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Biotechnology in the Midwest: Biotechnology in the Midwest: A Perspective from a A Perspective from a Blues Blues AficionadoAficionado
Michael S. Rosen, MBAMichael S. Rosen, MBA,, ePrairieePrairie Biotech Biotech
ColumnistColumnist
Rosen Background• Academics
– B.A.: Beloit College, International Relations– MBA: University of Miami, International Business– Postgrad studies: Sophia University (Japan); Universidad
Tecnica Federico Santamaria (Chile)– Lecturer, International Management, Lake Forest Graduate
School of Management• Work Experience: 30 years pharma/biotech/ag
– Big Pharma/Big Ag ( 20 years)• Pfizer (10 years/6 countries): marketing/sales
• Bristol-Myers (2 years): business development
• Searle/Monsanto (8 years/3 countries): general mgmt
– Biotech (10 years)• PharmaMar (Spain): CEO
• Endorex Corp. (Chicago): CEO
• Barbeau Pharma (Chicago): CEO
Rosen Background
Other Activities:• IBIO: first vice-chairman and co-founder• Immune Cell Therapy (cancer vax): chairman• Microbial Cellulose Technologies: board of directors• Efoora: board of directors• ePrairie: biotech columnist• Lived in:
– Japan– U.K.– Italy– Spain– 5 L.A. countries
• PASSIONS:– 1970 Fender Telecaster/ 1968 Fender Super Reverb Amp– 1998 Gibson Les Paul– 1980 Guild Acoustic
What is Biotech
• A culture?– an extension of the rock culture of the
1960’s• A science?
– genetic engineering– recombinant DNA
• The future of the pharmaceutical industry?
ALL OF THE ABOVE!!!!!!!!
History of Biotech
• 1953 : Structure of DNA: Crick/Watson• 1958: DNA made in test tube• 1965: Fusion of mice and human cells• 1966: Genetic code cracked• 1969: Synthesis of an enzyme• 1971: Synthesis of first gene• 1972: DNA of humans 99% similar to chimps• 1972: First genetic engineering: Cohen/Boyer• 1974 NIH forms RAC to monitor DNA experiments• 1975: First monoclnal antibodies• 1977: First expression of human gene in bacteria• 1978: Human recombinant insulin produced
The Start of an Industry
• Pivotal cities: late 1970’s– San Francisco (Genentech/Cetus)– Los Angeles (Amgen)– Chicago (E. Goldwasser/UC- EPO)– Geneva (Biogen starts)– Boston (Genetics Institute)
• Pivotal events:– Cetus and Genentech go public
• raise $108 M and $36 M in IPO
Why is Biotech a Growth Industry?
• Healthcare– Aging of populations in U.S., Europe and
Japan • Baby Boomers = 30% of U.S. population
– Many diseases still unconquered:• Cancer, HIV, Alzheimers, Diabetes
– New Diseases:• SARS, Prion, West Nile Virus, Obesity
– Need for Personalized Medicine• Drugs don’t work in 40% of population
– Chronic Diseases (75% of all HC costs)
Why is Biotech a Growth Industry?
• Agriculture– replacement of old “dirty” industries,
e.g. agrochemicals/pesticidies– improved food productivity from
same amount of land– Utilization of land not currently
arable– Use of agricultural products for fuel
and plastics (bio-refineries)
Why is Biotech a Growth Industry?
