Governments Come in Search of a Slice of the Biotech Pie

UC San Diego’s Connect program is in the business of linking San Diego’s fledgling bio- and high-technology companies with hard-to-find sources of capital.

So Carole Ekstrom, Connect’s member services director, gladly sat down Monday with officials from Belgium who view the program as an entree to San Diego-based biotech firms that might one day consider expanding across the Atlantic.

When Ekstrom is done working with the Belgians, she’ll meet with officials from England and Canada who also view Connect as an ideal way to forge relationships with San Diego-based biotech companies.

The irony of out-of-towners using Connect to build ties to home-grown firms isn’t lost on Ekstrom, who is operating a booth at the Assn. of Biotechnology Companies’ (ABC) annual trade meeting this week at the Town and Country Hotel in Mission Valley. Given the weakened world economy, Ekstrom said, competition for fast-growing biotech firms is likely to grow even more intense.

There is now a “feeding frenzy” among states and foreign countries that are intent on grabbing a share of the biotech pie, said San Diego Economic Development Corp. President Dan Pegg, who Monday took part in an ABC session on what incentives cities and states can use to attract and retain the companies.

One sign of how widespread the competition has grown for biotech was the booth operated by the Montana Center of Excellence in Biotechnology, which supports what state officials describe as the “Bitterroot Valley Biotech Corridor.”

Although no local biotech firms are known to have left town for greener pastures, business leaders believe it’s only a matter of time before San Diego, home to one of the nation’s largest collections of biotech companies, gets burned.

During an early-morning breakfast Monday in San Diego, for example, Colorado officials tweaked local business leaders by harping on California’s high tax rate, its tough regulations and general anti-business attitude.

“They said, ‘We don’t need to recruit them. . . . You people are sending them out of state,’ ” Connect director William Otterson said.

At the Washington-based ABC’s annual meeting, nearly two dozen states and countries--including Montana, Pittsburgh, Toronto, Hong Kong and France--are using booths, glossy brochures, luncheons and private receptions to try to bolster their share of the biotech industry.

Yet, although members of San Diego’s biotech business community are well represented on panels--the county has 170 biotech companies that employ 10,000 residents--the Economic Development Corp. and San Diego are conspicuously absent when it comes to wining and dining industry players.

The cash-strapped development corporation, for example, was forced to leave its brochures on a table in the hotel lobby, alongside flyers from Wisconsin and Richmond, Va.

“If we had the resources, we’d be at all of these (biotech trade) meetings,” Pegg said. “In fact, we should be at all of these meetings.”

Although San Diego’s presence is limited, that’s not the case with some other locales.

Montana officials are using their booth to advertise the “Bitterroot Valley Biotech Corridor,” and Alachua, Fla., is courting the biotech industry with glossy brochures.

Smaller cities and towns aren’t expecting to steal huge chunks of biotech away from San Francisco, Massachusetts, San Diego or the New York-New Jersey-Pennsylvania region, which account for the lion’s share of the nation’s 1,200 biotech firms.

Rather, they are trying to develop narrower niches where they can use biotechnology to breathe new life into existing industries and provide needed jobs for their labor forces.

Michigan, for example, is concentrating on industrial applications for biotech, said J. Gregory Zeikus, director of the Lansing-based Michigan Biotechnology Institute.

The state is emphasizing research into bioengineered crops that one day will generate feed stocks that can be used to manufacture super-hard plastics, biodegradable materials, environmentally friendly printing inks and systems that can safely remove pollutants from the environment.

Researchers at a 25,000-square-foot livestock research laboratory at Florida’s Biotechnology Institute near Gainesville are concentrating on veterinary medicine, in keeping with that state’s rich agricultural and livestock heritage. Similarly, Iowa State University’s Office of Biotechnology in Ames is focusing on biotech research that will benefit the state’s strong agricultural and livestock industries.

But some states and countries are taking a broad-brush approach:

North Carolina is concentrating on biotech advances that will complement its agricultural industry. But the state also intends to carve out a leadership role in research that will lead to biomedical products to improve human health.

The explosion of interest in biotechnology doesn’t surprise ABC board member Martin Nash, chief executive officer of San Diego-based NeuroTherapeutics Corp.

“This is a clean, non-polluting growth industry,” Nash said. “And, because of that, you’re seeing increasingly fierce competition for a part of it.”