Fosters Daily Democrat | December 17, 1999 | By BOB SANDERS, Granite News Service
TCG Environmental, a Kittery, Maine, consulting start-up, plans to import billions of manure-munching microbes from the Midwest to distribute to farmers because the owner doesnt think that anyone in the region is capable of producing them.
Will Gilbert teaches a class at the University of New Hampshire in bioinformatics, the software edge of the biotechnology industry. Yet most of his students leave the state to find a job.
The Ulysses Groups finances and manages biotech companies all over the world. The Exeter firm doesnt have a client in New Hampshire.
"We would like to fund something in New Hampshire," said Davis Farmer, the managing partner of the group. "But New Hampshire is not on the map as far as biotech is concerned."
Biotechnology is a group of many technologies that use living cells or their process to make products and solve problems. But even those within the biotech industry in New Hampshire dont know about the local biotech industry here.
The New Hampshire Biotechnology Council is trying to change that. The fledgling group (it just held its first official meeting in mid-October) has identified nearly 60 biotech-related companies in the Granite State.
"Thats just what we can find out about," said Lulu Pickering, vice president of the council and the CEO of Informagen, a Portsmouth firm which produces computer software and analysis for the industry. "We think that there may be more than 100 out there."
However, she said, its not unusual for most of these companies not to know about the other.
"So far people are working in isolation," said Pickering. "New Hampshire can be very self-effacing. They believe that Massachusetts has all the high technology. That might have been correct a decade ago, but there has been this huge influx. We need to understand what we have."
But so far much of the companies are small and new enough to be off the radar screen, so the conventional wisdom is that a biotechnology industry simply doesn't exist in this state.
It isnt that people are interested in biotechology, which was all the rage a decade ago. The Pease Development Authority, which has landed Cell-Tech now Lonza Biologics Inc. was hoping to become to biotechnology what Nashua was to the software revolution. But when the companies didnt show up, Pease started to look in other directions, like medical manufacturing.
"It certainly was all the buzz a few years ago," said David Mullen, director of economic development for Pease. "But it sort of fizzled. We are looking more for companies which manufacture medical equipment, not so much the research and development of drugs."
But it might be that interest in biotechnology just peaked too early. And when it finally did emerge, it didnt gather in one place, but spread all over the southern part of the state, with a minor concentration in the Upper Valley, which benefits from a large teaching hospital, as opposed to the Seacoast.
"Its going to be more linear than radial," said Francis Smith, president of Bio-Concept, a Derry firm with $12 million in sales from manufacturing experimental biotechnology drugs for testing purposes. "Its not going to be a circle around one area. And its my belief that its going to come from start-ups, rather than by luring established companies into the state."
One difficulty in targeting biotechnology is that, much like the computer industry, the target is moving. The software generation, after all, came about when everyone was paying attention to hardware. The Internet blossomed when people were focusing on software.
The definition of biotechnology is also shifting rapidly. It used to be directly messing with DNA and changing the basic building blocks of life or creating gene sequences for some useful purose. But the useful purposes it can service are so many that the definition has become a lot broader.
For instance, it now includes diagnostics, or finding a way to use these sequences to diagnose a problem. Thus some firms create diagnostic kits.
Biogenesis is in this mode. The Brentwood firm supplies about 4,500 different antibodies to the diagnoses and research market. At first it imported the antibodies from its parent company in the United Kingdom, but seven years ago, Biogenesis bought a building for its own manufacturing laboratory.
"Research is wonderful, but unless you can bring out a product, whats the point?" asked Joan Poehlman, president of the company. "We make the raw material for the product. Its like supplying flour for the cake."
Only six people at the lab are needed to manufacture the antibodies, which are frozen and kept in inventories. It was hard to sell the idea at first to the neighbors, who had seen too many movies about biogenetic manufactured sweeping the country.
"The hardest part was getting it up and running, especially in New Hampshire," Poehlman said. "Theres no governing body here, no set of guidelines to make towns people feel comfortable. They worried about everything, and rightly so."
Now, however, business is booming and the lab expects to employ a dozen in the next three or four years. That doesnt sound like a lot, "but you dont have to have 3,000 people to be a player," she said.
There are industrial applications, using the results of genetic engineering for everything from creating green golf courses to producing less irritating eye drops.
TCG Environmental, for instances, uses microbes for everything from cleaning up oil spills to MTBE contamination. The latest product, ManureX, can be used for the "nutrient management" now required by the federal government on large agribusiness operations.
"Its going to be big," said TCG Environmental president Bill Campion. "Bigger than oil spills. Farmers are really hungry for that information."
Campion set up his new company in Kittery a few months ago, markets via the Internet, and is starting to get his first few bites.
Then there are firms than make biotechnology possible, which manufacture equipment, think up the software, and line up the venture capital.
Some firms on the biotechnology councils list are not what you would think of as biotechnology, such as Fisher Scientific, which manufactures some biotech equipment.
But most firms are more directly related to the biotech industry. Diatide is perhaps one of the best examples of a "pure" biotechnology research firm. Richard Dean, the founder of Diatide Inc., just sold the Londonderry biotechnology firm he founded a decade ago for a cool $130 million.
Diatide produces radioactive isotopes that are attached to targeting proteins. The technology can diagnose certain cancer cells by emitting light, and kill them using radiation.
Like many New Hampshire firms, Diatide got its start in the Cambridge area.
