Gauze is good for Newport News firm

A Newport News company whose bread-and-butter is developing high-tech wound-healing products had two major announcements in February, including receiving substantial funding that could help it capture a share of the defense industry in addition to its pursuits in the consumer realm. Soluble Systems LLC announced it received $800,000 in federal funding to conduct a clinical study of its flagship product, TheraGauze.

Congress approved the funding from the 2010 Defense Appropriations Bill with the hope that TheraGauze can be proven to be a successful new battlefield wound dressing.

TheraGauze, which the company manufactures in Hampton, is a complex piece of gauze that has the ability to sense and respond to moisture within a wound. If part of a wound needs less moisture, the product can absorb it. If part of the same wound needs extra moisture to promote healing, the gauze helps produce that moisture, jump-starting or speeding up the healing process. The company calls this its proprietary Skin Moisture Rebalancing Technology.

The science behind TheraGauze came to be in the late '90s when Dr. Guy Levy, a local dentist, now the company's chief technology officer, secured a patent for a polymer intended to help combat dry mouth in Levy's dental patients.

Levy and attorney Allan Staley, now the company's president, "ultimately discovered [the polymer] had a lot more attributes than originally anticipated," Staley said.
Without getting into its patented chemical specifics, the polymer seems to magically know how to handle moisture in a wound. From there a wound-care dressing was developed and the two brought in CEO Kerry McCarter, a former Johnson & Johnson exec.

Finally in late 2007, after raising $5.9 million, Soluble Systems was able to bring TheraGauze to market. It's manufactured in a high-tech clean room in the facilities of the Arc of the Virginia Peninsula, a group that helps put individuals with developmental and other disabilities to work.
In addition to studying its moisture capabilities, one of the goals of the Department of Defense-funded study will be to further confirm the product's ability to deliver antibiotics to a wound, particularly serious wounds and infections seen in battle.

The study will take place at multiple sites including Eastern Virginia Medical School in Norfolk, Harvard Medical School, Johns Hopkins Medical Center and The University of Cincinnati Medical Center.

The study will begin later this year and will run for about two years, Staley said, and more funding will be sought from DOD to supplement the initial $800,000. It sought $4 million for the study initially.

The other big news for Soluble Systems came when it received notice that it was granted trademark protection on its skin graft product known as TheraSkin.

TheraSkin refers to cryogenically preserved grafts of human skin that are applied to wounds that are not healing properly. The technology behind this product provides important skin elements such as cytokines and collagen to and around the wound to jump-start the healing process.

TheraSkin was launched in 2009 after the company secured a partnership with Virginia Beach-based organ procurer LifeNet for its supply of human skin.

"We were looking to expand our product line and wanted to create a synergistic product expansion," Staley said. "[TheraGauze and TheraSkin] work together as part of the wound solution."

That combination of products, and a few more undisclosed Thera-brand ideas up its sleeve, gives Soluble Systems reason to be excited for the future.

The company employs 22 workers, including a sales force that calls on 10 major markets all over the U.S.

It is approaching $1 million in annualized sales, Staley said, with a target of just under $2 million in total sales for 2010.

It's in the midst of raising a second round of private capital, some of which will come from local investors, though its track record now allows it to look elsewhere for funding.

The money will be used to expand its sales efforts into 20 markets with 65 sales reps over the next five years.

Its biggest challenge, Staley said, remains competing with its multinational competitors and getting the Thera-brand and Soluble Systems names out there. The market in which TheraGauze competes is ripe with competition. TheraSkin, however, has just two main competitors, Staley said, both of which use bioengineered tissue rather than actual human skin.
TheraGauze has been plugged into the industry distribution chain and is available to consumers by the box or the case with a prescription.

A 2-inch-by-2-inch piece of the gauze runs about $8. The price goes up for larger versions.
Soluble Systems hopes to one day sell TheraGauze as an over-the-counter product.

It has been selling TheraSkin to customers such as VA hospitals since the fall.

The big question - what's the end game for Soluble Systems?

The biotechnology industry is a frontier for venture capital, acquisition or even going public.
For now, "we're looking to grow a company - to build a company here in Virginia," Staley said. "We'd like to employ more than 22 people."

Availability of private capital and a disdain toward public offerings will keep an IPO off the table for now, he said.

"It truly is an exciting opportunity to build this company and help the patient population to heal better and faster," Staley said, "and ultimately provide a solid return for our investors."

By Michael Schwartz Inside Business

Anti- Embryonic Stem Cell Language in VA House Budget

From the Richmond Times-Dispatch:

"Two perennial amendments pushed by anti-abortion legislators also found their way into the House committee's budget bill.

A language amendment would prohibit state funding of embryonic-stem-cell research but would permit entities that conduct such research, without using state money, to receive state funding. State funding of research using aborted fetuses would be prohibited.

A second language amendment would prohibit the distribution of state money to Planned Parenthood Federation of America, or any affiliate. Very little general-fund money is given to the organization. Planned Parenthood says none of that money goes to abortions.

Similar amendments have failed in past sessions."

VA Senate Rejects Governor's Econ Dev Plan- Except Biotech!

Washington Post: "Legislative and budgetary measures designed to create jobs are Republican Gov. Bob McDonnell's top priorities for the current legislative session. So it may be no great surprise the Democratic-led Senate Finance Committee declined to include most of his package in the budget it passed Sunday."

"Senators noted they did include funding for a new biotech center in Northern Virginia, as endorsed by McDonnell. And they passed a variety of tax credits and other bills that McDonnell wanted for job creation, each of which has budgetary impact."

For more click here.

New biotechnology scholarship available at NOVA :: Northern Virginia Community College

Northern Virginia Community College is accepting applications for a new scholarship sponsored by Rividium, Inc. The Rividium Biotechnology Scholarship will provide $3,000 per year for two years for a student who plans to enroll full time in NOVA’s Biotechnology Program beginning in fall 2010.

To be eligible, applicants must be graduating from a local high school this year, have a minimum 3.0 grade point average and qualify for financial aid as determined by the Free Application for Federal Student Aid (FAFSA).

The biotechnology associate degree program prepares graduates for employment in entry-level positions as laboratory, research or manufacturing technicians at biotechnology and pharmaceutical companies. Coursework covers basic scientific principles in biology and chemistry and emphasizes laboratory techniques and procedures.

The application deadline is March 15. To access the application, click here.

For more information, call Ia Gomez at 703-530-8255."

VA Del. Chris Peace: Support Capital Gains Exclusion for Biotech in Virginia

"Encouraging innovation and technology: Former Secretary of Commerce and Trade Bob Skunda along with the executive director of the Virginia Biotechnology Association, Mark Herzog, have brought nearly 60 businesses to the Virginia BioTechnology Research Park in downtown Richmond. These businesses have diversified our marketplace and made the region attractive to those who wish to explore the cutting edge of research and development. The park's businesses include life science companies, research institutes, and government laboratories -- and employ close to 2,000 people. In order to aide our statewide competitiveness in this sector -- as well as attract more scientists, engineers, and researchers who bring additional jobs to the commonwealth -- Del. Sam Nixon and Sen. Mark Herring (HB523/SB 428) introduced the Virginia Innovation Investment Act, which is a capital gains exclusion on income earned from a qualified investment in an advanced technology company in Virginia. There is a three-year window for the investment to be made. This bill will incentivize individuals and corporations to make investments in Virginia businesses that would not otherwise have occurred."

Click here for the full story from the Richmond Times Dispatch.

Flashback: John Crowley from "Extraordinary Measures" in Virginia

 
John Crowley, the man who started a biotech company with the express purpose of saving his own kids suffering with Pompe's Disease, was a keynote speaker at the 2004 Virginia Biotechnology Summit in McLean. His story has been made into the Hollywood film "Extraordinary Measures" starring Harrison Ford and Brendan Fraser. The photo is from his speech he made to the audience that night at the banquet.

For more pictures from the event, click here.

HGS CEO Cites Virginia as Success in Growing & Attracting Biotech

Tom Watkins, CEO of Human Genome Sciences and the chairman of the Maryland Life Sciences Advisory Board, commented recently on Maryland's economic development plan and competition from other states:

"We have to be realistic," he said, pointing out that it is a 10-year plan. "Other states, such as Virginia, are being aggressive in growing and attracting biotechnology companies. So we have to be forward-looking."

H. Thomas Watkins
CEO, Human Genome Sciences
January 29, 2010

http://www.gazette.net/stories/01292010/businew175358_32548.php

Biotechnology Is Part of Jobs and Opporunities Agenda

In a column published in the Augusta Free Press yesterday, Lt. Governor Bill Bolling referenced biotechnology as a part of the administation's jobs and opportunities agenda.

"We will be able to invest in a number of strategic programs that are designed to improve Virginia’s ability to attract enhanced manufacturing facilities, become the East Coast’s energy leader and assert our position as a great place for biotechnology and life sciences companies."

Read the column here.

