When biotech company Osteologix A/S was looking to set up a US corporate headquarters in 2004 to supplement its facility at the Symbion Science Park in Copenhagen, Denmark, its goal was not only to establish a foothold in the US market but also to gain exposure and a high-level CEO to take the company public. Wherever this new executive was located was where Osteologix would base the company.
Enter Charles J. Casamento, with a CV that reads like a Who’s Who: key positions with Sandoz, Hoffmann-LaRoche, Johnson & Johnson and American Hospital Supply Corporation, where he was vice-president of business development and strategic planning for the critical care division. He had also served as senior vice-president and general manager for pharmaceuticals and biochemicals at Genzyme and was co-founder of Interneuron Pharmaceuticals, valued at $1.6bn after the new drug application for Redux, assembled and submitted to the Food and Drug Administration (FDA) during his tenure. As chairman, president and CEO of RiboGene, he took that company public and later merged with another public company.
Mr Casamento was based in San Francisco, so that is where Osteologix set up. The company retains its development activities in Copenhagen, Europe’s own hotbed for biotech research and development and start-ups. Now that the company is undergoing clinical trials with its lead compound for osteoporosis prophylaxis and therapy, however, having a headquarters in the US is critical because the location offers both experienced executives and investment capital.
“San Francisco and San Diego lead the pack in that regard, as does Boston on the east coast,” Mr Casamento says, although he adds: “The venture capital firm that has invested in us has money from a large Scandinavian pharmaceutical company. They also have money from the Wallenberg family in Sweden.”
What is missing in Europe, according to Mr Casamento, is management talent. “In Europe, biotechnology is still a new business, whereas it’s some 40 years old in the US,” he explains.
As a state, California offers little financial support to biotechnology. “We don’t need it because we are able to raise money ourselves,” says Pam Marrone, president and founder of AgraQuest, a Sacramento-based company that focuses on natural and environmentally safe pesticides.
AgraQuest, which is located next to the University of California-Davis, has investors in the US, UK, Switzerland, Japan, Taiwan and Hong Kong. It has also obtained a grant for early-stage R&D from the US Department of Agriculture’s Small Business Innovation Research programme.
One of the benefits of being based in Sacramento, California’s capital city, is the low cost of living. Plus, says Ms Marrone, AgraQuest has immediate access to state legislatures. “California lawmakers are involved in pioneering biotech legislation and regulations. We can easily add our two cents’ worth.”
Anchored by large companies such as Burroughs Wellcome and GlaxoSmithKline, North Carolina’s Research Triangle is noted for having the US’s fastest growing life sciences workforce and the highest success rate for bringing biotech research to market. One success story that hails from Research Triangle is Ercole Biotech, founded in 2002 to develop splice switching drugs for treating major diseases. Ercole is in Raleigh-Durham because its founder was a professor at the nearby University of North Carolina-Chapel Hill School of Medicine. In September, Ercole established a collaborative agreement with Santaris A/S of Denmark.
Bennett Love, Ercole vice-president, says that the top-notch medical facilities at Duke University and UNC-Chapel Hill help to make Research Triangle one of the world’s premier locations for contract research organisations. “We are the ‘research’ in research and development,” he says.
In the race
Phoenix in Arizona is in the national race to become a biotech centre. A key reason is strong support from the state and city governments. “Legal and university entities are united around the theme of building bioscience industry,” says Richard Love, chief operating officer at the Translational Genomics Research Institute (TGen).
Last year, non-profit groups TGen and the International Genomics Consortium (IGC) established their headquarters in the $46m, 15-acre, city-centre Phoenix Biomedical Center, a project owned by the City of Phoenix. Growth has been fast and furious: TGen has a staff of 300 – an impressive number for a young biotech venture.
With the centre already full, TGen, along with other biomedical research entities, now operates its research laboratories from a new biomedical research facility on Mayo Clinic’s Scottsdale campus. “We are seeing co-operative opportunities between both campuses,” Mr Love says.
An addition to Phoenix’s biotech landscape will be a biomedical research and medical school in the centre of Phoenix, which, in a rare move, is being jointly built by Arizona State University (ASU) and the University of Arizona (UA).
Barrow Neurological Institute (BNI) operates its renowned medical centre in Phoenix. BNI director Robert Spetzler, one of the world’s leading neurosurgeons, says: “I was recruited in 1983 when I had the option of being chairman at institutes in Ohio and New York. I came to Phoenix because of its environment. Phoenix is a place where innovative thinking is the norm.”
Today, BNI is the world’s largest neurology research centre and has spawned a large research component that is very interactive with ASU, TGen and UA. “What makes Phoenix an increasingly fertile environment is the collaboration that is not found in many of the older academic centres,” says Dr Spetzler.
Trying to capitalise on its tradition of entrepreneurship, Huntsville in Alabama is developing a biotech industry cluster. With the Hudson Alpha Institute for Biotechnology (HAIB) as its lynchpin, the facility will contain laboratories for R&D in genetics and personalised medicine (see page 7).
“We have around six energetic biotech companies spread out throughout Huntsville,” says Jim Hudson, HAIB president. “Our goal is to place them into a single building.”
