M. D. Anderson Cancer Center
Date: March 25, 2008
Duration: 0 / 31:06
So at this point I would like to introduce Jacqueline Northcut and
Jacqueline Northcut we know each other quite for few years. She
was, when I first met her, with Anderson consulting at the time and was
very, I mean for years and years, already working in the Healthcare
Life Science Space evaluating opportunities consulting big hospitals
and she was part of the group that consulted M. D. Anderson as well in
the live science space in technology commercialization and all these
issues. She is intimately involved in these things has a great
knowledge and then several years ago, she got elected to be the
president of BioHouston and basically built BioHouston, rebuild it I
mean at the time you basically build it all up. And she so
created the great organization that has a lot of resources for anyone
in Houston that is involved in the life sciences and she'll gonna tell
you BioHouston all does. I mean what she'll tell you is to have
incubator space, wet lab space, all the resources. So everybody
who always ask me you know how to continue and I don't know anyone out
there I will always say, "Call BioHouston". So that's a good way to go
and she will tell you all about it and it's a pleasure to having you
Jacqueline. Okay.
[ Audience clapping ]
Thank you and...
Will you wait for a second. I'll just put this on.
Okay. Well, that was my elevator pitch so [laughs] and you did
a good job I think we should score you very highly. Okay so am I
ready to go okay. Where's the cursor? How do you advance the
slides, that's the question?
Magic
Magic. Oh, there it is yeah okay right great thank you,
appreciate it. Well I'm glad that to be here it's good to see all of
you and I enjoy the elevator pitches. If you had absolutely no
turning on that, I'm highly impressed. I mean I know Brad than
cheating 'coz he's had lots of training. Brad's been working with
BioHouston for the last, I guess, what 18 months or so. So anyway he
does a very good job. I'm very impressed. So let me tell a little
bit about BioHouston. I'm gonna talk to you about, you know, all
we wanna talk of are some of the things that we do and how we help
companies. So let me just give you a couple of background slides. We
are a non-profit organization. We're founded by the Academic and
Research Institutions in the region and we're also funded by them as
well. And you'll recognize at few names on here Dr. Malcom Gillis
as you probably know the immediate past president of Rice University he
is the Chair of our Board and Dr. John Mendelsohn is the vice-chair and
has been the vice-chair since inception. So what we just want to run
through really is just to remind everybody hopefully you already know
that you're funding for you research that comes from the NIH
predominantly with just degree of output, say Federal funding. It
comes from the Feds, from tax discoveries which leads to the creation
of companies which hopefully leads to these companies getting their
products approved and then tax revenue, they go back to ultimately
funding more NIH funding. So I just wanted to point out that this
really is a continuous circle and what we're ultimately trying to do is
create companies that create revenue, economic wealth for the region
that creates revenues and tax revenues that go back into funding
additional basic research. So what we're trying to do is really to the
develop the life science cluster and you know this Biotech Cluster it
could you know the depending on who your talking to. You can use the
words; life science, biotech interchangeably. When we talk about
our industry and what were doing here in Houston, we're really talking
about life sciences and I'll tell you more to about the break down of
the companies that we see. But in the next show, what we're
trying to do is to have a cluster--a critical mass of companies because
if you have a critical mass of companies, each of those companies has a
better chance of being successful. And it really takes there's
been a lot of researching done. It usually it takes three
things. It takes great research. It takes money and it
takes people. so you can check the box. We know we have the
research here in the region. In money, what we're about is the
capital that's available to see these companies and the funding through
product development and actual product approval. And then the
expertise what we're talking about is not a people like yourselves who
are sitting here and all the 75,000 employees there in the Texas
Medical Center were talking about, those people that we don't have that
media out here. They spent the last 25 years of their career
working with the FDA trying to get their product approved and a lot of
disciplines. So that's really what we're about talking about
there. So adding you're plunge, you can kind of read what this
is. I did not if you guys knew some of the statistics but Texas
does rank third as far as research is performing in academic
institutions. You know, not only there is it a large, you know, the
Texas Medical Center is the largest in the world, but you also know
because you right here in the middle of it you know all the number 1
rankings. So let's talk about where we are as far as our life
science cluster and about a billion funds. We define a region
call a session to gathers and there's is about a billion funding in
Federal Reserves that's going on an annual basis having in these
boundaries. We have over a 140 life science companies that breaks up to
be about a third nutritional biopharma; about a third medical device
and about a third that
operated in other market which includes tools and electrical services,
manufacturing. Believe it or not, we manufacture one of the
active ingredients for Tamiflu here. It's one of our better
kept-secrets here in the region. Let me just point out that the