VaBIO Hosts "Extraordinary Measures" Movie Night in Richmond

 
The Virginia Biotechnology Association rounded up nearly a dozen members and friends January 27 in Richmond to see the new Harrison Ford biotech -themed movie "Extraordinary Measures" about John Crowley's fight to save his kids suffering from Pompe's Disease. Next week we plan to do the same in Charlottesville!

Virginia Gov. McDonnell proposes more biotech funding

Virginia Gov. Bob McDonnell made biotech initiatives a visible part of a job creation agenda he unveiled Tuesday.

His list of economic development action items includes removing a $3 million cap on certain equity and debt investment tax credits and raising the amount to $5 million in fiscal year 2011.

McDonnell also wants $2 million in fiscal 2011 funding for a business incubator program that would serve biotech companies.

He has expressed support for a bill already introduced that would create an exemption from the capital gains tax for income related to certain angel, corporate or venture investments in science and technology startups, a key issue for young biotech companies that are in a constant search for funding.

In addition, the new governor said he would invest $3 million in bioscience wet lab facilities over the next two years. In a move initiated by former Gov. Tim Kaine, the state is already awarding $3 million from the Governor’s Opportunity Fund to the Ignite Institute, a new nonprofit medical research organization, and the Center for Innovative Technology to build roughly 20,000 square feet of new lab space in the CIT’s Herndon building.

McDonnell’s plans for Ignite include $22 million in total funding for the nonprofit through the next five years, as long as Ignite agrees by June 30 to fulfill its pledge to create 415 jobs and invest $200 million in its future campus in Fairfax County.

The funding, announced by Kaine in an economic development gathering with Fairfax County leaders late last year, will be divided into four $5.5 million chunks. Under McDonnell’s proposal, the first $5.5 million chunk will be awarded in fiscal 2012, starting July 1, 2011.

Ignite, which needs to raise roughly $100 million more to help make the planned institute successful, also received a $25 million funding commitment from another major partner, Inova Health Systems.

Washington Business Journal
Vandana Sinha
January 26

VA Gov McDonnell: $7.5 Million for Biotech Program

Governor Bob McDonnell Lays Out Details on Job-Creation Investments; Identifies Existing Funding and Spending Cuts to Offset Cost

Senate Finance Chair Colgan and House Appropriations Chair Putney Join Senator William Wampler to Carry Governor’s Job Creation Measures

RICHMOND- Virginia Governor Bob McDonnell today announced that leading Republican and Democratic lawmakers will carry the budget amendments necessary to implement the job-creation proposals he outlined in his Address to the Joint Houses of the General Assembly last Monday. In the Senate the amendments will be carried by ranking Senate Finance Committee member William Wampler (R-Bristol) and Finance Committee Chairman Senator Charles Colgan (D- Prince William). The amendments in the House will be brought forward by Appropriations Committee Chairman Delegate Lacey Putney (I-Bedford). McDonnell further announced that he has identified existing funding and specific spending cuts to offset the cost of each new job-creation proposal.

In last Monday’s speech to the General Assembly, McDonnell called for greater investments in state programs that spur job-creation and economic development in the Commonwealth. The Governor noted, “Yes, we face a difficult budget cycle. The budget that I have inherited is dire, and it is unbalanced. We begin with nearly a billion dollar annual shortfall based on tax hike proposals that both parties have rejected. More spending cuts must be made. But even in the toughest of times – even now – we must have the vision and the foresight to invest in our future.”

Lieutenant Governor Bill Bolling, Chief Jobs Creation Officer, commented, “I am delighted to join Governor McDonnell and legislative leaders in supporting this aggressive jobs and opportunity agenda. These proposals will enable us to re-prioritize economic development in Virginia and invest in programs that help create jobs for Virginia families. This is the most important issue currently facing our state, and it deserves our full attention. These legislative initiatives and financial investments will send a message that we are serious about getting Virginia’s economy moving again and enable us to reach out to businesses all across the country and all around the world an encourage them to make Virginia their home.”

Speaking today about the Governor’s job-creation legislation, Senator Charles Colgan stated, “The need to create new jobs for Virginians is pressing, not partisan. The proposals made by the Governor represent smart investments in the Commonwealth’s future. I am confident that we will find broad bipartisan support for them.”

Delegate Lacey Putney remarked, “We all know who creates jobs: men and women in the private sector. We also know that government can either make their lives easier, or get in their way. These ideas will facilitate job creation and economic development. They are exactly what a smart state should be doing in a tough time.”

Senator William Wampler added, “The citizens of my Senate district, like all Virginians, are reeling from some of the toughest economic times in many years. If Richmond will give them the resources to get to work rebuilding our economy, they will. These efforts will result in real jobs and a real return on investment. I applaud the Governor for finding cuts equal to each investment he is asking the Commonwealth to make. That is fiscally responsible government.”

Delegate Kirk Cox (R-Colonial Heights), who serves as Vice-Chairman of the House Appropriations Committee, will help Delegate Putney in this effort. He commented, "This is a comprehensive approach that addresses all of the critical areas of much needed economic development for Virginia. We are committed to work together - Republicans and Democrats, House and Senate - to make this happen."

McDonnell is calling for $50 million in new investments over the next biennium. The Governor is proposing:

· More than doubling the Governor’s Opportunity Fund in FY 2011 by increasing the state commitment by $12.1 million

· Committing $5 million in FY 2011 to a state industrial mega-site fund to attract new employers

· Using $2 million over the biennium to establish state economic development offices in major growth markets in China, India and the United Kingdom

· Supporting the fast growing bio-technology and life sciences industry by removing the $3 million cap on the Qualified Equity and Subordinated Debt Investment Tax Credit and raising it to $5 million in FY 2011; Investing $3 million in bioscience "Wet Lab" Facilities over the biennium; Utilizing $2 million to reestablish funding for the Business Incubator Program in FY 2011; Providing income tax exemption for qualified investments by technology and science startup companies in FY 2012 (cost $500,000)

· Increasing state funding for the Virginia Tourism Corporation by $3.6 million in each year of the biennium, and state funding for the Governor’s Motion Picture Opportunity Fund by $2 million in FY 2011

· Depositing the Wine Liter Tax attributable to Virginia Wine into the Wine Promotion Fund ($1.5 million over biennium)

· Improving Virginia’s business assistance services by increasing funding for the Loan Guarantee Program by $1 million in FY 2011; Continuing funding for the Business One Stop Program, cost of $1 million over the biennium; Increase the appropriation for the Virginia Jobs Investment Program by $6.5 million in FY 2011

The fiscal impact of the Governor’s investments will be offset by utilizing existing revenue sources and cutting some expenses. Specifically:

· $21 million will be available through increased revenue from Virginia’s tax amnesty program

· $500,000 from the elimination of a capital outlay contingency reserve

· $4 million by not filling vacant positions at the Department of Correctional Education

· $1.2 million by deferring equipment purchases at the Department of Corrections

· $25 million will be available through the phase-in of VRS employer contribution rate increases included in the introduced budget bill with one-half of the increase being recognized in FY2011 and the full increase being recognized in FY2012

· $5 million will come from an offset of state funding with additional federal grant funding for food stamp program administration

Va. business leaders put transportation woes on back burner for now, turn to incentives and fairer school funding

Virginia’s budget woes may have proved stronger than Northern Virginia’s transportation woes, but area business leaders are sharpening their focus on issues from job creation to education funding in Gov. Bob McDonnell’s rookie legislative season, which started Jan. 13.

Business officials are generally receptive to the postponement of transportation fixes given the staggering $4 billion deficit.

Instead, they will take up an issue that has snared the political agendas of many regional business groups: the state’s formula for funding its school systems — encapsulated in a composite index that breaks down the state’s and local governments’ share of funding. The higher the composite index, the more that local government pitches in for school funding based on its ability to pay from sources such as adjusted gross income, taxable retail sales and property values.

Here’s where the index gets complicated. The current funding expectations from local governments were enacted July 1, 2008, for the 2008-10 period based on local revenue levels from 2005 — before the housing crash plundered property values.

Before leaving office, Gov. Tim Kaine had proposed freezing the current rates until July 1, 2011, to save smaller, more vulnerable localities from anticipated increases during budget crises. But business leaders said that leaves Northern Virginia and its larger localities shouldering more of the state’s budget burdens and paying tens of millions of dollars more in their cut of school system bills than they can bear.

“It’s adding insult to injury,” said Tony Howard, president of the Loudoun County Chamber of Commerce, which is teaming with the Dulles Regional and Greater Reston chambers for the first time to send a lobbyist to Richmond to focus on taxes and regulation, energy, the environment and economic development.

Business leaders said their rationale for making school funding a cornerstone issue is simple. They consider the health of neighborhood schools a key factor in attracting companies to the area.

