1 Biotechnology Research in Puerto Rico: The Synergy between Academia, Government & the Private Sector Lueny Morell Director R&D Center University of.

1

Biotechnology Research in Puerto Rico: The Synergy

between Academia,

Government & the Private

Sector

Lueny MorellDirector

R&D CenterUniversity of Puerto Rico at

Mayagü[email protected] International Corporate/Academic

Roundtable on Emerging Technologies

WPIMarch 19-20 2002

• Background, the drivers– Economic Development

• Jobs, High tech clusters, biotechnology

– The Competition• Singapore, Ireland, Tucson, Taiwan

• Puerto Rico– PRTEC, INDUNIV,

• ViTeC, Tech roadmap, UPRM

Facts

• According to the Biotechnology Industry Annual Report (Burril 2001)– During 2000 the biotechnology world market had a record

breaking $441 billion (>41% increase over previous year) Of the present global pharma products, 16% are of biotechnological origin or related

– This is expected to rise to 30% by 2005 & by 50% by 2010 as enabling technologies such as genomics, proteomics, cellomics, combinatorial chemistry, etc allow pharmaceuticals & biotechnology companies to focus on specific therapeutic areas and disease knowledge required in the development of protein pharmaceuticals, protective and therapeutic vaccines, advanced synthesis, bio-transformation and formulation.

Facts

• Understanding the new era of genomics-based medicine, genetically enhanced microorganisms, cloning, stem cell, biomarkers & the rest will require a

concerted efforts on the part of government, industries, universities, research organizations, the analyst community & the media

• Pockets of biotechnology are seen as very important for economic development in various regions of the world

Facts

• Puerto Rico has the largest concentration of pharmaceutical industries in the world– Result of the synergy between world-class

managers, workforce & suppliers, and preeminence as a global, tax-advantaged super-manufacturing center

• The world’s leading pharmaceuticals & biotech companies trust the successful product technology transfer, scale-up, manufacturing and quality control of their products to Puerto Rico human capital

Facts

• Puerto Rico:– has the pharma manufacturing highest location

quotient** of 9.19, followed by New Jersey with 5.08.

– Exported more pharma products to foreign countries than any of the states in the US

– Pharma exports reached $28.6 billion in Fiscal 2001, up 245% from Fiscal 1997

** a measure of the relative importance of an economic activity in a particular geographic area compared to its importance in the US

economy as a whole- between PR and states in the mainland

Puerto Rico’s Total Exports of Pharmaceutical Products in $Milllions

0

5,000

10,000

15,000

20,000

25,000

30,000

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000Fiscal years ending June 30

Source: Puerto Rico Planning Board.

Pharmaceutical Industry in PR

• Represents 25% of GDP• 60% of PR exports: $28.6 Billion in 2000• Over 100,000 direct & indirect jobs• Employment growth from ’96-’01• Investment growth of $1 Billion• Nine out of 10 top world prescription drugs

are manufactured in Puerto Rico.• R&D Base Pharma Global Contribution $30B

Source: Puerto Rico Pharmaceutical Industry AssociationEmail: [email protected]

Facts

• Recent investments in Biotech R&D– Eli Lilly

• $250MM investment in large biotech manufacturing facility

• A Humalog ® recombinant insulin manufacturing plant to launch inhaled insuling in alliance with drug delivery company Alkermes, total investment of $450 million

– Amgen• $200 million to manufacture all of its products in PR

– Other companies• $400 million

Facts: Knowledge Supply Chains

ProductCreation

ProductDevelopment

MaterialSourcing

ProductAssembly

ProductDistribution

ProductUse

Material Supply ChainConcept Usable Product

Engineering Manufacturing Customer

Continuous Flow of Information and Knowledge

Creating orDiscovering

new Knowledge

Making KnowledgeTransferable

Tacit to Explicit

TransferringKnowledge

Documentationand People

ApplyingKnowledge

Knowledge Supply ChainConcept Usable Knowledge

Research Teaching User

Continuous Flow of Information and Knowledge

Source: Knowledge Supply Chains; A Next-Generation Manufacturing Project

KnowledgeGeneration

KnowledgeTransfer

KnowledgeGeneration

KnowledgeTransfer

The Knowledge Process of the Future

Academia

Industry

Source: Knowledge Supply Chains; A Next-Generation Manufacturing Project

New KnowledgeTo Satisfy Society

Competence &Ability to Learn

•Joint Research•Customer Solutions•New knowledge•Knowledge Application•Best Practices•Customer Needs•Customer Feedback

