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Region’s bioscience companies are in the mix

Exports define how most bioscience companies in the Inland Northwest succeed. Our firms may not ship overseas, although some do. But they certainly ship outside the region. By selling outside the region, or exporting, bioscience firms import unique benefits to our economy.

Patrick Jones
Special to The Spokesman-Review

How easy is it for these companies — largely startups — to achieve most of their sales far, often very far, from their home base? Consider first the importance of markets far beyond the Inland Northwest. Hollister-Stier Laboratories LLC, located in northeast Spokane and the largest of all regional firms, estimates that 98 percent of its sales of products and contract services take place outside the region. More than 5 percent of its sales occur abroad.

Caldwell Laboratories, an established medical device manufacturer in Richland, reports that 98 percent of its revenue comes from outside the Pacific Northwest.

Sales by GenPrime, the Spokane-based diagnostics company, stem almost entirely from outside the region.

Bio-OriGyn, the Spokane-based firm developing fertility technologies, has just started to market its first product over the Web via Drugstore.com.

Sales for Pullman-based Amplicon Express breaks down as: 25 percent Inland NW, 50 percent USA, and 25 percent International (Europe and Asia).

On reflection, this dependence on distant markets may seem obvious. After all, most technology firms are intensely specialized. To succeed, they need large markets, a much broader customer base than the Inland Northwest can provide. A connection to national, if not global, markets is a hallmark of technology firms in general.

What may not be obvious are the consequences of this dependence for our regional economy. First, goods and services exported out of the region are, by definition, paid by monetary flows from other regions or countries. This exchange is one of the central means for any region to create wealth. Put another way, bioscience goods and services are simply not recycling the dollars in our region.

Second, bioscience firms pay, on average, above the prevailing level of wage and salaries. In a recent report on the regional bioscience community, Tripp-Umbach Associates estimated that for those engaged in drug manufacturing, average income is 67 percent higher than the Spokane County average wage of approximately $30,000. For those employed in the medical device industry, wages are at least 20 percent higher than the local average.

As bioscience firms grow, they and their staff will spend more in the regional economy, with high impacts. The Tripp-Umbach report estimated that for every one new job created in drug manufacturing, 1.3 other jobs are created throughout the economy. For medical devices, the impact is even greater. Relative to other industries, total job creation of bioscience commerce is high.

But how hard is it to do business from the Inland Northwest location? To most of the U.S., our northwest corner is an isolated one, with none of the advantages of either a central continental or port location. How does location challenge a company’s ability to sell? To attract talent? From conversations with members of the Biotechnology Association of the Spokane Region (BASR), the answer is not very much.

A quick case study of Amplicon Express, founded in 1996 and led by one of the co-authors of this article, illustrates how Inland Northwest bioscience firms have managed the location issue.

Amplicon Express has exploited a lucrative niche of providing custom services in the fields of microbiology and molecular biology. These custom services include manufacturing DNA libraries, DNA sequencing, DNA fingerprinting and bio-informatics services. Amplicon’s client base includes pharmaceutical companies, biotech companies, government labs and academic labs worldwide. Researchers from these fields use Amplicon Express products and services for two general reasons:

1.Often it is less expensive and faster to outsource projects to Amplicon Express because it specializes in performing certain optimized tasks at a high-throughput rate.

2. A researcher may need an experiment performed only once, making it less expensive and faster to "outsource" for this single task rather than "tooling-up" with expensive equipment and technical staff.

A typical project for Amplicon Express involves USDA researchers working on diseases plaguing rainbow trout, such as whirling disease. An important tool for discovering a cure is a trout DNA library. On contract, Amplicon Express constructed two trout DNA libraries for a consortium of rainbow trout researchers. Other organisms Amplicon Express has built libraries for include: black pearl oyster, mosquito (malaria), various cattle diseases, soybeans, a rare butterfly, wine-producing grapes, sugar beet, a strange marine sponge collected off the coast of Hawaii, rice, human and many others.

Most of Amplicon Express’ clients have come from the firm’s participating in scientific meetings, publishing in peer-reviewed journals, advertising in trade journals, Web search engines and word of mouth. Amplicon Express has a partnership with a French company called Genome Express. The majority of sales originating in Europe come through Genome Express and Web searches.

The Internet and Federal Express are key ingredients to the success of Amplicon Express. Located in the Washington State University Research and Technology Park, Amplicon Express enjoys a fiber-optic connection to a network providing a massive amount of bandwidth. This is critical for delivering DNA sequence data and performing bio-informatic services.

All of the employees at Amplicon Express have a BS degree or higher, even administrative assistants. Attracting talented people has been quite simple: Nearly all employees originate from WSU or University of Idaho.

Tucked away in a beautiful corner of the world? Yes. Isolated from national and world markets? No. Our region’s bioscience companies are already part of a global economy.

Robert Bogden, who co-wrote this column, is founder and CEO of Amplion Express and a member of the BASR board. D. Patrick Jones, Ph.D., is executive director of the BASR.

http://www.spokesmanreview.com/news-story.asp?date=120802&ID=s1269536&cat=section.business

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