Another recap from the DC Examiner-- This highlights biotech in Virginia and Maryland.
Biotech industry makes significant strides in 2006
Katie Wilmeth, The Examiner
Dec 28, 2006 3:00 AM (3 days ago)
Current rank: Not ranked
WASHINGTON - The region’s biotechnology industry took center stage in 2006 as several high-profile successes showcased Washington’s growth in the highly competitive sector.
The October opening of Janelia Farm — a $500 million, 689-acre state-of-the-art research campus dedicated to basic biological research in Ashburn, Va. — demonstrated the region’s ability to attract world-renowned scientists and drew the attention of even more investors to the region.
“It’s the single largest science investment of the decade and it will probably have the most impact for [Virginia], maybe for decades to come,” said Larry Rosenstrauch, director of economic development for Loudoun County, in a September interview. “We have to recognize this is a global asset that has landed in our region and we have to try and use it.”
October also saw a successful biotech fair that attracted hundreds of venture capitalists and numerous local biotech firms in search of capital. Though the event was only the second bio-focused venture capital fair for the region, it was a sign that biotechnology was on the same path as the region’s other highly successful industry: information technology.
“We wanted to create a platform where private equity and venture investors felt they could do business around the growing industry of life sciences,” said Julia Spicer, president of sponsoring organization Mid-Atlantic Venture Association, in a September interview.
MAVA launched a similar fair, Capital Connection, 20 years ago when the region’s technology industry was finding its footing and today the conference is one of the most respected in the industry.
Several individual biotech firms had notable successes in 2006. MedImmune, the region’s most successful biotech company by revenue, broke ground on a $250 million plant in Frederick, Md., that will allow it to manufacture vaccines in the state. While there are many biotech firms in the region, there is limited manufacturing capability. MedImmune’s plant points to a maturing of the industry, said economic development officials.
MedImmune’s expansion “is important. All of this is evolutionary,” said Aris Melissaratos, Maryland’s secretary of business and economic development, in September. “For every drug in the pipeline, you want to get [to the manufacturing stage].”
Several companies, including Vanda Pharmaceuticals, also went public, each one an important step in turning Washington’s research-focused industry into a commercial one.
“I really think [success] is when you have more publicly traded companies,” said Tim Priest, executive director of the Greater Washington Initiative, a regional organization that markets the Washington area to potential biotech companies looking for a home. “We have a handful of companies that are forces in their industry ... but there’s a deficiency in this region. We don’t commercialize as much as we should.”
As more investors look to Washington as a biotech region, local industry leaders expect to see the industry gain ground on competitors. There were also signs in 2006, that the industry was beginning to catch up to the region’s robust the IT industry. In the second quarter, for example, venture capital investments in local biotech firms overtook both software and telecommunications.
Sunday, December 31, 2006
Another recap from the DC Examiner-- This highlights biotech in Virginia and Maryland.
at 7:54 AM
Wednesday, December 27, 2006
Here is an article that gives a recap on the DC area's VC activity for 2006. Mid-Atlantic Bio is mentioned at the end.
Venture capital: Strong year for software, telecom
Katie Wilmeth, The Examiner
Dec 27, 2006 3:00 AM (6 hrs ago)
Current rank: # 1 of 13,170 articles
Washington, D.C. - Despite several high-profile biotechnology deals in 2006, software and telecommunications remained the dominant industries among venture capitalists looking to invest in the Washington region.
“We have a strong legacy sector in telecommunications and technology in this region,” said Julia Spicer, executive director of the Mid-Atlantic Venture Association. “That will continue to be opportunistically a great investment space, and we have lots of investors across the board who understand that space.”
Funding for local software companies was approaching the $200 million mark at the end of the third quarter with $192 million invested in 51 deals. While numbers aren’t out yet for the fourth quarter, those figures put the category on track to outpace 2005 investments. During the third quarter of 2005, investments had reached only about $140 million.
Telecom also had a strong year. With more than $270 million invested in 17 deals in the first three quarters of 2006, the industry sector jockeyed with software and biotechnology for the top spot among investors.
But while software and telecom quietly remained on top, it was the biotech industry that made headlines in 2006 with several multimillion dollar deals. Investments in local biotech companies surged ahead in the second quarter with $145 million in funding and 13 deals. Much of that money went to Rockville-based CoGenesys. The biotech firm received nearly $55 million in Series A financing in June, a number often unheard of in the software industry.
Biotechnology remains a growth area for the region, said Spicer, with few venture firms focused on the sector and more money needed to fund fewer companies.
“[Software] is more predictable in some ways,” said Bill Gust, managing general partner of Anthem Capital in a July interview. “It’s more predictable. You can sell the company or software to somebody else and recoup your investment. Whereas the life sciences … you’re talking about tremendous amounts of money needed to carry a company into commercialization.”
The opening of Janelia Farm — a bioscience research campus in Loudon County — and a successful venture capital fair sponsored by MAVA, as well as the Virginia Biotechnology Association and MdBio, also put the industry in the spotlight in 2006.
Top five venture capital deals of 2006:
» CURRENT Communications Group — $129,999,700 (Germantown)
» CoGenesys Inc. — $54,999,9000 (Rockville)
» MacroGenics Inc. — $45,000,000 (Rockville)
» SunRocket Inc. — $33,000,200 (Vienna)
» Kajeet Inc. — $27,000,000 (Bethesda)
at 9:10 AM
Friday, December 22, 2006
The 2006 Virginia Biz/Bio Conference (December 14, Virginia BioTechnology Park, Richmond) was an important, perhaps seminal event for the Commonwealth. Robert Skunda, Mark Herzog, Aneesh Chopra and all the organizers deserve congratulations for an excellent, eye-opening Conference. Dr. Charles Hamner, William Conklin and other speakers graphically illustrated what works to develop and grow a world-class biotechnology and life sciences cluster, and thereby provided keys to what we need to do now. The speakers and panelists illuminated many dimensions of Virginia's opportunities and challenges.
It is clear that Virginia has a solid foundation, and exciting new developments, thanks to proactive State action, important biopharma industry investments and public-private-academic partnerships. We are ready to jumpstart Virginia's leadership position.
We need to work hard, and together, to develop and strengthen the critical mass, infrastructure and identity to support Virginia's emergence as a global leader in the biotechnology and life sciences sector. Let us make 2007, the Jamestown QuadriCentennial, a year of leadership, action and progress for Virginia-based biotechnology and life sciences.
at 11:18 AM
Wednesday, December 20, 2006
This edition of the Virginia Bioscience Podcast features Dr. Charles E. Hamner, DVM and PhD, the former president and CEO of the North Carolina Biotechnology Center. When Hamner joined the Center in February 1988, the state had a fledgling biotechnology industry. Today, North Carolina is among the nation’s top five biotechnology states with several hundred thriving bioscience, contract research, device, and other supporting companies throughout the state.
Under his leadership, the Center strengthened the state’s biotechnology infrastructure by investing more than $50 million in the state’s universities, seed-funding 62 startup companies, creating a $26 million venture capital fund for new companies, building a permanent headquarters building and conference facility, providing biotechnology workshops for more than 1,000 high school teachers, and helping recruit more than a dozen biotechnology companies to North Carolina.
Dr. Hamner’s presentation, “Key Factors of Attracting the Biotechnology Industry to a State,” was given on December 14, 2006 at the Virginia Biotechnology Association’s conference on economic development strategies for the bioscience industry. The host is Mark Herzog, executive director of the Virginia Biotechnology Association.
at 1:05 PM
Wednesday, December 13, 2006
Virginia Biotech Podcast: Dr. Francis Collins
This special edition of the Virginia Bioscience Podcast features Dr. Francis Collins, the director of the National Human Genome Research Institute (NHGRI) at the National Institutes of Health.
Dr. Collins was the guest speaker at the 2003 Virginia Biotechnology Summit, held at the McLean Hilton in Tyson’s Corner, Virginia. Following his remarks about his work on the Human Genome Project, Dr. Collins thrilled the crowd by pulling out a guitar and singing some pop songs—though with new lyrics that take a light-hearted view of genetics and the commercial side of biology.
Dr. Collins sings “Amazing DNA” and “We Really Got The Code On You.” The recording quality is poor but well worth the download!
The host of the Virginia Bioscience Podcast is Mark Herzog, executive director of the Virginia Biotechnology Association.
at 11:58 AM
Friday, December 01, 2006
Nearly thirty national and state organizations have joined forces to present a half-day policy conference on how to develop and enhance Virginia's bioscience industry. The event, "The Virginia BizBio Conference," will be held from noon to 7 p.m. on Thursday, December 14, at the Virginia Biotechnology Research Park in Richmond.
This interactive half-day conference will address how government, business, academia, investors and entrepreneurs can work together to create a positive climate to maximize the growth of the biotechnology and biopharmaceutical industry in the Commonwealth.
Here is a link to the "Virginia Biotech: Vision 2010" Report:
Here is a link to a video that helps frame the issues:
Here is a new report from the Biotech Industry Organization that outlines important legislation passed by state legislatures across the United States: Click here.
