BioIndustrySouth Winter 2005

Courtesy of www.BioIndustrySouth.com

Seen and Heard this Winter

SEEN: Officials with Genentech, the South San Francisco-based biotech giant, scouting sites in North Carolina, Texas and South Carolina for its next manufacturing plant. Genentech is undergoing a $600 million expansion of its Yacaville, Calif., biotech manufacturing plant. But that expansion won't create enough capacity for what Genentech is about to put on to the market. With 10 approved drugs in four categories, the company is looking for a new production facility outside of California. In addition, Genentech's product delivery is somewhat at risk considering many of its drugs are produced at just one licensed facility.

HEARD: Merck officials maintaining its new $300 million vaccine plant it plans to build in Durham, N.C. will not be affected by significant layoffs the company has announced over the last year or the fact that its arthritis drug Vioxx has been taken off the market. Revenues from Vioxx sales totaled about $2.5 billion (that's with a "b") a year for Merck. Hundreds of lawsuits have sprung up from the Vioxx deal. The drug was pulled from the market because an internal study concluded that people who took the drug for more than 18 months doubled their chances for heart attack and stroke.

ALABAMA

UAB Selects Site for New Lab

The University of Alabama-Birmingham has announced it is building the new Southeast Biosafety Laboratory in Birmingham. Construction of the 35,000-square-foot, $22 million facility is slated to begin at the end of this year. UAB received about $16 million from the National Institutes of Health in the fall of 2003 to build the research facility.

Vaxin's First Flu Vaccine Clinical Trial Reported

Vaxin, Inc., a privately-held biotechnology company located in Birmingham, has demonstrated, in a Phase I clinical study, that the company's recombinant influenza vaccine provides a potential alternative to traditional flu vaccines. The trial was reported in a recent issue of the journal Vaccine. The publication concluded that Vaxin's novel flu vaccine, which is produced in cell culture, was immunogenic and well tolerated by human volunteers. Vaxin developes vaccines and other biological products utilizing non-invasive delivery to the nasal passages and skin.

BioCryst Completes Direct Offering

Birmingham-based BioCryst Pharmaceuticals, Inc., announced in late February that it has completed a $23.9 million registered direct offering of 4,350,000 shares of its common stock to a group of investors. The new financing will help BioCryst continue its clinical trial program planned for later this year. The net proceeds to BioCryst were approximately $22.7 million.

UAB Starts One-Year MBA for Scientists

The University of Alabama Birmingham has launched a one-year MBA for scientists. The new program is designed to give those who hold graduate degrees in science, biomedical engineering, cell biology, physics, medicine and biochemistry among other fields, a better understanding of business processes, including entrepreneurial ventures and commercial uses of bioscience discoveries.

FLORIDA

Scripps Plans to have 100 Scientists Working by End of Year

Even though the Scripps headquarters is mired in a political and judicial mess, the non-profit biotech research concern plans to have 100 scientists on board working on at least 50 projects by the end of the year. Currently, a few Scripps scientists are working at labs located at the temporary Scripps home, the Boca Raton campus of Florida Atlantic University. That work is expected to be moved to another temporary Scripps home, a new 40,000-square-foot lab on the Jupiter, Fla. campus of FAU.

Biotech Pilot Program Starts at FAU

Florida Atlantic University has implemented a Certificate of Biotechnology program through a $2.3 million grant given the university by the U.S. Department of Labor. With the prospects the new Scripps Research Institute offers, universities throughout Florida are ramping up their biotech programs in anticipation of increased demand. Twenty students are currently in the new FAU biotech program.

Universities in South Florida Adding Research Space

The University of Miami and Florida Atlantic University are adding new research space. Both universities are located in South Florida. UM is building a 40,000-square-foot research building and a 20,000-square-foot incubator next to its medical school. The university is targeting bioscience research, health care software and medical devices for the facilities. FAU is adding a second building to its existing, 12-acre research park, which is located in Deerfield Beach. The expansion will bring another 22,000 square feet of bio space on line at FAU.

California Company Links with University of Miami

Foster City, Calif.-based Applied Biosystems has expanded its relationship with the University of Miami in the study of genetic biomarkers in the treatment of non-Hodgkin's lymphoma. UM assisted the company last year in the study of patients receiving standard chemotherapy. The expanded study will focus on six genes when patients are treated with chemotherapy and Rituxan, the first monoclonal antibody therapy approved in the U.S.

CURE Florida Initiative Launched

An initiative called Citizens United for Bioscience Research and Education, or CURE Florida, has been launched as a new public education and outreach program. It is designed to promote the region and the state as a growing hub of biomedical and health science research. CURE Florida officials point to the Scripps project as the core of new bioscience industry growth in the state.