140 companies we've more than doubled the number of companies in the
last 4 to 5 years. I think in 2003 when we started counting, we
had about 60 companies. So we've seen a tremendous amount of
growth. I mean, one of the things that's really helped that is
believe it or not, some of the success we've had in some of the
companies we probably recognized the Tanox625 was acquired by
Genentech. It was Genentech's first acquisition ever and it's
foreclosed to a billion dollars. You may not know that in Houston
we have the two largest IPOs in biotech history. We still hold
that record. The largest is Tanox and the second largest is
Lexicon pharmaceuticals at the Woodlands which is a bailer spin
out. But believe it or not, the acquisition of Genentech has
really helped to put us on the map because the investor community knows
that the very first acquisition ever Genentech for Tanox it was close
to a billion dollar and it was in Houston, Texas. So that has
helped us get the attention of the national investor crowd. You
know there is a little bit of a chance of success, we haven't you know
even the BioHouston has really been at this mission for the last 5 or
so years. The companies that are on this list, some of them have
been around close to 20 years but all of them have been around more
than 10 years. So what that does is that it helps with that
expertise, part that was talking about earlier, I'll comeback to
it. Here is just a few of the names of some other companies that
had some staying power and just one thing to update you'd probably see
on here, Pfizer has recently agree to acquire, as I said, for about 350
million dollars. One of the other great things that has happened
and only I'm not gonna go into a lot of depth here because I know
you're gonna have a whole session that talks about the emerging
technology and I wanna mention in the context in that thing that our
landscape, our environment has changed dramatically. One, we
double the number of companies. Two, we have this emerging
technology fund and three, we're gonna talk about this in a minute;
hopefully, you all know about they cancer fund. But the emerging
technology fund, what it has done besides having some gap funding as
some seed funding for companies which is very, very helpful. But what
it has done in the national venture community crowd is they see this is
a way that some of the companies are pre-screened and National VCs will
look at a hundred deals before they write one check. And so anything
that they see, the type of that pre-screening companies form in you
know kind of separating you know companies maybe they should focus on
versus the other ones, that they really like that. So we're
getting some money to seed some companies or just start up the fund
with someone from the press. You know talking about a company that just
recently got emerging technology fund money or as a seed as start up,
it is from technology that was outside the state brought here to the
state from an entrepreneur. So I really see this as, every way
you look at it, it is attitude to our community. Not to say that
there aren't problems with it you know, there are always problem with
everything that we're really glad that we have it. The three
billion dollar cancer fund--the first funds here won't be spent until
2009 and we won't know a lot of the details until you know the new
Executive Director is hired. But one of the things that we do
know is 300 million dollars a year for 10 years something that can be
critical in the development of our life science industry. The
governor really wants to see products. He wants to see products
commercialized and brought to mankind. I think that tells nicely into
the people who wanted to spend the money with basic research because
doing basic research you're gonna have to spend some dollars for
commercialization to ever bring it to man. So another, there's a little
bit of tug-of-war going on there between that but I think that anyway
we look at this I think this is going to be very, very important for
the future of Texas. And I think I can't imagine other better
place and a more exciting place than to be in Texas and which I think
is gonna be Mecca. I think Houston's gonna be Mecca when it comes
to this cancer fund but I cant think of a more exciting place to be
because we do now have a lot of the building blocks that we did not
have five years ago, definitely not 10 years ago. We've got, you
know, you'll hear from Paul Campbell, DFJ Mercury is a local venture
fund. You've got PTP sciences--again, a venture fund focused on
life sciences. You've got a new venture fund by a 135 million
dollar venture fund called Sontay Ventures that again is focused purely
on life sciences. You've got the Houston Technology Center.
You've got BioHouston. Houston Technology Center has offices that
are available and a very, very cheap but cost-effective basis. In
fact BioHouston's office has been there for 4 1/2 years and then it was
a great facility. BioHouston has wet lab facility that's
available for start up company. I'll tell you a little more about
that later. But the stars are aligned for the first time in Texas and
what we're saying is we're saying that the national crowd is waking up
and saying that there's real opportunity and a need to pay attention to
Texas. It used to be that we have the, you know knocking doors three to four times in the national, you know, there in California knocking
doors three or four times the National VC before we got them to a greater
company here or before we got them to really kinda wake up and to get
excited about the opportunity that we see in our backyard. But
with the lot of the things that has been going on and with the
publicity that we've gotten around the cancer fund, people are starting
to return off phone calls very easily or to even reach out to us.
