annual_review_2007

REVIEW 2007

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The Managing Director’s review _________________________________________ 3 A look at the main business areas Biotechnology in Turku ___________________________________________ 4 The Applied ICT environment in Southwest Finland _______________________ 6 Department activitiesBioTurku® _________________________________________________________ 8 Case: Biovian Ltd goes international _________________________________ 9Applied ICT and development projects ___________________________________ 10 Case: An innovative business environment requires cooperation between the public and private sectors ______________________________ 11Centre of Expertise and international activities _____________________________ 12 Case: Can the Centre of Expertise Programme be applied to South Africa? _____ 13Business Development ______________________________________________ 14 Case: Does our gustatory gene have an impact on our habits as consumers? ___ 15 Case: BioCis Pharma – Incubator Company of the Year 2007 _______________ 16 Case: Pre-incubating company successful in Nordic Venture Contest _________ 17Biocelex Ltd _______________________________________________________ 18Real Estate _______________________________________________________ 19 Case: Ixonos sought growing room _________________________________ 19Marketing and Communications ________________________________________ 20The work of the Board of Directors ______________________________________ 21Financial statement and balance sheet ___________________________________ 22Turku Science Park history ____________________________________________ 23

Turku Science Park 2007

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Turku Science Park 2007

The year 2007 was one of

great changes in our company.

During this year, an entirely new

operations model was planned

and implemented.

Turku Science Park’s vision is

to be an effectively networked

centre of expertise in high-level

research, product development

and business activities in its

focal areas. It aims to be both an attractive cooperative partner as well

as a renowned, competitive environment for both Finnish and international

businesses, research communities and researchers.

The goals of this new operations model are to increase cost effectiveness,

overall effectiveness, transparency in operations and the commercialisation

of services.

The following changes have been implemenTed aT The operaTional level:

• The concern’s structure has been simplified, and business policy

services which were previously the responsibility of the subsidiaries

are now centralised in the parent company. The personnel of the

subsidiaries have been transferred to the parent company.

•International cooperation has been deepened through affiliation

with Karolinska Institutet, an internationally renowned research

university. Turku Science Park Ltd and Karolinska Institutet Holding

AB, the holding company of Karolinska Institutet, have founded

Biocelex Ltd, a company which functions in the framework of

commercial guidelines. The company commercialises innovations

originating from research at universities and institutes of higher

education in Finland, both in Southwest Finland and elsewhere.

Biocelex Ltd also provides enterprise development services for

already existing companies by utilising resources provided by

its international partners and business cooperation networks.

•The City of Turku has invested substantial resources in our operation

over the years. Subscription in kind real estate ownerships were

transferred onto the Turku Science Park concern balance sheet,

particularly in the year 2002. The significant resources resulting from

these transfers will, in accordance with the new operating model,

be utilised for business operations development. The efforts to

relinquish real estate ownership have begun, and this large venture

will continue.

The Managing Director’s review

The Managing Director’s review

•International consultation has been given an active role in

company development. In the 20 years Turku has been involved in

technology center and science park activities, a wealth of valuable,

commercialisable information has been accrued which can be sold to

areas still in the beginning stages of innovation system development.

•By financial standards the year 2007 was a successful year for our

company. The concern’s turnover was 10.4 million euros, which is

similar to the previous year (10.8 million euros in 2006). The profit for

the financial year was 0.4 million euros, 0.8 million euros better than

in 2006 (a 0.4 million euro difference). The positive outcome was due

to single installments. According to plan, investments from the City of

Turku decreased by 0.6 million euros from the year 2006.

•The planning and implementation of changes has required a

significant input of labour. I want to thank my own employees and all

our cooperative partners who have brought forth their ideas and have

participated in this large-scale process of change.

Ilkka Kouvonen

Managing Director, Turku Science Park Ltd

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Biotechnology in TurkuBioTurku® is a cluster of actors in the Turku region. The nation’s leading

centre in biotechnology is also well known elsewhere in Europe.

BioTurku consists of approximately one hundred players – companies,

as well as educational and research centers. The main focus areas are

made up of drug discovery and development, diagnostics, biomaterials,

and functional foods. Strong areas of therapeutic application are

hormonal diseases and cancer, inflammatory and infectious diseases,

diseases of the central nervous system, and regenerative medicine

and biomaterials.

Turku Science Park Ltd coordinates the HealthBIO cluster, which unites

the five most important biocentres of Finland. This national health

consortium draws on top multi-disciplinary expertise and knowledge.

Its activities cover genomics, diagnostics, healthcare and human

spare parts. Beyond the attraction of the innovative, international

environments, the program provides support for the growth of SMEs

founded on knowledge and expertise. HealthBIO is a part of the national

Centre of Expertise Programme for the support and development of

the coordination and specialisation of regional activities, as well as

the building of internationally competitive centers.

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In 2007, the field of biotechnology developed rapidly in Turku. The area’s

three driving enterprises, Orion, PerkinElmer Life and Analytical Sciences

(known as Wallac by Turku residents) and Bayer Schering Pharma each

reported positive developments. Additionally, even the smallest companies

and research ventures in this field produced concrete results.

Some 100 new employees were hired by Orion, raising the number of

employees in Turku to 760. Concurrently, the pharmaceutical plant made

the transition to operating in three shifts. Orion’s product development

activities in Turku also increased and the department began moving into a

new 1700 m2 expansion.

PerkinElmer continued to grow as a large-scale enterprise in Turku, publicly

announcing an exceptional economic outlook. Chromosome testing and

related production, which was moved to Turku from Houston a few years

ago, increased to the extent that the red brick Wallac building in Lauste

was expanded by another 2000 square meters. PerkinElmer’s strengths in

the Turku area have proven to be its moderate level of costs, a working

quality control system and solid know-how in DNA chip research. Turku has

been actively involved in research in this field from the beginning. Sales of

products related to newborn screening increased, up to 60 percent.

The Turku pharmaceutical plant previously known as Leiras benefited from

becoming a part of the Bayer Schering concern. Tablet production will

double in Turku by the year 2009 as a result of the Turku supply centre

winning the concern’s competitive bidding for global distribution of four

new tablets. The company announced a reduction in salaried employees

at the beginning of 2007, but thanks to an increase in the Mirena hormonal

contraceptive sales, at least 35 new employees will be hired for production

and logistics. The total number of Bayer personnel in Turku will rise to

600.

