Biologists Tackle Cells' Identity Crisis

Ever since biologists learned how to grow human cells in culture half a century ago, the cells have been plagued by a problem of identity: many commonly used cell lines are not actually what researchers think they are.

Cell-line misidentification has led to mistakes in the literature, misguided research based on those results and millions wasted in grant money. Last year, Nature described the situation as a scandal.

But a universal system for determining the identity of cell lines may now be in view. Next month, a working group led by the American Type Culture Collection (ATCC), a nonprofit biological repository based in Manassas, Virginia, that stores 3,600 cell lines from more than 150 species, plans to unveil standardized protocols for verifying the identity of cultured cells using DNA fingerprinting. Labs worldwide — including repositories such as the ATCC itself — would use the protocols to determine whether a breast-cancer line, for instance, did come from breast tissue. The group also plans to create a public database, which the National Center for Biotechnology Information in Bethesda, Maryland, has agreed to host, to store DNA profiles of validated lines, allowing researchers to compare their own cell cultures with the ATCC's reference lines.

"I really think it's fantastic progress," says Rolf König, director of the Tissue Culture Core Facility at the University of Texas Medical Branch in Galveston.

Misidentification can happen when faster-growing cells contaminate cultures of slower-growing cells in the same lab, or when researchers simply mislabel a specimen. One particularly robust cell line called HeLa, the first human cell line grown in the lab, has contaminated dozens of other lines without researchers' knowledge2, and there are many other examples where melanoma cells and ovarian cells, for example, have been mistaken for breast cells. In this month's Nature Reviews Cancer3, the ATCC consortium notes that one group has published around 20 papers since 1988 in which they incorrectly use a line called Int-407 as a model of normal intestinal cells.

The working group, composed of representatives from academia, government and industry, as well as from other cell repositories, advocates verifying cells' identities by comparing their DNA in regions where short stretches of three to five bases are repeated. Closely related cells are likely to have the same number of repeats; comparing these snippets at several different positions in the DNA sequence provides an overall estimate of relatedness.

Forensics applications, such as paternity testing and identifying crime victims, already use the technique. But cell lines often come from tumour tissue, in which DNA mutates at a higher rate than normal, making a 100% match between cells unlikely. Instead, the consortium suggests, cells that match at 75% or above can be considered to be the same. The group has now developed and tested a standardized procedure for extracting DNA from cells, doing the fingerprinting and interpreting the results.“Without policing, many investigators may not be motivated to do the necessary tests.”

Many researchers already use DNA fingerprinting to test their cell lines, notes Steve Oglesbee, director of the tissue-culture facility at the Lineberger Comprehensive Cancer Center of the University of North Carolina in Chapel Hill. The ATCC and other repositories have already established fingerprints for some of the most commonly used lines. "We're recommending that investigators authenticate from the beginning, and do it at least at the very end, and if they feel the need even during the work process," he says. Having a universally accepted approach will allow different facilities to compare their cell lines with each other, he adds.

Fingerprinting has its limits, cautions Michael Johnson, a cancer researcher at Georgetown University in Washington DC. "Just because a cell fingerprints out as the same [as another cell] doesn't mean they will behave the same," he says, noting that a cell's properties can also be affected by the way it has been grown, the number of times it has been cultured anew and small genetic changes that wouldn't show up in a fingerprint test. One classic example, he notes, is an immortalized breast cell line called MCF10A, which can form organized hollow structures similar to those found in mammary tissue; MCF10A cells currently distributed by ATCC do not do this nearly as efficiently.

Cell Solution

He worries that, useful though it would be, a database such as the one ATCC proposes "in some sense creates a false sense of security" about the "official version" of a cell line. Being able to keep track of a cell line's lineage — where it was derived — could be as important as ascertaining its DNA fingerprint, he adds.

Others note that researchers will probably need an extra push to embrace the ATCC protocols. About half a dozen journals, including Wiley's International Journal of Cancer and journals published by the American Association for Cancer Research, have begun demanding that researchers authenticate their cell lines before they publish their work. And Nature has endorsed efforts to make verification easier and cheaper for researchers, pledging to require it once funders acknowledge the need and provide the necessary financial support1. "Without the policing by journal editors and granting agencies," says Gertrude Buehring, a virologist at the University of California, Berkeley, "many investigators may not be motivated to do the necessary tests to authenticate the cell lines used for their research."

Alla Katsnelson
Nature News

RichTech Honors the Area’s Greatest Tech Firms and Folks

RichTech held its 15th Annual Awards Gala this evening, honoring the best local companies and leaders that drive Central Virginia’s technology-based economy.

“During the last year we’ve watched the economy turn brighter, and so too have Central Virginia’s technology companies. Businesses are stronger and more efficient, good talent is getting hired, and clients locally and nationally are being well-served by the slick tech companies that call the Richmond area home,” said Chip Farmer, Executive Director of RichTech.

