technology companies in Indiana. The CTP program was formed to create special tax districts to encourage the development of technology incubators; to leverage the intellectual and equipment resources of nearby universities; and to attract talented technology entrepreneurs.

Under the program, 100 percent of state income and sales taxes generated by businesses located in technology parks are used to finance the technical, environmental and capital improvement projects for public use areas within the park.

Indiana’s strength in life sciences, biopharma and medical technology is helping to attract top leaders in the medical fields and innovation.

In April 2012, medical-device maker Cook Group announced its purchase of General BioTechnology, an Indianapolis company that specializes in cell and tissue processing and cryopreservation technologies. Cryopreservation is low-temperature storage of a living organism so it can later be revived and restored.

Bloomington-based Cook didn’t disclose what it paid to acquire the company, which also runs an umbilical cord blood and tissue bank for individuals and a reproductive tissue bank.

Birck Nanotechnology Center, Purdue University Discovery Park

In February 2012, BASi announced the opening of a new Discovery Center, located at its corporate headquarters in the Purdue Research Park of West Lafayette. The purpose-built facility is designed to provide pharmaceutical and biotech companies with the information they need to evaluate new compounds in the earliest stages of development.

The lab features the Culex® automated in vivo sampling system that provides multiple streams of data from stress-reduced subjects and allows for rapid decisions based on more accurate information.

“Our unique in vivo discovery service offers a high value option for our discovery customers in generating tight, reliable data, which makes for better predictive decisions,” said John Devine, vice president of non-clinical services.

The facility has 4,800 square feet of dedicated research space and state-of-the-art environmental systems to maintain and monitor lab conditions. The discovery center is part of BASi’s plan to expand its capabilities in drug discovery to meet client demand. The company also renovated a building at its preclinical toxicology site in Evansville, Ind. The improvements provide scientists with more flexibility and space to complete multiple studies.

In January 2012, California-based NantWorks, LLC, announced plans to locate a new pharmaceutical manufacturing plant in Terre Haute, IN, creating up to 234 new jobs by 2016.

The pharmaceutical company plans to invest $85.5 million to redevelop the former Pfizer facility on approximately 210 acres on the south side of Terre Haute. The new manufacturing plant, which is expected to be operational in 2015, will produce critical care injectable and oncological drugs.

“With the strength of our life sciences industry and a first-class work force, it’s no surprise that innovative companies from high-tax, business-hostile states continue to choose Indiana as the home for new investment,” said Indiana Gov. Mitch Daniels. “With its established executive leadership and groundbreaking pharmaceutical research, NantWorks has all the right ingredients to flourish in the Hoosier State.”

Dr. Patrick Soon-Shiong, chairman and chief executive officer of NantWorks, has previously developed two pharmaceutical companies addressing the unmet needs of critically ill patients. His injectable drug company APP was the nation’s only safe source of heparin during a supply crisis in 2008 and his biopharmaceutical company Abraxis Bioscience developed the world’s first protein nanoparticle cancer drug for breast cancer. Soon-Shiong sold these companies in 2008 and 2010, raising several billion dollars to pursue his vision of personalized medicine.

The Indiana Economic Development Corporation offered NantWorks, LLC up to $2 million in conditional tax credits and up to $100,000 in training grants based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. Vigo County will consider additional property tax abatement at the request of the Terre Haute Economic Development Corp.

KBA Makes Big Plans in KS
Bioscience is among the fastest-growing sectors of the Kansas economy—with good reason. Visionary leaders in Kansas have created a welcoming environment for bioscience researchers, entrepreneurs and industry leaders.

The Kansas legislature established the Kansas Bioscience Authority (KBA) in 2004 to help grow the bioscience sector into a pillar of the Kansas economy. The authority makes investments in sectors in which Kansas has established leadership and expertise including animal health, human health, bioenergy, biomaterials and plant biology.

In 2011 alone, KBA investments helped drive more than $200 million into the Kansas economy. Since its inception in 2004, KBA investments have fueled the state’s economy by more than $800 million. This includes 1,347 new bioscience jobs created by Kansas companies and universities, generating $354 million in annualized wages.

Kansas Bioscience Park Venture Accelerator

To provide bioscience entrepreneurs a bridge from innovation to success, the Venture Accelerator incubator at the Kansas Bioscience Park opened for business last year.

The 38,723-square foot building is customized with office space, wet labs and shared equipment designed to help startups get to market efficiently and successfully. The award-winning design and green features helped the facility earn gold LEED certification. The Venture Accelerator is located within the Kansas Bioscience Park and is home to eight resident companies advancing drug development, medical devices, animal health technologies and more. KBA staff also resides in the Venture Accelerator, offering tenants ready access to KBA expertise and hands-on business assistance.

The Kansas Bioscience Park in suburban Kansas City is a unique research and office park with a powerful mix of deep academic research resources, industrial strength and personalized business assistance. Located in the heart of the Kansas City Animal Health Corridor, which encompasses one-third of the world’s $19 billion animal health industry, 42 acres of land will be granted to qualifying bioscience companies to build facilities within the park.

The Kansas State University Innovation Campus is located within the park itself, while the tremendous research capabilities of the University of Kansas and the University of Kansas Medical Center are minutes away.

Bevy of Incentives Builds Biotech in Pennsylvania
Pennsylvania is a national leader in the life science industry and home to a cohesive community that unites biotechnology, medical device and diagnostics, pharmaceuticals, research institutions and holds significant financial strength. The Pennsylvania Department of Community & Economic Development (DCED) has played a significant role in helping to grow its biotech sector through the following initiatives:

• Increasing the R&D Tax Credit from $40 million to $55 million last fiscal year and level funding of $55 million proposed for this year.
• Supporting early stage bioscience companies access to capital through support of the Life Sciences Greenhouses and Ben Franklin Technology Partners.
• Expanding access to venture capital across the state with recent investments of $8 million into several funds that will leverage between $24 and $60 million for investment.
• Directing recent U.S. Treasury funding provided to the commonwealth to support bioscience and early stage companies—$5 million is earmarked for that effort.
• Opening global markets for Pennsylvania’s life science industry by participating and supporting companies at trade shows in the U.S. and around the world. DCED will be promoting PA products at the upcoming Medical Design and Manufacturing Show in Philadelphia this month.
• Accelerating the growth of emerging firms through the funding of the Keystone Innovation Network that will support our entrepreneurs and university startup companies across the state.
• The current budget also “evergreened” the Tobacco Health Venture funds so in the future it can be reinvested into Pennsylvania bioscience venture capital

Pennsylvania is home to one of the largest, urban research parks in the U.S. Located in Philadelphia, the University City Science Center accelerates technology commercialization, regional economic development and the market availability of life-enhancing scientific breakthroughs by bringing together innovations, scientists, entrepreneurs, funding, laboratory facilities and business services. Graduate organizations and current residents of the Science Center’s Port business incubators have created more than 15,000 jobs that remain in the Greater Philadelphia region today and contribute more than $9 billion to the regional economy annually.

