New Jersey Shuts Down Stem Cell Intitute

State pulls back on stem cell funding
by by Josh Margolin and Ted Sherman/The Star-Ledger
Sunday June 22, 2008, 3:33 PM

Eight months after state officials broke ground on New Jersey's new center for stem cell research, the once-heralded $150 million project has quietly been put on indefinite hold.

Despite continuing assurances that the 18-story tower in New Brunswick would remain on track -- even after voters rejected proposals last year to finance $450 million in stem cell science grants -- state officials behind the scenes pulled back millions in construction funding for the research facility late last year. They now acknowledge they are re-evaluating the entire project.

Gov. Jon Corzine said the project is in limbo and could not offer a concrete timeline for getting it restarted.

"I'd like to have a director and I'd like to see what our options are on making sure that New Jersey continues to be the leader, or among the leaders on biotech research -- particularly as it relates to stem cells," he said. "And then we'll work together on our rollout of what our plans are."

As of now, the Stem Cell Institute of New Jersey is little more than a web page and scattered lab research in three existing locations.

Under the joint oversight of the University of Medicine and Dentistry of New Jersey and Rutgers University, UMDNJ officials say more than 50 faculty members from both universities are doing grant-funded stem cell research through the institute.

The site of the proposed research center itself, though, is just a gravel parking lot with a lone sign featuring a drawing of a building that now may never be built.

In October, Corzine and others put shovels in the dirt for a ceremonial groundbreaking of what was to be called the Christopher Reeve Pavilion. Surrounded by relatives of the late actor, who became a strong advocate of stem cell research after he was paralyzed in a horse-riding accident, Corzine predicted the new center would serve as a nexus of cutting edge science.

"To the future!" he proclaimed, turning a silver-colored spade in a boxed patch of loose dirt.

A few weeks later, though, the project was abruptly halted after the failure of a controversial ballot initiative to borrow nearly half a billion dollars to fund the actual research.

The statewide bond proposal -- bloated by Trenton lawmakers to include money for four additional research centers in Camden, Newark, Belleville and Allendale -- was unexpectedly turned down by voters. Many blamed the rejection on anger with the state's borrowing, fanned by a vigorous campaign by conservatives and religious leaders staunchly opposed to stem cell research on moral grounds.

New Jersey has been pushing for years to become a center for stem cell research -- even before Corzine made it a central plank in his campaign for governor in 2005.

Stem cells have the potential to develop into many different types of cells in the body and scientists believe they hold the key for developing cures and treatments for now hopeless ailments like Lou Gehrig's disease and Alzheimer's. Economists for Rutgers University also say investment in such research would generate billions in economic activity.

A CHANGE IN PLANS

After the bond issue was rejected, senior administration officials said publicly that the New Brunswick research facility -- which had already incurred more than $2.3 million in planning expenses -- would proceed as planned, using money previously earmarked by the state.

The Legislature in 2006 had authorized the state to borrow up to $270 million in construction costs for the five stem cell labs across the state. At the same time, NJ Transit continued planning work on a federally funded, $10 million platform extension to serve the new research tower.

With the failure of the bond issue, discussions were initiated within the administration to save the New Brunswick lab by shelving the other four research facilities that had been added by the Legislature under political pressure and using the $120 million earmarked for that construction to pay for the actual science, according to senior administration officials.

But last November, the administration pulled back a funding proposal before the state Economic Development Authority, which was ready to approve $3.7 million in preliminary expenditures for the Reeve Pavilion. EDA officials refused last week to discuss the issue, referring all calls to the governor's office.

Many officials, however, were unaware the project has been put on hold. Rep. Frank Pallone (D-6th Dist.) referred to the "ongoing construction" of the stem cell research center in congressional hearings he chaired last month.

U.S. Sen. Robert Menendez (D-N.J.), who has been pushing for federal transit aid for the site by convincing federal officials that the stem cell institute would yield hundreds of high-tech, well-paying jobs for Central Jersey, was surprised to learn the project was halted months ago. He said he would go back to federal officials and try to convince them to apply the money to another New Jersey project.

"The money just can't hang out there forever," Menendez said. "It's obviously a disappointment because it is exactly the type of entity we're trying to attract to New Jersey -- high-end jobs with low impact on the state's services. And we want to be a center for research and development excellence."

Marie Tasy, executive director of New Jersey Right To Life and a prominent opponent of the stem cell labs, said voters "clearly spoke loud and clear last November" in voting down stem cell research funding and said the project should be abandoned. She said the initial construction funding for New Brunswick was done without ever going to the public.

"They put the cart before the horse. They assumed the people of New Jersey would support the research," she said. "At the time, it made no sense at all."

Tasy said they should use any money already appropriated to reduce the state debt.

Senate President Richard Codey (D-Essex), who has championed stem cell research funding long before he served as acting governor in 2004-05, conceded that the defeat of the bond issue last fall effectively killed construction of the institute, despite public statements to the contrary. Once the voters turned down the referendum, Corzine and his staff felt that proceeding with the institute would be perceived as a slap in the face, Codey said.

"It's unfortunate but it's obviously the governor's decision to make and, hopefully, it can get back on track," Codey said.

Asked whether the administration should have proceeded because the money had been approved by the Legislature, Codey said "that's a decision that he (Corzine) made. I respect it. I understand it. I'm not going to second-guess it. Am I disappointed? Sure. I want to save lives. Of course I'm disappointed, but not with him."

LifeNet tissue bank nears deal to expand headquarters

Published on HamptonRoads.com | PilotOnline.com (http://hamptonroads.com)

LifeNet tissue bank nears deal to expand headquarters

VIRGINIA BEACH

City officials are renegotiating a million-dollar deal to sell 6 acres of land to LifeNet Health, one of the largest tissue banks in the country and an anchor of the burgeoning medical village along Princess Anne Road.

The deal is expected to be settled next month, said Douglas Wilson, executive vice president of LifeNet.

The biomedical firm and the city first started talking last year about redoing the contract, said Steve Herbert, the Beach's chief development officer.

LifeNet had an option to buy 6.57 acres adjacent to its corporate headquarters on Concert Drive, but the discounted deal was to expire on June 10. The City Council approved a 30-day extension that day so talks could continue.

Wilson said there is no doubt LifeNet will buy the land - the second phase of a deal first announced in 2003 - but the company needed time to work on development plans.

He wouldn't go into detail, but said the company would likely invest at least $2 million and expects to create up to 100 jobs in the next three years. LifeNet, founded in 1982, already employs more than 550 people, spokeswoman Dena Reynolds said.

"The negotiations have moved very efficiently," Wilson said. "We're very pleased to be where we are in this corridor of Virginia Beach. It's gone well for us."

In 2003, LifeNet bought roughly 16 acres along Concert Drive for $1.97 million. The land is in the area known as Princess Anne Commons, a series of medical and athletic villages stretching from Tidewater Community College to Dam Neck Road.

LifeNet's deal included a five-year option to buy the adjacent six-acre plot for $125,000 an acre, plus an annual increase based on the consumer price index. Those increases have pushed the price under the deal to about $150,000 an acre, said Warren Harris, Virginia Beach's economic development director.

When LifeNet buys the parcel, the cost is expected to be around $1 million. The City Council must approve the deal.

Without a final plan on what to do with the new acreage, Wilson said, LifeNet isn't quite finished with the contract. He added that talks with the city have been amicable.

"It's not an unusual request," Councilman Bob Dyer said. "They've been a good friend to the city. To really promote a friendly business environment, these are the type of things we need to do."

Herbert said the extension request gave the city a chance to strengthen the contract with investment thresholds and firm time -lines for construction.

"We're trying to find a middle ground here where they can continue to enjoy the benefits of the option agreement," he said, "and the city can get... a little more certainty about the nature of the investment."

Harris said any LifeNet expansion makes the Princess Anne Commons corridor more attractive to other firms. It also solidifies the city's attempts to recruit more medical companies with high-paying jobs in the Princess Anne corridor and elsewhere.

"LifeNet is an important player," Harris said. "They anchor an important piece of our strategy to attract other health science or medical device companies to Virginia Beach."

Governor Kaine Attends BIO 2008 in San Diego

  Governor Tim Kaine attended the 2008 Biotechnology Industry Organization's 2008 International Convention last week. The convention drew 20,108 industry leaders from 70 different countries and 48 states. The full Convention program included four full days with 175 breakout sessions, 21 educational tracks, more than 1,000 speakers, three keynote sessions, six Super Sessions and three CEO Forum sessions. The convention featured the largest gathering of biotech exhibitors in history, with more than 2,100 companies, 126 of which were new, and more than 208,000 sq. feet of exhibition space, the largest ever at the convention. The exhibition included more than 60 domestic, country and regional pavilions representing every aspect of the biotechnology industry.

