COVER STORY: Building A Biotech Bonanza

The global financial contraction put a squeeze on seed money for biotech startups, forcing locations to build their biotech future the old-fashioned way: with long-term planning and a comprehensive strategy for growth. From the May/June 2012 issue.

By Jenny Vickers
From the May/June 2012 issue

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 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
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
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
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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biotech, May/June 2012, nanotech, pharmaceuticals

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