Biotech: Finding the Formula for Growth | Business Facilities - Area Economic Development, Site Selection & Workforce Solutions

The U.S. lead in biotechnology no longer is a sure thing as growth leaders like China and India join the fray. Government, industry and academia must join forces to remain No. 1.
The U.S. lead in biotechnology no longer is a sure thing as growth leaders like China and India join the fray. Government, industry and academia must join forces to remain No. 1.

Biotech: Finding the Formula for Growth

Biotech: Finding the Formula for Growth | Business Facilities - Area Economic Development, Site Selection & Workforce Solutions

The U.S. lead in biotechnology no longer is a sure thing as growth leaders like China and India join the fray. Government, industry and academia must join forces to remain No. 1.

Late last month, a panel of biotechnology industry leaders appeared before the U.S. Congress’ Joint Economic Committee to urge congressional action to maintain America’s leadership position in biotech and the 21st century innovation economy.

There was good news and bad news in the industry’s assessment of biotech in the U.S.: On the one hand, the leaders lauded the astounding breakthroughs that have transformed biotech into a thriving growth engine for the U.S. economy; however, they also cited some disturbing trends warning that our lead may be slipping away.

Testimony at the Congressional hearing in May indicated that U.S. biotech companies are facing financial uncertainty at the same time that other countries are increasing their investments and enacting intellectual property protections to encourage domestic biotech growth. We still hold our place as the leader in global biotechnology patents thanks to our large head start, but China and India rank first and second in biotech patent growth. These emerging powers are heavily investing in science, and particularly in biotechnology.

Meanwhile, the U.S. has fallen to 20th out of 23 countries in new biotech patent applications. Additionally, many countries in Western Europe are implementing biotech-friendly tax incentives, including lower corporate tax rates for innovative industries, as a means to grow their 21st century economies. This lag has put the U.S. at risk of losing our place at the forefront of this important and innovative economic growth sector.

It takes an estimated 8 to 12 years for one of the companies developing breakthrough treatments to bring a new therapy from discovery through Phase I, Phase II and Phase III clinical trials and on to FDA approval of a product. The entire endeavor costs between $800 million and $1.2 billion. Due to this capital-intensive process, biotechnology companies lacking research and development funds turn to private sector investors and collaborative agreements to finance the early stages of therapeutic development.

However, the current economic climate has made private investment dollars extremely scarce. In 2010, venture capital fundraising endured its fourth straight year of decline and its worst since 2003. Biotechnology received just $2 billion in venture funds, a 27 percent drop from its share in 2009. Even worse, the biggest fall was seen in initial venture rounds, which are the most critical for early-stage companies. Series A deals last year brought in just over half of what they did in 2009. Decreasing upfront investment could mean cures and therapies being shelved in labs across the nation and ultimately not reaching patients.

There also has been a dearth of initial public offerings for biotech companies in the past two years. However, companies today with groundbreaking research do not have the same support on the public market. From 2004 to 2007, the United States had an average of 34 IPOs in biotechnology per year. From 2008 to the first quarter of 2010, that number dropped to a total of 8. While the numbers have ticked up slightly this year, the weak demand for these offerings is restricting access to capital. This then hampers critical research and depresses valuations of later-stage venture rounds, biotech leaders told Congress.

This is problematic for two key reasons, they said: first, it means that the early investors, generally angels or venture investors, cannot sell their shares. That means that they cannot return their initial capital or make any return to their limited partners, who are primarily large institutions such as public pension funds or endowments. Second, it means that companies are unable to access the considerable resources available in the public markets.

Speaking on behalf of the Biotechnology Industry Organization (BIO), Arthur Sands, president and CEO of Lexicon Pharmaceuticals, Inc., told the Joint Economic Committee at the May 25 hearing that urgent government action is needed to maintain America’s lead in biotech.

“Congress’ support for biotechnology is critical in this uncertain economic climate,” Sands said.

