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 The State Senate is working on a tax revision measure that broadens the state’s tax bases and reduces tax rates. For businesses, most corporate income tax credits – with the notable exception of the R&D tax credit – are repealed; the corporate tax rate is phased down to 5.8% over two years; the franchise tax is extended to limited liability companies; and depreciable capital equipment is excluded from sales tax. Combined reporting is not required and tax nexus is unchanged.
NCBIO is monitoring the progress of the legislation. President Sam Taylor says, “Our preliminary analysis suggests that the proposed reform package generally does not appear to be unfavorable to life science companies.”
The Senate plan repeals the State’s existing Article 3J investment and job creation tax credits. Article 3J credits already earned will be creditable to future tax liability. Other corporate income tax credits, except for the R&D credit and certain refundable credits also are repealed. Certain targeted tax incentives, created to support one-off economic development arrangements, will be honored.
NCBIO has sent a detailed memo to members about proposed changes and will send additional information as changes occur. Contact Sam Taylor if you have questions or concerns about the proposal.
Revenue estimates released by legislative leaders in early May project that state revenues for the 2009-10 fiscal year will be down $4.6 billion from levels anticipated in the last budget cycle. The Assembly’s lead economist, Barry Boardman, advised members that revenue shifts during the last twelve months are some of the largest ever experienced.
Boardman now estimates that revenues in the current fiscal year, which ends June 30, will fall $3.2 billion short of initial projections, or approximately 15% off anticipated collections of $20.8 billion. Revenues in FY 2009-10 are expected to reach only $17.5 billion, or $4.6 billion below the $22 billion needed to continue state operations at current levels. Governor Beverly Perdue presented legislators a FY 2009-10 budget proposal in March using a combination of spending cuts, tax increases and federal stimulus monies designed to meet a revenue shortfall of $3.25 million. In April, Perdue took $200 million in FY 2009-10 stimulus monies to shore up funding for the current fiscal year. That shift, combined with lowered revenue estimates released this month, will require legislators to find an additional $1.5 billion in spending cuts or tax increases to bring Perdue’s March proposal into alignment with current fiscal realities.
The new revenue estimates are based on consensus economic forecasts predicting that the state’s economy will experience some strengthening – probably less than 1% annualized growth -- in the fourth quarter of this year, followed by a further modest rebound of 1.5% to 2.0% growth in 2010. Increases in state tax revenues will lag economic growth – generally tracking a slower recovery in employment. The consensus forecast calls for a 2.0% decline in state wages and salaries in FY 2009-10 with worker income finally beginning to climb again in FY 2010-11.
“Despite economic woes, we are seeing quality ventures and are investing,” Dana Mead, a partner with Kleiner Perkins Caufield & Byers told the more than 270 individuals attending the MedTech conference May 14. Mead noted than many successful companies started in economic downturns.
William Hawkins, Chairman and CEO of Medtronic, encouraged medical technology company leaders to “have some humility; take risks outside your comfort zone; stick to products that are easy to use; document everything; associate with good, smart people; network all the time; never, never, never, never give up; and have fun.”
Conference Steering Committee and Speakers
The conference was sponsored by CED and supported by NCBIO. Other speakers included: Gary Henley, President and Chief Executive Officer, Wright Medical Group, Inc.; Dr. Gregg W. Stone, Director of Cardiovascular Research and Education, The Center for Interventional Vascular Therapies, Columbia University Medical Center and the Cardiovascular Research Foundation; Rick Anderson Managing Director, PTV Sciences; and Dan Lemaitre, Former President and Chief Executive Officer, CoreValve Inc. Comments from these speakers and more information from the conference will be included in the June NCBIO Update.
The event was held at the Duke University Fuqua School of Business. Steering Committee for the event included: Co-Chairs Greg Davis (Tryton
Medical) and Karen LeVert (Southeast TechInventures), Fred McCoy (Synecor), Barry Myers (Pappas Ventures and Duke University), Rick Randall (TranS1), Richard Stack (Synecor) and Rob Tyler (Hutchison Law Group).
 Resources for emerging biotechnology companies have taken a major leap forward at the Wake Forest University Babcock Demon Incubator (BDI) Wet Lab in Piedmont Triad Research Park, thanks to a Regional Development Grant recently awarded by the North Carolina Biotechnology Center. The matching grant allows the BDI Wet Lab to substantially expand its low-cost, multi-user wet lab space and support six new biotechnology and bioscience companies annually.
