Biosciences scorecard: report finds Indiana one of the country's top three life-sciences states.

WHEN EVALUATING Indiana's life-sciences status, it might be useful to employ former New York City mayor Ed Koch's daily refrain, 'How'm I doing?" It was daily because he knew he needed to keep his finger on the pulse--things can change in a heartbeat. And with all 50 states and many other countries vying for a slice of the life-sciences pie, constant attention is a necessity.

Indiana's life-sciences movers and shakers take some comfort in the fact that the state ranked well in the "Growing the Nation's Bioscience Sector: State Bioscience Initiatives 2006" report issued in April by Battelle Memorial Institute and the Biotechnology Industry Organization (BIO), an industry trade group. But they say there's no time to relax.

Indiana is one of the country's top three life-sciences states, according to the report, defined by number and concentration of life-sciences-related jobs. It made it into three out of the four industry subsectors: agricultural feedstock and chemicals, drugs and pharmaceuticals, and medical diagnostics, devices and equipment. The fourth subsector is research, testing and medical laboratories.

"There is only one state, New Jersey, that is a major player in all four," says August "Gus" Watanabe, chairman of BioCrossroads, a 4-year-old public-private initiative to help grow the life-sciences industry in Indiana. Watanabe is retired executive vice president of science and technology for Eli Lilly "I think we're actually doing pretty well, and probably have a lot more assets than even I realized." Connecticut also has specialization in three industry subsectors. Nine states have specialization in two, 25 in only one.

"We always do pretty well because we have a lot to start with," says David Johnson, president and CEO of BioCrossroads, "It's great and we love talking about it, but having what we have obligates us to do something about it. With blessings come obligations."

INDIANA'S ASSETS

Some of those longstanding assets in Indiana's life-sciences sector are well-known, including Eli Lilly, Dow AgroSciences, Roche Diagnostics, the Cook companies, world-class orthopedic device manufacturers in Warsaw, manufacturing sites for Baxter, Pfizer, Bayer and Boston Scientific, and universities with impeccable research reputations, including Indiana and Purdue universities and the University of Notre Dame. "Much of our work," says Johnson, "is to get companies and universities to work together land invest together."

While Indiana didn't make the cut in the research, testing and medical laboratories subsector in the BIO/Battelle report and may not have its share of discoveries, it enjoys a longstanding reputation in development and manufacturing. Not coincidentally, the latest in a string of new businesses for Cook Group in Bloomington--the world's largest privately held manufacturer of medical devices--is Cook Pharmica, a contract biopharmaceutical manufacturer with the tagline: Changing Your View on Outsourcing.

It's difficult and expensive for pharmaceutical companies to operate at top capacity when they may only use a line for three or four months of a year, or make only one batch a year, says Cook Pharmica CEO Jerry Arthur. "We can run a line for one product, then switch to another product. So we can keep a line running year-round." Outsourcing is in its infancy, he says, and there's lots of room for growth because of the significant financial advantage to companies.

"We are targeting the startup companies that don't have a line," he says, and don't have the $50 million to $70 million it would take to build a plant to see it through lab tests and clinical trials to eventual production. "Some will never start their own manufacturing plant."

Cook Pharmica's $70 million facility occupies a fourth of the former RCA television assembly plant in Bloomington, and will eventually occupy the full 480,000-square-foot facility, with plans to build out an additional 50-acre space with a second building in future years. For now, it's running two years ahead of schedule, hiring its 100th employee in August, with plans to begin production early next year.

The company will develop and manufacture cell culture-based biopharmaceuticals for clinical and commercial uses, using two giant 2,500-liter stainless steel production bioreactors, and smaller ones for smaller runs. Arthur explains that a scientist from a contracting company will alter part of a cell to produce an antibody. The cell lives and multiplies in Cook Pharmica's bioreactor, then the antibodies are harvested, "separating the wheat from the chaff."

Arthur says Cook Pharmica has been fortunate so far in attracting the talent it needs to fill its new jobs, but "we are fighting to get another 100 hired. That's going to be a challenge for us."

Cook and other Bloomington-area companies will benefit from a new Life Science Education and Training Institute opening in the fall of 2007. Steve Bryant, director of the Bloomington Life Sciences Partnership, a 3-year-old effort under the Bloomington Economic Development Corp., says the collaborative effort including Ivy Tech and the Monroe County Redevelopment Commission will help train entry-level workers for the estimated 1,200 to 1,500 new life-sciences jobs expected in the area over the next five years.

