Once it was easy to understand what we made in our factories in North Carolina. Furniture. Socks. Blue jeans. But now we’re becoming known for making biological products such as drugs, diagnostics, vaccines, vitamins, amino acids and enzymes. If we’re lucky, we soon will be known as  a world leader in the field. Perhaps by then North Carolinians will know a little bit more about this strange new industry.

Defining biotechnology is almost as difficult as describing how detergent gets grass stains out of clothes. That’s because biotechnology isn’t a single business but a vast collection of technologies that use living cells and/or biological molecules to solve problems and make useful products.

North Carolina has become a world leader in the research, development and investment of biotechnology endeavors. State officials, university researchers and company leaders plan to continue to build on the industry through an aggressive worker training program and funding initiatives. Doing so, they say, will bring more companies to the state, add thousands of jobs and push the academic and research community for more and improved products.

The industry here is growing 10 to 15 percent a year, according to the North Carolina Biotechnology Center. By 2025, as many as 125,000 state residents are projected to work in biotechnology, and annual revenues should approach $24 billion. Many of the new jobs created in biotechnology will be in biomanufacturing — the making of biological products such as drugs, diagnostics, vaccines, vitamins, amino acids and enzymes.

Lee Yarbrough, president of Novozymes North America Inc. in Franklinton, just north of Raleigh, predicts that biotechnology companies will increasingly call North Carolina home because of the state’s continued investments and commitments to their success. “The potential for products using biotechnology are endless. We’re just beginning to understand what that may mean. The future is wide open,” he says. “We need a workforce in place for companies with new ideas. … It will give us a competitive edge.”

State leaders have heard Yarbrough and others. To strengthen the industry and its benefits to the state, a number of initiatives are under way, including more than $100 million from the Golden LEAF (Long-term Economic Advancement Foundation) for investment in the industry and workforce training. In addition, Gov. Mike Easley has established a task force to develop a statewide strategic plan on biotechnology for the next decade. Officials also are trying to make sure the whole state benefits from biotechnology. So the state Biotechnology Center is setting up four satellite offices to aid communities in the nurturing of new endeavors.

Commerce Secretary Jim Fain says North Carolina has the resources and capabilities that many others do not. “We made a commitment in the early ’80s to build a support system for this industry. A lot of other states have now decided to put their emphasis in this growth area,” Fain says. “We’ve been doing this for quite some time and have built resources that will build on our future success.”

Those in the industry say the state is on the right track. Even the international biotechnology community has taken notice of the state’s initiatives, says Dr. Leslie M. Alexandre (left), president and CEO of the North Carolina Biotechnology Center, a private, nonprofit corporation established by the General Assembly in 1981.

 “I was at the U.S.-Ireland Business Summit, where there were economic developers, and they were aware of the model adopted by North Carolina,” Alexandre  says. “It’s important that we be proactive and not wait for the site selection committees to come to us. We need to do it globally. … There are many companies in Europe and Asia, and we have significant competition from other countries, as well as places in our own country, that are envious of our development. We have to make sure that we are aggressive. We need to continue to grow.”


150 Companies and Growing

To understand the importance of biotechnology, look at the scope of the industry and the ripple effects it has on people and communities. Examples of biotechnology products include:

Food biotechnology, which reduces the amount and toxicity of pesticides in the environment, in addition to increasing crop yields;

The sequencing of the human genome, which allows researchers to store, retrieve and analyze vast amounts of genetic data; and

The next generation of medical treatments.

 “There is no one specific biotechnology bit of science. It’s not like the automotive parts industry,” explains Steven Burke, senior vice president of corporate affairs at the Biotechnology Center. “To bring about a product of biotechnology requires a complicated, long-term process involving many different parties. We start with a societal need — to address a certain kind of cancer or to protect the Frazer firs in North Carolina, for example. We meet the needs by starting with science and research, then doodle and noodle so it will yield a tangible outcome — a drug, an application.”

The industry involves a wide array of players — researchers, manufacturers, investors, even “policy workers” who can decipher ethical issues such as “whether a stem cell product is a good idea,” Burke says. “A researcher at the beginning of the line is very different from a cold, hungry venture capitalist, who is different from an educator at a community college that trains workers. You can visualize this whole industry as a continuum.”

