Bio Ohio Power Point Slide Set All 9 17 10

Ohio’s Bioscience IndustryWhy Ohio?

John F. Lewis Jr.

September 17th, 2010

An Ohio Thomas Edison Center

© 2010 BioOhio

Agenda

• Overview of Biosciences…in detail

• Working Lunch

• Overview of BioOhio’s Attraction Strategy

• Open Discussion

© 2010 BioOhio

© 2010 BioOhio

Be Proud…Be Strategic

“Ohio is one of the best places in the world to optimize the profitable growth of your bioscience company because we can imbed you in an asset base, 1,253 companies and growing. We are a partner that allows you to maximize any or all phases of your business strategy”

© 2010 BioOhio

The Original Biotechnologies

© 2010 BioOhio

Why Listen to me?• We are here to help you!• Increase leads, follow-up, help create regional

jobs, give you all > visibility, > bio partnerships globally, more wins…but we need your help!!!

• Licensed attorney in Ohio 1987• 20 years international and TBED experience• Lived in 3 countries, traveled to >50

– VC in Caribbean, Medical/Pharma/Opto Asia

• Started offices, JV’s in Korea & China, closed one in PRC

• Since 2001 been with BioOhio– Helped raised more than $1.1 billion

© 2010 BioOhio

Our History

• 1987 Edison BioTechnology Center (EBTC)

• 2001 Moved HQS to Columbus

• 2002 Omeris

• 2007 BioOhio

© 2010 BioOhio

What is Bioscience?

…a broad sector, including:

•Pharmaceuticals•Genomics •Diagnostics •Medical devices & equipment•Bioinformatics•Biomedical imaging•Biomaterials•Clinical Research Organizations•Environmental•Regenerative medicine•Research and development & Testing Labs•Agricultural bioproducts•Healthcare Informatics•Nutraceutical/Food

© 2010 BioOhio

AgriculturalFeedstock & Chemicals

Agricultural processing

Basic organic chemicals

Ethyl alcohol mfg.

Organic fiber mfg.

Fertilizers

Pesticides and other agricultural chemicals

Medicinal & botanicals

Pharma-ceutical preparations

Diagnostic substances

Biological products

Drugs & Pharmaceuticals

Medical Devices & Equipment

Laboratory apparatus & furniture

Surgical, medical, dental, ophthalmic & analytical instruments & equipment

Irradiation apparatus & electromedical equipment

Hospitals

Specialty hospitals

University medical

research hospitals

Clinical research institutions

Healthcare IT

Research, Testing, &Medical Laboratories

Biological research

Commercial medical

research

Testing laboratories

Medical laboratories & diagnostic imaging centers

Product-Oriented Service -Oriented

Bioscience Subsectors

© 2010 BioOhio

Ohio, more than you know…

• 7th largest state with 11.5 million people

• In the top 10 nationally for Biotechnology Industry strength

• Within 1 day drive of 61% of USA, 50% Canada

• Highly educated workforce

> 150 colleges and universities

© 2010 BioOhio

Ohio. More than you know…

• 7th largest state with 11.5 million people

• In the top 10 nationally for Biotechnology Industry strength

• Within 1 day drive of 61% of USA, 50% Canada

• Highly educated workforce

> 150 colleges and universities

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

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© 2010 BioOhio

© 2010 BioOhio

Bioscience companiesand organizations can be found in 73 of Ohio’s

88 counties!

Source: The Ohio BioscienceResource Directory, May 5, 2010.

www.bioohio.com/directory

It’s not just the3 C’s, Bio in

Ohio is statewide!

© 2010 BioOhio

© 2010 BioOhio

Large Ohio Bioscience Companies

• Procter & Gamble Pharmaceuticals www.pgpharma.com

• Ethicon Endo-Surgery (J&J)www.ethiconendo.com

• Cardinal Health www.cardinal.com

• Battelle Memorial Institute www.battelle.org

• STERIS www.steris.com

• Philips Medical Systems www.medical.philips.com

• Abbott Nutrition (Ross Laboratories) http://abbottnutrition.com/

• Chemical Abstracts www.cas.org

• Mettler-Toledowww.mt.com

• Invacarewww.invacare.com

…and lots of emerging and mid sized companies

© 2010 BioOhio

3 cities in the top 40 Biotech locations in USA

In the top 10 nationally for Biotechnology Industry strength

State City Rank

OH Cleveland-Akron 20

Columbus 22

Cincinnati 28

All three cities rank higher than the 100 city average in Research grant awards in Bio-

Sciences

$769 Million in NIH Awards in 2009!