Sands lauded several recent federal legislative initiatives designed to boost the biotech boom in the U.S., including The Life Sciences Jobs and Investment Act, introduced by Sen. Bob Casey of Pennsylvania, which would incentivize research and investment in the life sciences industry on a targeted basis. Under the bill, a taxpayer engaged in the life sciences could elect an increased R&D tax credit for their first $150 million spent on life sciences research. The taxpayer also would have the option to return up to $150 million of foreign earnings to the United States free of taxation in lieu of the increased R&D credit.

The repatriated funds would be earmarked specifically for investment in new jobs, and would have to be kept in a special account or trust, to be disbursed only for permitted activities. Through this legislation, biotechnology companies would have the resources necessary to hire additional scientists and researchers, increase partnering with American universities and invest in new research facilities.

Sands also cited the recently introduced American Research and Competitiveness Act, which would support and foster the creation of the high-wage jobs associated with R&D in the biotechnology industry by strengthening and making permanent the R&D tax credit. A permanent R&D credit would provide greater certainty and assist American biotechnology companies as they plan future research investments in the U.S. The legislation also would increase the Alternative Simplified Credit (ASC) rate to 20 percent, making U.S.-based R&D more attractive relative to the research incentives offered by many foreign governments seeking to foster their own biotechnology industries.

On behalf of BIO, Sands made a pitch for Congress to extend the type of tax credits it offers high-risk sectors like oil and gas exploration to the biotech industry.

“Research and development in the biotechnology industry is a high-risk undertaking with substantial start-up costs, a lengthy R&D period and the possibility that the technology will not be commercially viable,” he said. “The challenges that smaller oil and gas corporations face in finding and developing new resources and diversifying risk are analogous to the hurdles that small biotech companies must overcome. These companies expend substantial financial resources on research and development before successful FDA approval.”

Sands continued, “As Congress looks to continue America’s leadership in the 21st century innovation economy, it should look to tax incentives available to the oil and gas industry that would be equally beneficial to the biotechnology industry. These incentives, when combined with the research and development tax partnership structure, would encourage investment in the biotechnology sector.”

For example, he noted, allowing biotech companies to drop their R&D projects into joint ventures with investors to provide tax benefits to those investors would create a powerful incentive structure for private investment in this high-risk industry.

Sands also suggested that Congress follow the example set by more than 20 states that have implemented angel investor tax credit programs, in which high-net worth individuals are incentivized to invest in small innovative businesses.

“Angel investors play a valuable role during the seed stage of therapeutic development,” Sands said. “They are the main source of capital for about 50,000 companies each year, but that number could decrease significantly unless action is taken to promote investment and minimize risk. The states have recognized the importance of angel investors and implemented tax credit programs reimbursing angels for 25 percent to 50 percent of their qualified investments in biotechnology and other small businesses. This investment by the states makes clear the important impact that innovation can have on the national level.”

Last March, Congress enacted the Therapeutic Discovery Project (TDP), a tax credit program in which small biotech companies received a much-needed infusion of capital to advance their innovative therapeutic projects while creating and sustaining high-paying, high-quality American jobs. In total, the Therapeutic Discovery Project awarded $1 billion in grants and tax credits to nearly 3,000 companies with fewer than 250 employees each. These small companies were eligible to be reimbursed for up to 50 percent of their qualified investment in activities like hiring researchers and conducting clinical trials. The impact of this funding was felt across the American biotech industry, as companies in 47 states received awards. The average company received just over $200,000, an important shot in the arm in these rough economic times.

In the uncertain national economic environment, the most successful state biotechnology initiatives are being engineered as cooperative efforts between industry and academia, with government playing an organizing role and lending a helping hand with R&D seed money. Here is a sampling of some of the more innovative and successful efforts.



In Kansas, a burgeoning Animal Health Corridor is expanding so fast the Kansas Bioscience Authority has decided to invest $1 million in a consortium that will act as a “high-speed lane” to link business, academia and government development efforts.

