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Strides taken in life sciences, experts say: Industry panel: Thanks to ongoing efforts, Indiana has experienced serious progress as biomedical hotbed during last 5 years

July 23, 2007

Five leaders of Indiana's life sciences industry offered their perspectives at the Indiana Convention Center June 26 as part of the Indianapolis Business Journal's Power Breakfast Series.

The panelists:

Mike Arpey, managing director of global investment bank Credit Suisse's Asset Management Division and manager of the $73 million Indiana Future Fund for BioCrossroads, the state's life sciences economicdevelopment initiative.

Ron Ellis, co-founder, president and CEO of Lafayettebased Endocyte Inc., a biotechnology company focused on the treatment of cancer through receptor-targeted therapeutics.

Harry Gonso, a partner with Indianapolis-based law firm Ice Miller who leads its life sciences practice. He was Indiana Gov. Mitch Daniels' senior counsel and chief of staff from 2005 to 2006 and is a partner with the local venture capital firm Twilight Venture Partners.

Dr. Ora Hirsch Pescovitz, president and CEO of Riley Hospital for Children as well as the Indiana University School of Medicine's executive associate dean for research affairs.

Dr. Gus Watanabe, chairman of BioCrossroads, retired president of Lilly Research Labs and a director of half a dozen life sciences firms around the nation.

The discussion was moderated by IBJ reporter Peter Schnitzler. Following is an edited transcript: National competition: Is Indiana's life sciences industry gaining ground against competing states?

WATANABE: First of all, I think we should remember that we start with a strong base. There are a relatively few [areas] in the country-perhaps only one in fact, New Jersey and eastern Pennsylvania-that has as many life sciences R&D, commercialization and manufacturing operations in a specific location as we do here in Indiana.

You think of [Eli Lilly and Co.], Cook [Group] in Bloomington, Roche Diagnostics, Dow Elanco, three of the four largest orthopedic-device companies in Warsaw, Indiana. You add to that Indiana University-Bloomington, the medical school here in Indianapolis and Purdue University, and we have a tremendous amount of talent and activity already going on in life sciences.

We're building on that and trying to tell the story, trying to capitalize interactions between these various institutions spinning out companies, spinning out technology to start the companies. Building on that base, we start with strength, and I think we are, indeed, getting a lot stronger. We are gaining.

ARPEY: When we arrived here in 2002, Indiana ranked 37th among the 50 states in terms of life science venture-capital activity. Today, five years later, it ranks 21st. That's by a MoneyTree survey that's done annually.

Indiana has made tremendous progress. It has tripled the amount of venture-capital activity over that five-year period of time.

So you ask, "Well, gee, why is that happening? Was it just kind of the market? What brought us to this place?" When I trace it back, I think the root causes of it are in this room today. It's because you can get 500 people to show up and talk about life sciences and be concerned about life sciences in this state.

It's because we have a point of coordination in terms of BioCrossroads. It's because the universities are totally committed to the effort. It's because the corporate community is totally committed to the effort, and it's because now there is a funding source both in terms of the BioCrossroads Seed Fund, which is so important, as well as the Indiana Future Fund, which has really created the carrot, if you will, to help further that set of activity.

The news is good, the metrics are good, we're heading in the right direction. We're not there yet, but the early signs are very strong.

GONSO: I think Mike's right. You know, you make progress on the basis of individual efforts, and hats have to go off to Gus and the talented team from BioCrossroads.

You always have a tendency to try to compare yourself with the other states, and I think that sometimes that's helpful as a stimulator, but quite candidly, we ought to be working against our own goals.

We do, as Gus indicated, have some outstanding assets here. We've seen tremendous coordination and complementary activities engaged in by BioCrossroads and our universities. Other states are completely different than ours. We have to watch what they're doing.

Take a look at, for example, what happened in Florida. They had a horrific group of hurricanes hit that state and it created a windfall on their sales tax, throwing off $3 billion, so the state of Florida decides as an economic development matter that they want to get into the life sciences game. So they go to the business of trying to acquire outstanding research institutions in California and relocating them to Florida.

