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South Carolina targets biotech businesses

Submitted by: John Warner on Jun 28, 2003 at 5:00 am Tagged with: General Archives Source:

South Carolina targets biotech businesses

BIOTECHNOLOGY

BY JONATHAN MAZE
Of The Post and Courier Staff
For years, ambitions to build a base of biotechnology companies has been little
more than just talk in South Carolina.
Recently, it seems, something is being done about it.
Whether the state will succeed remains to be seen. Just about every community
is targeting biotech, and South Carolina in many ways is starting farther back
in the pack. Experts say the state needs investment money, changes in its
incentive system and to make more lab space available.

Nevertheless, industry officials have seen what they consider to be encouraging
signs that the state is making headway in its efforts to promote the industry's
growth.
"We're seeing a lot more activity," said Ernest Andrade, director of the
Charleston Digital Corridor, noting that the number of inquiries about the
state from biotech and medical device companies in other parts of the country
have grown this year.
Biotech's needs are different, Andrade said, and the state has spent
considerable time in recent months trying to make changes and develop
incentives to address those needs.
The General Assembly, for instance, took up bills to change the state's system
of corporate incentives so they could be used to lure more biotechnology
companies. It also looked at setting up a $100 million fund to attract venture
capitalists into the state.
South Carolina also is more active in getting its research universities more
involved in economic development. It started with the Centers of Excellence
Endowed Chairs program, which provides lottery funds to help Clemson, USC and
MUSC attract top professors -- who would then do research that could spin off
to form companies.
Adding momentum to these efforts was the decision by a handful of companies to
move here.
Last fall, Pilot Therapeutics decided to relocate to Charleston from
Winston-Salem, N.C., in large part because of a $10 million incentive package
from the state. The company plans to employ 50 people on Daniel Island and
another 80 at a manufacturing plant being built in Orangeburg.
By next year, Pilot's first product, asthma medication Airozin, will be on
store shelves nationwide.
South Carolina also managed to attract a Virginia company called Croptech,
which uses tobacco plants to make medications. But the company has since
declared bankruptcy and all but scuttled its plans to move to Berkeley County.
While the bankruptcy was an embarrassment to economic development officials,
those in biotech circles stress that not every company in the sector is bound
to succeed. "The failure of a company could still mean success for our region,"
Andrade said.
In addition, experts are almost universal in their belief that real industry
growth comes not from companies attracted to the state, but from those that
grow within its borders.
One such company is GenPhar.
The company emerged last year after spending years quietly developing its
product, a vaccine platform that can be easily adapted to fight a number of
viruses.
GenPhar has made progress with its anti-virus. Early tests for vaccines against
Ebola and Marburg were successful.
Despite the early promise, GenPhar has struggled attracting venture capital.
Part of the problem is hardly unusual during these times, because the stagnant
stock market has hammered investors, who've been far more judicious with their
dollar.
"Actually, several venture capitalists have showed initial interest," said Dr.
John Dong, the company's chief scientific officer. "But most have not responded
favorably because we're in South Carolina. It's the same theme over and over
again."
GenPhar also has struggled to find lab space, another problem felt by many more
biotechs in the state.
The company could attract millions in government contracts to manufacture its
Ebola and Marburg vaccines, if only it had a manufacturing facility. But
GenPhar has had trouble getting investors or developers interested in such a
project.
There are efforts under way locally and across the state designed to correct
the problem and provide startups with lab space.
Most notably, there's a proposal for a biotechnology incubator near the Medical
University of South Carolina. Karl Kelly, CEO of the South Carolina
Biotechnology Incubation Program, would like to see incubators built near
Clemson and the University of South Carolina, too.
Economic development and biotech industry officials believe the state is making
headway in its industry-building efforts. "There are some real misconceptions
about South Carolina that are changing very quickly," Kelly said.
For one thing, he said, more research is being done in the state than many
believe. "We're getting constant interest from people who want to form new
companies, to the point where we're flooded with opportunities," Kelly said.
He said that the state has the resources and capabilities to be a player in the
biotech industry. Already, the industry presence here has doubled since 1996.
Finally, Kelly believes that as more biotech companies move from research and
into commercialization, the industry's focus will shift to manufacturing -- a
South Carolina strength.