A guest writer in a recent article in the Wall Street Journal repeated the oft quoted Jonas Salk statement about his Polio vaccine: “There is no patent.  Could you patent the sun?”  Many use this statement as the moral impetus for refusing patents on medically important innovations (see Michael Moore’s Capitalism: A Love Story).  Unfortunately, Jonas Salk created a myth that day by leaving out several crucial details.

As pointed out by Robert Cook-Deegan at Duke University, “When Jonas Salk asked rhetorically “Would you patent the sun?” during his famous television interview with Edward R. Murrow, he did not mention that the lawyers from the National Foundation for Infantile Paralysis had looked into patenting the Salk Vaccine and concluded that it could not be patented because of prior art – that it would not be considered a patentable invention by standards of the day. Salk implied that the decision was a moral one, but Jane Smith, in her history of the Salk Vaccine, Patenting the Sun, notes that whether or not Salk himself believed what he said to Murrow, the idea of patenting the vaccine had been directly analyzed and the decision was made not to apply for a patent mainly because it would not result in one. We will never know whether the National Foundation on Infantile Paralysis or the University of Pittsburgh would have patented the vaccine if they could, but the simple moral interpretation often applied to this case is simply wrong.”

While the debate on whether patents are the best way to incentivize medical innovation and commercialization continues, that debate should proceed without reliance on this myth regarding the history of the Polio vaccine.

The 2011 BIO International Convention brought together over 15,000 leaders from industry, government and academia who are working to solve some of the sector’s biggest challenges. Last year’s event was a highly successful meeting with representation from all fifty states and 65 nations involved in innovation and manufacturing of life science technologies for the marketplace. We were honored to host governors from 11 U.S. states as they promote their bioscience economic development endeavors.

Here’s a little video we put together featuring Governors’ participation at the 2011 convention:

Governors at the 2011 BIO International Convention:

• Maryland Governor Martin O’Malley
• Virginia Governor Robert F. McDonnell
• Kansas Governor Sam Brownback
• North Carolina Governor Bev Perdue
• Oklahoma Governor Mary Fallin
• Massachusetts Governor Deval Patrick
• Kentucky Governor Steve Beshear
• Florida Governor Rick Scott
• Illinois Governor Pat Quinn
• South Dakota Governor Dennis Daugaard

Read the press release

‎Not surprisingly, President Obama’s vision for “an economy built to last,” as outlined in this week’s State of the Union address, makes job creation a cornerstone:

“I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that – openings at a time when millions of Americans are looking for work.”

The president’s comments get to the heat of looming crisis. High-tech industries need a well-trained workforce. You would think that with over 8% unemployment, companies would have their pick of candidates. Regrettably, that is not the case.

The fact is, there are far too few available programs in this country geared towards producing qualified recruits for advanced manufacturing jobs. If America is to remain competitive in tech-focused and innovative industries, such as the biosciences, we need more 21st century workforce training programs.

In the last week, I came across two news stories that offer hope this crisis is being addressed.

First, Massachusetts Governor Deval Patrick made the following statement during his annual State of the Commonwealth address earlier this week:

“We have a skills gap. We can do something about that. We can help people get back to work. And our community colleges should be at the very center of it.’’

He went on to outline a plan to overhaul the Massachusetts community college system, with a focus on preparing students for technical jobs.

The other piece of promising news relates to a soon-to-be-open high school in Virginia, Monticello High School’s Health and Medical Sciences Academy. As described by the school’s website, the program will “provide students a foundation for post-secondary education or workforce readiness in certified health related professions. Students will explore core content with technology through integrated projects, case studies, and focused learning experiences.” The school opens next fall and applications are being accepted now.

Virginia Governor Bob McDonnell, a notable advocate for workforce training initiatives, recently unveiled an economic development package as a means of increasing the number of high-paying bioscience jobs in the commonwealth. The Governor’s proposal contains funding for planning and implementing grants that support the establishment of Health Science Academies in the state.

Update: Read Jim Greenwood’s statement following this week’s
State of the Union speech

Have you heard of other new tech-focused worker training programs? If so, please post a comment below!

In Albemarle County, Virginia, the public school division is debuting a Health and Medical Sciences Academy this fall. Public high school students throughout the county will apply for a four-year program with a curricular concentration on skill sets that will serve state and national needs in the healthcare, pharmaceutical and research industries.