A biotech company formed out of the University of Pennsylvania with the support of the Science Center is one of two new companies to locate in the Port Business Incubator in Philadelphia. Nelum Sciences, a spin out of the University of Pennsylvania’s School of Engineering, is occupying lab space while Oxo Pharma, headquartered in France, has established its U.S. presence in the Bullpen, the Port’s newest co-working space.

With its headquarters in Paris and operations in Lyon, France, as well as a recently opened office in Shanghai, Oxo Pharma is an international consulting firm supporting the life science industry by helping to improve performance, quality and regulatory compliance. The firm plans to increase customer support in major markets with plans to open offices in Benelux and Morocco within the next few years.

Oxo Pharma is the latest participant in the Science Center’s Global Soft Landing program, which fosters international business in the U.S. by helping global companies establish a foothold in local life sciences and IT markets.

Chester County, Pennsylvania will soon be home to Endo Pharmaceuticals, a U.S.-based, specialty healthcare solutions company. In January 2012, Pennsylvania Gov. Tom Corbett cut the ribbon for the future site of Endo’s corporate headquarters. At the event, the Governor praised the company for its continued commitment to the region and its plans to create more than 150 high-paying jobs.

“Here in Pennsylvania we are employing the kind of creative cooperation that says yes to opportunity. And today we are cutting the ribbon on a new headquarters,” said Gov. Corbett. “This investment in the future means we have saved 475 existing jobs and will create another 154 positions over the next three years.”

Endo Pharmaceuticals operates in three key business segments: branded pharmaceuticals, generics and devices and services, delivering a suite of complementary products and services to meet the needs of patients in areas such as pain management, pelvic health, urology, endocrinology and oncology.

Endo entered into a 10-year lease for approximately 315,000 square-feet of office space which will house their corporate headquarters. The company will retain their 475 existing employees and 100 contractors while also creating 154 new positions to be filled over the next three years.

Texas Biotech Packs a $75-billion Economic Wallop
Texas has a dynamic biotechnology marketplace with an estimated annual economic impact of $75 billion. A significant number of top global biotechnology companies have Texas locations, underscoring the state’s vitality in this industry. In 2009, one out of every 19 U.S. biotechnology employees worked in Texas while one out of every 15 U.S. biotechnology establishments was located in Texas.

Currently, the Lone Star state is home to more than 3,500 firms involved in biotechnology-related manufacturing, research or testing. More than 108,600 workers are employed in the biotech sector in Texas at an average annual salary of over $74,800.

Although biotech industry growth takes place statewide, there has been a huge development push in San Antonio and Austin.

San Antonio is seeking to become a bigger player in health care and the biosciences, nationally and internationally, and several new announcements could help give the Alamo City a leg up.

In May 2012, the Texas Technology Development Center (T3DC), which seeks to identify promising tech startup companies and provide them with early-state seed funding, announced plans to invest $100,000 each in two biotech startup companies: OtoMetrix Technologies and Rapa Holdings Inc.

OtoMetrix has a patent on a medical device that it says will make diagnosing ear infections in pediatric patients quicker and more accurate. The company is currently completing work on a prototype of the device and hopes to begin clinical trials soon.

Rapa Holdings Inc. is working to bring a promising anti-cancer agent known as rapamycin to market. Rapamycin is a synthetic compound originally derived from organic materials found on Easter Island in the 1960s. During the 1990s, it was commonly used as an anti-organ rejection drug. But today, researchers believe it has qualities that would be useful in the treatment of age-related diseases, such as cancer and Alzheimer’s.

“We think these are both very promising startups and this gives us equity in those companies,” said Randy Goldsmith, president of T3DC. “They both represent solid growth opportunities for San Antonio.”

In April 2012, four of San Antonio’s large research institutions announced they have formed a new partnership to develop new vaccines. The new partnership, called the San Antonio Vaccine Development Center, could have almost $1 million in new funds to spur scientists in new directions, said Kenneth Trevett, president of the Texas Biomedical Research Institute.

The group, whose members include the University of Texas Health Science Center, University of Texas at San Antonio (UTSA) and the Southwest Research Institute, has raised $600,000 in private donations —including a corporate gift from USAA and a personal donation from NuStar Energy LP Chairman Bill Greehey. With that, they’ve applied another $300,000 from the Texas Research Incentive Program, a state fund that provides a 50 percent match for private gifts of up to $1 million to emerging research universities such as UTSA.

Initially, four $50,000 grants will be awarded to researchers from among the four partners, with priority given to collaborations between two or more of the institutions.

“The center leverages and builds on core scientific resources, expertise and talent at the four institutions in San Antonio,” said Bernard Arulanandam, associate dean for research at UTSA, whose own work includes development of an experimental chlamydia vaccine in collaboration with scientists at the health science center.

Other research at the four institutions includes vaccines against tularemia and Lassa virus, both potential bioterror threats, under development at Texas Biomed; and vaccine delivery systems at Southwest Research.

Ann Stevens, president of BioMed SA, an Alamo City-based biotech booster group, said infectious disease research “is one of five areas we have identified where San Antonio has recognized strengths of national or international caliber. So clearly this is an area where San Antonio can leverage its expertise, both for regional economic benefit, and also to protect human health around the world.”

BioMed SA is finalizing work on a strategic asset initiative in an effort to determine the city’s areas of strength in the bioscience arena. In addition to infectious disease research, it has identified regenerative medicine as another top area. According to BioMed SA, if San Antonio can become a major international player in regenerative medicine, that could have a profound impact on the city’s multibillion-dollar health and bioscience industry—and it could attract the attention of other researchers and companies interested in relocating to the region.

Regenerative medicine is a rapidly evolving interdisciplinary field that draws on fundamental knowledge from biology, chemistry and physics to create materials, devices, systems and therapeutic strategies—including cell-based therapies that augment, repair, replace or regenerate organs and tissues.

GenCure, which was launched last August as an arm of the South Texas Blood & Tissue Center, is helping to propel San Antonio’s regenerative medicine industry on a national and international scale. The non-profit center currently provides expertise in cell and tissue services for regenerative medicine—including patient treatment and clinical research. One such potential being studied is the use of certain cells from umbilical cord blood to improve brain activity in stroke victims.

“Those components of cellular therapies and tissue engineering are very unique to regenerative medicine,” says Mary Beth Fisk, president and chief operating officer for the Blood & Tissue Center and GenCure. “That’s what GenCure is all about.”

GenCure has already teamed up with a number of researchers and is involved in multiple clinical trials in the U.S.—and in other parts of the world, including Brazil and China. One of GenCure’s collaborations is with the University of Illinois and involves the restoration of specialized cells as part of a treatment for Type I diabetes.

The Alamo City is also gaining important ground on the cancer front. In January 2012, South Texas Accelerated Research Therapeutics (START), a local health care group that operates one of the world’s largest Phase I medical oncology programs, announced it is spearheading the development of a new war on cancer that could have a far-reaching impact.

