By GREG FREEMAN
BB&T Contributing Writer
and DON LONG
Med-tech/biotech industries are rather valuable to a community. Companies in these sectors produce big dollars out of small footprints and attract major investments. They’re environmentally clean. They provide well-paying, blue- and white-collar jobs, usually held by people with upper-level technical or graduate degrees, who often are strong contributors to community life.
But you need more than a dozen such companies sprinkled here and there across the state to claim critical mass. You want enough companies to create synergy – the modern buzz word for the old idea of cooperation, cooperation between people and resources that really works.
The pieces to do this are fairly obvious: researchers and entrepreneurs in local universities and tech incubators; prominent hospital and healthcare facilities using updated technologies that attract publicity; clinicians and thought leaders well-known in important technology sectors; and the ability to attract solid equity financing.
But what if your region doesn’t have all these pieces? You’re not Massachusetts or Silicon Valley. You’re not the Twin Cities or the Research Triangle.
Biomedical & Business Technology asked four up-and-coming regions just what they are doing to parley their advantages into national and worldwide med-tech/biotech status.
Piedmont Triad — not competing against, but emulating its high-profile neighbor
It’s only natural that anyone trying to build a med-tech/bioscience cluster will look to the big success stories like the Twin Cities or San Diego for lessons, but it can be a mistake to focus too much on what worked for someone else, says Jon Wilson, president of the Piedmont Triad Partnership (Greensboro, North Carolina). Instead, he says, a better strategy can be to play to your strengths and what makes you different from the other big centers.
The Piedmont Triad region — made up of 12 geographically and economically diverse counties in central North Carolina around the cities of Greensboro, Winston-Salem and High Point — has considerably fewer med-tech/life science offerings than its well-known neighbor, Research Triangle, but it is developing its own presence in these sectors.
Wilson moved his GI manufacturing company Wilson-Cook Medical to the Piedmont Triad in 1984, when the company was less than three years old, precisely because it wasn’t a huge biomedical center but still offered many benefits.
“We moved to the Triad area because it wasn’t the Research Triangle,” he says. “We weren’t going to be competing for experienced people with the large companies that were well established in that area.”
Wilson says that while the Piedmont Triad has lofty ambitions just like every other developing region, the partnership decided to put a special focus on smaller companies to provide the type of support they need. That plays to the region’s strengths as opposed to trying to compete head-to-head with bigger regions.
“If you have a lot of intellectual property locally, develop that as a resource for these up and coming companies,” he says. “If you can have 100 small, early-stage companies versus one or two large companies, ultimately I’d rather have the small companies because that is where you’re going to develop a very strong base, like in the Minneapolis-St. Paul area” – a region he cites as an example of how companies can be attracted to the unique resources available locally, and how smaller companies can form the critical mass that keeps a region successful.
“This area has the potential to grow in that fashion,” he says. “Larger companies are still attracted to the area, but it’s the number of smaller, dynamic players that give the region a presence.”
More than 200 in Triad
With a population of more than 1.5 million, the Piedmont Triad is centrally located along North Carolina’s I-85/I-40 corridor between Raleigh and Charlotte and is midway between New York and Miami; Washington D.C. and Atlanta. Its transportation infrastructure, including the Piedmont Triad International Airport (site for the new FedEx Mid-Atlantic Sorting Hub) and East Coast location, put more than half the U.S. population and most major markets within 650 miles.
The region can boast 200 international firms, representing 29 foreign countries. At the same time, academic/industrial collaboration is taking place throughout the region with production and R&D activity ongoing in a host of high-tech sectors such as semiconductors, nanotechnology, biotechnology and advanced materials.
Companies operating in the Piedmont Triad— such as Dell, Procter and Gamble, Novartis, Reynolds American, FedEx and American Express— feed off of North Carolina’s outstanding business climate, ranked No. 1 by Site Selection magazine.
In addition to a variety of business assistance programs available both locally and from the state, there is no inventory or intangibles taxes and no sales taxes on raw material. At the same time, tax credits available from the state reward job creation, investment in machinery and equipment and R&D. North Carolina is also a right-to-work state with the lowest union enrollment rate in the nation.