I was just at Genentech yesterday and normally it's a pretty hard to
sell for something like Genentech. But they said you know we get
it. We know, we understand it and we're gonna be there. So
I do think that the cancer fund has done a lot to help us get
there. There's a little biotech publication called Fierce Biotech
and they just rated Texas as one of the top five areas for emerging
biotech companies. And that's arguably and evidently we kicked
Singapore off the list by adding us to the list. So let me just go back
to this biotech clusters and what we're trying to do as far as our
cluster is concerned with life science conference. Again,
research money and people. So we all agree that we got wealth of
opportunities and breakthrough research. So, let me talk a little
bit about some of the programs that binds me to this because what we
will try to focus on those, you know, a lot on the last two so the
money and people--the expertise. We have roughly 80 events on an
annual basis but what we're trying to really do is convene people and
encourage communication and catalyze either the creation of new
companies or stimulation of technology transfer out of an institution
into a start up company or at least just helping a company that's
already started. Start up company is not easy. It is a hard thing
and it's a jagged road you know it's a hard road. So what were
trying to do, what HTC is to trying to do is to smooth out that road
and make an easier path and all of these things that we're all doing
with your class. I mean, that's just one more thing that's trying
to smooth that road for our entrepreneurs to start companies and make
it easier for them to do. Our 80 programs, they could be anything from
300 person events, our Texas life science conference will bring
National VCs and to see Texas opportunities. Or it could be, you
know, a 25 person CEO dinner that we have what we gonna see is gather
so that they can talk and if you're a young entrepreneur CEO, you wanna
be there, we welcome you to be involved in that. The CEOs don not feel
like they're competing with one another. They are very open and
they will help you. They'll roll up their sleeves and really talk
to you and do anything they can to help because they do feel like it is
a rising time for us and all that. One of the things that we do
was really to come up behind-the-scene connecting the dots. We have a
match-making program where we work with National Venture Capital
companies, big pharma, big device companies, big bio companies.
They are looking to place investments, strategic investment. So
what we do is we get their wish list and basically welcome them, to
bring them to town and some of our CEO's call this speed dating.
But we essentially introduce them to right people, to the right
companies. We also have worked with a lot of the companies.
As you know Tanox being acquired, Pfizer being acquired. We
worked with a lot of seasoned management folks who say, "I've lived
here, I'll live my family here, I love Houston, I don't wanna
leave". So we help them try to place him into other opportunities
or maybe even potentially another start up opportunity. And then
the BioHouston Resource Center, if you haven't talked about , we'll
talk about the expanding gap , a lot of people talk about the value of
debt which is between when your Federal funding stops, when academic
institutions and when private investment wants to come in there is this
gap and basically this gap is this pre-concept data. And it
exists in device companies and biopharma companies, it exists all over
the globe but it's not as Houston-centered problem. And that's
one of the reasons this emerging technology fund is so important is
because it does provide some gap funding and some of that money to get
some of that data that you need to take to the investors. So the
investor will write a check. One of the other ways that we
thought were filling that gap is with the BioHouston Resource
Center. It's a fully-equipped wet lab that has all the standard
equipment that you would need and we essentially rent it out on a
month-to-month basis and a fraction of the costs of what would it be if
you went out, try to negotiate the lease, they're gonna want you this
personal on a long term lease, follow your equipment et cetera.