Dr. Pamela R. Moran, Superintendent of Albemarle County Public Schools, Photo courtesy of Jen Fariello

In the following guest blog post, Dr. Pamela R. Moran, Superintendent of Albemarle County Public Schools, discusses this innovative program and offers insight as to why it is such an important model other counties and states should copy:

There will continue to be tremendous growth in the healthcare and pharmaceutical fields over the next several years. Virginia’s employment commission projects that between 2008 and 2018, more than 12,000 jobs will have been created in healthcare technical and support operations and among practitioners. Employment in the state’s bioscience industry is growing at four times the rate of all other industries combined.

The Albemarle academy will be unique in its academic approach—beginning with an integrated core curriculum developed around areas of study with a health and medical science concentration. Latin, for instance, will be required as the foreign language course, while history, science, and other core subjects will incorporate concepts linked to the study of medicine. Specialized content, such as biomedical innovations, will be added in junior and senior years.

In our Mission Statement, we emphasize relationships, relevance and rigor, and at the top of our list of strategic goals is preparing students to excel in the global community and in a global economy. This Academy will require quality relationships in its reliance upon a broad community of expert advisors, relevance in its incorporation of private sector priorities and rigor in its academic standards.

To ensure agility and alignment with the private sector, the academy will be influenced by an external advisory board, create job shadowing and internship opportunities and use case studies to advance student competencies in real-time critical and strategic analysis.

Monticello High School (Charlottesville, VA), future home of the Health and Medical Sciences Academy

The Health and Medical Sciences Academy will include three career pathways: allied health technicians, to include a range of industry certification programs; bio-engineering, to include Genetic Engineering and laboratory research and science and medical practitioners to include M.D., D.D.S., RN and LPN.

This fall, the first entering class will consist of 50 students and each year 50 students will be added until the academy reaches its full complement of 200 students. Modeled after the county’s highly acclaimed Math and Science Academy (MESA) at Albemarle High School, teachers and counselors will identify and nurture potential student applicants as early as in elementary school.

The drug class of 2011 was larger than the past few graduating classes. We count over 30 new “innovative” drugs found among the list of FDA approvals last year. This is in contrast to the 20-something range of the past few years. On the list are some clear breakthrough treatments and a few glimpses of “the future of biotech”. The specific drugs are listed further below, but first a big picture view:

Ten of the approvals were for biologics, six of which came through CDER. Of these six, three were antibodies, two were recombinant fusions, and one was a PEG linked enzyme. The other four biologics came through CBER. The CBER approvals contain blood or serum derived therapies such as the first blood cord stem cell therapy (Hemacord), a mixture of horse derived antibody fab domains for scorpion venom (Anascorp), and an autologous cell therapy for wrinkles (LaViv). One recombinant blood protein was approved by CBER, rFactor XIII (Corifact).

A range of disease areas were addressed by the the approved therapies. Cancer, being the most prevalent with eight approvals. Two of the small molecule new molecular entities (NMEs) are kinase inhibitors for cancers that were approved along side companion diagnostics. We expect to see more of this in the future, as patient identification and responder selection gains more traction in the industry, and regulators welcome the concept. News this week from Biogen, regarding Tysabri, underscores the importance using diagnostics for patient stratification even for approved drugs. News that Roche has bid ~$6B for Illumina also illustrates the imperative for drug developers. Examples of companion diagnostic for negative/positive responder identification, as well as safety profiling, will likely become a major theme in biotech in coming years.

The drugs slated for fast review and decision accounted for over 50% of the approvals. Orphan designated drugs made up a fifth of these approvals, and over a third were priority approvals.

Counting approvals that are new and “innovative”, is not as straight forward as copying and pasting from fda.gov. First, we only include drugs that are being approved for the first time, for a first indication. Second, we do not include imaging agents in our list, like the FDA did in their fiscal year list back in November (note we use a calendar year here). Third, unlike lists published elsewhere online that only count CDER BLA approvals, we include certain BLAs approved via CBER. Fourth, we exclude new formulations, and combinations. However, we do include chemically modified forms of exisiting drugs, such as this year’s addition of PEG to arginase in Erwinase (chemically like what Amgen did for Neulasta or Celltech did for Cimzia). As another example, two drugs with Gabapentin were approved in 2011, but only one was chemically unique (the prodrug Horizant) and made it on our list. The other, Gralise is a once daily reformulation.

Below is the 2011 list of new drugs. The colors denote biologics: Antibody (green), fusion or native protein (blue), blood fraction or cell therapy (orange).