SMEs Biotie Therapies, Hormos Medical, DelSiTech, Faron Pharmaceuticals and StickTech announced significant research and

financial results. Hytest and Biovian reported dramatic growth in net

sales and profitability. Further, bioinformatics corporation Genolyze and

drug development company BioCis Pharma successfully raised large

capital investments. Six new biotechnology companies were founded in the

Science Park last year as well. It is believed that collaboration between

Turku Science Park and Karolinska Institutet Holding will continue

to increase the viability of young biotechnology companies in the Turku

region.

research leads To new ouTlooks

On the biotechnology research side, the Turku unit of VTT (Technical

Research Centre of Finland) has increased its activities. The Turku branch now

employs over 60 people. Additionally, it has signed significant agreements

with large international enterprises. Researchers from Turku and Åbo Akademi Universities have founded a cross-collaborative bioimaging and

teaching group (Turku Bioimaging), which is expected to have far-reaching

consequences for biotechnology and biomedical development in Turku. The

group effectively utilizes the newest bioimaging technology in all areas of

imaging, ranging from the molecular level to patient diagnosing.

The University of Turku’s Centre for Disease Modeling officially started

its activities last year. The centre develops effective tools for disease

modeling for use before medical molding preforms are employed in patient

studies. The Clinical Research Centre (CRC), funded by the University of

Turku and the Hospital District of Southwest Finland, was opened. CRC

offers clinical researchers support and guidance for fulfilling increasingly

strict requirements at various stages of research, in this way ensuring high

research standards. Additionally, it offers expert training for professionals

in the field.

The outlook for biotechnology is currently good, but finding risk investments

for enterprises in this field still poses challenges. Funding is a prerequisite

for enterprise growth. The universities’ new research units clarify the

infrastructure of research and service activities in the field of biotechnology

in Turku. However, these research units must be able to provide more

of the kind of content and capacity that Turku bioenterprises and large

international companies are willing to purchase. In practice, meeting these

goals requires employing full-time personnel, as effective research units

cannot be operated successfully “on the side”.

A look at the main business areas

The applied ICT environment in Southwest Finland

The year 2007 was one of continuous growth in the area of information

and communications technology. Several of the ICT businesses in Turku

and Southwest Finland, such as IT Mill, Sanako and Axel Technologies have

reported their trends in development.

At the beginning of the year, software company IT Mill, which operates in

the Turku Science Park area, announced it had received capital investments

amounting to 500,000 euros from Profita Group and Finnish Industry

Investment Ltd. This was immediately followed by an announcement of the

launching of new products on the market and of OpenAjax certification,

which makes the company the only one in Finland to have such certification.

Neoxen, a software company that operates out of Turku, also continued

its steady growth. According to Luotain, a company offering research and

forecasting services, the software business is indeed one of the most swiftly

growing areas of business in Southwest Finland.

Language technology company, Lingsoft Ltd, has reported of its

international cooperation with Infomaker Scandinavia Ab, which is a

partner with leading newpaper and publishing houses in Sweden. Lingsoft’s

products were introduced into Elisa’s (cell phone carrier) customer services

and more extensively into Microsoft’s products. The company stated that it

had made eight new delivery contracts for language editing programs. With

regards to research, Lingsoft Ltd continued work in the Louhi project, which

will come to an end in 2008. The University of Turku, the Turku University

Hospital, Mehiläinen Ltd and Turku Science Park Ltd also took part in the

project.

Information and communications technology (ICT) is the second

largest industrial sector in Southwest Finland, which has been

marked by continuous and steady growth. A total of 13,500 people

are employed in the field. As far as areas outside the greater Helsinki

area are concerned, the Turku–Salo region constitutes the strongest

concentration of expertise in Finland. The scientific centre is located

in Turku Science Park.

In Southwest Finland, applied information technology has been linked to

the fields of social welfare and healthcare and especially the maritime,

metal, biotechnology and pharmaceutical industries. Other especially

strong areas include electronics and telecommunications technology,

namely digital media and speech and language technology.

The most significant growth in information and communications

technology is still ahead as the field becomes more and more

commonplace and allies with other fields. We are answering to the

challenge with the combined efforts of about 1,500 ICT businesses in

the region.

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7A look at the main business areas

The applied ICT environment in Southwest Finland

Like Lingsoft, Sanako Ltd concentrates on language technology. The

company reported about the expansions of their operations to the

international community. In August, Sanako announced it had entered into a

cooperation agreement with Beijing JetRich Information Technology Co, Ltd

in China. The year culminated with a considerable capital investment. At the

beginning of 2008, the company announced that Nordic Venture Partners

had invested more than 5 million euros in Sanako.

Teleste Corporation, a company that provides information communications

technologies, improved its results and turnover compared to the previous

year. Digital TV services and the demand for broad-band Internet connections

have increased the volume of orders for all of the company’s business units

in Europe.

One of the strongest growing fields in the Turku and Southwest Finland

region is mobile TV. Axel Technologies, operating out of Turku, reported

about their cooperation with Wiz4com, a cell phone manufacturer in

France, and Elettronika S.r.l., an Italian company that produces TV and

radio broadcasting systems. As with Sanako, Axel Technologies Oy’s year

culminated with a capital investment. At the beginning of the year, the

company announced it had received a capital investment of over 1 million

euros from Nexit Ventures Oy. The DTV Group in association with the

University of Turku is also a strong contributor in mobile TV technology. Its

applications were tested at the Ilosaari Rock festival.

Technology for health and wellbeing has been an area of emphasis in

applied ICT in the Turku and Southwest Finland region, and it is gaining

an increasingly stronger foothold. The field is advancing with the help of

cooperation between companies and institutions of higher education,

for example within the framework of projects carried out by The Finnish

Funding Agency for Technology and Innovation (Tekes); the Management of

Medication Information and the Louhi projects are good examples of such

projects. Within the course of the year, Medbit Oy, a company producing

information management services, was established. The company is owned

by the Hospital District of Southwest Finland and officially began operations

on 1 January 2008.

