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As Georgia Readies for BIO, Its Leaders Hope Meeting Will Raise State's Life-Sci Standing


With the BIO convention starting Monday, Georgia's life-sciences industry will be spotlighting many signs of its recent growth — while seeking to defeat proposed limits on research on human embryonic stem cells, create a state "one-stop" agency to attract more biobusinesses, and attract more private and public capital.

Charles Craig, president and CEO of GeorgiaBio, told BioRegion News this week that his group, and its industry, are counting on the Biotechnology Industry Organization's 2009 BIO International Convention to help them emerge from the shadow of two Southeastern rivals into a top choice for life-sciences companies and their jobs.

During BIO, Craig said, he plans to deliver that message to a group of state officials scheduled to tour the convention's exhibit hall on Tuesday.

"Georgia should be aggressive in supporting the life-sciences industry, and should be more aggressive if it's going to remain competitive with other states, like North Carolina and Florida, which have invested significantly more money than Georgia," Craig said.

Craig also acknowledged that the Peach Tree State also faces many challenges.

The one that has drawn the most public attention to Georgia is the one least welcomed by the state's life-sci industry. The state House of Representatives' full Science and Technology Committee will hold hearings "in the September-October timeframe" on Senate Bill 169, a measure that would bar research institutes and businesses from creating their own human embryonic stem cell lines within the state, committee Chairman Amos Amerson (R-Dahlonega) told BRN on Thursday.

"I had over 700 calls, faxes, and e-mails from constituents favoring one side or the other," Amerson said via e-mail. "After our hearings in the fall, we will decide how to proceed."

Georgia's legislative session runs through 2010, which gives supporters of the measure more than a year to try to pass the bill through the House, reconcile that measure with the bill that passed the state Senate on March 12, then bring it to Gov. Sonny Perdue for a signature or veto.

SB 169, called the "Ethical Treatment of Human Embryos Act," made coast-to-coast headlines this past winter, when Georgia's Republican-controlled state Senate passed the bill by a strict party-line vote of 34 to 22. The measure defines a living in vitro human embryo as "a biological human being who is not the property of any person or entity."

The bill's sponsor, state Sen. Ralph Hudgens (R-Hull), told BRN at the time that the measure "does not impede, inhibit, [or] restrict research with embryonic stem-cell lines, the existing stem-cell lines, or stem-cell lines that are created outside of Georgia" [BRN, March 16].

The Senate passage of SB 169 was the second legislative defeat this year for Georgia's life-sci establishment. A month earlier, the state Senate's Economic Development Committee defeated Senate Bill 101, which would have shielded biopharma and medical device companies from tort claims against US Food and Drug Administration-approved products. The bill also would have forced plaintiffs to pay legal fees in cases dismissed soon after being filed, and would have required losing plaintiffs to pay the defendants [BRN, Feb. 2].

SB 101 would have applied to companies that either "base [their] corporate headquarters in Georgia" or "either employ over 200 workers in manufacturing or research and development, or have [their] principal place of research and development in Georgia." The bill enjoyed the support of GeorgiaBio and Gov. Perdue, who said he wanted to improve the state's economic climate for growing life-sci businesses

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This year and last, budget constraints — such as the need to plug a $2.7 billion shortfall blamed on the economic slump in the approved $18.6 billion budget — have slowed down action until now on other items sought by the life-sci industry.

Chief among those has been the creation of a one-stop agency to attract new biotech employers and retain existing ones, somewhat similar to the successful North Carolina Biotechnology Center. That agency was one of several proposals contained in a $600 million package of programs for life-sci recommended in a 2007 study by the House Georgia Bioeconomic Development Study Committee, chaired by Rep. Charlice Byrd (R-Woodstock), and later introduced as legislation [BRN, Jan. 28, 2008].

The $600 million package was not introduced as a bill in the current legislative session, which began in January. Byrd told BRN Friday she did not reintroduce the bill due to Georgia's fiscal constraints, but may do so early next year. Between now and January 2010, Byrd said, she will "once again try to meet with leadership to get some traction with it, to see what they have to say."

