The Virginia Biotechnology Association rounded up nearly a dozen members and friends January 27 in Richmond to see the new Harrison Ford biotech -themed movie "Extraordinary Measures" about John Crowley's fight to save his kids suffering from Pompe's Disease. Next week we plan to do the same in Charlottesville!
Thursday, January 28, 2010
at 10:45 AM
Wednesday, January 27, 2010
Virginia Gov. Bob McDonnell made biotech initiatives a visible part of a job creation agenda he unveiled Tuesday.
His list of economic development action items includes removing a $3 million cap on certain equity and debt investment tax credits and raising the amount to $5 million in fiscal year 2011.
McDonnell also wants $2 million in fiscal 2011 funding for a business incubator program that would serve biotech companies.
He has expressed support for a bill already introduced that would create an exemption from the capital gains tax for income related to certain angel, corporate or venture investments in science and technology startups, a key issue for young biotech companies that are in a constant search for funding.
In addition, the new governor said he would invest $3 million in bioscience wet lab facilities over the next two years. In a move initiated by former Gov. Tim Kaine, the state is already awarding $3 million from the Governor’s Opportunity Fund to the Ignite Institute, a new nonprofit medical research organization, and the Center for Innovative Technology to build roughly 20,000 square feet of new lab space in the CIT’s Herndon building.
McDonnell’s plans for Ignite include $22 million in total funding for the nonprofit through the next five years, as long as Ignite agrees by June 30 to fulfill its pledge to create 415 jobs and invest $200 million in its future campus in Fairfax County.
The funding, announced by Kaine in an economic development gathering with Fairfax County leaders late last year, will be divided into four $5.5 million chunks. Under McDonnell’s proposal, the first $5.5 million chunk will be awarded in fiscal 2012, starting July 1, 2011.
Ignite, which needs to raise roughly $100 million more to help make the planned institute successful, also received a $25 million funding commitment from another major partner, Inova Health Systems.
Washington Business Journal
at 9:27 AM
Tuesday, January 26, 2010
Governor Bob McDonnell Lays Out Details on Job-Creation Investments; Identifies Existing Funding and Spending Cuts to Offset Cost
Senate Finance Chair Colgan and House Appropriations Chair Putney Join Senator William Wampler to Carry Governor’s Job Creation Measures
RICHMOND- Virginia Governor Bob McDonnell today announced that leading Republican and Democratic lawmakers will carry the budget amendments necessary to implement the job-creation proposals he outlined in his Address to the Joint Houses of the General Assembly last Monday. In the Senate the amendments will be carried by ranking Senate Finance Committee member William Wampler (R-Bristol) and Finance Committee Chairman Senator Charles Colgan (D- Prince William). The amendments in the House will be brought forward by Appropriations Committee Chairman Delegate Lacey Putney (I-Bedford). McDonnell further announced that he has identified existing funding and specific spending cuts to offset the cost of each new job-creation proposal.
In last Monday’s speech to the General Assembly, McDonnell called for greater investments in state programs that spur job-creation and economic development in the Commonwealth. The Governor noted, “Yes, we face a difficult budget cycle. The budget that I have inherited is dire, and it is unbalanced. We begin with nearly a billion dollar annual shortfall based on tax hike proposals that both parties have rejected. More spending cuts must be made. But even in the toughest of times – even now – we must have the vision and the foresight to invest in our future.”
Lieutenant Governor Bill Bolling, Chief Jobs Creation Officer, commented, “I am delighted to join Governor McDonnell and legislative leaders in supporting this aggressive jobs and opportunity agenda. These proposals will enable us to re-prioritize economic development in Virginia and invest in programs that help create jobs for Virginia families. This is the most important issue currently facing our state, and it deserves our full attention. These legislative initiatives and financial investments will send a message that we are serious about getting Virginia’s economy moving again and enable us to reach out to businesses all across the country and all around the world an encourage them to make Virginia their home.”
Speaking today about the Governor’s job-creation legislation, Senator Charles Colgan stated, “The need to create new jobs for Virginians is pressing, not partisan. The proposals made by the Governor represent smart investments in the Commonwealth’s future. I am confident that we will find broad bipartisan support for them.”
Delegate Lacey Putney remarked, “We all know who creates jobs: men and women in the private sector. We also know that government can either make their lives easier, or get in their way. These ideas will facilitate job creation and economic development. They are exactly what a smart state should be doing in a tough time.”
Senator William Wampler added, “The citizens of my Senate district, like all Virginians, are reeling from some of the toughest economic times in many years. If Richmond will give them the resources to get to work rebuilding our economy, they will. These efforts will result in real jobs and a real return on investment. I applaud the Governor for finding cuts equal to each investment he is asking the Commonwealth to make. That is fiscally responsible government.”
Delegate Kirk Cox (R-Colonial Heights), who serves as Vice-Chairman of the House Appropriations Committee, will help Delegate Putney in this effort. He commented, "This is a comprehensive approach that addresses all of the critical areas of much needed economic development for Virginia. We are committed to work together - Republicans and Democrats, House and Senate - to make this happen."
