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Biotech BoomHow Wisconsin's biotech industrycould become a world leaderby Susan Paprcka, SBT ReporterCover photo by: Francis Ford |
And with aggressive public and private-sector maneuvers to make Wisconsin a biotechnical "mecca," it seems the industry itself is attracting quite a bit of attention - not only by the State of Wisconsin, but the nation as well.
Many say it's because the industry has quite a prosperous future, potentially surpassing even the massive technology dynasty of the last few decades.
But American Ag-Tec in Delavan is one biotechnology firm that has its roots firmly planted in Wisconsin, even though one of the company's partners in its Quantum Tubers potato production project is the NASA space program.
Turning to 'taters
Turning potatoes into "rocket science" was no easy task, says Robert Britt, president of American Ag-Tec, a 19-year-old international biomanufacturing company. The former seed distributor found its niche in potatoes quite by accident.
The discovery first presented itself to both Britt and Dr. Thomas L. German, University of Wisconsin-Madison plant pathologist, in 1992, through developments that surfaced from UW-Madison.
A visiting professor from China attended a seminar conducted by German, regarding how potato production was conducted in the United States. When the program concluded, she pulled German to the side for a long conversation, Britt recalls. "Dr. German came up to me afterward and said, 'If what this woman is telling me is correct, it's going to change the way potatoes are grown in the world.'"
Having little experience with potatoes at the time, Britt admits he had no idea of the discovery's significance. But with the help of German and the Plant Pathology Department at UW-Madison, Britt learned quickly the vast possibilities.
What Chinese researchers had done was introduce technology that could potentially peel five years from the painstaking and time-consuming process of breeding new, disease-free potato varieties.
"What the Chinese discovered was a way to fool the potato to be able to multiply significant amount of plantlets, so that we could do it in a very short period of time," says Britt. "To where we have millions of these zero-generation minitubers rather than hundreds."
In other words, what used to be a nine-month process was reduced to 40 days, resulting in a disease-free pure end-product, and in greater numbers than ever before.
"And what that means is that all these years of growing potatoes out in the field don't exist - they're all part of the first phase of development," says Britt.
It was an exciting discovery, primarily for the international market in terms of feeding Third-World nations where potatoes are often weak and diseased.
But the real challenge seemed to be putting into action what they had discovered.
The team of Ag-Tec and UW-Madison quickly found that it would take a tremendous amount of financial resources to take advantage of the technology. And there was the challenge of holding the knowledge close to home.
"If you start training a hundred people to do something, your technology bleeds out real quickly," according to Britt. "The next day somebody hires your best people and you're out of business."
An appealing discovery
When the technology moved to the Biotron at UW-Madison and became even more advanced under the highly-controlled, artificial environment, they were unsure where to go from there.
The Biotron is a controlled environment facility for biological research, providing the ability to manipulate parameters of the physical environment to simulate natural or changing environments.
"When we moved over to the Biotron, what the Chinese were doing doubled," recalls Britt. "We could control everything to a very finite amount. And so we took this new finding, sent all these people back to China, had a report in our hands and said, 'OK, now what do we do with it?'"
So in 1995, Britt remembered an experiment that was being conducted in the Biotron at the same time Ag-Tec was conducting its experiment.
"It was a project through NASA where they were growing potato plants in a completely black room except they had little red LED lights right up against the leaf of the plant, feeding the potato - for the purpose of feeding people in space," he says.
When Britt called the Biotron and inquired about the technology, the director told him that it was a NASA project, and, as it so happened, they were having an open house the following day where the researchers would be present.
"Well, the Biotron was built in 1965. They had their first open house in 1965 and the second one the day after I called," Britt laughingly recalls of his serendipity.
Britt's good fortune resulted in a signed deal with the NASA-funded Wisconsin Center for Space Automation and Robotics (WCSAR), using its advanced technology to manufacture what are now called Quantum Tubers.
The high-tech system uses computer-controlled growth chambers, providing an ideal environment for culturing disease-free potatoes from tissued, rapidly-multiplying clones, with each generation as good as the original.
The chances of passing disease from one generation of seed potatoes - the fourth largest seed crop in the world - to the next increase with each generation because they are grown directly from the potato, hereditarily passing down disease, according to Britt.
Apart from the technology's ability to feed more in a fraction of the time, the system is also considered to be ideal for growing plants that contain "edible vaccines" - which Ag-Tec has already achieved for the Hepatitis B vaccine.
"The first pharmaceutical potatoes in the world were grown by us," says Britt of the accomplishment.
Using potatoes in that fashion reduces the chance of contamination, is less expensive than building new facilities for traditional means of production, and eliminates the need to give shots to administer the vaccine.
