Tech transfer

Many people are looking to biotech to fill the gap that manufacturing has left in Northeast Ohio. However, Cleveland is not the only city looking to biotech to replace or augment revenue, and the competition promises to increase as more and more scientific and technological discoveries are made.

According to BIO, the biotechnology industry has more than doubled in size since 1993, with revenue increasing from $8 billion in 1993 to $22.3 billion in 2000. Biotechnology’s potential is great. The key now is to develop an environment conducive to attracting, retaining and growing biotechnology.

Dan Eramian, vice president of communications for the Biotechnology Industry Organization (BIO), a biotechnology information, advocacy and business support organization, claims Cleveland is the perfect place for biotechnology to flourish.

In a speech at Athersys in July, Eramian analyzed the region’s opportunity to grow. “The nation’s three most concentrated biotech centers – the Bay Area, Boston/Cambridge and San Diego – share many traits that led to their emergence as leaders,” says Eramain. “First, they all boast world-class academic institutions and biomedical research facilities, which produce the initial intellectual property for start-ups and supply the technically nimble workforce needed to advance novel products through development and market launch.”

Eramain says that presence of the Cleveland Clinic, Case Western Reserve University and the Metro Health research facilities and the fact that Northeast Ohio ranks 12th in the nation in total NIH funding, are case in point when it comes to proving that the area has what the fundamental ingredients to foster a biotech industry.

Eramain is quick to add that, “the second key ingredient for biotech hotbed is money.”

It’s not cheap to fund biotech. In fact, the U.S. biotech industry spent $10.7 billion on research and development in 2000 alone. The top five biotech companies spent an average of $89,400 per employee on R&D in 2000, compared to an average of $37,200 per employee spent by the top pharmaceutical companies.

Eramain points out that Cleveland already has in place a number of firms and venture capitalist that are making investments in biotech and he stresses how important they’re involvement is.

“The venture capitalists really drive creation of marketing plans, and indeed that whole bumpy transition from an academic mindset to a business one,” he says.

The amount of money invested in the U.S. biotechnology industry increased 156 percent in one year, soaring from $137.9 billion in 1999 to $353.5 billion in 2000. Eramain stresses that to build a financial base for Cleveland biotech, we will need more than individual investors. Last year only 10 percent of biotech funding came straight from venture capitalists.

“You’ve already got the basic infrastructure in place to nurture companies … with organizations like the Ohio Venture Association and the Greater Cleveland Growth Association,” he says. Even though Ohio has an R&D tax credit already in place, he says, “You need to have your state legislators and administration officials recognize the economic benefits of nurturing biotech in this state as part of building the new economy.”

It’s obvious that the biotech industry is just getting started. To date, there are 1,273 biotechnology companies in the U.S. The biotechnology industry currently employs 150,800 people. That’s more than all the people employed by the toy and sporting goods industries. And as Eramain puts it, “Competition between the states to attract biotech companies is heating up.”

“Eight years ago, the critics said there would be no biotech industry, and that all these biotech companies would be bought by large drug companies,” says Eramian. “Eight years ago, the critics said Wall Street would not invest in us. Last year we raised more than $40 billion, a record.”

How to reach: Athersys, (216) 431-9900; BIO,