According to Tom Clarkson, Director of BDI, "We are now open for business for inception stage companies, with a facility designed specifically for biotechnology and bioscience ventures that is fully equipped with anything a young company might need to develop business plans, validate scientific research, complete proof-of-concept or test a final product offering. Add to that an extensive and growing services network and a strategic downtown location in the Piedmont Triad Research Park, and you have a tremendous competitive advantage as a biosciencetech entrepreneur launching a company in North Carolina," Clarkson said.
The grant from the NC Biotechnology Center allowed BDI to upfit the existing BDI wet lab with the core lab equipment including microscopes, cell and tissue culture equipment, PCR, electrophoresis equipment, and freezers, all to be shared by multiple users. The total budget for the project is $105,955 with the BDI providing $35,739 in matching funds and $70,578 from the Biotechnology Center.
More than 230 students participated in the third annual Career Fair hosted by the NCBioImpact consortium. Students attended seminars on how to conduct a job interview as well as expectations between employers and entry-level employees in life science companies. This year’s event was held at the Biomanufacturing Research and Technology Enterprise (BRITE) facility on April 3.
Companies participating in the event were Aerotek Scientific, Biogen Idec, Catalent Pharma Solutions, Diosynth Biotechnology, Eisai Inc., Griffin Engineering & Technical Services, Inc., Kelly Scientific Research, Merck & Co., Nova Nordisk Pharmaceutical Industries, Novartis Vaccines and Diagnostics, Novozymes North America, Talecris Biotherapeutics, the U.S. Environmental Protection Agency, and Wyeth Biotech.
The Biomanufacturing Training and Education Center (BTEC) at North Carolina State University will feature six short-course offerings this summer. The courses are designed for the working professional with the goal of providing relevant information reinforced through hands-on work in the state-of-the-art teaching facility. Courses include Downstream Biopharmaceutical Process Development; Bioreactors for Cell Culture; Biologic Formulation Science Fundamentals; cGMP Fermentation Operations; Single-Use Bioreactor Technology; and Fermentation Engineering. Click for more information and registration.
The North Carolina Biotechnology Center and Business North Carolina magazine are partnering to print and distribute the Center’s official BioSciNC Company Directory, the definitive listing of the state’s life-science corporations. The directory is already the Biotechnology Center’s most popular publication at meetings and trade shows around the world.
The directory provides names, addresses and Web sites of more than 500 life-science companies. Business North Carolina’s printed version will be published as a separate pull-out section of the September 2009 issue of the magazine. The special section will be sent to all 30,000 of Business North Carolina and used in the Biotechnology Center’s marketing and promotional efforts.
The joint venture represents the first opportunity for third parties to purchase sponsorships and advertisements for the directory. Companies and institutions may also elect to enhance their listing within the directory. More information is available from Ben Kinney at Business North Carolina magazine, who can be contacted at (704) 523-6987, or by e-mail at bkinney@businessnc.com.
More than 400 scientists and other life science employees turned out for the second annual vendor fair hosted by NCBIO and VWR. Participants attending the April 28th event had a chance to see the latest in scientific products available from more than 70 vendors. GE Healthcare and ZyGem hosted seminars on topics of interest to attendees.
The annual event is designed to give scientists and purchasing managers at small companies first hand access to new laboratory technologies. Proceeds from the event help support NCBIO’s member programs and activities.
 Nearly 500 entrepreneurs and investors gathered at the Pinehurst Resort for the Council for Entrepreneurial Development’s Venture 2009. Celebrating its 26th year, participants at the conference heard from Wells Fargo & Company President and CEO John G. Stumpf, who was on his first trip to North Carolina. Stumpf discussed perspectives from Wells Fargo’s acquisition of Wachovia. University of North Carolina President Erskine Bowles also addressed the conference, outlining some of the challenges facing the state and its university system in the current economic environment.
Three North Carolina entrants have been named semifinalists in the annual BIO/Plan competition sponsored by Southeast BIO (SEBIO), a regional nonprofit organization dedicated to fostering the growth of the Southeast's life sciences industry. The BIO/Plan Competition is a year-long program developed to promote the creation of new, fundable life science companies based in the Southeast. Working closely with technology transfer offices and entrepreneurs throughout the region, the competition is bringing forward opportunities from leading Southeastern research universities and research centers.
