Governor’s bold jobs stimulus package sees opportunity in bioscience
In his State of the State address on February 6, Governor Ted Strickland proposed a $1.7 billion jobs package, Building Ohio Jobs, which will invest in job-creating industries and Ohio workers over a four-year period.
Through issuing bonds, the $1.7 billion Building Ohio Jobs package would aim to create more than 80,000 good-paying jobs by investing:
- $200 million in the biomedical industry, saving lives by fueling Ohio’s leadership in new medical products.
- $250 million in the advanced and renewable energy economy, including solar, wind and clean coal.
- $100 million in bioproducts that use renewable sources instead of petroleum to create plastics and other products.
- $150 million in infrastructure to help create a seamless network of roads, rails, and ports to support logistics and distribution industry.
- $200 million establishing the Ohio Main Streets Renewal Initiative to spur redevelopment in downtown neighborhoods.
- $400 million in the Clean Ohio fund, to advance efforts to reclaim brownfields and other damaged lands and preserve farm land and open spaces.
- $400 million in the Ohio Public Works Commission to help local partners with road, bridge, water and sewer projects.
“BioOhio supports aggressive state investment in the biosciences as a major growth industry for Ohio both now and into the future,” said BioOhio President & CEO Tony Dennis. “We also are pleased that the administration has invited us to participate in policy development discussions by representing and engaging Ohio’s bioscience industry.”
To that end, BioOhio is helping the administration and the Ohio Department of Development organize meetings and conference calls with Ohio’s biomedical industry leaders. BioOhio also recently distributed a survey to its members, seeking their input on utilizing funds for maximum job growth.
In its recent Ohio Bioscience Growth Report, BioOhio reported that the state’s commercial bioscience sector alone accounted for a $27.3 billion overall economic impact and 48,485 direct jobs in 2006. When indirect and induced jobs are factored, the commercial bioscience employment figure jumps to 128,206.
Lt. Governor Lee Fisher has stated that the biomed-focused funds will be biased toward supporting those opportunities with the greatest potential to create immediate jobs, especially those related to products or services already in the market or entering the market soon. He also has said this initiative is not intended to be a follow-on or replacement for the Third Frontier Project, but rather a jobs stimulus initiative focused on accelerating the growth of technology-based industries where market opportunities and current growth are significant. The administration has indicated it plans to pursue extending the Third Frontier Project as it reaches its maturity in 2012 to continue to generate new emerging companies and technologies.
During his State of the State address, Governor Strickland also referenced several bioscience organizations. Mentions of Cardinal Health’s 700-job, $50 million headquarters expansion in Dublin, Amylin Pharmaceuticals’ 500-job, $400 million investment in its West Chester production facility, and Cleveland’s Global Cardiovascular Innovation Center helped illustrate opportunities and successes in Ohio’s economic evolution. (Click for full text of the address)
The Governor has said that he wants the bond package on the Nov. 4 ballot.
Ohio bioscience and healthcare economic impact near $150 billion
More than 800 bioscience-related entities counted in the state
Released last December, the 2007 Ohio Bioscience Growth Report indicates the growing importance of bioscience to the state’s economy.
BioOhio’s comprehensive definition of the bioscience industry includes three integrated sectors: commercial bioscience entities, hospitals and healthcare providers, and medical colleges. The commercial bioscience sector alone accounted for a $27.3 billion overall economic impact and 48,485 direct jobs in 2006. When indirect and induced jobs are factored, the commercial bioscience employment figure jumps to 128,206.
In 2006, the overall economic impact of Ohio-based bioscience was $146 billion, representing 17.6% of Ohio’s total economic output. Bioscience also directly and indirectly sustained 1.2 million jobs in Ohio in 2006. BioOhio teamed with consulting firm Tripp Umbach and employed the IMPLAN input-output model to estimate the impact of bioscience economic events in the state of Ohio.
Cleveland, Cincinnati, and Columbus anchor the three Ohio regions that collectively accounted for 89 percent of the state’s commercial bioscience industry economic impact and 90 percent of the state’s commercial bioscience employment impact in 2006. In northeast Ohio, commercial bioscience was responsible for an $8.6 billion overall economic impact and 39,247 total jobs (direct, indirect, and induced). The commercial bioscience sector in southwest Ohio boasted an $8.3 billion economic impact and 36,700 total jobs. In Central Ohio, commercial bioscience had an economic impact of $6.5 billion and contributed 30,152 total jobs.
