Kiger's Notebook

Big money biotech guru to speak @ RAEDI meeting

This is interesting (to me, anyway).

G. Steven Burrill, one of the top biotechnology evangelists in the U.S. and a backer of the Elk Run bio park by Pine Island, is headlining the annual meeting of the Rochester Area Economic Development entity.

The event is Feb. 12, 2010 at the Rochester International Event Center. Here's some from an editorial by Burrill that I read in the Nov. 1 issue of the Genetic Engineering & Biotechnology News:

There are 328 biotechs that are publicly traded on major U.S. markets (down 7.8% year-to-date), and at the end of September the group of public biotech companies had an aggregate market cap of $352 billion (up 10.4% for the quarter).

In addition, there are 51 companies that have market caps greater than $1 billion (up 4% year-to-date); 36 companies that have market caps between $500 and $999 million (up 38% year-to-date); and 136 public biotech companies (41%) that have a market cap below $100 million.

While the data is encouraging, we don’t yet believe biotech is fully back on track, as many companies are still struggling to find the necessary funding to maintain their operations.

Almost half of U.S. public biotechs have market caps below $100 million and we are seeing companies still consistently turning off their lights for the last time.

It is important to remind ourselves that the biotech industry is undergoing a major transition, a process that will likely continue for at least another two quarters.

This is because we do not yet know how President Obama’s proposal for healthcare reform will fully impact the biotechnology industry, and the status of biosimiliars legislation (follow-on biologics) is also still unresolved.

There are fears that these issues will drive the prices of innovative drugs lower and eat away at biotech company profits. Despite the market uncertainties, we will likely see the industry build on the momentum it has gained over the past several months.

Biotech guru Burrill on biobiz future

Remember Steven Burrill?

He's the head of Burrill & Co., a biotech investment/ venture capital firm. He is the guy pledging $1 billion for Pine Island's Elk Run biobiz development.

And he recently spoke at the Mayo Clinic/ Minnesota booth at the national BIO conference.

So his name jumped out at me when I opened my my favorite bio-focused magazine, Genetic Engineering & Biotechnology News.

Here's a little of what he was quoted as saying in an article headlined - "Tough Time Rachet Up Need for Partners":

“The marketplace of the next ten years is going to be dramatically different,” explained Steven Burrill, CEO of Burrill & Co. 

On the whole, Burrill’s outlook was optimistic—he calls the current situation a sea change and says this is generally a change for the better. “We will be a stronger industry in the end than we are today,” he promised. 

However, Burrill admitted that much had happened in the last year and a consumer credit crisis—to follow that experienced by the banks—is now looming.  Each country is experiencing recession in its own way and this could last for five to ten years, he added. Healthcare systems, too, are going through dramatic change. 
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In reality, healthcare systems have not changed for 2,000 years—people wait to get sick—it is only the tools and technologies that have gotten better. But between now and 2020 everything will change, Burrill said. He believes there will be WalMart-style delivery of products like genetic screening, and that we will enter a “consumer, digital, healthcare world,” in which diagnostics will be based upon information being sent via iPod or Blackberry to a lab.
“All of these technologies exist already—we just need to integrate them,”  he added. 

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As far as the Wall St. implosion is concerned, after 30–40 years of access to cheap capital, financing is now harder to find and more expensive. VCs have deep pockets, but short arms. “Buy side is not interested in microcap companies worth less than $1 billion,” Burrill explained.

“We have created extraordinary value,” he concluded. “There is capital. It is just more expensive. And there will be another IPO market, but it will be different.

Wall St. will be back in 2010 to 2011—but will not finance what it has historically. And finally, physical cluster will become less important, but there will be more virtual clusters.”

Mayo launches new science blog

This is kind of interesting. Mayo Clinic is opening more windows into its interior. Of course, Mayo completely controls the flow of information through these portals. But it is still nice to get this perspective. It is another source for leads for stories.

The description of "middle ground news" is intriguing. I'd love to write more of that kind of news. I am not a fan of press releases (they often miss the true news value), but a one line e-mail or quick phone call would be enough for me to jump on such a story.

And check out o=who was speaking at the Mayo Clinic Theater at the recent international biobusiness conference - mega-investor Steve Burrill of Elk Run fame.

 Advancing the Science is the latest addition to Mayo Clinic's family of blogs.

"It's aimed at the public, but the topic is how medical science improves patient care," says blog editor Bob Nellis of Mayo's Public Affairs Department.

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"Mayo has so many great research stories to share," says Michael Ackerman, M.D., Ph.D., chair of Mayo's Research Communications Subcommittee. "This is a great way to let everyone be involved and to reach new audiences, as well."

The goal is to provide a virtual home for everyone interested in how Mayo's groundbreaking research impacts treatments worldwide. The audience includes everyone who fits that description — whether student, scientist, science journalist, research collaborator, or one of the more than 500,000 patients treated at Mayo each year and their family members.