The ten semifinalists were selected from more than fifty total applications. The applicant pool included applications from Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia. The ten semifinalists represent a wide range of technologies including: small molecule therapeutics, biologics, diagnostics and medical devices. In addition to the North Carolina entrants, two semifinalists were from South Carolina, two from Tennessee, one from Georgia, one from Florida, and one from Virginia. The technologies emerged from some of the region's finest research institutions, including: Duke University, Emory University, the University of Florida, the University of North Carolina at Chapel Hill, the University of Tennessee, the University of Virginia, and Vanderbilt University.
Each semifinalist will now be paired with small mentoring teams and begin the mentorship phase of the competition. Each team includes three or four experienced professionals from active venture funds or angel groups, biotech entrepreneurs and managers, and service providers with relevant start-up expertise. The mentoring teams directly interact with the semifinalists over a period of 6 months focusing on the strategic development of the business concept and commercial opportunity. The teams are also supported with additional resources including: business plan templates and guidelines, regulatory consultants and presentation guidelines and examples. The ultimate goal of the mentoring process is the development of an executable business strategy and associated written plan. This rigorous mentorship process is the cornerstone of the competition.
An article in The Economist April 16th, “Pippets at the ready,” looks at the growth of the state’s life science industry. The article focuses on training at the Golden Leaf Biomanufacturing Training and Education Center at North Carolina State University as well as other university and community college training activities.
The article reviews North Carolina’s biotechnology development efforts and concludes, “Biotech has its struggles at the moment; companies are worried about investment in the current climate. But North Carolina’s love affair with its new industry will survive.”
Please have your organization’s media/marketing coordinator send news about your company to Brenda Summers - bsummers@ncbioscience.org
NCBIO’s Board of Directors welcomed the following new members at its April 30 meeting: Acurian, bioMérieux, BioResource International, CeNeRx, Eli Lilly, Grassroots Biotechnology, Hile Associates, Haddad Wylie Industries, Invitrogen, K&L Gates, Pamilco Pharmaceuticals, Scottish Development International, Smith & Nephew, W.L. Gore, and Yonkers Industries.
Terry Costello of Yonkers Industries and
Doug Puzia of W.L. Gore
Biolex Therapeutics, Inc., announced the results of its United States Phase 2a clinical trial (the "PLUS" trial) of Locteron® at the 44th Annual Meeting of the European Association for the Study of the Liver (EASL) in Copenhagen, Denmark. Locteron, controlled-release interferon alpha 2b, is designed to improve patient care by providing a more convenient once-every-two week dosing schedule and by reducing the side effects, including flu-like symptoms, associated with pegylated interferons, the current standard of care. Biolex has also announced the commencement of patient dosing in the SELECT-2, a Phase 2b trial of Locteron in the United States and Europe.
GlaxoSmithKline plc (GSK) and Stiefel Laboratories Inc. announced that they have signed an agreement to create a new world-leading speciality dermatology business. Under the terms of the agreement GSK will acquire Stiefel for a cash consideration to shareholders of $2.9 billion. GSK also expects to assume $400 million of net debt upon closing. A potential further $300 million cash payment is contingent on future performance. GSK’s existing prescription dermatological products will be combined with Stiefel’s and the new specialty global business will operate under the Stiefel identity within the GSK Group.
Inspire Pharmaceuticals, Inc., scientists and collaborators presented information from a Phase 4 program with AzaSite(R) (azithromycin ophthalmic solution) 1% in two electronic poster presentations at the 2009 American Society of Cataract and Refractive Surgery (ASCRS) annual meeting in San Francisco, CA. AzaSite is currently approved by the U.S. Food and Drug Administration (FDA) for the treatment of bacterial conjunctivitis. Inspire is pursuing an additional indication for AzaSite for the treatment of blepharitis.
The North Carolina Research Campus (NCRC) has received a major contribution from Herman Stone, president of Stone Theaters and former owner of Consolidated Theaters. Stone announced his $1 million lead gift and chairmanship of On the Shoulders of Giants: the Carolina’s Campaign to Cure MS. NCRC creator David Murdock, Dr. Mary Hughes of the National Board of the MS Society, scientists from Duke University and numerous local board members and clients were on hand for the announcement. The gift is the largest in the history of the National MS Society in the Carolinas and will support the work of Dr. Simon Gregory along with his research team and partners as they begin a new MS research focus at the NCRC.