Analysis of commercial bioscience industry segments revealed medical device and equipment manufacturers as the top employers (12,392), while agricultural biotechnology contributed the largest direct economic impact ($6.1 billion) in 2006.
Bioscience, medical technology, and research organizations continue to thrive in Ohio. In 2006, 818 bioscience-related entities were operating in the state, a 6% increase since 2005. Bioscience-related entities include those involved in research, development, and marketing of pharmaceuticals, diagnostics, bioinformatics, medical devices, medical equipment, biotechnology products, and health-related products.
The distribution of Ohio’s 818 bioscience organizations remains consistent with previous years. Northeast Ohio continues its strong performance, as more than half (425) of the bioscience entities are located in the metropolitan Cleveland area, Akron, or Canton. Southwest Ohio, anchored by metropolitan Cincinnati and Dayton, is home to about one-quarter (195) of the bioscience-related entities, followed closely by Columbus and central Ohio (146).
From 2004 to 2006, an average of 58 new companies began operation in Ohio each year. In 2006, Ohio welcomed 47 new bioscience organizations by way of new company launches or companies establishing their first facility in the state, including Activaero America (Columbus), Bexion Pharmaceuticals (Cincinnati), and Telerad Express (Beachwood).
Funding for research, company formation, and company expansion also continued to rise in Ohio. Overall, more than $1.3 billion were invested across Ohio to accelerate Ohio’s bioscience growth in 2006, an increase of nearly $100 million (8%) as compared to 2005.
The sources of funding include venture capital, angel funds, IPOs, SBIR/STTR, state biomedical grants, and National Science Foundation and National Institutes of Health grants. The largest portion of this funding came from NIH ($721 million), which constitutes 60% of total investment.
For the complete report and appendix, visit www.bioohio.com/growthreport07.pdf.
BioOhio partners with Cleveland Clinic on company attraction, recruitment
For years—13 to be exact—there has been a very compelling reason for emerging cardio-focused companies to put Cleveland on their travel itinerary. That’s how many years the Cleveland Clinic has been recognized as the nation’s top heart care and surgery center by U.S. News & World Report.
The latest attraction is the Global Cardiovascular Innovation Center (GCIC), a $250 million research and product development consortium, led by the Cleveland Clinic. Spurred by $60 million from the state of Ohio (the largest economic development investment via the Third Frontier Project), the center was established to assist companies and commercialize cardiovascular products to improve patient care. A statewide collaborative effort, the center currently comprises 20 medical, academic, economic development and industry partners from around Ohio.
In addition to developing, testing, and commercializing new technologies, GCIC officials also believe the center will be a magnet for existing cardio-related companies. To test the theory, BioOhio and the GCIC recently forged an active partnership focused on attracting companies to Ohio. The partnership also has BioOhio contributing to GCIC goals in formation, expansion and job retention of Ohio cardio-related entities. Team NEO, a joint venture of northeast Ohio chambers of commerce, will also partner in the overall recruitment effort for the GCIC.
The GCIC partners’ five-year goals are to form or recruit 27 companies and to create 850 high-paying jobs, said Mark Low, the medical imaging industry veteran hired late last year as the GCIC’s managing director.
In 2007, five bioscience companies moved to northeast Ohio without any incentive package, demonstrating the strength of the state’s existing infrastructure. The companies had existing relationships with area institutions and assets within Ohio. To date, these moves have resulted in 16 new high-paying jobs.
John F. Lewis Jr., vice president of BioOhio, cited the Cleveland Clinic’s unrivaled reputation and the GCIC’s expert-laden management team as to why BioOhio shook hands on the partnership.
“This is a world-class operation,” said Lewis, who leads BioOhio’s attraction and expansion efforts. “We fully expect the GCIC will make Ohio the cardiovascular destination of the world, and BioOhio certainly will promote and leverage it to the fullest.”
BioOhio is in the second year of leading a separate asset-based company attraction project for the state of Ohio targeting relocation or expansion of cardiovascular, imaging, biopharmaceutical and biopolymer related companies.