“The No. 1 reason we hear for businesses to come to Virginia, and to Fairfax County in particular, in addition to the low regulatory and pro-business stance, is education,” said Stu Mendelsohn, Chamber of Commerce chairman in Fairfax County, where political leaders have considered legal action against the funding proposal.

While business groups lobby legislators for a budget amendment that would thaw the proposed composite index freeze, they also are trying to increase job creation, rallying behind McDonnell’s plan to double the Governor’s Opportunity Fund, a pot of money used to entice businesses to locate in the state.

Biotech business leaders are watching this legislative session closely, hoping for new benefits for potential investors. They are tracking bills lauded by McDonnell and offered by Sen. Mark Herring, D-Leesburg, and Del. Sam Nixon, R-Richmond, that would exempt capital gains taxes from income related to certain angel, corporate or venture capital investments in science and technology startups. Biotech leaders in Virginia see the measure as a way to better compete for younger industry players that might have chosen another headquarters address, such as in Maryland, where tax breaks are more readily available for angel investors. (For more on the tech industry's issues, click here.)

“It’s one more incentive to not consider that,” said Mark Herzog, executive director of the Virginia Biotechnology Association.

An optimistic Herring said the bills’ chances are good even in a downturn because they don’t require new funding.

Even as business groups train their eyes on the emerging issues of 2010 — everything from delaying new stormwater management regulations on new development to curbing the unemployment insurance burden on companies — transportation remains the top priority for some who anticipate it becoming the subject of a special session in the fall.

One bill to raise the gas tax is again on the table, but many observers think it has little likelihood of getting passed.

But another bill has captured more attention — one introduced by Del. Thomas Davis Rust, R-Herndon, that, in part, increases sales taxes in Northern Virginia by 0.5 percent to fund transportation projects specifically in that region.

“The budget is going to consume everything,” said Bob Chase, president of the Northern Virginia Transportation Alliance. “A pledge to make meeting Virginia’s transportation needs a top priority was a cornerstone of McDonnell’s campaign. It’s our expectation that he remains committed to honoring that.”

Washington Business Journal
Vandana Sinha
January 22, 2010

US Trade Representative Seeks Input on Trade Matters

The United States Trade Representative (USTR) has instituted investigation No. 332-509, Small and Medium-Sized Enterprises: U.S. and EU Export Activities, and Barriers and Opportunities Experienced by U.S. Firms, for the purpose of preparing the second in a series of three reports requested by the USTR relating to small and medium-sized enterprises. They are seeking feedback and are inviting companies to participate.

BACKGROUND: In his letter the USTR requested that the Commission provide three reports during the next 12 months relating to small and medium-sized enterprises (SMEs). In this notice the Commission is instituting the second of three investigations under section 332(g) for the purpose of preparing the second report, which is to be transmitted to the USTR by July 6, 2010. The Commission published notice of institution of the first investigation, investigation No. 332-508, in the Federal Register of October 28, 2009 (74 F.R. 55581).

As requested, in the second report (investigation No. 332-509) the Commission will:
(1) Assist in analyzing the performance of U.S. SME firms in exporting compared to SMEs exporting in other leading economies. As one way of comparing the performance of U.S. SMEs to those in other countries, the Commission will compare the exporting activity of SMEs in the United States and the European Union (EU), and analyze the distinctions between U.S. and EU firms in terms of sectoral composition, firm characteristics, and exporting behavior.
(2) Identify barriers to exporting noted by U.S. SMEs and strategies used by SMEs to
overcome special constraints and reduce trade costs.
(3) Identify the benefits to SMEs from increased export opportunities, including free trade agreements and other trading arrangements.

To best aid the Commission in gathering information for the report, the Commission is seeking information in response to the following questions:
• What are the most significant constraints that U.S. SMEs face in their efforts to export?
• If SMEs have been successful in overcoming those constraints, what strategies have they adopted?
• What particular benefits do SMEs believe they have received from increased export
opportunities including those from free trade agreements and other trading arrangements; which trade agreements or other arrangements have been most beneficial?

DATES:
January 26, 2010: Deadline for filing requests to appear at the public hearing.
January 28, 2010: Deadline for filing pre-hearing briefs and statements.
February 9, 2010: Public hearing (Washington, DC).
February 23, 2010: Deadline for filing post-hearing briefs and statements.
March 26, 2010: Deadline for filing written submissions.
July 6, 2010: Transmittal of Commission report to the USTR.

ADDRESSES: All Commission offices, including the Commission's hearing rooms, are located in the United States International Trade Commission Building, 500 E Street SW, Washington, DC. All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.

FOR FURTHER INFORMATION CONTACT: Project Leader Laura Bloodgood (202-708-4726 or laura.bloodgood@usitc.gov)

Venture capital investments plunged last year

Investment by venture capital firms declined last year to its lowest point in more than a decade, according to a report scheduled to be released Friday.

There were 2,795 investments worth $17.7 billion in 2009, a 37 percent decline in dollar value compared with 2008, according to the report from PricewaterhouseCoopers and the National Venture Capital Association, which analyzed data provided by Thomson Reuters. The number of deals decreased 30 percent.

The Washington area had 117 deals totaling about $540 million for 2009, compared with $985 million the previous year. That level of investment put Washington in the middle of the pack nationally, based on the report's accounting, which divides the country into 19 regions. The Washington area trailed regions such as Los Angeles, the New York metro area and San Diego.

Mark Esposito, director of the emerging company services group at PricewaterhouseCooper, said the findings show that the amount of venture capital investment increased as the year went on. During the first quarter of the year, for instance, there was only $80 million worth of investment in local firms; by the fourth quarter, that number had grown to $163 million.

"Without a doubt, it looks like we hit a trough somewhere in the first half of 2009, both locally and nationally," he said.

Esposito pointed to bright spots on the local scene such as social media development firm LivingSocial, which landed $5 million in investment capital from investors such as Steve Case, and the Rockville-based drug developer Zyngenia, which raised $10 million.

For the Washington area, some of the largest investments last year targeted the software, biotech and telecommunications industries. Software led the pack, with venture capital investments totaling almost $98 million. Biotech firms and telecommunications companies took in $88 million and more than $82 million, respectively.

In a call with reporters on Thursday, PricewaterhouseCoopers partner Danny Wallace said 2009 marked the first year that nationally, the biotech industry nudged past the software industry to grab a larger chunk of investment capital.

Other than that, venture capital activity in the Washington area generally mirrored larger national trends, Esposito said, though he pointed to one growing industry that is not yet well represented in the area. "We didn't see much on the 'clean tech' side here," he said, referring to the movement toward products and technology that help reduce energy consumption. "Most of that continues to be on the West Coast."

At least one local venture capital firm, Walker Ventures, announced last year that it was winding down operations and would not seek to raise a new investment fund.

Founder Steve Walker said at the time that the economic conditions were simply too rough to raise enough investor interest. "This isn't the end of early stage investing," he said, "but it's a time period when that's not something most people want to consider."

By Mike Musgrove
Washington Post
January 22, 2010

Virginia Gov McDonnell: Biotech Investment A Priority

Governor Robert F. McDonnell highlighted the importance of the Biotechnology industry in his first "State of the Commonwealth" address to the Virginia General Assembly, January 18, 2010. He specifically notes legislation by Delegate Sam Nixon (HB 523) and Senator Mark Herring (SB 428) to create a capital gains tax exclusion for bioscience investment.

From the transcript: "We will also target new Opportunity Fund dollars to the bio-tech industry. This is an industry of high-paying jobs in a fast-growing career field. Smart states look at this sector for future economic development. We will as well. Delegate Sam Nixon of Chesterfield is teaming up with Senator Mark Herring from Loudoun County to push my commitment to grant an income tax exemption for qualified investments by technology and science startup businesses."

Click here for the video:

CQ: Rep Anna Eshoo Takes on Obama Over Data Exclusivity

CQ reports that US Rep Anna Eshoo challenged President Obama over the issue of using the conference committee on health care reform to make changes to items that were, in fact, not in conflict between the two versions of the bill.

Rep. Anna G. Eshoo, D-Calif., who wrote the biologics provision of the House bill, asked Obama his position on the issue during a question-and-answer session with House Democrats Thursday evening, and he told her he disagreed with her legislation, a Democratic aide said. She noted that both the House and Senate had voted for it.

“Nothing is sacrosanct,” he told her, according to the aide. “We’re discussing it. I have a great deal of respect for the House and the Senate, but my job is to do what I think is good policy.”

Eshoo, according to her chief of staff, Jason Mahler, responded, “if the president overturns the clear will of Congress on this that it will not only be a bad precedent but a dangerous precedent.”

Ignite Institute deal a spark for Fairfax County incubator

After winning support for $25 million in state funds during a major budget crisis and using the field of molecular exploration to unite rival politicians behind the same cause, the Ignite Institute has managed one more miracle in Northern Virginia.

It will help create the area’s first known biotech incubator with wet labs.

