 North Carolina legislators continue their search for budget solutions to the $4.6 billion funding shortfall expected for the State’s 2009-10 fiscal year. In early June, the State House of Representatives signed off on a draft budget using a combination of spending cuts ($2.3 billion), new taxes ($784 million), federal stimulus monies ($1.4 billion) and other one-time monies to balance revenues and expenses. The House must now negotiate a compromise budget with the State Senate, which adopted its draft budget in May.
The House budget would eliminate funding for the One North Carolina Small Business Fund SBIR matching grants program and reduce funding for the North Carolina Biotechnology Center by 4% or about $617,000 in FY 2009-10. For the Biofuels Center of North Carolina, the House budget allocates $5 million in one-time funding from federal stimulus monies. The House proposal also includes $928 million in recurring cuts for education, including teacher layoffs and class-size increases in grades four to twelve, and $725 million in recurring cuts to health and human service programs.
Tax increases in the House budget draft include (i) addition of two new personal income tax brackets, raising the State’s top income tax rate from 7.75% to 8.5%, (ii) a 0.25% increase in the state sales tax rate, raising the general rate to 4.75%, (iii) expansion of the state sales tax to maintenance, repairs and other services, (iv) changes in corporate income tax calculations, including mandatory combined reporting and a new “throw-back” rule designed tax income derived from non-tax jurisdictions, and (v) extension of the state franchise tax to limited liability companies. Click here to download NCBIO’s memorandum analysis of the House tax package.
 NCBIO has asked legislators negotiating 2009-10 budget legislation to avoid tax changes that will adversely affect North Carolina’s life science community. “There are several tax proposals in play that would have disproportionately negative impacts on life science and innovation companies,” said Sam Taylor, president of NCBIO. “We are asking legislators to be mindful of these impacts in negotiating tax provisions in the budget conference report.” The troublesome tax provisions include a new sales tax on repair and maintenance services, increases in personal income tax rates, and a requirement that holding company systems base their state tax payments on consolidated earnings.
“One of our most significant concerns is the House proposal to tax repair and maintenance services,” said Taylor. “We believe it is highly inappropriate to impose this tax on repair and maintenance of depreciable equipment. Most technology companies spend heavily on maintenance, calibration and other similar services for research, development and manufacturing equipment. These services are essentially ‘inputs’ to these companies and a tax on these inputs will disproportionately burden technology-based products.” Taylor said Senate leaders expressed similar concerns and are seeking to exclude not only repair and maintenance of depreciable equipment, but also depreciable equipment purchases, from sales tax.
In addition, NCBIO has expressed concern that increases in personal income tax rates proposed in the House tax package will suppress the availability of angel capital in North Carolina – funding that is already in woefully short supply. “This proposal is especially troublesome because North Carolina taxes capital gains as ordinary income,” said Taylor. “By increasing the personal income tax rate, North Carolina will increase the incentive for angel investors and entrepreneurs who expect to realize significant cash-outs to move to lower tax states in order to avoid North Carolina’s tax penalty on these gains.”
NCBIO is also suggesting that legislators avoid adopting a mandatory combined reporting requirement for corporate taxation of holding company systems doing business in North Carolina. The proposed change, which would tax holding companies based on their consolidated earnings, would likely discourage multistate businesses without existing tax nexus in North Carolina from locating or acquiring new stand-alone R&D subsidiaries in the State. “By requiring companies without other tax nexus to consolidate tax returns for subsidiaries that are basically cost centers, this proposal will impose an unnecessary tax burden that most such companies will seek to avoid,” said Taylor.
NCBIO is working with other North Carolina business associations, including the North Carolina State Chamber, to help legislators understand and avoid potentially negative economic impacts of proposed tax changes. “NCBIO understands the need to raise tax revenues in order to avoid draconian cuts in education and other essential services,” said Taylor. “Our work is geared to assuring that, in raising new revenues, the State does not impose tax burdens likely to be hurtful to the life science community and other innovation-based sectors of our economy.”