The Turku Centre for Computer Science (TUCS), the research and

training center established by the University of Turku, the Åbo Akademi

University and the Turku School of Economics, has been Turku Science

Park’s most crucial partner. It is the only research and training unit of its

kind in Finland. TUCS is a catalyst in combining academic expertise with

the research and product development projects of various companies,

especially in the ICT field. A new operations model is being created at the

moment in partnership with the higher education institutions, which will aid

in the development of innovations into products. Cooperation has given rise

to the ICT building, which was inaugurated at the end of 2006. The facility

makes everyday cooperation between professionals and students working

in the field possible.

pracTical neTworking of companies and research

One of the more interesting moves in the cooperation between institutions

of higher education and companies was the introduction of the Work Informatics master’s program at the University of Turku. The program

takes a practical approach to applied ICT especially and has proven to be an

active partner capable of bringing various contributors together in various

research and product development projects. True cooperation was evident

in the Enterprise-ICT project, which was established to support SMEs in the

field in the Turku and Southwest Finland region. Encouraged by positive

customer feedback, plans have been made for continuing the project in

2008.

As far as the third sector is concerned, the most important partner in the ICT

field is the Information Processing Association in Southwest Finland

(VSTKY). The association gathers together various contributors in the field

through different events. The association has 1,103 members, 27 of which

are company members.

The large amount of micro-companies in Southwest Finland poses a challenge

for the ICT field because they require the generation and development of

effective partnership networks. The availability of skilled professionals

has decreased, according to companies, but this is something that can be

rectified through active cooperation between academic institutions and

companies. Being able to identify opportunities and challenges and truly

taking interest in them will help the ICT field to continue its steady growth

in Southwest Finland in the future as well.

In 2007, BioTurku focused on activating regional projects as well as

supporting development of potential business activities in the area. Through

the change to a new operations model, activities formerly belonging to the

subsidiary Turku Bio Valley Ltd were transferred to direct administration

within Turku Science Park Ltd.

To promote the marketing and preparation for business activities of Turku

University’s Center for Disease Modeling, business environment support

was successfully sought from the Employment and Economic Development

(T&E) Centre of Turku. With this funding the Center has since been able

to employ a person for marketing. Researchers from the Turku and Åbo

Akademi Universities have established a cross-disciplinary work community

for research and teaching in bioimaging (Turku BioImaging). This will

come to have far-reaching effects on the development of biosciences and

biomedicine in Turku, as well as the entire BioTurku® organisation.

New imaging technologies are utilised effectively in collaboration from

bottom to top – from basic research all the way to clinical case studies.

BioTurku started up the commercialisation process for Turku BioImaging

mainly through the producing of marketing materials. To attract students,

PharmaCluster Finland (coordinated by BioTurku) compiled a DVD and

brochure presenting professions in the field of medicine. Through the

ScanBalt collaboration network based in the Baltic region, the unit has

taken part in launching international Master and Doctoral programs.

In support of internationalisation and marketing of the various Science

Park businesses, 13 enterprises from our region cooperated in a large

BioTurku department in the Helsinki ChemBIO exhibition. In addition to

this, participation for Turku companies in an international partnering

event in Switzerland was organized in September. An event for companies

concerning the special features of the American market was organised in

cooperation with the Pennsylvania Center for Foreign Direct Investment. In

addition to these special events, the department was involved in inviting

and hosting numerous delegations of international enterprises interested

in the services available from businesses and research institutes or in

positioning themselves in the Turku region. BioTurku has coordinated a

large Tekes (the Finnish Funding Agency for Technology and Innovation)

funded internationalisation project for the Bio and pharmaceutical service

sector, which has also enabled Turku enterprises in the field to substantially

develop their international activities.

The National HealthBIO cluster program was initiated at Turku’s lead last

year. In addition to the organization of activities, an idea forum for industrial

diagnostics and a national clinical research network were started up,

new channels to markets in China opened up, and a Europe-wide funding

investigation to increase financing opportunities for Finnish businesses.

BioTurku®

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Top-quality facilities, excellent professionals, fulfiller of all

official regulations, and processes carried out according to cGMP

stipulations – these are the pillars upon which Biovian Ltd, a contract

manufacturer operating in the Turku Science Park area that produces

biopharmaceuticals and drugs, has achieved strong growth on the

international level. More than 70% of the company’s volume of orders

comes from foreign clients. The company’s increase in turnover has

been made possible by doubling the number of personnel.

Established in 2003, Biovian has greatly expanded in the past two years

especially. Turnover has increased as much as 60% and this has enabled

the company to double its number of personnel. The company already has

30 full-time employees. Project and Marketing Manager Knut Ringbom of

Biovian Ltd explains, “Becoming a global company has been an absolutely

essential issue right from the very beginning of our operations. Our solid

and valued client base in Finland is insufficient in guaranteeing the amount

of growth at which our company is aiming. For this reason, we have

systematically developed our partner networks and readiness to work in an

international environment.

Acquiring international clients is a process that requires contribution and

perseverance. Biovian has also successfully utilised the opportunities

for cooperation offered by the BioTurku® cluster by taking part in the

internationalisation project for biotech and pharmaceutical service

companies, which is partially funded by the Finnish Funding Agency for

Technology and Innovation (Tekes) and coordinated by Turku Science Park

Ltd. Ringbom says, “The greater portion of our client base now comes from

Sweden, Denmark, Germany, and Great Britain. We will, of course, actively

continue to build partnerships in Europe especially.”

everyThing for The benefiT of The clienT

Biovian Ltd is a contract manufacturer of biological molecules and a

service provider for the development of biopharmaceuticals. Clients include

companies in the drug development, pharmaceutical and diagnostics

industries as well as research institutions. Ringbom emphasises, “We do

everything according to the needs of the client; we don’t develop our own

products. Therefore, conflicts of interest are non-existent.”