The medical research institute, a coup for Fairfax County announced late last year, and its temporary landlord, the Center for Innovative Technology in Herndon, will use at least $3 million from state incentive funds to construct, at minimum, 20,000 square feet of lab space in the modern building.

The Ignite Institute, which aims to have 100 scientists by the year’s end and 500 in five years, will use the lab space on the third and possibly fourth floors of a 60,000-square-foot CIT wing. It could move in as early as June.

After the institute departs in a few years for a permanent, 300,000-square-foot home, likely in the Dulles corridor, CIT officials plan to partition the lab space left behind and use it as a new life sciences incubator for lease to young biotechs .

“We would work directly with entrepreneurs,” said the center’s CEO, Peter Jobse.

Lab space has topped wish lists for every Northern Virginia economic development office, university and lost biotech prospect for decades while suburban Maryland accumulated a plethora of lab space. No developer was willing to shell out money for pricey lab build-outs without guaranteed tenants, and no potential tenant was willing to pick Northern Virginia without ready lab space.

“Lots of little tenants would have been in Virginia were there lab space,” said Dan Gonzalez, a member of the Virginia Biotechnology Organization’s board and CEO of Appian Realty Inc., a real estate company representing CIT. “Ten years ago, we identified this as a need. If Ignite is the catalyst for it happening, so be it.”

Fairfax County once had a BioAccelerator in Springfield that amounted to less than 10,000 square feet of office space, closing it in 2007 because of high operating costs.

George Mason University also ran into problems with its plans for bulking up its lab space. After the lack of local labs sent one GMU spinoff, Theranostics Health LLC, packing for Rockville, the university sketched out larger lab quarters in Manassas. However, the main developer pulled out of a planned build-out last year, and state funding remains difficult to find, forcing GMU to cram a second spinoff, Ceres Nanosciences LLLP, into its own science building.

Operating a biotech incubator is not for the fainthearted. Owners must manage some of the world’s most sensitive machinery and hazardous materials, not to mention companies that crave hundreds of millions of dollars for product development for years in return for zero revenue. The investment and upkeep amounts also are high. Construction costs alone approach $300 a square foot.

“There are a lot of issues on the business end and technical facility side that are very unique to biotech companies that would need to be considered prior to running a successful incubator,” said Mike Norris, a vice president in the Vienna office of Scheer Partners Inc., a life sciences real estate company.

Thanks to Virginia’s high population of information technology companies, CIT has gravitated more toward that field. Only six of the center’s 36 funded companies are in the life sciences, and two of those are in Northern Virginia. But with a 3-year-old, roughly $500,000 annual BioLife fund and staff expertise, CIT officials say they are well-equipped to serve the life sciences.

“We don’t have the rich history and strong base of life sciences companies in the Commonwealth that exist in San Diego and Boston,” said Tom Weithman, managing director of CIT Gap Funds. “But that said, I think there’s tremendous potential in the work being done by companies here.”

Vandana Sinha, Staff Reporter
Washington Business Journal

'Big Pharma' feed biotech startups record funds

The biotech industry raised a record $55.8 billion in 2009 despite hesitant stock and venture capital markets, as drug-company partnerships fed the cash-burning startups that develop new therapies.

That represents a jump of 85 percent over the $30.1 billion recorded in 2008, according to Steve Burrill, whose San Francisco firm Burrill & Co. is both an industry investor and analyst.

He said the 2009 results were driven by $37 billion in financial partnerships through which large drug companies license technologies or experimental remedies from biotech startups, a dynamic that enabled many small firms to survive a tough year. But it may ultimately limit their growth if they were forced to cede control over their most promising developments.

"You're not going to grow a lot more Genentechs or Amgens," Burrill said, painting a picture of a biotech industry that is increasingly the farm team that develops remedies that will ultimately be licensed and sold by the major league drug companies, also known as "Big Pharma."

That's the snapshot of the industry that emerges as 6,500 scientists, executives and financiers converge on San Francisco this week for the JP Morgan Healthcare Conference.

Now in its 28th year, the gathering is the health care industry's premier financial event, giving more than 330 companies a chance to make formal pitches to institutional investors. Another 7,500 private meetings are expected to take place from Monday to Thursday when the event ends.

"Success for JP Morgan is for our clients to get a lot of value out of the conference without feeling like it's speed dating," quipped Robbie Huffines, co-head of JP Morgan's global health care investment banking group.

Established in the early days of biotech by the now-defunct investment bank Hambrecht & Quist - old-timers still refer to it as "the H&Q" - the event gives invited companies a chance to pitch their corporate stories to an elite investment audience and also highlights the Bay Area's role as a biomedical discovery center.
Funding partnerships

Edward Lanphier, chief executive of Sangamo BioSciences in Point Richmond, who will be speaking at the conference, said he hopes to use partnerships to fund the costly marathon of developing a biomedical breakthrough while retaining enough control to preserve his company's big league potential.

Founded in 1995, Sangamo is developing a type of molecular switch called a zinc-finger protein that can turn genes on or off. The firm is currently conducting clinical trials to see whether these zinc-fingers can trigger the genes to repair nerves and blood vessels in patients with diabetic neuropathy, extreme forms of which can require amputation of damaged limbs.

Lanphier said the 75-person firm, which ran about $20 million in the red last year, had no layoffs and made a few key hires in 2009, thanks to revenue-producing partnerships under which it has licensed off some nonmedical uses for its technology for purposes such as genetically engineering plants.

But Sangamo has kept the most lucrative medical rights in the hope that zinc-fingers prove useful at switching on repair genes for human diseases, Lanphier said.

John Milligan, president of Gilead Sciences, said it has always been difficult for small biotech firms to make the leap from development firms to drug sellers, although the degree of difficulty may be increasing as partnerships and buyouts become easier ways to raise capital than initial stock offerings.

"How not to get bought was one of the challenges we went through in the early 2000s," said Milligan, recalling the time when his Foster City firm was on the cusp of delivering what have become market-leading treatments for HIV.

With a current stock market capitalization of about $40 billion, Gilead became the Bay Area's most valuable independent biotech firm last year after the Swiss drug firm Roche finalized its takeover of industry pioneer Genentech. But back when Gilead was still in its development stage, Milligan said the company partnered with Roche to commercialize the flu treatment called Tamiflu to raise the cash to develop its HIV line.

Now Gilead is growing through acquisition, last year acquiring CV Therapeutics of Palo Alto to add heart drugs to its product portfolio. As Milligan explained, once biotech firms develop marketable drugs they still face the cost of developing worldwide sales efforts, and adding new medicines through acquisition is one way of defraying their overall sales overhead.
Startups keep growing

So while biotech companies continue to be absorbed, enough startups are created to keep the life sciences industry growing, said Gail Maderis, acting chief executive of BayBio, the regional trade association with some 450 members.

She said BayBio estimates that total life sciences employment in Northern California grew to 129,410 persons last year, up 1.7 percent from 127,241 in 2008, despite the tough hiring climate.

Passage of the health care reform bill pending in Congress would have enormous and complex effects on the medical industry, but one provision provides a boon for biotech by setting rules for the creation of generic biomedicines favored by the industry.

"We see this as a huge win for innovation," Maderis said.

But Kathleen Jaeger, president of the Generic Pharmaceutical Association, characterized those proposed rules as "a sweetheart deal with the brand drug companies" that will make it harder for generic and biogeneric companies to provide cheaper alternatives.

While most of the action this week will take place at the Westin St. Francis Hotel where the conference is being held, the entire Bay Area biotech industry takes advantage of the critical mass of scientific and financial talent in town.

Fluidigm Corp. CEO Gajus Worthington won't have a formal role at the conference, but he will be briefing potential investors, industrial partners and scientific collaborators about his firm's technology to automate the biological reactions performed in early stage biomedical development.

"For companies that are located within striking distance of San Francisco, you can get all three of those groups to your company," he said.

Tom Abate, Staff Writer
San Francisco Chronicle

Altria’s plays major role in Richmond area’s economic life

If you've spotted a new computer in a school office in Richmond, grumbled about the midafternoon jam at the Bells Road exit or wondered about those "Dippers & Smokers" fliers around town, you've run across Altria Group Inc.'s footprint.

The nation's No. 1 tobacco company makes all its cigarettes -- 150 billion a year -- in Richmond. Its headquarters are here, and so are the labs where it designs new products, such as the tipless Black & Mild cigarillo and the new Marlboro Blend 54 in its dark-green box -- and where scores of Richmonders, intrigued by the fliers, have taken up its invitations to earn money by participating in tobacco-consumer studies.

Standing at 160 on the Fortune 500 list of large companies, among Richmond-area firms only Dominion Resources Inc., at 157, is larger.

"Looking at just Philip Morris USA, its employees and the complex visible from Interstate 95, one sees just the tip of the iceberg," said Roy Pearson, a business professor emeritus at the College of William and Mary.

It's a big tip:

About 5,700 people work in Altria factories, offices and laboratories in the Richmond area. The company ranked seventh among private-sector employers in the region.

