Recombinant DNA. Genetically altered fish that produce human proteins. Filter systems with pores just 0.2 microns wide. Low-fat peanuts. Chemicals that fight disease, including cancer.
These don't come from a futuristic science-fiction book, but from today's health technology industry in Florida.
Florida is a major player in the health technology industry, ranking third in the country as a location for businesses in the industry, behind California and Texas. Almost 30,000 Floridians are employed in health technology, with an average wage of $35,076, that is 137 percent of the average wage in the state.
Health technology includes drugs, medical instruments, laboratory instruments and research.
Florida companies manufacture medical devices, provide parts for IV systems and make just about anything related to the health technology field.
Businesses in health technology require skilled workers, workers with advanced degrees, access to markets, and a high quality of living to keep employees happy.
Health technology companies in Florida are finding the essentials in great supply.
Beefing up biotech
In the narrower band of biotechnology, Florida is attempting to get a larger share of the pie. Over 60 Florida biotech firms employ 2,200 workers, with an average wage of $45,000 per year.
Expanding the biotech industry is easier said than done. Unlike other industries, where products can immediately be produced, marketed and sold, biotech products take years to develop into a profitable endeavor.
"Biotech must be viewed differently than some others," said Dr. Sheldon Schuster, director of the Biotechnology Program at the University of Florida. "There's a big gap between an idea and the product on the other end. We try to link the university with the business community."
The biggest hurdle for a growing biotech company is raising money. It can take six to seven years to get a product ready for public use, and capital must be raised to sustain research and development during that time.
"It can be a painful, brutal process," said Schuster. "We have a business incubator that has produced three (independent companies). We can help in recruiting management, raising money and providing technology."
Companies fight long battles
Testing is conducted and ideas are refined in laboratories, often on the campuses of major universities. Florida is no different. The research universities in Florida all are set up to assist new biotech companies.
| To Get the OK
Biotech companies
go through several
stages to get an
end product.
FINAL PHASE -- an end product is manufactured and sold.
SECOND PHASE -- the company produces samples of the product. The Food and Drug Administration must then approve the product, and plans must be made for mass production.
FIRST PHASE -- the company proves that its idea is viable, which is typically a two-to-three year process. |
"When a technology advancement gets to the point it is applied and approved, then a corporation becomes interested," said Gary Margules, director of the Technology Transfer Program at the University of Miami. "Our job is to help the small, start-up companies to get to that point."
AquaGene, formed in 1997 in Alachua, Fla., is moving from a first phase to second phase company in 1999. John Rogers is president and CEO of AquaGene, located in the business incubator at the University of Florida.
His company develops pharmaceuticals, based on proteins, that help in treating heart attacks and diabetes. AquaGene uses genetically modified fish carrying a human gene to produce the protein. The protein is then extracted from fish organs and purified.
Rogers said the state of Florida is a good fit for his business.
"I have a business background," said Rogers. "A big part of the reason I chose to come here was the University of Florida. You have to have access to people with advanced degrees and technology, and you can get that here. With the (university's) Biotechnology Development Institute, companies can start out with a smaller amount of venture capital."
Rogers described the fund-raising process as a painful, but necessary, aspect of any successful biotech company operation.
"I spend 40 to 50 percent of my time raising money," said Rogers. "It's about networking. It's no big secret, all biotech companies have to do it, and it's a big hill to overcome."
According to a report on health technology compiled by Enterprise Florida, the economic development organization for the state of Florida, it costs about $500 million to bring a product from the research to production phase, without any guarantee of FDA approval.
Much of the venture capital in the biotech industry comes from sources on the West and East coasts. Building up funding sources in Florida will take time and a few initial success stories.
"We've had companies here that have had offers of funding if they will move their company to Silicon Valley or somewhere in the Northeast," said Schuster. "The advantage that we point out to venture capitalists is they can visit a number of different companies here in our incubator right now."
Products that help people
Biotech companies are compelling. Cures for diseases, more nutritious plants and safer medications are all the result of years of research and development by this industry.
| "A big part of the reason I chose to
come here was the University of Florida. You have to have access to people with advanced degrees and technology, and you can get that here."
-- John Rogers, president and CEO, AquaGene, University of Florida |
In Miami, Sunol Molecular Corp. is a two-year old company in the development stage. Sunol uses DNA technology to make proteins that supplement the human immune system. Sunol employs 27 people and has three products entering clinical trials.
"Certainly the potential for helping people is a factor in our business," said Dean Taylor, vice president of business development for Sunol. "But you also have to come up with a product that works and is feasible to manufacture."
In Jacksonville, Walter Lorenz Surgical, Inc., makes plating systems that aid in surgery for facial fractures and head and neck injuries. The company uses titanium and a recently patented substance, called LactoSorb, in the plating systems.
Sunshine State's advantages
Florida's resources to entice biotech and health technology companies are numerous.
Perhaps the most important is the linking of government, private companies and education in promoting the industry.
| It costs about $500 million to bring a product from the research to production phase, without any guarantee of FDA approval. |
Representatives from all three groups are part of the Health Technology Task Force, which plans strategies for the expansion of the biotech industry in the state.
"We're in a good position in that all the components are marching to the same tune," said Larry Clark, president of BioFlorida, Inc., a group of businesses and institutions that have formed to promote health technology. "We have a tremendous opportunity here. There's really nothing against us."
