IEDC: Indiana: A Bioscience Centre of Excellence




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Video title: IEDC: Indiana: A Bioscience Centre of Excellence
Released on: January 01, 2008. © PharmaVentures Ltd
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  • Summary
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In this interview, which took place in Brisbane at AusBiotech 2007, Fintan Walton talks to Stephen Patillo and David Boncosky who are both Directors at Indiana Economic Development Corporation (IEDC). Stephen and David talk about how IEDC helps companies to establish themselves in the US state of Indiana, and how Stephen runs the overseas office for Australia and New Zealand. They discuss the types of companies typically assisted and highlight Portland Orthopaedics as a good example of one of their clients. The benefits of having operations in Indiana are discussed, including the region’s ‘vibrant biosciences ecosystem’.
The types of companies The Indiana Economic Development Corporation is attracting to Indiana
Fintan Walton:
Hello and welcome to PharmaVentures Business Review here in Brisbane, in Australia. On this show I have Stephen Patillo and David Boncoskyboth from the Indiana Economic Development Corporation, welcome to the show.
Stephen Patillo:
Thank you.
Fintan Walton:
On this show what I want to cover is the roles of both of you in the Economic Development Corporation of Indiana and specifically for you Stephen what is a US guy working for the Indiana Economic Development Corporation doing here in Australia?
Stephen Patillo:
Well I run an overseas office for the Indiana Economic Development Corporation. I cover Australia and New Zealand. I've been here for five-years prior to that I was on the Indiana Office in Singapore covering South East Asia for about four-years and my job is to find leads to find companies who are heading to North America and in this conference life sciences companies and medical device companies which is why David has joined me who will work with us to find a way for them to find a home in Indiana for their North American headquarters and then manufacturing. So we go out and find the leads and develop relationships at the highest levels, the CEO's of all the companies that you and I know well and try to find a way for them to go to Indiana instead of a neighboring state or one of the states in the coast.
Fintan Walton:
There are a lot of companies as you know emerging here in Australia what type of companies are you actually attracting because there are very early stage companies and the companies that are maturing, give me some examples of the types of companies you've managed to attract to go to Indiana?
Stephen Patillo:
It's a very good question, actually you want to get in an early stage but not too early because your resources are too limited to work at really the university level, we do sometimes but really we are looking for people who are coming into Phase I and Phase II in the pharmaceutical space and in the devices space those that have been successful in raising some venture capital in Australia or internationally and are starting to look at very late stage design and FDA approvals and manufacturing and we are looking for those device companies and those pharma companies that fit very well with our expertise in Indiana particularly those pharmaceutical expertise that we may have and the device expertise that we may have. The best examples would probably be in orthopedics industry where virtually all of the orthopedics companies who are in Australia, New Zealand who are manufacturing or developing components or parts for that have some relationship in Warsaw, Indiana which is of course well known as the orthopedics device capital of North America with the world and also in other areas in Indiana where that expertise exist.
Fintan Walton:
So it's important to identify specific industries that can fit into the Indiana, I suppose clusters that have been have developed within Indiana itself?
Stephen Patillo:
That's exactly right.
How does IEDC help companies to establish themselves in the state of Indiana?
Fintan Walton:
Okay. So David a question for you work very closely obviously the Economic Development Corporation works very closely with the state you are sponsored by the state largely?
David Boncosky:
Correct.
Fintan Walton:
But there is some additional commercial sponsorship, so how does then the Indiana Economic Development Corporation work to try and attract companies like Australian companies or companies from outside the US into the state of Indiana?
David Boncosky:
Well as far as attraction I would say that there is a marketing effort both in the US and then international and Steve is part of that marketing effort and then when a company expresses interest my biggest goal in life is to not waste people's time, so I want to understand what that company needs. We have a very vibrant life sciences eco system in Indianapolis, Central Indiana in the state do we have the right assets to support your business be at logistics, be at manufacturing whatever you are looking for whatever expertise you need. I look at myself as almost as a tour guide because I was meeting with one smaller Australian company and he said you know the US is a pretty scary place, it's a big market and we are just a little company so he doesn't just needs state incentives and grants and money he needs contacts and he needs confidence.
Fintan Walton:
Sure, because I suppose you know one thing that particularly companies outside of the United States automatically think of places like California or State of Massachusetts and the East Coast and West Coast Indiana is clearly not in either that's right in the middle of America, so getting that message across to companies outside the United States may be even inside the United States is a tough task?
David Boncosky:
It's getting a lot easier, we are winning quite a few life sciences jobs, we've also won quite a few auto manufacturing jobs. I would say the only in life sciences the only place that we are still challenged and we might always be challenged is probably venture capital, but every other aspect cost of living, quality of manufacturing, educated work force, standard of living et cetera we compete very nicely.