A typical Biovian client is a drug developing company that does not have

its own customised facilities or equipment. The client may not have the

required permits and/or expertise to enable it to produce the needed amount

of a drug candidate to perform clinical research on it.

biovian lTd in brief:

- 1600 m² of inspected facilities and processes that fulfill both EU and

cGMP requirements

- Permit granted by the National Agency for Medicines

Services:

•Contract manufacturing of biopharmaceuticals for pre-clinical and

clinical trials, as well as for diagnostic applications and rare drugs for

the market

•Contract research associated with bio-molecules, protein

characterisation, and the development of cleaning processes

•Other activities and quality control subject to GMP regulations,

including microbiological quality control, analysis development of

bio-molecules, and development of cell-based analyses

CASE: Biovian Ltd Goes International

BioTurku®

www.biovian.com

Further information: Turku Science Park Ltd / BioTurku Department, Director Tero Piispanen, Tel: +358 (0)40 078 1683

Applied ICT and development projects offer businesses and institutions

of higher education help in procurement of research and cooperation

partners, in finding channels of funding, by preparing applications, for

example, to the EU and Tekes (the Finnish Funding Agency for Technology

and Innovation), as well as in project management. The department has over

ten years of experience in EU projects, which also includes coordination-

level responsibilities. Activities will emphasise collaboration in applied ICT,

i.e. the field of information and communication technology supportive of

other branches of business. The department will continue to function as

a specialist in its field in the activities of regional development, as well as

participate in national innovation projects.

Through the move to the new operations model, activities of the former

subsidiary ICT Turku Ltd became part of Turku Science Park Ltd. Work

was rationalized and costs were cut. Maintenance and development of the

OpenSpark wireless broadband network were transferred in their entirety

to MP-Masterplanet Ltd, who has been responsible for its commercial

activities and development. Activities of the software development centre

were discontinued.

The European Union funded projects RAIN and Connect, led by our

company, were extended. Of these projects belonging to the 6th framework

programme phase (CORDIS FP6), RAIN aims at increasing investments

for the IT field in the Baltic area, while Connect is focused on ensuring

protection of privacy for users of wireless communications.

In the Enterprise-ICT project, very small businesses with an average of 1-5

employees were offered guidance in electronic business activities. One

example of this could be an individual entrepreneur with a service business

for whom email, computer security, a website or a web shop introduce a

significant change to their activities. Continuation of the project is planned

due to good client feedback.

The department made a comprehensive report on the European Union’s new

framework programme phase (CORDIS FP7, other individual programmes,

regional development programmes) and presented this information to other

business policy enterprises and institutions of higher education in the city

of Turku. In addition, cooperation was developed with the institutions of

higher education and the Employment and Economic Development Centre

(TE-keskus) in order to improve publicising of EU programmes.

Through work with the board of the Turku Centre for Computer Sciences, TUCS, new means were planned to enable scientific results

of this nationally significant research institute to be better capitalised

on commercially. The Turku Innovation Platform, conceived by the

institutions of higher education, could function as one instrument for this.

In addition, we participated in the planning of ICT SHOK – a cluster of the

Finnish Strategic Centres for Science, Technology and Innovation – with the

intention of becoming shareholders in the company to be founded. Through

the structures of the newly formed national SHOK, research programmes

developed by businesses and research units together will be realised.

Together with the Development Center of the Salo Region, we initiated an

applied ICT cluster survey. On the basis of the survey’s results, decisions

will be made concerning which products and services Turku Science Park

will offer the companies of the cluster in the future.

Applied ICT and development projects

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Led by Turku Science Park Ltd, a group of science parks located in

the Baltic Sea region has completed a research project aimed at

comparing and contrasting existing practices, as well as improving

the efficiency of turning technological innovations into commercial

products. The project, known as RAIN, took two years to complete and

was financed by the European Union.

RAIN (Regional acceleration for the innovation circle in the ICT sector)

featured a study on current innovation systems and the project was also

used to share expertise between the cities of Turku, Tallinn, Tartu, Riga,

Klaipeda and Rostock. These cooperative experiences proved useful

for all parties and so the group has decided to further continue its close

collaboration. The new EU member states are very eager to familiarise

themselves with Finland’s successful innovation system.

public secTor To speed up developmenT of icT

The study showed that the new EU member states had had very little (if any)

experiences of prior interaction between the public and private sectors and

institutions of higher education, and that they had not been connected to

political decision-making.

However, partnership between the public and private sectors is an effective

way of increasing regional investments, particularly in the ICT field. For

instance, setting up extensive information networks for healthcare services

as well as offering various governmental online services for the public can

create demand for the ICT sector in addition to improving the efficiency and

quality of public services. Other means of increasing public demand are, for

example, improvement of data communications infrastructure, investment

in the reliability of electronic media, and the development of electronic

learning environments.

increased creaTiviTy and parTnership

The Baltic Sea region is one of the fastest growing areas in the European

Union. However, particularly in the Baltic countries, the process of utilising

available innovation potential is only beginning.

“Creativity goes beyond the externals. Innovation requires more than the

raising of grand buildings”, was the central message the RAIN project sent

to the new EU member states. The recommendation, suitable for all regions,

was to increase cooperation between the private and the public sectors,

especially in the ICT field. Science and technology parks play an important

role in this, as they operate at the junction of several different industries

and research areas.

CASE: An innovative business environment requires cooperation between the public and private sectors

Information for new EU countries

ICT Turku

Further information: Turku Science Park Ltd / Applied ICT and development projects, Director Sirpa Simola, Tel: +358 (0) 50 557 0031

souThwesT finland’s cenTer of experTise

The nation-wide Centre of Expertise Programme, OSKE, began a new constructive period in 2007 grounded on national clusters of expertise. Of the thirteen national clusters named, Southwest Finland is participating in five. Turku Science Park Ltd has overall responsibility for the programme, but activities are divided between various industrial policy actors according to the strategy of the city of Turku:

The actor for HealthBIO is Turku Science Park Ltd, who is also in charge of national coordination. National coordination and the regional activities

of the Finnish Maritime Cluster are situated in the Machine Technology

Centre in Turku. The travel cluster is run from Rovaniemi and its regional

administrator is Turku Touring. The cluster for expertise in food and nutrition is located at Turku University’s Functional Foods Forum and cluster coordination is in Seinäjoki. The Turku Science Park’s areas of

responsibility within the forest industry cluster include new materials and printing surfaces with cluster coordination located in Lappeenranta.

inTernaTional acTiviTies

Focus of the department’s International operations was on Finland’s innovation organisation in consultations.

