West Coast Hot Spots

On the West Coast, Seattle has been dubbed the BioForest by BioSpace.com, the web-based hub of the biotech industry. The city boasts 165 biotechnology and medical technology companies. According to Michael Tippie, vice president for business development of LifeSpan BioSciences, which was founded in 1995, it's an old-growth forest. "The development of a center for biotechnology takes a great many years," says Tippie. "A great university is a necessary condition, as well as an availability of talent and some existing companies from which to spin off."
       

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Seattle's academic greatness, says Tippie, is the result of "30 years of pork barrel politics" that sends more federal funding to the Univ. of Washington than to any other state-funded school in the nation.
        But while $500 million a year pours into academia, Seattle itself has been a little hard up for capital. "The Bay Area investors don't come up here," says Tippie. "They figure, why travel?" Biotech, with its long road to success, is not generally a venture capital favorite anyway. LifeSpan BioSciences has been funded by local angels, as well as institutional investors the world over.
        Bruce Carter, president and CEO of ZymoGenetics, thinks the dry capital bed is about to flood. "There's a rush of capital coming in now from up the coast, from other successful biotechnology firms and from Microsoft co-founder Paul Allen's Vulcan Ventures investment firm," he says.
        And biotech companies keep spawning themselves in Seattle; there's little difficulty keeping them staffed between the local talent pool and the willingness of people to move from the more expensive Bay Area.
        Carter believes his company has a recruiting edge because of the nature of its headquarters in which all the researchers work. In 1994, the company took over a derelict 1910 electric generating plant in downtown Seattle on Lake Union. With a $25 million investment, ZymoGenetics not only restored the building to its former glory, including replacing toppled chimneys, but it provided huge windows for the laboratories and hung modern art in the 110,000-sq.-ft. (10,200-sq.-m.) facility. In 1997, the company built an additional 40,000-sq.-ft. (3,700-sq.-m.) facility across the street. "Normal turnover in biotech is 18 percent. Ours is 9 percent," boasts Carter.

North Carolina and Other Key States

Elsewhere in the U.S., biotech hot spot North Carolina is aggressively seeking to recruit more companies in the sector. "It's a clean industry, it pays well, and it's growing," says Barry Teater, spokesman for the North Carolina Biotechnology Center, a state-financed non-profit biotech recruiter. Teater emphasizes that even on the manufacturing side, biotech jobs pay higher-than-average salaries.
        The North Carolina Biotechnology Center isn't an incubator, but it does serve to recruit firms to the area with venture capital and low-interest loans. The real allure for many companies is its close proximity of Duke University, North Carolina State University, University of North Carolina, Chapel Hill, Wake Forest and East Carolina Universities.
        AlphaVax Human Vaccines landed in Durham because the technology originated at the Univ. of North Carolina. "Two of our founding scientists are at UNC, and our technology license, as well as the early formation of the company, took place there," explains Peter F. Young, president and CEO. "We maintain close links with the founders' labs, and have benefited from some excellent start-up expertise from the local entrepreneurial community."
        A North Carolina Genomics and Bioinformatics Consortium has just been founded, lead by Glaxo-Wellcome and IBM, to unite biotechnology players across the state and to help them commercialize their products.

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        Teater counts 10 new recruits to the Tarheel State in the last couple of years. The most recent are Syngenta AG, formed by the merger of Novartis and AstraZeneca, which chose Greensboro as the site for the U.S. headquarters division of its Syngenta Crop Protection division. And Schwarz Pharma AG, of Monheim, Germany, opened a drug research and development facility in Research Triangle Park. In 1999, Diagnology, a Northern Ireland maker of diagnostic tests, chose the Research Triangle area as the site of its U.S. headquarters.
        In the Midwest, an increasingly important region for biotechnology and pharmaceuticals, Eli Lilly and Co. made news last July, when it announced a $1 billion expansion of its Indiana operations and the expected creation of up to 7,500 new jobs for the state.
        The expansion plan includes development and infrastructure improvements at two of Lilly's main Indianapolis campuses -- the Lilly Corporate Center and Lilly Technology Center. Of Lilly's total investment, approximately $500 million has already been committed to new construction projects. The total project involves more than 20 new construction projects, including a $100 million expansion of the company's recombinant DNA human insulin production facilities to $5 million to create high-tech research laboratories. The State of Indiana and the City of Indianapolis are providing $108 million and $106 million in economic incentives respectively over the next 10 years.
        Oklahoma is developing a small biotechnology cluster connected to the Univ. of Oklahoma in Norman, which is hosting part of the federal Human Genome Project, and the Oklahoma Medical Research Foundation. Pure Protein LLC, Novazyme and Novagen are new companies spawned from research done at the university.