Halfway on its Road Map, Arizona’s Bioscience Community is Attracting Attention

Posted By Mike Padgett

June 18, 2009

PHOENIX, Ariz. – Downtown Phoenix is a special place for Jerry Colangelo. It is home to US Airways Center, which opened in 1992 as America West Arena, home of the Phoenix Suns. Colangelo coached and led the team, starting at Veterans Memorial Coliseum, for more than a generation.

Next door is Chase Field, which opened in 1998 as Bank One Ballpark, home for the Arizona Diamondbacks. It is the team that Colangelo assembled, starting in the summer of 1993, at the request of banker and former Maricopa County Supervisor Jim Bruner and sports attorney Joe Garagiola Jr.

The two sports arenas, as well as the $600 million expansion of Phoenix Convention Center across the street, a new 1,000-room Sheraton Phoenix Downtown hotel nearby, the new $1.4 billion light rail system and the $900 million CityScape project under construction, have scored high in the revitalization of the city’s downtown core.

Colangelo, 69, also was chairman from 1999 to 2008 of Phoenix Community Alliance, a downtown business group that discussed many of the major projects completed or under construction.

All of the new projects have benefited downtown Phoenix, but Colangelo and other business leaders say another new economic engine is needed to help keep the region’s momentum moving. That new engine, Colangelo and others say, is bioscience.


Arizona’s economy: too limited

Until a generation ago, Arizona’s economy historically was based on agriculture, mining, tourism and construction. Today, with economic conditions slowing down most of the state’s industries, state and business leaders are looking for a new economic engine. Those concerns are focused on “bioscience and the new technologies that lead toward the future,” Colangelo says.

New reports show that while Arizona has a long road to travel before it matches the economic power of bioscience clusters in other states, its young scientific community has taken some giant steps.

Analysts say cities and economic development groups in other states are watching Arizona because of its bioscience communities’ achievements and research, as well as their workforces totaling tens of thousands, and the millions they and their workers pay in state and local taxes.

“Arizona has one of the nation’s fastest-growing bioscience industries,” Walter Plosila, senior advisor to the Battelle Technology Partnership Practice, said in his analysis of Arizona’s fledgling industry earlier this year. “It’s not a major bioscience destination yet – that will require several more years – but Arizona has gained a national reputation as an emerging bioscience center.”

Environmental research has been underway in Arizona for decades, but the state’s formalized biosciences strategy – called “Arizona’s Bioscience Roadmap” – dates to 2002, says Brad Halvorsen, assistant vice president of communications at Flinn Foundation, a private philanthropic organization.

A timeline for Arizona’s bioscience initiative is on Flinn Foundation’s Web site, www.flinn.org.

Even though it didn’t yet have a home, June 2002 is considered the official start of Translational Genomics Research Institute, promoted as a one-of-a-kind genomics research institute in Phoenix. For about two years, TGen worked out of donated office space from Arizona Public Service Co. and temporary lab space from Banner Health System and Quest Diagnostics.

TGen was the complementary research institute of the International Genomics Consortium, which was granted lab space in the Virginia G. Piper Cancer Center at Scottsdale Healthcare in Scottsdale.


Research’s first home

Two years later, in late 2004, TGen and IGC moved into their new downtown Phoenix headquarters on a 15-acre biomedical campus. The six-story, $46 million building, owned by the City of Phoenix, is considered the cornerstone of the Phoenix Biomedical Campus, or PBC, and a key part of the statewide bioscience efforts.

Business leaders and elected officials are saying Arizona’s recent venture into the high-tech biosciences arena is critical to broaden the state’s total economy. They say diversification is needed to end the boom-and-bust cycles that cause high rates of unemployment and throw economies into a tailspin.

One has only to look at San Diego, Boston and Baltimore, to name a few, where bioscience ventures started decades ago have grown into economic powerhouses.

“It’s obvious that our economy needs to be diversified, and this (the biosciences) is one way to try to strengthen and add diversity to the state’s economy,” says Halvorsen.

While knowledge-based industries like biosciences sometimes are perceived as niche industries, biosciences are inextricably linked to the healthcare field, “which is significant in and of itself,” says Jim McPherson, assistant vice president of public affairs at Flinn.

Another heavyweight player in Arizona’s bioscience efforts is Science Foundation Arizona. The nonprofit organization was created in 2006 by three statewide business groups –– Flagstaff 40, Phoenix Leadership and the Southern Arizona Leadership Council. The goal is to establish a bioscience community that will make Arizona’s economy more competitive in the global economy. The agency’s director is William Harris, who was recruited from Science Foundation Ireland, where he was founding director general and CEO.


Ventana expanding

In 2008, one of the Arizona bioscience community’s high points was the $3.4 billion purchase of Ventana Medical Systems in Tucson by Roche Holding AG. Ventana develops, manufactures and markets systems that automate tissue preparation and slide staining in laboratories worldwide. Roche, based in Basil, Switzerland, is one of the world’s largest research-focused healthcare groups in pharmaceuticals and diagnostics.

Roche says Ventana’s headquarters will remain in Oro Valley, north of Tucson. Ventana’s workforce of 750 is expected to increase to 1,000 by late 2009. This week, Ventana officials presented more details of their 10-year master plan to the town council. The long-range plan includes adding hundreds of jobs, up to 17 acres of parking for the additional workers, and raising the height of the company buildings.