As a part of bilateral development cooperation between Finland and the

Republic of South Africa, the COFISA (Cooperative Framework on Innovation Systems between Finland and South Africa) programme was launched. In

connection to this entity the Feasibility Study for the Centre of Expertise Programme was conducted in the province of Gauteng. South Africa’s Ministry of Science and Technology was satisfied with the report and decided to start the first pilot projects from the beginning of 2008.

On the basis of collaboration agreements between the Regional Council of Southwest Finland and Pomerania (a Polish and German region) a

preliminary report of the science park concept was made in Gdansk and Pomerania.

One-day seminars about the science park concept were organised for delegations from Budapest and Brno, as well as the Centre of Expertise Programmes’s adaptation about travel for Catalonian officials.

At the end of the year successful negotiations on cooperation were carried out with the Heidelberg Technology Park, as well as the Comenius University in Bratislava. A five-seminar series on innovation was carried out

in Bratislava in January 2008.

Centre of Expertise and international activities

13Centre of Expertise

Turku Science Park Ltd has taken part in providing consultation

services in the Cooperation Framework on Innovation Systems

(COFISA) programme, a joint project between Finland’s Ministry

of Foreign Affairs and the South African government. The program

involves Finns helping South Africa to improve its innovation system

and to develop science parks. Turku Science Park Ltd’s participation

in the project was sparked by CEO Ilkka Kouvonen, who is a member

of the steering committee, and N. Tapani Saarinen who carried out a

preliminary study to determine the possibilities of doing a project like

OSKE (Centre of Expertise Programme) in the Gauteng province.

opporTuniTies and challenges

A preliminary study took place during the summer and early autumn of 2007. Director of Development Saarinen met with representatives of nearly 200 local interest groups in a total of 53 meetings in the areas of Tshwane, Midrand and Johannesburg over two weeks. The study revealed that there is a great need to enhance the innovation system in these areas and to consolidate its extremely scattered elements.

The OSKE program, which has proved to be an effective tool in Finland, could well be tested in South African conditions as a pilot project in the Gauteng province, if the area’s leading bodies commit themselves to the project. In his report, Saarinen views as challenges to the pilot study the fact that the area has no tradition of cooperation between universities and business, neither are there independent bodies that could be considered as investors on the national level.

efforTs conTinue

COFISA is an example of the new development aid policy in the Ministry of Foreign Affairs. The targeted project funding comprises investments by the

Finnish and South African governments. The Helsinki Consulting Group

is responsible for the project in Finland and South Africa’s Ministry of Science and Technology is a partner in the endeavor. Lauri Kuukasjärvi is program director for Finland, and he works out of Pretoria.

The COFISA project has already led to practical measures with the initiation of the first OSKE pilot projects in 2008. The project is on-going and new surveys in the Cape Town and Stellenbosh areas were conducted in spring

2008.

CASE: Can the Centre of Expertise Programme be applied to South Africa?

www.oske.netwww.cofisa.org

Further information: Turku Science Park Ltd / Centre of Expretise and International Operations, Director N.Tapani Saarinen, Tel: +358 (0)40 052 5308

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Do people possess innate differences in their sense of taste and

does it affect their personal eating habits? Will it be possible or

even necessary in the future to customise flavours to accommodate

various consumer groups and add them to health-promoting products

to boost their consumption? Researchers carrying out the Makugeeni

(gustatory gene) study at the Functional Foods Forum (FFF) are looking

for answers to these questions.

The Functional Foods Forum (FFF) is an independent institution in

conjunction with the University of Turku that combines the best knowledge

and expertise of various fields. FFF develops ideas for health-promoting

foods into products and commercialises them according to consumer

needs. It also carries out applied research and offers services to companies

in the food industry for their research and product development projects.

The institution also functions as promoter in Western Finland for a cluster

of expertise in the food industry which is a part of the Centre of Expertise

Programme.

A study has been initiated at FFF to determine whether or not our genes have

an impact on the sensitivity of our sense of taste. The study is being funded

by the Academy of Finland. Researchers hypothesize that a certain gene

exists that may be linked to the bitter sense of taste. The test subjects give

a DNA sample after which they are given various vegetables and flavored

mixtures to taste. The goal is to determine if the shape of the gene affects

how sensitive or insensitive people are in tasting bitterness in their food.

Senior Researcher Mari Sandell, head of FFF’s flavor-sensing team

states, “The perspective we are taking will eventually be expanded to the

understanding of how the entire sense of taste functions and how this

affects consumer habits. The study here in Turku is a continuation of the

work I began at the Monell Chemical Senses Center in Philadelphia during

2005–2006.”

CASE: Does our gustatory gene have an impact on our habits as consumers?

http://fff.utu.fiwww.oske.net

Centre of Expertise

15

Business development

Turku Science Park Ltd Business Development provides services for

start-up technology companies and individuals planning a new technology

business. Two business incubator units operate within the Turku Science

Park Ltd: the Bio Incubator, equipped with laboratory premises, and the DIO Business Centre for other technologies. Services include the evaluation of

new business plans, pre-incubator services for preparing business start-

up, and incubator services for the beginning stages of company operation.

Additionally provided are premises with office services.

Approximately 60 new business start-up plans were assessed during the

year 2007. New pre-incubator ventures totalled 18 and 13 new incubator

companies were started. Of the new businesses, 9 operate in the field of ICT

and four in biotechnology. 10 businesses graduated from incubator services.

In 2007 the incubator housed a total of 28 beginning enterprises.

The operation of the incubator businesses improved significantly during

the year. Six incubator businesses received external funding, with capital

totalling about 3.5 million euros. Incubator companies created 78 new

jobs.

Incubator services were funded by the Turku Region Development Centre, TEKES (the Finnish Funding Agency for Technology and Innovation)

and the Employment and Economic Development Centre for Southwest

Finland.

Business development was actively involved in the national Technology

Incubator Development Programme (Yrke). The program, which included

the technology incubators of 12 regions, ended in 2007. The venture

developed incubator services and worked to create new, shared methods

of operation. Funding was also provided to businesses and incubators for

acquiring outside expert services. The Yrke- project significantly improved

the content of incubator services.

