Global Event for Biotechnology Returns to Chicago

WINTER/SPRING 2010

Special BIO International Convention Edition Global Event for Biotechnology Returns to Chicago

Essays from BIO, ADM, Abbott and Baxter Updates on Nanotechnology Overviews of Astellas and Lilly Highlights from Illinois Technology Parks and Midwest Research Universities Network Guidance on Patents and Payers

James Greenwood President and CEO Biotechnology Industry Organization

WINTER/SPRING 2010 Contents BioLogical Quarterly SM Responding to Challenges, Capitalizing on Opportunities Editorial Advisory Committee 4 Kris Lutt, iBIO Chairman of the Board Steven E. Ducommun Partner 6 Meeting Agriculture’s Challenges, Sustainably K & L Gates LLP Dr. Robert Fraley, Chief Technology Officer, Monsanto Company William Fitzsimmons Senior VP 12 Global Expertise at the Nanoscale Research & Development Jed Weiner, Editor, BioLogical Quarterly Astellas Pharma US, Inc. Dr. Alicia Löffler 20 Patient-Focused Medical Innovation Executive Director & Bart Peterson, Senior Vice President, Eli Lilly and Company Associate VP for Commercialization Northwestern University 26 Astellas, Moving Forward Kris Lutt Seigo Kashii, President & CEO, Astellas Pharma US, Inc. Advisor, Office of the Chairman Archer Daniels Midland Company 30 Research Institutions in the Midwest: Powerful & Diverse Allen J. Dines and Marc Oettinger, Midwest Research University Network Terrence J. Noetzel Global Lead Client Service Partner Deloitte Consulting LLP 36 Leading the Charge for Education Reform David Miller, iBIO Institute President & CEO Dr. Norbert Riedel Corporate VP & Chief Scientific Officer Illinois’ Technology Parks Grow Biotech Businesses Baxter International Inc. 40 Summaries submitted by technology park personnel

General Manager AJ Pace 50 What Payers Want: Viewing Payers as Customers Deloitte Consulting LLP Editor Jed Weiner Biotechnology Patenting: What You Need to Know Contributors 56 McDonnell Boehnen Hulbert & Berghoff LLP David Miller Sales Development Biotechnology 2010: Fulfilling the Promise John Conrad 60 James Greenwood, President & CEO, BIO Layout/Design/Production Goble & Associates Healthcare Communication 66 Why the 2010 BIO International Convention Is Important for Illinois Dr. Norbert Riedel, Chief Scientific Officer, Baxter; James Tyree, President, Abbott Biotech Ventures Inc.

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ForFor mmoreore iinformation,nformation, visitvisit www.ibio.orgwww.ibio.org. • Submitting Submitting storystory ideasideas ©2010©2010 IllinoisIllinois BiotechnologyBiotechnology IndustryIndustry OrganizationOrganization • W Writingriting llettersetters toto thethe editoreditor (iBIO).(iBIO). AllAll RightsRights Reserved.Reserved. TheThe viewsviews expressedexpressed inin • Contacting Contacting uuss aaboutbout ssponsorshipponsorship opportunitiesopportunities thisthis ppublicationublication aarere tthehe vviewsiews ooff tthehe aauthorsuthors aandnd ddoo nnotot nnecessarilyecessarily rreflecteflect tthehe vviewsiews ooff iiBIOBIO oorr iitsts aaffiliates.ffiliates. JJoinoin usus nnowow bbyy submittingsubmitting allall questions,questions, ccomments,omments, iBIOiBIO mmakesakes nnoo rrepresentationsepresentations cconcerningoncerning tthehe ssource,ource, ooriginality,riginality, aaccuracy,ccuracy, ccompletenessompleteness oorr rreliabilityeliability ooff aanyny oorr remarksremarks toto [email protected]@ibio.org. sstatement,tatement, iinformation,nformation, data,data, finding,finding, iinterpretation,nterpretation, aadvice,dvice, opinion,opinion, oorr vviewiew ppresentedresented herein.herein. From the Board Responding to Challenges, Capitalizing on Opportunities By Kris Lutt Advisor, Office of the Chairman, Archer Daniels Midland Company; Chairman of the Board, iBIO

Company, a position that seeks to enhance ADM’s Kris Lutt, performance by coordinating the activities of Advisor, Ofﬁce of the the company’s executive leadership team. I am Chairman, Archer the ﬁrst representative of the state’s agriculture Daniels Midland community to serve as iBIO Chairman since the Company. merger in 2001, yet my focus and goals extend well beyond agriculture. I am interested, for example, in seeing our agriculture and healthcare communities grow together to tackle some of the toughest challenges facing our state, including job creation and improved education.

Illinois is nationally recognized for the quality and scope of our research universities, but we are not reaping the rewards of these world-class institutions. Our inability to create jobs to retain a talented work force, and our failure to provide The year 2010 is already proving to be an exciting OUR AG AND sufﬁcient resources and incentives to create one for the Illinois life sciences community, companies, has put us at a disadvantage not just and I am honored to serve as Chairman of our HEALTHCARE to the coasts — as has been the case historically organization during such an important and integral — but also to our neighbors in Wisconsin, Indiana, time in the community’s growth. The Illinois Ohio and Michigan. COMMUNITIES Biotechnology Industry Organization (iBIO) and its PROPEL programs made great strides under To address this issue, Illinois State Senator SHOULD GROW the leadership of Immediate Past Chairman Andy Michael Frerichs last year introduced Senate Bill Hull of Takeda Pharmaceutical North America, 1522, which included a set of programs based TOGETHER and I look forward to continuing Andy’s legacy of on best practices from our neighboring states, dedication and hard work during my term. programs that have contributed directly to the creation and retention of high-tech jobs. The bill I believe deeply in our organization’s mission, and I unanimously passed the State Senate, but it has look forward to working with David Miller and the been held up in the House of Representatives. To rest of the iBIO staff during this critically important accomplish the goals outlined by Governor Pat year. But the purpose of this article is not to spell Quinn, the House must pass SB 1522 or Illinois will out iBIO’s work plan for the year, or to talk up the continue to lose jobs and technological advantage 2010 BIO International Convention. Instead, I am to our neighbors. going to discuss some of the industry issues that are particularly important to me, and suggest how PROPEL-ing Small Business Growth each of us might begin to address these topics. We in the life sciences community have been By way of background, I am the Advisor in the working to reverse this trend through our PROPEL Ofﬁce of the Chairman at Archer Daniels Midland

4 BioLogical Quarterly Winter/Spring 2010 programs, which are designed to facilitate the and develop the connection between the school creation of small companies. Thanks to a grant lab and local industry. from the Illinois Department of Commerce and Economic Opportunity (DCEO), along with A second program, SCI: Science Career significant pro bono counsel and mentoring Investigation, educates students about career from subject-matter experts within the Illinois opportunities in the life sciences industry. The life sciences community, entrepreneurs now innovative, research-based SCI program combines benefit from a support system that helps them in-class and online activities to reach students overcome the challenges of starting a business in in creative and effective ways. Comprehensive a challenging economic climate. career information and industry profiles provide the next generation of scientific and business PROPEL works to align resources and expertise for leaders with a roadmap to a career in the life member companies through coaching, technical sciences community. assistance, business plan presentation panels and direct assistance grants provided by DCEO. iBIO I encourage you to find out more about the created PROPEL after analyzing programs that programs that iBIO, iBIO Institute and PROPEL had proven successful elsewhere, and — as a have developed to build a better business recent New York Times article noted — PROPEL community for Illinois. Visit www.ibio.org, is generating momentum for start-ups in Illinois. www.ibioinstitute.org and www.ibiopropel.org Yet, we still have much work to do to ensure the to learn how you can get involved on behalf of state’s business environment is more conducive students and entrepreneurs alike. to start-ups’ growth. I intend to focus much of my time and energy as chairman to the issues of job A Year of Promise and Productivity development and business expansion, which are The 2010 BIO International Convention in Chicago, too important to the economic viability of Illinois to which runs from May 3 to 6, will be a great be overlooked by the leadership in Springfield. showcase for the breadth and quality of expertise that resides in our community, and in the Midwest Toward a Renewed Focus on as a whole. I believe that our strength in four Education major biotech-related sectors (agriculture, human health, environmental and industrial applications) Another issue weighing on the Illinois economy distinguishes our region from any other in the is the state of our education system. For years, global life sciences market. The BIO convention we have seen a shift in the job market from is a great opportunity for us to move our local manufacturing to knowledge- and innovation- agenda forward to national and international based jobs. As a state with several high-tech audiences. industries, we need highly trained employees to advance our economy and maintain the Finally, this is a major election year in Illinois, and community’s competitive advantage over other the primaries have showcased how tight some regions. We need an education system that of these races can be. It is our responsibility to cultivates a new generation of thought-leaders. monitor both the federal and state agendas to make sure that Illinois has the best representation To this end, the iBIO Institute has developed possible for our community. I encourage you to a suite of programs, including TalentSparks!, engage in the process and make your voice heard which conducts workshops to help junior high among those seeking our votes. school and high school teachers develop skills in biotechnology through hands-on activities. During I hope to see you at 2010 BIO, and I look forward these two-day seminars, teachers further their lab to collaborating with you on our continuing growth skills, learn best practices, attend lectures given and success as a community. BQ by top researchers and industry representatives 5 Advancing Agriculture

Meeting Agriculture’s Challenges, Sustainably By Dr. Robert Fraley Chief Technology Ofﬁcer, Monsanto Company

Dr. Robert Fraley hunger and poverty in order to improve the social is sometimes well-being of resource-poor farmers. referred to as Today, approximately 40 percent of our global the father of food supply is drawn from the 18 percent of agricultural the agriculture area that is irrigated. Accessing biotechnology. more water and providing it to crops has been an essential and productive tool of the Green Revolution. Agriculture currently makes 70 percent of the freshwater withdrawals on a global basis, with up to 90 percent in some regions of the world. The World Water Council suggests we will need 17 percent more water than is available if we are going to feed the world in 2020.

Agriculture is already the predominant user of all habitable land, yet grain-producing land per capita in 2030 is projected to be just 0.08 hectares, or one-third of what was available in Food production and agriculture are major issues AGRICULTURE 1950. Topsoil is the living ecosystem upon which challenging today’s society. According to the all of humanity is most utterly dependent, yet U.S. Census Bureau, global population will MAKES 70% 40 percent of all existing agricultural lands are reach 8.9 billion by 2040 and 9.4 billion by 2050 considered seriously degraded. While topsoil can before stabilizing around 9.7 billion later in the be renewed, it takes 200 to 1,000 years to create OF GLOBAL century. Population growth and rising incomes are 2.5 centimeters of rich topsoil. Initiatives to expected to double the quantity of food demanded realize the impressive increase in food production FRESHWATER by 2050. In fact, participants at a recent United cannot ignore agriculture’s impact on the Nations forum on food demand predicted environment and must include efforts to preserve agriculture will be called upon to produce more WITHDRAWALS or even improve the environment. food over the next 50 years than has been produced in the past 10,000 years combined. The Three Pillars of Crop Yield In order for agriculture to be sustainable, we must These areas of agricultural technology – plant meet our present needs – providing affordable biotechnology, plant breeding and agronomic food, ﬁber and energy for 6.6 billion people – practices – can be seen as the three pillars of while simultaneously developing the technology crop yield, all contributing simultaneously to its to meet the needs of more than 9 billion people improvement. Globally, improvements in each by 2050. Global experts agree that increasing technology pillar will likely contribute differently agricultural productivity is a practical imperative to improvements in crop yields. For example, that must be at the center of strategies to reduce

6 BioLogical Quarterly Winter/Spring 2010 All visuals courtesy of Monsanto Company although weather is a signiﬁcant factor in some countries, much of the disparity in grain yields Three Pillars of Crop Yield between high- and low-producing countries can be ascribed to agronomic practices, such as the In 1970, the average corn use of open-pollinated corn varieties instead of yield in the U.S. was hybrids, low input rates or poor soil management. about 75 bu./acre. By Increasing the use of modern farming practices in 2030, Monsanto predicts these countries, together with the infrastructure, average corn yields in marketing and risk management tools needed to the U.S. will reach 300 support them, could lead to signiﬁcant increases bu./acre thanks to gains in crop production. In countries where modern from a combination of farming practices represent the norm, new breeding, advanced technologies such as geographical information agronomic practices and systems, precision planting equipment, advanced biotechnology crops. seed treatment formulations and on-farm customized management of inputs like fertilizer and water represent the future of farming.

Historically, plant breeding has been one of the most important sources of global crop production improvement. Although the practice is thousands of years old, recent advances — such as the sequencing of crop genomes, the availability of high-throughput genotyping systems and the utilization of globally sourced germplasm pools — have the potential to signiﬁcantly improve the speed and accuracy of genetic gains. As DNA marker information becomes more fully incorporated into crop breeding programs, rates of gain are likely to increase beyond those observed in the past. Additionally, the furious pace at which these types of technologies are advancing could make techniques like collecting the whole-genome sequence of every plant in a breeding program become a reality.

Compared to plant breeding and agronomics, crop biotechnology is a relative newcomer to the set of technologies employed in agriculture and in its first generation has been primarily focused on systems for insect and weed control. Because of the benefits they provide to growers and the environment, traits that protect yield potential pests to enhance the consistency and durability will continue to be demanded. of yield protection for growers. In soybeans and cotton, the stacking of dicamba herbicide To meet that demand, new products such as tolerance with glyphosate tolerance can offer GenuityTM SmartStax™ corn will become available effective management solutions for even difficult that provide multiple modes of action against weeds. While traits that protect yield potential 7 Advancing Agriculture

such as drought-tolerance and nitrogen utilization efficiency – can represent a step-change in crop yield performance by improving productivity. A field For example, Monsanto is developing soybeans demonstration containing a biotech trait for intrinsic yield showing dicamba- improvement that has resulted in an average tolerant soybeans yield increase of 7 percent over negative isolines (r.) vs. soybeans susceptible across five seasons of testing on two continents. to dicamba. Dicamba-tolerant Sustainable Agriculture Must be soybeans, a Sustainable Enterprise for the which are still Farmer in development, would expand While many offer advice or policy on sustainable farmer’s weed- agriculture, farmers are the people who make control options. it happen on the land. Farmers in industrialized countries must produce sufficiently to keep food and energy affordable. Small-holder farmers in developing countries need to feed their families and create additional income from agriculture to will continue to be important, the development break the cycle of poverty and hunger. Agriculture of traits that target intrinsic yield improvement, certainly will not be considered sustainable if the abiotic stress control and nutrient utilization – social well-being of nearly 1 billion farmers is lost in the process.

8 BioLogical Quarterly Winter/Spring 2010

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Field trials have shown that corn with Monsanto’s drought- I WAS A Addressing the challenges faced by agriculture tolerance trait (corn plant on the right) stabilizes yield in drought individually is not enough. For agriculture to be conditions versus control. SCIENTIST sustainable, we must: (1) meet global demand while, (2) protecting and even improving the I know what it’s like to rely on nature for your environment, and (3) providing opportunity for the success. Growing up on a farm in Iroquois County, DEVOTED TO social well-being of 1 billion farmers. All three Ill., I’ll never forget the excitement on my dad’s are essential. None are optional. Agriculture face when we were harvesting a big crop. But BENEFITING has a history of making dramatic productivity I also have vivid memories of my dad sitting at improvements due to the deployment of our kitchen table on a hot, dry summer, watching FARMERS numerous innovations, better genetics and better- a rain cloud roll ten miles too far to the north, informed farming practices. We plan to help wishing it was just a little further south and thinking of what he wouldn’t be able to provide AROUND THE continue that tradition as we work to deliver on our commitment to sustainable yield over the next us that year. The truth is, farming can be an 20 years. incredibly rewarding but an extremely stressful WORLD occupation. Personal Reﬂections on It was sharing the joys and challenges with my Agricultural Biotechnology dad while living on the farm that inspired me to For generations, farmers around the world have apply science to farming. I left my dad’s farm in depended on Mother Nature for their success. the early 1970’s and by the late 70’s and early However, the reality is that in the coming years, 80’s, scientists were making great advances in the growing world will continue to challenge gene transfer methods. That’s where my farm farmers to feed more, fuel more and clothe more. and agricultural background kicked in, and I I believe plant biotechnology will play an even became focused on applying what had been more critical role in mitigating the effects of done in bacteria, yeast and animal cells, to plants adverse weather as farmers meet the needs of a and crops. I was a scientist devoted to doing growing, hungry world. good science that would directly beneﬁt farmers around the world.

10 BioLogical Quarterly Winter/Spring 2010 Monsanto is working on a variety of soybean products, including ones that will boost intrinsic yield potential, insect- protected soybeans that use the same biotechnology widely adopted in corn and cotton, omega-3 enhanced soybeans, and soybeans that produce a healthier nutritional proﬁle similar to olive oil.

