Research and development productivity is on the upswing in the biopharmaceutical industry, where the number of new clinical trials has increased by more than 50 percent since 2002, according to a study released in May by the Tufts Center for the Study of Drug Development.

Spurring the increases has been the development of new business models as traditional R&D pipelines continue to dry up, said Neven Karlovac, Ph.D., vice president of technology commercialization programs, Larta Institute, when announcing the “2006 Venture Forum,” which was to be held in June.

Larta is a San Jose, Calif.-based organization that helps biotech and pharma companies raise venture capital. “The cost of getting a new drug to market has skyrocketed to $1 billion in development costs in recent years and it is getting worse,” Karlovac notes.

As costs rise and budgets strain, companies have begun in-sourcing technology, buying innovation from outside the corporation and bringing it in-house, or collaborating with another company in clinical trials and sharing in the commercialization rewards. And merger and acquisition activities are on the rise. The Tuft's study found that licensed-in compounds broaden and strengthen development pipelines to complement other efforts.

While it will take a few years to gauge the success of the drugs now entering clinical trials, the increases in productivity bode well for the biopharma industry's growth. Biopharma companies will find economic developers across the country are prepared to meet the industry's needs because they realize the industry attracts a good workforce, steady employment, and has the ability to create other jobs, says Lori Reilly, vice president for policy and research, Pharmaceutical Researchers and Manufacturers of America (PHrMA).

An example is the more than $60 million in spending and incentives, including $34 million to build new waste treatment and sewage facilities, to support Bristol-Myers Squibb's new $660 million investment at the former Fort Devens, which is located 35 miles from Boston. The company expects to hire 550 people for a manufacturing plant. Massachusetts officials will also change the state's investment tax credit rules to allow Bristol-Myers Squibb to claim a refund for 5 percent of its investment.

Reilly points out that while the biopharma industry's traditional corridors remain located on the East Coast, particularly in Boston, Maryland and North Carolina; as well as California on the West Coast, in a study conducted in 2004 for PHrMA by the Milken Institute, states such as Nevada, Vermont, Rhode Island, Alabama, Washington and the northwest Oregon region were identified as future industry growth locations.

Ohio, which traditionally has had strong industrial manufacturing capabilities, which have evolved across time, is positioning itself to support the biopharma industry as well.

An emerging North Carolina destination is Cumberland County (Fayetteville), which is well suited to support biopharma manufacturing. In a feasibility study of the industry, the Cumberland County Business Council asks companies to consider that selected pharmaceutical production plant operating costs are nearly $8 million dollars per year below the national average in the county, a potential savings of more than 32 percent.

Womack Army Medical Center, located at Fort Bragg, is one of the nation's largest military hospitals and is the Army's global center for several specialized medical practice areas. There is also a major Veteran's Administration hospital, and a facility affiliated with Duke University.

What's more, located within two hours of Fayetteville are four medical schools. North Carolina State University has developed a hands-on pharmaceutical GMP simulation center on its Raleigh Campus. Fayetteville Technical Community College and Cumberland County schools are developing programs specifically oriented to manufacturing and biotechnology.

Handling Your Requirements

Cumberland County is an example of communities that will work to meet the individual needs required by the different sectors of the industry. Reilly says R&D facilities continue to look for a strong university base or hospital base, as well as venture capital access and an ideal quality of life.

Companies involved in the discovery phase are looking at the intellectual property climate of an area, and again, the educational infrastructure and venture capital access.

Companies siting manufacturing facilities stick with researching the characteristics of potential sites, the capacities and proximity of water and waste water facilities, and incentives that may be available. “In terms of the availability of a workforce, it would be different from an R&D facility; so more technicians are needed,” Reilly notes.

Workforce needs are becoming more high-tech based, Reilly notes. “Oftentimes the exacting standards that are imposed by regulations can determine the types of people that companies need to work,” Reilly notes. “They need a productive, efficient and cost-conscious staff that can contribute to their success.” In addition, workers need to adjust quickly and roll with the technological changes that are being implemented.

The workforce in Pennsylvania is prepared to handle the needs of companies involved in regenerative medicine and tissue engineering, which are emerging sectors in the state. The state also features clusters in the traditional areas of cancer and cardio research.

