House and Senate budget writers in the North Carolina General Assembly are meeting to negotiate differences between budget plans approved separately by the two chambers. Several items from NCBIO’s 2010 legislative agenda appear poised for inclusion in Assembly’s 2010 final budget bill.
Both chambers have approved a doubling in appropriations for the One North Carolina Small Business Fund, which makes matching grants to North Carolina companies receiving federal SBIR and STTR grants. Funding for the program would total $1.5M in the FY 2010-11 state fiscal year, but as in previous years, would expire at the end of that period. The program requires nearly $5M annually to fully match all eligible grants in the State. Nevertheless, the 2010-11 appropriation is an improvement over the $700,000 in funding allocated in FY 2009-10. Governor Beverly Perdue recommended $1.5M for the program in her administration’s budget proposal
Legislation to extend North Carolina’s Qualified Business Venture Tax Credit has been included in both the House and Senate budget packages; albeit with different details. The Senate provision would extend it in its current form by one year, to December 31, 2011. Language approved by the House would extend it by three years – until December 31, 2013, and increase the statewide limit on total payments from $7.5M to $8M annually. Governor Perdue and the House Select Committee on Small Business recommended a three-year extension and $8.0M cap for the Credit in proposals filed before the Assembly convened May 12.
The State House included approximately $4.3M in additional recurring funding for the North Carolina Biotechnology Center in its budget draft. The Senate, however, earmarked no new appropriations for the Center. Governor Perdue recommended $3M in non-recurring funding for the Center in FY 2010-11. It is likely that the final budget will include an increase somewhere between those proposed by the House and Senate. The economic downturn has forced approximately $1.5M in reductions to the Center’s recurring budget since FY 2007-08.
NCBIO’s proposal to establish a capital gains tax exclusion for stock issued by start-up companies eligible for the Qualified Business Venture Tax credit has not been acted on during this session by either chamber of the Assembly. Key leaders of the State House’s Committee on Finance do not favor the proposal. Senate Finance Committee leaders have expressed a preference for dealing with most proposed tax changes as part of a comprehensive tax reform package in the 2011-12 session of the Assembly. North Carolina small businesses are eligible, however, for a capital gains tax exclusion made applicable to small business stocks by the American Recovery and Reinvestment Act of 2009. The ARRA, sometimes referred to as the 2009 economic stimulus legislation, includes a 75% exclusion for gains on qualifying small business stocks purchased in 2009 and 2010. Because North Carolina uses federal adjusted gross income as the starting point for income tax calculations, the exclusion will be reflected in tax income for State tax purposes when qualifying stocks are sold.
Legislation to establish NCBIO’s proposed Life Science Development Corporation (LSDC) remains eligible for action in the current legislation. House Bill 530, which was amended by the Senate in 2009 to include the LSDC has been referred to a conference committee of the two chambers for negotiation. NCBIO and the North Carolina Biotechnology Center are working with proponents of the bill to develop a final version of the legislation acceptable to both chambers. Although the proposal has many supporters in both chambers, it has been strongly opposed by other interest groups and will require aggressive advocacy to win approval. NCBIO continues to coordinate grassroots support for the proposal. Persons interested in contacting legislators in support of the bill should contact Sam Taylor at email@example.com.
Other pending legislation of interest to the life science community includes, (i) a $10M appropriation proposed by the State Senate to support the Institute of Regenerative Medicine at Wake Forest University; (ii) a $5M non-recurring appropriation to fund operations of the Biofuels Center of North Carolina in FY 2010-11; (iii) a $500,000 expansion of funding for the North Carolina Research Campus included in the House version of 2010-11 budget legislation; and (iv) legislation to provided for public comment and review of the State Medicaid Program’s new preferred drug list.
NCBIO is working with the North Carolina State Chamber in support of two legislative proposals designed to clarify existing tax penalty statutes. The first proposal, offered as Senate Bill 1172 (Fair Tax Penalties), would clarify the timing and scope of penalties paid by multistate holding company systems for failing to file consolidated state tax returns. North Carolina law permits the State’s Secretary of Revenue to compel multistate holding company systems to file consolidated tax returns in order to assure that companies pay a fair share of the tax burden. Companies may not, however, file consolidated returns on a voluntary basis. Revenue officials have indicated that companies seeking to settle claims surrounding holding company system tax reporting may be required to pay penalties for not filing a consolidated return, even if such a return were not permissible under applicable law. SB 1172 would clarify that penalties would be payable only from the date a consolidated return is filed or the date that a dispute regarding consolidation of a return is settled.
