By Ransdell Pierson and Lewis Krauskopf Ransdell Pierson And Lewis Krauskopf
WHITEHOUSE STATION, New Jersey (Reuters) – Merck & Co (MRK.N) plans to break into biotechnology medicine, including a major push into the developing market for generic biotech, as it confronts challenges to its product line.
The move into generic biologics, announced on Tuesday at Merck's annual business day, marks a significant shift for the drugmaker into territory primarily targeted by generic companies, and underscores the growth hurdles Merck faces.
"Next year will continue to be a period of fundamental transformation that establishes Merck as a different competitor for the next decade," Merck CEO Richard Clark told analysts and investors at the meeting held at its New Jersey headquarters to review its business operations.
Merck shares have fallen more sharply than rival drugmakers this year as it has seen demand falter for its Singulair asthma drug, Gardasil cervical cancer vaccine and its cholesterol fighters, Vytorin and Zetia.
The drugmaker, whose shares fell 1.7 percent on Tuesday, last week forecast 2009 earnings below Wall Street's targets, citing sluggish sales for key medicines and negative foreign currency trends. It repeated that forecast on Tuesday.
Merck, which faces looming patent expirations, is also cutting 7,200 jobs on top of an earlier restructuring.
Mike Krensavage, principal at Krensavage Asset Management, said the generic biotech move was "a rather significant departure for a company that was so focused on once-daily pills."
"If a company was able to produce enough novel pills, it wouldn't need to go into biologics," Krensavage said. "To copy other people's biologics may admit that the company was overly optimistic about its pills."
Several other analysts and money managers interviewed at the meeting said there was not a great deal of major news, outside of the biotech effort.
Merck is moving to diversify its portfolio by creating a new division, Merck BioVentures, which leverages a platform for both new biologics and so-called "follow-on" biologics -- or generic biotech medicines.
Many drugmakers are investing more into the lucrative area of biologics, which treat conditions such as cancer, multiple sclerosis and rheumatoid arthritis and are derived from living cells as opposed to synthetic chemicals. There were $94 billion in 2007 global biologics sales, according to Merck.
Merck has no such biologics on the market now, and will leverage its 2006 purchase of GlycoFi to break into the area.
By pushing into generic biotech medicines, Merck will be competing with generic drugmakers such as Teva Pharmaceuticals Industries (TEVA.O) and Novartis' (NOVN.VX) Sandoz unit.
The company said its first follow-on biologics program, MK-2578 for anemia, is in clinical development and it plans to launch it in 2012. Merck expects to have at least five follow-on biologics in late-stage development by 2012.
Now, however, generic biotech is an uncertain market.
No U.S. pathway exists for approval of lower-cost generic versions of biotech medicines, which are generally more complex to manufacture than pills and capsules and could be tougher to duplicate. The topic is likely to take on new urgency under President-elect Barack Obama, as lawmakers seek to cut health-care costs.
"Novartis and Teva are further along," Michael Levesque, an analyst at Moody's, said at the meeting. "Merck has vast financial resources to try to catch up despite the pressure on its earnings."
Natixis Bleichroeder analyst Jon LeCroy said the anemia product could be a big drug "if they get it through," but noted the lack of a U.S. regulatory pathway. Merck's involvement with generic biologics "could definitely make things move" with the regulatory process, LeCroy said.
Merck research chief Peter Kim said it was unlikely regulators would allow direct generic substitution without extensive study. Merck plans the full range of clinical trials required for new drugs to support the products.
Merck's development technology could enable the company to launch the anemia drug two years ahead of competitors that are developing similar products, Kim said.
Merck also said it is on track to reach $2 billion in emerging market sales by 2010 and is making significant investments in key markets, including China and India.
Its research pipeline has nine total medicines in late-stage development.
Among its experimental medicines, Merck touted an asthma medicine that could move into late-stage development next year, and a vaccine that targets staph infections that the company expects to seek approval for in 2011. Merck also said it was significantly investing in Alzheimer's disease research.
Merck shares were down 47 cents at $26.53 in afternoon trading on the New York Stock Exchange.
(Editing by Dave Zimmerman and Gunna Dickson)
From Yahoo News
Wednesday, December 17, 2008
By Ransdell Pierson and Lewis Krauskopf Ransdell Pierson And Lewis Krauskopf
Tuesday, December 16, 2008
Biotechnology Industry Statistics: December 2008
• By comparison with 2007 through the first 11 months of the year, funds raised from IPOs have fallen 97% and follow-on/secondary offerings have fallen 56%. Through November 30, 2008, total capital raised by the industry has fallen by 56% (source: BioCentury).
• 120 companies (30%) are now trading with less than 6 months of cash on hand. This represents a jump of 90% more companies that have less than 6 months cash on hand vs. 2007. (source: BIO) 180 companies (45%) have less than 1 year of cash remaining” This represents a jump of 65% more companies that have less than 1 year cash on hand vs. 2007. (source: BIO) Only 10% of the 370 public US biotech companies have positive income. (source: BIO)
Stock Performance In 2008 Through 11/24/08:
• All US biotech stock performance: Mean - 51%, Median -62% ;
• Small US biotech stock performance: Mean - 53%, Median -64;
• Large US biotech stock performance: Mean - 33%, Median -42%
• 90% of US biotech stocks have dropped in 2008 as of 11/24/08
• 35% of the 270 biotech companies under $1 Billion in market cap are trading below their cash value. That is, they have more cash on hand per share than the market value of their companies. This level has gone up by 5x as compares with the average over the 5 prior years. (source: BIO).
• 24 small, public biotechs have laid-off workers in the past eight weeks alone (10/1/08-12/5/08.) (source: BIO)
• In the past three months (9/1/08-12/1/08), many promising drug development programs have been shelved in a number of therapeutic areas including: Alzheimer’s, Multiple Sclerosis, diabetes and various cancers (source: BioCentury)
• The biosciences sector pays, on average, 68% higher salaries than the average private-sector job. The average annual wage of the bioscience worker is approximately $71,000 as compared with an average annual wage of $42,000 for the total private sector. (source: Battelle)
• The total employment in the biosciences in the U.S. reached 1.3 million in 2006, up from 1.2 million in 2004, with bioscience workers found in all 50 states and Puerto Rico. (source: Battelle)
• The U.S. biotechnology industry is very R&D-intensive with $30 billion in 2007 invested in research for new therapies and cures. There are currently more than 400 biotech drug products and vaccines currently in clinical trials targeting more than 200 diseases including various cancers, Alzheimer’s disease, heart disease, diabetes, multiple sclerosis, AIDS and arthritis. (source: E&Y)
The data were compiled by BIO for their lobbying effort on Capitol Hill for the NOL Stimulus Proposal.
at 5:14 PM
EntreMed, Inc. , a clinical-stage pharmaceutical company announced today plans to focus the Company's resources on its most promising near-term product candidate, ENMD-2076, an Aurora/angiogenesis kinase inhibitor, as part of the Company's overall plan to lower operating costs and preserve capital. The plan calls for acceleration of the Company's 2009 clinical objectives for ENMD-2076, effectively transitioning the Company into a clinically-focused operation.
ENMD-2076 is a unique small molecule kinase inhibitor which, in preclinical studies, has displayed an excellent activity profile and is currently in Phase 1 clinical trials for solid tumors and multiple myeloma. The Company expects to have available clinical data in mid-2009. While the Company's other product candidates, including MKC-1, ENMD-1198 and Panzem(R) in rheumatoid arthritis, continue to be promising, the Company will consider further clinical development only if additional financial resources are available. As a result, the Company expects to reduce all research activities to the minimal level necessary to continue its efforts to realize their potential value through arrangements with third parties. The Company's plan for these programs is not expected to affect ongoing trials and current patients.
Carolyn F. Sidor, M.D., M.B.A., Vice President, and Chief Medical Officer, will continue to lead the clinical development of ENMD-2076. Mark R. Bray, Ph.D, Vice President Research, will lead the research support for the Company's clinical activities. These research activities will concentrate primarily on those actions that will generate critical data to support and enhance the understanding of the mechanism of action and potential clinical utility of ENMD-2076. Focus on these activities will allow the Company to restructure and reduce its current workforce by approximately 60% across all areas of the business. The Company expects to substantially implement this restructuring plan by December 31, 2008.
As part of the restructuring and in order to further reduce costs, President and Chief Executive Officer, James S. Burns, will be leaving the Company and resigning from the Board of Directors. In addition, Chief Financial Officer, Dane Saglio; Senior Vice President, Research & Development, Kenneth W. Bair Ph.D.; and Senior Vice President, Corporate & Business Development, Thomas H. Bliss, will be leaving the Company.
The senior management team going forward will include: Carolyn F. Sidor, M.D., Vice President & Chief Medical Officer; Mark R. Bray, Ph.D., Vice President, Research; Cynthia W. Hu, Vice President, General Counsel & Secretary who has been appointed Chief Operating Officer; and Kathy Wehmeir-Davis, Controller who has been appointed Principal Accounting Officer.
This senior management team will report to a newly formed Executive Committee of the Board comprised of three independent directors: Michael M. Tarnow, Dwight L. Bush and Jennie Hunter-Cevera, Ph.D.
"In addressing the near- to mid-term strategy for the Company, the Board concluded that focusing our human and financial resources on our most promising program and its upcoming clinical milestones is the best course for providing shareholder value," said Chairman of the Board, Michael M. Tarnow. "EntreMed is indebted to Jim Burns under whose leadership ENMD-2076 was acquired and, along with our other compounds, was readied for, and submitted to, clinical evaluation. Jim, together with CFO, Dane Saglio, worked tirelessly in difficult market conditions to assure that adequate funding would be available to advance our portfolio. This is a difficult period for many similar stage companies and while we are committed to adjusting and focusing our assets, we recognize and appreciate the efforts of our departing officers and the many men and women who have dedicated their professional efforts to EntreMed."