Not out to compete with ‘the bigs’
Greg Brownstein, vice president of the Piedmont Triad Partnership, says one of its key challenges is to rise above all the “noise” — meaning the hype of all the other regions trying to attract companies. With so many clusters sprouting up all over the country, setting yourself apart is a real challenge.
“We see a lot of areas making very large claims about their ability to grow medical device and life science sectors,” he says. “We try to put forth a very genuine account of how we can support those sectors. We are very realistic in how we portray what you can do here. It’s still a very positive and attractive message, but it has more credibility.”
Brownstein says people often ask how the Piedmont Triad can compete with Research Triangle Park. “The answer is that we do not. We are a lower cost but still effective alternative. We don’t have exactly the same assets, but we have similar resources and can offer lots of advantages.”
Wilson and Brownstein agree that the key to the Piedmont Triad’s success — past and future — is the availability of high quality workers. Underpinning its industrial community and supporting a resident workforce of almost 800,000 are 11 four-year colleges and universities, nine community colleges. The four-year institutions share a student body of more than 50,000, while the community colleges collectively serve an additional 50,000 students each year through degree programs, continuing education and industry training.
All three of the region’s doctorate-granting universities — NC A&T State University, The University of North Carolina at Greensboro and Wake Forest University — are classified as universities with “high research activity” by the Carnegie Foundation for the Advancement of Teaching.
Wilson notes that the Piedmont Triad’s temperate climate, varied geography and a wealth of cultural and recreational amenities are other strong features. The partnership focuses on attracting established players in the med-tech/bioscience industry to the area, but also on developing new intellectual property and companies in the start up or very early development stages. Wilson says there is a tremendous need for that kind of assistance.
“Regulatory assistance, engineering, pilot manufacturing — those are all very costly resources to develop internally, so we offer an a la carte series of resources to help early stage companies,” Wilson says.
For larger, more established companies, the Piedmont Triad promotes the region as a place where they can establish specialized manufacturing or development hubs rather than trying to get the national headquarters.
“Moving a company’s headquarters is a big task for anyone, but when it comes to doing things on a smaller scale this region has a leg up because it is not competing for limited resources. We still have the capacity,” Wilson says. “If a company needs a site where they can establish an R&D center, or specialized manufacturing, they can see a lot of appeal to a place like the Piedmont Triad which has the same resources as some of the bigger regions but you don’t have to fight with other companies for every employee.”
Resources — and untapped opportunity
One company president says his experience is a good example of how the Piedmont Triad attracts rising stars in the industry. Ted Reynolds is president of Stovall Life Science (Greensboro), manufacturing electromechanical devices for molecular and cell biology research since 1989. He lived in the area already and saw that the Piedmont Triad offered support that a smaller company might not get from bigger biomed clusters.
“I found engineers who could design products for me, moonlighting from bigger companies here,” he says. “We also have excellent suppliers here, and that is key to our type of business. These are suppliers, fabricators, machine shops that don’t just take on customers with millions of dollars to offer, who see our volume as desirable.”
Wilson says there still is a tremendous amount of opportunity left untapped in the Piedmont Triad. Intellectual property is only as good as the resources available to commercialize it, he notes, and a strength of the Piedmont Triad is that there are available resources to capitalize on someone’s good idea.
“In our industry technology keeps moving forward,” Wilson says. “If technologies are not capitalized upon, the opportunity ultimately goes away. New technology will surpass old technology if you don’t bring resources to bear on these ideas, and that makes it important to not only be in an area where good work is being done, but in an area that still has resources available for you to tap into.”
— Greg Freeman
Colorado: lean workers and heading to the topin med-tech, biotech
A recent report on increased obesity raging across the U.S. ranks the states according to their citizens’ adipose — that is, their fat. And among the five states populated by those with the least fat is Colorado.