That's a completely different strategy than what we have here, but, nonetheless, Florida is trying to take advantage of their opportunities. California is doing the same thing. They're providing leadership in embryonic stem cell research, etc. We have to play our own game, too. Indiana's biotech evolution: BioCrossroads is now 5 years old. How has Indiana's life sciences sector changed during that time?

WATANABE: There are many ways it's changed, but let me just highlight a few where most areas are measurable. One, for example, is venture capital funding. When we organized BioCrossroads about five years ago, we were in the bottom quintile, the lower percent, of the United States as far as the amount of VC money operating within the state. Currently, we're at somewhere above the middle.

A good part of that money that's now working here in the state of Indiana, about two-thirds of it, is actually money from out of state. So we're leveraging other people's money to start businesses here in Indiana. During the past five years, there have been about 25 life-sciences-oriented companies that have received venture capital money within the state of Indiana, so that's one very important metric.

Another one is there's a lot more awareness I think with the universities about the opportunities of starting new companies, a lot more with entrepreneurial spirit. We're beginning to see more and more real examples of companies coming out of universities. I can mention a couple: CS-Keys, for example; Endocyte, which actually started before BioCrossroads, but that's a startup out of Purdue University technology; Marcadia Biotech, which I'm involved in, which comes from technology discovered at Indiana University Bloomington.

There are many more examples of that and I think we're going to see a lot more. And then I would just also say that although BioCrossroads can't necessarily take credit for all of this, there's a tremendous amount of investment occurring in Indiana in the life sciences in terms of capital investment, building of buildings, laboratories, manufacturing plants, etc.

Roughly $2 billion is currently at work building new operations, manufacturing plants and so forth, including about $900 million from Lilly that's being invested into a biotech, R&D and development center here in Indianapolis.

A lot of activities going on, many of which I think are attributable to BioCrossroads' initiatives, but others that are also going on just as part of the strength of the life sciences industry here.

ARPEY: We arrived in 2002. Let's just kind of do a before-and-after look. There were no venture capital investments in the state at all from the public pension plans. There were only two or three small venture funds that had life sciences exposure of any stage. There were no local venture capital funds focused primarily on life sciences. There was no seed funding. This is where things were before BioCrossroads got to work.

Today, you have our IFF managers seeing 500 potential investments over the last five years. We've invested in Indiana companies, $85 million has been invested in this fiveyear period of time. And $61 million of that has come from funds that are outside of the state. We've attracted capital into the state, to Gus' point, of $61 million into those companies. We've increased the seed funding through the BioCrossroads Seed Fund, which is really very, very important for the generation of young companies in the state.

There have been a whole new crop of science funds that started because of IFF and outside of IFF, which is a great thing. So, we now have 15 life science-focused venture capital funds present in this state. That's very exciting and we think that's a great sign of the times.

Maybe a visible way that we can see the market taking hold is the Suros [Surgical Partners Inc.] exit, which is a great accomplishment by Harry and his partners at Twilight. This was just an incredible job on their part to grow a company and sell a company. And let's face facts-nothing attracts more capital than capital that's been deployed well and successfully sold. That was sort of a landmark investment for the state. So this is a totally different landscape today than existed in 2002 because of BioCrossroads' activities.

PESCOVITZ: Another important thing to comment on is just the research facilities. The IUPUI campus has seen growth of nearly 3 million gross square feet in research and hospital space since the year 2003. That is just extraordinary. I would challenge anyone to go to any community and see that type of facilities growth that is in partnership to all of these other components that we're talking about. Startup investments: It takes years to develop a new life sciences business. What are the keys to attracting investors at the various stages of growth, from startup to initial public offering?

ELLIS: We have to have a long-term perspective on this initiative. A lot of progress has happened in five years. [But] this is a 30-, 40-, 50-year initiative. I've talked to a lot of people that say, "What's the key to raising capital as you go through varying stages?" [It's] really not a difficult answer. It's just a lot of work.

You have to talk to lots of people and you have to keep your story out there in front of people. In the case of Endocyte, I know one of our key investors, who ended up in the end bringing probably more money than anybody else, [during] the first meeting I met with them about investing in Endocyte they said, "No. We're not interested in doing any investing in your company."

