Health Diagnostic Lab Wins VABIO Company of the Year

Congratulations to Health Diagnostic Laboratory (HDL) of Richmond, winner of the 2011 Virginia Bioscience Company of the Year Award. The award, presented May 26 at a special reception at the Pfizer Consumer Products Research Laboratory in Richmond, recognizes the biotech or medical device company that has distinguished itself from its peers with strong overall performance and best exemplifies the innovative spirit of the Virginia life sciences community.

Mark Herzog, executive director of VABIO, presented the award to Tonya Mallory, CEO of HDL.

The Virginia Bioscience Company of the Year Award was presented by the Virginia Biotechnology Association and sponsored by the law firm Cooley LLP and Pharmaceutical Researchers and Manufacturers of America.

Del. Scott Lingamfelter Wins Virginia Bioscience Award

The Virginia Biotechnology Association (VABIO), today announced that L. Scott Lingamfelter, a member of the Virginia House of Delegates from Woodbridge, received the Virginia Bioscience Legislative Leadership Award for his exemplary efforts on behalf of the bioscience industry during the 2011 Session of the Virginia General Assembly.

“Delegate Lingamfelter played a key role in the passage of legislation to match Small Business Innovation Research (SBIR) awards and to protect and fund Virginia’s commitment to the Commonwealth Research and Commercialization Fund (CRCF),” said Mark A. Herzog, executive director of VABIO. “The CRCF is designed to spark early-stage commercialization and job creation in high-growth, high-wage technologies such as biotechnology.”

The Virginia Biotechnology Association has only recognized a handful of state legislators with this special distinction.

“Technology, and biotechnology in particular, will be a major component of a vibrant Virginia economy going forward,” said Delegate Lingamfelter in a statement following the award presentation. “ I'm glad to have played a small part in working with the Governor and leaders with an economic vision for Virginia by advancing legislation that will attract and grow more high-tech companies to Virginia.”

The SBIR program, signed into law by President Reagan in 1982, is the largest innovation program in the United States. SBIR offers competition-based awards to stimulate technological innovation among small private sector businesses with significant commercial applications. Many famous, high-tech firms, such as Qualcomm, first got their start via this important program. These awards are extremely competitive; historically only about 15% of all Phase One applications are approved.

“The Virginia SBIR Match Program was first created in 2009 but no funding had been provided,” said Mr. Herzog. “We are grateful to Delegate Lingamfelter and his colleagues in the General Assembly for including the $2 million in the 2012 budget.”

Previous recipients of the award include: Delegate Steve Landes of Weyer’s Cave; Delegate Mark Sickles of Fairfax; Delegate John O’Bannon of Henrico; Delegate Sam Nixon of Chesterfield, Delegate Joe May of Loudoun and Senator Mark Herring, also from Loudoun.

The Virginia Biotechnology Association (VaBIO) is the statewide non-profit organization that promotes the scientific and economic impact of the life sciences industry in the Commonwealth of Virginia. Approximately 200 biotechnology, pharmaceutical and medical device companies are based in Virginia, mainly clustered around universities in Blacksburg, Charlottesville, Richmond, Norfolk and Northern Virginia. For more information about the impact of the bioscience industry in Virginia, please visit www.vabio.org.

Building On A Firm Foundation

A new R&D tax credit, among other programs and projects, could help Virginia reach the upper echelon of life sciences states.

All across the Commonwealth of Virginia, biomedical innovators are pursuing a shared passion to help their fellow citizens live longer, healthier lives. These dedicated researchers, in nearly 200 biotechnology and medical device firms clustered around research universities such as the University of Virginia, Virginia Commonwealth University, George Mason University and Virginia Tech, are expanding the frontiers of modern medicine. They are pioneering new drugs, more effective therapeutics and life-saving medical devices. According to a new study by Miami-based Archstone Consulting, there were more than 1,500 active clinical trails conducted last year by Virginia researchers on new drugs, including those targeting cancer, diabetes, HIV/AIDS, mental health disorders and respiratory diseases.