Monsanto conducted the world’s first biotechnology field trial in 1987 in Jerseyville, Ill., first with tomatoes and later that year with Roundup Ready soybeans. lives around the world. And I look forward to the day when those commitments become a reality. I was fortunate to enjoy a lot of scientific firsts early in my career, including the ability to We are just at the cusp of what exciting things introduce new genes into crops for the first time. are to come in agriculture and it makes me wish It was exciting to see the first transgenic petunia that I was at the beginning of my career as a and tobacco plants containing a new gene flourish scientist in agricultural biotechnology. Where in our greenhouses, and the transformation agricultural biotechnology is today is similar to of the Roundup Ready® technology from test where computers were in the 1960s. There are tube to greenhouse to the first field trials was so many more innovations to come. In the next phenomenal. Just as I’ll never forget watching decade, we are going to see 10, 15, maybe even my dad on the farm, I’ll never forget watching the 20 different genes stacked in a corn plant. In first Roundup Ready and insect-resistant crops soybeans, we are going to see 6 or 8 different perform in the field. Being an active participant in genes. We are going to be able to produce a lot the transition of science into technology and then more with a lot less inputs than we ever have products was breathtaking. before.

When you look at the products in Monsanto’s When I look at agricultural biotechnology today pipeline – crops that withstand drought better and where it can go in the future, I’m astounded. than crops today, use nitrogen more efﬁciently, It’s something I always hoped for in the early and inherently produce more yield – you’re days of my career. And while I was conﬁdent and looking at how agriculture will continue to optimistic we could make it happen, the extent feed and fuel a growing population while also of what we have been able to do has exceeded minimizing the impact farming has on the all my early expectations. I know that we’re just environment. Because of these types of future seeing the beginning of what’s possible. BQ products, I know that together with others in the industry, we’ll meet our commitment to help farmers double yields, reduce inputs and improve 11 Resizing Technology Global Expertise at the Nanoscale By Jed Weiner Editor, BioLogical Quarterly

Since its creation two years ago, BioLogical systems, assay kits and contract services for Quarterly has highlighted the world-class nanoscale protein detection. Its platforms research and commercialization efforts in all combine DPN nanofabrication technology with aspects of biotechnology. Under the broad optimized substrates and ultra-sensitive detection umbrellas of biotech lies the highly specialized to miniaturize and multiplex protein analysis. work of nanoscientists and nanotechnologists. Traditional protein arrayers that use pin- The world-class expertise in nanotechnology that spotting or ink-jetting technology often print resides in Illinois is one of the most significant and inconsistent features, leading to poor sensitivity widely acknowledged points of differentiation and reproducibility. Also, pin arrays are typically for this biotech cluster. Industry and academic limited to 16 sub-arrays per slide. By contrast, research experts from beyond the Midwest and NanoInk states that its DPN nanoarrays exhibit outside the U.S. often look to the Chicago area highly uniform features that enable improved and Illinois for exciting new developments in sensitivity, increased reproducibility and low non- nanotechnology. specific binding. As a result, even low-abundance protein studies are possible. DPN’s ability to print As biotechnology leaders from around the world many sub-arrays per slide translates to multiplex, prepare to attend 2010 BIO in Chicago this May, high-throughput protein analysis on a single slide. the BQ staff decided to provide a snapshot of the field where our regional community is considered Located in Romeoville, Advanced Diamond a world leader. The organizations highlighted Technologies, Inc. (ADT) was formed in below are representative of the breakthrough LOOKING TO December 2003 to commercialize research work performed daily in Chicago and Illinois. originally funded by the U.S. Department of For more examples of the state’s unique Energy at nearby Argonne National Laboratory. ILLINOIS FOR nanotechnology skill sets and resources available ADT’s proprietary technology captures the for collaboration, visit the websites listed in the properties of natural diamond in a nanocrystalline EXCITING NEW graphic that accompanies these brief profiles. thin-film form. The company markets its technology under the name UNCD®. Nanotech Start-ups DEVELOPMENTS ADT converts natural gas into nano-sized Nanoscience breakthroughs discovered in the diamonds for use as a smooth, thin material in the IN NANO- state’s research laboratories are the foundation industrial, semiconductor and medical industries. of Illinois’ nanotech start-ups. One example In the biotech sector, ADT is developing wearable TECHNOLOGY is NanoInk, Inc., located in Skokie in close biosensors to detect e. coli in water for soldiers in proximity to Northwestern University, where Dr. the field. Also, ADT has an exclusive relationship Chad Mirkin and his team developed the Dip Pen with Dr. Robert Jarvik, applying its technology Nanolithography® (DPN®) that led to NanoInk’s to Jarvik Heart products engineered to eliminate creation nine years ago. Since then, the company blood clotting in the Jarvik heart pumps. has used the DPN platform to mature into four distinct commercial business divisions. Additionally, ADT continues to market and expand its family of atomic force microscope (AFM) NanoInk’s Nano BioDiscovery™ Division provides probes, known as NaDiaProbes, which are being a new generation of array-based instrument used in many biological applications, including

1212 BioLogical Quarterly Winter/Spring 2010 measuring the structures of proteins in a hydrous environment.

Nanosphere, Inc. is well known in nanotechnology circles not only for its Verigene® Raman Tracker System, an advanced molecular diagnostics Particles were platform for direct genomic and ultra-sensitive created using protein detection, but also for its success as a gold-silica publicly traded company. nanoshells with a Raman-active The Verigene System is a benchtop molecular poly(ethylene diagnostics workstation that utilizes patented glycol) passivating gold nanoparticle technology, first developed layer. Using at Northwestern University, to detect nucleic surface enhanced acid and protein targets of interest for a Raman imaging, variety of applications. In March 2010 the it was found that company announced that the U.S. Food and the particles Drug Administration (FDA) had categorized are localized Nanosphere’s respiratory virus panel as externally in “Moderate Complexity.” breast cancer cells (Red), while they “This categorization is another validation of the are readily taken value of our technology and its ease of use,” said up by macrophage Nanosphere President and CEO William Moffitt. cells (Green). “It broadens our market for the Verigene SP and provides customers with the first ‘Moderate Complexity’ molecular flu test.”

Nanotech Research tracked in vitro using Surface Enhanced Raman While Northwestern University is known globally Scattering (SERS).” as a hotbed of nanoscience activity, other A collaborative research project at the research centers in Illinois contribute daily to University of Illinois at Chicago (UIC) enhancing the understanding of our world at the involves experts in restorative dentistry, nanoscale. mechanical and industrial engineering and For example, Dr. Sandra Whaley Bishnoi and her kinesiology and nutrition. Their study of nanoscale team at the Illinois Institute of Technology material properties of dental composite-tooth in Chicago conduct research that may ultimately interfaces seeks to advance the development of facilitate fast screening and early diagnosis of novel biomaterials or techniques that improve the breast cancer. Earlier this year they announced durability of dental restoration therapies. their selection of new technology for their And nanoscience is at the heart of a recent research. “We want to create tools that function $2 million grant to UIC from the National at the bionanotechnology interface,” Dr. Whaley Science Foundation’s Ofﬁce of Emerging Bishnoi said. “By tailoring the surface chemistry Frontiers in Research and Innovation (EFRI). of gold-silica nanoparticles with a pH sensitive A multidisciplinary team expects to generate molecule and a targeting molecule, we can deliver new scientiﬁc and technical knowledge that functionalized nanoshells that will selectively could be transformative to the development of bind with human cancer cells. These can then be a biomimetic retinal implant. The goal of the

Visuals courtesy of Vimal Swarup and Sandra Whaley Bishnoi Illinois Institute of Technology 13 Resizing Technology

UIC NCF Laboratory Manager Robert Lajos and students conduct research at the MEMS/Nano facility.

implant would be to restore lost or damaged Kathleen Cook, the Institute for Nanotechnology retinal function for the millions of people was formed as an umbrella organization for all affected by retinal degenerative diseases, such of the nanotechnology efforts on campus, and to as age-related macular degeneration. The UIC support new initiatives and partnerships in this researchers hope that their study also could lead exciting area of research. to novel drug delivery strategies and biomimetic therapies for treating Parkinson’s disease and “In 2005, in an innovative and far-reaching other neurological disorders. collaborative venture, the Institute partnered with Argonne National Laboratory’s Center Northwestern University (Evanston and for Nanoscale Materials and established the Chicago campuses) has earned a worldwide International Institute for Nanotechnology (IIN). reputation for its leadership in nanoscience From its humble beginnings, the IIN has become a research and its successes in spawning global hub of excellence in the ﬁeld and currently start-ups via nanotech transfers. According represents and unites over $500 million in to Northwestern’s International Institute of nanotechnology research, educational programs Nanotechnology’s website, “Research at the and supporting infrastructure. nanoscale has been conducted at Northwestern over the last several decades. In 2000, under Collaborative partnerships exist in 30 foreign the leadership of Professor Chad Mirkin and countries, and relationships have been developed Director of Operations & Strategic Initiatives with universities in Europe, Asia and North and

14 BioLogical Quarterly Winter/Spring 2010 Photograph courtesy of the University of Illinois at Chicago

Resizing Technology

,OOLQRLV1DQRWHFK2QOLQH BQ could have devoted more than a dozen pages The general goal of the Molecular & Electronic to a brief overview of nano-based activity currently Nanostructures (M&ENS) research theme is to thriving in Illinois, but space constraints prevented develop a fundamental understanding of chemical us from doing so. Instead, consider these few and physical processes involving structures on the snapshots in our story as representative samples nanometer scale. of why global experts in nanotechnology expect big www.beckman.illinois.edu/mens discoveries and major successes to emerge from Illinois. Visitors to the Web sites below can identify University of Illinois at Chicago research experts available to discuss their work – The Nanotechnology Core Facility (NCF) is a and opportunities for collaborations and joint versatile MEMS/Nano facility and is accessible ventures. to non-proﬁt and industrial researchers. The NCF enables research by providing access, training, Argonne National Laboratory service and process guidance on fabrication and The Center for Nanoscale Materials is a premier characterization equipment. user facility, providing expertise, instruments and www.ncf.uic.edu infrastructure for interdisciplinary nanoscience and nanotechnology research. Academic, industrial and Northwestern University international researchers can access the center The International Institute for Nanotechnology (IIN) through its user program for both nonproprietary is anchored by 27 major research centers. The tools and proprietary research. necessary to support this cutting-edge research www.nano.anl.gov are available for measurement, manipulation and analysis at the nanoscale. Signiﬁcant support from University of Illinois at Urbana-Champaign the State of Illinois has enabled the IIN to augment (UIUC) existing facilities and create in-house multi-user The Micro and Nanotechnology Laboratory (MNTL) facilities like the Nanoscale Imaging, Fabrication, is a multidisciplinary research facility in the College Testing and Instrumentation (NIFTI) facility. of Engineering that houses advanced equipment www.iinano.org to support research in photonics, microelectronics, nanotechnology and biotechnology. The Institute for BioNanotechnology in Medicine www.mntl.illinois.edu (IBNAM), an interdisciplinary research institute established in 2000, bridges the frontiers of The Center for Nanoscale Science and Technology medicine, engineering and science. The institute is (CNST) was established in 2001 to harness the a partnership of the Feinberg School of Medicine, entrepreneurial and technical spirit in downstate McCormick School of Engineering and Applied Illinois, with ongoing linkages with the University Science and Weinberg College of Arts and Sciences. Research Park, the Illinois Technology and www.ibnam.northwestern.edu Enterprise Corporation (an initiative of the Illinois Department of Commerce and Economic Opportunity), and the state legislature. CNST also has established linkages with industry. www.cnst.uiuc.edu

16 BioLogical Quarterly Winter/Spring 2010

Resizing Technology

Researchers at Northwestern’s IIN functionalized gold nanopyramids with an antibody that targets the Her2/Neu receptors in breast cancer cells. They hope to use gold nanoparticles for photothermal destruction of cancer cells and diagnostic applications.

South America that provide opportunities for and powerful medical diagnostic systems for student and postdoctoral exchange programs and many debilitating diseases. Additionally, joint workshops. Sixteen start-up companies have 18 corporations have aligned themselves been launched or are under development, and directly with the IIN through membership in several IIN technologies in medical diagnostics the Nanotechnology Corporate Partners (NCP) and nanomaterials have been commercialized and program. BQ are being used by researchers worldwide – these

include versatile new tools for nanofabrication Photograph courtesy of Teri Odom and Thomas O’Halloran

18 BioLogical Quarterly Winter/Spring 2010 19 Transforming Healthcare Patient-Focused Medical Innovation By Bart Peterson Senior Vice President, Corporate Affairs and Communications, Eli Lilly and Company

Bart Peterson, Senior Providing better The impact of new medicines has increased life Vice President, outcomes for patients expectancy over the past ﬁve decades and helped Corporate Affairs and is the driving force at manage and beat diseases such as cancer and Communications. Eli Lilly and Company polio. Since 1995, heart disease rates in America and has been since dropped more than 34 percent,3 and medication its inception in 1876. therapy accounted for more than 50 percent of Colonel Eli Lilly, a the reduction in heart attack mortality from 1975 pharmaceutical through 1995.4 Between 1995 and 2005, AIDS- chemist and veteran of related deaths dropped more than 70 percent.5 the U.S. Civil War, was The life expectancy for cancer patients has frustrated by the poorly increased by approximately three years since prepared, often ineffective medicines of his day. 1980,6 and the death rate from strokes dropped He made a commitment to himself and to society by 63 percent from 1950 through 2002.7 Many to manufacture products of the highest possible of these gains in improved patient outcomes are quality based on the best science of the day. attributable to new treatments.

Today, Lilly employees continue this commitment Advances in medicine also help bring down health in an ever more demanding and challenging costs, especially as overall costs increase to environment. Lilly is working to maintain its manage increases in chronic diseases such as position as a leading biopharmaceutical company heart disease, cancer and diabetes. More than by searching for ways to tailor medicines to 100 million Americans have a chronic medical individual patients while speeding the development condition, and it is projected that by 2020, 134 of new medicines and delivering greater value million people will live with chronic illness.8 to customers. Not only does research and Forty-four percent of those individuals will have development of innovative medicines improve the multiple chronic conditions. It also is estimated health and lives of people around the world, it can that by 2020, one in six Americans over age lead to reduced healthcare costs and supports the 65 will become limited by chronic conditions.8 economy by providing many well-paying jobs. Currently, 70 percent of direct medical costs can be attributed to chronic illnesses.8 Chronic diseases exact a devastating human toll – leading According to data from the to seven out of 10 deaths and $3 of $4 spent on United Nations, life expectancy healthcare.9 at birth increased globally by almost 20 years, from 46.5 years The Future Is Now in 1950 to 1955, to 66 years in 2000 to 2005.1 The life expectancy in A majority of Americans, 78 percent according to a study by Intel/Newsweek, believe innovation the United States is 78 years, 2 will be more important to the U.S. economy during up from 68 in 1950. the next three decades than it has been during the past three decades.3 With advances in science

20 BioLogical Quarterly Winter/Spring 2010 Photographs courtesy of Eli Lilly and Company and medicine, biopharmaceutical innovation is moving toward personalized medicine.

Innovators in the realm of personalized medicine are striving to deliver more effective treatments that will enable us to control and prevent disease and tailoring treatments in ways that are known to work best for certain populations. The goal is to provide the right drug to the right patient for the right illness in the right dose at the Lilly’s global right time. Genetic factors, along headquarters with environmental and cultural are located in factors, underlie variations in Indianapolis, Ind. drug response among different groups. Age, gender, race, ethnicity, illness severity, family health history ethnic and racial backgrounds be included in and other genetic, phenotypic and behavioral clinical trials. Lilly has changed its core business characteristics influence how patients respond to to understand these patient differences and to medications. include more diverse participants in the company’s Personalized medicine will succeed through clinical trials. More inclusive data may lead to scientific advances that enable doctors to anticipate doctors prescribing the right medicines with which medicine is most effective and least likely more confidence based on having representative to have side effects based on the patient’s biologic data and help ensure consumers are prescribed profile (biochemical and genetic), phenotypic medicines that will more likely work for them — profile (e.g., age, gender) and patient reported the essence of personalized medicine. information, creating more personalized and targeted approaches to prescribing.10 For patients, Investing in Health and the personalized medicine should result in more Economy predictable outcomes and enhanced efficacy.11 In 2008, America’s pharmaceutical research On a more basic level, personalized medicine and biotechnology companies invested a record involves tailoring treatment plans to individuals, $65.2 billion in the research and development of coordinating care with multiple providers based new medicines and vaccines.12 The investment on individual patient needs, and taking into supports research on more than 2,900 medicines consideration cultural and ethnic differences that in the industry’s research pipeline. The pipeline may affect treatment outcomes differently within includes more than 1,000 medicines to fight different communities. To have true personalized chronic disease, the number-one killer and leading medicine, patients need access to all necessary driver of healthcare costs in the United States.3 medications and provider resources.

To tailor drug therapy effectively, it is also critical that signiﬁcant numbers of patients from varied 21 Transforming Healthcare

$ERXW/LOO\ At Lilly, innovation consists of:

Powering biopharmaceutical • Collaboration – breaking down walls to work together, with large innovation makes the most of and small enterprises, and with academic and government researchers today’s wealth of scientific worldwide. knowledge while addressing unmet needs and benefiting • Competency – employing advanced scientific tools and the explosion of patients. knowledge in human biology and culture. • Culture – putting patients and improved outcomes at the center.

