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BATTELLE SPOTLIGHTS RAPID
EMERGENCE OF BIOBELT
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Report Card: Biotech Industry in St. Louis Has Accelerated at 'Record Pace'
By Pam Droog Jones and Bill Beggs Jr.
So reads “Moving to the Next Level: Accelerating
St. Louis’ Plant and Life Science Economy,” the report card on the 2000 study by the Battelle Memorial Institute, the nation’s leading independent research and development contract organization.
The assessment comes as no surprise to the scientists, educators and business leaders who have envisioned the region as the “BioBelt” and formulated the strategy for the Gateway City and a region encompassing surrounding areas of Missouri and Southwestern Illinois. The report notes that St. Louis has accomplished or made significant progress on 90 percent of the recommendations set down not five years ago.
But the speed with which the progress has been made has surprised even true believers... as well as impressed objective observers. The region’s biotech industry was dubbed a “whiz kid” by a front page
St. Louis Post-Dispatch headline.
“Overall, St. Louis has probably moved at a record pace to position itself in plant and life sciences
compared to other parts of the country,” notes
Walt Plosila, vice president of the Technology Partnership Practice at Battelle. “Four years is not a long time to do this. It took San Diego and Maryland a decade or more.”
Presently in the St. Louis region there are about 390 plant and life sciences companies with a total of 22,000 employees, generating more than $10.5 billion in direct and indirect annual economic impact. Also within the region are more than 17 million square feet of high-tech research space, with more being developed. These and other accomplishments have put the region just a few steps behind the top four long-established biotech centers—the San Francisco Bay area, San Diego, Boston and Washington D.C./Maryland—says Donn Rubin, executive director of the Coalition for the Plant and Life Sciences, a group of 37 business, academic, economic development and community leaders established four years ago by Civic Progress and the St. Louis Regional Chamber and Growth Association.
“St. Louis is fortunate to have top-tier research assets,” Rubin says. “But we’ve only been working for four years to develop the entrepreneurial infrastructure around those research institutions to generate new companies with high-paying jobs based on science that can grow and remain in the region.”
Ascending to the top five or even the top 10 is no mean feat, when you consider the scores of U.S. regions jockeying for position at the forefront of the national biotech industry, observers say.
Like any progress evaluation, of course, the report notes room for improvement.
St. Louis, never a community to rest on its laurels, is targeting these areas of concern while managing the continued emergence of the BioBelt. The civic leadership here is used to raising the bar.
One such leader is Dr. William H.
Danforth, chancellor emeritus of Washington University in St. Louis, who chairs the Coalition. Danforth is accustomed to rubbing shoulders with men and women from every walk of life who, while they may vigorously debate, by and large share a vision for the region’s optimal growth. Team-building is highly valued, encouraged—and expected.
“The St. Louis region is rapidly building a reputation as a global center for plant and life science research, investment and business opportunity due in large part to a unique combination of private/civic leadership that is dedicated to providing a vibrant environment in which bioscience companies can grow and prosper,” Danforth has said.
Overall, the report provides an excellent assessment. As many point out with pride, 90 percent is an “A.” But this is much more than boosterism.
Richard Fleming, CEO of the St. Louis Regional Chamber and Growth Association and publisher of this magazine, says Battelle’s outside perspective “not only does Battelle affirm St. Louis as an emerging national player in the overall life sciences, but they further document a unique St. Louis niche in plant sciences.”
“When Battelle puts their name on something it’s with real authority.”
The report explains that, while St. Louis has made much progress, a lot has changed, including increased competition for biotech research and business in 41 states, new ways to commercialize research, and mergers and acquisitions within the industry. Why reassess now?
“It seemed to be the right time to review where the region stands, to celebrate how far we’ve come and identify our focus for the next five years,” says Bob Coy, senior vice president of entrepreneurial development at the RCGA.
The region’s successes have occurred within the framework of strategies outlined in the original Battelle study. Here’s where St. Louis stands on several of those today:
Build an entrepreneurial culture that
supports and nurtures new firms.
Plosila says progress on this strategy
has been most recognizable in three areas: capital formation, commercialization and research space.
“Four years ago we (Battelle) said St. Louis needed to raise $100 million in private and other capital for plant and life sciences. Instead the region raised $400 million, as good as anyone in the U.S. has done in the time period,” he says, also citing the recently launched Arch Angel Investor Network, which invests in start-ups with significant growth potential, as well as the locally managed, dedicated life sciences venture funds Prolog, RiverVest Partners and Vectis Life Sciences Fund I.
