Biotechnology Holds Promise In Scientific Research, Economic Benefits

Sunday, July 2nd 2006, 2:32 pm

By: News On 6

OKLAHOMA CITY (AP) _ It was in a hallway four year ago that Dr. Craig Shimasaki had a conversation with a representative of a scientific research company that was running out of money and in danger of closing its doors.

Intrigued by the company's discovery _ a genetics-based test that can help predict whether certain patients will develop breast cancer _ Shimasaki persuaded the governing board of Prohibitex to delay its decision on the company's fate until he could work on it.

He changed the company's business model and raised the first $1.25 million in capital to get the business on its feet.

Shimasaki is now guiding the company, renamed InterGenetics Inc., as it prepares to put it's product, OncoVue, on the market.

Unlike traditional Oklahoma jobs in the energy, manufacturing and agricultural sectors, InterGenetics is part of a fledgling ``knowledge-based economy'' that promises advances in the prevention and treatment of diseases and provides relatively high-paying jobs in a state that sorely needs them.

According to a report released in May by the Oklahoma Department of Commerce, the average employment in the scientific research and development services sector in Oklahoma was 2,153 in 2005, a 28.1 percent increase from the 1,681 employed in 2000. Nationally, the average employment in the same category was 607,463, up 10.6 percent over the same time period.

``Oklahoma's percent increase surpassed the national increase for the same period _ that's a positive statement for Oklahoma,'' said Jon Chiappe, senior research analyst for the Commerce Department.

Oklahoma, particularly Oklahoma City, has done a lot to foster more of these kinds of jobs in a so-called ``bio-corridor,'' stretching from Stillwater west to Oklahoma City and south through Norman and down to Ardmore.

InterGenetics is one of nearly 50 companies occupying the Presbyterian Health Foundation Research Park, a six-building complex of research laboratories and office space adjacent to the sprawling Oklahoma Health Center.

The 300-acre complex east of downtown Oklahoma City includes the Oklahoma Medical Research Foundation, the University of Oklahoma Health Sciences Center, two hospitals and other agencies related to the health and medical sciences.

Not all of the 12,500 people working in the area are involved in scientific research and development but those who are earn salaries nearly double the state's per capita income of more than $29,000, said Michael Anderson, president of the Presbyterian Health Foundation.

``We've been a next exporter of our PhDs from our universities for years,'' Anderson said. ``We're hoping to build an economy with science-based companies so that we not only can keep PhDs but we can import people with doctorates to work here.''

With 49 tenants employing 1,178 people who earn a little more than $50,000 each on average, the PHF research park has a $60 million annual payroll, Anderson said.

Even with that, economic development is not the goal but a ``side effect'' of what the foundation does, he said.

``If we did this as an economic development model, we'd go about it differently,'' Anderson said. ``... It takes a while to get a science company up and running'' because Food and Drug Administration trials for the average science product last between five and eight years.

``If you're starting a new company that's doing widgets or making hamburgers, you're not go to wait eight years to get income,'' Anderson said. ``But these companies have to, so they have to raise a lot of money to start.''

That was the problem for InterGenetics' predecessor, Prohibitex, which began as a spinoff company from the Oklahoma Medical Research Foundation and was incorporated in 1999.

The company was still years away from developing a product that could be marketed and create self-sustaining income when Dr. David Ralph met with Shimasaki, whose BA in biochemistry, MBA and PhD in molecular biology and biotechnology gives him an understanding of what it takes to make a scientific research company thrive from both the science and business aspects.

``That's actually a potential pitfall in the development of technology companies, being able to transcend the technology and science to get the product to the marketplace,'' Shimasaki said.

Shimasaki persuaded Bill Swisher of the Swisher Family Trust to put up $1.25 million for InterGenetics and found other investors and funding, including $300,000 in capital from the Oklahoma Life Science Fund to make OncoVue a reality.

The OncoVue Genetic Breast Cancer Susceptibility Test is a mouthwash that analyzes DNA from a woman's cheek cells and examines genes and other factors like personal history to determine the risk for breast cancer.

The Oklahoma Center for the Advancement of Science and Technology also provided funding to the company.

Born during the oil bust decade of the 1980s, OCAST has awarded $126.7 million in state funding to small companies like InterGenetics since its inception in 1987.

OCAST's focus is on economic development for a state forced to diversify its economy.

``You have to give credit to our Legislature for having the fortitude and vision to create an agency that focused on science and technology,'' said Michael Carolina, OCAST's executive director. ``... the university presidents bought into the idea, the private sector bought into it and there was a focus on the state level that could increase jobs and increase wealth so that we could sustain economic growth in the state of Oklahoma.''

The agency announced last week that legislators appropriated an extra $10 million to OCAST, bringing its budget to nearly $23 million for fiscal year 2007 to fund research.

Legislators also provided $150 million for Gov. Brad Henry's Economic Development Generating Excellence, or EDGE, research endowment, which Henry has said is key to developing research-based industries.

Still, Shimasaki and Anderson say Oklahoma needs to provide more investment in these industries.

``I think we're slow to understand that the new economy for America is a knowlege-based economy,'' he said. ``America isn't going to have the world's greatest farm-based economy and it's not going to have the world's large energy-based economy. We're not going to have more gold mines and we're not going to find more platinum.

``The one thing that we have is new ideas and so knowledge and how to apply that knowledge technologically is the basis of the new economy.''