• The primary focus of Eli Lilly and Company is to make medicines that help people live longer, healthier and more active lives. • John C. Lechleiter, PhD, is chairman, president, and chief executive ofﬁcer of Eli Lilly and Company. • A heritage more than 130 years strong: The company was founded by Colonel Eli Lilly on May 10, 1876. • Headquartered in Indianapolis, Indiana, USA. • Approximately 40,000 employees worldwide. Colonel Eli Lilly in 1884. • More than 7,000 employees engaged in research and development. • Clinical research conducted in more than 50 countries. • Research and development facilities located in 8 countries. • Manufacturing plants located in 13 countries. • Products marketed in 143 countries. • The Lilly Foundation is dedicated to improving the lives of patients and the communities we serve. In 2008, the Foundation donated more than $28 million to charitable causes. • Recognized around the world as a top company by Fortune Magazine “Global Top Companies for Leaders,” Points of Light Institute “Award of Excellence Corporate Engagement,” U.S. Department of the Interior “Take Pride in America,” United Way Spirit of America® Award, Forbes.com “Most Generous U.S. Companies,” Human Rights Campaign Foundation “Corporate Equity Index – 100 Ranking,” Institutional Investor “Top Shareholder-Friendly Companies,” Med Ad News “Most Admired Global Companies,” Science magazine “Best Companies for Scientists,” U.S. Small Business Administration “Outstanding Rating for Supplier Diversity Initiatives,” United Way of America “Summit Award for Corporate Philanthropy, Community Investment and Community Impact,” Working Mother Magazine “100 Best Companies for Working Mothers.” • For more information, visit www.lilly.com and www.lillyforbetterhealth.com.

The average cost to bring one new medicine to account for only 10 cents of every dollar spent market is more than $1 billion.13 The investment on healthcare in the United States.14 This large biopharmaceutical companies make in developing investment in research and development enables new, life-saving medicines is vast, but even the continuation of medical innovation, improves with these enormous ﬁgures, prescription drugs lives and contributes to the economy.

22 BioLogical Quarterly Winter/Spring 2010 Photograph courtesy of Eli Lilly and Company Archives

Transforming Healthcare

As of 2006, the biopharmaceutical industry 11 Ferrara, J. Personalized Medicine: Challenging employed nearly 700,000 Americans Pharmaceutical and Diagnostic Company Business Models. McGill Journal of Medicine, January 2007, p and supported a total of 3.2 million jobs 59. http://www.medicine.mcgill.ca/MJM/issues/ 15 across the economy. Biopharmaceutical v09n01/feature_rev/Personalized%20Medicine-%20 companies supported a total of 181,788 jobs Joseph%20Ferrara.pdf. Accessed January 19, 2010. in Illinois in 2006. In the same year, the Illinois 12 R&D Spending by U.S. Biopharmaceutical Companies biopharmaceutical sector supported $37.9 billion Reaches Record Levels in 2008 Despite Economic in total output –– the value of goods and services Challenges. Pharmaceutical Research and Manufacturers 16 of America and Burrill & Company, March 10, 2009. http:// produced and its ripple effect. BQ www.phrma.org/news_room/press_releases/r&d_ spending_by_u.s._biopharmaceutical_companies_ References reaches_record_levels_in_2008_despite_economic_ 1 World Population Ageing 1950-2050. United Nations, chal/. Accessed November 19, 2009. Population Division, Department of Economic and Social 13 Sharer, K. Leadership in Life Sciences: From Promise to Affairs, 2002, p 6. http://www.un.org/esa/population/ Progress. Pharmaceutical Research and Manufacturers publications/worldageing19502050/pdf/8chapteri.pdf. of America (PhRMA), PhRMA Annual Meeting, March Accessed November 19, 2009. 15, 2007. http://www.phrma.org/about_phrma/ 2 Heron, M., Hoyert, D., Murphy, S., Xu, J., Kochanek, K. ceo_voices/leadership_in_the_life_sciences:_from_ and Tejada-Vera, B. Deaths: Final Data for 2006. National promise_to_progress/. Accessed October 27, 2009. Vital Statistics Reports, April 17, 2009, pp 1, 27. http:// 14 Prescription Drug Trends. The Henry J. Kaiser Family www.cdc.gov/nchs/data/nvsr/nvsr57/nvsr57_14.pdf. Foundation, September 2008, p 1. http://kff.org/rxdrugs/ Accessed November 23, 2009. upload/3057_07.pdf. Accessed November 19, 2009. 3 Tauzin, B. Innovation Today, Rewards Tomorrow. 15 The Biopharmaceutical Sector’s Impact on the Economy of Pharmaceutical Technology. Volume 34, Issue 2, pp. 97-98. the United States. Research sponsored by Pharmaceutical 4 Heidenreich, P. and McClellan, M. Trends in Heart Attack Research and Manufacturers of America. Archstone Treatment and Outcomes, 1975-7995: Literature Review and Consulting, 2009. Synthesis. http://www.nber.org/chapters/c7635.pdf. 16 The Biopharmaceutical Sector’s Impact on the Economy of Accessed February 9, 2010. Illinois. Research sponsored by Pharmaceutical Research 5 HIV/AIDS Policy Fact Sheet. The Henry J. Kaiser Family and Manufacturers of America. Archstone Consulting, 2009. Foundation, July 2007. http://www.kff.org/hivaids/ upload/3029-071.pdf. Accessed February 9, 2010. 6 Pharmaceutical Industry Profile 2009. Pharmaceutical Research and Manufacturers of America. http://www. phrma.org/files/attachments/PhRMA 2009 Profile FINAL.pdf. Accessed February 12, 2010. 7 Jemal, A., Ward, E., Yongping, H. and Thun, M. Trends in the Leading Causes of Death in the United States, 1970-2002. The Journal of the American Medical Association. Vol. 294 No. 10, September 14, 2005. http://jama.ama-assn.org/ cgi/content/full/294/10/1255. Accessed February 9, 2010. 8 Nadkarni, M. The Double Whammy of Chronic Illness in Underserved Populations: Can We Afford Not to Care? Medscape Public Health and Prevention, March 31, 2004; 2(1). http://www.medscape.com/viewarticle/472495. Accessed November 6, 2009. 9 Chronic Diseases and Health Promotion. National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control and Prevention, December 17, 2009. http://cdc.gov/nccdphp/overview.htm. Accessed January 15, 2010. 10 Chang, W., Hawkins, E. and Zussa, F. Personalized Medicine and the Future of the Pharmaceutical Industry, May 11, 2005, pp 8-9. http://www.core.org.cn/NR/rdonlyres/ Sloan-School-of-Management/15-912Spring-2005/ A8CD6869-1CD9-4B60-856A-62959E84D012/0/ personaledmne_ch.pdf. Accessed November 6, 2009.

2424 BioLogical Quarterly Winter/Spring 2010 Connecting the Community

The Community Travels to the Capitol About 75 members of the Illinois community and the state’s The second objective for the Illinois Life Sciences Day participants legislative and executive branches participated in iBIO’s Second was advocating for improvements to the state’s permitting Annual Illinois Life Sciences Day in Springﬁeld last March 10. After processes. “Why should it take business people half a year to get watching the telecast of Governor Pat Quinn delivering his budget projects approved here, when it can take less than half the time in address, the “lobbyists for a day” met with their respective Senate nearby states? These slow, cumbersome processes are jobs and and House members to advocate on behalf of iBIO’s highest tax-base killers,” Miller said. legislative priorities, summarized by iBIO President and CEO David Miller. After visiting government ofﬁcials, participants were joined by members of the legislature and the executive branch at the “Senate Bill 1522 provides critically needed support of early- Sangamo Club for the Senator John W. Maitland Leadership in stage companies through matching grants for start-ups and tax Biotechnology Award Ceremony. Senator Michael Frerichs of credits for angel and early-stage venture capital investors,” Miller Champaign and Illinois Department of Commerce and Economic explained to the gathering of iBIO members who represented Opportunity (DCEO) Director Warren Ribley each received this academic centers and private businesses. “Each of these programs year’s honor in recognition of their strong leadership on behalf has been adopted in about 25 states, which means Illinois start- of S.B.1522 programs and for their support of iBIO’s efforts to ups have a tougher time getting up and running. In some cases, encourage the growth of the biotechnology cluster in Illinois. entrepreneurs have left Illinois, taking with them jobs, wealth, excitement and a strong tax base.”

Illinois Life Sciences Day at the Capitol

IIllinoisllin Rep. LLaShawnaS Ford aacknowledgesc the ccrowdro at the Illinois LLifeife Sciences Day rreception.ec

Illinois Rep. David Miller, Illinois Institute of Technology DCEO Director Warren Ribley (2nd from l.) and Illinois Senator Vice President David Baker, Michael Frerichs hold their 2010 Maitland Awards, joined by iBIO iBIO President & CEO David President & CEO David Miller (l.) and iBIO Chairman Kris Lutt. Miller, Illinois Rep. Karen May.

Illinois Rep. Dan Reitz, Illinois Department of Agriculture Director Tom Jennings, Illinois Rep. Naomi Jakobsson, Illinois Rep. Brandon Phelps.

Illinois House Majority Leader Barbara Flynn Currie is joined by iBIO Chairman Kris Lutt (l.) and iBIO President & CEO David Miller. 25 Transforming Healthcare Astellas, Moving Forward 2010 marks company’s ﬁfth anniversary By Seigo Kashii President and CEO, Astellas Pharma US, Inc.

Rendering of Astellas’ new Americas headquarters.

This year Astellas Pharma US, Inc. celebrates aware of our social responsibilities and we take a its fifth anniversary. In April 2005, Astellas was broad view that considers economics, society and formed by blending the talents, resources and humanity so that we can exist not just as a market passions of two highly successful pharmaceutical entity, but also as a valuable member of society. companies—Yamanouchi and Fujisawa. Yamanouchi brought a heritage of blockbuster Our product pipeline continues to be critical to NEW drugs as well as a rich pipeline, while Fujisawa growing our business and we have expanded our contributed a strong presence in transplantation pipeline and research capabilities through key licensing deals including co-development and AMERICAS HQ and a track record of developing market-leading products that became new standards of care. promotion agreements with Medivation, Zogenix, With the combined assets of both companies Cardiome and Theravance. In addition, we have IN GLENVIEW, Astellas has achieved much success in just five strategically identified and acquired companies short years. such as Agensys Inc. and Urogenix Inc., which ILL. will bring us closer to achieving our VISION 2015 Astellas is now one of Japan’s largest goal of becoming a Global Category Leader in our pharmaceutical companies and ranked in the stated therapeutic areas of interest. top 20 global pharmaceutical companies. In the United States, we employ over 1,900 full time Within the last five years in the US, we have employees who are involved in all aspects of the successfully launched six new medications to ® company’s commercial research and development improve patient lives, including Mycamine , ® capacities. At Astellas, we put the highest priority Vaprisol and Vaprisol Premixed in 5% Dextrose, ® ™ on upholding high ethical standards, and we Lexiscan , SUMAVEL™ DosePro™ and VIBATIV . believe that individual integrity creates integrity At Astellas we have an unrelenting commitment at the organizational level. The company is acutely to R&D as the value-creating core of our

26 BioLogical Quarterly Winter/Spring 2010 All visuals courtesy of Astellas Pharma US, Inc. business. By developing better medicines we reliable medicines. This is in line with our 10th are determined to help patients by providing anniversary goals, or our VISION 2015, in which value-added, trustworthy and highly effective the Astellas global group aims to become a global pharmaceuticals to patients fighting illness. category leader in key therapeutic areas. This is based on the company’s commitment to pursuing New North American Headquarters disease areas where high unmet medical needs on the Horizon exist and a high degree of expertise is required. Our impressive growth and business successes Commitment to the Scientific over the last five years have consequences; Community we have outgrown our current headquarters. In order to achieve even greater successes this At Astellas we understand that a new North spring, Astellas will break ground on a new North American headquarters and increased research American headquarters located in Glenview, Ill. dollars alone won’t help us reach our goals. (just north of Chicago), stretching the Illinois We also need to establish a pipeline of top tier, pharmaceutical corridor south into Cook County. innovative employees to reach our shared goals. In the summer of 2012, we will relocate the That’s why Astellas developed Science WoRx, company’s Deerfield-based employees to our a local mentoring program and online resource new location. Two state-of-the art buildings, network for science teachers and their students. with approximately 425,000 square feet will be the new North American home for many of Astellas recognizes that there is currently an our employees. Astellas’ new facilities have unmet need among science teachers and their been designed to be environmentally friendly, students—particularly within Chicago area furthering our global sustainability initiatives and schools and its surrounding counties—for helping us reduce our overall carbon footprint. greater support in and outside the classroom. A The research arm of Astellas Pharma US, Inc. and couple of statistics really caught the company’s Astellas Research Institute of America will remain attention, 1) a study by the National Assessment at the Illinois Science + Technology Park located of Educational Process uncovered that roughly in Skokie, Ill. 36 percent of students in Illinois were performing below the basic skill level in science; only 38 The new headquarters symbolizes the growth percent were performing at the basic level, and Astellas has achieved in the past five years 2) a recent MIT study revealed despite interest and the growth we expect to achieve in the and feelings of preparedness, nearly two-thirds years ahead. Our decision to build a new North of teens indicated that they may be discouraged American headquarters reflects our belief in and from pursuing a career in science, technology, commitment to the State of Illinois and continued engineering or mathematics because they do not growth of our U.S. operations. Astellas’ decision know anyone who works in these fields (31%) or to stay in Illinois back in 2005 and build our new understand what people in these fields do (28%). headquarters here was heavily influenced by the proximity of the world-class scientific expertise at Astellas employs an enthusiastic group of Chicago’s leading hospitals and universities, and scientists who are eager to visit classrooms and the booming hub of other large pharmaceutical inspire those interested students, so we put companies and biotechs in the area. the two together. Science WoRx focuses on understanding science’s role in human health and Our new location will help make possible our medicine, and is designed to invigorate interest mission of Changing tomorrow by bringing hope among students about science’s role in human to people fighting diseases all over the world health and career pathways through in-classroom through the development of innovative and presentations by Astellas scientists, and 27 Transforming Healthcare

supporting science teachers’ needs in and outside headquarters will help to optimize development the classroom through an interactive Web site – strategies, administration of global projects www.ScienceWoRx.org. and will utilize the several other important therapeutic-focused research and development Science WoRx is supported by the iBIO Institute, centers, including the Astellas Research Institute the education arm of the Illinois Biotechnology of America (ARIA), a subsidiary located in Skokie, Industry Organization (iBIO) and the National Ill., dedicated to enhancing immunology research; Science Teachers Association. An advisory board Urogenix, Inc., a subsidiary in North Carolina of Astellas scientists and local science teachers focused on urology research; and Agensys, Inc., a oversee the program. subsidiary in California currently developing fully Astellas’ creation of the Science WoRx program human monoclonal antibodies (MAbs) to treat is just one of the key initiatives the company is solid tumor cancers. undertaking to support the local community and Since the 2005 merger, Astellas has made the advancement of science in the classroom significant investment in research and and to ensure science education remains a top development and in building our overall priority. For the second year, Astellas Pharma capabilities and expertise in key therapeutic areas US, Inc. has also supported the National Science to support the company’s vision. Astellas seeks to Teachers Association (NSTA) by sponsoring 15 go beyond all others in exploring and tapping the local area science teachers to participate as part potential of the life sciences. of the New Science Teacher Academy, a national, year-long program that connects new science Exploratory Research teachers to a range of tools and resources, while The scientists at Astellas leverage leading-edge providing the essential support needed to build a technologies such as combinatorial chemistry, strong foundation for science in their classrooms. involving the parallel synthesis of many different R&D at the Core of Company’s compounds, and high-throughput screening, consisting of the computer controlled screening Strategic Plan of a vast number of biochemical, genetic or When not in the classroom, our scientists are pharmacological tests. In this way, Astellas is hard at work in the lab researching new able to make the most of its researchers’ creative therapeutic areas to expand our portfolio of ideas by continually searching for the best answer products. Astellas is currently making the to the world’s unmet medical needs. transition from a transplantation-focused Optimization & Development company to a diversified portfolio company. This transition will help maximize our business value Research and position us as a partner of choice within an After finding a promising compound, it is increasingly competitive marketplace. In the U.S., evaluated from every conceivable perspective the company is focused on six key therapeutic including efficacy, toxicity, absorption, distribution areas – anti-infectives, cardiology, dermatology, and excretion. In this way, we optimize the neuroscience, transplant and urology – and we compounds for use as drugs. In this process, are also expanding our research and development we utilize structure-based drug design, which efforts into other disease areas such as oncology involves the three-dimensional mapping of the and diabetes. target protein’s molecular structure. Through reevaluation of the results of experiments, Recently, Astellas Pharma Global Development, and numerous repetitions of the synthesis and Inc. (APGD) was established in the U.S. in evaluation processes, the potential of the drug order to strengthen its product development candidate gradually becomes clearer. Natural competitiveness. The relocation of the R&D substances obtained through the fermentation

28 BioLogical Quarterly Winter/Spring 2010 of naturally occurring microorganisms Gladys Crews, are subjected to the same testing Senior Scientist processes, with the aim of deriving of Cellular compounds suitable for use as drugs. Immunology, conducts research Astellas takes great care to evaluate at Astellas and estimate the metabolic effects Research Institute of compounds, and to assess their of America in safety at an early stage in the Skokie, Ill. drug development process. In the development research process, ﬁnal- stage conﬁrmation is made of the pharmacologic behavior, metabolic effects and safety of the candidate compounds prior to clinical testing on human subjects.

