Biotechnology Research in Puerto Rico: The Synergy between Academia, Government & the Private Sector Lueny Morell Director R&D Center University of Puerto Rico at Mayagüez lueny@ece.uprm.edu Second International Corporate/Academic Roundtable on Emerging Technologies WPI March 19-20 2002 1 • Background, the drivers – Economic Development • Jobs, High tech clusters, biotechnology – The Competition • Singapore, Ireland, Tucson, Taiwan • Puerto Rico – PRTEC, INDUNIV, • ViTeC, Tech roadmap, UPRM Facts • According to the Biotechnology Industry Annual Report (Burril 2001) – During 2000 the biotechnology world market had a record breaking $441 billion (>41% increase over previous year) Of the present global pharma products, 16% are of biotechnological origin or related – This is expected to rise to 30% by 2005 & by 50% by 2010 as enabling technologies such as genomics, proteomics, cellomics, combinatorial chemistry, etc allow pharmaceuticals & biotechnology companies to focus on specific therapeutic areas and disease knowledge required in the development of protein pharmaceuticals, protective and therapeutic vaccines, advanced synthesis, biotransformation and formulation. Facts • Understanding the new era of genomicsbased medicine, genetically enhanced microorganisms, cloning, stem cell, biomarkers & the rest will require a concerted efforts on the part of government, industries, universities, research organizations, the analyst community & the media • Pockets of biotechnology are seen as very important for economic development in various regions of the world Facts • Puerto Rico has the largest concentration of pharmaceutical industries in the world – Result of the synergy between world-class managers, workforce & suppliers, and preeminence as a global, tax-advantaged supermanufacturing center • The world’s leading pharmaceuticals & biotech companies trust the successful product technology transfer, scale-up, manufacturing and quality control of their products to Puerto Rico human capital Facts • Puerto Rico: – has the pharma manufacturing highest location quotient** of 9.19, followed by New Jersey with 5.08. – Exported more pharma products to foreign countries than any of the states in the US – Pharma exports reached $28.6 billion in Fiscal 2001, up 245% from Fiscal 1997 ** a measure of the relative importance of an economic activity in a particular geographic area compared to its importance in the US economy as a whole- between PR and states in the mainland Puerto Rico’s Total Exports of Pharmaceutical Products in $Milllions 30,000 25,000 20,000 15,000 10,000 5,000 0 1982 1984 Sou rce: P u erto Rico Pl an n in g Board . 1986 1988 1990 1992 1994 Fiscal years ending June 30 1996 1998 2000 Pharmaceutical Industry in PR • • • • • • Represents 25% of GDP 60% of PR exports: $28.6 Billion in 2000 Over 100,000 direct & indirect jobs Employment growth from ’96-’01 Investment growth of $1 Billion Nine out of 10 top world prescription drugs are manufactured in Puerto Rico. • R&D Base Pharma Global Contribution $30B Source: Puerto Rico Pharmaceutical Industry Association Email: info@preda.com Facts • Recent investments in Biotech R&D – Eli Lilly • $250MM investment in large biotech manufacturing facility • A Humalog ® recombinant insulin manufacturing plant to launch inhaled insuling in alliance with drug delivery company Alkermes, total investment of $450 million – Amgen • $200 million to manufacture all of its products in PR – Other companies • $400 million Facts: Knowledge Supply Chains Material Supply Chain Concept Product Creation Usable Product Product Development Material Sourcing Product Assembly Product Distribution Product Use Continuous Flow of Information and Knowledge Engineering Manufacturing Customer Knowledge Supply Chain Concept Creating or Discovering new Knowledge Usable Knowledge Making Knowledge Transferable Transferring Knowledge Tacit to Explicit Documentation and People Applying Knowledge Continuous Flow of Information and Knowledge Research Teaching Source: Knowledge Supply Chains; A Next-Generation Manufacturing Project User The Knowledge Process of the Future New Knowledge New Talent Knowledge Generation Knowledge Transfer Academia •Joint Research •Customer Solutions •New knowledge •Knowledge Application •Best Practices •Customer Needs •Customer Feedback New Knowledge To Satisfy Society Competence & Ability to Learn Industry Knowledge Generation Knowledge Transfer •Integrated Enterprises •Integrated Product/Process Dev •Learning Organizations •Enterprises-Wide Supply Chains Source: Knowledge Supply Chains; A Next-Generation Manufacturing Project •Faculty •New Talent •Curriculum •Stakeholder Needs •Talent Specification •Industrial Teacher Other countries’ strategies Ireland Singapore Taiwan States in the US 12 Ireland: Industrial Development • Key Success factors for Ireland’s success in economic development (Michael McLaughlin, USA IDA Director) – Demographics • Workforce: 1.8 million, 4.5% unemployment (2000) • 40% under age 30, 55.7% women, English speaking with foreign language capabilities • Investment in education: 13.5% investment, 57% college graduates in science, engineering, CS, business – Government economic policy • Attractive & consistent taxation & financial incentives, member of EU • Telecommunications nfrastructure investment – Social partnerships • Agreement between