Biotech Landing in Miami's Liberty City

MediVector, a Cambridge, Mass. biotech, has announced plans to open a 50,000-square-foot manufacturing, R&D and training operation in one of Miami's most distressed sectors: Liberty City. The company, which has partnered with pharmaceutical giants such as Merck and Pfizer in Massachusetts, plans to spin off companies from drugs discovered by small biotech companies located in South Florida.

Editorial

Economic Development History Unkind to Scripps Situation

Don't Be Surprised if Scripps Skips Out on South Florida

Scripps is not the first huge deal to come to the South and face significant environmental protests. In the fall of 2003, officials with the California-based Scripps Research Institute announced they would expand to a site called Mecca Farms in northern Palm Beach County. The state of Florida and Palm Beach County would fund the construction of the campus, which would include a 345,000-square-foot biotech research facility and an entire community surrounding it. Reports claimed up to 50,000 jobs could be created directly and indirectly by the project, which, if built, would garner one of the largest incentive packages in the South's history: about $500,000,000.

Now it's the spring of 2005 and not a shovel of dirt has been turned to build the new permanent home for Scripps. In fact, as of this writing government officials in South Florida haven't even agreed on a location. The original Mecca Farms site, a 1,900-acre orange grove, has been met with huge opposition from environmentalists in the state. Several lawsuits have been filed and no decision on those are expected for 18 months, if then. The site is located adjacent to the J.W. Corbett Wildlife Management Area.

A second, alternative site apparently has been agreed upon and it is the Florida Research Park, located north of the Mecca site. However, that site is limited, particularly in respect to the residential part of the project. Regardless, Scripps' first pick is the Mecca Farms site. Curiously, there's been little said from Scripps officials of late regarding the site controversy. That should be Florida's biggest concern.

The litigants against the project pose the greatest risk to Scripps and to the state of Florida. We can think of two projects announced in the South over the last 10 years that have met with similar opposition to Scripps. In 1996, Japanese industry giant Shintech announced it would build a $700 million PVC production facility in Convent, La. Protestors soon marched opposing the deal. The proposed project became the first major court challenge mounted using the Environmental Justice Act (EJA), which was implemented in 1994. That law makes illegal any disproportionate distribution of environmental hazards in low-income communities. At the time, almost half of all Convent residents had incomes below the federal poverty level. Shintech abandoned the project in 1999. Interestingly, Shintech announced a similar project, a $1 billion PVC facility in Addis, La., on January 25, 2005.

In 1998, FedEx announced it would build a $500 million package hub at the Piedmont Triad Airport in Greensboro, N.C. After the announcement, angry protests emerged. The protests centered on noise in the middle of the night from FedEx's aircraft, air and water quality and a reduction in property values. Here it is, almost seven years later and FedEx still isn't operating an air cargo hub in Greensboro, even though it is expected the project will be operational in 2009, 11 years after the announcement.

Scripps is operating at a temporary site at Florida Atlantic University's Boca Raton campus. But it should be noted that we have not seen the level of opposition surrounding the Scripps project since the FedEx and Shintech announcements. So, if economic development history has anything to do with it, there is a possibility Scripps might just skip out on South Florida.

Mike Randle
mike@sb-d.com

GEORGIA

Governor Perdue Launches Life Sciences Innovation Center

Georgia Gov. Sonny Perdue announced in mid-February the creation of the state's fourth center of innovation, the Life Sciences Innovation Center in Augusta. The joint program between the state and the Life Sciences Business Development Center of the Medical College of Georgia will assist life sciences companies by offering a variety of resources. The Center was formed to promote and facilitate interactions between the two hospitals that form the medical college and Georgia-based companies to drive research and development, commercialization and job creation. Georgia has established three other innovative centers -- the Maritime Logistics Innovation Center in Savannah, the Aerospace Innovation Center in Warner Robins and the Agriculture Innovation Center in Tifton.

Regional Group Forming Bio Corridor

The Georgia Bioscience Joint Development Authority has recently been formed. The organization is working to build a bioscience corridor on Georgia Highway 316 between Athens, where the University of Georgia is located, and Lawrenceville, which is located west of Atlanta.

KENTUCKY

Biotech Expands in Lexington

Immpheron, Inc., a start-up biotech in Lexington, is moving its lab in Lexington to the Coldstream Research Park. The company began at the R&D level developing technologies to improve certain protein drugs for diagnostics and therapy of chronic diseases. Funding for Immpheron's research and development activities is being provided by InNexus Biotechnology, Inc., a Canadian public company. The expansion is expected to result in the creation of 15 new jobs.