 The General Assembly has given final approval to legislation that would loosen investing rules for the $56 billion state pension fund, allowing more money to be put into nontraditional investments. The legislation, enacted as Senate Bill 703 (State Treasurer Investments), would allow up to 10% more pension fund money to be put into nontraditional investments. Current law already allows the state treasurer to put up to 5% of pension fund assets into private equities and up to 10% in real estate.
Legislators have also enacted changes to the State’s industrial revenue bond law to allow financing of research and development facilities. Included in Senate Bill 754 (Changes for Bonds Authorized Under ARRTA), the changes track modifications to federal tax-exempt bond law enacted in Congress’s federal economic stimulus package earlier this year.
Governor Beverly Perdue, Commerce Secretary Keith Crisco, North Carolina Community College President Scott Ralls and life science industry leaders were among those participating in events at the BIO International Convention in Atlanta. In a visit to the North Carolina Pavilion in the exhibit area, Governor Perdue talked about the State’s investment in biotechnology. “North Carolina’s life science industry contributes more than $45 billion and 240,000 jobs to our State’s economy,” said Perdue. “I am committed to continuing to grow North Carolina’s life science sector.” Perdue also spoke at a reception hosted by the North Carolina Department of Commerce for BIO 2009 attendees.
In all, more than 14,500 persons attended the BIO International Convention in Atlanta, which featured 170 programs in 22 subject tracks. More than 190 companies presented at partnership meetings and programs at the Convention. BIO 2010 will be held in Chicago, May 3-6.
 The Research Triangle area enjoys a life science employment concentration substantially greater than the national average according to The Greater Philadelphia Life Sciences Cluster 2009: An Economic and Comparative Assessment, released at the BIO International Convention. The report updates the Milken Institute’s 2005 study of the U.S. top life sciences clusters. Raleigh-Durham ranked 1st for employment concentration in the therapeutics and devices category, a field in which it also emerged as the top performer for indexed relative employment growth between 2002 and 2007 (coming in at 114, compared to the U.S. average of 100). Greater Raleigh-Durham’s employment concentration in biotechnology was also the highest of all 11 metros studied. Its excellent ranking in R&D stems from a cluster of hospitals, medical centers, and top universities. Click for more about the Raleigh-Durham rankings or for the overall study.
A new report by Battelle Corporation finds that states across America are failing to prepare students for pursuing biosciences in higher education. The report, which was commissioned by the Biotechnology Industry Organization and its affiliate, the Biotechnology Institute, provides the first ever comprehensive study of middle and high school bioscience education in the 50 states, Puerto Rico, and the District of Columbia.
The report also finds a wide disparity across measures of student achievement in overall science and biosciences, an uneven record across states in incorporating the biosciences in state science standards, supporting focused bioscience education programs and higher level bioscience courses, and ensuring science and bioscience teachers are well qualified. The findings, released at BIO’s annual convention, indicate a clear need for improved science education that incorporates the biosciences at the middle and high school levels if the United States bioscience industry sector is to remain globally competitive.
North C arolina ranked better than many states although it is included in the Second Tier states, which is the category after Leaders of the Pack. The report on North Carolina highlights a number of activities including those of the North Carolina Biotechnology Center to improve education opportunities for students and for teachers.
An advisory group for the Advanced Medical Technologies (AMT) Center of Innovation is moving ahead with plans to launch the new center in late summer or early fall. NCBIO secured a $2.5M grant for the AMT project from the NC Biotechnology Center earlier this year.
The new AMT Center was one of the topics discussed at a MedTech CEO Leadership dinner held the night before the May CED Medtech Conference. More than 60 MedTech executives from across the state talked about the future for the industry in North Carolina. The guest speaker for the evening was Michael Weinstein, Managing Director, J.P. Morgan & Co. Michael discussed macro trends influencing the industry and his belief that current dynamics will fuel rapid growth in many MedTech sectors moving forward.
