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region more name recognition and gravity in attracting skilled workers and
companies. Both the states of Kansas and Missouri have provided great incentives
to both relocating companies and existing companies which offer great cost-
effective advantages over other life science clusters.
Unlike California life science clusters, Kansas City's life science cluster falls
short of entrepreneurs and venture capital. At a recent Greater Kansas City
Chamber of Commerce's Innovation Conference held in July 2010, Nicholas
Franano, president and founder of Lenexa-based Novita Therapeutics asked a
rhetorical question, ''Can anyone name a very prominent medical device or bio-
tech firm that has started in Kansas City in the last three years?'' His point was that
Kansas City has had ''a pretty long drought'' when it comes to new life science
companies.
One of the key reasons cited during the panel discussion was a lack of venture
capital, which all seemed to be in the West Coast or East Coast. Steven St. Peter,
managing director of MPM Capital Group explained, ''It's not that people hate the
Midwest, it's just that that's where the venture capital is formed.'' The panel also
added that it is not that area companies are not capturing venture capitalists'
attention—9 of the 20 companies that received investments from Enterprise Center
of Johnson County's (ECJC) angel investor networks were in the life science areas.
According to St. Peter, if Kansas City wants to attract more venture capital
money, area companies need to be aware of where that money is coming from
because financing plays a critical role in the process and success of drug devel-
opment. Moreover, the process of getting a drug from the lab to the shelf takes
more time and money than some venture capitalists willing to gamble. The average
drug discovered in a university takes between 10 and 17 years and costs $1.2
billion and upwards before it gets to market, according to Scot Weir, director of
the Institution of Medical Innovation at University of Kansas Medical Center. He
added that KU is making strides to curb that cost and time commitment. Weir cited
a recent instance in which the KU Cancer Center and the Leukemia and
Lymphoma Society were able to get a novel drug into a clinic in 13 months for
$1.5 million.
The average drug developer needs to be ready to spend between $50 and $150
million before the drug reaches the market. However, academia still faces chal-
lenges in turning drug discoveries into drug development as pointed out by Weir:
• Universities are holding onto technologies longer, which increases patent costs
• Innovative, advance technologies are more expensive
• There is a disconnect between intellectual property investment and faculty
accountability
• There are large human capital investments associated with startup ventures.
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