In other words, residents of Colorado are generally thinner, probably in better shape. They hike, climb mountains, bicycle, ski, snowboard, do all sorts of things to stay fit.
The reason, of course, is environment and the attraction of the great Colorado outdoors. The state is home to the most mountains in the U.S. over 14,000 feet in height — an amazing 53 in all — providing year-round playgrounds for those pursuing physical activities.
But like most things in this world, this type of environment has two sides to the economic coin. Colorado’s mountains make it a magnet for tourists, and the state has thrived on that. But tourism is highly labor intensive and, when receiving out-sized emphasis, tends to shoulder aside other things — like medical technology — for funding and overall attention.
Colorado is clearly a hotbed of medical device and life science activity along its Front Range — the terminology describing activity along the western slopes of the Rockies — and Denver and its surrounding communities increasingly can boast of a growing number of companies and activities in these sectors, with synergy from its high-quality research, university and healthcare centers. These assets are, in turn, supported by the state’s many thin and in-shape residents — most often a bit younger, a bit better educated, wanting to stay in Colorado because of all its outdoor assets, and providing a confident, optimistic workforce for the state’s healthcare industry. (Not coincidentally, of course, the state’s ski slopes and alpine meadows produce an array of medical consequences seen in its hospitals and sports medicine clinics: torn cartilage, worn joints, herniated disks.)
The Metro Denver area alone has an estimated 11,700 bioscience workers at more than 350 companies, according to the Metro Denver Economic Development Corp., a host of these on view at this year’s BioWest 2006 conference in June, focused on bannering the life science and medical device opportunities of the Rocky Mountain region.
Fitzsimons: a biotech magnet
Besides its assets in higher education, a growing keystone of the state’s healthcare/med-tech emphasis is the Fitzsimons Development, a major redevelopment effort in Aurora, Colorado, just west of Denver, historically a “bedroom” and commuter community for the city. Over the past 10 to 20 years, however, development in the metropolitan area offered little space for the creation of new, major healthcare facilities and Aurora was seen as prime real estate for these efforts.
These moves weren’t seen at first by Denver as particularly metro-friendly, but Fitzsimons has become a major magnet for attracting a variety of clinical and research assets to the state.
Fitzsimons is a project to transform the former Fitzsimons Army Medical Center — historically perhaps best known as the location of the hospital that treated President Dwight Eisenhower for heart failure in the late ‘50s — into a bioscience hub.
Directed by the Fitzsimons Redevelopment Authority, it is a square-mile, $43 billion transformation of military space into patient care, science education and bioscience R&D. The redevelopment authority reports more than 5,000 people employed at Fitzsimons, with plans for more than 30,000.
Besides the redevelopment authority, the many partners collaborating on developing this life science community include the University of Colorado at Denver and Health Sciences Center, the University of Colorado Hospital, The Children’s Hospital and University Physicians Inc. These groups have jointly contributed more than $1 billion in construction, with dozens of new projects planned for ground-breaking in 2007. Besides its hospital and research facilities, the campus provides space for early-stage companies, and the Fitzsimons BioBusiness Incubator provides assistance in business development expertise. These assets further benefit from the close proximity of the University of Colorado’s research complex which houses more than 1,600 researchers and provides a broad range of state-of-the-art equipment and technologies, from leading-edge imaging to tissue generation.
Fitzsimons has received rave reviews from no les than Elias Zerhouni, director of the National Institutes of Health, who praised the University of Colorado as a “visionary institution” for its participation in the Fitzsimons development. “Colorado,” he said, “is setting a new trend, and we’re watching with enthusiasm and want to be your partner in that.”
Sources readily available
The ability to develop thriving life science/med-tech opportunities in and near Denver has been described by Sherry Fox, president and CEO of BioCare Systems (Parker), founded in 1999 to develop photon therapy. Fox says she depended entirely on local resources: a local attorney for patent advice, the Colorado BioScience Association for networking opportunities, and local companies for expertise in negotiating the FDA’s regulatory rapids, manufacturing and marketing, and to find executive talent. Fox says that if she were to do another startup, she would probably proceed somewhat differently (and more efficiently), but would “definitely keep my team of Colorado-owned and -operated vendors.”
