Hawaii hitching
a ride on a mouse
A cloning breakthrough at UH has
By Helen Altonn
become the catalyst for an effort to grab
a share of the growing biotechnology industry
Star-BulletinHawaii hopes to cash in on a biotechnology industry estimated to reach $500 billion in the United States by 2020.
A recent Biotechnology Business Forum signaled the start of a University of Hawaii-government-business partnership to make it happen.
Michael Harrington, interim director of the Hawaii Institute for Tropical Agriculture and Human Resources, said he figured Hawaii in the next two decades will have more than 8,000 employees in biotechnology enterprises valued at more than $7 billion.
"That was B.M. -- before mouse," he said, referring to the successful mouse-cloning by UH anatomy and reproductive biology professor Ryuzo Yanagimachi's team.
The forum was the first event sponsored by University Connections, launched in December by UH to develop entrepreneurism among knowledge-based industries and create spinoff companies. Co-sponsors were City Bank, the Hawaii Venture Group, LLC, ProBio Inc. and Venture Consulting Group Inc.
The growing interest in a biotechnology industry to spur the state's economy was reflected in the diversity of the conferees.
About 75 to 80 percent of those at a biotech conference in February were from the university, said Alan Teramura, UH senior vice president for research.
This time, however, 85 to 90 percent of those in the meeting room at the Kahala Mandarin Oriental Hotel were nonuniversity people, he pointed out.
They included attorneys, representatives of Bishop Estate, state Employees' Retirement System, state agencies, legislators, accountants, money managers, venture capital and banking people.
"I'm amazed," Harrington said. "I never thought a year ago we would be doing what we're doing."
Describing UH developments in molecular biology, Harrington said, "People here have been working in biotechnology for 20 years. Fifteen or five years ago no one would listen. The time is right."
He said "millions and millions of dollars are to be made" from genetic engineering to increase food production with better-quality, disease- and pest-resistant crops.
Yet, Harrington and others cited many obstacles to commercializing biotechnology research, from import restrictions to lack of venture capital.
John Stiles, technical director of Integrated Coffee Technologies Inc., said his group is concentrating on the development of caffeine-free coffee and tea.
If they bring a plant into Hawaii to work on, it has to go into a quarantine greenhouse for one year, he said. "In California, you can work with a plant the same day (it arrives)."
Stiles also pointed to "a perception that it's very difficult to do business in Hawaii." It's easy to get local capital on property but not on biotechnology or high technology, he said.
Courtney Brown, president of the Hawaii Venture Capital Association, said he's started a private Venture Consulting Group to guide new businesses and connect them with "angels" for possible financing.
He explained in an interview: "It's that people think there is nothing here to invest in other than real estate.
"There is a perception that businesses can't thrive or do well in Hawaii, so they go somewhere else. I think we're making some inroads in overcoming that."
If either Bishop Estate or the state retirement fund invested just 1 percent of their funds in Hawaii businesses, Brown said, "it would make a real difference in what is happening here."
Bill Richardson, who runs HMS Hawaii, a venture capital fund, thinks the situation will change as he and others move forward with their funds.
"West Coast venture capital funds will get to know us and relationships will be built between Hawaii funds and Silicon Valley funds so they would trust us to be the lead for some of these, and be more open for companies staying in Hawaii."
Richardson said his company feels "we need to have our fingers out in geographic areas like Hawaii, Arizona and New Mexico. But we have to have at least one foot in Silicon Valley because that's where large follow-up investments will come from."
Bradley Mossman, deputy director of the state Department of Business and Economic Development and Tourism, said the Hawaii Strategic Development Co. was set up to try to make more capital available.
It has a little more than $5 million out in partnerships to fund various start-up projects, he said. The agency also has capital loan and innovation loan programs and is supporting incubator facilities through the High Technology Development Corp. and Natural Energy Lab at Keahole, on the Big Island, he pointed out.
Mossman said the state is trying to develop a larger venture capital industry by encouraging local investors to get into that area and leverage funds available from outside sources.
"Once people become familiar with the real work that goes on here in technology they're impressed," he said.
Teramura said future business forums probably will target biotechnology, information technology and health sciences, and they'll focus more on the private sector and needs.
It's estimated that major biotech companies in the next 10 years will each spend about $1 billion in research and development, Teramura said.
"That's not all going to happen in company labs ... There is huge potential out there."