Sadly, it was also the first year that the Commonwealth of Virginia did not even have a booth. Having the governor there to walk the floor was great as he was able to see first hand what kind of competition Virginia faces to attract and develop this dynamic and high-paying industry.

Following the walk-about on the show floor, the governor was the host for a special reception for all of the Virginia attendees who where there in San Diego to represent the industry.

Here is the link to some pictures.

Baltimore Sun on Maryland's DBED & Biotech

Let Md. focus on firms it has now

Jay Hancock

June 4, 2008

It's as plain as the steely resolve in Gov. Martin O'Malley's eyes that something interesting is about to happen to the Department of Business and Economic Development.

The governor didn't tell the department he wanted to overhaul it until just before he said so in a speech last month, according to people familiar with the situation, so O'Malley and DBED Secretary David W. Edgerley haven't been reading from the same PowerPoint

plan.

The risk is that, like governors before him, O'Malley will turn Business and Economic Development Department into a deal-chasing boiler room for planning ribbon-cutting announcements with out-of-state companies.

Of course, DBED needs to play the business recruitment game. But its primary focus should be helping the companies that have already thrown in their lot with the state.

The agency's present mode is small-ball - bite-size financial deals originated through county and city development offices, along with guidance from DBED branches for any Maryland company trying to make its way.

O'Malley can't say exactly how that will change until the completion of a top-to-bottom review this summer.

But he wants to put much more focus on promoting and developing high-tech business, especially biotechnology. He wants to publicize Maryland's smart work force, its constellation of employers, its proximity to Washington.

"It's a great story, and we've never told it well," he said in an interview. Edgerley, whom O'Malley appointed at the beginning of his term "has done a pretty capable job," he said, "and has gotten DBED to become more responsive and more accountable" to local economic development officials who deal with companies every day.

Now the governor seems to want to put the state, DBED and himself back in the front office with them, trolling for deals. He just got back from promoting Maryland's biotech economy to Israelis, and he's about to head to North Carolina to see how that state has done such a good job of developing its life sciences sector.

Far be it from me to identify this as a response to Maryland Comptroller and O'Malley rival Peter Franchot, who has been making his own headlines from biotech goodwill tours. Focusing on DBED had to wait until now, the governor said, because most of last year was taken up in fixing the state's fiscal problems.

The truth is that, while biotech is important for Maryland, there's a limit to what public officials can do. The biggest government decision for Maryland biotech came in the 1930s when Washington decided to put the National Institutes of Health in Bethesda. Most of what has happened since then has been about the private sector arranging itself around the public asset.

For all the attention it gets, biotech has never fulfilled its grandiose promise. A study last year by the Sage Policy Group found only 30,000 private-sector, bioscience jobs in the state - a little more than 1 percent of total employment. Products bought and used by patients - as opposed to those in development - are few. MedImmune, the state's premier biotech company, got sold off last summer to AstraZeneca.

For economic developers, the grail has been to land a big biotech manufacturing facility to help make up for the collapse of Maryland's traditional factory base. The biotech manufacturing portion "is a piece of our cluster that's underperforming," O'Malley said.

But it hasn't happened and it's not likely to. Novartis bypassed Maryland and put its plant in North Carolina because of lower labor costs. There's little DBED can do to reverse that. Even so, O'Malley said he might be willing to put tens of millions of dollars on the table - what North Carolina gave Novartis - "for the right company" to put a plant in Maryland.

Translation: Having just raised taxes on Maryland companies, he might use some of the money to try to lure drug factories here to compete with them for workers.

A big study partly financed by Baltimore when O'Malley was mayor found that the state must "invest greater resources and implement innovative deal structures" to lure biotech concerns. Shortly after being elected governor, he was talking about founding a "statewide life sciences authority" and putting up $100 million in public money to develop biotech, according to the Baltimore Business Journal.

To his credit, O'Malley knows that Maryland's highly educated work force and existing technical institutions - from the Johns Hopkins University to the National Security Agency - are its greatest attributes. He has continued the state's tradition of investment in higher education.

He knows that today's DBED, with a strategic focus and better financial department, is superior to the agency that once flailed around from company to politically connected company. He understands the need to continue the unglamorous work of Gov. Robert Ehrlich's DBED secretary, Aris Melissaratos, in connecting academic researchers with businesses.

Edgerley is on board with the overhaul. (He likes the term "refocusing" instead.) "It creates some nervousness among staff and among our partners," he said. "We're doing what we can to let everybody know we're focused on the opportunity it presents."

So is Melissaratos, now working with Johns Hopkins' technology transfer office.

"I don't see anything wrong with reorganizing it," he says. "Any improvement is well-accepted."

But those guys would say that. It's what the governor wants. The real constituency is the larger business community, which is already quite unhappy with O'Malley's tax increases.

Markets and businesses follow their own logic. Someday Maryland biotechnology may blossom into the same kind of employment engine as, say, the defense industry. But it won't have much to do with what one governor is able to do.

If renewed promotional efforts and hunting for biotech elephants distract DBED from being a service resource for ordinary Maryland companies - something it has become very good at - it'll hurt the economy more than help.

Launch of the Hampton Roads Bioscience Cluster

 The Virginia Biotechnology Association's chairman, Maciek Sasinowski and Mark Herzog, the executive director, serve as members of the steering committee for the new Hampton Roads Bioscience Cluster. The first meeting took place on May 29, 2008 in the IDA board room in Hampton, Virginia. Attendees came from a wide range of organizations such as Eastern Virginia Medical School, the College of William and Mary, Arkios BioDevelopment; Old Dominion University; Soluble Systems, CIT, the City of Hampton and the Hampton Roads Research Partnership.

States Attracting Biotech With NOL Carry Forward

States Attracting Biotech by Extending NOL Carry Forward


By Karen Pihl-Carey

Senior Staff Writer

With a federal tax benefit that allows young companies to carry forward 20 years of net losses, more states are following in papa's footsteps in order to incentivize innovation and attract the high-wage biotech industry within its borders.

A total of eight states already are there, and 10 others offer a 15-year benefit. But two of the most populous states for the biotech industry - Massachusetts and California - offer only a five- and 10-year net operating loss (NOL) carry forward benefit, respectively. The lawmakers in both states, however, are working on a change.

Since it takes up to 15 years in research and development before most biotech companies reach profitability with a marketed product, those residing in biotech's western epicenter must absorb one-third of their losses.

"This is not only unfair, but it also makes the economic rationale for a lot of these projects very, very difficult," said Frank Karbe, executive vice president and chief financial officer of South San Francisco-based Exelixis Inc.

That is why California State Assemblywoman Sally Lieber introduced in 2007 Assembly Bill 1370, which proposes doubling the time biotech companies can carry forward their NOLs from 10 years to 20 years. The state is home to 2,000 life sciences companies that would benefit, including those developing therapeutics, diagnostics, research tools and medical technology.

"This legislation would literally help every single biotech company operating in California," said Matt Gardner, CEO of BayBio, Northern California's life sciences association.

The bill passed 79-0 in the Assembly and is awaiting action by the Senate Review and Tax Committee. It currently is at a standstill while state legislators grapple with budget deficit discussions, but Gardner hopes they will include the bill in an economic stimulus program, under which it "could move very quickly this summer," he told BioWorld Financial Watch.

In Massachusetts, the legislature is working on Gov. Deval Patrick's $1 billion life sciences initiative that would not only extend the NOL carry forward from five to 15 years, but would earmark $500 million for capital spending, $250 million for grants and financings to encourage job growth, and $250 million in tax credits and incentives. The bill was passed earlier this year by both the House and Senate, and a committee is working on a completed package with amendments

The initiative prompted Canton, Mass.-based Organogenesis Inc., which had once planned to move out of state, to expand its headquarters and its research and development and manufacturing facilities in Canton. The regenerative medicine company expressed concerns last year over tax inequalities between states and worked closely with the Massachusetts Office of Business Development to secure a $12.9 million incentive package, as well as $5 million in low-interest loans for job growth. The company has since increased its 200-employee workforce to 325 employees and it has 50 more positions to fill this year. Its first product, the living, allogeneic, cell-based Apligraf, was approved in 1998 for venous leg ulcers and in 2000 for diabetic foot ulcers.

With 11 compounds in the clinic, four of which could move into Phase III within the next year, California cancer company Exelixis still is two to three years away from having its first marketed product. After 12 years of research and development, it is now posting net losses of about $100 million a year, money that under the current law it will never recover. Karbe is astounded that the state has not taken full advantage of investing in an industry that has brought it a high concentration of brainpower and well-paying jobs.

The current tax benefit "ultimately means less jobs, less money invested in R&D, less products coming to market, less solutions for patients," he said.

In total, it can take up to $1 billion to bring just one product to market. Once that product reaches the market and revenues begin to roll in, according to the Biotechnology Industry Organization, companies in these states - Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kentucky and Pennsylvania - can offset their state taxes by applying 20 years of net losses, thereby maximizing their profits.