At the Medtech Conference, Dan Lemaitre, President and CEO of CoreValue, Inc., warned that companies needed to be more than just a product-line and that acquiring companies do not like to buy those businesses that have simply been dressed-up to sell. He also noted that the regulatory process typically leads to approval in Europe before the U.S.
Dr. Gregg Stone, Director of Cardiovascular Research and Education of the Center for Interventional Vascular Therapies, Columbia University Medical Center and the Cardiovascular Research Foundation, said that he is optimistic about the opportunities available with the marriage of medicine with biotechnology. Gary Henley, President and CEO of the Wright Medical Group indicated that regulatory hurdles are becoming difficult for medical device companies and he encouraged conference participants to make sure their voices are heard by Congress and the FDA.
 Dr. Michael Luther has been named president of the David H. Murdock Research Institute of the North Carolina Research Campus. “Dr. Luther has a distinguished career in science and is a proven entrepreneur,” said Dr. Steven Leath, President of the DHMRI Board of Directors and Vice President of Research at the University of North Carolina system. “His education, experience and local roots make him the perfect candidate to grow the DHMRI into the organization we all have envisioned,” Leath continued.
Prior to joining the DHMRI, Dr. Luther was Vice President, Basic Research and Site Head at the Merck Frosst Centre for Therapeutic Research in Montreal. In this role, he was responsible for overseeing the development of novel therapeutics for respiratory, endocrine and metabolic disorders. Before joining Merck, Dr. Luther spent fifteen years at GlaxoSmithKline, where his last role was Vice President in Discovery Research. Dr. Luther also worked at GSK’s predecessor companies, Glaxo and Glaxo-Wellcome. He received his BS from North Carolina State University. He holds a Ph.D. from the St. Louis School of Medicine and an MBA from the Duke University Fuqua School of Business.
The North Carolina Biotechnology Center has approved a four-year, $2.5 million grant for the Center of Innovation in Nanobiotechnology (COIN) to develop the commercial potential of nanobiotechnology research from universities across the State. "Nanobiotechnology is an exciting new discipline that has the potential to change everything from textiles to medical devices. This Center of Innovation will help commercialize more of the nanobiotech breakthroughs being made in North Carolina laboratories," said Mary Beth Thomas, senior director of the Centers of Innovation program at the Biotechnology Center.
The four-year award to COIN builds on a $100,000 planning grant given by the Biotechnology Center last year. That money was used to hire an executive director and develop a business plan, making the Nanobiotech Center eligible for the current round of funding. With the new award, COIN will establish itself as an independent, self-sustaining entity. The $2.5 million will be paid as business milestones are reached. Key partners in the planning effort included North Carolina Agricultural and Technical State University, the University of North Carolina at Greensboro and Wake Forest University.
"This is the first major grant developed jointly by these three research universities," said Gwyn Riddick, director of the Biotechnology Center's Piedmont Triad Office and one of the initiative's original supporters. "In developing nanobiotechnology, we aim to create a strong, region-specific science brand for the Piedmont Triad and the State."
SEBIO has named Jennifer Moore, Ph.D., as its new Executive Director. Dr.
Moore replaces Stephanie Adams, SEBIO’s second Executive Director.
Moore has worked for Emory University for the last four and a half
years as a Licensing Associate. “That role helped prepare her for the
new position,” notes Garheng Kong, chair of the SEBIO Board of
Directors and General Partner with Intersouth Partners.
The Eleventh Annual Southeastern BIO Investor Forum will take place
December 3-4, 2009, at the Charleston Place Resort in Charleston, SC.
Please have your organization’s media/marketing coordinator send news about your company to Brenda Summers - bsummers@ncbioscience.org
Bayer CropScience will strengthen its commitment to its rapidly growing Seeds and Traits business by establishing a Plant Biotechnology Research center in Morrisville. Over the next five years, over $10 million will be invested and about 130 new jobs will be created. The opening of a dedicated BioScience Innovation Center in the U.S. will improve access to US-based innovation and extend the company’s presence in the important U.S. market. The new site is scheduled to be operational in the fall.