Candidate compounds for new drugs found during the discovery research process are subjected to detailed examination to confirm their safety and production equipment and processes employed, efficacy – the two qualities that are of paramount but also the methods of raw material procurement importance. To obtain approval for the sale of and storage, staff training and logistics services the new drug, Astellas must conduct pre-clinical including delivery. At the same time, through studies on candidate compounds that comply the use of advanced factory automation with good laboratory practice standards (GLP) systems and computerized production control standards, as well as clinical studies that comply systems, Astellas has constructed a system of with good clinical practice (GCP). Assuming the manufacturing that effectively balances the twin desired results are obtained from those studies, requirements of low cost and high quality. compounds are moved into clinical trials, through Phases I, II, and III to confirm the safety and Motivation of the Company efficacy of the potential medication. Our overall vision, guiding all of our activities, is the company’s focus on Changing tomorrow Through close collaboration between our R&D by bringing about a healthier world today. At units in the United States, Japan and Europe, Astellas, we are working hard to address the we enable the sharing of data on clinical trials unmet medical needs of people around the world. conducted in all areas, which helps speed up By building on our heritage of specialty products, the new drug application process and realize an we are creating a rich pipeline of innovative integrated development system on a global scale. medicines, focused in the six therapeutic areas referenced earlier, where the challenges are Manufacturing and Technology great. Our commitment to Changing tomorrow Once a drug has been approved for use, the staffs is measured not only by our focus on innovative at our production plants, and of the technological medicines, but also by the importance we place development units that support those plants, on serving the communities where we live and ensure the smooth realization of mass production. work.BQ Astellas has drawn up our own standards of good-manufacturing practice (GMP), which meet For more information about Astellas Pharma US, globally accepted standards. These rigorous Inc., visit www.astellas.us. quality control standards cover not only the 29 Catalyzing Knowledge Research Institutions in the Midwest: Powerful & Diverse By Allen J. Dines Marc Oettinger President, Midwest Research Director of Operations, Midwest Research University Network University Network

University of Wisconsin- Madison established the University Research Park in 1984 on lands near the campus used for agricultural research. Today, the Park’s MG&E Innovation Center (pictured) has helped more than 70 early stage companies grow since 1989.

Universities have long been magnets for bright, federal laboratories, such as the U.S. Department innovative people motivated to tackle big ideas. of Energy’s Argonne National Laboratory and They often create new solutions to large problems Fermilab near Chicago; the Ames Laboratory in that make the world a better place. To that end, Ames, Iowa; the U.S. Department of Agriculture’s universities increasingly ﬁnd themselves at the Forest Products Laboratory in Madison, Wisc.; heart of breakthrough innovations and technology and Agricultural Research Service lab in Peoria, clusters. Because the Midwest is home to some Ill. By most any parameter for research and of the nation’s best academic and research technology transfer excellence, Midwest research institutions, these organizations are poised to institutions, broadly including universities, play a critical role in the 21st Century Midwest medical centers and federal laboratories, number economy. among the top ranking institutions nationally.

The research universities of the Midwest are The National Science Foundation tracks R&D complemented by more than a dozen major spending at academic institutions and medical medical centers, including Mayo Clinic, Cleveland centers each year. For ﬁscal 2008, Midwest Clinic, Rush University Medical Center, Children’s research institutions within the core eight-state Hospital of Cincinnati and Marshﬁeld Clinic. Upper Midwest region account for $9.8 billion, or Additionally, the Midwest is home to several 20% of total U.S. institutional R&D expenditures of $49.9 billion.

30 BioLogical Quarterly Winter/Spring 2010 Photograph courtesy of University Research Park According to the Association of University Science and Engineering R&D spending at Technology Managers (AUTM), the professional Midwest Universities ranked among the top 50 society of the Technology Transfer community, Science & Engineering Midwest universities and medical centers rank Institution National R&D Spending (all campuses unless indicated) Rank favorably among the nation’s leading institutions ($ in thousands) across virtually all parameters used to measure University of Wisconsin-Madison 840,672 3 technology transfer success. Collectively, University of Michigan 808,731 5 the research institutions in the eight Upper Ohio State University 720,206 9 Midwest states (Illinois, Indiana, Iowa, Michigan, University of Minnesota 624,149 14 Minnesota, Ohio and Wisconsin) alone account for a significant portion of the nation’s innovation Washington University 572,775 18 economy, including: University of Illinois-Champaign 473,890 28 Northwestern University 443,345 33 • 17% of total U.S. patents filed Purdue University 415,172 35 (1,851 of 10,795) University of Cincinnati 375,852 38 • 19% of total U.S. patents issued Case Western Reserve University 372,374 41 (611 of 3,134) Iowa State University 363,243 43 Michigan State University 360,852 44 • 19% of total U.S. options and licenses University of Chicago 342,421 49 executed (953 of 4,981) (Source: National Science Foundation FY2007, latest data available) • 34% of total U.S. license revenue received ($1.2 billion of $3.4 billion) fifth, sixth and seventh places nationally (Mayo Clinic, UW-Madison/WARF, and University of • 14% of total start-up companies licensed Illinois, respectively). (112 of 773) More than Technology Transfer • 20% of total invention disclosures for 2008 Metrics (3,937 of 19,459) But the benefits of university research cannot Apart from these aggregate numbers, several be captured merely by quantifying licenses individual Midwest institutions figure prominently and royalties. Rather they are reflected in new in national rankings. For example, for fiscal treatments and cures for disease, improved 2008, University of Minnesota led the nation patient outcomes, better agricultural production in number of technologies licensed. Purdue techniques, a more wholesome and safer food University (Indiana) followed closely at fourth. supply and a better environment. Across all For new patents issued in fiscal 2008, University industries, many advances of the last several of Wisconsin (UW)-Madison/Wisconsin Alumni decades that have improved society can be traced Research Foundation (WARF) ranked fourth, with to university research. Arguably the emergence University of Michigan at fifth. For number of of the biotechnology industry in the late 1970s start-up ventures initiated, University of Michigan has its technology foundation in the life sciences ranked sixth nationally. UW-Madison/WARF discoveries at the nation’s universities. Examples ranked third in number of licenses generating of university research that have made the world more than $1 million in license revenue. With a better place include many originating with respect to all licenses and options generating Midwest research appear on page 32. income, WARF ranked seventh and University of Minnesota ranked tenth. For invention disclosures received in fiscal 2008, Midwest institutions took 31 Catalyzing Knowledge

The table below highlights Midwest research • Helical TomoTherapy®, developed by institution participation in the Top 20 rankings UW-Madison researchers, combines across key technology transfer metrics. integrated computerized tomography imaging with precision delivery National Ranking of Midwest Institutions of radiation therapy to only the across major technology transfer metrics cancerous tissue. The device spares surrounding tissue and nearby Number of Midwest research Tech Transfer Metric organs from damaging radiation. institutions ranked in the Top 20 That concept was a mere idea and Number of technologies licensed 7 vision in the minds of UW-Madison Licenses/Options generating income 6 researchers in the early 1990s. Licenses generating >$1 million income 5 Today, TomoTherapy Inc., a university Invention disclosures received 4 spinout, markets its Hi-Art® System New patent applications filed 5 as the most advanced radiation New patents issued 4 therapy device in the world. Licenses to start-ups 3 The Importance of Start- (Source: AUTM – FY 2008) ups in Commercializing • In the late 1930s researchers at the Novel Technology University of Minnesota worked to The success of TomoTherapy, Inc is not unique. develop a machine that would sustain Increasingly, over the last two decades, many life while the surgeon worked to repair advances originating in Midwest university a damaged heart. The work led to the research laboratories have been brought to the development of the heart-lung machine, market by new business ventures. As many large which has extended the lives of tens companies have retreated from expensive and of thousands. The first known clinical risky early-stage R&D in favor of acquiring new operation involving open cardiotomy products with a proven track record, these start- occurred at the University of Minnesota ups are often the only route to commercialization Hospital in 1951. for novel technologies. While the germ of • Scientists at the Cincinnati the idea for these ventures may begin in a Children’s Hospital Medical Center university laboratory, these start-ups are critically have developed an oral vaccine dependent on access to capital markets and against rotavirus. This infection is management talent to move their R&D ahead, the primary cause of gastroenteritis in to advance product development and to bring a children. More than 600,000 children novel product to market. around the world die every year from With respect to management talent, the Midwest this virus, mostly in developing countries. has found returning alumni who have gone to the east or west coasts to build their careers in • Developed by researchers at University venture-funded, high-tech companies to be an of Illinois at Chicago, Prezista™ is one attractive source of talent for Midwest-based of two second-generation protease start-ups. Many of these alumni have returned inhibitors providing a major advance to their Midwest roots to take leadership in drug resistance. For the thousands of roles in start-ups. Equally important, a strong patients with multi-resistant strains of HIV, and diverse base of Midwest healthcare Prezista™ is proving a potent option in their companies has helped to produce a regional fight against the disease.

32 BioLogical Quarterly Winter/Spring 2010 pool of skilled managers. In medical devices, companies like Medtronic, St Jude, Boston Scientific, Zimmer, Cook and GE Healthcare are all based in the Midwest. Indeed the Minnesota-Indiana corridor transects the heart of the U.S. medical device industry. In pharmaceuticals and diversified healthcare products, Lilly, Abbott, Baxter, Johnson & Johnson, Takeda, Astellas and Pfizer all have major operations in the Midwest. Other companies with strong life science-related businesses based in the region include Cardinal Health, Dow AgroSciences, Monsanto, ADM, Sigma-Aldrich, Hospira, Procter & Gamble and In December 2010 WellPoint. cardiovascular health. Six years later Pfizer the UW-Madison acquired the company for $1.3 billion. After Pfizer While securing management talent is an issue, campus will house closed its R&D facilities in Michigan, it spun out access to capital for funding start-ups is by far twin biomedical Esperion into an independent company and it is the single most important challenge facing those research now progressing with Phase I clinical trials of its seeking to commercialize Midwest research. institutes, the lead compound designed to treat dyslipidemia, a Midwest entrepreneurs have tapped into both private Morgridge disorder in which too many fatty substances are regional and national investors, but by comparison Institute for present in a patient’s blood. to the coasts the Midwest is no hotbed of venture Research and the university’s capital activity. Some progress is evident as Between 2000 and 2008 eight acquisitions or Wisconsin many angel investors have sprung up throughout IPOs of life science start-ups spun out of the region and several regional venture capital Institute for UW-Madison generated more than $3.5 billion in Discovery. firms participate actively in seed- and early-stage shareholder value. Companies having operations investing. To their credit, several notable ventures in Madison as a result of UW-Madison start-up have navigated the road from technology to acquisitions include Monsanto (Agracetus), viable business. These Midwest university-based Roche (Nimblegen and Mirus), GE Healthcare success stories are attracting the attention of (Lunar Corp), Life Technologies (Pan Vera), coastal VCs and some companies have gained Genzyme (Bone Care), Hologic (Third Wave), national prominence. Examples include: Catalent (Gala Biosciences), Danisco Esperion Therapeutics was founded in (Marshall Products) and SAFC (Tetrionics). 1998 based on research at the University of Nanosphere, Inc., based on nanoparticle Michigan. At its conception Esperion focused on probe research performed at Northwestern creating viable products based on its proprietary University, makes products that improve the high-density lipoprotein therapy for improving

Photograph courtesy of Wisconsin Alumni Research Foundation (WARF) 33 Catalyzing Knowledge

diagnosis and treatment of disease by enabling high-tech start-ups concentrated. MRUN emerged access to and detection of new and existing as a venue where ofﬁcials from across the region biomarkers. The company raised more than $100 could compare their contact lists and learn that million in private money and in 2007 went public while the right connections may not be available at a valuation of more than $500 million. locally, they could be found regionally.

In early 2010, San Diego diagnostic test maker Beyond information critical to the emergence Quidel Corporation acquired Diagnostic of spinout start-up ventures, university officials HYBRIDS for about $130 million in cash to seeking to boost their local start-ups needed expand Quidel’s line of rapid, point-of-care information about how others were solving tests for pregnancy, infectious diseases, similar problems at their institutions. MRUN cancer, bone health and autoimmune disorders. became a community of university officials who Started in 1983 by a group of Ohio University could exchange ideas about fostering start- professors, Diagnostic HYBRIDS was spun out ups and apply them in the context of their own of the university to commercialize sophisticated institutional practices, constraints and cultures. diagnostic tests used mostly by hospital and In 2010 there are some encouraging signs that reference laboratories. The Ohio University bode well for promising developments across the Foundation, which invested more than $1 million Midwest: in Diagnostic HYBRIDS, will receive more than $35 million from the acquisition. • BioEnterprise has formed in Cleveland to take advantage of the innovations occurring Regional Cooperation for Local in Cleveland’s Case Western Reserve Start-up Development University, University Hospitals and the Cleveland Clinic. While each institution Bringing university researchers, entrepreneurs, continues to facilitate commercialization management talent and early-stage investors internally, BioEnterprise provides assistance together at the right time and with the right to promising area start-ups, helping to chemistry remains a critical challenge in the position them for the investment they need Midwest. Our organization, the Midwest to grow while cultivating relationships University Research Network (MRUN), does with angel and venture capital that make it exactly that. By operating as a Midwest-wide easier for those investors to navigate the network focused at the intersection of university Cleveland start-up environment. research and start-up venture creation, MRUN fosters regional cooperation to facilitate local • In Madison, MERLIN Mentors recently start-up development. MRUN was established celebrated its first full year of operation, in 2002 as an informal working committee of providing formal mentoring for area university technology transfer managers from emerging companies. More than 80 peer- across the region. All faced common problems reviewed mentors each having experience in commercializing university research through in starting, operating or exiting a new start-up formation. In the Midwest, information venture, participate actively. More than about sources of financing, identification of 16 emerging companies are now engaged management talent and opportunities for with active mentor teams. Modeled on collaboration were limited by the lack of critical MIT’s successful Venture Mentoring mass in even the most robust of Midwest Service, MERLIN is run by the mentors high-tech communities. Further, there was a themselves with support from WARF, the lack of communication across the numerous UW-Madison Office of Corporate Relations geographically dispersed communities where and the University Research Park. A similar

34 BioLogical Quarterly Winter/Spring 2010 mentoring program, InnovateVMS, is university start-up and licensing professionals operating with similar success in St. Louis. with early-stage investors and economic Of course, regular readers of BioLogical development. MRUN seeks to broaden its Quarterly are quite familiar with PROPEL, membership beyond university ofﬁcials to be the 3-year-old joint partnership of iBIO and inclusive of all those involved with accelerating the iBIO Institute. PROPEL is a series of growth of new ventures. As access to capital programs aimed at increasing the number remains critical across the region to emerging of life sciences start-ups in Illinois and spinouts, expect to see MRUN members in the boosting the success rates of existing trenches working to eliminate this problem, one companies. deal at a time. BQ

• Afﬁnity Capital Management and For more information: Triathlon Medical Ventures recently • Visit MRUN on the web at www.mrun.us announced plans for a new $10 million • Follow MRUN on Twitter at MRUNhotline early-stage fund in Minnesota. Other recent developments in Minnesota • Join MRUN’s group at LinkedIn include plans to raise $25 million to fund ﬁrms taking root at a planned Elk Run BioBusiness Center in a 2,300-acre mixed- use development at Pine Island, Minn., near the Mayo Clinic. Meanwhile the University of Minnesota is working with private developers to create a $20 million venture fund to anchor a planned incubator center at the school’s Biomedical Discovery District.

• The Midwest Co-Investment Network, created in late 2009 by the Wisconsin Angel Network and the Illinois Business & Investor Forum (ILBIF), is bringing together investor groups from across the Midwest to improve deal sourcing and syndication. Next up for MRUN? MRUN’s top priority for 2010 is improving access to capital for university start-ups. This is not the stuff of policy positions, white papers and more roundtable meetings. The Brookings Institution report, Turning Up the Heat, is only the most recent of the myriad reports that have pointed to this problem. Now is the time for action to build university-investor relationships by those involved day to day in creating and funding university technology. MRUN offers a neutral, regional venue that enables face-to-face meetings and the relationship building that efﬁciently connects 35 Enhancing Education and Training

Leading the Charge for Education Reform A brief conversation with iBIO Institute President & CEO David Miller

Editor’s Note: the fall of 2006, the Board members and officers During this plus some of the board-represented companies dialogue, David chipped in about $25,000 in all to match a DCEO Miller reflected on grant to continue the pilot programs. A month the iBIO Institute’s later, we hired Ann Reed to manage the Institute’s David Miller growth since operations, and that’s when things really, as BIO first held you say, took off. From that point on, the iBIO its convention Institute created TalentSparks! and became in Chicago, and the lead implementer of biotechnology teacher shared his vision for how the organization will development programs in Illinois. So I’d say the continue to support education initiatives that the 2006 BIO Convention was catalytic. U.S. so desperately needs. What are your top priorities for iBIO For new readers of BioLogical Quarterly who Institute in 2010? may benefit from some background, the iBIO In 2010 we’re going to be building our programs Institute provides educational programs and and raising funds to bring on additional training for K-12 and community college staff. We’ve become deeply aligned with the students; members of the health and life leadership of the state’s academic strategies, sciences community, including entrepreneurs; which emphasize building scalable, replicable those considering careers in the life sciences; programs, along with mechanisms to quickly and the general public. The iBIO Institute creates share information on what works and what programs that increase career opportunities doesn’t. When you consider the magnitude of for minority and other under-served groups, the problem—America’s pitiful rank in science engages in specialized research of particular and math education and the implications for interest to Illinois and the Midwest region, and our prosperity and security—we really think secures recognition for Illinois and the Midwest these kinds of strategies are the only reasonable as one of the world’s leading science centers. approach. iBIO Institute seemed to take off after At the same time, the Institute has developed BIO 2006. What impact did BIO’s some programs that have become high impact first appearance in Chicago have on with the involvement of health, ag and bio- the evolution of the Institute and its industrial businesses, and we’ll continue to add programs? to the national discourse on and the body of Thanks to the leadership of DCEO (Illinois knowledge about education reform and career Department of Commerce & Economic awareness, planning and development. Opportunity) and its director at the time, Jack The Institute’s SCI: Science Career Lavin, Illinois was able to launch some pilot teacher development programs in 2006, using the Investigation program appears to be Virginia-based Biotech Institute as a resource. gaining traction quickly. What is your The community had set building the iBIO Institute vision for expanding the program as one of the “legacy goals” from the show, that throughout Illinois, and perhaps to is, one of the projects we wanted to highlight neighboring states in the Midwest? during the convention and pursue afterwards. In

36 BioLogical Quarterly Winter/Spring 2010 I actually want to expand it across the entire United States, and perhaps ultimately beyond. This program is well conceptualized and structured in so many ways; I mean, there’s really no need to have multiple versions across the country. So we’re going to be working at the 2010 BIO Convention in Chicago to show off the program and recruit partners for its expansion. Of course, we’ll generate the learning curve and most robust early iterations here in the Midwest where we already have the web of relationships we need for that.