Estimated at more than $420 billion, cardiovascular medicine is the largest healthcare market opportunity in the U.S. The cardiovascular disease burden poses clear challenges —medical, scientific, and commercial—with enormous benefit accruing to the investigators, entrepreneurs, and companies that can provide innovative, state-of-the-art solutions.
As part of their company attraction and expansion strategy, BioOhio has networked 44 statewide economic development partners, which meet monthly. Recent successes include Amylin Pharmaceuticals building and then expanding its first manufacturing and packaging facility, and Eurand breaking ground on a 13,000 square feet R&D/manufacturing expansion. In both instances, Ohio was chosen out of a highly competitive field of states and countries.
BioOhio’s company attraction function is also linked with, on a less formal basis, the Ohio State University-led Wright Center of Innovation in Biomedical Imaging, the Center for Personalized and Genomic Medicine at Cincinnati Children’s Hospital Medical Center, and Wright State’s Calamityville, among others.
BioOhio Government Affairs Update
written and monitored by Colby & Company
Despite the negative economic forecasts, 2008 holds great promise for the growth and development of Ohio’s bioscience industry. Governor Strickland used his second State of the State speech last Wednesday to propose a $1.7 billion economic stimulus bond package — “Building Ohio Jobs” — that he projected would create more than 80,000 jobs. The growing biomedical industry receives significant attention in this stimulus package. BioOhio is engaged with the administration and Ohio Department of Development as an advisor (see full story above).
Last October, BioOhio President Tony Dennis testified in support of SB 186, the Cancer Trials bill. He stated, “Biotechnology has already created more than 200 new therapies and vaccines, including products to treat cancer. There are more than 400 biotech drug products and vaccines currently in clinical trials targeting more than 200 diseases, with the majority targeted at various cancers. This bill will accelerate the continued drive to cure cancer by encouraging the wider application of cutting edge therapies.”
BioOhio continues to monitor health-related legislation that could affect the bioscience industry. HB 99 regulates the substitution of drugs intended to treat epilepsy. This bill would benefit brand name manufacturers by allowing doctors to require the prescription be filled “as written” rather than permitting a generic substitute. HB 137 requires certain health care policies, contracts, agreements, and plans to provide benefits for equipment, supplies, and medication for the diagnosis, treatment and management of diabetes and for self-management education. SB 278 requires certain health care policies, contracts, agreements and plans, as well as the state’s Medicaid program, to provide benefits for colorectal examinations and lab tests.
The Patent Reform Act of 2007 (H.R.1908/S.1145), introduced by Rep. Howard Berman (D-CA) in the House and Senator Pat Leahy (D-VT) in the Senate was passed out of the House of Representatives in September. The Senate is currently working on the legislation and many believe it will come to the Senate floor as early as mid-February. Of major concern to the bioscience industry are provisions relating to apportionment of damages, the creation of an unlimited second window, and the need for “inequitable conduct” reform.
BioOhio offered members the opportunity to sign-on to an advocacy letter expressing these concerns. Eighteen members signed the letter, which was faxed to Senators Brown and Voinovich on February 12.
The Senate Health, Education, Labor and Pensions Committee passed follow-on biologics legislation last July. There have been several bills introduced in the House, including a proposal from Rep. Jay Inslee (D-WA) that is favorable to the industry because, among other things, it provides 14 years of data exclusivity. Additional proposals include a bill introduced by Congressman Henry Waxman (D-CA) that lacks safeguards for patient safety as well as protection for data exclusivity. The biotechnology industry is supportive of finding a pathway for the creation of follow-on biologics this year.
The Small Business Innovative Research Program is up for reauthorization this year. Currently, companies that are more than 50% backed by venture capital are not eligible for SBIR dollars. This month the House Small Business Committee met to discuss ways to restore funding available for research focused on innovative new treatments for life-threatening illnesses. BIO and its state affiliates like BioOhio are hopeful that the need to reauthorize the SBIR program this year will serve as a vehicle to change eligibility standards for majority venture-backed bioscience companies.
