Biotech Firms Discover Capital, Resources in Tenn.
Published Apr 08, 2004
Protein Discovery Inc., a 3-year-old Knoxville company using technology licensed from Oak Ridge National Laboratory, has joined one of the fastest-growing segments of the life science research market. Its objective: a biochip-based tool for understanding the function of proteins in disease.
In Cool Springs, just south of Nashville, a dentist and former Harvard faculty member heads BioMimetic Pharmaceuticals Inc., which is using its patented technologies in tissue engineering to develop new methods for the healing and restoration of bone and other tissues.
GTx Inc., a Memphis company co-founded in 1997 by a physician and a businessman, focuses on the development of products for the treatment of serious health conditions afflicting men. The biotech company has two products for treatment of prostate cancer in clinical trials.
As a wave of increased biotechnology activity sweeps the nation, Tennessee is emerging as a major player. According to a 2004 state-by-state study of bioscience economic impact by the Biotechnology Industry Organization, Tennessee is one of only 12 states with both large employment bases in biosciences and at least one industry sub-sector specialty.
Available capital is a critical ingredient in the industry’s growth, and the three companies mentioned above have a common denominator. MB Venture Partners LLC, a Memphis firm investing in biotech and medical device companies, is providing all three with capital, playing a pivotal role in keeping biotech companies in the state. Investments by MB Venture Partners are evidence of the firm’s confidence in the work of these companies, providing the boost that enables them to attract other capital from across the nation and, in the case of BioMimetic, from across the globe.
“Memphis Biomed Ventures is a small, $22 million fund,” says Gary Stevenson, managing partner of MB Venture Partners. “If we can get companies established, and they can bring in capital from outside the state, we can have a multiplier effect.”
“That,” he says, “will be a good thing for Tennessee economic and community development.” The business climate for biotech companies continues to improve, Stevenson adds.
“I would describe the state of Tennessee as an emerging player in the field of biotech. If we carve out medical devices, the state is a more established player. That’s well established in Memphis.”
Biotech clusters can be found in Memphis, Nashville, upper East Tennessee, and the Knoxville-Oak Ridge community. In Memphis, the fast-growing biomedical field takes advantage of the city’s existing strength in medical-device manufacturing and growing emphasis on biomedical research. In Knoxville-Oak Ridge, research at the Oak Ridge National Laboratory and the University of Tennessee is fueling the bioscience orientation of technology companies.
Tennessee has a wealth of resources on which to build biotech company growth. A strong research base exists with the UT system, ORNL, Vanderbilt University in Nashville and St. Jude Children’s Research Hospital in Memphis, among others.
And with the state’s increasing support for technology development, even more success in this field is expected. Eric Cromwell, new technology development director in the Tennessee Department of Economic and Community Development, is giving full attention to technology business growth. Gov. Phil Bredesen’s budget includes funding for biotech initiatives, including the downtown Memphis medical research park and a UT-ORNL Joint Institute for Biological Sciences in Oak Ridge.
Regional clusters have “advanced most dramatically” in Tennessee since 2001, according to the Biotechnology Industry Organization 2004 report, prepared for BIO by the Battelle Memorial Institute and the Science and Technology Institute.
“The states realize that the biosciences have the potential to generate vibrant economies,” says Walt Plosila, vice president of the Technology Partnership Practice at Battelle Memorial Institute. Factors that appear to influence a state’s ability to grow bioscience employment include involvement by research institutions, available capital, and a stable and supportive tax and regulatory environment, according to the report. “Tennessee is in a good position, because we have resources on which to build,” Cromwell says. “The future is bright here. The state of Tennessee is committed to creating opportunities and jobs for the future.”
Story by Kay Brookshire
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