Here is the link to the 2006 Batelle State Biotech Report that outlines all of the known state initiatives and some basic statistics about each state:
Featured speakers include William Conklin, biotech business unit director for Merck & Co.; Charles Hamner, founder and former CEO of the North Carolina Biotechnology Center; Tony Corso, CEO of B.I. Chemicals; Cheryl Moore, COO of the Janelia Farm Research Campus of the Howard Hughes Medical Institute; the Honorable Brian Feldman, Maryland House of Delegates; Hugh Keogh, president of the Virginia Chamber; the Honorable Walter Stosch, majority leader of the Virginia Senate and member of the Finance Committee; the Honorable Patrick Gottschalk, Virginia Secretary of Commerce and Trade and the Honorable Aneesh Chopra, Virginia Secretary of Technology.
Bioscience research and development represents a major source of capital to Virginia and local communities. Throughout the discussions during the event, the speakers will illustrate the potential economic growth that the industry can bring to Virginia if resources are accessible.
The event is open to all interested attendees but requires advanced registration. Lunch and a closing reception are included. Limited seating is available. For more details and registration information, please visit www.vabizbio.org.
at 11:41 AM
Thursday, November 16, 2006
An article about WV's plans for tech-based economic development...
West Virginia enters biotech race
As states across the United States are beginning to bank their futures on the potentially unlimited possibilities of biotechnology, West Virginia feels it has no other choice but to enter the competition.
The state government has invested $4 million in Technology-Based Economic Development to date. TBED is a program that calls for postsecondary research institutions to stimulate a region's economy by creating state-of-the-art inventions, mainly in the biotechnology field.
The state's TBED proposal, Vision 2015, calls for a state investment of $250 million by 2015. Governor Joe Manchin has publicly spoken in support of the proposal and TBED in general, and proponents are currently touring the state to try to build enough legislative support to pass the proposal.
The state received $60 million from the federal government for TBED activities as of 2005, which proposal literature considers below the national average. However, the state received its largest grant, $9 million, from the National Science Foundation in July. All the money from the grant was earmarked for Marshall University research.
The goal would increase the amount of federal funding to more than $120 million by 2010 and $220 million by 2015.
Proponents of Vision 2015 point out that every federal dollar invested in TBED will yield $7 in revenue. However, a Web site at the University of Louisville, a member of Kentucky's TBED program, states that each federal dollar invested has yielded $3 in revenue.
The proposal also includes recruiting 89 new scientists and engineers to the state. West Virginia University would get 63 of the scientists, and Marshall University would receive 26.
Start-up costs for the new scientists and engineers would be close to $40 million, and the universities would be collectively paying out more than $8 million per year in salaries and fringe benefits. The universities' base budgets would need to be increased beginning in 2008 in order to compensate for possible salary increases, according to the proposal.
Vision 2015 also calls for the construction of two minimum 100,000 square-foot facilities-one at Marshall and the other at West Virginia University-by 2010. More than $120 million must be raised in order to pay for both buildings, and the proposal sets a December 2007 deadline to obtain the funding.
Marshall would be getting a science and engineering building meant to complement the $48 million Robert C. Byrd Biotechnology Science Center, which was dedicated in August. The biotech center had been in the planning stages since the late 1990s and was initiated by former Marshall President J. Wade Gilley, Dr. Howard Aulick, Marshall vice president for research, said.
Two other major items in the proposal include increasing the production of scientists and engineers already in the state, as well as developing new tech-based businesses.
If Vision 2015 is completed as proposed, it will create 33,000 jobs and have a total economic impact of more than $3 billion, according to proposal literature.
"If we don't do this now, Ohio will recruit our best researchers or Kentucky will," Aulick said.
Looking at TBED investments made in neighboring states, West Virginia is years behind. Kentucky, through the Bucks for Brains project, has invested $300 million in state funding into TBED since 1997. Ohio's TBED project, Third Frontier, has received $300 million from the state to date as well, but it started funding the project only three years ago. The state will invest a total of $1.1 billion in the project by 2013.
Because neighboring states have already made large-scale investments into TBED, some wonder if West Virginia has entered the marketplace too late to compete effectively.
"Every university in the nation is making the same bet, and many are better equipped and located to succeed in (biotechnology)," one person said in a message on the open comment section of the Marshall Strategic Vision Web site.
Aulick said he has heard this argument before. However, because West Virginia's TBED projects and investments will focus on health problems of major importance in Appalachia, the state will have its own competitive advantage, Aulick said.
at 8:32 AM
Wednesday, November 15, 2006
Go get 'em Bob Goodlatte! Here is an article from the WP:
U.S. lawmakers: EU dragging heels on biotech trade
By Missy Ryan
Wednesday, November 15, 2006; 1:46 PM
WASHINGTON (Reuters) - The United States must pressure the European Union to stop dragging its feet on approving new imports of bioengineered food, senior U.S. lawmakers said in a letter released on Wednesday.
"The EU has avoided for too long its WTO obligations ... The illegal discrimination against biotech products on nonscientific grounds must cease," a group of lawmakers said in a letter to U.S. Trade Representative Susan Schwab.
Bioengineered foods are made from crops altered by biotechnology, boosting the vitamin content of a strain of rice, for example, by inserting genes from daffodils and from soil bacterium.
The EU has insisted on careful regulation of bioengineered food to screen for any risk to human health or to the environment.
The U.S. lawmakers, including the incoming chairs of the House and Senate Agriculture committees, want European officials to act quickly on the heels of a September 29 ruling by the World Trade Organization's dispute settlement body.
A main finding of that ruling was that a ban on approving new biotech products, which the EU had in place for four years until 2003, led to "undue delays."
"Winning the WTO case without achieving any positive changes in the approval process would greatly erode the credibility of the WTO in the eyes of U.S. agriculture," the lawmakers wrote in the letter, which was delivered to Schwab's office late on Tuesday.
It was signed by Iowa Sen. Tom Harkin and Minnesota Rep. Collin Peterson, who are poised to lead the Senate and House Agriculture committees once Democrats take control of Congress in January.
The committees' outgoing chairs, Republicans Saxby Chambliss of Georgia and Bob Goodlatte of Virginia, also signed the letter, along with the current heads of the powerful Senate Finance Committee and House Ways and Means Committee.
The European Union says its current regime for approving bioengineered products -- including a food safety authority based in Italy -- complies with WTO rules.
"The new system is science-based. We've set up a centralized procedure ... that's responsible for doing risk assessment" of bioengineered food, said Canice Nolan, who directs food safety, health and consumer affairs for the EU's delegation in Washington.
Keith Williams, a Chambliss spokesman, said the European Union had sidestepped WTO rulings in the past, and pointed to a case involving beef hormones.
Nolan said the European Union had not decided if it would appeal the WTO's ruling. It has until late November to do so.
A representative for Schwab, who is traveling in Asia, was not immediately available for comment.
at 2:58 PM
Tuesday, November 14, 2006
New Dems in Md., Va. won’t bring stem cell research funding right away
Katie Wilmeth, The Examiner
Nov 14, 2006 5:00 AM (3 hrs ago)
Current rank: # 9 of 5,967 articles
WASHINGTON - Despite victories for Democrats who support stem cell research in the Maryland governor’s race and the U.S. Senate race in Virginia, local biotechnology industry officials aren’t expecting a huge shift in policy anytime soon.
Virginia Democrat Jim Webb’s win in the U.S. Senate that captured the Senate majority for the party and Gov.-elect Martin O’Malley’s win in Maryland may eventually make some waves, but “it’s way too soon to tell,” said C. Robert Eaton, president of MdBio, an organization that represents the interests of the biotech industry in Maryland.
Eaton said the organization has no plans to meet with Governor-elect Martin O’Malley, but “I’d love to hear what their plans are and hope they get up to speed on [the industry].”
Maryland garnered national attention under outgoing Gov. Robert Ehrlich with the establishment of the Maryland Stem Cell Commission and a $15 million stem cell research fund. The commission is currently accepting grant proposals from Maryland-based researchers.
Funding for stem cell research has been a hot topic in the Washington region, and particularly in Maryland, recently. But it comes down to those in the scientific community — not in the political arena — who are largely shaping the progress, said stem cell research watchers.
Funding for stem cell research “primarily depends on whether the universities or hospitals think they have something to add.
Once they take up the issue of stem cells, then the politics comes in,” said Gail Pressberg, author of “The Promise of Politics of Stem Cell Research.”
Johns Hopkins University in Maryland is a leader in stem cell research, which helped secure funding from the state, Pressburg said. But in Virginia, where state universities haven’t focused on the issue, a Webb win isn’t likely to turn the tide locally.
However, the fact that Webb tipped the scales on the national level may eventually lead to new legislation, she said.
“It makes a difference when the party in favor of stem cell research controls the agenda by chairing the committees,” Pressberg said. “But it’s no guarantee ... they have to first deal with Iraq. I’ve talked to a bunch of lobbyists and nobody has a clue as to when this might come out.”
at 8:14 AM
Friday, November 10, 2006
Stem Cells and the new Congress:
Stem cells a priority for new Congress
By KRISTYN ECOCHARD
Click here for the article.
WASHINGTON, Nov. 9 (UPI) -- Stem cell issues emerged as an important platform during the midterm elections, and despite some moral concerns the new Congressional leadership is poised to bring the issue to the table.
Presumptive Speaker of the House Nancy Pelosi, D-Calif., has already listed funding for stem cell research as one of the top priorities of the new House.
"Bringing this issue up in the first 100 hours of Congress indicates the importance it had on the electorate," Daniel Perry, executive director of the Alliance for Aging Research, told United Press International.
Stem cell research focuses mostly on embryonic stem cells and how they might be used to create other kinds of tissue cells. A bill providing federal funding was passed by Congress earlier in Bush's presidency, but he vetoed it due to a religious outcry about the sanctity of life.