In addition to the National Science Foundation (NSF) and biopharma companies with facilities in Virginia such as Pfizer, Merck, Novozymes, Abbott Laboratories, Boehringer Ingelheim, Teva Pharmaceuticals, ATCC and SRI International, the Commonwealth is also home to one of the most advanced bioscience research institutes in the world. The Janelia Farm Research Campus of the Howard Hughes Medical Institute (HHMI) opened in October 2006. Located on a 689-acre (279-hectare) property in Northern Virginia, the unique, world-class biomedical research complex represents a $500-million investment by HHMI, one of the largest biomedical research philanthropies in the world. Several hundred of the world's top researchers from diverse disciplines use emerging and innovative technologies to pursue biology's most challenging problems.

Clearly, biotechnology has asserted itself as a vital contributor to Virginia's economic growth.

According to the Battelle/BIO State Biosciences Initiatives 2010 report, from 2001 to 2008, bioscience employment in Virginia grew by 23 percent, compared to 6-percent total growth statewide and 3.5-percent across all sectors in the U.S. Between 2001 and 2008, the number of Virginia bioscience companies grew by 55 percent, in contrast to 18-percent growth in the private sector statewide, and 14 percent across the U.S.

In Virginia, bioscience organizations directly employ more than 20,000 people. Indirectly — through biomedical suppliers, vendors and services-related companies — more than 80,000 jobs are dependent on Virginia's life science industry. All told, Virginia's biopharmaceutical and device sector generated products and services valued at more than $13 billion in 2008.

New Tools Help, But Stronger Educational Focus Will Help Keep Up With the Neighbors

Founded in 1607 by a venture-backed company in London, Virginia has always been a welcoming home for entrepreneurs and start-up companies. That continues today as private investors recognize the long-term value of Virginia's robust biotechnology industry. Between 2004 and 2009, Virginia biotechnology companies attracted $405 million worth of venture capital. That puts Virginia in the top 20 nationally (19th).

Underlying this hopeful news are some potentially worrisome issues. Like many states, Virginia's educational requirements need to be reviewed, particularly to get more students prepared for careers in the science, technology, engineering and mathematics (STEM) fields. A state's concentration of STEM graduates generally is considered to be a bellwether of its future ability to compete for jobs and economic growth, especially in the global economy. In fact, a recent study notes that Virginia is one of only 17 states without a biology requirement for high school graduation (biology is one of three laboratory options).

Indeed, bioscience research provides fertile soil to nurture ideas from seedlings to useful products and services. And on the surface, Virginia's biotech sector seems to match up well in terms of the percentage of research-and-development activity taking place at state academic institutions. In fiscal year 2008, Virginia ranked 17th in the nation in the amount of academic research and development dollars spent on biosciences. Of the $70.55 billion in academic funding, more than $550 million was allocated to biosciences research in Virginia.

That's good enough to place Virginia in the top 20, but it also indicates how far the Commonwealth has to go. Virginia is bookended by two states — North Carolina and Maryland — that rank fifth and sixth in the nation, respectively. In short, state policy-makers and the research community must take action now to gain full advantage of future growth in the life sciences industry.

Seeking to capitalize on the growing nucleus of innovative research-based companies, Virginia Gov. Robert F. McDonnell earlier this year signed into law the Virginia Refundable Research & Development Tax Credit, which recognizes the enormous upfront expenses emerging advanced technology companies typically absorb during the arduous journey of bringing cutting-edge products and services to market. Virginia is now one of only a handful of states that provides a refundable credit that gives cash-strapped bioscience companies more elbow room to pursue their innovative ideas, without having to worry quite as much about meeting expenses before revenue comes rolling in. These "pre-profitable" biotech firms are eligible for up to a 15-percent tax credit or refund of their "qualified" R&D expenses, and up to 20 percent if they partner with Virginia's public or private universities.

