JANUARY 2006
A report from Ernst & Young earlier this year indicated that greater competition and a search for opportunities in new markets were among the factors internationalizing the biotech industry.
While the U.S. remains far ahead of Europe in terms of the maturity of the sector, competition is growing as Europe's financial performance improves.
Asian countries have also stepped up their efforts in the biotech arena — it is now a priority area for investment by governments across the continent, with stem cell research providing some of the stimulus.
According to Ernst & Young, publicly traded biotech companies across the globe saw revenue rise 17 percent in 2005 to $54.6 billion — with more than three-quarters of that accounted for by the U.S. alone.
It said $3.6 billion in venture capital was raised in the U.S. and $1.4 billion in Europe. It also found the pipeline of late-stage products in development has grown considerably with 20 new biotech medicines approved in the U.S. last year and nine in Europe.
Increasingly, the biotech industry is feeding the pipelines of drugs in development of both biotech groups and big pharmaceutical companies. Pharmaceutical groups are looking to biotechnology companies to help bolster their own pipelines and find new potential blockbuster drugs, as their own laboratories have been slow to generate new drug leads. They are looking to license in biotechnology products — or just to buy the companies outright.
While such deals show that the pharmaceutical companies see value in biotech groups, the question remains who the terms of the deals favor. Increasingly, biotech companies are marketing their products through a pharmaceutical company rather than directly to the patient base.
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An article by Benjamin Conway, head of life science investment banking for Kaufman & Co. in Genetic Engineering News reports that any number of perspectives would suggest that the business of drug development is in the midst of great evolutionary upheaval.
Where historically the pharmaceutical industry has been something of a big brother to the biotechnology industry, facilitating its smaller sibling's efforts with everything from financial support to development expertise to market access, today the biotechnology industry would seemingly have a legitimate claim to equal industry stature.
Moreover, emerging trends would suggest that biotechnology is poised to displace large pharma's long-standing industry dominance.
On closer study of the data, the difference between the biotechnology industry and the pharmaceutical industry with regard to the number of new drugs produced is striking. From regularly generating 20 or more new drugs annually, the output of the world's top 20 pharmaceutical companies has dropped precipitously to 12 drugs in 2003, and 7 in 2004. This decline seems even more staggering considering the levels of R&D dollars involved.
At the same time, the number of new drugs originating from the biopharmaceutical sector has risen sharply. In 2003, biotechnology gave rise to 29 new compound approvals. In 2004, that number rose to 38, over 80 percent of all new drug approvals. This trend underscores what seems to be a growing reality: innovation today is decidedly not the domain of large pharma but is instead dominated by biotechnology.
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Today, Singapore continues to capitalize on its geographic location as one of the crossroads of the world to grow life science companies. An article in Genetic Engineering News explains as a testament to their commitment to the life science industry in the 21st century, Singapore built two state-of-the-art biomedical research parks. The Biopolis, a biomedical research complex of seven buildings that houses 2,000 scientists, opened in September 2003.
The first tenants were the Genome Institute of Singapore and the Bioinformatics Institute. Buildings named Centros, Genome, Matrix, Nanos, and Proteos hold biomedical research institutes of the Agency for Science Technology and Research (A*STAR), which oversees scientific efforts under the Ministry of Trade and Industry.
The Biomedical Sciences group of Singapore's Economic Development Board, Bio*One Capital, and A*STAR work in close partnership to develop, fund, and build life science companies and facilities. The joint initiative, launched in 2000, is paying off. Between 2003 and 2004, manufacturing output in the biomedical sciences sector rose 33 percent, and employment grew 7 percent to 9,225 workers.
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Susan Aldridge, Ph.D. explains in Genetic Engineering News that Norway has considerable experience with fishing and related industries and is now using its close relationship with the sea to develop a thriving marine biotechnology sector. Several new initiative around the country promise to help "blue biotech" discover drugs, novel enzymes, and other useful compounds, while exploring the genetic diversity of the marine ecosystem.
Another key focus of blue biotech for Norway is developing aquaculture — fish
health, breeding, and feeding.
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Eden Biodesign (Cheshire, U.K.), a specialist consultancy in biopharmaceuticals development and regulatory affairs, has been chosen to operate the U.K.'s new National Biomanufacturing Centre® (NBC) scheduled to open in early 2006.
