Northeast Ohio's bioscience development organization, BioEnterprise, helped attract $171 million in venture capital to the region's health care companies last year. Kansas wants to follow their lead.
The Kansas Bioscience Authority, the body charged with building the state's bioscience industry, hopes to adopt the model of the Cleveland-based BioEnterprise.
"It's one-third of the mission of the Bioscience Authority, which is to work with startup companies that come out of the university and the private sector," said Clay Blair, chairman of the Authority. "We toured the country and found this model and believe it will be effective for Kansas."
BioEnterprise looks to the needs of venture capitalists, then finds their needs in the area and helps make the matches that can attract outside dollars and spur economic development for the state.
It differs from other regional efforts across the nation, which attempt to attract venture capital by promoting existing offerings and not necessarily first determining where venture capitalists want to invest, BioEnterprise President Baiju Shah said.
Since 2002, BioEnterprise has helped create, recruit or boost more than 45 companies and worked with over 150 technology transfer deals.
Shah said Kansas was brimming with potential because it had world-class institutions such as Kansas University and Kansas State University, the Stowers Institute in Kansas City, Mo., and other agencies and companies to build upon.
But, he said, the effort takes commitment.
"It's not a cheap operation," he said. "You've got to have a broad team, and you've got to be able to fund that team for a number of years."
To mimic the plan here, the Authority expects to invest $500,000 to $1 million per year initially, Blair said.
Those funds will cover hiring personnel and for some seed money for startup companies, he said.
The Authority is a product of the 2004 Kansas Economic Growth Act, which provides that growth in tax dollars from the state's biotechnology efforts will be reinvested in the life sciences. The Authority is made up of politicians, business leaders, university administrators and others.
Shah said the BioEnterprise team spent one-third of its time working with potential investors and determining their needs. Additional time is spent identifying local opportunities coming from institutions and entrepreneurs.
The bulk of the team's time is working to make sure entrepreneurs and others are ready to talk.
"What we are is the expert matchmaker and adviser," he said.
Shah said Northeast Ohio drew in $171 million in bioscience venture capital in 2005 - up from a baseline of about $30 million in the years before BioEnterprise began.
"The breadth and depth of the pipeline is what gives me hope that we will move from the minor leagues to the major leagues," he said.
Shah said Ohio aspired to be like Minnesota and North Carolina - regions that consistently draw at least $150-$200 million a year in bioscience investment.
Shah said BioEnterprise focused on one figure - the amount of funds feeding startup companies. He said that figure was the bottom line and the best gauge of how effective plans were.
According to Shah, Kansas attracted zero dollars so far this year and has attracted less than $25 million per year over the last few years. Shah said BioEnterprise compiled the figures from several sources, including Dow Jones Venture Wire, Venture Source, PWC Moneytree, local business journals and direct reports from companies.
"I think the initiative itself is evidence enough that we're trying to turn it around," Blair said of the Kansas bioscience landscape. "There's certainly no promises of success."
Blair said this part of the Authority's work was what he called "patient investing."
"It's going to take some time," he said. "It tends to have more risk. It also has more reward. We have no qualms about it. It will take patience."
And it won't necessarily mean more jobs at the outset.
The goal, Blair said, is to take the time to eventually build companies the size of Cerner or H&R; Block.
"We're hoping for a few home runs, knowing that there's going to have a lot of folks up to bat before that happens," Blair said.
The Authority has picked Bill Sanford, chairman and chief executive officer of NanoScale Materials Inc., to lead the plans for adopting the BioEnterprise model and recruiting a chief executive to head up the initiative.
The Authority expects to announce that executive this year and have the initiative rolling by the end of the summer.
- Staff writer Sophia Maines can be reached at 832-7155.