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

Total Bioscience Funding 2004-2009

>$9 Billion  2009 2008 2007 2006 2005 2004

  Funding In $Millions  VC/Angels 96 $189 $296 $114 $98 $91

IPO 0 $0 $188 $12 $49 $0

SBIR/STTR* 24 $21 $19 $27 $29 $22State Biomedical Partnerships (Third Frontier)

40 $98 $135 $155 $75 $51

Matching Corporate Funds for Biomedical Partnerships

47 $105 $92 $273 $112 $111

NSF Bioscience Grants 24 $13 $12 $10 $15 $36NIH Institutional Grants 769 $637 $698 $689 $725 $695Other Healthcare Equity Financing

$0 $0 $13 $0 $112 $12

Acquisitions 59 $473 $1,089 $75 $279 $0Total Bioscience Funding

$1,059 $1,536 $2,542 $1,355 $1,494 $1,018

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

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© 2010 BioOhio

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© 2010 BioOhio

© 2010 BioOhio

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Top Employers

© 2010 BioOhio

Top Employers

© 2010 BioOhio

Top Employers

© 2010 BioOhio

NAICSThe North American Industry

Classification System

© 2010 BioOhio

Ohio is ranked 8th nationally in total patents issued and has more than every country in the world except for Japan, Germany, and the UK

© 2010 BioOhio

Fantastic Hospitals

• 12 of US News & World Report’s top 214 hospitals & medical centers are in Ohio– Cleveland Clinic, 4th best hospital in the nation and Top Heart

Center in the country for 16 straight years!– Rainbow Babies Children’s Hospital (Cleveland) 3rd in Neonatal Care– Cincinnati Children’s Hospital Medical Center #1 in Gastroenterology– 4 pediatric hospitals ranked in the Top 25– 4 top 50 Diabetes & Endocrinology Centers– 4 top 50 Pulmonology centers– 3 top 50 Orthopedic centers and 3 top 50 adult cancer centers

• Child Magazine ranked Nationwide Children’s Hospital (Columbus) as the #1 facility for pediatric emergency care in 2007

• Thomson Reuters National Top 100, which measures hospital reliability, ranked 8 Ohio hospitals in 2009. Ohio has the most ranked facilities in the nation in this publication - 70 ranked hospitals from 2004-2009!

© 2010 BioOhio

© 2010 BioOhio

17% of all clinical trials in the US are conducted in Ohio

0

200

400

600

800

1000

1200

1400

1600

1800

2000

IN MI NC MA OH PA

Total Active Clinical Trials In the U.S. was 10604 as of June 2009One clinical trial may be conducted in more than one state

Source:www.clinicaltrials.gov

TOTAL

phase IV

phase III

phase II

phase I

© 2010 BioOhio

17% of all clinical trials in the US are conducted in Ohio

Source: ClinicalTrials.gov, data 2/19/2010

© 2010 BioOhio

Now 86 Ohio Health Care Venture Funds…More than 100 have invested

into Ohio bioscience companies

1. Adena Ventures

2. Akron ArchAngels Network

3. Alpha Capital Partners

4. Arboretum Ventures

5. Athenian Ventures

6. Battelle Ventures

7. Blue Chip Venture Company

8. Blue Point Capital

9. Bridge Investment Fund

10.Case Technology Ventures

11.Charter Life Sciences

12.Chrysalis Ventures

13.CID Equity Partners

14.Cincinnati Children's Tomorrow Fund

15.CincyTech Ventures

16.Cleveland Clinic Innovations

17.Core Network

18.Draper Triangle Ventures

19.Early Stage Partners

20.Edgewater Capital

21.Entrepreneurs “E” Fund

22.Everett Partners

23.Fletecher Spaght

24.Fort Washington Capital

25. Foundation Medical Partners

26. Frantz Medical Ventures

27. Glengary Ventures

28. GLIDE Fund

29. iNetwork BioOpportunity

30. Innovation Fund of LCCC

31. Isabella Capital

32. JumpStart

33. Kadima Partners

34. Miami Valley Ventures

35. Morgenthaler Ventures

36. Mutual Capital

37. NCIC Capital

38. NCT Ventures

39. North Coast Angels

40. Oakwood Medical

41. Ohio Tech Angels I, II & III

42. Portal Capital

43. Primus Capital

44. Queen City Angels

45. Radius Ventures

46. Redwood Holdings

47. Reservoir Ventures

48. River Cities Capital Funds

49. Riverside Capital

50. Rivervest Capital

51. Soin International

52. RMS Investments

53. Rocket Ventures

54. Southern Ohio Creates Capital

55. Summit Health Ventures

56. Sycamore Partners

57. Talisman Capital

58. TechColumbus TechGenesis

59. TechColumbus RCF

60. Teton Capital

61. Triathlon Medical Ventures

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

© 2010 BioOhio

Business Climate Improved

• Jobs and Progress Plan

• 10-year, $5 billion investment in Ohio’s highways

• Tax Reform 21 percent income tax reduction Eliminating property taxes on investments in

machinery and equipment No business tax on products exported out of Ohio First $1 million of gross receipts tax-free