The support of stem cell research is promising but not a complete turn-around, said Jonathan Moreno, senior fellow at the Center for American Progress and professor at the University of Virginia in Charlottesville.
"On the surface, it doesn't appear there's a veto-proof majority in the House or the Senate," he told UPI. "But people may be more open now to hearing what the scientific evidence says."
One of the biggest challenges to supportive policy and funding other than from the private sector is the use of human embryos as the source of the stem cells, Henry Greely, professor at Stanford University, said during a public stem cell symposium at the National Academy of Sciences Tuesday.
Since the beginning of the debate, progress has been stalled by religious objections to endangering or destroying human embryos.
"The greatest religious concern has been the moral status of the embryo," said Suzanne Holland, associate professor of ethics and chair of the department of religion at the University of Puget Sound in Tacoma, Wash. "The greatest ethical concern surely is sensible oversight -- the just use of healthcare resources and research for the common good."
The Catholic Church's stance is that life begins at the moment of conception. However, survey results from a 2005 Johns Hopkins University study show that among U.S. Catholics, 69 percent dissent from the view of the church and approve embryonic stem cell research. Perhaps more surprisingly, the poll showed 49.5 percent of fundamental evangelical Christians approve of stem cell research, Holland said.
In the scientific community there is still some debate as to when a child's life has begun, although most believe an embryo is a developing human life. It's still debatable, however, whether the fetus is developed enough at five days or 14 days of life. At 14 days, it's highly unlikely the embryo will divide into twins, which begins its individual identity, Holland said.
Researchers can also do stem cell research on tissue or adult stem cells instead of embryos, which is more acceptable to religious leaders. The answer, Holland suggested, lies in respecting developing human life at the appropriate time and allowing research that has the potential to cure disease in people.
Using the existing method types -- destroying potential viable human embryos, the "dead" embryo method and non-embryonic cell harvesting -- a variety of cell types can be produced.
Nerve, liver, cardiac muscle, skeletal, blood and insulin-creating cells can all be derived from embryonic stem cells, said Alan Colman, chief executive officer of Embryonic Stem Cell International and senior scientist for A*STAR Centre for Molecular Medicine in Singapore.
The tissue cells that are created, however, only simulate the activity of an original cell and aren't as effective as the original, he said.
In recent research, cardiac muscle cells have been transplanted to pigs, rats and mice in Holland and California.
While the animal transplants were successful, the 97 trials transplanting skeletal cells into humans have had some problems, Colman said. One of the patients died of irregular heartbeat, and the rest of the patients have since been hooked up to defibrillators.
Another challenge, Greely pointed out, is that while embryonic stem cells are able to turn into any kind of cell, and they can be used to replace large quantities of different tissue types, safety regulations are difficult to define and enforce.
Whether the research is funded, banned, permitted or supported could be decided by the language used, he added.
"It matters what we call these entities," Greely said. "It may affect whether funding is admissible under President Bush's policy."
To make the best of the available funding, Greely suggested the scientific community should rank the types of research methods and invest in the ones that are most promising.
But for now, it's clear the new Congress will be in favor of stem cell research, said Sean Tipton, president of the Coalition for the Advancement of Medical Research.
He also said this issue is likely to be a major factor in the 2008 elections.
at 2:33 PM
Friday, November 03, 2006
Virginia Biotechnology Research Park tenant, Tissue Technologies, was recently awarded a $100K Phase I SBIR grant from the National Institutes of Health for the development of a bedside diagnostic strip which will lead the care giver to treat chronic wounds more effectively.
“Some of the treatments that are currently on the market for chronic wounds can be extremely expensive and unfortunately are often used on wounds that simply won’t benefit from them,” commented Kel Cohen, MD, president and CEO of Tissue Technologies. “Our diagnostic strip will help medical professionals evaluate the best treatment options for their patient’s wonds.”
According to Cohen, the diagnostic strip can test the level of proteases in the wound. These are the enzymes found at high concentrations in chronic wounds. While these enzymes play an important role in tissue synthesis and degradation in normal wounds, chronic wounds produce too much proteases, resulting in substantial healing problems. Specifically, high protease levels in chronic wound fluid delays the wound healing process by degrading newly formed tissue and growth factors.
By using these “litmus” type testing strips, the doctor or nurse can determine protease levels to better evaluate what treatments will be most effective. It can also be used to monitor protease levels during and after treatment to ensure healing is occurring as expected.
“We are very excited about the results of our preliminary studies and the potential applications of this product,” commented Cohen.
In addition to the diagnostic strip, Tissue Technologies recently announced the FDA approval of a new product for dressing chronic wounds, which could potentially promote healing by eliminating the elevated levels of protease in chronic wound fluid.
at 2:02 PM
Tissue Technologies LLC and Living Microsystems participated in Virginia Capital Day on November 2, 2006 at the Jefferson Hotel in Richmond. Living Microsytems Chairman Michael Grisham joined Wayne Hunter , Harbert Venture Partners, David Kauffman, Envest and Samuel Bemiss, III, Ewing Memiss & Co. in a panel discussion on investment strategies. The panel offered insightful comments on today's investment marketplace and shared the views of both investors and comapny executives on the current investment environment.
Tissue Technologies LLC was part of a select group of "Companies to Meet" who are currently seeking financing and looking to establish relationships with sources of capital. Dr. Kelman Cohen, founder and CEO of TT reprresented the company at this event.
Both Tissue Technologies and Living Microsystems are tenants in the bioscienes incubation program at theVirginia Biotechnology Research Park in Richmond.
at 11:09 AM
Thursday, November 02, 2006
Good news for a new Virginia biotech company...
Va. biotech secures $3M from angels
Washington Business Journal - October 27, 2006
by Vandana Sinha
A Virginia biotech is close to securing a $3 million first round of funding before hitting the road in search of more money.
Medgenics, which moved to Vienna from California in March after a struggle to survive, expects to close on nearly $2 million in mostly angel financing in the next month, adding to the $1 million it's already raised.
The company shares an office with one of its investors, venture capital firm Windy City.
After the first round closes, Medgenics will jump back on the circuit hoping to drum up $15 million more to fund Phase I and Phase II trials of its protein injection treatments, one for anemia slated to begin at the end of next year and another for hepatitis C expected to follow in the first quarter of 2008.
This is the second time around for the company, which had shut down for a year.
Medgenics raised $17 million in four rounds of funding during the company's first three years of operation. CEO Andy Pearlman founded the company in Palo Alto, Calif., in 2000 with technology he licensed from Hebrew University in Israel.
After failing to raise an additional
$25 million in a tough climate for biotechs, Pearlman was asked by a divided board to leave in 2003. He was replaced by Menachem Nassi, a CEO from the cardiac-imaging industry who sported an IPO track record and, the board thought, could round up that cash.
The company foundered without funding and closed up in 2004, leaving 32 people in California and Israel to find other jobs.
"Even though the technology succeeded, the CEO was unable to sell it or get people to invest in it," says Pearlman, who had remained on the board. "It just died for all the wrong reasons."
Last year, Windy City spent about $250,000 to buy out two investors, and Pearlman picked up the investment road map again. He's hired eight people, almost all former employees in Israel from Medgenics' previous incarnation, and is already talking up a potential IPO.
The staff has revived its tests on the technology, which turns a patient's toothpick-size tissue sample into its own production plant for disease-fighting proteins within 10 days. Doctors can inject that sample back into the patient's skin to pump those proteins through the body for months, dispelling the need for regular shots.
Once Medgenics is well funded, and well on its way through trials, it will hunt for a new headquarters, perhaps remaining in the Washington area.
"Washington has two great assets going for it. One is that the FDA is located here," says Joel Kanter, president of Windy City, a family-owned investment firm, and also "there is an extensive network of life sciences companies and, therefore, life sciences executives."
E-maiL: Vsinha@bizjournals.coM Phone: 703/258-0838
at 8:24 AM
Wednesday, November 01, 2006
Diffusion Pharmaceuticals LLC, a drug discovery and development company pioneering a revolutionary mechanism of action to treat life-threatening diseases, today announced that it has completed all animal toxicology studies required by the U.S. Food and Drug Administration (FDA) to file an investigational new drug (IND) application for its lead compound trans sodium crocetinate (TSC). The company also announced that it has completed a private financing round of $1.5 million, the proceeds of which will be used to support the company’s overall growth and move TSC into Phase I clinical trials in early 2007.
The recently completed toxicology tests were conducted at independent research laboratories, and were funded in part by a grant from the Office of Naval Research. The no adverse effect level (NOAEL) was about 500 times the efficacious dose in those animals, which is substantially higher than the proposed dose to be examined in humans.
“These studies show no appreciable toxicity of TSC, even at doses much greater than the proposed human dose,” said David G. Kalergis, Diffusion’s Chief Executive Officer. “Reaching this critical milestone has positioned us to prepare and file our IND application, which is currently being assembled by a team of Diffusion staff members and expert consultants,” he continued.
Assuming no significant FDA objections after filing, the company can proceed with its plans to initiate testing in healthy human volunteers. These studies are expected to begin in early 2007. Completion of these Phase I clinical trials will provide the foundation for further testing of TSC in populations suffering from such life-threatening conditions as hemorrhagic shock, stroke, respiratory disorders and cancer.