In addition, regional entrepreneurs are
finding ways to form companies around technology. One example is the creation of the BioGenerator, a virtual commercialization and technology transfer center designed to channel university research into start-up companies.
Also in progress is an 180,000-square-foot, multi-tenant commercial wet lab that will be built on eight acres next to the Donald Danforth Plant Science Center. And CORTEX, a new 1,000 acre urban research park, is under development in midtown St. Louis.
“When they’re ready, companies can graduate out of the biotech business incubators and into CORTEX,” Coy explains. Those incubators are the NIDUS Center for Scientific Enterprise and the Center for Emerging Technologies (CET).
While most areas have only one advanced technology incubator, St. Louis is fortunate to have two, Plosila says.
Take advantage of the region’s
intellectual capital resources.
“Science and scientists are what a region builds a biotech industry on,” Rubin says. “If we didn’t have so much intellectual capital already in place, that would be the hardest resource to create.” But because the region has a concentration of world-class scientists at Washington University and Saint Louis University, plus Monsanto, Pfizer, Sigma Aldrich and other
corporations and nonprofits, “that puts us in a
fairly select group,” Rubin says. Fleming notes that the Brookings Institution affirmed this point when they ranked four regions among over 60 in the U.S. as having the scientific and university research capacity to become biotech powerhouses. They were: Chicago, Ann Arbor/Detroit, Houston and St. Louis.
Fleming emphasizes that exciting developments are under way across the Mississippi, as well, not the least of which is The National Corn-To-Ethanol Research Center (NCERC) at Southern Illinois University at Edwardsville. This is the only facility in the world that fully emulates both a corn wet-mill and dry-mill commercial fuel ethanol production center.
Build, attract and retain
a quality workforce.
In 2002, Plosila says, the average bioscience job paid $63,000; the average wage of all private sector jobs was $36,000.
And, as Fleming emphasizes, jobs that provide more disposable income are a catalyst for economic development, from construction to recreation.
“We’ve always had people at the universities generating the skills the life sciences need,” Coy says. In addition, a few years ago St. Louis Community College started a Biotech Associate program for technicians. “One concern we still have is the need for executives with experience in launching start-ups and growing them to a liquidity event,” Coy says. “We’re still recruiting that talent from outside the region.”
Where does the region grow from here?
“Basically we continue to do what we’ve been doing,” Coy says. “We continue to build up the venture capital industry and build wet labs for companies as they grow. We continue accelerating technology transfer from universities and marketing the region to attract other biotech companies here.
“Another element of a vibrant entrepreneurial economy is the networking of people. Innovation happens when people from different disciplines collide with each other.”
The region is seeing more networking opportunities through organizations such as the RCGA’s Technology Gateway, says Coy.
Plosila says the report suggests the region do all it can to attract entrepreneurial managers as well as research professionals.
“With 41 states competing, to stay even you have to grow,” he says. “We can’t assume that although area universities have been strong in the past they’ll stay that way in the future.”
Another challenge that biotech companies in Missouri face is the state’s perceived resistance to such advances in the life sciences as stem-cell research.
“Most states are trying to out-gun each other in how much they are putting into stem-cell research,” Plosila points out. “Compare that to Missouri and surrounding states that are trying to limit it.”
Emphasizes Plosila: “It’s not just a question of money, but of philosophy and recognizing the importance of diversifying the regional economy while providing good, well-paying jobs.”
Plosila also believes the region must find ways to build stronger connections between universities and businesses to maximize research. It must further identify the research niches where it can excel, for example, exploring alternative fuels made from plants through the BioEnergy Project. And, Plosila says, although the region has raised hundreds of millions of dollars in life sciences venture capital, pre-seed and later-stage funds still are needed.
“There’s a lot of positive momentum,” Rubin says. “Many observers who visit us from outside the region observe that St. Louis already has done a lot of the hard work. We have very strong research institutions and talent which are the envy of most other regions that seek to be plant and life science centers.”
Urban and economic development and the rise of the biotech industry in St. Louis have gone hand-in-hand, emphasizes Fleming. New homes are under construction in a formerly blighted area adjacent to the Missouri Botanical Garden and BJC. Just blocks both from Washington University and Saint Louis University medical centers, The Center for Emerging Technologies and CORTEX are reinvigorating a once-stagnant swath of midtown.
“CET has primed the pump,” Fleming says. “You begin to see the synergy. We’re in a continuing series of connecting the dots here.” |
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