2012 BIO International Convention to Highlight Breakthroughs in Healing, Fueling, and Feeding the World

The BIO International Convention Program Committee recently selected 125 thought-provoking and timely sessions among 13 educational tracks. The 2012 tracks include: Achieving Regulatory Approval and Compliance; Biofuels and Biobased Chemicals; Biotech Patenting and Tech Transfer; Business Development; Drug Discovery and Development; Finance; Food and Agriculture; Global Innovation and Markets; Health Policy and Reimbursement; Innovations in Vaccines; International Case Studies; Manufacturing of Biologics and Drugs; and Personalized Medicine and Diagnostics.

The tracks are designed to help attendees stay up to date on industry developments, trends and policies, improve upon your day-to-day operations and make informed decisions. Breakthroughs in medicine, diagnostics, the environment, energy production, business operations, financing partnerships, policy issues and much more will be highlighted in this year’s program.

Due to the opening of the BIO Exhibition on Monday, June 18, select programming, including breakout sessions, will be offered beginning Monday morning. The additional morning of programming will now include four full days of programming.

Monday events include:

• Biotechnology Entrepreneurship Boot Camp
• Product Delivery Workshop: Understanding the Path to Commercialization
• Leadership Summit
• Biotech Primer: Understanding Biotech in the News
• Translation Research Forum
• Diversity Summit
• BIO Career Fair
• One-on-One Partnering

Another exciting addition to this year’s event is the late-breaking breakout session slot in most tracks. Session Organizers interested in submitting a late-breaking session must submit a proposal containing new information that was not yet known or fully available by the original Call for Sessions. Proposals for the late-breaking session will be accepted February 20^th – March 5, 2012. Late-breaking applicants can apply at convention.bio.org.

Attendees can expect to hear from not one but two Keynote Speakers at this year’s Convention. Tuesday, June 19^th and Wednesday, June 20^th will feature dynamic presentations from exciting industry thought leaders. For a complete schedule at a glance, visit here.

Don’t miss out on the exciting extra day of programming! Make plans now to attend Monday’s special programs with some of the biggest names in biotech. As an added bonus, most of these special sessions are FREE with Full Convention or Convention Access registration. Check back often for Convention and program updates.

The National Venture Capital Association (NVCA) has released their 4Q 2011 numbers for biotech venture financing in the US. The report echoes the global numbers already out from BioCentury and BioWorld – a boost in investment for 2011.

The take away, however, is not the total amount, but 1) the drop in the total number of biotech deals, and 2) the drop in start-up, early-stage deals from 2010. The total number of deals near 447 was down 8% from 2010, and the number of start-ups receiving funding dipped 19% from 2010. Biotech 1st round deals fell below 100 for the 3rd time in a decade (see table below). The NVCA defined “Life Sciences” group had the lowest deal number in FIFTEEN years. (They add device companies to biotech to get their “Life Sciences” number, which essentially means things are worse off in the device space.) As is often the case in our sector, the devil is in the details.  So, take the 20% jump in VC $ funding with a grain of salt.*

Here are the 1st round VC financings from NVCA since 1995:

Below is the US biotech venture investment from NVCA, 2005-2011. The second chart shows TOTAL US venture investment and total deals. Note that the second chart shows the total number of deals for all sectors going up, yet biotech (in the first chart) goes down for 2011:

What this implies is that although we did see more investment, the funding is becoming more concentrated. We see fewer deals, but more money invested. There are two possible reasons for why this could be happening. First, VCs are very conscious of capital constraints in a volatile macro environment and want portfolio companies to weather the next storm if need be. Second, later stage assets in biotech require more funding. With LPs demanding closer time horizons for an exit, these companies may have a better chance receiving additional rounds vs. discovery start-ups (without an asset) seeking a first round.

*A point that has been brought up since the NVCA release, see Bruce Booth and Rick Soltero, is the over reaction to the magnitude of the drop in the 1st round deals. Bruce argues that 100 is still a decent turn out, and Rick argues that they get more than they used to, with quality the focus on the VC front. Both are valid points and do not disrupt the thesis that more late-stage rounds deals are occurrring vs. early stage. When we plot the number of biotech deals that are 1st round vs. later round, the divergence is pretty clear (see below). However, when we plot the amount of money going into 1st rounds as a percent of total biotech investment, it is far more consistent (15-20% of all invested biotech VC money). Thus, taken together, this would mean the following:

1. There is no growth in the number of start-ups per year, potentially at a baseline near 100 (the 98 companies in 2011 is off peak levels of 140, by 30%, and below the 15 year average of 105)
2. The VC allocation discipline to early stage is about the same, but off peak allocation of 20% of invested money (typically 15-20% range since 1995)
3. Because there is more VC money invested in 2011, and start-up numbers stagnate, the investment per start-up is increasing (see last chart)

The story of Acheflan highlights the role of patents in homegrown innovation in developing countries.  Professor Michael Ryan of Georgetown reviewed several case studies (including Acheflan) in Brazil that highlight the differences in biomedical innovation both pre- and post-intellectual property reforms.