•Faculty•New Talent•Curriculum•Stakeholder Needs•Talent Specification•Industrial Teacher

•Integrated Enterprises•Integrated Product/Process Dev•Learning Organizations•Enterprises-Wide Supply Chains

New KnowledgeNew Talent

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Other countries’ strategies

Ireland

Singapore

Taiwan

States in the US

Ireland: Industrial Development

• Key Success factors for Ireland’s success in economic development (Michael McLaughlin, USA IDA Director)– Demographics

• Workforce: 1.8 million, 4.5% unemployment (2000)• 40% under age 30, 55.7% women, English speaking with foreign

language capabilities• Investment in education: 13.5% investment, 57% college

graduates in science, engineering, CS, business– Government economic policy

• Attractive & consistent taxation & financial incentives, member of EU

• Telecommunications nfrastructure investment – Social partnerships

• Agreement between government, employers, & trade unions Inward investment

Singapore: plans for a knowledge based economy

SINGAPORE

OptimizingResource

Management

Government asBusiness Facilitator

StrengtheningThe External Wing

Human &Intellectual Capital as

KeyCompetitive

Factors

LeveragingOn

ScienceTechnology

&Innovation

Manufacturing and Services as Twin Engines

BuildingWorld – Class

Companies

StrengtheningSmall & MediumLocal Enterprise

NUSNUS

Source: Dr. Casey Chan, Director of INTRO National University of Singapore

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Puerto Rico

Puerto Rico’s economy

2,361 diversified industrial plants

producing & shipping everything from apparel and pharmaceuticals to

computer components & medical devices

Puerto Rico’s economy

Highly skilledworkforce

>81% of the workforce HS

graduatesRanked 6th in the

world in higher

education enrollment

Over 8,000 S&E degrees/year

Puerto Rico

• Due to high level of competitiveness in the global market, PR is modifying its economic strategy

• Shifts towards:– a knowledge base economy – and the establishment of strategic alliances

between all sectors:• Government, private sector and academia

– Act quickly to compete with the administrative, research & venture investing programs geared to:

• big pharma & biotech startups available in competing tax advantaged manufacturing locations such as Singapore & Ireland

Synergy & Collaboration

• Synergy:–Defined:

• “to work together”• “combined cooperative action or

force”

Collaboration

Exchanging information, altering activities, sharing resources, and enhancing the capacity of one another for mutual benefit and to achieve a common purpose

Collaboration

• Willingness to share risks, rewards, & responsibilities

• All view each other as true collaborators - not what we can get from each other - not as competitors - not just for a short period in time

• Seek to enhance each other’s capacity to achieve excellence

Collaboration

Commitment to:

• Defining mutual relationships & goals• Jointly developed structure• Shared responsibility• Mutual authority & accountability for success

• Sharing of resources & rewards

Collaboration - TRUST

• Not coordination of activities• Not entered into when one needs something

from another• Not “give us and go away”• Not short term - expands in long term• Doesn’t disintegrate in economic downturns

or academic restructuring

New Structure

• Full commitment to a common mission

• Built on trust

• Comprehensive planning

• Acceptance of equals in planning, executing and accountability

• Well-defined communication on all levels

• Long-term planning, trust and commitment

• Mutual agreement on termination

Key success factors for synergy

– Rapid response

– Consider all stakeholders and their interests

– Voice of the customer

– Benchmarking

– Strategy for differentiation

– Strategy to be a low-cost competitor

Puerto Rico’s response: roles

• Government• Academia• Private Industry

Puerto Rico’s R&D Opportunities & Tax Incentives

• Income tax rate of 2-7% for all qualified corporations

• 25% credit on purchase of goods manufactured in PR

• Other Incentives– R&D

• Special $25 million annual fund• Soft loans (no interest or guarantee)• 200% special credit for R&D expenditures involved in product

or process development

– Location• By regions

– Number of employees

– Importance of industry (e.g., biotech, C&IT)