James S. Burns, President & CEO commented, "These are difficult economic times for biotech companies. EntreMed has made the transition to a clinical organization, so a smaller focused organization will allow us to preserve cash and concentrate on ENMD-2076. I would like to thank all of my colleagues who have contributed the best of their time and talents to building our cancer pipeline."
Link to release.
at 5:10 PM
Friday, December 12, 2008
Matt Gardner of BayBio out front on Bloomberg's version of the biotech aid bill story...
Biotechnology Companies Pitch for U.S. Taxpayer Aid
By David Olmos and Justin Blum
Dec. 10 (Bloomberg) -- U.S. biotechnology executives are lobbying Congress to change a tax law and provide millions of dollars in government money to small, cash-starved drugmakers.
The companies want to be able to claim a tax rebate upfront in exchange for giving up a portion of the deductions for net operating losses that they are eligible to take once they begin to make a profit, said Matt Gardner, president and chief executive of BayBio, an industry group in South San Francisco, California, in a telephone interview yesterday.
Although its troubles aren’t as high profile as those of carmakers and banks, the biotechnology industry faces one of its worst cash shortages in years. The crisis is being felt most severely by smaller companies, which require big infusions of money for costly drug research though they often have no sales. New drugs require hundreds of millions of dollars and more than a decade to develop.
“Most of these companies have not yet had their first product approved” by regulators, Gardner said. “They don’t have any revenue, and they are accumulating these operating losses. This change would allow them to convert some of these losses back into future research spending, which is a very good thing for the economy.”
The effort in Congress is being led by the Biotechnology Industry Organization, or BIO, a Washington, D.C.-based trade group. According to the group’s figures, 120 of the 370 publicly traded U.S. biotechnology companies have less than six months of cash on hand. The industry also has been hit by hundreds of layoffs and some bankruptcies.
Executives from 10 small biotechnology companies are meeting with lawmakers and their staff on Capitol Hill today to press for assistance, said Ellen Dadisman, a spokeswoman for BIO, in a telephone interview. Among them are officials from Acorda Therapeutics Inc. of Hawthorne, New York, and CombinatoRx Inc. of Cambridge, Massachusetts, she said.
The executives, who want the measure included in economic stimulus legislation, are meeting with both Democrats and Republicans, including leaders of the House Ways and Means Committee and Senate Finance Committee, Dadisman said. Lobbying has just begun and it’s too soon to say which lawmakers support the measure, Dadisman said.
“I have not seen an environment this terrifying in the 22 years I have been raising money to help develop novel drugs,” said Ron Cohen, president and chief executive officer of Acorda, in a telephone interview. “Almost nobody can raise money. That’s what’s scary. Companies are beginning to go out of business right and left.”
Without assistance, biotechnology companies will fail and their drugs won’t be developed, he said.
A company with $100 million in net operating losses would be entitled to $35 million in lower federal taxes when it becomes profitable, according to BIO. Such a company may receive $20 million upfront to pay for U.S.-based research, under the proposal, according to the group.
at 4:47 PM
Tuesday, December 09, 2008
A month after reporting the company's research and development was not being adversely affected by the souring economy, Luna Innovations Inc. has laid off about 20 employees.
The Roanoke-based technology company that develops and manufactures health care, telecommunications, energy and defense market products attributed the layoffs to the national economy.
"Like many U.S. companies, Luna has been affected by the current economic environment," said Luna Chairman and CEO Kent Murphy in an statement e-mailed to The Roanoke Times. "We are taking the necessary actions to ensure our future success. These proactive steps include downsizing our workforce by approximately 20 positions spread across our various locations and business units."
In addition to Roanoke, Luna has offices in Blacksburg, Charlottesville, Hampton and Danville.
During a Nov. 5 conference call with analysts and investors, Murphy said, "At the moment we're not seeing any slowdown, any measurable slowdown, at all."
But with the recession deepening in November as U.S. companies shed jobs at the fastest rate since 1974, Luna has felt the impact.
"Arrival at this decision was difficult," Murphy's statement said. "Luna truly values its employees and those impacted by this realignment are deserving of our gratitude for the contributions they have made in our success.
"With this workforce adjustment we are further streamlining our company just as other businesses across the nation are doing. And, we will continue to provide our stakeholders with the quality of products and services we are known for."
Luna had been hiring for most of 2008, and currently has five open positions.
"These positions relate to development work under existing contracts and require very specialized skill sets that we felt could not reasonably have been filled by the individuals who were laid off," Luna spokeswoman Karin Clark said in an e-mail. "The other previously posted openings have been placed on hold."
In October Luna employed 239 people. As of Friday ,company-wide employment was 218, Clark said.
Since its initial public offering at $6 in 2006, Luna has struggled to become profitable and at times attract investors.
Luna's shares have plummeted 80 percent in a year. By Dec. 27, Luna's stock price was on the verge of breaking $10 a share, but by March it had fallen below $5 dollars a share and by October it was trading below $3 a share.
Luna shares closed down 3 cents to $2.23 Friday, but reached its 52-week low of $2 in early trading.
Carilion Clinic, which owns the development that houses Luna's corporate offices, is the second-largest shareholder, with a 20.5 percent stake, according to an April federal government filing. Carilion's Chief Executive Officer Ed Murphy votes those shares by proxy. Only Luna's CEO has a higher stake, controlling 25.3 percent of the company's shares.
At the time of the public offering, Luna was touted as the first step in what was to become Roanoke's new economy centered around biotechnology. The entire development project, which has been supported by the city, was billed as an economic springboard that would bring more high-skilled jobs and attract more health care businesses.
Since then, the development area, located at the corner of South Jefferson Street and Reserve Avenue, has morphed into a complex that will house the future Virginia Tech Carilion School of Medicine and Research Institute and physician offices for Carilion's burgeoning health care system.
Luna has managed to increase its revenues and reported $10.7 million for the third quarter that ended Sept. 30. That was the first time quarterly revenues surpassed $10 million.
In November, Luna reported a net loss of $473,985, or 4 cents a share, in the third quarter, compared with a net loss of $1.8 million, or 18 cents a share, for the same period a year earlier.
Kent Murphy has continued to say that Luna is on its way to becoming profitable.
To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com/.
at 5:24 PM
Biotech industry group spent $1.9M lobbying in 3Q
Associated Press, 12.08.08, 12:48 PM EST
The Biotechnology Industry Organization, a lobbying and advocacy group for the biotech industry, spent more than $1.9 million lobbying the federal government in the third quarter, according to a recent disclosure form.
The group lobbied on a range of agricultural issues, including marketing and regulatory programs and risk assessment for cloned products, as well as on patent reform, biofuels, stem cells, and government reimbursement rates.
The group also has been at the forefront in the now stalled efforts to allow generic drug companies to make cheaper versions of biotech drugs. Currently, the Food and Drug Administration only has a system in place for approving generic versions of chemical-based drugs. Biotech drugs are made using living cells and are more complex.
Both generic drug developers and biotech companies are at odds over how a new system would work, with the length of patent protection for biotech drugs a key sticking point.
The trade group's members include some of the largest names in biotech, such as Genentech Inc. (nyse: DNA - news - people ) and Amgen Inc. (nasdaq: AMGN - news - people )
Besides Congress, the group lobbied the Department of Agriculture, FDA, Federal Trade Commission, and Centers for Medicare and Medicaid Services, among other agencies, according to a form posted online Oct. 20 by the House clerk's office.
Those lobbying on behalf of the organization included: Patrick Carroll, a former legislative assistant to Rep. Ray LaHood, R-Ill.; Tooshar Swain, who was a legislative correspondent to former Sen. Rick Santorum, R-Pa.; and Bill Olson, who used to work as a legislative assistant to Rep. John Shimkus, R-Ill.
at 9:18 AM
Friday, November 21, 2008
We are still a long way from the bottom...
`Unprecedented' Biotech Bankruptcies Erupt Amid Finance Crisis
By David Olmos and Rob Waters
Nov. 21 (Bloomberg) -- The global economic crisis has cut funding for biotechnology companies to the lowest level in a decade, triggering bankruptcies and threatening development of drugs based on biomedical breakthroughs.
In the past month, at least five biotechnology businesses have sought bankruptcy protection, according to company news releases, and others may be heading toward a similar fate. Those at highest risk have experimental compounds moving into costly human research. Peptimmune Inc., a 6-year-old closely held firm, says it’s struggling to pay for clinical trials of its promising multiple sclerosis drug.
The amount raised this year by biotechnology companies fell by $9.7 billion through September, or 54 percent, compared with the same period in 2007, according to Burrill & Co., a life sciences investment bank in San Francisco. That may mean work on dozens of potential treatments will stall or die as companies fire workers and shelve early research projects, industry executives and investors said.
“I’m looking down the barrel of a gun,” said Peptimmune’s Chief Executive Officer Thomas Mathers in an interview. The Cambridge, Massachusetts-based company’s cut staff by more than half to 22 people, moved to smaller offices to conserve the $6.5 million on hand and is delaying research on new drugs for Alzheimer’s disease and Parkinson’s, Mathers said.
Biotechnology companies in the U.S. are raising less cash than they have in a decade, according to Burrill, which tracks investment in the life-sciences industry. Financing fell to $8.2 billion through September, from $17.9 billion last year. Venture capital funding fell 16 percent, to $2.9 billion.
