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Where the heck is our biotech? Featured

8:00pm EDT April 29, 2002
 According to Biotechnology Industry Organization (BIO), there are 1,379 biotechnology companies in the United States, and the industry has doubled in size since 1993.

Of those biotech companies, the Midwest has 68. That may not sound so bad, until you compare it to the fact that North Carolina alone has 86 biotech firms and San Diego and San Francisco have 120 and 176 respectively.

There are, however, biotech success stories. One of the best examples is Athersys Inc. and its president and CEO, Gil Van Bokkelen. Van Bokkelen is everything Northeast Ohio is looking for -- he's a scientist with an MBA, he's a Cleveland transplant, his company is based on solid and commercially viable science and he's a passionate advocate for biotech success in Cleveland.

According to a recent poll, 5,886 people in the Cleveland-Akron area are employed in the drug and medical device industry, constituting only four-tenths of 1 percent of overall employment. But if Van Bokkelen has his way, those numbers will rise.

He takes a "Why wouldn't people want to move to Cleveland?" attitude and is a staunch supporter of attracting, funding and mentoring entrepreneurs from all over the country.

SBN asked Van Bokkelen about the future of biotech and what Cleveland should do to attract companies.

A lot of time and effort have been spent mapping the genome and understanding gene expression. What is the next step in research and/or development?

(Last) year was a significant transition year for the industry in many respects. With the completion of the initial phase of the human genome project last year, attention has turned squarely toward the next phase -- characterization of the biological role of specific proteins.

Now that the genome has been mapped, we have a general idea of how the human genetic landscape is organized but we still are a long way off from understanding the specific role of all the proteins and how they impact human growth and development or disease. It will take at least several more years and hundreds of millions of dollars to get to the point where we have cloned and isolated every individual gene.

As proteins are being characterized and new drug targets are identified, the next phase will become the focal point, which is using that information to develop new, safer, more effective therapeutics -- pharmaceuticals, proteins, therapeutic antibodies. As a result, those companies that develop more efficient and cost-effective ways to develop safer, more effective drugs will have an enormous advantage.

Every major city wants to develop biotech as its next new industry. In your opinion, what are Cleveland's prospects for developing a significant biotech industry?

I think the prospects for future success in this region are pretty solid, provided we have a good game plan and then we invest for success. We also need to think and implement solutions that are long term -- we can't simply fix this problem in a year or two.

By "we" I mean the city, county, state and various organizations, including prominent institutions in the business community that would fundamentally benefit from accelerated economic growth and development in the region.

Specifically, I think we need to do five or six things to improve the regional economic infrastructure. First, and most importantly, we need to do a much better job of attracting entrepreneurial talent, as well as mentoring and supporting the aspiring entrepreneurs that are already here. We cannot effectively grow our future economic infrastructure without competing nationally for talent, capital and new technologies.

In order to do a much better job of attracting entrepreneurial talent, we need to do something bold and visionary. For example, I suggest that we hold a national annual business plan competition, focusing on specific technology areas that we feel are high-impact, high-growth opportunities for the region. The winners of the competition could be provided with access to facilities for free for up to two years.

Second, each entrepreneurial team would be given access to a formalized network of mentoring entrepreneurs and executives, made up of experienced professionals in a variety of disciplines.

Third, the winning entrepreneurial companies could also be given access to professional services that are provided pro bono or at a substantial discount from the world-class professional service firms located here in Cleveland, like the leading law firms, consulting firms, accounting firms. Many firms will do this for early stage, high-growth potential clients anyway, as part of their client development programs. It makes sense, since they are building their client base of the future.

Fourth, we could provide access to a regional network of venture capital firms.

Fifth, we should create broad-based internship programs at each of the region's academic institutions, and then provide access to these entrepreneurial companies.

Finally, I think we should create economic incentives for these companies to stay in Ohio long term, and for them to hire students out of Ohio's academic institutions. If we do these things, I think we can accelerate economic growth.

There has been a lot of talk about facilitating technology transfer, but we as a city are still behind others in bringing our academic research and industry together. Any suggestions on how to get the two to work together?

The efficient transfer of technology out of academic research institutions into the commercial sector is critically important for our long-term economic growth and development. Historically, this region has done a poor job of technology transfer, and we need to change that.

We can't fix it from the outside -- improving the process is really the primary responsibility of the regional academic and research institutions that receive many millions of dollars of research funding from the federal government each year. Ultimately, those dollars come from taxpayers, and we as taxpayers expect that institutions that receive those dollars will accept the responsibility that goes with it.

This isn't just a nice idea -- it's actually a federally mandated law, and is critical for our regional and national economic growth and development.

Improving technology transfer, however, is not enough, in my opinion, to fuel our regional economic growth and development. For every $30 million to $50 million dollars of research funding, we may see one new company formed, and that only after several years.

So to form 10 new companies a year, we need to be spending $300 million to $500 million in research funding each year, far more than we are now. I would suggest that it is far more cost-effective to attract entrepreneurs here at the earliest stages, because they will stay here more often than not because of the great quality of life in Northeast Ohio.

We need to compete nationally and globally for entrepreneurial talent and ideas, and then those companies will attract investment dollars on a national and international basis. That will help build our economic foundation for the future. How to reach: Athersys Inc., (216) 431-9900 or www.athersys.com; Biotechnology Industry Organization, www.bio.org