Thursday, September 16, 1999
Biotech biz needs shot in arm
Start-up money is key local issue
BY TIM BONFIELD
The Cincinnati Enquirer
To become a leading center for biotechnology, Greater Cincinnati needs to double its volume of basic medical research, vastly expand seed money for start-up ventures and strive in several ways to build an entrepreneurial culture for the region.
These and other lofty goals for the biotech future of Cincinnati were laid out Wednesday at a press conference held by the recently formed Life Science Task Force.
The driving theme: Cincinnati has a cluster of biotech businesses and research efforts that has the potential to grow into a powerful part of the regional economy. But getting there will take years and cost hundreds of millions of dollars.
“This area is gaining a good reputation nationally. (But) the life sciences industry is still in its infancy,” said Mark Collar, president of Procter & Gamble Pharmaceuticals Inc. and chairman of the Life Science Task Force, a consortium of academic and business leaders. “If the Greater Cincinnati area is to capitalize on this opportunity, we will need to become even more aggressive.”
The task force Wednesday released a study that compares Greater Cincinnati with 21 regions on eight “critical success factors” for a strong biotech industry.
The good news: Cincinnati ranked third in effectiveness of technology transfer, a measure that compares the number of patents filed, license agreements and companies formed to the amount of local research spending.
The city also scored well on transportation and quality-of-life measures.
The bad news: Cincinnati ranked 17th in access to capital, 16th on the overall amount of academic research and 18th on a measure of entrepreneurial culture.
To address these issues, the task force has announced a five-step plan to build up the life science industry.
“We'd like to start seeing success within five years. But this is a 20-year quest,” said Dr. Donald Harrison, senior vice president and provost for health education at the University of Cincinnati. The initiatives are:
• Expand biotech research funding.
• Expand venture capital money.
• Find a way to use the vacant Hoechst Marion Roussel research facility in Reading.
• Create a voice for the region's life science industry.
• Strengthen the entrepreneurial culture.
On the research front, the University of Cincinnati attracts about $118 million a year in public and private medical research funding. The goal is to exceed $200 million by 2004 or 2005 while recruiting twice as many researchers as UC has now.
Toward that goal, UC next week will open its $40 million Vontz Center for Molecular Studies. It also hopes to raise $117 million to rebuild and expand its medical sciences building. In addition, UC has teamed up with other Ohio medical colleges to lobby for a $1.8 billion chunk of Ohio's $10 billion tobacco settlement.
Cincinnati ranked 17th of 22 markets on access to venture capital. The top biotech markets have up to four times as much venture capital as Cincinnati, which fund up to six times as many start-up companies.
To start the money chase, Bio/Start, a local biotech business incubator, recently received a $100,000 state grant to start a life science seed fund. The goal is to add as much as $6 million in private money to that fund.
Cincinnati has several venture capital funds and plenty of wealthy individuals who can invest in new companies. The problem seems to be an unwillingness to take longer-term risks.
Traditional venture capital funds prefer to wait until a company is within six months of bringing a product to market, said Bio/Start Executive Director Patricia Snider. That's a problem for pharmaceutical development, which can often take 10 years to move a new drug from lab concept to market.
The efforts of the Life Science Task Force already have won some applause.
Almost any effort to build up the Tristate's biotech industry will go beyond keeping more start-ups in town. It also will make it easier for existing biotech companies such as Alkermes Inc. to recruit talent.
Alkermes, based in Massachusetts, employs about 70 people in Blue Ash and Wilmington. In Wilmington, the company makes polymers for use in time-released injectable medications. In Blue Ash, the company makes oral drug delivery systems, such as a “dose sipping” device for people who cannot swallow pills.
“The concern we hear from high-level prospects is that if things don't work out here, there's nowhere else (in Greater Cincinnati) to go,” said Paul DeMasi, human resources manager for Alkermes.
Gary Conley, president of the Institute of Advanced Manufacturing Sciences, said the task force study reinforces calls from several business organizations to create a “High Technology Leadership Council.”
“Cincinnati is one of the largest cities in the country that does not have a cohesive leadership organization responsible for the development and implementation of technology strategy,” Mr. Conley said. “It is important that Cincinnati speaks to Washington and Columbus with one voice about our plans for our technology future.”
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