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puerto rico technoeconomic corridor

…the ultimate business paradise

p r t e cp r t e c

prtec

• A technical integration of resources from the public, private & academic sectors in order to achieve a world class business & industrial culture

• A synergistic alliance of government, industry & academia in order to stimulate the expansion of the value-added production chain.

• Established in the Western region of the Island, close to the proposed Las Americas Transshipment Port and the Rafael Hernandez Air Cargo/Tourism Hub

Government

PR

Techno

Economic

Corridor

(non-profit)

Academia PrivateSector

Agile/innovativecollaboration

Clusters

SupportiveEnvironment

Help Puerto Rico to become widely recognized as a leader/center of high-tech excellence in the world

Improve the quality of lifestyle for Puerto Rico’s citizens by helping to make it a better place for them to both live and work.

prtec activities

• Research & Development of specific technologies

• Sharing in the development of technical processes and skills

• Develop technical and support infrastructures for participating industrial & economic clusters

• Focus on the creation of new & innovative technologies to be applied on products, processes & services with commercial value

• Strengthen Puerto Rico’s competitive edge as a high-tech center through the joint efforts of government, industry & academia

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“Cluster”

association of entities with common or related objectives, needs, products, processes and/or

services

Provides economic & technological leadership

Creates synergy

Works to promote & develop its respective enterprises & bring new members

Addresses issues that may affect its members

Promotes innovation centers

Facilitates promotional efforts

High-Tech Clusters

Computer & Information Technology Cluster:Hewlett Packard: Anchor Tenant

HPCaribe Mfg.

Anchor Tenant

CM3

CM4

CM5

CM2

CM1

Security

Foodservices

Maintenance

Logistics

S1S2

S3HPTechnology

Center

OtherTenants

CM=contract manufacturers

S=strategicsuppliers

C & IT Cluster Current Members…

• Hewlett Packard (anchor)

• Sensormatic• MSL• TNT• Smart Modular

Technologies (Solectron)

• Caribe GE

• PCB Horizon• Western

Manufacturing• TechnoPlastics• NYPRO• MS&SS• PR Storage• EMS

Interested: Symmetricon, Dupont Microelectronics

Medical Devices Cluster Current Members…

• Allergan (anchor)• Edward Lifesciences• ThermoPlastics• Thermometrics• Allegiance• Surgical Medical

Products• St. Jude Medical• Jostra

Pharmaceutical Industry Cluster

• Manufacturing Sites– 40

• Marketing sites– 20

• Abbott Laboratories• Ayerst Wyeth Pharma Inc• Amgen• Aventis• Bristol Myers Squibb

(DuPont)• GlaxoSmithKline• IPR Pharmaceutical• Johnson & Johnson• Lilly Del Caribe

• Merck Sharp & Dohme• Novartis• Pfizer (WL)• Pharmacia (Searle)• Procter & Gamble

Pharmaceuticals Inc• Schering Plough• Mova• Roche

Pharmaceutical Industry Cluster Mission

“Proactively foster integration of the pharmaceutical industries & its supporting elements, developing strategies that will

enhance a competitive environment, retaining, growing existent business &

attracting new opportunities”.

