Chase for biotech billions pits city against many rivals

Can Portland win a bite of the bioscience pie?

By Mary Bellotti

The Portland Tribune, Feb 10, 2004, Updated Oct 30, 2009

Portland should be able to slice off a lucrative piece of the biotechnology pie, despite competition from 45 other cities also pinning their economic hopes on the rapidly growing sector, local industry experts and economic development officials say.

Capturing even 1 percent of the nationwide biotech sector Ñ which grows at an estimated $100 billion a year Ñ would mean an annual $1 billion industry for Oregon, said Dan Dorsa, vice president for research at Oregon Health & Science University, which is a key player in the city’s efforts to capitalize on the burgeoning biotech industry.

“Given our impressive research growth and the quality of the technologies we’re developing, there is a piece of the action that I think we can compete for,” Dorsa said.

So far, the optimism and -activity haven’t won over skeptics, who worry that the city, state and OHSU are gambling hundreds of millions of dollars on an economic long shot.

Among their concerns: competition from other cities, limited access to the venture capital needed to start or expand biotech companies, and a dearth of managers experienced in starting and guiding biotechnology enterprises.

“Nearly every metro area has similar hopes and dreams,” said Portland economist Joe Cortright, the co-author of a 2002 study of the U.S. biotech industry.

“It’s just too late, I think, to pursue this,” Cortright said.

But Dorsa and other biotech advocates point to a number of aggressive moves made by the city, state, OHSU, other research universities and private industry over the last three years.

Chief among them is the launch late last year of OHSU’s ambitious $500 million Oregon Opportunity biotech research effort, which aims to add research labs, recruit scientists and make it easier to turn research discoveries into profitable business ventures.

Construction of a $105 million biomedical research building to expand the university’s biotech research Ñ part of the first phase of the Oregon Opportunity initiative Ñ is under way on the Marquam Hill campus.

Also, OHSU is attracting more federal funding for its research efforts each year. Both the university and state Legislature are setting aside money to help jump-start fledgling biotech companies.

“OHSU has a wealth of technology that hasn’t been commercialized,” said Al Ferro, chief executive officer of Virogenomics Inc., a Tigard biotech company founded in 1997 to develop and market five drugs based on genetic research done at OHSU.

“There are so many possibilities to develop new technologies and products that aren’t going to be coming just from a handful of people in a few major cities,” Ferro said. “We have excellent researchers and technology here. We need to focus on bringing more money here in the form of venture capital.”

But Cortright said biotech research takes a long time to develop, and it’s risky and expensive. So investors tend to start businesses in cities that already have biotech workers, entrepreneurial-minded scientists and significant sources of capital.

“If you’re a brilliant young life scientist who wants to be an entrepreneur, you’ll go where there is a lot of venture capital and a pool of people who’ve done this before,” he said.

Oregon would be better off building on its scientific strengths, particularly semiconductor manufacturing and its related technologies, Cortright said.

That’s exactly OHSU’s strategy, said Dorsa, who prefers the term bioscience to biotech, which he believes has become narrowly identified with drug discovery and development.

Bioscience research, Dorsa said, includes medical devices, chemical compounds used in lab experiments and bioinformatics Ñ the marriage of biomedical research with computer sciences.

Moves on the waterfront

OHSU’s expansion plans were a key factor in getting the city’s and Portland Development Commission’s $1.3 billion South Waterfront Central District development off the ground, said Marty Harris, the PDC’s economic development director.

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