The synergy between innovative biotech businesses and world-renowned life science research being conducted at academic science communities is rapidly propelling Texas toward being recognized as a major force in developing next-generation treatments and cures for the world’s most deadly diseases.
Texas has become one of the most prolific scientific research regions in the United States, with more than 30 colleges, institutes, and centers working on a host of novel research projects. In 2012, the National Institutes of Health (NIH) database ranked the state as second in the number of clinical trials being conducted, with more than 14,000 studies under development.
However, the biotech industry is changing, as biopharmaceutical companies are gaining a new space in the research field, with partnerships between public and academic research institutions becoming increasingly common.
According to the “Research in your backyard: Developing cures, creating jobs” report, which was compiled by the Pharmaceutical Research and Manufacturers of America (PhRMA), since 1999, biopharmaceutical companies have been responsible for more than 8,200 clinical trials, testing new medicines in collaboration with public clinical research centers, university medical schools, and hospitals.
“Freedom fuels innovation and through our proud tradition of bold thinking and personal freedom. Texas is a natural fit for industries looking to create cutting-edge treatments, develop cures and improve lives,” said Texas Governor Rick Perry, as cited in the report. “I’m of proud of Texas’ ranking in clinical studies and believe our state has the workforce, talent, universities and business climate to become a national leader for biotech research, development and commercialization.”
Economically Viable for Texas
The partnerships between public research facilities and pharmaceutical companies not only benefit patients and the medical community, but the Texas economy as well. Research currently taking place within the state creates jobs and tax revenue, and promotes follow-on research spending. In 2012 alone, 125 biotech companies created a manufacturing workforce totaling 9,500 new jobs in Texas, according to the Texas Biotechnology Industry Report from the Office of Governor Rick Perry.
The private sector has invested heavily in Research and Development (R&D), employing 21,300 workers in one of the largest private scientific R&D expenditures in the state. The total value of pharmaceutical shipments in 2010 exceeded $4.7 billion, and manufacturers spent almost $100 million in investment capital, according to U.S. Census Bureau numbers.
In the drug development sector, a major component of the cost of developing a new, cutting-edge therapy is invested in clinical trials. “In a nutshell, clinical trials of new drugs have been beneficial to patients, the state’s economy and the advance of science,” said Bill Hammond, President and Chief Executive Officer of the Texas Association of Business, and cited in the report. “The trials account for 45 to 75 percent of the average $1.2 billion cost of developing one new drug and biopharmaceutical companies generally hire local institutions to do this challenging clinical research work.”
Public investment in research and development has also increased, as the state has been supporting more research projects at public universities and health-related institutions. In 2010, higher education public institutions in Texas invested more than $2.5 billion into medical and life sciences research, and 61 percent of that capital was public.
“In Texas, we understand that high-tech companies don’t just happen overnight but are a product of forethought, sound vision and planning, and strategic investments by both the public and private sectors,” stated Governor Rick Perry. “Through our Emerging Technology Fund, we are bringing the best scientists and researchers to Texas, attracting high-tech jobs and helping start-up companies get off the ground faster.”
The Texas state government has made substantial investments into the growth of the biotech industry, creating institutions to directly support the industry. Mentioned above, the Texas Emerging Technology Fund (TETF) is a $485 million dollar fund created in 2005 by Governor Rick Perry to “make Texas the best place in the nation to pursue the next great idea, give an unparalleled advantage in the research, development and commercialization of emerging technologies, bring the best scientists, researchers and innovators to Texas and help startup companies get off the ground faster and attract high-tech jobs.”
To date, it has invested $220 million in funds to Texas universities, and more than $205 million to over 145 early-stage biotech companies, $130 million of which were awarded to pharmaceutical-related startups. The returns have come from the funded companies in terms of a wide range of new technologies developed, including treatments for cancer, liver disease, and obesity.
But the public sector is not the only one that is boosting the Texas biotech industry. Angel investors are also aware of the growth potential of the region right now.
The Health Wildcatters accelerator, for example, is a startup accelerator based in Dallas and designed after Tech Wildcatters, a local accelerator that focuses on assisting business-to-business startups. The first of its kind organization aims to encourage and assist startups that are looking to merge technology and health, and is gearing up for its second class, after raising almost $5 million during their inaugural year.
The accelerator provides $35,000 in seed money to startups in exchange for equity in the company as well as mentorship with entrepreneurs and doctors. Although the investment in medical care devices and life sciences is not always considered to be the most attractive, investors are now turning to digital health care systems as a promising, next-generation approach.
Similarly, the Texas Bio Corridor is an alliance created to improve the collaboration among biotech and life sciences organizations in San Antonio, Austin, and Dallas in order to make them bigger players in the biotech industry nationwide. “We see ourselves as a complementary entity, not a competitive one. We plan to embrace the companies in the Houston area, as well,” explained Texas Bio Corridor chairman K. Russel Peterman to W. Scott Bailey, from the Houston Business Journal.
The goal is to make the companies in the center of the state more visible and increase the number of bioscience entrepreneurs through the identification of resources and potential stakeholders in the region. “We will work to recruit companies and talent,” he added.
The Cancer Prevention and Research Institute of Texas (CPRIT) was created in 2007 with an initial state funding of $3 billion in bonds to fund groundbreaking cancer research and prevention programs in Texas. The state-run institute is one of the most successful organizations of its kind, with its mission to “create and expedite innovation in the area of cancer research, attract, create, or expand research capabilities of public or private institutions of higher education and other public or private entities, and continue to develop and implement the Texas Cancer Plan by promoting the development and coordination of public and private policies, programs, and services related to cancer,” as established by the Texas Legislature.