McDonnell is calling for $50 million in new investments over the next biennium. The Governor is proposing:
· More than doubling the Governor’s Opportunity Fund in FY 2011 by increasing the state commitment by $12.1 million
· Committing $5 million in FY 2011 to a state industrial mega-site fund to attract new employers
· Using $2 million over the biennium to establish state economic development offices in major growth markets in China, India and the United Kingdom
· Supporting the fast growing bio-technology and life sciences industry by removing the $3 million cap on the Qualified Equity and Subordinated Debt Investment Tax Credit and raising it to $5 million in FY 2011; Investing $3 million in bioscience "Wet Lab" Facilities over the biennium; Utilizing $2 million to reestablish funding for the Business Incubator Program in FY 2011; Providing income tax exemption for qualified investments by technology and science startup companies in FY 2012 (cost $500,000)
· Increasing state funding for the Virginia Tourism Corporation by $3.6 million in each year of the biennium, and state funding for the Governor’s Motion Picture Opportunity Fund by $2 million in FY 2011
· Depositing the Wine Liter Tax attributable to Virginia Wine into the Wine Promotion Fund ($1.5 million over biennium)
· Improving Virginia’s business assistance services by increasing funding for the Loan Guarantee Program by $1 million in FY 2011; Continuing funding for the Business One Stop Program, cost of $1 million over the biennium; Increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in FY 2011
The fiscal impact of the Governor’s investments will be offset by utilizing existing revenue sources and cutting some expenses. Specifically:
· $21 million will be available through increased revenue from Virginia’s tax amnesty program
· $500,000 from the elimination of a capital outlay contingency reserve
· $4 million by not filling vacant positions at the Department of Correctional Education
· $1.2 million by deferring equipment purchases at the Department of Corrections
· $25 million will be available through the phase-in of VRS employer contribution rate increases included in the introduced budget bill with one-half of the increase being recognized in FY2011 and the full increase being recognized in FY2012
· $5 million will come from an offset of state funding with additional federal grant funding for food stamp program administration
at 7:14 AM
Monday, January 25, 2010
Va. business leaders put transportation woes on back burner for now, turn to incentives and fairer school funding
Virginia’s budget woes may have proved stronger than Northern Virginia’s transportation woes, but area business leaders are sharpening their focus on issues from job creation to education funding in Gov. Bob McDonnell’s rookie legislative season, which started Jan. 13.
Business officials are generally receptive to the postponement of transportation fixes given the staggering $4 billion deficit.
Instead, they will take up an issue that has snared the political agendas of many regional business groups: the state’s formula for funding its school systems — encapsulated in a composite index that breaks down the state’s and local governments’ share of funding. The higher the composite index, the more that local government pitches in for school funding based on its ability to pay from sources such as adjusted gross income, taxable retail sales and property values.
Here’s where the index gets complicated. The current funding expectations from local governments were enacted July 1, 2008, for the 2008-10 period based on local revenue levels from 2005 — before the housing crash plundered property values.
Before leaving office, Gov. Tim Kaine had proposed freezing the current rates until July 1, 2011, to save smaller, more vulnerable localities from anticipated increases during budget crises. But business leaders said that leaves Northern Virginia and its larger localities shouldering more of the state’s budget burdens and paying tens of millions of dollars more in their cut of school system bills than they can bear.
“It’s adding insult to injury,” said Tony Howard, president of the Loudoun County Chamber of Commerce, which is teaming with the Dulles Regional and Greater Reston chambers for the first time to send a lobbyist to Richmond to focus on taxes and regulation, energy, the environment and economic development.
Business leaders said their rationale for making school funding a cornerstone issue is simple. They consider the health of neighborhood schools a key factor in attracting companies to the area.
“The No. 1 reason we hear for businesses to come to Virginia, and to Fairfax County in particular, in addition to the low regulatory and pro-business stance, is education,” said Stu Mendelsohn, Chamber of Commerce chairman in Fairfax County, where political leaders have considered legal action against the funding proposal.
While business groups lobby legislators for a budget amendment that would thaw the proposed composite index freeze, they also are trying to increase job creation, rallying behind McDonnell’s plan to double the Governor’s Opportunity Fund, a pot of money used to entice businesses to locate in the state.
Biotech business leaders are watching this legislative session closely, hoping for new benefits for potential investors. They are tracking bills lauded by McDonnell and offered by Sen. Mark Herring, D-Leesburg, and Del. Sam Nixon, R-Richmond, that would exempt capital gains taxes from income related to certain angel, corporate or venture capital investments in science and technology startups. Biotech leaders in Virginia see the measure as a way to better compete for younger industry players that might have chosen another headquarters address, such as in Maryland, where tax breaks are more readily available for angel investors. (For more on the tech industry's issues, click here.)
“It’s one more incentive to not consider that,” said Mark Herzog, executive director of the Virginia Biotechnology Association.
An optimistic Herring said the bills’ chances are good even in a downturn because they don’t require new funding.
Even as business groups train their eyes on the emerging issues of 2010 — everything from delaying new stormwater management regulations on new development to curbing the unemployment insurance burden on companies — transportation remains the top priority for some who anticipate it becoming the subject of a special session in the fall.
One bill to raise the gas tax is again on the table, but many observers think it has little likelihood of getting passed.
But another bill has captured more attention — one introduced by Del. Thomas Davis Rust, R-Herndon, that, in part, increases sales taxes in Northern Virginia by 0.5 percent to fund transportation projects specifically in that region.
“The budget is going to consume everything,” said Bob Chase, president of the Northern Virginia Transportation Alliance. “A pledge to make meeting Virginia’s transportation needs a top priority was a cornerstone of McDonnell’s campaign. It’s our expectation that he remains committed to honoring that.”