"We have long needed a venue for discussion and for the middle-ground news, the items that perhaps aren't the best fit for a news release or for a long magazine article," says Nellis. Mayo's research communicators will be regular contributors, but guest posts from Mayo patients, their families, and Mayo investigators and research community are welcomed and encouraged.

Elk Run and hospital tax @ Legislature

Some hot local topics are cooking at the state legislature. Here's some from two of the stories filed for today by our eyes at the state house, Heather Carlson:

Pine Island’s Elk Run development would be eligible for $2 million in state grants as part of an economic development bill headed to the governor’s desk.

The House on Tuesday approved the $263 million bill that funds a wide range of programs including workforce training, business development and housing. It passed by a vote of 74-54. The Senate approved the measure 38-28 on Monday night.

Within that larger bill is language aimed at making sure the 2,300-acre Elk Run project is eligible for the state grant money. It allows this grant money from the Minnesota Department of Employment and Economic Development to be used for projects that include residential development — such as Elk Run. A biobusiness park is also planned at Elk Run, along with other commercial development.

The bill also includes $300,000 for job-training programs for immigrants and refugees. It specifically notes that these dollars can be spent in Rochester.

Rep. Kim Norton, DFL-Rochester, said she had been pushing to make sure that funding was included. In the past, Rochester’s Intercultural Mutual Assistance Association has received grant funding. It also includes $1 million for the BioBusiness Alliance of Minnesota.
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Those voting against the bill included Rep. Greg Davids, R-Preston, Rep. Steve Drazkowski, R-Wabasha, Rep. Tim Kelly, R-Red Wing, Rep. Tina Liebling, DFL-Rochester, Rep. Gene Pelowski, DFL-Winona and Rep. Andy Welti, DFL-Plainview. In the Senate, Sen. Sharon Erickson Ropes, DFL-Winona, and Senate Minority Leader Dave Senjem, R-Rochester, voted against the bill.

Liebling said she was deeply troubled with the state forgiving the loan so the city can build a new project.

“If we’re going to start forgiving loans, we need to discuss loan forgiveness for other projects around the state,” she said.

But Norton voted in favor of the bill. While she said she is concerned about the loan forgiveness, “it wasn’t worth taking the whole bill down.” 

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 Mayo Clinic is preparing to fight a proposed increase to the state’s provider tax on hospitals, even as the Minnesota Hospital Association backs the idea.

With hospitals facing millions of dollars in potential cuts this budget year, the hospital association is offering a last resort to lawmakers — consider boosting the tax charged to hospitals. 

Association president Lawrence Massa said the organization’s board agreed to boost the provider tax from 2 percent to 3 percent, generating an estimated $500 million in new revenue for the state. The tax helps fund MinnesotaCare, a state-subsidized insurance program for low-income individuals and families.

The hospital association has stipulated that if the tax is increased, the money would have to go toward health care spending — not plugging the state deficit.

Mayo Clinic opposes any increase to the provider tax, said Frank Iossi, the clinic’s director of state government relations. Last year, Mayo Clinic and Mayo Health Systems paid $53 million in provider taxes. And while most hospitals in the state are able to pass that tax on to insurance companies through contracts, Mayo Clinic is different, Iossi says. 

Since more than half of the clinic’s patients are from out of state, the clinic ends up absorbing those costs. Iossi said that is a big deal when you consider last year the Mayo Clinic and Mayo Health Systems broke even.

“That is real money that comes off our bottom line,” Iossi said. “That would have given us $53 million net income, so it’s a big deal.”

Olmsted Medical Center also opposes the idea of raising the provider tax, according to OMC President Dr. Roy Yawn. Last year, he said OMC paid $2.1 million in provider taxes. If the tax is raised to 3 percent, he said that would likely bring the center’s total to $3 million — the same amount it spends on capital improvements for a year.

RAEDI annual meeting - Tues.@noon

Remember the Rochester Economic Development Inc. crowd will have lunch Tuesday for its annual meeting.

The RAEDI folks says about 140 people are signed up. It looks like it will be a crowded room, comparable to 2008.

Dale Walhstrom, the CEO of BioBusiness Alliance of Minnesota, is the keynote speaker. His presentation is titled, Destination 2025: Roadmap for the Bioscience Industry in Minnesota.

For details on this roadmap, go to this BioBusiness Alliance page to see all of the various documents, reports and white papers.

Beside being CEO of this industry group and a retired Medtronic exec, Wahlstrom is also on the board of the non-profit Biotechnology Center at Elk Run outside of Pine Island.

Others on that board include: Larry Pease of Mayo Clinic, Dale A. Wahlstrom of the BioBusiness Alliance of Minnesota, Charles C. Muscoplat of the University of Minnesota, Leonard Ruiz of BIOVIRx, Dave Melin of MGI Pharma and Ian Troup. 

Elk Run developers call that center the "core of the onion."

Elk Run + $1.2M grant state

Here's an interesting tidbit from the biotech sector that rolled in last night amid reports of a Big Blue blood bath. We'll have more on this soon:

Tower Investments, LLC, owner and developer of the Elk Run master planned community and BioBusiness Park at Elk Run, today announced plans for the installation of onsite infrastructure funded in part by a $1.2 million state-sponsored grant.  Total project cost for this phase is expected to be $2.5 million.