All told, North Carolina has about 150 biotechnology companies that generate about $3 billion in annual revenues and employ 18,500 North Carolinians (representing a payroll of more than $925 million). About one-third of the state’s biotechnology companies are multinational, including Bayer, Biogen, GlaxoSmithKline, Novozymes, Novo Nordisk Pharmaceutical Industries and Wyeth Vaccines.

Two-thirds are smaller, homegrown companies. The Biotechnology Center has provided seed funding for 62 of them with low-interest loans, totaling about $8 million, and helping them raise more than $450 million in other funding.

Novozymes North America Inc., an industrial enzyme manufacturer, is a good example of how biotechnology companies have flourished in North Carolina.

Originally called Novo Biochemical Industries Inc., the company began facility construction in rural Franklin County in 1977 and yielded its first product in 1979 with 50 employees and a $10 million investment. Today, the company has made a $250 million investment in its facilities and employs more than 400 fulltime. It serves several markets with its enzymes, including detergents, textiles, baked goods, food and beverages and ethanol for food.

“You can see how we’ve grown in this time frame, and that’s what it’s all about. We started small,” Yarbrough says.

Dr. Charles Hamner, former president of the Biotechnology Center and current president of NCBIO, the industry’s lobbying group, was at the forefront of early efforts to bring biotechnology companies to the state in the late 1980s. He says the industry is growing much faster than its production capacity. The industry has been in a growth phase of producing new products since 1995, and the phase will continue for another 20 years at least. “Over the next five years or so, we’re going to have at least triple our manufacturing capacity just to keep up with new products coming out,” he says. “If we only service the industry we already have here in North Carolina, we’d have to create another 2,500 new jobs per year for the next 10 years.”

Hamner adds that North Carolina got into the game at just the right time. “That’s why training a workforce for bioprocess manufacturing is so important. We now have the infrastructure at universities and community colleges to support the growth of the industry. We have to have a skilled workforce and appropriate financing to build manufacturing plants,” he says.


Training a Workforce

The Golden LEAF recognized the importance of workforce training in biotechnology, says President Valeria L. Lee. The foundation invests money from the national tobacco settlement for the long-term economic advancement of North Carolina.

This year, it committed up to $60 million to further develop bioprocess manufacturing training programs from the most basic level at the community colleges to the graduate degree level. That was in addition to $42 million committed in 2002 to invest with venture capital funds for new biotechnology businesses.

N.C. State University in Raleigh will receive $33.5 million to build a prototype biomanufacturing training plant. The community college system will use the facility to train those at less than the baccalaureate level. “It’s a place where people can have a capstone experience — really get into specialized and a higher skill level of bioprocess manufacturing,” Lee says.

The plant will have a “clean” environment, and students will learn state-of-the-art manufacturing skills. They also will learn about bioprocess, bioreactor processor, downstream processing and quality assurance issues, as well as gain an understanding on validating drugs.

The university will use the money to enhance current offerings in the biotechnology and chemical engineering fields and related disciplines.

North Carolina Central University in Durham will receive $17.8 million for new undergraduate and graduate degree programs in biosciences. “They will do specialized research to link the new activities with what is already under way,” Lee says.

The state’s community college system will benefit with $8.7 million to put infrastructure in place to implement biotechnology training throughout the state. “We will also select up to five community colleges to be lead institutions in bioscience/biotech training,” Lee says. “Some funding will go toward bringing those community colleges up to a higher level.”

An “innovation fund” for the community colleges will be used to challenge people in the system to come up with new ideas and new ways of training. “It might even be basic research on how to do the processes differently,” Lee says.

There will also be a mobile training lab to go throughout the state and offer short-term courses to accommodate a given company’s employment needs.

One community college that already has a strong start in biotechnology training is Asheville-Buncombe Technical Community College. Its Enka campus was created in 2000 when Swiss chemical giant BASF consolidated its Southeast operations in South Carolina and donated 37 acres and 277,000 square feet of space to the college.