“For the first time in the history of the biotech industry, you’re going to see unprecedented levels of bankruptcies and dissolutions,” said David Strupp, managing director in the life sciences group at Canaccord Adams, a research and investment bank in New York. “This all will play out in the next six to nine months.”
Bankruptcies in biotechnology have been rare because struggling companies often dodged trouble through mergers, licensing or development deals, or through investors willing to make cash infusions, Strupp said in an interview.
Now, a large number of companies are “not cycling out of this queue,” Strupp said. “Wall Street won’t finance them, and the pharmaceutical industry can’t buy all of them. They keep marching forward without the ability to get saved.”
Most Advanced Drug
Peptimmune’s most advanced drug, PI-2301, is a multiple sclerosis treatment designed to be taken weekly. It would compete with Teva Pharmaceutical Industries Ltd.’s daily treatment Copaxone, which generated $1.7 billion in sales last year. Peptimmune is counting on positive data from a study due in 2009 to show its drug is better than Copaxone.
“If the multiple sclerosis program doesn’t do well, it will be very difficult for this company to raise money,” Mathers said.
MS, which affects about 300,000 people in the U.S., is caused when the body’s immune system attacks the protective coating of nerve fibers. There’s no cure. Four of six MS treatments cleared by the U.S. Food and Drug Administration were developed by biotechnology companies.
Peptimmune, with no products on the market, has raised and spent about $85 million. Biotech companies without products on the market, or those unable to access equity markets by selling shares, are the ones in most need of cash to fund clinical studies, investors and company executives said.
Worst in a Decade
Initial public offerings for biotechnology companies have almost disappeared, with just one, for $5.8 million, so far in 2008. That’s down from 28 IPOs that raised $1.7 billion last year and from 66 in 2000 that garnered $6.5 billion.
The most likely companies to seek bankruptcy are those with less than six months of cash on hand, just a few drugs in development and no definitive clinical data to attract a funding partner, said Andrew Busser, principal at Symphony Capital, a New York-based investment fund. Twenty-five percent of the 370 public U.S. biotechnology companies have less than six months of cash, according to data compiled by the Biotechnology Industry Organization, a trade group in Washington, D.C.
A Darwinian pruning of the weakest companies is inevitable, and isn’t necessarily to be mourned, said Peter Wysong, health- care investment banker for Natixis Bleichroeder in New York, in an interview.
“Most people would probably say there have been too many biotechnology companies that have been like the walking dead,” Wysong said. “The deaths will be concentrated among companies that have little to offer,” leaving a smaller crop of stronger companies still standing, he said.
On Nov. 10, MicroIslet Inc., a San Diego developer of diabetes treatments, and Accentia Biopharmaceuticals, of Tampa, Florida, sought bankruptcy protection to reorganize, each citing an inability to raise money.
MicroIslet spent $50 million during the past decade developing an experimental treatment for Type 1 diabetes that would involve transplanting insulin-producing cells harvested from the pancreas of pigs into diabetics to allow them to forego insulin injections. The treatment, tested in animals but not in humans, came from technology developed at Duke University in Durham, North Carolina.
With the company $3 million in debt and needing millions more to begin clinical studies, private investors turned away, leaving MicroIslet without money for human tests, said Michael Andrews, the company’s chief executive officer, in an interview.
‘Down the Path’
“We’re at a stage that a lot of companies are in, where it’s time to raise money but there’s no clinical data and you’re not a brand new company coming out of academia,” Andrews said. “I suspect there will be a number of companies that will go down this path.”
In October, AtheroGenics Inc., an Alpharetta, Georgia-based developer of a diabetes drug, filed for bankruptcy after defaulting on $302 million in debt the previous month. Orchestra Therapeutics Inc., of Carlsbad, California, also filed last month. The long-struggling company was co-founded in 1986 by the late Jonas Salk, the polio-vaccine developer who sought to find a way to immunize patients against AIDS.
Amylin Pharmaceuticals Inc., a San Diego biotechnology company, said Nov. 10 it would cut 16 percent of its workforce, or about 340 employees, to try to save $80 million in 2009. Cell Genesys Inc., a South San Francisco, California-based company that recently halted work on a prostate cancer therapy after deaths were reported in a study, said Nov. 6 it will fire 230 workers, or 80 percent of its workers, by year-end.
The lucky ones find buyers among bigger pharmaceutical companies to keep research programs alive. That’s what happened to Redwood City, California-based Genelabs Technologies Inc., a developer of hepatitis C treatments, which agreed on Oct. 29 to be bought by GlaxoSmithKline Plc, Europe’s biggest drugmaker, for $57 million. Genelabs’ market value had plunged to $10 million and its stock had lost 82 percent of its value this year before the deal was announced.
“The sign over Wall Street for small biotechs is ‘closed for the season,’” said Frederick Driscoll, Genelabs’ chief executive officer, in a Nov. 6 telephone interview. Driscoll said he considers the company, whose hepatitis C therapies are still in laboratory tests, fortunate.
Other biotechnology companies, unable or unwilling to find a partner, will go into “hibernation, just doing enough to keep the technology alive and waiting for a better day,” Glen Giovannetti, the Boston-based global leader of Ernst & Young’s Biotechnology Center, said in an interview Oct. 31.
Investors will likely return to biotechnology once the economy stabilizes because the industry still promises attractive returns, said Brent Milner, managing director of health care investing at Stanford Financial Group Co., an investment bank in New York.
“Stock-picking will come back in vogue and people will ask, ‘Where are the 30 percent growers?” Milner said. “When that happens, everyone will again look to biotech because everyone loves a lottery ticket. I think there is a long-term silver lining.”
at 9:03 AM
Wednesday, November 12, 2008
Jeanna Duerscherl The Roanoke Times
Vyvanse, an ADHD drug, was developed by New River Pharmaceuticals, which had a lab at the Virginia Tech Corporate Research Center.
Inside a recent issue of Time magazine, a two-page advertisement hailed the work of medical minds in Southwest Virginia.
The ad directed chronic time-wasters among the millions of adults with attention-deficit hyperactivity disorder to try a new drug.
It's Vyvanse, invented by New River Pharmaceuticals, a small, private company that had an office in Radford and laboratory space leased at the Virginia Tech Corporate Research Center in Blacksburg.
Like a missile that soared out of sight, New River Phamaceuticals rode to prominence on a successful initial public stock offering and sold in 2007 for $2.6 billion. It is part of global drug company Shire plc in England with no local operations.
Swallowed in a corporate merger, you won't find New River in the phone book, on the Web or on a table placard at the next chamber banquet.
The company is gone, but what remains of its legacy?
For some entrepreneurs in the New River and Roanoke valleys, it's a big deal that a nationally important drug was developed in this business community. They say the company generated inspiration and cash from which the region continues to profit.
"It has inspired a lot of folks," said Sam English, a Roanoke-based business consultant, biochemist and analyst who works with early stage companies in the life sciences industries.
While taking away nothing from what New River achieved, they say they don't expect a series of medical technology companies to follow, but remain sold on the promise that science and technology-driven businesses hold for the region.
Vyvanse has shown success treating patients with ADHD
By one objective measure, Vyvanse, a Schedule II stimulant, is one of the region's greatest business successes.
The drug is on course to bring in gross revenue of $300 million this year, making Vyvanse a bigger enterprise than many area companies.
For example, Roanoke-based Luna Innovations, which grew out of Blacksburg, is on pace to bring in about $40 million in 2008 revenues. At the top of the spectrum, Roanoke-based Advance Auto Parts sold $4.8 billion in merchandise last year.
Sales of Vyvanse are similar in size to the revenues of Stanley Furniture, a symbol of Western Virginia's old economy that recorded $307 million in sales last year.
Analysts have projected that, with adult ADHD increasingly diagnosed, the drug could be a blockbuster -- a pill whose sales exceed $1 billion a year.
"I have used Vyvanse on several hundred patients from age 5 to some of my now-adult patients in their 20s and 30s with a high degree of success," said Dr. Michael Sisk, a clinician at Roanoke Neurological Associates.
With a few exceptions, Vyvanse triggers the fewest side effects of the central nervous system stimulants prescribed for ADHD, he said. He described the scientists who made Vyvanse as "brilliant."
New River Pharmaceuticals was founded in 1996 and off and running with an initial public stock offering in 2004.
Investors believed that New River would launch important new drugs and stayed with the company through periods of heavy spending on drug development before the first dollar came in.
As Vyvanse grew in promise, a 2005 partnership with Shire plc generated a payment of $50 million to New River. That was followed by a second such payment after the Food and Drug Administration accepted the drug for review.
By early 2006, following news that more drugs were in the works and favorable national media attention, the company's market capitalization (the value of its stock) climbed to $1 billion.
In April 2007, Shire, the leaking maker of ADHD drugs, paid $2.6 billion for New River.
Drug is No. 5 in its class and could go higher
Vyvanse, which went on sale in July 2007, now makes up about 10 percent of all ADHD drugs sold.
It is the fifth most-prescribed stimulant for the disorder, according to IMS Health, a Pennsylvania health care information and consulting company.
At least 1 million people are taking Vyvanse, most of them children whose parents are looking for relief from the constant rambunctiousness that accompanies the disorder, said Matt Cabrey, spokesman for Shire. He said Shire and New River believed they could position Vyvanse to become the emerging ADHD medicine of choice after top-selling Adderall goes off patent in April.
"And it's proven to be the case," Cabrey asserted.
NRP, shorthand for New River Pharmaceuticals, shows up in tiny letters on the midsection of Vyvanse capsules.
But that's about all the ongoing credit New River receives for its contribution to the project's success.
R.J. Kirk, the Pulaski County businessman who founded New River Pharmaceuticals, said some of the money the company made is still here as business investment capital.
Still here, too, are some of the people who worked at New River.
