 NCBIO This Month
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 The comprehensive health reform legislation that passed Congress in March contains a new refundable tax credit for small life science companies developing drugs and diagnostics for acute and chronic illnesses. The credit is among several provisions of the Patient Protection and Affordable Care Act of 2010 that will have big affects on the pharmaceutical and biologics industries. Others include a new pathway for regulatory approval of biosimilars, a new federal excise tax on pharmaceutical companies, and new pricing and rebate requirements for pharmaceutical companies selling products for outpatient care at certain hospitals and to Medicaid and Medicare beneficiaries. The Act also authorizes, but does not appropriate, expanded NIH funding for translational research.
Therapeutic Discovery Project Tax Credit. For tax years 2009 and 2010, businesses with less than 250 employees and engaged in the development of new therapies to prevent, diagnose and treat acute and chronic diseases will be eligible for a refundable tax credit for up to 50% of qualifying research and development costs. Total credits under the program are capped at $1 billion for the two-year period. The credit covers preclinical activities and clinical trials or studies. Expenditures covered by the credit would not qualify for the R&D Tax Credit, the Orphan Drug Tax Credit or bonus depreciation. The Treasury Department is charged with developing regulations to implement the new credit.
Biosimilars. The new health reform law provides a new pathway for Food and Drug Administration (FDA) approval of biosimilars or so-called generic biologics. Under the provision, innovator companies are entitled to twelve years of data-exclusivity for new biologics products – effectively protecting such products from generic competition during the twelve-year period. The data exclusivity period can be extended for six additional months in certain cases involving pediatric studies for new products. FDA is required to develop recommendations for the new regulatory process by 2012.
Excise Taxes. The legislation imposes new excise taxes on the pharmaceutical and medical device industries. Brand name pharmaceutical manufacturers and importers will pay $2.5 billion in 2011 under the new tax. The tax will increase in subsequent years, to a maximum of $4.1 billion in 2018, then drop again to $2.8 billion in the 2019 tax year and thereafter. The tax will be apportioned among companies based on their share of federal program sales. Orphan drugs are exempt from the sales calculation.
The Act also creates a new 2.3% excise tax on medical devices. To be collected by device manufacturers, producers and importers, the tax takes effect in 2013 and will be assessed on all FDA approved devices except eyeglasses, contact lenses, hearing aids, and other devices that are typically sold to the general public at retail establishments.
Rebates and Hospital Pricing. The act also increases the base rebate for brand name drugs sold to Medicaid recipients from 15.1% to 23.1% effective January 1, 2010, and requires manufacturers selling drugs to seniors under the Medicare program to contribute 50% of a brand name drug price to enrollees that are in the so-called Donut-Hole in the Part D drug benefit. In addition, the legislation allows more hospitals to qualify for federally mandated discount pricing of drugs dispensed in connection with outpatient services.
Cures Acceleration Network. The legislation creates, but does not fund, a new program within the National Institutes of Health to address translational bottlenecks in the commercialization of new medical products. The Cures Acceleration Network program would provide grants of up to $15 million annually to public and private sector research and development entities. Projects would be selected by a new Cures Acceleration Network review board and implemented by the Director of the National Institutes of Health.
Governor Beverly Perdue’s new Innovation Council is meeting regularly to evaluate strategies for improving North Carolina’s innovation climate. Steve Nelson, who co-chairs the panel with Governor’s Policy Advisor Al Delia, met with NCBIO’s Board of Directors March 25 to discuss the Council’s work. Nelson said the group expects to make recommendations for near-term projects to the 2010 General Assembly and provide a more comprehensive and long-term suggestions to legislators in 2011.
Innovation Council Co-Chair Steve Nelson
Nelson said that the Council’s 2009 recommendations will likely include adoption a capital gains tax exclusion for founders stock similar to the Founders Credit proposed by Governor Perdue in 2009. Nelson said the panel’s recommendations may also include support for reauthorization of North Carolina’s Qualified Business Venture Tax Credit (which is scheduled to expire at the end of 2010) and expanded funding for the North Carolina Board of Science and Technology’s SBIR matching grants program.
Nelson said the group is also considering proposals to improve the State’s Research and Development Tax Credit and to expand recruitment tools for attracting innovation-based companies Nelson also noted that the Council is working closely with State Treasurer Janet Cowell who has announced the creation of Innovation Fund to support innovation-based companies with a presence in North Carolina.