"Maybe next year, things will get a little bit better" with the state's finances, elevating the chances of a biotech bill enough to reintroduce it, Byrd added.

Byrd said in an interview that reintroducing the bill next year will allow potential successors to Perdue an opportunity to champion the measure, and position themselves as supporters of the life-sci industry. Perdue is term-limited and cannot seek re-election after his second term ends in 2010.

"I also thought it may be good [to wait until next year] — because next year Georgia is having its elections for the new governor — to engage people who may be running for governor, to see who will stand out that would be willing to step up to the plate and do some serious funding, and getting really serious about economic development for the life sciences," Byrd told BRN.

Craig said GeorgiaBio hopes the one-stop agency and other proposals can be advanced under the state's next governor. Byrd noted that officials in recent months have explored transforming the soon-to-shutter Fort McPherson into a biotech campus. The University System of Georgia Board of Regents sought to advance that idea recently by announcing support for including 2 million square feet of research space in the planned redevelopment of the 500-acre US Army outpost.

Up the Establishments

Figures released last month show that as of 2007, Georgia was home to 793 life-science establishments — 716 core life-sci employers and 77 agricultural biotech concerns. The previous year's report, covering 2006, showed 669 life-sci establishments in the state, with no agri-bio category.

Medical and diagnostic laboratories constitute the largest number of establishments at 432, or 60 percent. Next-largest at 136 (about 19 percent), are establishments focused on "research and development in the life sciences;" followed by surgical appliance and supplies manufacturing with 53 (7.4 percent); and pharmaceutical and medicine manufacturing with 49 (6.8 percent).

The four sub-sectors of life sciences establishments held their same position a year earlier, though Georgia recorded 379 medical/diagnostic labs as well as 146 R&D establishments in 2006, 50 surgical appliance establishments and 48 pharma/med manufacturing places.

The figures were contained in the latest annual report detailing the progress of Georgia's life-sci sector and released last month. The report — Shaping Infinity: The Georgia Life Sciences Industry Analysis 2009 — was released by GeorgiaBio and the Selig Center for Economic Growth at the University of Georgia's Terry College of Business.

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Craig contends SB 169 would hamper the industry's future ability to grow in Georgia by scaring off potential life-sci employers planning to relocate to or expand in the state. Not so, contends Daniel Becker, president of Georgia Right to Life, a key supporter of SB 169. He and other SB 169 advocates have argued that the benefits to Georgia from unfettered creation of new stem-cell lines is outweighed by what they have said is the moral wrong of the embryo destruction involved.

"Ninety-nine percent of all research is moral and ethical. We're not Luddites. We are very much interested in promoting the right kind of research, both at our universities, and in the private sector," Becker told BRN.

While bills to limit creation of stem-cell lines have also been under review this year by lawmakers in Texas and Oklahoma, SB 169 was crafted last summer "for the purpose of providing a template for other states to follow as they choose," Becker said.

"The United States is the Wild West, as far as bioethical concerns go. We're second only to China as far as unregulated, unfettered access to research," Becker said. "We're seeking to engage in the bioethical side of the equation. If we can't get the bioindustry to step up to the plate and police themselves, then we have to provide some impetus for them to have some restraint."

That restraint, he said, would entail stem-cell research using induced pluripotent stem cells, research into which is explicitly allowed by SB 169. iPSCs, which are typically derived from adult stem cells and can be produced without embryos, are capable of creating all types of cells with the exception of extra embryonic tissue.

Becker said he and other SB 169 supporters also want Georgia to bar creation of human-animal hybrids, as allowed and licensed in the UK.

But even the current SB 169 allows research labs to bring in newly created stem cell lines from out of state — a consequence of the embryo personhood language being dropped from the bill. Asked how RTL will pursue that policy goal going forward, Becker replied: "We'll just have to wait and see for 2010."

