DEL.ICIO.USGeorgia ready to move up among biotech players
State hopes conference leads to next step in biotech success
The Atlanta Journal-Constitution
Sunday, May 24, 2009
Georgia officials, giddy with possibility, proclaimed last week’s biotech conference in Atlanta a roaring success. Gov. Sonny Perdue even danced with a robot.
The state’s nearly $2 million biotech coming-out party let the world know that Georgia aims to be taken seriously in the competitive, lucrative life sciences industry.
Johnny Crawford / jcrawford@ajc.com
The face of Sir Elton John is projected on a screen as he delivers the keynote address at the Bio International Convention May 19.
Georgia, though, doesn’t come close to industry leaders California, Massachusetts and North Carolina when it comes to bio-engineered medicines, fuels and foodstuffs.
Georgia must also overcome some self-inflicted wounds that could relegate it perpetually to second-tier status. A paucity of financing, and a state legislature unfriendly to cutting-edge research, hamper the industry’s growth.
Still, the state counts an impressive array of biotech researchers and businesses. Dozens of start-up companies also work toward patents and profits.
Georgia, eager to make up for lost time, places the life sciences industry atop its economic recruitment pyramid.
“What this convention has done is really shine a light on Georgia and helped change peoples’ perceptions of Georgia,” said Charles Craig, president of Georgia Bio, a nonprofit that promotes the biotech industry. “There is a huge growth potential for Georgia. We’re headed in the right direction.”
More than 14,300 convention-goers descended upon the Georgia World Congress Center last week for the 2009 Bio International Convention. Initially, 20,000 people were expected. But a lousy global economy, swine flu fears and a bummer year for biotech kept away thousands of conventioneers.
Quality of attendee, though, sort of made up for quantity. Nearly half hailed from overseas. Executives comprised 70 percent of all comers, according to the Biotechnology Industry Organization that put on the convention.
The B-52s sang. Sir Elton John keynoted. Karl Rove debated former Vermont Gov. Howard Dean.
The hoopla masked industry turmoil: the Burrill Biotech Select Index dropped 4.4 percent in the first quarter of 2009.
“Our prediction that biotech would face tough times during 2009 and into 2010 is, unfortunately, playing out as financing and investor support remain in short supply,” said Steven Burrill who runs a life-sciences consortium in San Francisco. Yet biotech’s promise proved an irresistible lure.
“The basic critical mass was there; people were doing deals,” said Mitch Horowitz, a biotech expert with Battelle, a nonprofit research and development firm in Maryland. “And states are not slowing down.”
Georgia spent $1.8 million winning, promoting and participating in the convention, according to state officials.
“We deem it a success,” said Perdue before a brief tango Wednesday with the crowd-pleasing robot at the pavilion. “Companies across the world engaged in bioscience are coming here and saying (Atlanta) is a happening place.”
Biotech in Georgia
Nearly 18,000 Georgians worked in life science industries in 2007, according to the University of Georgia’s Selig Center. Average annual salary: $63,317 — about $20,000 more than the state’s average industrial wage. Sales hit $16 billion in 2007.
In 2006, consultants at Ernst & Young ranked Georgia the nation’s seventh best biotech state. Others find the designation a stretch.
Battelle’s Horowitz gives Georgia’s biotech research a top 10 ranking on par with Pennsylvania and New Jersey. As for industrial output — turning vaccines into profit for example — Horowitz says Georgia ranks in the top 25.
While 70 percent of Georgia’ 300 biotech companies tally revenues of $10 million or less, according to UGA, the state counts some Big Pharma manufacturers. Marietta is the U.S. corporate home for Belgium-based Solvay, the $13 billion chemical and pharmaceutical maker.
Sciele Pharma is a home-grown success story. Makers of therapeutic drugs for heart patients, diabetics and pregnant women, Sciele was acquired by a Japanese company last fall for $1.3 billion.
“Georgia is an attractive state to do business in,” said Joseph Schepers, the company’s spokesman. “You’ve got a pool of talent, which is important, and the clinical, regulatory, legal and financial (foundation) too..”
Georgia’s nonprofit research world — Georgia Tech, Emory, UGA, the Medical College of Georgia, Georgia State, the Centers for Disease Control, Morehouse College, St. Joseph’s and Piedmont hospitals — has cranked up biotech development.
Tech, St. Joseph’s, Piedmont and the Georgia Research Alliance launched Tuesday the Global Center for Medical Innovation to speed to market medical devices. That same day, Emory announced a “new drug discovery institute” on campus, as well as a partnership with an Australian institute to develop vaccines.
Georgia also plays off its agricultural roots to boost its nascent biotech industry. Merial, headquartered in Duluth, makes vaccines and drugs for animals. Energy from timber, algae and other natural products tops the state’s bio-fuel wish list.
Self-inflicted wounds
Between 2006 and 2008, according to PricewaterhouseCoopers, Georgia raised $148 million in biotech venture capital, money critical to turn inventions into profits. Georgia ranked No. 14 in private funds. California, the No. 1 state, raised $6 billion.
North Carolina, the Southeast’s biotech leader due largely to the Research Triangle Park, ranked No. 5 with $564 million. It counts 520 bioscience companies that employ 56,000 people, according to N.C. officials.
North Carolina’s legislature, universities and the fund that manages the tobacco settlement have plowed hundreds of millions of dollars into biotech start-ups. The N.C. Biotechnology Center, established in 1984, has funneled more than $200 million into the industry alone.
Georgia offers the usual mix of tax breaks for new and expanding companies, as well as for research and development. It also manages a “seed capital” fund for budding life science companies that matches $1 for every $3 raised privately. Since 2004, the fund has invested $4.6 million.
The Georgia Research Alliance works to turn university and business inventions into commercial successes. Seventy start-ups, armed with GRA seed money, have attracted $300 million in private investment and created 450 jobs since 2002.
Competitive edge
Virtually every state, except Georgia, can tap state-managed pension funds for biotech investments. Georgia legislators won’t allow the estimated $54 billion in teacher and employee funds to be spent on start-ups.
“We need to use every asset possible to be competitive,” said Ken Stewart, Georgia’s commissioner for economic development.
Georgia legislators also throw up biotech barriers whenever Gold Dome discussion turns to restricting stem cell research. The Senate approved a bill in March to prohibit one type of research on the controversial, yet potentially life-saving science. The legislation died in the House. But not before Georgia received a business recruitment black eye.
“It caused people to question our legitimacy as a player in the biotech and life science space,” said Tom Callaway, a founder of Georgia Venture Partners which finances biotech start-ups. “It sent a strong message to the scientific community that we’re not going to embrace the tools of the next revolution.”
But, as Callaway notes, Georgia is still free to research the next life science breakthrough with stem cells and other bio-engineered matter. And there’s hope that last week’s conference will lead Georgia to the next level of biotech success.
“What is tremendous about Georgia,” said Battelle’s Horowitz, “is that it has laid the foundation for an innovation economy.”
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