Additionally, Diffusion announced that it has closed a financing round in which it raised its target of $1.5 million in private equity, primarily from existing shareholders.
“These funds help move TSC into human testing, where we will have the opportunity to demonstrate the drug’s safety in humans and show proof of principal for the company’s novel technology,” said Kalergis. “Over the past 18 months, the company has also solved complex technical formulation issues, manufactured TSC to GMP (human) quality standards, and enhanced its intellectual property portfolio, all of which add value to the company and its platform technology.”
at 10:09 AM
Monday, October 30, 2006
An article on the risk of investing in the life sciences...
It's risky to bank on biotech: Companies move, fail before communities see any benefits
By Clayton Park
Journal Business Editor
Article published Oct 29, 2006
In recent years, economic development boosters both in Seattle and on the Eastside have increasingly focused their efforts on attracting biotechnology companies, citing their potential for creating high-paying jobs.
But banking on biotechs can be as risky as betting on dot-coms, or, for that matter, betting on racehorses.
One local stock analyst told the Journal recently that he and his colleagues refer to early stage biotechs as "casinos" because of their 90 percent failure rate.
But conversely they are also referred to as "The Promised Land" by analysts like Paul Latta of McAdams Wright Ragen in Seattle. That's what he calls biotechs that can successfully bring multiple drug products to market because of the profits they generate.
Biotechs that fail to reach the "promised land," however, are bound to either eventually disappear, along with the jobs they provided, or get sold, which often also results in layoffs.
Job cuts likely on Eastside
An example of the latter is Bothell-based Icos Corp., which earlier this month agreed to be sold to Eli Lilly & Co., the Indianapolis-based pharmaceutical maker, for $2.1 billion.
Lilly's CEO has already said his company intends to eliminate a yet-to-be-determined number of the 700 positions at Icos once the sale closes either later this year or in early 2007.
Many of those job cuts will likely occur on the Eastside, where Icos employs 500 workers at facilities in Bothell, Redmond and Bellevue.
And Icos, which developed the blockbuster anti-impotence drug Cialis, is one of the region's more successful biotechs.
Despite the drug's growing popularity, Icos' board of directors earlier this month unanimously voted to accept Lilly's buyout offer of $32 a share — less than half of what the stock was worth at one point in 2001.
Latta said Icos' inability to get other new drug products through the development "pipeline" after 16 years of trying was the likely reason for the board's decision to sell.
1-drug companies at risk
"It was kind of a one-drug company," said Latta of Icos, noting that the same was true of the region's other big biotech, Seattle-based Immunex, which produced the popular arthritis drug Enbrel.
Immunex, despite being the Puget Sound region's biggest and arguably most successful biotech at the time, agreed to be sold to Thousand Oaks, Calif.-based Amgen for $16 billion in 2002.
The sale of Immunex left Icos as the region's largest Washington state-based biotech, a distinction that will most likely now go to Seattle-based ZymoGenetics.
Amgen, which laid off some workers here shortly after its acquisition of Immunex four years ago, announced earlier this year plans to expand its Seattle operations.
The sale of Icos will benefit some of the company's investors, including Microsoft Chairman Bill Gates, who, if he continues to hold on to his 5.36 million shares until the deal closes, would pocket more than $171.5 million.
Shaky future for startups
But backers of biotech startups don't always fare as well with their investments.
Of the region's 26 largest biotechs listed in the Puget Sound Business Journal's 2001 Book of Lists, 12 are missing from the publication's 2006 list. Some of the companies that failed to make the list this past year have gone out of business or have been acquired.
Several of those on the Business Journal's current list were locally based five years ago but now have out-of-state owners.
The number of impending job cuts by area biotech firms rose this past week when London-based GlaxoSimithKline announced that it will close its vaccine-research lab in Bothell by the end of the year, which will eliminate 70 positions, according to a Seattle Times report.
Benefits outweigh risks
Despite the long odds facing early stage biotech ventures, industry observers and local economic development boosters say the benefits to the area that those companies provide, even if they are sometimes short-lived, far outweigh any the risks.
"It is worth it," said Maura O'Neill, the former president of Explore Life, a regional economic development group that teamed up with the city of Renton a few years ago in an effort to establish a "Science City" hub for biotechs on land that Boeing was thinking of selling off.
That effort got put on hold indefinitely when Boeing decided to hang on to most of its potential surplus property as orders for its Renton-built 737 jetliners began picking up.
O'Neill said even though Icos, and many of its jobs, will soon become history, the company "provided a terrific set of high-paying jobs over the last decade for this region."
Research attracts biotechs
The good news, O'Neill said, is that many of those soon-to-be-former Icos employees will likely elect to remain in the area and either go to work for other biotech companies, which will strengthen them, or perhaps even start up new biotech ventures.
As long as the Puget Sound region is home to outstanding medical research institutions such as the University of Washington and the Fred Hutchinson Cancer Research Center, it will continue to attract biotech and lifesciences companies, and/or birth new ones, O'Neill said.
The presence of the Gates Foundation and other institutions such as the Benaroya Research Institute, which is a leading diabetes research center, among others, also are helping to make this region a magnet for biotech and lifesciences ventures, said O'Neill, who now works as the chairwoman of an e-text book company and a part-time instructor with the entrepreneurship program at the University of California Berkeley.
"What we're missing in this region is a broad and deep commercialization eco-system," that would allow biotechs, once they get to the size of Immunex or Icos, to continue to survive, and perhaps acquire other companies, as opposed to becoming acquired, O'Neill said.
State fund supports biotechs
Jack Faris, president of the Washington Biotechnology and Biomedical Association, said the Puget Sound region is making progress towards creating a better support system for biotechs, which could improve their chances for success in the coming years.
"We should NOT assume that we won't be able to improve the odds," Faris said.
One future "tool" to help biotechs in this region is the state's new Lifesciences Discovery Fund, which has already been approved by the Legislature, and is scheduled to receive funding beginning in 2008.
In addition, Faris said, his association is working with other economic development groups to create some "comprehensive strategies" on how to help more biotech and lifesciences ventures become commercialized.
The Puget Sound region already has a "great tradition of entrepreneurship," as evidenced by the success of homegrown global companies such as Starbucks and Amazon.com, Faris said.
"We certainly have enough (ingredients) that if we do the right things with them, we can be absolutely assured of success," Faris said.
27,000 jobs in Bothell
Terrie Battuello, manager of the city of Bothell's newly created economic development division, said the city is already home to 164 professional scientific and technical services companies, including a number of biotechs and medical device makers.
Bothell, which has a population of 32,000, has approximately 27,000 jobs, thanks in large part to the presence of those biotechs and other professional scientific firms, Battuello said.
Battuello said much of the credit for why the city is home to so many biotechs belongs to real estate developer Roger Belanich, who got the ball rolling when he built the Canyon Park Business Center in the 1980s, one of the first of many business parks now in the Bothell/Woodinville area.
The city also has been working closely with the Snohomish County Economic Development Council and other groups to continue to attract employers to the area.
Battuello expressed hope that Lilly will continue to operate Icos' facilities in Bothell and keep at least some employees. "I wouldn't say that it's a given that they'll leave," she said.
The city is currently working on a downtown revitalization project to create some new "opportunity sites for private investments in Bothell," Battuello said.
'Science City' on backburner
Alex Pietsch, who heads Renton's department of economic development, neighborhoods and strategic planning, said while efforts to create a "Science City" have been put on the backburner for now, "we continue to be interested in the industries of this community's future.
"Clearly, biotechs and lifesciences will be a part of that," Pietsch added.
For now, the city is focusing on making Renton "more attractive to companies like that by seeing that major retail projects," such as The Landing, a proposed mixed used complex by Harvest Partners next to Boeing's 737 plant, "are done right."
"We hope that The Landing will be that catalyst so that lifesciences, aerospace, information technology and clean technology companies will want to come here," Pietsch said.
As far as the risky nature of biotechs, Pietsch said, "the good thing" about creating facilities to house those kind of businesses is that "if one company fails, another company can come in and use it."
Sooner or later, because of the city's close proximity to the growing biotech hub in Seattle's Lake Union area, a "science city"-like development is "going to happen in Renton," just as it's "already happened in Bothell," Pietsch said.
at 2:57 PM
Monday, October 23, 2006
Analysts are saying that the Biotech industry will finally post a profitable year sometime in the next 5 years or so. This article is a re-hash of some of the arguments in the Brookings Institution Report from a few years ago. However, it does have some updated numbers from E&Y.
California pulls in most biotech money
Report lauds success of industry, but it has yet to turn a profit
JOURNAL STAFF AND WIRE REPORT
Saturday, October 21, 2006
California remained biotechnology's favorite place of business last year as other states unsuccessfully tried to woo a disease-fighting industry that has yet to turn a profit, according to a report issued Thursday by an industry promoter.
The California Healthcare Institute found that biotech, broadly defined to include diagnostic companies and makers of medical equipment and devices, accounted for $62 billion in revenue in the state last year. The report didn't say how much the industry lost in that time.
Nearly half of the $5.9 billion in venture capital invested in the industry nationwide flowed to California companies. Many of the companies are developing so-called biological drugs to combat such diseases as cancer, diabetes and arthritis. These biological drugs are often derived from genetically engineered microbes, rather than chemicals used in traditional pharmaceuticals.
California scientists also landed $3.6 billion in National Institutes of Health grants in fiscal year 2004, the report found.