Another obvious strength is Florida's coastal environment. The state is a leader in marine biology research.
"We've got water on three sides," said Clark. "There's a trend toward marine biotechnology and we've got a tremendous resource."
In addition, the people of Florida are older, on average, than the rest of the country. The research and clinical opportunities for testing products are great.
"There is a large patient base," said Gary Margules, director of Technology Transfer at the University of Miami. "Clinical trials are easier and more manageable here than in other areas."
Aside from the business pluses, the quality of life in Florida is unique.
In 1991, Chuck Gelman was vacationing in Florida, while at the same time considering opening a medical device membrane facility.
Gelman placed his company in Pensacola, on the far northwestern tip of Florida, in part because he found it to be a top-notch vacation spot. In 1996, the Pall Corp. bought the company, and since that time has expanded the plant.
"Chuck Gelman settled on Florida when he was on vacation and he fell in love with the place," said Steve Sharp, regulatory affairs coordinator for Pall. "The more he looked at the education system, the cost of living, the work force, the more he liked it."
Pall Membranes, after an expansion, now employs 160 people, and the Ann Arbor, Mich.,-based company has moved the research and development portion of the division to Pensacola. Pall also has facilities in Ireland, Japan, England and Puerto Rico. Sharp said Pall looks for specific requirements in its employees.
"Our manufacturing people must be fairly technically skilled," said Sharp. "All of our production uses some type of computer systems. A lot of them go through a chemical operations course at the local community college (Pensacola Junior College).
"The R&D people are chemical engineers, process engineers. We have to recruit some of them from around the country, but once they are here they love it."
Jacksonville had success in retaining Walter Lorenz. After moving to Florida in 1976, the company considered shifting its Florida operations to another Walter Lorenz site in Indiana. After looking at all options, however, the company decided to stay.
"We had a lot of options," said Kent E. Williams, president of Walter Lorenz. "But there were too many good things here to move. We like the weather, and we are only two miles from the Jacksonville Airport."
Not only did Walter Lorenz stay, but it expanded in Jacksonville. It added 60,000 square feet of manufacturing and distribution space, and purchased six acres for future expansion.
"We have a specialized pool of labor, and we have to bring in some employees from other parts of the country," said Williams. "But we have no trouble getting people to come here or stay here."
Health technology thrives
While developing biotech firms are striving to make their mark in Florida, other aspects of the health technology industry are thriving. Medical supply companies, management firms and other health technology businesses are entrenched in the economy, forming a strong support system for the biotech industry.
| "The R&D people are chemical engineers, process
engineers. We have to recruit some of them from around the country, but once they are here they love it."
-- Steve Sharp, regulatory affairs coordinator, Pall Corp., Pensacola, Fla. |
Biotech companies need special systems and equipment for research and lab tests.
Kinetics Systems, Inc., in Boca Raton, provides clean equipment for companies needing sanitary systems. The company's products include special stainless steel containers and freeze-dry vials and scrubbers.
"Some companies require a certain standard of water or air cleanliness, and we step in there for them," said Dale Haupt, sales manager for Kinetics. "We help them to keep bacteria levels low with special heating or filtration of water."
Kinetics began in California in 1970, and has had a presence in Florida for about a year.
"We came in here seeing there was a need," said Haupt.
For suppliers like Kinetics, it's important to be familiar with companies from the time they start, since a supplier that is hired initially may be the supplier for the life of the company.
"We don't get that many repeat sales, unless the company expands," said Haupt. "You have to be first in line with a company to really get them."
Impact on central Florida
The Interstate 4 corridor, from Daytona in northeast Florida to Sarasota in southwest Florida, illustrates the health technology industry's impact on the state. The area includes Orlando and Tampa.
To study the economic impact of health technology in the area, the University of South Florida, in Tampa, completed a report on medical products. The report identified 190 health technology companies, with 75 percent involved in medical device manufacturing, with and the other 25 percent being diagnostic and pharmaceutical companies.
Together, the businesses bring in revenues of $1.3 billion annually. The average company employs fewer than 100 people with average revenues of $11 million.
"There's a foundation of large companies here," said Richard Streeter, director of economic development at the University of South Florida. "All of the ingredients necessary for a mature cluster that feeds off one another are here."
Future is bright
There are indications that Florida's growth in health technology will continue into the next century. The Mayo Clinic in Jacksonville is working on several exciting projects, including a treatment for Alzheimer's Disease. The research branch of the clinic now employs over 200 people, and total employment at the clinic is 1,500.
The clinic is also examining business opportunities with area companies. Outside companies would take products developed by the clinic and manufacture and market them to the public.
On the education side, the University of Florida earned a $1 million grant for its new biomedical engineering graduate program. The Whitaker Foundation's endowment will allow students to focus in on biomechanics, biomaterials, cellular and tissue engineering and biomedical imaging.
"There are good ingredients here," said Schuster. "There are incubators and research centers at the universities, and the business climate is good. The work force is good and our quality of life is terrific.
"Growing in this industry is a matter of networking. Once momentum is started, it just feeds on itself. We're headed the right way."
Lance Yoder is a senior writer for Expansion Management Magazine.
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