“Altogether, the companies that make up RichTech have come together and strengthened our organization as one that stimulates and connects innovative, creative and technical people.”
During the past year, RichTech – formerly the Greater Richmond Technology Council – has revamped its brand, logo and website. It has also updated its membership structure to allow more individuals to join, and reached out to peer groups across the region to promote the cause of supporting innovation and creativity throughout the local technology community.

More than 500 people attended the Technology Stars gala, held at the Greater Richmond Convention Center. The awards are structured in a way that recognize individual accomplishments, corporate wins, non-profit success stories, innovators in their field, and small business triumphs.

“This is RichTech’s 15th year of celebrating innovation, perseverance, and investment in the future of our region and beyond,” said Margaret E. “Lyn” McDermid, Senior Vice President of Information Technology and Chief Information Officer at Dominion and RichTech Chair. “It has been exciting and encouraging to watch our companies grow and strengthen. Tonight we honor the value of technology in our community through these very deserving nominees and award winners.”

The award winners are:

IBM Community Catalyst Award: Mark Herzog This is Herzog’s 10th year as executive director of the Virginia Biotechnology Association. Through his work at VaBIO and the organizations that support it, new technology discoveries are being made in Virginia in medicine and healthcare, the environment and energy. The award recognizes an individual or organization that has made a significant impact on the growth of technology in this region, and/or the advancement of Greater Richmond as a center for technology innovation.

Computer Resource Team Educator Award: Richmond Area Program for Minorities in Engineering (Virginia State University & Virginia Commonwealth University) This pre-college program prepares "new-century engineers" to to gain experiences and target a conceptual understanding of science and technology topics in order to develop workforce skills. The award recognizes an educator or school program that provides exceptional technology leadership and encourages students to pursue higher education or training in engineering, math, and the sciences.

Cherry Bekaert & Holland Emerging Company Award: TBL Networks TBL Networks designs, implements, and supports Cisco IT systems as well as data center infrastructure. The company also provides ongoing troubleshooting, support, and maintenance. The award recognizes a local technology company that has demonstrated recent growth in revenues and/or employees - a company whose recognized accomplishments and prospects demonstrates the ability to achieve commercial success.

The PLANIT Technology Group Technology Builder Award: Altria Client Services Information Systems (IS) team ALCS Information Services provides the full range of IT services and solutions as an internal shared services organization. The group was ranked by Computerworld in its “100 Best Places to Work in IT” survey, ranking No. 1 in Virginia and No. 26 nationwide in 2009. The award recognizes an institution or organization that delivers technology solutions and/or services to internal or external clients that drive business or operational efficiencies.

The VACO Technology Innovation: Financial & Professional Services Award: Capital One Capital One is a diversified bank that offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. A Fortune 500 company, Capital One has approximately 44 million customer accounts and is one of the nation's most recognized brands. The award recognizes a company or organization whose use of new or existing technology in finance and professional services vertical creates or significantly enhances new processes, methodologies and/or services for their or others benefit.

The Cisco Systems & Packet360 Technology Innovation: Healthcare Award: MedVirginiaMedVirginia has deployed cutting-edge health information exchange technology in a national manner and is garnering headlines across the U.S. for its ability to expedite the Social Security disability determination process. The award recognizes a company or organization whose use of new or existing technology in the healthcare vertical creates or significantly enhances new processes, methodologies and/or services for their or others benefit.

The CSC Leasing Technology Innovation: Manufacturing, Distribution and Retail Award: Owens & MinorOwens & Minor, Inc., is a leading distributor of national name-brand medical and surgical supplies. The company serves its 4,500 healthcare provider customers from 55 distribution centers located strategically throughout the U.S. Owens & Minor's customers include acute-care hospitals, group-purchasing organizations, integrated healthcare systems and the federal government. The award recognizes a company or organization whose use of new or existing technology in manufacturing, distribution and/or retail creates or significantly enhances new processes, methodologies and/or services for their or others benefit.

2010 RichTech Chairman’s Award sponsored by Altria: Scott McKay, CIO and Senior Vice President, Genworth FinancialThrough his steadfast involvement with not only RichTech but VirginiaFIRST, the Science Museum of Virginia, and the Virginia Technology Intern Program, McKay continues to leave a long-term positive impact throughout our community. By working on all of these programs, he engages young people at every stage—from their years in early education through to their years in a university, inspiring them to pursue high-tech careers. The Chairman’s Award is presented annually to an individual or organization that has made a significant impact on the growth of technology in this region, and/or the advancement of Greater Richmond as a center for technology innovation. The award recognizes results that are the product of great leadership, great execution, great process implementation, great innovative ideas, and great talent.

RichTech

McDonnell puts jobs commission to work

Virginia can't rest on its pro-business reputation and must be more aggressive in marketing its assets and competing for jobs, state leaders said Wednesday.

"This is a top priority for what faces our people right now," Gov. Bob McDonnell told members of his Economic Development and Jobs Creation Commission.

McDonnell called the state's 7.4 percent unemployment rate "absolutely unacceptable" and said: "It's nice that it's a couple of percentage points below the national average, but that doesn't make you feel good when you go to Martinsville and see 20 percent of the people unemployed."

