Preparing the Way

Making Tennessee a launching pad for the cutting-edge

BusinessTN
November 2007

Tennessee is well on its way to becoming the nation's latest hotbed for cutting-edge technology companies.

The last 10 years have seen the creation statewide of some of the country's most innovative operations, particularly those focused on biotechnology. In addition, Tennessee's four main research centers—Oak Ridge National Laboratory, St. Jude Medical, the University of Tennessee and Vanderbilt University—continue to garner universal respect in materials science, biomedical devices, and life sciences research, among other areas.

Memphis-based biopharmaceutical company GTx Inc. has been on the forefront of the state's technology movement.

"I believe within 20 years, Memphis could be home to five to 10 promising, publicly owned biotech companies," says Dr. Mitchell Steiner, GTx CEO and co-founder.

To achieve such growth in Memphis and statewide, both government and private-sector leaders are aggressively addressing issues involving education as it relates to a qualified high-tech workforce. "An educational background with heavy emphasis on math and science is necessary to give future workers the building blocks they will need for a career in the biosciences," says Dr. Steven J. Bares, president and executive director of Memphis BioWorks Foundation.

A 501(c)(3) nonprofit, the foundation formed Innova, an entrepreneurial accelerator, as part of the approximately $60 million Memphis Fast Forward initiative. Innova will work to build a national entrepreneurship "center of excellence" to nurture high-value business ventures and jobs, particularly among the biosciences and biologistics.

Bares says the state's goals are challenging but attainable.

"Tennessee needs to attract more investors that are willing to fund startup companies based on the technologies developed at the state's universities and health care centers of excellence," he says. "Fortunately, the private and public sectors are beginning to recognize these challenges, and are beginning to take the steps and make the investments to meet them."

Bares says that once out-of-state companies move past any pre-established notions about Tennessee, their reaction is "one of surprise and admiration."

"They already know about organizations like St. Jude Children's Research Hospital and some of the orthopedic leadership in Memphis," he says. "What they are often surprised about is the depth of research, discovery and leadership that takes place—both in those organizations and in the many support efforts that surround them."

The state's biotechnology industry, in particular, is emerging as an "extremely promising area," according to GTx's Steiner.

Founded in 1997, GTx is one of Tennessee's more established high-tech entities. The biopharmaceutical company focuses on the discovery, development and commercialization of therapeutics addressing men's health, particularly oncology and aging.

GTx is on the national forefront with its clinical trials involving ostarine, which would be used to combat cancer and kidney muscle wasting.

Dr. Samuel Lynch, founder of Franklin-based BioMimetic Therapeutics, says the state's success stories are becoming more commonplace. For example, Tennessee ranks among the top two states (with Indiana) in orthopedic research and product development.

Regarding the public-private initiatives BioWorks' Bares advocates, BioMimetic is working with the state to build a GMP (good manufacturing practices) center, which Lynch says would accommodate a range of high-technology manufacturing and laboratory operations.

Both Tennessee Gov. Phil Bredesen and Matt Kisber, commissioner of the Department of Economic and Community Development, have indicated the state is willing to provide a $5 million grant to assist the effort. Already, the Cool Springs Life Sciences Center (opened in 2005 and home to BioMimetic) is receiving positive reviews.

Lynch praises the Bredesen administration for its focus on the educational component of the high-tech effort. Relatedly, BMTI has helped create nonprofit BioTN (Bridging Innovations Originating in Tennessee) to be a catalyst in science and technology education for grades K-12 and at the university level, and to provide a conduit for securing federal and state grants. Such efforts spur great optimism, according to Chuck Witkowski, CEO of Knoxville-based Protein Discovery, a privately held life sciences company.

Witkowski predicts much of the state's high-tech growth will occur in burgeoning industries such as nanomaterials, biomedical devices and molecular therapeutics and diagnostics.

"I also think that you will see some of the same technology entrepreneurs starting multiple successful companies within the state, a hallmark of successful companies on the East and West coasts," Witkowski adds.

Witkowski says success within the state's high-tech community must be defined from both an investor's perspective (that is, achieving liquidity) and by the creation of sustainable companies that are national stalwarts in their respective industries.

He points to CTI Molecular Imaging as an industry-leading technology company founded and still located in Knoxville (though now owned by Siemens).

"As more and more technology companies are started in Tennessee and grow to be industry leaders, the perception of Tennessee as a technology hotbed—or not—will change," he says. "It's simply not enough to have world-class research facilities. We have to have the commercial entities that can successfully translate research into monetary value."

Reprinted with permission from BusinessTN.