• Industry– improved productivity of current
processes– environmental cleanup– apply same technology used in
medicine to chemistry for industry
The Biotech Revolution
Environment& Petroleum
Food Industry
PharmaIndustry
AgriculturalIndustry
BIOTECH
Medical DeviceIndustry
DiagnosticsIndustry
Nanotech
Largest Pharmaceutical Companies (2003)
Company Revenue (B)1. Pfizer (U.S.) $45.22. Johnson & Johnson (U.S.) 41.93. GlaxoSmithKline (U.S./U.K.) 35.04. Sanofi-Aventis (French) 29.35. Novartis (Swiss) 24.96. Roche (Swiss) 23.27. Merck (U.S.) 22.58. Bristol-Myers Squibb (U.S.) 20.99. Abbott Labs (U.S.) 19.710.Astra-Zeneca (British/Swedish) 18.8
Worldwide Pharmaceutical Market (2003)
Market Sales(B) Share Growth
U.S. $207.5 46% +11%
Europe 124.2 27% +8%
Japan 50.7 11% +2%
Asia 31.1 7% +9%
Latin Amer. 19.6 4% <3%>
Mid.East/Africa 13.1 3% 17%
Canada 9.8 2% 12%
TOTAL $455.9 100% +9%
Largest Biotechnology Companies (2003)
Company Revenue (B)
1. Amgen (U.S.) (16) $8.4
2. Genentech (U.S./ Swiss) (29) 3.3
3. Serono (Swiss) (39) 2.0
4. Chiron (U.S.) (43) 1.8
5. Genzyme (U.S.) (45) 1.7
Major Product Categories (2001)
Category Sales(B) Share Growth
Anti-ulcerants $19.5 6% +14%
Cholesterol reducers 18.9 5% +22%
Antidepressants 15.9 5% +20%
Anti-rheumatics 10.9 3% +16%
Calcium channel block 9.9 3% +4%
Anti-psychotics 7.7 2% +30%
Biotech in the United Biotech in the United States (2003)States (2003)
1473 COMPANIES314 publicly-traded1473 COMPANIES314 publicly-traded
Biotech in the United Biotech in the United States (2003)States (2003)
$311 billion market cap$39.2 billion in annual
sales$17.9 billion in R&D
expense
$311 billion market cap$39.2 billion in annual
sales$17.9 billion in R&D
expense
Biotech in the United Biotech in the United States (2003)States (2003)
370 biotech drugs/vaccines in clinical trials198,300 people employed37 biotech drugs/new indications approved by FDA (2003)
370 biotech drugs/vaccines in clinical trials198,300 people employed37 biotech drugs/new indications approved by FDA (2003)
Major Biotech Centers in the United StatesEmerging Biotech
CentersMidwest Biotech Centers
(300+ companies)
Biotech Profile in the Biotech Profile in the MidwestMidwest (8 states)(8 states) 2003
TotalPublic
Total Companies (estimated) 320 30
- Michigan 50 5- Illinois 80 6- Wisconsin 40 4- Iowa 20 2- Missouri 20 3- Indiana 20 2- Minnesota 60 5- Ohio 30 3
Biotech Profile in the Biotech Profile in the MidwestMidwest
Life Science Industry Employment Total Jobs - California 101,298- New Jersey 93,214- Illinois 57,930- New York 39,140- Pennsylvania
37,639- Minnesota 31,356- Indiana 29,541- Massachusetts 25,388- North Carolina
21,707- Ohio 17,298- Michigan 16,789- Wisconsin 8,530- Maryland 7,944
Total Midwest (6 states)
161,444Source: Dunn & Bradstreet 2-2000
Leading Midwest Biotech Companies(value >$100 M)Company State Focus
Mkt.Cap (M)
MGI Pharma Minnesota Cancer $1,886
KV Pharma Missouri Drug Delivery 880
Bone Care intern. Wisconsin Bone Disease 472
SurModics Minnesota Device 416
Northfield Labs Illinois Blood 286
Possis Medical Minnesota Device 284
Third Wave Tech. Wisconsin Genomics 278
Stereotaxis Missouri Device 260
Endocardial Sol. Minnesota Device 256
NeoPharm Illinois Cancer 199
BioSante Illinois Drug Delivery 166
Neogen Michigan Nutraceutical 157
Orphan Medical Minnesota Orphan Drugs 119
Synovis Life Tech. Minnesota Device 110
ImmTech Int. Illinois Infectious Diseases 105
National Institute of Health National Institute of Health (NIH) Support to Midwest (NIH) Support to Midwest
InstitutionsInstitutions
Funding $ Millions - Illinois 473- Ohio
444- Michigan 390- Missouri 367- Wisconsin 253- Minnesota 282- Indiana 141- Iowa
136TOTAL 8 States $ 2,486
Source: IMPAC, 2000
Biotech Profile in IllinoisBiotech Profile in Illinois
Companies
- Chicagoland- Downstate (Champaign/Carbondale/Springfield)
JobsMarket Valuation
200377
6710
2000+$1+ billion
2006150
100 50
5000+$3+ billion
2001 Merger of Two 2001 Merger of Two AssociationsAssociations
IBIO