NCBIO is also supporting efforts by the State Chamber to clarify when certain environmental, workplace, or other regulatory violations make companies ineligible for economic incentive tax credits in the State. State law currently provides that companies with “significant” regulatory violations cannot receive incentives, and may be required to give up ones already earned but not claimed. House Bill 1973 (Extend Various Economic Incentives Sunsets) would clarify when regulatory violations are “substantial” for purpose of eligibility.
For more information, contact Sam Taylor at firstname.lastname@example.org.
The North Carolina bioscience sector is one of the few areas adding jobs to the State’s economy NCBIO President Sam Taylor told lawmakers at the Annual Legislative Breakfast May 26th. More than 90 legislators and NCBIO members turned out for the event co-sponsored by Administaff and VWR International.
Senate Deputy Pro Tem Charlie Dannelly and House Majority Leader Hugh Holliman brought greetings on behalf of the two chambers and welcomed the NCBIO members. They noted the importance of the life science industry to the State.
Taylor highlighted NCBIO’s legislative agenda, stressing the importance of funding for the North Carolina Biotechnology Center, as well as the State’s SBIR matching grants program, extension of the Qualified Business Venture Tax Credit and passage of the Life Science Development Corporation. “The Life Science Development Corporation is important to the future of some of our companies that are at risk of being acquired and moving to another state,” Taylor said.
Chris Dobbins of VWR International & Mary Ellen Perry of Administaff
"Administaff was glad to be a sponsor of efforts to inform North Carolina leaders about the importance of the life science industry to the State," stated Mary Ellen Perry, Small Business Consultant for Administaff, following the NCBIO Legislative breakfast. Perry said “Administaff is excited about being a member of NCBIO and looks forward to consulting with both established and new bioscience companies toward developing long-term HR strategies that support business growth in the Life Sciences industry."
VWR Senior Sales Representative Chris Dobbins highlighted the importance of the life science industry. "VWR has eleven VWR technical sales representatives that cover North Carolina,” said Dobbins.” They work daily to enable the biotechnology customers to reach their goals by providing scientific supplies, chemicals and services.” Dobbins noted that “VWR has partnered with NCBIO to form a more effective effort to provide education, market information and a Biotech voice for this industry.” He said policies that support the biotech industry will continue to enhance industry growth in North Carolina, which in turn will provide aggressive job growth and increased tax revenues from the business activity. “This industry is a high technology, low maintenance industry,” said Dobbins. “It provides for improved living conditions for its workers and for those who benefit from the products that are manufactured here in North Carolina."
North Carolina’s Advanced Medical Technology Center of Innovation became officially known as ibiliti at a recent launch event to introduce the organization to the life science community. ibiliti President and CEO Cindy Clark unveiled the new name. As part of the event, NCBIO President Sam Taylor outlined the history of the new entity. NCBIO helped developed the strategic plan for the center of innovation and helped secure State funding through the North Carolina Biotechnology Center’s Centers of Innovation grant program.
Cindy Clark and Ken Atkins
ibiliti focuses on North Carolina’s advanced medical technologies sector, which includes companies developing medical devices, diagnostics, medical imaging and health care software. ibiliti is a non-profit organization that is committed to building and expanding a network of intellectual, human and financial resources that advanced medical technology companies can tap into in order to quickly and successfully navigate the
“North Carolina is a growing community of more than 400 medical technology companies statewide,” said Clark. “Through the economic support the State has provided to ibiliti, the State has taken steps to ensure that the potential of emerging medical technologies is not only reached but surpassed.”
North Carolina has a leading, specialized, and growing bioscience industry according to a new industry study released by BIO and the Battelle Institute. Analysis issued in conjunction with the report Battelle/BIO State Biosciences Initiatives 2010 shows that North Carolina has a specialized employment concentration in three key life science sectors -- drugs and pharmaceuticals (location quotient of 2.04), research, testing and medical laboratories (1.30), and agricultural feedstock and chemicals (1.22). The analysis shows that academic bioscience research and development expenditures in North Carolina totaled $1.52 billion in 2008, and have grown faster than the national rate.
According to the analysis, North Carolina’s largest academic R&D categories were medical sciences ($834M) and biological sciences ($510M). Both academic bioscience R&D and research funded by the National Institutes of Health are highly concentrated in North Carolina with per capita research funding ranking near the top among all states. The State’s biomedical institutions hosted 732 active clinical trials in 2009. Bioscience venture capital invested in North Carolina bioscience companies during the last six years totaled $1.76 billion, focused heavily in human biotechnology, followed by medical therapeutics and pharmaceuticals. Drugs and pharmaceuticals led the 2,307 bioscience patents issued during the same period.