government, employers, & trade unions Inward investment Singapore: plans for a knowledge based economy SINGAPORE Government as Business Facilitator Strengthening The External Wing Manufacturing and Services as Twin Engines Building World – Class Companies Human & Leveraging Intellectual On Capital as Science Key Technology Competitive NUS & Factors Innovation Strengthening Small & Medium Local Enterprise Optimizing Resource Management Source: Dr. Casey Chan, Director of INTRO National University of Singapore Puerto Rico 15 Puerto Rico’s economy 2,361 diversified industrial plants producing & shipping everything from apparel and pharmaceuticals to computer components & medical devices Puerto Rico’s economy Highly skilled workforce >81% of the workforce HS graduates Ranked 6th in the world in higher education enrollment Over 8,000 S&E degrees/year Puerto Rico • Due to high level of competitiveness in the global market, PR is modifying its economic strategy • Shifts towards: – a knowledge base economy – and the establishment of strategic alliances between all sectors: • Government, private sector and academia – Act quickly to compete with the administrative, research & venture investing programs geared to: • big pharma & biotech startups available in competing tax advantaged manufacturing locations such as Singapore & Ireland Synergy & Collaboration • Synergy: –Defined: • “to work together” • “combined cooperative action or force” Collaboration Exchanging information, altering activities, sharing resources, and enhancing the capacity of one another for mutual benefit and to achieve a common purpose Collaboration • Willingness to share risks, rewards, & responsibilities • All view each other as true collaborators - not what we can get from each other - not as competitors - not just for a short period in time • Seek to enhance each other’s capacity to achieve excellence Collaboration Commitment to: • • • • Defining mutual relationships & goals Jointly developed structure Shared responsibility Mutual authority & accountability for success • Sharing of resources & rewards Collaboration - TRUST • Not coordination of activities • Not entered into when one needs something from another • Not “give us and go away” • Not short term - expands in long term • Doesn’t disintegrate in economic downturns or academic restructuring New Structure • • • • Full commitment to a common mission Built on trust Comprehensive planning Acceptance of equals in planning, executing and accountability • Well-defined communication on all levels • Long-term planning, trust and commitment • Mutual agreement on termination Key success factors for synergy – Rapid response – Consider all stakeholders and their interests – Voice of the customer – Benchmarking – Strategy for differentiation – Strategy to be a low-cost competitor Puerto Rico’s response: roles • Government • Academia • Private Industry Puerto Rico’s R&D Opportunities & Tax Incentives • Income tax rate of 2-7% for all qualified corporations • 25% credit on purchase of goods manufactured in PR • Other Incentives – R&D • Special $25 million annual fund • Soft loans (no interest or guarantee) • 200% special credit for R&D expenditures involved in product or process development – Location • By regions – Number of employees – Importance of industry (e.g., biotech, C&IT) puerto rico technoeconomic corridor p r t ec …the ultimate business paradise 29 prtec • A technical integration of resources from the public, private & academic sectors in order to achieve a world class business & industrial culture • A synergistic alliance of government, industry & academia in order to stimulate the expansion of the value-added production chain. • Established in the Western region of the Island, close to the proposed Las Americas Transshipment Port and the Rafael Hernandez Air Cargo/Tourism Hub Help Puerto Rico to become widely recognized as a leader/center of high-tech excellence in the world Improve the quality of lifestyle for Puerto Rico’s citizens by helping to make it a better place for them to both live and Government work. Clusters Agile/innovative collaboration PR Supportive Environment Techno Economic Corridor (non-profit) Academia Private Sector prtec activities • Research & Development of specific technologies • Sharing in the development of technical processes and skills • Develop technical and support infrastructures for participating industrial & economic clusters • Focus on the creation of new & innovative technologies to be applied on products, processes & services with commercial value • Strengthen Puerto Rico’s competitive edge as a high-tech center through the joint efforts of government, industry & academia High-Tech Clusters “Cluster” association of entities with common or related objectives, needs, products, processes and/or services Provides economic & technological leadership Creates synergy Works to promote & develop its respective enterprises & bring new members Addresses issues that may affect its members Promotes innovation centers Facilitates promotional efforts 33 Computer & Information Technology Cluster: Hewlett Packard: Anchor Tenant HP Technology Center S3 CM2 Security CM=contract manufacturers CM4 S=strategic CM3 suppliers Maintenance HP Caribe Mfg. Anchor Tenant CM1 S1 Food services S2 CM5 Other Tenants Logistics C & IT Cluster Current Members… • Hewlett Packard (anchor) • Sensormatic • MSL • TNT • Smart Modular Technologies (Solectron) • Caribe GE • PCB Horizon • Western Manufacturing • TechnoPlastics • NYPRO • MS&SS • PR Storage • EMS Interested: Symmetricon, Dupont Microelectronics Medical Devices Cluster Current Members… • • • • • • Allergan (anchor) Edward Lifesciences ThermoPlastics Thermometrics Allegiance Surgical Medical Products • St. Jude Medical • Jostra Pharmaceutical Industry Cluster • Manufacturing Sites – 40 • Marketing sites – 20 • • • • • Merck Sharp & Dohme Novartis Pfizer (WL) Pharmacia (Searle) Procter & Gamble Pharmaceuticals Inc • Schering Plough • Mova • Roche • • • • • • • • • Abbott Laboratories Ayerst Wyeth Pharma Inc Amgen Aventis Bristol Myers Squibb (DuPont) GlaxoSmithKline IPR Pharmaceutical Johnson & Johnson Lilly Del Caribe Pharmaceutical Industry Cluster Mission “Proactively foster integration of the pharmaceutical industries & its supporting elements, developing strategies that will enhance a competitive environment, retaining, growing existent business & attracting new opportunities”. Vision Make Puerto Rico the preferred location for new business opportunities for Pharmaceutical Corporations Elements Supporting Pharmaceutical Cluster Materials Suppliers Technical & Special Services Government Manufacturing Support Services General Services Pharmaceutical Cluster Professional Associations Academia Engineering & Construction Non-Profit Support Centers Academia • Collaboration & specialization within UPR & between UPR & private universities, particularly in applied research, Ph.D. and postdoctoral programs to: – Strengthen basic infrastructure capabilities in the biomedical, chemical, environmental & agricultural areas – Reach a clinical level of command over key technologies (combinational chemistry, high throughput target screening) & focus on therapeutic areas & disease knowledge required in the development of protein pharmaceuticals, protective & therapeutic vaccines; and, – Gain a command of advanced synthesis, biotransformation & formulation, from an interdisciplinary framework, anchored in chemical engineering. The University of Puerto Rico at Mayagüez • Major Campus of the UPR System – Established in 1911 – Land-Grant, Sea-Grant & Space-Grant Institution – Science/Math/Engineering/Tech nology Campus of the System – Agricultural Experiment Station • 2 primary research sites: Río Piedras & Mayagüez • 6 substations, 2000 acres – Agricultural Extension Service 69 offices in 69 municipalities UPR Mayagüez • Colleges – Agricultural Sciences – Arts & Sciences – Business Administration – Engineering www.uprm.edu UPR Mayagüez • Student Body – Undergraduate students • 13,000 – Graduate students • 860 • Faculty – – – – – – 739 62% male 57% PhD’s 43% full professors 64.3% tenured 12 credit-hours academic load • Administration – 1,800 • Colleges – Engineering, Arts & Sciences, Business and Agricultural Sciences • 4 PhD’s – – – – Marine Sciences Civil Engineering Chemical Engineering Computer & Information Sciences & Engineering Bachelor Degrees AY 1999-2000 700 600 500 400 300 200 100 0 En Sc Ar ts gi ien ne ce er s in g Bu s in Ag ri c ul es tu s re BS degrees in Engineering AY 99-00 B S E ngi ne e r i ng 1 9 9 9 - 2 0 0 0 140 120 100 80 60 40 20 0 CE EE IE ME f emal e 28 20 69 27 mal e 71 103 38 102 CHE SU R V C OM P E 63 3 9 52 15 46 Master Degrees 99-00 200 150 100 50 0 Engineering Sciences Arts Business Agriculture Total PhDs 8 7 6 5 5 Sciences 4 Engineering 3 2 3 1 4 0 0 1998-99 1999-2000 Research Thrust Areas • Software, Computer Information Systems • Telecommunications, Network Applications & Information Technology • Remote Sensing & Image Processing • Systems Engineering • Marine Sciences • Energy, Environmental Sciences & Engineering • Biotechnology – BioScience • Biophysics, Biochemistry, Biotechnology – Material Sciences • Surface, Pharmaceuticals, Colloids, novel materials Activities that Support BiotecH Cluster • Technology Roadmap • Strengthening courses – Technology-based Entrepreneurship • Business School • New businesses based on high technology • Strengthening degrees – ABET Accreditation • Strong industry participation – Re-focused Industrial Biotechnology Program • Strong collaboration with industry Activities… • New Degrees – BS in Software Engineering – PhD’s in collaboration with industry & government • Biotechnology • Applied Chemistry • Computer & Information Science & Engineering • Water resources & environmental engineering UPRM Biotechnology Research Centers • Tropical Environmental Biotechnology Center • Tropical Marine Biotechnology Center • Center for Protein Structure Function and Dynamics • Bioinformatics Center • Center for Tropical Agriculture Biotechnology Cluster Initiatives: INDUNIV • R&D Industry-University Consortium – Materials Characterization Center – Center for Pharmaceutical Processing Research – Research Grants ($2.5M) & Education • Under Development: – Center of Advanced Packaging Technologies – Biotech Center – Clinical Research • Future Development: – Drug Delivery System – Technology Transfer Center Puerto Rico’s Competitive Initiatives • • • • • • Permitting Process Leverage Supplier Quality Energy Reliability/Cost Vocational/Technical Education Transportation Costs Labor Laws May 21 – 24, 2002 Caribe Hilton Hotel San Juan, Puerto Rico website: www.induniv.org Concluding Remarks