Biolex Therapeutics, Inc. has completed patient enrollment in the SELECT-2 Phase 2b trial of its lead product candidate Locteron® for the treatment of chronic hepatitis C. Locteron, controlled-release interferon alpha 2b, is designed to improve patient care by providing a more convenient once-every-two weeks dosing schedule and by reducing the side effects, including flu-like symptoms, associated with pegylated interferons, the current standard of care. "We are pleased with the response to the SELECT-2 Phase 2b trial and the fact that we were able to rapidly complete enrollment using substantially less clinical sites than we originally anticipated," said Jan Turek, Biolex's President and Chief Executive Officer.
bioMérieux – a world leader in the field of in vitro diagnostics – announced plans to divert trade-show expense allocations into education and knowledge-exchange initiatives for its customers and the clinical microbiology community. The company plans to launch a new WorkSmart™ initiative, host regional education programs and offer limited-time-only customer incentives. The company’s WorkSmart initiative will allow lab personnel to share content on relevant topics for an educational grant. WorkSmart is designed to help foster a peer-to-peer dialogue within the clinical microbiology community.
The Hamner Institutes for Health Sciences has signed an agreement with China Medical City to create the Hamner-China Medical City Institute for International Drug Development. Building on strengths of the two organizations in translational research, business development, and education, the Institute will help to produce new biomedical technologies that benefit the United States and People’s Republic of China as well as the rest of the world. During the first phase of this agreement, the Institute for International Drug Development will be established at The Hamner’s campus in Research Triangle Park, and will focus on preclinical drug development and compliance with FDA regulatory standards. After the partners validate research capabilities and new technologies at The Hamner campus, they will transfer them to China Medical City, a new life science park located in the Yangtze River Delta north of Shanghai.
Hughes Pittman & Gupton, LLP, the largest locally owned and managed, independent CPA firm in North Carolina, served as a Gold Sponsor of the Council for Entrepreneurial Development's Medtech 2009 Conference. "We're proud to be a continuing sponsor of the CED's Medtech Conferences," says Nancy Campbell, HPG partner and audit team leader.
Tim Gupton, a partner in Hughes Pittman Gupton, LLP, is receiving a Chief Financial Officer (CFO) of the Year Award from Triangle Business Journal. Gutpon will be among 21 individuals recognized at a luncheon July 14th.
Inspire Pharmaceuticals, Inc. has initiated a Phase 2 program with AzaSite(R) (azithromycin ophthalmic solution) 1% to pursue a potential indication for the treatment of blepharitis, an ocular disease characterized by inflammation of the eyelids. AzaSite is currently approved by the U.S. Food and Drug Administration (FDA) for the treatment of bacterial conjunctivitis. The trials will evaluate various signs and symptoms of blepharitis as well as safety and tolerability. The results from each trial are expected in the first half of 2010. Kim Brazzell, Ph.D., Executive Vice President and Head, Ophthalmology Business at Inspire, stated, "The Phase 4 results we have generated to date suggest that AzaSite could be an effective treatment for blepharitis and the goal of the Phase 2 program is to more fully understand this potential by studying AzaSite in larger Phase 2 placebo-controlled trials."
Two Inspire leaders, Thomas R. Staab, II, Chief Financial Officer and Treasurer, and Kim Brazzell, Ph.D., Executive Vice President and Head, Ophthalmology Business, made presentations at the Deutsche Bank 34th Annual Health Care Conference May 19th in Boston, MA.
Tom Staab of Inspire Pharmaceuticals will be recognized as a CFO of the Year at a luncheon July 14th hosted by Triangle Business Journal.
