David N. LeffScience Editor

GLASGOW, Scotland -- This country's national economicdevelopment agency, Scottish Enterprise, on Mondayannounced a #10 million ($14.7 million) strategy to double thenumber of Scotland's biotechnology companies over the nextfive years.

The purpose of the agency "is to help create a predicted #450million ($659 million) industry with more than 4,000 jobs,"said John Bremner, who heads the biotechnology task force ofScottish Enterprise. He was addressing a Valentine's Day pressconference covered by British newspapers and staff journalistsfrom four selected U.S. biotechnology news publications.

The main goals of the new strategy, said Bremner, are "to helpstart and grow companies to commercialize biotechnologyproducts and services in international markets, and helpScottish industry become more competitive." ScottishEnterprise, a government-funded agency with an annualbudget of $674 million, is dedicated to further training,environmental enhancement and business development.

In the business category, about $5.9 million a year isearmarked for helping small, high-risk, high-technologycompanies get off the ground. The first such funding of abiotechnology company took place late last year "as a precursorto the seed-money fund announced Monday," said MarieHughes, the biotechnology task force member who negotiatedthe deal. It provided $73,000 to Core Technologies Ltd. of EastKilbride, a town on the outskirts of Glasgow. This company,which is developing drug-delivery systems, also received$366,000 from the English venture capital concern PreludeTechnology Investments of Cambridge, England. Prelude agreedto invest only if Scottish Enterprise also made a placement,Hughes told BioWorld.

"That's how our new #10 million ($14.7 million) will work," shesaid. "Investing on the basis of a small equity position ratherthan an outright grant helps the company as well as ourselves.Many a young enterprise has foundered because it never gaveaway stock in exchange for funding, and so developed badhabits."

In addition to aiding start-ups, she said, money can also beused for investing in a specific project of value to otherindustries. "For example, a biotechnology product or process ofbenefit to food processing would demonstrate howbiotechnology can better their business."

The one purpose the fund will not underwrite is basic research,Hughes stated. "(The money) will go to companies to helpleverage commercial products," said Bremner.

Scotland (pop. 5.6 million) has numerous assets in enteringinternational biotechnology markets, he said. "It produces adisproportional number of university graduates inbiotechnology-related disciplines. With 9 percent of the UnitedKingdom's population, it produces 15 percent of biotechnology-related graduates and 18 percent of post-grads."

The task force's directory lists 23 "dedicated biotechnologycompanies and 39 suppliers of biotech-related products andservices. It lists 192 university or industrial research anddevelopment sites active in 13 technologies, such as cellculture, cell fusion and recombinant DNA.

"We have a good regulatory environment and an opening forfunding to the London Stock Exchange," Bremner told BioWorld.

His task force is also seeking access to U.S. venture capital. Lastsummer it held preliminary talks with James Vogt of VectorSecurities International. "Now we need to go back," he said."The onus is on us to do so."

Bremner described four Scottish biotechnology companies thathave alliances of some kind with U.S. companies:

-- Cruachem Ltd. of Glasgow has an American subsidiary thatrecently won a small business innovative research (SBIR) grant.

-- Pharmaceutical Proteins Ltd. of Edinburgh has a partnershipwith Wyeth-Ayerst Laboratories, a division of American HomeProducts Corp.

-- ScotGen Biopharmaceuticals Ltd. of Aberdeen has mergedwith VasoCor of Palo Alto, Calif., which raised $7 million in theU.S.

-- Microbiological Associates Inc. of Rockville, Md., has set upits European branch, Microbiological Associates InternationalLtd., in Stirling, Scotland.

Citing Scotland's long tradition in classical biotechnologyprocesses, Bremner said, "It's as old as the hills. Take whiskey,for example."

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