KBA approved the seed money to establish a public-private consortium called the National Center of Animal Health Innovation. This center of innovation will bring nine area animal health companies, plus regional universities and government agencies, together to accelerate job creation, research, development and commercialization of the next generation of animal health and nutrition products.

“The Center of Animal Health Innovation will effectively serve as a filling station for the pipeline of animal health companies,” said Tony Simpson, KBA director of commercialization. “Identifying new technologies is expensive and time consuming for animal health companies. For entrepreneurs and universities, getting their discoveries into these large companies can be a big challenge.”

“These new technologies often need an industry perspective to mature them before a company will invest,” Simpson added. “The Center will help companies identify and refine promising new technologies, while helping researchers find someone to partner with to commercialize the new technologies they’re developing.”

The Center’s seven-person board of directors seats members from five leading animal health companies, including board chairman, Dr. Wayne Carter, vice president-global research for Hill’s Pet Nutrition. Paula Stack, the Center’s interim CEO, sees this as a competitive advantage. Established animal health companies can provide researchers an industry-driven perspective on the types of products the industry needs and those that have the greatest potential, she said.

“Our efforts are focused on promoting this synergy between academic and industry partners,” Stack said. “The Center’s primary role is to help accelerate the development and commercialization of new technologies that will positively impact the animal health industry.”

Kansas State University’s leadership role in animal health and animal disease research made the school’s new Olathe campus the right location for the new Center, according to Dr. Dan Getman, president of the Kansas City Area Life Sciences Institute. Getman was instrumental in bringing the region’s animal health companies together to recognize the Center’s potential and provide the needed expertise that shaped the proposal for the KBA.

Initially, Stack and her board will be busy establishing the Center’s operations and recruiting a scientific advisory board of “best-in-class” people that will review and assess new technologies, both from a science and a business perspective. In addition to Simpson, Getman and Carter, the board includes Dr. Ernst Heinen, vice president, research and development, Bayer Animal Health; Mark Metrokotsas, president and CEO, Centaur; Dr. Kristi Moore Dorsey, vice president, research and development, CEVA/Biomune; and Dr. Edward Robb, vice president, research and development, Boehringer Ingelheim Vetmedica, Inc.

Participating companies at the Center will include Bayer Animal Health, Boehringer-Ingelheim Vetmedica, Centaur, Ceva Biomune, Hennessey Research, Hill’s Pet Nutrition, Intervet/Schering Plough, Nestle/Purina and Teva Animal Health. Participating universities, organizations and government agencies are expected to include: University of Kansas, Kansas State University, University of Missouri, Midwest Research Institute, U.S. Department of Agriculture Research Services, USDA Animal and Plant Health Inspection Service, FDA Center for Veterinary Medicine, National Bio and Agro- Defense Facility (NBAF), Morris Animal Foundation, National Institute for Strategic Technology Acquisition and Commercialization (NISTAC) and others.

In its first year, the Center plans to complete a strategic plan that will clearly define the Center’s mission, vision and value proposition. Additional funding will be based on the achievement of these and other key milestones.

The Center and its goals fit like a glove with the region’s focus on animal health. More than 120 companies representing at least $7 billion of the $19 billion global animal health market are clustered between Manhattan, KS and Columbia, MO. The region has the largest single concentration of animal health companies in the world.

The National Center for Animal Health Innovation is the fourth “center of innovation” the KBA has initiated and funded. The other Centers include the Kansas Alliance for Biorefining and Bioenergy; the Center of Innovation for Biomaterials and Orthopaedic Research; and Heartland Plant Innovations. The centers are led by industry and link research assets and industrial partners to develop new innovative products and create jobs.

Also moving forward in Manhattan, KS is the crown jewel of the state’s biotech hub, the $650-million National Bio- and Agro-Defense Facility (NBAF). Congress recently authorized $40 million in first-phase development funding for the project, which will become the nation’s premier biodefense lab, replacing a 50-year-old facility on Plum Island in New York.