Chicago Biotech Network &Illinois Biotechnology Industry
Organization
BIO State Representative25+ membersState Agencies & Big PharmaAdvocacy ProgramAg/Food Biotech
“Grass roots” Networking200 membersSeminars & ConferencesInformation “clearinghouse”Human Health Biotech
CBN
2001 Merger of Two 2001 Merger of Two AssociationsAssociations
IBIO
Chicago Biotech Network &Illinois Biotechnology Industry
Organization
CBNSYNERGY
225+ MembersBIO State Chapter
State & Local Representation
Advocacy ProgramHuman/Ag/Food Biotech
IBIOIBIO
Services that facilitate growth:
• “Breakfast series” at Universities
• “Biotech bootcamp” and competence seminars
• Annual Illinois (Midwest)Investor forum:
IBioMarketplace
• Job Fair
• Legislative presence in Springfield and
Washington• Midwest Biotech initiatives: Indiana, Ohio, Michigan, Wisconsin, Missouri, Iowa, Minnesota, and Illinois
• BIO- 2006: CHICAGO
IBIOIBIO
An organization focused on helping Illinois’ biotech industry grow
Connecting building blocks already in place
• Office/lab facilities: Chicago Tech Park
• Labor: Graduates of world class educational institutions and local skilled workforce
• Capital: “Angel” investors, venture capital firms
and state/local grants
Chicago Technology ParkChicago Technology Park
• Biotech incubator located in Illinois Medical District (3 miles west of downtown)
• 650,000 square feet of lab and office space on 56 acre campus
• 30 emerging companies
• $20 million in SBIR and state challenge grants
• $35 million in CTP revenues
Biotech in Midwest: Biotech in Midwest: IssuesIssues
• Lack of “anchor” biotech company in region
• Most local companies at “discovery” stage
• Lack of biotech/pharma “serial entrepreneurs” in area
• Lack of “cluster” effect due to distance between states
• mini – “clusters” not big enough
• How to progress our companies up the “food chain”
• Other states’ incentives: Michigan, Wisconsin, New Jersey
• Difficult financial environment (State & City Budgets)
• Consolidation of big pharma & local impact .
IBIO Goals: 2004- 2006IBIO Goals: 2004- 2006
• Increase biotech “critical mass” in Illinois:
– number of companies
– progression up “food chain”
• Complete successful ($$/attendance/satisfaction) BIO 2006 meeting
• Establish Illinois as Midwest hub
The Biotech Job Market
Direct Biotech Jobs• Business Development (marketing & sales)• Finance• Scientists (chemistry, biology, drug delivery)• Experienced CEO’s• Regulatory (FDA)
Indirect Biotech Jobs• Venture capital (seed and early stage)• Investment banking• Executive search• Architecture/engineering/real estate (wet labs construction)• Audit firms• Legal firms• Information technology (scientific and drug development software)
Leading Midwest Life Science Companies(valuation >$1 B)
Company State Area Mtk. Cap (B)
P&G Ohio Cons./Pharma $138
Eli Lilly Indiana Pharma 68
Abbott Labs Illinois Pharma/Diagn. 66
Medtronic Minnes. Medical Device 63
3M Minnes. Industry/Pharma 63
Dow Chemical Mich. Agroscience 42
Walgreens Illinois Drug stores 37
Guidant Indiana Medical device 21
Baxter Illinois Device/Pharma 20
Zimmer Indiana Medical Device 19
Leading Midwest Life Science Companies(valuation >$1 B)
Company State Area Mtk. Cap (B)
Stryker Mich. Medical Device $19
Cardinal Health Ohio CRO/CMO 19
St. Jude Medical Minn. Medical Device 13
Biomet Indiana Medical Device 12
ADM Illinois Food process. 11
Monsanto Missour. Agroscience 10
Hospira Illinois Medical Device 5
Sigma-Aldrich Missour. CMO 4
Dade-Behring Illinois Diagnostics 2
Stericycle Illinois Hospital waste 2
WHY THE MIDWEST LIFE WHY THE MIDWEST LIFE SCIENCE IS DIFFERENT FROM SCIENCE IS DIFFERENT FROM THE EAST & WEST COASTS ?THE EAST & WEST COASTS ?
• AGRICULTURE: “Breadbasket of the U.S.”
• MEDICAL DEVICE CAPITOL: Minnesota
•Medtronic
• ORTHOPEDIC/SURGICAL DEVICE CAPITOL :
• Indiana: Zimmer, Biomet, Guidant
• Michigan: Stryker
• DIAGNOSTICS CAPITAL:
• Illinois: Abbott, Dade-Behring
• Indiana: Roche
• NANOTECHNOLOGY CAPITOL: Illinois/Michigan