That said, I’m convinced this is a program America needs. It plays on young people’s actual interests, on their optimism about making the world a better place and on their hunger for seeing how passion so it’s deployed through the educational what they’re learning ties into real life. Let’s face system—broadly defined to include classroom, it: Even many graduate students have a pretty preschool and after-school experiences—to get undifferentiated notion of what they want to do children and young adults fired up about engaging in science. Maybe become doctors. Maybe do in science, jazzed about helping to make the research. It’s much more exciting and interesting miracles. to tie into real jobs, jobs that are needed, jobs that make a difference. How will you know when the Institute What roles would you like to see industry has made a significant mark on the play in the future growth and expansion Illinois workforce? What metrics are of the Institute? best suited for either validating the Institute’s success or identifying areas Industry is key to everything we do. We represent that require additional attention? the focused voice of the life sciences industry for education in Illinois. That’s what makes the The short answer is, I don’t know. But we’re Institute special and different. We need funding, working on finding the answers. One of my certainly, but that’s only a condition precedent business heroes, the late quality-productivity for everything else that goes into it. The real consultant W. Edwards Deming, used to say, “In currency of our realm of activity is the passion God we trust. All others bring data.” Ultimately, that folks in science—on both the technical and we want to know that the educational programs business sides—have for what they do: healing the Institute provides are having an important the sick, saving people from dying, creating crop impact, not just in Illinois, but around the country, yields that feed the hungry, dramatically reducing in getting more students into science, technology, insecticides and pesticides in our fields, making engineering and math careers—what they fuel, plastics and carpet fibers from renewable nickname “STEM” pursuits. But how do you resources. We bring their perspective, input and track all that? Again, we don’t know, but we’ve excitement into everything we do. partnered up with some nationally known experts at the University of Illinois, led by Dr. Lizanne I’ve seen that passion infect teachers, students, Destefano, to begin figuring that out. parents and administrators in iBIO Institute programs like TalentSparks! It’s a fun thing to There’s a second answer to your question, see. And it’s not something money can buy. Our though. What we’re doing to build the Illinois “sweet spot,” if you will, is orchestrating that workforce is more than just improving student education and providing a vision to career 37 Enhancing Education and Training

paths in science industries. It’s also tied up tech sectors, creation, retention and attraction of in the work of PROPEL®, our growing bundle start-ups, and so forth. of services for entrepreneurs, and through iBIO’s public policy advocacy. This stuff is all So in tracking and judging the success of what synergistic. For example, iBIO and the Institute we’re doing, we won’t isolate metrics relevant teamed up with the Illinois Farm Bureau and only to the iBIO Institute’s work. We’ll also be a few dozen organizations across the state to studying the fruits of iBIO’s and PROPEL’s labors. develop the Smart Agenda for Illinois™. The Educational reform, good public policy and job Agenda (reviewed in the Summer 2009 issue of creation are the three key elements in our overall BioLogical Quarterly) is a blueprint for the kind work plan. And in all three areas, we depend of business climate Illinois needs to foster an not only on industry, but also upon our partners innovation-based economy. You can have the in government and academia. These are tough world’s best students, but if you don’t equip them challenges, and there is no other way to succeed. with the ecosystem of support for entrepreneurial There’s no doubt in my mind that we will. BQ activity, and with a supportive public policy To learn more about the iBIO Institute and its framework, you’re cooked. And here the metrics programs, visit www.ibioinstiute.org. are much easier to track: number of science- based companies, employment in the various

38 BioLogical Quarterly Winter/Spring 2010 TAKE A CLOSER LOOK

On behalf of the Illinois Life Sciences community, we want to welcome the thousands of attendees from across the globe to the 2010 BIO International Convention in Chicago.

Following the record-setting BIO 2006 convention in Chicago, the state’s Life Sciences community has established itself FOR MORE INFORMATION as an international industry leader. Illinois provides Life on how your business can take advantage Sciences companies with the right balance of highly skilled of the opportunities that exist in Illinois, workers, essential capital, strong community connections and contact the Illinois Department of Commerce access to the global marketplace. With an ideal business and research infrastructure, and a deep commitment to fostering and Economic Opportunity at 1-877-221-4403 innovation, Illinois is creating the next generation of medical, or by email at [email protected]. agricultural, industrial and environmental solutions. Expanding Infrastructure Illinois’ Technology Parks Grow Biotech Businesses Summaries submitted by technology park personnel

A network of technology parks helps make four buildings, including the 5,000 square-foot Illinois one of the hottest technology clusters Incubator–North with four wet-lab/office suites. in the world. Each of the parks highlighted in Under construction and scheduled for completion this article have strong connections to world- in 2011 is the 28,000 square-foot Incubator– class research institutions, yet each also has South, with 15 wet- and 15 dry-laboratory suites. its own unique qualities and resources to help start-up companies grow to their full potential. Wexford’s adjacent Technology Business Center Below are brief summaries of the tech parks that (TBC) has both custom build-to-suit tenant have a strong focus on supporting life sciences workspace and pre-built technology suites (2,000 companies. square feet each) for post incubation in a 126,000 square-foot building, as well as an International For more information on the tech park network, Soft Landing Center for foreign companies visit www.iltechparks.com. entering the U.S. market. Also part of UTP’s initial phase of development is Illinois Institute University Technology Park at the of Technology Research Institute (IITRI) Center. Illinois Institute of Technology The building houses the IITRI Life Sciences Group, a provider of pre-clinical contract research and Supported in part by funding from the State of development services to the government and Illinois and in partnership with Wexford Science sponsors in the pharmaceutical, biotechnology, + Technology, LLC, University Technology Park chemical, agrichemical and personal products (UTP) at the Illinois Institute of Technology industries. The fourth building at UTP is IIT Tower opened its doors in 2006. UTP moves innovation (383,000 square feet) with available office space forward by meeting the needs of small- and ranging from small, furnished offices on a month- mid-sized growing, high-growth and spin-off to-month basis to build-to-suit suites on 20,000 technology clients. UTP’s first phase consists of square-foot floors.

UTP’s Technology A distinct feature of UTP is that it Business Center provides tenants with access to the provides custom academic brainpower of students and and pre-built suites, faculty, many of whom share research and an International and office space in UTP under the Soft Landing umbrella of the Pritzker Institute for Center for foreign Biomedical Science and Engineering. companies entering Faculty members come from the fields the U.S. market. of biomedical imaging, computational biomechanics, neuro-engineering and particle technology. UTP has created an entrepreneurial ecosystem with an abundance of in-house and IIT-affiliated services, facilities and

40 BioLogical Quarterly Winter/Spring 2010 Photographs courtesy of Illinois Institute of Technology equipment. In addition to services available requires the highly trained and skilled team through IIT, such as access to the university members that a world-class university can library, analytical equipment and trade discounts provide. UTP is also home to several other life for supplies and services, start-ups also benefit sciences and biotech companies: from resources provided by IIT’s Jules F. Knapp Entrepreneurship Center, located on nearby main Chromatin develops and markets novel campus. UTP tenants can consult with Knapp proprietary technology, first developed at the Center experts on launch strategies, employment University of Chicago, which enables entire and staffing issues, business plan development chromosomes to be designed and incorporated and other topics integral to the process of moving into plant cells. These mini-chromosomes can an idea from innovation to an integrative whole, be used in any plant to simultaneously introduce and on to the marketplace. multiple genes while maintaining precise control of gene expression. Chromatin’s mini- Progress Since 2006 chromosome technology can be used to deliver genes that benefit the agricultural, nutritional, Two dozen science and technology companies energy, pharmaceutical and chemical sectors. with more than 300 employees have signed on to be part of UTP, growing from four companies Martin-Protean is a biotechnology company in 2006. Among the companies operating that determines protein structure using chemical at UTP is Therapeutic Proteins, Inc. (TPI), a cross-linking and mass spectrometry. Its biotechnology start-up that has developed the technology provides unique insight into protein first-ever biosimilars production facility in the structure, facilitating drug design and discovery. U.S. TPI and its subsidiary, Therapeutic Proteins The pharmaceutical and biotechnology sectors as Ltd. (TPL), are world-class global developers and suppliers of biosimilar recombinant therapeutic UTP at IIT’s proteins as active pharmaceutical ingredients Incubator–North (API). Manufactured in fully FDA cGMP (current includes four wet- good manufacturing process) compliant facilities, lab/office suites. its products will meet or exceed all worldwide Incubator–South, compendia specifications available. scheduled for completion in Unlike generic small molecule pharmaceutical 2011, will offer 15 products, the development of biosimilar wet- and 15 dry- therapeutic proteins using recombinant laboratory suites. techniques is a highly complex process. From the construction of a genetically modified cell that will express the product to efficient downstream purification and packaging, the cGMP manufacturing of biological products requires development of proprietary techniques. According to Tom Flynn, CEO of TPI, the decision to locate at UTP was an obvious choice. “We had many location alternatives,” he said, “but the combination of Wexford and UTP is rare in terms of the array of services and support that were available to our company.”

Like many other UTP clients, TPI also ﬁnds IIT students a great resource, as its technology 41 Expanding Infrastructure

well as the U.S. National Institutes of Health (NIH), Facilities are constructed annually as “shell” national and academic labs can use its products. buildings with common areas and build-to-suit suite fit-out options for individual companies to Wrightwood Technologies Inc. (WTI) is a lease space. Options include existing and custom technology development company with a strong office and lab configurations. Fox/Atkins leases focus on robotics and machine intelligence space to companies in multi-tenant buildings with applications and their integration into industries a long-term ground lease for the University land. such as pharmaceuticals and healthcare. WTI aims to provide both the public and private EnterpriseWorks (EW) is a 43,000 square foot sectors with technologies and services that start-up business incubator in the Research Park improve efficiency, increase production, reduce and is owned and operated by the University costs, eliminate waste and improve society’s of Illinois to help launch successful technology overall quality of life. Its most significant start-up companies. EnterpriseWorks has biotech, project to date involves a subsidiary, which chemistry and basic laboratory configurations handles distribution and sales of countercurrent available for companies. chromatography equipment and services in North America, while developing applications and The Research Park and incubator provides a broad incremental improvements of this technology support system for technology entrepreneurs, to the world. WTI is a recipient of both Phase I including weekly entrepreneur programming, and Phase II Small Business Innovative Research shared lab instrumentation, entrepreneur- (SBIR) grants from the NIH. According to WTI in-residence consulting, procurement of lab President Samuel Pro, “The University Technology supplies at University of Illinois rates, discounted Park and Wexford provided the resources and University of Illinois facility-use agreements, infrastructure Wrightwood needed for excellent chemical/hazardous waste service by the positioning in the SBIR grant process.” University, co-location server facilities and state- of-the-art telecommunications. For more information about the University Technology Park at IIT, visit On February 10, 2010, Sony Corporation www.universitytechnologypark.com. announced that it had acquired iCyt Mission Technology Inc, a fast-growing University of The Research Park at the Illinois Research Park biotechnology company. iCyt University of Illinois is an example of innovation and entrepreneurial success in Champaign, which is supported The Research Park at the University of Illinois is a through the technology commercialization joint development with Fox/Atkins Development resources at the University of Illinois. This is made LLC and is home to more than 70 companies, possible by the hard work and leadership of Gary including nine Fortune 500 companies. The Durack and the iCyt team and their commitment Research Park is located on the Urbana campus to build his operation in the Research Park. Many with a contiguous location next to central campus. programs in the community and the State of The Research Park is attracting companies that Illinois helped support and make this company are seeking to engage with the University in success story possible. an open-innovation model, collaborating with iCyt supplies advanced flow cytometry analysis faculty and employing students year-round to and sorting technology for use in life science supplement their R&D operations. The Research research. Its products are marketed to private Park has continued to attract new operations in and public research institutions, pharmaceutical the last year, including Sony, Abbott, Littelfuse, and biotechnology companies and large medical Pearson, Waterborne, Wolfram Alpha and several centers. iCyt has received significant industry technology start-up companies. The Research Park recognition for its line of multi-channel, high-speed celebrates its 10th anniversary this year.

42 BioLogical Quarterly Winter/Spring 2010 cell sorting products. Customer relationships students are creating educational materials include Monsanto, Washington University, St. about nutritional ingredients such as prebiotics, Jude Children’s Research Hospital, Yale and the which are ingredients that aid in the healthy University of North Carolina at Chapel Hill. development of the immune system. They are also evaluating potential new ingredients for “When Sony was evaluating their decision nutritional products and regulatory analysis. to acquire our business, they appreciated the collaboration with the University of Illinois and “Abbott is pleased to join the Research Park the facilities in the Research Park that support our community,” says Robert H. Miller, PhD, divisional business,” said Gary Durack, founder, president vice president, Nutrition Research & Development and CEO of iCyt. “I am thankful to the University and Scientific Affairs, Abbott Nutrition. “A of Illinois, Fox/Atkins Development, our investors fundamental necessity of our business is to ensure and the community for their support. They continuous innovation and we look forward to have helped us function like a big company and forging a relationship with UIUC (the University of compete with large corporations in our industry.” Illinois at Urbana-Champaign) and the Division of Nutritional Sciences, as well as other university The Stem Cell Facility is a unique collaboration schools and colleges.” with Carle Foundation Hospital, the University of Illinois Institute for Genomic Tracy Noe, spokeswoman for Abbott Nutrition, Biology and iCyt to operate an adult stem cell said, “We do have partnerships with a number research facility for the isolation and enrichment of universities around the world but certainly the of low-frequency cell subpopulations (stem cells). University of Illinois is a priority for us. Abbott is The Stem Cell Facility also received funding committed to building a pipeline of future leaders.” support from the State of Illinois Regenerative The Archer Daniels Midland Company Medicine Institute (IRMI). This cell enrichment is (ADM) Bioenergy Modeling Center made possible by using innovative iCyt Reflection focuses Sorting System (RSS) technology. The RSS is on modeling for new biofuels plant development. a scalable system that consists of two highly The center reports into Corn Processing Research automated parallel sorting (HAPS) modules. at ADM. Students work along with ADM These HAPS modules are enclosed in a biosafety researchers on process design and simulation cabinet and are specifically designed to handle for second-generation biofuels. Internships are potentially biohazardous material. In addition to established for undergrad and graduate students cell sorting, the facility is capable of supporting for computational work in research areas related other projects and clinical trials requiring storage, to bioenergy and chemicals, with a focus on sterile processing and other ex vivo manipulations exploratory work. ADM is also working on a of BL2 materials. collaborative feed research project with the University of Illinois out of this center. Abbott opened a new center in the Research The Modeling Center engineering interns Park in July 2009, beginning with Abbott create models of ADM’s industrial chemical and Nutrition research projects. The center is part biochemical processes. These models will predict of a larger partnership with staff and faculty at the behavior of unit operations involved in the the University of Illinois. Abbott has established production of ethanol, biodiesel, lysine, threonine, a sponsored-research, technical-testing and Xanthan gum, propylene glycol, the biodegradable facilities-use agreement to work with researchers polymer PHA or other products. The unit on campus, primarily in the Division of Nutritional operations modeled may include chromatographic Sciences. The center employs graduate students separation, distillation, adsorption, crystallization, to work on a wide range of scientific research drying, extraction, membrane separation and projects, focusing largely on human nutrition and reactor operations. The interns work 10 hours per pharmaceutical manufacturing quality. Graduate 43 Expanding Infrastructure