The technology was developed in Harvard Medical School. Those supplying the venture capital wanted the company to stay within 60 miles of Cambridge, "so I drew a circle on the map," he said, "and decided on the Granite State. ... I didnt understand why we should stay in Boston area other than to be trendy. And I sometimes like a little distance from the founding scientists. It gives you a little breathing room."
Diatide certainly used that room to expand. The company started with a $1 million in 1990, and went public in 1996. Its stock climbed from $1.67 to $9.50 a share before being snatched up in early November by Schering AG, a German pharmaceutical firm based locally in Boston.
"I see people trickling and looking in New Hampshire," Dean said. Boston will still be the center. "It will be a while before there is a big exodus in this direction in biotech."
But Diatide is increasingly collaborating with the University of New Hampshire as opposed to the name universities, like Harvard and MIT.
"Sometimes the whole thing about big institutions is a bit over valued," Dean said. "All you need is a good laboratory, good science and good ideas and we can bring them together here as well as anywhere else."
Farmer, the managing partner of Ulysses Group, wouldnt mind investing in a few more local biotech companies. The company raises venture capital from institutions, private investors and pharmaceutical companies for startups to conduct viability studies. The Group gets some equity in the companies they fund and sometimes buys or manages the companies outright. Farmer is the president and CEO of a company in Cleveland doing work on cellular immunology, and is on the board of a California company that are developing computer chips that use specific biological molecules. He was even help managing a firm that is the result of collaboration with universities in Baltimore, England and New Zealand (the firm is now headquartered near Princeton University).
"We use phones and fax and airplanes and lots of e-mail to manage remotely," said Farmer. Farmer used to have an office in Bostons World Trade Center but almost always visited the client rather than the other way around. "I could live anywhere I wanted to," so he chose New Hampshire where his family vacations and Exeter, where he once went to the academy.
Other biotech companies could flourish in New Hampshire low-tax environment. "Its a great place to have a branch," he said. "Its cheaper than most of the traditional location. It just takes a while to get an bio infrastructure developed."
Lonza Biologics Inc. is the largest biotech manufacturer in the state. Lured to Pease Tradesport four years ago as Cell-Tech, Lonza now employs 350 people and has been growing at 20 to 30 percent a year, producing therapeutic proteins that come from mammal cells.
While grateful that some small biotech companies are springing up, Lonza has been disappointed that no other large scale biotech companies have joined them.
"We had hoped there would be more, said Michael Chaffee, a company spokesperson. "Its extremely difficult to get financing for biotech. People underestimate the difficulty to get all this off and running."
One problem is the lack of university support, he said. So far, biotechnology at the University of New Hampshire has been low key. Thats a sentiment echoed by Gilbert, who teaches at the university biochemestry and genetics program.
"It has not done a good job in promoting biotech," he said. Thats partly because the university lagged behind other colleges in allowing professors to benefit from practical biogenetic research, said Bill Trumble, associate dean of life science and agriculture.
"In the past, there has been rather restrictive conditions by the state and university," Trumble said. "If we want to be a player and bring biotechnology into New Hampshire we need to be in a position to allow us to do that."
But in the last two years, he said, the university developed a formula "that would allow ownership and patents of ideas by the individual who created them. Were delighted to see that in place. In the next three to five years we expect an exponential increase. What an exciting time to be involved in biotechnology."
Thus far, most of the biotech education has been by the New Hampshire Community Technical College system, which has its own New Hampshire Biotechnology educational and training center at Pease. It is not unusual for the technical colleges to take the lead, said Sonia Sparks Wallman who heads the center, and is the Northeast Director of Bio-Link, the National center for Biotechnology Education.
The junior colleges, she said, are generating the employees. "The four-year college people drop out of labs. They dont have the hands-on skills, nor know anything about regulations, and regulation is everything in this industry. If you dont follow the regulatory bull, you cant get the drug out of the facility to be sold," Wallman said.
The Pease center graduates between six to 12 graduates a year for the biotech industry, but those numbers should increase because there has been a lot more student interest.
"The word is getting out to people that they can ask for biotech," said Wallman.
The Upper Valley is another potential hotbed of biotechnolgy, with its teaching hospital.
Thats how Textco got its start in West Lebanon. The company, founded by Robert Gross, a Dartmouth professor, and his wife, Roberta Brucks Gross, in 1984, provides software to analyze gene sequences. Textco, which specialized in Macintosh software, has been facing a shrinking market, but it has just came out with a Windows version.
Bioinformatics, is going to be hot in the next few years, said Pickering, of the Biotechnology Council, who also produces customized software and a bioindustry data base on the Internet.
The complete sequencing of the human genome should be complete by 2003. "Where is the bottleneck? Its processing all this information. If it is a gene what does it do? What is its function? What is known about it?"
Pickering, a Newington native, also got her start in Cambridge, but came back home to start Informangen in 1992.
"Its a much nicer quality of life than Massachusetts offers. I lived in San Francisco and New York and Boston. They are nice places, but what makes me happy is up here."
Enough people are thinking along the same lines to stand up and take count.
"The impression is that there is no biotechnology community up here. But its just that nobody has tried to pull it together as an industry," she said. Thats why she compiled and is distributing the list of companies. "Its pretty impressive: Gee, look at all these companies."
She hopes that the council will cause people to consider working in the state. When she was working in Massachusetts, "I would interview people in New Hampshire. Here we are, both commuting down to Boston. If we both worked together in New Hampshire, it would have saved us a trip."