"California's biomedical industry is a vital and growing component of our state's high-tech economy," Gov. Arnold Schwarzenegger said in a foreword to the report.
With the average salary rising to $70,400 from $60,000 10 years ago, Florida, Arizona and other states have put biotechnology atop their economic-development lists.
In North Carolina, a major biotechnology research center being developed north of Charlotte will focus on food and the nutritional applications of biotechnology. The state's three major research universities - the University of North Carolina at Chapel Hill, North Carolina State University and Duke University - have said they plan to create research facilities at the campus.
Yet, for all its prestige, biotechnology remains an unprofitable, niche industry that analysts said can't single-handedly boost a sagging economy. Despite being home to 2,700 companies, most employ fewer than 100 workers.
With 260,000 of California's 15 million workers, it's a bigger employer than the aerospace, movie and computer industries individually but smaller than the labor force in government, manufacturing and services.
"It's an industry not growing very rapidly in terms of the number of jobs it's adding," said Joseph Cortright, a Portland, Ore., economist. "It's a relatively small component of the metropolitan economy."
Biotechnology companies are clustered around just a few cities, the three biggest being San Francisco, San Diego and Boston.
To a smaller extent, other companies have their homes in Austin, Texas, Seattle and North Carolina's Research Triangle Park.
Winston-Salem is also developing its downtown research park as a biotech hub.
In the California Healthcare Institute report, compiled by PriceWaterhouseCoopers, there was scant mention of profitability - something that has eluded a large majority of the state and country's biotechnology companies.
Since the industry's inception 30 years ago, U.S. biotechnology companies have lost a combined $52 billion.
The losses continued to mount last year when the sector finished another $2.1 billion in the red, according to a report issued earlier this year by Ernst & Young.
The report did note that the rate of loss was slowing compared with losses of $4.9 billion in 2004 and $6.4 billion in 2003. The Ernst report didn't break out losses by state.
"From a profit standpoint, these companies have very long gestation periods until they actually start selling products," said Tracy Lefteroff, a partner in Ernst & Young and the report's author.
He predicted that the industry as a whole will break even within five years and begin showing an overall profit within 10 years as smaller companies begin receiving regulatory approvals for their drugs.
A handful of biotechnology companies, such as Genentech Inc. of San Francisco and Amgen Inc. of Thousand Oaks, have hit it big after modest beginnings, making their initial investors wealthy.
But they remain an exception. What's more, the high prices of their drugs, especially to treat cancer, are coming under political pressure and several patents on pioneering drugs are set to expire.
"Though the biomedical industry is a solid, significant and growing component of the state's economy, California's life- science leadership is fragile," said David Gollaher, the institute's chief executive.
at 8:39 AM
This is the 3rd Anniversary of the Scripps Florida deal. Here is an update...
Science campus slowly takes root in Florida's soil
By Deana Poole and Stephen Pounds
Palm Beach Post Staff Writers
Monday, October 23, 2006
Gov. Jeb Bush called the vote a "defining moment in Florida's future." An opportunity unparalleled. A partnership unprecedented.
Three years ago today, the legislature approved a $310 million incentive package to bring the world-renowned Scripps Research Institute to Palm Beach County. And with the county's additional $200 million commitment, plans were laid to have the institute's Florida campus open this fall.
That was the plan, at least.
Instead of a ribbon-cutting to celebrate the opening of the institute's new home, a ribbon was cut last week to celebrate the opening of a second temporary building on Florida Atlantic University's Jupiter campus. The new 33,000-square-foot building will help ease space constraints and allow the institute to recruit more staff as the permanent facilities are built nearby.
Crews just started clearing the 30 acres of land late last week. The end of construction is expected in 2009.
The setbacks, prompted by a judge's order and subsequent debates over alternative sites, have changed the course of those plans. They originally called for Scripps' campus to be built on 100 acres at Mecca Farms with another contiguous 400 acres set aside for spinoff companies. Now Scripps' campus is divided between 30 acres at FAU and 70 on the Briger tract. Space for spinoff companies is spread through five north-county cities. Instead of a 30-acre contract between Scripps and Palm Beach County, it's now 15.
But Scripps President Richard Lerner said the changes have not hindered the scientists' endeavors.
"As painful it was, it was for the most part good," Lerner said.
Since Scripps Florida was born in late 2003, the institute has hired 191 employees, filed 29 patent applications and received $12 million in grants from the National Institutes of Health. It also has entered into five collaborative agreements with Florida universities and established more than 30 scientific collaborations with Florida scientists.
The notable accomplishments came during the same time period when the county and Scripps were engaged in a drawn-out saga over where the institute's Florida headquarters should end up, followed by contentious contract negotiations. The past 13 months alone create a dizzying timeline of ups and downs and one critical vote after another.
For many county commissioners, the problem started at the beginning with a hurried rush to approve a deal to build Scripps' biotech village at Mecca Farms. They say they had little choice; they might lose the coveted biotech venture to Orlando if they slowed the plan.
"Everybody wanted to listen to the governor," said Commissioner Addie Greene, who ultimately became the swing vote to build Scripps' labs in Jupiter. "We were really following the governor's lead rather than doing our job as the commission and looking out for the taxpayers."
Palm Beach County Administrator Bob Weisman said when the project was announced, it was "a moving target."
"What you learn from that is: When something of such impact is proposed, you really have to try to slow it down and have a very broad understanding of what all the impacts and repercussions might be," he said. "Having said that, when people are threatening you that they might leave and go someplace else, and you want them, it's tough to take that time."
Lerner said the secrecy in the beginning was critical.
"I actually think Jeb did it in the right way," he said. "I know you guys don't like secrecy. My guess is that if it wasn't a secret, we'd still be doing it right now."
Lerner admits the La Jolla, Calif.-based institute was naive about the political environment here.
"I'll use a stronger word: perhaps even foolish, in assuming that these kind of land wars wouldn't go on," he said.
The experience has left Palm Beach County more cautious in quickly approving hefty incentives for nonprofit institutes under time pressures and with many unknowns. Torrey Pines Institute for Molecular Studies is proof of that.
In two sometimes-hostile debates in August, county commissioners critically and harshly questioned Torrey Pines President Richard Houghten's $94 million proposal to build a biotech lab in Boca Raton. In the end, he chose Port St. Lucie because officials there treated him better.
Some wonder if the long debate over Scripps and the acrimonious exchange between Houghten and the commission could paint Palm Beach County as anti-business.
"It certainly was disconcerting for people like me who are thinking of making an investment," said Sheridan "Sherry" Snyder, president of Biocatalyst International, a Virginia-based firm involved in biotech ventures. "It went on for so long, and there was quite a bit of animosity between them and Scripps, that there was some bruises and bangs."
Read the full article here:
at 8:27 AM
Friday, October 20, 2006
Check out the new VaBIO website-- we have added many new features including an RSS feed, podcasts and multiple viewing formats. The Virginia Biotechnology Association is trying to keep up with the latest technology, so the website was one of the first places we looked to update. Please send us your feedback.
at 9:23 AM
Here is a great article about Mid-Atlantic Bio from the Montgomery County Gazette:
Mid-Atlantic BIO backs regional cooperation, funding strategies
Friday, Oct. 13, 2006
by Steve Berberich
Can’t we all just get along? If we can, it will be better for all of us.
That was the major theme of the Mid-Atlantic Bio conference in Washington, D.C., this week, which highlighted efforts by bioscience leaders in Maryland, Virginia and the District to collaborate as a regional entity rather than push divisive provincial interests.
The second annual conference drew more than 800 investors, businesspeople and academic leaders in biotechnology industries to teach and learn how to better fund development of therapeutics, diagnostics, medical devices and health care services.
‘‘This conference is about regionalism,” said Aris Melissaratos, secretary of the Maryland Department of Business and Economic Development.
Melissaratos and Patrick Gottschalk, secretary of Virginia’s Department of Commerce and Trade, announced a joint plan to maintain regional investment conferences, in Bethesda in 2007 and in Chantilly, Va., in 2008.
‘‘And we are going to continue this regional push,” Melissaratos said. ‘‘This showcases individual companies to each other, smaller companies to the larger companies especially. And it showcases science to the investors and brings together the community. I think it works.”
Meanwhile, for venture capitalists, the main interest was in mid-stage bioscience companies, rather than biotech startups or latter-stage companies.
‘‘I think investors here are interested in finding companies that can be successful ... companies that legitimize their science,” Melissaratos said.
‘‘I have always had this response for the biotech community: They say there is not enough money. I say there is more money around than you can shake a stick at.”
Conference co-organizer Julia Spicer, executive director of the Mid-Atlantic Venture Association, said she enjoyed the regional comradeship.
‘‘It was so refreshing to hear the business development leaders from both states talk about the strengths of each other,” Spicer said. The leaders are ‘‘getting it,” that venture capitalists look at the region as a whole for biotechnology infrastructure and educated workforces. Regional collaborations will mean better markets through entire investor cycles in the region, she said.
‘‘Yes, the states in the region should coalesce,” said David C. U’Prichard, a partner with Red Abbey Venture Partners of Lutherville.
‘‘Look, this region, or the southern Jersey-Philadelphia region, are competing with the top guns, Massachusetts and California” and North Carolina’s Research Triangle Park, ‘‘although I think to some extent [Research Triangle Park] is a little overblown,” he said.
U’Prichard, who is also former chairman of the trade association PennsylvaniaBio, lauded the two-day conference.