Throw in the jolt of self-confidence New River inspired in business people, and perhaps a bit of pride, and Kirk sees innovation and commercialization flourishing all the more.
English said business leaders he has encountered elsewhere for a long time did not differentiate Southwest Virginia from the Northern Virginia-District of Columbia region.
They can now thanks in part to New River's impact.
"I wouldn't go so far as to say it put it on the map, but it let some folks know we've got some exciting things happening here," said English, a former Carilion Biomedical Institute analyst who now has his own firm, CIE Partners.
Aric Bopp, who directs the New River Valley Economic Alliance, sees a mixed impact.
"The good of it is that our young startup companies have had the opportunity to see just how much financial reward can be realized and how exciting of an opportunity can exist in the region," Bopp said.
"The bad is that with the purchase of New River Pharmaceuticals by Shire Pharmaceuticals, people also get to see that some of these opportunities don't last forever and how some of the jobs created by these exciting opportunities will inevitably come and go from the region."
Jim Flowers, who runs VT KnowledgeWorks in Blacksburg, warned against expecting too much from the sector New River Pharmaceuticals was in -- which he described as the medical technology end of biotechnology focused on treatment of disease.
"Although New River demonstrated that a med-tech home run can happen here, that does not mean that they will happen here with any regularity," Flowers said. "I don't think the New River success has created any particularly noteworthy local legacy other than some serious wealth in Radford."
Kirk, who controls some of that wealth, is a thoughtful investor looking out for his organization's best interests and "not in the regional economic development business," Flowers said.
For one thing, the region currently has no significant engine of research generating business opportunities in the medical technology subsector, a focus for Kirk's team, he said.
Flowers said entrepreneurs are succeeding to find footholds in a broad range of scientific and technical fields and he is excited by the promise that holds.
"The shift from a manufacturing mind-set to a creative mind-set is palpable and has begun to deliver in a serious way," he said.
Money made from sale of NRP still working locally
Kirk said by e-mail that New River's work force, which he said never exceeded 39 people, did break up when Shire bought the company.
Some went to Shire, which has offices in England and Wayne, Pa. Some work for other companies that Kirk's Radford-based private investment firm is supporting.
"Many local investors and New River employees earned (from their stock purchases and options) millions of dollars each. I am personally acquainted with many local investors who earned very substantial returns and these people are still in the New River and Roanoke Valleys, investing still," Kirk wrote.
Kirk's Third Security, which provided early funding to New River Pharmaceuticals, has grown to nearly 50 people. It has invested $50 million in Intrexon Corp. in Blacksburg, a biotech company that Kirk said is pursuing a more ambitious and potentially more valuable research agenda than New River.
Intrexon, which is developing biotherapeutic control systems to improve the effectiveness of medicines, occupies some of the space that New River used to lease at the Blacksburg research center, Kirk said.
Kirk said some business people seem to find it hard to believe Southwest Virginia will produce more biotech successes on par with Vyvanse.
"I ask, 'Why not?' " Kirk said.
at 1:35 PM
Thursday, November 06, 2008
The Adenosine Therapeutics Group is seeking a highly motivated and independent analytical chemist to join their Lead Development Team. Lead Development serves to progress novel compounds into the clinic through preclinical and clinical activities. Primary responsibilities will include method development for the analysis of small molecules in various matrices, timely reporting of quantitative results, and experimental project management to support our fast paced preclinical and clinical research and development programs. This position will play a pivotal role in the group’s ADME support program as well. This position will require the candidate to possess a strong background in method development for small molecule analysis using HPLC and LCMS technologies. The individual will also be responsible for the timely reporting of results through issuance of formal and informal reports and presentations. The Analytical Chemist will also provide support and assistance to the existing synthetic chemistry group located onsite. For more information click here.
Monday, November 03, 2008
Scientists call the gulf between a biomedical discovery and new treatment 'the valley of death.'
From the magazine issue dated Nov 10, 2008
It has been years since Hans Keirstead worked his biological magic, injecting stem cells into rats with severed spinal cords and thus making them walk almost normally. But the real miracle—since other experiments, too, have cured paralysis in lab animals—is that Geron Corp. plans to test the technique in people next year. Between Keirstead's experiment and Geron's trial lie these obstacles: Keirstead, a professor at the University of California, Irvine, had to invent instruments to squirt the stem cells into spinal cords ("what do we academics know about developing medical devices?" he asked me), find someone to try the technique in monkeys ("I know two researchers who handle monkeys; you have to get in line"), ramp up production of the stem cells ("it meant going from pipettes to this massive hydraulic setup") and … well, more industrial-strength biology that he wasn't trained in, that the government rarely funds and that brings exactly zero glory to a university scientist. "We hacked through the jungle and paved the road," Keirstead said. "But how many others are willing to do that?"
Going by how few discoveries in basic biomedical research get turned into treatments and cures, the answer is very, very few. The nation's biomedical funding and training system are set up to do one thing, and they do it superlatively: make discoveries. That is what scientists dream of, that is what gets them published in leading journals (the coin of the realm in academia) and that is what gets them grants from the National Institutes of Health. Here's what doesn't get them any of those: the grunt work that Keirstead did to turn his spinal-cord breakthrough into something that can be tried in patients.
These barriers to "translational" research (studies that move basic discoveries from bench to bedside) have become so daunting that scientists have a phrase for the chasm between a basic scientific discovery and a new treatment. "It's called the valley of death," says Greg Simon, president of FasterCures, a center set up by the (Michael) Milken Institute in 2003 to achieve what its name says. The valley of death is why many promising discoveries—genes linked to cancer and Parkinson's disease; biochemical pathways that ravage neurons in Lou Gehrig's disease—never move forward.
The next administration and Congress have a chance to change that, radically revamping the nation's biomedical research system by creating what proponents Richard Boxer, a urologist at the University of Miami, and Lou Weisbach, a Chicago entrepreneur, call a "center for cures" at NIH. The center would house multidisciplinary teams of biologists, chemists, technicians and others who would take a discovery such as Keirstead's and nurture it along to the point where a company is willing to put up the hundreds of millions of dollars to test it in patients. The existence of such a center would free scientists to go back to making important discoveries, not figuring out large-scale pipetting, for goodness' sake. "There is a sense among disease philanthropies that something like this is what needs to happen," says Katie Hood, CEO of the Michael J. Fox Foundation for Parkinson's Research. "It's a huge opportunity for a new administration."
Biomedical scientists I spoke to are wary of using NIH money for a new center for cures. They worry that it would divert dwindling funds from the basic research that is their pride and joy and, indeed, the basis for those hoped-for cures. Given current fiscal realities, scientists are right to be worried. But while basic research is necessary for finding new treatments, it is not sufficient. (While the NIH budget was doubling, the number of new-drug approvals fell from 53 in 1996 to 18 in 2006.) When I asked Kierstead if he ever wondered how many promising leads are gathering dust between the covers of research journals because no one is willing or able to push them forward, he said, "I don't wonder. I know it's the case." Why? Because "curing disease is a byproduct of the [NIH] system and not a goal," says FasterCures' Simon. Most scientists don't want to and don't have the skills to translate a discovery into a treatment; researchers at a dedicated center would try to do that full-time.
Some disease foundations have paved the way, turning themselves into mini-centers for cures. The pioneering Myelin Repair Foundation, which funds research on treatments for multiple sclerosis, actively manages the five scientists at five universities whom founder Scott Johnson hand-picked, requiring them to share data almost as fast as they collect it, mandating collaboration and pushing discoveries through the valley of death. For instance, a test-tube finding is quickly tested in a mouse model; contractors are hired to develop ways to scale up a discovery of how to turn stem cells into myelin-making cells that could help MS patients.
There is lots of talk these days about increasing the nation's spending on infrastructure, such as roads and bridges, to lift the economy out of its doldrums. Me, I'd be willing to put up with potholes in exchange for a new administration spending serious money to take the discoveries taxpayers have paid for and turn them into cures.
at 3:11 PM
From the Virginia Tech Corporate Research Center eNewsletter, 10/29/08
Roanoke and Blacksburg Region Growing Firms, Creating Jobs
High-tech companies and high quality of life getting noticed
The fastest-growing e-mail specialist in the country. One of the state’s leading biotech companies. A firm with patents for computer-controlled floor advertising. Another developing nanomedicine rototypes.
Silicon Valley? Not even close. Austin? Try again. Research Triangle? Nope.
These companies – and hundreds of high-tech innovators like them – are forming and flourishing in the Roanoke and Blacksburg region.
Lured by a low cost of living, short commutes and proximity to Virginia Tech, recent college graduates, first time entrepreneurs and even seasoned professionals are flocking to the region.
The area is frequently recognized as a great place to raise a family and for its outstanding quality of life. Recently CNNMoney.com and Forbes.com named the region as a top place nationally for entrepreneurs and small businesses.
The Roanoke and New River Valleys are home to hundreds of companies involved in technology, including software engineering, bio-informatics, autonomous navigation, water purification, materials science, aerospace, telecommunications, new media, optics, information technology and more.
With 200 employees, Meridium, Inc. is a multi-national company with its headquarters in Roanoke and an office in the Virginia Tech Corporate Research Center. Its “asset performance management” software helps companies maintain and optimize production, predict and prevent production breakdowns and improve profitability and reliability.
Novozymes Biologicals, Inc., named the Biotech Company of the Year in 2003 by the Virginia Biotechnology Association, has core competencies in developing, manufacturing, and applying live microbial products and is the market leader in several areas of environmental microbiology.
Optical Cable Corp. (NASDAQ:OCCF) in Roanoke designs and manufacturers tight-buffered fiber optic cable systems for use in harsh indoor/outdoor environments, such as mining, oil and gas, military and broadcast industries. OCC is the cable of choice for applications demanding the highest signal integrity and bandwidth for maximum security.