As a result, the Quantum Tuber facilities could prove to be an important tool for crop improvement, fighting hunger and fighting disease. The first international "biomanufacturing" facility is slated for construction in Poland this year.
"Somebody said potatoes aren't rocket science," says Britt. "Well, I guess they are now."
Making biotech a priority
Lying rather dormant for many years in the shadow of the technology revolution, the biotech industry has made a slow but steady climb over the last few decades. Like dot-com companies, many have yet to see a profit due to extensive research and development costs. But recently, small victories have added fuel to the engine that is expected to power biotech to the top of the marketplace.
Biotechnology is a broad term for a very multi-faceted industry. It is generally defined as the use of biological processes as a component in the development or manufacture of a product, or in the technological solution to a problem.
With a strong presence of businesses and institutions in such fields as food and agriculture, genetics, IT, pharmaceuticals and other environmental sciences, many believe Wisconsin is well poised to be in the forefront of the biotech revolution.
Last year, the state legislature conducted a study to determine just what industries could bring the highest growth potential for Wisconsin. Not surprisingly, biotech was determined as one of six target industries.
"We found with our study that we have a real niche with the agricultural-related biotech, because we have been cross-breeding and doing things with crops for years with a lot of companies here," says Scott Reigstad, director of communications for Forward Wisconsin, a public/private state marketing group.
"And it offers another opportunity for our farmers. Rather than just sell corn in the world market, now they can sell something that's value-added, they can make more money and be more successful - creating more markets for our agricultural base," he says.
At the recent Bio2000 conference in Boston, considered to be the largest international yearly conference for the industry, Lt. Gov. Scott McCallum echoed those sentiments.
"Biotechnology is the future and Wisconsin has all the pieces in place to become one of the nation's leaders," he said.
McCallum, along with representatives of other state and private agencies, put together a massive marketing plan at the conference to show the world just how serious Wisconsin is about becoming a strong contender as the industry leader.
Although current statistics say Wisconsin is making a strong showing within the industry, Gov. Tommy Thompson says it's not good enough.
"Wisconsin is one of 10 states vying for leadership in biotechnology," he said. "I want Wisconsin to be No. 1."
Thompson has made the growth of bioscience and technology businesses a high priority for Wisconsin, proposing a new $317 million BioStar initiative this past January.
Primarily a "brick-and-mortar" initiative, the BioStar plan is to build a series of state-of-the-art research centers and additions on the UW-Madison campus.
"We have some of the best scientists in the country here," says Reigstad. "And they need better facilities. They're getting wooed by other campuses and other colleges that have a lot more resources. That was a big part of it."
The Wisconsin Department of Commerce administers a number of programs that can assist companies with their research and development efforts. For example, the Technology Development Fund provides up to 75% of the costs of developing new technologies.
But is it enough? What will it take for these grand expectations to be realized?
Wisconsin's largest obstacle
Most agree that financing has been the major problem for biotech companies in the past. UW-Madison has spawned a number of bio-tech oriented business, but a lack of funding has often sent those concerns packing to other states.
Information compiled from the National Venture Capital Association reveals that at the end of 1998, the United States' venture capital industry was managing about $83 billion. Of the 40 states that had some of that venture capital, Wisconsin ranked 31st in total dollars under management with a meager $40 million.
Even Alabama, which ranks only 30th on a per capita basis, still averages $27.64 per person in venture capital - a rate four times as high as Wisconsin's.
Until recently, venture capital has been considered very much a primarily East Coast or West Coast activity.
Mason Wells, a Milwaukee-based private equity firm, is one of the businesses that is trying to change all of that for the biotechnology industry in Wisconsin.
Formerly part of M&I bank, a new independent business was started in 1998 directed toward venture capital investing - the Mason Wells Biomedical Fund 1.
"We aim to invest in biomedical ventures, primarily in the state of Wisconsin and secondarily in the upper Great Lakes - from Minnesota down to Chicago," says Tony D'Souza, managing director.
D'Souza is moving his family to southeastern Wisconsin in June for the sole purpose of augmenting the biotechnology business here.
"We [Mason Wells] think that the timing is absolutely perfect for doing this in Wisconsin because Wisconsin has a lot of biomedical research that goes on," says D'Souza.
But D'Souza agrees that lack of funding has held Wisconsin back in the past.
"What's happened is there has been a lack of capital to finance these businesses," he says. "And so because of that, traditionally, ideas that have received funding have left the state. And other ideas that are worthy of funding, but just did not get it, just died out."
The Biomedical Fund is a longer-term capital investment fund that was developed in order to get biotech businesses through the introductory, research and development period - where many companies are at their most vulnerable.
"It's when you get them past that 'ramped-up' stage is when they can survive," says D'Souza. If a company only has enough capital to get it through the initial stage of research and development, then items such as marketing and product roll-out can suffer.
