Founded in 1607 by a venture-backed company in London, Virginia has long been the destination of choice for entrepreneurs and start-up companies. That same tradition of discovery continues today with nearly 300 biotechnology and medical device firms that are expanding the frontiers of modern medicine.
These dedicated scientists, clustered around research universities such as Virginia Commonwealth University, are pioneering new therapeutic medicines, more effective diagnostics and life-saving medical devices.
According to a new study by Miami-based Archstone Consulting, there were more than 1,500 active clinical trails conducted last year by Virginia researchers on new medicines, including those targeting cancer, diabetes, HIV/AIDS, mental health disorders and respiratory diseases.
In addition to the National Science Foundation and biopharma companies with facilities in Virginia (such as Pfizer, Merck, Novozymes, Abbott Laboratories, Boehringer Ingelheim, and Teva Pharmaceuticals), the commonwealth is also home to the Janelia Farm Research Campus of the Howard Hughes Medical Institute (HHMI). This $500 million, world-class biomedical research complex in Loudoun County houses several hundred of the world's top scientists who use emerging and innovative technologies to pursue biology's most challenging problems.
Clearly, biotechnology has asserted itself as a vital contributor to Virginia's economic growth.
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The commonwealth's $13 billion bioscience and device industry directly employs more than 20,000 people, up 23 percent between 2001 and 2008. Annual average wages approach $78,000, far above the national average wage of $45,229, according to the U.S. Bureau of Labor Statistics.
Between 2001 and 2008, the number of Virginia bioscience companies grew by 55 percent, in contrast to 18 percent growth in the private sector statewide, and 14 percent across the U.S. Indirectly through suppliers, vendors and services-related companies, Virginia's bioscience industry employs nearly 80,000 people.
Thanks to the high quality of Virginia's intellectual property and aggressive state investor tax credits, private investors also recognize the long-term value of Virginia's robust bioscience industry. Between 2004 and 2009, Virginia biotechnology and device companies attracted $405 million worth of venture capital. That puts Virginia in the top 20 nationally.
With nearly 50 bioscience companies active in the community, the Greater Richmond region is one of the strongest life science clusters in the state. This is directly attributable to the close proximity to a leading research university, a developing angel capital community, a cadre of experienced bioscience entrepreneurs, and the foresight and determination to develop the Virginia Biotechnology Research Park, one of the most significant industry accomplishments to date.
Any region in the country would be proud to have Richmond-area companies such as Health Diagnostic Laboratory, Intelliject, Lyotropic Therapeutics, GPB Scientific, B.I. Chemicals or ECR Pharmaceuticals.
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Underlying this hopeful environment are some potentially worrisome issues.
On the surface, Virginia's biotech sector seems to match up well in terms of the percentage of research and development activity taking place at state academic institutions. In fiscal 2008, Virginia ranked 17th in the nation in the amount of academic research and development dollars spent on biosciences. Of the $70 billion in academic funding, more than $550 million was allocated to bioscience research in Virginia.
That's good enough to place Virginia in the top 20, but it also points up how far the commonwealth has to go. Virginia is bookended by two states — North Carolina and Maryland — that rank fifth and sixth in the nation, respectively. In short, state policymakers and the academic research community must take action now to gain full advantage of growth in the life sciences industry.
Seeking to capitalize on the growing nucleus of innovative research-based companies, Gov. Bob McDonnell earlier this year signed into law the Virginia Refundable Research & Development Tax Credit. Biotech and other advanced technology firms are now eligible for up to a 15 percent tax credit (or cash refund) of their qualified R&D expenses, and up to 20 percent when partnering with Virginia's public or private universities.
The new legislation complements the Virginia Innovation Investment Act, enacted by the General Assembly in 2010. That initiative rewards Virginians who invest in advanced technology companies with a 100 percent exclusion from capital gains taxes if an investment is made in the next three years.
And that is not all. Virginia also matches federal Small Business Innovation Research awards, provides aggressive tax credits for angel investors, has a state-funded seed-stage investment program and a stable corporate tax rate of 6 percent. All of these attributes in a state that consistently ranks first or second as the best place for business in America.
Virginians themselves have plenty of cause for optimism about the impact of biotechnology on their lives. Those sanguine sentiments go far beyond new tax policies and new high-wage jobs, as pivotal as those elements continue to be. Biotechnology-derived medicines are saving lives or managing debilitating diseases every day for millions around the world.
These are the ideals that animate the commonwealth's 21st century explorers: the ambitious, innovative and driven people who are the face of Virginia's inspiring bioscience community.
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