McDonnell's 64-member commission is charged with making recommendations on improving the state's business climate, improving economic development programs and incentives, and considering additional legislative and policy changes.

The full commission will hold public meetings in July and September before delivering recommendations to McDonnell in October. The commission is co-chaired by Lt. Gov. Bill Bolling and Bob Sledd, the governor's unpaid senior economic adviser. The panel includes Cabinet members, legislators and business leaders.

McDonnell won legislative support for a package of economic development incentives that he said will give him "more tools than any other governor has had to tell the Virginia story."
Additional steps are needed to keep Virginia competitive with other states and other countries, administration officials said.

"The reality is, we became a little bit complacent," said Sledd, adding that Virginia lags behind other states in attracting jobs in growing industry sectors such as biotechnology and advanced manufacturing.

The Roanoke Times© May 6, 2010
By Michael Sluss

Free Lance Star: VA State Senator Houck Fights PDL for Mental Health Drugs

HOUCK FIGHTS CHANGE TO MEDICATION CATEGORIZATION
By Chelyen Davis
The Free-Lance Star

Once again, mental health advocates are fighting against a governor trying to save money on psychotropic medications.

One of Gov. Bob McDonnell's proposed budget amendments would add psychotropic medications--such as antidepressants and anti-anxiety medications--to the state's "preferred drug list" for Medicaid.

The term "preferred drug list" pretty much means "cheaper drugs." It's a set, limited list of medications that doctors under the program are supposed to prescribe--such as generic versions of brand-name drugs. Any drug not on the list isn't supposed to be prescribed to a patient unless a doctor can show that the patient has already tried a drug on the list with poor results. But mental health advocates argue that when it comes to mental illnesses, those poor results can be as extreme as suicide.

Sen. Edd Houck, D-Spotsylvania, and Del. Riley Ingram, R-Hopewell, held a press conference yesterday in Richmond with mental health advocates to say they will oppose that amendment when lawmakers return to Richmond tomorrow to deal with the governor's amendments to bills.

McDonnell isn't the first governor to propose this: Governors Tim Kaine and Mark Warner before him also did so. Houck said he fought those proposals as well.

"We've had this same battle, seems like each governor listens to his budget people and fails to really hear the voices of people who advocate or treat mentally ill patients," Houck said.

When Kaine proposed it, it was estimated to save the state $1.5 million a year. McDonnell's version would save about $1 million a year.

McDonnell proposes grandfathering in current Medicaid patients who are receiving psychotropic drugs, so the change wouldn't affect them. But Houck said that's not good enough.

"It's always put in terms of cost savings to use the drugs on the PDL list," he said. "What they fail to realize is the real, tragic results that can come from trying patients on a medication to see if it works. With mental illness, it can have life-ending affects, and that's just not acceptable."

Houck said there aren't that many psychotropic medications out there, and the cheaper ones also tend to be the older, less-effective ones. Newer drugs are more effective but are costlier.

"There's a whole new generation of psychotropic medications," he said. "In fact, the treatment of mental illness has changed over the years because the medications have improved so much."

Fredericksburg Free Lance Star
http://fredericksburg.com/News/FLS/2010/042010/04202010/542270

Governor McDonnell Names Biotech Appointees to Jobs Commission

Three bioscience industry representatives, all members of the Virginia Biotechnology Association, were named by Governor McDonnell to his Economic Development and Jobs Creation Commission: R.J. Kirk, CEO of Third Security; Robert Skunda, CEO of the Biotech Park in Richmond and Mark Herzog, executive director of VaBIO.

Governor McDonnell Announces Members of Governor’s Economic Development and Jobs Creation Commission

RICHMOND – Virginia Governor Bob McDonnell today announced the members of the Governor’s Economic Development and Jobs Creation Commission created by the his Executive Order Number One, issued moments after he took the Oath of Office on January 16th. Keeping in mind the unprecedented economic difficulties facing Virginia families and businesses, the highest unemployment rate in decades and the ever increasing competitiveness of the global economy, the Commission will work to put forth bold and innovative ideas addressing these significant challenges. The Commission is scheduled to have its first meeting in May, and will complete its initial report to the Governor by October 16, 2010. Lieutenant Governor Bill Bolling, who serves as Virginia’s first-ever Chief Jobs Creation Officer, and Bob Sledd, the Governor’s Senior Economic Advisor, will serve as Co-Chairs of the Commission.

“The foremost priority of our Administration is job creation. Economic opportunity and free enterprise are the bedrock of a stable and prosperous Commonwealth. Virginia is home to abundant resources, fiscal responsibility boundless human potential and the entrepreneurial spirit instrumental to a robust economic recovery,” said Governor McDonnell. “The work of this Commission is to create more opportunities for good paying work for all Virginians. I look forward to the ideas and solutions that this Commission will put forward to help create new jobs, spur economic development and ensure this is a ‘Commonwealth of Opportunity’ for all Virginians.”