BIO Legislative Day Fly-in
BIO’s 2008 Legislative Fly-in is on April 15-16, in Washington, D.C. The annual BIO Fly-in takes place every spring and hundreds of biotech industry executives participate. This event will provide an opportunity for the biotechnology industry to meet with the members of the 110th Congress and to advocate the BIO legislative agenda. BIO has several room blocks at several D.C. hotels, available until mid-March. To register or for additional information: www.bio.org/flyin.
Ohio Bioscience Career Fair attracts and impacts
200 job seekers mingle with 21 recruiting companies
In November 2007, BioOhio hosted its 2nd Annual Ohio Bioscience Career Fair in Columbus. Nearly 200 job seekers, from current students to industry veterans, enjoyed meeting with 21 company exhibitors, including Alkermes, Amylin, Battelle, Ben Venue Labs, Diagnostic Hybrids, Eurand, NAMSA, and WIL Research. Attendees traveled to Columbus from cities throughout Ohio, including Cleveland, Cincinnati, Toledo, Akron, and Dayton. To date, exhibiting companies report that more than 40 interviews and at least 7 new hires have resulted from this event.
Based on positive feedback and results, BioOhio plans on continuing the annual statewide career fair and is considering regional offerings as well.
“Our career fairs are just one way in which BioOhio is helping Ohio bioscience companies meet their workforce needs,” said BioOhio Senior Program Director Bill Tacon. “In addition to matching available talent with Ohio openings, we are also working with Ohio’s educational feeder system, including high schools, community colleges, career centers, and universities to ensure the appropriate curricula and training modules are in place to respond to Ohio’s bioscience industry growth.”
Midwest health care startups raise record $1.2 billion in 2007
Minnesota and Ohio attract most dollars
Midwest health care startups attracted a record $1.2 billion in new investments in 2007, according to the Midwest Health Care Venture Investment Report released by BioEnterprise, a BioOhio regional affiliate. The total represents a 55% increaseover 2006, a sharp rise that both outpaces national venture industry growth and even surpasses the 25% increase that occurred in the previous year.
“The rise of Midwest health care ventures has accelerated in an almost exponential manner,” said Baiju R. Shah, president of BioEnterprise. “The pipeline of high-quality ventures continues to both mature and gain greater national venture interest.”
Ohio and Minnesota led all Midwest states—companies in both states attracted $296 million. Both states had one major financing (Athersys, Ohio, $70 million; CVRx, Minnesota, $65 million) and several other financings exceeding $20 million each. Ohio reported 44 transactions, compared to 29 for Minnesota. Following the leaders were Indiana ($135.6 million), Illinois ($125.5 million), and Western Pennsylvania ($101.4 million).
- Biopharmaceutical companies: $687 million (56%)
- Medical device companies: $329 million (27%)
- Health care software and service companies: $208 million (17%)
Ohio’s 2007 health care and bioscience investments represent a 160% increase compared to 2006, which included 39 deals totaling $113.9 million.
In terms of metro areas, Minneapolis ($296 million) and Cleveland ($241.8 million) led the way, collectively accounting for 44 percent of Midwest health care and bioscience investment. Those regions were followed by Chicago ($125.5 million), Indianapolis ($113.6 million) and Pittsburgh ($101.4 million).
The year saw several high-profile public biopharmaceutical offerings including Eurand (Ohio), Athersys (Ohio), and Targanta (Indiana). Other notable public offerings in the Midwest included Enteromedics (Minnesota) and Tomotherapy (Wisconsin). In addition, several companies achieved success through acquisitions such as Renal Solutions (Pittsburgh) and MemberHealth (Ohio).
“These data reflect the increasing quality and quantity of good investment opportunities we investors are seeing here in the Midwest,” commented John Rice, managing partner of
Triathlon Medical Ventures, which has offices in Cincinnati, Indianapolis, St. Louis, and Louisville. “This is the result of the continued investments being made by many of the states in this region promoting the life sciences.”
The Midwest Health Care Venture Investment Report aggregates venture investment in 10 Midwest states and western Pennsylvania and includes all reported numbers. For complete state-by-state and region-by-region results across the Midwest, access the full report here.
BioOhio News Briefs
Ohio attracts major bioscience-related events
In addition to the event goodness delivered by BioOhio and its members (see below), 2008 will see several “national” events coming to Ohio.