Quintiles Transnational has formally opened its new headquarters in the Research Triangle Park. The company is the largest contract research organization in the world and provides a broad range of professional services, information and partnering solutions to the pharmaceutical, biotechnology and healthcare industries. Quintiles was founded by Chairman and Chief Executive Officer Dennis Gillings. Governor Beverly Perdue and other state leaders were present for the opening of Quintiles Plaza. The building was been designed and built with the aim of receiving LEED (Leadership in Energy and Environmental Design) from the US Green Building Council (USGBC). For example, to improve the quality of the work environment, natural light is dispersed throughout the building. To maximize the amount of daylight reaching the core of the building, offices were positioned at the center of the building, workstations were placed toward the windows and workstation walls were lowered. Allowing daylight to reach the core of the building was also a factor in limiting the number of offices on each floor.
Governor Beverly Perdue and other state leaders cutting the ribbon for the opening of Quintiles Plaza.
Targacept, Inc. has announced preliminary results show that AZD3480 (TC-1734) met the primary outcome measure in a Phase II clinical study in adults with attention deficit/hyperactivity disorder (ADHD). “These results further our belief in AZD3480’s potential to benefit patients and reinforce our longstanding commitment to the neuronal nicotinic receptor mechanism. AZD3480 has now been studied in over 1,350 subjects providing us and AstraZeneca with substantial data,” said J. Donald deBethizy, Ph.D., President and Chief Executive Officer of Targacept.
Targacept, Inc., ranked 23rd in The Scientist 7th annual “Best Places to Work in Industry” survey. “This is our third consecutive year on the list, and we placed ahead of several other well-known and well-respected companies in our industry,” said J. Donald deBethizy, Ph.D., President and CEO of Targacept. “Targacept is very fortunate to have a scientific staff that is committed and passionate about their research. The continued recognition as one of the best places to work in industry is deeply rewarding to me and the other members of our management team.”
Vipin Garg, Ph.D., president and CEO of Tranzyme Pharma has won top honors in the health-care category as Entrepreneur of the Year 2009 in the Carolinas from Ernst & Young. Garg was selected as a finalist from nearly 75 nominations by a panel of independent judges. Tranzyme, which specializes in therapies for gastrointestinal and metabolic diseases, has nearly 40 employees at two locations in the United States and Canada.
United Therapeutics Corporation has opened a new solid dose manufacturing and office facility in Research Triangle Park. United Therapeutics’ Chairman and Chief Executive Officer, Dr. Martine Rothblatt, and President & Chief Operating Officer, Dr. Roger Jeffs, hosted the official grand opening celebration. Lieutenant Governor Walter Dalton joined in the festivities along with employees, patients, members of the pulmonary arterial hypertension community and other leaders from the Raleigh/Durham area. The new facility will be the headquarters for United Therapeutics' research and development and commercial groups, and will be where the company manufactures the oral formulation of treprostinil, which is currently approved for intravenous and subcutaneous administration. In addition to serving scientific and manufacturing functions, the facility also has office space for employees who fulfill management, business, sales and marketing and administrative roles. The facility has a unique open design, which allows employees and visitors to tour the manufacturing process without having to “gown up” and also fosters a collaborative environment among employees. The facility features extensive natural daylight that is transported into what are typically enclosed manufacturing spaces through use of interior floor-to-ceiling glass walls, skylights and a two-story lobby. United Therapeutics has also incorporated environmentally conscious design elements, including 258 rooftop solar panels that will minimize the facility’s impact on the environment.
 BIO Raises Concerns about White House Letter on Biosimilars
BIO President and CEO Jim Greenwood issued the following statement regarding the letter sent in late June from the Obama Administration to House Energy and Commerce Committee Chairman Henry Waxman regarding biosimilars.
“The Biotechnology Industry Organization continues to support strongly the development of a pathway for the review and approval of biosimilars. We are extremely concerned that the seven years of data exclusivity called for by the administration points to a risky short cut to biosimilars. We believe this abbreviated period will undermine the incentives necessary for continued biotech research into breakthrough medicines and cures for diseases such as cancer, multiple sclerosis, Alzheimer’s and HIV/AIDS as well as unmet medical needs.
