Atlanta economic development types have talked for 20 years about making Georgia a hothouse for biotech companies. Until the past couple years, it’s been just talk.

Consider: The state has no landmark biotech company. Including medical device makers, Georgia’s top 100 public companies, as compiled by The Atlanta Journal-Constitution, includes seven biotech firms. None has a market value of a billion dollars. By comparison, Yahoo lists 560 biotech and drug companies trading on U.S. stock exchanges, and 73 had market caps of $1 billion or more on Jan. 28.

Meanwhile, no Atlanta venture capital firm has more than three home-state life sciences companies in its portfolio. The three VCs often regarded as Atlanta’s leaders – Noro-Moseley Partners, Alliance Technology Ventures and Cordova Ventures – have a combined six local biotech companies among their holdings.

Not many outside VCs have been investing in Georgia biotech either. In the first nine months of 2001, according to the accounting firm PricewaterhouseCoopers, no Georgia biopharmaceutical company raised money from a venture capital firm, as opposed to individual angel investors. Four medical device and equipment companies in the state raised a combined $28.1 million in the first three quarters last year.

By contrast, in the same period 64 biopharmaceutical companies in California raised $842.3 million; 28 Massachusetts firms secured $282.2 million; nine in North Carolina raised $96.6 million; and six in Pennsylvania took in $91.7 million.

‘Formidable challenges’

“We have formidable challenges ahead of us,” says Mike Cassidy, president of the Georgia Research Alliance, GRA, a public-private consortium working to boost the economy through academic research. “But I don’t think there’s anything out there we can’t solve.”

The challenges include a dearth of early-stage capital, seasoned life sciences entrepreneurs and hotshot homegrown companies, according to a new study prepared for state officials by The Battelle Memorial Institute.

There are hopeful signs. In the past decade, the GRA has recruited 20 eminent life sciences scholars to the state’s six research universities. These brains bring dollars. Bioscience research grants to state universities from the National Institutes of Health climbed 48 percent between 1997 and 2000, compared to 31 percent growth nationally, according to the Battelle study.

Athens, home to the University of Georgia, has had a mini groundswell of bioscience startups in the past couple of years. Many of them are related to agricultural and veterinary research, and Clifford Baile has a hand in most of them. Baile, a GRA eminent scholar in agricultural biotechnology and distinguished professor at UGA since November 1995, is an investor, founder or advisor to 10 Athens bioscience startups.

Some building blocks in place

In Augusta, Georgia’s major state-funded medical school, the Medical College of Georgia, has doubled its research budget to $45 million in the past three years. A half-dozen biotech startups there are seeking funding, and a group of Augusta businesspeople is trying to raise an early-stage life sciences fund.

Georgia also has some nice building blocks in place: the Centers for Disease Control and Prevention in Atlanta, the Cancer Coalition launched by Gov. Roy Barnes to try to advance cancer research, varied specialties at universities and three life sciences-focused incubators.

More such blocks are in the works. Barnes has proposed a $3 million biotech seed fund modeled on the state’s $5 million Yamacraw Seed Capital Fund for IT and telecommunications startups. And starting around 1996, the GRA has gradually shifted more of its dollars toward life sciences, figuring the foundation for IT and telecoms is secure, Cassidy says. For this year, 72 percent of the $30 million Barnes has recommended for the GRA would go to biotech research, the biggest chunk in any year.

Of course, all this amounts to merely planting seeds. Biotech companies, like oak trees, are years in the making. With seeds in the ground, Georgia’s life sciences boosters now must tend them and hope they eventually bear fruit.