It's an attractive benefit not only for start-up companies deciding where to set up their headquarters, but for investors that are taking huge risks that don't always pay off.

"Attracting sufficient equity capital to fund critical research is often a challenging task for biotech innovators," said Jim Greenwood, president and CEO of Biotechnology Industry Organization (BIO). "From capital gains exemptions and net operating loss considerations to tax exemptions on equipment and investment credits for individuals, states are increasingly aware of the unique challenges facing bioscience companies."

Data tracked by BIO indicate that 31 states allow sales tax exemptions for equipment used in research and development activities, including biomanufacturing, and 39 states offer NOL carry forwards for anywhere from five years to 20 years. Puerto Rico offers the benefit for an unlimited number of years; and the benefit is transferable, meaning the company can sell the exemption credit to another entity, in the states of Kentucky, New Jersey, Ohio and Tennessee.

Resistance to the tax benefit change in California appears to be minimal, but critics do point to a handful of companies like Genentech Inc. and Gilead Sciences Inc. and ask whether biotech firms really need more tax incentives. For the first quarter, Genentech posted product sales of $2.2 billion and a non-GAAP net income of $895 million, while Gilead reported revenues of $1.3 billion and a non-GAAP net income of $522.1 million.

But the majority of the biotech industry is made up of smaller and mid-size companies, most of which will never see profits like Genentech and Gilead but still are conducting solid research on high-stakes money.

"We have such a wonderful accumulation of brain power in this state," Karbe said. "I think we need to be very careful that we create and maintain an environment here that . . . keeps this industry alive."

Published June 2, 2008

NYT Publishes Story on Tobacco Research at VCU

New York Times published a story regarding the sponsored research commissioned by Philip Morris at VCU in Richmond.

May 22, 2008
At One University, Tobacco Money Is a Secret
By ALAN FINDER, New York Times

On campuses nationwide, professors and administrators have passionately debated whether their universities should accept money for research from tobacco companies. But not at Virginia Commonwealth University, a public institution in Richmond, Va.

That is largely because hardly any faculty members or students there know that there is something to debate — a contract with extremely restrictive terms that the university signed in 2006 to do research for Philip Morris USA, the nation’s largest tobacco company and a unit of Altria Group.

The contract bars professors from publishing the results of their studies, or even talking about them, without Philip Morris’s permission. If “a third party,” including news organizations, asks about the agreement, university officials have to decline to comment and tell the company. Nearly all patent and other intellectual property rights go to the company, not the university or its professors.

“There is restrictive language in here,” said Francis L. Macrina, Virginia Commonwealth’s vice president for research, who acknowledged that many of the provisions violated the university’s guidelines for industry-sponsored research. “In the end, it was language we thought we could agree to. It’s a balancing act.”

But the contract, a copy of which The New York Times obtained under the Virginia Freedom of Information law, is highly unusual and raises questions about how far universities will go in search of scarce research dollars to enhance their standing. It also brings a new dimension to the already divisive debate on many campuses over whether it is appropriate for universities to accept tobacco money for research.

Dr. Macrina would not specify how much money Philip Morris gave for the restricted research. Historically, the company has not been a major contributor to the university. Last year, it gave $1.3 million in research grants that included the restricted contract and a more traditional independent grant, Dr. Macrina said.

Over all last year, Virginia Commonwealth, with nearly 32,000 students, received $227 million in research grants from government and private sources, a sum dwarfed by the amounts the nation’s largest research universities take in. For example, the University of Washington received $1 billion in grants last year, while Johns Hopkins got $1.4 billion in federal money alone.

Philip Morris, based in Richmond, is a likely source for Virginia Commonwealth in its hunt for dollars from a finite number of corporations. Among tobacco companies, Philip Morris is the leader in investing in academic research. And for Virginia Commonwealth, expanding ties with its neighbor could produce other benefits like additional grants and support for other university functions.

About a dozen researchers and research ethicists from other universities were astonished at the restrictions in the contract, when they were told about it.

“When universities sign contracts with these covenants, they are basically giving up their ethos, compromising their values as a university,” said Sheldon Krimsky, a professor at Tufts University who is an expert on corporate influence on medical research. “There should be no debate about having a sponsor with control over the publishing of results.”

Stanton A. Glantz, a professor at the University of California, San Francisco, School of Medicine who has lobbied for banning tobacco money on campuses, said, “University administrators who are desperate for money will basically do anything they have to for money.”

Although Dr. Macrina would not discuss many details of the research, Philip Morris officials were less reticent.

Rick Solana, the senior vice president for research and technology, said university scientists were studying how to identify early warning signs of pulmonary disease, and how to reduce nitrogen and phosphorus drained into rivers from processing tobacco leaves.

Dr. Solana also said the contract represented a new focus on developing tobacco products with reduced risks, a shift in strategy in underwriting university research that requires more confidentiality to protect the corporation’s intellectual property rights. And he said Philip Morris had similar arrangements with other universities — although he declined to say how many or which ones.

About 15 public health and medical schools no longer accept donations from the tobacco industry, and many major research universities continue to do so only if guaranteed independence to carry out the research and publish the results.

The business school at the University of Texas at Austin decided in December to stop accepting tobacco money. The University of California system tightened its oversight of tobacco-financed research last fall, after rejecting a proposal for a ban.

Virginia Commonwealth’s president, Eugene P. Trani, declined to be interviewed. But Dr. Macrina defended the contract, saying it struck a reasonable balance between the university’s need for openness and Philip Morris’s need for confidentiality, even though it violated Virginia Commonwealth’s own rules.

“These restrictive clauses seek to protect the rights and interests of multiple parties in the agreement,” Dr. Macrina said, pointing out that Virginia Commonwealth scientists would be working with other researchers.

Virginia Commonwealth’s guidelines for industry-sponsored research state, “University faculty and students must be free to publish their results.” The guidelines also say the university must retain all patent and other intellectual property rights from sponsored research.

Under the agreement, though, Philip Morris alone decides whether the researchers can publish because the contract defines “without limitation all work product or other material created by V.C.U.” as proprietary information belonging to the company.

“We would have discussions, and there could well be agreements that could ultimately result in the publication of proprietary information,” Dr. Macrina said.

Dr. Solana agreed, saying that once the company determined that its competitive interests were protected, it could permit researchers to publish.

“We have to start out with is anyone’s intellectual property going to be compromised?” Dr. Solana said. “Once the intellectual property is protected, then it’s usually O.K. to publish.

“Something being proprietary does not mean something cannot be published. We try to be very supportive in the health area of work being published.”

The contract also includes a longer than usual time for Philip Morris to review any possible publications by the researchers for potential patent or other proprietary problems — 120 days, with the option to continue for 60 days more. Again, this violates university guidelines, which call for reviews of no more than 90 days.

“When you have multiple parties involved at the level of the sponsor, we’re willing to agree to more time than we usually would,” Dr. Macrina said.

Dr. Macrina also defended the requirement that the university decline comment and tell the company if asked about the agreement by news organizations and other third parties.

“Language like that occurs in agreements like this because the sponsor wants to be sure there are no slip-ups, that things will not be released inadvertently,” he said.

Dr. Solana said the prohibition was intended to prevent participants in the research, both at the university or at other companies, from using the relationship with Philip Morris to promote themselves.

At Virginia Commonwealth, few professors appeared to know about the contract; when told about it, a number of them said they were concerned about its secretiveness.

“It’s a controversial area, and I personally prefer transparency,” said Richard P. Wenzel, chairman of the department of internal medicine at the university’s medical school, who had not heard of the contract before a reporter’s call.

Dan Ream, the president of the Faculty Senate, said he, too, knew nothing about the contract.

“It hasn’t come up as an issue of debate in the Faculty Senate at all,” said Mr. Ream, who works in the university’s library. “I’m highly committed to open access to information. That’s one of the tenets of librarianship.”

A tenured scientist at Virginia Commonwealth, who would not be interviewed for attribution because he said he feared retribution against his junior colleagues, called the contract’s restrictions, especially the limitations on publication, “completely unacceptable in the research world.”

For most of the decade, Philip Morris financed conventional research grants, using a scientific panel to select worthy research proposals from professors. The company granted independence to the professors whose work it sponsored and left them free to publish.

Even so, opponents of smoking opposed the grants, arguing that universities should not take money from tobacco companies because of the public health impact of smoking and what they viewed as the industry’s misuse of scientific research.

Last fall, Philip Morris began phasing out this program to switch to developing new products, said Dr. Solana, the company vice president. Some of the new research will be conducted internally, he said, at a new company research center in Richmond, and some will be contracted out to universities and corporations case by case.

The restricted contract with Virginia Commonwealth, Dr. Solana said, was part of what he hopes will be a new and different relationship between the company and universities. But scientists said such restrictions — especially the constraints on publication and what university officials can say publicly — are contrary to the open discussion essential to university research.