In the early 1980’s, Ache Laboratorios Farmaceuticos (a Brazilian generics manufacturer) became aware of a plant that grew near coastal cities that local fishermen would mash into an oil rub to serve as an anti-inflammatory and anti-scarring medicine.  Ache wanted to develop the plant into a product they could bring to the Brazilian and worldwide markets.  Ache realized that to develop the product they would need to isolate the active ingredient and then take it through toxicology studies, animal testing, and human clinical trials to demonstrate the safety and efficacy of the product.  However, Brazilian patent law at the time prohibited patenting of pharmaceutical patents.  While Brazilian patent law allowed for process patents, Ache quickly realized that competitors could easily reverse engineer the product and make their own version.  Ache did not pursue the project.

When Brazil reformed its patent law in 1996 to allow patents on pharmaceutical products, Ache resumed work on the shelved project.  Now they could finally invest in the project with a promise of a return guaranteed by a patent.  Not having the capacity to conduct research, Ache established research partnerships with Brazilian professors.  From 1998-2004, some 100 university agronomists, biochemists, pharmacologists, and medical doctors were involved in taking the product through isolation and toxicology studies.

The company launched the product, Acheflan, in 2005 and the years of hard work paid off.  Acheflan is the first medicine innovated and introduced in the marketplace by Brazilians and within a year the product received a 30 percent share of the anti-inflammatory market.  By the end of 2007, its market share exceeded 40 percent (beating out competitors among established global pharmaceutical companies).  The company is in the process of launching the product worldwide.

While Brazilian patent laws still require much improvement to lay the foundation for its future as a developed country, this case study is one of many suggesting that even incremental positive changes to the IP environment can catalyze commercialization of Brazilian innovation.

Q&A with ARPA-E Deputy Director for Commercialization Cheryl Martin

Q: What is the mission of ARPA-E, and how do you work to further that mission?

Cheryl Martin, ARPA-E Deputy Director for Commercialization

ARPA-E’s mission is to develop advanced energy technologies that can reduce U.S. energy consumption, emissions, and our reliance on foreign energy sources.  At the core, we are a technology funding agency, with a focus on next-generation, game-changing energy advances.  We award funding for research and development, with the goal of de-risking technologies enough to make them attractive to private sector investors and development partners.  With about 180 awards to date, we are funding an amazing set of projects not only at universities and national labs, but also at both large and small companies across the country, all working on enabling a more secure, competitive, and clean economy through more efficient buildings, low-cost electric vehicles, efficient alternative fuels, and beyond.

Q: What are some of the unique challenges that new companies face in commercializing an innovative energy solution?

The energy sector is enormous and offers an enormous opportunity for new technologies that disrupt the status quo.  Because the energy space covers such a wide range of technologies, from global game-changers to consumer products, it is hard to generalize, but some of the common challenges include a need for large amounts of development capital beyond the lab and difficulties in selling a new technology into an established customer base that strongly emphasizes reliability.

Q: How does ARPA-E work with companies to address those challenges?

First and foremost, we employ some of the country’s most entrepreneurial scientists and engineers as program managers, so that we can offer active support to help projects prove out their technologies as they move from the laboratory.  Beyond the lab work, we provide funding and resources to help project teams develop the knowledge and skills they need to prepare for deployment of their technologies.  We want our projects to address issues related to product definition, market entry and manufacturing as early as possible so that they will be well-positioned for success in private-sector funding and deployment.

Q: What are some of the ARPA-E projects that are commercializing biotech innovations for energy solutions?

The most direct application of biotechnology in energy is in alternative fuels. So far, we have supported these efforts in three different programs, totaling over 25 projects.  Our first broad program has projects that address both algae (for example, Arizona State) and feedstock (for example, Agrivida). There have been two subsequent focused programs, Electrofuels and PETRO.