That effort, dubbed the San Antonio 1,000 Cancer Genome Project, will pull together competing Alamo City physicians, researchers and institutions in a collaborative attempt to amplify and expedite efforts to better attack the deadly disease.

San Antonio project officials plan to make their data available to cancer researchers locally, nationally and internationally. Those same officials say that their efforts will encourage the development of new research and could attract more companies, further expanding the city’s multibillion-dollar bioscience industry.

The City of Austin has seen a lot of growth in biotech in recent years, including medical devices, pharmaceuticals and diagnostics. Helping to spearhead this growth is the group BioAustin, which represents over 140 life science companies with over 7,500 employees operating in the five-county Austin and Central Texas region. Companies included in BioAustin operate in the areas of bio-related activities including research, diagnostics, reference laboratories, pharmaceutical, CRO, medical device, agbio and bioveterinary. This group works closely with the hundreds of companies providing services to the bio-related industry and the outstanding healthcare providers in the area.

Austin, TX Biomed Expansions 2009-2012

According to BioAustin, its biotech companies are achieving significant breakthroughs, especially in the area of lymphoma and drug delivery technology. In May 2012, Austin-based biotechnology company Mirna Therapeutics, Inc. announced the publication of new results in the journal Leukemia demonstrating that the therapeutic delivery of microRNA-34 (miR-34) mimics and inhibits tumor growth in an animal model of lymphoma.

Mirna, founded in 2007, has received significant funding from the State of Texas, both through the State’s Emerging Technology Fund and from the Cancer Prevention and Research Institute of Texas (CPRIT). Mirna also is the recipient of a $10.3 million commercialization award from the Cancer Prevention and Research Institute of Texas (CPRIT).

In May 2012, Caisson Biotech, L.L.C. a biopharmaceutical company with a patented heparosan-based drug delivery technology, announced that it has entered into a Development and License Agreement with Novo Nordisk A/S, a global healthcare company and leader in diabetes care. The agreement gives Novo Nordisk the exclusive rights to use Caisson’s proprietary heparosan-based drug delivery technology to engineer and develop compounds within undisclosed therapeutic areas.

Caisson is funded and managed by Emergent Technologies, Inc. a leading life sciences technology investment and management firm headquartered in Austin.

Under the terms of the agreement, Caisson will receive an undisclosed upfront payment and contract research and manufacturing payments. In addition, Caisson will be eligible to receive milestone payments upon achievement of certain predefined clinical, regulatory and commercial targets plus royalties on the global sales of the therapeutic products developed under the agreement; representing a total deal potentially in excess of $100 million.

Utah: Beehive of Biotech
In 1982, a team of University of Utah researchers, engineers and clinicians successfully implanted the Jarvik 7 artificial heart in a Seattle dentist. This was one of Utah’s notable early successes in the medical device industry. Since then, the state has built upon this success and has become a thriving location for life science, biotech and medical device companies.

Today, Utah is home to more than 600 life science companies and 26,000 of their employees. Over 100 of these organizations are medical device companies that make everything from MRI and ultrasound equipment to pacemakers, hearing aids and surgical instruments. In fact, Utah companies currently produce 70 percent of all arterial and vascular access devices utilized worldwide.

In addition, Utah was ranked first among western states for life science business per capita and second for overall industry growth by the Milken Institute. The Bureau of Labor Statistics noted in 2010 that Utah has the highest concentration of biomedical engineers in the country. Utah’s advantages include:

• Direct access to innovative programs at major universities, including the University of Utah, Utah State and Brigham Young University
• The state-funded Utah Science, Technology and Research (USTAR) initiative that fosters research-related economic development in Utah’s colleges and universities—particularly in the biomedical device, nanomedicine and related specialties
• The Technology Commercialization and Innovation Program, which helps fund and transform University-generated ideas into products and companies
• Bioinnovations Gateway, an educational and workforce training facility that provides laboratory and resource access for high school students and entrepreneurs
• Expanded Engineering Initiative, to develop the workforce of the future. Biomedical engineering is a key element of the Initiative
• Life Science Tax Credit program, which encourages early-stage investments and capital for product development and expansion.

In April 2012, more than 400 people from academia, industry and government attended the ribbon cutting of the new James L. Sorenson Molecular Biotechnology Building—USTAR Innovation Center at the University of Utah.

The $130-million interdisciplinary research facility—funded by the state’s USTAR initiative and private donations—demonstrates how architecture and workplace design can support transformative research and business expansion by encouraging interaction across disciplines.

It is the new home of the Brain Institute, the Nano Institute and the Department of Bioengineering, along with USTAR faculty researchers plus junior faculty, administrative and laboratory personnel. The building contains wet lab and research computing space, faculty office space, meeting rooms and public areas designed to promote interaction within the scientific community and industry.

It also includes a state-of-the-art nanofabrication facility with 18,000 square feet of cleanroom space, biobay, and a 5,300-square-foot microscopy and materials characterization suite. The equipment in the microscopy suite ranges in cost from $300,000 to $3 million and is available for use by industry partners.

At USU’s North Logan Innovation Campus a similar story emerges around the 118,000-square-foot USTAR BioInnovations Center. This multidisciplinary facility houses the Synthetic Bio-Manufacturing Institute, the Center for Human Nutrition Studies, the Veterinary Diagnostics and Infectious Disease team, and other life science and renewable energy efforts. USU USTAR teams have a broad portfolio of industry collaborations, including such diverse partners as USANA, a Utah-based nutraceuticals company, and Inovar, an electronics company.

The building has a BioSafety Level 3+ lab (one of the few at that rating in the Intermountain West), as well as extensive multipurpose lab, research kitchen and clinical space.

NJ: Global Medicine Chest
New Jersey is, by any measure, the center of the world’s pharmaceutical industry. The state is home to more than 300 biotechnology companies and 20 pharmaceutical and medical technology firms and 17 out of the world’s top 20 have major facilities in the state. The state also boasts the highest concentration of scientists in the U.S., a total of 150,000 trained pharmaceutical, biotech and medical technology workers. This concentration offers extraordinary opportunities for joint ventures, recruiting and research.

In December 2011, Jones Lang LaSalle, a multinational financial and professional services company specializing in real estate, published its 2011 Global Life Sciences Cluster Report ranking New Jersey/New York as the no. 2 biotech region in the country. Boston was the top-ranked region. The report noted that the region has the highest concentration of college graduates in the nation, and the world’s highest concentration of academic institutions. The report also cited a spate of big-name Pharma firms leasing or buying space in New Jersey, including Bayer and Novo Nordisk.