- The analysis also highlighted growth in the national life science industry, showing that the industry continued to score employment gains through 2008 -- the first year of the recent economic downturn.
Other findings regarding the national life science sector included –
- U.S. employment in the bioscience sector reached 1.42M in 2008, a gain of 19,000 bioscience industry jobs in the United States since 2007. Other report highlights include: Rapid growth in the biosciences has been fueled primarily by growth in research, testing and medical laboratories. The subsector added more than 176,000 jobs between 2001 and 2008, accounting for 9 out of every 10 new bioscience jobs created during this time period.
- The bioscience sector continues to be a source of high-wage jobs. The average bioscience job paid $77,595 in 2008, $32,000 more than the average private sector job.
- Each bioscience job generates an additional 5.8 jobs in the national economy.
- Among publicly traded companies, all sectors of the national bioscience industry were positive generators of net income in 2009 – including research, testing, and medical labs; agricultural feedstock and chemicals; medical devices and equipment; or drugs and pharmaceuticals.
North Carolina State Treasurer Janet Cowell made her second stop in a state-wide Innovation Fund Road Show in Winston-Salem on May 18th. The North Carolina Innovation Fund (NCIF) is a $232.3M diversified investment partnership funded with monies from the alternative assets portfolio of state pension funds. The fund will be administered by Credit Suisse and seeks to generate strong returns while building successful, innovative enterprises for the benefits for its investors.
The Treasurer compared and contrasted the Fund to similar projects in other states. She also reviewed the development, long term strategy and vision for the Fund, stating that the program is “unique and tailored to North Carolina.”
Lee Brashear, of Credit Suisse Alternative Investments, will help manage the fund in Credit Suisse’s Research Triangle Park office. Brashear stated the Fund will include a diversified portfolio incorporating many innovative sectors, including “a meaningful portion” in life sciences.
The NCIF is currently accepting business plans. To learn more about the Fund or to submit a business plan, visit ncinnovationfund.com. Treasurer Cowell plans future stops across the State, including upcoming events in Research Triangle Park, Charlotte, and the eastern and western regions of the State.
More than 15,000 people attended the BIO International Convention in Chicago, and many of those visited the North Carolina Pavilion. The North Carolina Reception, hosted by the North Carolina Department of Commerce, also provided a great opportunity to focus on what is happening in the State.
Kendyle Woodard, NC Biotechnology Center Marketing and Public Events Director and NC Commerce Secretary Keith Crisco
Ten North Carolina experts in finance, international partnerships, devices, biologics and diagnostics were among the panelists and speakers at the Convention. The Campbell Alliance, a prominent life science consulting group head quartered in Raleigh, released its 2010 Dealmakers’ Intentions Survey. Highlights from the Survey included --
- Respondents with commercial operations expect levels of Phase III deal-making to remain steady.
- Survey respondents were optimistic about Phase II deal-making activity.
- There is strong interest for Phase II programs, particularly among in-licensors.
- Deal-making is concentrated in oncology, CNS and pain.
- There are few products available in areas such as cardiovascular and metabolic.
"For out-licensors, if you're operating in a competitive therapeutic area, it's critical that you align your development and your partnering program to highlight the factors that are influencing in-licensors' priorities in your category," stated Ben Bonifant, Vice President and Head, Business Development Practice, Campbell Alliance.
The North Carolina Biotechnology Center is working to estimate demand for research greenhouse space among North Carolina’s agricultural biotechnology firms and other life science companies. The Center is hoping to determine whether one or more multi-user research greenhouse facilities would be economically feasible within the State. For more information, or to provide information on research greenhouse needs, contact Amber Shirley at email@example.com.
Clean Burn Fuels has received the Biofuels Center of North Carolina's inaugural Biofuelist of the Year award. Governor Beverly Perdue presented a plaque to Jack Carlisle, President of Clean Burn Fuels, which operates a 60M gallon a year (GPY) ethanol facility near Raeford in Hoke County. The Biofuelist of the Year award honors pioneers in North Carolina’s emerging biofuels sector.
Clean Burn Fuels, the State’s first large-scale production facility,
is almost fully operational
The award will signpost the development of the new industry as it supports North Carolina’s goal of domestically producing 600M gallons of liquid fuels per year. In 2007, a handful of small-scale production companies were producing somewhere between 1-2M GPY of biodiesel. In 2010, two and a half years after the Biofuels Center was initially staffed, more than 400 people statewide are actively involved in biofuels research, biomass growing, feedstock development, production, distribution, workforce development and education, or are involved in supportive roles.