Arthur was impressed with the state's strong presence at the April BIO conference in Chicago, and with Gov. Mitch Daniels' attendance in particular; he was one of 12 governors among the 20,000 participants, nearly 400 from Indiana. "The state hosted a dinner for potential companies to come to Indiana. There was a passion from the leadership of the state."

Also impressed with the Indiana's strong presence at the important conference is Janet Geselmann, vice president corporate affairs, Dow AgroSciences. "Indiana had a huge contingent. It's every country, from Scotland to Ireland to India, selling itself as a life-sciences hub. Indiana absolutely can compete with the best of them."

Dow AgroSciences has 1,000 employees in its Indianapolis headquarters, 5,500 globally, with $3.4 billion in sales, most in crop protection. Additionally, its plant genetics and biotechnology business includes three sectors: seeds and traits, heal@ oils which are non-genetically altered, and animal health. Although the latter is a small segment, Geselmann points to an important recent breakthrough, the world's first regulatory approval for a plant-made animal vaccine.

LIFE-SCIENCE INITIATIVES

Working for a dozen years to advance health-related industries of the state--before the term "life sciences" was so widespread, is the Indiana Health Industry Forum, a statewide membership organization. It's the state affiliate for BIO, the Washington D.C.-based sponsor of the recent BIO/Battelle report, says president and CEO Mike Brooks. Its members come from every sector listed in the report, with added membership from hospitals and other health organizations.

The forum's own "Critical Mass" report in 2005 showed the strength of health and life sciences in the state, with 274,000 jobs directly tied to the industry, nearly 10 percent of Indiana's jobs. Information from that report combined with the recent BIO report shows that 4.4 percent of life-sciences jobs in the nation are found in Indiana.

Economic development, developing human capital and advancing public policy, are the organization's priorities, says Brooks, and it's currently undergoing a strategic planning process for its own future as well as advocating a life-sciences strategic plan for the state as a whole. An important element in the statewide planning process occurred during IHIF's annual conference in June, Innovention 06, where a two-hour kickoff event called "Intra-Indiana Collaborations: A Strategic Plan for Life Sciences" showcased university, business and economic-development representatives sharing life-sciences stories and encouraging collaboration. "We asked, 'What is we need to do as a state?' It's really important that we take advantage of our assets, understand what they are."

BioCrossroads' first goal was to belly up to the bar with some badly needed venture capital for life sciences. It established the $73 million Indiana Future Fund in 2003. A recent success story, says Johnson, was the $16.5 million investment in Indianapolis-based CoLucid Pharmaceuticals to develop an anti-migraine drug from Eli Lilly research. Half came from its Indiana Future Fund. Other new venture-capital sources, he says, are his organization's $6 million Indiana Seed Fund, and the state of Indiana's first foray into such funding by earmarking $100 million in pension funds for investment.

TECHNOLOGY PARK SUCCESSES

Intelliplex in Shelbyville is itching to Offer its attractive and competitive package to life-science companies who choose to locate in one of the state's newest certified technology parks, says Bob Carmony, director of marketing for the 141-acre park. He holds the same title for Major Hospital, its developer. Amenities include advanced fiber-optic connections, a new videoconference center, and most important, affordable land. With a not-for-profit developer, land can go for as little as $40,000 an acre, he says, versus $140,000 or more elsewhere.

In December, Intelliplex's first life-science company, Makuta Technics, will open its headquarters and manufacturing facility with 20 employees in a 30,000-square-foot building on four acres. The company produces precision micro-molded parts for medical diagnostics, drug delivery, surgical applications and automotive uses.

Purdue Research Park in West Lafayette has long been successful in landing both technology and life-sciences companies, many using licensed Purdue technology and starting in its incubator. Two years ago it was named the top university research park in the U.S. and it has the largest university incubator, says Joe Hornett, senior vice president, treasurer and CEO of Purdue Research Foundation, the owner and operator of the park. Although the incubator has gone through a couple expansions, it's completely full, he says. A new 100,000-square-foot building is being discussed, with potentially half used for additional incubator space, and half held for future economic-development needs.