The Colorado BioScience Association is in the forefront of marketing Colorado’s life science and biotech assets and says that a key growth area has been companies developing medical devices.
Denise Brown, executive director of the association, acknowledges that the state’s high profile as a tourism Mecca is a perception serving somewhat as a barrier — specifically in the need to shift tax incentives from the tourist industry to healthcare. The state, she told BB&T, “is not big on incentives and tax breaks,” but that local government incentives are growing and that the state is especially fertile ground for small business development. She notes that of the most recent group of 20 companies that have taken root in the state, three-fourths of them are “home-grown.”
A major out-of-state development is the establishment of an $80 million facility by Amgen in Boulder, manufacturing “all pre-approved products,” Brown notes.
Of Colorado’s key benefits, Brown says that No. 1, is “access to people” — the availability of a strong workforce, combining both the young and active and an active older population of senior executives; and No. 2, a broad base of manufacturing infrastructure.
Colorado’s goal, she adds, is “to be top five in the world” in both medical devices and biologics/pharma.”
Infrastructure helps ‘Alley’ recruit med-tech, keep what it already has
A concerted effort to get the word out about the resources and support available in Minnesota has led LifeScience Alley to a position as one of the country’s leading biomedical regions, and serving as an example of how an area not necessarily known as a bioscience hot spot can compete with the bigger players.
LifeScience Alley’s region extends from Rochester through the Twin Cities to northern Minnesota and is largely the product of the state’s efforts to raise its profile in the bioscience area, says president and CEO Don Gerhardt. Three years ago Minnesota’s governor asked it to take on further development of the state’s Bioscience Council, and that led to the recruitment of Dale Wahlstrom, formerly of Medtronic (Minneapolis), to become chairman of the BioBusiness Alliance of Minnesota.
The groups then joined their efforts to promote the region to biomedical companies across the country, and Gerhardt says they determined that a key to attracting members would be providing substantial support for the companies’ endeavors. Thus, LifeScience Alley offers ongoing education and logistical support that may not be available from other bioscience regions.
“We provide a great deal of education and training seminars, about 100 each year, on topics including regulatory, engineering, manufacturing, clinical studies, marketing and communications,” says Gerhardt. “That gives companies access to some really intense knowledge. Top-end people from Medtronic or Boston Scientific (Natick, Massachusetts) are providing information that our members won’t get anywhere else.”
1984 launch of Medical Alley
The organization was founded in 1984 — as Medical Alley, its new name adopted only this year — as a non-profit association to support the state’s healthcare industry. Its goals were to focus on legislative issues, provide members with educational opportunities and promote interest and investment in Minnesota as a major center of healthcare achievement research and innovation. The Minnesota Biotechnology Industry Organization (MNBIO) was founded in 1991 as a non-profit trade association to serve as the eyes, ears and voice of biotechnology in Minnesota. As the state’s chapter of the national Biotechnology Industry Organization (BIO; Washington), MNBIO provided valuable connections to other organizations across the country. In March 2005, Medical Alley and MNBIO merged to provide a more focused effort in supporting the human health, agricultural and industrial biosciences in Minnesota.
Gerhardt says many company leaders don’t realize that Minnesota possesses one of the best healthcare infrastructures in the world. It also has deep agricultural and industrial/manufacturing strengths so it is uniquely positioned to capitalize on the synergy created by bringing Medical Alley and MNBIO together.
The LifeScience Alley region is home to more than 500 FDA-registered medical technology manufacturers, thousands of healthcare-related organizations and top players in agriculture and food products. While the majority of LifeScience Alley members are located in Minnesota, membership continues to grow beyond the Minnesota and U.S. borders. Its 500 member companies employ about 250,000 people in the state of Minnesota and thousands more beyond its borders, nationally and internationally.