“We understand the difficult economic climate our nation faces today. That’s why we appreciate even more the resolve and commitment of the Department of Homeland Security to fund the NBAF. There is no question that a safe and secure food supply for every American is a national priority of the highest order,” said KBA Chairman John Carlin.

The NBAF will be a highly secure biosecurity level 3 and 4 facility on the Kansas State University campus where top government scientists and researchers will study foreign animal, emerging and zoonotic (transmitted from animals to humans) diseases that threaten the U.S. animal agriculture and public health.

“NBAF will provide and strengthen our nation with critical capabilities to conduct research, develop vaccines and other countermeasures, and to train veterinarians in preparedness and response against these diseases,” Carlin said.

“Beyond its immediate scope and mission to protect our nation’s food supply, the NBAF will be a major economic driver for this region and the State of Kansas. Starting with the construction of the $650 million facility and continuing with the ongoing employment of a highly educated workforce, the NBAF’s economic impact on Kansas will be significant, estimated at up to $3.5 billion in the first 20 years of the facility’s use,” he added. “Additionally, the NBAF will serve as a magnet for private industry. It will attract new jobs as private biotechnology companies, professionals and support infrastructure aligns to capitalize on the concentration of animal health and plant science assets in the state.”

NBAF will serve as the nation’s premier research center for combating agriculture’s vulnerability to naturally occurring diseases or agro-terrorism. Several reports, including the Congressional report entitled The Clock is Ticking, conclude that the most imminent threat to our nation’s homeland security is a biological attack.

“Now that funding for the central utility plant is approved, KBA will work closely with the Kansas delegation and others in Congress to secure approval of the $150 million proposed for the project in President Obama’s FY 2012 budget,” Carlin said. “Above all else, NBAF is about protecting America’s dinner table and our nation’s agriculture economy, but it’s also about jobs and economic vitality of our state for many years to come. NBAF will attract and retain highly educated, well-paid workers as well as support businesses that will cluster around Manhattan and elsewhere in Kansas. This is an economic engine that will pay dividends for generations of Kansans.”

Other recent project developments funded by KBA include:

• KBA is investing $1.5 million in support of Kansas State University’s construction of the Feed Technology Innovation Center on the Manhattan campus. The planned facility will be jointly shared by the University’s Grain Science and Industry and Animal Science and Industry departments and will provide for production, research, teaching and laboratory facilities to study the impacts of nutrition on animal health and disease. The facility is expected to cost $13.8 million to construct and equip.

• KBA awarded $500,000 to Evogen, Inc., a Kansas City, MO-based device and diagnostics company, to support the relocation of its facility to Olathe, KS. The company plans to invest approximately $1.8 million in its new facility over three years.

• Abaxis Veterinary Reference Lab (AVRL) will receive $650,000 over three years to launch the first centralized nationwide veterinary reference lab, which will offer a wide range of diagnostics to veterinary customers in the companion animal health industry. Currently based in California, AVRL has selected local entrepreneurs to start the company, and an existing site in Olathe to build out for its laboratory facility.

• Immunogenetix Therapeutics, Inc. (IGX) of Lenexa will receive up to $428,070 to perform key preclinical studies in collaboration with Kansas companies Xenometrics, LLC and Beckloff Associates, Inc. This funding will allow IGX to advance GenePro™, the company’s lead DNA therapeutic HIV vaccine, through the necessary preclinical studies to an application with FDA to initiate Phase I clinical trials.

• OsteoGeneX of Kansas City, Kan. will receive $450,000 as a partial match to a grant from the Israel-U.S. Bi-national Industrial Research and Development Foundation (BIRD). The grant will allow OsteoGeneX to work with Nextar Chempharma Solutions Ltd., an Israeli Contract Research Organization. The KBA grant will support the studies necessary for successful drug selection and optimization for OsteoGeneX’s spinal fusion and fracture repair medical device development program.