“Regenerative medicine and tissue engineering is a small field right now, but it has tremendous growth potential,” says Dennis Yablonsky, secretary, Pennsylvania Department of Community and Economic Development. “We are home to the No. 1 research center in the country for this industry, called the McGowan Institute for Regenerative Medicine, which is located in the Pittsburgh area.”

Pennsylvania is also primed for the convergence between biological and chemical treatment, as well as info tech and how it affects bioinformatics, proteomics and tissue engineering.

Pennsylvania's higher education system features 15 institutions that receive National Institutes of Health funding that is focused on life sciences, including the biopharma industry. In fact, Penn State University and the University of Pittsburgh are ranked as the No. 3 and No. 8 leading NIH-funded institutions in the country.

At press time, the Pennsylvania Legislature was deliberating on many items, including a proposal that would add $10 million to the R&D tax credit, which would create a $40 million tax credit program. Another proposal would add 2.2 million square feet of new biotech and biopharma research space in the state, as well as increase the number of new senior faculty research hires.

Infrastructure Is Situated

The formation of biopharma centers and institutions will further stimulate the biopharma industry, especially those that are university-industry collaborations. Earlier this year, the University at Buffalo's pharmacy school announced an alliance with Pfizer Inc. which will provide up to $7.5 million toward developing a center of excellence.

The center will focus on pharmacokinetics (how drugs are distributed and eliminated by the body) and pharmacodynamics (examines the physiological response to drugs) to support training and research.

In May, the University of Kentucky unveiled the $17 million Center for Pharmaceutical Science and Technology in Lexington. The 20,000-square-foot facility is the largest sterile biopharma manufacturing facility in the state. It will provide analysis, formulation and manufacturing of sterile drug products for early-phase clinical trials.

This Kentucky facility is unique among those worldwide because it will become the first biopharma manufacturing facility to produce cytotoxic and non-cytotoxic drugs in the same room at the same time. By using custom made mobile isolators, scientists can quickly switch from one project to another, eliminating the risk of cross-contamination.

The Center for Pharmaceutical Science and Technology is located at the university's Coldstream Research Campus. “The CPST is an attractive manufacturing facility that is capable of producing small, customized batches of drugs for clinical trials,” says John Parks, associate vice president for research and economic development at the university and executive director of the research campus.

In other biopharma related university activity, East Tennessee State University at Bristol will begin classes in 2007 at its new pharmacy school. The university features one of the youngest medical schools in the country, which started in the 1970s. The creation of a pharmacy school made sense based on the framework in place to support the medical school, in terms of life sciences and other programs, says John Campbell, CEO, Networks-Sullivan Partnership.

Campbell says that a group of private pharmacists was instrumental in working with the university to begin the pharmacy school. The group told the state and the university it would raise private dollars to pay for all front end costs if the state would approve the program. The group raised $7 million in eight months, and is six months ahead of its goals, Campbell notes.

The formation of a pharmacy school was to support not only the development of new pharmacists for the area, but also to support the biopharma companies in the area. “We have several companies that have started up in terms of compounding different products and they have naturally spun off from large companies,” Campbell notes.

One of the community's more successful companies is a clinical trial management firm. “It does well because of the large number of medical personnel in the area that might be ready to move out of general health care,” Campbell says. The area features not only the medical school but two hospital systems, both with more than 5,000 employees.

The medical school network has been important in Hershey, Pa. Ground has been broken for the 80,000-square-foot Hershey Center for Applied Research, which will be located adjacent to the Penn State Milton S. Hershey Medical Center and Penn State College of Medicine, which receives between $100 million and $110 million annually in federal and other research dollars.

The center is the logical next step to commercializing the research. It will provide medical research space to emerging and established businesses, including wet and dry labs, conference rooms and shared amenities through the Medical Center and College of Medicine. The college's pharmacology and technology development departments will lease more than 32,000 square feet in the new facility.

“Penn State was in need of wet lab space for additional research,” says Dave Black, president and CEO, Harrisburg Regional Chamber and Capital Region Economic Development Corp. “A lot of research is being conducted here to make sure medications entering the blood stream get to where they need to go in the body.”

The center for applied research will be supported by a $5 million incentive award from the state. The Business in Our Sites program offered a $2.5 million grant and a $2.5 million loan to support the project.

Incentive awards will assist biopharma companies as they begin to increase R&D and manufacturing activities. As the industry explores different business models it can count on the economic development community, working hand-in-hand with higher education to encourage and back its innovative processes.