In October 2007, an agreement with the University of Turku for the activation,

evaluation and development of innovations originating from university

research was signed as a part of the new TULI (business from research) –

programme. The co-operation extends through May 2008. The active search

for innovations originating from universities –and the development of those

innovations- was thus resumed. The programme continues the efforts of

the previous TULI program, which ended in the beginning of 2007.

Other activities during the year included the regional coordination of the

Venture Cup business plan development competition and the administration

of the Tekes development service funds.

Business Development

16

CASE: BioCis Pharma – Incubator Company of the Year 2007

BioCis Pharma Ltd, which operates in the Bio Incubator department at

Turku Science Park Ltd, was voted Incubator Company of the Year 2007,

a choice made by a jury comprising the business development team at

the Finnish Science Park Association (TEKEL) and venture capitalists.

Reasons for choosing BioCis included the company’s exceptionally

cost-efficient product development activities, the company’s

innovative business model that won the confidence of investors, and

its ability to extensively and productively take advantage of business

development services.

The appeal of a virTual business

Established at the end of 2004, BioCis Pharma’s business idea is built

around a medicinal impact mechanism, invented by the founders of the

company. The company develops its own innovative drugs based on this

patent-protected technology for the care of inflammation and cancer in

humans and animals.

BioCis Pharma’s business concept is exceptional in the pharmaceutical

industry. The company utilises a virtual business model, which involves

the outsourcing of nearly all product development and research activities

that require a huge amount of resources, to service providing companies

and research institutions in the pharmaceutical industry. BioCis Pharma is

responsible for planning, coordinating and managing product development

projects. Only a small proportion of the practical research and development

activities take place in the company. The company employs three full-time

employees, but carries out extensive operations as a virtual organisation.

BioCis Pharma has been able to successfully lure venture capital to the

company even in the challenging biotech financing environment of recent

years. The latest indication of this is the round of financing that took place at

the end of the summer in 2007 when Karolinska Development, a biotech

venture capitalist in Sweden, made a significant investment in BioCis

Pharma. BioCis Pharma is the first Finnish company in which Karolinska has

made an investment. Other venture capitalists include Oy Etra Invest Ab,

Finnish Industry Investment Ltd, and the Finnish Funding Agency for Technology and Innovation (Tekes).

a boosT from business developmenT services

BioCis Pharma Ltd has been a part of the Bio Incubator at Turku Science

Park Ltd right from the beginning. Bio Incubator has provided an excellent

business environment for this young drug development company by

offering, for example, a well-equipped laboratory as one of their support

services. Also, the training, consultation and sparring BioCis Pharma Ltd

received from Bio Incubator have been extremely helpful to the company.

CEO Lasse Leino explains, “We are a model example of a company that

has traveled along the path of innovation for technology companies, step by

step. First, our idea was tested using TULI financing. Then, a business plan

was generated with the LIKSA program and it was successfully fine-tuned

for investors in the Venture Cup business contest, and we then became a

part of the Turku Science Park business incubator.”

www.biocis.com

Business Development

17Business Development

CASE: Pre-incubating Company Successful in Nordic Venture Contest The business development activities at Turku Science Park Ltd offer

support and consultation as early as the ‘pre-incubating phase’ of

development for business ideas when fine-tuning a business plan

and approaching investors. Alex Michine of MetGen Ltd is extremely

satisfied with the assistance he received; the company’s business

plan, which was refined together with our business development team,

was awarded a certificate of honor in the Nordic Venture Contest in

Copenhagen in October 2007.

Alex Michine states, “We’ve now caught investors’ attention, and that’s

the most important thing at this phase.” There were about 40 companies

represented in Copenhagen, which was the number chosen out of 400

possible companies. MetGen’s business idea involves the production of

industrial enzymes.

The pre-incubaTor examines opporTuniTies

Olli Mankonen, director of the Business Development department at Turku

Science Park Ltd, says, “Our pre-incubator service helps to determine

whether or not an entrepreneur and enterprise are truly prepared to begin

business operations. We first determine whether or not the business idea

is one that can be developed and whether it suits us, a business incubator

for high technology. If it is, then we move on to the pre-incubating phase

in which we assist the entrepreneur in sharpening the business plan

specifically.”

conTacT wiTh invesTors is imporTanT

Acquiring contact with investors is the central part of our business

development services. Turku Science Park Ltd is an associate member of

the Finnish Venture Capital Association and is also a part of the unofficial

club of investors in the field of life science in the Nordic countries. This

unofficial club has been active since 2002, and it meets with a varying

combination of members twice a year. Members include investors from

Bergen, Oslo, Copenhagen, Lund, and Stockholm that make venture capital

investments in the field of life science. The Finnish Innovation Fund, Sitra,

and now Turku Science Park Ltd as well, are the two Finnish investors

involved in the club.

CEO Ilkka Kouvonen explains, “We met in Copenhagen in the autumn

around the same time as the Nordic Venture Contest. The host for next year’s

meeting in the spring will be Karolinska Development out of Stockholm, and

I have invited the community to Turku next autumn.”

Further information: Turku Science Park Ltd / Business Development Department, Director Olli Mankonen, Tel: +358 (0)40 092 1937

18

Biocelex Ltd was founded in July, 2007 and began operation September 1, 2007.

At the end of the year, the company shareholders were Turku Science Park Ltd

(69%), Karolinska Institutet Holding AB (25%) and the company’s management

(6%). At the end of the accounting period, the company had three employees.

The company’s operations centered on its launching activities and on the founding

of a seed fund in the life science field.

Biocelex Ltd’s innovation development activities include provincial and more

wide-spread searches for Finnish ideas and innovations in the field of life science,

commercialisation potential evaluations, and eventually, organising possible seed

funding for enterprises. In its operations in Finland, Biocelex Ltd utilises the so-called

innovation development model produced by the Karolinska Institutet Innovations

AB. The model has been modified to suit the Finnish life science field.