• Pinnacle Technology, Inc. of Lawrence will receive $424,895 over three years as a partial match to the company’s Fastrack NIH SBIR Phase I/II grant. Pinnacle specializes in wireless, web-enabled, brain/neurological biosensors, data acquisition and biotechnology products for the pre-clinical research market.

Priority: Skilled workforce

In addition to research and development facilities that offer a high-speed lane to commercialization, Kansas also is staking out a leading position in biotech workforce training. Kansas State University’s Biosecurity Research Institute (BRI) recently became the National Biosafety and Biocontainment Training Program’s first designated training facility in the nation.

“When the BRI was designed, we knew it wouldn’t be enough to build a facility focused exclusively on research needs,” said Ron Trewyn, K-State’s vice president for research. “Those charged with performing the research and working in the facility must also be adequately prepared to conduct their tasks in a safe manner.”

BRI, at K-State’s Pat Roberts Hall, is the only biosafety level-3 biocontainment research and training

facility in the U.S. that can accommodate high-consequence pathogen research on food animals, food crops and food processing under one roof, which allows for a more comprehensive research approach. Pat Roberts Hall is also equipped with an integrated training suite that includes a classroom and mock lab, as well as a large auditorium and advanced video capabilities.

Murray L. Cohen, president of the Frontline Healthcare Workers Safety Foundation, which serves as the government contractor for the National Biosafety and Biocontainment Training Program, noted the vision it took to pull together a facility like the BRI.

“Kansas State University, through the Biosecurity Research Institute, has shown bold foresight in planning for biosecurity and food security matters,” he said. “This facility is unparalleled and unsurpassed. It took at lot of vision and gumption to move forward and put this together while a lot of folks were simply talking about what is needed.”



Training also is a top priority in North Carolina, which has emerged as the nation’s third largest biotech industry with more than 520 bioscience companies, contract research organizations and device and life science-related companies. More than 58,000 workers with skill sets ranging from bioprocess technicians to PhDs are employed by this sector. The annual salary for entry level technicians starts at $25,000 to $30,000 and can potentially rise to $50,000 within 5 years. The average salary for all biopharmaceutical manufacturing jobs is $69,000. Biotechnology companies generate about $4.5 billion in annual revenue in North Carolina. Biotechnology employees represent a payroll of $1.7 billion and around $176 million in state income taxes.

Pitt County in particular offers tremendous assets to the growing biotechnology and life sciences industries in North Carolina. From training in bioprocessing to a research-intensive university setting, this location rivals others for its amenities coupled with a lower-cost business climate.

To help meet the industry’s ongoing need for trained professionals, North Carolina has created a comprehensive biotech training program partnering with government and academia through the North Carolina Biosciences Organization.

BioNetwork supports the mission of the North Carolina Community College System aligning world-class workforce training and education to the biotechnology, pharmaceutical and life science industries. BioNetwork trains at all levels of this industry, upgrading the skills of incumbent workers, from entry level to management.

The Biotechnology Center was created in 1984 and works to strengthen the research capabilities of North Carolina’s companies and universities. The center’s mission is to provide long-term economic and societal benefits to North Carolina through support of biotechnology research, business, education and strategic policy statewide. The Eastern Office of the North Carolina Biotechnology Center (, located in Greenville, is catalyzing economic development and job creation in the region.

The region is home to several large biopharmaceutical production facilities, including one of the largest contract manufacturing facilities in North America, operated by DSM Pharmaceuticals. DSM Biologics, a business unit of DSM Pharmaceutical Products, recently announced a contract with NKT Therapeutics, Inc. based in Waltham, MA, a biotechnology company that focuses on developing therapeutics based on unique immune cells called natural killer T (NKT) cells. The contract covers the process development and cGMP manufacturing by DSM of their lead product, iNKT mAb. NKT cells are a central part of the human immune system. Upon exposure to microbial and viral pathogens NKT cells secrete high levels of specific cytokines which stimulate the immune system to eliminate pathogens.

