REPORT GIVES MISSOURI A MIXED REVIEW

Rachel Melcer

06/08/2004

St. Louis Post-Dispatch

Five Star Late Lift Edition

Business Section

BIO 2004: SAN FRANCISCO

* Battelle study gives good marks, but Milken report leaves state off list of top 12 clusters.

Two studies released Monday show that when it comes to state and regional efforts to grow biotech businesses, it's easy to identify the players but much harder to know the score.

Missouri and St. Louis received good reviews from the Battelle Memorial Institute but failed to make a list of the top 12 biotech clusters from the Milken Institute. Both nonprofit research organizations released the reports at the Biotechnology Industry Organization annual convention.

Both reports were closely watched by delegations of the 39 states, including Missouri and Illinois, that are here to tout their biotech-industry strengths. At stake is each state's reputation as a welcoming, supportive home for lucrative life-science businesses and, to some extent, its ability to lure them.

The biggest difference between the studies was the decision by Milken analysts to ignore agricultural biotechnology, one of Missouri's strengths.

"We'll tell those 23,000 people in St. Louis, who make $69,600 a year average salary that, according to Milken, they don't exist. I'm sure the Milken study (counted) some of them who work in pharmaceuticals and medical devices, but they missed a lot," said Richard Fleming, president of the St. Louis Regional Chamber & Growth Association.

Of note: The RCGA hired Battelle to study the region's potential to be a biotech leader. Since the study was released in 2000, the RCGA has been touting the region as the BioBelt. Battelle has done similar studies in several other states and regions.

Perry Wong, senior economic researcher at the Milken Institute and one of the study's co-authors, acknowledged that its narrow scope limited the results. It focused on biotechnology directly related to the human body: pharmaceuticals, genomics, medical devices and the like.

"It was easiest for us to do that, but it is not necessarily the best way," he said. "There are so many ways that you can define (biotechnology). We even questioned ourselves on whether we should have taken it out to the larger life sciences."

Both studies outlined important criteria for areas that want to succeed in this industry: They need supportive policies, economic development incentives, a skilled work force, a rich research base, venture capital, infrastructure and an entrepreneurial spirit.

States or regions also need to be organized in their efforts, said Walter Plosila, author of the new Battelle study. Public and private efforts should be coordinated.

"St. Louis is one of my three best examples of really putting your act together," along with Pittsburgh and Arizona, he said.

Still, St. Louis "is an oasis in the desert, within the state of Missouri," Plosila said, noting the lack of support from the state Legislature.

Lawmakers repeatedly have not passed pro-biotech initiatives suggested by Gov. Bob Holden, who is attending the conference.

As a result, Missouri's section of the Battelle report is a nearly blank slate on biotech-supportive legislation, where many other states have lists of accomplishments. That will be a mid- to long-term problem as the industry grows nationally, Plosila said.

Robb Fraley, chief technical officer of Creve Coeur-based biotech-seed developer Monsanto Co., heads the Technology Gateway, an arm of the RCGA. He said the biotech successes of the St. Louis region are picking up pace.

At the state level, he said, "the thing that Missouri has done well is identify this as an opportunity space that they want to capture. . . . It is very realistic in recognizing the clear regional strengths that we have and how to build around them."

Yet the state has not followed through, Plosila said. "When it comes to the budget process, the money doesn't seem to show up. . . . You've got to turn that rhetoric into action."

Conservatives in the Legislature consistently have lobbied against biotech-related measures, over fears of stem-cell research and other types of science that might raise political issues related to the abortion debate.

Kelvin Simmons, director of the Missouri Department of Economic Development, said the mandate from Holden and the executive branch is clear: "In no uncertain terms, this is vitally important to us."

So, he and other department heads will continue to push the issue. They are working to educate lawmakers on the promises of biotechnology, both in terms of economic gains and the impact on improving human health and the environment, he said.

The biotech industry is growing at a rapid pace, the Milken and Battelle studies show. Its jobs pay much higher than average wages, and big companies tend to spin off smaller ones with new innovations.

Nationally, 885,000 people in all 50 states are employed in biosciences, much more than previously thought, according to the Battelle report. Forty states are targeting biotech today, compared with 14 in 2001, so the competition for businesses is fierce.

The best path to success is to target a particular niche and work diligently to provide it with resources, Plosila said. Missouri, with its focus on plant and particular life sciences, is doing just that.

The Missouri Biotechnology Industry Organization is working with regional bodies and the statewide Missouri Technology Corporation, which was established in 1994 as a nonprofit organization to promote policies that are positive for the industry, the Battelle study noted. The state has top-notch research, led by Washington University.

NOTES:

Link to more information about BIO 2004 online at STLtoday.com/links.