Lieutenant Governor Bolling remarked, “Governor McDonnell and I have been clear in our commitment to do everything we can to get Virginia’s economy moving again and create jobs. We accomplished a great deal with part one of our Jobs and Opportunity Agenda during this year’s legislative session, but there is more work to be done. Over the coming year, the Governor’s Economic Development and Jobs Creation Commission will help us craft part two of our Jobs and Opportunity Agenda. By looking for additional ways to make Virginia a more competitive state and invest in proven economic development and job creation programs, we can strengthen our reputation as the most pro-business state in America, and secure the capital investment and jobs we need to provide the people of Virginia with greater economic security.”

Bob Sledd, the Governor’s Senior Economic Advisor, noted, “I took this job to help create good jobs for Virginians. That is the focus of this Administration and the work of this Commission. Every state and every nation is engaged in a fierce competition to attract capital, jobs and economic development. As Virginians we cannot afford to lose. The private sector creates jobs, but public policy plays a major role in creating an environment that makes job creation easier or tougher. Our goal is to put in place the policies that will free our job-creators and entrepreneurs to grow and be successful, to innovate and expand. When they can do that, Virginians will find the good paying jobs that they deserve and upon which our future prosperity depends.”

Members of Governor’s Economic Development and Jobs Creation Commission
Co-Chairmen:
Lieutenant Governor Bill Bolling
Bob Sledd, Governor’s Senior Economic Advisor

Members:
Jim Cheng, Secretary of Commerce and Trade
Todd Haymore, Secretary of Agriculture and Forestry
Lisa Hicks-Thomas, Secretary of Administration
Gerard Robinson, Secretary of Education
Ric Brown, Secretary of Finance
Doug Domenech, Secretary of Natural Resources
Jim Duffey, Secretary of Technology
ean Connaughton, Secretary of Transportation
Don Banker, CEO & Owner Banker Steel, Lynchburg
Steve Baril, Partner, Williams Mullen, Richmond
John Biagas, CEO, Bay Electric, Newport News
Tom Brock, Retired Vice President, General Electric, Roanoke
Del. Kathy Byron, Co-Owner of B&B Presentations, Bedford
Mel Chaskin, Chairman, Virginia-Israeli Advisory Board, Clifton
Christine Chmura, President, Chmura Economics and Analytics, Richmond
Del. Barbara Comstock, McLean
Dr. Deborah DiCroce, President, Tidewater Community College, Chesapeake
Helen Dragas, President and CEO, The Dragas Companies, Virginia Beach
James W. Dyke, Partner, McGuireWoods LLP; Chairman, Greater Washington Board of Trade
Joe Funkhouser, President, Coldwell, Banker and Funkhouser Realtors, Harrisonburg
Lisa Gable, Executive Director, Healthy Weight Commitment Foundation, Fauquier
Anne Gavin, State Government Affairs Regional Manager, Microsoft, Reston
Tom Godfrey, President, Colonna’s Shipyard, Norfolk
Julia Hammond, State Director, National Federation of Independent Business, Richmond
Ann Heidig, President, Virginia Wineries Association, Spotsylvania
Mark Herzog, Executive Director, Virginia Biotechnology Association, Richmond
Del. Matthew James, Director, Peninsula Council for Workforce Development, Portsmouth
Donna Johnson, President, Virginia Agribusiness Council, Richmond
Kenneth S. Johnson, Founder, Johnson Inc., Richmond
Pat Jones, Vice-President and General Manager, Kings Dominion, Richmond
Quintin Kendall, Director of Government Affairs, CSX Transportation, Richmond
Del. Terry Kilgore, Chairman of the Tobacco Commission, Gate City
Andrea Kilmer, Vice President, ESG Enterprises, Virginia Beach
Randall Kirk, Chief Executive Officer, Third Security, Radford
John Langlois, President, Tele-Video Productions, Virginia Beach
Bob Leber, Director, Workforce Development, Northrop Grumman, Newport News
Chris Lloyd, Sr. Vice President, McGuireWoods Consulting, Richmond
Frank Longaker, President, National Business College, Roanoke
John Luke, CEO, MeadWestVaco Packaging, Richmond
Bengt Lundgren, Manager, Swedwood, Danville
Del. Danny Marshall, Danville, Small businessman
Mike Melo, President, ITA International, Newport News
Caren Merrick, Co-founder, Webmethods, Reston
Donna Morea, President, US, Europe and Asia, CGI and Chair, Northern Virginia Technology Council
Christofer Mowry, President, Babcock and Wilcox Nuclear Energy, Lynchburg
Dakshay Patel, Managing Member, American Enterprises, Richmond
Julien Patterson, CEO, Omniplex Worldwide, Chantilly
Sen. Phil Puckett, Vice President First Bank & Trust Company, Tazewell
Harold Pyon, Supervisory Patent Examiner, U.S. Patent and Trademark Office, Fairfax
Mike Quillen, Founder and CEO, Alpha Natural Resources, Abingdon
Daphne Reid, TV and Film Actor, Co-Owner, New Millennium Studios, Petersburg
Brenda Robinson, President and CEO, Environmental Solutions, Inc., Richmond
Richard Sharp, Managing Director, V-Ten Capital Partners, Richmond
Sudhakar Shenoy, Chairman and CEO, IMC, Fairfax
Bob Skunda, President and CEO, Virginia Biotechnology Research Park, Richmond
Steve Smith, CEO, Food City, Bristol
Don Storey, Owner, Quality Tech Services, President and CEO, govtips.biz, Norfolk
Bruce Thompson, CEO, Gold Key/PHR Resorts and Hotels, Virginia Beach
Fred Thompson, Chief Administrative Officer, Thompson Hospitality, Herndon
Brett Vassey, President and CEO, Virginia Manufacturers Association, Richmond
Sen. Frank Wagner, President and CEO, Davis Boat Works, Virginia Beach
Michel Zajur, President, Hispanic Chamber of Commerce, Richmond