The new legislation complements the Virginia Innovation Investment Act, enacted by the General Assembly in 2010. That initiative rewards Virginians who invest in advanced technology companies with a 100-percent exclusion from capital-gains taxes if an investment is made in the next three years.

And that is not all. Virginia also matches SBIR awards, provides aggressive tax credits for angel investors, has a state-funded seed-stage investment program and a stable corporate tax rate of only 6 percent. All of this in a state that consistently ranks first or second as the best place for business in America.

Virginians themselves have plenty of cause for optimism about the impact of biotechnology on their lives. Those sanguine sentiments go far beyond new tax policies and investment, as pivotal as those elements continue to be. Biotechnology-driven advances are saving lives or managing debilitating diseases everyday for millions around the world.

Like their counterparts nationally, these are the ideals that animate the ambitious, innovative and driven people who are the face of Virginia's burgeoning life sciences cluster.

Mark A. Herzog
The Site Selection Life Sciences Report

Hopewell's Osage Bio Energy Plant For Sale

The nation's first major barley-to-ethanol factory has been put up for sale before it ever fully opened in Hopewell.

Osage Bio Energy on Monday cited "unfavorable market conditions" as the reason for its decision to sell the company and its Appomattox ethanol plant in Hopewell.

The company said it will not start production at the plant. Osage said it will lay off all but a "core group" of the plant's 55 employees as it seeks to sell the property.

Heather Scott, a spokeswoman for Osage, declined to say how many employees would remain.

Osage's key investor, the private-equity firm First Reserve Corp. of Greenwich, Conn., decided to sell the company and its assets, Scott said.

"We are very hopeful this is still a great thing for Virginia and Hopewell," Scott said. "It will just be transitioned to a potential new owner that will come in and run this company and produce ethanol."

Osage, founded in 2007, planned to make ethanol for gasoline blends used in local markets.

The company started construction in 2008 on the $160 million plant, located on a 55-acre parcel in Hopewell. The plant was only in production for several days before a fire in September 2010 caused by a mechanical failure interrupted production.

Scott said Monday that the fire was not connected to the decision to the sell the plant.

The plant was expected to bring up to $2 million a year in tax revenue for the city of Hopewell.

"The city is pleased that the new plant has been constructed," City Manager Ed Daley said. "This is a major investment in our community. We are anxious for the sale to be completed so operations can begin."

Daley said he did not know all the components of the plant or what else other than ethanol could be produced there if a buyer could not be found.

The company had planned to produce up to 65 million gallons of ethanol at the plant, using up to 30 million bushels of barley a year, much of it from farmers in Virginia.

Osage obtained barley through Perdue AgriBusiness, which contracts with farmers to grow the crop. "Perdue is responsible for the receipt of the grain, so they will work with the growers on that," Scott said.

By: John Reid Blackwell
Richmond Times-Dispatch

New Patent Expands Keraderm's Portfolio

A Blacksburg company has received its fourth patent in pursuit of a lighted device that treats nail and skin infections.

The patent, granted April 5, expands Keraderm Corp.'s portfolio of three patents and broadens the company's hold on its technology, CEO William Cumbie said.

Keraderm is developing a medical device for the dermatology market. The new patent covers "a different way to generate the light," Cumbie said.

Cumbie said the patent could be thought of as an additional picket in a protective fence the company is building around itself. For technology protection, "you want to build a fence. This is just one more panel that we're putting on the fence," he said.

To advance its commercialization goals, Keraderm is conducting clinical trials and could have results by the end of the year, Cumbie said. The early stage company based at the Virginia Tech Corporate Research Center has yet to generate revenue, but has garnered investments of about $4.5 million, Cumbie said.

Some of the money came from NewVa Capital Partners, a fund through which the Virginia Tech Foundation, Carilion Clinic and Third Security support firms in the NewVa region of Southwest Virginia.

It will take additional money to bring the lighted treatment device to market, though the amount depends on the approach, Cumbie said.