Championed by U.S. Sen. Robert Menendez, BioNJ and the Biotechnology Industry Organization (BIO), the $1 billion Qualifying Therapeutic Discovery Project was created to further research into critical areas of unmet medical needs by providing early-stage companies conducting that research with additional financial resources. In 2011, the program provided $53 million for the state’s biotech industry—the third largest portion of grant money in the country. A total of 133 New Jersey companies received either tax credits or grants under the program, and these funds are being used to advance more than 225 research projects in therapeutic areas such as cancer, Alzheimer’s disease and Fabry disease.

Oncobiologics was able to access some of the resources it needed to get started through $244,000 in grants from the program. The company, established in January 2011, celebrated the grand opening of its new 25,000-square-foot research and development facility in Cranbury this past October.

“Qualifying Therapeutic Discovery Project funding was critical to helping us get Oncobiologics off the ground,” said Dr. Pankaj Mohan, founder of Oncobiologics. “We had assembled a world-class team and this government backing helped with early equipment investments, while also helping to establish our credibility with future partners.”

Oncobiologics currently employs 20 professionals and plans to employ 200 within two years.
At the end of 2011, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs were reauthorized for a six-year period. The programs include a provision that allows venture capital-backed companies to compete for up to 25 percent of SBIR grants from NIH, DOE and NSF and 15 percent at other agencies, reversing a policy that has hampered R&D at startup and early-stage companies for several years.

The Technology Business Tax Certificate Transfer Program was restored to $60 million in the 2011-2012 budget cycle after a cut to $30 million in the previous cycle. This innovative program enables companies to sell New Jersey tax losses and/or research and development tax credits to raise cash to finance their operations. Since the incentive was established in 1999, over 1,530 applicants have been approved for $630 million. The 75 emerging biotechnology and technology businesses approved to receive funds in 2011 received, on average, approximately $800,000—more than double the previous average.

Companies that benefited from the program in 2011 include Princeton-based Advaxis, Inc., a biotechnology company developing immunotherapies for cancer and infectious diseases, and Cedar Knolls-based Emisphere Technologies, Inc., a biopharmaceutical company that focuses on improved delivery of pharmaceutical compounds, medical foods and dietary supplements.

New Jersey recently raised the Research and Development Tax Credit rate from 50 percent to 100 percent as of January 2012. Previously, R&D spending in New Jersey was used to offset up to 50 percent of corporate tax liability. The new law allows critical and economically beneficial R&D spending in the State to be used to offset all of the corporate tax liability.

In November 2011, Allergan, Inc., a global multi-specialty health care company, announced it will relocate to New Jersey from California, building a $12 million R&D development facility.

The new facility will create several hundred high-quality jobs over the next few years and will be integral to Allergan’s pursuit of new therapies for patients. To help support this project, the New Jersey Economic Development Authority (EDA) approved a $14.9 million grant for the company through its Business Employment Incentive Program. Allergan currently employs 20 people at a subsidiary in Bedminster, New Jersey and receipt of this grant was a critical factor in the company’s decision to grow in the State.

In April 2011, Bayer HealthCare also announced it will expand in New Jersey. The company plans to consolidate its entire East Coast business in the state, keeping 1,000 jobs and adding up to 500 more. The NJEDA awarded Bayer grants totaling $38.2 million, contingent on the company’s planned growth.

Adding to this economic momentum, LEO Pharma, a Danish subsidiary headquartered in Parsippany, New Jersey, announced expansion plans in 2011 as well. The company opened an office in the State two years ago with five employees and expects to have approximately 300 employees in early 2012.

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Hexcel commissions two new carbon fiber lines.

By Donna Clapp
From the May/June 2012 issue

In January 2012, Business Facilities named Utah “State of the Year” for its aggressive economic development strategy. Apparently we aren’t the only ones who noticed Utah’s stellar economic performance in the past few years. In April, the American Legislative Exchange Council (ALEC), released it’s annual “Rich States, Poor States” economic outlook and once again, for the fifth year in a row, Utah was named the Top State For Economic Outlook.

“I’m absolutely thrilled,” says Gov. Gary Herbert. “My vision statement for the State is ‘Utah will lead the nation as the best performing economy and be recognized as a premier global business destination.’ When we are ranked at the top in studies like ‘Rich States, Poor States,’ I am confident we are well on our way to accomplishing that goal. It’s great to know we are on the right road, headed in the right direction, and that others are noticing”.

The “Rich States, Poor States” analysis uses 15 variables to evaluate the State’s potential economic outlook, including tax rates, tax burdens, number of public employees, minimum wage and more.

Utah’s economy is performing well overall, with the unemployment rate dropping to 5.7% after the state added 30,300 jobs in January, raising the total wage and salary employment to 1,207,400, according to a report from the Utah Department of Workforce Services released March 2, 2012. That rate has fallen each month since August, when it was 7.6 percent.

High Speed, High Tech

Utah has a long and distinguished history in the high-tech industry, especially in the burgeoning data center, software, IT cluster. The technology industry employs over 76,000 Utahns with an average annual salary that is 62% higher than the statewide average nonagricultural wage. Utah’s well-developed information technology industry includes such major employers as Intel, Iomega, IM Flash, Twitter, Microsoft, Micron, Novell and L3 Communications. Oracle, another major player in Utah’s high-tech industry, operates a 4,000-server data center for world-wide product and operations support. Siebel Systems, a recent relocation to the state, has successfully relocated many of its senior IT staff from California to Utah. In fact, in the past year Adobe and e-Bay both announced major expansions that will create 1,000 new jobs for Adobe and 2,200 jobs for E-bay!

When it comes to data centers in particular, one of the factors that puts Utah ahead of the pack is its Internet speed.  The Beehive State was recently ranked forth in the nation for Internet speed, above all other Western States, according to Akamai Technologies’ most recent “State of the Internet” report, a quarterly comparison of average internet speeds of states across the U.S.

Internet speed and infrastructure are crucial components of Utah’s position in economic development, technology, and education climates. Several studies even suggest a correlation between broadband access and lower unemployment rates.

“Utah was the only inland western state to be highly ranked,” says Tara Thue, manager of the Utah Broadband Project at the Governor’s Office of Economic Development (GOED). “Given Utah’s large concentration of rural land, this ranking says something significant about our progress in distributing high-speed access throughout the entire state.”

The Utah Broadband Project launched in 2010 and aims to map available broadband services in the State. The mapping data is used to identify gaps in service and will be used by policymakers and leaders to develop a statewide plan to make broadband access available to all Utahns. Over 45 broadband service providers have willingly partnered with the Project to supply data and information for the map. Utah sits astride a major east-west line of the Internet “backbone,” with 10 major service providers delivering high-speed services to the area.

“Twenty-first century business runs on high-speed Internet, and we appreciate the support and cooperation of broadband service providers throughout Utah, which has been critical to the success of the Project. This kind of partnership with teamwork and collaboration between government and the private sector is why Utah continues to be recognized as the best place for business and careers,” says Spencer Eccles, executive director of GOED.

