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1/25/2004

Is biotech the magic pill?

By Tony Kindelspire
The Daily Times-Call

LONGMONT — Jobs being “outsourced” overseas, the aging of the baby boomer generation and technological advances the likes of which the world has never seen before.

Combine these three seemingly disparate things, and what you get might be the future of 21st-century job creation in this country: life sciences, or biotechnology.

While the term “biotechnology” is relatively new, the ancient Egyptians were using biotechnology eons ago. Using techniques to alter the state of certain substances, they were able to create a completely new substance: Today, we call their invention “beer.”

Science has come a long way since then. But just as America shifted from an agriculturally based economy to an industrial one, the industrial revolution was displaced by advancements in computer technology and automation.

Now, we’re seeing another wave, with computer-related jobs — and many other skilled, white-collar positions — going somewhere else, where the labor is cheaper.

Meanwhile, research and inventions are now done on the scale of a nanometer — one-billionth of a meter. Cells are manipulated at the molecular level, and new ways of treating sickness and disease are coming forth that make even 20th-century medicine seem like child’s play.

Other communities have recognized the potential of using biotechnology for economic development for decades.

The Research Triangle Park in North Carolina, for example, was started as a public-private partnership in 1959. Today, more than 100 research and development facilities operate there on 7,000 acres. The park has $2 billion in capital investment, 19 million square feet of development and an average annual salary for people working there of $56,000.

The park housed 500 employers when it was launched, and now 38,500 people work there. And while the biggest employer on-site is IBM — with 13,000 employees — 40 percent of the companies have fewer than 10 employees.

And that’s the way it is with biotech companies: They can be giant, multinational corporations, or they can be two- or three-person startups.

Colorado has many of those types of companies here — but it wants more.

“I think for the country, the biotech industry has the potential to be an economic driver like we’ve never seen before,” said Ralph “Chris” Christoffersen, a partner with Morgenthaler Ventures, a venture capital company.

With a Ph.D. in chemistry from Indiana University, Christofferson’s background in biotechnology makes him an invaluable part of Morgenthaler’s investment team.

Christoffersen came to Morgenthaler from Ribozyme Pharmaceuticals Inc., where he had been president and CEO, and his background includes time at SmithKline Beecham and The Upjohn Co.

Christoffersen said that advancements in biotechnology have given the United States a distinct advantage over other countries.

Scientists and chemists in this country have been doing research, acquiring patents and bringing a tremendous variety of products to market for decades, he said. It’s going to take a long time for other countries to catch up.

In the case of past economic drivers, Christoffersen said, “the entry barrier has been low.” Not so with life sciences.

“Nowhere else in the world has this kind of potential,” he said. “The United States has this opportunity that can make enormous strides in the medical sense and can also be a significant economic driver.”

Other, “tier-one” biotechnology hubs, besides North Carolina, include the Boston, New Jersey, San Diego and Northern California areas.

All of the hubs share critical characteristics in common: nearby, world-class research institutions; the ability to attract serious amounts of venture capital investment, especially for early-stage companies; a qualified workforce; and geographic proximity to other life science-related companies. All of those things are necessary in creating a tier-one biotech hub. The experts call it “critical mass.”

“In Colorado, we’re not in the top 10, but we’re getting close,” Christoffersen said.

A report commissioned two years ago by the Colorado Office of Innovation and Technology, which was created by Gov. Bill Owens, laid out some of the advantages and disadvantages the Centennial State has in moving up the biotech ladder.

Competitive advantages, according to the report, include:

•A highly skilled workforce.

•A dynamic entrepreneurial economy.

•An attractive lifestyle and environment, making it easy to lure workers here.

•A “business-friendly” environment.

•Very strong research institutions heavily engaged in life sciences.

In regards to the latter point, Colorado has made great strides. At the forefront is the Colorado Bioscience Park in Aurora, based at the former home of Fitzsimons Army Medical Base.

“That’s a $4 billion project whose size and scope is unmatched anywhere in the country,” said Christoffersen.

Fitzsimons will become home to the University of Colorado Health Sciences Center, University of Colorado Hospital and Children’s Hospital by 2007. Congress is also considering a proposal that would move the Veteran’s Affairs Medical Center to the site.

Fitzsimons, combined with research done at the University of Colorado at Boulder, Colorado State University and the Colorado School of Mines, along with some of the state’s private institutions, posits Colorado as a major player in terms of research, but even there, there is work needed. Unlike in the past, however, the challenges are no longer hidden.

“The number of pieces that we have to put in place to be a major player nationally — you can count them now,” said Christoffersen.

Indeed, the 2-year-old report commissioned by the governor’s OIT lays out what is hindering Colorado’s advancement. They include:

•The life sciences industry is still in its relatively early stages of development.

•Higher education and bioscience have a weak record of connectivity in Colorado. Taking something from a university laboratory discovery to a product on store shelves is something the state is only now figuring out how to do effectively, experts say.

•A lack of strong public sector initiatives in support of the biotech industry.

•A lack of perceived national presence.

“I believe Colorado could land in the second wave of clusters,” said Paul Ray, director of Life Sciences for McKim & Co. and a 32-year veteran of the biotech industry in Colorado.

As an example of what can happen, Ray points to San Diego, where more than 45 firms spun out of one company: Hybritech.

“Those hubs have grown up because one company begets another,” said Ray. “When Fitzsimons really started coming online, that was really the piece that jelled it in Colorado.”

Ray is the former director of the Office of Life Sciences and Biotechnology for the state, and his involvement with government dates back to the ’80s, when he was chairman of the Colorado Advanced Technology Initiative. That was an office created by the state government following the oil bust of that decade.

“Colorado, really, today is positioned to lead that second wave of clusters, and there’s a lot of people interested in making it happen,” Ray said. “I started my first company here in 1984, and I’ve watched us continue to move from being pretty much a medical device state ... to bringing in the biotech side along with the medical device.”

To further get things moving in the right direction, last year, the Colorado Biotechnology Association merged with the Colorado Medical Device Association to create the Colorado BioScience Association.

“Fitzsimons fills a critical role in the development of the industry in Colorado,” said Denise Brown, executive director of the CBSA. “It provides land for the development of bioscience companies directly adjacent to the labs and the research at the CU Health Sciences Center. That’s a unique opportunity, and it’s very important.

“But, that 160 acres will always be a small part of the picture in Colorado.”

There already are hundreds of life science companies in Colorado, and their impact on the economy is significant. But looking ahead — 10, 20, 50 years down the road — as more technological advancements are made and more commercial opportunity is brought forth, whether that opportunity strikes in Colorado or elsewhere remains to be seen.

“I would say, in terms of the health of the companies (here), it’s an ‘A,’” said Brown. “I would say, in terms of do we have enough critical mass? It’s a ‘B.’

“We can’t relax and say we’re one of the big players if we just don’t have the infrastructure. This industry requires a unique set of assets in the business environment to support it.”

Colorado knows what it needs to fuel a biotech boom in the state. The question is, how do we get to where we need to be?

Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at tkindelspire@times-call.com.