The idea for the NBC came from Professor Julian Crampton of Liverpool University in response to a government-funded program called Manufacturing for Biotechnology, which had already identified a lack of capacity in the U.K. for manufacturing small-scale, high-quality biopharmaceuticals for early-stage clinical trials.
The money for the Center — £34 million in total — has come from a number of organizations. The Northwest Development Agency has given £19 million, the Department of Trade and Industry £3 million, while almost £12 million has come from the EU's Regional Development Fund.
Linda Magee, Ph.D., director of Bionow, the Agency's dedicated biotech cluster division, is the project director of the NBC.
The northwest England location for the NBC, at Speke, Liverpool, was chosen because, according to Derek Ellison, Ph.D., Eden's business development manager, "It is currently the U.K.'s largest manufacturing region for pharmaceuticals and has a track record stretching back many years."
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Together New Zealand and Australia constitute a rapidly-growing biotech hub — the world's fifth largest biotech center, worth a combined NZ$14 billion, employing over 10,000 (with over 40 percent of the region's biotech employees residing in New Zealand).
Australia has about 400 core biotechs, with about 43 percent focusing on human therapeutics, 17 percent in agbiotech, and 15 percent in diagnostics. It has also made significant investments in aquaculture and marine biotechnology, environmental sciences, stem cell research, and nanotechnology.
In June, a new $104.5-million biotech research center opened in Melbourne, Bio21 Institute, part of a $400-million Bio21 cluster in Victoria.
New Zealand has 53 biotechs and 28 research institutes — also heavily weighted in human therapeutics — and as an agriculture-based society, it is putting substantial efforts in plant and animal sciences.
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Today, the manufacture of pharmaceuticals and related products makes up about 16 percent of the Czech Republic's $5-billion chemical industry, according to government statistics and estimates. So it is no surprise to find CzechInvest officials enthusiastic about biotechnology in the country, nor to see an ambitious new innovation center devoted to life sciences being established in Brno.
The Brno initiative — a biotech innovation cluster — is based at the new $120-million campus of Masaryk University, which will serve the fields of medicine, chemistry, biology, and sports, with an additional 37 acres to be developed for commercial partners.
The university's morphological center and a large research and teaching hospital have already been built. Two months ago, integrated laboratories for biomedical and environmental technologies opened. And an "incubator" for biotechnology company startups is scheduled to be ready in February 2008.
Last month, JIC launched an Internet site, www.gate2biotech.com, that aims to connect the international biotech community with Central Europe. Organizations, universities, companies, and researchers from the Czech Republic, Austria, Slovakia, Hungary, and Slovenia can share their know-how, knowledge, and experiences in the field of biotechnology.
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Flanders, in northern Belgium, is the center of the nation's biotech industry, home to 43 dedicated biotech and 70 mixed biotech companies.
Twenty-five multinationals, including Johnson & Johnson, Pfizer, Bayer, Schering-Plough, Baxter, Monsanto, AstraZeneca, and Genzyme, have chosen to locate R&D, manufacturing, and marketing and sales in Flanders. With the seat of the European Union (EU) in Brussels, the region is centrally located within the EU.
Over the past decade, Flanders has transformed longstanding excellence in the academic life sciences into a flourishing commercial center of biotechnology, mostly in Ghent, Leuven, and Mechelen.
Flanders has the second highest rate of clinical trial protocols per capita in all of Europe, and is home to Europe's second largest hospital. The region currently employs about 20,000 in the life sciences, and after the U.K. and the U.S., has the world's highest number of drugs in development.
Flanders has also steadily increased investment in venture capital in biotech per capita, and now maintains the highest rate of investment among eight EU nations.
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When it opens in early 2006, the Barcelona Biomedical Research Park (PRBB) will house 60 international research groups on the cutting edge of the life sciences, from stem-cell research and regenerative medicine to genetic sequencing. The Financial Times reports the Catalan government has opened its checkbook to sign up some of the hottest tickets in the biomedical research field from the U.S. and northern Europe. They include top Spanish scientists who were working abroad due to the lack of funding and facilities in Spain.
Some of the teams are already working in provisional labs. By the end of 2006, there will be 1,000 professors, researchers and students working on a host of projects ranging from molecular sciences to big epidemiology studies.
