Category: Archive

The next revolution

February 16, 2011

By Staff Reporter

Some experts in the field say that biotechnology has the potential to outperform the Irish high-tech boom of the 1990s, that gave rise to the term Celtic Tiger and the image of a new, confident, prosperous Ireland. All the ingredients are in place, say the conference organizers, which includes the Ireland Chamber of Commerce in the United States.
But first, what exactly is biotechnology?
Some proponents cast their net wide enough to claim that the domestication of dogs, cats and farm animals several thousand years ago, was the first significant human act of biotechnology.
Their point is it is the manipulation of biology to improve the human lot.
Today that includes intervening at the level of cells and DNA, which could lead to ethical questions in future: stem cell research is one such example, with its potential to heal previously incurable diseases such as Alzheimer’s, yet it requires tinkering with the fundamental sources of life.

Biotech revolution
More practically, biotechnology is an industry that is generating $500 billion a year worldwide, half of which is in the U.S., and, speakers at the Philadelphia conference will say, Ireland is well-placed to take advantage of the huge growth potential.
“Whoever started it deserves a statue on O’Connell Street,” said Bill McLaughlin, the president of ICCUSA’s Mid-Atlantic chapter, who is involved in putting the symposium together. The 58-year-old McLaughlin is also president of McLaughlin and Morgan Business Development Company, which since 1999 has been working with U.S. and Irish companies with a particular focus on the biotech world.
“My view is bidirectional,” he said, “getting Irish companies to come here and Pennsylvania companies to go to Ireland.”
Philadelphia has 80 percent of the world’s leading biotech companies in a 40-mile radius around the city.
It is a model that experts hope Ireland will follow. Several factors led to the rise of the so-called Celtic Tiger — a focus on high-tech education in the 1980s, an English-speaking workforce and some of Europe’s lowest corporate tax rates.
As the experts have said before, all the ingredients are in place for a biotech revolution. How successful will Ireland be this time? Rivals are rising up in Eastern Europe, offering skilled workforces with perhaps lower corporate taxes, even if they don’t speak English.

Government support
Key to future Irish growth is the venture capital companies that trawl through hundreds of small, usually university-based biotech projects, and then decide which have the potential for growth and fund them accordingly. One such VC is as Seroba BioVentures, a $15 million Dublin-based fund.
“Most of the success has been in software. There hasn’t been that cluster in biotech and other areas until now,” said John O’Sullivan of Delta Partners, another venture capital company in Dublin.
Government-funded organizations such as Enterprise Ireland and Science Foundation Ireland help coordinate funding and provide information and public-relations work to boost the industry.
According to McLaughlin, these bodies are vital to bringing often-skeptical venture capitalists into focus on the Irish high-tech and biotech potential.
“No company is interested just because it’s Ireland,” he said. “Its population is too small. But Europe has a huge market of around 350 million.”
When the Irish started to attract outside investment 40 years or so ago, they tended to go to industries looking for cheap labor, such as the garment manufacturing industry.
“Would you rather employ 100 people with biology degrees or a hundred making jeans?” asked McLaughlin. The cheap-labor-based initiatives did not have the same commitment to their location — they merely moved to Third World countries where the labor was cheaper.
The goal of the government was to move up the value change, and change from the focus on cheap labor. With this aim, it has committed a budget of $670 million to SFI for the period 2000-2006.
According to ICCUSA, “SFI’s goal is to support far-reaching, high-impact research in its target areas and to fund excellent scientists and engineers working on the dynamic intellectual frontiers of Biotechnology and information and communication technology development.”
It was established in 2000, and has to date invested about $200 million in over 80 researchers and their teams who work in the various universities and institutes of technology in Ireland.
Some observers are more cautious about the Celtic Tiger’s biotechnological second round. The industry took a hit when Elan, the Irish pharmaceutical giant that was one of the most successful companies in the drug-manufacturing field, ran into serious difficulties last year.
In January 2002, Elan’s share price collapsed after speculation in the Wall Street Journal about the company’s accounting practices. It has been a long fight for the company to stay afloat since then. Such events cast doubt on other biotech and pharmaceutical ventures, observers say, at least from the market’s perspective.
Kerry Capell is a reporter for Business Week in the UK and covers the biotech industry there and in Ireland.
Capell said that while “the Irish government likes to promote biotech as the next big thing, but although Ireland has lots of biotech companies, most are either offshoots of big global drug makers or the indigenous ones are more often devoted to making say the ingredients in drugs or medical devices.”
She agrees that people are right to see the biotech industry as one of potential growth but suggests that the innovation side of things will remain in traditional centers like the UK and the U.S. Viagra, one of the most successful drugs ever, is made in Shannon and exported from there, but the drug itself was developed in the U.S.
McLaughlin points out that there are already in excess of 100,000 people working in the Irish biotech industry.
Most recently, one of the industry’s biggest players, Wyeth Corporation, with annual sales of some $14 billion, has invested in a $2 billion site at Grange Castle, just southwest of Dublin. Wyeth makes anti-depression drugs, among other things. But what may give Irish biotech pushers a headache is that once again, these are drugs innovated in the U.S. — they are merely manufactured and processed in Ireland, a process that could easily be transferred to another, cheaper country if the market so dictated.
By 2010 the global biotech market will be valued at euro 2000 billion. Professor Michael Comer, chair of the Irish Bioindustry Association from 1997 to 2002, said, “If the island as a whole is going to become a ‘smart place’ for biotechnology, we need to encourage linkages between both parts of the island to facilitate the clear demand for cooperation, particularly in the areas of R&D and joint technology development.”

Conference details
The Philadelphia conference will take place on Thursday, April 10, at the Union League of Philadelphia, 140 South Broad St.
Also taking part as speakers will be Marina Donohoe, executive vice president of Enterprise Ireland; Dr. Deirdre McDonnell-Lee, vice president, Pharma Products of Enterprise Ireland; Kevin Carroll, vice president, Bio-Pharma, for IDA Ireland; Myles Duffy, vice president of IDA Ireland; Dennis Flynn, president of Puresyn, Inc., and chairman of the Pennsylvania Biotechnology Association, and Fritz Bittenbender, CEO of the Pennsylvania Biotechnology Association.
For details, call Kevin McGeehan at (215) 574-3100.

Jack Holland (jholland@irishecho.com) contributed to this story.

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