Electrofuels, which has funded 13 projects, seeks to explore practical ways to convert reducing agents (sources of electrons) plus carbon dioxide into more valuable chemical products through non-photosynthetic biochemical pathways. This includes organisms that have found a way to use DC electricity!  PETRO (for Plants Engineered To Replace Oil) is one of our most recent programs, and it seeks to explore practical ways to develop dedicated biofuel crops that reduce, or even eliminate, the need for post-harvest conversions. Projects included in PETRO are seeking to synthesize large amounts of non-oxygenated natural products (such as turpentine) through directed engineering of plants.

Q: Are there unique hurdles that are facing biotech companies?

As mentioned above, in energy, biotechnologies usually focus on production or transformation of fuels.  In fuels, the hurdles are scale and cost:  You have to be able to create a lot of a high-energy product, at a price that makes it cheap enough to burn. Biotechnology companies need to bridge into these markets through specialty chemicals, or identify markets that are willing to pay for fuel alternatives, in order to address the associated challenges of profitably getting to large production volumes.

Q: If additional biotech companies want to participate in the ARPA-E program, how do they go about it?

For companies and individuals seeking funding, the best advice is go to our website energy.arpa-e.gov and add your email address to our mailing list, where we send updates on all of the agency’s new funding opportunities.  We also hold a flagship conference every year in late February in Washington, DC, where we review the agency’s ongoing efforts, discuss upcoming areas of interest, and showcase technologies that have applied for funding with our agency.  This year, the ARPA-E Summit will be February 27-29 – more information at energyinnovationsummit.com.

Q: Tell us about the ARPA-E Summit coming up in February. How will it showcase these projects?

The ARPA-E Summit is a conference we put on to celebrate the incredible amount of innovation happening in energy technology across the United States.  This year we’ll be featuring perspectives on energy by industry, academic and political titans like Bill Gates, Fred Smith and other keynote speakers, as well as conversations with top energy experts on some of the emerging issues and opportunities for energy technology today.  Another highlight of our summit is the Technology Showcase, where hundreds of transformational energy technologies set up demonstration booths to showcase their technology ideas and prototypes.  The showcase features not just the projects that ARPA-E is funding, but also some of the top finalists that we weren’t able to fund, as well as other exciting technologies aligned with our mission.  We hope to see you there!

State legislatures throughout the country are back in session – or soon will be. That means it is time for governors to deliver their annual state of the state addresses. In fact, several have already happened.

Just in the last week, Missouri Governor Jay Nixon and West Virginia Governor Earl Ray Tomlin made reference to the biotech industry as an important part of their economic development strategy. As the economy continues to slowly chug upward, job creation will undoubtedly continue to be a watchword for lawmakers.

Governor Nixon presented his State of the State address last night, in which he outlined his Missouri Works strategy, a comprehensive study to create career opportunities. An important component of his strategy is to train more workers for high-tech careers and jump start job-creation in science and technology.

Governor Nixon stated, “One pillar of Missouri Works is to accelerate investment in high-growth industries like science and technology. With more than 1,000 agribusiness, life science and biotech companies, Missouri is already home to some of the brightest minds and innovators in the world. With the passage last year of the Missouri Science and Innovation Reinvestment Act, we are poised for rapid progress. As part of Missouri Works, my budget includes $4 million in seed capital to invest in attracting the very best science talent to Missouri. By speeding the flow of innovations out of the lab and into the marketplace, we’re growing these industries today and creating the high-tech jobs of tomorrow.”

Special thanks to MO BIO for the heads-up on Governor’s Nixon’s above statement.

Gov. Jay Nixon delivers the State of the State address at the State Capitol in Jefferson City, Missouri on January 17, 2012.

Just last week, West Virginia Governor Earl Ray Tomlin’s State of the State address noted the importance of home-grown bioscience and innovation industries:

“We must also continue to bridge the gap between our education system, its research components and the potential for new business development with, job creation. One of the best examples of the fusion of these three areas can be found in Morgantown at Protea Biosciences. Protea was launched as a spin-off from West Virginia University in 2001. It was largely financed by a loan from West Virginia Jobs Investment Trust. Protea was recently recognized as one of the Top Ten Innovative Technology Companies in the world for the life sciences.

Governor Earl Ray Tomblin delivers his 2012 State of the State Address at the State Capital in Charleston, West Virginia on January 11, 2012.

This recognition was for the development of a first of its kind imaging technology that allows for real-time imaging of live cells. The result is that Protea, a start-up company nurtured here in West Virginia, will revolutionize the precision and speed by which cancer is diagnosed and monitored.

Protea represents in every way what I know West Virginia can produce with smart partnerships between our colleges, universities and the private sector.”