Speaking with BRN, Becker rejected the view, cited by some life-sci industry and political circles, that Georgia has become less of a "red," or conservative, state in past years, and thus more likely to defeat legislative limits on the creation of new hESC lines like those sought by SB 169. That opinion is based on the growth in Democratic presidential votes between 2004, when US Sen. John Kerry (D-Mass.) drew 41 percent of voters compared to George W. Bush's 58 percent, and last year, when Barack Obama racked up 47 percent in losing to US Sen. John McCain (R-Ariz.), who received 52 percent of the state vote.

Becker cited the fact that Republicans lost no seats to Democrats during the 2006 election year, and in 2008 lost just one seat — though pro-lifers across party lines last year gained a state legislative seat.

"Georgia is pro-life to the core, which is pro-Republican," he said.

That includes Senate president Pro Tem Tommie Williams (R-Lyons), Senate Majority Leader Chip Rogers (R-Woodstock), Lt. Gov. Casey Cagle — and Gov. Perdue, who issued a proclamation declaring April 18 as "Hope for Life Day" in Georgia, stating in part: "I call upon all Georgians to recognize this day, to rededicate ourselves to compassionate service on behalf of the weak and defenseless, and reaffirm our commitment to respect the life and dignity of every human being."

Nationwide, however, the GOP is less united on the issue, according to a Gallup poll issued March 9. It found 33 percent of respondents calling themselves Republicans favored easing federal funding restrictions on hESC research, and another 6 percent called for eliminating those restrictions altogether.

No Middle Ground

GRTL, Becker said, has met with life-sci industry reps to hammer out research policies acceptable to both sides, without success. "The bio industry, GeorgiaBio, and Mr. Craig have made it clear they intend to have unfettered access to research. They want nothing more than what is federally allowable, which is tantamount to having no restraint" since President Obama in March lifted federal funding restrictions designed to stoke more hESC research nationwide.

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"We will oppose, and make every effort to drive off venture capital coming to the state for the unethical treatment of human embryos. I think we're succeeding in that. That's our objective," Becker declared, citing a dearth of private VC investment into hESC stem cell research beyond Georgia.

One recent example: The venture capital firm Kleiner Perkins Caufield & Byers, whose investors include Al Gore, said last month it would invest $20 million into a research collaboration of iZumi Bio of San Francisco and Japan's University of Kyoto, where researcher Shinya Yamanaka has been an innovator in creating iPS cells. The collaboration hopes to produce treatments for degenerative conditions including Parkinson's disease and Lou Gehrig's disease or amyotrophic lateral sclerosis.

If Becker and GRTL succeed, it would worsen what Craig and other life-sci leaders have long acknowledged as one of Georgia's key struggles in developing a bioindustry cluster: A dearth of investment capital compared with top-tier states like North Carolina, Massachusetts, and California.

While the global economic upheaval has reduced VC investment in most of the nation, Georgia's nearly 91-percent year-to-year plunge was among the steepest. According to the quarterly MoneyTree Report, $3.6 million in VC was invested into two Georgia deals during the first quarter of 2009, compared with $38.7 million in Q1 '08. The state didn't record a single medical device deal in the first three months of '09, but had three deals totaling nearly $1.1 million in the year-ago period.

As strong as Q1 2008 was, Georgia's best single quarter for VC investment was Q1 2002, when $52.3 million was raised by early-stage companies. MoneyTree is produced by PricewaterhouseCoopers and the National Venture Capital Association with Thomson Reuters data.

Multi-year trends, however, paint a brighter picture of Georgia's life-sci capital investment. According to figures based on MoneyTree data in the latest edition of Shaping Infinity, $148 million in venture capital was raised by 24 companies between 2006 and 2008, up from $127.3 million between 2003 and 2005. When total capital from sources beyond VC is accounted for, Georgia raised $991.4 million between 2006 and 2008, up from $977 million between 2003 and 2005.