Washington Business Journal
January 22, 2010
at 4:45 PM
The United States Trade Representative (USTR) has instituted investigation No. 332-509, Small and Medium-Sized Enterprises: U.S. and EU Export Activities, and Barriers and Opportunities Experienced by U.S. Firms, for the purpose of preparing the second in a series of three reports requested by the USTR relating to small and medium-sized enterprises. They are seeking feedback and are inviting companies to participate.
BACKGROUND: In his letter the USTR requested that the Commission provide three reports during the next 12 months relating to small and medium-sized enterprises (SMEs). In this notice the Commission is instituting the second of three investigations under section 332(g) for the purpose of preparing the second report, which is to be transmitted to the USTR by July 6, 2010. The Commission published notice of institution of the first investigation, investigation No. 332-508, in the Federal Register of October 28, 2009 (74 F.R. 55581).
As requested, in the second report (investigation No. 332-509) the Commission will:
(1) Assist in analyzing the performance of U.S. SME firms in exporting compared to SMEs exporting in other leading economies. As one way of comparing the performance of U.S. SMEs to those in other countries, the Commission will compare the exporting activity of SMEs in the United States and the European Union (EU), and analyze the distinctions between U.S. and EU firms in terms of sectoral composition, firm characteristics, and exporting behavior.
(2) Identify barriers to exporting noted by U.S. SMEs and strategies used by SMEs to
overcome special constraints and reduce trade costs.
(3) Identify the benefits to SMEs from increased export opportunities, including free trade agreements and other trading arrangements.
To best aid the Commission in gathering information for the report, the Commission is seeking information in response to the following questions:
• What are the most significant constraints that U.S. SMEs face in their efforts to export?
• If SMEs have been successful in overcoming those constraints, what strategies have they adopted?
• What particular benefits do SMEs believe they have received from increased export
opportunities including those from free trade agreements and other trading arrangements; which trade agreements or other arrangements have been most beneficial?
January 26, 2010: Deadline for filing requests to appear at the public hearing.
January 28, 2010: Deadline for filing pre-hearing briefs and statements.
February 9, 2010: Public hearing (Washington, DC).
February 23, 2010: Deadline for filing post-hearing briefs and statements.
March 26, 2010: Deadline for filing written submissions.
July 6, 2010: Transmittal of Commission report to the USTR.
ADDRESSES: All Commission offices, including the Commission's hearing rooms, are located in the United States International Trade Commission Building, 500 E Street SW, Washington, DC. All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.
FOR FURTHER INFORMATION CONTACT: Project Leader Laura Bloodgood (202-708-4726 or firstname.lastname@example.org)
at 11:24 AM
Friday, January 22, 2010
Investment by venture capital firms declined last year to its lowest point in more than a decade, according to a report scheduled to be released Friday.
There were 2,795 investments worth $17.7 billion in 2009, a 37 percent decline in dollar value compared with 2008, according to the report from PricewaterhouseCoopers and the National Venture Capital Association, which analyzed data provided by Thomson Reuters. The number of deals decreased 30 percent.
The Washington area had 117 deals totaling about $540 million for 2009, compared with $985 million the previous year. That level of investment put Washington in the middle of the pack nationally, based on the report's accounting, which divides the country into 19 regions. The Washington area trailed regions such as Los Angeles, the New York metro area and San Diego.
Mark Esposito, director of the emerging company services group at PricewaterhouseCooper, said the findings show that the amount of venture capital investment increased as the year went on. During the first quarter of the year, for instance, there was only $80 million worth of investment in local firms; by the fourth quarter, that number had grown to $163 million.
"Without a doubt, it looks like we hit a trough somewhere in the first half of 2009, both locally and nationally," he said.
Esposito pointed to bright spots on the local scene such as social media development firm LivingSocial, which landed $5 million in investment capital from investors such as Steve Case, and the Rockville-based drug developer Zyngenia, which raised $10 million.
For the Washington area, some of the largest investments last year targeted the software, biotech and telecommunications industries. Software led the pack, with venture capital investments totaling almost $98 million. Biotech firms and telecommunications companies took in $88 million and more than $82 million, respectively.
In a call with reporters on Thursday, PricewaterhouseCoopers partner Danny Wallace said 2009 marked the first year that nationally, the biotech industry nudged past the software industry to grab a larger chunk of investment capital.
Other than that, venture capital activity in the Washington area generally mirrored larger national trends, Esposito said, though he pointed to one growing industry that is not yet well represented in the area. "We didn't see much on the 'clean tech' side here," he said, referring to the movement toward products and technology that help reduce energy consumption. "Most of that continues to be on the West Coast."
At least one local venture capital firm, Walker Ventures, announced last year that it was winding down operations and would not seek to raise a new investment fund.
Founder Steve Walker said at the time that the economic conditions were simply too rough to raise enough investor interest. "This isn't the end of early stage investing," he said, "but it's a time period when that's not something most people want to consider."
By Mike Musgrove
January 22, 2010
at 9:25 AM
Tuesday, January 19, 2010
Governor Robert F. McDonnell highlighted the importance of the Biotechnology industry in his first "State of the Commonwealth" address to the Virginia General Assembly, January 18, 2010. He specifically notes legislation by Delegate Sam Nixon (HB 523) and Senator Mark Herring (SB 428) to create a capital gains tax exclusion for bioscience investment.