So we think that having met and shared a facility for companies to get
started is just another way to fill the gap. I mentioned to you
our Texas Life Science Conference and it is a source of bringing in the
National Venture folks to see Texas deals. The BioHouston
Research Center is literally ride around the corner calling home and
made it that's another reason we think the location is good for start
up companies because the founders who are typically in academic
institution can be closed because there are 18 life science companies
up and down that street so this is becoming a little cluster of
companies. Here is the location of the facility and in fact this
Friday we are having our Annual Chili Cook-off and if you wanna come
and network with the companies and when I say come and network to the
companies you'll be networking with the CEO's and some of the VP's and
into the you know the receptionist and there'll be over 500 people
there and a very relaxing environment--a very relaxed environment, come
out and have some chili and maybe a beer and get to know some of the
company's and see what they're doing. It is s a lot of fun but it
is a great way to network. Some of the things that we have in
this facility; it's actually on El Rio and always, it's meant to be
companies coming and going so we always have you know available space
for new companies. It's a fairly small facility but it's exactly
what our companies made. In fact, and one of them is DFJ Mercury
Company; POZ Company was over there for a while. And I think, to
me that's an interesting story because the DFJ Mercury guys , the VCs
found some technology at Rice University and I said, "You know we can
put a few hundred thousand dollars to work and determine whether or not
we can actually develop the prototype and we will know if this will
works or not. We don't have to sink 15 million dollars and to
determine whether or not it works so they were able to go into our
facility for a matter of months and prove that they can do this.
And now they are now to the next level. They've taken the next
step and about on to the next thing. Just a few things to invite
you to participate in, I really encourage you to do, if you are
interested in knowing what's going on, in the region we do have an
electronic news letter that comes out every two weeks that it talks
about not just the events that are going on so you can stay abreast of
the event. But more importantly, it's the fervent amalgamation of
all the news from the various companies so you can stay abreast of what
Lexicon is doing or what PLx Pharma is doing but the information that
they released to the public about the progress of their companies and
it's a very straight forward newsletter, it's very easy to read.
In about 10 seconds you can catch a glimpse of it and see what's going
and on April 10th, just to mention there we got Dr. Nancy Dickie who
runs the entire whole Health Science section of Texas A& M System
that's gonna be talking at our breakfast so glad to have you
participate. There's a lot of different ways that you can
participate. I did not fail to bring a directory only that we got
a directory that's about an inch-and-a-half thick. It's about a
page of all the 140-plus companies. So if any of you guys would
like the directory, we sell them on our the website but let me just
tell you, for students or people that don't have a budget in other
words that they can put any list to, we do always have scholarships
available for any of our events or for things like the directory.
So we'd be happy to share those things with you. I've been
running for this pretty quickly so I'll be happy to stop and take
questions. There are 40 sum up regions around the country that
are trying to put a stake in the sand when it comes to Bio and Life
Sciences and I'm pretty suspect those 40 regions are gonna be able to
do it and I'm pretty suspect cause most of those 40 regions are out
trying to create. You know they don't have the Texas Medical
Center. They don't have the research-based that we do. They
don't have the M. D. Anderson Cancer Center or Baylor College of
Medicine. And so if you've heard about Florida and you know
Florida brought the scripts and brought it to towns, spent hundred of
millions of dollars but they're trying to replicate the
research-base. Some very suspect that the 40 regions around the
country are gonna be able to develop an industry base, but I do think
that Texas and Houston in particular can do it because we do have
breakthrough discoveries. We do have a very entrepreneurial
climate and now we're starting to have a capital that is available to
us to get a lot of these companies seeded and we're getting the
attention from the National Venture Capital crowd to join forces with
the local VCs to syndicate deals, to fund the companies and their way
of stages. And I don't know of how much you talked about venture
capital, I think you talked a much about it yet but the syndication to
the National VCs are incredibly important. So we'll just take an
example of traditional pharmaceuticals, I mean, at the minimum you're
gonna spend a hundred million dollars and there's not one VC that wants
to right the check for that whole hundred million dollars. So
what they do is go out and get their other venture capital friends to
come and to syndicate so maybe 4, 5, 6 not a whole lot and they'll come
in and they'll co-invest together. One VC will step up to the
plate. They will take the lead or do the lion share. Or
take the lead or do the diligence on. They'll take the lead on
the negotiations of the venture terms with the company and so as
building those bridges to the National Venture firms are critical
because not only do our companies need it but the local VCs lead those
relationships as well for their individual companies to be
successful. And the bottom line is and there do really is no
where in the world where in you got in such close proximity the
research infrastructure, the leading clinicians and the large and
diverse patient-based that we have. And I personally happened to
believe that we will feature personalized medicine that patient-based
is gonna be a real critical element in the development of our
industry. So with that, I'll take a little bit of time for
questions I think you wanted about 20 minutes so. Okay.
Who funds you?
Sure, So we are non-profit and 50% of our budget comes from the
academic institutions and about half of it comes from the corporate
community. So the bankers, lawyers, real state developers, those
that want to see this industry grow.