The Enka campus has three components — a Corporate Technology Training and Conference Center, a Small Business Incubator and the Biotechnology Training and Incubation Center. The biotechnology center landed its first tenant, Phenix Research Products, in June. Phenix is a leading supplier of lab instruments to the lab science research market. Local officials hope the anchor tenant will kickstart the entire Western North Carolina biotechnology effort.

Four other biotechs are incubating at Enka, and more will be added as renovations are completed. The four and their products or services are: EarthWell Tech (organic cleaning products); Mountain Biotech (protein synthesis); Organic Herbals (a beverage company); and Magna DNA Laboratories (DNA testing).

Meanwhile, the biotechnology industry has committed $4.5 million to the Golden LEAF initiative. It is still undetermined how it will be distributed, Lee notes. “It’s very exciting, what we’ve made a commitment to do,” she says. “We are helping North Carolina to provide at every level the trained workforce that is envisioned to come here. It’s a circular strategy — North Carolina will be the state companies will want to locate in because of a trained workforce. Obviously, that will mean new jobs.”

Commerce Secretary Fain says the Golden LEAF commitment is a “continuation of a tradition in North Carolina of innovation and innovative initiatives to grow our economy and enhance our quality of life. That’s a tradition that began when we grew our first state-supported university in 1789, but there have been other milestones in our state that have made us a pioneer in innovations — things ranging from creating the first state-supported symphony to the Research Triangle Park in 1958, when we created the first state programs for industrial training. This is another hallmark of innovation that has characterized our state over a couple hundred years.”

Besides the Golden LEAF initiative, the Biotechnology Center has been working with community colleges and private industry on “BioWork,” a highly successful course that trains process technicians. Salaries for these positions range from $26,000 to $40,000. The 128-hour course prepares students for entry level jobs in bioprocessing plants that produce biopharmaceuticals, amino acids, enzymes, vaccines and other products. It’s intended for high school graduates, traditional manufacturing workers who have lost jobs or anyone interested in a new line of work.

Mark Paige is vice president of technical operations at Novozymes. He also is the chairman of the Biotech Manufacturers’ Forum — a group of six companies (Novozymes North America Inc., Novo Nordisk Pharmaceuticals, Bayer, Diosynth Biotechnology Inc., Biogen Inc. and Wyeth Vaccines) that has supported BioWork.

Paige says that when the forum was formed two years ago, it identified worker training as the most strategic concern of the industry. BioWork fed into the push for the expansive funding from Golden LEAF, he says. Now that the money is in place, the forum will focus on taking advantage of the opportunity and helping to move the training initiative forward. “What we don’t want to do is compete against each other, but have the trained workforce grow with the manufacturing base,” Paige says. “In the end, that’s how it moves the state forward. We’re already one of the powerhouses in the nation, and it’s our intention to remain competitive and move up a notch or two.”


Opening Branch Offices

To spur company recruitment, the Biotechnology Center is establishing four satellite offices. The initiative, overseen by Burke, will ensure that the whole state benefits from biotechnology. In 2003, two offices were set up in Winston-Salem (to cover the Piedmont area) and in Asheville (to cover western N.C.). Hopefully, Burke says, by summer 2004 two more offices will be open in Charlotte and at a yet-to-be-determined site in eastern North Carolina.

Two employees — a director and an administrative assistant — will staff each location and will be supported by staff at the Biotechnology Center for specific needs and questions.

The goal, according to Burke, is for each office to assist all parties and participants within the biotechnology community by building on the resources of each geographic area. “Our geography is diverse enough in its resources to identify and build on the resources of each area,” Burke says. Each office will handle everything from gaining funding for science to helping with company recruitment, to assisting with a worker training program at a community college. “They will be a lightning rod — a focal point,” he adds.

Eastern North Carolina will focus on marine resources, agriculture and the medical school at East Carolina University. Western North Carolina has “remarkable biodiversity, yielding plants that could be explored for pharmaceutical purposes,” Burke says. “Trees are important, and there are facilities that might target biomanufacturing.”

Charlotte’s key resource is investment capital. The office there will focus on helping companies gain funding for their needs. And the Piedmont has thus far been the most highly developed biotechnology community of the state because of the foundation laid by Wake Forest University, Burke says. The office there will continue to work with those resources.

Fain says the regional offices will be “helpful to young, emerging companies and also build a climate around the state for others to move here.”

