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Bloomington faces challenges in quest to be biotech center

By Chris Fyall 331-4307 |
April 11, 2010

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There are a few simple truths about life sciences in Bloomington, the industry long seen as this area’s next great economic hope.

First, and fortunately, folks like Bill Cook were shaping “life sciences” here before anybody crafted the term that now encompasses biotechnology, biomedicine and more.

Second, and less happily, while Bloomington was early to the party, it is no longer alone. Not at all.
An increasingly fierce and global competition poses immediate challenges to Bloomington’s life sciences sector, experts agree.

The area’s sterile manufacturing lines need more workers starting yesterday, its few newly developed laboratories need more researchers now, and its small life sciences companies need better access to capital financing for the future.

Mayoral administrations in Bloomington have been trumpeting life sciences for years. Earlier this year, for example, Mayor Mark Kruzan said in his State of the City address that strengthening the sector was a key step towards “economic vitalization.”

However, the hurdles for continued success are many. Leaders in Bloomington’s business and political circles are trying to clear them.

“It is not something that we can do overnight,” said Danise Alano, who directs life sciences efforts for City Hall as its director of the economic and sustainable development. “But we are in this together to make this cluster as strong as it can be.”

Bill Cook, who grew his business from a tiny apartment on Bloomington’s east side into a billion-dollar life sciences enterprise with offIces worldwide, is impatient with the pace. “We have been talking ‘high-tech’ in this community for 30 years. Not much has come of it,” he said in a recent interview. “There is a lot of talk. I am not sure there are a whole lot of ideas.”

State of the cluster

Indiana is one of the leading life sciences states in the country, and exported about $5.1 billion worth of life sciences products in 2007, the most recent year data is available. Only California and Massachusetts did more.
Bloomington is a big part of that. The city’s role within Indiana even mimics the state’s role within the country: Indiana acts as a sort of manufacturing hub for the country, and Bloomington is one of the state’s most productive assembly lines.

Large companies like the Cook Group, Baxter Healthcare and Boston Scientific have a significant impact on the local cluster, but smaller firms like BioConvergence and KP Pharmaceutical Technology play an important role, too.

That means jobs. In 2007, the industry accounted for 6.8 percent of all jobs in Bloomington — and the rate was growing.

There’s some concern, though, that the local industry might be bumping up against its capacity.

Building a work force

Making a coronary catheter that will snake into a human heart is not like making a hydraulic brake for a semi-truck, say, or a television for a living room. A worker who can do one might not be able to do another.
A job fair hosted by the Cook Group about four years ago illustrates the point, said Steve Ferguson, the company’s chairman.

Executives hoped to launch a new product line in Bloomington with people they hoped to hire at the fair, Ferguson said. His company has struggled in recent years to fill its employee needs.

The plan almost immediately fell flat. Although 1,000 people showed up, problems with inadequate education, criminal histories and too-poor hand-eye coordination cut deeply into the pool, Ferguson said. About 200 were hired.

“All we did (with the new hires) was cycle in the number of employees we were replacing over the course of the year,” he said. “We had to begin looking to other areas to expand to solve our manpower needs.”

The jobs went elsewhere.

Other companies know the problem. “Work force is probably one of the things that will come up on everybody’s list as a top issue,” said Steve Bryant, former director of the Bloomington Life Sciences Partnership, and the business development and marketing manager at BioConvergence.

New lingo, intense regulations and sterile conditions create “a whole different environment” that not everybody can easily adjust to, he said.

Building the big ideas

Finding employees is not the only problem Bloomington faces. It also faces a lack of great ideas, said Bill Cook, who founded the Cook Group.

His company is chasing four or five would-be products in West Lafayette near Purdue University. There are ideas in Indianapolis at the Indiana University School of Medicine, and from other places around the world. But there are few, if any, would-be Cook products being developed in Bloomington, he said.

In truth, a lack of research is a problem that faces the entire Hoosier state.

“One glaring gap in Indiana’s otherwise strong life sciences industry is found in the research and development sector,” wrote the authors of an Indiana Business Research Center report on the state’s life sciences sector released in April 2009.

Just 7 percent of life-science employees in Indiana work in research and development. The national average is 37 percent.

Although specific data is not available for Bloomington, salary data from the U.S. Bureau of Labor Statistics suggests the problem is even more pronounced in Monroe County. The total wage costs for companies is less than an average county in the United States, the data shows.

In 2008, while employers in Tippecanoe and Marion counties paid roughly twice as much to their life sciences employees as the average U.S. county, employers in Monroe County paid less than half as much.

Less money was spent on researchers because there are fewer researchers here, said Ron Walker, president and CEO of the Bloomington Economic Development Corp.

“One of the things that is a challenge for us, that is not always as challenging for the larger cities, is the pool of qualified, very skilled scientists and engineers who can work in this field,” he said. “We have excellent ones, but we are a smaller community. We don’t have as many.”

Paying for growth

Ed Morris was an engineer working by day in high-energy physics at Indiana University, and at night in his garage, developing what would become the start-up company Morris Innovative and its core product, “FISH,” the femoral introducer sheath and hemostatis device, that helps prevent blood clots and other problems associated with surgical catheters.

In 2004, he started working with Morris Innovative full-time. A few years later, he won initial regulatory approval for the product from the Food and Drug Administration.

Since then, the company that now employs more than 30 people has been undergoing the expensive process of fine-tuning the product and starting to develop a sales force.

It is hard finding financial help for that in Indiana, he said. The state has its 21st Century Fund, which has been great, but it does not have an extensive network of private financiers, Morris said.

“The vast majority of venture capital dollars are on both coasts, or internationally,” he said. “It really is a barrier.”

Finding solutions

Bloomington’s life sciences sector is clearly a vital aspect to the local economy today.

But, to the extent that Bloomington’s leaders are banking the city’s future on its life sciences sector, they know they cannot be satisfied with the status quo.

Steps are clearly being taken, and many of them are taking place on campuses, experts said.

In early 2009, for instance, Ivy Tech’s Bloomington campus opened the Indiana Center for Life Sciences, an ambitious effort to train a manufacturing work force prepared for the rigors of life sciences.

In late 2009, Indiana University officially opened its Innovation Center, a business incubator with wet- and dry-lab space, and a sort of nerve center for the expanding technology park at 10th Street and the Ind. 45/46 Bypass.
These steps are important, because without the right people here, without the right manufacturing skills and the right brainpower, Bloomington will have trouble expanding its life sciences sector, said Bryant, the former Life Sciences Partnership director.

“If you can keep a steady supply of people, of employees, companies will come here,” he said. “As much as people talk about tax incentives and abatements and things like that, it is about the people.”

Melissa Horton checks microbiology media in a prep room for the labs at the Indiana Center for the Life Sciences.
Jeremy Hogan | Herald-Times

Miranda Lindley builds a molecular model in a general chemistry class at Ivy Tech's Indiana Center for the Life Sciences.
Jeremy Hogan | Herald-Times

Bill Cook, founder of the area's largest medical-device company

Ivy Tech created the Indiana Center for the Life Sciences to train workers for the emerging industries.

Ron Walker, president and CEO of the Bloomington Economic Development Corp.

Copyright: 2010