State's bioscience industry continues to bloom - East Valley Tribune: News

State's bioscience industry continues to bloom

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Posted: Tuesday, January 12, 2010 11:53 am | Updated: 3:37 am, Sat Oct 8, 2011.

Despite the declining economy, Arizona's bioscience sector made major progress in 2009, according to the authors of the state's plan for growing the industry.

See a map of bioscience sites in Arizona

Despite the declining economy, Arizona's bioscience sector made major progress in 2009, according to the authors of the state's plan for growing the industry.

See a map of bioscience sites in Arizona

"We have put bioscience on the map," said Martin Shultz, chairman of the Arizona Bioscience Roadmap Steering Committee, in a briefing for reporters Tuesday on the seventh year of the 10-year plan launched at the end of 2002.

But he also said problems are looming for the industry as the economy continues to falter and the Arizona Legislature continues to look for ways to cut the state budget.

"We will need a bipartisan commitment to improve the state's economy and focus on a few key clusters with prospects for growth," he said.

The number of jobs in Arizona's bioscience industry grew by 5.8 percent to nearly 90,000 in 2008, the latest year that detailed employment statistics are available from the federal government, said Walter Plosila, senior advisor to the Battelle Technology Partnership Practice, who has monitored the state's bioscience industry since Battelle completed the road map.

Although it's too early to gauge how well jobs fared in 2009, expansions by several major biotech employers including W.L. Gore, Covance, Ventana Medical Systems and sanofi-aventis suggest that jobs in the sector continued to expand, he said.

Several new bioscience incubators, which help early-stage companies establish themselves, also were launched during the year in Chandler, Phoenix and Surprise, and the University of Arizona broke ground on a major bioscience business park in Tucson, he said.

Total bioscience research and development spending at Arizona's public universities reached a new high of $435 million in 2008 despite a 10 percent drop in funding from the National Institutes of Health - the industry's "gold standard," Plosila said.

But the preliminary estimate for research and development funding from NIH in 2009 is encouraging because of an injection of $33 million in stimulus money from the Obama administration for bio-research, he said.

On the negative side, bioscience venture-capital investments in new startup companies declined to their lowest level last year since 2003. And public investment in research and education is threatened by the budget crises facing state and local governments, he said.

He urged the state to maintain research and other support funding for the bioscience sector to gain a competitive advantage over other states as the economy pulls out of the Great Recession.

"Protecting investments will lead to long-term economic gains for Arizona," he said.

Specifically, he urged the state to maintain its share of funding for Science Foundation Arizona, a group that provides grants for science education and to small innovative businesses.

Biosciences are defined in the road map as including agricultural processing and chemicals: pharmaceuticals, hospitals and medical devices as well as research, testing and medical labs. Plosila said Arizona's greatest growth has been in the latter two categories.

Hospitals continue to dominate the sector in the number of jobs with 84 percent of the total, but the non-hospital sectors have been growing faster, he said. For example, non-hospital research, testing and lab employment is up 40 percent since the roadmap was launched in 2002 while overall bioscience employment is up 31 percent, he said.

Arizona's job percentage growth and growth in the number of bioscience establishments are far above the national averages, he said.

Cultivating the industry is important because wages on average are $14,000 a year higher than the average private-sector wage in Arizona, according to Battelle's analysis of government data. And the gap is expanding due to weakness in other Arizona industries, Plosila said.

Of the road map's 19 recommended actions to stimulate the industry, progress has been made on 17, he said. The only two that have not been implemented are providing a mechanism for Arizona universities to take ownership positions in startup companies, which required a change in the Arizona constitution that was rejected by Arizona voters, and establishing technology zones where tax breaks and streamlined permits would encourage development of biotech companies.

The outlook for both in murky, but Shultz said the road map steering committee is encouraging the state legislature to act on technology zones.

Overall, the bioscience sector poured $21.2 billion in direct and indirect benefits into the Arizona economy in 2008 and generated $765.7 million in tax revenue, Plosila said. The impact could grow to $34.3 billion and $1.2 billion in state and local taxes by 2020 if support for the industry is maintained, he said.

To achieve that, the state needs to maintain funding for research and increase the availability of venture capital for entrepreneurs, he said.

Major developments in Arizona’s bioscience industry in 2009:

• Catapult BioAccel, a not-for-profit organization, is launched to boost funding for bio startup companies.

• TGen forms alliance with Van Andel Research Institute in Michigan to speed movement of research discoveries to treatments for patients.

• Covance opens drug development and testing center in Chandler.

• ASU, Chandler, GateWay Community College and Surprise launch high-tech business incubators to assist early-stage companies.

• Manager selected for Arizona Fund of Funds to raise up to $200 million for investments in early-stage technology firms.

• University of Arizona breaks ground on Arizona Bioscience Park in Tucson.

Source: Flinn Foundation

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