“It’s counter to the entire purpose and rationale of a university,” said David Rosner, a professor of public health and history at Columbia University. “It’s not a consulting company; it’s not just another commercial firm.”

Cary Pharma Seeks $14M in First Round

Great coverage for Doug Cary in the WBJ:

A Northern Virginia biotech is beginning its first funding drive with an ambitious road map. Despite sluggish life sciences investments for this region, the company wants to raise $14 million by the summer to launch two clinical drug trials later this year.

Executives for Cary Pharmaceuticals Inc., currently based out of its founder's Great Falls home, are taking to hours-long plane rides in their attempt to nail down what would be its first institutional round of funding. To date, the company's cashbox has been composed of $688,000 from its principals, family and friends, nearly $625,000 in federal grants and $1.3 million from a manufacturing partner.

By adding another $14 million to that pot, Cary Pharmaceuticals said it would not need any more funds to reach profitability by the end of 2009 -- and perhaps an initial public offering or acquisition beyond that.

But for the six-person company, which has ducked under the radar for its 14-year lifetime, that's hardly easy in a region that garnered a measly 3 percent of last year's record-breaking national biotech venture capital.

Company leaders argue they have graduated from their biotech rookie years. Cary Pharmaceuticals plans by this winter to file its first request to market a drug, an oral antidepressant that it bought equal rights to with a Canadian drug developer partner, and aims to begin the first phase of clinical trials on a new hypertension pill and second phase of trials on a smoking cessation pill before the end of the year.

"It all has to do with your definition of 'early stage,'" said Doug Cary, a former Abbott Laboratories executive and president and founder of Cary Pharmaceuticals, which hired New York-based investment banking firm Bio-IB to introduce it to investors.

Cary, which licensed the hypertension drug candidate from Georgetown University, patented the antismoking drug by combining an antidepressant pill by GlaxoSmithKline PLC and hypertensive pill by Merck & Co. Inc., both federally approved drugs. The company is gearing up to test the resulting once-a-day tablet, which blocks nicotine receptors and calms cravings for what Cary said will be less than the price of a cigarette pack, on 500 smokers at five clinical sites around the country. Cary then will license out the product line to a larger drugmaker that can handle the monthly payments of a final third-phase clinical trial while paying the local company for its development trouble until then.

They're banking on -- and asking investors to bet on -- what analysts expect to be a $2.6 billion market for antismoking products by 2010. While the U.S. market is dominated by slightly lagging over-the-counter patches and gums sales, major drug companies are digging their heels in the prescription side, such as Pfizer Inc. with Chantix and GlaxoSmithKline with Zyban. Cary said it hopes to make a play for foreign smokers after getting patents in China, Taiwan, Singapore and Europe.

Though, Cary also will have to surpass a publicly traded neighbor with 10 times the employee directory. Rockville's Nabi Biopharmaceuticals is planning to enter its third, and final stage of clinical tests for NicVax, its smoking cessation vaccine, this year.

Meanwhile, Cary expects its first dose of revenue next year from an antidepressant that it's pushing toward the market with $2 million raised by its publicly traded Quebec partner Intelgenx Corp. The two companies would split sales proceeds equally under an agreement ratified last month -- proceeds that Cary plans to use to increase its employee count by 50 percent and, depending on incentives, shift to office space in Maryland or Northern Virginia.

VaBIO "After Hours" a Hit in NoVa

 

The Virginia Biotechnology Association held its spring 2008 "Biotech After Hours" in Northern Virginia at the Tower Club in Tyson's Corner on April 29. More than 75 came out to enjoy the food, drink and networking with their bioscience peers from universities, research leabs, biotech companies and medical device firms.

The event was made possible by the generous sponsorship of Foley & Lardner LLP and Appian Realty Advisors. Additional support came from the law firm of Latimer Mayberry and Mathews IP Law.

Here are some images from the event...

Colorado Gov Signs Biotech Incentive Bill

From the Denver Business Journal----

Thursday, April 24, 2008 - 1:53 PM MDT
Ritter signs biotech incentives bill
Denver Business Journal - by Greg Avery Denver Business Journal

Colorado Gov. Bill Ritter signed a $26.5 million incentive package for biotechnolgy research and startup businesses into law Thursday.

He told onlookers at a signing ceremony at the state Capitol that the investment will help Colorado's economy and is part of the governor's larger business agenda.

"This is one of the pillars of our strategy," Ritter said. He likened biotechnology to aerospace and alternative energy development as industries that not only contribute economically to Colorado but help improve the state's quality of life with good-paying jobs and building an educated work force.

Ritter said the incentives would build on biomedical research already being done at Aurora's Anschutz Medical Campus at Fitzsimons, in Boulder and in Fort Collins "that will literally change our world."

The bill, sponsored by Rep. Jim Riesberg, D-Greeley, and Sen. Bob Bacon, D-Fort Collins, provides grants for five years to Colorado startup companies and research institutions seeking to commercialize new biotech drugs, biofuels, medical devices and nanotechnology. The grants are capped at $150,000 for research institutions and $250,000 for companies.

About 400 biotech companies operate in Colorado and employ 16,000 people, most of them on the northern Front Range between Denver and Fort Collins. The average salary at the companies surpasses $70,000, making it one of the better-paying industries.

But the state still lags behind the leading biotech centers of San Francisco, San Diego and Boston, said Tom Cech, a University of Colorado-Boulder biotech researcher whose work made him the state's first Nobel Prize laureate.

Cech is the president of the Howard Hughes Medical Institute in Maryland, where he oversees a multibillion-dollar endowment funding biomedical research. He announced recently he is stepping down as the institute's president and is returning to CU to conduct research and help lead CU's Colorado Initiative for Molecular Biotechnology.

At Thursday's bill signing, he said the public support being shown for biotech in Colorado helped lure him back and promises great things.

"I would not be coming back to this state if I thought we were going to do something that is just good," he said to cheers.

After the ceremony, Cech said that having incentives for startups helps raise Colorado's profile nationally. More importantly, though, it should help increase the number of biotech companies with a good chance at commercial success, he said.

Cech estimated that Colorado needs to at least double the number of local biotech startups to attract the scale of private investment that makes leading biotech areas hotbeds of innovation.

"It's within realistic reach," Cech said.

Riesberg lauded language in the bill that requires recipients of the biotech grants to demonstrate their research at Colorado K-12 schools.

Kaine Withdraws Generic Drugs Amendment

Associated Press
Published: April 23, 2008

RICHMOND, Va. (AP) - Governor Tim Kaine has withdrawn an amendment to the state budget that would have cut Medicaid costs by substituting generic behavioral medicines for brand-name drugs.
Kaine decided late Tuesday night to strike the amendment. It was among 41 amendments to the new, two-year state budget he submitted for legislative review Wednesday during the General Assembly’s one-day reconvened session.
The governor had said that allowing generics to be prescribed for the indigent, elderly and disabled could save the state $1.5 million.
Mental health advocates, however, denounced the amendment. They said people with severe mental or psychological conditions could be denied specific and proven drugs at critical moments. Critics said behavioral medicines are not easily substituted and can have devastating results.

Massachusetts Biotech Program Gives $ for Equity Stake

This is a great idea that could help make the case to reluctant legislators.

State looks to get in on biotech ground floor
By Jay Fitzgerald | Wednesday, April 23, 2008 | http://www.bostonherald.com | Business & Markets

The state of Massachusetts could one day be part-owner of the next Genzyme or Biogen Idec.

A little-noticed provision in the $1 billion life sciences initiative bill passed by the House earlier this year calls for a future quasi-public agency to become an equity partner in a biotech firm if state funds are used to help a small company get started.

The equity clause only applies to young firms that otherwise can’t get venture or angel-investor capital.

The equity stake would be limited to no more than 3 percent ownership - in return for small grants of about $150,000, said state Rep. Dan Bosley (D-North Adams), chairman of the House’s economic development committee, which pushed the concept.

Bosley said it’s not unusual for universities to negotiate similar deals with young start-ups with exciting but yet-unproven scientific potential.

The hope is that one of the young companies might hit it big via profits from a state investment, allowing the state to have a “revolving loan fund” to help other companies, said state Rep. Tom Conroy (D-Wayland), a major backer of the provision that was inserted into the final House bill.

Conroy, a former management consultant, said he used to be involved in similar deals when he was in the private sector.

Some within the biotech industry have expressed queasiness about the state getting involved in ownership of firms, according to one industry source.

Meanwhile, John Regan, executive vice president of the Associated Industries of Massachusetts, said there’s some “possibility for conflicts of interest” if a firm makes it big and the state has a stake in it.

But he said rules can be written to avert any future favoritism.

He noted that the Massachusetts Technology Development Corp., a quasi-public agency, cuts similar equity deals. The state’s constitution bans direct state investments in firms, so an arms-length quasi-agency would have to be created, he said.