They take home more than $710 million a year in pay.

Some of them place some $840 million a year in orders for goods or services from Virginia companies. Others buy some 17 million pounds of tobacco a year from 400 Virginia growers -- about $30 million a year.

And more than 250 of them pitched in last autumn at Huguenot High School to paint murals, create a butterfly garden and freshman class courtyard, and even remodel the teachers' lounge. A dozen took time last month to move 235 company computers into the Richmond Public Schools warehouse, to be shipped out to schools across the city.

"It really matters to me -- I'm a product of Richmond Public Schools," said Immanuel Sutherland, who moved from Altria's procurement services to run its volunteer programs four years ago.

Altria and its people -- who also number some 5,700 Virginia retirees -- have helped shape Richmond for decades.

Richmond was a center of the nation's aluminum business because Reynolds Metals got its start making foil for cigarette packs. The area's newest corporate citizen, MeadWestvaco, numbers Altria among its biggest customers.

The company buys paper, filters, cellophane, packaging material and printing plates mainly from local firms. Local firms service and maintain machinery for the company, do data-processing work and provide health-care services for employees.

Pearson said computer models of the local economy and surveys of where the company and its employees buy goods show every Altria job generates more than one job with Virginia suppliers. There's a ripple effect as those suppliers buy goods and services locally, too.

All in all, each Altria job generates 2.9 more jobs in Virginia, mostly in the Richmond area, Pearson said.

Doing business with Altria has changed the way Jewett Machine Manufacturing Co. works.

For years, the South Richmond company made precision machine parts for the cigarette factory. Now, Jewett is involved in bigger and more complex engineering tasks.

"The work for us has sort of shifted from manufacturing parts and aiding their engineering groups to actually designing and building turnkey systems in a whole different arena, the noncigarette arena," said Bryce Jewett, Jewett Machine's president. Jewett employs about 100 people at its locations on Maury Street and Mechanicsville Turnpike.

. . .

Tobacco products other than cigarettes are now an important part of Altria. Altria is investing $100 million in its York County factory, where it makes snus, a Swedish-style smokeless tobacco that is starting to make a splash in the United States.

Its $11.7 billion purchase of U.S. Smokeless Tobacco last year and $2.9 billion acquisition of cigar-maker John Middleton in 2007 brought about a dozen executives to the area.

Altria's two-year-old, $350 million research center in the downtown Virginia BioTechnology Research Park, where some 100 Ph.D's work, now handles the development of cigars and smokeless-tobacco products as well as cigarettes. A total of 500 people work there, the Virginia BioTechnology Research Partnership Authority says.

Over the past several months, marketing experts from U.S. Smokeless' Copenhagen division worked with the local scientists, who gained their expertise with flavoring tobacco at Philip Morris USA, to figure out how to get just the right wintergreen flavor into Copenhagen's snuff -- creating Copenhagen's fifth new product in 187 years.

But the push into smokeless tobacco and cigars came on the heels of a major split. The company, then based in New York, carved off its Kraft Foods and Miller beer businesses. Then, it spun off Philip Morris International, the independent New York-based company that makes and sells Marlboro and other Philip Morris brands overseas.

After the split, Altria's Philip Morris USA unit decided to make all of its cigarettes in Richmond, closing a North Carolina plant. The consolidation meant a $230 million investment in the Richmond Manufacturing Center next to I-95 in South Richmond.

Still, the business is under pressure.

"Philip Morris used to be nearly all of our business," said Stephen Young, chief executive officer of Mundet Inc., which makes the paper that is wrapped around filters, as well as packaging for cigarettes, at its Colonial Heights plant.

Now Altria accounts for about 40 percent of the company's sales.

As the industry has consolidated and cigarette sales continue to slide, "we have felt the need to diversify our product range and customer base and have looked to expand into nontobacco printed packaging."

Still, though Altria accounts for a smaller part of Mundet's business, Richmond accounts for a larger share of Altria's operations than it used to. Even before consolidating all its U.S. cigarette manufacturing here, Philip Morris USA moved its headquarters to Henrico County in 2003, and some 270 people came from its headquarters on Manhattan's Park Avenue. Altria itself moved to the landmark Reynolds Metals building in the county in 2008.

. . .

For company spokesman David Sylvia, moving from New York meant suddenly finding three extra hours a day. Without the long train ride from Park Avenue to the Connecticut suburbs, there was more time to spend with his four young children and a lower cost of living that made it easy giving up the old pickup he used to drive to the train station. He has bought two cars here since he moved.

Taking the kids to art classes at the Visual Arts Workshop, he saw a strong fiber-arts program that reminded him of his father, working in the now-shuttered velvet-textile industry of his Stonington, Conn., hometown -- and before long Sylvia found himself on the board of the nonprofit, involved it its efforts to reach into the Richmond public schools.

Time to look around and get to know a different kind of place than New York reminded the one-time altar boy of something else about Stonington:

"It was the kind of place where everybody knew everybody and if you were down on your luck, people would lend a hand to help out," he said.

The volunteer work he'd done as a Providence College student and the participation of his Henrico church, St. Bridget's Catholic, in the CARITAS program for the homeless led him to join the board of the interfaith group. It also has led him to do his share of pot-washing and meal-serving when it is St. Bridgit's turn to feed and provide a safe, warm bed.

"They're very active," said David J.L. Fisk, executive director of the Richmond Symphony, where Altria sponsors the Masterworks series through which the orchestra is seeking a new music director.

"Financially, they contribute over $100,000 to the symphony," he said, adding that support comes from the very top all the way through the company. That's in addition to helping finance CenterStage, now the symphony's home, as well as the Arts Fund and CultureWorks.

"Employees are members of the symphony chorus, they are parents of members of the youth orchestra, volunteers with the Richmond Symphony Orchestra League," he said. "They've been major supporters of the cultural scene and of downtown."

Altria is a big donor to the city schools, on the order of $2 million a year, targeting math and science education, trying to keep middle school students on track, and helping high schoolers get ready for college.

The company also pays for things donors don't always think of, such as computers for classrooms and training for teachers. But just as important, said Richmond Superintendent Yvonne W. Brandon, is that Altria volunteers are regularly in the schools: tutoring, mentoring and helping fix things.

"They show up," she said.

DAVID RESS AND JOHN REID BLACKWELL
Richmond Times-Dispatch

VA Gov McDonnell Names Duffey as Technology Secretary

Virginia Governor-elect Bob McDonnell announced that Jim Duffey will serve as the Commonwealth’s next Secretary of Technology. Duffey worked for Electric Data Systems Corporation for 24 years, serving as Vice President and General Manager of U.S. Public Sector business, and is a former Vice-Chairman of the Northern Virginia Technology Council.

McDonnell remarked about his Secretary-designate of Technology Jim Duffey, “Jim has worked around the globe at the highest levels in the information technology industry. During his time with Electronic Data Systems Corporation, Jim was based in Washington D.C., Rome, Spain, England and Australia. He has managed billion dollar budgets and thousands of employees. And he understands Virginia’s high tech community well through his recent leadership as Vice-Chairman of the Northern Virginia Technology Council. This broad experience has prepared Jim well for the position of Secretary of Technology. I am honored that Jim would agree to serve the citizens of Virginia in this capacity. With over 20 years of experience in the private sector Jim is a well-respected leader in his field and will be a positive addition to our Cabinet and Virginia state government.”

Virginia Tech Students Researching Breast Cancer Meet With Survivors

YouTube Video: Virginia Tech assistant professor of Biological Sciences Carla Finkielstein arranged for breast cancer survivors and advocates to speak to her students. The goal was to help the students put a face to the disease for which they are searching for a cure.

4-H Targets STEM Education in PSA

Senator Herring Named To State Technology Panel

If Governor-elect Bob McDonnell (R) has a New Year’s resolution, it might have something to do with bipartisanship.

In an interview with the Times-Mirror Dec. 30, Democratic State Sen. Mark Herring (eastern Loudoun) shared the news that McDonnell – who takes office Jan. 16 – has named Herring to the Technology Working Group advisory panel, part of the governor-elect’s transition team.

According to the transition office, the group involves technology leaders in the private sector with state government experience and legislators.

The mission of the panel is to do fact finding from the agencies, offer long-term strategic planning for state government and to turn campaign promises into action. The group will produce a report for the incoming governor and secretary of technology to advise them in the new administration.

Before his election in November, McDonnell had made technology a focus of his campaign.
“Northern Virginia’s technology community powers the economy of our state," he stated. "The men and women who work at [technology] companies are the innovators key to Virginia's, and America’s, future economic prosperity.”

Herring, who is halfway through his first term in the state Senate and is running for re-election in 2011, said he was “very honored” by the appointment. He added that he spoke last week with the head of the governor-elect’s policy unit about technology and the new panel.

“We talked a lot about areas where we could work together on technology, and I look forward to working with the new administration,” Herring said.