“We are delighted to be working with NKT Therapeutics from our European biomanufacturing operations located in Groningen, the Netherlands. We are truly honored to be supporting their first clinical program from our cGMP operations,” said Karen King, president of DSM Biologics. With a range of mammalian bioreactor sizes from 50 liters up to 1000 liters and, process and analytical development capabilities, DSM offers development and production flexibility combined with economy.”

The state legislature created the Biofuels Center of North Carolina in 2007 with the mission of developing a statewide biofuels industry. The Center, which is a private, nonprofit organization, received an initial appropriation of $5 million and has continued to receive operating support from the state. The Center awards funds on a competitive basis to academic institutions, economic development organizations, and nonprofit organizations to identify and bridge gaps in knowledge and information, speed development of technology to industry, and create a seamless continuum from agriculture to transportation fuels.

An estimated 5.6 billion gallons of petroleum-based liquid fuels are consumed in North Carolina annually. According to the state’s Strategic Plan for Biofuels Leadership, adopted when the Biofuels Center was created, “North Carolina is well-advised to gain internal capability for production of a measurable percentage of its liquid biofuels consumption. Doing so reflects increasingly strong national and federal mandates, and is also mirrored by other states—many of which are targeting biofuels development far more aggressively and measurably than North Carolina. More importantly, gaining increased internal biofuels capability is eminently feasible in this State in coming decades. North Carolina is remarkably well-positioned to shape science, biotechnology, agricultural and biomass resources, smart participants and policies into an internally strong biofuels sector.”

The first-ever census of biofuels employment across the state found a larger number of jobs than was expected so soon for a new and emerging sector. According to the survey, recently conducted for the Biofuels Center of North Carolina by third-party market research firm Bioscience Information Partners, 443 people statewide are actively involved in biofuels research, biomass growing, technology development, production, distribution, workforce development and education and other supportive roles.

“Results reveal a sound footing for North Carolina’s new biofuels sector,” said Biofuels Center President and CEO Steven Burke. “Having 443 jobs already, with anticipated future growth of respondents, verifies the state’s smart policy commitment to gain large capacity for alternatives to imported petroleum-based liquid fuels. More jobs will come, as will millions of gallons of liquid fuels.”

Sixty-two public, private and industry organizations completed the survey. Despite challenging economic factors, 97 percent of survey respondents expect their respective organizations to maintain or ramp up biofuels-related employment in the next 12 months.

The Biofuels Center of NC recently awarded $1.6 million for 15 projects statewide to accelerate the commercialization of renewable liquid fuels. Awards were made through the 2011 Statewide Biofuels Development Grants Program.

CEO Burke affirmed the value of both the large number of proposals and those awarded. “The juncture of new energy and new agriculture requires smart ideas and practical commercial outcomes. The 15 awarded projects-encompassing rural communities and woody biomass, technology and municipal solid waste-verify the competence, scope and remarkably rapid development of this new sector statewide,” he said.

Strengthening and funding capabilities statewide for biofuels commercialization is a prime task within the Center’s legislative and policy mandate, and key to development of sector leadership, economic return, and meeting the state’s goal: by 2017, 10 percent of North Carolina’s liquid transportation fuels will come from biofuels grown and produced within the state.

The Center received 58 pre-proposals totaling more than $5.2 million from 23 institutions following its December 2010 request for proposals. Emphasizing commercialization, the program sought projects targeting three areas:

• County or regional analyses of assets available for site location of biofuels companies

• Needs analyses and plans for the conversion of municipal waste into biofuels

• The growing of energy grasses in the North Carolina Piedmont region

The awarded projects will impact 60 counties and will in various ways address biofuels ranging in variety from biogasoline and bioethanol to FT diesel and biomass-derived jet fuel. Expert panels comprised of industry, non-profits and state agency representatives reviewed the applications in a competitive process and made funding recommendations for approval by the Biofuels Center Board of Directors.

Four regions of the state will work with forestry consultants to assess the availability of woody biomass in their respective regions. The strategy is a three-phase approach that will provide a regional assessment suggesting the optimum two sites per region, the validated infrastructure required for a biofuels production facility and a detailed woody biomass assessment for the selected sites.