 State Treasurer Janet Cowell has announced that Credit Suisse will manage the newly-created North Carolina Innovation Fund. The Fund will include $230 million from the alternative asset allocation of the State’s pension funds. Credit Suisse will invest the monies in companies and funds with significant operations in North Carolina or other economic connections to the State. University of North Carolina System President Erskine Bowles joined Cowell for the announcement. Bowles told reporters and entrepreneurial community representatives attending the announcement: “This fund is well structured. It’s a great idea.”
“North Carolina is a good investment,” Cowell said at the announcement press conference. “As we look globally for opportunities to achieve a high rate of return for our pensioners, we need to be diligent in looking into the possibilities that are here in our backyard.”
Cowell said Credit Suisse was selected because of its breadth of experience in running similar funds, including funds in New York, Oregon, Michigan and Indiana. Cowell also cited Credit Suisse’s existing office in Research Triangle Park, NC, which employs roughly 1,000 workers.
Cowell said that Credit Suisse has been instructed to undertake an aggressive outreach program to seek out good investments within North Carolina. NCBIO will work with Credit Suisse and the State Treasurer’s office to support outreach efforts in the State’s life science community.
NCBIO and VWR are once again working together to give small life science companies a chance to learn about new research and development tools first hand. The two will sponsor a third annual scientific products show between 10:00 a.m. and 2:00 p.m. on April 27th at the Research Triangle Park Marriott. Suppliers registered for the event include BD, Beckman, Coulter, Biohit, Biomerieux, Contec, EMD, GE Healthcare, Greiner BioOne, Lonza, Mallinckrodt Baker, METTLER TOLEDO and Thermo. Lunch will be provided.
Please forward this to those in your company who may be interested. RSVP to Leigh Kridle or Jennifer Fong by April 14th.
 David Kappos, Director of the U.S. Patent and Trademark Office and Under Secretary of Commerce for Intellectual Property, will be a featured speaker at the Intellectual Property Super Session taking place during the 2010 BIO International Convention. The May 3 event, entitled “Leveraging IP to Spur Global Biotechnology Innovation, Investment and Jobs,” will examine the role that intellectual property systems play in attracting biotech investment and how some countries are successfully leveraging their patent policies to foster economic growth.
Presidents Bill Clinton and George W. Bush, the 42nd and 43rd Presidents of the United States, will appear together for a moderated discussion on May 4th, and former Vice-President Al Gore will speak on May 5th.
Seventy sponsors from North Carolina’s life science community will be represented in the State’s Pavilion at BIO 2010. The North Carolina Commerce Department, the North Carolina Biotechnology Center, and NCBIO are assisting with the Pavilion. Pavilion visitors will enjoy an opportunity to test their golfing skills on an on-site putting green sponsored by Pinehurst Resort. The Resort has also donated 1,000 golf balls and a Donald Ross gift package for Pavilion visitors.
NCBIO members have the opportunity to educate lawmakers about the growth and benefits of the state’s life science industry to the North Carolina economy. This is the fourth time NCBIO has held the breakfast, which attracts legislators and NCBIO members. The event is May 26, 7:30-8:30 am in the NC Legislative Cafeteria. It is free and open to all NCBIO members. Please RSVP to Jennifer Fong by May 24th if you plan to attend.
NCBIO has entered into a new discount purchasing arrangement with Paragon International, Inc., a global meeting and events product company based in Wilmington, North Carolina. Under the agreement, Paragon will offer discounts to NCBIO member companies off of the costs of services associated with producing any meeting or event. In addition, Paragon will at times make discounts available off of the rates charged by its wholly-owned subsidiary, Dram Tree Productions, a full service, audio-visual production company, also based in Wilmington.
Paragon International, Inc. has been producing meetings for the pharmaceutical and biotech industries worldwide since 1995. For complete information on Paragon International, Inc., and its service offerings, contact Christopher Diehl, Director, Business Development, at (888) 429-5875, or cdiehl@paragonmeetings.com.
NCBIO members can obtain discounted registrations for AdvaMed 2010, October 18-20 in Washington, DC. The AdvaMed conference offers an important opportunity for participants to showcase products and concepts to national and international businesses, media, government officials, and other key constituents. As the premier MedTech conference in North America, it enables participating companies to efficiently network with potential business partners, investors, media representatives, regulators, and collaborators on a global scale.
To receive the NCBIO discount, you must register by August 20th.