• Lawsuit Reform

• Third Frontier $1.6 billion

• Ohio’s Bipartisan Jobs Stimulus Plan $1.57 billion ($100 million, $50 million, $250 million)

© 2010 BioOhio

Tax Reform

© 2010 BioOhio

• Cardiovascular

• BioPharma

• BioPolymers

• Biomedical Imaging

• AgBio

© 2010 BioOhio

Ohio is ranked in the top 10 in biotechnology strength by

Business Facilities magazine.

© 2010 BioOhio

Ohio – National Top 10

AdvaMed

© 2010 BioOhio

Ohio claims its 4th consecutive Governor's Cup, 2006-09, for the most new or expanded capital projects, thanks to the Strickland Administration's focus on

taking steps necessary to be competitive, even in a challenging economic environment

© 2010 BioOhio

BioOhio’s Balanced Strategyindustry growth, resource optimization, community

building

Company & Capital

Formation

Company Attraction & Expansion

Member / Trade

Association Industry Function

Bioscience Workforce & Education

© 2010 BioOhio

BioOhio Statewide Board• Lisa Ashby, SVP/GM, Scientific Products, Healthcare Supply Chain Services, Cardinal Health• John A Bantle, II, PhD, Vice President, Research & Graduate Studies, Wright State University• Timothy G. Biro, Managing Partner, Ohio Innovation Fund I, LP• Greg Blackmore, CEO, Midmark• Rathindra Bose, PhD, Vice President for Research & Creative Activity - Ohio University• Mark A. Collar, Chairman - Third Frontier Advisory Board / Partner, Triathlon Medical Ventures• Sandra J. Degen, PhD, Vice President for Research - University of Cincinnati• Anthony J. Dennis, PhD, President & CEO – BioOhio• Kevin Driscoll, PhD, Exec Director, Global Health Care Connect & Develop-Procter & Gamble• Brian Duncan, MD, Arboretum Ventures• John (Jack) Fisher, Executive Vice President - Ohio Farm Bureau Federation• Mike Hooven, President & CEO - Enable Medical Technologies• Peter G. Kleinhenz, Chairman Managing Director – CID Capital & Fletcher Spaght• Barbara Kunz, President - Health & Life Science Global Division, Battelle• John M. Rice, PhD, Managing Partner - Triathlon Medical Ventures• David R. Scholl, PhD, President & CEO - Diagnostic Hybrids now Quidel• Arnold W. Strauss, MD, Director - Cincinnati Children’s Research Foundation• Caroline Whitacre, PhD, Senior VP for Research - The Ohio State University

© 2010 BioOhio

By-The-Numbers, then & nowYear 1991 2001 2008 – Today

Number of Ohio bio entities 170 352 1,253 (2009, 3.6X ‘01 )

University R&D expenditures

$285 million

$481 million

$1.1 billion (2.3X ‘01)

New Company starts ≈12 12 80 per year 2004-09 (6.6X ‘01)

Private capital raised for new starts

Unknown $14 million

$96 million in 2009 (6.8X ’01)

Bioscience Capital sources (in State)

4 8 86 in 2010 (10.7X ‘01)

BioOhio (EBTC) membership

52 86 383 in 2010 (4.4X ‘01)

© 2010 BioOhio

Member Organization/Trade Association / Bioscience “Chamber”

• Marketing Ohio’s Collaboration & Partnership Opportunities

• New Website launched July 2008 / Expanded Directory July 2009• http://www.micrOHscope.com• Trade Missions (Japan, Taiwan, China, USA, Germany, Israel)• Various Publications• LinkedIn• News Ticker, Webinars, Newsletters and much more

• Advocacy (National & Ohio)• BIO, PhRMA, AdvaMed• SBIR Legislation, Patent Reform• Drug Pricing and importation, Biosimilars• Device Tax• Stem cell research / Human Cloning• Bioscience workforce training• Third Frontier funding strategies

• Networking• BioOhio, statewide and regional events• Career Fairs• AgBio events• National BIO, PhRMA events• Regional Affiliate events

© 2010 BioOhio

Ohio Bioscience Growth Report 2009Accelerating Excellence Magazine

Company & Capital Formation

www.biostart.org

www.bioenterprise.com

www.techcolumbus.org

www.ohiou.edu/biotech

www.rgp.org

www.ci.akron.oh.us

© 2010 BioOhio

What do our Incubators / Accelerators do?