The Senate has passed a similar life-sciences bill - but without the equity clause in it. Sen. Jack Hart (D-Boston), who could not be reached for comment, will be meeting soon with Bosley to hammer out a compromise bill.

A spokesman for Gov. Deval Patrick, who originally proposed the life sciences initiative, said “we are pleased with the revisions made in both” the House and Senate bills.
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1089002

Insmed Launches Study for its First Generic Biologic

Insmed Initiates Clinical Study for Follow-on Biologic Version of Neupogen(R)
INS-19 Receives Regulatory Clearance

RICHMOND, Va., April 16, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Insmed Inc. (Nasdaq: INSM), a developer of follow-on biologics and biopharmaceuticals, today announced that it has received approval from the United Kingdom's Medicines and Healthcare products Regulatory Agency (MHRA) to initiate the Company's first clinical study for a follow-on biologic (FOB) product candidate. Insmed's INS-19, which is a recombinant form of human G-CSF, is a follow-on biologic of the FDA-approved product Neupogen(R), which had U.S. sales of approximately $0.9 billion in 2007.

Pre-clinical studies demonstrate that INS-19 and FDA-approved Neupogen(R) are comparable in both their pharmacological and toxicological profile. Detailed analytical characterisation also demonstrates that the products have a high degree of similarity. Data from these initial evaluations have been used, in part, to support the Phase I study, which will be initiated immediately. The Phase I study will be conducted in the UK and will compare the safety and establish the bioequivalence of INS-19 to Neupogen(R). Results from the trial are expected in the second half of 2008, and are planned to be used as part of a submission to the FDA to establish a protocol with the agency for a Phase III trial in the U.S.

"By utilizing Insmed's unique protein drug development capabilities and technical expertise, the Company has been able to advance a follow-on biologic product candidate from project initiation to human testing in less than one year, a significant achievement," said Geoffrey Allan, CEO of Insmed. "We intend to utilize the data generated from the Phase I trial, in combination with the positive preclinical results previously garnered, as the basis for discussions with the FDA in an effort to establish a Phase III development path for INS-19."

The initiation of this follow-on biologic trial is the first of two planned for 2008 as part of Insmed's development of a portfolio of FOBs. Members of Insmed's skilled biologics team have worked on over 50 therapeutic proteins. Their focused protein-based drug development backgrounds, coupled with the Company's FDA-approved protein manufacturing facility, and clinical and regulatory expertise, positions Insmed, upon the establishment of a regulatory approval pathway, to be an initial entrant into the U.S. FOBs market with a broad range of medicines following the expiration of patents covering the innovator products. The patent covering Neupogen(R) expires in 2013.

The Follow-on Biologics Market

According to published reports, an estimated $10 billion worth of biologic drugs are expected to come off patent by 2010, with an additional $10 billion by 2015. FOBs would provide safe and effective therapies at a reduced cost following the expiration of the original product's patent. A recent econometric study by economist Dr. Robert J. Shapiro, former Under Secretary of Commerce in the Clinton Administration, found that "...generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years."

About INS-19

Recombinant human G-CSF is a synthetic version of a human G-CSF that is produced in bacteria. The G-CSF mimics the biological effects of naturally occurring G-CSF and is used to treat certain medical conditions were a person's neutrophils are too low (neutropenia), such as in cancer patients who are receiving certain chemotherapeutic regimens, patients receiving bone marrow transplants, or in patients who have chronically low neutrophils for other reasons. Pre-clinical studies demonstrate that INS-19 and FDA-approved Neupogen(R) are comparable in both their pharmacological and toxicological profile. Detailed analytical characterisation also demonstrates that the products have a high degree of similarity.

About Insmed

Insmed Inc. is a biopharmaceutical company with unique protein process development and manufacturing experience and a proprietary protein platform aimed at niche markets with unmet medical needs. For more information, please visit www.insmed.com.

Biotechs Lead VC Investments in 1st Q

According to Fierce Biotech:

In the first quarter of this year, venture capital investment dipped 5 percent to $7.1B, signaling that the current economic slump could have an impact on venture financing. However, there was still a dose of good news for biotech, as the industry outpaced the software sector, raising $1.27 billion with 126 deals (software, with 234 deal, had more transactions overall). The Life Sciences sector (both biotech and medical devices together) took the lead in VC investing, raising with $2.3 billion in Q1--that's roughly a third of all VC dollars and a quarter of all deals.

"The continued interest in the life sciences and clean technology industries, as well as the traditional IT sectors, reflects the long-term investment horizon..." said Mark Heesen, president of the NVCA. "We do not expect to see significant declines in investment levels in the coming year. However, the dollars going to later stage investments could increase if the IPO window remains closed for an extended period of time and venture capitalists have to sustain companies longer than expected."

Good news, but Biotech was number one only because there was a steep decline in IT investing.

FDA Blocks Genzyme's Own Biologic Copy...

This is a fascinating development in the debate about the potential pathway for generic biologics. Other companies have also experienced problems manufacturing their own drugs in different locations. There will certainly be a pathway for FDA approval eventually. However, the key issue remains as to whether a generic producer should have to replicate the clinical trials process to prove patient safety is still up in the air...

FDA rejects Genzyme request for Myozyme

By Todd Wallack, Globe Staff | April 22, 2008

In a decision that shows how difficult it is to copy complex, biologic drugs, federal regulators rejected Genzyme Corp.'s request for permission to sell in the United States a version of its Pompe disease drug, called Myozyme, that is made at its Allston manufacturing plant, the company disclosed yesterday afternoon.

Though Genzyme already has permission to sell batches of Myozyme manufactured at its smaller Framingham plant, the Food and Drug Administration ruled that Myozyme made at the Allston plant should be considered a different product because of small differences in its chemical structure, Genzyme said.

In order to sell the Allston version of the drug in the United States, Genzyme said it will have to file another application with new data showing the drug is safe and effective in large numbers of patients.

Because it was already preparing to submit such data anyway, Genzyme said it believes it probably will be able to start selling the Allston-made drug early next year.

"We are disappointed by the decision because it will delay access to Myozyme in the United States," said Genzyme Corp. chief executive Henri Termeer in a conference call with analysts.

Specifically, Genzyme believes the decision will reduce its revenue by $45 million this year and cut its earnings by 10 cents a share. Because the Framingham plant has only limited capacity, it is currently supplying the Allston drug to 140 US Pompe patients free. Pompe disease is a rare, debilitating genetic illness that prevents people from breaking down a common sugar called glycogen, which can then build up in the body's cells and weaken the muscles. It affects an estimated 5,000 to 10,000 people worldwide.

Termeer said he believes the FDA decision will be only a temporary financial setback. The company said it had been preparing to give the FDA positive data collected from 900 patients who are already taking the Allston-made drug. In addition, more than 40 countries have approved Myozyme made at the larger plant.

But the FDA decision also suggests that regulators may be reluctant to approve any generic versions of biologic drugs - called biogenerics or biosimilars - without clinical data proving the drugs are at least as safe and effective as the originals if there are even slight differences in the compounds.

"It sends a very loud message and sets a very high bar," said Alison Lawton, Genzyme's senior vice president for regulatory affairs. Lawton noted that Genzyme had the advantage of having full access to all the original information about the drug and still had trouble replicating the manufacturing process exactly.

While traditional "small molecule" drugs, like aspirin, are usually mixed from chemicals, biologic drugs are made from living organisms and considered much harder to replicate. Myozyme, for instance, is based on specially designed proteins grown in Chinese hamster ovary cells.

In this case, Genzyme said the FDA was concerned about slight differences in the carbohydrate structures of the molecules. To make sure the differences weren't important, executives said the FDA demanded data from larger numbers of patients that proves the version made in the larger plant is safe and effective. So far, Genzyme said it has submitted data only from a very small number of patients, making it hard to tell whether the molecular differences were significant.

The FDA did not a return a call seeking comment.

Congress is currently considering at least two bills to create a process to let drug makers market generic versions of biologic drugs, such as those made by Genzyme and many other biotechs.

But lobbyists disagree about how long brand-name drug makers should be entitled to exclusive rights to their drugs before facing generic competition, as well as how difficult the approval process should be.

Most specialists believe some version of the legislation, however, will likely be adopted by the end of 2009, making the FDA ruling relevant.

First UVa-Tech Community Lunch a Success

 
Dr. Barry L. Johnson, founder of Privaris, a Charlottesville biometric security company, was the featured speaker at the first “Charlottesville Bio and Technology Luncheon,” held Thursday, April 17, in the Harrison Institute Auditorium at the University of Virginia.

This event was the first collaborative effort of The University of Virginia, the Virginia Biotechnology Association (VaBIO) and Charlottesville Business Innovation Council (CBIC). The law firm LeClair Ryan, was the premier sponsor of the event. Additional support was kindly provided by Latimer, Mayberry and Mathews IP Law.