Georgia can improve those numbers further, Craig said, by creating additional income tax breaks and other incentives for VC investors akin to those in some other states. A 25-percent income tax credit and a 10-percent income tax credit were provided to private investors putting up capital as part of the public-private Georgia Research Alliance Venture Fund established last year.

"In order to really increase the amount of venture capital coming into the state, that tax incentive should be more broad, and should be for investment by any venture capital fund in emerging biotech companies here in Georgia," Craig said.

Georgia is raising the $7.5 million it promised as its share of the $30 million GRA venture fund; the remainder would come from private investors.

"We expect to close the first round of the fund some time this year," Kathleen Robichaud, a spokeswoman for the Georgia Research Alliance, told BRN on Thursday.

That work was not slowed down by the weak economy, she said, adding: "That has not been a challenge. We're doing fine with it."

But the economy does explain why the size of the fund has shrunk from the $40 million discussed last year.

Once the first round closes, Robichaud said the fund will go about investing in early-stage life-sci companies. The fund was created to finance seed-stage university spinouts, with an emphasis on vaccine developers and other life-science specialties.

That research can spin out of any of several institutions that Georgia life-sci leaders say offer an advantage to their state's startups over those of other states. They include the Atlanta-based US Centers for Disease Control and Prevention, the American Arthritis Foundation, the US Department of Agriculture's Agricultural Research Service-Southeast Poultry Research Lab, a key facility in researching avian influenza, as well as a nascent but growing biofuel sector, the ports of Savannah and Brunswick, and the Southeast's busiest airport, Hartsfield-Jackson Atlanta International.

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In the 2008 fiscal year, GRA spent $19.1 million on research infrastructure, $12.5 million on eminent scholars, and $9.5 million on tech commercialization, according to the alliance's 2008 Annual Report. GRA consists of the University of Georgia, the Medical College of Georgia, Emory University, Clark Atlanta University, the Georgia Institute of Technology, and Georgia State University.

The state-funded alliance fosters industry-academic collaborations, and oversees the successful GRA Eminent Scholars program — which since 1990 has recruited 61 top-tier researchers to Georgia research universities. The eminent scholars program has drawn attention from several states in recent years, including Arizona [BRN, Sept.2, 2008] and New York [BRN, Jan. 11, 2008] — and is credited by GRA with creating more than 1,650 jobs statewide.

Those jobs are among the state's 9,807 life-sci academic R&D jobs in 2007, according to the most recent Shaping Infinity; no comparable figure for 2006 was included in the previous year's report.

Shaping Infinity also recorded 17,941 industry life-sci jobs statewide in 2007. While that figure is 17 percent higher than the 15,283 jobs reported for 2006, the change largely reflects the addition the following year of 2,751 agricultural biotech jobs; the category was not listed in the 2006 statistics published last year. When "core" life-sci industry jobs are measured, the number actually dipped by 0.6 percent year to year, to 15,190 in '07 from 15,283 a year earlier.

However, Shaping Infinity noted that life-sci job growth rose between 2001 and 2007 at double the rate of the state's entire workforce — a key reason why the state is eager to help grow the industry. So too is the effect on Georgia's gross domestic product. The state's core life sciences sectors generated $4.3 bil¬lion in state GDP in 2007, while agricultural life sciences companies contributed another $1.9 billion to Georgia’s GDP, which stood at $396.5 billion in 2007, according to US Bureau of Economic Analysis figures released in June 2008.

The report also found that Georgia life-sci employers helped create 62,033 jobs across all industries as well as generate $17.3 billion in total economic impact, and $517 million in tax revenues for state and local governments. Academic R&D accounted for a total 14,919 direct and indirect jobs, and another $1.3 billion in sales, and $807 billion in economic impact.

"The [BIO 2009] convention will really shine a light on Georgia, and will show the rest of the world that there is a life sciences industry here," Craig said, "If you talk to people outside Georgia, it’s not well known as a place where there's a significant life sciences industry. But there is, and it's clustered around the strong research universities.

"It's really going to be eye-opening for a lot of people from around the nation, and around the world," Craig added.

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