The agency has just announced a new leadership structure and new grants to ensure that the public investment continues to be properly appropriated in finding the cure for cancer. “The new agency leadership is a strong group who are committed not only to ensuring the previous mistakes are never repeated, but also fulfilling CPRIT’s mission of finding a cure for cancer,” State Senator Jane Nelson recently said in an interview with Laylan Copelin at the Austin American Statesman.
Complementing the drug research and development sectors across the state, Texas also features more than 2,000 medical and testing laboratories, including blood, pathology, imaging, diagnostics, and device testing facilities. The 32,200 employees of these companies consist of researchers, management executives, office and administrative support workers, production workers, engineers, architects, computer and math experts, and sales representatives.
Focusing on Unmet Needs In Healthcare
Almost 53% of the clinical trials performed by pharmaceutical companies in collaboration with public institutions for new medicines targeted one of the six most debilitating chronic diseases currently affecting the US. Asthma, cancer, diabetes, heart disease, mental illnesses and stroke are all major focuses in Texas-based research, drug development, and clinical trials.
“The clinical trials of new medicines conducted by companies in Texas have been an especially important development for chronic disease patients in the state and all over the country. Nearly 4,400 [from a total of 8,254] of the trials pursued by biopharmaceutical firms in the Lone Star State have been aimed at the nation’s six most debilitating chronic conditions, which have wreaked havoc in Texas,” said President of the Texas Healthcare & Bioscience Institute Thomas R. Kowalsky, as cited in the report.
Chronic diseases are a great threat to the nation’s health, and being able to treat them is a major goal for the scientific community. The Centers for Disease Control and Prevention states that U.S. patients with chronic diseases account for 75 percent of every dollar spent on healthcare, and those illnesses are leading drivers of rising costs, which total billions of dollars every year. However, chronic diseases are still the main cause of death and disability in the United States, and remain a driving factor in Texas biotech R&D.
For example, although there is no cure for asthma, the disease can be controlled with proper prevention and treatment. Asthma is characterized by an inflammation of the airways and is genetic. Symptoms include difficulty breathing, wheezing, coughing and tightness in the chest, and in severe cases can be deadly. In the United States, asthma is becoming a more common and expensive disease, according to the Asthma and Allergy Foundation of America.
“The annual cost of asthma is estimated to be nearly $18 billion, direct costs accounted for nearly $10 billion (hospitalizations the single largest portion of direct cost) and indirect costs of $8 billion (lost earnings due to illness or death). For adults, asthma is the fourth leading cause of work absenteeism and “presenteeism,” resulting in nearly 15 million missed or lost (“less productive”) workdays each year (this accounts for nearly $3 billion of the “indirect costs” shown above),” according to the website of the foundation.
The most common type of cancer is breast cancer, with an expected 235,000 new cases in the U.S. in 2014, according to statistics reported by the American Cancer Society. The list of prevalent cancer types in America is followed by prostate and lung cancers. More than one million people are diagnosed every year with one of the more than 200 types of cancer diagnoses in the nation. “Cancer alone will kill nearly 37,000 Texans this year” said President and Chief Executive Officer of the Texas Association of Business, Bill Hammond.
Cancer remains one of the most studied diseases in Texas, as there are currently more than 600 trials recruiting patients, including numerous research projects supported by CPRIT. “Thanks to advances in detection and treatment, 13 million American cancer survivors are alive today, and the numbers are growing. Although research has begun to document the issues faced by cancer survivors, many questions remain. Additionally, quality-of-life issues among persons touched by cancer are not fully understood,” said the American Cancer Society.
While cancer certainly garners the headlines in the Texas biotech industry, other diseases, such as diabetes, are also being aggressively pursued by Texas-based researchers and biotech companies alike. Nearly 26 million children and adults in the United States have diabetes, and “. . . about 10 percent of the state’s adults, 1.8 million people, are diabetics,” according to Bill Hammond. However, less than 19 million people nationwide have yet to be diagnosed — a health concern that is equally prevalent in Texas as well. If the present trends continue, in 2050 one in every three people will have diabetes. Not only is the disease the primary cause of death for more than 70,000 Americans each year, but it also contributes to the severeness of other diseases.
“$245 billion are annually attributable to diagnosed diabetes, including $176 billion in direct costs and $69 billion in direct costs (disability work loss, premature mortality). 1 in 10 healthcare dollars is spent treating diabetes and its complications. 1 in 5 is spent caring for people with diabetes,” notes the American Diabetes Association.
Freedom Fuels Texas Biotech
Since 1999 in Texas, biopharma companies have sponsored 4,390 clinical trials of potential new drugs to treat asthma, cancer, heart disease, stroke, diabetes and mental illnesses. Many of them are next-generation biotechnology treatments that could revolutionize the course of medicine worldwide and involve collaborations with institutions like University of Texas Health Sciences Centers or Texas A&M Health Science Center College of Medicine.
“What’s more, it is significant, and certainly exciting, that a respectable number of drugs tested in Texas over the last 13 years have been new generation biotechnology treatments, which have the strong potential to be more effective medicines and some of them could improve our ability to predict and even prevent disease,” stated Bill Hammond, as cited in the report. While Texas continues to fight for national and worldwide attention for what it contributes to life sciences research and the biotech industry, the state’s contributions to science, particularly over the past few decades, are unquestionable. With heralded research institutions such as Baylor College of Medicine, the largest cancer center in the world in MD Anderson, and the largest research complex in the world in the Texas Medical Center, Governor Perry’s vision for wielding the proud tradition of bold thinking and personal freedom embodied by Texas to fuel innovation in biotech is no doubt propelling the Texas biotech industry to the forefront.