“LifeScience Alley is truly a unique organization as its members include medical device and equipment manufacturers, agricultural and industrial bioscience organizations, pharmaceutical companies, health plans, insurers, hospitals and clinics, education and research institutions, government agencies and trade organizations, and a large variety of healthcare service and consulting companies,” Gerhardt says. “This is one of the only membership organizations in the country that serves this converged audience and delivers such a comprehensive offering of services and benefits.”
LifeScience Alley helps small and emerging companies access capital and expertise via its Annual Medtech Investing Conference. In March 2003, it began the process of developing an early-stage venture fund to focus on seed and early-stage capital funding for medical device, bioscience and other life sciences and healthcare-related companies.
Networking is major benefit
The association also provides networking opportunities for the broad range of members at its educational seminars, conferences and networking events, dubbed “Alley Chats.”
These networking opportunities have proven to be a big hit with members. “There is a really well-done, intensive network infrastructure here,” Gerhardt says. “People say the infrastructure network is special and is a tremendous asset to help them connect. Members can network with intellectual property lawyers, engineering consultants, packaging experts, all sorts of resources.”
Amy Johnson, senior project manager with the BioBusiness Alliance of Minnesota, says that the member companies, particularly device manufacturers, can share best practices and learn non-proprietary information from one another. “They can take that information and go back to their workplace to immediately implement it,” she told BB&T. “Their companies don’t have to send them out of town. They’re right here.”
When he came on board to head the BioBusiness Alliance, Wahlstrom first conducted an assessment of the state’s status as a bioscience leader and, based on that, the group, developed a 20-year plan for how to improve that status. Part of that plan included developing the BioBusiness Network, which helps provide the networking opportunities to members.
“It’s a connection service to help companies that want to start here, grow here, or move here,” Wahlstrom says. “We haven’t been advertising the network or really promoting it, yet we’ve had more than 20 requests for assistance in the past nine months. Seven of those were serious inquiries from companies considering moving here from other states or other countries.”
Wooing what’s grown at home
In addition to recruiting companies from across the globe, Lifescience Alley makes a real effort to serve the home-grown Minnesota companies. Wahlstrom and Gerhardt say they never forget that there are plenty of other regions out there wooing Minnesota companies just like they’re trying to appeal to those in other states.
“The competition out there is very intense,” Wahlstrom says. “States like Ohio and North Carolina, to name just two, are making a major play for med-tech to supplement their biotech, or just to grow a new med-tech focus. The same thing is happening in Japan and other countries, and we compete head-to-head with all of them.”
The long history of Lifescience Alley, with 24 years of work under its belt, is what can make the difference for Minnesota, Wahlstrom says. Years of creating that megacluster for medical devices has produced a government/industry/academic collaboration that can be very appealing, he says. The next goal for Lifescience Alley is to achieve same level of resources and infrastructure for general biotech as well, not just med-tech, Wahlstrom says.
“That level of cooperation can create an infrastructure that sells itself,” Wahlstrom says. “We hosted a committee from another country last week, and their comment was that they had scoured the entire Asian Pacific rim to find the capabilities that we have here to support med-tech.”
— Greg Freeeman
Southern hub’s rapid growth mirrors recent advances in med-tech assets
Mention “Georgia” to anyone outside the state and the images called to mind are likely a tad hazy. Something about peaches, perhaps ... or peanuts (and a former president known for growing them). Maybe even cotton and the location of some major scuffles back in Civil War times.
But those are hardly the images that most Georgians have about their state today — with the understanding, of course, that somewhat more than half of Georgians live in metro Atlanta, a multi-county area with a rapidly growing life science, biotech and medical device community.
The fact is that while rural Georgia remains largely agricultural, the city of Atlanta has moved far from those roots. Over the past 15 years or so, it has seen a rapid influx of people from all over the U.S. — and the world — and is perhaps the most cosmopolitan city of the South, in a sense no longer a “Southern” city. (And its most vivid current icon highways packed with traffic, moving either NASCAR-fast or first-gear slow — or the air traffic in and out of Hartsfield-Jackson International Airport, ranked busiest on the globe.)