So we came back a year later and we met with them again and then a year later, and then about the third meeting in the third year they started to put in money. It takes a lot of hard work and persistence to be able to build capital. It also is very helpful, though, what's happened in Indiana. When we were here 10 years ago, there was no way to get any money. Now with the BioCrossroads fund and firms like CID, it's a very different environment for raising money for life sciences than it was in '96.

ARPEY: When we think about what's necessary for a company to flourish in the state, one of the key considerations has got to be management team talent. Indiana is lucky because it enjoys lots of life sciences businesses that exist here. A lot of people who lead those large corporations look to be entrepreneurial. But we [also] constantly have to be looking at bringing people in.

One of the things that we're proud of with the Indiana Future Fund [is] a company that's been backed by a number of our VCs, a company that spun out of Lilly called CoLucid. Jim White [its CEO] is a person who was born and raised here in Indiana, and we brought him back home.

There's sort of a push and a pull that has to happen. The opportunity has to exist here to attract that management-team talent to come here. But also we've got to go out and have that management-team talent present within the state for it really to scale. So the more education that we can present about what it takes to be entrepreneurial, the more that we help people think about what's necessary to establish the intellectual property that's necessary to grow their companies, the broader that scientific platform is-these are the things that are going to help grow a company.

GONSO: Wearing my Twilight hat for just a moment, investors in the mainstream, they want to earn a reasonable return on risk. Some investors, like Dr. Watanabe, have psychic returns as well-in other words, they invest to improve the community.

The elements have already been mentioned by everybody. You've got to have a good idea, one that is protected with patent or other intellectual property protection and is very effective in the marketplace-that's what generates the sales and the income. You've got to have capital to support it and you have to have long-term capital, not only initially to get it started, but to go through all of the trials or whatever it may cost to take it from start to finish.

Then, most importantly, it's a work force element. But the point that I would like to make is, the key individuals that are spun off of institutions like Guidant or Biomet or Lilly, the people that have the gray hair, that have the experience, that can sit down and hold the hand of a young entrepreneur and tell them what to expect and what to avoid, those mentors are absolutely essential to success.

WATANABE: I would just reinforce the point of the ideas and the technology and remind everybody that these come mostly from universities, especially now we're talking about startup of young companies.

The areas of the country that have the most startups in the life sciences are the same areas that have the most [National Institutes of Health] grants from the federal government, and so we need to continue to support our research universities-IU, Purdue, Notre Dame-help them build their basic science departments and biology- and chemistry-related areas. This is where the ideas come from that are patentable, eventually some of which are commercializable and start companies. New economic development tool: How can the IEDC maximize the impact of its new $20 million Life Sciences Research and Development Growth Fund?

PESCOVITZ: The overall purpose of the life sciences initiative is really twofold: On the one hand, it is to promote human health. On the other, it is to promote economic health. So these two missions together are what we're really focused on.

There is a very big difference between the type of research that happens in academia and that which happens in industry. Academia is focused on both basic and applied research, whereas industry for the most part is focused on development. The differences between these two are very important because basic and applied research, for the most part, seems unfocused and the returns take longer to achieve. Whereas, in development, we see them right away.

And yet as Gus has said, we cannot have one without the other. A company like Lilly, if it focused all of its efforts on further marketing and development of a drug like Prozac, would be nothing if it didn't have the pipeline. So the purpose of universities and of the support of the Indiana state Legislature through the IEDC for the life sciences initiative is to support this pipeline. Therefore, the majority of the funds, the $20 million that we have recently been granted so generously by the state of Indiana, will be used both by Indiana University and Purdue University to grow this pipeline.

ELLIS: We've had a couple of awards with the 21st Century Grant Program. [At the time of] the first one we received, we were negotiating our first Series A Round and we were running out of money. I keep a piece of paper in my drawer that says, "$3,658.42." That's how much money we were running down to as we were trying to negotiate this deal with some venture capitalists.