Clean Burn Fuels, the State’s first large-scale production facility, is almost fully operational. The facility will produce 60M gallons of fuel alcohol a year. While fuel alcohol production is the focus of Clean Burn Fuels, the plant will also produce and sell its co-products.
AdvaMed 2010 will be held October 18-20 in Washington, DC. The conference offers an important opportunity for participants to showcase products and concepts to national and international businesses, media, government officials, and other key constituents. NCBIO members are eligible for discounted registration.
Please have your organization’s media/marketing coordinator send news about your company to Brenda Summers - firstname.lastname@example.org
Arbovax, an early-stage company developing vaccines against insect-borne diseases, started preclinical testing of a unique new Dengue fever vaccine in early May. Arbovax has signed a contract with Hamden, Connecticut-based RxGen to conduct the trials in non-human primates at the St. Kitts Biomedical Research Foundation. The Walter Reid Army Institute of Medical Research is providing additional assistance in the testing process. “These trials represent a significant milestone for our investors and for global health” said Malcolm Thomas, CEO of Arbovax, “RxGen has a very experienced team that will complete this work by August under closely supervised conditions.” The Arbovax core technology was developed by Dennis Brown, Ph.D., and Raquel Hernandez, Ph.D., at North Carolina State University.
Capstrat received three Inspire Awards at this year’s North Carolina Public Relations Society of America (NCPRSA) awards program. The company received the following recognition: Silver, Public Affairs/Public Service — "Smoke-free NC" public affairs campaign, American Cancer Society and North Carolina Alliance for Health; Bronze Category Award — 2009 Foundation Annual Report, Blue Cross and Blue Shield of North Carolina Foundation; and Silver Honorable Mention, Events and Observances — "2009 State of Preventive Health Summit," Blue Cross and Blue Shield of North Carolina.
Eisai Inc., commemorated the opening of its newly constructed parenteral facility in the Research Triangle Park. The new site will be utilized for the commercial production and formulation research and development of intravenous treatments. The 65,000-square-foot facility will serve as Eisai's global commercial manufacturing and drug development site for intravenous drug products in support of the company's global clinical development programs, including those for oncology. Eisai invested approximately $100M in the new facility, which encompasses aseptic processing suites, laboratories and other support functions. The new operation is designed to handle and process highly potent compounds utilizing state-of-the-art isolator containment technology.
"Constructing this new facility at our current location has allowed for the seamless integration of our production and research and development operations," said Hajime Shimizu, Chairman and CEO of Eisai Inc. "Furthermore, North Carolina's highly skilled workforce, as evidenced by our capable and dedicated employees, has helped Eisai become the successful company that it is today and will continue to help propel our business in the future."
Hughes Pittman & Gupton, LLP is the recipient of the 2010 Pinnacle Integrity in Business Award from the Greater Raleigh Chamber of Commerce. The firm was honored during the Chamber's 26th annual award ceremony on May 4th. The Integrity in Business Award recognizes HPG as a company that exhibits a strong commitment to corporate responsibility, integrity, and ethics. The firm's behavior benefits not only their business and employees, but all likeminded companies in the Triangle area. HPG was selected by an independent group of judges based on the level of commitment to these principles.
Inspire Pharmaceuticals, Inc., scientists and collaborators presented data on denufosol tetrasodium, an investigational therapy for cystic fibrosis (CF), during an oral presentation at the American Thoracic Society (ATS) 2010 International Conference May 14 – 19 in New Orleans. The data suggested that denufosol, an inhaled ion channel regulator, has properties that allow it to reach and improve lung function in the small airways, which may support its potential as an early intervention therapy.
Kryosphere has secured $700,000 in additional funding to support its continued growth and expansion. The round financing is being backed by existing and new angel investors and KeySource Commercial Bank in Durham. “We continue to be impressed with the company’s progress and execution of its strategy, and are pleased to support this growing Research Triangle based company,” commented Don Draughon, CEO of KeySource Bank. “The financing came together quickly and we were thrilled at the level of interest. In the end we were over-subscribed.” said Eric Hallman, CEO of Kryosphere. Hallman said that the financing also addresses the infrastructure requirements for a major biotech client with which Kryosphere just signed a five year biomaterials management contract.
The Immune Tolerance Institute, Inc. (ITI) and the David H. Murdock Research Institute (DHMRI) have announced a collaboration to establish the Center for Critical Path Research in Immunology (CCPRI) at The David H. Murdock Research Institute on the North Carolina Research Campus in Kannapolis. Driven by a mission to accelerate the discovery and development of new breakthrough treatments for the many people afflicted with the broad range of immune system-related conditions, the CCPRI will integrate state-of-the-art genomic, cellular, proteomic and bioinformatics technology platforms to discover and develop novel biomarkers that more effectively guide new advances in human health and match patients with therapies that will provide them the greatest benefit. General Mills is also expected to announce establishment of an operation on the campus later this month.
