Building the Biotechnology Sector in Houston

• Introduction• Houston Biotechnology Atmosphere• Why so few companies?• Possible solutions

Building the Biotechnology Sector in Houston

• Introduction• Houston Biotechnology Atmosphere• Why so few companies?• Possible solutions

Building the Biotechnology Sector in Houston

• Introduction• Houston Biotechnology Atmosphere• Why so few companies?• Possible solutions

BioHouston BackgroundNon-profit 501(c)3 founded by Houston-area research institutions to develop the Houston region – defined as College Station, to The Woodlands, to Galveston

Northcut MendelsohnGillis

Regional Research Strength from College Station to Galveston

• Texas Medical Center– Largest medical center in the world; 42+ member

institutions– $2.1 billion spent for additions to facilities from 2002-2004– 800+ acres; 100+ permanent buildings– Ground broken for The University of Texas Research Park

• Texas A&M University-College Station– Ranked 11th by NSF for total research and development

expenditures– 5,200+ acres, including a 324-acre research park– 2.5M+ square feet of research space

• University of Texas Medical Branch-Galveston– Ranked 19th of 121 medical schools in NIH funding– 84 acres; 77 major buildings– 385k+ square feet of research space

Massive but under-recognized research and commercialization assets

Leading Medical Institutions in the U.S.World Class Research Institutions

Baylor College of Medicine

• #1 in Pediatric Research funding-NIH (with TCH)

• #11 in NIH Awards to Med Schools-NIH

• #13 Research Intensive Medical Schools

The University of Texas M. D. Anderson Cancer Center

• #1 in Oncology

• #5 in Gynecology

• #10 in Urology

• #10 in Ear, Nose and Throat

• #10 in Rehabilitation

The University of Texas Medical Branch

• 1 of 2 Infectious Disease and Biodefense National Laboratories

• 1 of 6 Regional Centers of Excellence for Biodefense

• #19 in NIH Awards to Med Schools-NIH

Methodist Hospital

• #10 in Neurology and Neurosurgery

• #17 in Cardiology and Cardiac Surgery

Rice University

• #1 in Nanotechnology Commercialization

The University of Texas Health Science Center School of Public Health

• #1 in Health Education

Texas Children’s Hospital

• #1 in Pediatric Research funding-NIH (with BCM)

• #4 in Pediatrics

Texas Heart Institute

• #9 in Cardiology and Cardiac Surgery

University of Houston

• #2 in Health Law

Source: U.S. News and World Report, 2004, NIH database, Small Times

Other Selected Centers of Excellence

• Gulf Coast Consortium for Bioinformatics

• Gulf Coast Center for Computational Cancer Research

• John S. Dunn, Se. GCC for Chemical Genomics

• John S. Dunn, Sr. GCC For Magnetic Resonance

• Gulf Coast Consortium for Membrane Biology

• Gulf Coast Consortium for Protein Crystallography

• Gulf Coast Consortium for Theoretical and Computational Neuroscience

• Gulf Coast Consortium for Bioinformatics

• Gulf Coast Center for Computational Cancer Research

• John S. Dunn, Se. GCC for Chemical Genomics

• John S. Dunn, Sr. GCC For Magnetic Resonance

• Gulf Coast Consortium for Membrane Biology

• Gulf Coast Consortium for Protein Crystallography

• Gulf Coast Consortium for Theoretical and Computational Neuroscience

Brown Foundation Institute for Molecular Medicine

Brown Foundation Institute for Molecular Medicine

Source: Battelle Memorial Institute and the State Science and Technology Institute study

Research Leadership

• Historical firsts:– First multiple organ

transplant

– First identification of C60

– First draft of the human genome

– One of two National Biocontainment Labs

– First artificial artery– First successfully cloned

companion animal– First total heart

transplant

• National Recognition:– Three Nobel laureates– 16 members of the

National Academy of Sciences

– Two Presidential Advisors– Hundreds of members of

national academies

• Next Generation of Leaders:– #2 in higher education

degrees in bioscience– #3 for university

expenditures in biosciences– 22,000+ biomedical

students in the Texas Medical Center

Houston region highlights

• Total annual academic research investments exceed $1.5 billion

• 140+ life science companies

• Number of companies has doubled since 2003

• Approximately 1/3 are therapeutic, 1/3 are device and 1/3 are tools and service providers

• Recent VC investment activity in region

Best Biotech Fields for Houston to Grow

Oncology

Neuroscience

MetabolicDiseases

Biodefense /InfectiousDisease

CardiovascularMedicine

GenomicsGenetics

Nanotechnology

Texas Emerging Technology Fund

• Initiated in 2005.

• $175 million in funds available

• $52.9 million in total statewide life science grants have been awarded or are currently under final review by State leadership

• 9 Houston region life science companies have received grants for $10.1 million since inception

• Texas Life Science Committee conducts extensive due diligence (business/science/IP) on technologies and companies before forwarding to leadership for final approvals

$3 Billion Cancer Research Initiative Approved in November 2007

• Established Cancer Prevention and Research Institute of Texas

• Peer reviewed distribution of up to $300 mm in grants per year over next decade

• Every $1 invested will require $0.50 in matching spending by recipient organizations

• Public and private educational institutions and medical research facilities will be eligible for grants

• First investment expected in 2009

TanoxA 20-year and $919 Million Journey to

Success

• The Houston region is home to the 2 largest IPO’s in biotech history:– Tanox: Acquired by Genentech for $919

million in 2007– Lexicon Pharmaceuticals: Ten

products in clinical pipeline

Also… – Agennix: Developing drugs for cancer

and diabetic ulcers; in late-stage trials for NSCLC

– Cyberonics: VNSTherapy for epilepsy and depression

– Introgen Therapeutics: In late-stage development of ADVEXIN to treat head and neck cancer

– Repros Therapeutics: Lead drug Proeelex; IND will be submitted to initiate Phase 3 trials for Uterine Fibroid indications

Snapshot of SuccessIntrogen

Texas Life Science Conference

• Largest investment conference in Southwestern U.S.

• 2007 Conference– More than $6 billion in current funds in attendance– 50+ company presentations– Record attendance– Texas Governor Rick Perry addressed meeting

• 2008 Conference will be held November 5-7

Why Houston?

“Nowhere in the country is there such research infrastructure, scientific

leadership, and patient numbers in such close proximity.”

Building the Biotechnology Sector in Houston

• Introduction• Houston Biotechnology Atmosphere• Why so few companies?• Possible solutions

Why so few companies?

• Everybody wants to be “the next San Diego”. • Institutions doing more development. • Easier to export ideas and talent.• Lack of experienced management. • No soft landing for failures.• Insufficient informed Venture Capital.• Unfamiliar value proposition.

Building the Biotechnology Sector in Houston

• Introduction• Houston Biotechnology Atmosphere• Why so few companies?• Possible solutions

Possible solutions

• Support pump priming efforts• Insist on regional cooperation• Strategic recruiting• Monitor the ETF and CPRIT $• Philanthropic investments