Here’s the hypothesis: If you mix a few hundred scientists with a lot of money, something good will happen. That theory will be tested soon in Northern Virginia. The Howard Hughes Medical Institute plans to spend $500 million over 10 years on a state-of-the-art research center in Loudoun County that will host some of the best minds in the life sciences. Backed by the Maryland-based Hughes Institute’s $12.4 billion endowment, the center could grow into one of the biotech industry’s premier research centers.

The Howard Hughes Medical Institute plans a major new research facility at the Janelia Farm in Loudoun County. Photo by William K. Geiger

Its biggest impact so far, though, is on the hopes of Virginia’s fledgling biotechnology industry. The Hughes facility won’t open for at least four years — its initial focus will be on the new field of bioinformatics, which taps the power of computers to analyze huge quantities of biological data — but it’s already a tonic for believers in the state’s biotech potential. "The significance of the Hughes Institute I don’t think can be overstated," says Jerry Coughter, directory of biotechnology and medical applications at Virginia’s Center for Innovative Technology. "Now we have a real thing to point to. These people could have gone anywhere, and they chose to come here."

For now that endorsement is enough. As big a deal as the Hughes project is, though, it’s just one step in a drive already underway in Virginia and around the country to grab a share of the biotech sector that is starting to flourish after years of disappointing results. Research universities such as Virginia Tech and Virginia Commonwealth University are aggressively beefing up their life-sciences programs. There are new or expanding biotech research parks in Roanoke, Richmond and Northern Virginia, and new efforts to transfer whatever breakthroughs come from research done here to the private sector.

Virginia’s biotech potential unexpectedly caught the spotlight this summer during the controversy over stem cell research. The Jones Institute for Reproductive Medicine in Norfolk, which produced the first test tube baby 20 years ago, is one of just a few research centers in the U.S. that have created stem cells from human embryos (Story page 18). While their applications could be dramatic and extensive, a tremendous debate is roaring over the ethics of killing the embryos after removing the stem cells.

Stem cell research and the raft of cures it might some day advance are just one part of the biotechnology business that seems to be jump-starting after years of languishing. Revenues of biotech companies in the U.S. have nearly tripled since 1993 from $8 billion to $22.3 billion in 2000. Employment over the same period has more than doubled to 162,000 people, according to Ernst & Young. New drugs, therapies and technologies are pouring into the market: about 9,000 biotech patents were granted in 1999, the most recent year available, up from 4,000 in 1995, according to the U.S. Patent and Trademark Office.

Dr. Adam Katz of the University of Virginia is looking to fat cells as a less controversial source of stem cells. Photo by Joe Mahoney

Virginia has about 180 biotech companies and the number is growing, says Mark Herzog, director of the Virginia Biotechnology Association. Nearly half are in Northern Virginia and many of the rest are near universities in Richmond, Charlottesville and Blacksburg.

Research facilities like the Hughes project are valuable tools for building laboratory clusters that biotech firms depend upon. Look at how the National Institutes of Health in Bethesda and Johns Hopkins University in Baltimore helped build Maryland’s biotech sector of more than 300 companies. "Companies of a particular type like to locate in an environment where there’s more of the same going on," says Thomas Cech, president of the Hughes Institute and a co-recipient of the 1989 Nobel Prize for chemistry.

Founded in 1953, the Hughes Institute employs about 350 researchers selected from faculty at research universities and academic health centers around the country. The researchers are hired for five- or seven-year terms and work at institute labs while staying on the faculty of their host institutions. They work in a wide range of areas, such as genetic studies into the causes of diabetes or Alzheimer’s, or finding ways to use genetic engineering to create hybrid species from previously incompatible plants. Several besides Cech have won a Nobel Prize, most recently Eric R. Kandel, a researcher at Columbia University who last year shared the prize for medicine for research on the human nervous system.

The 281-acre Janelia Farm site in Loudoun was chosen because it’s big, close to Dulles International Airport and Northern Virginia’s IT expertise, and not far from the Hughes headquarters in Chevy Chase, Md. Cech says the presence of so much computer expertise in the region will help support the center’s work in bioinformatics. "We need to hire people who are computationally savvy and inventive, and there are such people in the neighborhood," Cech says. Cech points out that the new center’s main purpose will be advancing science, not building the local tax base, but the latter will probably happen. "There will be a flow of intellectual property, patents and novel ideas coming from the scientists and that may very well spawn biotech companies," he says. "It’s important to allow that to occur, because otherwise you’re just an ivory tower institution."

Virginia is taking some steps to help its universities. In July 2000 the state created the Virginia Bioinformatics Institute at Virginia Tech, and in May the institute received a $2.5 million grant from the Commonwealth Technology Research Fund to support its research into developing gene-based medicines and disease-resistant crops. The new institute is growing fast. It has drawn $10 million in funding and now employs 29 people — a figure expected to double in the next year, says its director, Bruno Sobral. "We’ve already got relationships with European [research] organizations. They’re strategic partnerships that allow us to deploy a platform more quickly because we don’t have to do the whole thing ourselves." It is also partnering with Sun Microsystems and will be announcing other corporate partnerships later this year. "Our primary product is intellectual property," Sobral says. "The way biology is going if you don’t do these kinds of [programs] for innovation and technology transfer, you can’t succeed. Traditional academic structures just weren’t designed for this." The state also gave grants to support public-private research, such as a $3 million grant over three years to a joint effort between Virginia Commonwealth University, George Mason University and Inova Health Systems for the study of cancer genomics and the development of diagnostic tools.

