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![]() Biotechnology Sector Profile: USA (Dallas)May 2002Richard Crouch Market OverviewWhile Texas prides itself on being "larger than life" in just about everything, the Lone Star State has to take a back seat to some other U.S. regions when it comes to biotechnology. With its 45 or more biotech companies, few of them with more than 100 employees, Texas cannot yet compare with the huge biotechnology clusters in California or New England. However, this should not prevent Canadian companies from looking more deeply into the Texas scene. Texas is home to some promising biotech developments, and could evolve into a major player in the industry. The biotech industry in Texas has most of the ingredients necessary for growth. In a way, its structure is similar to that of Canada's biotech industry, with small but dynamic companies clustered around strong medical research centres in different geographic areas of a vast territory. Indeed, the Texas biotechnology industry may provide a more comfortable "fit" for Canadian biotech companies entering the U.S. market. The majority of Texas biotechnology companies focus on health care, and are concentrated in four metropolitan areas: Houston, Dallas, Austin and San Antonio. These four clusters benefit from proximity to large, well-funded medical/educational institutions. The Texas Medical Center in Houston is a medical city within a city that thrives on the presence of multiple large research facilities belonging to the University of Texas network, Baylor College of Medicine, and Texas A & M. It is, no doubt, because of the Texas Medical Center that Houston is by far the most important biotechnology cluster of Texas. In Dallas, the University of Texas Southwestern Medical Center, home to research on the Genome Project, is at the core of the city's budding biotech industry. The University of Texas in Austin and the University of Texas Health Science Center at San Antonio anchor the other two clusters. There is an ongoing partnership between private industry and Texas research institutions to move innovative ideas to market. All large medical teaching and research centres have created a technology-transfer organization to assist in bringing research and development (R&D) out of the classroom and laboratory and into the marketplace: 55% of Texas biotechnology companies are direct spinoffs from Texas public universities. Overall, royalties, licensing fees and other transactions involving intellectual property at Texas public-health-related institutions generated about $30.2 million1 in 2001. In addition to a positive business environment, support for the biotechnology industry has come from local governments and industry organizations. A multiyear strategy in support of the industry has recently been developed, with the state government contributing just over $24 million annually to that plan. This trend is worth noting because Texas is, traditionally, a state that tends to minimize government intervention in the private sector, and is where fierce individual competition is the rule. The first signs of collaboration started 12 years ago when newly established technology-transfer units from competing universities decided to share information and experience. They created the Texas Technology Transfer Association (T3A), a tightly knit and highly professional association comprising the technology-transfer units of all major medical research institutions in Texas. Three years ago, the Texas Healthcare and Bioscience Institute (THBI) was funded. THBI is a private consortium of biotech, medical device and pharmaceutical companies, universities and private research institutions that is at the forefront of the industry's organizational efforts. It tracks an index of the Texas health-care technology industry, and coordinates state-wide initiatives and educational seminars. More recently, the San Antonio & Austin Life Sciences Association (SALSA) was created to promote the biotechnology industry in those areas. OpportunitiesTexas ranks third in the U.S. in expenditures for R&D in life sciences. Its universities spend an average of 58% of the state's R&D expenditures (close to $1.4 billion a year) on life sciences. The private health-care industry puts nearly $14 million directly into biotechnology research each year. There is a lot of room for strategic partnering and technology transfer. Possibilities include R&D collaboration, in- and out-licensing of technologies, product development, venture-capital funding and joint ventures. Market Access ConsiderationsAll companies, whether local or foreign, are required to adhere to United States Food and Drug Association (USFDA) standards. Major CompetitionBiotechnology companies wishing to participate in this market must be prepared to make a strong case for their technology and their business. Although somewhat overlooked on the global scene, Texas is expected to develop into a strong player in the U.S. biotechnology field. Other Useful Information Sources/Web SitesBaylor College of Medicine: http://public.bcm.tmc.edu M.D. Anderson Cancer Center: http://www.mdanderson.org San Antonio & Austin Life Sciences Association: http://www.bio-salsa.org Texas A&M Institute of Biosciences and Technology: http://tamushsc.tamu.edu/ibt/ibt.html Texas Healthcare and Bioscience Institute: http://www.thbi.com Texas Medical Center at Houston: http://www.tmc.edu Texas Technology Transfer Association: http://www.t3a.org University of Texas Health Science Center at San Antonio: http://www.uthscsa.edu University of Texas Southwestern Medical Center: http://www3.utsouthwestern.edu For detailed market reports about this sector, please visit http://www.infoexport.gc.ca
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