Responsibilities of Governor’s Economic Development and Jobs Creation Commission

Identify impediments to and opportunities for job creation; Review how other states and foreign countries are attracting jobs and how Virginia could replicate and improve upon those initiatives; Review the agencies’ role in job creation and make recommendations on how those efforts can be better coordinated to ensure unparalleled efficiency and effectiveness; Make recommendations on new investments and changes to the tax and regulatory environment in the Commonwealth to maintain and increase the Commonwealth’s standing as the best place to do business in the United State of America; Evaluate the current programs and investments designed to develop the workforce and attract and retain businesses in Virginia, and make recommendations on their effectiveness and need for improvement; and Assist the Cabinet and the Virginia Economic Development Partnership to identify and target industries and businesses to recruit to Virginia.

Ignite Institute loses major funding partner

Ignite Institute for Individualized Health, a medical center startup hailed to be an economic development coup for Fairfax County, has lost one of its biggest sources of funding after Inova Health System’s board voted to pull out of the partnership.

But Ignite Institute’s founder said Inova’s decision doesn’t detract from his effort to launch the ambitious medical research institute, which was touted to bring nearly 500 world-class scientists to a newly built campus in the next five years to study personalized medicine.

“Ignite is absolutely going to launch and we’re on track to do so,” said Dietrich Stephan, president and CEO of Ignite Institute and originator of the idea.

Inova, which was one of the founding partners of the institute, said it could no longer back the venture after it ran into delays in raising additional funding.

“The money that they needed for the scope and scale for what was being proposed for the Ignite Institute was challenging at best,” said Tony Raker, a spokesman with Inova. “With the economic conditions, it became more of a challenge.”

Ignite had said it needed at least $150 million to start construction on a new campus. Inova had committed to pitch in $25 million, and Virginia had bestowed another $3 million from its Governor’s Opportunity Fund in an incentive grant. Just this week, Virginia Gov. Bob McDonnell signed into law another measure that frees $22 million for such a research institute, so long as it creates 415 jobs, through $5.5 million annual chunks available starting July 2011.

Ignite had said it planned to hire its first 100 scientists by the end of this year. It’s taking up temporary quarters in the Center for Innovative Technology building, while longer-term lab space is being built out in the next wing of the Herndon building.

Inova leaders had said the original plan to invest the $25 million in the institute was also based on Ignite’s ability to assemble a total $100 million, including the state commitments. Stephen M. Cumbie, Inova Health System board’s chairman, had said the team had come close to another potential $25 million grant from a national technology company that he wouldn’t name.

“But there was a change of CEOs and a pullback, and again a lot of this was being driven by the economy,” Cumbie said. “That and other prospects didn’t materialize.

“We were certainly concerned about starting down that road without the capital being raised,” Cumbie added. “The plan we felt great about. Dietrich is a world-class scientist, there’s no question about that. We had a lot of faith in him.”

With a key medical center partner leaving the table and a brutal economy still leaving wide budget deficits in its wake, Fairfax County leaders said they also can no longer support a multimillion-dollar bond that they had been considering to help locate Ignite Institute in a permanent residence in the county.

“Fairfax County has never before entertained even the idea of purchasing a building in partnership with an institute,” said Sharon Bulova, chairwoman of the Fairfax County Board of Supervisors. “For us, this was a very major consideration and therefore for us, there was a lot of risk associated with it, especially during this time. … Unfortunately, it just turned out not to be possible.”

But Stephan said he’s still collecting a syndicate of national partners and funders for the venture, describing these latest moves as a “reshuffling.” Ignite recently bought new gene sequencing equipment, making it the largest concentration outside of Asia to help scientists decipher through genes a patient’s predilection toward certain diseases.

“It’s mission-critical to maintain momentum,” Stephan said. “This is the future of medicine. Literally. Personalized, preventative medicine is the solution to our health care crisis today. It needs to be in the greater Washington area because of policy decisions. It will absolutely happen.”