week at the Research Park, interacting with ADM primarily because of the pretreatment needed for scientists and engineers located at the Center and effective hydrolysis to sugars. These problems other ADM locations. can be avoided with EM waves, also known as “irradiation.” Company founder Munir Cheryan has Chemical engineering student Fred Sollberger been in the Department of Food Science at UIUC has conducted biofuels research at the ADM since 1975, and is an internationally recognized Bioenergy Modeling Center to review and model expert on membrane separations. He provides the most relevant open-source cases in literature entrepreneurial experience to Prairie Gold, Inc. in for second-generation biofuels production. Fred Bloomington, Ill., to commercialize the COPE (Corn evaluated the differences in operating conditions Oil and Protein Extraction) process that he invented. and performance that can be obtained when employing real feed compositions after using ImmuVen, Inc. is a start-up that features a in-house data. His work helps determine the powerful, emerging life science technology – most relevant design features for a large-scale high-affinity T cell receptors, a novel class of reactor at an early stage of development. These immune-targeting drugs and diagnostic agents. findings will be instrumental in current in-house Founded by two of the world’s leading experts in developments at ADM for second-generation the field, ImmuVen plans to engineer and develop biofuels production. T cell receptor proteins through contract research and strategic partnerships with pharmaceutical Chromatin (described earlier in the UTP at IIT and biotechnology companies. section of this article) has been in the Research Park since 2005 and also uses greenhouse facilities InstaRecon’s patented algorithms increase the on the University of Illinois campus. Its operation computational efficiency of image reconstruction in Champaign has been instrumental in performing in CT, PET, SPECT and MRI technologies by a plant research with corn, sorghum and sugar factor of 20-100. Three active Phase II SBIR cane. The company has corporate partnership awards, two from NIH and one from NSF, help agreements with Syngenta, Monsanto, Dow the company advance its mission. In May 2009 Agrosciences and Bayer Crop-Science. InstaRecon launched its first product, the CBR conebeam reconstruction software package for TetraVitae Biosciences is developing next- micro-CT and nano-CT. generation production platforms for renewable bio-based chemicals and biofuels based on Recent university graduates started Nucleon conventional and cellulosic feedstock. TetraVitae’s Biotechnology in 2009 to provide ribonucleic focus is the production of biobutanol using a acid products for academic and industrial proprietary fermentation process and enhanced laboratories. Nucleon plans to leverage recently microorganism platform. At the end of 2008, developed molecular techniques to offer a unique TetraVitae completed a Series A venture capital low-cost, high-throughput RNA synthesis service. funding round with $6.3 million from RPM Ventures, Harris & Harris Group and Illinois Illinois Science + Technology Park Ventures. TetraVitae currently has incubator labs and offices for genetics/biology and fermentation April 2003 marked a sad month for the Midwest: processing for pilot production. The company is the Pharmaceutical behemoth Pfizer acquired largest employer in the EnterpriseWorks incubator. Pharmacia and in the process began the dismantling of Pharmacia operations, including EM Wave Technology is developing technology two once-proud multinational pharma companies for the production of biofuels from biomass G.D. Searle in suburban Chicago and The Upjohn through the application of electromagnetic waves Company in Kalamazoo, Mich. Both of these (EM waves) to facilitate the rapid and efficient well-known Midwest corporate brands started conversion of biomass to ethanol and other fuels in the late 1800s and had over a century of that use sugars as the feedstock. The cost of pharmaceutical tradition across the globe. ethanol from cellulosic substrates is high today

44 BioLogical Quarterly Winter/Spring 2010 The 23-acre, 667,000 square foot Illinois Science + Technology Park is being developed by Forest City.

G.D. Searle was an early innovator in Skokie from Pfizer. Forest City began the pharmaceuticals including oral contraceptives, process of repurposing a 70-year-old, single- new cardiovascular medicine, Metamucil, user enclosed campus into a modern, open, NutraSweet, new anti-ulcer therapy and finally multi-user bioscience campus to become the new approaches to chronic pain management: Illinois Science + Technology Park (ISTP). The the COX-2 inhibitors and Celebrex (a blockbuster campus is strategically located midway between drug). In one fell swoop starting in April the academic scientific prowess of Chicago’s 2003, some 2,500 Searle jobs disappeared in formidable hospitals and universities downtown Chicagoland, mostly concentrated in the town and nearby Evanston, and the large pharma of Skokie: 2,000 of those jobs were focused companies and life science community of on pharmaceutical R&D. Even worse was the Chicago’s northern suburbs – no small task! shuttering of an important Chicago R&D center, which became a ghost town for two years. Five years later, the ISTP’s promise is a reality. Forest City opened up the once-enclosed campus, The challenge for the Illinois bioscience tearing down some non-historic buildings and community and state government was how renovating the scientifically relevant remaining to somehow resuscitate this important legacy structures. The plan for the 23-acre campus is of R&D: Could a foreign pharma company be to add 1.3 million square feet of scientific space attracted to set up operations in Chicago? to the existing 670,000 square feet, eventually After much search, in March 2005, Forest City housing some 5,000 scientists and life science Science + Technology Group, a division of a employees. Today, the ISTP has brought back Midwest-based (Cleveland) publicly traded just short of 1,000 people and jobs and some real estate developer, acquired the former 18 life science companies, including Chicago’s Searle R&D campus (23 acres) in downtown premier nanotechnology commercial hub (with 45 Expanding Infrastructure

ISTP’s building in a thriving biopharmaceutical region – a true at 8045 Lamon community of industry and academic colleagues. offers biology and Its central position in the country also makes it chemistry labs easy for our North American customers to reach with state-of-the- us, and us them.” art conference facilities. The goal of the ISTP is to create for Chicagoland a significant life science mall, containing all the key product development needs for drugs, diagnostics and medical devices, including the key service companies that support the biotech and pharma industry. Today contract research organizations (CROs) such as Midwest BioResearch, contract manufacturing organizations (CMOs) such as Vetter, and industry service groups such as ThermoFisher Scientific, World Courier and Global Pharma Device, are tenants at ISTP. Chicago’s largest hospital group, North Shore University Health Systems (with four hospitals), which recently established a strategic relationship with the University of Chicago, located its IT systems including patient medical information database five Northwestern spin-out nanotech companies and patient call center at the ISTP. and the national nanotech trade association, the With the spectacular growth of nanotechnology NanoBusiness Alliance) and two international into materials, sensors and drugs, and the pharma companies: the Astellas Research proximity of the ISTP to Northwestern University’s Institute of America (ARIA, the U.S. R&D nearby Evanston campus and its International branch of the second-largest Japanese pharma Institute of Nanotechnology, the ISTP has company), its sibling research group (Astellas become a logical home for the flourishing of Pharma U.S.) and the German company Vetter, a such companies as NanoInk (nanometer-scale leading global manufacturer of biotech therapies. manufacturing and applications development for “We are extremely pleased with the Illinois the life science and semiconductor industries), Science + Technology Park,” said Dr. Kouichi Nanotope (investigational spinal cord injury Tamura, senior vice president & director of therapy), NanoIntegris (carbon nanotubes), research at ARIA. “The park facilities have NanoSonix (nanoscale imaging) and Polyera excellent laboratory space for our ARIA scientists (printable electronics). As nanotech branches out to do their important work, and for the company into the world of CleanTech (clean technologies), to accomplish our research goals. The location this could well become the next area of also provides us with access to collaborate with nanotechnology growth at the ISTP. the major research centers located throughout As the United States represents some 40 percent the Chicago area and the Midwest to aid in our of the world’s pharma, drug and medical device research efforts.” markets, there are still many international life Vetter Managing Director Peter Soelkner noted, science companies that are looking for places to “The Illinois Science + Technology Park was our establish a base in the United States. Working destination of choice. Not only does it offer us closely with the State of Illinois’ overseas trade excellent infrastructure and services, it’s located offices (Illinois Office of Trade and Investment) and iBIO’s Ambassador Program, the ISTP offers

46 BioLogical Quarterly Winter/Spring 2010 these companies an optimal location to establish The Peoria NEXT Innovation Center U.S. operations and expand to ﬁt their growth needs. The ISTP is actively involved in recruiting Last year, CNN Money named Peoria as one life science companies from Israel, Japan, India, of the best places to launch a small business Europe and Canada. The ISTP campus offers: due to the low cost of doing business and the business resources provided to entrepreneurs. • State-of the-art wet lab space for biology One of the most prevalent resources offered to and chemistry-based science start-up companies and entrepreneurs is Bradley University’s Technology Commercialization • Two pilot plants for drug product (solid Center (BTCC). Working with researchers, dosage forms such as tablets and pills, and inventors and entrepreneurs the BTCC helps them sterile ﬁll injectables) with class 10,000 and develop business plans and provides funding 100,000 clean rooms. options to help start-up companies grow in the • Conferencing center with auditorium and community. Cooperative efforts of the leading video-conferencing capabilities private and public entities of Central Illinois have fueled this innovation and are committed • Vivarium to helping commercialize new technology. These entities include Caterpillar Inc., Bradley • Nuclear magnetic resonance suites University, The Heartland Partnership, University • Campus café with catering group of Illinois College of Medicine, National Center for Agricultural Utilization Research and the • Easy access to Chicago mass transit (Skokie Biotechnology Research and Development Swift and nearby Morton Grove Metra station). Corporation.

Located near Bradley University, the Peoria NEXT Innovation Center offers ofﬁce and wet/dry lab space for up to 27 companies. Current tenants come from the agriculture, medical, manufacturing, energy and bio industries.

47 Expanding Infrastructure

These partners and many more make up Peoria build physician confidence because data are NEXT and helped build a 45,000 square foot immediately transmitted to a secure location for technology-based incubator in the Heart of storage and follow-up. The ability to view this Peoria called the Peoria NEXT Innovation Center. software on many different handheld systems The BTCC manages the Peoria NEXT Innovation is expected soon. “Without the resources from Center and facilitates the business development the BTCC and Peoria NEXT, such as business of the companies housed there. Located just a classes, mentoring, and affordable office space few blocks away from Bradley University, the and communications, ORQA would have never Peoria NEXT Innovation Center can house up to been able to bring our solutions to market so 27 companies with space for offices and wet/dry rapidly,” said ORQA President and Co-Founder labs. Current tenants are working on technology Mike O’Meara. in the agriculture, medical, manufacturing, energy and bio industries. InformMed

Three such companies in the biotechnology field InformMed was one of the first companies have used the BTCC resources and their own to reside in the BTCC. It provides a handheld ingenuity to get past the difficult start-up phase medication safety tool and dose calculator to of their companies. Online Radiology Quality hospitals around the nation. A Peoria native, Assurance (ORQA), InformMed and Endotronix registered nurse and current company chief believe that being housed at the Peoria NEXT clinical officer, Kathy Francis developed the Innovation Center and utilizing the resources of technology to address medication dosing errors Bradley’s Technology Commercialization Center at the point of care. “The Peoria community helped them gain credibility and investor interest. has provided continued support and a creative environment for InformMed’s continued progress Online Radiology Quality and success. The support that we have received Assurance (ORQA) from the Peoria healthcare community, local business leaders and other entrepreneurial ORQA has been working on reducing the risks companies has been tremendous,” said Donald in healthcare by providing solutions to enable Bauman, vice president of sales and marketing for collaboration and open communication with InformMed. advanced Web 2.0 software. This allows physicians’ departments to report quality and Since its start at the BTCC, InformMed has patient safety issues through a simple-to-use added employees and locations while continuing program that can be searched and analyzed for to pursue and achieve its corporate goals. maximum efficiency. ORQA has developed open- InformMed introduced its second-generation source software to emphasize transparency and solution called ally™ in 2009. ally™ provides collaboration from leading healthcare experts additional features, such as the ability to while also providing Federal protection from scan medication bar codes and wireless disclosure of safety-related information through communication capabilities, to the robust ORQA’s listing as a Patient Safety Organization medication safety features already provided by (PSO). One such expert is Johns Hopkins the InformMed solution. Currently the company anesthesiologist Dr. Peter Pronovost, who has has three hospital clients and two additional provided a checklist on how the world’s health- active pilot implementations. Three additional care community can reduce infections in complex hospitals are expected to implement the system environments like the intensive care unit. later this year. ORQA’s Web-based checklists and safety Endotronix forms are advantageous over paper because they allow integration with electronic medical Founded in 2007, Endotronix, Inc. is a medical records to eliminate data-entry mistakes and device company dedicated to the development

48 BioLogical Quarterly Winter/Spring 2010 of minimally invasive wireless health monitoring activities. Adjacent to UIC’s Medical Center, the products and related data services. The companies in the CTP can easily access UIC’s company’s initial focus was on a monitoring centralized research services, laboratories and tool to address cardiovascular disease, primarily world-class researchers. hypertension and congestive heart failure. “One of the biggest boosts we got from the center was The CTP supports many successful biotech firms it gave us credibility and a great facility to bring that have their origins in the Illinois Medical potential investors to. It really helped us take our District’s major medical centers and regional product to the next level,” said Dr. Harry Rowland, institutions of higher education. For more than chief technology officer of Endotronix. two decades, the CTP Research Center has been home to spinouts from the University of Chicago, Endotronix has since graduated from the Center Northwestern University, University of Illinois, and has licensed two patents from NASA’s Glenn Argonne National Laboratory and other major Research Center for radio frequency (RF) Bio- research institutions. MEMs sensor technology. The Endotronix RF Bio- MEMs sensors can be implanted in the body, and The CTP’s dynamic community helps to fulfill its then wirelessly transmit findings to a handheld mission to assist in the growth of life science or wearable device that transmits the data to companies and to help life science businesses a remote data center. This device will improve flourish. By supplying fully equipped infrastructure healthcare by creating a faster and more effective and access to university resources, internship way to monitor patients’ health. “In the last year programs, world-class talent and custom- we have successfully validated prototypes in designed business development services, the CTP animals and prepared for human trials this year,” works to ensure the success of the companies said Dr. Rowland. that make up its community. Such companies include those in the fields of drug discovery Chicago Technology Park and delivery, medical devices and testing, genomics and nanotechnology. Many collaborate The Chicago Technology Park (CTP) Research with our premier medical facilities to achieve Center was constructed in 1985 as one of the breakthroughs in research and design. first biotech incubators in the U.S. Today, the CTP Research Center ranks among the largest biotech Firms located in the CTP Research Center have incubators in the nation. taken advantage of the available infrastructure and custom-designed business support services At the heart of the CTP are its multi-tenant to grow and develop into successful stand-alone incubation and expansion buildings. The two businesses. In addition, the Research Center largest buildings are the Research Center and fosters a collaborative environment to help start- 2242 West Harrison Building, both of which are up firms apply for government funding and attract owned and managed by the University of Illinois venture capitalists to support their business at Chicago (UIC). With a total of 126,000 square development. feet, they currently lease space to 25 companies and research organizations. The CTP has successfully graduated many firms into the local economy, such as Amgen, The 56,000 square-foot Research Center, with MediChem Life Sciences, United Therapeutics 38 wet labs, is designed primarily for early-stage and Litholink. BQ and emerging-growth companies and offers lab configurations ranging from 400 to 1000 square feet. The 70,000 square-foot 2242 Harrison Building houses emerging-growth companies and is suitable for customization for wet- and dry-lab 49 Serving Business What Payers Want: Viewing Payers as Customers By Linda Heitzman Michelle Poulin Director, Deloitte Consulting LLP Senior Manager, Deloitte Consulting LLP Dhan Shapurji Neil Lesser Director, Deloitte Consulting LLP Senior Manager, Deloitte Consulting LLP

A MORE Not long ago, pharmaceutical (pharma) companies What Is Changing? maintained the most desirable position in the DYNAMIC, healthcare marketplace. They collectively had Recent years have brought a number of changes a steady stock of highly profitable products, with dramatic implications for healthcare industry virtually full control over the data associated with stakeholders. Pharma companies face challenges BALANCED the safety and efficacy of those products and from rising health expenditures, decreasing R&D relatively low barriers to product approval and efficiency and increasing market competition. RELATIONSHIP access. As a result, pharma companies enjoyed They are under pressure to allocate resources significant pricing power with little push back more efficiently, get the most commercial value BETWEEN from payers, public and private sector entities from their approved products and deal with that assume the risk of paying for medical tightening regulatory constraints and increasing price pressures. PHARMA AND treatments. This can be an uninsured patient, a government agency, a self-insured employer Concurrently, payers are challenged by rising or a healthcare plan or health maintenance costs, calls for increased transparency, increased PAYERS organization (HMO). patient influence and policy changes that point Pharma companies largely viewed payers as to more government involvement in the future. administrators and intermediaries, different than In response, payers are establishing therapeutic the traditional pharma “customers” of physicians guidelines, managing access more tightly and and patients. As long as pharmaceutical products scrutinizing drug pricing. These actions make were safe and effective, doctors could prescribe them a major stakeholder in commercialization, them, patients could get their prescriptions filled and place additional pressure on pharma and payers would reimburse costs. companies to demonstrate product value and rethink their commercial models. For instance, But recent developments in the healthcare two recently announced drug deals tie product industry are redistributing the balance of power prices directly to patient outcomes, harbingers more equally. Compared to several years ago, of things to come in a world of evidence-based the industry is now characterized by increased medicine and comparative effectiveness. information transparency, more crowded therapy areas and a focus on reducing pharmaceutical In short, marketplace changes have affected spend. These trends and the subsequent shift both payer organizations and life sciences of some bargaining power to payer groups are companies, and they need to adjust accordingly. changing the dynamics of the pharma-payer The sum effect will be a more dynamic, balanced relationship. Pharma organizations now need to relationship between the two – pharma rethink their commercial model, collaborate with companies will no longer hold the privileged stakeholders and adopt strategies built around a position of unilateral decision-makers, and payers view of the payer as customer. will wield increased bargaining power. Pharma

50 BioLogical Quarterly Winter/Spring 2010 companies will need to look beyond prescribers, cost-effectiveness and budgetary impact learn to view payers through a customer service second and third behind therapeutic beneﬁts. lens and strive to anticipate and respond to the As a health plan executive stated in an interview, evolving needs of payer organizations. “Manufacturers need to prove value and superiority over other options. They need to What Payers Want provide data beyond the FDA approval standards.”