Targacept, Inc., a clinical-stage biopharmaceutical company developing a new class of drugs known as NNR Therapeutics™, has announced the initiation of a Phase 2 exploratory study of TC-5214, a nicotinic channel blocker, as an augmentation therapy for resistant hypertension. TC-5214 is also being studied in an ongoing Phase 2b clinical trial as an augmentation therapy for major depressive disorder. “We believe the unique profile of TC-5214 makes it a promising product candidate as an augmentation therapy to existing medications to help address the unmet need for patients with resistant hypertension,” said J. Donald deBethizy, Ph.D., President and Chief Executive Officer of Targacept. “In addition, we remain enthusiastic about the therapeutic potential of TC-5214 as an augmentation therapy for major depressive disorder and expect to complete our ongoing Phase 2b trial in mid 2009.”
TCG will attend EuroMedtech in Dusseldorf, Germany, on June 3-4, 2009. TCG helps companies that have a medical technology or medical device to commercialize in Europe. For more information, call TCG at 919-354-4204 or email to rkeefer@tcgbiopharma.com. For more information on EuroMedtech, click here.
Vipin Garg, President and CEO of Tranzyme Pharma, a clinical stage biotechnology company, has been selected as a finalist for the Ernst & Young Entrepreneur Of The Year® 2009 Award in the Carolinas. According to Ernst & Young LLP, the awards program recognizes entrepreneurs who demonstrate extraordinary success in the areas of innovation, financial performance and personal commitment to their businesses and communities. Dr. Garg was selected as a finalist from nearly 75 nominations by a panel of independent judges. Award winners will be announced at a special gala event on June 18, 2009 at the Westin Charlotte “Under Vipin’s direction, Tranzyme has become a major international innovator and developer of drugs for gastrointestinal (GI) disorders”, said David J. Drutz, MD, Chairman of the Board for Tranzyme Pharma, and General Partner, Pacific Rim Ventures Co., Ltd.
Senate Committee Approves Patent Reform Compromise
The Biotechnology Industry Organization (BIO) has commended the Senate Judiciary Committee for its success in developing a more consensus-oriented approach to patent reform legislation. “The Committee has made encouraging progress toward reforms that will help strengthen and improve our nation’s patent system,” said BIO President Jim Greenwood. “Thanks to the leadership of Chairman Patrick Leahy (D-VT) and Senators Dianne Feinstein (D-CA) and Arlen Specter (D-PA), we are optimistic that we will now see meaningful patent reform that preserves the incentives necessary to sustain America’s global leadership in innovation and spurs the creation of high-wage, high-value jobs in our nation’s innovation economy.”
Greenwood said the Committee had crafted careful compromises on several key issues, including damages and post-grant review. “While no compromise is ever perfect,” said Greenwood, “we believe the Committee’s product breaks the logjam on the major issues that have held up patent reform for the past several Congresses and will clear the path for a bill to be completed without undue delay.”
Bipartisan Proposal for Biosimilars Legislation
Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood has commended Representatives Anna Eshoo (D-CA), Jay Inslee (D-WA) and Joe Barton (R-TX), on their introduction of H.R. 1548, the Pathway to Biosimilars Act, which would develop a regulatory pathway for approving biosimilars.
“The legislation introduced by Representatives Eshoo, Inslee and Barton bill lays out an effective, reasonable and safe pathway to biosimilars. It is the right medicine for lowering costs, ensuring patient safety and providing fair, responsible incentives for continued biotech research into cures for diseases such as cancer, multiple sclerosis, Alzheimer’s and HIV/AIDS. In short, the bill provides patients with the right balance between innovation and competition.
“This bill will lead to real solutions for our nation’s health care challenges and provide real hope for patients. It will help reduce costs by enabling additional competition among biologics but at the same time help safeguard patient safety by requiring demonstration of the purity, safety and effectiveness of biosimilars. More, the bill includes the incentives necessary for biotechnology researchers to develop new breakthrough therapies and potential cures.
“The Eshoo-Inslee-Barton bill establishes parity with the outcomes of the Hatch-Waxman regime developed for traditional pharmaceuticals, balancing the need to increase access, lower costs, ensure drug safety and promote continued biomedical breakthroughs. At the same time, the bill recognizes the fundamental differences between biologics and traditional pharmaceuticals.
May 18-21. BIO International Convention, Atlanta, GA.
For more information.
June & July. Summer 2009 Biotechnology Workshops for Educators.
For more information.
July 26-July 29. Health Sector Overview: Health Care in the 21st Century: An Executive Education Program at the Fuqua School of Business, Duke University
For more information.
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NCBIO This Month