One of the region’s shining stars is Luna Innovations Incorporated (NASDAQ:LUNA) with offices in Roanoke and Blacksburg. Applying proprietary sensing and instrumentation and pharmaceutical technologies, Luna develops and manufactures new-generation products for the healthcare, telecommunications, energy and defense markets. Its products are used to measure, monitor, protect and improve critical processes.
Meanwhile, Mailtrust ranks #217 on the Inc. magazine list of fastest-growing companies in America and has been growing by more than 100 percent for each of the last five years. Mailtrust hosts nearly one million e-mail accounts for businesses throughout the world and was recently acquired by Rackspace, the world’s leader in Internet hosting. Since the merger, Mailtrust has created more than 70 high paying local jobs.
Other companies see the region’s skilled labor market to establish a footprint. One example is the Salem-based office of JDSU, a Fortune 500 company that provides communications test and measurement solutions and optical products for telecommunications service providers, cable operators and network equipment manufacturers.
Behind every great company is someone who believes. Founded by billionaire and Radford native R.J. Kirk, Third Security is an independent, local venture capital firm. Three of its top-10 investments are in the region, including life sciences company Intrexon, which launched a human clinical study related to melanoma; Synchrony, which develops advanced magnetic bearing technology for commercial and military applications; and LevelVision, which patented digital advertising on floor mats and other line-of-sight locations.
Learn more about other technology companies and employment opportunities in the NewVa region by visiting The NewVa Corridor Technology Council, NCTC.
at 9:19 AM
Friday, October 31, 2008
Congratulations to Julia Spicer and her team at the Mid-Atlantic Venture Association (MAVA) for orchestrating the opportunity to open trading at the New York Stock Exchange. Here are the details...
Leaders from the Mid-Atlantic Venture Association (MAVA) and the entrepreneurial community gathered on the iconic stage above the New York Stock Exchange and rang The Opening BellSM today.
Representatives from MAVA member funds and guests, including Updata Partners, New Enterprise Associates, H.I.G. Ventures, Boulder Ventures, The Carlyle Group, Core Capital Partners, ABS Capital Partners, In-Q-Tel, Paladin Capital Group, Avansis Ventures, The Grosvenor Funds, Montague Newhall Associates, and Safeguard Scientifics and others, attended the bell-ringing and related events at the New York Stock Exchange to promote the vital role of venture capital and private equity in the capital markets and to celebrate MAVA’s more than two decades of leadership in the venture capital industry. In May, the NYSE Euronext was a sponsor of MAVA’s Capital Connection 2008 conference in support of mid-Atlantic venture capitalists and entrepreneurs.
Following the ceremonial bell-ringing, MAVA Board President John Burton, who is also Managing General Partner of Updata Partners, provided a perspective to the viewers of CNBC’s live broadcast from the Exchange, Squawk on the Street.
Burton’s remarks on the broadcast reflected the findings of MAVA’s recent member survey on the current state of the markets as well as highlights from last week’s Mid-Atlantic Bio conference, which boasted record attendance and highlighted the vitality of the global bioscience marketplace.
“The Mid-Atlantic Venture Association has been honored to ring The Opening Bell today. Venture is essential to economic growth, now more than ever as a catalyst for innovation and jobs. We are here at a pivotal time, and there is no question the economy and our industry are facing challenges. But we are seeing that not every fund and every sector has the same challenges to the same degree. For example, biotechnology has an inherently longer cycle from genesis to liquidity, which mitigates the extended time to exit that the economy is imposing on our industry as a whole,” Burton said. “The current financial crisis is serious, there is no doubt, but our funds, whether focusing on information technology or other areas, are telling us that deals are being done, and their portfolio companies are continuing to mature and evolve to meet the needs of their market niches.”
at 10:20 AM
Wednesday, October 29, 2008
October 29, 2008
Broader Financial Turmoil Threatens Biotech’s Innovation and Cash
By ANDREW POLLACK
So many biotechnology companies talk about “extending the runway” these days, you might think they had entered the airline business.
But for them, runway refers to the time before a company runs out of money. And with financial markets in turmoil, the runways are looking dangerously short for many small biotechnology companies. A biotech crash, if it comes, could threaten an industry that plays a vital role in turning scientific advances into usable medicines.
“If you imagine a plane falling slowly to earth, the financial crisis just tipped the nose straight down,” said Andrew Baum, chief executive of SemBioSys Genetics in Calgary, Alberta, whose stock trades on the Toronto exchange.
SemBioSys, which hopes to use genetically engineered safflowers as a low-cost way to produce insulin and other drugs, said last week it would cut about 30 workers, or more than 40 percent of its work force. Even so, the company’s cash might last only until the middle of next year, Mr. Baum said.
Many other biotechnology companies are starting to cut their work forces and even eliminate research and drug development projects in a desperate effort to extend the runway. Some might have to sell themselves at a bargain price, like Avalon Pharmaceuticals did Tuesday to Clinical Data for $10 million in stock.
The problem is that newly risk-averse investors are shunning biotechnology stocks, which are among the riskiest investments around, because most experimental drugs fail.
Biotech companies accounted for 86, or 25 percent, of the 344 companies that, as of Oct. 9, were in danger of being delisted by Nasdaq because their share price was less than $1 or they failed to have an adequate market valuation.
One of those is DeCode Genetics, which has regularly made headlines for discovering genes linked to cancer, heart attacks and numerous other diseases. The company’s stock has fallen more than 90 percent in the last year to 29 cents a share.
Investors apparently are concerned that the company’s cash is running low and that it will have trouble paying a $230 million debt that comes due in 2011. It has not helped that DeCode is based in Iceland, which has suffered a financial collapse, and that it lost millions of dollars on investments in auction rate securities. The company is now planning to sell certain operations.
There are exceptions, of course. The big biotechnology companies, including Genentech and Amgen, have products on the market and are highly profitable. The biggest companies are in such strong financial shape, in fact, that their shares are roughly flat for the year, far better than stocks as a whole.
But most biotechnology companies — several hundred publicly traded ones and thousands more in private hands — are unprofitable and can sustain themselves only with periodic infusions of cash from willing investors or pharmaceutical companies. It can take hundreds of millions of dollars and 10 years or longer to bring a drug to market.
“For a biotech company, cash is a raw material,” said George Milstein, head of investment banking at Pacific Growth Equities, an investment bank specializing in health care.
Some 113 biotechnology companies, up from 68 in the first quarter, now have less than a year of cash at their current spending rates, according to Rodman & Renshaw, an investment bank. That is about one-third of the publicly traded biotech companies it tracks.
Lack of access to credit is not the main problem for small biotechnology companies, which are considered so risky that even in boom times they cannot borrow much money from banks.
Some, though, have issued securities convertible into common stock, which might have to be paid back in cash if the stock price falls below the conversion rate.
That happened to AtheroGenics after its drug for heart disease failed in a clinical trial. Paying off $30.5 million in notes that came due in September would have left it with little cash to test its drug as a treatment for diabetes. So it defaulted, entered bankruptcy and is now trying to sell itself or the drug.
For biotechnology companies, though, the main impact of the credit crisis involves the broader market. Some hedge funds have pulled out of biotechnology investing, while others have had to sell shares to cover losses elsewhere or to return money to their investors.
To be sure, the industry has been through funding droughts before, such as in 1998 and again in 2002, and most companies survive.
But this crisis comes as other factors were already souring investors on biotechnology. Drug development has become longer and more costly, in part because the Food and Drug Administration has become more demanding. And there is more pressure to cut drug prices.
So far this year, public and private biotechnology companies have raised $5.6 billion, according to the publishing company FDC-Windhover’s Strategic Transactions database. That is only one-third the amount in all of 2007 and likely to be the lowest amount since 2002.
It has been virtually impossible for biotech companies to go public this year. That deprives venture capitalists, who help start and nurture small companies, of one of the main ways of realizing a return on their investment. And it means they have to keep financing their companies longer. Those factors — plus the fact that some venture capitalists are investing in publicly traded biotechnology companies because their shares have become so cheap — mean there will be less money left for starting new companies.
When investors do invest, they are more often insisting on quick returns. Robert I. Blum, chief executive of Cytokinetics, a publicly traded company based in South San Francisco, Calif., said hedge funds had constantly pressed him to spend money only on the company’s drugs that were already in clinical trials and to abandon earlier-stage research aimed at finding new drugs.
“They were challenging us and critiquing us for still investing in research,” Mr. Blum said. He said such pressure threatened to dry up innovation.
Cytokinetics partially bowed to the pressure in September, cutting some of its early research and dismissing 45 employees, or 29 percent of its work force.
As a company’s cash and stock price diminish, raising money becomes even harder. Companies do not like to sell new stock cheaply because it dilutes existing shareholders. And potential new investors, sensing a company is desperate, drive a harder bargain. So do pharmaceutical companies, which are desperate for new drugs and have the cash to buy smaller biotechnology companies.
“I have a sense that Big Pharma is sitting on the sidelines waiting for them to hit bottom,” said Dennis Purcell, senior managing partner of Aisling Capital, a life-sciences investment firm.
Fund-raising would also get harder if Nasdaq carried through on its threat to delist biotech companies that have become penny stocks. But with so many companies in various industries in trouble, Nasdaq has now suspended enforcement of its delisting rules for three months, until Jan. 19.
Some companies are managing to get money. Phenomix, a San Diego company, put off trying to go public but licensed a diabetes drug to Forest Laboratories for an initial payment of $75 million. Ista Pharmaceuticals of Irvine, Calif., got a $65 million credit line from Deerfield Management and two other shareholders.