Though, these are serious setbacks in an initiative that was grandly announced in mid-November at a press conference with two governors and a host of state, county and Inova leaders as an “accelerator” of the county’s infant biotech sector.

“I’m really disappointed that this didn’t work out, but I’m hopeful that something will come back, maybe in a different iteration,” Bulova said. “Everyone was very excited, very optimistic, and really thought that it could happen. And the harsh reality is that it was just a rough time to try to do something as ambitious as the Ignite proposal.”

Vandana Sinha
Washington Business Journal

Washington region bets big on biotech

State and local leaders are betting billions of dollars in subsidies, tax breaks, loans and grants to biotech capitalists in the hopes of cashing in on a worldwide bio-boom.

But the industry's volatility has some worried that taxpayer dollars are being gambled on a dangerous roll of the dice.

"It's very much a crapshoot -- even with great science," said John Carroll, executive editor of FierceBiotech, a daily Web newsletter that monitors the industry. "On the upside, of course, biotechnology provides a great number of great jobs at high pay. And that's why so many economic development officials are eager to attract them."

Governments on both sides of the Potomac River are doubling down on life science research.

With the National Institutes of Health, the Food and Drug Administration and Johns Hopkins University calling it home, Maryland is consistently ranked as one of the top five states for biotech research. Virginia has rolled millions into the sector for more than a decade.

In 2008, Maryland Gov. Martin O'Malley promised to set aside $1.1 billion for the industry. This year, the General Assembly is weighing legislation that would require the state's pension fund to invest in Maryland bioscience companies.

Montgomery County, the fertile crescent of Maryland biotech, is lobbying for a law that would allow the county to buy biotech stocks with taxpayer money. The County Council approved a new tax credit for biotech firms, and Executive Ike Leggett has created a task force to expand the county's research industry. Nearly one-quarter of the county's economic development funds are dedicated to the life sciences industry.

County officials are considering a multibillion-dollar "Science City" project in the Gaithersburg-Potomac-Rockville area that promises to bring up to 76,000 biotech jobs to the area.
Some officials are worried that it's too many eggs in a fragile basket.

"If we invest in a company and they fall flat, we lose," said state Sen. Rob Garagiola, D-Poolesville.

Virginia Gov. Bob McDonnell signed legislation giving tax breaks to biotech investors. And he approved awarding $22 million in grants to the Ignite Center, a genetic research center that being built in Fairfax County.

The potential rewards are endless.

In the first decade of this century, the biotech industry saw more than $295 billion worth of mergers and acquisitions, according to Carroll's FierceBiotech. Among the big winners was Gaithersburg's MedImmune, which AstraZeneca acquired for more than $15 billion in 2007.
But the perils are just as big.

"For every person who goes down the right path, there's going to many more that went down the wrong path," said Andy Bauer, a regional economist with the Federal Reserve Bank of Richmond. "Whenever you have an industry driven by innovation, it's going to go in fits and starts."

Of the decade's mergers, only 18 percent of the targeted companies were making money, FierceBiotech analysts found.

In the first three months of the year, drug companies alone cut more than 26,000 jobs, according to analysts at Chicago outplacement firm Challenger, Gray & Christmas.

Last week, GenVec, a Gaithersburg biotech firm, saw its stock lose three-quarters of its value when it said it was canceling trials of a drug that was supposed to help fight pancreatic cancer. Its shares closed at 73 cents on Nasdaq Thursday, after a months-long run-up to $3.35. GenVec had borrowed $125,000 from Montgomery County.

For some, that's a bad sign.

"Since when is our county government serving as the chump of last resort for businesses too shaky to get off the ground through conventional means?" Montgomery County Civic Federation leader Peggy Dennis asked.

By: Bill Myers
Washington Examiner - Staff Writer
April 4, 2010

Obama Admin Seeks Input on Commercialization of University Research

The Office of Science and Technology Policy and the National Economic Council have issued a request for information (RFI) on how best to encourage the commercialization of university research and on whether proof of concept centers are an effective tool in early-stage commercialization. The RFI asks for models, strategies and metrics that can help universities contribute to economic development. Responses are due by April 26.
Read the request for information:http://www.gpo.gov/fdsys/pkg/FR-2010-03-25/pdf/2010-6606.pdf

Governor Signs Bioscience and Technology Bills

From 2010 Bioscience Legislation Bill Signing

Flanked by Democratic and Republican lawmakers and Northern Virginia technology and business leaders, Governor Bob McDonnell today signed into law a number of bills from his successful "Jobs and Opportunity" legislative agenda that received broad bipartisan backing in the recent General Assembly session. The signing ceremony was held at the Center for Innovative Technology and Northern Virginia Technology Council in Herndon.

McDonnell's "Jobs and Opportunity" legislative agenda consisted of measures designed to spur job creation and promote economic development in Virginia. The bills signed today included tax deductions on capital gains derived from investments in technology, energy, biotech and science-based companies operating in the Commonwealth; granting temporary business licenses to individuals who already have a business license or certification from another state; broadening the allowable uses of the Governor's Development Opportunity Fund to assist in attracting major employers to the Commonwealth; designating the head of the Virginia Economic Development Partnership as CEO; and establishing a biotech research performance grant program.