‘‘The quality of the turnout and the quality of the speakers from the companies here, they are excellent,” he said.
The conference’s focus on a regional approach was also a boon for scientific service firms in attendance.
‘‘It is hard to distinguish Maryland from the mid-Atlantic region of potential clients” who add value to exhibiting at the conference, said Greg Mingo, director of new business development and marketing for Chesapeake Biological Laboratories Inc. of Baltimore.
The regional approach also appealed to Robert J. McLinden Jr., business representative for the 100-employee Advanced BioScience Laboratories Inc. in Kensington. ‘‘We are finding vendors and new clients and get our name out in public across several states,” he said.
Kristin Olson of VWR BioSciences Inc. of West Chester, Pa., said she collected ‘‘great leads” for 10 new clients from Baltimore all the way to Richmond, Va., in the first two hours of the exhibit hall opening Tuesday.
Venture capitalists in attendance frequently commented that biotech startups and late-stage, clinical drug development companies are less attractive than companies in mid-stage product development who have smart alliances with larger pharma or biotechs.
‘‘We actually feel a little cornered right now,” U’Prichard said. Many VCs have been focused on clinical stage drug development for the past five years, but the process is so expensive now that ‘‘you are lucky to get your money back.”
‘‘Things are changing because the returns are a lot more favorable for development stage companies,” he said.
The conference offered dozens of young, eager biotechnologists the opportunity to pitch for venture capital in workshops.
Miles Grody, senior vice president of operations and general counsel of ACell Inc. in Jessup, pitched his company’s extra-cellular matrix system of wound healing without scars.
‘‘The body heals almost as if it had never been injured,” Grody said of ACell’s technology. Then he asked for $7.5 million to help the company pursue its strategy.
‘‘We are not looking to becoming a large manufacturing company,” Grody said. ‘‘Instead our strategy is focused on partnering with large, established companies in the life sciences industries.”
Doug Doerfler, president and CEO of MaxCyte Inc. of Gaithersburg, asked investors for $10 million help advance its patented cell-based therapeutics with up to 20 new commercial and academic clients.
‘‘We are in a position now to take off,” Doerfler said. There are ‘‘several hundred companies” now involved in cell therapies that are potential clients, ‘‘so it is starting to look like we have the right technology.”
Doerfler said his company is typical of what VCs are seeking.
‘‘We are not a discovery company but strictly a development company, the development of clinical assets with our partners,” he said.
After only 15 months in operation and 20 employees, Boro Dropulic, founder and CEO of Lentigen Corp. of Baltimore, offered investors a unique, established technology of virus-transported gene therapy techniques called ‘‘lenti-viral vectoring.‘‘ He, too, pitched the mid-stage theme, touting Lentigen’s collaboration with Johns Hopkins Medical Center, the National Cancer Institute and the Army, as well as a bevy of patented technologies.
Larger players make their pitch
The mid-stage theme for investors is not just for smaller biotechs, said Steven Mayer, CEO of CoGenesys and a speaker on a panel, ‘‘Building a Sustainable Company: Practical Advice for Bioentrepreneurs.”
CoGenesys, a spin-off of Human Genome Sciences Inc. of Rockville, completed a $55 million financing round in June and has at least seven drug candidates in late preclinical stages.
‘‘Our objective is to move them into the clinic, have proof of principle, and then seek partners or out-licensing of these products. We really do not intend to commercialize. We want to find large pharmas or large bioechs who want to partner with us to commercialize our products,” Mayer said.
He said he and former HGS colleague Craig Rosen, also now with CoGenesys, ‘‘took a long time” to study the venture environment and come up with their current formula.
‘‘We feel that it is a better way to build value into a company that does not require as much funding. So we can do more things with less capital,” Mayer said. ‘‘That is our thesis.”
He added that many companies are abandoning using an initial public stock offering as their ‘‘exit strategy,” because of the rising costs of government regulations.
Conference speaker Todd Brady of Domain Associates LLC of Princeton, N.J., and San Diego also said investors are influenced by rising costs of government regulations on biotech startups.
‘‘Because biotech companies take a very long time and have high expenses to market a drug, I think that is why the whole field has changed,” Brady said. ‘‘The closer to revenues you are, the more like a real company you are to investors.”
Copyright © 2006 The Gazette -
at 9:19 AM
Thursday, October 12, 2006
Cover story about Northern Virginia Biotech in the Washington Business Journal
Virginia's new biotech formula
As Northern Virginia rolls out the welcome mat for its new $500 million prize -- the Howard Hughes Medical Institute -- business leaders are thinking bigger than proteomics, and looking beyond their own county lines.
Washington Business Journal - October 6, 2006
by Joe Coombs and Vandana Sinha
A fort of trees veils it from the traffic-ridden reality of Route 7 on one side. On the other, the banks of the Potomac River quietly cushion it. Between the two lie 689 acres of green seclusion called Janelia Farm Research Campus.
The Loudoun County campus is sliced by meandering roadways that, when finished, will circle two man-made lakes, wild meadows and a veritable greenhouse for science: a glass-walled labyrinth of labs and meeting spaces in a wide staircase of a building burrowed into a hill that, at three football fields long, spans more square footage than Dulles International Airport's main terminal.
Inside that building, along curved hallways and past glass-enclosed office pods, roughly 50 scientists who chose Ashburn over Harvard or Oxford now unpack boxes of equipment and research materials that local economic development officials hope will herald a new era for biotech in Northern Virginia.
Janelia Farm, the Howard Hughes Medical Institute's $500 million retreat, celebrates a quiet public opening Oct. 7. But regional leaders are toasting a different occasion: the baby steps of a Northern Virginia biotech industry that's long been under construction compared with its counterpart across the river.
They hope that in the next generation these high-dollar life sciences projects will spawn the kind of roaring biotech sector Montgomery County has long enjoyed.
But before the celebrations begin, Northern Virginia must still round up some key ingredients -- wet lab space, incubators and gobs of venture capital -- to spur one of the world's costliest and most regulated industries.
"I think it's in its early stages. There's a good energy about it," says Cheryl Moore, chief operating officer for Janelia Farm Research Campus and a board member for VaBio, the state's biotech trade group, and the Virginia Biotechnology Research Park in Richmond. "I wouldn't say it's there yet, but there's a buzz."
Bound to cause the most buzz are the sudden sounds of regionalism, or at least, semiregionalism.
Cooperation among neighbors is often a foreign concept when it comes to economic development. But three Northern Virginia counties are doing the unthinkable: touting each other's strengths to create the region's -- and perhaps the country's -- next great cluster of bioscience activity.
Only a year old, the Northern Virginia Life Science Communities coalition will use a three-pronged sales pitch to reach its goal:
* The pending delivery of the Hughes campus in Loudoun County;
* A 1,500-acre, rapidly growing business park in Prince William County; and
* The powerful tech-based economy and international connections of Fairfax County.
The group consists of the three counties' economic development agencies, and while they'd all like a big piece of biotech for their own tax rolls, they're not averse to attracting business on a regional level.
"We are indeed competitors, make no bones about it," says Jerry Gordon, president and CEO of the Fairfax County Economic Development Authority. "But we're friendly competitors. This is one industry where we can't compete effectively on our own, or separately."
The wild card for Northern Virginia's biotech hopes is at George Mason University, which doesn't have a tradition rich with research but is increasing those efforts at campuses in Fairfax, Loudoun and Prince William.
Some of the university's current work is focused on two emerging bioscience sectors -- proteomics, the study of protein activity in cells, and theranostics, a combination of therapy and diagnostics that tailors treatments to specific individuals.
For now, the Northern Virginia coalition is just trying to let the industry know what the counties have to offer, says Dorri O'Brien Morin, manager of business investment for Loudoun County's economic development department. They're sending a team to the 2006 Mid-Atlantic Bio, an Oct. 10 trade conference in D.C. expected to attract heavyweights from the bioscience industry.
In November, Loudoun County for the first time will host a three-day international medical automation conference, which will be at the Lansdowne Resort Conference Center. The county ponied up $100,000 to bring the annual conference to Loudoun for the next five years, Morin says.
"That's just one example of the effort that's being made," Morin says. "If we can get the right people here on a regular basis, they're going to be in Loudoun and Northern Virginia and say, 'This place is on fire.'"
A work force study is also in the coalition's plans for early 2007. The goal, Morin says, is to find out "where we have gaps, and where we have strengths."
If there are budding strengths and a buzz in Northern Virginia, then Maryland has been comparatively drunk with biotech success. Virginia has 160 biotech and pharmaceutical players statewide, with a little less than half inhabiting the northern suburbs. In Maryland, more than 200 such companies reside in Montgomery County alone.
While Maryland began collecting biotech companies a quarter of a century ago, Northern Virginia scored what many consider its first biotech company in 1998 with American Type Culture Collection, a not-for-profit corporation that inventories microorganisms for research and christened now-growing Innovation @ Prince William Technology Business Park.
Northern Virginia, however, has lacked the research engines that drove most of Maryland's biotech development: large research universities, such as Johns Hopkins University and University of Maryland, and federal research agencies, such as the National Institutes of Health. The sizable budgets of those organizations fund scientific research, and then scores of their researchers graduate to entrepreneurialism.
Northern Virginia, meanwhile, has stuck with its strengths, banking more on information technology and telecommunications companies. Until now.