Through research and interviews with public Additionally, surveyed payers want research that and private sector payer executives, Deloitte is robust and reliable. Payers don’t completely endeavored to answer the question that should be trust the information provided by pharmaceutical on every pharmaceutical executive’s mind: “What sales reps, and they are frustrated by the lack of do payers want?” We found that most payers are information available to drive true comparative primarily seeking three things to help them deal studies and modeling. Consequently, they are with the evolving healthcare landscape: seeking improved access to information from sources and studies that they do trust. • Demonstration of pharmaceutical products’ real value A Potential Solution • Assistance with cost management Pharma companies need to provide the information being sought by payers – specifically, information • Less contentious relationship with pharma such as comparative effectiveness, cost- companies. effectiveness and real-world data. If pharma companies do not do so, public and private sector To meet these needs and treat the payer as a payers will likely develop and fund their own health customer, pharma companies will want to develop outcomes research, real-world trials and head-to- three distinct capabilities: improved information, head studies. Simply put, unless pharma companies advanced contracting and superior service. In begin to provide the outcomes-focused, objective combination, these capabilities should enable information sought by payers, they risk ending pharma companies to develop a broad set of up outside the debate about their own products’ value-added services that address payers’ needs. efficacy, safety and value. Outcomes data and Improved Information health economics need to be ingrained throughout the pharma value chain to include R&D, not just Payers are looking beyond safety and efficacy commercialization. To meet payers’ information information for new therapies; they seek objective needs, pharma companies must build the capability research focused on health outcomes. Many of to conduct a wider range of conclusive studies our interview respondents stated that pharma covering comparative effectiveness across companies maintained an unrealistic view of products and standards of care, epidemiological the true value that their products brought to meta-analyses, patient-reported outcome analyses patients. Pharma companies need to substantiate and retrospective database analyses to both their products’ value by providing payers with commercialize and develop their products. information that can be used for health economic analysis, enabling payers to make better decisions Exceptional Service regarding reimbursement and coverage. Payers also desire a customer-centric provision Understanding the Need of services via enhanced relationships that incorporate a true understanding of payers’ needs While clinical efficacy and safety remain the and add value with individualized approaches. key measures in life sciences decision making, Similar to the “high-touch” strategies that have surveyed payers in the European Union ranked been adopted to better serve physicians and 51 Serving Business

patients, pharma companies can address payer of data transparency and account teams with needs by delivering an enhanced total customer poorly aligned incentives and high turnover. On experience. the other hand, life sciences companies have typically viewed payers as barriers to appropriate Understanding the Need prescribing, claiming that their formulary The payer/pharma relationship has historically management techniques create ﬁnancial hurdles been adversarial. Payers complain about pharma for approval and that their lobbying of providers companies’ aggressive marketing practices, lack and patients may be overstepping bounds. Payers

Figure 1: Range of Payer Partnerships

Developing a Payer-centric Strategy A recent study by Deloitte and the Economist Intelligence Unit found that 75 percent of pharma company executives surveyed agree that major changes are needed in some or all parts of their organization to address future risks. The changes currently under consideration conﬁrm that delivering improved information, exceptional service and advanced contracting are keys to meeting payer organizations’ needs. Adequately addressing these needs will require pharma companies to develop a strategy that aligns with payers’ different business objectives. For many pharma companies, this will require signiﬁcant cultural shifts to build consensus on the importance of the payer customer and a willingness to reallocate resources away from traditional customers (e.g., physicians) to payers. Developing and maintaining a successful “Payer as Customer” strategy (Figure 2) follows an iterative process that is guided by a set of key questions.

5252 BioLogical Quarterly Winter/Spring 2010

Serving Business

Figure 2: Developing a Payer-as-Customer Strategy

• Does your organization possess the necessary capabilities to deﬁne payer strategies, broadly develop its value propositions and design and measure advanced contracting arrangements? (e.g., market research, data mining, predictive analytics)

• Where are the functional gaps to overcome in order to address new payer demands?

• What are the measures of success (e.g., increased revenues, faster coverage, favorable positioning) and how do your organizational capabilities support their communication?

A Final Thought As the healthcare landscape evolves, the relationships between individual stakeholders will continue to change as well – particularly the relationship between pharmaceutical companies and payers. As payers continue to gain influence in the funding and reimbursement of healthcare, pharma companies must shift their fundamental perception of these organizations so they are viewed not as an obstacle or mere counterpart, but 1. Gain Payer Insight as a customer. To facilitate this process, pharma companies must first develop insight into their payers’ specific There is no one-size-fits-all approach – as with any customer needs. They can then begin to develop a strategy tailored to strategy, the first step is to understand specific needs. meet those needs, and build the capabilities necessary to • Which payers are the most important to the business and implement their strategy in a way that fully incorporates payers how do those payers honestly view your organization and into their customer-centric model. products? For Further Information, Contact: • What are the key drivers underlying the payers’ needs? • Which needs should be prioritized? Has the priority Terry Noetzel at [email protected], or David Flowers changed? at dfl[email protected]. Terry Noetzel is a Principal with Deloitte Consulting LLP, the leader of the Midwest Life Sciences 2. Define Strategy practice (www.deloitte.com/us/lifesciences), and an iBIO board Developing and delivering a rich customer experience requires a member. David Flowers is a life sciences industry specialist broad strategy that is built around payer needs and aligned with with Deloitte Services LP and is actively involved with iBIO. overall business objectives. Both Terry and David are based in Chicago and have substantive • Which key variables should be used to segment payer experience working with a variety of life science organizations. customers? 7KLVSXEOLFDWLRQFRQWDLQVJHQHUDOLQIRUPDWLRQRQO\DQG • What are you already doing well and can you leverage those LVEDVHGRQWKHH[SHULHQFHVDQGUHVHDUFKRI'HORLWWH approaches? SUDFWLWLRQHUV%HIRUHPDNLQJDQ\GHFLVLRQRUWDNLQJDQ\ • What are your competitors doing well? DFWLRQWKDWPD\DIIHFW\RXUEXVLQHVV\RXVKRXOGFRQVXOW • Does this strategy apply to your global organization across DTXDOL¿HGSURIHVVLRQDODGYLVRU'HORLWWHLWVDI¿OLDWHV all therapeutic areas or is it better to be applied selectively? DQGUHODWHGHQWLWLHVVKDOOQRWEHUHVSRQVLEOHIRUDQ\ORVV VXVWDLQHGE\DQ\SHUVRQZKRUHOLHVRQWKLVSXEOLFDWLRQ 3. Improve Capabilities Assess existing core competencies and prioritize improvements $VXVHGLQWKLVGRFXPHQW³'HORLWWH´PHDQV'HORLWWH in key areas, such as information technology, data analytics, &RQVXOWLQJ//3DVXEVLGLDU\RI'HORLWWH//33OHDVHVHH health economics and pricing and contracting. ZZZGHORLWWHFRPXVDERXWIRUDGHWDLOHGGHVFULSWLRQRI WKHOHJDOVWUXFWXUHRI'HORLWWH//3DQGLWVVXEVLGLDULHV

&RS\ULJKW'HORLWWH'HYHORSPHQW//&$OOULJKWVUHVHUYHG

54 BioLogical Quarterly Winter/Spring 2010 want a level of service commensurate with the pharma companies to help payers address status of a valued customer, and they are actively their need to manage costs. As one health plan seeking ways to build better relationships. executive put it, “Companies need to stand by their product and share the risk.” As such, payers A Potential Solution are looking for pharma companies to engage as The assertive “corporate sales rep” approach will an active participant in the treatment process. not adequately serve payers in the future; the Advanced contracting can enable pharma next generation of account managers will need companies to engage payers on multiple levels, to bring a much broader knowledge base and skill with links to a wide range of payer cost and set to the table. They will need to have strong risk management objectives, including cost- clinical understanding of disease states and effectiveness, downside protection, value-based knowledge of a broad portfolio of product options. pricing and addressing unmet treatment needs. Their focus cannot be solely on getting the next sale, but on building strategic relationships that A Potential Solution tailor services to meet the specific needs of each Payer Partnerships (PPs) are a flexible risk-sharing payer and create long-term value. and cost-management mechanism that offers a means for pharma companies to substantiate By adopting a next-generation Key Account their products’ value propositions and share with Management model, pharma companies can payers a portion of the financial risk associated efficiently convey scientific data and clinical case with treatment. PPs span a range of forms (Figure studies from peer-reviewed literature, ample 1), from traditional partnerships centered on knowledge of the reimbursement and legislative education programs, to leading-edge value-based environment and deeper understanding of the partnerships built on outcome performance customer’s preferences and service needs. This guarantees. While not appropriate for all products enhanced model can provide an exceptional or markets, properly designed and executed PPs service experience by coordinating across sales, can provide value to pharma companies, payers marketing, government affairs and clinical and patients. PPs can support brand strategies, resources to support the account. Above all, it increase collaboration with payers, support provides a single, reliable face to the client. demonstration of product value and improve patient care by promoting access to the right Advanced Contracting product for the right patient. BQ Payers seek contracts that enable shared responsibilities for the administration and provision of cost-effective healthcare, including education, compliance and other industry challenges. Pay-for-performance arrangements and support of treatment compliance can enable payers to better control the total cost of successfully treating patients. This new paradigm is often referred to as Advanced Contracting. Understanding the Need Payers now expect a more favorable – they would say equitable – distribution of accountability. As their costs continue to climb, questions arise regarding the strength of product claims. Advanced Contracting arrangements can enable 55 Serving Business Biotechnology Patenting: What You Need to Know By Bradley W. Crawford, Partner Andrew W. Williams, PhD, Partner Kevin E. Noonan, PhD, Partner

Even under current economic conditions, protect its technology with patents is that they pharmaceutical companies and venture capitalists are important for attracting investment. While (VCs) are looking to invest in biotechnology. granted patents provide a higher degree of However, before investing in these entities certainty regarding what technology a company perform due diligence on a company’s technology, can protect, most investors will be satisfied with critically including the company’s intellectual a portfolio consisting of patent applications, if property protection. If the intellectual property they are properly drafted. does not provide adequate protection, the company may not attract investment. Clearly, When to File a Patent Application robust intellectual property protection is essential. A company should file patents on its technology This article will highlight the intellectual property as soon as reasonably possible after the company needs of small or start-up biotech companies. has developed a new product or method. Doing so will provide the earliest possible priority date Obtaining a Patent and will help reduce the prior art that the United States Patent and Trademark Office (USPTO) can For a biotech company to protect its technology, WHEN TO FILE apply against the invention. This is particularly patents are the most valuable form of intellectual important in instances where there will be a property protection, because they allow the patent A PROVISIONAL public disclosure of any kind, especially any time owner to prevent others from making, using, a disclosure is not made under a confidentiality selling, offering for sale or importing the claimed agreement. This is so because most countries OR UTILITY invention. Other types of intellectual property, have an “absolute novelty” requirement, so that a such as trade secrets, are rarely adequate (often patent cannot be obtained unless an application is APPLICATION because the product may be reverse-engineered filed prior to public disclosure. Specific examples so that any secrecy is destroyed). of potentially patent-defeating disclosures include Patents, including those protecting biotechnology a scientist presenting her work at a conference or inventions, confer the right to exclude others from publishing an article. On the other hand, once an practicing the patented invention for up to 20 application is filed, any disclosure within the scope years from the patent application filing date. It is of what is included in the application protects the important to note that the patent grant is a wholly company from loss of rights. In contrast to most negative right; for example, many biotechnology other countries, a U.S. patent applicant has a one- inventions must satisfy regulatory requirements, year grace period from disclosure, sale or offering such as those of the United States Food and Drug to sell an invention, but it is better to file an Administration (FDA), before a product can be application before any activity that could defeat sold. In addition, even for patentable inventions, patent rights. there may be third-party patents that can block Since the scope of protection often depends on commercialization of a company’s invention. whether the invention is disclosed with sufficient Besides these practical considerations, another information for one of ordinary skill in the art to important reason for a biotech company to appreciate what the inventor has invented and to

56 BioLogical Quarterly Winter/Spring 2010 practice the invention without requiring undue experimentation, we strongly advise having the help of an experienced patent attorney. What Type of Application to File In the United States, there are two options for ﬁling a patent application: a provisional and a utility application. Each has its own set of properties and protections.

A provisional application (“provisional”) is particularly useful for biotechnology and chemical companies. A provisional establishes a filing date for whatever it discloses, but it is not examined by the USPTO. Indeed, a provisional automatically expires one year after its filing date (unless it is converted into a utility application). Moreover, a provisional does not require claims, so that the precise scope of an invention can remain unspecified. This is particularly useful when additional research is required, for example, to identify The other type of U.S. application is a utility advantageous or preferred embodiments of an application (“utility”). A utility patent application invention. claiming priority to a provisional will typically A provisional should contain as much disclosure include any additional inventions, experimental as possible, since the same standard used for data or other relevant information generated by judging sufficiency of disclosure in a utility the inventors during the priority year. In addition, application is used to evaluate the scope of any the utility patent application must contain priority provided by a provisional. Thus, it is at claims that define the metes and bounds of the least sub-optimal and can be disadvantageous to invention. Thus, preparing a utility application file merely a manuscript or invention disclosure usually requires additional drafting. The utility synopsis without more, since such disclosures patent application is examined with regard to may be deemed later not to satisfy the statutory whether the invention has been described with requirements and cause priority problems either sufficient particularity and breadth that one in the U.S. or abroad. having only ordinary skill in the art to which the invention relates will recognize that the inventor Filing a provisional establishes a priority date that has invented what is claimed. In addition, the can be useful in situations when two different application must describe how to make and applicants claim the same or closely related use the invention so that the ordinarily skilled inventions. Another advantage is that while worker can practice the invention throughout providing a priority date, the term (20 years) of any the entire scope of the claims without undue United States patent claiming priority from the experimentation. Uniquely in the United States, provisional(s) is not impacted. Having this extra year an inventor must disclose the best mode (if there can be very profitable for drug products, extending is one) of practicing the invention known to her on the time of maximum profits from drug sales. the filing date. And finally, the utility application 57 Serving Business

CHOOSING must include at least one claim that defines what Where to File a Patent Application the inventor considers to be her invention. A biotechnology company will typically want COUNTRIES The claims are exceedingly important because United States patent protection. Filing a United they define the subject matter to be protected; States application (either provisional or utility) FOR NATIONAL claims provide the legal definition of the invention. makes it possible to file the application abroad Claims are single-sentence descriptions that within one year of the earliest priority date FILINGS are in many ways like a plat description of real under the terms of an international treaty, the estate or a fence surrounding land, delineating Paris Convention. The easiest and most cost- efficient way for a biotechnology company to DEPENDS the boundaries of what is and what is not the invention. Since claims are descriptions in words take advantage of this opportunity is to file an of tangible objects (machines, manufactures or application using the provisions of the Patent ON SEVERAL compositions of matter), or methods of making Cooperation Treaty (PCT), which preserves and using tangible objects, they are subject to the right to file in over 170 countries. A PCT FACTORS, ambiguities of language that are best addressed application delays the deadline for filing in each by making sure there is a close correspondence country from 12 months to 30 months (31 months in some countries) from the earliest priority INCLUDING THE between what is claimed and what is described in the application. Claims are probably not something date, and can be filed in English in the USPTO. that a non-attorney can reliably prepare, because In addition, filing a PCT application entitles an NATURE OF THE it is in the claims that most of the arcane minutiae applicant to a prior art search by an international of patent law resides. searching authority (typically performed in the INVENTION USPTO or the European Patent Office). Such It should also be noted that in the United a search may uncover references that were States, patents are only granted to inventors. unknown to the applicant at the time of filing Consequently, filing a utility application requires of the application and influence decisions on that only those individuals who satisfy the whether or where to file the application abroad. inventorship requirements are named as inventors. It must be emphasized that properly Which countries are chosen for national filings identifying the inventors is a legal question that is is a question that depends on each company’s best addressed by experienced patent counsel. business model, the funds available for protecting the invention, the investment status and the Although patent applications can be drafted by nature of the invention. As a general rule, patent anyone having a sufficient technical background protection should be sought in any country with a to understand the invention, patent applications sufficiently large market for selling the company’s are complex legal documents and the scope products, or a sufficiently developed commercial of protection that can ultimately be obtained or industrial infrastructure to make such products. can depend on how the application is drafted. Accordingly, consulting an experienced patent The Patenting Process attorney and getting her help in preparing the application is prudent. This doesn’t mean that Patent prosecution is the process of examining technical or business people at a biotechnology an application in the USPTO. After filing, an company should not participate in drafting the application is assigned to an art unit of examiners application. Indeed, the efficiency of drafting trained in the relevant technology area. Usually, increases, and the cost can decrease, when a the patent application is published within 18 company’s scientists are active participants in months after its earliest priority date, with the patent drafting process. Business people’s most applications being examined thereafter. contributions can also be critical, since a patent claim Examination entails a prior art search by the is most valuable when it properly encompasses the examiner, comprising patents, patent applications company’s products and technology. and printed publications (in the biotechnology area, these comprise mostly peer-reviewed

58 BioLogical Quarterly Winter/Spring 2010 articles in the scientiﬁc literature). The examiner assesses whether the claimed invention was known in the prior art, or would have been obvious to the ordinarily skilled worker in view of the art. In addition, the examiner determines whether the claimed invention is useful and has been adequately described in the speciﬁcation.