A second major initiative to bridge research and the private sector is in Roanoke. The Carilion Biomedical Institute, founded last year with a $20 million grant from Carilion Health System, funds research and development at the University of Virginia, Virginia Tech and Carilion Health System. The institute is supporting research at U.Va.’s Medical Automation Research Center into the use of robotics in medicine, such as automation of lab processes or developing tools to isolate DNA molecules, which could speed the discovery of DNA-based drugs. The institute also backs work at Virginia Tech’s Optical Sciences and Engineering Research Center, which is working on developing laser-surgery systems and nicotine patch-like devices that can diagnose medical conditions or determine drug levels in the body.

It also doles out business advice in areas such as market analysis, something scientists don’t do well and have little time for, says institute President and CEO Dennis Fisher. "Getting technology out of the universities is not trivial. Many people have blunted their pick on that one," he says. Carilion’s first company, Charlottesville-based BioPhile Inc., was launched in January. It makes automated freezers to store and retrieve medical tissue, blood and DNA samples.

Building the biomedical sector in southwest and central Virginia is one of the institute’s primary goals. It will be making jobs itself in a few years when it becomes the first tenant in the 110-acre Riverside Centre for Research & Technology in downtown Roanoke. The institute is building a $10 million, 50,000-square-foot facility there with office and incubator space as well as research and testing areas. The institute and companies associated with it are expected to create at least 200 jobs over the next several years. Roanoke leaders estimate investments of $175 million over the next 15 years to build out the new park.

In Richmond, Virginia Commonwealth University will open its new $28 million life sciences building this fall. The 132,000-square-foot building has 44 laboratories as well as lecture and classroom space and will house the Department of Biology and the Center for Environmental Studies. Next door to VCU’s Medical College of Virginia, the Virginia Biotechnology Research Park has six buildings and two more under construction. It has about 600,000 square feet of space and tenant companies working in areas such as genetics, biopharmaceuticals and the development of biosensors. One of its new tenants is the United Network for Organ Sharing, which is beginning construction of a $15.5 million facility.

Even with these new parks, Virginia still will be a relative small fry in biotech. It won’t be able to compete with the major biotech regions in places such as San Francisco, San Diego and Boston. Robert Skunda, president of Richmond’s biotech park, is optimistic about the park’s future but says its growth so far has stayed in its boundaries. "For the most part it hasn’t extended to the neighboring business community," he says. "So that’s the real challenge here if we’re going to become a successful competitor and not simply grow from within." Getting the projects like the organ network building and the Hughes center, he says, "validates what we have to offer. Much of this business is ... a function of demonstrating that you have legitimate credentials."

In terms of nurturing a biotech industry Virginia fares well in some areas though not in others. It’s one of 10 states with staff dedicated to working with the biotech industry, for example. And it has funneled $2 million of the money from its share of the $206 billion tobacco lawsuit settlement to help fund the Blacksburg-based CropTech, a for-profit firm trying to develop a genetically altered tobacco plant for use in making pharmaceuticals. Yet Virginia does not have a publicly funded venture fund that can invest in biotech-related companies, something 27 states have established. North Carolina, for example, has put $10 million into the NC Bioscience Investment Fund and another $15 million was raised privately. Wisconsin has devoted $50 million of its state pension funds to biotech investments through two venture capital firms. California, which has the largest share of the country’s biotech industry, is investing $500 million of its pension funds in biotech.

There are Virginia-based companies that could use that kind of money. BioCache, a new biotech firm formed in Richmond with technology licensed out of the Medical College of Virginia, is looking for $2 million. It has a lead investor in the Charlottesville venture capital firm Tall Oaks Capital but needs more and has to go outside the state. BioCache CEO Sandy White says Virginia lacks venture firms with the know-how to invest in biotech. "It is complicated," he says. "A lot of times you walk into these funds, and they don’t have anybody who understands science at all." Biotech firms in the mid-Atlantic did attract slightly more funding in the second quarter, though — nearly $38 million. That’s 5 percent of the total invested, up from 3 percent in the previous quarter, according to the Mid-Atlantic Venture Association. Coughter of CIT says some venture firms can’t shake their desire for the quick exits that made dot-com investments so much fun a few years ago. "If an investor has even heard about biotech, one thing they remember is, ‘$500 million and 15 years before you get a drug.’"

Such skittishness is understandable. Not only is the risk high for investors, but the speed of discovery is overwhelming even for those in the field. "Even for us it has come in a much more profound way than we expected and much more rapidly," says Thomas Huff, vice provost for life sciences at VCU. The Human Genome Project launched in 1990 by NIH and the U.S. Department of Energy was expected to take 15 years to map human DNA, but a working draft of the human genome sequence was completed a year ago, about five years ahead of schedule. BioCache’s White, who worked more than 20 years with agriculture biotech leader Monsanto Corp., says the next decade will see an explosion of advancement in life sciences. "Five years ago it wasn’t even possible to do what we’re doing right now," he says. "People can’t even imagine what’s going to come out of this."

How much of this will happen in Virginia? To hear some talk it seems like the biotech revolution will be too big to avoid, which sounds a lot like what they said about the Internet a few years ago. Still, the Hughes project is a big plum, and it could help Virginia pull its weight in building the metro Washington area into a major biotechnology cluster when paired with Maryland’s DNA Alley. And Virginia does have reputable research universities that could launch smaller clusters of biotech firms. Today, though, the drive to build Virginia’s biotech future seems fueled as much by ambition as by the fear of falling behind.