”As we have consistently said, any pathway to biosimilars should provide a fair period of time for innovators to protect their proprietary data from competitors in order to promote the continued development of breakthrough medicines, therapies and cures. We continue to believe that fourteen years of data exclusivity will strike the appropriate, reasonable and fair balance between our common desire to expand access to breakthrough biotech medicines and the need to preserve the protections necessary to promote further biomedical advances. In addition, it will provide biologics manufacturers with the same effective protections provided to small molecule drug manufacturers. This is the approach supported by the 110 bipartisan cosponsors of H.R. 1548, the Pathway for Biosimilars Act, along with more than 105 patient advocacy, physician, academic and innovator groups who join us in supporting H.R. 1548.
“We are disappointed the administration chose to base its policy upon the Federal Trade Commission (FTC) report. This report was based upon highly selective assumptions and has been rejected by many members of Congress as fundamentally flawed. Following the recommendations in the report will place at risk the more than 7.5 million high wage, high-quality American jobs supported by the biotech industry and jeopardize our nation’s global competitive advantage in biomedical innovation.
“We look forward to continuing to work with the Obama administration and the Congress to develop a bipartisan pathway to biosimilars that places patient safety at its center, reduces costs, expands access and promotes continued biomedical advances for patients.”
BIO Comments On Medicare Drug Discount Agreement Announced by PhRMA, the White House and Senate Finance Committee
“We look forward to reviewing in greater detail the agreement struck among President Obama, PhRMA and the Senate Finance Committee,” stated BIO President and CEO Jim Greenwood following the agreement.
“We will examine the deal through the lens of measuring its impact on the ability of biotechnology researchers to continue to develop and produce breakthrough medicines and therapies that extend and improve the quality of life, and provide renewed hope, for patients suffering from debilitating diseases such as cancer, Parkinson’s, Multiple Sclerosis and a host of rare diseases. We share the goal of ensuring that all Americans have access to high quality health care. We look forward to continuing our participation in the process of reforming our nation’s health care system to increase access and reduce costs while promoting the continued development of new therapies and cures.”
July 2009.
Summer 2009 Biotechnology Workshops for Educators. Enroll now in one of the 2009 Biotechnology Workshops for Educators sponsored for the 23rd consecutive year by the North Carolina Biotechnology Center. Learn how to teach activities that will engage your students while reinforcing State education objectives. North Carolina educators receive a daily stipend, room and board, technology or regular CEUs, and access to the Biotechnology Center's Free Supplies and Equipment Loan Programs. For more information, click here.
July 8, 2009.
Biotechnology: Infusing Innovation and Opportunity into the Economy, David H. Murdock Research Institute, North Carolina Research Campus, 150 Research Campus Drive, Kannapolis, NC. An Emerging Technologies and Trends Breakfast hosted by the North Carolina Technology Association. Features introductory remarks by Sam Taylor, President of NCBIO. For more information, click here.
July 26-July 29, 2009.
Health Sector Overview: Health Care in the 21st Century: An Executive Education Program at the Fuqua School of Business, Duke University. Broaden your knowledge and your professional network by joining us for this four day intensive course on current health care issues and trends. For more information, click here.
July 27-28, 2009.
Session 2. Universal Technology Transfer Methodologies for Biopharmaceuticals. BTEC at NC State University. For more information, click here.
August 19, 2009.
Application Deadline for NC Biotechnology Center Education Enhancement Grants program. For more information, click here.
October 12-14, 2009.
AdvaMed Conference 2009. Washington, D.C. Designed by industry for industry, AdvaMed 2009 is the premier MedTech Conference for CEOs, business executives, policy-makers, media, financiers, and other MedTech leaders from around the world. In only its second year, AdvaMed 2008 attracted 1,400 industry leaders – including 500+ CEOs, Presidents and C-level executives. For more information, click here.
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