Some of the business development services Biocelex Ltd provides include strategy

planning, commercialisation, and internationalisation. Biocelex Ltd sells business

development services primarily to actors in the Finnish life science field. Potential

clients include early-stage and growing companies as well as larger, more

established enterprises in this field.

Biocelex Ltd

Biocelex Ltd

Further information: Biocelex Ltd, CEO Kai Lahtonen, Tel: +358

(0)50 689 48

19

There was continuing interest in the Turku Science Park area during 2007.

Two large ICT companies made the decision to relocate to the Science Park

area. One of these moved to the PharmaCity building as a tenant of Turku

Science Park Ltd. Demand for smaller spaces was relatively high and new

businesses located to the science park premises.

With regard to the real estate of Turku Science Park Ltd, the most significant

development was the decision to gradually give up direct ownership of real

estate. Preparation for this began already during 2007 in cooperation with

the city of Turku. Turku Science Park Ltd holds shares in the ElectroCity and

DataCity property management companies, as well as having full ownership

of Real Estate Company Focu Ltd in BioValley.

Management of Real Estate Company Focu Ltd, situated in Bio Valley, was

transferred from the real estate company LabPharma Ltd (currently Akela

Pharma), which moved away from Focu. Real Estate Company Focu Ltd

represents one of the most modern facilities for the biotechnology industry

in the Nordic countries. Substantial laboratory and other specialised space

became available in the building through the move of LabPharm.

Real Estate

Real Estate

CASE: Ixonos sought growing room

The information and communications technology enterprise Ixonos Plc

moved their staff of 15 to the 6th floor of PharmaCity, but already from

the start wanted space for at least up to 40 employees. The location

in the Turku Science Park close to the Kupittaa train station and

institutions of higher education was considered important, parking

space essential and the convenience of nearby lunch restaurants a

pleasant bonus.

“We had intense growth last year and the future possibilities to expand

on the same floor were one prerequisite for our choice of this space,”

commented Ixonos Turku-Salo site manager Päivi Soinio.

The company has approximately 70 employees working in Salo, who travel

between Salo and Turku as often as daily; for this reason locating near the

Kupittaa station was important. The PharmaCity offices are also in close

proximity to the institutions of higher education and the ICT building.

“The location near educational centers is important for recruiting purposes.

Close collaboration with the schools will certainly increase in other ways as

well in the future; one of our employees is already giving lectures in mobile

programming at the university,” says Soinio.

The PharmaCity premises were still relatively new and in good condition, so

no major changes to the space were needed. A kitchen had to be built and

cameras and locks were added for the security system.

Ixonos Plc is a Finnish information and communications technology service

company. It provides customer-specific technology consulting, as well

as project management and software production services. The customer

base of Ixonos includes, for example, leading mobile and smartphone

manufacturers, mobile network suppliers, telecom operators, and Finnish

finance, industrial and service sector companies, as well as public

administration organisations.

Ixonos has their head office in Helsinki and business units in Espoo,

Haapajärvi, Jyväskylä, Kemi, Oulu, Salo, Tampere and Turku. Sites outside

of Finland are located in Bochum, Germany, Kosice, Slovakia, and Tallinn,

Estonia. The concern has a total of over 900 employees.

Ixonos Plc is listed on the OMX Nordic exchange in Helsinki. In 2007, the

company’s turnover was 59.2 million euros and profit was 4.7 million

euros.

Further information: Turku Science Park Ltd, Real Estate Manager Harri Lindqvist, Tel: +358 (0)40 570 8481.

www.ixonos.com

20

Marketing and Communications

Communication services support the implementation of the company

strategy, and the realisation of its goals through communications and

marketing. It aims to strengthen community image and to enhance

the attractiveness of the clusters (Bio Turku / ICT Turku) and the region,

both locally and internationally. The division plans, consults, coordinates

and implements marketing communication services, and it measures

and evaluates the effectiveness of its activities. The most important

tools in internal and external communication include media relations, communication among interest groups, community image, and

services to support the communications competency of personnel. Our primary services centre on Turku Science Park communications and

cluster marketing.

In 2007, the majority of activities were directed towards communications

with central co-operative partners and interest groups regarding the new

operations model. The entire management committee was involved in

polishing up the company’s service menu. Marketing materials were

redesigned to conform to the transition into the new operating model and

the founding of the Centre of Expertise. The visual image was refreshed, and

a new photography series was commissioned to emphasise not technology

as such, but people and the joy of discovery. This draws attention to the

Turku Science Park community and serves as a reminder of the end-users

of the technological products. The graphic style was revised only slightly

-the choices made years ago continue to function well and still stand out

internationally.

During the year, 103 news reports were published. In terms of media

visibility, the business compared favorably with other technology centers.

The department produced an extensive series of articles particularly for

international biotechnology publications. Further, Turku Science Park stories

and article series appeared in national economic newspaper supplements

which were commissioned by the University of Turku and the Turku

Regional Development Centre. The web pages were viewed, on average,

by 8000 people a month. The electronic interest group publication eSpark

was published 11 times. The company internal bulletin was published

regularly, as were minutes from personnel meetings. A column series titled

“On the science park bench” (Tiedepuiston penkillä) - , written by Turku

Science Park Ltd personnel, will appear in each economic supplement (TS-

Talousliite) to the Turun Sanomat newspaper, the most widely read financial

publication in our region.

Further information: Turku Science Park Ltd, Director of Communications, Katja Wallenlind, Tel: + 358 (0) 50 577 4 807

Marketing and Communications

During the year, two Science Park or Spark-benefit events were organised

together with collaborative partners. These partners include a travel agency,

an airline, and hotel and congress services providers that offer discounts or

other benefits to companies operating within the Turku Science Park area.

Additionally, one new contract interest package was negotiated for the

benefit of companies in the Science Park. An interest group event “Finland

90 years – the freedom to innovate” was held at our own premises on

Independence Day, 5 December. Nearly 200 cooperative partners attended

the event. In the autumn, the first ever directory of clients and interest

groups for the whole company was compiled.

21

board of direcTors chairman Tom von weymarn:

The board of Turku Science Park

Ltd brings together top-level

national management expertise

and international experience.

The make up of the board unites

competence and experience in the

organisation’s principle fields with

the objective of balanced representation of the key interest groups - the

higher education sector, the business sector, and the City of Turku.