Speaking about the bill signing, Governor McDonnell stated The number one job of our Administration is to help create good jobs for the citizens of Virginia. We will do that by investing in proactive policies that help private sector companies expand and grow in the Commonwealth. The states that help lead this country out of this economic downturn will be those that move aggressively to promote job creation and make it easier for entrepreneurs and business owners to be successful. That is what we are doing in Virginia. The bills we are signing today gained broad bipartisan support because job-creation and economic development are bipartisan objectives. I thank the legislative leaders from both parties who helped carry this legislation, and the members of the Virginia technology and business communities who advocated effectively for its passage."

McDonnell also used the bill signing to comment on budget amendments successfully advanced by the Administration to further assist in the job-creation effort, "We also successfully promoted changes in the introduced budget to invest more in critically important economic development tools. These include the CIT GAP Fund which will provide critical and immediate first financing for 20 new early-stage companies, and position Virginia as a leader in next-generation company formation in the areas of technology, biosciences, and energy. We expanded funding for Virginia's wet labs so that they can increase lab space to the benefit of growing biotechnology companies. And working together we continued to fund the Virginia Leaders in Export Trade (VALET) Program and provided additional funding for the DBA Loan Guarantee Program which helps finance small businesses at a time when credit markets are tight."

Lawmakers joining the Governor this afternoon included Senator Mark Herring (D-Loudoun); Senator Janet Howell (D-Fairfax); Senator Walter Stosch (R-Henrico); Delegate Dave Albo (R- Fairfax); Delegate Tom Rust (R- Fairfax); Delegate Tim Hugo (R- Fairfax); Delegate Barbara Comstock (R- Fairfax); Delegate Mark Sickles (D- Fairfax); Delegate Rich Anderson (R-Prince William); Delegate Joe May (R-Loudoun); Delegate Jackson Miller (R-Prince William) and Delegate Mark Keam (D-Fairfax). Among the many leaders from the Northern Virginia technology and business communities in attendance were Bobbie Kilberg, President and CEO of the Northern Virginia Technology Council; Pete Jobse, President and CEO of the Center for Innovative Technology; Mark Herzog, Executive Director of the Virginia Biotechnology Association; John Backus, Managing Partner of New Atlantic Ventures; Spencer Williamson, President and CEO of Intelliject LLC; and Michael Grisham the President of GPB Scientific.

Speaking about his bill to grant an income tax deduction for capital gains derived from investments in technology, science-based or bio-tech start ups in Virginia, Senator Mark Herring remarked, "This legislation tells Virginia investors that if you support the entrepreneurs in this dynamic sector of our economy, state government will support you. Science, technology and biotech-based jobs are good-paying and fast-growing, and we must take every action possible to make sure they are created in the Commonwealth. This legislation will encourage more investors to put their private capital to work creating good work for Virginians."

Medicare agency adds ex-Va. official, plans reorganization - The Hill's Blog Briefing Room

Virginia's Marilyn Tavenner Joins CMS...

Medicare agency adds ex-Va. official, plans reorganization
By Jeffrey Young
The Centers for Medicare and Medicaid Services (CMS) has tapped a former top health official from Virginia for a senior leadership position and plans its first structural reorganization in nearly 10 years.

Marilyn Tavenner, who was secretary of Health and Human Resources in the administration of then-Virginia Gov. Tim Kaine (D) from 2006 until Gov. Bob McDonnell (R) took office this year, has joined CMS as principal deputy administrator, a newly created position that makes Tavenner the second-ranking official at the agency -- and the Obama administration's most senior appointment to the agency.

Prior to her tenure under Kaine, Tavenner was a nurse and an executive at the Hospital Corporation of America, where she ran two facilities in suburban Richmond and served as chairwoman of the Virginia Hospital Association and a trustee at the American Hospital Association.

Obama, however, has yet to nominate anyone to serve as administrator of CMS. The agency has not had a confirmed chief executive since Mark McClellan resigned in Oct. 2006. President George W. Bush's last nominee for CMS administrator, Kerry Weems, served on the job in an acting capacity for more than a year but the Senate never took action on his confirmation. Since Obama took office, CMS's chief operating officer Charlene Frizzera, a veteran civil servant, has been acting administrator.

Medicare agency adds ex-Va. official, plans reorganization - The Hill's Blog Briefing Room

Delegate Steve Landes Wins “Virginia Bioscience Legislative Leadership Award”

Richmond, VA--- The Virginia Biotechnology Association (VaBIO), today announced that Steve Landes, a member of the Virginia House of Delegates from Augusta County, won the Virginia Bioscience Legislative Leadership Award for his exemplary efforts on behalf of the biotechnology and medical device industry in the Commonwealth.