MARYLAND

Cleveland Developer Named Developer of $500M Baltimore Project

Cleveland, Ohio-based Forest City Enterprises, which developed 1.3 million square feet of research and office space called University Park at MIT in Cambridge, Mass., has been chosen as the master developer of a planned $500 million life sciences, retail and residential project near Johns Hopkins in East Baltimore. Forest City has developed similar large, mixed-use projects in California, New York, Colorado and Washington, D.C.

Joint Agreement Set to Develop New Anthrax Treatment

Annapolis-based PharmAthene and Medarex have announced a joint effort to develop a new anthrax treatment. Medarex is based in Princeton, N.J. PharmAthene is the first biotech to locate in the Chesapeake Innovation Center, located in Annapolis.

MISSOURI

Oakwood Closes on $43M in Venture Cap

St. Louis-based medical and life science venture capital fund Oakwood Medical Investors closed on a new $43 million fund this winter. The fund garnered investments from the Missouri Foundation for Health, The Danforth Foundation and Washington University among others. The latest round of funding is the fourth and largest to date by Oakwood. One of Oakwood's previous investments was in the form of $2 million for Birmingham-based TransMolecular Inc., based in Birmingham, Ala. TransMolecular is developing a drug using venom derived from scorpions to treat brain cancer. That drug is expected to begin clinical trials later this year.

New Labs, Offices Set for St. Louis

CORTEX, the Center of Research Technology and Entrepreneurial Expertise, is building a new biotech center equipped with wet labs and offices in St. Louis. St. Louis offers research facilities and incubators for startup biotechs in university settings, but lacks modern rental space. The $35 million, yet-to-be-built facility is already 50 percent leased.

NORTH CAROLINA

Enormous Project Eyeing Research Triangle

Cardinal Health, the Ohio-based pharmaceutical company, is checking out sites in the Research Triangle to build a $500 million, 1,500-job biotech manufacturing facility. Cardinal currently operates an 85,000-square-foot facility in Raleigh and there's a possibility the new plant, if built, could be constructed adjacent to that operation. At the same time, Cardinal Health is cutting 4,200 jobs from its total work force of 58,000. The new facility could include a 5,000-liter bioreactor similar to those operated by Biogen Idec and Diosynth in the Research Triangle Park. Companies like Cardinal are working to ramp up manufacturing lines in anticipation of new bio drug products entering the marketplace. Currently there are 98 biotech drugs on the market in the U.S. with 370 new drugs undergoing clinical trials. Cardinal Health is a pharmaceutical manufacturer, packager, distributor and consultant to the industry.

Merck Layoffs Won't Affect New $300M Plant in Durham

Merck & Co. has announced over 5,000 job cuts over the last year. Apparently the cuts won't affect the company's proposed $300 million,

166,000-square-foot vaccine manufacturing plant in Durham. The new Merck plant was one of the largest bio projects announced last year in the South. Company officials have said it will build the plant despite taking Vioxx off the market in September. The company is facing numerous lawsuits in that deal. The new plant will house about 200 workers.

LabCorp Expanding in Research Triangle Park

Laboratory Corp. of America is adding 33,000 square feet of space at its existing drug screening operation in the RTP. The company is benefiting from the additional demand for workplace drug testing and disease screening. Growing even faster is LabCorp.'s Center for Molecular Biology and Pathology. That center performs HIV tests and tests for cancer, infectious and genetic diseases. The expansion will result in 90 new jobs.

N.C. State Offering New Biotech Program

North Carolina State University announced it is offering a new biotechnology-pharmaceutical program for its Master of Business Administration studies. Full-time MBA students can take courses centering on issues faced by the bio and pharma industries, including legal and regulatory issues.

RTP to Retain Former Bayer Plasma Division

Bayer AG has sold its plasma products business to investment firms' Ampersand Ventures and Cerberus Capital Management. The selling price was $590 million. Bayer's plasma division employs over 1,600 Research Triangle Employees. Bayer officials claim no layoffs are planned as a result of the sale. The headquarters of the new company, NPS BioTherapeutics, will also remain at RTP.

Pharma Adding 80 Workers

Cary, N.C.-based Cornerstone BioPharma is hiring around 80 employees as it brings several new drugs to market. Cornerstone began in 2004 as Carolina Pharmaceuticals. The company sells three different drugs and is negotiating with several companies on potential partnerships to sell pain and anti-infection drugs.

SOUTH CAROLINA

Ventus Capital to Locate in Greenville

Ventus Capital Services, Inc., will establish a new financial services operation in Greenville. The company specializes in financial management assistance for medical facilities. The company is investing $2 million in the deal and expects to create about 200 new positions.