An effective management system, open communication, and reporting of

essential information are vital elements of sound corporate governance.

Central to the operation of the board has been the aim of bringing together

different complementary types of competence so as to enhance the board’s

effectiveness and strengthen corporate governance of the organization.

Restructuring of the organisation and a new business model, in addition

to deepening international cooperation, represented the most significant

policy definitions to proceed to the implementation stage in 2007.

The board of direcTors of Turku science park lTd (from 5 sepTember 2005)

presiding officers:

Tom von Weymarn, Chairman of the Board, also functions as chairman

of the board in TeliaSonera AB, as well as Lännen Tehtaat plc.

Tero Hirvilammi, Deputy Chairman of the Board, Deputy Mayor of the

City of Turku responsible for Competence and Business Development.

The work of the Board of Directors

The work of the Board of Directors

members of The board:

Pauliina de Anna, Vice Chair of the City of Turku Board

Rabbe Klemets, Chairman of the Board for Oy LS-Link Ab

Seppo Lehtinen, Vice Chair of the City of Turku Board

Björn Mattson, Senior industrialist, also functioning as chair of Nordkalk plc

Aleksi Randell, Member of the City of Turku City Council, Special Adviser

to the Ministry of Transport and Communications

Matti K. Viljanen, Professor, Vice Rector of the University of Turku,

responsible for the strategies of research activities

22

Financial statement and balance sheet 2007Statement of earnings

turnover 10 396 223,26

materials and services - 1 854 364,82

staff expenses - 2 681 258,10

depreciation and value adjustments - 1 266 454,52

other costs - 3 959 616,54

operating profit / operating loss 842 016,98

financing costs - 445 184,93

net profit 426 856,05

Balance sheet

Assets:

non-current assets 27 944 974,21

current assets 14 187 944,37

total assets 42 132 918,58

Liabilities:

shareholders’ equity 21 236 748,28

outside capital 20 806 170,30

total liabilities 42 132 918,58

Number of employees 46

Financial statement and balance sheet 2007

23

Two decades of technological business activity

Technology centre activities officially began in Turku in 1988 when the

management and development company known as Oy DataCity Center Ab

was established in the brand new DataCity building. Situated alongside the

Kupittaa park area within walking distance of the city centre, it sprang up

as an exciting focal point for Turku and Åbo Akademi Universities, the Turku

School of Economics, the City of Turku’s IT department and IT companies.

effecTive environmenT for innovaTion

In order to prevent everything remaining confined to one building, the

development company Oy DataCity Center Ab (DCC) undertook to work

for increased cooperation between the city’s institutes of higher education

and the businesses which could take advantage of their expertise. New

partnerships and projects were created, as well as entire programmes

which gathered participants from further afield in the province. For financial

instruments, the organisation learned how to make use of the opportunities

offered through the Finnish Funding Agency for Technology and Innovation

(Tekes), the Academy of Finland (a governmental funding body for scientific

research), and later also the EU. In addition to the field of information

technology, materials research, metal, printing and biotechnology fields

among others were added. To spawn the start-up and support of new hi-tech

enterprises, a business incubator was established offering developmental

services. Instruments were also created for the commercialisation of

inventions and the seed funding of start-up enterprises.

ElectroCity was converted from the former Silo factory building and together

with the universities efforts were made to see the rise of BioCity in 1992, at

the time the most modern biotechnology centre in all the Nordic countries.

Consequently, biotechnological research and business activities grew to

be a second focal point of the technology centre, alongside information

technology.

With the expansion of operations and the technology centre area, in 1999

the name of the development company was changed to the more easily

understood Turku Technology Centre Ltd. More and more new technology

buildings owned by property development companies went up in the area

- today there is already over 250 000 square metres of space - and the

technology centre’s project activity expanded to being, among other things,

a national tool for regional development through the long-term Centre of

Expertise Programme.

The concern as a Tool for business policies

The City of Turku took a significant step in the early 2000s in shaping the

focus of its own business policies. Turku Science Park Ltd was created as a

means to promote hi-tech business activity; the principle owner is the City

of Turku with surrounding municipalities, property companies and university

foundations as other shareholders.

At the end of 2002 operations which had begun under the Turku Science

Park concern were merged with the former Turku Technology Centre Ltd.

Subsidiaries were formed from Turku Bio Valley Ltd, already previously

founded for the construction of properties for the life science field, and

ICT Turku Ltd, founded to promote ICT business activity. Properties owned

by the City of Turku were transferred to the concern’s balance sheet as

non-cash issue capital contribution. Development of the overall operational

environment became the parent company’s responsibility, while the

objective of the subsidiaries was to promote growth and development of

the main fields, life sciences and ICT.

new business model: clariTy and inTernaTionalisaTion

In 2007 Turku Science Park Ltd transferred to a new business model. The

subsidiaries were relinquished and activities consolidated in the parent

company. Life science and applied ICT remained the main fields, but

activities were based on profit-generation strategy in which ties to what

had proven to be uncertain income from rentals in the life science field

were eliminated. In the new business model, properties were let go of and

business policy functions were centralised in the parent company.

In order to promote innovative activity of Southwest Finland’s university

and higher education sector, Turku Science Park Ltd together with

top international experts in the field from Karolinska Institutet Holding

AB founded a developmental company named Biocelex. The business

concept of Biocelex is to find ideas with potential for development in the

life science field and support their commercialisation by taking advantage

of Karolinska’s tools and experience. There is a plan to set up a separate

small-scale investment fund as a catalyst for the field’s developmental

processes.

Turku Science Park history

Turku Science Park – Innovate to Accelerate•Three universities:

University of Turku, Åbo Akademi University and Turku School of Economics

• Two polytechnics:

Turku University of Applied Sciences, Diaconia University of Applied Sciences

• University hospital

•Focus areas: biotechnology and ICT

• 17,500 employees

• 30,500 students

• 400 professors

•300 companies and organisations

• over 250 000 m2 of premises

• An integral 5 km2 area within a walking distance from the city centre

(Located along the Helsinki motorway, in the immediate vicinity of the Kupittaa railway station)

• Less than a half-hour drive from an airport with international connections