Onward and Upward

Utah continues to attract the interest of the world’s leading high-technology companies, as is proven by some of these recent expansions. In December, the GOED, announced plans to help support Hexcel’s plans to expand its existing Utah operation in several increments over the next decade, resulting in a potential of up to a 100% increase in its West Valley City workforce.

“I am very pleased Hexcel has chosen to undertake this major expansion of its already considerable presence in our state,” said Gov. Herbert at the announcement. “This expansion is a testament to Utah’s position on the leading edge of the advanced composites industry, and it will be a major boost to our efforts to accelerate private sector job creation.”

Hexcel has advanced composite facilities around the world and is one of the country’s largest producers of carbon fiber and carbon fiber prepregs. The company’s current facility in West Valley City is one of its largest U.S. operations.

Advanced composite materials are currently a big focus in Utah’s aerospace and defense sector. Carbon fiber and similar materials are used in products ranging from lightweight, high-impact body armor and rockets to high-end sports cars and recreational products. As an example of Utah’s critical mass of companies working in the industry, Hexcel products are the first step in a local supply chain that ultimately produces structures for large and small commercial airplanes, as well as key space and defense programs like the V-22, the F-35 and the C-17.

“Utah’s strength in the composite engineering cluster has resulted in industry leading, world-class companies choosing our state over competitive global cities in Europe and Asia,” said Jeff Edwards, president & CEO of the Economic Development Corporation of Utah (EDCUtah), who has worked with Hexcel to facilitate several expansions over the last 20 years.

The GOED board of directors approved a one-time, post-performance EDTIF refundable tax credit of $7,767,961 over the 10-year life of the project. Hexcel Corporation expects to hire as many as 600 new employees during that time, with wages above 125% of the Salt Lake County average salary including benefits. Hexcel plans to make significant capital investments for the expansion over the life of the incentive and the State is expected to gain as much as $30 million in new state revenue.

L-3 Communications, a high-tech multinational corporation with operations in Utah, also announced major expansion plans in December.

“I cannot think of a better place to do business,” said Susan D. Opp, President of L-3’s Communication Systems-West during the announcement. “Utah has the combination of a skilled, well educated work force, excellent quality of life options, and state and local governments that promote business growth. That is why our operation has continued doing business in Utah for over 50 years.”

L-3 Communications, which has operations in eight countries and 20 U.S. states, is a prime contractor in command, control, communications, intelligence, surveillance and reconnaissance (C3ISR) systems, aircraft modernization and maintenance, and government services. Its Utah division, Communication Systems West, provides network engineering, software integration, hardware manufacturing, and test support services for the Defense market.

L-3 began the process of hiring up to 500 new workers as it expands its current facility in Salt Lake City at the beginning of this year. Those workers are paid salaries that exceed 125% of the Salt Lake County average wage. The company expects to pay nearly $390 million in new state wages over the 10-year life of the expansion project.

The GOED board of directors approved a one-time, post-performance EDTIF refundable tax credit of $5,526,682 over the 10-year life of the project. L-3 Communications has committed to hire up to 500 new employees at 125% of the Salt Lake County average wage, and will pay nearly $390 million in wages, while the State will gain over $22 million in new state revenue over the same period. L-3 estimates that it will invest approximately $6 million in capital for improvements related to the expansion in the near term.

And in the past month Xactware Solutions Inc. announced plans for a major expansion of its headquarters and operations in Utah. The company and GOED revealed plans for 859 new full-time positions with full benefits to be created over a 20-year agreement.

Xactware Solutions provides software and services for professionals involved in estimating all phases of building and repair. Insurance companies use Xactware products

to estimate the replacement cost of insured buildings, to immediately send assignments to professionals when a building needs repair, to estimate the cost of repairs, to analyze performance and improve customer service. Contractors, specialty service providers and other professionals use Xactware products to estimate, document, analyze and manage rebuilding work.

“Xactware has experienced phenomenal growth by tapping into Utah’s hard-working and intelligent high-tech workforce,” says Jim Loveland, Xactware’s president and CEO. “We’re pleased to be able to continue our growth and build on the strength of our Utah roots.”

The company will make a $130 million capital investment in a new facility and infrastructure to house its Utah employees. Over the life of the agreement the company will pay over $756 million in new State wages and $129 million in new Utah tax revenue. As the company completes this expansion, over the years, it will qualify for a maximum post-performance EDTIF tax credit of up to $32,262,990 over the life of the agreement.

Growth Across the Board

Xactware was just one of four companies that announced new expansions in May. The GOED approved four companies’ business growth incentives expected to bring 1,133 new jobs and more than $160 million of capital investment to the Beehive state over the coming years. Each company plans to pay wages in excess of 125% of the county average wage in which it eventually locates.

The successful effort to secure the growth of the companies announcing expansion in Utah was brought about through the close collaboration of GOED, The Economic Development Corporation of Utah (EDCU) and local community leaders.

“Collaboration and cooperation is a part of our ‘secret sauce.’ Each of these companies is a leader in its industry, and Utah is stronger today because each one has made the commitment to grow its workforce well into the future,” says GOED Executive Director Spencer Eccles.

Peterbilt of Utah will be adding 50 new full time employees over the next five years and each position will include full benefits. The company, which sells Peterbilt trucks, parts, and services from its dealership locations in Utah, Idaho, Colorado, and Nevada, will be paying out $43.6 million in wages during that time.

“After 35 years on 3rd West, the Jackson Peterbilt Group of Companies is excited to move its headquarters to 2100 South in Salt Lake City in 2013. The new flagship store will double the size of our current facility and office all support staff for our 10 other dealerships in Utah, Idaho, Nevada and Colorado. We express our sincere thanks to the State and city leaders that have the vision and forethought to encourage this type of growth. Their support has been pivotal in our decision to expand.”

In order to support its expansion Peterbilt of Utah will invest $12 million in capital improvements and will pay $2.5 million in new state tax revenue. The agreement with GOED as approved will offer the company a post-performance tax credit of $518,138 based on the company payment of its corporate income, payroll and sales taxes paid over the five year period of the agreement.

Schiff Nutrition International, Inc., a leading nutritional supplement company with headquarters, and manufacturing and distribution facility are based in Salt Lake City, expects to invest approximately $1.5 million in growth capital in Salt Lake City over the next several years.

During its six-year agreement with the State, Schiff will receive a $308,186 blended EDTIF post-performance tax credit for adding up to 100 new employees with full benefits. These new positions would add approximately $17.6 million in new state wages. Additionally, Schiff will receive post-performance training funds of up to $300,000 in a joint agreement with the Department of Workforce Services and GOED to extend  job training for up to 300 of its current employees.

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The digital media sector is developing rapidly, creating thousands of jobs as millions of pixels are aligned in the unbelievable images its artists generate for the latest feature films and video games produced by the multi-billion-dollar entertainment industry. While most of the workforce still is centered in traditional locations like California, Massachusetts and New York, several states have aggressively introduced incentives that are geared to jump-starting new digital media clusters. Among the emerging leaders in this thriving new industry are Utah, Louisiana, Rhode Island and Oregon.