"Like Lance Armstong says, 'It's not about the bike,'" says Hornett. "And it's not about the building. The key to a successful research park goes back to services you provide." Those include high-tech connections, of course, pooled office staff, conference rooms and food service; it's even launching a day-care center. The most important benefit, though, is the flexibility of the landlord. Where else can you get a six-month lease when commercial brokers want two- to five-year commitments, says Hornett, and you're allowed to shrink or grow as needed.

The park's companies aren't all life-sciences related, of course, but a growing number are, with increasingly recognizable names like Endocyte, Quadraspec, Med Institute, Cook Biotech, SSCI and BASI, the only publicly traded company in the park, providing drug development contract services and manufacturing analytical instruments.

Sally Byrn, president and CEO of SSCI, a contract research company, is a champion of the Purdue Research Park and testifies to its flexibility and services. She started in 1991, offering short courses on solid-state chemistry to identify carbon and organic compounds, teaching people how do testing themselves. She quickly found people asking her to do it for them through Purdue, where her husband worked. That wouldn't do for a variety of reasons, so in 1993 she moved from her house to one room of the incubator with a $50,000 personal loan, some Eli Lilly salvage equipment and two employees, her daughter and a friend.

"They provided a conference room, I had a kitchen table," says Byrn. "You don't think about this, but they had a postage meter--a stamp says Mom and Pop." And to be able to use the address "Purdue Research Foundation Business and Technology Center" on her letterhead was instant prestige. SSCI's services for a pharmaceutical company might include determining how fast a compound will dissolve in the stomach, its shelf life, or what happens in a humid environment--should it be blister packed?

The incubator staff worked with Byrn as she grew, even gently moving another company to accommodate her expansion. In 1999, when firmly on its feet and occupying 8,000 square feet, SSCI moved to a "graduation" facility in the park built especially for it by Purdue. Earlier this year the company bought the building, housing its 100 employees with room for more. Purdue took the risk to build the graduation building at a time when private companies would not, she explained. Now there are two private buildings serving the needs of growing businesses.

FUNDING FOR LIFE-SCIENCES COMPANIES

Byrn is on the board of the Indiana Economic Development Corp., IEDC, and chairs its Entrepreneurship Subcommittee, which reviews 21st Century Fund grant requests. The fund supports companies that develop and commercialize advanced technologies, which will lead to high-value jobs. Since created in 1999, it has invested $173 million.

"What's going on is exciting," she says. "Our ability to turn around and get back with companies wanting to do business in Indiana has moved from government time to industry time."

Recent improvements in the 21st Century Fund application process include a requirement for a viable business plan and a management team in place, she says. "The review process will increase the number of companies that make it." In the latest round of seven awards, 21 companies received $26 million. But it's small compared to other states' funds. One winner in this round was PhySci Pharmaceuticals (now called Marcadia Biotech). Its $2 million award is the largest funding source so far for the Indianapolis company, which will make a ready-to-use form of glucagon for diabetic patients who develop hypoglycemia.

The 21st Century Fund is a good start in state support, says Cheryl Blanchard, senior vice president of research and development and chief scientific officer at Zimmer

"Zimmer is the No. 1 pure play orthopedic implant company in the world," she says, with 2,100 employees at its Warsaw headquarters, 6,700 worldwide.

For clarification, she makes the distinction between the orthopedic hardware part of life science and the biologics part. The latter is trying to regenerate or repair bone or cartilage, for example. "That doesn't happen in Indiana," she says, although Zimmer has a location in Austin, Texas, and fellow Warsaw orthopedic manufacturer DuPuy has a location in Raynham, Mass., to develop those products.

Blanchard says Warsaw is an attractive place for orthopedic companies to do business because of its long history in the industry, the number of companies, employee base and support systems. Workers with skills in biologics, however, desire a critical mass of people who do what they do.

There are some things the state can do to lure those types of life-science companies to the state, she says. First, do your best to keep talented college grads in the state. Next, beef up state supports of life-science entities, through an expanded 21st Century Fund, for instance, to build up that critical mass that attracts both companies and employees.

"More assets than even I realize," says Gus Watanabe, chairman of BioCrossroads and former executive vice president of science and technology for Eli Lilly, pictured at Dale Chihuly's sculpture "DNA Tower" at the IU School of Medicine in Indianapolis.