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![]() Biotechnology Sector Profile: USA (Seattle)May 2002Jane Shaw Market OverviewThe biotechnology and medical technology industry in the U.S. Pacific Northwest comprises 220 companies, with 80% of them located in the greater Seattle metropolitan area. The region's 10 largest companies provide 52% of industry employment, while approximately 75% of the region's firms employ fewer than 50 people each. The growth in the industry is relatively new, with 41% of the firms formed in the last five years. The region is fairly typical of other biotechnology cluster communities, with major research institutions anchoring the industry, including Fred Hutchinson Cancer Research Institute, the University of Washington (UW) and Oregon Health Sciences University. The UW continues to rank near the top as a medical school and is in receipt of federal funds for grants and research-the National Institute of Health (NIH) has created three National Centres of Excellence in Genomic Sciences, with the UW receiving two awards, one in the School of Medicine and one in the College of Engineering. Over half of Washington's biotechnology and medical technology companies were founded on technologies developed at instate institutions. Oregon Health Sciences University recently acquired the Primate Centre and is expanding its research efforts with two new buildings and a commitment to recruit top-quality, internationally known researchers. Notably, the level of NIH research grants in Oregon has increased 53% since 1993. Four out of 10 new companies formed in 2000 were in the area of genomics and bio-informatics, and 19 companies are currently working in these areas. Of these companies, 50% are focused on research and development of therapeutic products; 31% on diagnostics; 9% on genomics/informatics; and the remaining 10% on agriculture, environmental and other related areas. The UW, along with the local presence of Microsoft and many other software engineering firms, provide strong support and research in these arenas. There is a small, but well-developed local venture-capital community that supports the life sciences. A continued source of funding remains a priority for all companies, and follow-on rounds of financing often require bringing in new partners and forming alliances with larger firms that will bring in milestone payments. Of the region's biotechnology companies, 32 are publicly held. Recent critical responses from the FDA for review of Stage III trial data has targeted several of the larger, more advanced companies (which is reflected by reports throughout the industry). Local companies experiencing setbacks include ICOS, Dendredon, Corixa and Cell Therapeutics. The industry in Washington is well-organized and supported by the Washington Biotechnology & Biomedical Association, which works on behalf of the biotechnology and medical device companies to provide educational and networking programs of interest to the membership and to lobby for favourable legislative actions on items ranging from pharmaceutical price controls to tax credits for research-based companies. Although the states of Washington and Oregon are not perceived to have particularly favourable business climates, the industry continues to grow here because of the developing critical mass and the strength of the local research institutions. It is perhaps at a crossroads, as the future direction is questionable due to the merger of Amgen and Immunex, which was the largest, home-grown biotechnology company. The state of Oregon continues to struggle for critical mass as it attempts to capitalize on opportunities to build its own biotechnology industry cluster. OpportunitiesOpportunities exist for Canadian firms in collaborative research, partnerships and alliances, technology transfer, in and out-licensing, product development, contract manufacturing and research, as well as for all service providers related to the industry. This is a highly global industry, but initially, the companies seem to locate near the sources of funding and their research bases, readily seeking alliances and partnerships where the science is a good fit. Market Access ConsiderationsMarket access considerations are the same for all firms choosing to do business here, including FDA regulatory compliance and GMP procedures. There appears to be a current shortage of space available for expansion and new firms. Market conditions are very competitive for seeking new funding and for finding key experienced management staff to grow young companies through clinical trials and product launch stages. Major CompetitionIn this industry, similar companies should perhaps be viewed as potential partners, collaborators or teammates rather than as competitors, as mergers and acquisitions continue to be a way of life for both the large and small biotechnology and biomedical companies. (See the post's territory overview report for a recap of other mergers, including Immunex- Amgen and Rosetta Inpharmatics-Merck.) Other Useful Information Sources/Web SitesWashington Biotechnology & Biomedical Association (WBBA): http://www.wabio.org Oregon Biosciences Associations: http://www.oregon-bioscience.com Fred Hutchinson Cancer Research Centre: http://www.fhcrc.org University of Washington Academic Medical Centre: http://www.washington.edu/medical Washington State University: http://www.wsu.edu Oregon Health Sciences University: http://www.ohsu.edu Oregon State University: http://www.oregonstate.edu University of Oregon: http://www.uoregon.edu Battelle (Pacific Northwest National Laboratory): http://www.pnl.gov Institute for Systems Biology: http://www.systemsbiology.org Contact the post for the recent "Market Overview of The Biotechnology Industry in the US Pacific Northwest States of Washington & Oregon, April 2002." For detailed market reports about this sector, please visit http://www.infoexport.gc.ca
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