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Tuesday, November 20, 2001

By Dan Fitzpatrick, Post-Gazette Staff Writer

The University of Pittsburgh and Carnegie Mellon University yesterday unveiled $600 million plan to build up Pittsburgh's biotechnology industry, an effort they said could create more than 5,000 new jobs over 10 years.

The 153-page report, part of an application for $40 million in state biotechnology funds, pairs CMU know-how in computers and information technology with Pitt's medical expertise, extending far beyond any collaboration to date between the two schools.

Dubbed "Pittsburgh BioVenture," the plan asks local researchers and companies to focus on drug discovery, therapeutic strategies for neurological disorders, tissue engineering and medical devices. It also calls for spending millions on constructing new labs, hiring star researchers, assisting biotechnology entrepreneurs, developing local management talent and attracting new companies to the region.

"Six hundred million dollars seems like a king's ransom to invest in university research, but that is what it takes to be a leading region in this field," Carnegie Mellon President Jared Cohon said. Other parts of the country, he said, have already raised similar amounts, he said, and "we, in a very significant way, are already playing catch-up."

The day-to-day job of running the program would belong to a new nonprofit known as "Pittsburgh BioVenture/Life Sciences Greenhouse."

"The potential benefit to the region is huge," Cohon said. His biggest concern, though, is being able to raise enough money to implement the plan.

Yesterday's release of the Pittsburgh BioVenture plan was the first step in a massive fund-raising campaign expected to pass through foundations, the federal government, local corporations and the state, which this year set aside $100 million in tobacco settlement money to create "life sciences greenhouses" across Pennsylvania.

Pittsburgh BioVenture wants $40 million from the tobacco fund, but has to compete with other parts of the state to get it. Last week, a Philadelphia-based group of university and business officials asked the state for $45 million, and another proposal is expected soon from Central Pennsylvania.

Gov. Mark Schweiker wants to release the $100 million early next year.

By then, the framework for Pittsburgh BioVenture should be in place. As an organization, Pittsburgh BioVenture will have at least nine employees, including a CEO. Its total budget, according to the BioVenture report, would range from $1.3 million to $1.5 million a year.

In addition to predicting an increase in jobs, the plan also predicts it will produce 90 new start-ups and lure 25 existing biotechnology companies to the region in the next decade.

BioVenture's first priority, and biggest expense, will be real estate.

Of the $600 million proposed in yesterday's report, $270 million would be spent on new university buildings. Both Pitt and CMU want the new buildings because federal money for so-called "basic" research typically goes to big labs headed by big-name investigators. Pitt and CMU believe they need world-class facilities to attract big-name researchers, who, in turn, will attract large amounts of federal money.

To that end, Pitt is planning a 300,000-square-foot biomedical research building along Fifth Avenue in Oakland. It also wants to build a nearby "biological annex" of 30,000 square feet. At Forbes and Morewood avenues in Oakland, CMU is planning a 300,000-square-foot "Morewood Life Sciences Complex," Together, the three buildings would house much of the biomedical research associated with Pittsburgh BioVenture.

The plan released yesterday also calls for a large, undefined "Research Park" and an $8 million, 50,000-square-foot biomedical incubator located in the Oakland area. Potential locations include Panther Hollow, the Syria Mosque site, a set of old warehouses near Craft Avenue, the Pittsburgh Technology Park or the South Side.

Another big part of the plan is a $206 million "opportunity fund" that would be used to attract and retain faculty at the two universities by offering them lucrative start-up packages or endowed chairs. In 10 years, according to yesterday's report, the work of Pittsburgh BioVenture could result in the hiring of 55 bioscience faculty members, with start-up packages averaging $2 million apiece. Some of the "opportunity fund" money could also be used to identify and reward young research stars, thereby encouraging them to stay in Pittsburgh.

The rest of the $600 million would be used for a variety of smaller expenditures, among them a "seed" fund for young companies, a "leasehold improvement" fund that would be used to renovate office space, and a fund that would establish partnerships between universities and companies, a fund that would identify and nurture young entrepreneurs, a fund that would support research projects at Pitt and CMU, a marketing fund, and a fund that would help biotechnology companies find new space.

Among the details still to be worked out are how the universities might share the proceeds generated by BioVenture, and how much total university money will be pledged to the effort.

"This certainly is a very ambitious initiative, and one that has the potential to pay dividends for the region for a long, long time to come," Pitt Chancellor Mark Nordenberg said.