The region has captured attention with high-profile bioscience wins in recent years, including a $325 million Eli Lilly manufacturing plant, a $45 million George Mason University biocontainment lab and a $32 million FBI lab, all in Prince William County.
Three years ago, Northern Virginia opened its first biosciences incubator in Springfield, taking a step toward competing with Maryland, whose goal is to have seven incubators by the end of next year.
Earlier in the year, George Mason University hired a full-time licensing executive specifically for life sciences in the university's Office of Technology Transfer. That's already led to two new biotech licensing agreements and one new startup in Prince William County, with two more fledgling companies in the works.
"The goal is to keep these companies in Northern Virginia," says Matthew Kluger, vice president for research and economic development at George Mason. "We hope this will be the first of many."
But Janelia Farm is likely to remain the centerpiece of Northern Virginia's biotech strategy. Local leaders hope the campus will be the re search engine that pushes scientists into the business community.
In more than two decades, Hughes researchers around the country have won 11 Nobel Prizes and launched more than 100 companies, a few bulging to more than 500 employees. Last year, they licensed enough technology to earn $2 million in royalties.
"We improved the probability that some companies will want to locate here. There's no question about that, but we didn't make it 100 percent," says Janelia Farm Director Gerry Rubin. "But just having us is not going to do it."
The Hughes institute surely can't do it alone. To lure startups, regional and state officials must have more potent biotech bait, including built-out lab space and pockets full of financing.
In Maryland, the state launched its own venture fund, 40 percent of which goes to biotech companies. The state also has subsidized incubators and this summer began offering generous tax breaks to those who invest in the earliest stages of biotech companies.
Northern Virginia companies, on the other hand, often end up paying their own way. In the past decade, that's amounted to $1.6 billion in private investments in the state's biotech communities.
"We are where we are today because we've done it on our own," says Eric Major, CEO of K2M who founded the spinal cord diagnostics company near his Leesburg home and next door to the regional airport. "I'm not saying Virginia is putting any roadblocks in our way. But they could spur this."
Virginia officials say that instead of pinpointing a specific sector to assist, they want to create a low-tax business-friendly climate that's appealing across industries.
Two years ago, however, Gov. Mark Warner commissioned a biotech committee to look at things the state could do to pump up its activity.
As a result, Virginia leaders say they are reviving a state technology research fund this year with $5 million in new funding for public-private academic partnerships and an additional $250,000 for research and development.
"Some of that is likely to be spent on biotech," says Aneesh Chopra, Virginia Secretary of Technology. "I'm not saying we've solved everything, but we've taken a step forward."
Where Northern Virginia continues to lag is in the amount of lab space. There is virtually none today.
The creation of wet lab space, whose price tag can be as much as five times the cost of office space and well beyond a startup's budget, was one of the recommendations of the governor's commission. For this budget cycle, however, it remains in discussion mode in Richmond.
"We have clients who need space now," says Dan Gonzalez, a VaBio board member and executive vice president of commercial real estate firm Scheer Partners. "So their only alternative is, they can go to Maryland. Or they can go down to Richmond."
Eli Lilly -- searching for temporary wet lab space while its 350,000-square-foot insulin manufacturing plant is being built -- has declared it will build its own 10,000-square-foot wet lab in Prince William County.
It remains to be seen if the gentlemen's agreement among the members of the Northern Virginia Life Science Communities coalition yields the hoped-for big-time results.
Representatives of all three counties say this is the first time that they've been at the table together vying for the same business, and it's taking some adjustment.
However, there's never been such a confluence of events working in their favor:
* The region's economy is still booming.
* Fairfax County has a well-established, tech-based work force, and its economic development agency is building global contacts through several international offices.
* The Hughes campus in Loudoun will be fully operational in 2007.
* Prince William County's Innovation technology park is already creating a burgeoning bioscience sector, anchored by the Eli Lilly plant that will employ 350 people when it opens in 2009.
The Hughes complex could also have a good neighbor in the One Loudoun development, a proposed 360-acre project on Route 7 in Leesburg with 3.8 million square feet of office and commercial space, a 400-room hotel and 1,935 residences.
The project's partnership has teamed up with the International Association of Science Parks, and a significant portion of One Loudoun's commercial property will be devoted to bioscience companies expected to feed off research conducted at Hughes.
"We want a company to be in the best place possible," says Morin, the business investment manager for Loudoun's economic development department. "We may not have the work force available in Loudoun that Fairfax has, for example, but we've got Hughes and we've got some land. Prince William has the Innovation park and a lot of incentives already in place. We can find the right fit."
Prince William was already targeting life sciences before the coalition was formed, says Jason Grant, a spokesman for the county's Department of Economic Development.
As a targeted industry, bioscience companies are eligible for a fast-track permitting processes that lasts only 30 days and can get a reduction of up to 50 percent in county fees for site development. They also are eligible for assistance from a fund administered by the county's industrial development authority.
Although Prince William had begun taking steps on its own to become a biotech center, it jumped onboard when the idea for a regional coalition was proposed, Grant says.
"We asked the question, 'Are we helping ourselves by only marketing ourselves?,'" he says. "As it turns out, each of the three counties has assets that are substantial, and it's a stronger message for us to send out."
Even with a bioscience stronghold in Montgomery County, coalition members say there's plenty of room for the industry to grow elsewhere in Greater Washington.
"We all know that Virginia, Maryland and D.C. don't play together all that well," says Gordon of Fairfax County's economic development group. "So now we've got a Northern Virginia subset that has plenty to offer. There's a lot we can accomplish with simple marketing. We're still in the early stages, but this industry grows in short steps, too."
Even if Northern Virginia succeeds in expanding its biotech industry, the region still has several more years of baby steps before it nears the Maryland-level leagues.
"It's not a single company. It's not a single building. It's not a single facility," says Robert Skunda, president and CEO of the Virginia Biotechnology Research Park, a $585 million business park and incubator that's a partnership among the city of Richmond, the state and Virginia Commonwealth University. "It's really kind of creating a critical mass of all of those things."
Until then, from the terraced, plant-lined roof of the Janelia Farm Research Campus, Northern Virginia's proudest accomplishment in life sciences to date, the biotech community can get a front-row view of its competitor just miles across the Potomac River.
Economic development = scientific developments
From unlocking the mysteries of the genetic code to following the brain's wiring, the Howard Hughes Medical Institute promises science in Ashburn that's never been explored.
The Chevy Chase-based nonprofit research organization -- whose roughly $16 billion endowment pays for long-term, society-altering science projects not profitable enough for most others to fund -- will focus on two areas at its new Janelia Farm Research Campus in Loudoun County.
In one area of emphasis, researchers will try to gain a better understanding of how the brain works. The second research field will focus on obtaining better images of biological pieces.
Its earliest efforts so far have been in imaging. Inventors Eric Betzig and Harald Hess, new employees at the Loudoun County lab, have created a microscope that uses light to differentiate proteins from one another at a resolution rate 10 to 100 times higher than its counterparts -- the equivalent of the difference between a soccer ball and marble.
The extra visibility from their technology, featured in a recent issue of the online Science Express magazine, could help biologists better determine where diseases formulate and grow.
"When you have that extra resolution, you can begin to ask, 'How do some of these organelles work?'" says Hess, Janelia Farm's director of the applied physics and instrumentation group. "How do proteins work together?"
Hughes constructed the lab in a way that makes it easier for researchers to work together. The lab's architects have carved out considerably wide hallways and open spaces that practically force scientists to bump into one another and share ideas.
Chemists, neurobiologists, geneticists, physicists, computer scientists, mathematicians, biologists and engineers will have access to a 500-square-foot cell culture lab, two equipment machine shops and a data center, among other resources.
Janelia Farm will be the only place where the Hughes Institute clusters its researchers, 300 of whom are now scattered across more than five-dozen universities around the world.
By the end of the decade, when Janelia Farm reaches capacity, more than 300 group leaders, researchers, fellows and visiting foreign scientists will be delving into everything from neurons to nanosensors in what Hughes calls its boldest work.
The Loudoun campus is seeking "people who are picked in the first round of the draft," says Gerry Rubin, director of Janelia Farm, which competes for scientists with the likes of the Massachusetts Institute of Technology and Harvard, Stanford and Oxford universities. "We are getting really ambitious, very talented people who set their sights very high and want to do important things. We want you to bet your career on your ideas."
* Vandana Sinha
Happenstance, not strategy, lured Hughes
Loudoun County can credit its top-billing biotech coup, the Howard Hughes Medical Institute's world-class $500 million Janelia Farm Research Campus, to one thing: near coincidence.
When searching for land six years ago, Hughes leaders knew they wanted at least 80 acres of relatively isolated, untouched expanse. They also wanted an airport nearby for visiting scientists, but no bustling office parks as neighbors. They envisioned a remote university-campus setting, with housing for the scientists and on-site eateries.
That largely left Northern Virginia, but finding the amount of space needed for research and development still proved more difficult than expected -- until the project's then-anonymous real estate adviser, The Mark Winkler Co., now Duke Realty, spotted the perfect proposition in the fields of Ashburn.
The lot's previous owner, Dutch software company Baan, had endured eight straight quarters of losses and was hemorrhaging $1 million a day. Days away from bankruptcy, it had no choice but to sell its land in 2000, only two years after announcing plans to construct 2.5 million square feet of office and training buildings to hold 1,000 people in a location already zoned for research.
At the time of the announcement, Gov. Jim Gilmore had called that $40 million project one of the largest development investments in the county's history.
