From company creation to growth: Doing business in Wisconsin
Association for Biomedical Research and Education, two-thirds (165) did not exist before 1989. More than half (131) didnt exist before 1994. Thirty percent (75) were created in the last five years. The average age of companies in Wisconsins bioscience sector is barely 13 years, making the industry a rambunctious teenager with plenty of room for growth.
Those 248 companies employ 19,328 people and had sales in 2002 of $4.76 billion, according to the Wisconsin Association for Biomedical Research and Education. Sales growth for these companies collectively continued from 2001 into early 2004, despite the economic slowdown.
Wisconsins bioscience industry is dominated by manufacturing, in large part because of the states expertise in medical equipment. In 2002, 142 bioscience manufacturers posted sales of $4.14 billion, 90 service companies recorded sales of $450 million, and 16 mixed manufacturing and service companies accounted for $174 million in sales. Biopharmaceutical companies (41) dominated sales for the industry with more than $2 billion. Profit margins were greatest for bioscience technology manufacturing companies (55), which include medical imaging technologies and diagnostic service. These companies posted sales of $439 million in 2002, according to WABRE.
Agricultural biotech (26 companies) showed the most sales growth over recent years, with almost $632 million in sales in 2002 compared to $395 million in 2000. Much of that growth is due to the marketplace introduction of genetically modified seed varieties and genetic engineering technologies for livestock. Forest and Paper Biotechnology claims some of Wisconsins youngest bioscience companies, while Food Biotechnology offers some of the oldest.
Centers of Excellence
The expertise of Wisconsin bioscience companies matches closely with the states core research strengths. Research institutions in Wisconsin are leaders in the following areas:
In its report, Vision 2020: A Model Wisconsin Economy, the Wisconsin Technology Council proposed the development of research centers of excellence that would be organized around large-scale opportunities to build high-technology Wisconsin businesses. These centers of excellence will focus on applied research that transfers new, public sector science and technology to solve the unique problems of particular industries.
Bioscience made up half of the Tech Councils list of potential centers of excellence. They are:
Tissue regeneration and regenerative medicine Personalized medicine Error-free hospitals Genetically modified organisms Zoonotic disease control Small molecule pharmaceuticals Nanotechnology systems Homeland security
GE Healthcare: A Wisconsin Leader
General Electric Co. has invested $12 billion in its Wisconsin-based health care unit in the past year in an effort to better reach an aging domestic population and fast-growing economies around the world.
Health care is an unstoppable demographic. We want to make sure we are well-positioned for that, said Jeffrey Immelt, chairman and chief executive officer of GE. Immelt was chairman and CEO of GEs health care unit for four years. Weve invested to make it bigger, better and more substantial.
The growth of GE Healthcare (formerly, GE Medical Systems) exemplifies Wisconsins emerging position as a global leader in biosciences. In the past decade, GE Healthcare has expanded its revenue from $4 billion to $15 billion and grown to 40,000 employees, including 6,500 in Wisconsin with an estimated 2,000 more to come.
If theres any place that can compete in the future, its right here (Wisconsin), Immelt said. Youve got smart people who work hard.
The medical device cluster in Wisconsin, which is led by GE, produces an array of instruments, machines and devices designed to diagnose, cure or prevent disease. It stands at the intersection of the states increasingly convergent biotechnology, health-care delivery and health-care information sectors as well as the manufacturing sector.
Wisconsin ranks 11th nationally in medical devices employment, with nearly 12,000 workers.
Sources of Capital
Assorted types of capital are provided by a variety of actors within Wisconsins larger private equity community. Those sources are: angel investors and networks; federal SBIR/STTR resources; developmental venture capital; federally licensed SBICs; seed, startup and early-stage venture investment firms; expansion and buyout capital funds; and other exit finance strategies.
Currently, Wisconsin has four venture capital funds that invest in life sciences. They are Baird Venture Partners of Milwaukee and Madison, Frazier Technology Ventures of Madison and Seattle, Mason Wells Biomedical Fund of Milwaukee, and Venture Investors LLC of Madison. Several angel networks throughout Wisconsin also participate in life science investing. Wisconsins support program for SBIR grants has been active since 1990.
For more information on the sources of capital in Wisconsin, contact the Wisconsin Department of Financial Institutions at (608) 261-9555.
This article was reproduced with permission, courtesy of the Wisconsin Technology Council, from their recently published Wisconsin Life Science magazine. All rights reserved.