[ Pause ]
Any other questions?
I have one question. So you mentioned kind of three key things
for this to becoming at the center for the research-based funding with
which we started to see now in the third missing component to me was
really the talent, the people of the background. So how do you envision
that changing and driving those people here?
Well, some of these that may be honest with you so much of it is the
chicken and egg concept, right? So once you have a critical mass
of companies, you're gonna have a critical mass of those people that
were in that VP level, director level, physicians that have that kind
of expertise. There are some creative programs that we're working
on right now but we haven't taken them it off. There are also creative
programs to seed some of that, but one of the things that we try to do
is serve as that almost kind of that chamber of commerce when people
are trying to recruit people in the town. We worked with them in
their recruiting process. The only thing that we do is that when
there is an acquisition like Pfizer or Genentech acquiring a copy
required, we worked very closely with that their team of people that
they have in trying to retain the people that are here. Because
the people who moved to Houston I've seen are similar but the people
who come here in the corporate community love Houston and they don't
want to stay and they moved people in and they moved their kids and put
them to work and go to school and they don't do anything to really
stay. So we're trying to plug them back into the community.
If someone is, you know if you had that growth that critical mass of
companies we're gonna continue to struggle for awhile. But we have seen
a difference in the fact that, for example, the Tanox who already seen
spin off companies management, they were at Tanox wanting to stay
together, you know, starting up new company will jusr see the same
thing, you know add indecisive. So and that helps, believe it or
not, I hate to say it when companies are acquired it actually helps
us. Because it puts people on the market, it puts people
available to go to work with other companies and a lot of these people
are working as consultants for a while and there are out to see any
people but it's gonna be a challenge for until you kind of get that
balance of companies.
So in general, how much money typically is required over the first one,
two, three years that you've seen that have used the BioHouston
infrastructure that most of these companies really sort of at least
have to have to get into this first two or three years of using the
resources that are available with the BioHouston?
Well, I think, I don't wanna say, this wet lab is just one
facility and I mean there are a lot of other resources in the region
using technologies and they have office space too. It really
depends on the product that you're developing and then the phase at
which you're gonna develop the product. The emerging technology
fund has a Sea Grant Program which is 250 is the first charge and it
can go up to a million right. So you can tell and look at that,
that's a pretty good barometer of somebody who you know wants to get
started , but a million and a half dollars is not, you know, its not
unusual for probably a great percentage, but a million and a half you
know on the 12th month born right to get something started and it gets
some data that's probably a pretty good number but that number will
change with every specific company you look at. I mean there is
really no, you know, norms when you when you know cause if you gotta
device, that's really a kind of me too device I mean that's great
whenever, but you know when you got a pharmaceutical that's a new, it
could just can be drastically different. And then there's a lot
of different ways you can do it, I mean whether you or not you build
the company virtually or just wanna build up the staff but the bottom
line is for a million and a half bucks you can usually go and get some
data. Over a three year period you know, that's probably a 12
month pretty decent average and you gotta ramp that up as you go and
that's just we know that's kind of how we all spend the money it always
ramps up and it never goes down. But what's gonna happen is to
make the progress that you need to make to meet your milestones, you
are gonna ramp up. Now once you hit the clinic, I mean those
numbers you know are going to be exponential you know and that really
depends on the product that you've got as well. Being on what's
your animal model and where you gonna do that testing and is it really
available which is so wonderful about in the M. D. Anderson
Pharmaceutical Development Center to have that as a resource
here. When I go around the country talking to investors or pharma
companies then I tell them about the pharmaceutical development center,
I mean their eyes get really, really big and they always wanna, you
know be a part of that and want to come and learn more about it. That's
a resource that most people do not have and I think when you got
resources, you know, at your own disposal you don't realize that how
very unique it is but it is now an outstanding resource for you guys.
[ Inaudible Audience question ]
I'm sorry. Or sure we do, we have full- time, part-time and all
different kinds. We do some contract workers but roughly about
ten people on the staff. [Clapping] And like I said, Brad
E. Wall has been great. He has have been interning with us, is
the way to say it but he's been a tremendous asset to us.
Thank you.
© 2007 The University of Texas M. D. Anderson Cancer Center
1515 Holcombe Blvd, Houston, TX 77030
1-800-392-1611 (USA) / 1-713-792-6161