Georgia makes good on promise to expand biotech industry

Last May, the state spent nearly $2 million hosting the biotech industry’s biggest annual convention at the Georgia World Congress Center. Billed as the debutante ball for the state’s life science industry, Georgia leaders vowed to recoup their investment in the 2009 Bio International Convention.

It appears they did.

A week ago, a Texas blood-testing center announced it would spend $12 million and hire 125 scientists, technicians and support staff for a laboratory in Norcross.

Six months earlier, a Seattle biotech firm said it would build a $70 million cancer-fighting lab in Union City and hire 300.

In all, state economic development officials tallied tens of millions of dollars in investments and hundreds of new jobs in the pharmaceutical, medical device and bio-energy industries in Georgia over the last fiscal year.

“These are quality investments, high-paying jobs, knowledge-based jobs, jobs that Georgia definitely wants to go after,” said Carol Henderson, director of the department’s health sciences and advanced technologies division. “We’re heading in the right direction.”

Georgia still has a long way to go to match North Carolina and Florida, let alone California and Massachusetts, as life science leaders. Those states dwarf Georgia in the amount of biotech investment. They’ve also established, with little political interference, a steady stream of financing to grow their life science industries.

Georgia’s start-up financing is paltry by comparison and inconsistent. State legislators routinely threaten to hobble Georgia’s biotech industry by outlawing some forms of stem-cell research – an anti-science broadside frowned upon by industry leaders worldwide.

“There’s a general agreement that the state is not doing as much as other states to attract industry,” said Charles Craig, president of Georgia Bio, a nonprofit association representing 300 life-science companies, universities, business and government groups. “This industry is essential to the state’s economic development.”

Georgia’s array of biotech assets is impressive. Roughly 18,000 Georgians worked in life science industries in 2007, according to the University of Georgia’s Selig Center, and earned an average salary of $63,317. Sales hit $16 billion. State and local governments reaped $517 million in tax revenues.

The industry is relatively young and homegrown in Georgia. About 40 percent of the companies employ fewer than 10 people, according to UGA. Global biotech giants abound, though. Marietta is the U.S. corporate home for Belgium-based Solvay, the $13 billion chemical and pharmaceutical maker. Duluth’s Merial, a French company, makes vaccines and drugs for animals.

The state’s biotech research world is equally rich: Georgia Tech, UGA, the Medical College of Georgia, Georgia State, the Centers for Disease Control, Morehouse College, St. Joseph's and Piedmont hospitals. Emory University recently started a “new drug discovery institute.”

QualTex Laboratories, the nation’s largest independent non-profit testing lab, announced earlier this week it will hire 125 people in Norcross to test blood and plasma for infectious diseases. Dr. Norman Kalmin, QualTex’s CEO, said Atlanta’s location, airport and talent helped seal the deal.

“Finding qualified people is always a challenge, but in the Atlanta area the chances of finding the people we are looking for are much greater,” he said.

Consultants, including Ernst & Young and Battelle, routinely rank Georgia among the top 10 states for biotech research and development. Georgia’s life science industry is growing twice as fast as the state’s overall growth rate, according to the U.S. Bureau of Labor Statistics.

Yet financing, and perceived ambivalent political leadership, hinder development.

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, received $6 billion. No. 5 North Carolina, home to the Research Triangle Park, raised $564 million.

Georgia offers the usual mix of tax breaks for new and expanding companies, as well as for research and development. A tax credit for good-paying jobs helped lure Dendreon.

In addition, the Georgia Research Alliance, which links six of the state’s top universities with promising start-ups, offers grants to bring ideas to market. Since 2002, GRA has helped 80 early-stage, bio-science companies and others attract $300 million in private equity investment.

However, the unwillingness of the General Assembly to let a small portion of the state’s $50 billion pension fund be used for venture capital represents a big disappointment for bio-tech backers. Virtually every other state allows it.

Craig and others hold out hope the General Assembly this year will pass, as part of a job-creation bill, a new round of tax credits for so-called “angel” investors to encourage early-stage investments.

A new money source would take some of the sting from legislators’ attempts to restrict, and criminalize, research using embryonic stem cells. A stem cell bill passed the Senate last year and remains alive in the House.

“If we did something restrictive, it would position Georgia in a negative way,” Craig said. “We’re all -- the business community, the life science industry, the universities, the state -- trying to promote Georgia as a positive place, a destination for life science industry development.”

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