Approximately 50 attendees from industry and academia heard how Dr. Johnson took Privaris from start-up to its current status. Dr. Johnson joined the U.Va. faculty in 1984 and co-founded Privaris in 1998. Privaris has now successfully raised two venture rounds of $15.6 million and $3.3 million as well as an angel round of approximately $8 million. Dr. Johnson still serves on the Privaris executive team and board, but is now Senior Associate Dean for Research and Professor in the Charles L. Brown Department of Electrical and Computer Engineering at the University of Virginia.

Also speaking at the event were Mike Drzal of LeClair Ryan, David Chen of UVa's Coulter Translational Research Program, Tracey Linkous of Diffusion Pharmaceuticals (and representing CBIC) and VaBIO Executive Director Mark Herzog. Sharon Krueger of UVa and Dawn Freeman of VaBIO provided the administrative support.

For more information about the joint initiative and the next meeting of the group, please contact VaBIO at 804-643-6360.

Food Crisis Lessens Resistance to Biotech Crops

From the IHT:

In lean times, biotech grains are less taboo
By Andrew Pollack
Monday, April 21, 2008

Soaring food prices and global grain shortages are bringing new pressures on governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops.

In Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies have paid extra to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky.

"We cannot afford it," said a corn buyer at Kato Kagaku, a Japanese maker of corn starch and corn syrup.

In the United States, wheat growers and marketers, once hesitant about adopting biotechnology because they feared losing export sales, are now warming to it as a way to bolster supplies. Genetically modified crops contain genes from other organisms to make the plants resistance to insects, herbicides or disease. Opponents continue to worry that such crops have not been studied enough and that they might pose risks to health and the environment.

"I think it's pretty clear that price and supply concerns have people thinking a little bit differently today," said Steve Mercer, a spokesman for U.S. Wheat Associates, a federally supported cooperative that promotes American wheat abroad.

The group, which once cautioned farmers about growing biotech wheat, is working to get seed companies to restart development of genetically modified wheat and to get foreign buyers to accept it.

Even in Europe, where opposition to what the Europeans call Frankenfoods has been fiercest, some prominent government officials and business executives are calling for faster approvals of imports of genetically modified crops. They are responding in part to complaints from livestock producers, who say they might suffer a critical shortage of feed if imports are not accelerated.

In Britain, the National Beef Association, which represents cattle farmers, issued a statement this month demanding that "all resistance" to such crops "be abandoned immediately in response to shifts in world demand for food, the growing danger of global food shortages and the prospect of declining domestic animal production."

The chairman of the European Parliament's agriculture committee, Neil Parish, said that as prices rise, Europeans "may be more realistic" about genetically modified crops: "Their hearts may be on the left, but their pockets are on the right."

With food riots in some countries focusing attention on how the world will feed itself, biotechnology proponents see their chance. They argue that while genetic engineering might have been deemed unnecessary when food was abundant, it will be essential for helping the world cope with the demand for food and biofuels in the decades ahead.

Through gene splicing, the modified crops now grown — mainly canola, corn, cotton and soybeans — typically contain bacterial genes that help the plants resist insects or tolerate a herbicide that can be sprayed to kill weeds while leaving the crop unscathed. Biotechnology companies are also working on crops that might need less water or fertilizer, which could have a bigger impact on improving yield.

Certainly any new receptivity to genetically modified crops would be a boon to American exporters. The United States accounted for half the world's acreage of biotech crops last year.

But substantial amounts of corn, soy or canola are grown in Argentina, Brazil and Canada. China has developed insect-resistant rice that is awaiting regulatory approval in that country.

The pressure to re-evaluate biotech comes as prices of some staples like rice and wheat have doubled in the last few months, provoking violent protests in several countries including Cameroon, Egypt, Haiti and Thailand. Factors behind the price spikes include the diversion of crops to make biofuel, rising energy prices, growing prosperity in India and China, and droughts in some regions — including Australia, a major grain producer.

Biotechnology still certainly faces obstacles. Polls in Europe do not yet show a decisive shift in consumer sentiment, and the industry has had some recent setbacks. Since the beginning of the year France has banned the planting of genetically modified corn while Germany has enacted a law allowing for foods to be labeled as "GM free."

And a new international assessment of the future of agriculture, released last Tuesday, gave such tepid support to the role genetic engineering could play in easing hunger that biotechnology industry representatives withdrew from the project in protest. The report was a collaboration of more than 60 governments, with participation from companies and nonprofit groups, under the auspices of the World Bank and the United Nations.

Hans Herren, co-chairman of the project, said providing more fertilizer to Africa would improve output much more than genetic engineering could. "What farmers really are struggling with are water issues, soil fertility issues and market access for their products," he said.

Opponents of biotechnology say they see not so much an opportunity as opportunism by its proponents to exploit the food crisis. "Where politicians and technocrats have always wanted to push GMO's, they are jumping on this bandwagon and using this as an excuse," said Helen Holder, who coordinates the campaign against biotech foods for Friends of the Earth Europe. GMO refers to genetically modified organism.

Even Michael Mack, the chief executive of the Swiss company Syngenta, an agricultural chemical and biotechnology giant, cautioned that the industry should not use the current crisis to push its agenda.

Whatever importance biotechnology can play in the long run, food shortages are making it harder for some buyers to avoid engineered crops.

The main reason some Japanese and South Korean makers of corn starch and corn sweeteners are buying biotech corn is that they have dwindling alternatives. Their main supplier is the United States, where 75 percent of corn grown last year was genetically modified, up from 40 percent in 2003.

"We cannot get hold of non-GM corn nowadays," said Yoon Chang-gyu, director of the Korean Corn Processing Industry Association.

But the tightening global supply has made it harder to get nonengineered corn from elsewhere. And as corn prices soar, millers and food companies are less able to pay the surcharge to keep nonengineered corn separate from biotech varieties. The surcharge itself has been rising.

Yoon said non-engineered corn cost Korean millers about $450 a metric ton, up from $143 in 2006. Genetically engineered corn costs about $350 a ton.

In Europe, livestock producers say that regulations on genetically modified crops could choke feed supplies at a time when they are already reeling from higher prices. Even after a new genetically engineered variety is approved for growing in the United States, it might take several years for Europe to approve it for import.

Moreover, European rules require an entire shipment of grain to be turned back if it contains even a trace of an unapproved variety. Such a problem last year disrupted exports of corn gluten, a feed product, from the United States to Europe.

Feed makers and livestock producers want faster approvals and a relaxation of the rules to allow for trace amounts of unapproved varieties in shipments.

Even in the United States, where genetically engineered food has been generally accepted, the wheat industry has had to rethink its reluctance to accept biotech varieties.

Because about half of America's wheat crop is exported, farmers and processors feared foreign buyers would reject their products. Facing resistance from American farmers, Monsanto in 2004 suspended development of what would have been the first genetically modified wheat.

But some farmers and millers now say that the lack of genetically engineered wheat has made growing the grain less attractive than growing corn or soybeans. That has, in turn, contributed to shrinking supplies and rising prices for wheat.

Milling & Baking News, an influential trade newspaper in Kansas City, Missouri, said in an editorial that companies that used wheat were now paying the price for their own "hesitancy, if not outright opposition" to biotechnology.

Biotech Leads VC Investments in 1st Q

Biotech leads but overall investments down so far in 2008.

1Q venture capital investments dip 5 percent to $7.1B

By MICHAEL LIEDTKE – 2 days ago

SAN FRANCISCO (AP) — Venture capital investments in the United States dipped 5 percent to $7.1 billion during the first quarter compared to 2007, signaling the financing climate may be turning frostier for entrepreneurs as the slumping economy makes it more difficult for startups to go public or sell to a larger company.

This was the first year-over-year decline in the venture capital industry's quarterly investments since the end of 2005, based on data to be released Monday by the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters.

In last year's first quarter, venture capitalists invested $7.5 billion.

Despite the decline, the $7.1 billion invested during this year's first quarter was the fifth-largest amount in a single quarter since 2001.

Although there were fewer dollars disbursed by venture capitalists, more deals got done in this year's first quarter than last year's — a total of 922 compared with 861 last year.

The first quarter's smaller average deal size — $7.7 million, down from $8.8 million — could mean the entrepreneurs whose ideas were funded didn't need as much money or it could reflect greater caution among venture capitalists.

For now, industry officials are confident investment will pick up in the months ahead. The January-March period usually is the slowest time of the year for venture capital deals.

"We do not expect to see significant declines in investment levels in the coming year," said Mark Heesen, president of the National Venture Capital Association.

Because they expect to have to nurture startups for three to five years, venture capitalists generally aren't as worried about short-term economic turbulence as many other classes of investors are, said Nina Saberi, managing general partner of Castile Ventures in Waltham, Mass.