From the transcript: "We will also target new Opportunity Fund dollars to the bio-tech industry. This is an industry of high-paying jobs in a fast-growing career field. Smart states look at this sector for future economic development. We will as well. Delegate Sam Nixon of Chesterfield is teaming up with Senator Mark Herring from Loudoun County to push my commitment to grant an income tax exemption for qualified investments by technology and science startup businesses."
Click here for the video:
at 3:13 PM
Friday, January 15, 2010
CQ reports that US Rep Anna Eshoo challenged President Obama over the issue of using the conference committee on health care reform to make changes to items that were, in fact, not in conflict between the two versions of the bill.
Rep. Anna G. Eshoo, D-Calif., who wrote the biologics provision of the House bill, asked Obama his position on the issue during a question-and-answer session with House Democrats Thursday evening, and he told her he disagreed with her legislation, a Democratic aide said. She noted that both the House and Senate had voted for it.
“Nothing is sacrosanct,” he told her, according to the aide. “We’re discussing it. I have a great deal of respect for the House and the Senate, but my job is to do what I think is good policy.”
Eshoo, according to her chief of staff, Jason Mahler, responded, “if the president overturns the clear will of Congress on this that it will not only be a bad precedent but a dangerous precedent.”
at 12:10 PM
After winning support for $25 million in state funds during a major budget crisis and using the field of molecular exploration to unite rival politicians behind the same cause, the Ignite Institute has managed one more miracle in Northern Virginia.
It will help create the area’s first known biotech incubator with wet labs.
The medical research institute, a coup for Fairfax County announced late last year, and its temporary landlord, the Center for Innovative Technology in Herndon, will use at least $3 million from state incentive funds to construct, at minimum, 20,000 square feet of lab space in the modern building.
The Ignite Institute, which aims to have 100 scientists by the year’s end and 500 in five years, will use the lab space on the third and possibly fourth floors of a 60,000-square-foot CIT wing. It could move in as early as June.
After the institute departs in a few years for a permanent, 300,000-square-foot home, likely in the Dulles corridor, CIT officials plan to partition the lab space left behind and use it as a new life sciences incubator for lease to young biotechs .
“We would work directly with entrepreneurs,” said the center’s CEO, Peter Jobse.
Lab space has topped wish lists for every Northern Virginia economic development office, university and lost biotech prospect for decades while suburban Maryland accumulated a plethora of lab space. No developer was willing to shell out money for pricey lab build-outs without guaranteed tenants, and no potential tenant was willing to pick Northern Virginia without ready lab space.
“Lots of little tenants would have been in Virginia were there lab space,” said Dan Gonzalez, a member of the Virginia Biotechnology Organization’s board and CEO of Appian Realty Inc., a real estate company representing CIT. “Ten years ago, we identified this as a need. If Ignite is the catalyst for it happening, so be it.”
Fairfax County once had a BioAccelerator in Springfield that amounted to less than 10,000 square feet of office space, closing it in 2007 because of high operating costs.
George Mason University also ran into problems with its plans for bulking up its lab space. After the lack of local labs sent one GMU spinoff, Theranostics Health LLC, packing for Rockville, the university sketched out larger lab quarters in Manassas. However, the main developer pulled out of a planned build-out last year, and state funding remains difficult to find, forcing GMU to cram a second spinoff, Ceres Nanosciences LLLP, into its own science building.
Operating a biotech incubator is not for the fainthearted. Owners must manage some of the world’s most sensitive machinery and hazardous materials, not to mention companies that crave hundreds of millions of dollars for product development for years in return for zero revenue. The investment and upkeep amounts also are high. Construction costs alone approach $300 a square foot.
“There are a lot of issues on the business end and technical facility side that are very unique to biotech companies that would need to be considered prior to running a successful incubator,” said Mike Norris, a vice president in the Vienna office of Scheer Partners Inc., a life sciences real estate company.
Thanks to Virginia’s high population of information technology companies, CIT has gravitated more toward that field. Only six of the center’s 36 funded companies are in the life sciences, and two of those are in Northern Virginia. But with a 3-year-old, roughly $500,000 annual BioLife fund and staff expertise, CIT officials say they are well-equipped to serve the life sciences.
“We don’t have the rich history and strong base of life sciences companies in the Commonwealth that exist in San Diego and Boston,” said Tom Weithman, managing director of CIT Gap Funds. “But that said, I think there’s tremendous potential in the work being done by companies here.”
Vandana Sinha, Staff Reporter
Washington Business Journal
at 10:58 AM
Tuesday, January 12, 2010
The biotech industry raised a record $55.8 billion in 2009 despite hesitant stock and venture capital markets, as drug-company partnerships fed the cash-burning startups that develop new therapies.
That represents a jump of 85 percent over the $30.1 billion recorded in 2008, according to Steve Burrill, whose San Francisco firm Burrill & Co. is both an industry investor and analyst.
He said the 2009 results were driven by $37 billion in financial partnerships through which large drug companies license technologies or experimental remedies from biotech startups, a dynamic that enabled many small firms to survive a tough year. But it may ultimately limit their growth if they were forced to cede control over their most promising developments.
"You're not going to grow a lot more Genentechs or Amgens," Burrill said, painting a picture of a biotech industry that is increasingly the farm team that develops remedies that will ultimately be licensed and sold by the major league drug companies, also known as "Big Pharma."