Herring represents eastern Loudoun County, an area rich in technology companies and data centers, including Aol., Verizon, Telos, Orbital, M.C. Dean, Ask.com, DuPont Fabros.
No further details were immediately available on the group's other members, or when they will meet in the coming weeks.

The position will not require Herring to give up his state Senate seat.

Herring received the 2009 Legislative Leadership Award from the Virginia Biotechnology Association for his successful efforts to adopt the Science and Technology Research Development and Commercialization Act. The legislation increases Virginia’s existing resources to support new technology and bioscience-related businesses.

Herring and his Loudoun colleague in the state Senate, Jill Holtzman-Vogel (R), both serve on the chamber's General Laws & Technology Committee.

By Nicholas Graham
Source: Loudoun Times-Mirror

Intelliject Twins Profile in RTD

Twins start firm to help allergy sufferers
Richmond Times-Dispatch
Jan 4, 2009

Millions of people at risk of severe allergic reactions to certain foods and bee stings rely on pen-size syringes that contain a life-saving dose of the drug epinephrine administered in an emergency.

As lifelong allergy sufferers, twin brothers Eric S. Edwards and Evan T. Edwards, co-founders of the Richmond-based specialty pharmaceutical firm Intelliject Inc., keep their epinephrine auto-injectors close by.

Accidental ingestion of peanuts, tree nuts and shellfish can cause them to go into anaphylactic shock, a potentially fatal allergic reaction. Tongue and throat tissues swell, making breathing difficult. A person may break out in hives and blood pressure may drop, causing fainting.

Injecting the drug epinephrine into the thigh quickly reverses the symptoms.

As grateful as the brothers are to have the existing injector technology available, from their own experiences they've concluded there has to be a better injector system.

The 29-year-old brothers and their management team have built Intelliject around the goal of creating a more intuitive, compact and safer emergency epinephrine delivery system.

Their result: a credit-card-size device that "talks" users through administering epinephrine.

"It's user-centered design," said Evan Edwards, vice president of product development at Intelliject.

"We really started with the patient and worked our way backwards," he said. "A lot of companies don't really think about how, in the moment of truth, when [people] are actually having to use the injector, what are the scenarios involved."

In the hands of a babysitter or parent who has never used an epinephrine injector, for instance, precious seconds could be lost trying to figure it out, he said.

A month ago, Intelliject moved into the big leagues, announcing a multimillion licensing deal with pharmaceutical giant Sanofi-Aventis U.S., which will manufacture and market Intelliject's novel epinephrine injector.

"Evan and I are just a small part of that" deal coming to fruition, Eric Edwards said. "We really have been blessed with an extraordinary management team."

That team includes President and Chief Executive Officer T. Spencer Williamson IV, who has been with the firm since 2006; Vice Presidents Kristopher D. Ford, Ronald D. Gunn, Neil D. Hughes and Mark J. Licata; and Chief Financial Officer Christopher T. Schools.

Sanofi-Aventis U.S. is an affiliate of Sanofi-Aventis, one of the world's largest pharmaceutical firms, with annual sales worldwide of about $40 billion in 2008. Sanofi-Aventis' U.S. product lineup includes blockbuster medications such as the allergy drug Allegra, the sleep aid Ambien and the clot-buster Plavix.

The agreement with Sanofi-Aventis U.S. calls for $25 million up front to Intelliject. In addition, Intelliject is eligible for up to $205 million more over time as development and commercial milestones are reached, plus royalties on sales associated with the licensure.

In announcing the deal, Sanofi-Aventis' Brent Ragans said: "This agreement complements our strong presence in the U.S. as a leader in the allergy arena and is a great example of our company's transformation into a provider of health-care solutions."

Intelliject retains licensing and marketing rights for their auto-injector delivery system in the rest of the world and is shopping around for other partners.

"The $25 million is being used to invest in our business and to realize the potential of Intelliject's portfolio across a range of therapy areas," Eric Edwards said. "We have over 70 patents pending, issued or granted and have multiple other platforms that can be utilized with a variety of pharmaceuticals across many therapy areas."

. . .

Not bad for two young men raised in Chesterfield County who have spent the past decade balancing school, starting families and building a firm they say is "all about relationships."

"Our faith is of extraordinary importance in everything we do," Eric Edwards said. "Some would say this is a faith-based company."

Explained Evan Edwards: "When you have the management team and everyone in the company that shares a similar culture, when you go through some difficult times, it really tests you, and that's when you have to really rely on faith to get over those hurdles. . . . We have seen that time and time again. This whole idea of us having allergies and living with it all our lives and turning it into an opportunity, we feel is very divinely led. It's not just by chance that all these individuals have come into our lives and helped us make an impact."

The sons of Linda and Gary Edwards went to Monacan High School, but their paths diverged for college -- Evan heading off to the University of Virginia to study engineering and Eric to Virginia Commonwealth University for biology and pre-med.

"We pretty much shaped our education around this idea of creating a better delivery system," Eric Edwards said.

A grant from the National Collegiate Inventors and Innovators Alliance started Intelliject, which in the early days was a family company, Evan Edwards said.

"We had our father be the CEO and our older brothers be a part of it," Evan Edwards said.

The brothers realized that to get to the next stage, they needed expertise they didn't have.

The Virginia BioTechnology Research Park, with its business incubation centers, offered a place to fine-tune their idea.

"We asked them to tell us their story," recalled David R. Lohr, executive director and vice president of business development at the park's Biosciences Development Center. "What are you trying to accomplish? What are you looking for in the way of help? We also shared with them our program, how it works, what it does and perhaps what it doesn't do. . . . We don't invest, but we can help them raise capital."

Lohr said his first impression of the brothers is that they had a unique and revolutionary idea -- they probably didn't realize how revolutionary.

"Not only did I see the potential to put epinephrine in this device, but I saw the potential to put a lot of other drugs into the device," said Lohr, who had run a drug-delivery company before. "Especially the newer biotech drugs that typically have to be injected anyway, they are very expensive, they would be more affordable if they could be self-administered, and the whole compliance issue would be better.

"We helped them to think about this as a drug-delivery company and not just a single-product company," Lohr said.

Over the next three to four years, the incubation center provided mentoring, networking, help with the business plan and financial model development, fundraising and help identifying a chief executive.

"Why are these guys successful? They had a great idea rooted in their personal understanding of an unmet medical need," Lohr said.

"The thing that differentiated them is these guys listened and took the advice they were given from this myriad of advisers. They processed it, integrated it, and they just kept redoing their thinking."

. . .

Now ensconced in Intelliject's modern offices in Shockoe Slip, Eric Edwards and Evan Edwards talked about what's next for them.

Evan Edwards is preparing to move to Indianapolis temporarily. The brothers are limited in what they can say about product development, so he will not say what he will be doing specifically.

"As Spencer [Williamson] likes to say, it's really the end of the beginning," Evan Edwards said. "Because there is so much more work to do."

Success, for them, will be when their auto-injector is in the hands of people, like themselves, at risk of severe allergic reactions, Eric Edwards said. That is at least a year or more down the road.

"With this partnership, Intelliject is responsible for finishing the development of the product through [Food and Drug Administration] approval," Eric Edwards explained. "It's a late-stage product. We will be filing our new drug application with the FDA [in 2010]. . . . Within the next couple of years this product should be on the market."

VA Biotech Park CEO Bob Skunda on State Biotech Policy

VA State Senator Mark Herring (D-Loudoun) on Biotech Development

Howard Dean on Biotech & Healthcare Reform

Building Biotech Bridges Conference

Co-hosted by: Biotechnology Institute and MdBio Foundation, Inc.

November 17, 2009 - 8:30am-4:15pm
Naval Heritage Center - 701 Pennsylvania Avenue, NW - Washington, DC

Early bird rates apply until Nov. 5!
A comprehensive look at how the biotechnology and education communities work together at the local, state, and national level to address science education and workforce development. Attendees will learn how to develop and enhance partnerships between the biotechnology and education communities.

WHO Should Attend? The conference will be a premier professional development and networking opportunity for:
• Biotechnology professionals in community relations, communications, government relations, or human resources who want to develop or enhance their science education support initiatives in order to advance their company's strategic objectives
• Educators and education administrators looking to establish or better leverage partnerships with industry in order to advance their education agenda
• Nonprofit professionals who want to become integral to developing partnerships among the industry and education communities
• 
Keynote speaker: Rep. Vernon J. Ehlers
• Other speakers include: Thomas F. Bumol (Applied Molecular Evolution, 
Eli Lilly and Company), Christy Shaffer (Inspire Pharmaceuticals), Henry Darnell (Genzyme Corp.), Tara Hiltke (Program Manager, National Cancer Institute), Liz Huntley (MedImmune), and Lynn Johnson Langer (Johns Hopkins University)


Register now at http://www.biotechinstitute.org/programs/bridges.html
Early bird rates apply until Nov. 5!