"The effect (of a poor economy) is milder than you might imagine," she said.

But the enthusiasm of venture capitalists could still be dampened, especially if they continue to have as much trouble cashing out of their investments as they did in the first quarter this year.

Only 56 venture-backed startups were sold during the first three months of the year, the lowest volume in a decade.

Making an initial public offering of stock proved to be even more daunting than selling a startup, with just five venture-backed companies making their market debuts in the quarter.

That's a potential problem because venture capitalists count on IPOs and buyouts to make money off their investments. If those exits remain closed, venture capitalists may become more likely to hold off on locking up more of their funds until they see signs of a turnaround.

"We are not completely immune from the rest of the world," said venture capitalist James Thomas of Thomas, McNerney & Partners in Stamford, Conn.

For now, venture capitalists still have plenty of money to throw around, having raised $6.3 billion for future investments in the first quarter. They hauled in nearly $68 billion during 2006 and 2007 combined.

As usual, in the first quarter, venture capitalists put most of their money into the technology sector. Internet companies attracted $1.31 billion, an uptick from $1.29 billion in the same period last year. Venture capitalists have invested at least $1 billion in Internet startups in six of the last seven quarters.

Biotechnology picked up $1.27 billion in venture capital in the first quarter, a 17 percent declined from $1.53 billion last year. Venture capitalists have invested at least $1 billion in the biotech sector for eight consecutive quarters.

Kansas to Cut Life Science Funding

From the Kansas City paper:

Posted on Mon, Apr. 14, 2008
State funding for life sciences could be cut
By JASON GERTZEN
The Kansas City Star
Missouri’s life sciences community took a step forward last year, but now leaders fear it is about to retreat.
State lawmakers a few years ago agreed to set aside up to tens of millions of dollars annually for life sciences from Missouri’s share of a nationwide settlement with tobacco companies.

Last year Missouri distributed about $13 million to a variety of research projects, including several in the Kansas City area.

The latest word from Jefferson City is that the amount could be cut almost in half this year. The Missouri Senate is to consider, possibly as soon as this week, a budget committee recommendation to provide only $7.6 million for the program, said Kelly Gillespie, executive director of the Missouri Biotechnology Association.

“To get it done in the first place was a fight,” Gillespie said. “Now our fight is about the money. Why would they be cutting life sciences funding after the first year’s program went so well?”

Biotechnology leaders, including dozens of CEOs and leading scientists who visited the statehouse to meet with Missouri General Assembly members last week, were told that a tight state budget was one reason for the possible funding decline, Gillespie said.

Missouri’s perennial conflict over embryonic stem cell research also appears to be playing a role. Missouri Right to Life has been raising questions about whether the program could be “opening the door” to state funding of embryonic stem cell research, which the organization opposes.

When state officials created the Missouri Life Sciences Research Trust Fund, the idea was to expand research and reinforce the state’s status as a hub producing medical advances and scientific breakthroughs.

Devoting the full amount of funding initially proposed would pump more than $30 million into the program.

That falls short of the annual investment coming from other states. In Kansas, nearly $600 million could be pumped into life sciences over a decade.

Although $13 million a year falls short of the investment seen in other states, it is enough to make a notable difference over time, Gillespie said.

“If you add up 10 years of investments, it does get to a substantial amount of money in building the state’s research capacity,” Gillespie said.

The proposed drop to $7.6 million is even more troubling to Missouri biotechnology executives because the House proposed funding the program with $25 million, said Bill Duncan, president of the Kansas City Area Life Sciences Institute.

“That would allow us to start building infrastructure around the state so we could compete nationally and internationally,” Duncan said.

In the last round of the program, Kansas City received nearly $3 million, which went to projects such as those at the University of Missouri–Kansas City to address livestock diseases, the development of a new cement for fractured bones and a new eye treatment.

Duncan and others are optimistic that state officials eventually will direct the $25 million to the program recommended by the House. The emergence of the much lower $7 million proposal, however, is hindering those trying to persuade executives, scientists and others in the biotechnology industry that Missouri is a good place to pursue their vocation, Duncan said.

“That doesn’t send a strong signal to the life science industry statewide that the state is really serious about this,” Duncan said.

Biogen-Idec Faces off Against Icahn

From FierceBiotech and the WSJ:

The war between Biogen Idec and Wall Street raider Carl Icahn is heating up. The Boston-based biotech has rejected Icahn's nominees for the board of directors and is putting up a slate of its own candidates. And a spokesperson says it all comes down to Icahn's tunnel vision on selling the company.

"In the end," she tells the Wall Street Journal, "the board decided that Mr. Icahn's slate is pledged to a single-minded agenda to sell the company. Such a singular focus represents a risk to driving future value that would not be in the interest of all shareholders."

Last fall Biogen Idec put itself up on the auction block, only to step back down after failing to get an offer acceptable to the CEO and the board. Icahn isn't having any of that, though. He's already filed suit over the failed sale and has been hammering Biogen Idec to get back on the sales block.

- read the article in the Wall Street Journal

Virginia Biotech Association Awards at 2008 Science Fair

 
The Virginia Biotechnology Association presented awards at the 2008 Virginia State Science and Engineering Fair on Saturday, April 12, 2008, at George Mason University in Fairfax. The volunteer judges studied the abstracts prior to their arrival at the Fair and then voted on the top six projects to interview one-on-one.

After talking with each of the students, the judges made their final selections:

First Place: Erin Kim, 11th Grade
“Engineering of Stayphylococcus aureus Sortase A to improve protein detection and localization” (13005)
Category: Biochemistry
Region: Mathematics and Science High School, Clover Hill, Richmond

Erin also won second place overall for biochemistry.

Second Place: Hannah Meredith, 12th Grade
“A Wound with no Scar: Perfecting the Wound Healing Process” (19004)
Category: Engineering: Materials and Bioengineering
Region: Mathematics and Science High School, Clover Hill, Richmond

Hannah also won first place overall for engineering and biomaterials plus awards from the U.S. Army and the National Society of Professional Engineers.

Third Place: Arun Dutta, 9th Grade
“An Inhibitor for Cells' Response To DNA Damage” (14001)
Category: Cellular and Molecular Biology
Region: Western Albemarle High School, Charlottesville

Arun also won second place overall for cellular and microbiology.

Thank you to our VaBIO Judges:
J. Patrick Vandersluis (chair), CEO, HealthRX
Jeff Conroy, CEO, Adjuvant
Matt Latimer, Partner, Latimer, Mayberry & Matthews IP Law, LLP
Mark Herzog, Executive Director, Virginia Biotechnology Association
Marshall Ferrin, Director, International Business Development, George Mason University
Nasir U. Ahmed, EE Technologist, Janelia Campus, HHMI
Gary Fletcher, Executive Director, Chesapeake Bioscience Education Foundation

Slide Show:

08 Science Fair: 1st Place for Biotechnology

 
First Place: Erin Kim, 11th Grade
“Engineering of Stayphylococcus aureus Sortase A to improve protein detection and localization” (13005)
Category: Biochemistry
Region: Mathematics and Science High School, Clover Hill, Richmond

Abstract: Proteins serve as catalysts that maintain metabolic processes in the cell. Because of its important roles, new methods to characterize protein localization and trafficking are required to better understand the many complex regulatory pathways. Current technologies rely heavily upon Green Fluorescent Protein (GFP), a bulky fluorescent protein with a propensity to polymerize within a cell, and a chemical coloring method which chemically dyes the proteins. However, these two primary methods have problems: GFP is limited in its utility because of its size, which interferes with proteins’ regular movement or pathways, and the chemical coloring method lacks specificity because it labels all proteins. In this experiment, the researcher alternatively combined a fluorescent substrate with Staphylococcus aureus Sortase A (Srt A) to create a better tool for protein detection and localization. The results showed that Srt A with fluorescent substrate could be used as a protein marker. However, in vitro studies using the preferred fluorescent substrate have verified limited use of Srt A. To increase Srt A’s efficiency, it was put into successful rounds of mutagenesis. Error prone PCR was used to create random mutagenesis and it will allow the researcher to screen for active mutated enzyme with the researcher’s desired specificity and properties. The result from the experiment will provide researchers with a better tool in which to study any protein of interest when tagged with the specificity marker.