They would call me every week and say, "Oh, how are you doing on cash?" and I'd say, "We're great, great, no problem, great." It was right in the midst of this negotiation that we, through our third attempt, finally got some 21st Century money, and that was very helpful.

With that $2 million that came in, since then the company has raised $80 million on top of that and [grown from] 10 people to over 60 people now employed at the company. But, most importantly, that money was used toward a particular product that's now being used in clinical trials. We use it with about 300 patients and that money was directly used to do the early development work with that program.

ARPEY: The universities are really key to this whole effort. Research and the funding of that research that would come from the state can't be done in a vacuum. Tech transfer is mission-critical to really growing those companies and getting the whole equation right.

We've seen great strides at IU over the time that we've been here again in coordination with BioCrossroads. Dean Brater has really opened up the doors to our venture capitalists, to a number of different groups to come in. We've hosted events at the medical school. We've been to the Bloomington campus. We've been to Purdue. Purdue with Discovery Park has really done a very nice job with tech transfer.

Part of what we're trying to do is to further that public-private partnership. One of the things that's great about Indiana is they're not just trying to throw money at the problem from the state level and just say, "That's the panacea, that's how we're going to solve the problem." Rather, they're bringing in corporate community, they're bringing in venture capitalists, and they're validating the science with having that entrepreneurial and that business aspect married up. What's going on at the research universities is informed by what the market requires so that we're not just talking about science projects. We're talking about things that will have commercial applicability in the future. That's what's going to grow sustainable companies within the state. And that's what we're really focused on fostering along with BioCrossroads.

ELLIS: There's a quote by Samuel Johnson, I love this: "Nothing concentrates a man's mind quite so wonderfully as the prospect of being hanged in the morning."

You think about this $20 million. The sweet spot for the money is just as the technology is coming out of the university and the initial company is being formed and you have two or three people who are full time trying to get [it] going. They're the people who are looking at being hanged in the morning if they don't get the capital.

For me having gone through this, that early-early company where there's just a couple of employees is the critical place where we could have a big impact investing that money.

GONSO: Let me add that $20 million isn't very much given the scope of things that we're trying to take on. $15 million is going to life sciences at Indiana University School of Medicine. $5 million is going to Purdue in advanced manufacturing.

I know that the governor and the Legislature wanted to have a lot more money going that way, but it just didn't happen. There were other competing demands in this legislative session. You've got to stay in the black in terms of the state's budget and finances and you've got to deal with the other issues that are facing state government as well.

Hopefully, this is just a good start. In real estate there's a phrase: "location, location, location." In life sciences and what we're talking about here, in my humble judgment, is that it's "jobs, jobs and jobs." You can identify a descriptor to that would be high-paying jobs. I think that's what we're all about.

PESCOVITZ: As we think about what this $20 million may do, I should mention that we asked for $80 million, but we're very appreciative that we got the 20. We should be in a position to think about the return on investment. It's been demonstrated that there is no other industry that actually returns a greater investment than that in life sciences research today, so it's a good investment.

But let me just give you some numbers about what we should expect out of that $20 million that's coming to us, so that you get an actual sense of return. On average it may take us a million dollars to recruit one average-level investigator that's not a senior investigator and that's not a starting scientist. We would expect that scientist to bring with him, or her, at least $2.5 million in direct grant dollars probably from federal funding.

In addition, we would expect another $1.25 million in indirect funding that helps us to support facilities and a research infrastructure. In addition, the NIH estimates that there is a 40-percent return on funds spent in basic research in terms of the advantages for human health, so that's another $1.6 million. In addition, that investigator is going to bring with him, or her, eight to 10 new people with jobs that are likely to come from another state, and all of those people are going to spend money in our community, they're going to pay taxes, they're going to make contributions to our schools, to our museums, to our sports events, to our boards.

So, on average, we should expect a minimum of a 10-to-1 return on that investment. And that doesn't even count the advances that we could expect in terms of improving human health and the quality of life of our citizens. So it's a great investment. Thank you for it. Fast-growing upstarts: What are some examples of the most promising young life sciences companies that are now taking root in Indiana and why are you so excited about them?

