By Rachael Rees • The Bulletin

C hris Schelling moved to Bend two years ago, intending to start his pharmaceutical company, Acer Therapeutics, in the High Desert.

But after some research, he realized Central Oregon did not have the infrastructure to support the kind of growth he wanted for his startup company, so he located it in Cambridge, Mass.

Today, Schelling and other industry leaders are spurring an effort to get the region national attention as an up-and-coming biotech cluster.

“We need to educate, get out there and get people to take this seriously,” Schelling said, referring to investors, business owners and the community. “We want people to start thinking, why not Central Oregon?”

The initiative to grow a bioscience industry is a statewide effort. The Oregon Bioscience Association and the Oregon Translational Research and Development Institute (OTRADI) have drafted the 2014 Oregon Bioscience Roadmap, a report scheduled to be released later this month, which identifies the state’s strengths and weaknesses, as well as a strategic plan.

In 2011, Oregon’s bioscience sector employed 17,293 people at 775 establishments, which made it the fifth largest industry sector in the state, according to the report. And with key attributes like Oregon Health & Science University and the Knight Cancer Challenge — an initiative to raise $1 billion to fund cancer research within the state — experts say there’s no reason Oregon can’t become a bioscience leader in targeted sectors.

But a stable funding source, access to talent and business development resources are key.

“To grow the bioscience industry, Oregon industry leaders and economic development experts must develop strategies that not only foster innovation, but also create an entrepreneurial environment that retains and attracts companies to Oregon,” the report states.

“For too long, Oregon has accepted its role as an inventor/innovator state — satisfied with watching the fruits of its labor migrate to other states with better entrepreneurial environments. This is not a economically sustainable trend.”

Efforts to create a bioscience industry in the state have been underway for decades. The Oregon Bioscience Association was established in 1989, according to its website.

In 2001, said Dennis McNannay, executive director of the association, Oregon was having a difficult time because bioscience requires specific infrastructure such as biological laboratories, researchers and universities.

Over the last decade, however, there’s been a conscious investment to build laboratories outside of universities, he said. In addition, he said, OHSU decided to recruit world-class researchers with the intent of attracting grant money. That grant money has allowed OHSU to build focused programs like the Knight Cancer institute, which has led to Knight Cancer Challenge.

The report highlights Bend as a developing bioscience cluster, as well as an attractive location for entrepreneurship. With the expansion of Oregon State University-Cascades Campus into a four-year university, McNannay said, Bend will be much better equipped to attract companies that need to locate near research infrastructure.

Bend is home to about 10 companies, including Bend Research Inc., Grace Bio-Labs, Agere Pharmaceuticals and JettStream, many of which are growing.

Bend Research Inc, a division of Capsugel, Dosage Form Solutions, is the parent of Bend’s bioscience industry.

Started in 1975, Bend Research has spawned a half-dozen companies in the last 12-15 years, including Agere and Validation Resources, said Rod Ray, former CEO of Bend Research.

Last week, the company completed the first part of its multistage, $20 million expansion to enhance commercial manufacturing capabilities. Ray said the sale of Bend Research to Capsugel last fall made the expansion possible.

“One of the big reasons we sold is because they do have the capital,” Ray said. “Bend Research has been successful enough that the client projects have advanced towards commercialization. We really needed a commercial facility, and we just couldn’t generate enough money to do that.”

In addition to existing clients signing up to have their pharmaceutical formulations made in the new commercial facility, he said, the expansion is attracting new clients.

Ray said the bioscience cluster is growing, similar to the development of the tech sector and craft beer industry in Bend.

The more companies, the bigger the labor pool, which creates more visibility for investors and helps Bend become known for a biotech industry, he said.

Jennifer Fox, executive director of Oregon Translational Research & Development Institute, said the bioscience community is similar to the tech-startup community, but the timeline is much longer to get a product to market.

“You can sit down and have an app out in two months and be selling it, making money,” she said. “But for a bioscience product, with all the (U.S. Food and Drug Administration) regulation and all the human health implications, it can take up to 10 years for some drugs to get to market.”

To help bioscience startups, Fox said, she worked to open the Institute’s Bioscience Incubator in Portland last year. The building includes a shared lab space, equipment and offices, which cuts costs for the six startup companies the incubator houses. Fox said she’s received requests from Schelling and others to create a similar space for bioscience companies in Bend and is working to find the funds.

Schelling said the development of an incubator, specifically one for pharmaceutical biotech companies, as well as an bioscience accelerator, would diversify the bioscience industry in Bend and create a critical mass that would attract similar companies.

“Once we have two or three companies that are here, that should make it easier for the other companies to look at this as a viable opportunity,” he said.

While Portland will be the No. 1 hub for bioscience, he said, there’s no reason Bend can’t be No. 2 in the state.

Schelling, who currently operates a pharmaceutical and biotech consulting company in Bend called Apanii Consulting LLC, said he plans to open an Acer Therapeutics office here, as well as form an oncology company in 2015.

“I definitely want to have a company here to show it can be done, and I want it to grow,” he said. “It can’t be something that’s a one-and-done kind of deal. It’s going to take a long time to cultivate and become something that is self-sustaining.”

— Reporter: 541-617-7818,

rrees@bendbulletin.com

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