Biomanufacturing center now seen as a non-profit

Proponents of the $11.3 million cooperative biomanufacturing center have switched strategies, abandoning a for-profit venture for a non-profit model, along the lines of the Canandaigua-based Infotonics Technology Center Inc.
Officials expect the new model to build a stronger case for a Center of Excellence in biomanufacturing.
“This is a tremendous opportunity for the community. Having a New York State non-profit facility is extremely doable. We are talking about a potential Center of Excellence in biomanufacturing,” said Raymond Watkins, vice president of operations at Vaccinex Inc., a biotechnology firm.
The planned 11,000-square-foot facility will function as a manufacturing resource for New York universities and biotech firms looking to push therapeutic product candidates into clinical development.
Research findings led to the switch to a non-profit.
“We assembled a project team and they were assessed with a charge to see if a for-profit cooperative facility made sense,” Watkins said. “We concluded the profit margin was relatively thin, but it doesn’t detract from the critical need (for this facility).”
Paul Wetenhall, venture coach and interim director of High Technology of Rochester Inc., however, indicated the project needed to be reexamined, based on the study’s results.
“We know there is going to be a demand,” he said. “Right now it is not a top priority, but it will be reevaluated.”
Officials from Vaccinex, University of Rochester Medical Center and HTR last July filed a proposal to tap the state’s Empire Opportunity Fund to establish the facility. The fund is projected to start at $750 million and grow to more than $2 billion over a three-year period.
Design and construction of the building would be a two-year project. The center would create some 40 jobs over a three-year period and be run by a fixed staff. Supporters have met with Albany officials, Watkins said.
“A senior delegation has been to Albany. This is clearly going to benefit the region and benefit the state,” he said. “It is too soon to make announcements, but we are certainly making progress.”
City and Monroe County officials, Greater Rochester Enterprise Inc., Rochester Institute of Technology and Rochester Business Alliance Inc. officials and local biotech firms have voiced support for the project.
The center also has attracted interest from the Rump Group, an informal group of more than a dozen top CEOs and corporate executives.
“We are very supportive of the effort,” said Katherine Keough, president of St. John Fisher College and a group member.
The group is conducting research on three focus areas: potential capital projects, venture capital and the group’s role in the debate over government consolidation. The Center for Governmental Research Inc. is studying those areas to gauge economic impact.
The study includes research on the biomanufacturing center proposal, Keough said. CGR officials declined to provide details of the report.
Jay Stein, former URMC CEO is an active principal of the group. In his previous role as URMC chief, Stein was a prominent supporter of the center.
Stein’s plans to position URMC as a magnet for biotech-related firms and research was expected to drive the local biotech industry. He abruptly resigned from URMC in May.
Successful biotech hubs such as the San Francisco Bay area; and the Research Triangle Park in North Carolina have a common thread-a critical mass of three or four major research universities and medical centers. Stein played a role in pushing URMC at the forefront of establishing a biotech cluster in Rochester.
“University of Rochester is still as committed to this as Jay was. Jay was able to push things; he was a pretty unique guy,” said Douglas Merrill, professor and head of the department of biological sciences.
The cooperative biomanufacturing center is expected to provide an avenue for New York-based biotech startups, research universities and midsize firms to develop a pharmaceutical grade product that meets Food and Drug Administration requirements.
Most young firms lack financial resources for in-house manufacturing and face a variety of challenges while pushing a product through clinical development. Typically, pilot scale manufacture costs $5 million to $10 million per product for early clinical trials.
“Sometimes companies have to get in queue or license the product (and) essentially give it away, so that somebody else would manufacture it,” Merrill said. “The center would attract other small companies, so they could come and use the facility.”
New York is home to some 90 biotech startups and emerging companies in the biotech area, and more than 15 major universities engaged in biologic product research and development, the proposal for the center states.
The center is expected to attract firms from outside the area as well. Meeting FDA requirements could shine the spotlight on companies in need of venture capital. Biotech industry investors are likely to invest in businesses that are closer to clinical trials, poised to enter the market. And as a result, venture capitalists would pay more attention to the region as a whole.
“The center is one of the missing links, on top of everything else like work force, incubators and tax credits,” Merrill said.
A tough economy could make the road to attracting funds and building the center a long one. A Center of Excellence-type initiative would involve funding from state, federal and corporate sources.
The Infotonics Center, also known as the Center of Excellence in Infotonics, is an example of that type of cooperative, public-private effort. The center has attracted corporate investment from Eastman Kodak Co., Xerox Corp. and Corning Inc.
“We are in the process of garnering necessary support,” Watkins said. “Sometimes progress is slow, (but) the project is alive and well.”
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06/27/03 (C) Rochester Business Journal