The company contends that drugs are ineffective in curing fungal nail infections, which are embedded in the nail, but that its microbe-destroying light has yielded results. The light penetrates the nail and either kills the infectious microbes or renders them incapable of reproducing, the company told the U.S. Patent and Trademark Office.

Keraderm is hoping the same or similar technology can be proven to combat infections of the skin.

By Jeff Sturgeon
The Roanoke Times

Biotech Is Making Life Better In Virginia

Op-Ed by Mark Herzog, printed in the Virginia Gazette and the Daily Press

Virginia's bioscience leaders met this week in Williamsburg to discuss the opportunities and challenges facing health care, public policy and biomedical innovation in the commonwealth. For more than 20 years, biomedical innovators across our state have pursued a shared passion to help their fellow citizens live longer, healthier lives.

All across the commonwealth, dedicated researchers in nearly 200 biotechnology and medical device firms are expanding the frontiers of modern medicine. They are pioneering new drugs, more effective therapeutics and life-saving medical devices

Virginia companies have developed nearly 80 marketable biotechnology products, with another 50 or so undergoing the arduous process of clinical trials.

Clearly, biotechnology has asserted itself as a vital contributor to Virginia's economic growth.

According to the Battelle/BIO State Biosciences Initiatives 2010 report, from 2001 to 2008, bioscience employment in Virginia grew by 23 percent, compared to 6 percent total growth statewide and 3.5 percent across all sectors in the U.S.

In Virginia alone, biotechnology organizations directly employ more than 20,000 people. Indirectly through suppliers, vendors and services-related companies, Virginia's biotechnology industry employs nearly 80,000 people. All told, Virginia's biotech sector generated products and services valued at more than $13 billion in 2008.

Underlying this hopeful news are some potentially worrisome issues. Like many states, Virginia's educational requirements need to be reviewed, particularly to get more students prepared for careers in the science, technology, engineering and mathematics (STEM) fields. A state's concentration of STEM graduates generally is considered to be a bellwether of its future ability to compete for jobs and economic growth, especially in the global economy. In fact, a recent study notes that Virginia is one of only 17 states without a biology requirement for high school graduation (biology is one of three laboratory options).

On the surface, Virginia's biotech sector seems to match up well in terms of the percentage of research and development activity taking place at state academic institutions like the College of William and Mary, Eastern Virginia Medical School and Old Dominion University. In fiscal year 2008, of the $70.55 billion in total academic funding nationwide, more than $550 million was allocated to biosciences research in Virginia.

That's good enough to place Virginia in the top 20, but it also points up how far the commonwealth has to go. Virginia is bookended by two states — North Carolina and Maryland — that rank fifth and sixth in the nation, respectively. In short, state policy-makers and the research community must take action now to gain full advantage of future growth in the life sciences industry.

Seeking to capitalize on the nucleus of innovative research-based companies, Gov. Robert F. McDonnell earlier this year signed into law the Virginia Refundable Research & Development Tax Credit, which recognizes the enormous upfront expenses emerging advanced-technology companies typically absorb during the arduous journey of bringing cutting-edge products and services to market.

The refundable aspect of the tax credit gives cash-strapped bioscience companies more elbow room to pursue their innovative ideas without having to worry quite as much about meeting expenses before revenue comes rolling in.

The new legislation complements the Virginia Innovation Investment Act, enacted in 2010. That initiative rewards Virginians who invest in advanced technology companies with a full exclusion from capital-gains taxes if an investment is made in the next three years.

Biotechnology-driven advances are saving lives or managing diseases every day for millions around the world. Biotech treatments have increased life expectancy for cancer patients by three years since 1980. Three years may not sound like much, but if you're a parent it can seem like a new lease on life — it may be just enough time to watch a grandchild graduate from college or walk a daughter down the aisle on her wedding day.

Like their counterparts nationally, these are the ideals that animate the ambitious, innovative and driven people who are the face of Virginia's burgeoning biotechnology cluster.

Herzog is the executive director of the Virginia Biotechnology Association.