For complete details about the organizations featured in this article, visit:

Center for Pharmaceutical Science and Technology, www.cpst.uky.edu

Coldstream Research Campus, www.rgs.uky.edu/coldstream

Cumberland County (N.C.) Business Council, www.ccbusinesscouncil.org

Harrisburg (Pa.) Regional Chamber and Capital Region Economic Development Corp., www.harrisburgregionalchamber.org

Networks-Sullivan (Tenn.) Partnership, www.networkstn.com

Pennsylvania Department of Community and Economic Development, www.newpa.com

Pharmaceutical Researchers and Manufacturers of America, www.phrma.org

University at Buffalo, www.buffalo.edu

Pharmaceuticals

Based on number of establishments

New Branches

Florida
Pennsylvania
North Carolina
Connecticut (tie)

      4.   New Jersey (tie)

      6.   Georgia (tie)

      6.   Massachusetts (tie)

      6.   Illinois (tie)

      6.   New York (tie)

     10.  Ohio (tie)

     10.  Texas (tie)

     10.  Michigan (tie)

     10.  Missouri (tie)

     10.  Washington (tie)

     10.  California (tie)

Startups

California
New Jersey
Florida
New York
Massachusetts (tie)

      5.   Texas (tie)

      7.   Minnesota

      8.   Pennsylvania (tie)

      8.   Colorado (tie)

     10.  Illinois (tie)

     10.  North Carolina (tie)

Data includes the following SICs:

        2834 Pharmaceutical preparations

        2835 Diagnostic Substances

3559.9922 Pharmaceutical machinery

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Visit www.bizminer.com for access to more than 2.5 million local and national marketing research and financial analysis reports.

The Wright Stuff

While a healthy lifestyle plays an important role in wellness, nutraceuticals (dietary supplements and functional foods) can also contribute to wellness and health. There are many dietary supplements that are studied in conjunction with the use of prescription drugs, says Mark Wright, president, Health Wright Products, Inc., located in Clackamas, Ore. The company is a contract nutraceutical manufacturer.

“One of the products we make, CoQ10, is a good example of a product that most doctors who are prescribing cholesterol reduction medicine suggest patients take in conjunction with the use of the drug,” Wright says.

As the nutraceutical market grows, so do its companies. When the time came for the company to expand, it reviewed surrounding communities, and looked across the river at Vancouver, Wash. Wright decided Clackamas was the most attractive location. “Granted, some of the workforce would have moved with us; but we would have lost some of our workforce if we moved a substantial distance from where we are now,” Wright says.

Health Wright Products will open a new 120,000-square-foot facility this summer at the Clackamas Commons business park, which will be the first building in the park. Clackamas County officials were key in getting the business park ready for development as the location had some contingencies. “The county went to bat for us in order to get the contingencies lifted so we could develop the property and expand and keep our business here locally,” Wright says.

And keeping this nutraceutical business located in Oregon is just the way Wright likes it. As a lifelong resident, with extensive travel experience, there is no place he would rather be. Snow skiing is located 45 minutes away, and the Pacific Coast is located an hour away. Those quality of life amenities no doubt contribute to the success of a company whose products contribute to wellness.

For more details on Health Wright Products, visit www.healthwrightproducts.com. For more details about conducting business in Clackamas County, visit www.co.clackamas.or.us/business.

Wyeth Announces Scottish Collaboration

In April, Wyeth Pharmaceuticals and the Health Ministry of Scotland announced the Translational Medicine Research Collaboration, in which Wyeth is investing nearly $86 million.

Translational medicine integrates the study of the elements of disease with the development of novel therapies and diagnostics. The collaboration will conduct speedier, more efficient and more effective clinical testing of new therapies where a candidate drug is studied in smaller, better defined patient groups.

The model will be based on a central core laboratory working with the centers of excellence at four medical universities in Scotland. The laboratory will be based at the University of Dundee. “This translational medicine research collaboration represents a truly novel concept in industry-academic-government partnerships,” says Frank Walsh, Ph.D., executive vice president, Wyeth Discovery Research.

“Translational medicine provides a major opportunity to reduce the bottlenecks in the development of new drug treatments, resulting in significant benefits in economic development and health,” says Jack Perry, chief executive, Scottish Enterprises.

For complete details on this collaboration, visit www.wyeth.com.