"And if somebody from out-of-state comes in - if the idea's good enough - they'll put the money in, but they'll take the company with them," he says.
The making of an industry leader
Many associated with the biotechnology industry believe it will take a "big hit" to make Wisconsin an industry leader - a company to forge the way for Wisconsin, such as what happened in Silicon Valley almost two decades ago.
"Hewlett-Packard is now advertising the fact that it was the first venture capital funding company in Silicon Valley," says D'Souza. "In fact there was no Silicon Valley before Hewlett-Packard. And because of the risk taken in starting that company, other companies followed."
It seems the bottom line on venture capital is that it's about taking risks - something that a conservative area like Wisconsin has never really been too comfortable with, observers note.
"When you take risks, some of your ventures will fail," he says. "And it seems the risk-takers here are then penalized. That's very much the opposite of what goes on in the booming parts of the country."
Above all, it seems D'Souza agrees with the importance of hopping aboard the biotech bandwagon quickly. "If the last few decades were the decades of the computer, the next few decades are going to be the decades of biology," he says.
So why biotech and why now?
"I think the time has come for the biomedical industry," says D'Souza, who is one of those who believe biotech could surpass the technology industry in the next decade.
"The computer industry is much more stable and mature these days, and the biotech industry has been around for some time. A lot of people have been working very hard for a long time."
Fueled by the technology age, affecting various facets of human existence, biotech seems to have a limitless future that's garnering much support and excitement.
Britt of American Ag-Tec agrees, "I believe it will be larger than the technology revolution because it affects more things - like genetic code, medicine and the world's food supply."
Small Business Times Cover Story ~ April 28, 2000Researchers are increasingly using biotechnology to develop edible vaccines. These vaccines are genetically incorporated into food plants and need no refrigeration, sterilization equipment or needles. This new technology will be especially useful for delivering inexpensive, safe and highly-effective vaccines throughout the world.
A leader in this field, Dr. Charles J. Arntzen, president of the Boyce Thompson Institute at Cornell University, is developing a hepatitis vaccine in bananas. Arntzen says he selected bananas because they are one of the infant's first foods - they can be eaten raw and are widely available throughout the world.
If successful, the edible hepatitis vaccine could save the lives of millions of children especially in developing countries where refrigeration and sterilization equipment are prohibitively expensive. Arntzen estimates the banana could deliver the vaccine at two cents a dose versus $125 for a vaccine injection.
An estimated 300 million people carry the hepatitis virus and about one third of them will die from its effects this year.
Dr. William Landridge at California's Loma Linda School of Medicine has created an edible cholera vaccine by adding genes for the cholera toxin to potatoes. One of the more important attributes of the immunization-potatoes was the fact that boiling the potatoes did not destroy vaccine activity.
Researchers are also using biotechnology to produce plants that make antibodies against bacterial tooth decay, lung infections in patients with cystic fibrosis, and sexually transmitted diseases.
Source: Doctors Andrew Hiatt and Mich Hein, formerly of Scripps Research Institute in La Jolla, CA, now with EPIcyte Pharmaceutical, Inc. San Diego
Biotechnology leads the way in medical innovation by confronting life's most threatening illnesses. More than 350 biotechnology drugs and vaccines are in human clinical trials and hundreds more are in early development. Our nation has more scientists working on more new therapies and cures in more biotechnology companies than any other nation in the world.
Of the 1.2 million cases of various forms of cancer diagnosed in the United States each year, patients are finding hope in some 200 drugs under development that use the body's natural weapons to fight cancer cells. These new treatments pinpoint cancer cells and destroy tumors, while leaving healthy tissue unharmed. With the hope that this new therapy could someday replace traditional chemotherapy, cancer patients may look to their future with greater certainty.
People grappling with obesity may be able to look to a brighter future as biotechnology research uncovers new strategies for controlling weight. Drugs based on the genetics of excessive weight gain will help battle not only obesity but also related conditions such as diabetes and heart disease.
Hope is also on the way for the more than 58 million Americans who suffer from cardiovascular diseases. With intense research being conducted into the genetic mechanisms involved in heart attacks and strokes, this biotechnology breakthrough is revolutionizing the field of cardiology and vascular medicine.
Age-related diseases, such as Parkinson's, Alzheimer's and osteoporosis, have baffled researchers, but now there is hope. Biotechnology research into nerve-growth medications holds great promise for slowing, reversing or eliminating Parkinson's and Alzheimer's diseases. In another tremendous advancement, researchers have discovered a gene that appears to control bone density, clearing the path for possible new treatments for crippling osteoporosis.
Source: Biotechnology Industry Organization, Washington, DC
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