Elk Run seems to have all the right stuff
Pine Island park wants to duplicate superstar pattern
By Matthew Stolle
So you want to start your own biotechnology park?
The group of investors and entrepreneurs behind efforts to build the Elk Run biotech project have yet to reveal all of what is on their drawing board, but the announcement of a venture capitalist company, Burrill & Co., now in the mix, it appears that the biotechnology park 15 miles north of Rochester will be moving ahead.
Not a lot is known about what will happen next. But we do know one thing: The landscape is littered with start-up causalities and biotech wannabes.
Biotech experts point to at least three main ingredients needed to create a major biotech superstar, say, like Virginia’s Biotechnology Research Park, which has 2,000 scientists, researchers, engineers and technicians housed on a 32-acre downtown campus.
"The thing about biotech parks is that there is a long time to market. It’s not like they form and next day they’re kicking out product. But what they do is they form and begin to create jobs," said Dale Wahlstrom, CEO of the BioBusiness Alliance of Minnesota, an organization that promotes bioscience-based businesses in the state.
One key component is access to collaborative, leading-edge academic institutions. Research Triangle Park in North Carolina, for example, is located within a half-hour’s drive of three major academic institutions — the University of North Carolina, Duke University and North Carolina State University. The University of Minnesota and Mayo Clinic would both fit the bill in Elk Run’s case.
"You need to have access to academia, because there are certain fundamental skills and infrastructure that typically you can only get from an academic sector," Wahlstrom said.
The second ingredient is what Wahlstrom calls "domain knowledge." These are people, primarily in the private sector and academia, who have extensive know-how and understanding of the industries that the park is focused on.
Two areas in which Minnesota has an "unbelievable amount of domain knowledge" are medical devices and renewable energy.
And last but not least is an acceptable business environment, a term which covers a full range of financial issues ranging from tax policy to loan programs and venture capital.
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A critical piece of the biotech park puzzle appears to have fallen into place when San Francisco investor Steve Burrill agreed to put as much as $900 million toward funding firms for the planned development in Pine Island. Combined with the money developer Tower Investments says it is investing into the project, that brings to $1 billion the amount people say is being committed to the project.
Burrill is no stranger to Minnesota. The venture capitalist was the commencement speaker for the University of Minnesota’s College of Biological Sciences last spring. Robert Elde, dean of the U’s biological sciences college, calls Burrill, a "person of substance" and a "very big player," who has been involved since the dawn of the biotech industry.
"He’s from Wisconsin originally, and he’s been dying to get something going in the Upper Midwest, and he really believes this is the next place for things to happen," Elde said.
Elde said the biotech revolution in many ways resembles the technology revolution in which search engine and social networking companies were engaged in a mad scramble for commercial supremacy.
Like the tech shakeout, the biotech industry has had its fair share of start-up companies fall by the way side. Oftentimes, they fail because they run out of cash.
The significance of Burrill’s involvement is that it "dramatically increases the number of times that the roulette wheel can be spun," Elde said. "There are going to be a lot of them, and that kind of money will really galvanize the competition to get that money."
Biotech experts say that proximity to Mayo Clinic was no doubt a factor in the location of the proposed Elk Run. Mayo has indicated it could participate in the venture, but has not signed any deal with Tower.
Mayo Clinic declined to make Eric Wieben, the program director for the Minnesota Partnership for Biotechnology and Medical Genomics, the partnership forged between Mayo and the University of Minnesota, available for comment.
Biotech experts at the U said they were intrigued with the site near Pine Island, noting that the location was closer to Mayo than the Twin Cities.
"In a certain sense, it’s an open field down there, literally and figuratively," Elde said.
One expert wondered whether it might be too far off the beaten track.
"It’s like trying to strike a compromise, making it halfway," said Marc von Keitz, director of the Biotechnology Institute in the Twin Cities. "It might be too far away. Again, I’m not familiar enough with the geography, but it would definitely be a concern that I have."
Experts say Minnesota has been in "catch-up" mode in the biotech race, but they said the Elk Run project has the potential to be a game-changer.
"We’re not a very big player yet, yet something like this ... It’s hard to imagine how we would get to be a big player without something big happening. And this, in my judgment, is something big that could help us move in that direction," Elde said.