Please have your organization’s media/marketing coordinator send news about your company to Brenda Summers - bsummers@ncbioscience.org
Argos Therapeutics has appointed Jeffrey D. Abbey as President and Chief Executive Officer. Mr. Abbey assumes leadership of Argos as John Bonfiglio, Ph.D., who is leaving the company to pursue other business interests. Mr. Abbey joined Argos in 2002 and has held positions of increasing seniority, most recently as Chief Business Officer. Mr. Abbey has extensive experience in structuring and negotiating licenses, joint ventures and other technology transfer agreements, as well as mergers, acquisitions and financing transactions. He has been a partner at Eilenberg and Krause, a corporate law firm, where he acted as business counsel for a number of life sciences and other emerging technology companies. He also served as Vice President of Business Development and Finance for Internet Appliance Network, an information technology company.
Argos Therapeutics also has announced the presentation of positive data from a Phase II clinical trial that evaluated the safety, clinical response and immune response for AGS-003, the company’s treatment in newly diagnosed patients with metastatic renal cell carcinoma (mRCC). The data were discussed March 7th in a poster presentation at the ASCO Genitourinary Cancers Symposium. AGS-003 is a product of the company´s Arcelis™ technology, and is a personalized, RNA-loaded, dendritic cell-based immunotherapy matched to each patient´s unique tumor burden.
Capstrat Social Media Manager Angela Connor discussed “Using Social Media to Share Community Ideas in Creative Ways” as part of the 2010 Knight Community Information Challenge Boot Camp at the University of Southern California’s Annenberg School for Communication & Journalism on March 25th. Before Connor began overseeing social media strategy for Capstrat, she authored 18 Rules of Community Engagement: A Guide for Building Relationships and Connecting with Customers Online.
The Hutchison Law Group announced the completion of its annual compensation survey. The survey profiles executive compensation levels at venture-backed technology and life science companies in North Carolina, as well as information regarding their Boards and general employee policies. The 2010 report also includes information regarding trends and forecasts related to salaries and hiring. The full report can be downloaded on Hutchison Law Group’s website.
 RTI International has committed more than $2 million to form a new multidisciplinary research center called the Molecular Epidemiology, Genomics, Environment and Health (or MEGEH). The Center will focus on addressing significant issues or questions regarding genetics and human health through interdisciplinary and translational research. Scientists working at the Center will employ "team science" to develop integrative approaches that better define disease states and states of wellness and susceptibility to disorders and diseases. Working together, they will devise medical and public health interventions and policies that will promote implementation of personalized and preventive medicine. Researchers at the new Center represent specialties that comprise the entire range of RTI's research fields, including genetics, bioinformatics, proteomics, biostatistics, epidemiology, engineering and many others.
Targacept, Inc. and the Brain Awareness Council (BAC) of Wake Forest University’s Graduate School of Arts and Sciences are hosting a number of events in the Triad area to help people of all ages and backgrounds understand wellness and illness involving the brain. Click to find out more.
Tranzyme Pharma has been selected to present data from the Phase II clinical trial of ulimorelin (TZP-101) for the treatment of severe gastroparesis at Digestive Disease Week (DDW) 2010 being held May 1-5, 2010 in New Orleans, Louisiana Ulimorelin has previously shown the ability to enhance gastric emptying in patients with severe diabetic gastroparesis. The present analysis focused on the ability of this drug to relieve nausea and vomiting, which are the most serious and potentially life-threatening complications of this disorder. Consistent with its effects on gastric emptying, ulimorelin significantly reduced nausea and vomiting and improved overall symptomatology. These results further support ulimorelin’s future role in the effective management of this debilitating condition.
 BIO Comments on Health Reform Legislation
Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood released the following statement after passage of “The Patient Protection and Affordable Care Act of 2009” by the U.S. House of Representatives:
“The health care reform bill passed by the House of Representatives last night includes key provisions that provide real solutions for our nation’s health care challenges and real hope for patients living with debilitating diseases such as cancer, Multiple Sclerosis, Parkinson’s, HIV/AIDS and many rare diseases. These provisions will lead to new and improved treatments, cures, and cost-savings for patients, while driving job growth in our industry and maintaining our nation’s global leadership in biotechnology innovation.
“The bill includes a historic provision which creates a pathway to enable the U.S. Food and Drug Administration to approve biosimilars. Thanks to the leadership of Representatives Anna Eshoo (D-CA), Jay Inslee (D-WA) and Joe Barton (R-TX) in the House, and the late Senator Ted Kennedy and others in the Senate, patients living with debilitating diseases will have expanded access to safe and effective cutting-edge medical therapies at lower costs. Additionally, according to the Congressional Budget Office, this provision will save patients tens of billions of dollars over the next decade. Moreover, this provision includes the incentives necessary to attract the massive investment required to speed the discovery and development of the next generation of breakthrough therapies and potential cures for the world’s most debilitating diseases. This language establishes equity with the Hatch-Waxman regime, which spurred the availability of the generics market for traditional pharmaceuticals, while bringing the same benefits of increased access, lower costs and expanded competition.”