But risk aversion is spreading even to some companies not in immediate danger of running out of cash.
Despite having about $200 million on hand, Maxygen last week suspended work on its lead drug — aimed at protecting cancer chemotherapy patients from infections — rather than commit $100 million or so to move the drug through clinical trials. The company, based in Redwood City, Calif., said it would reduce its work force by 30 percent and would explore selling itself.
Russell Howard, the chief executive, said the company’s market valuation was only about $130 million. That is less than its cash on hand, meaning investors were placing no value on the drug or any of the company’s other programs.
“Why would you be investing more in this business,” he said, “if the market doesn’t care?”
at 9:02 AM
Monday, October 27, 2008
From the Frederick News-Post
Balog's Biotech — Mid-Atlantic Bio 2008
Originally published October 26, 2008
By Jason E. Balog
While most national and international conferences for the bioscience industry occur in the spring and summer, over the past several years the industry has seen the proliferation of a number of regional conferences that primarily occur in the fall and early winter. These smaller regional gatherings have become a great way for a local region to showcase and celebrate its bioscience industry and help create excitement in the local community.
The Mid-Atlantic region is lucky to have what has quickly become recognized as one of the best local conferences, drawing heavy attendance from the local bioscience community as well as from outside the region. Earlier this week (Oct. 22 through Oct. 24), the local bioscience community gathered at the Westfields Marriott Conference Center in Chantilly, Va., for the latest installment of Mid-Atlantic Bio.
Mid-Atlantic Bio is the Maryland, Virginia and Washington regions' annual bioscience conference, co-hosted by the Mid-Atlantic Venture Association, the Virginia Biotechnology Association and the Tech Council of Maryland/MdBio. Mid-Atlantic Bio was created four years ago and was hosted in Washington for its first two years before moving to Bethesda last year and Virginia this year.
In its short history, Mid-Atlantic Bio has quickly gained recognition as a substantive, regionally hosted forum and a popular place for members of the local bioscience industry to gather.
Along with numerous marketing and networking opportunities, Mid-Atlantic Bio is composed of three major components. First, attendees are presented with the opportunity to hear from leaders in the bioscience industry about innovations and advances in the industry. These opportunities range from breakout sessions focused on specific topics to keynote speakers addressing regional and industry wide topics. Some of the notable speakers at this year's conference included Virginia Gov. Tim Kaine, Food and Drug Administration Commissioner Andrew von Eschenbach, and former President and Chief Executive Officer of MedImmune David Mott.
Mid-Atlantic Bio also presents investors the opportunity to learn about the initiatives of individual bioscience companies and research organizations through in-depth company presentations. Of the numerous companies that requested an opportunity to present at this year's conference, 26 companies were selected for two tracks. Ten later-stage growth companies were selected to present as part of the Showcase track. The showcase companies were all established, funded companies representing some of the brightest technologies and companies in the region.
Sixteen emerging companies also were selected to present as part of the Growth Watch track. These companies represented a wide spectrum of early-stage companies all with one primary goal in mind: to find a funding source from the numerous venture capitalists, angel investors and other qualified financing sources in attendance. The presentations are always a highlight of Mid-Atlantic Bio and showcase the cutting-edge technology being developed in the region.
Finally, Mid-Atlantic Bio presents exhibitors a chance to showcase their capabilities and offerings in the lively exhibitor hall. Exhibiting companies generally represent the backbone of the local bioscience community and include local universities and research institutions, business development agencies and a wide range of service providers among others. As in the past, the exhibitor hall at this year's Mid-Atlantic Bio was the place where relationships were forged and deals were struck, again making it the place to be at this year's conference.
What has set Mid-Atlantic Bio apart from other regional conferences has been the successful mix of informative speakers, exciting company presentations and lively exhibition space. Mix these elements together in a location that is in the heart of one of the most vibrant bioscience hubs in the country and you instantly have the ingredients for success. As a result, Mid-Atlantic Bio has quickly become one of the premier regional bioscience events in the country. Next November, Mid-Atlantic Bio returns to Washington for its fifth anniversary at the Walter E. Washington Convention Center, and organizers are already anticipating the largest and most successful event yet.
Jason E. Balog is a principal in the law firm, Miles & Stockbridge, and leads its life sciences, biotechnology and pharmaceutical practice group. For information, please visit www.milesstockbridge.com.
at 3:53 PM
Wednesday, October 22, 2008
2008 Mid-Atlantic Bio today announced that respondents to a pre-conference survey acknowledged the severity of the global credit crisis in affecting bioscience companies in the mid-Atlantic region, but believe it can be weathered with appropriate planning. 2008 Mid-Atlantic Bio will take place October 22-24 in Chantilly, Va. Dedicated to promoting the growth of biotechnology in the Mid-Atlantic region, 2008 Mid-Atlantic Bio is sponsored collectively by the mid-Atlantic’s most influential bioscience and investor associations, Mid-Atlantic Venture Association (MAVA), Tech Council of Maryland/MdBio (TCM/MdBio), and the Virginia Biotechnology Association (VaBIO). The conference attracts more than 700 senior executives from the life sciences industry, as well as investors, financiers, capital sources, international delegations, attorneys, service providers, and consultants.
In today’s declining economic climate, respondents said that obtaining adequate early stage, or A Round, funding is the biggest challenge to developing a bioscience company in the Mid-Atlantic region today. Access to adequate angel funding was also cited as a significant challenge.
“More than 90 percent of respondents believe the current state of the economy is serious and will significantly impact their enterprise, but that it is survivable and will ultimately rebound,” said Douglas A. Doerfler, conference steering committee chairman and president and chief executive officer of MaxCyte, Inc. “Our companies are taking the current decline very seriously and responding with swift and certain actions. This week’s meeting brings our life sciences community together to focus on these critical issues,” he added.
The poll showed that companies plan to survive the turmoil by looking for alternative forms of revenue while managing expenses, collaborating and more aggressively pursuing partnering opportunities, and aggressively pursuing private equity investment.
Respondents also foresee considerable merger and acquisition activity ahead involving life sciences companies and large pharmaceutical firms. When asked what they believed would likely be the ultimate outcome for a biotechnology company in the Mid-Atlantic today, two out of three predicted acquisition by “Big Pharma,” while only one in five believed companies of like sizes would merge. The remainder predicted companies would grow stand alone, independent companies with marketed products.
Respondents were also asked about one of the most hotly discussed topics in the biotech industry today - “follow-on” biologics, also known as “biosimilars” or “generic biologics,” which are under consideration by the U.S. Food and Drug Administration. Two thirds of respondents viewed FDA approval of a pathway for these products to be positive for the biotech industry.
“The survey results suggest that a majority of the biotech industry would view FDA approval of follow-on biologics as a positive development, observed Natasha Leskovsek, a partner with Cooley Godward Kronish LLP, and moderator of a Follow-on Biologics panel taking place at the conference on October 23. “Particularly in the current economic climate, a market with more participants may increase patient access and stimulate overall demand and further innovation, while ensuring adequate protections for innovator companies,” she said.
at 1:42 PM
Friday, October 10, 2008
Catena Pharmaceuticals said this week that it has obtained a worldwide, exclusive license to intellectual property surrounding anti-angiogenic G-protein coupled receptor antagonists from the University of Virginia Patent Foundation.
The licensing agreement covers multiple patents and patent applications covering GPCR chemistries and methods discovered by UVA researchers Kevin Lynch and Timothy Macdonald.
Lynch and Macdonald identified antagonists of a subset of GPCRs specific for lysophosphatidic acid, an angiogenic molecule that promotes tumor growth. Autotaxin, the enzyme that manufactures LPA, is a recognized oncogenic protein.
Financial terms of the licensing deal were not disclosed.
Catena, which recently spun out of the university, also said that it has received an undisclosed amount of seed financing from Golden Pine Ventures to support product development at the company.
Ian Mehr, managing director of Golden Pine Ventures, will serve as president and director of Catena. Lynch and Macdonald will serve as vice president of biological sciences and vice president of chemical sciences, respectively, and will sit on Catena’s board.
From Biotech Transfer Week
at 2:21 PM
Wednesday, October 08, 2008
Roger Tsien Wins 2008 Nobel Prize in Chemistry
The Royal Swedish Academy of Sciences announced this morning
that the 2008 Nobel Prize in Chemistry was awarded to Roger
Y. Tsien, a Howard Hughes Medical Institute investigator at
the University of California, San Diego (UCSD), Osamu
Shimomura of the Marine Biological Laboratory, and Martin
Chalfie of Columbia University. The three were honored for
“the discovery and development of the green fluorescent
For more background on Roger Tsien's research, including an
extensive biographical profile of Tsien, please visit the
HHMI web site at www.hhmi.org.
To read the full story, go to http://www.hhmi.org/news/nobel20081008.html
at 5:40 PM
By JOHN REID BLACKWELL
TIMES-DISPATCH STAFF WRITER
Pharmaceuticals maker Wyeth said yesterday that it will consolidate its East Coast distribution centers next year, costing 61 jobs at the company's distribution site in Henrico County.
The Madison, N.J.-based company plans to move its consumer health-care products distribution from the local site at 2300 Darbytown Road to a larger plant in Knoxville, Tenn., that also serves the East Coast.
About 70 employees will continue to work at the local site, a 286,000-squarefoot building, in support functions such as quality assurance and a call center, Wyeth spokesman Rob Norman said. "This just impacts the logistical services group at the facility," he said. "Wyeth does not intend to sell the facility," Norman said. "However, the company is in the process of determining the best use of the space that will become available."
The logistical operations will be phased out starting in January and close by May, he said. The company said it would provide severance, extended benefits and outplacement help to affected employees.