Fintan Walton:
Okay, so going back to the same point Stephen made is you have to talk with the right companies to come into Indiana.
David Boncosky:
Yes.
Portland Orthopedics as a good example of one of their clients
Fintan Walton:
So Stephen, you said your remit is largely within Australia and New Zealand does it extend outside that as well or is just purely Australia and New Zealand?
Stephen Patillo:
No it's Australia and New Zealand but we do there would be time for as you know we see each other at BIO very frequently and BIO is a major focus within the US where the overseas representatives around the world for Indiana we have similar responsibilities we sometimes travel with delegations like I do who go the state before going to the conference and meeting with our Governor or our Secretary of Commerce to talk about closing deals that they've looked at during the visit it's those companies going into the North America.
Fintan Walton:
Just coming back to part of the question I've asked last time which was really looking at examples of companies when we've talked in the past you've actually listed some specific companies that you've managed to move over may could you tell us why they in the end choose Indiana?
Stephen Patillo:
Probably one really good example would be Portland Orthopedics run by David Sekel, who is the CEO of Portland. David and I have lunch with him in Sydney on Thursday before we came to Brisbane and he is doing about $2.5 million deal with the contract manufacturing in Warsaw, Indiana with one of our contract manufacturers there and essentially the way that we were able to attract him wasn't really as David said really weren't through incentives we really didn't give away any tax payer dollars or anything like that it was the centre of excellence that existed in Warsaw. The cost of producing his products in Warsaw, Indiana is only one quarter what it cost for him to produce that in New South Wales. Now he has design engineers who actually build much of the product and get a lot of the development in intellectual property he is still an Australian company, he still paying taxes in Australia but he is making his product in Indiana, so our advanced FedEx hub, his products travel into the states through the air transport hubs in the United States in very advance they come back to Sydney for testing, for quality assurance testing and then they are packaged and send back to North America and distributed throughout North America and he has sales rep throughout North America to handle that. So it's actually the content of his products are partly Indiana and partly New South Wales, Australia.
Fintan Walton:
So why is it cheaper to produce the goods in Indiana?
Stephen Patillo:
Variety of reasons, the main one you have to ask David for getting that level specifics. But our understanding is that the main cost advantage is the centre of excellence is there. The skilled labor pool that is so large and then the economy scale that comes from using a contract manufacturer where he uses expertise really in the design and development and so forth and then all of the later stage including the manufacturing really is just so fast competitive and the infrastructure is there to do that in Indiana instead of doing that in Australia. So it's really a win-win. His company is growing very rapidly part of that growth and part of that profitability comes from the centre of excellence, the high level of quality manufacturing and the low cost of doing that or the lower cost of doing that in Indiana. So he is one good example and there are many others as well but that would be wonderful.
The benefits of having operations in Indiana
Fintan Walton:
So going to you David, I mean there are lots of similar types of companies obviously in the United States outside Indiana is the Indiana Economic Development Corporation attracting companies from within the US into Indiana as well?
David Boncosky:
Well one of the I am trying to make it a less of a secret is that Indiana actually is the fourth largest employer of life science jobs in the United States, which people like around Indiana where is it and what how are you employing these people or Eli Lilly is pretty good place to start but Warsaw Indiana, Bloomington Indiana with that we've got the number one private catheter manufacturer in the world. We had an American company with locations in four different states and he wanted to consolidate everything in the one area they wanted our pharmacists so we graduate 900 pharmacists every year and they wanted our distribution, logistics and then they also wanted software and like manufacturing. So we had all four of those and at the end of the day of course we can offer tax incentives but we don't get to that conversation unless we can first satisfy their businesses.
Fintan Walton:
Right, so it's not just a matter as we were saying earlier, it's not necessarily a matter of money with more around the skill sets, economic scale those sorts of issues?
David Boncosky:
When I meet with the company 90% of my work is explaining our eco system and introducing them with the right people and proving to them that Indiana can support their business. And if they can't then we don't even get to incentives because we don't, I don't want to waste their time they should go somewhere else.
Great opportunities in New Zealand
Fintan Walton:
Right, and going back to you Stephen with the companies here, one thing about Australia is as you know I don't need to tell you because you've been here lot more than I have, but it is quite strong in medical devices areas so it does make a lot of sense for you to be based here, you've also as you said earlier your responsibilities include New Zealand, are there examples of companies in New Zealand that have been located to Indiana yet?