North Carolina has a leading, specialized and growing bioscience industry. Among four major subsectors quantified in the comprehensive 2010 report by BIO and Battelle, the state has a specialized employment concentration in three—drugs and pharmaceuticals, research, testing and medical laboratories and agricultural feedstock and chemicals. Academic bioscience research and development expenditures totaled $1.52 billion in 2008, and have grown faster than the national rate. The largest academic R&D categories were medical sciences ($834 million) and biological sciences ($510 million). Both academic bioscience R&D and research funded by the National Institutes of Health are highly concentrated in North Carolina with per capita research funding ranking near the top among all states.

The state’s biomedical institutions hosted 732 active clinical trials in 2009. Bioscience venture capital invested in North Carolina bioscience companies during the last six years totaled $1.76 billion, focused heavily in human biotechnology, followed by medical therapeutics and pharmaceuticals. Drugs and pharmaceuticals led the 2,307 bioscience patents issued during the same period.



South Dakota has specialized employment concentrations in two of the bioscience industry subsectors—agricultural feedstock and chemicals and medical devices and equipment—and job growth across all four subsectors. Academic research and development expenditures in the biosciences also have grown rapidly, up 70 percent since 2004 to a total of $61.3 million. Academic R&D was led by agricultural sciences and medical sciences. The 55 bioscience patents issued to South Dakota inventors during the last six years were primarily in surgical and medical instruments and in biotechnology.

South Dakota has established six biotech-oriented research centers, including a unit focused on translational cancer research. The centers are aimed at growing the state’s economy by targeting investments in specialized research at South Dakota public universities. A new biotech animal research facility also is under development.

During a groundbreaking ceremony for the new Innovation Campus at South Dakota State University, then-Gov. Mike Rounds announced that the Drought Tolerance Biotechnology Research Center (DTBRC) at SDSU would join the five other highly-specialized research centers already in operation. This followed the state legislature’s approval of Gov. Rounds’ request to create a fifth center focused on Bio Processing.

Then-Gov. Rounds noted that after only 24 months in operation, the four original research centers now report a $40 million economic impact from a state investment of $5.4 million.

The drought tolerance biotechnology center focuses on research that leads to emerging technologies in drought tolerant crops. This research could potentially accelerate the availability of drought resistant products to the market by one to three years. A primary focus of the center will be to identify genes associated with drought, temperature, disease resistance and crop quality. All of these traits are important for South Dakota’s growing biofuel and feedstock industries.

Yankton, SD is a good example of the development of biotech jobs potential in South Dakota. The city’s economy has three primary sectors—medical, manufacturing and agriculture. The medical community is buoyed by three main entities—the State Human Services Center, Avera Sacred Heart Hospital and Yankton Medical Clinic. Yankton, a city of 14,500, has more than 3,200 professionals employed in medicine and human sciences, including more than 140 physicians who research and practice a full spectrum of medical and biotechnological applications.

Biotech companies located in Yankton include Vishay Dale Electronics, Applied Engineering and Direct Biologicals. Vishay and Applied Engineering manufacture precision components for various medical applications, Direct Biologicals is an entrepreneurial startup that produces bacteria used in the cleaning of feed lots and in other agri-science applications. Local grasses in Yankton are being used in bioenergy research.



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, which possess major industry R&D. 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.

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.

Maryland’s burgeoning biotech cluster continues to expand exponentially. A good example is MedImmune, now part of AstraZeneca, which is completing its new 337,000 sq. ft. Frederick Manufacturing Center. The Frederick facility will be one of the biggest bulk biotech manufacturing facilities in the country. The $600-million facility will employ 250 when it opens and is expected to take five years to ramp up to full production, when the workforce may double.

MedImmune also is expanding 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, is expanding its North American headquarters and manufacturing center in Germantown. The $2-million expansion, to be completed in four phases, will add 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.

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