POZEN Inc. has announced that results of a Phase 1 Trial of PA65020, a combination of enteric-coated aspirin (EC-ASA) and immediate-release (IR) omeprazole, show PA65020 significantly reduces the incidence of gastrointestinal (GI) mucosal damage compared to EC-ASA (650 mg twice daily) in healthy adults treated for one month. Patients receiving analgesic doses of EC-ASA were five times more likely to experience significant GI mucosal damage than patients receiving PA65020. The study concluded that PA65020 may provide an important therapeutic option for at-risk patients who require analgesic doses of aspirin. Data was presented on May 7th at the 29th Annual Scientific Meeting of the American Pain Society (APS) in Baltimore. Data will also be included in a supplemental issue of the Journal of Pain.
Talecris Biotherapeutics has entered into an agreement to be acquired by the Spanish pharmaceutical firm Grifols for newly issued Grifols non-voting shares having an aggregate value of approximately $3.4 billion. The merger will create a global leader of life-saving and life enhancing plasma protein therapeutics. Grifols Chairman and CEO Victor Grifols commented, “The acquisition of Talecris furthers our vision to better serve patients and health care professionals with innovative products, a strong clinical research capability and new research into recombinant therapies.” Talecris Chairman and CEO Lawrence D. Stern said that “Grifols´ well-established reputation, know-how and expertise will enable the combined entity to meet the needs of more patients. Our employees will benefit from the opportunities available to them as part of a larger, global organization committed to the expansion of Talecris´ existing business, the development of our pipeline products, and the maintenance of our culture of compliance and quality. Importantly, our stockholders will realize a compelling premium and benefit from the ability of the combined business to accelerate key gross margin improvement opportunities within Talecris.”
Wyrick Robbins has been recognized by Dow Jones Private Equity Analyst as the 22nd most active law firm in the nation in terms of venture capital and private equity transactions based on volume of deals closed in 2009. In closed venture deals alone, the firm ranked 17th nationally. “Our 2009 transactions increased in a year when industry volume dropped significantly,” stated Larry E. Robbins, Partner at Wyrick Robbins. “We continue our long standing tenure as a recognized national leader in the venture capital and private equity industries.” Last year, Wyrick Robbins closed a total of 106 deals – of those, 79 were venture capital deals and 27 were private equity. While the publication does not rank law firms geographically by numbers of venture capital and private equity deals, Wyrick Robbins total deals closed in 2009 would qualify them as ranking #1 among law firms based in the Southeast.
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Guidance on Therapeutic Discovery Project Program
The Biotechnology Industry Organization (BIO) praised the Obama Administration for its new guidance, released in May, that will lead to many small biotechnology companies receiving needed funding to support critical on-going research and development programs. The guidance document
initiates the Therapeutic Discovery Project Program (TDPP), which was created by the Patient Protection and Affordable Care Act signed into law by President Obama on March 23. The program will provide tax credits and grants to small biotechnology firms that show significant potential to produce breakthrough medical therapies, support good jobs and increase U.S. competitiveness.
The guidance importantly sets out timelines for applications to be received by the U.S Department of the Treasury and clarifies the evaluation process for the program. The formal application window will extend from June 21 to July 21, 2010. Applicants will receive a determination no later than October 29, 2010. The new rules also impose a per company cap of $5M, ensuring that this program is spread broadly over a significant number of promising projects at biotech firms.
June - July 2010. Summer Biotechnology Workshops for Educators, North Carolina Biotechnology Center, Research Triangle Park, NC. Enroll now in one of the 2010 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.
July 19-21, 2010. BTEC Professional Development Course: European Regulatory Expectations, Golden LEAF Biomanufacturing Training and Education Center (BTEC), North Carolina State University, Raleigh, NC. BTEC, in collaboration with the University of Strasbourg, France, presents an exceptional professional development opportunity for pharmaceutical and biotechnology professionals: Navigating the European Regulatory System. Learn about European regulatory expectations in this 2½ day course. Topics include organization of the European regulatory system; the texts and organizations that deal with the regulation of medicinal products; how products are authorized; requirements for drug development and manufacturing, and more. More information.
October 6, 2010.
NCBIO Annual Meeting. Save the date for this half day program: A Look at North Carolina’s Vaccine Cluster: Present and Future. RSVP to Jennifer by calling 919-281-8960 or email@example.com
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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