Metro Atlanta’s 4 million-plus population is on pace to keep ballooning and is mirrored by a parallel explosion in its med-tech and bioscience offerings, according to a recent survey and report from the Selig Center for Economic Growth, issued at last month’s Georgia Life Sciences Summit, on the status of the state’s life sciences and opportunities. The study — the first of what are promised to be yearly updates — reports on the number of the state’s universities, research institutions and the recent “dramatic growth” in companies developing medical products.
CDC among key healthcare features
Most prominent among these, of course, is the Centers for Disease Control and Prevention, on Atlanta’s east side, perhaps best known for tracking down outbreaks of difficult pathogens, but more recently emphasizing methods for stemming the tide of our most common diseases. Near the center of the city is the Georgia Institute of Technology, recently ranked by U.S. News and World Report as the 4th best school of engineering in the U.S., and continually churning out an impressive array of bioengineered concepts, research results and spin-off products. Complementing these is Emory University and its prestigious school of medicine. Ninety miles away, in Athens, the University of Gerogia (Athens) is a burgeoning research center across multiple disciplines that feed the growing bioscience sector.
The Selig report acknowledges that the life sciences industry makes up only a small part of the state’s economy, but is picking up speed. It says that from 2001 to 2005, this sector’s growth “outpaced the rest of the state’s economy by a wide margin. The life sciences industry not only added jobs in research and development, but also in manufacturing which provides close to a half (44%) of the life sciences jobs in the state.”
Other sets of figures echo this increase.
Life science growth rapid
The report cites the U.S. Economic Census “which reported that the number of bioscience companies in the state climbed 390% between 1997 and 2002, with the largest jump — 77% — reported in life sciences research and development. And it cites recent Bureau of Labor Statistics data showing that the number of life science companies kept growing through 2005 — employment in Georgia’s life sciences reaching 15,237 workers in 2005, with the largest numbers in surgical, electro-medical and electro-therapeutic instruments manufacturing (3,518) and medical and diagnostic laboratories and blood and organ banks (6,540), making these sectors the largest part of the state’s life science offerings.
The report also cites figures indicating the area’s ability to attract venture capital. From 1995 through the first quarter of 2006, the state’s companies focused on life sciences R&D and medial devices secured $687 million in 109 deals, with medical device firms raising about one-third of this total.
Importantly, Georgia is “in the running” — meaning on the short list — as prime location for the U.S. Department of Homeland Security’s new National Bio and Agro-Defense Facility. The potential economic impact of the NBAF in the state is estimated at from $3.5 billion to $6 billion.
Strong data, but the thought leaders focused on expanding the Georgia’s bioscience and med-tech offerings are aware of the competitive challenges that they face. For instance, the Selig report states that 44 states in the U.S. are currently building life sciences R&D capacity, 46 of them offering support to life sciences firms and 27 making available the much-needed capital for growing these business.
Need: a governmental partnership
Organizations focused on making Atlanta — and Georgia — a major med-tech/life science hub are the Georgia Biomedical Partnership and the Georgia Research Alliance. They acknowledge the need for more funding to these efforts and the need for state government to lead in this effort. “The state needs to be an aggressive partner,” says Charles Craig, executive director of the Biomedical Partnership. “I think the state recognizes that and wants to do more. We encourage them to think big.”
With this hoped-for big-thinking going on, the region’s life sciences efforts are pointing to new developments in this sector. Last year, Georgia researchers landed a five-year $20 million federal grant to develop the Emory-Georgia Tech Nanotechnology Center for Personalized and Predictive Oncology. Next year, the first phase of the Technology Enterprise Park, a 600,000 square foot bioscience and technology facility comes online adjacent to Georgia Tech.
And Atlanta is pointing to another major event in May 2009, when it will host the annual meeting of the Biotechnology Industry Organization (BIO; Washington). Jeff Strane, director of the innovation technology office at the Georgia Department of Economic Development, says, “Our goal is to be in Ernst & Young’s top five [life sciences states] by the BIO convention. We think that’s doable.”
— Don Long