TENNESSEE

Memphis Emerging

The year 2004 will most likely be remembered as the year Memphis got its bio industry act together. Demolition of the old Baptist Medical Center complex began to make way for a new biotech research park and a biocontainment lab paid for primarily by the Department of Homeland Security. St. Jude Children's Research Hospital is in the middle of a $1 billion expansion and in the fall of 2004 it broke ground on another research facility. The state of Tennessee announced $53 million in the funding of the College of Pharmacy at the University of Tennessee-Memphis and GTx, a homegrown Memphis biotech firm, completed a highly successful IPO by raising over $50 million.

Vanderbilt Hooks Up with California Company

A professor at the Vanderbilt-Ingram Cancer Center is working with Alerion Biomedical on the development of biochemical agents that would help detect cancer during an MRI. San Diego-based Alerion was formerly called MetaProbe, Inc. It designs technology used to detect and monitor diseases at the molecular level. Vanderbilt University Medical Center has received a $250,000 NIH small technology transfer grant for the project.

Nashville Startup Locks Up Deal

BioDtech, Inc. has secured a deal with the National University of Singapore to manufacture a product that detects, neutralizes and eliminates bacterial toxins. The product and its technology, called Factor C, are based on an amino acid found in the horseshoe crab. When applied to injectable drugs or implanted in medical devices, it kills organisms such as E.coli and salmonella and then neutralizes fever-producing endotoxin. BioDtech plans to make the product at Tennessee State University's business incubator and will perform R&D at Cumberland Emerging Technology's biotech incubator in downtown Nashville. The move from prototype to the production phase is expected within six months. Michael Pepe, CEO of BioDtech, expects employment could grow to 200 employees at full production.

Pathfinder Therapeutics Secures Investment

The Discovery Life Sciences Fund is directing funding for Pathfinder Therapeutics Inc., a start-up medical device concern spun-off from technology developed at Vanderbilt University. Pathfinder is developing an image-guided system used in open liver surgery. Investors with the Nashville Capital Network and Vanderbilt are also participating in funding the start-up.

TEXAS

California Medical Device Company Relocating

Stryker Corp. announced in the winter that it has chosen a site in Flower Mound, Tex., to relocate two of its California divisional headquarters. The relocation will add about 300 new high-tech and bio-medical R&D jobs to the Dallas-Fort Worth region. Stryker is a leader in the worldwide orthopedic market and is one of the world's largest medical device companies. The company makes joint replacement, spine, trauma and micro implant systems, endoscopic products and other medical equipment. The Flower Mound operation will concentrate primarily on bio-medical R&D, software development, engineering and sales.

New Med Device Company Forming in Austin

LDR Spine USA, a joint venture between a French company and local capital firms and entrepreneurs, is being launched in Austin. The new medical device firm has received more than $10 million in funding from Austin Ventures, PTV Sciences in Houston, Path4 in Austin and the Paris-based Rothschild Group. The company will make and sell spinal implants and 25 employees are expected to be hired this year.

Fund Halted

Houston-based Momentum Bio Ventures has halted operations after 18 months. The fund, a part of the Momentum Equity Group, was launched in 2003 with the goal of raising $200 million for bio industry investment. The goal was never met. Local managers of the fund are trying to buy out the owners and restart.

Pharma Expanding in Grand Prairie

PharmaFab, a Grand Prairie, Tex., contract pharmaceutical manufacturer has announced a $5 million expansion that will create 100 new jobs over the next two years. The company is adding 106,000 square feet of space to its current 98,000-square-foot facility. The company is involved in new product development, working with biotechs in the decision to make drugs into capsules, tablets or liquids.

VIRGINIA

Merck Investing $40 Million

Merck & Co., is investing $40 million to prepare its facility in Elkton, Va., to support the production of a vaccine candidate in the company's pipeline. The investment will include construction of a new building on its property and the installation of new manufacturing equipment for the process. Merck, headquartered in New Jersey, employs about 900 at its facility in Elkton.

Ascend Therapeutics' Drug Passes Second Round of Testing

Herndon, Va.-based Ascend Therapeutics' TamoGel, used to treat cyclic breast pain, passed its second round of FDA testing during the winter quarter. Officials with the company have met with officials with the FDA to discuss additional trials. About 10 million women suffer from cyclic breast pain, which is not related to breast cancer.

Howard Hughes Medical Buys Land in Virginia

The Chevy Chase-based institute Howard Hughes Medical has been on a land grab venture of late, purchasing an eight-acre parcel of land in Loudoun County, Va. and a 400-acre tract in Montgomery County. Both sites are located near Hughes' 281-acre Janelia Farm research campus. Janelia Farm will be home to 300 scientists conducting biomedical research. It is scheduled to open in 2006.