Utah Aims for Digital Peak

In Utah, the digital media industry, which consists of businesses in animation, graphics, film and digital gaming, currently accounts for 1,500 jobs and $415 million in revenue for the state. But now, the goal is to double that by 2016.

In November 2011, the Utah Cluster Acceleration Partnership (UCAP) announced its strategy to double the number of digital media jobs and turn the industry into an $800 million contributor to Utah’s economy by focusing on the state’s unique creative and technology strengths. UCAP is an innovative effort in which Utah’s institutions of higher education become regional hubs of economic activity and the respective presidents become “regional economic stewards.”

“UCAP was started about three years ago,” said Gary Harter, managing director for the Utah Governor’s Office of Economic Development (GOED), which includes the Utah Clusters Initiative. “UCAP connects industry demands for skill sets today and skill sets necessary for the future.”

UCAP’s Utah Digital Media Cluster Report was finalized in fall 2011 after a collaborative effort between Utah Valley University, the Utah System of Higher Education (USHE), the Utah Department of Workforce Services (DWS), GOED and Grow Utah Ventures.

“The digital media industry is growing rapidly here in Utah,” said T. Craig Bott, president and CEO of Grow Utah Ventures. “The partnership’s goal with the digital media cluster strategy is to make Utah a ‘must connect to’ state for any business that hopes to succeed in the global digital media industry. We certainly have the talent and innovation here to make this happen.”

Many of the state’s colleges and universities are rapidly adding or expanding programs to meet the demand for educated workers in the industry. In Utah County, Brigham Young University has established a world-class digital media program that is sponsored by digital media giant Pixar. Through the program, BYU students have garnered numerous “Student Emmys” from the Academy of Television Arts and Sciences, as well as several “Student Academy Awards” from the Academy of Motion Picture Arts and Sciences.

Meanwhile, the University of Utah’s Entertainment Arts and Engineering video game development program, ranked second nationwide, represents one part of Utah’s flourishing video game industry that employs 600 people and generates about $242 million in revenue annually.

“The University of Utah’s game development program has been great for us,” said Ben Bell, Executive Producer at Electronic Arts (EA) Salt Lake City. “They have passionate faculty and we work closely with them on curriculum. We’ve had great luck working with them. It’s a really great asset that the state has with respect to the momentum of digital media.”

EA is one of the top producers of digital games in the world. Bell credits the state’s successful workforce as one of the reasons why the company chose to locate in Utah.

“In our industry we live and die by our talent,” said Bell. “We need great game creators and great business creators. Utah is home to an established talent pool. Essentially that’s why we are there, the talent is there.”

Utah’s success in digital gaming is showing. In addition to EA Games, the state is rife with blockbuster studios including The Walt Disney Co.’s Disney Interactive Studios, Epic Games Inc.’s ChAIR Entertainment Group, Silverlode Interactive and Smart Bomb Interactive.

In 2010, EA expanded to a larger, state-of-the-art, custom-designed studio in downtown Salt Lake City where it has produced several top-selling games, including The Sims brand, one of the most successful video game series of all time, and Hasbro’s Monopoly, Littlest Pet Shop and Nerf.

One of EA’s latest successes is its release of RISK: Factions Game for Facebook. The EA adaptation of Hasbro’s popular RISK game represents a brand new dimension in social gaming and the first major Facebook game to be developed in Salt Lake City.

“Social gaming is an important part of growth that’s happened in our industry,” said Bell. “With social games you need a blend of talent that includes creative, business and analytic skills. The great success story for us and I think for the state is that we were able to build a team that could deliver a competitive Facebook game and we did it in a market where we had never done it before.”

Another example of Utah’s success is Avalanche Software, which is known for creating the recent video game for Pixar’s “Cars 2” movie.

Avalanche was founded by four lead programmers from Sculptured Software in 1995. The company has developed for every console platform since the Sega Mega Drive/Genesis and SNES days and has grown to a staff of over 100 since its inception. The company is headed up by Vice President and General Manager John Blackburn.

“I started in the industry in 1992 as a programmer working on Super Nintendo games,” said Blackburn. “After a few years of programming, I co-founded Avalanche with a few friends. We mainly did conversions of coin-operated arcade games to the home systems initially, and then started to make our own original games after 2000.”

Since 2001, the company, which works primarily on kids and family titles, became a well-known developer of games such as Tak and the Power of Juju games for THQ (Toy Head Quarters) and Nickelodeon and Chicken Little for Disney. In 2005, Disney Interactive Studios, the interactive entertainment affiliate of The Walt Disney Company, announced its plans to expand its focus into the video gaming industry. The Walt Disney Company acquired Avalanche and created the Fall Line Studio in Salt Lake City.

Utah-based Avalanche Software created the video game for Pixar’s “Cars 2″ movie. (Photo: Avalanche Software.)

“The working relationship with Disney was good and they wanted to acquire developers to lock down talent in the industry, so it was a good match,” said Blackburn. “Working for Disney has been a great learning experience because we have been exposed to working with some of the most talented entertainment creators of our generation. Sometimes it is truly surreal.”

In addition to a healthy talent base, Blackburn says that Utah’s quality of life and location are attractive to digital media companies. “We are close to the west coast and most of the major publishers, but the cost of living is cheaper and quality of life is higher in many ways,” said Blackburn. “We have really good universities with excellent programs in computer science and computer arts that allow us to grow local talent.”

Although Utah’s digital media industry has a long way to go to reach the “critical mass” of entertainment capitals like California and New York, the state is certainly well on its way.

“Utah is now focusing quite a bit on workforce,” said GOED’s Gary Harter. “Through the UCAP initiative, we are making sure we are going toward where an industry needs to be. We want to meet their demands today but be forward-looking and meet their demands for the future.”

Louisiana Digital is Red Hot

Louisiana’s rich culture in creativity, film, music and television has been a natural fit for the development of an emerging digital media and technology industry. The state first began cultivating video game development in 2005 when it passed the digital media tax credit program, attracting major game developer EA Games to the state.

In 2009, Gov. Bobby Jindal and the Louisiana Economic Development (LED) office decided to shift its focus to the whole space of digital media, expanding the program’s definition of “digital interactive media” and making the program more effective for all digital companies. The program, which is now available to any type of software development for commercial sale, including national security and IT applications, offers a bottom-line savings in the form of a 25 percent tax credit for expenditures and a 35 percent tax credit for Louisiana labor.

An Oscar for Shreveport

Moonbot Studio, based in Shreveport, LA, created the Oscar winning interactive short, “The Fantastic Flying Books of Mr. Morris Lessmore.”

Moonbot, an animation and visual effects studio, has helped put its hometown of Shreveport, LA on the global digital media map. At the 84th Academy Awards™, Moonbot won an Oscar for Best Animated Short for its digital interactive storybook for children, The Fantastic Flying Books of Mr. Morris Lessmore.