• Collaborations with universities, established companies, and start-up companies; national and international collaborations

• Business development to help established and startup companies make contacts and pursue success

• Management support for startup companies, “portable executives,” “entrepreneurs in residence” until the company operates on its own

• Professional Services referrals to attorneys, accountants, regulatory expertise and others who understand the technology, the startup company environment, international business

• Access to Capital helping startups find investors, and helping investors find companies to invest in

© 2010 BioOhio

Workforce & Education• Community College Partnerships. Coordinating the efforts of Ohio’s 2

year colleges to provide comprehensive programs in support of bioscience industry expansion (e.g. introduction of manufacturing content)

• Blue Ribbon Panel. Invited participant on national 50-member NSF panel to set standards for education bio-technicians. Report published August 2008; www.aacc.nche.edu/ateprogram

• Career Fairs. Since 2006 held annual and regional Ohio Bioscience Career Fairs

• Job awareness & Community Outreach. Entered into partnership with the Society for Manufacturing Engineers Educational Foundation to address improving bio-manufacturing image

• $5 million Department of Labor Grant to BioOhio, workforce training grant targets Ohio’s displaced workers to implement the Ohio Bioscience Industry Workforce Preparedness project for 660 displaced workers. 6 Community Colleges: Cuyahoga, Cincinnati State, Columbus State, Owens, Lakeland and Sinclair.

© 2010 BioOhio

Bioscience Jobs

Agricultural Feedstock & ChemicalsDrugs & PharmaceuticalsMedical Devices & EquipmentResearch, Testing, & Medical Laboratories

33%

25%

8%

33%

Distribution of Bioscience Employment by Subsector

Source: Battelle calculations based on Bureau of Labor Statistics, QCEW program data from the Minnesota Implan Group. Data include Puerto Rico.

• Research & Testing 20,565 companies

• Medical Devices 15,190 companies

• Drugs & Pharmaceuticals 2,589 companies

• Ag Feedstock & Chemicals 2,111 companies

© 2010 BioOhio

Bioscience Wage Trends

• The biosciences offer high-paying, quality jobs across a range of occupations

• Bioscience workers earn $26,772 more than the average U.S. private sector wage, with all four subsectors above the national average

• Since 2001, real (inflation-adjusted) earnings are up 6.4% for bioscience workers, compared to just a 1.4% increase for private sector

Drugs & Pharmaceuticals 79,303$ Finance & Insurance 69,889$ Total Biosciences 65,775$ Research, Testing, & Medical Laboratories 65,414$ Agricultural Feedstock & Chemicals 63,383$ Professional, Scientific, & Technical Services 62,411$ Information 60,530$ Medical Devices & Equipment 56,449$ Manufacturing 47,705$ Construction 40,297$ U.S. Total Private Sector 39,003$ Transportation & Warehousing 38,758$ Real Estate & Rental & Leasing 37,167$ Health Care & Social Assistance 36,606$ Retail Trade 24,337$ Source: Battelle calculations based on Bureau of Labor Statistics, QCEW

program data from the Minnesota Implan Group.

Data include Puerto Rico.

U.S. Average Annual Wages per Employee, 2004

© 2010 BioOhio

Attraction & Expansion• 52 new companies attracted to Ohio April 2007-June 2010• 1,984 jobs created or retained• Regional Partners – more than 50

– Quarterly phone calls and e-mail updates• Global Cardiovascular Innovation Center (GCIC)

– Strong Partnership– Supply Chain directory is outstanding

• Expansions– Site Selection Magazine “Governor’s Cup” 4 years in a row– Area Development Magazine Silver Shovel Award– 179 Bioscience expansions or new facilities 2006-09

• OBDC Ohio Sales Partnership • Israel, Taiwan, Finland, Ireland, Hungary, China, Germany,

India

© 2010 BioOhio

AgBio• Ohio is home to the world’s largest soup factory (Campbell’s)

• Ohio is home to the world’s largest ketchup factory (Heinz)

• Ohio is home to the world’s largest pizza plant (Pillsbury)

• Ohio is home to the world’s largest yogurt plant (Dannon)