That's the snapshot of the industry that emerges as 6,500 scientists, executives and financiers converge on San Francisco this week for the JP Morgan Healthcare Conference.
Now in its 28th year, the gathering is the health care industry's premier financial event, giving more than 330 companies a chance to make formal pitches to institutional investors. Another 7,500 private meetings are expected to take place from Monday to Thursday when the event ends.
"Success for JP Morgan is for our clients to get a lot of value out of the conference without feeling like it's speed dating," quipped Robbie Huffines, co-head of JP Morgan's global health care investment banking group.
Established in the early days of biotech by the now-defunct investment bank Hambrecht & Quist - old-timers still refer to it as "the H&Q" - the event gives invited companies a chance to pitch their corporate stories to an elite investment audience and also highlights the Bay Area's role as a biomedical discovery center.
Edward Lanphier, chief executive of Sangamo BioSciences in Point Richmond, who will be speaking at the conference, said he hopes to use partnerships to fund the costly marathon of developing a biomedical breakthrough while retaining enough control to preserve his company's big league potential.
Founded in 1995, Sangamo is developing a type of molecular switch called a zinc-finger protein that can turn genes on or off. The firm is currently conducting clinical trials to see whether these zinc-fingers can trigger the genes to repair nerves and blood vessels in patients with diabetic neuropathy, extreme forms of which can require amputation of damaged limbs.
Lanphier said the 75-person firm, which ran about $20 million in the red last year, had no layoffs and made a few key hires in 2009, thanks to revenue-producing partnerships under which it has licensed off some nonmedical uses for its technology for purposes such as genetically engineering plants.
But Sangamo has kept the most lucrative medical rights in the hope that zinc-fingers prove useful at switching on repair genes for human diseases, Lanphier said.
John Milligan, president of Gilead Sciences, said it has always been difficult for small biotech firms to make the leap from development firms to drug sellers, although the degree of difficulty may be increasing as partnerships and buyouts become easier ways to raise capital than initial stock offerings.
"How not to get bought was one of the challenges we went through in the early 2000s," said Milligan, recalling the time when his Foster City firm was on the cusp of delivering what have become market-leading treatments for HIV.
With a current stock market capitalization of about $40 billion, Gilead became the Bay Area's most valuable independent biotech firm last year after the Swiss drug firm Roche finalized its takeover of industry pioneer Genentech. But back when Gilead was still in its development stage, Milligan said the company partnered with Roche to commercialize the flu treatment called Tamiflu to raise the cash to develop its HIV line.
Now Gilead is growing through acquisition, last year acquiring CV Therapeutics of Palo Alto to add heart drugs to its product portfolio. As Milligan explained, once biotech firms develop marketable drugs they still face the cost of developing worldwide sales efforts, and adding new medicines through acquisition is one way of defraying their overall sales overhead.
Startups keep growing
So while biotech companies continue to be absorbed, enough startups are created to keep the life sciences industry growing, said Gail Maderis, acting chief executive of BayBio, the regional trade association with some 450 members.
She said BayBio estimates that total life sciences employment in Northern California grew to 129,410 persons last year, up 1.7 percent from 127,241 in 2008, despite the tough hiring climate.
Passage of the health care reform bill pending in Congress would have enormous and complex effects on the medical industry, but one provision provides a boon for biotech by setting rules for the creation of generic biomedicines favored by the industry.
"We see this as a huge win for innovation," Maderis said.
But Kathleen Jaeger, president of the Generic Pharmaceutical Association, characterized those proposed rules as "a sweetheart deal with the brand drug companies" that will make it harder for generic and biogeneric companies to provide cheaper alternatives.
While most of the action this week will take place at the Westin St. Francis Hotel where the conference is being held, the entire Bay Area biotech industry takes advantage of the critical mass of scientific and financial talent in town.
Fluidigm Corp. CEO Gajus Worthington won't have a formal role at the conference, but he will be briefing potential investors, industrial partners and scientific collaborators about his firm's technology to automate the biological reactions performed in early stage biomedical development.
"For companies that are located within striking distance of San Francisco, you can get all three of those groups to your company," he said.
Tom Abate, Staff Writer
San Francisco Chronicle
at 9:03 AM
Monday, January 11, 2010
If you've spotted a new computer in a school office in Richmond, grumbled about the midafternoon jam at the Bells Road exit or wondered about those "Dippers & Smokers" fliers around town, you've run across Altria Group Inc.'s footprint.
The nation's No. 1 tobacco company makes all its cigarettes -- 150 billion a year -- in Richmond. Its headquarters are here, and so are the labs where it designs new products, such as the tipless Black & Mild cigarillo and the new Marlboro Blend 54 in its dark-green box -- and where scores of Richmonders, intrigued by the fliers, have taken up its invitations to earn money by participating in tobacco-consumer studies.
Standing at 160 on the Fortune 500 list of large companies, among Richmond-area firms only Dominion Resources Inc., at 157, is larger.
"Looking at just Philip Morris USA, its employees and the complex visible from Interstate 95, one sees just the tip of the iceberg," said Roy Pearson, a business professor emeritus at the College of William and Mary.
It's a big tip:
About 5,700 people work in Altria factories, offices and laboratories in the Richmond area. The company ranked seventh among private-sector employers in the region.
They take home more than $710 million a year in pay.