Another out-of-state group eyeballing Arizona’s bioscience achievements is a consulting group in Georgia. The consultants, representing an Atlanta client, called executives at Flinn several times in 2008 to discuss the high rate of collaboration found in the Arizona bioscience community. 

“They were looking to get their own bioscience initiative going, and how do you get the various groups to work together,” says Halvorsen at Flinn.

McPherson adds: “They were just asking, ‘How does Arizona do this? What makes you different? Why are you able to break through the silos,’ that sort of thing.” 

The “silo effect” in business refers to the isolation created when companies, universities, elected officials and even departments within the same organization, all with similar goals, fail – or refuse – to collaborate.


Arizona attracting attention

Bioscience officials say Arizona’s gains in the scientific community are sparking the creation of more startup companies as well as attracting attention from bioscience nodes in other states.

“The state’s research institutes continue to capture a greater share of NIH (National Institutes of Health) dollars and continue to build a critical mass of research,” says Plosila at Ohio-based Battelle. “More firms are being spun off university and research institute intellectual property and Arizona is moving towards a critical mass of research strengths and creation of firms in each of the state’s three regions – Tucson, Phoenix, and Flagstaff.”

Plosila adds that Arizona’s bioscience achievements and ongoing efforts are raising the state’s profile in this high-tech arena. He and others point to TGen and IGC as the sparks that created this new element in the state’s economy.

“First, I believe the attraction and growth of TGen itself became a model for other regions such as Florida to create their own research anchors to buttress their university base,” Plosila says.

“Second, Arizona is definitely getting attention and recognition but it takes 12 to 14 years at least to build a major bioscience center.  Arizona’s approach is two-fold:  focus on key signature opportunities around research strengths and technology commercialization opportunities and encourage collaboration among and between universities, medical centers, and private research institutes and industry.  Focus and collaboration means Arizona can stand out in certain areas without requiring the kinds of investments otherwise necessary to be good in everything.  And that is one feature Arizona is getting national recognition for – the ability and willingness to collaborate.”

Using Plosila’s estimate that it can take 12 to 14 years to establish a major bioscience center, Arizona’s bioscience community in 2009 could be halfway to its goal, since the state’s bioscience strategy was officially launched in 2002. That was the year when more than 50 leaders in science, government and business met at the state Capitol to begin promoting bioscience as part of the state’s economics.


Arizona budget crisis

However, the state’s bioscience community could be forced into the slow lane by the state’s current budget crisis, which has triggered proposals for widespread cuts throughout state government. Arizona faces a deficit of $3 billion to $4 billion in its budget for the upcoming fiscal year, beginning July 1. Gov. Jan Brewer favors a temporary tax. State legislators are excluding tax hikes in their own proposals. Brewer has sued the Legislature over its failure to send her any proposed budget.

Although the discussions about the state budget, a temporary tax and cuts in state agencies have complicated the state’s economic arena, what is anything but complicated is the far-reaching potential of bioscience, officials say.

“Bioscience sounds complicated and scary, but it actually affects pretty much everybody,” Halvorsen says. “I think everybody’s been touched by disease through their family or friends, in one way or another. And there’s a lot of activity going on here to prevent and cure those diseases.

“And also there’s the economic impact, as far as trying to diversify the economy and strengthen our economic base,” he continues.

The economic impact of Arizona’s bioscience community in 2007, the latest year for which numbers are available, was nearly $21.2 billion in direct, indirect and induced impacts, according to an April report from Battelle Technology Partnership Practice.

The report, called “The Economic Impact of the Arizona Biosciences Sector,” prepared April 7, also shows that:

• The bioscience community employed 87,417 workers who, along with their employers, paid $765.7 million in state and local taxes in 2007.

• State and local tax revenues increased from nearly $567 million in 2002, when bioscience arrived in Arizona, to $765.7 million in 2007, for a 35 percent increase.

• Battelle’s research also shows that the 87,417 workers in Arizona’s bioscience community (which is 2.5 percent of total state employment) earned more than $5.3 billion in compensation.


Entertainment district, more central city living

In addition to the bioscience community’s presence in downtown Phoenix, Colangelo and others would like to see an entertainment district downtown that would complement hotels and the new convention center, and the increased residential construction within the city’s core.

A proposal for such a concept – the Jackson Street entertainment district – is winding its way through Phoenix City Hall. It could reach the city council by early July. Plans for the project are available for viewing at www.jacksonstreetphx.com.

Colangelo and other business leaders envision an entertainment district filled with restaurants, art galleries, retailers and public spaces that could be used for a variety of seasonal events.

“I see a downtown Phoenix down the road – I don’t know when the year is – where people work and live and eat and are entertained in an urban setting,” he says.

“I love the community. It’s been great to me. I’ve been blessed to have an opportunity to be part of its growth. I’m sure I’ll be involved in many ways going forward.” 

For more information about the bioscience community in Arizona, visit:

• Arizona BioBasics: www.arizonabiobasics.org

• Arizona BioIndustry Association: www.azbioindustry.org

• Arizona Bioscience News: www.flinn.org

• Arizona’s Bioscience Roadmap: www.flinn.org/bio/roadmap.cms

• Bioindustry Organization of Southern Arizona: www.bio-sa.org

• Statewide Biosciences Directory: www.flinn.org/bio/bio_directory.cms

• Statewide Biosciences Calendar: www.flinn.org/bio/bio_calendar.cms


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Jun 18th, 2009

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