Forbes on Essentials for Attracting Angel Investors

Great article on essentials for raising angel funding.

Forbes.com
Deep Pockets
Ten Ways To Attract Angel Funding
Martin Zwilling, 10.27.09, 6:15 PM ET

The papers are filled with scary statistics. Here are a few more for entrepreneurs on the hunt for capital from angel investors--those loosely banded groups of deep-pocketed individuals looking for the handsome returns that only risky, early stage investing can (sometimes) bring.

According to the latest data from AngelSoft, which pairs entrepreneurs with angel groups in a particular city or ZIP code, only about one out of 100 companies that make a formal request for angel funding manage to secure the capital. Among the axed, three-quarters never make it past the initial screening process; of those that do, more than half are eliminated during live presentations and discussions, and another 10% during the following due-diligence process.

It's a brutal gauntlet.

While there are no guaranteed strategies for success, you can boost your chances of survival. Over the past decade, I have had the opportunity to see how the process works, several times from the start-up side, and more recently from the angel perspective (as a member of the selection committee for the Arizona Angels Investment Network, in Phoenix).

Here is my list of the top 10 action items for those looking to land angel funding. If some of these are familiar, ask yourself: Are you actually doing something about them?

1. Incorporate your business now. If you expect to seek external funding, first incorporate as an S-Corp, C-Corp, or a limited liability company, rather than the more expeditious sole proprietorship or partnership. Corporate entities allow for easy carving up of equity stakes, one reason why unincorporated entities often can't find funding.

2. Line up an experienced team. There's an adage: "Investors fund people, not ideas." Not only is this dead on, poorly assembled teams are probably the biggest stumbling block in the initial angel-screening process. If the founders are not experienced, find a couple of advisers who are experts in your industry to fill the gap.

3. Launch a Web site. I don't care what kind of company you are, in today's world, you need a cleanly designed, easy-to-use Web site. If not, you won't be perceived as a real company. Investors routinely troll sites of companies looking for capital to get a feel for their tone and scope, as well as the nature and maturity of their products and services. Also, protect that virtual real estate by reserving the company name on social-networking sites.

4. If you have real intellectual property, defend it. File patents and trademarks. They may or may not be true barriers to entry (first-mover advantage can be more powerful than any patent), but they are often perceived as such. Start the process early, as it takes a while to pound through. (Note: Patents can run the gamut. For more on this, check out "Ten Of The Zaniest Patents.")

5. Build a prototype product. Many entrepreneurs need capital to build a prototype product, yet most angels expect to see a prototype before they invest. Do what you can to demonstrate progress early.

6. Hit the high notes. At the initial screening, investors expect a one- or two-page summary of the business, including an explanation of how it makes money and how specifically you would invest an angel's capital to boost your prospects--all backed up by a streamlined 10-slide PowerPoint investor presentation. Remember to aim the content at investors, not customers. (Translation: Don't spend too much time gushing over every last product detail.)

7. Prepare an investment-grade business plan. All entrepreneurs need a well-crafted business plan for their own use, whether they intend to seek investor funding or not. As a founder, you may think that everyone understands your vision based on your words and passion, but it doesn't work that way. A good business plan should answer every question an investor or associate might ask. For a breakdown, check out "10 Elements Of A Sound Business Plan."

8. Finalize your financial model. Like the business plan, a financial model is required as much for your own use as to impress angel investors. In most cases, an interactive Microsoft Excel spreadsheet is adequate, with projections (and well-defined and denoted assumptions that drive them) for revenue, expenses and cash flow over the next five years. Best-, expected and worst-case scenarios add credibility.

9. Close at least one customer. This must be someone who is willing to pay real money for your product or service. Free trials don't count. All the conviction and market research in the world are no substitute for real customers paying real money.

10. Network--ahead of time. This last item should be your first: Build relationships with investors and friends of investors before you need their money. Start by taking an active role in relevant technology groups, trade associations and university functions.

I hope the takeaway is clear: Angels can be saviors, but not without plenty of careful preparation. Don't expect anyone to swoop down, gather you up and whisk you to financial freedom. For more on raising angel funding, read "Wooing And Choosing The Right Backer."

Martin Zwilling is the founder and chief executive officer of Startup Professionals, a company that provides products and services to start-up founders and small business owners. He can be reached at marty@startupprofessionals.com.

Biotech Issues Featured in O'Bannon vs. Shields Race for Delegate

Delegate John O'Bannon (R-Henrico), co-chair of the Virginia Bioscience Caucus, is promoting his support of the Virginia biotech industry in his advertising. John also was the chief sponsor of our legislative package last year that enhanced the incentive for investors to support advanced technology companies in Virginia.

Way to go, John!

A New Treatment for Chronic Wounds

Israel could become a leader in the $3 billion chronic wound industry with a new device that heals wounds faster and more cheaply than alternatives.

Millions of Americans, particularly the elderly and diabetics, are afflicted with chronic wounds, which are complicated to treat and can lead to lengthy hospital stays. With life expectancy and the numbers of those suffering from diabetes and obesity increasing worldwide, the global chronic wound industry currently totals around $3 billion.

Israeli company EnzySurge hopes to change the way chronic wounds are treated, with its DermaStream product line. The device is relatively low-cost, has the appearance of a bandage and is disposable, unlike the unwieldy equipment in use today.

Its small size and simplicity make it convenient for use in outpatient facilities or at home, reducing the need for costly hospital stays. It also helps wounds heal faster, saves time for physicians and nurses, and cuts costs. The technology is currently undergoing regulatory procedures and will reach the market next year.

Based on the company's patented Continuous Streaming Therapy technology (CST), the new DermaStream device meets a variety of important needs: It applies negative pressure to a wound, while at the same time providing a continuous stream of healing solutions to the wound bed. DermaStream also drains the wound of exudates - bacteria and other fluids that are released and can hinder the healing process.

Simplify treatment, reduce costs

"DermaStream provides the combined effect of streaming, negative pressure, and the active ingredient in a solution that is determined according to the wound type and stage, for a comprehensive approach to treatment," Amir Shiner, CEO of EnzySurge, tells ISRAEL21c. "The idea is to simplify the means of treatment while simultaneously providing an effective solution for patients that is low-cost, easy to use, and can be used in homecare."

A supplemental technology developed by EnzySurge is SilverStream solution, which topically infuses the wound with a very low concentration of silver ions. This solution is a powerful enemy of bacteria and can enhance the effects of DermaStream. Like DermaStream, it will be available next year.

Given recent US government attempts to reform national healthcare and reduce standard treatment costs, EnzySurge's products are coming to market at just the right time, says Shiner.

"Most of these chronically ill patients are 65 and older and are covered by Medicare or Medicaid. There's a lot of receptiveness now to alternative treatments that are lower-cost and intended for outpatient settings, to be used by the patients themselves," he says.

Getting rid of dead tissue in the wound

The latest technology in development at EnzySurge is an enzymatic Debridement solution, which in conjunction with the DermaStream device removes necrotic (dead) tissue from the wound.

A clinical trial on the new system performed on 48 venous ulcer patients in Israel demonstrated good results. The debridement solution is expected to begin its regulatory approval process in 2010.

EnzySurge's technology is based on research by Prof. Amihay Freeman of Tel Aviv University's Department of Biotechnology. He founded the company, which is headquartered in central Israel in Rosh Ha'ayin, with an additional office in Richmond, Virginia, in 2001.

The company is collaborating with the Virginia Biotech Commercialization Center (a wholly owned subsidiary of Virginia Life Sciences Investments) on business development, reimbursement, marketing and sales. EnzySurge currently employs 10 people and has raised $8 million from private investors in Israel.


Israel 21C
By Ilana Teitelbaum
October 25, 2009

State bioscience group formed

West Virginia's bioscience firms have started a new group in hopes of expanding the biotech industry across the state.

The BioScience Association of West Virginia will be made up of biotech companies and organizations, as well as research groups at Marshall University and West Virginia University. The statewide association will be an affiliate of the National Biotechnology Industry Association.

"This organization will coordinate the exchange of ideas and research, develop new business relationships and expand efforts to attract economic development opportunities for biosciences in our state," said Gov. Joe Manchin in a prepared statement.

About 6,900 people across the state work in bioscience jobs, according to a study by WVU's Bureau of Business and Economic Research. In 2006, the average bioscience worker earned more than $55,000 a year. Bioscience employees made a combined $1 billion in wages. The industry creates about $7.2 billion a year in economic activity across the state, according to the WVU study.

Bioscience employment is largely concentrated in Charleston, Huntington, Morgantown and Tyler County. Monongalia has the most bioscience employees -- 2,269, followed by Kanawha County with 2,033. West Virginia has about 241 firms that work in bioscience fields. Those firms include organic chemical and fertilizer manufacturers, biopharmaceutical companies, and biological research facilities and testing laboratories.