Some of them place some $840 million a year in orders for goods or services from Virginia companies. Others buy some 17 million pounds of tobacco a year from 400 Virginia growers -- about $30 million a year.
And more than 250 of them pitched in last autumn at Huguenot High School to paint murals, create a butterfly garden and freshman class courtyard, and even remodel the teachers' lounge. A dozen took time last month to move 235 company computers into the Richmond Public Schools warehouse, to be shipped out to schools across the city.
"It really matters to me -- I'm a product of Richmond Public Schools," said Immanuel Sutherland, who moved from Altria's procurement services to run its volunteer programs four years ago.
Altria and its people -- who also number some 5,700 Virginia retirees -- have helped shape Richmond for decades.
Richmond was a center of the nation's aluminum business because Reynolds Metals got its start making foil for cigarette packs. The area's newest corporate citizen, MeadWestvaco, numbers Altria among its biggest customers.
The company buys paper, filters, cellophane, packaging material and printing plates mainly from local firms. Local firms service and maintain machinery for the company, do data-processing work and provide health-care services for employees.
Pearson said computer models of the local economy and surveys of where the company and its employees buy goods show every Altria job generates more than one job with Virginia suppliers. There's a ripple effect as those suppliers buy goods and services locally, too.
All in all, each Altria job generates 2.9 more jobs in Virginia, mostly in the Richmond area, Pearson said.
Doing business with Altria has changed the way Jewett Machine Manufacturing Co. works.
For years, the South Richmond company made precision machine parts for the cigarette factory. Now, Jewett is involved in bigger and more complex engineering tasks.
"The work for us has sort of shifted from manufacturing parts and aiding their engineering groups to actually designing and building turnkey systems in a whole different arena, the noncigarette arena," said Bryce Jewett, Jewett Machine's president. Jewett employs about 100 people at its locations on Maury Street and Mechanicsville Turnpike.
. . .
Tobacco products other than cigarettes are now an important part of Altria. Altria is investing $100 million in its York County factory, where it makes snus, a Swedish-style smokeless tobacco that is starting to make a splash in the United States.
Its $11.7 billion purchase of U.S. Smokeless Tobacco last year and $2.9 billion acquisition of cigar-maker John Middleton in 2007 brought about a dozen executives to the area.
Altria's two-year-old, $350 million research center in the downtown Virginia BioTechnology Research Park, where some 100 Ph.D's work, now handles the development of cigars and smokeless-tobacco products as well as cigarettes. A total of 500 people work there, the Virginia BioTechnology Research Partnership Authority says.
Over the past several months, marketing experts from U.S. Smokeless' Copenhagen division worked with the local scientists, who gained their expertise with flavoring tobacco at Philip Morris USA, to figure out how to get just the right wintergreen flavor into Copenhagen's snuff -- creating Copenhagen's fifth new product in 187 years.
But the push into smokeless tobacco and cigars came on the heels of a major split. The company, then based in New York, carved off its Kraft Foods and Miller beer businesses. Then, it spun off Philip Morris International, the independent New York-based company that makes and sells Marlboro and other Philip Morris brands overseas.
After the split, Altria's Philip Morris USA unit decided to make all of its cigarettes in Richmond, closing a North Carolina plant. The consolidation meant a $230 million investment in the Richmond Manufacturing Center next to I-95 in South Richmond.
Still, the business is under pressure.
"Philip Morris used to be nearly all of our business," said Stephen Young, chief executive officer of Mundet Inc., which makes the paper that is wrapped around filters, as well as packaging for cigarettes, at its Colonial Heights plant.
Now Altria accounts for about 40 percent of the company's sales.
As the industry has consolidated and cigarette sales continue to slide, "we have felt the need to diversify our product range and customer base and have looked to expand into nontobacco printed packaging."
Still, though Altria accounts for a smaller part of Mundet's business, Richmond accounts for a larger share of Altria's operations than it used to. Even before consolidating all its U.S. cigarette manufacturing here, Philip Morris USA moved its headquarters to Henrico County in 2003, and some 270 people came from its headquarters on Manhattan's Park Avenue. Altria itself moved to the landmark Reynolds Metals building in the county in 2008.
. . .
For company spokesman David Sylvia, moving from New York meant suddenly finding three extra hours a day. Without the long train ride from Park Avenue to the Connecticut suburbs, there was more time to spend with his four young children and a lower cost of living that made it easy giving up the old pickup he used to drive to the train station. He has bought two cars here since he moved.
Taking the kids to art classes at the Visual Arts Workshop, he saw a strong fiber-arts program that reminded him of his father, working in the now-shuttered velvet-textile industry of his Stonington, Conn., hometown -- and before long Sylvia found himself on the board of the nonprofit, involved it its efforts to reach into the Richmond public schools.
Time to look around and get to know a different kind of place than New York reminded the one-time altar boy of something else about Stonington:
"It was the kind of place where everybody knew everybody and if you were down on your luck, people would lend a hand to help out," he said.
The volunteer work he'd done as a Providence College student and the participation of his Henrico church, St. Bridget's Catholic, in the CARITAS program for the homeless led him to join the board of the interfaith group. It also has led him to do his share of pot-washing and meal-serving when it is St. Bridgit's turn to feed and provide a safe, warm bed.
"They're very active," said David J.L. Fisk, executive director of the Richmond Symphony, where Altria sponsors the Masterworks series through which the orchestra is seeking a new music director.