“Delegate Landes receiving this award will not surprise anyone who knows Steve or is familiar with his legislative achievements in support of economic development and job creation,” said Mark A. Herzog, executive director of VaBIO. “Our members are generally small start-up companies that are attempting to turn a discovery in a lab into a usable treatment for disease or suffering. These companies face huge challenges and it helps to know that we have a legislator like Delegate Landes who understands the challenges small technology businesses face every day.”

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

“The technology industry in Virginia knows that Steve Landes takes the time to understand the complexity of the development process for new drugs or technologies,” continued Herzog. “If it means new, high growth jobs for the community, Delegate Landes always goes above and beyond the call of duty.”

The Virginia Biotechnology Association (VaBIO) is the statewide non-profit organization that promotes the scientific and economic impact of the life sciences industry in the Commonwealth of Virginia. Approximately 300 biotechnology, pharmaceutical and medical device companies are based in Virginia, mainly clustered around universities in Blacksburg, Charlottesville, Richmond, Norfolk and Northern Virginia.

According to a recent study by Archstone LLC, the bioscience industry has a profound impact on the state’s economy:
• According to a study in 2006, the bioscience industry supported nearly 80,000 direct and indirect jobs in the Commonwealth.
• The value of the industry’s products and services was approximately $12.6 billion in 2006.
• The biopharmaceutical industry grew by 8.1% between 1996 and 2006.
• The industry paid employees about $1.8 billion in wages in 2006, resulting in $81.6 million in state taxes and $433.3 million in federal taxes.
• Biopharmaceutical employees paid, on average, $4,091 in state taxes, compared to the much more modest $1,501 paid by the average worker.
• In 2008, Virginia’s biomedical researchers conducted nearly 1,900 clinical tests of new medicines, including 678 trials for cancer drugs, 102 tests for heart disease medicines, 232 rare disease treatment trials and 80 tests for HIV/AIDS drugs.

For more information, please visit www.vabio.org.

US House GOP Whip Eric Cantor on Biotech

"Simply put, we have to stop borrowing and spending so much money! As government shrinks, the private sector will grow, creating droves of new jobs. Think of the biotech park right across the street and the growth engine it has been for our region, and think of the potential there that remains untapped."

Capital Gains Exclusion on Technology Investments Goes to VA Governor

The Virginia Biotechnology Association's (VaBIO) legislation to provide incentives for investments in biotech and other advanced technology companies is on the way to Governor Robert McDonnell's desk for signature. VaBIO and NVTC, the Northern Virginia Technology Council, are encouraging the Governor to amend the bill with an "emergency clause" so that it will take immediate effect upon his signature. Otherwise, there would actually be an unintended disincentive to invest until July 1st.

This legislation will make Virginia the most welcoming home for advanced technology companies seeking capital for growth. The new law will exclude capital gains from state taxes for all investors--private, angels, venture funds, and corporations, as long as the investment was made in a qualified, biotech or advanced technology firm. Our congratulations to the Virginia Bioscience Legislative Caucus for championing this legislation and to our two chief patrons, Senator Mark Herring (D-Loudoun) and Delegate Sam Nixon (R-Chesterfield). The concept was also highlighted by Governor McDonnell's Transition Team before taking office. Here are the details:

Bill Summary: Income taxes; recognition of income from capital gains. Grants an income tax deduction for any income taxed as a long-term capital gain for federal income tax purposes or any income taxed as investment services partnership interest income, on or after January 1, 2011, that is related to a qualified investment in a technology and science start-up business having a principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment. The deduction would relate to investments made between July 1, 2010, and June 30, 2013.

HB 523 (Delegate Nixon)
http://leg1.state.va.us/cgi-bin/legp504.exe?101+sum+HB523
SB 426 (Senator Herring)
http://leg1.state.va.us/cgi-bin/legp504.exe?101+sum+SB428

DNA Co. Intrexon Raises $17.4M

Biotech company Intrexon Corporation raised $17.4 million in Series D shares, according to an SEC filing. A group of 40 investors took part in the equity offering.

Housed at the Virginia Tech campus in Blacksburg, Va., Intrexon is developing DNA control systems to enhance the safety and efficacy of existing and emerging biological therapeutics.
Named in the filing were executive officers Randal J. Kirk, chief executive officer and chairman of the board; Thomas Reed, Ph.D., founder & chief science officer; Sunil Chada, Ph.D., senior vice president, translational medicine; Rick Sterling, chief financial officer; Ronald B. Herberman, M.D., chief medical officer - oncology; and Robert Beech, senior vice president, corporate development & communications. Directors named were Cesar L. Alvarez; Steven Frank; Larry Horner; Dean J. Mitchell; and Burton Sobel M.D.

While specific investors are not identified in the filing, Intrexon has reported $35 million in Series C-2 investment in previous years from New River Management, managed by Third Security, LLC., and NewVa Capital Partners, LP.

SEC filing: http://tinyurl.com/ye5lkq6.

By Citybizlist Staff'
Citybizlist Washington D.C.
March 5, 2010

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."

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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