BIO Asks Congress to Support Deployment of Biotech Chemical Platforms to Create Green Jobs
The Biotechnology Industry Organization is seeking federal tax policies that incentivize commercial deployment of advanced industrial biotechnologies that create jobs, reduce reliance on petroleum, and achieve greenhouse gas reductions. BIO has released a white paper on the growth and jobs potential of green chemicals and briefed Congressional staff on the commercial status of industrial biotechnologies for algae applications, bio-based products, and advanced biofuels.
BIO’s white paper, Bio-Based Chemicals and Products: A New Driver of U.S. Economic Development and Green Jobs, shows that even in its nascent state, the bio-based chemicals and plastics industry accounts for over 5,700 direct jobs and is likely responsible for over 40,000 jobs economy wide. Total United States employment in the sector declined by 20 percent over past two decades. A recent report commissioned by BIO, Economic Impact of Advanced Biofuels Production, projects that development of advanced bio-refineries could create as many as 29,000 jobs over the next few years.
April - July 2010
Golden LEAF BTEC Short Courses, NCSU Biomanufacturing Training and Education Center, Raleigh, NC. The biomanufacturing industry grows and changes rapidly from year to year, creating significant educational demands on our workforce. BTEC is committed to providing updated, cutting-edge short courses to workers who are grounded in the industry but may not be positioned to take advantage of new industry developments. Members of NCBIO’s Biotech Manufacturers Forum can receive 20% discounts on all courses. More information.
April 6-8, 2010
Translational Regenerative Medicine Forum, Benton Convention Center, Winston-Salem, NC. This event advances the field of regenerative medicine and healthcare innovation through the sharing of scientific discoveries, best practices and business models. The meeting will also feature a venture forum showcasing international regenerative medicine companies and investors from corporate venture, venture philanthropy, private equity and venture capital firms. More information.
April 13, 2010
BioNetwork BioForum: Biotechnology for the Non-Scientist. This webinar is FREE, but registration is required. More information.
April 20, 2010
How to Enter the European Medtech Market, Hotel Sierra, Morrisville, NC. Medical products companies will learn how to get revenues from the huge European Union market even before a North American product launch. Four experts with launch experience will present in an informal half day setting. More information.
April 20-22, 2010
CED's Venture Conference: Where Great Minds Meet Smart Money, Pinehurst Resort, Pinehurst, NC. For the past 25 years, CED’s Venture conference has created business opportunities for hundreds of entrepreneurs and investors across North Carolina and the Southeast. As the nation’s longest running financing event, CED’s Venture showcases the region’s most promising companies to an audience of top tier investors and entrepreneurial leaders. More information.
April 21, 2010
Duke Clinical Research Institute: Next Generation of Quality: Linking Clinical and Organizational Performance, Fuqua School of Business, One Towerview Drive, Durham, NC. More information.
April 27, 2010
VWR-NCBIO Scientific Vendor Show, Marriott Hotel, Miami Boulevard, Durham, NC. More information.
May 3-6, 2010
BIO International Convention. McCormick Place, Chicago, IL. More information.
May 21-22, 2010
2010 IACUC Conference, North Carolina Association for Biomedical Research, North Carolina Biotechnology Center, Research Triangle Park, NC. More information.
May 26, 2010
NCBIO Legislative Breakfast, General Assembly Building, Raleigh, NC. More information.
June - July 2010
Summer Biotechnology Workshops for Educators, North Carolina Biotechnology Center, Research Triangle Park, NC. Enroll now in one of the2010 Biotechnology Workshops for Educators sponsored by the North Carolina Biotechnology Center. The workshops give teachers the tools they need to teach activities that will engage students while reinforcing state education objectives. North Carolina educators receive a stipend, room and board, CEUs and access to the Biotech Center’s Free Lab Supplies Program. More information.
October 18-20, 2010
AdvaMed MedTech Conference, Walter E. Washington Convention Center, Washington, DC. AdvaMed 2010 is the premier MedTech Conference for CEOs, business executives, policy-makers, financiers, media, and industry stakeholders from around the world. More information.
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BIO Fly-In, April 13-14
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