North Carolina’s principal biotech industry organization’s incoming president and CEO this week said he intends to double the state’s biotech workforce by 2020 and gain additional state government funding for the industry.
Norris Tolson, who will give up a cabinet position in North Carolina’s state government to take the group’s reins, told BioRegion News last week he plans to make no changes to the structure or personnel of the North Carolina Biotechnology Center, where he has been a director since 2000.
“I believe in setting goals high,” said Tolson, who will remain an ex officio member of the NCBC board. “And we will look very hard for new opportunities we ought to be engaged in, and then we’ll go down to our legislature and try to encourage them to invest in it.
“Many of the folks in this legislature that we’re working with are old colleagues of mine from when I was in the General Assembly,” he added. “I think we can find ways to invest together.”
On June 29 Tolson stepped down as secretary of revenue under Gov. Michael Easley to take the biotech group position. As CEO of the NCBC, Tolson, 67, said he aims to boost biotech employment by around 40 percent to 66,500 by 2013 and to 125,000 by 2023.
“We’ll get there before then,” Tolson predicted.
Those were goals Tolson helped lay out in 2004 as a steering committee member of a panel named by Easley to examine how the state’s biotech industry should grow.
The panel issued its findings in “New Jobs Across North Carolina: A Strategic Plan for Growing the Economy Statewide Through Biotechnology,” at a time when North Carolina companies employed 18,500 biotech workers, or 9 percent of the nation’s biotech workforce.
Tolson’s challenge will be to meet the expectation of biotech leaders that the biotech center will grow along with the industry, according to a board member and longtime venture capitalist based in Research Triangle Park.
Art Pappas, managing partner with A.M. Pappas and Associates, said the growth of jobs in recent years reflects in part the region’s success in attracting serial entrepreneurs. He cited Michael Pavia, entrepreneur-in-residence at Oxford Bioscience Partners, and Joseph DeSimone, the William R. Kenan Jr. distinguished professor of chemistry and chemical engineering at the University of North Carolina, Chapel Hill.
DeSimone and colleagues at UNC developed a technology for fabricating nanomaterials applied by a company he founded, Liquidia Technologies, to create vessels to deliver drugs into cells.
“The challenge is clearly defining [industry growth] and prioritizing that and making sure the values and the programs that we put in place will continue to expand as required,” Pappas said in an interview.
He said that as it grows, the center will need to maintain its vision of assisting serial entrepreneurs and other business leaders by linking them with capital, talent, and other resources.
Also likely to remain unchanged will be the center’s investment policy, Tolson said, despite an article late last month in the Triangle Business Journal reporting that the center recouped only $1.3 million from a $10 million fund it had invested in 1998 in 10 companies, eight of which were sold or went out of business.
“Are we proud of the return we got on that particular investment? No,” Tolson said. “But other investments we made since then have gone really, really well. The investment policy that we’re operating under today is a very solid policy. Do you invest in the stock market? Have all your investments played out well?”
Tolson and the chair of the center’s board, Sue Cole, said the fund accounted for part of a $26 million investment by the center in 108 early-stage companies that have received more than $1.3 billion over the past decade. The money-losing fund attracted $100 million in additional funding. “That’s not so bad,” he said.
By many indicators, North Carolina is among the nation’s top biotech clusters. With 380 biotech companies in business last year, the state ranked third by an Ernst & Young biotech assessment. Over the past five years North Carolina has ranked either third or fourth in number of biotechs, most of them based at Research Triangle Park near the state capital of Raleigh.
Yet RTP ranked eighth among 24 regions in the amount of venture capital raised by early-stage companies during the first quarter of 2007, according to Ernst & Young. Philadelphia and the rest of Pennsylvania joined the Boston area and four California regions in outranking North Carolina.
Within RTP, E&Y said that $72.8 million was spread among four biopharmaceutical deals during the first three months of this year compared with $65.3 million in eight VC deals recorded for all of last year.
The Council for Entrepreneurial Development and Research Triangle Regional Partnership on June 28 sought to boost that number even higher by approaching a group of Boston investors on North Carolina’s biotech and other high-tech sectors.
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“Are we proud of the return we got on that particular investment? No.” |
“Our vision is to create opportunities for people to invest their capital in this state, both local networks and anybody from outside who wants to come in here as well,” Tolson said. “The center also understands that it’s not science for science’s sake. It is, ‘How do you take it from science to ultimately the creation of new jobs and new opportunities for North Carolina citizens?’”
The answer, he said, was capitalizing on strengths such as strong science generated by the state’s universities and research centers.
Another challenge Tolson said he will tackle in his new job is to increase state funding for biotech programs, as well as for economic-development programs that can benefit life sciences companies.
The public-private NCBC, which operates on a $17 million budget and employs more than 60 people, has sought to obtain more funding from Raleigh this year: $3 million in addition to the $12 million it received this fiscal year.
While Easley’s proposed $20 billion budget for the fiscal year that began July 1 projects a surplus of $825 million, the governor, a Democrat, has scrapped with state Senate Democrats over whether to end a $.025 sales tax enacted in 2001 that is expected to generate $260 million in FY 2007-08. That, plus Senate opposition to a state House of representatives plan to contribute $100 million toward Medicaid costs of counties, have ensured that this year’s budget will be late.
Tolson, a crop scientist by trade who graduated with that major at NC State, said he hoped to succeed through contacts developed during more than a decade of government service, and for 28 years before that as an agricultural chemical executive with DuPont, from which he retired in 1993.
NCBC
Established by the General Assembly in 1984, the NCBC is the nation’s first publicly funded group devoted to promoting regional life sciences development. It has worked to fuse the state’s universities, biotech businesses, and officials into a coalition intent on winning back jobs the state lost as its textile, furniture, and manufacturing industries declined since the 1970s as companies sought cheaper labor overseas. That helped catapult North Carolina into one of the nation’s top-10 biotech clusters during the tenure of Charles Hamner, the center’s president and CEO from 1988 to 2002.
Reasoning the biotech center needed someone from the state’s rural regions, Hamner recruited Tolson to its board in 2000, two years before retiring. Hamner’s successor, Leslie Alexandre, expanded the center’s reach beyond Research Triangle Park, opening offices in Ashville, Charlotte, Greenville, Wilmington, and Winston-Salem. She resigned March 31.
When the center announced Alexandre’s resignation in January “to pursue new opportunities,” it said it would conduct a national search to find her successor. The following month it formed a nine-member search committee that included Tolson, who initially did not seek Alexandre’s job. The board also solicited proposals from search firms, winnowing them down to five finalist firms, said Sue Cole, chair of the biotech center board.
Tolson will be paid $225,000 as head of the NCBC, about double what he made as secretary of revenue.
Cole said search committee members began focusing on Tolson in early March after concluding he met the criteria they set at the start of their quest for a new leader. At that point he resigned from the search committee and began pursuing the position.
“We wanted someone who was a strategic thinker, someone who was a visionary, someone who could lead a team and build very strong relationships with our many, many partners throughout the state, the region and, in fact, the world, someone who was a proven leader, who had worked with nonprofit as well as for-profit organizations. And we thought it was helpful, also, to have a native North Carolinian at the helm,” Cole said. “When we looked at all of that, we basically said, we have a person here in our midst who we think has such qualifications.
“We knew him. We were comfortable with him. And we felt like he could move the center to the next level,” Cole added.