GONSO: [One example is] Marcadia, mentioned earlier by Gus, [who was] one of the founders, along with Richard DiMarchi out of Lilly. Gus is the chair as well.

What is exciting about Marcadia is not necessarily the fact that it has tremendous products designed for a very attractive and expansive market of obesity, hypoglycemia and diabetes, but, rather, it's what it represents. It represents great [intellectual property] coming out of Indiana University and a local industry that has been handled in such a way the private industry can commercialize it.

It's the ability to attract and keep outstanding talent in the sense of keeping Gus here after his retirement from Lilly and doing all of the things that he's doing. Richard DiMarchi has a tremendous staff down at IU Bloomington in the School of Chemistry-he's teaching all of these young kids the ways of the world down there. We're keeping these resources-and they could go anywhere in the world, they'd have a blank ticket if they wanted to-but fortunately they're staying here.

Moreover, we're attracting talent to help run Marcadia. They were able to attract a senior executive from Guidant who was stationed somewhere else and brought him back home, so to speak, Fritz French.

Just within the last month or so, Marcadia successfully closed a $15 million Series A Round and Twilight was an investor. As Gus mentioned earlier, there's this leverage of national investment, Frazier and 5 AM came in and were the lead investors, so it's wonderful having other people's money to help support the investment.

So, really, if you think about the poster child of what BioCrossroads and this life sciences initiative is trying to get done, it's Marcadia.

WATANABE: There are other very good examples. CS-Keys is another example of very good technology coming out of Indiana University. This is going to lead to diagnostic initially and may lead eventually to therapeutics.

The Indiana Health Information Exchange, which is another new company that was formed under BioCrossroads' sponsorship, that turns out to be probably one could arguably say the best medical informatics organization actually operating. It's helping patients, helping their physicians, health care providers take better care of them, coordinating the information electronically among hospitals initially within central Indiana. It's spreading throughout the state, and within a year or two, probably will go out of state, in the Midwest region. That's another example of starting a company based on tremendous technology out of Indiana University, the informatics strengths of IU and the Regenstrief Institute starting a company that's actually making a difference in terms of health care for patients in Indiana.

PESCOVITZ: It might be just worth mentioning that in addition to these incredible companies that are sprouting out of research that is taking place in a variety of places, in our industries and in our universities, we also contribute to products that are produced by major pharmaceutical companies.

Another type of an example is one of the drugs that's gotten the most attention in recent years, a vaccine for prevention of cervical cancer. Well, much of the basic research that took place for that vaccine took place at the Indiana University School of Medicine by one of our scientists, Darron Brown.

It's a success if it is contributing to someone else's industrial success not only when we grow a company internally. I also think that even when we lose a company to another state, Guidant, for example, it's great when we can attract people back. But I don't think we should view those as losses but rather as opportunities for us to fertilize the rest of the country. We get our name out there, we spread talent, and, of course, we're very good at stealing talent, so it's only fair that we should share it, too. Workforce development: In response to Harry's comment "jobs, jobs, jobs," how do we deal with the low percentage, less than 25 percent, of Indianapolis' work force that has a bachelor of science degree or higher? Is filling jobs an issue?

GONSO: We're part of the economy and a growing part, but we still have agriculture, we still have manufacturing. The heavy reliance on the industrial age is a thing of the past, probably. We see what's going on in Detroit with the automotive and the steel industries. Fortunately, we have the Toyotas and the Hondas coming in. But, nonetheless, our future is going to be built on transforming and preparing our work force.

That is often an overlooked aspect of what goes on in the state. We have an awful lot of talented, hard-working people here who just need a little bit of tweaking for their skill sets to maybe be able to adjust and take those manufacturing experiences and apply them in a manufacturing job to support the life sciences industry.

PESCOVITZ: I might just mention one particular project that Indiana University School of Medicine is engaged in which we're very, very proud of and we hope will yield great outcomes in the end. That is our relationship with the Crispus Attucks Medical Magnate Program here in downtown Indianapolis with an attempt to really try to engage inner-city youth-at an age where it really matters.