Moonbot was founded in Shreveport in 2009 by William Joyce, a Shreveport-native who has worked for Disney/Pixar; Brandon Oldenburg of Reel; FX Studios, an award-winning design, visual effects, animation and entertainment studio; and Lampton Enoch of GWave Productions, a company which produced a slate of television movies for the Disney Channel and ABC Family.

In 2009, after bouncing back and forth between two coasts for work, Joyce decided he’d spent enough time on the road and was determined to find a way to base his work in his native Shreveport. It was then that he started Moonbot with Enoch and Oldenburg and Mr. Morris Lessmore was born.

“The idea for the story started with longtime children’s books publisher William Morris, Joyce’s mentor at HarperCollins,” said Enoch. “Joyce wrote this little story about a guy who gives his life to books on a flight en route to visit Morris. He read it to him when he went to see him and then Morris died just a few days after that. That story became the film, and it was also inspired in equal measures by Hurricane Katrina, Buster Keaton, The Wizard of Oz,and a love for books.”

The company credits the state’s FastStart workforce training program and digital media incentives for helping get their story off of the shelves and onto the screen. “Much of what has allowed Moonbot to flourish creatively can be attributed to the company’s strong local support, including LED’s FastStart program,” said Oldenburg. “We can’t emphasize enough how much the support of LED and the Shreveport community has helped to get Moonbot where it is in such a short time. With the support of State incentives and workforce training programs, we’ve been able to build a strong team of talented artists and storytellers and have far exceeded our expectations for what we could accomplish in our first months of business.”

The company was in the middle of production on Mr. Lessmore when Apple announced the new iPad. Moonbot used FastStart to help quickly train their programmers to learn the new technology in order to turn the children’s tale into an iPad App. Within weeks after they released the App, Mr. Lessmore soared to the top tier of Apple’s most popular apps for iPad.

“The app for ‘Morris Lessmore’ came about almost by accident, well into production on the short film and book, when the iPad was introduced, and filled a previously unarticulated void,” said Oldenburg. “It wasn’t a book and it wasn’t a movie—it was something in between. We had been wanting that, but not knowing what that was. The filmmakers found it to be a fitting way to stretch the multimedia potential of Morris Lessmore.”

A digital artist at Moonbot puts the finishes touches on a frame of the shop’s award winning animated short.

Moonbot is currently housed in the BioSpace 1 building in Shreveport’s InterTech Science Park, home to several of the area’s newest high-tech companies. The studio’s latest project is “The Numberlys” featuring a black and white aesthetic inspired by Fritz Lang’s silent film, “Metropolis.” The interactive storybook app offers a unique cinematic experience and innovative game play to engage users in an imaginative, interactive story about the origin of the alphabet.

“We envision the future of storytelling is a whole new class of interactive content that transcends traditional boundaries between traditional film and written text,” said Enoch.

“Our vision is to transform the art of story-telling into a multimedia experience. Working on so many versions of the same story at once may sound a little nuts, but the multi-platform approach has been the key to becoming a viable company.”When asked what they would tell other digital media companies about Louisiana, Oldenburg and Enoch both echoed the same sentiment: “Come on down!”

“We feel like the more the merrier,” said Oldenburg. “We have already collaborated with several local companies which has led to some amazing results. You won’t find a more supportive state and the Louisiana Economic Development department is phenomenally proactive.”

The LED also has implemented strong incentives for technology and film growth through its Technology Commercialization Tax Credit and the Louisiana Motion Picture Investor Tax Credit, as well as best-in-nation workforce and job training incentives through its FastStart and Quality Jobs Programs.

These incentives have helped to create thousands of new jobs in the state and catapult the region to the forefront of a rapidly growing digital media industry. Between 2001 and 2007, employment at Louisiana digital media firms—which include Smartphone App and video game designers, software developers and more—grew 9 percent, according to a 2009 report by the firm Economics Research Associates.

“Digital media and software development is at the top of our targeted growth industries,” said Stephen Moret, Secretary of LED. “We’ve been working hard to cultivate it, it’s a great fit for Louisiana and we are experiencing a lot of success right now.

Louisiana’s digital media industry is one of the fastest growing in the nation, growing at a rate of more than 100 percent, according to Moret. The state has almost 19,000 skilled software developers and more than 100,000 professionals with a skill set conducive to digital media or software development. In addition, its information sector, including software publishing and telecommunications, has experienced the second fastest growth rate in the country since June 2009.

“What’s really exciting is that it’s happening all over the state,” said Moret.” Essentially we’ve got significant digital media and software development and telecommunications activity in roughly five cities: Baton Rouge, New Orleans, Shreveport, Monroe and Lafayette.”

Baton Rouge—Creative Capital of the South

Known as the “Creative Capital of the South,” Baton Rouge has attracted development studios such as Electronic Arts, Firebrand Games, Crawfish Games, Nerjyzed Entertainment, BitRaider MMO. Now, the city will soon be home to a new international Academy Award-winning visual effects studio, Pixomondo.

In February 2012, Pixomondo announced it is investing $1.2 million to open shop in Baton Rouge’s Celtic Media Centre, a state-of-the-art movie studio.

Pixomondo won an Oscar for Best Visual Effects (VFX) at the 84th Academy Awards for Martin Scorsese’s 3D epic-adventure, Hugo. The film, which is based on Brian Selznick’s novel The Invention of Hugo Cabret, is about a boy who lives alone in a Paris railway station and the enigmatic owner of a toy shop there. The company completed more than 800 shots as the primary visual effects vendor on the film.

Opening in May, the Pixomondo Baton Rouge studio will be the German company’s 12th international location. Annual salaries will average more than $65,000, plus benefits, and Pixomondo will hire 50 people in its first year, expanding to 75 by the end of its second year. The project will result in the creation of 49 indirect jobs, the LED estimates, for a total of more than 120 jobs.

“Pixomondo already operates a dozen VFX studios worldwide and they could have chosen anywhere to create a new studio,” Gov. Jindal said in a press release. “Their decision speaks volumes about how far Louisiana has come when it comes to improving our business climate and providing competitive incentives.”

Founded by CEO Thilo Kuther in 2001, Pixomondo offers 24/7 visual effects production and supervision, CG character creation, 3-D animation and pre-visualization for the feature film, television and commercial industries. The company has created visual effects for more than 30 feature films, including Journey 2: The Mysterious Island, Red Tails, Sucker Punch, Super 8, Fast Five, Percy Jackson, The Olympians: The Lightning Thief, 2012 and Hugo. The company is currently in production on VFX for Snow White and the Huntsman, The Amazing Spiderman and TV series that include Game of Thrones, Terra Nova, Hawaii Five-O and Grimm.

The state began working with Pixomondo six months ago to gauge the company’s interest in establishing a visual effects studio that could partner with major movie and TV productions in Baton Rouge and Louisiana. The company was drawn to Louisiana due to its rapidly growing film industry, as well as generous LED incentives including digital media and film production tax credits, FastStart and the Quality Jobs Program.