Other regions, notably Madrid, the Basque country and Valencia, are also setting up biomedical research centers with a view to creating their own biotech clusters. GlaxoSmithKline has located a big tropical medicine research center on the outskirts of Madrid, while Valencia has just inaugurated a big research facility for 500 researchers in the life sciences.
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Two hundred bioscience companies are based in Minnesota, largely around the University of Minnesota (UM) in Minnesota-St. Paul and the Mayo Clinic in Rochester.
Three bioscience incubators opened in the last year to support new companies. In St. Paul, a private investor converted the old state crime laboratory into Menlo Park, a 78,000-square-foot building that's home to ten companies. Elliott Park Life Sciences Institute in downtown Minneapolis houses startups in 10,000 square feet near the Hennepin County Medical Center.
The newest incubator, University Enterprise laboratories, is a nonprofit partnership between St. Paul and UM that provides 21 wet laboratories in its 150,000-square-foot facility.
Minnesota also established a Bioscience Zone in the corridor that stretches from Minneapolis-St. Paul to Rochester. The zone offers tax incentives to existing and startup bioscience companies who locate there.
Several large pharmaceutical companies operate facilities in the Twin Cities.
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According to Genetic Engineering News, for the second straight year, North Carolina ranks third behind California and Massachusetts as a biotechnology powerhouse. In fact, North Carolina continues to be the “leading center in the Southeast for biotechnology,” according to Ernst & Young’s Global Biotechnology Report 2005.
The state’s 225 life science companies employ 40,000 people in a variety of biotechnology, drug discovery, lab testing, and biomanufacturing facilities.
Much of the activity centers in Research Triangle Park, bordered by Chapel Hill, Raleigh, and Durham, home to the University of North Carolina (UNC), Duke University, and North Carolina State.
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According to a report that the Battelle Technology Partnership Practice and the State Science & Technology Institute prepared last year for Biotechnology Industry Organization, only 14 states identified the biosciences as an economic development opportunity in 2001. But the study, called “State Bioscience Initiatives,” points out that “today, 40 states are targeting the biosciences for development, and all 50 states have technology-based economic development initiatives that are available to bioscience companies.”
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MacroGenics, Inc. announced the grand opening of its recently-completed cGMP manufacturing facility located in Rockville, MD.
The manufacturing facility houses two large Wave bioreactors that enable MacroGenics to produce monoclonal antibodies under current Good Manufacturing Practice (cGMP) standards in 4,500 square feet of cleanrooms. The new site also provides the company with 10,000 square feet of space for support laboratories and offices.
MacroGenics currently employs 15 individuals at the Shady Grove manufacturing site in Montgomery County, MD and anticipates that by 2012, the number will grow to approximately 40. The company further employs over 50 people at their corporate headquarters on East Gude Drive in Rockville, also located in Montgomery County’s biotech corridor.
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Genzyme says it has started work on pharma manufacturing and R&D facilities in Massachusetts as part of a $210 million investment program in the state. Projects include a research center at Waltham and a 50 percent increase in cell-culture manufacturing capacity at Allston. The Allston expansion is due for completion by the end of 2008, Genzyme says.
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The Waisman Clinical BioManufacturing Facility at UW-Madison is seeing strong demand for biomanufacturing lab time.
“Space is getting to be an issue,” says John Keach, business development manager for the facility that was designed to help pharmaceutical researchers advance their discoveries by providing them with lab space that has highly-controlled and extremely clean environments. “We have very little down time.”
Of the facility’s 10,000 square feet, 6,000 is cleanroom space. It has two suites each for microbial products, cell processing, and mammalian products. It also has an aseptic fill suite, quality control labs and a cell bank.
The facility has proved so popular that Keach and facility technical director Derek Hei are starting to talk about expansion, which would likely come in the form of separate space where some of the current suites could be moved to.
“We’re a ways off to physical expansion,” Keach said. But he envisions something happening in three to five years.
It would be no small venture; the current facility costs about $8 million to develop as part of a $24-million research wing added to the Waisman Center. The center is one of 14 national centers dedicated to research on human development and developmental disabilities.
If a split were to occur, it might make sense to have some of the research suites at the University Research Park, where potential clients may be based, Keach said. Projects that were more closely related to the UW Hospitals would remain in the current facility, he speculated.