I first decided to become a scientist when I was in ninth grade. That's the time, or even before, when we really have to capture these kids. And so partnerships between industry and the community and the schools and the universities and the state are really critical to achieving that.

WATANABE: There's also a little bit of a chicken-and-egg or cause-and-effect phenomenon here as well, because the state of Indiana is actually an exporter of baccalaureate-trained people, particularly in the technology area.

They train here, [but] they go out of state. Part of the reason is there are not enough good jobs in life sciences to retain them. So we need to, in addition to continuing to train these people, we need to be creating these jobs by forming companies that are attractive and signing them up so that we will keep them here. That's another part of the solution.

Nanotech development: Please speak to the progress and inroads Indiana has made in nanotechnology and what is happening in capital support of nanotech? Also, what's happening to assure that nanotech products and progress are ecologically or biologically safe and is this helping to draw more venture capital?

GONSO: I can address the back-end phase of it. I'm not as close to the Purdue people as I am the IU people, but I do know that Purdue is in the process of developing a new seed, early-stage fund to address precisely that, the support of advanced manufacturing and nanotechnology. So that is not, obviously, a forgotten issue, but an opportunity many people in the state are looking forward to exploring.

PESCOVITZ: I can't specifically address the question, but I do think that it's important to note that collaborations between Indiana University, in particular the School of Medicine, and Purdue, in the area of nanotechnology, are really increasing.

We have a wonderful collaborative program in which we share grant funding between the two universities and in which we encourage applications of scientists between Purdue and IU to apply for competitive applications.

A significant number of those have been in the area of nanotechnology and their application to human health, so I think we're still a few years away from seeing this truly turn into medical practice in a global way. But I think its coming, and I do believe that the collaborative efforts between our two major research universities will play an important role in [our] getting there. National perception of Indiana: A Forbes senior writer recently described Indiana as, quote, "The Mississippi of the North." This same Forbes writer, who recently wrote about the transformation of Madison, Wis., in the life sciences, claims that any talk of real transformation of Hoosier life sciences is at best, quote, "premature". Why do these stereotypes exist and persist?

ARPEY: Well, let me take that head on. There's a perception out there that nothing good happens except if it happens on the coasts. Part of what we've done in the last five years is to stop having Indiana just be a flyover state.

We did that in a very conscious way in partnership with a lot of people to attract both national and local and regional players who are venture capital firms into this state. This is why, when we talk about these success stories that have happened here-when we talk about Marcadia-we talk about the way they're attracting national capital. We talk about CoLucid, and more than half of its money came from outside of the state from national firms. That draws attention to what's good that's going on in the state.

We [at Credit Suisse] have a global practice. We work with a variety of states all over the country, and I can tell you that what's going on in Indiana is very different, very powerful, and it's on a path to success.

We're never going to stop uninformed people from saying stupid things. And that's a stupid thing that was said. But what we can do is put points on the board, block and tackle, support the good activities that are going on at the universities and corporations here, and continue to stay the course.

One of the questions that you had posed to us is, what are the obstacles to further success? Just don't give up. You're on the right path here. We see it. We're committed to it. We've opened up offices here. We spend a lot of time here. We've invested a lot of our own money here. I lead our whole team's $20 billion of assets and I'm personally involved here because I believe in what's being accomplished in the state-and you should, too. Regional life sciences collaboration: Recently, BioCrossroads traveled to San Diego to participate in a life sciences conference. Please expand on this experience and the partnership or relationship between Indianapolis and San Diego.

WATANABE: Basically, the idea of the conference was to look at the future of the industry, biotech as well as pharmaceutical. How are the large pharmaceutical companies going to continue to do research and development and commercialization of their products?

As most people probably know, Southern California is probably the best discovery location in the world in terms of biotech-type of technology. They do it better there, and there are more companies there doing it than in any other part of the United States. No one can argue with that.

But there's a lot more to taking a discovery to the actual patient than just making the discovery. It's very complex. There are multiple steps. There's multiple kinds of expertise involved, including medical, development of the product, making it into a nice elegant pill or a sterile solution for administration in the hospital.