"Financially, they contribute over $100,000 to the symphony," he said, adding that support comes from the very top all the way through the company. That's in addition to helping finance CenterStage, now the symphony's home, as well as the Arts Fund and CultureWorks.
"Employees are members of the symphony chorus, they are parents of members of the youth orchestra, volunteers with the Richmond Symphony Orchestra League," he said. "They've been major supporters of the cultural scene and of downtown."
Altria is a big donor to the city schools, on the order of $2 million a year, targeting math and science education, trying to keep middle school students on track, and helping high schoolers get ready for college.
The company also pays for things donors don't always think of, such as computers for classrooms and training for teachers. But just as important, said Richmond Superintendent Yvonne W. Brandon, is that Altria volunteers are regularly in the schools: tutoring, mentoring and helping fix things.
"They show up," she said.
DAVID RESS AND JOHN REID BLACKWELL
at 12:06 PM
Wednesday, January 06, 2010
Virginia Governor-elect Bob McDonnell announced that Jim Duffey will serve as the Commonwealth’s next Secretary of Technology. Duffey worked for Electric Data Systems Corporation for 24 years, serving as Vice President and General Manager of U.S. Public Sector business, and is a former Vice-Chairman of the Northern Virginia Technology Council.
McDonnell remarked about his Secretary-designate of Technology Jim Duffey, “Jim has worked around the globe at the highest levels in the information technology industry. During his time with Electronic Data Systems Corporation, Jim was based in Washington D.C., Rome, Spain, England and Australia. He has managed billion dollar budgets and thousands of employees. And he understands Virginia’s high tech community well through his recent leadership as Vice-Chairman of the Northern Virginia Technology Council. This broad experience has prepared Jim well for the position of Secretary of Technology. I am honored that Jim would agree to serve the citizens of Virginia in this capacity. With over 20 years of experience in the private sector Jim is a well-respected leader in his field and will be a positive addition to our Cabinet and Virginia state government.”
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YouTube Video: Virginia Tech assistant professor of Biological Sciences Carla Finkielstein arranged for breast cancer survivors and advocates to speak to her students. The goal was to help the students put a face to the disease for which they are searching for a cure.
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Monday, January 04, 2010
If Governor-elect Bob McDonnell (R) has a New Year’s resolution, it might have something to do with bipartisanship.
In an interview with the Times-Mirror Dec. 30, Democratic State Sen. Mark Herring (eastern Loudoun) shared the news that McDonnell – who takes office Jan. 16 – has named Herring to the Technology Working Group advisory panel, part of the governor-elect’s transition team.
According to the transition office, the group involves technology leaders in the private sector with state government experience and legislators.
The mission of the panel is to do fact finding from the agencies, offer long-term strategic planning for state government and to turn campaign promises into action. The group will produce a report for the incoming governor and secretary of technology to advise them in the new administration.
Before his election in November, McDonnell had made technology a focus of his campaign.
“Northern Virginia’s technology community powers the economy of our state," he stated. "The men and women who work at [technology] companies are the innovators key to Virginia's, and America’s, future economic prosperity.”
Herring, who is halfway through his first term in the state Senate and is running for re-election in 2011, said he was “very honored” by the appointment. He added that he spoke last week with the head of the governor-elect’s policy unit about technology and the new panel.
“We talked a lot about areas where we could work together on technology, and I look forward to working with the new administration,” Herring said.
Herring represents eastern Loudoun County, an area rich in technology companies and data centers, including Aol., Verizon, Telos, Orbital, M.C. Dean, Ask.com, DuPont Fabros.
No further details were immediately available on the group's other members, or when they will meet in the coming weeks.
The position will not require Herring to give up his state Senate seat.
Herring received the 2009 Legislative Leadership Award from the Virginia Biotechnology Association for his successful efforts to adopt the Science and Technology Research Development and Commercialization Act. The legislation increases Virginia’s existing resources to support new technology and bioscience-related businesses.
Herring and his Loudoun colleague in the state Senate, Jill Holtzman-Vogel (R), both serve on the chamber's General Laws & Technology Committee.
By Nicholas Graham
Source: Loudoun Times-Mirror
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Twins start firm to help allergy sufferers
Jan 4, 2009
Millions of people at risk of severe allergic reactions to certain foods and bee stings rely on pen-size syringes that contain a life-saving dose of the drug epinephrine administered in an emergency.
As lifelong allergy sufferers, twin brothers Eric S. Edwards and Evan T. Edwards, co-founders of the Richmond-based specialty pharmaceutical firm Intelliject Inc., keep their epinephrine auto-injectors close by.
Accidental ingestion of peanuts, tree nuts and shellfish can cause them to go into anaphylactic shock, a potentially fatal allergic reaction. Tongue and throat tissues swell, making breathing difficult. A person may break out in hives and blood pressure may drop, causing fainting.
Injecting the drug epinephrine into the thigh quickly reverses the symptoms.
As grateful as the brothers are to have the existing injector technology available, from their own experiences they've concluded there has to be a better injector system.
The 29-year-old brothers and their management team have built Intelliject around the goal of creating a more intuitive, compact and safer emergency epinephrine delivery system.
Their result: a credit-card-size device that "talks" users through administering epinephrine.
"It's user-centered design," said Evan Edwards, vice president of product development at Intelliject.