Stephen Patillo:
We do, we have some we actually had some really good interaction with New Zealand and that the CEO of NZBio, Dr Brian Ward you probably have known, he came to Indianapolis with me in early May and he has actually, we have a couple of non-disclosure agreements in place I can't give you specifics like I did on Portland example and other's. But actually it has opened up an extraordinary opportunity because there is quite frankly very little competition in New Zealand among state reps who are going out looking for business, so I don't know how wise it would be going to be to talk about the fact that New Zealand does present great opportunities but it does. And we just the other day we talked to someone who makes coatings, antibiotic coatings that could be applicable in the lot of medical device areas and now we are in discussions with them as well. So yes it does present a lot of opportunities and just like Australia all of them have the priority of getting their technology and their products into North America so it's an easy selling that point, the challenge as I mentioned before is making sure that they were what they could potentially do in Indiana where they may not be as common they thought of. The Australian's and the New Zealanders have the same sort of outlook there, but yes New Zealand great opportunities there, we are in discussion I go to NZBio like I do AusBiotech and BIO every year and David's coming to AusBiotech this year we'll have probably delegations in NZBio in Auckland in late March and then of course we will all go to BIO in San Diego in June. So that's pretty much the way we will attack it.
Fintan Walton:
Is it correct to look at Indiana as a sort of like because it's in the middle of the United States it acts like a hub?
David Boncosky:
It's very much a logistics hub 75% of the United States is within a 24 hour drive of Indianapolis. During our current FedEx expansion we will soon be the largest FedEx hub in the United States. So we have companies, laboratories and companies that are transporting vials of molecules and these are 100's of millions of dollars these little tubes and they want to know it's going to get there and it's going to stay cold and et cetera, so it's a critical component to life sciences.
Successful meetings at AusBiotech
Fintan Walton:
Right, okay. So you've both been here at AusBiotech at 2007, how is it been, is it been a good conference for you so far Stephen?
Stephen Patillo:
Yes it's been excellent, we actually were in Sydney for week doing meetings there and we were focused primarily in the device community there and some biotech with more in the device community in Sydney which is staggering to me and here we are also focused on doing a lot of the biotech company meeting that we may not have been able easily able to do. But we have been able to do, but yes it's been very, very good in fact, we've seen probably 60 to 70% of the companies at CEO level that we really feel like our excellent candidates who I have been identifying over the years and David has come in very kind of him to fly over across the Pacific for week and a half but he has been able to come in and bring some of that incredible knowledge that he has of the cluster and the details of the cluster and the contacts of the people and into the CEO's, CFO's and the business development Vice Presidents people that we've seen and we have already three active projects starting Monday, October 14 we've already have three active projects we are already exchanging non-disclosure agreements and senate paperwork and site selection and so forth and seeing existing customers, so he has been very valuable and I've been pleasantly surprised of what we've been able to get done in a such a short period of time.
Fintan Walton:
Yes, and David this was your first time to Australia?
David Boncosky:
Yes, and Stephen being an enthusiastic sales person always tells me how much is going on in Australia and so he talked me into coming down here and I would say I am amazed for a country of 21 million people how much wonderful technology and opportunity there is. So we'd like to bring it to North America and have them build it and make it nicely.
Fintan Walton:
Well thanks a lot both of you for coming along on to the show, really appreciate it.
Stephen Patillo:
Thank you Fintan.
David Boncosky:
Thank you.
Fintan Walton
Dr Walton is the Founder and CEO of PharmaTelevision. After completing his doctoral research on the genetics of cell proliferation at the University of Michigan (US) and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Stephen Patillo
Director at Indiana Economic Development Corporation
Stephen Patillo has run the IEDC overseas office in Sydney, Australia for the past five years. Before that, he spent four years as director of the Singapore-based overseas office of the US-ASEAN Business Council. He gained a BA in Economics from Duke University and carried out additional study on the Pacific Rim at the University of New South Wales.
David Boncosky
Director at Indiana Economic Development Corporation
David Boncosky has been Director of Life Sciences at IEDC since August 2007. Before that, he was a senior development manager for Duke Realty Corporation and a managing member of Georgetown at the Crossing. He gained an MBA from Butler University and a BA in Economics and Japanese from Indiana University.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialization.
Indiana Economic Development Corporation
The Indiana Economic Development Corporation (IEDC) is the State of Indiana's lead economic development agency. The IEDC was officially established in February 2005 to replace the former Department of Commerce. In order to respond quickly to the needs of businesses, the IEDC operates like a business and is organized as a public private partnership governed by a twelve-member board. The IEDC focuses its efforts on growing and retaining businesses in Indiana and attracting new business to the State of Indiana.
Indiana Economic Development Corporation
The Indiana Economic Development Corporation (IEDC) is the State of Indiana's lead economic development agency. The IEDC was officially established in February 2005 to replace the former Department of Commerce. In order to respond quickly to the needs of businesses, the IEDC operates like a business and is organized as a public private partnership governed by a twelve-member board. The IEDC focuses its efforts on growing and retaining businesses in Indiana and attracting new business to the State of Indiana.