- The Association of University Technology Managers (AUTM) Central Region Meeting will be held at the Marriott Cleveland Downtown at Key Center, July 14-16. This meeting will host 200 technology transfer professionals from across the country. BioOhio is a supporting promotional sponsor. Click here for more information.
- The 40th Central Region Meeting of the American Chemical Society (CERMACS) comes to Columbus, June 10-14. More than 1,200 attendees are expected, including students, academics, and business professionals from throughout the Midwest (cermacs.org).
- In October (22-25), the National Career Pathways Network 2008 Annual Conference takes place in Cincinnati’s Duke Energy Center. This year’s theme is “Connecting for Success: Building the Future Talent Pipeline,” and programming will include bioscience-centric sessions. Organizers expect 3,000+ attendees. Visit the event site for details.
- Also in October (14-16), SSTI will hold its 12th Annual Conference at InterContinental Hotel Cleveland. This year’s host sponsor is NorTech. SSTI’s Annual Conference offers opportunities for tech-based economic development practitioners and policymakers to further their professional development and learn how to apply best practices. Go here for details.
Welcome to a multitude of new members
BioOhio welcomes and thanks the following members who have come on board since October:
- NanoLogix, Inc.
- Lakeland Community College
- University of Toledo
- Ward Engineering, Inc.
- Freedom Meditech, Inc.
- Cellular Technology Ltd.
- Detrow & Underwood
- Cincinnati Sub-Zero Products, Inc.
- Warren County Career Center
- Gallagher & Dawsey Co., LPA
- Interplex Medical, LLC
- MAR-TEST, Inc.
- RadioCarb Genetics
- Global Recruiters of Cleveland-Westside
- Traycer Diagnostic Systems, Inc.
- CompuSniff LLC
- OhioHealth Research and Innovation Institute
- Gary Kurc
- Roy Kulick
- Margaret Wong
- Scott Jacobs
- Charles Hart
- David Clifford
Regula awards $500,000 grant to develop bioscience education pathways
Congressman Ralph Regula (R-16) recently awarded a $500,000 planning grant to an Ashland-based consortium of businesses and educational institutions with the purpose of developing future workers for bioscience-related industries.
The Ashland-based BioScience Consortium of Northeast Ohio received the one-year grant to help develop regional bioscience educational pathways such as medically-oriented sciences, devices and diagnostics, agricultural biotechnology, biomaterials and bioinformatics.
The consortium, a seven-county partnership of more than 25 businesses, educational providers and nonprofit organizations (including BioOhio), sought the grant based upon evidence that the biosciences will remain a strong regional and state industry.
AdvaMed now accepting panel proposals for 2008 Conference
As a supporting partner of AdvaMed 2008, BioOhio encourages Ohio’s medical technology companies and institutions to consider submitting a panel session proposal for inclusion at the annual meeting in Washington, Sept. 21-24. Submission deadline is March 21. More information and online application found here: www.advamed2008.com/program/.
Bioscience events in Ohio
Business Development “Boot Camp” for Scientists and Techies
March 19, 3pm-5pm | TechColumbus Center
Join BioOhio-member ImprovEdge for an engaging session focused on individual networking skills – introductions, working a room, and the art of conversation. Battelle, the Wharton IT group and Lexicon Genetics have all benefited from ImprovEdge training that demystifies the process of building relationships and building business. Free for members; $10 for non-members. For more info: email or call Jen Goldsberry (614/675-3686, x1004).
Showcase 2008: A Celebration of UC’s Contribution to the World of Ideas
March 6-7 | Tangeman University Center, University of Cincinnati
The opening keynote, Moira Gunn, PhD, host of NPR’s Tech Nation and BioTech Nation and author of “Welcome to BioTech Nation,” will occur March 6, followed by a VIP Reception. Exhibits, displays and opportunity to meet the inventors happen March 7. For more information, visit: www.uc.edu/showcase.
Research ShowCASE at Case Western Reserve University
April 16-17 | Veale Convocation Center
Hundreds of scientists and scholars will come together for two days of collaboration, creativity, and innovation. Research ShowCASE is a free public exhibit. For more information: http://ora.ra.cwru.edu/showcase/index.cfm.