Norman said the change will not affect Wyeth's other local operations, including its manufacturing plant at 2248 Darbytown Road that makes consumer health products such as ChapStick, Robitussin and Preparation H. The company has about 1,200 employees in the Richmond area.
Moving the local operations to Knoxville will improve the efficiency of Wyeth's U.S. distribution network, the company said.
The Henrico site distributes consumer health products in 14 Eastern states, including Virginia, and its volume accounts for about 30 percent of the company's annual sales.
The Knoxville center, which also distributes other pharmaceutical products, is 600,000 square feet and has the capacity to serve all of the company's East Coast customers, the company said. Wyeth has a West Coast distribution center in Sparks, Nev.
In July, Wyeth said it would close its administrative office at 1407 Cummings Drive, just off Interstate 95 in Richmond, and move those offices to its nearby product-development center at 1211 Sherwood Ave. by early next year.
Richmond Times Dispatch...
at 6:21 AM
Monday, October 06, 2008
Recent Research: How are Immigrant and Ethnic Workers Changing the Face of U.S. Innovation?
Foreign-born and ethnic workers continue to rapidly grow in their importance to the U.S. innovation economy, according to two recent studies that address this issue by examining the links between these groups and patenting activity.
In How Much Does Immigration Boost Innovation?, Jennifer Hunt uses state panel data from 1950 to 2000 to measure the extent of immigration's impact on U.S. patenting, state innovation economies and the science and technology workforce. Foreign-born residents account for just over ten percent of the working population, but represent about 25 percent of the science and engineering workforce. The 2003 Survey of College Graduates found that immigrants patent at double the rate of native U.S. residents. That study found that the difference was attributable to disproportionate educational attainment in science and engineering.
Hunt finds that a 1.3 percent increase in the share of the population composed of immigrant college graduates can increase patenting per capita by between 10 and 26 percent. Post-college immigrants had an even larger positive impact. In addition, immigrant college graduates can have positive spillovers for the non-immigrant population. While there may be some short-term crowding out of the native population as immigrants arrive, in the long-term, there is evidence that post-college immigrants can increase the patenting activity of their native neighbors.
Overall, Hunt argues that an immigrant college graduate contributes at least twice as much to patenting as a native counterpart.
Purchase How Much Does Immigration Boost Innovation? from the National Bureau of Economic Research (NBER) at: http://www.nber.org/papers/w14312.pdf
at 9:10 AM
Friday, October 03, 2008
The Financial Crisis and Biotechnology
October 3, 2008
This week we want to take some time on our Web site to focus on the profound impact the financial crisis has had on biotechnology companies.
Biotechnology companies are highly dependent on well functioning capital markets to finance their development projects since many will not see revenue for perhaps a decade.
It generally takes approximately $1 billion, including the cost of failures, to get a new therapy to market. This financing generally comes in the form of equity investment.
When credit markets seize up, as we've seen in the past 13 months, there is less capital available for investors to put at risk, and the capital that is put at risk is dedicated to shorter term, lower risk options. So while some areas of the economy have seen a slowdown, biotech has seen a near-freeze.
This means that our companies - especially our public companies - are in a very precarious situation: they must continue on their development projects, but are unable to attain additional financing from investors. As a result, many of the 300-400 public biotech companies are trading at very low levels, and many are operating with less than one year's cash remaining.
If credit markets don't open up, it's possible that the biotechnology industry may go through a considerable consolidation or shake out during the next year. The result? Companies with promising therapies may not be able to continue their work, delaying the availability of new options for patients.
We recognize this difficult climate for our industry. As Congress moves beyond the current crisis, we will work with members of Congress and the administration to develop a series of legislative and policy remedies that will help improve the investment climate and reduce administrative burdens. These initiatives include provisions to shore-up companies' balance sheets and incentives to attract and retain investment in our industry.
We will work with allies across numerous industries - those innovative industries similar to ours - as well as new partners to develop these initiatives and urge Congress for action.
President and CEO
Biotechnology Industry Organization, BIO
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|From Hampton Roads Bioscience Luncheon|
Thursday, October 02, 2008
Boots Centre for Innovation (BCI) - www.bootsinnovation.com - has been established to work closely with early stage companies or inventors to develop pioneering products for the shelves of Alliance Boots stores that will improve the quality of life for consumers across Europe.
Alliance Boots is a leading pharmacy, health and beauty company with a retail network of 2,400 Boots stores in the UK, and access to 100,000 pharmacies across Europe.
Call for Proposals
We will be seeking proposal submissions of products and technologies that may be of interest to Alliance Boots in their 10 consumer focus areas:
1. Improve ways to diagnose, treat and monitor key aspects of health, beauty and wellbeing through use of devices
2. Support positive ageing through products and devices for mind and body
3. Minimize the complications of living with chronic conditions
4. Improve digestive health, particularly issues related to stress, poor diet and obesity
5. Improve and maintain the health, look and feel of skin
6. Minimize the severity and duration of pain
7. Improve quality of sleep for everyone, including pregnant women, babies and the elderly
8. Create more convenient methods of taking and using medicines and health products
9. Improve the health and appearance of teeth and gums
10. Improve the health, appearance and comfort of eyes
This is an excellent opportunity to have your technology or product potentially developed and sold through the vast Alliance Boots retail network.
New Product Innovation Seminar & Direct Interviews
BCI will also be hosting a New Product Innovation Seminar in Boston in early December, which will allow selected companies to understand how to access Boots with new ideas and how to work with them in partnership to bring ideas to the shelf across Europe.
Do you have a product concept or idea that you would like to submit to Boots Centre for Innovation?
Please complete the Boots Centre for Innovation Questionnaire by clicking here - www.bootsinnovation.com/bostonevent.html
The deadline for submission of proposals is October 30th 2008.
Please contact Louise Bryce - Tel: 011 44 1792 602 673, or email firstname.lastname@example.org
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Friday, September 26, 2008
Thursday, September 25, 2008
9.23.2008By Jane W. GrahamAFP Correspondent
HALIFAX, Va. — Virginia Gov. Tim Kaine joined in the excitement Sept. 10 to cut the ribbon, opening the Governor’s Career and Technical Academy for Renewable Resources and Agricultural Sciences. The academy, one of eight in the county, is designed for pre-K-12 students, said Melanie Stanley, director of academies for the Halifax County School System. Stanley said she is excited about the academy, which she expects to enable county students to become part of the its agricultural industry as adults.
Stanley is a county native who left and came back when she was needed to help with her family’s business after her mother was injured. She stayed and surprised herself by joining the school system. She said that Halifax is a rural county in southern Virginia with approximately 6,000 public school students. About 1,800 of these are in high school. While the county is located in the state’s dwindling tobacco belt, forestry is its largest industry, Stanley said.
The county’s academy approach to education is different from magnet schools, Stanley said. There is no need to apply; the doors are open to all students who want to attend. The academies offer dual enrollment college level courses, she added. Stanley said the renewable resources and agricultural academy looks at agriculture sciences from several different viewpoints. She is developing four programs of study for the high school students. They are horticulture, pre-veterinary, biotechnology and renewable resources. The programs are being designed to meet the needs that have been identified through community participation.
Business partnerships and grants play important parts in the schools, she said. Examples of community participation include the Lowe’s Equine Center at the county fairgrounds that belongs to the school system and a 128-acre farm willed to the schools by the late Hula Moorefield. He stipulated that it be used to enhance agricultural sciences.
In outlining the four programs of study for high school students, Stanley said that each tries to teach a variety of skills and business practices that will help students work in the agricultural industry. The horticulture program offers the study of floriculture. Students work with plants in the high school’s greenhouse, learning how to care for plants, how to run a greenhouse and how to run a business. The pre-vet course of study is dealing with horse management this year. The barn at the fairgrounds is home to this program. She said she believes Halifax County is the only school system in the state to have its own equine barn. It is equipped with an interactive classroom that lets students learn with hands-on projects. Stanley said she is looking forward to adding small and large animal veterinary sciences to the curriculum in the coming year.
The biotechnology program will be a study of biological application. In 2009, Stanley said the program will be doing a lot in aquaculture, a need that has been identified locally. Students will be learning how to earn a livelihood in this field. The program of study may incorporate some catfish farming in the students’ schedules. The fourth course of study is in renewable resources. Its topics will include forestry and biofuels. Among the hands-on activities the students can expect is making biofuels. They will also be looking at forest mensuration, including harvesting and logging. This program will have help from WoodLINKS, an industry education partnership. In this part of the plan of study, students move from how to take rough cut lumber to making furniture, to using both hands-on methods and computerized machines, to marketing, and on to packaging and shipping. Stanley said this program will help give them tools with which to work, including math, finance and marketing capabilities. She said she hopes it will help them to begin to understand and see all aspects of the industry. Not every student can excel in hand scraping a chair seat, she said, but one might be able to market the product.
The program is trying to teach values and give the students a feeling of ownership for what they have created. The county’s students become involved in the program before high school with the younger students going on field trips and seeing what the older students do. In middle school, the students can take an introduction to agricultural science that includes some of the same components that are in the high school courses. A greenhouse is being constructed at the middle school to further this project. It is an indication that the academy is a work in progress.
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Wednesday, September 17, 2008
Members of VaBIO enjoyed a private tour of the Wyeth Consumer Healthcare manufacturing facility in Richmond on September 17th. More than 700 work at this advanced manufacturing facility that produces more than a dozen Wyeth products. This exclusive event was sponsored by Latimer, Mayberry & Matthews IP Law, LLP and open to VaBIO members only.