Patrick Kelly, vice president of government relations for the national bio-tech group, said Manchin's "Bucks for Brains" initiative -- a plan to stimulate research jobs at WVU and Marshall -- has given West Virginia's nascent bioscience industry a "tremendous shot in the arm." The state spends about $4 million a year on the "Bucks for Brains" program.

"We look forward to working with [the West Virginia BioScience Association] to help promote the bioscience industry development, champion science education and help attract high-skill, high-wage jobs to the state," Kelly said.

The West Virginia biotech group has started a membership drive. Its Web address is www.biowv.org.

Derek Greg, chief operating officer at Vandalia Research in Huntington, is chairman of the statewide association. Steven Turner, chief executive officer of Protea Biosciences in Morgantown, also will serve on the group's board of directors.

By Eric Eyre

The Charleston Gazette

Two Prominent State Biotech CEOs Resign: Gardner from BayBio and Eaton from AzBio

Two state biotech execs with roots in the Maryland biotech community resigned from their posts last week. Bob Eaton, the former CEO of MdBio, resigned from AZBio. Matt Gardner, the CEO of BayBio, and former executive director of the Tech Council of Maryland's Bioscience Alliance, also resigned his post late last week.

Both were members of the board of directors of the Council of State Bioscience Associations (CSBA), the national group comprised of all 44 state bio trade associations across the USA.

BayBio chief Matt Gardner resigns
Matt Gardner, president of local biotech trade organization BayBio for six years, has resigned.

In an email from Chairman Bill Young to BayBio members, Gardner said he would “pursue other opportunities.” Gardner did not specify what he was considering or when he would officially step down from BayBio.

“I have worked with the BayBio board of directors to effect a smooth transition plan designed to deliver the organization to new heights,” Gardner wrote.

In six years under Gardner’s leadership, BayBio has grown more than 150 percent in membership, he noted, and is nearing 500 members at its 20th anniversary. The organization also has added new programs, including lobbying, advocacy, communications, group purchasing, entrepreneurship and science education.

BayBio serves more than 900 life sciences companies.

Gardner, who bachelor’s and master’s degrees from the University of San Diego, came to BayBio from the Maryland Bioscience Alliance, where he was director, and spent six years as North American business development director for the government of Queensland, Australia.

San Francisco Business Times

And here is the news on Bob Eaton...

Eaton out, Green takes over at Arizona BioIndustry Association
Bob Eaton has quietly left the Arizona BioIndustry Association, and a new president and CEO already has been named.

Eaton is resigning his position under a mutual agreement with the AZBio board.

His replacement, Robert Green, is a longtime Tucson biotechnology entrepreneur who has formed and operated several biotech companies since moving to Tucson in 1989. Late last year, he sold Integrated Biomolecule Corp. to Ventana Medical Systems/Roche Group.

On Sept. 24, AZBio held its annual awards dinner, honoring six companies and individuals who are changing the world through bioscience innovation. Ventana was named Bioscience Company of the Year, while Applied Microarrays Inc. of Tempe received the Fast Start Award.

Martin Shultz, vice president of government affairs at Pinnacle West Capital Corp., received the Jon W. McGarity Leadership Award. Bruce Rittman, director of the Center for Environmental Biotechnology at Arizona State University’s Biodesign Institute, won the Award for Research Excellence.

Arizona Rep. Nancy Barto, R-Phoenix, received the Public Service Award, and the Bioscience Educator of the Year Award went to Barbara Fransway, outreach coordinator and research specialist at the University of Arizona’s Arizona Research Laboratories.

Device Makers Fight to Cut New Fees in Senate Health Bill

This article from the WSJ provides background on the multi-billion dollar battle over new fees (taxes) placed on the makers of medical devices.


Medical-Device Makers Push to Cut New Fees in Health Bill
By ALICIA MUNDY and MARTIN VAUGHAN

WASHINGTON -- Medical-device makers, joining an 11th-hour scramble to influence the shape of health-care legislation in the Senate Finance Committee, have petitioned panel chairman Max Baucus to shave billions of dollars in fees that the industry would face under the measure.

The Advanced Medical Technology Association, or AdvaMed, the trade group for the larger device manufacturers, wants the Montana Democrat to reduce $40 billion in fees over the next decade to $15 billion, according to people close to the negotiations. But industry was told that offer is too low. As of Sunday, the final draft included the higher number.

Wanda Moebius, a spokesman for AdvaMed, declined to comment on the $15 billion counteroffer, calling it "rumors and speculation."

"AdvaMed continues to work with members of Congress to educate them of the onerous nature of this [annual] $4 billion tax -- nearly half of the total of the industry's research and development investment in 2007," Ms. Moebius said.

With the Senate Finance Committee expected to vote on its health bill as early as Tuesday, lawmakers, industry executives and others have been seeking to make final changes. A main challenge in passing a health bill has been finding a way to pay for the overhaul. That is the aim of the proposed fees on medical devices, along with other fees and taxes that would be imposed on the drug industry, hospitals and the insurance industry.

People close to the negotiations said the White House supported a medical-device tax to help pay for the overhaul. A White House spokeswoman said the administration doesn't comment on specific health-care legislative provisions.

Administration officials and Mr. Baucus were troubled that AdvaMed and the $200 billion industry didn't offer any concessions to the White House and Senate Finance Committee early this summer.

AdvaMed's president said in a recent interview that the industry had proposed a way to save billions of dollars that would involve a tax on hospital-supply and device wholesalers, which they could pass on to the device makers. Wholesalers strongly objected to the proposal. It was rejected by the Senate committee, AdvaMed said.

The pharmaceutical industry in June offered concessions that would save the government an estimated $80 billion on health-care costs over the next decade, and the coalition of hospitals proffered $155 billion. Executives from both industries believe some sort of health legislation is likely to pass and would prefer to have a say in shaping it. Administration officials have told them that expanded, government-subsidized health coverage would likely bring them millions of new customers.

Industry and congressional aides said a deal could still emerge with device makers before the Finance Committee votes on the health bill.

A number of lawmakers have voiced support for the device makers. Sens. Amy Klobuchar and Al Franken, both Minnesota Democrats, have publicly objected to the proposed fees, which they describe as a tax, as have Indiana's two senators, Republican Richard Lugar and Democrat Evan Bayh. Medtronic Inc., a major cardiovascular-device maker, is based in Minneapolis, and defibrillator maker Guidant Corp. is based in Indianapolis.

President Barack Obama pushed the health-care overhaul in his Saturday radio address, saying it would drive down the cost of insurance for small businesses, which, in turn, would help them grow and create more jobs.

'Darwinian' Cuts in VC Funds and Biotechs...

Great coverage of David Mott's remarks last week to the MAVA breakfast.

Tuesday, September 29, 2009
Dave Mott: Biotechs face tough road
Baltimore Business Journal - by Vandana Sinha Contributor

Biotech entrepreneur Dave Mott suggested that the worst capital markets he has seen for emerging life sciences companies in a quarter-century has perhaps hit bottom.
But even with an upswing, the next generation of successful companies will confront much stronger barriers to nailing capital than did its predecessors, including Mott himself, the former MedImmune CEO said in a talk to local life sciences leaders hosted Tuesday by the Mid-Atlantic Venture Association.
A year after selling Gaithersburg's MedImmune to London-based AstraZeneca PLC, Mott moved back last year to his investment banking roots to become a general partner at New Enterprise Associates, a Chevy Chase venture capital firm that focuses on health care, technology, energy and biotech companies.
“Three years from now, there will be one-third as many venture capital firms as there were three years ago,” Mott said. “And there will be half as much money.”
But he said that sort of Darwinian selection will be a good thing -- a slimmer funding pot filters out the companies with weaker prospects from the beginning, ensuring only the strongest survive. “The industry is alive if not well,” he said. “Any purging that has been happening and is still ongoing in our ranks is going to be good for our industry. ... [Before], we were starting companies that weren’t going to get bought out.”
Indeed, he said venture capitalists must continue to be more selective, a common criticism from early-stage companies that protest that investors don’t give them a second glance. Mott said he foresees that changing, that earlier-stage companies with pathbreaking science offering a broad range of drug possibilities are likely to start receiving the venture checks and undergoing initial public offerings. Later-stage companies, which have long been the sweet spot among investor circles, may have to prove themselves more able to cross the hurdles that can often pop up among that age group -- things like lukewarm drug results, partnership interference or stock dilution.
“I think there’s going to be a surprising shift to the big idea, science-based companies, sort of where we were 20 years ago,” he said.
But he did render a tough review of the local biotech industry, saying it’s only produced a handful of spinouts that would catch a venture capitalist’s eye. “I go above and beyond looking for local companies” to invest in, he said, “but I can’t make bad investments.”
He added that his job is to opt for the best science and management teams, even if he finds them in La Jolla, Calif., San Francisco Bay or Cambridge, Mass., rather than local counties. “Right now,” he said, “I see a much higher concentration of investable opportunities in those three regions than I see here.”