Generally, some defects in the application or claims are identified by the examiner, who issues an Office Action requiring the applicant to address these defects. Responding to an Office Action can CUT R&D TIME IN HALF include amending the claims, making arguments or (typically) both, and this process can continue SAVED STRATEGIC ALLIANCE until the examiner allows some or all of the claims, the applicant appeals the examiner’s rejections, or the applicant abandons the application. Like claim BROUGHT PRODUCT FIRST TO MARKET drafting, responding to an Office Action ideally involves a company’s scientists, business people WE’VE HELPED GLOBAL GIANTS AND START-UPS ALIKE MEET THEIR TOUGHEST GOALS. and its patent attorney.

In this article we outlined only the basics of LIFTED FDA WARNING LETTER protecting biotechnology inventions, with a goal of maximizing the value of a company’s SLOWED BURN RATE intellectual property and attractiveness to investors. It is only the basics, however, and we would be happy to expound (at length) to anyone SHRANK QA RELEASE TIME willing to contact us. WE DON’T HAND YOU A PLAN AND WALK AWAY. For Further Information, Contact: WE WORK WITH YOU SHOULDER TO SHOULDER UNTIL THE JOB IS DONE. Brad Crawford at [email protected], Kevin Noonan at [email protected] or Andrew Williams at [email protected]. Brad Crawford, Kevin Noonan and Andrew Williams are partners at McDonnell Boehnen Hulbert & Berghoff LLP, (mbhb.com) a Chicago-based law ﬁrm that specializes in intellectual property law. Brad, THE LEADER IN PROFESSIONAL Kevin and Andrew have extensive experience PROJECT MANAGEMENT SERVICES in preparing biotechnology and chemical patent 630.789.8600 WWW.IPMCINC.COM applications and in biotechnology related licensing and litigation. BQ

59 Biotechnology Update Biotechnology 2010: Fulﬁlling the Promise to Heal, Fuel and Feed the World By James Greenwood President and CEO, Biotechnology Industry Organization

in our industry who conduct the vital research and development work that will help treat previously untreatable diseases, grow more crops on available land, prevent pollution and environmental degradation at the source and Jim Greenwood develop advanced, renewable sources of energy. delivers keynote at 2009 BIO The science of biotechnology isn’t easy. Nature International does not readily yield her secrets. Still, every Convention. day in nearly every country on Earth our brilliant scientists decode a bit more of the language of life. The science continues to astonish and amaze. Today, there are more than 250 biotechnology health care products and vaccines available to patients, many for previously untreatable diseases. More than 13.3 million farmers around the world use agricultural biotechnology to increase yields, prevent damage from insects A PROUD and pests and reduce farming’s impact on the environment. And more than 50 biorefineries TRADITION OF are being built across North America to test and refine technologies to produce biofuels and chemicals from renewable biomass, which can This May, the global biotechnology industry RESEARCHING help reduce greenhouse gas emissions. will convene in Chicago, Ill., for the 2010 BIO AND International Convention. There, we will celebrate The industry continues to strive to fulfill the our accomplishments, discuss our common promise to heal, fuel and feed the world. More challenges, learn about new technologies and than 600 new biotechnology medicines are DEVELOPING trends and seek new opportunities for investment currently being developed and tested for more and collaboration. We arrive in Chicago during than 100 diseases. Drought-tolerant crops are in BREAK- a period of great uncertainty and great hope for development that will help farmers to maintain our industry. The global economic downturn has yields while conserving water resources. THROUGH hit our industry hard but the fundamentals — the Continued advances in the area of transgenic brilliant promise of our science — remains strong. animals will enable researchers to investigate new disease treatments, produce natural PRODUCTS America’s biotech industry is committed to material and expand scientific knowledge. And continuing our proud tradition of researching industry scientists are deploying new tools, such and developing breakthrough new products and as synthetic biology and genetically enhanced technologies that address some of the greatest microbes that require only sunlight and carbon challenges facing our global population and our dioxide, to enable bioprocesses for biofuels and planet. It is the passionate, committed people chemicals.

60 BioLogical Quarterly Winter/Spring 2010 Photograph courtesy of BIO The High Cost of R&D therapy, bioinformatics, animal biotechnology and other fields shows the way toward whole new The research and development of innovative generations of biotech products. biotech products is an expensive and uncertain process, and companies require substantial Even as we cheer these scientific resources if they are to translate basic science into accomplishments and study economic data beneficial products. For instance, the development for signs of improvement, we must remember of a new biotech therapy can cost $1.2 billion over the role of public policy in advancing biotech a decade or more from the time research begins innovation. We know that biotech innovation has until the drug is prescribed for patients. And one always been a high-risk enterprise and always estimate of the cost of building enough advanced will be. But we can improve the odds. Even with biofuel plants to meet the Renewable Fuel the best scientists practicing the most cutting- Standard is more than $100 billion. edge science in the best-run businesses, it is more important than ever for us to make sure that Biotech companies depend on investor capital and policy makers around the world make policy that other financing sources to fund their development values and incentivizes innovation. efforts. The ongoing financial downturn has left many biotech companies unable to access the Health Care Reform capital they need to continue their work. And when investment dollars are limited, innovative, In early 2009, it was widely expected that the research-intensive start-up companies in our U.S. Congress would adopt comprehensive health industry are often among the first casualties in the care reform legislation. This effort proved far fight for assets. Last year’s economic recession more difficult and time-consuming than many had a tremendous impact on our industry, forcing observers anticipated but after months of debate companies to curtail projects, lay off workers and the President signed legislation on March 23, in some cases close their doors. Even at the start of 2010, that promises to transform significantly 2010, biotech companies with promising research our nation’s health care system. The debate over continue to have difficulty securing investment the broad shape and fine details of health care funds. As of January 2010, for example, 38 percent reform was lengthy and vigorous. While careful of publicly traded U.S. biotechnology companies deliberation is certainly appropriate for such had enough cash on hand to fund one year of an important initiative, uncertainty about the operations, and 24 percent had only six months’ outcome kept cautious investors on the sidelines worth of cash in reserves. until the final shape of health care reform became clear. There are signs that investor confidence in If biotechnology companies are forced to delay biotechnology has increased somewhat now that promising projects for lack of funding, we risk the bill has been signed into law. losing innovations that can improve health, increase food production and reduce our reliance While BIO continues to analyze the full on oil, while also creating high-wage innovation implications of the new law for the biotechnology economy jobs and continuing our country’s industry, the new law does provide some position as the global leader in biotech innovation. resolution on several critical issues of concern to the biotechnology community surrounding Despite the current economic challenges, health care reform, including biosimilars and the the long-term prospects for biotech remain Therapeutic Discovery Tax Credit. strong. Our companies continue to innovate at a breathtaking pace. There were heartening The new health care law includes provisions signs in 2009, including the positive outcomes of to authorize an approval pathway for clinical trials across several key areas and Food biosimilars — sometimes inaccurately referred and Drug Administration (FDA) approvals of new to as “biogenerics.” Both the House and Senate products. Research in synthetic biology, gene adopted, by overwhelming bipartisan margins, 61 Biotechnology Update

GLOBAL PUBLIC language that strikes the critical balance and immediate relief. The Therapeutic Discovery among promoting patient safety, expanding Project Tax Credit included in the new health care POLICIES MUST access, lowering costs and promoting continued law provides a tax credit to small and emerging innovation. The approach taken in the final law biotechnology companies to help offset a portion employs a fair, common sense approach similar of resources spent on therapeutic development VALUE AND to the process and timeline currently in place for activities, including hiring scientists and generic versions of chemical-based medicines conducting clinical studies. These credits will help INCENTIVIZE such as aspirin and statins. Importantly, the sustain projects that promise new therapies while biosimilars provisions will help ensure patient also creating and saving thousands of U.S. jobs. INNOVATION safety and presume that biosimilar manufacturers Companies with 250 or fewer employees will be will be required to perform clinical testing to eligible for the $1 billion Therapeutic Discovery secure approval. The provisions also allow the Tax Credit for expenses made in 2009 and 2010. original developer of a biologic to protect the proprietary data used to develop the medicine for Additional items in the new law impacting the at least 12 years, with a potential of six additional biotechnology industry include: months for conducting pediatric studies (at the • The Cures Acceleration Network — request of the FDA). This period of exclusivity will help speed the development of next is key. A shorter exclusivity period would have generation medicines, treatments and cures prematurely deprived biotech innovators of by providing federal grants to promising their intellectual property and deprived biotech projects in the public, private, academic and investors of adequate time to gain a return on research communities. This provision also will their investments. Establishing a strong and fair help expedite FDA review of highly innovative pathway for biosimilars will lower costs and safe and effective treatments for patients. increase access while giving investors greater confidence in backing biomedical innovation. • An Independent Agency for Comparative Effectiveness Research — an independent, Both settling health care reform and establishing nonprofit institute to conduct research a balanced biosimilars pathway will improve the to compare the clinical effectiveness, policy environment and strengthen the overall risk and benefits of two or more medical investment climate for the health care biotech treatments, services or items. Provides that sector, but many companies need more direct such research information cannot be used Much of BIO’s to determine coverage and reimbursement. work focuses on advocating • Separate billing codes for Part B for legislation biosimilar products — an increase in that encourages the Medicaid rebate — to 23.1% of Average biomedical Manufacturer Price. innovation and An Independent Payment Advisory supports the • nation’s food, health Board — establishes a 15-member and energy needs. Independent Payment Advisory Board (IPAB) with significant authority with respect to Medicare payment rates.

Implementation of the new health care law will be a top policy priority for the industry in 2010. Other health care related priorities for the year include maintaining strong intellectual property

62 BioLogical Quarterly Winter/Spring 2010

Biotechnology Update

(IP) protections; beginning negotiations with the loan guarantees for biofuel projects. In December FDA regarding reauthorization of the Prescription 2009, the U.S. Department of Energy announced Drug User Fee Act; continued focus on improving grants totaling $600 million for construction of 19 the performance of the FDA; ensuring that the advanced biorefineries to produce biofuels and FDA receives appropriate funding to fulfill its chemicals, the largest single federal investment in public health, safety and regulatory missions; and advanced biorefineries to date. adequately funding other agencies, including the National Institutes of Health and the Biomedical BIO will advocate for tax credits that promote Advanced Research and Development Authority. early-stage research in biofuels and biochemicals by rewarding innovation and Food and Agricultural first commercialization. BIO also will advocate expanding grant programs for both biofuels and Biotechnology chemicals, a tax credit that incentivizes adoption In September 2009, the Obama Administration of biobased products, and recognizes parity for launched a new global food security initiative that algae-based biofuels and products. will focus on addressing the root causes of hunger Fulfilling the Promise BIO WILL by investing in technologies and infrastructure that will make farming more productive and BIO will continue to engage with leaders in profitable in developing countries. Agricultural ADVOCATE FOR Washington to ensure that policies support an biotechnology has an important role to play in economic environment and public policy regime these efforts. BIO met with the State Department TAX CREDITS that encourage innovation. Now more than on this Global Food Security Initiative, which ever, we need supportive policies to sustain recognized the contributions biotechnology can biotechnology innovation and investment, so that THAT PROMOTE make to feed the world. our industry can continue to translate scientific Throughout 2010, BIO will continue to meet with discovery into useful products. Millions of people EARLY-STAGE the administration and other officials to help are waiting, some for a new treatment or a hope them recognize that agricultural biotechnology is for cure, others for tools to enable economically, RESEARCH IN integral to the goal of enhancing global food and nutritionally and environmentally sustainable food energy security because it enables sustainability production, and nearly everyone for a more livable BIOFUELS AND and productivity in crop production, animal environment. Biotechnology provides the best husbandry and forestry. BIO seeks to ensure that chance we have to end the waiting and fulfill the promise. BQ BIOCHEMICALS this is reflected in the federal regulatory process governing biotechnology-derived products. Industrial & Environmental Biotechnology In formulating proposed rules for the Renewable Fuel Standard in May 2009, the U.S. Environmental Protection Agency explicitly recognized the improvements biotechnology brings to biofuel production, finding that use of biotech enzymes in biofuel production can significantly reduce transportation emissions compared to gasoline. Also, the American Recovery & Reinvestment Act included $800 million for biomass projects and $500 million for

64 BioLogical Quarterly Winter/Spring 2010 Setting Innovation in Motion We’re driven to improve people’s lives. Takeda strives toward better health for individuals and progress in medicine by developing superior pharmaceutical products. At Takeda, we make a commitment to make a difference.

Takeda Pharmaceuticals North America, Inc. Takeda Global Research & Development Center, Inc. www.tpna.com © 2008 Takeda Pharmaceuticals North America, Inc. Biotechnology Update Why the 2010 BIO International Convention Is Important for Illinois By Dr. Norbert Riedel James L. Tyree Chief Scientiﬁc Ofﬁcer, Baxter International Inc. President, Abbott Biotech Ventures Inc.

Dr. Norbert Riedel in aiding biotech entrepreneurs via small seed (l.) and James Tyree grants. Furthermore, government initiatives and have collaborated partnerships between large and small companies for years on behalf help spur innovation by sharing risk and reward. of the biotech community Illinois’ Department of Commerce and Economic in Illinois and Opportunity (DCEO) contributed public funding throughout the to PROPEL, and was also hugely instrumental in Midwest. attracting the BIO Conference to Chicago in 2006. DCEO and a number of local companies recognize Global and local business leaders and that it is in our collective best interest to promote entrepreneurs from the fields of healthcare, and support a robust biotech industry in Illinois. Not agriculture and industrial technology will only does the biotech industry have tremendous converge at McCormick Place in early May for the opportunity for long-term growth and economic 2010 Biotechnology Industry Organization (BIO) impact, but it creates a strong pull for a highly International Convention. trained workforce that can contribute on a number of levels. Large companies such as Abbott, Baxter, Clearly a conference of this size has importance Takeda, Astellas and ADM, as well as smaller ABBOTT AND to the City of Chicago in terms of the attention companies, such as NanoInk and Nanosphere, are and revenue generated by its presence here. But active members of the local biotech community. BAXTER EACH the conference has further meaning for all of Their work creates a competitive job market, Illinois. In short, it’s about two things: creating offering well-paying jobs that attract and retain the HAVE MULTI- high-paying jobs and advancing education. best and the brightest employees. Before we look forward to the potential impact Efforts are also underway to improve our state’s MILLION of 2010 BIO, let’s look back to 2006. That year home-grown biotech workforce, which includes was the first time that BIO held their annual young people with a passion for science and DOLLAR convention here, and the event was the largest a determination to make a difference. iBIO’s and most successful of any BIO International educational arm, the iBIO Institute, developed the Conference, attracting more than 19,000 INITIATIVES TalentSparks! program as part of the BIO 2006 attendees to Chicago and prompting BIO to return legacy goals, to train educators to incorporate this year and again in 2013. biotechnology concepts in Illinois high school SUPPORTING classrooms. Industry has also stepped up through The impact can still be seen and measured today. company-specific programs. For example, Abbott Industry and government alliances formed at the STEM and Baxter each have multi-million dollar initiatives time to promote job creation and improvements supporting science, technology, engineering and in science and math education continue to thrive. math (STEM) education in Chicago and around EDUCATION The Illinois Biotechnology Organization (iBIO), just the state. Other companies are making similar up and running in 2006, now has mechanisms efforts to advance education today and to nurture in place to assist biotech start-ups, including inventors and innovators of tomorrow. the PROPEL® program. Created with private and public funding, PROPEL has been successful

66 BioLogical Quarterly Winter/Spring 2010 Many such innovators are already hard at work • Developing statewide STEM learning in our state’s academic powerhouses, such as exchanges, increasing access to learning Northwestern University, Illinois Institute of tools and educational programs. Technology, and the University of Illinois. These and other academic institutions fuel commercial • Expanding PROPEL to provide more support entrepreneurship, with technology transfer to biotech start-ups. leading to start-up companies located across • Supporting the Illinois Science and the state, including in the Illinois Science and Technology Coalition’s efforts to attract Technology Park in Skokie. more federal research and development The 2010 BIO conference will help shine the funding into Illinois. spotlight on the progress being made in Illinois, • Advocating for creation of a state science but also on the need for further action. Illinois fellows program within the Ofﬁce of the Senate Bill 1522, the Emerging Technology Governor, to provide advisors to key state Industries Act, is a step in the right direction. government agencies. This bill empowers the DCEO to establish and maintain a program to award grants to emerging- These efforts will foster a climate where technology enterprises in the state. This kind of innovation thrives and companies are born incentive encourages new businesses to locate and nurtured. Illinois is already a biotech hub. and stay in our state. Groundbreaking research and developments in every area of biotechnology are taking place at The 2010 conference has already served as companies and academic centers across this region. a catalyst, bringing together local business, education and government leaders to help plan, If we commit ourselves and take action, we will support and implement aspects of the event as continue to see real job creation and long-term well as the legacy that will follow. Legacy goals educational results. We hope 2010 BIO in Chicago for 2010 BIO include: will encourage others to join us in striving to achieve these goals, for the good of the entire state. BQ • Expanding TalentSparks! and other successful programs to positively impact more students and teachers.