Germany’s Operon Biotechnologies is planning to relocate its US headquarters from Maryland to Huntsville and plans to build a facility on the HAIB campus. Funds for the project come from private donations, which are being matched by the state. “Although we [HAIB] are specialised in a narrow field, Governor Bob Riley has been very supportive,” Mr Hudson says.
Several hundred miles to the north, Canada hopes to usher in a new era of science and innovation for academe, government and industry. To spur research, a mixture of federal, provincial, municipal, industrial and academic sources created an unprecedented partnership to construct Canadian Light Source (CLS), a national facility for synchrotron light research that opened in October 2004.
Located on the University of Saskatchewan campus, one of the synchrotron’s many uses will be to help in the design of new drugs. The CLS is one of only a handful of ‘third-generation’ synchrotrons in the world.
Access to skills
Company expansion is happening on both sides of the Atlantic. In Belgium’s Walloon region, for example, the Mestdagh Group (which manages the Champion supermarket chain in Belgium) and a large private investor recently invested €1.4m in KitoZyme, a vegetable biopolymers manufacturer.
SRIW, the Walloon regional investment group, is putting in €250,000. The arrival of a new shareholder with new financial resources will give KitoZyme the ability to launch industrial-scale production.
KitoZyme is one of numerous spin-offs from the University of Liege. Other foreign companies, such as GlaxoSmithKline and Baxter Healthcare, have also set up in Wallonia to capitalise on a wealth of skilled scientists from the region’s universities. Nearby Liege University Hospital is also an important asset for the medical biotechnology in the area.
In Flanders, in eastern Belgium, about 850 scientists and technologists at the Flanders Interuniversity Institute for Biotechnology (VIB) conduct gene technological research and work in research departments of four Flemish universities. Their work has led to impressive breakthroughs.
VIB pursues an active technology transfer policy to set up new biotech companies, such as Solucel, founded last year. This start-up, established in Finland for the moment, is the fruit of years of collaboration between VIB and Finnish research institute VTT. Solucel’s business is exploring applications for a technology platform for increasing the bio-synthesis of phytopharmaceutical products in plants and to synthesise new drugs.
VIB is also one of the co-founders of FlandersBio vzw, a non-profit organisation established in 2004. Its goal is to develop a biotech cluster to create synergies among the regional players, and to raise the profile of Flanders-based biotechnology in Europe and the rest of the world.
Although Germany still has Europe’s highest number of biotech companies, the UK is regarded by Ernst & Young (E&Y) as the dominant player. Five out of the top 10 venture funding deals in Europe involved UK companies raising €164m, bringing UK total venture capital funding in 2004 to €372m, reports E&Y.
Scotland has one the largest and most concentrated clusters of life sciences companies in Europe. Eighty per cent of the industry, which encompasses 560+ companies and research organisations, is located within a 50-mile radius of the cities of Edinburgh, Dundee and Glasgow. Scotland’s history of innovation is long, including the discovery of anaesthesia and CAT and MRI scans.
Endpoint Research, founded in Toronto, Canada, in 1990, chose to locate and expand its office at the Roslin Biocentre near Edinburgh to access Scotland’s biotech clusters. The Roslin Institute is world renowned for its research in animal biotechnology.
“The location offers good access to London, Cambridge and Oxford, and is a hub to all points in Europe,” explains Wendy Porter, Endpoint Research president. “It is also attractive for hiring.”
Quality of life
Switzerland is another location that has proved appealing to biotech concerns. Indiana-headquartered Zimmer Holdings, a leading orthopaedic company, concentrates its R&D and production of orthopaedic implants in Winterthur near Zurich. The site doubles as its European and Australasian headquarters. It attracts expatriates from around the world, many of whom say that Switzerland’s quality of life is more important to them than their salaries.
Orthopaedics company ReGen Biologics recently launched its wholly-owned subsidiary in the Swiss canton of Appenzell, from where it will market and distribute its products throughout Europe. Brion D Umidi, ReGen Biologics’ senior vice-president and chief finance officer, says that several factors weighed in Switzerland’s favour. “Not only is it home to many of the world’s leading biotechnology and life sciences companies, Switzerland also has outstanding resources in higher education, including the Federal Institutes of Technology in Zurich and Lausanne,” he says.
“A business-friendly government, realistic tax structure and the availability of a skilled and multilingual workforce all support our business across the continent.”
In 1990, Wisconsin-based Mortara Instrument, a leader in ECG technology, expanded to Bologna, in Italy, to form Mortara Rangoni Europe. Bologna plays an important role in health and medical technology with its long tradition of innovation and scientific research. At its heart is the University of Bologna, the oldest university in Europe and, by most accounts, the world.
Mortara also has offices in Germany and the Netherlands. Today, Mortara Rangoni works in collaboration with the University of Bologna’s School of Medicine, an institution with a history of achievements, some related to X-ray development.
“Mortara Rangoni Europe is also heir to the century-long entrepreneurial history of the Rangoni family, who found the ideal ground for their business in their homeland,” says Valerie Reggi, an executive at the firm.
Corporate collaboration with the university is deemed even more important today. “To fight competition on a global scale, it is essential to have a constant exchange with leading clinicians and researchers to understand the future needs of healthcare and get access to technological innovation,” says Ms Reggi.