RESEARCH TRIANGLE PARK, N.C., Sept. 9, 1997 - A $7.5 million special appropriation by the N.C. General Assembly will enable the North Carolina Biotechnology Center to create a multi-partner investment fund for new and expanding bioscience companies in the state.
The appropriation, part of the state's new $11.4 billion budget passed by the Legislature on Aug. 27, will lay the foundation for a Bioscience Investment Fund that will provide working capital to biotechnology and bioscience companies. The Center will use the state appropriation to attract additional funding from private and institutional investors from throughout North Carolina and the United States. Its goal is to leverage the state's money three- or four-fold for a total Fund of at least $30 million.
"My vision 15 years ago was for North Carolina to be a national leader in biotechnology," said Gov. Jim Hunt. "Today we have a young and growing biotechnology industry, but it needs more capital in order to reach its full potential. The state's contribution to this Bioscience Investment Fund is the right help at the right time."
Norris Tolson, secretary of the N.C. Department of Commerce, said, "The Fund represents a new tool for creating home-grown companies and attracting high-growth companies from out of state. It will give North Carolina a clear competitive advantage over other states pursuing biotechnology companies."
North Carolina has had a shortage of early stage venture capital for biotechnology and other technology companies. This shortfall is the single greatest hindrance to the start-up and growth of such companies here, concluded a 1996 report commissioned by the Council for Entrepreneurial Development.
The Biotechnology Center has a low-interest loan program that supports the product research and development activities of small bioscience companies, but it has limited funds available. Last year it was able to help seven companies with loans totaling $892,770. The new Fund is expected to invest much larger sums in more companies over longer periods for a greater economic impact.
Early stage bioscience companies require substantial, risk-oriented investment over several years because it takes a great amount of time and money to overcome the technical and regulatory hurdles associated with the medical, agricultural and environmental industries. The Fund will be positioned to make early investments, helping companies meet milestones that will enable them to attract even larger capital investments from other sources.
"This new Fund is an investment in our state's future, said Dr. Charles E. Hamner, president of the Biotechnology Center. "It will create jobs and expand our entire economy. We commend the General Assembly for its foresight in helping the bioscience industry.
"We have a five-year window to fund a number of evolving companies and retain our state's leadership in biotechnology," Hamner said. "We have a great opportunity right now, and we have to seize it before it passes."
The Fund will be organized as a "business-like entity with competent investment managers who will focus on early stage deals with the intention of generating a reasonable return on investment," said Tom Laundon, vice president of the Biotechnology Center's Business and Technology Development Program. "Developing a mechanism to use and oversee the state's appropriation responsibly is an important and complex job," he said. "We will work carefully in the coming months to do so."
The goals of the Fund will be to retain and develop in-state bioscience technologies, bring new technologies into the state, and support company development.
John Irick, president and chief executive officer of Apex Bioscience in Durham, said the General Assembly's appropriation for the Fund will give a much-needed boost to bioscience companies seeking funding. "This appropriation will allow the Biotechnology Center to build on its successful track record in fostering the formation and growth of new bioscience companies," said Irick, who is also president and chairman of the North Carolina Biosciences Organization. "We are grateful that the Legislature has taken this important first step in addressing the capital-formation challenges facing our industry."
About 80 biotechnology and related bioscience companies have operations in the state, placing North Carolina first in the South and among the top 10 states nationally in commercial biotechnology. Given sufficient operating capital, the industry in North Carolina is projected to grow 10- to 15-fold in the next 20 years, employing as many as 100,000 people and generating $15 billion in annual product sales.
The North Carolina Biotechnology Center is a private, non-profit corporation funded by the N.C. General Assembly. Its mission is to provide long-term economic benefit to North Carolina through support of biotechnology research, development and commercialization statewide.
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Contact: North Carolina Biotechnology Center, 919-541-9366.