The Bioscience Business Development Public Infrastructure Program grant, awarded to the City of Pine Island by the Minnesota Department of Employment and Economic Development (DEED), will provide the necessary resources to complete improvements at the site of the BioBusiness Park.  

“This grant signals the next major step in bringing the BioBusiness Park at Elk Run from concept to reality, as we will now establish the physical foundation for this innovative bioscience development,” said Geoff Griffin, Elk Run project manager for Tower Investments, LLC. 

“We credit the City of Pine Island with securing this important grant.  Mayor Perry and his administration have been staunch advocates for biobusiness development, and we applaud both the City and the State for recognizing Elk Run’s profound potential to create jobs and encourage further economic growth throughout the region and state of Minnesota.”

The City of Pine Island expects bid solicitation for on-site infrastructure improvements to begin in mid-February, with bid awards likely to be made in mid-April 2009.  A Master Development Agreement was executed between the City of Pine Island and Tower Investments, LLC in June 2008, which provided the green light for Phase I off-site infrastructure improvements. 
 
The 

BioBusiness Park 

at Elk Run is the first step of Phase I development for the Elk Run master planned community.  The mixed-use development will include residences as well as commercial, medical and bioscience facilities. 
  

News from Elk Run Bio complex

Some interesting (in my opinion) news is coming out soon (as soon as I do a little more confirmation) from the Elk Run Biotechnology community by Pine Island.

This project continues to be a fascinating one with effects on Rochester that are hard to gauge and effects on Pine Island that are not too hard to analysis.

I should have some more on this very soon.

Dirt moving @ Elk Run

Here's a piece by Laura Gossman on what's cooking at Elk Run in Pine Island:

Excavating equipment, construction workers and road closures are all signs that the Elk Run development is closer to reality.

The City of Pine Island awarded a $1.76 million contract to A-1 Excavating of Bloomer, Wis., in July, and the company began work to extend utilities to the biobusiness park on Aug. 11.

The city is hosting a groundbreaking ceremony for the public utilities extension at 9 a.m. today in the Cornerstone Baptist Church parking lot, located at 857 Rolling View Lane S.E.

City Administrator Abraham Algadi said the site of the event was moved from CJ’s Auto Sales because the church has a sound system and an area for people to go if it rains.

“We figured it might be hard to hear people talk over all of the construction noise,” Algadi said.

Construction began at the lift station and will move along 520th Street to the east. Traffic will be rerouted, and businesses along that road will remain open during the construction.

Tower Investments Senior Vice President Alex Marks said the developers are excited about the progress so far.

Marks said he’s been talking with quite a few prospective tenants, but wants to finalize the design plans before announcing those tenants.

“The demand is definitely there,” Marks said. “They’re all excited about the progress being made and can’t wait to get into the center.”

The 40,000-square-foot biotechnology center will be the first building constructed.

Originally, Tower Investments had goals of beginning the construction project before the end of 2008. Marks said the project will likely begin in the first quarter of 2009.

Elk Run off and running

Here's some from a piece by Laura Gossman with a minor assist from me.

Money is rolling in at the Elk Run biotechnology community by Pine Island and work on the infrastructure and utilities should start on Aug. 1. No word yet on tenants.

Elk Run seems to be off and running with money from the state, Pine Island and Tower Investments to fuel it.

The Pine Island City Council voted 5-0 Tuesday to approve the preliminary plat for Tower Investment’s Elk Run project, a proposed biobusiness park along U.S. 52.

The council also voted to extend sewer and water to the development site and to award a $1.8 million contract to A-1 Excavating of Bloomer, Wis.

Pine Island City administrator Abraham Algadi said Tower Investments agreed to transfer $1.2 million to the city to help pay for utility extension.

“It has been a long haul, which started long before we got involved,” says Alex Marks, senior vice president of Tower. “This is a huge milestone. Things are obviously going well if we’re plunking down more than a million dollars.”

Work at the site is slated to start August 1.

The city was also awarded a $600,000 grant from the Minnesota Department of Economic Development to help cover the cost of utility extensions to the site.

Elk Run to build 40,000 sq ft center, has tenant

Remember Elk Run's Biotechnology Center at Elk Run project?

Well, Tower Management has finalized the design of the nonprofit center aimed at housing companies in early stages of product development at the proposed Pine Island development

Today's announcement at the Bio2008 International Convention in San Diego, Calif. says expect ground to be broken for the 40,000 square foot center in the 4Q of 2008. The anticipated completion is targeted at mid-2009.

Here are some specs Tower highlights:

• Efficient management to ensure low costs
• An executive suite concept for development, quality and regulatory services
• 20 ISO class production clean rooms
• Support for cell/protein/tissue therapeutic platforms

While the number could change, Tower forecasts that about five biotech entities will staff that center.

And, most interestingly, one entity has signed up for space, but Tower is not giving out the name yet.