In addition, Gov. Mike Easley has appointed a 15-member steering committee, chaired by former governors Jim Hunt and Jim Martin, to develop a strategic business plan for the industry.

Six working groups have been formed to analyze areas critical to biotechnology development, including university research and infrastructure, K-12 education, workforce training, entrepreneurial companies, recruitment of life science companies and public policy and societal considerations. The final plan was due to Easley on Oct. 31.

Hamner notes that, “whatever is contained in that strategic plan will have a huge influence going forward.”


‘Feeling Our Way Along’

Hamner, meanwhile, is trying to work out a public-private partnership that will allow the state to provide revenue bonds for biotechnology companies. The bonds would not have to be backed by the state but would be available through the state Treasurer’s office. In combination with that, Hamner wants banks and insurance companies to make loans to young companies so that they could build manufacturing plants.

“These plants usually are built and then, over about a four-year period, they usually have up to 500 employees per plant,” he says. “I’m hoping that we can attract about 15 companies over the next five years to the state.”

Hamner has discussed the idea with Gov. Easley and also has broached it with members of the General Assembly, but “we won’t know until next March or April whether we require (General Assembly) approval,” Hamner says. “It depends on how it’s structured, and we don’t know how we will structure it yet. It’s like so many things we’ve done — nobody’s done it before, so we’re feeling our way along.”




Genomics: Making Biotech Better, Faster
North Carolina has established itself nationally as a leader in the tools and technologies for genomics — the study of all the genes in an organism — and overseeing the state’s advancement in the field is the North Carolina Genomics and Bioinformatics Consortium.

The science of genomics includes identifying the specific building blocks of all the genes in a cell, mapping their locations in relation to the rest of the DNA and studying the function of those genes or combinations of genes. The North Carolina Biotechnology Center launched the consortium in response to the current genomics revolution in the life sciences.

“These are, simply put, new approaches that allow us to utilize living cells and biochemical processes to develop new products, including therapies, agricultural products and industrial applications,” says Dr. Kenneth R. Tindall, president.

Tindall notes that applications for the technology are vast. Researchers can focus on treating the causes of diseases rather than just alleviating symptoms. Through another science, pharmacogenomics, existing medications can be tailored to a person based on his body’s ability to respond to the treatment (which is determined by his genetic makeup). The time to discover and develop drugs, which now is about seven to 10 years, could be cut in half.

Tindall says North Carolina’s strength in genomics comes from the work of its universities. Five of the state’s major universities — Duke, East Carolina, UNC-Chapel Hill, N.C. State and Wake Forest — are collectively investing more than $800 million in new genomics and bioinformatics research programs.

But he notes that “no one can do it all.” The consortium, he says, “takes things to a more sophisticated level of research and development. … No one has the capability of doing everything. But the consortium provides opportunities for university academics, the business community and the nonprofit support world (like the Biotechnology Center) to be involved with one another to find appropriate collaborations. I like to think the consortium takes on projects that no one group alone would take on.”

Some of the top projects the consortium is tackling include the development of the North Carolina BioGrid, which will allow life science researchers across the state fast access to vast amounts of genomics and proteomics data and the ability to analyze it. (Proteomics is the study of the composition, structure, function and interactions of all the proteins in a cell.)

“A researcher, for example, will be able to sit at his computer and compare a DNA sequence which he finished with one at Duke, with another one that might be at North Carolina State University — all using software that’s at SAS,” Tindall says.

The consortium is also working through its Education and Training Focus Group to bring together a number of organizations in the educational community and coordinate training and educational opportunities in genomics and new life sciences.

Currently, the consortium funds a program that brings together K-12 teachers at various places around the state to gain hands-on access to the tools of biotechnology and take the knowledge back to their classrooms and laboratories. “Teachers get great reactions and enthusiasm from students,” Tindall says.

Tindall adds that genomics will significantly add to the research and product development capabilities of biotechnology companies in North Carolina. “It is my feeling that most, if not all, companies will be applying these tools in their businesses — if not now, certainly in the future,” he says. “It provides a more sophisticated way of asking questions and developing products. It’s something that companies are already recognizing the value of.” -- Heidi Russell Rafferty