VisionMake Puerto Rico

the preferred location for new

business opportunities for

Pharmaceutical Corporations

Elements Supporting Pharmaceutical Cluster

Pharmaceutical Cluster

Technical & Special Services

Professional

Associations

Materials Suppliers

Non-Profit Support Centers

Engineering &

Construction

Academia

General Services

Manufacturing Support ServicesGovernment

Academia

• Collaboration & specialization within UPR & between UPR & private universities, particularly in applied research, Ph.D. and postdoctoral programs to: – Strengthen basic infrastructure capabilities in the

biomedical, chemical, environmental & agricultural areas

– Reach a clinical level of command over key technologies (combinational chemistry, high throughput target screening) & focus on therapeutic areas & disease knowledge required in the development of protein pharmaceuticals, protective & therapeutic vaccines; and,

– Gain a command of advanced synthesis, bio-transformation & formulation, from an interdisciplinary framework, anchored in chemical engineering.

The University of Puerto Rico at Mayagüez

• Major Campus of the UPR System– Established in 1911– Land-Grant, Sea-Grant &

Space-Grant Institution– Science/Math/Engineering/

Technology Campus of the System

– Agricultural Experiment Station• 2 primary research sites: Río

Piedras & Mayagüez• 6 substations, 2000 acres

– Agricultural Extension Service 69 offices in 69 municipalities

UPR Mayagüez

• Colleges– Agricultural Sciences

– Arts & Sciences

– Business Administration

– Engineering

www.uprm.edu

UPR Mayagüez

• Student Body– Undergraduate students

• 13,000

– Graduate students• 860

• Faculty– 739 – 62% male– 57% PhD’s– 43% full professors– 64.3% tenured– 12 credit-hours academic load

• Administration– 1,800

• Colleges– Engineering, Arts & Sciences,

Business and Agricultural Sciences

• 4 PhD’s– Marine Sciences– Civil Engineering– Chemical Engineering– Computer &

Information Sciences & Engineering

0

100

200

300

400

500

600

700

Bachelor Degrees AY 1999-2000

0

20

40

60

80

100

120

140

BS Engineer ing 1999-2000

f emale 28 20 69 27 63 3 9

male 71 103 38 102 52 15 46

CE E E IE ME CHE SURV COMP E

BS degrees in Engineering AY 99-00

Master Degrees 99-00

0

50

100

150

200

Engineering Sciences Arts Business Agriculture Total

3

5

0

4

0

1

2

3

4

5

6

7

8

1998-99 1999-2000

PhDs

Sciences

Engineering

PhD’s

Research Thrust Areas

• Software, Computer Information Systems

• Telecommunications, Network Applications & Information Technology

• Remote Sensing & Image Processing

• Systems Engineering• Marine Sciences• Energy, Environmental

Sciences & Engineering• Biotechnology

– BioScience • Biophysics, Biochemistry,

Biotechnology– Material Sciences

• Surface, Pharmaceuticals, Colloids, novel materials

Activities that Support BiotecH Cluster

• Technology Roadmap• Strengthening courses

– Technology-based Entrepreneurship

• Business School• New businesses based

on high technology

• Strengthening degrees– ABET Accreditation

• Strong industry participation

– Re-focused Industrial Biotechnology Program

• Strong collaboration with industry

Activities…

• New Degrees– BS in Software Engineering

– PhD’s in collaboration with industry & government

• Biotechnology• Applied Chemistry• Computer & Information

Science & Engineering• Water resources &

environmental engineering

UPRM Biotechnology Research Centers

• Tropical Environmental Biotechnology Center

• Tropical Marine Biotechnology Center

• Center for Protein Structure Function and Dynamics

• Bioinformatics Center

• Center for Tropical Agriculture Biotechnology

Cluster Initiatives: INDUNIV

• R&D Industry-University Consortium – Materials Characterization Center – Center for Pharmaceutical Processing Research– Research Grants ($2.5M) & Education

• Under Development:– Center of Advanced Packaging Technologies– Biotech Center– Clinical Research

• Future Development:– Drug Delivery System– Technology Transfer Center

Puerto Rico’s Competitive Initiatives

• Permitting Process

• Leverage Supplier Quality

• Energy Reliability/Cost

• Vocational/Technical Education

• Transportation Costs

• Labor Laws

May 21 – 24, 2002Caribe Hilton HotelSan Juan, Puerto Rico

website: www.induniv.org

Concluding Remarks