08 Science Fair: 2nd Place for Biotechnology

 
Second Place: Hannah Meredith, 12th Grade
“A Wound with no Scar: Perfecting the Wound Healing Process” (19004)
Category: Engineering: Materials and Bioengineering
Region: Mathematics and Science High School, Clover Hill, Richmond

Abstract: The formation of a scar following tissue damage may not only be unsightly, but may also result in tissue that is limited in structure and function. Consequently, a number of studies have been aimed at developing a tissue-engineered scaffold using synthetic and/or natural polymers that would aid wound healing and prevent scar tissue formation. However, scaffolds constructed from synthetic polymers (such as polydioxane) tended to be strong, but not biocompatible, whereas a scaffold constructed from natural polymers (such as gelatin) tended to be biocompatible, but not as strong. The present study tested the performance of a novel material, placental extract, which is notoriously rich in extracellular matrix components (which provide strength) and nutrients (which promote cell growth and biocompatibility). It was hypothesized that a scaffold containing placental extract would withstand normal physical manipulation and would function as a highly efficient platform for cell growth. In this experiment, three different scaffolds (placenta, gelatin or polydioxane) were electrospun. The physical properties of each scaffold were tested, and results showed the placental extract scaffold could withstand normal physical manipulation as well as the other scaffolds. The scaffolds were tested to determine how each would perform as a platform for cell growth by observing the reaction of cardiac fibroblasts on the scaffolds. The placental extract scaffold supported cell growth the best, as indicated by the extent of cell migration. The results suggest that placental extract is a potential material for constructing the ideal engineered tissue to promote wound healing and prevent scar tissue formation.

08 Science Fair: 3rd Place for Biotechnology

 
Third Place: Arun Dutta, 9th Grade
“An Inhibitor for Cells' Response To DNA Damage” (14001)
Category: Cellular and Molecular Biology
Region: Western Albemarle High School, Charlottesville

Abstract: When a cancer is treated with radiation, the radiation cuts through the cell’s DNA. The desired result is that the cell will replicate the damaged DNA and thus hurt the cancer. But a cellular complex called Tip60 helps repair the damage. Thus the cancer cells are not damaged. So, we must find some way to stop Tip60 from doing its job. This experiment tests two chemicals to see how well they inhibit Tip60 activity: anacardic acid and garcinol. These two chemicals are known to inhibit other Histone Acetyl Transferases (HATs), and we will first test if they inhibit Tip60 acetyl transferase activity. If they do so, then we will test whether together they inhibit Tip60 even more.
To measure Tip60 activity, we used an ELISA HAT assay. We chose this procedure because of its brief completion time (4-5 hours) and its ability to give results in numbers. First, histone peptide H4 in the wells was briefly acetylated with Tip60 enzyme with or without the chemicals. Acetylation was measured by the addition of anti-acetyl-Lysine and Goat Anti-Rabbit IgG-HRP conjugate. TMB substrate mixture was next added to the wells. After the reaction was stopped, absorbance was measured at 450 nm with a spectophotometer.

After testing, it was clear that anacardic acid and garcinol inhibit Tip60 with anacardic acid inhbiting more than garcinol does. Anacardic acid decreases Tip60 activity to 50% at a much lower concentration than garcinol. Both these chemicals have enormous potential for use in treating cancer with radiation.

VaBIO at BioEurope 08 in Madrid

 
About 1200 attendees participated at the 2008 BioEurope Spring meeting April 7-9 in Madrid, Spain. At least three Virginia companies were in attendance: Luna Innovations, Oxford Finance and the Virginia Biotechnology Association. VaBIO joined forces with our colleagues from Maryland to promote the 2008 Mid-Atlantic Bio event. About 20 convention attendees joined us for a reception at the Hotel Sofitel across the street from the Madrid Convention Center.

Plan to lure animal testing firm Covance has PETA growling

From the WBJ: Plan to lure animal testing firm Covance has PETA growling

In its plans to take over part of a plot vacated by Eli Lilly & Co. last year, Covance Inc. is bringing to Prince William County 450 jobs, $175 million in investments -- and the wrath of the country's leading animal activist group.

People for the Ethical Treatment of Animals has been sending letters in recent weeks urging county and state officials to rescind the combined $3.7 million in incentives for Princeton, N.J.-based Covance, which plans to consolidate its Northern Virginia operations on 47 acres inside Innovation@Prince William Technology Park.

Norfolk, Va.-based PETA charges that Covance, a $1.5 billion research contractor whose work includes using animals to test potential drugs for biotech and pharmaceutical clients, is cruel to animals in its care. Covance counters that PETA's claims are part of a "campaign of distortion of facts."

PETA said if it does not get the response it is seeking, starting with a meeting with county and state officials, it plans to rally local supporters and protest the planned facility in full force.

"At that point, we'll think about mobilizing activists," said Alka Chandna, a senior researcher at PETA who penned the letters. "We think there are a lot of issues residents can get behind in going against Covance."

That may well be the outcome. County officials said they planned to respond this week with a single letter from the Board of Supervisors chairman, restating their support of Covance as a new entry to help fill out the area's life sciences community and repeating the company's claims that any prior citations regarding animal care have been resolved.

"These allegations have already been fully investigated by the United States Department of Agriculture and the United States Food and Drug Administration, as [being] well addressed by Covance," said Mona Terrell, a spokeswoman for Covance, which describes the animal rights group as "extremists." "PETA's agenda is not solely against Covance, but against the use of animals in biomedical research and the development of life-saving and life-enhancing medicines generally."

But PETA, which fights the FDA on issues of animal testing separately, said its concerns are directed at Covance's treatment of animals in its lab.

In a packet of materials PETA said it sent to the county Economic Development Department, each supervisor and Gov. Tim Kaine's office, the group included video footage that a PETA member took after getting a job at Covance's facility in Vienna, which will shut down when the company moves its operations to Manassas.

The video was a result of the PETA investigator's work as a lab technician from April 2004 to March 2005.

"Employees habitually slapped monkeys, choked them, threw them against cages and shook them violently," wrote Chandna in one letter to Kaine that also alleged poor animal importing practices by Covance. "Many animals exhibited signs of severe psychological trauma -- circling frantically in their cages, pulling out their hair and biting their own flesh."

PETA turned over its findings in 2005 to the Agriculture Department, which began its second investigation in recent years of Covance that June. The first investigation, which was started in August 1999 after some rabbits died in transit to the company's labs, did not turn up any violations.

In March 2006, however, the Agriculture Department found enough evidence for a potential court case against Covance but offered the company a chance to pay $8,720 to settle and fix any rule violations, said Jim Rogers, a department spokesman. Covance paid the fine, and the department has not investigated since.

The Agriculture Department's annual inspections since 2001 have resulted in four raised flags, mostly in the company's Wisconsin location. Two, in 2003 and 2004, described damaged areas along the walls, peeling and chipped paint on support beams and the floor base in a room that housed monkeys, and a large hole in the floor in a room that housed dogs.

Those issues were corrected by April 2005. A 2006 inspection, the most recent available, asked for more detail about a company committee that oversees animal care in research institutions, information the Agriculture Department received by June 2006. Also that year, in the Vienna lab on Leesburg Pike, inspectors found wooden boards, which dogs used for resting, with chewed edges, causing sharp points. The company fixed the boards a month later in June 2006.

"We don't have any reason to not support their relocation to Prince William," said Liz Bahrns, a county government spokeswoman. "Covance has corrected its issues. It has paid its fines. It is in good standing with the federal government at this time."

The company arrived at the county as an economic development saviour of sorts, setting its flag down on a plot abandoned for 10 months after it was reserved for Eli Lilly.

After trumpeting plans in 2002 to build a manufacturing plant for 700 workers and make $450 million in investments, Eli Lilly abruptly canceled even scaled-down plans in January 2007. The remaining 73 acres of its former plot are still on the market, but this past November Covance took a large chunk that included the metal shell of the plant.

"Having them here substantiates our position as a life sciences community," said Jason Grant, a spokesman for the county's Economic Development Department.

In addition to adding new jobs and construction, Covance is estimated to ultimately bring $1.2 million annually to the county's coffers in property taxes. County officials forecast that in its first 10 years in operation, Covance will pay $8 million in taxes, minus the county's own $1 million incentive investment.

With Prince William County getting the brunt of the region's housing slump -- it saw a 30 percent drop in total dollar volume in housing sales in March compared with the previous year -- the county could use the boost in property taxes that Covance would deliver on otherwise unused land today.

But Chandna said that is a short-term view that ignores broader ethical concerns.

Bahrns said the county expected Covance's move to come with costs.

In November, Bahrns was in talks with her counterpart in Chandler, Ariz., where packed hearing rooms, picketing protesters, a lawsuit and up to 1,000 angry e-mails a week illustrated the opposition by some in the community to a Covance research facility announced in 2005.

The facility is now under construction at a second location that needed rezoning -- not an issue for Prince William County, which is already zoned for this type of building. But the Chandler lab stands at the center of an attorney general's investigation into whether local legislators failed to inform members of the public about that change in location.

With PETA's former home base in Rockville and current base 180 miles south of Manassas, the organization expects to play a more vocal role in battling the company here, attending Board of Supervisor meetings and staging press conferences and rallies -- prospects that Bahrns said the county is prepared to face.

Not that Chandna thinks its journey will be any easier, though.

"Covance can outspend PETA," she said. "They can outspend us by multiple factors to one. We expect that as with Chandler, it's going to be a difficult road."