"We really started with the patient and worked our way backwards," he said. "A lot of companies don't really think about how, in the moment of truth, when [people] are actually having to use the injector, what are the scenarios involved."
In the hands of a babysitter or parent who has never used an epinephrine injector, for instance, precious seconds could be lost trying to figure it out, he said.
A month ago, Intelliject moved into the big leagues, announcing a multimillion licensing deal with pharmaceutical giant Sanofi-Aventis U.S., which will manufacture and market Intelliject's novel epinephrine injector.
"Evan and I are just a small part of that" deal coming to fruition, Eric Edwards said. "We really have been blessed with an extraordinary management team."
That team includes President and Chief Executive Officer T. Spencer Williamson IV, who has been with the firm since 2006; Vice Presidents Kristopher D. Ford, Ronald D. Gunn, Neil D. Hughes and Mark J. Licata; and Chief Financial Officer Christopher T. Schools.
Sanofi-Aventis U.S. is an affiliate of Sanofi-Aventis, one of the world's largest pharmaceutical firms, with annual sales worldwide of about $40 billion in 2008. Sanofi-Aventis' U.S. product lineup includes blockbuster medications such as the allergy drug Allegra, the sleep aid Ambien and the clot-buster Plavix.
The agreement with Sanofi-Aventis U.S. calls for $25 million up front to Intelliject. In addition, Intelliject is eligible for up to $205 million more over time as development and commercial milestones are reached, plus royalties on sales associated with the licensure.
In announcing the deal, Sanofi-Aventis' Brent Ragans said: "This agreement complements our strong presence in the U.S. as a leader in the allergy arena and is a great example of our company's transformation into a provider of health-care solutions."
Intelliject retains licensing and marketing rights for their auto-injector delivery system in the rest of the world and is shopping around for other partners.
"The $25 million is being used to invest in our business and to realize the potential of Intelliject's portfolio across a range of therapy areas," Eric Edwards said. "We have over 70 patents pending, issued or granted and have multiple other platforms that can be utilized with a variety of pharmaceuticals across many therapy areas."
. . .
Not bad for two young men raised in Chesterfield County who have spent the past decade balancing school, starting families and building a firm they say is "all about relationships."
"Our faith is of extraordinary importance in everything we do," Eric Edwards said. "Some would say this is a faith-based company."
Explained Evan Edwards: "When you have the management team and everyone in the company that shares a similar culture, when you go through some difficult times, it really tests you, and that's when you have to really rely on faith to get over those hurdles. . . . We have seen that time and time again. This whole idea of us having allergies and living with it all our lives and turning it into an opportunity, we feel is very divinely led. It's not just by chance that all these individuals have come into our lives and helped us make an impact."
The sons of Linda and Gary Edwards went to Monacan High School, but their paths diverged for college -- Evan heading off to the University of Virginia to study engineering and Eric to Virginia Commonwealth University for biology and pre-med.
"We pretty much shaped our education around this idea of creating a better delivery system," Eric Edwards said.
A grant from the National Collegiate Inventors and Innovators Alliance started Intelliject, which in the early days was a family company, Evan Edwards said.
"We had our father be the CEO and our older brothers be a part of it," Evan Edwards said.
The brothers realized that to get to the next stage, they needed expertise they didn't have.
The Virginia BioTechnology Research Park, with its business incubation centers, offered a place to fine-tune their idea.
"We asked them to tell us their story," recalled David R. Lohr, executive director and vice president of business development at the park's Biosciences Development Center. "What are you trying to accomplish? What are you looking for in the way of help? We also shared with them our program, how it works, what it does and perhaps what it doesn't do. . . . We don't invest, but we can help them raise capital."
Lohr said his first impression of the brothers is that they had a unique and revolutionary idea -- they probably didn't realize how revolutionary.
"Not only did I see the potential to put epinephrine in this device, but I saw the potential to put a lot of other drugs into the device," said Lohr, who had run a drug-delivery company before. "Especially the newer biotech drugs that typically have to be injected anyway, they are very expensive, they would be more affordable if they could be self-administered, and the whole compliance issue would be better.
"We helped them to think about this as a drug-delivery company and not just a single-product company," Lohr said.
Over the next three to four years, the incubation center provided mentoring, networking, help with the business plan and financial model development, fundraising and help identifying a chief executive.
"Why are these guys successful? They had a great idea rooted in their personal understanding of an unmet medical need," Lohr said.
"The thing that differentiated them is these guys listened and took the advice they were given from this myriad of advisers. They processed it, integrated it, and they just kept redoing their thinking."
. . .
Now ensconced in Intelliject's modern offices in Shockoe Slip, Eric Edwards and Evan Edwards talked about what's next for them.
Evan Edwards is preparing to move to Indianapolis temporarily. The brothers are limited in what they can say about product development, so he will not say what he will be doing specifically.
"As Spencer [Williamson] likes to say, it's really the end of the beginning," Evan Edwards said. "Because there is so much more work to do."
Success, for them, will be when their auto-injector is in the hands of people, like themselves, at risk of severe allergic reactions, Eric Edwards said. That is at least a year or more down the road.
"With this partnership, Intelliject is responsible for finishing the development of the product through [Food and Drug Administration] approval," Eric Edwards explained. "It's a late-stage product. We will be filing our new drug application with the FDA [in 2010]. . . . Within the next couple of years this product should be on the market."
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