Through Winkler, which had learned about the struggling software player, the Hughes institute approached Baan with an offer it wasn't able to refuse. For a relatively small $57 million, the institute became the proud owner of the 281-acre property.
Only after the negotiations ended and funds were transferred did Loudoun County officials learn of what would indeed become one of the largest development deals in its history.
The Loudoun County Board of Supervisors, in one of its last moves at the end of 2003, voted to award
$6 million in tax exemptions to the research campus. And they're watching closely for what the regional economic payback will be.
* Vandana Sinha
Northern Virginia vs. Montgomery County: Competitors, or 'complements'?
Start with a handful of huge government research groups. Add a 288-acre piece of property for private-sector development and sprinkle in a couple of universities.
That's how Montgomery County crafted the recipe for its biotechnology industry, which today has about 12,000 workers, 200 companies and hundreds of millions of dollars in research and development activity.
Montgomery County is the place where giants such as MedImmune and Human Genome Sciences got their starts, and it's poised to make room for more: The county is in the preliminary stages of building out a 185-acre plot on its east side for life science companies.
As Northern Virginia tries to find its own identity in bioscience, it can turn to a pretty good blueprint on the other side of the Potomac.
Montgomery County, though, already was starting from a strong point when its effort began about 25 years ago: The National Institutes of Health, the U.S. Food and Drug Administration and the National Institute of Standards and Technology had homes in the county. But Montgomery officials knew they couldn't build a biotech industry on federal agencies alone.
"In the early 1980s, it was really the start of the biotech industry itself," says Joe Shapiro, a spokesman for Montgomery County's economic development department. "We had resources in place. The county leaders at the time realized that in order to attract the private sector, we needed to increase our higher education opportunities."
The county created the Shady Grove Life Sciences Center in 1983. The first two tenants at the 288-acre property in Rockville were Otsuka Pharmaceutical and Microbiological Associates, today known as BioReliance. The center then welcomed divisions of Johns Hopkins University and the University of Maryland. Montgomery County's biotech sector blossomed.
"Having Johns Hopkins and the University of Maryland here created the momentum the county was looking for," Shapiro says. After that, people like Wayne Hockmeyer came from Walter Reed and started MedImmune, and Craig Venter left NIH to create Celera Genomics.
Life science incubator complexes for startup companies have sprung up, and the next big thing is the East County Center for Science and Technology near the new headquarters of the FDA in White Oak, which, when finished in 2008, will house 8,000 employees.
Northern Virginia could be on the cusp of creating its own life sciences community, but "we're not trying to go head-to-head with Maryland," says Dorri O'Brien Morin, manager of business investment for Loudoun County's economic development department. "We know we're just getting started, but we think we'll see the metamorphosis of another industry cluster in our economy. We think we can be a complement to what Maryland already has."
at 3:21 PM
Save the dates: The 2007 Mid-Atlantic Bio conference will be held October 25-26 at the Bethesda North Marriott Hotel and Conference Center in North Bethesda, Maryland. The 2008 conference will be held on October 23-24, at the Westfields Marriott Conference Center in Chantilly, Virginia.
at 3:08 PM
MORE THAN 800 ATTENDEES PARTICIPATE IN 2ND ANNUAL MID-ATLANTIC BIO CONFERENCE
Science posters, research updates, commercialization guidance, international business perspective, federal policy trends and investor presentations part of regional conference
October 11, 2006 -- Washington, DC – More than 800 attendees from 18 states and countries, including representatives from 135 different life science companies and more than 60 venture investors, participated in the 2nd annual Mid Atlantic Bio Conference coordinated jointly by MdBio, the Virginia Biotechnology Association (VaBIO) and the Mid-Atlantic Venture Association (MAVA). The two-day program offered something for everyone, including 60 exhibits, 36 scientific posters, and plenary sessions by leaders of science and industry. Keynote speakers included Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Disease and David Holveck, President of Johnson & Johnson Development Corporation. A variety of scientific, business and investor workshops, panels, and focused roundtables rounded out a full programming agenda.
During the conference participants heard lessons learned from a panel of CEO’s; the current status of regenerative medicine, FDA policies and research funding from Washington policy makers and international companies; how to implement a corporate licensing program from representatives of GlaxoSmithKline, compugen USA, MedImmune and Pfizer; understanding and overcoming the unique challenges of running a company of ten or fewer employees; and how to master operating clinical trials on an international level.
Exhibitors interfaced with attendees and other exhibitors throughout the day, with both a luncheon and evening reception taking place in the exhibition hall on Tuesday. In the afternoon, companies from Maryland, Virginia, North Carolina, Delaware, and Pennsylvania who had survived a rigorous selection and preparation process made company presentations to industry colleagues and more than 60 investors from some of the leading life sciences private investment groups in the industry.
On day two, as part of the inaugural debut of the conference’s “Innovation Corridor,” thiry-six scientific posters were on display, featuring a variety of cutting edge academic, federal laboratory, and company research and development efforts providing commercial solutions to unmet needs and highlighting advances in biotechnology. During the morning plenary on October 11, 2006, Dr. Fauci provided insight into the “Matrix of Infectious Diseases.” He discussed both emerging infectious diseases such as AIDS and SARS, and re-emerging diseases such as West Nile Virus and Influenza. During his remarks he noted that a new case of West Nile Virus has just been reported this week in Maryland and that the disease, while prevalent in Africa and the Middle East for centuries, was not evident in the United States until 1999. “More than 26% of all deaths in the world are caused by infectious diseases,” Fauci said, adding that a new strain of drug resistant TB known as XDR-TB had recently lead to the deaths of several people overseas. Putting the common seasonal influenza in perspective, he said “Influenza is a very different, unique re-emerging disease for which the world’s population goes largely under vaccinated.”
The closing plenary luncheon took a look into what it takes to build a sustainable company, and included representatives from Aisling Capital, Morgan Stanley and UBS, who spoke candidly to the audience about their views of the market. They suggested that emerging companies need to understand the competitive landscape and provide a business plan that shows they have the in-house power to get things done from a financial, management and regulatory perspective. They noted the importance of the company having IP and a minimum of Phase II proof of concept data. Dennis Purcell from Aisling Capital noted that the new trend is for VCs to fund a company all the way through the process, so it is important to pick the right VCs from the beginning. He also noted that early stage companies today are further along in the development process than early stage companies of five to ten years ago. All panelists agreed that while now is a more difficult time to go public, it is a positive time for mergers and acquisitions and attractive ideas are getting funded.
The Mid-Atlantic Bio conference program is designed to offer business development and networking opportunities for academics, policy makers, federal labs, and industry leaders through exhibition, industry showcase, scientific poster sessions, and topical panel and plenary sessions. Unique to this event is the opportunity for companies at all stages of development to present to venture capital firms interested in the areas of therapeutics, diagnostics, medical devices, and healthcare services as well as network with potential pharmaceutical partners.
“This conference is growing in reputation and attendance,” said Julia Spicer, Executive Director of MAVA and a member of the Host Committee with partners MdBio and VaBIO. “2006 Mid-Atlantic Bio was an overwhelming success providing a platform where leaders of industry, science, academia, policy, and finance have all come together to collaborate and support the growth of the biotechnology and life sciences communities. We look forward to building on this success in 2007 and 2008, and hope even more members of the life science and investor community will participate in the upcoming regional conferences hosted jointly by MdBio, VaBIO and MAVA.”
During the event the Mid-Atlantic Bio host committee announced plans to rotate the conference around the region to further highlight area assets. The 2007 conference will be held October 25-26 at the Bethesda North Marriott Hotel and Conference Center in North Bethesda, Maryland, in the heart of “DNA Alley.” The 2008 conference will be held on October 23-24, at the Westfields Marriott Conference Center in Chantilly, Virginia, a commerce and technology hub. Aris Melissaratos, Secretary of Maryland’s Department of Business and Economic Development and Patrick Gottschalk, Secretary of Virginia’s Department of Commerce and Trade joined officials from Montgomery County, Maryland and Fairfax County, Virginia in applauding this regional commitment to promote the life science sector and public/private partnerships on a multi-state level.
“By rotating this conference from Washington, DC to other locations in the region, this will continue to be the ‘annual meeting’ for our region’s bioscience community, a place where industry leaders, academic entrepreneurs and researchers, investors, educators, policy makers, and economic development officials can meet, network, share ideas and foster the relationships and partnerships that strengthen the region’s bioscience sector,” said Bob Eaton, President of MdBio.
Lead and diamond sponsors for the 2006 conference included Alexandria Real Estate Equities, Cooley Godward Kronish, LLP, Quintiles Transnational and the states of Maryland and Virginia. For a complete list of sponsors visit www.midatlanticbio.org.
About Mid-Atlantic Bio
Mid-Atlantic Bio is the only industry and investor conference and exhibition dedicated to promoting the growth of biotechnology in the region. The Conference is collectively sponsored by the mid-Atlantic's most influential bioscience and investor associations, MdBio, the Mid-Atlantic Venture Association (MAVA), and the Virginia Biotechnology Association (VaBIO). The initiative benefits from broad regional support, including the investor and greater business communities, academic institutions, government agencies, and partnered regional associations. The conference provides the platform for conducting business, and building broad alliances with key organizations and audiences sharing a common interest in the long-term growth and stability of biotechnology in the mid-Atlantic. For more information, please visit www.midatlanticbio.org.
at 3:06 PM