Wyeth, ranked 113th on the Fortune 500 list, is one of the world’s largest research-driven pharmaceutical and health care products companies. They employ more than 50,000 worldwide. It is a leader in the discovery, development, manufacturing and marketing of pharmaceuticals, vaccines, biotechnology products, nutritionals and non-prescription medicines that improve the quality of life for people worldwide. The company’s major divisions include Wyeth Pharmaceuticals, Wyeth Consumer Healthcare and Fort Dodge Animal Health.
The next Virginia Biotechnology Association bioscience facilities tour is scheduled for October 14 in Charlottesville, Virginia. The tour, open exclusively to VaBIO members, includes tours of two emerging biotech companies, conveniently located in the same building. For details, please visit http://www.vabio.org/category/events/.
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Tuesday, September 16, 2008
UVA Clinical and Translational Research Program Director
The University of Virginia School of Medicine seeks a manager with experience in biomedical technology and business to join an exciting new program for enhancing clinical impact of medical discoveries through promotion of clinical and translational research and facilitation of the transfer of innovative intellectual properties from University laboratories to commercial practice. Details about position responsibilities and qualifications can be found at: https://jobs.virginia.edu by searching on Position Number FP732.
To apply, complete a Candidate Profile and attach a cover letter, cv and contact information for three references. Salary will be commensurate with experience. Position is open until filled.
Contact Dr. Erik Hewlett at: EH2V@virginia.edu for further information.
The University of Virginia is an Equal Opportunity/Affirmative Action Employer.
From BIOtech Now:
Mark Herzog on Biotech Innovation in Virginia
Posted on September 12, 2008 by danmcgirt
BIOtech Now talks with Mark Herzog, executive director of the Virginia Biotechnology Association. Mark discusses the strengths of and recent developments in Virginia’s innovative biotech industry, as well as efforts the state is making to further accelerate the growth of the life sciences in Virginia.
With its strong research universities, advantageous location in the Mid-Atlantic, and a favorable business climate, Virginia is home to more than 175 biotechnology, equipment, pharmaceutical and medical device companies.
According to Mark, Virginia gives strong support to emerging biotech companies. One challenge that success brings is meeting the changing needs of young life science companies as they grow. Making sure Virginia’s homegrown biotech companies have access to the advanced laboratory space, trained workforce and investment capital they need to reach the next level will help ensure that Virginia remains a leader in biotech innovation.
Click here for the Podcast.
Tuesday, September 02, 2008
From this month's Virginia Business Magazine.
This article, probably written about a month ago, captures the general attitudes of the state's bioscience-focused economic developers regarding the Commonwealth's history with this industry. There is guarded interest in what comes out of this Virginia General Assembly panel chaired by Delegate Mark Sickles and Senator Janet Howell.
Support for biotech pales in comparison with leading states
September 01, 2008 12:01 AM
by Robert Burke
Backers of Virginia’s biotech industry went to the 2008 BioInternational Convention in San Diego in June hoping to show off in front of thousands of companies and industry insiders. The four-day convention, which pitches itself as the world’s largest biotech event, featured elaborate exhibits from dozens of countries and 30 U.S. states.
But Virginia wasn’t among them. Gov. Timothy M. Kaine attended the event but was relegated to walking the exhibit floor and schmoozing with the masses instead of hosting guests in a Virginia pavilion. “We had nothing,” says John Avellanet, a Williamsburg consultant who attended the event.
Now in October comes the 2008 Mid-Atlantic Bio conference, a three-day event co-sponsored by the Virginia Biotechnology Association, the MdBio/Tech Council of Maryland and Mid-Atlantic Venture Association, which has offices in Northern Virginia and Maryland. This is the event’s first time in Virginia — at the Westfields Marriott in Chantilly.
The commonwealth might feel like a weak sister, though, because in many ways Maryland far outpaces Virginia. In the past six years, for example, Maryland firms garnered $1.96 billion in venture capital, compared with $193 million in Virginia over the same period, according to a report released in June by the Biotechnology Industry Association. Virginia outpaces many states in some areas — it ranked 14th in the number of bioscience-related patents during that six-year period, with 2,884 patents. But Maryland ranked seventh, with 3,680 patents. It has built a thriving, centralized biotech community on anchors such as the National Institutes of Health and Johns Hopkins University.
And in July, Gov. Martin O’Malley unveiled a $1.1 billion Bio 2020 Initiative, designed to boost the life sciences industry through tax credits, money for stem cell research and new lab and incubator space.
Don’t expect a similar plan in cash-strapped Virginia.
Mark Herzog, executive director of the Virginia Biotechnology Association (VaBio), says even modest proposals fall flat here. Three years ago a 43-member Governor’s Commission on Biotechnology, which included legislators, businesspeople and educators, recommended steps the state could take, such as funding efforts by Virginia universities to find commercial applications for bioscience discoveries. “We all spent about four years on the initiative and nothing came out of it. Not even a press release,” Herzog says.
To Herzog and others, the state’s effort to promote its biotech sector is listless at best and is starting to hurt. “The general industry feeling seems to be that Virginia is well positioned … to be a player in the biosciences,” says Robin Sullenberger, CEO of the Shenandoah Valley Partnership, who also attended the San Diego event. “But there is some amount of confusion in regard to the political will and the commitment to invest to make that happen.”
Virginia obviously offers some significant assets. Northern Virginia has the Food and Drug Administration at its doorstep in Washington, D.C., for example, and that access is invaluable for companies trying to navigate federal regulations. Also, the Janelia Farm research campus that recently opened in Loudoun County is a one-of-a-kind facility with the potential to produce breakthroughs that could spawn new companies. Plus, there are growing biotech clusters and advanced university-based research in places such as Charlottesville, Richmond and Blacksburg.
Skeptics, though, say that’s not enough. There is intense competition among states and even nations to grab a share of the action in life sciences, and Virginia isn’t keeping up. “There are states that are already well-positioned players,” says Sullenberger, such as Maryland, Massachusetts, North Carolina and California. “I think it’s very obvious we send a mixed message.”
Part of the reason stems from the state’s generally conservative approach to spending. “Virginia tends to be relatively cautious and tends to want to see some evidence before it necessarily strikes out in a bold direction,” says Jerry Giles, director of finance with the Virginia Economic Development Partnership.
That’s not necessarily a bad thing. Massachusetts Gov. Duval Patrick proclaimed in January that his $1 billion life-sciences initiative would create 250,000 jobs in the next decade. An unrealistic goal, perhaps, since, as skeptics noted, that is twice as many jobs as the state had added from all sources in the past 10 years. So bold isn’t always beautiful.
Bottom of the list
Neither is lagging behind the pack. The June study cited 25 state-supported funds that provide seed and pre-seed investments to help biotech firms get started. Nearly all the other states on the list had multimillion-dollar funds, led by Ohio’s $263 million Third Frontier Pre-Seed Fund. Down at the bottom of the list was Virginia’s $500,000 GAP BioLife Fund, handled by the Center for Innovative Technology.
Giles responds with two points: first, the life-sciences sector overall has thus far not turned a profit, so some caution is warranted in terms of investing money. It is time-consuming and expensive to bring a discovery from the lab through the regulatory maze and to the marketplace, and the risk is substantial. Secondly, there are many factors that determine why a company succeeds and where it takes root. “The cost of doing business, the cost of living … the cost of hiring highly qualified biotechnology workers — all of that has to be factored into the equation,” he says. “There’s a lot more that goes into making a good strategic business decision than how much money the state is willing to give.”
But Herzog can tick off examples of entrepreneurs that did their research here but ended up launching the company somewhere else, lured away by venture capitalists or the availability of facilities such as wet labs, which have the plumbing and equipment to allow hands-on scientific research. Two years ago, for example, a pair of researchers at George Mason University in Fairfax County launched a company called Theranostics Health, but put it in suburban Maryland instead of Northern Virginia. VaBio, the state’s biotech industry association, this year backed legislation to use public-private partnerships to spur construction of wet lab space, a critical need for young life-science companies, but it failed. “We’ve become an incubator for other state’s biotech industries,” Herzog says. “There have not been major investments in life sciences in the past eight years, and it’s really starting to catch up to us.”
Avellanet, however, thinks the companies and the supporters of Virginia’s biotech sector are looking in the wrong direction. He is the co-author of the book “Best Practices in Biotechnology Business Development.” “There’s a lot of waiting for the government to bail them out,” he says. A better approach would be pulling together all the players and coming up with a strategy that recognizes their shared interests in building a sector with critical mass. “Anything less than a 10-year plan is just a crisis mode,” he says. “What it needs to say is, ‘Here’s the overall umbrella of biotech in Virginia, here are the components, and these are the people who need to be leading the charge.’”
Avellanet also asks why the state biotech association doesn’t try to encourage other companies to come here by getting its current members to provide discounts for the new arrivals. He worries that without a statewide initiative, parts of the state such as Northern Virginia will be pulled into other regional clusters and leave other parts of Virginia out in the cold. “Virginia has got to get its act together first and start to get some traction, and then talk to Maryland and D.C.” about creating a true multi-state life sciences cluster, he says.
Herzog notes that VaBio does help companies find the support they need to grow here, and it has group-purchasing programs to help members cut costs. “If we had better luck working with our state-policy partners, we’d feel better about what we’re doing,” he says.
Now, there’s a new chance. The General Assembly this year created the Commission on Bioscience and Biotechnology, with members from industry and the legislature. Its goal: to come up with the top three things the state should do to grow the biotech industry and craft recommendations for next year’s session. The lack of venture capital and facilities are two major issues, Herzog says, but he’ll be glad to see any substantial support. “Virginia in a lot of ways is suffering from this idea of ourselves as being the ‘best state for business,’” he says. “But we could have so much more.
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