“Opening an office in Baton Rouge fits perfectly with our overall company vision,” said CEO Kuther. “Louisiana offers a very generous production tax credit that we can pass on to our clients to bolster our project load as well as growing teams in Los Angeles, London and Germany—not to mention China and Canada. Baton Rouge is a beautiful city with a wealth of resources. We’ve already connected with the Louisiana State University computer science department to help set up remote render farms and virtualization with our other studios.”

Digital Marches into NOLA

New Orleans is undergoing an economic renaissance—and digital media is playing an integral role.

Companies drawn to New Orleans include Firebrand Games, a critically acclaimed video game development company currently working on titles for the Nintendo DS and Wii, and Fortune 500 company CenturyLink, the third-largest telecommunications company in the U.S.

At the same time, the city has attracted GE Capital’s new technology office, adding hundreds of jobs to the local workforce. After examining hundreds of locations for its new project, the company announced it is choosing New Orleans.

“When selecting a location for a center of this importance, we considered many attractive options across the country,” said Brackett Denniston, GE Senior vice president and general counsel. “Louisiana rose to the top of our list because of the advantages it offers in terms of talent, infrastructure, location and environment. Gov. Jindal and the Louisiana delegation presented a compelling case for locating in Louisiana.”

Denniston said cooperation between the state and the company helped make the project a reality. “We are thrilled to be part of what is rightly called the renaissance of New Orleans” said Denniston. “This is one of America’s signature cities, and we wanted to be a part of that.”

The state began cultivating IT-related economic development opportunities with GE in late 2010, and those efforts intensified in collaboration with local partners Greater New Orleans (GNO) Inc., the New Orleans Business Alliance and the New Orleans Mayor’s Office in 2011 as GE Capital was conducting a nationwide search for its new IT Center of Excellence. The center, which is expected to open by mid-year, will focus on developing software, processes and technology for the GE Capital financial services arm of the company.

New Orleans also attracted Paris-based Gameloft, one of the world’s largest publishers of digital and social games, to establish a major new game development studio in New Orleans, creating 146 new high-paying jobs over the next decade.

Gameloft credits the LED’s FastStart as one of the major reasons it decided to locate in New Orleans.

“Over the last 10 years, we’ve sold over 200 million titles, said David Hague, Studio Manager of Gameloft, on LED’s website. “We’ve calculated that we sell three games every second. What FastStart does is make sure we have the people that will help us create a great game. FastStart comes in and says I understand how you recruit and the type of person that you are looking for, your corporate culture, and tailors that perfectly.”

According to Hague, New Orleans emerged as the front-runner among many other sites not only because of the state’s strong digital media and workforce incentives, but also because it offers a quality of life and lower cost of living and doing business, which is important in a globally competitive market.

“Throughout the search process, we went through a lot of the gaming technology hubs of the U.S.,” said Hague on the LED’s website. “Last on our list was New Orleans. After being here for just under 24 hours I quickly realized that this was a city where we would be able to pull a workforce to have a great cost of living and a very fun lifestyle when people aren’t at work.”

“Gameloft was worried that they couldn’t attract the same number of applicants to their studios compared to New York and California,” said Moret. “Yes, we are smaller, but what we lack in size we make up for in exceptional targeted resources for recruitment and training. It turned out that they had the same quality and number of applicants for their New Orleans studio as they did in NYC—and NYC is a vastly bigger pool.”

According to Hague, the state‘s customized solutions got the company running in half the time.

“We’re really starting to create a hub that can really grow to become one of the meccas that you see in some of the other large cities in the U.S.,” said Hague. “These jobs are here and they’re here to stay.”

Rhode Island’s Winning Pitch

In 2004 and 2007, pitching ace Curt Schilling helped the Red Sox win the World Series. He is now taking aim at the video game industry and has picked Providence, Rhode Island as the home for his hot new video game studio, 38 Studios.

“The staff at 38 Studios is incredibly excited about our relocation to Providence and we expect to be the first of many relocating knowledge-economy companies that will take advantage of the opportunities Rhode Island provides,” said Jen MacLean, chief executive officer of 38 Studios, in a press release. “Providence has some of the best students in the nation, a vibrant arts community and a dynamic urban environment with easy access to public transportation.”

In February 2012, 38 Studios released its first game, Kingdoms of Amalur: Reckoning, which became the No. 4 best-selling video game and the only new franchise to crack the top ten, according to consumer market research group NPD.

The company is located in downtown Providence’s “Knowledge District”—an area with a strong creative and arts culture and in close proximity to internationally recognized schools such as the Rhode Island School of Design, The University of Rhode Island and the New England Institute of Technology. The gaming company also has a second studio in Maryland for its Big Huge Games subsidiary.

The state was able to lure 38 Studios to the state thanks to Rhode Island’s Job Creation Guaranty Program, which authorizes the RIEDC to use up to $125 million in loan guarantees to facilitate critical economic development projects.

38 Studios is receiving $75 million through the loan guarantee program and in turn will employ 450 people in the state by late 2013.

“The program is one piece of a state strategy to build Rhode Island into a leader of innovation, into a world-class incubator for 21st century growth industries,” said KeithStokes, executive director of the Rhode Island Economic Development Council (RIEDC). The addition of 38 Studios to Rhode Island’s growing knowledge economy is a critical step in further developing the state’s digital media sector, Stokes said.

“As an ‘anchor tenant’, 38 Studios will be a magnet for other related businesses that will set up shop here and generate thousands of additional jobs in our state,” he said.

Another anchor tenant to set up in downtown’s Knowledge District is Hasbro, a top-selling toymaker turned digital media conglomerate.

In July 2011, Hasbro announced it is expanding into a 136,000 square-foot facility in downtown Providence. The $24 million project will bring at least 284 full-time jobs within the first three years with annual wages averaging $80,290.

The RIEDC conferred “Project Status” on Hasbro, making the company eligible for a sales tax exemption on the purchase of construction materials and equipment and other items such as furniture and computers related to its expansion in Providence.

“As Hasbro continues to grow and evolve, we are excited about expanding our presence not only in Rhode Island but in the Capital City of Providence as well,” said Brian Goldner, CEO of Hasbro, in a press release. “Rhode Island has been our home since 1923 and we look forward to remaining an active and important part of this community.”

Hasbro’s expansion is part of the company’s continued emergence as a branded play company. No longer just a toy and game company, Hasbro is creating global experiences for its consumers with its brands like Transformers, Littlest Pet Shop, Nerf, Monopoly and G.I. Joe into a wide range of areas including film, digital gaming, licensing and television.

“Hasbro has transformed itself for the 21st century as a branded play and multi-platform entertainment company,” Stokes said in a press release. “So too will the larger Knowledge District area in Providence with the addition of another powerful anchor institution acting as a magnet for the strong digital media and IT cluster already in place.”

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