There are very complex things that have to be done regarding all of that, as well as regulatory, and then figuring out how you're going to commercialize all of that. Many of these specific kinds of expertise and talent are not present in places like San Diego, so they need partnership. They need help from other parts of the country in order to take these subsequent steps. The idea of the conference was to talk about how Indiana can partner with San Diego to help commercialize [their] inventions, [their] discoveries.

One other important part that I didn't mention is manufacturing. A lot of these products that are discovered in biotech centers such as San Diego are peptides or proteins, in other words hormones. Things like insulin, glucagon, growth hormone, parathyroid hormone, etc. These are very complex molecules that are very difficult to manufacture. Eli Lilly is one of the strongest companies in the world in manufacturing proteins. Cook Pharmica in Bloomington, which is a new company started by Cook Industries specifically for protein manufacturing, is another very good early example of a company focusing on manufacturing of peptides.

So, we in Indiana, can partner with San Diego to, for example, manufacture proteins and peptides even for the clinical trials. They are not even capable of manu facturing some of these drugs for their own clinical trials. They're just not set up to do that. So the question is, can we partner? Can we create some sort of collaboration to do these things to help take the molecule all the way to commercialization? And that's what the conference is about. And I think that's one of the areas where Indiana can really fit into the United States' life sciences economy and participate in a unique way, have our own niche.

Attracting experienced executives:

What does a company that has outgrown its current management team do to identify the individuals that will be necessary to take it to the next level?

ELLIS: When we started off with Endocyte, I thought the biggest problem was capital, and probably for the first three or four years, maybe even six or seven years, that was the big challenge. Now, I think the biggest challenge is finding in some of the key positions experienced people to fill roles in the company.

We are able to do it, but it takes time. I think if you're on the West Coast or East Coast, you could probably fill a position like regulatory affairs in maybe three months, but for us it takes six to nine months. There's good news and bad news to that. If you find somebody and get them out here, they tend to stay. You have very little turnover of people.

So you have to look locally and nationally and globally to try to find these kinds of people. You have to tell them the advantages of being here and a lot of advantages to living in Indiana, the cost of living and commute and great place to raise a family. So [once] you find people who are interested in those kinds of things and get them here, they'll stay. It makes a difference for the organization. Hoosier health: As we strive for more healthy paychecks, do Indiana life sciences businesses have any obligation to also strive for healthy citizens?

PESCOVITZ: The focus of industry is on the economic health and, to a certain extent, the focus of academia is on the human health. We have an obligation to both, however, and if you look at three decades in the 20th century, you will note that the average life expectancy increased from 47 years to 77 years almost exclusively secondary to improvements in research. So, if you extrapolate that to what the future holds, we should expect dramatic changes.

Another example is that death rates from cardiovascular disease and from stroke have decreased by two-thirds from the efforts of research. So the impact on human health, which we really haven't focused much of our discussion on today so I'm delighted to have this question, are really significant.

Of course, I think we would be remiss if we did not acknowledge the fact that Indiana is one of the least healthy states in the United States, and not because we have a different genetic makeup than the rest of the country. It's because of the fact we have a poorer lifestyle. We have an increased rate of obesity. We have an increased rate of poverty. We have an increased rate of smoking, and the impact of all of these environmental factors on human health is significant.

So if we only focus on the high-tech things and don't pay attention to the simple things that we could be doing, we really won't get the greatest economic gains that are possible.

GONSO: Obviously, I'm a big fan of the governor. I think at the end of his four years or eight years, whatever it may be, he's going to be known as the health governor of the country for a variety of initiatives.

He takes a lot of hits for daylight saving time and the [Indiana] Toll Road, but really he is providing outstanding leadership on reminding everybody we've got to stay healthy or get healthy. His INShape Program-you all probably have seen his ad on prostate cancer. We have a Rails-to-Trails Program.

And then of course this last legislative session, I think the thing that he's going to be really remembered for is the passage of the health insurance for our working poor. That is just a tremendous benefit. It helps people get healthy, stay healthy. It provides a lot of money for immunizations for young kids that don't otherwise get it. So that is one thing that the governor and the state administration are trying to do.
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