BY TIM BONFIELD
The Cincinnati Enquirer
Even though Allergenics Inc. sprouted here, Greater Cincinnati is not likely to enjoy the economic fruits that may come from the company's success.
"There is a very high possibility that the company will be moved within a year to California," said company President Clint "Skip" Dederick.
That means the Tristate area will miss out on nearly all the jobs that might come from expanded production and nearly all the local spending and taxes that might come from increased sales, even though the idea that created the company came from a state-supported university. Allergenics is likely to leave because Greater Cincinnati lacks the "infrastructure" needed to support biotech companies, Mr. Dederick said. The ingredients in short supply include venture capital, contract pharmaceutical manufacturing ability and a reputation as a biotech hub.
Local business and academic leaders are working on the venture capital and manufacturing issues. If they're successful, time and marketing will take care of the reputation issue.
In addition to being Allergenics' president, Mr. Dederick is a top executive with Senmed Medical Ventures, the Tristate's only venture capital group focusing on biotech start-ups.
Even though the University of Cincinnati Medical Center and Children's Hospital Medical Center have been involved in increasing amounts of medical research, little of that work has translated into local development of new drugs or medical devices.
"It is very difficult to start up a company and keep it here in Ohio," Mr. Dederick said. "You don't see as much of the entrepreneurial urge here, at least in the biomedical field."
There are two reasons Allergenics is likely to move. The West Coast investors who back the company want the top people located closer to them. Meanwhile, the company wants to be close to other biotech businesses, which makes it easier to find personnel and work with contract services.
That's why many biotech start-ups gravitate to places such as San Diego, San Francisco and Boston, Mr. Dederick said.
An effort to change this trend has started with the October 1996 opening of the Bio - Start medical business incubator in Corryville. The incubator is supported by a long list of powerful local institutions, including Procter & Gamble Co., Fifth Third Bank, the University of Cincinnati, Children's Hospital Research Foundation, TriHealth and Senmed Medical Ventures.
Bio - Start has a dozen tenants in varying stages of start-up. Next month, Bio - Start plans to start construction on a $2.7 million expansion, said Executive Director Patricia Snider.
A vital part of the expansion will be a specialized manufacturing module that tenants can share to make small batches of test drugs in accordance with Food and Drug Administration regulations. The manufacturing area is intended to help keep some tenants in town that otherwise would have moved away to be closer to contract laboratories.
While Bio - Start is an important first step, even more venture capital and manufacturing ability are needed to help the "graduates" of Bio - Start stay in town, Mr. Dederick said.
"We would like to fund more companies like Allergenics and keep them here," he said. "But one of our challenges is finding co-investors in Cincinnati."