• Ohio is home to the country’s largest fructose plant (Cargill)

• More Swiss cheese is produced in Ohio than in Wisconsin

• Center for Innovative Food Technology • 935 food processing facilities • Ohio Agricultural Research & Development Center

© 2010 BioOhio

Ohio’s Agricultural

Output

$79.6 Billion

Ohio’s Chemicals,

Plastics, Rubber

Materials Output $49

Billion

Ohio BioProducts Innovation Center

© 2010 BioOhio

Ohio BioProducts Innovation Center

Bio-Derived Feedstocks

Monomers and Resins

Bio-Polymers andBio-Product System

Solutions

• Soybean Oils

• Next Gen Soybean OilsSoy Proteins

• Corn based carbohydrates/sugars

• Polyacids

• Polyols

• Monomers

• Oligomers and Resins

• Specialty Compounds

• Coatings, Binders, Toners• Adhesives and Sealants• Composites • Solvents, Plasticizers• Lubricants • Surfactants, Cleaners• Fertilizer Systems

© 2010 BioOhio

Technology Innovation Cycle

ADVANCED RESEARCH(8-15 years)

PRODUCT CYCLE(1-3 years)

BREAKTHROUGH(5-8 years)

v:

Discovery Development Application

t

er

CrossIndustrySources

FederalResearch

CollaborativeResearch

ResearchUniversities

GlobalSourcing

CorporateLabs

InternationalSources

Integration

Sense &Locate

GapAssessment

Assess

ProductPlatform

Produc

CustomDrives

UnmetNeeds

Develop

Product Development Involves the “Application” of Technology

© 2010 BioOhio

Medical DeviceCommercialization Pathway

Concept Development and Initial Research

Company Formation / Project Team

Secure IP Portfolio

Product Engineering and Prototype Development

Pre-Clinical and Clinical Studies

Manufacturing Development/ expansion for clinical trials

Clinical Trials/Outcomes

FDA Approval and Market Launch

Expansion/ Investment in Working Capital

$A

B

© 2010 BioOhio

Typical Product Development Process

Source: PTRM

© 2010 BioOhio

Critical Success Factors

• Differentiated, superior product/technology • Sharp, early product definition • Quality of pre-development activities• Strong market orientation• Reduced cost / drives revenue• Customers willing to pay $• Effective organizational structure• Engaged Partners• Quality of execution

– Technical, Business

© 2010 BioOhio

83

Sources of Capital

• Bootstrapping– Who will benefit from

your success? • FF&F

– Find enthusiastic supporters in your personal network

– Put your own money in (investors want to see this commitment)

• Angels– Looking to make money,

but also hope to get involved and add value

• Grants – Lots of free and cheap

money out there

• Venture / Private Equity– Care about making a

return on investment– Often do not have time or

ambition to get to involved

• SBA / Banks – Always take debt before

equity, but often difficult as they require security (receivables, assets…)

© 2010 BioOhio

Pitching

• 10 slides, 20 minutes, 30 Point font

• Differentiate for different audiences

• Investor

• Sales Prospect

• Partner Prospect

• B to B

• Problem• Solution• Business Model• Your Magic• Mktg/Sales• Competition• Mgmt Team• Financial Projections• Current Status – The

Ask

© 2010 BioOhio

Medical Product Development each step has defined Work Processes

Product Requirements(User Functional, Environmental,Physical, Manufacturing, Safety)

Design ValidationPlan

ProductSpecification

DesignVerification Plan

Product ArchitecturalDesign

(Spec allocation,Theory of operation)

SoftwareRequirementsSpecification

SoftwareVerificat./Validat.

Plan

SoftwareSubsystem(s)

Design

Design Transfer

Software SourceCode

SoftwareVerificat./Validat.

Procedures

DesignVerification

Results

SoftwareVerificat./Validat.

Results

DesignVerificationProcedures

Software Develop Plan(QA, Life Cycle, CodingStds., Tools, Environ.)

Initial HazardAnalysis

(Top Down)

Critical Element Flow Diagram (Complex Products with Software)

HardwareSubsystem(s)

Design(Electr. / Mech.)

DesignValidation

Procedures

DesignValidation Results

Hazard Analysis(Cumulative)

Operator Interface

Detailed DesignHazard

Assessment(Bottom Up)

MasterVerificat./Validat.

Plan

Risk/Safety Verification/ValidationDesign/Development

Product Definition(User Needs, Human Factors)

An Ohio Thomas Edison Center

Let me know how we can help you!

John F. Lewis Jr.Vice President

[email protected] x7